---
election_year: 1974
election_month: february
party_id: liberal
party_name: Liberal Party
party_leader: Jeremy Thorpe
political_spectrum: centre
victory: false
government_outcome: opposition
sections:
  - economy
  - taxation
  - health
  - education
  - housing
  - foreign-policy
  - environment
  - transport
  - welfare
  - democracy-and-constitution
  - agriculture
  - energy
  - local-government
---

# Liberal Democrats Manifesto 1974

**Liberal / SDP / Libdem Manifestos**

---

## Change the face of Britain - Take power - Vote Liberal

## Foreword

In this election, the paramount objectives of the Liberal Party, overriding all other
considerations are to tell the people the truth about our country's situation and to secure a
new approach to our problems in which sectional and partisan interests are set aside in favour
of the general welfare of all.

We are faced with an immediate economic and social crisis, the seriousness of which it is
impossible for anyone to calculate with assurance and for which no-one can offer easy remedies.

But the immediate crisis - desperate as it is - is only the culmination of a long process of
deterioration in our ability, and the capacity of our political and social institutions, to
manage our counntry's affairs efficiently and with tolerable sanity.

Moreover, the present crisis is but a symptom of a deeper underlying disorder afflicting not
only ourselves but the whole of the so-called western world. The era of western affluence side
by side with poverty, and largely at the expense, of the other World is at an end.

The situation is one which requires of all people - and all parties - a fundamental reappraisal
of their attitutdes and policies. Without such a reappraisal it is questionable whether our own
or any democratic system can or will survive. Here at home, and at this election, no one and
no party has a ready made prescription for the cure of our troubles either in the short term or
the long run, and anyone who pretends to have such a cure is a quack.

But two basic requirements can be met. They might be called 'the essential conditions for
democratic survival'.

The first is to recreat in our society and in our political institutions a loyalty to the
'general good', to which all sectional and partisan interests, however inherently worthy, must
be subordinate. But all efforts towards such a consensus, towards finding this area of common
ground, will be idle and fruitless unless accompanied by a recognition (and this is the second
condition for survival) that our present society is grossly unfair in its distribution of
privileges and material rewards between capital and labour, between class and class and between
one individual and another. Only when it is manifest that the restructuring of our society is
in hand and that a fairer society is in sight will the necessary political consensus be
attainable.

People are now bewildered, frightened and often angry. The first business of any Government
should be to draw the national together and to chart the course towards a new society based on
fairness and tolerance.

The role of the Liberal Party at this election is to act as a catalyst in bringing this about
by securing the largest possible representation of the 'general interest'. And you, the
elector, can help us in this task by rejecting the sterile class conflict of two discredited
parties and voting in a new era of reconciliation. It will take courage, but the five Liberal
by-election victories in the last fifteen months, during which period we have secured more
votes than any other party, shows that it can be done.

Every Liberal vote cast at this election will be a nail in the coffin of the two party system
of confrontation and a step towards national unity and reconstruction.

**Jeremy Thorpe**

## The Crisis of Government

This country has seen two parties, Labour and Conservative, alternating in office during the
last fifty years. For the last five years, both parties have had to deal with very similar
problems; both have offered similar solutions; both, in Opposition have opposed the policies
of their opponents and then adopted them on becoming the Government. In 1967 Labour in office
introduced a compulsory policy of prices and incomes control which the Conservatives, in
opposition, opposed vehemently. At the same time the Labour Party re-opened negotiations for
Britain's entry into the Common Market and these negotiations concluded with the offer
of terms of entry which were accepted by Labour in 1969. In 1969, the Labour Government also
introduced its White Paper 'In Place of Strife' which advocated legislation to
control Industrial Relations. The Conservative opposition opposed this measure. When the
Conservatives returned to office in 1970 they immediately introduced the Industrial Relations
Act which was bitterly opposed by Labour, despite the fact that many of the provisions for
union registration and protection of employment had been in their own proposals. When the
Conservative Government in early 1971 elected to join the Common Market on terms which Mr.
Roy Jenkins asserted were similar to those negotiated by the Labour Government, Labour
opposed entry. Finally, having persistently opposed compulsory prices and incomes control,
the Conservative Government did one more U-turn and introduced its own pay and price freeze in
1972 to be followed by Phase II and Phase III. Once more the Labour opposition stood on its
head and opposed what had formerly been its own policy.

## A Crisis of Confidence

Britain cannot be governed effectively when parties continuously change their policies and
principles to make cheap political gains and without regard for their own principles or for
public opinion. The crisis of inconsistent government has led to a crisis of public confidence
in the two parties which have ruled this country for the last fifty years. Liberals refuse to
accept that the present crisis is induced by any one political party, Tory or Labour. It is
caused by the type of policies and politics which both parties espouse; policies which employ
short term, instant cures, but which leave behind more problems than they solve; politics
which are partisan, dividing and polarising the nation into confrontation between classes
whether they be rich or poor, manager or worker, house owner or tenant. This country cannot
be ruled from the extremes of right and left which set the people against each other - it
must be run by a government whose neutrality is unquestioned, whose policies are fair-minded,
and whose politics is not governed by vested interests.

## A New Type of Politics

Politics has become sterile; the old two-party system has finally proved its inadequacy. Old
political theories of unbridled free enterprise and undiluted socialism have been shown to be
irrelevant. Even leading members of the Conservative and Labour Parties admit that their own
administrations have failed to deal with our fundamental problems and yet they hang on limply
to political power. Politics has gone away from the people and this, in a democracy, is the
most dangerous development of recent years.

