Statement from The Liberal Democrat Party

Liberal Democrats support the key objectives of economic stability, cutting down unnecessary regulation and encouraging a flexible and efficient labour market.

Economic stability
The main problems facing British business are the existence of an overvalued and fluctuating pound. In today's global market the continued existence of an overvalued pound will seriously affect competitiveness and therefore engineering and manufacturing capability.

Liberal Democrats believe that the main aim of government economic policy should be to promote economic stability and create the conditions for sustainable growth. In particular we would work to limit the damage of a fluctuating exchange rate that is destroying thousands of jobs in manufacturing and engineering. We believe that the Euro offers the potential to avoid this exchange rate instability and reduce the costs of trade with the rest of Europe.

We would therefore set out a positive timetable and policies for achieving a sustainable entry into the Euro, including a competitive level for the pound. This would be followed by a referendum so that the British people, not politicians, decide on whether to enter the Euro.

Over-regulation
In addition to exchange rate problems all businesses can be held back by burdensome over-regulation. Liberal Democrats are therefore committed to scrap unnecessary business regulations. We have published a list of 25 specific major regulations that we will scrap. Specific examples include repealing section 8 of the Immigration and Asylum Act 1996 which imposes a duty on employers to police visas and passports, and ending companies' responsibility for administering the Working Families Tax Credit. We believe that many new regulations should be subject to a "sunset clause", setting a deadline after which they would automatically lapse.

Flexible and efficient labour market
In general we welcome those elements of the government's proposed changes to the Employment Agencies Act 1973 designed to meet more adequately the modern needs of the labour market, promote flexibility in the market, prevent payment abuses and provide greater transparency of terms of business on an industry wide basis. However, we share many of the concerns expressed by the industry that the short quarantine period on "temp to temp" and third party arrangements will inhibit the creation of job opportunities. This is of particular concern for those who may be disadvantaged such as older candidates, women returning to work, those with gaps in their CVs due to unemployment and job applicants who may not perform well in the interview situation. Additionally we believe that "temp-to-temp" and third party services will become uncommercial for many agencies leading to less temporary work and fewer job opportunities for disadvantaged groups. We will continue to work for a solution that does not act as a constraint on the temporary job market.

We are concerned that controversial new tax, IR35, will discourage entrepreneurs in the IT industry. We support the repeal of IR35 and would allow 'one person companies' to function and develop. We would look to stop abuse by closing the 'Friday night to Monday morning' loop hole (where people leave work as an employee on Friday and return to do the same job on Monday as a one-person company) by targeted legislation along the lines suggested by the Professional Contractors Group.