It is often said that the Liberal Democrat strategy in recent years has been to announce a host of small and largely incoherent policies designed to support local campaigns rather than represent a genuine plan for government. Cleaning up Britain’s waterways and holding sewage companies to account, for instance, plays well with ultra-local campaigns. As I rack my brain to recall other parts of the 2024 manifesto, I can see how there are similar effects for ‘fixing our social care sector’ and providing a ‘dedicated mental health professional in every secondary school’. People care about their local services, and Lib Dem national policy has been designed to entrench the idea that the party would stand up for what people care about in their area. It is telling that in the manifesto, the ‘fair deals’ on the economy, public services and the environment were held listed before the pledge for a ‘strong United Kingdom and a fair international order.’ That is not to say the party is shy of talking about foreign affairs as it has, of course, been the leading voice against Trump’s tariffs and reckless attitude towards the liberal world order. It does, nonetheless, suggest that the strategy for the Lib Dems last time around was a piecemeal approach to support the election of local champions. Who would really hold this against them? The strategy delivered the largest third party since the Liberal Party in 1923. If we are being honest: does a party even need a coherent programme of government to win an election? The answer is obviously not, as Labour won in 2024 more or less on promises to ‘change’ the country and clean up politics. However, as we have seen, the lack of a real plan does have ramifications when a party comes into office. Keir Starmer will soon have had three Cabinet Secretaries, four Chiefs of Staff, and five Directors of Communications. When a government cannot set out what it stands for, then it is surely doomed for a crisis in communication and narrative.
Therefore, whilst there was no issue with the Lib Dem strategy last term around, if the party wants to look like a serious contender for office (and it should) then it needs to adopt a more coherent plan. The best place to start is the economy. The last time that the party properly announced a clear, overriding economic philosophy was in the publication of the Orange Book in 2004 which pinned its mast to economic liberalism. Whilst not popular with all parts of the party, it certainly helped make the party more credible and it is worth pointing out that it won 22% of the popular vote a year later (much higher than the 12.2% in 2024).
Back to the present day: On Tuesday 10th February, the party’s social media accounts revealed that a ‘major announcement’ was set to be made on the economy the following day by Daisy Cooper, the Treasury Spokesperson. Finally, it seemed the party was listening to the calls for a broader economic plan. Roll around to 9am the next day and what is the policy? To abolish the Treasury, replace it with a Department for Growth, and set it up in Birmingham. My initial reaction was like that of the Shadow Chancellor Mel Stride: surely this is just a ‘gimmick’? However, I have decided to give it some rational thought and come to a reasoned judgment, and where better to do so than in Freedom of the Press? I will firstly assess the idea of renaming and reorganising the departments and then will assess the idea of moving economic policy to Britain’s second city. I will judge both elements on two factors: how good it is for the party’s strategy, and how credible it is as a policy. I will also scrutinise the arguments made by Cooper when justifying the policy.
Firstly, what is the proposed departmental shapeshifting? Step one is the literal abolition of the Treasury – the oldest government department, dating back to the Norman Conquest. Step two is the abolition of the Department for Business and Trade. Step three is to replace the two with a new ‘powerful’ Department for Growth. Finally, step four is the creation of a smaller Department for Public Expenditure to ensure value for money. The whole thing adds up to a statement of intent: the Lib Dems favour a long-term, government-led growth strategy. This is a far cry from the ultra-local and piecemeal approach from before. Cooper argued that the problem for the Treasury currently is that it encourages governments to go ‘for short-term tax grabs that suit political cycles over the need for long-term growth’. She points to the means testing of the Winter Fuel Payment, the jobs tax and the family farm tax as examples. Hang on though. Let’s go back to the 2024 Lib Dem manifesto where the plans to make the tax system fairer included taxing the big banks, increasing the Digital Services Tax and introducing a tax on share buyback schemes. These may have been policies designed more in lockstep with focus groups than the Treasury, but they are nonetheless relatively small tax grabs that suit political cycles. If the Lib Dems are serious about a growth strategy, they need to go further than more of the same. After all, ‘growth’ was the named priority for this Labour government once.
Is the abolition of the Treasury on its own enough to create a fundamental rethinking of the way economic policy is made? Cooper is not the first to make the case for it. Lord Glasman, founder of Blue Labour, encouraged his party last year to adopt ‘economic radicalism’ by scrapping the Treasury at a fringe event last year, arguing that they are a ‘block on industrial strategy’; meanwhile, Conservative Michael Gove has said that the Treasury is ‘the enemy of innovation’ and so it should be ended. Perhaps the Lib Dems saw the prevailing wind of the political hot potato that is Treasury reform and have jumped the gun. It is feasible that a few Labour resets down the line or the new centre-right Conservative group Prosper UK might have announced a similar thing.