The Liberal Party's concern for the individual person expressed in our 'Community
Politics' campaigns has been criticised by the old-fashioned politicians as the politics
of the paving stone. Yet they forget that politics is fundamentally about people, and their
problems - however trivial they may seem - should dominate the minds of all politicians.
Liberals believe in the supremacy of the individual and that political institutions should
serve, not enslave, the people. Fundamentally Community Politics is an attempt to involve
people in the decisions that affect their daily lives at the time when the individual
viewpoint can really be expressed effectively - not six months after the decision has been
reached, through a futile protest or enquiry. Our policies to decentralise government; to
democratise the vast bureaucracies which run our Education system, our Industrial Relations
and our Health and Welfare services, are all designed to further the goal of 'people
participation'.

## A New Party

But a party which seeks to transform the politics and administration of Britain must itself be
organised in such a way as to avoid the pitfalls of compromise partisanship and inconsistency
which have befallen parties in the past. The Liberal Party is a party of no vested interest -
financial or individual. Opinion Polls have consistently shown that we draw our support almost
equally from all sections of the population, whichever way it is divided up, and that between
40 and 50 per cent of the people at any given time would vote for the Liberal Party if they
thought that a Liberal Government would be elected. Our five by-election victories have
indicated that many people feel that the time has come for a Liberal Government.

Unlike the other two parties we draw on no permanent source of financial support, while the
Conservative Party consistently draws on at least a million pounds per year from the vested
interests of big business, and Labour relies on the vested interests of the Trade Unions for
over 90 per cent of its election funds. Is it any wonder that the country is polarised by
Tory-Labour confrontation?

The Liberal Party is tied to no sectional interest. That is why we can justly claim that we
approach the problems of our country with no doctrinaire prejudices, no class inhibitions and
no sectional interests.

## New Policies - A Radical Programme of Reconstruction

Most of all, the present crisis demands fundamental changes in the policies which we adopt.
The old values which have led to inequalities in wealth, property and power must go. Government
must be seen to be acting fairly in the interests of all the people instead of the interests
of the very few. We must set aside the sterile class conflicts, the debates about capitalism
or socialism, and the policies that divide and weaken us as a nation. We must rigidly question
any new initiative by asking the question: 'will it narrow the gulf between the classes;
will it reduce conflict?' No policy will achieve any lasting progress without national
acceptance. Until we achieve the ideal of national unity, any other policy aims to achieve
economic growth or industrial efficiency, will be unattainable. What is therefore needed is
a fearless programme of economic, social and industrial reconstruction and a clearout of the
old values which have so dogged the progress of the nation.

### Liberal Policy Aims

- Establish the universal right to a *minimum income* balanced by a fairer
 *distribution of wealth*, through a credit income tax system and national
 minimum earnings guarantees.

- Create an equal *partnership* between employers and employed in recognition of
 the equal importance of their contributions to the success of industry.

- *Decentralise* government and bring political power to Scotland, Wales and the
 regions of England so as to ensure that decisions are taken as close to people as
 possible.

- Involve people in exerting influence within their communities through
 *participation; *and encourage proper consultation in the exercise of national
 responsibilities for Health, Education and General Welfare.

- *Break-up* monopolistic concentrations of political and economic power so that
 individual initiative is not suppressed.

- *Conserve and protect* finite resources for the lasting benefit of the whole
 community.

All these aims have one end; to serve the individual and to create the conditions in which he
can develop his personality to the full.

## The Long Term Crisis

Since the War, politicians, business leaders, trade unionists and journalists have all assumed
that a high economic growth rate is desirable and have encouraged expectations that put a
premium on the acquisition of more money to spend on material goods. But the pursuit of
unlimited growth has been accompanied by soaring prices, high unemployment and high domestic
demand which has led to recurring balance of payments crises. The usual remedy adopted by Tory
and Labour Governments has been 'stop go' - boom followed by freeze and squeeze.

The Wilson and Heath Governments have even acted similarly - and mistakenly - in either
holding out against devaluation of the pound until world pressure forced an uncontrolled
devaluation, or holding on to a mistaken belief in the importance of maintaining our balance
of payments at the expense of rising unemployment, which finally reached the million mark in
early 1972.

The result of these policies has been the frustration of targets unreached and the deception
of unfulfilled promises, as the following examples illustrate:

### Value of the Pound

*Labour 1964-1970*

'Devaluation does not mean of course that the £ here in Britain, in your pocket,
or purse, or in your bank has been devalued.'

*Harold Wilson TV Broadcast November 19, 1967*

**REALITY In six years of Labour Government the £ lost nearly 20 per cent of its
value.**

*Conservative 1970-1974*

'We have become resigned to the value of the £ in our pockets or purses falling
by at least a shilling a year.'

**REALITY The £ of June 1970 dropped in value to 75p (or about 15/- in pre-decimal
terms) in January 1974 (House of Commons Question/Answer), a drop of well over a shilling a
year.**

### Unemployment

*Labour 1964-1970*

'We see no reason why unemployment should rise at all, apart from seasonal increases.'

*Harold Wilson (Labour Party Press Conference March 29, 1966)*

**REALITY In six years of Labour Government Britain experienced the most prolonged period of
high unemployment since 1940. For three-quarters of this period the number of unemployed was
over half a million!**

*Conservative 1970-1974*

'If we could get back to Tory policies, the unemployment position would be a great deal
better than it is today.'

*Robert Carr, May 6, 1971*

'We accept absolutely the responsibility for the level of unemployment.'

*Robert Carr November 23, 1971*

**REALITY During 1971 and 1972 unemployed was running at record war levels. Unemployment
averaged 758,000 (3.3 per cent of working population) in 1971, and 84,000 (3.7 per cent of
working population) in 1972.**

### Cost of Living

*Labour 1964-1970*

'The continual rise in the cost of living can, must, and will be halted to give the
housewife relief and her family a genuine rise in their standard of living.'

