At the Liberal Democrats’ spring conference in York, Treasury spokesperson Sarah Olney will unveil plans for a new tax targeting share buybacks by large corporations, echoing a move by President Joe Biden.
The proposed 4% levy on share buybacks by FTSE 100 firms is expected to generate approximately £2 billion annually, funding public services and green industries.
Share buybacks, criticized for inflating share prices at the expense of investment, have surged among UK companies, particularly in sectors benefiting from the current cost-of-living crisis.
Lib Dem leader Sir Ed Davey asserts the necessity of fair funding for public services, highlighting the party’s initiative following previous calls for a windfall tax on profitable oil and gas giants.
The proposed tax aims to address soaring prices affecting families while encouraging investment and job creation, particularly in green sectors. Olney emphasizes the potential of redirecting funds from share buybacks to productive investments, citing Biden’s similar measures in the US.
The party sees the policy as a means to challenge the Conservatives in their traditional strongholds, eyeing key constituencies in the southwest of England and across the “blue wall.” Sir Ed Davey expresses optimism about the party’s prospects, citing a positive response from voters, including former Conservatives.
With recent gains in formerly Conservative-held seats through by-elections, the Lib Dems aim to further expand their presence in southern England.
Amid their electoral ambitions, polls suggest a challenge from the far-right Reform UK party, potentially impacting the Lib Dems’ standing. Prime Minister Rishi Sunak‘s decision to postpone an election to coincide with local elections signals a delay in the electoral showdown, likely pushing it to the latter part of 2024.