Also, it is worth pointing out the other political advantages for the Lib Dems. When party spokespeople were asked at Conference last year how to sum up the Lib Dems’ economic plan, it generally consisted of three things: a long-term industrial strategy (they are of course still proud of the one they got introduced under the Coalition); a skills strategy; and rejoining the EU Customs Union. These three things are brought together rather neatly under the new proposal: long-term planning facilitated by a civil service culture reset. It also helps the party overcome its reputation for being ‘Nimby’ demonstrating the party is willing to drive growth from central government rather than always devolving decisions to the local level – where they can be blocked. Finally, it is designed to build relationships between the party and business, demonstrated by Cooper making the announcement in the City of London. Before 2024, Labour had effectively cultivated the affection of big business with the promise of ‘growth’ which had a large part to play in making the party look credible on the economy.
Such support also supplies important momentum: I hear that Labour and Tory Party conferences are usually packed with exhibitions from businesses; though, I wouldn’t know as Lib Dem conferences are packed almost exclusively with ‘constituent organisations’ of the party. With some business backing, the party might get donations, media coverage, and an Establishment credibility that it generally tends to lack as it gets relegated to being ‘unserious.’ Therefore, for the party strategy, I think there is a very strong case for the reorganisation of government departments as proposed. As for whether the plan is economically credible: it certainly goes further than the Labour Party just expecting Whitehall to be able to make things happen and deliver growth, as it is. There can be no doubt that it is radical; however, it is only the first step towards gaining economic credibility. The party must prove that this isn’t a gimmick. It must make large capital spending commitments in infrastructure projects; it must show that its tax policy is not just a series of small money grabs; and it must show that it knows what it is all for. In short, the policy makes a lot of sense. Secondly, Daisy Cooper announced that she planned for the new Department for Growth to be in Birmingham. There was then a slight disconnect as she sought to link it to the party strategy as she said: ‘We Liberal Democrats are the only political party with MPs that span from the highlands and the islands of Scotland down to the tip of the South West, so we know, we see the differences in economic growth between the South East and everywhere else’. It is true that the party does have MPs both in Shetland and St Ives; however, the one place it most definitely does not have MPs is Birmingham – the closest being Stratford-on-Avon. It is hardly likely to be a key target area come the next election, with barely a Liberal MP elected there since 1918.
Whilst it is a statement of intent that the Lib Dems are a party focussed on growth across the UK, it feels as though it is slightly awkwardly attached to a policy that is trying to do too much. However, if it can be seen to be practically feasible then maybe it is a policy triumph? When questioned on the move out of London, Cooper pointed to the ongoing ‘Places for Growth’ programme of the Cabinet Office, which was launched under Boris Johnson. It had a target to move 22,000 civil service jobs out of the capital by 2027 which it had already exceeded by the end of the last Conservative government, suggesting a reasonably effective decentralisation of the seat of government. Looking more closely however, such moves have had mixed success. The Met Office’s move from Berkshire to Exeter boosted the local economy by £69 million annually and has provided one of the area’s biggest employers, but moving the Office for National Statistics to Newport was less successful as 90% of staff opted not to make the move, leading to a reduction in the quality of its output. Parts of the Treasury have already been moved to Darlington in a project dubbed ‘Treasury North’ so the proposed Lib Dem plan would not be totally new. It appears that the Lib Dems have again cited the prevailing wind of civil service reform and decided to make a bold statement to move not only a whole department out of London, but surely the most important. In a way, Birmingham is the ideal testing ground. It is near enough to London that the journey can be made in under two hours which should avoid an exodus of existing staff and leaves open the possibility of bringing important figures together in person quickly. It would be backward to suggest in 2026 that every decision must be taken in person, as many meetings frankly could happen online. Therefore, based on this analysis, the move is nowhere near as crazy as maybe it first sounds. As Cooper herself pointed out, she already commutes almost two hours to Westminster each day from St Albans. It is also fundamentally not a ‘gimmick.’ She is right when she says it could add billions to the economy and perhaps have an even greater effect on the economy of the West Midlands than that of the Met Office on Exeter.
Consequently, whilst I remain somewhat sceptical about the awkward mixing of a growth-led economic strategy and moving the hub of economic policy to Birmingham, I can see the logic to both. The reorganisation of the departments represents a real attempt at the Lib Dems defining what they stand for economically, and it fits well with where I think the party strategy is and should go. Whilst the move to Birmingham is not so in-keeping with party strategy, it would be a practical plan and does build on existing government policy. Basically, let this be only the first step towards a coherent economic plan – the next election could well be decided on that. More of this please.