*George Brown, Swadlingcote September 27,1964*

**REALITY In just over live years under the Labour government prices rose by 25 per cent.**

*Conservative 1970-1974*

'In implementing our policies we will give overriding priority to bringing the present
inflation under control.'

*Conservative Manifesto June 1970*

**REALITY Retail prices have risen by over 33 per cent since the 1970 election. Food prices
by nearly 50 per cent (Dept. of Employment index of retail prices, December, 1973).**

### Statutory Wage Control

*Labour 1964-1970*

'As to the idea of freezing all wage claims, salary claims . . . I think this would be
monstrously unfair . . . I do not think you can ever legislate for wage increases, and no
party is setting out to do that.'

*Harold Wilson BBC Election Forum March 10, 1966*

**REALITY Four months later measures were taken to freeze wages and prices until the end of
1966, followed by 6 months of 'severe restraint'.

*Conservative 1970-1974*

'Labour's compulsory wage control was a failure and we will not repeat it.'

*Conservative Manifesto June 1970*

**REALITY A compulsory price and wage freeze was introduced by the Conservatives in November
1972, followed quickly by Phase II and culminating in the crisis of Phase III.**

### Housing

*Labour 1964-1970*

'We have embarked on a massive expansion of the housing programme reaching by 1970 no less
than 500,000 new dwellings. This is not a lightly given promise, it is a pledge.'

*Harold Wilson (Election Speech) Bradford March 27, 1966*

**REALITY It was abandoned in January less than two years later. In 1970 less than 365,000
new houses were built, fewer than the 373,000 built in 1964.

*Conservative 1970-1974*

'It is scandalous that this year (1970), as last year, fewer houses will be completed
than in 1964 when Labour took over. And far fewer are under construction.'

*Conservative Manifesto June 1970*

**REALITY This Government completed only 293,000 in 1973, the lowest number since 1959, and
on current trends they will again fail to achieve 300,000 in 1974.**

## The Quality of Life

In addition, the damage to the fabric of society and the environment as a result of the
pursuit of unlimited growth has been enormous. To the extent that growth has been achieved,
it has not increased human happiness. Instead there has been evidence of increased social
disintegration to which the growth in crime, mental illness, drug taking and divorce all
testify. Furthermore, the destruction of whole communities in the interest of
'redevelopment', the scarring of the landscape by motorways and the shattering
noise of jets over rooftops near major airports are a few of the more obvious symptoms of
incompatibility between unlimited material growth and the good life.

### The Liberal Strategy

Whether or not continued expansion is desirable, we now have to ask if it is indefinitely
feasible. The Liberal Party believes that we now have to begin planning for an age of
stability. The resources of this planet are limited and we shall not be able to go on
increasing consumption of energy, raw materials and foodstuffs at current rates. The steep
rises in world commodity prices and the restrictions imposed by the producer nations on oil
supplies, are strong indications of a turning point in history, the significance of which
has yet to be grasped by most politicians.

We must therefore act on two fronts to cut back on demand for our limited resources, firstly
by effectively controlling domestic inflation which is causing intense pressure on our
balance of payments and adding to the chaos of our industrial relations as well as preventing
the development of long-term economic and social policies.

But secondly, we must now abandon the policy adopted by past Governments, based, almost
entirely, on the crude maximisation of Gross National Product. **GNP** is not a measure
of real benefit, including, as it does, outputs that are good, bad and indifferent, and to
talk simply of unlimited increases in growth is to deprive people of the power to choose
between the beneficial and the harmful.

Liberals advocate a policy of controlled economic growth, by which we mean the careful
husbandry of resources and the limitation of private consumption by the few in favour of
better public services for the majority of our citizens.

In terms of human resources a policy of controlled economic growth also recognises that the
obligation to provide employment and a safe environment can no longer be sacrificed to the
maximisation of industrial efficiency. People cannot be treated as 'lame ducks'.

## Inflation - The Present Crisis

The major single problem facing the next Government will be that of inflation. Given the
long-term crisis of resources which we face it is unlikely that inflation will ever be
completely conquered but it can be controlled with determined and fair policies which have the
support of the people. Conservatives and Labour Governments have pandered to vested interests
to the detriment of the population as a whole. Both have been fearful of embarking on
long-term policies to control the economy and attack inflation for fear of denting the profits
of the big corporations and the wage packets of the strongest unions. Hence their timid
attempts at controlling inflation have been undercut by promises of an ultimate return to a
free for all.

Liberals would control inflation through a combination of industrial reconstruction and a
permanent prices and incomes policy enforced by penalties on those whose actions cause
inflation. We propose that prices, dividends and average earnings within a company should be
limited to an agreed annual rate of increase. Any company which increased prices faster than
that rate would suffer an extra surcharge on its Corporation Tax payments equivalent to the
amount by which its prices had exceeded the agreed norm. Excessive dividends and profits
pay-outs would also be penalised by a tax surcharge, on a sliding scale according to the
amount by which such increases exceed the norm.

If average earnings per person (including fringe benefits) within a company rose faster than
the agreed annual rate, then both the employer and the employees concerned would have to pay
an extra surcharge on their graduated National Insurance Contributions, again on a sliding
scale according to the amount by which earnings had exceeded the norm.

Of course, there would have to be provision for appeal and this would be best achieved by the
compilation of *ad hoc* reports on earnings levels and pricing policies in particular
industries along the lines of the old National Board for Prices and Incomes. Such reports
would also cover changes in relativities and wage differentials, which will have to be
narrowed considerably, and Parliamentary consent would have to be obtained before reports
could be implemented.

