Lib Dems call for Biden-style tax on share buybacks and focus on beating Hunt & Gove in General Election
The Liberal Democrats are advocating for a new tax on share buybacks by large companies, echoing Joe Biden's policy, as they gather for their spring conference in York. Read more: Lib Dems call for Biden-style tax on share buybacks and focus on beating Hunt & Gove in General Election
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The Liberal Democrats are advocating for a new tax on share buybacks by large companies, echoing Joe Biden’s policy, as they gather for their spring conference in York.
Sarah Olney, the party’s Treasury spokesperson, will outline the plan to impose a four per cent levy on share buybacks by FTSE 100 firms, potentially generating around £2bn annually for public services and green industries.
Share buybacks, where a company repurchases its own shares, have faced criticism for inflating share prices at the expense of investment spending. Following Joe Biden’s lead, who introduced a one per cent tax on share buybacks for US-listed companies in 2022 and proposed raising it to four per cent, the Liberal Democrats aim to address this issue in the UK.
The party argues that UK share buybacks, primarily conducted by oil and gas giants, banks, and large corporations, have surged in recent years, benefiting from the cost-of-living crisis. Party leader Sir Ed Davey asserts that a new tax on share buybacks would ensure fairer funding for public services and encourage investment, job creation, and growth, particularly in green industries.
The proposed policy could potentially raise £2bn annually, similar to what Labour’s plan to tax non-doms could have generated before Chancellor Jeremy Hunt adopted the measure in his Budget. Olney emphasises the potential economic benefits of redirecting share buyback funds towards productive investments, particularly in green transition initiatives.
The Liberal Democrats intend to use their conference to prepare for a concerted effort to contest “blue wall” seats, traditional Conservative strongholds, in the upcoming general election. Sir Ed Davey expressed optimism about winning over lifelong Conservatives, particularly in the southwest of England, where the party has gained momentum in recent by-elections.
He told the PA news agency: “The response we’re getting is phenomenal. Lifelong Conservatives switching to the Liberal Democrats, which gives us great, great belief that we can beat many Conservative MPs whenever the election comes.”
Sir Ed has the seats of some of the top Conservative cabinet ministers in his sights, including Mr Hunt’s Godalming and Ash and Communities Secretary Michael Gove’s Surrey Heath.
Despite the Liberal Democrats’ gains in several constituencies, recent polls indicate that the far-right Reform UK party has surpassed them in popularity nationwide. Prime Minister Rishi Sunak has ruled out an election on May 2, aligning with previous indications of holding elections in the latter half of 2024.
