The Liberal Democrats are to kick off their spring conference with a call for the UK to mimic Joe Biden’s tax on share buybacks by big corporations, as the party prepares for a further push into Conservative-held “blue wall” seats before the election.
The plan, the set-piece announcement of Saturday’s first full day of the gathering in York, would impose a 4% tax on any share buybacks by FTSE-100 companies, which on the basis of the past two years of such activities would raise about £2bn annually.
As a taxation idea, this would have the appeal of being most probably popular, given that critics of share buybacks say the practice – used to inflate share prices – is often done at the expense of spending on investment, and can be a way for executives to cash in on their stakes.
The potential amount it would raise is also close to that which would have been gathered by Labour’s proposed ending of non-domiciled tax status, an idea partly stolen by Jeremy Hunt in this month’s budget.
In a speech to the conference, the Lib Dems’ Treasury spokesperson, Sarah Olney, is to urge the UK to follow the example of Biden, who introduced a 1% buyback levy in 2022 and has just announced his intention to raise this to 4%.
The party argues that many buybacks are launched by corporations in areas such as banking, food and oil and gas, and that in the latter case the money could instead be used for more investment in green energy.
Ed Davey, the Lib Dem leader, said: “Neither the Conservative government or Labour party have explained how they will fund public services fairly after the next election. Large corporations from fossil fuel giants to banks are making huge profits off the back of families facing soaring energy bills, mortgage payments and food prices. It is only fair that we ask these companies to pay more in tax.
“This new levy would not just raise much-needed money for public services, it would encourage investment, help create jobs and boost growth including in the green industries of the future.”
Even with Rishi Sunak having now ruled out a 2 May election, the conference will be heavily focused on campaign planning, including a training session for Lib Dem candidates in so-called ghost constituencies – either those without an MP, as they are newly created under boundary changes, or where the sitting Tory is standing down.
The party has previously said that in so-called blue wall commuter belt target seats such as Esher and Walton in Surrey, departing incumbents – in Esher’s case, Dominic Raab – are largely absent. It says its candidate in Esher, Monica Harding, is acting like the de facto MP, opening events and holding surgeries.
The training session, with the perhaps inevitable title of Ghostbusters, will give tips to other candidates on how to fill such a void, seen as a way to boost their electoral chances.
“When we win seats it’s because we have proved we are the main challengers to the Conservatives, and then that we work hard,” one Lib Dem official said. “We need two groups of voters: those who want a local champion and the ones who want to get the Tories out. This covers both.”
Davey, in his speech to the conference on Sunday morning, will try to go beyond this tactical focus and explain why, ideologically, people should back the party.
“He will argue the case for having more Lib Dem MPs in parliament, whoever wins,” the official said. “With Labour it can feel like they are just waiting their turn to govern in the same way. We’re the party which would change the whole broken system.”