Thus instead of countering inflation by increasing everybody's taxes, as Mr. Powell and
the Labour Party advocate, Liberals would tax only those who cause inflation and would
control the supply of money into the economy without having to resort to the blunt instrument
of brutal cuts in expenditure on social services which once again hit the poor hardest of all.

A great merit of this policy is that it would enable wage bargaining to take place without
direct government intervention and inevitable accusations of partisanship. Yet it would still
enable the Government to maintain overall control of the economy. But no policy can hope to
succeed unless it is accepted and seen as fair by the great majority of people. Two major
defects in past policies must be remedied if this policy is to succeed: the unfairness of the
present wage bargaining system which favours those who shout loudest must be ended, and a
fairer pricing policy must be evolved to ensure that price increases do not merely contribute
to increased profits.

### Fair Prices

Liberals would strengthen price controls by relating them to absolute rather than percentage
margins. We would also insist that middle-sized companies were obliged to submit applications
to increase prices, as are top companies. We would strengthen the powers of the Monopoly and
Mergers Commission to investigate and regulate monopoly companies. The Government must
stimulate competition where it can still be made to work, break up and control monopolies,
prevent non-productive mergers and stamp out widespread restrictive practices. Nationalisation
will not solve the problem of high prices or monopolies. As we have seen in so many
nationalised industries, the public either has to suffer high prices or subsidise
non-profit-making industries. Either way the consumer pays more.

But in the meantime, where there are rapid increases in prices which are beyond the
Government's control, Liberals favour the incorporation of guaranteed wage increases into
any agreed pay policy to allow compensation for any excessive rise in food prices which occurs.
With food prices having risen by fifty per cent in three-and-a-half years such action is now
required immediately.

### A National Minimum Earnings Level

We must work to narrow the differentials between the highest and lowest paid **in our**
economy. **At a** time when average earnings have reached over £40 a week, six
million working people still earn less than half of this sum. A Liberal Government would
introduce a statutory minimum earnings level for a normal working week and no employer would
be allowed to pay less than this amount.

The importance of such legislation has been starkly illustrated by the three-day week. Those
who suffered most in reduced wages and redundancies have been the poor - precisely those who
do not have earnings guarantees.

But we must also reform the wage bargaining free-for-all in which the poorest inevitably come
off worst. To do this effectively we must reconstruct our frame work of industrial relations
to spread the monopoly power now vested in a few very powerful Unions.

### A New Charter for Industrial Relations

Britain lost more than 24 million working days last year - more than any other European
country and almost double the amount lost in Italy, our nearest rival. Yet what have our
opponents to offer as an antidote to industrial chaos? The Industrial Relations Act and the
impotent Industrial Relations Court stand as monuments to attempted Tory repression, and a
perpetual reminder to the Labour Party of its capitulation to Union pressure while in
Government. Whatever the merits of the Act's provisions for contractual obligation and
redundancy protection its practical effectiveness has foundered on Union opposition and
Conservative folly. The dues which were expropriated from the **AUEW** political fund were
drops in the ocean, but the action which confiscated money earmarked for the Government's
opponents, was a devastating piece of party political warfare.

The Industrial Relations Act must be repealed and replaced by far-reaching legislation to
introduce real democracy into industry. The Labour Party talks glibly about Industrial
Democracy by which it means Union domination and the effective exclusion of over fifty per
cent of our work force which does not belong to a union. The Liberal Party believes that
*all* individuals should be involved in the industry in which they work and this has been
the cornerstone of our policy for over fifty years. We believe that the two-party system in
Britain based on a party of organised capital confronting a party of organised labour has
helped to divide industry into two camps to the detriment of the community as a whole. We
therefore advocate industrial partnership not merely as an aid in solving the economic
problems of our country, but as a system which is right and just, and which will unite
instead of dividing.

Liberal industrial policy has three objectives. Firstly, employees must become members of
their companies just as shareholders are, with the same clearly defined rights. Secondly, it
must be accepted that directors in public companies are equally responsible to shareholders
and employees. Employees should be entitled to share in the election of the directors on equal
terms with shareholders, and Works Councils representing all employees must be set up at plant
level with wide powers to negotiate pay and conditions of work. Thirdly, employees should share
in the profits of the company and the growth of its assets.

In the long term, the implementation of Liberal co-partnership policies will contribute to the
solution of wage inflation, by ensuring that all employees benefit from wage increases and by
including a measure of responsibility into wage bargaining. For in the day-to-day negotiations
within each company employees would realise that there is little to be gained by wage increases
in excess of productivity. Such increases would simply reduce the amount available in which the
workers would share. In short our policies would achieve the identification of employees'
interests with those of the firm by providing a visible link between the immediate limitation
of wage demands and the future prosperity which will be generated for both employees and
shareholders as a result. We cannot believe that any reasonable employer would prefer an
industrial strike and the loss of millions of pounds to the hope of industrial harmony and
responsible wage bargaining through industrial partnership. Similarly, no responsible employee
would refuse the opportunity to become an equal partner in his firm with an equal share in its
profits in favour of continued confrontation, inequality and insecurity.

## The Energy Crisis

The short-term problems caused by the miners' industrial action and the interruption of
Middle East oil supplies demanded immediate action to reduce consumption, and in the main the
Liberals supported Government restrictions in the use of energy and the three-day week, both
of which we were convinced were necessary to avoid even more serious disruption of economic
life as stocks would otherwise have fallen below the danger level. However, we have been
critical of the inflexibility of the Government's anti-inflation policy, which prevented
the National Coal Board from entering into proper negotiation on the miners' claim.
Instead of being recognised as the life blood of a nation now deprived of a large portion of
its energy supplies, the miners were made the scapegoat for the Government's obstinacy in
clinging to out-dated policies. Any settlement with the miners must be permanent and ensure
continuing reward for their contribution to the alleviation of the Energy Crisis. We believe
that a settlement could have been reached if, in addition to the increases offered under Phase
III, the **NCB** could have undertaken to make further rises available as the industry
expands.

All political parties, including the Liberals, must share the blame for the decline in coal
output since the middle sixties. In order to reverse the decline, the NCB should be encouraged
to press ahead with the development of new coal reserves in Yorkshire and the Midlands.

The Government's policy of exploiting North Sea Oil and Gas must be done at a rate
determined by a National Energy Policy so as to allow indigenous industries to acquire the
necessary expertise and equipment. The policy must also have regard to the longer-term future
when imports of hydrocarbons are likely to be even more expensive and difficult to obtain.
Royalties from the production of North Sea oil should be used in part to encourage the
development of other industries in Scotland and the North East - and later, if exploration in
the Celtic Sea is successful, in Wales. We are not satisfied that the revenues accruing to the
nation from our own oil are fair in relation to the latest assessments of the size and value
of the fields, and Liberals will ensure that huge windfall profits are not made by the
licensees, many of whom are foreign concerns who have been given licences on exorbitantly
advantageous terms.

The Liberal Party advocates continuity of work on British nuclear reactor systems. The first
advanced gas-cooled reactors will come into operation during 1974, and it would be a grave
mistake to switch horses now to the American pressurised water reactor system, as it is
suggested we are likely to do. The evidence from the United States shows that they are less
safe. But energy policy should not consist solely of adjusting supply to meet whatever demand
is created by existing market forces. Governments can influence demand as well as supply by
pricing policy, incentives and capital projects. At a time when public spending on education,
housing and health is being cut, it is not acceptable to press on with the £3,000
million projected expenditure on Concorde, Maplin and the Channel Tunnel simultaneously, quite
apart from energy and environmental considerations. Since, however, air travel will become far
more expensive as jet fuel increases in cost, Maplin is no longer necessary, and the airlines
will not buy Concorde, the former should be scrapped and the latter severely curtailed.
Similarly, fewer people will be able to afford Continental motoring holidays with petrol at
£1 a gallon, as predicted by Lord Stokes, and the Channel Tunnel should therefore be
rail only, saving £240 million. These are all complex problems, and it cannot be
denied that we have been caught unprepared by recent changes in the energy situation. The
importance of the matter has been recognised implicitly by the Government, in the creation of
a separate Department responsible for energy, but there is still no authoritative body to give
impartial advice to both Government and Parliament. We need a permanent Royal Commission,
serviced by adequate professional staff and with funds to commission research by industry,
universities and government research establishments. This body would be required to publish
reports at regular intervals, the first of which should be on the long-term proposals in the
coal industry. Such reports should then be debated in Parliament.

Finally, the Government's long-term plan to reorganise the steel industry and close some
steelmaking plants should be reviewed in the light of the changed situation. Liberals believe
that concentration on bigger and fewer plants, on the scale adopted by the Japanese, of which
we have no experience, may prove detrimental, particularly if uncertainties over fuel supplies
continue. In addition, the economic and social dislocation within traditional steelmaking
communities affected by such closures provides a very powerful argument for a complete rethink
of strategy by both the Government and the European Coal and Steel Community.

## Social Reconstruction

Underlying all our policies for social reconstruction are the twin themes of participation and
individual freedom. Indeed the first is dependent on the second, for no person can play his
full part in society unless he has the freedom to do so, and this must include freedom from
discrimination, freedom from poverty and illness, the security of a roof over his head and the
prospect of an equal start in life.

We are still a long way from achieving these goals even in 1974. Once again promises have been
lightly made and cruelly broken because they have all been founded on assumptions of maximum
production and economic growth. Only when we rid ourselves of the false logic that sees all
social advancement as a product of economic efficiency will the well-being of society truly
become a social service.

### Health and Social Welfare

The reorganisation of the National Health Service has failed to unify the Health Service or to
ensure adequate public participation in the decisions which affect them. Liberals would bring
local authority welfare services into the main structure of a unified **NHS** by placing
them under the financial and administrative control of the area Health Authorities. We also
favour democratic election to Area Health Boards so as to ensure a strong voice for the
community.

The Chronically Sick and Disabled Persons Act 1970, having been a Private Members Bill, has, in
many areas, failed to give people the comprehensive services that were intended as it gives
local authorities additional responsibilities without providing extra funds to discharge them.
We would introduce a Bill encompassing the provisions of the 1970 Act, so that central finance
can be made available for its implementation, and extending provision for the disabled to
other fields such as education where urgent national provision is required in facilities and
finance.

The Liberal Party opposed the increase in prescription charges, the abolition of free school
milk in junior schools and increased school meal charges - all callously petty economies
introduced by a Conservative Government and all hitting directly at the poor and needy in our
society.

### Security without Means Tests - A Credit Income Tax Scheme

Liberals have long advocated a system of credit income tax whereby social security payments
would automatically be paid to those in need. The Government's tax credit scheme, however,
falls well short of the Liberal ideal because it values administrative efficiency above
adequate provision for social need, while the Labour Party still pins its faith in the
paternalism and stigma of the old means tested welfare system.

The Liberal scheme represents a major onslaught on the Means Test Society and would replace
most of the 44 means tests to which under-privileged and handicapped people are subjected.

The Liberal credit income tax scheme would sweep away existing tax allowances, family
allowances, national insurance benefits, nearly all supplementary benefits, housing subsidies,
rent and rate rebates, family income supplements and a wide variety of miscellaneous benefits.
All income would be taxed according to a progressive scale from the very first pound, but
*everyone* would be entitled to various 'credits' or allowances depending on
circumstances. Where the liability to tax exceeded the value of credits there would be net tax
to pay. Where the value of the credits exceeded the liability of tax the difference would be
paid to the individual. automatically, through the tax system. Thus a redistribution of income
could automatically be effected in favour of those needing help. There would be three types of
credit - personal, housing and social. The most important would be the personal credit. This
would be paid to every person and would be fixed at a level sufficient to guarantee a
subsistence living to that individual. The credit for an adult would be greater than for a
child. In the case of children under 16, the credit would be paid to the mother.

Then there would be a universal housing credit, paid regardless of whether the individual
lived in rented or owner-occupied accommodation.

The third category of credits would correspond to national insurance benefits. There would be
a credit for pensioners and for short- and long-term unemployment, sickness and disablement.

Whereas the Government scheme helps to tackle the poverty problem it has no intention of
guaranteeing in every case that a family with no further help from the state would have enough
to live on. The Liberal scheme does just this. It has estimated that a combined income and
social security tax of 40 per cent (against the present 36 per cent) plus a recasting of VAT
(but not on food) would be sufficient to operate the scheme. In the transitional period before
the full introduction of our credit income tax scheme we propose that family allowances should
be extended to the first child, and social security benefits proportionately increased with
increases in average earnings. This is particularly urgent in the case of those such as widows
whose circumstances can change so dramatically.

### Provision for our Pensioners

Pensioners have had a bad deal from both Tory and Labour Governments. Amid extravagant claims
that they have kept pace with increases in the cost of living, pensioners have actually been
left behind in the great wage race. Under the Labour government pensions only rose marginally
as a percentage of average earnings. The single pension represented 19 per cent of average
earnings in 1964: and 21 per cent by the time Labour left office in 1970. Under the
Conservatives the single pension has actually fallen back to 19 per cent of average earnings.

The Conservative Government's Occupational Pension Scheme incorporates a degree of
compulsion which is anathema to Liberals in forcing everyone to contribute to a second pension
scheme which will do nothing for today's pensioners. The last Labour Government had
similar idealistic plans.

Liberals reaffirm the Beveridge commitment to introduce a basic pension which provides an
adequate income irrespective of further financial provision. We would therefore increase the
retirement pension in stages to 50 per cent of average earnings for a married couple and 33.5
per cent for a single person. Thus we would spread over a number of years a cost which if
incurred immediately would amount to about £1,400 million. However, there would be a
considerable saving in supplementary benefits which at present are claimed by a third of our 8
million pensioners, at a cost of £400 million.

This first phase of our pension plan would be a transitional stage, prior to the introduction
of our full credit income tax scheme. Pensioners would be included in this scheme and would be
entitled to a personal credit and housing credit as well as a pension credit resulting in an
income of approximately two-thirds of average national earnings for a married couple. In
addition we would reduce the retirement age for men to sixty. We would also abolish the
earnings rule which penalises those who wish to go on doing a valuable job of work.

### Education

Liberals have long recognised that resources for education are limited and across the board
advance is impossible. We therefore took care to work out a ten-year development plan which
would allocate clear priorities. In our view these should be:

- The full implementation of the Plowden Committee's recommendations paying
 special attention to the need for pre-school education particularly in those areas
 of underprivilege and social deprivation, and the urgent reduction in the size of
 primary school classes to a maximum of 30 pupils.

- The reorganisation of secondary school education on non-selective lines. There are
 more ways than one to organise a non-selective secondary school and we would allow
 local authorities maximum flexibility within minimum standards to adapt their
 system to local conditions.

- A major reorganisation of curricula and school institutions to provide a more
 realistic last three years education for non-academic children.

- The abolition of the binary system of further education and the closer integration
 of Universities, Polytechnics and Colleges of Education. In particular we would
 seek to establish Community Colleges open to all age groups, with the ultimate aim
 of providing further education to all who desire it. To this end an adequate
 student grant through our credit income tax scheme would be provided.

### Homes for all

The Liberal Party opposes the present Government's housing priorities because it considers
them socially divisive.

They have severely cut local authority house building at a time when rising house prices have
hit those trying to buy their own home; rents have been raised under the Housing Finance Act
while, at the same time, wages have been frozen and then reduced by the three-day week;
finally, the Government has failed to reform the mortgage system and failed to act effectively
to curb land hoarding and speculation.

Liberal policy would fundamentally change our system of housing finance and property taxation,
providing help to householders and tenants on an equal basis and concentrating a two-pronged
attack on the housing shortage by building more houses and preserving as many houses as are
inhabitable. In particular, we would end the divisiveness and inefficiency in the national
housing programme by encouraging more flexible and enterprising policies which will allow for
greater co-operation between local authorities, particularly in respect of the homeless, and an
enhanced role for self-build organisations, possibly through the establishment of
Government-approved consortia.

These are our proposals:

- Freeze all rents during the period of economic restraint.

- Repeal the Housing Finance Act and replace it with a genuinely fair rents
 system geared to true housing costs and pay a single housing allowance to
 tenants and householders on an equal basis automatically through the tax
 credit system.

- Make all new urban office building contingent on the grant of a certificate of
 social need and concentrate the resources of the building industry on the
 housing programme.

- Institute a crash programme of house-building in both public and private
 sectors with full use being made of industrialised building techniques.

- Concentrate on housing renovation and repairs wherever possible, rather than
 on wholesale demolition.

- Oblige Building Societies to stabilise interest rates by drawing on their
 reserves. Introduce new types of mortgage for first home buyers with low
 level initial repayments which rise with increased incomes and the cost of
 living.

- Withdraw tax concessions and improvement grants for second home purchasers.

- Give greater financial encouragement and responsibility to Tenants'
 Co-operatives and Housing Associations.

- Give local authorities power to acquire at cost price those properties which
 have stood unoccupied for three years.

## Paying for Security - A Radical Redistribution of Wealth

To finance all these proposals, there must be a radical redistribution of income and inherited
wealth, the credit income tax proposals being the principal instrument for the former, and the
Liberal proposal for a Gifts and Inheritance Tax, to replace Estate Duty and related in its
incidence and rate to the gift or legacy and the wealth of the recipient, for the latter.

### Site Value Rating

We must also ensure that a proper contribution is made by those who own property and land.

As a means of reforming the present rating system which penalises those who improve their
property while subsidising those who let it decay, Liberals have long advocated that rates
should be levied on the value of the site only, and not on the value of the site and buildings
as now. This would enable much of the present burden of rates to be shifted from householders.

The rating of site values would also be levied on land which, after proper inquiry, had been
zoned for development but which had not been developed within a reasonable period. This would
be an effective punitive measure against land hoarders and speculators.

Site value rating also recognises the undisputed fact that today a major source of wealth
resides in development land and property rather than in income. Over a period of years there
is no doubt that the rating of land values could gradually replace income tax as a main source
of revenue. It would also recover for the community a proportion of the increased value of
land created by mere assignment of planning consent.

## The Status of Women

Liberals will put particular emphasis on securing equality of opportunity and equal treatment
for women. As a nation we can no longer afford to ignore the talent and energies of half our
population as we have done so often in the past. We would legislate to ensure equal
opportunities for women in all spheres of activity particularly in regard to employment,
remuneration and social interaction. In particular we advocate the establishment of an
independent Sex Discrimination Board, establishment of the principle of equal pay for work of
equal value, tougher legislation to outlaw restrictive and discriminatory practices in
industry and equal social security benefits for men and women, with adequate provision for
maternity leave. Our aim is to provide the opportunity for women who so wish freely to seek
satisfying goals other than a lifetime of childbearing.

## Civil Liberties - A Bill of Rights

Every person is entitled to protection from arbitrary interference in his personal and private
affairs. Liberals are concerned that in our increasingly complex and bureaucratic society,
fundamental freedoms should not be impaired or the individual citizen put at a disadvantage in
his dealings with authority. Hence we have long advocated that minority and individual
liberties should be guaranteed through a Bill of Rights effective in all parts of the United
Kingdom and at all levels of Government and administration. Among protected guarantees should
be the freedom of speech and assembly, the right to a fair trial, and protection against
discrimination on the grounds of race, religion, sex or national or social origin. We would
establish a small Claims Court where redress for minor injustices could be sought without
recourse to the complexity and delay of the court circuit. Finally, we oppose any laws which
penalise people retrospectively for actions done in the past, when through lapse of time they
have become immune from prosecution or administrative action.

## Immigration and Race Relations

The Liberal Party regards freedom of movement as an important basic principle. However, since
1965 we have accepted that a densely-populated country such as ours cannot, at present,
adequately cater for all those people who wish to come here. Accordingly we have supported a
system of regulation whereby would-be immigrants are allowed to enter the United Kingdom only
if they possess a work voucher showing that they have an actual job waiting for them or they
possess particular skills which are needed in this country. While opposing illegal entry we
strongly oppose the retrospective provisions of the 1971 Immigration Act and would take
immediate action to remove these and other discriminatory clauses in that legislation.

We believe that we have a primary obligation to citizens of the United Kingdom and colonies,
and also to Commonwealth citizens whose right to register as **UK** citizens after five
years' residence in this country was removed by the 1971 Act and should be reinstated.
We believe that a Royal Commission should urgently examine and clarify the rights of **UK**
and Commonwealth citizens on the lines outlined above. In the meantime husbands and children
from Uganda should be allowed to join refugees who have settled here. We are opposed to all
forms of racial discrimination. The goal of integration is of critical importance and there
should be a separate Minister for Community Relations and greater financial support for the
Community Relations Commission.

## The Future of Our Community

### The Environment

Liberals recognise the need for an urgent re-appraisal of the use man is making of his
material environment. We are concerned that in the present economic crisis panic measures
should not be taken for the sake of short-sighted expediency, that might cause irreversible
damage.

The Liberal Party was the first to adopt a National Population Policy which includes free
family planning advice as part of the NHS and a programme of education stressing the need
for responsible parenthood in this era of scarce resources.

We insist on stringent controls on the use of all potential pollutants and in particular the
establishment of a regionalised Pollution Inspectorate with investigatory and punitive powers
over the use of noxious substances. In particular we are concerned that there should be the
maximum recycling of all materials and that individuals and communities should have the legal
means to resist, where necessary, threats to their environment from Government or commercial
agencies.

The protection of our environment must be extended to the preservation of natural resources
including our sources of energy, our landscape and our country side. We strongly support the
principles of nature conservation and assert that the co-ordination of policies in other
fields such as agriculture and transport must be pursued urgently.

Finally, the global environment, of which Britain is only a small part, can only be
permanently preserved through international co-operation and support for United Nations
environmental agencies.

### Transport

Transport is inextricably bound up with overall development and must be integrated with
national, regional and town and country planning. Our main priority must be to provide for
integrated policies which acknowledge the changed roles of our various modes of transport.
Conservative and Labour Governments have consistently worked on a piece-meal basis, Liberals
assert that it is time to work out an overall strategy. In particular we advocate the
prohibition of any further closures of railways and waterways until a study group has reported
on the possibilities of further transferring freight carriage to rail and water. A new attitude
must be taken to our railways which takes into account social and environmental factors as
well as capital expenditure.

Transport has become a social service in many cases, particularly the regions and rural areas.
We believe that County Councils should collaborate with the Ministry of Transport in promoting
research studies into rural transport needs and preparing schemes for meeting them. Liberals
hold the view that there must be a limitation of access for private vehicles to designated
areas of city and town centres. Adequate parking facilities on the outskirts must be
complemented by free, reliable public transport within these areas. Liberals would also
establish Regional Transport Authorities to determine priorities of investment in all forms of
transport, co-ordinate long-term planning of main roads, ports, airports, railways and inland
waterways. Immediate attention must be given to assess the impact of increased oil prices upon
our transport infrastructure.

## Agriculture and the Common Market

Liberals are well aware of the grave difficulties being experienced at the present time in
many sections of the agricultural community. The Government, so far, has been deaf to the
Liberal warnings and appeals concerning the plight of the dairy farming and livestock sections
of agriculture. This could result in an actual food shortage in this country, particularly with
regard to fresh foods arising from the excessive slaughter of breeding animals by farmers who,
overwhelmed by the high cost of feedingstuffs and the very high interest rates, believe that
their future is extremely insecure.

Help should be given to these sections of agriculture immediately, for the sake of both the
farmer and the consumer. To build up to a sufficient level of profitability for the farmer and
maintain a decent basic price for the consumer can be achieved in a variety of ways. One way
which is capable of instant implementation is to compensate the consumer by raising pensions,
and increasing family allowances which should also be extended to the oldest child. In our
view it is necessary to create a farm structure which will encourage young men to enter
agriculture as a career, with a possibility of achieving management and ownership. In the
immediate term an improved wage structure for the industry must be established. The
Agricultural Credit Corporation must also be swiftly expanded into a Land Bank. Loans would be
available at a fixed rate of interest for projects which might properly be regarded as
medium-term, in particular for the purchase of livestock and for projects now covered by
Government grants, but should not be available for the purchase of farms or of land. In the
present climate, it is essential that United Kingdom Marketing Boards should be retained and
voluntary co-operatives encouraged. The Annual Price Review should certainly be retained but be
coupled with a five-year strategic review.

In order to help keep down the price of land and make farms more readily available to genuine
farmers, agricultural losses should no longer, in any circumstances, be allowable against
profits from other businesses. Furthermore, Estate Duty relief should be restricted to bona
fide agriculturalists. This would help prevent the major transference at the present time of
city assets into agricultural land. Agricultural land in productive use would be zero-rated
under our policy for Site Value Rating.

The Common Agricultural Policy of the European Economic Community must represent a just balance
between the interests of consumers, efficient producers and international trading. The widening
of the Community has already resulted in a less protectionist attitude but Britain must make
an all-out effort to broaden and deepen this attitude. In the **UK** we do not have the
problem, which has existed in the Community, of uneconomic farming units and we accept the
need for measures to reduce their number. Finally, Liberals believe that there should be a
rapid expansion of domestic production and an energetic drive by this country to secure allies
in the Common Market for a major modification of the Common Agricultural Policy, so as to
secure reasonably-priced food for the consumer and an acceptable return for the farmer.

## Power, People and the Community

The Liberal Party believes in devolution, decentralisation and electoral reform. We favour the
immediate implementation of the Kilbrandon recommendation to establish elected Parliaments in
Scotland and Wales and to this effect a Bill has already been introduced into the House of
Commons by Liberal MP, Jo Grimond.

In the long term we would establish a federal system of Government for the United Kingdom with
power in domestic matters transferred to Parliaments in Scotland, Wales and Northern Ireland
and Provincial Assemblies in England. The Westminster Parliament would then become a Federal
Parliament with a reformed second chamber in which the majority of members would be elected
on a regional basis. If Britain is to have effective and successful centres of commerce and
finance outside London there must be a real devolution of political and economic power to the
regions. Recent Local Government reform has removed decision-making even further from the
people. We advocate the setting up of Neighbourhood Councils below the District Councils to
act as efficient transmitters of protest and suggestion from the community.

Liberals would introduce proportional representation by the single transferable vote for all
elections. The present electoral system buttresses the discredited 'two- party
system' of confrontation. Electoral Reform, while giving fairer representation to
different sections, will make co-operation between them easier. The success of proportional
representation in Northern Ireland in uniting a divided community through a power-sharing
executive is strong testimony for its introduction in Britain as a whole to heal the rifts in
our society.

Parliament has lost touch with the country. It must be brought back to the people and its
proceedings opened up to the broadcasting media. Its formality must not deter improvements in
the organisation of business to make Parliament more efficient and effective, with really
full-time members elected for fixed five-year periods.

Liberals urge the establishment of direct elections to a European Parliament which would give
full democratic power of control over Community activities.

Maximum opportunity must be offered at all levels for involving citizens in the process of
Government, through the fullest possible provision of information.

## Europe and the World

We must not allow our present national crisis to let us forget the immense problems of
instability in the world, that have loomed and threatened in the last few months. The
need for international co-operation and understanding has never been more pressing and the
contribution of Britain to building a better world as well as our hopes of a better life in
these islands depend on partnership with our democratic neighbours.

### The European Economic Community

Liberals have always insisted on the duty of Britain to play a leading role in transforming
Western Europe from warring rivalry into a united community, hence our consistent support
for British membership of the Common Market. Further more, it is only as a full participant
in the world's largest trading entity that we can hope to solve our chronic balance of
payments problem and at the same time develop the political unity that will guarantee peace
and free us from the spectre of domination by the super powers.

We deplore the delay in joining the Common Market for which Conservative and Labour
Governments were equally to blame, but we are even more critical of the narrow-minded
nationalism of many so-called 'internationalists' in the Labour Party who still
shun their responsibility to represent their constituents in the European Parliament. We also
condemn the Conservative Government for abdicating their great opportunity to develop the
Community in a democratic and outward-looking manner in favour of meek compliance with the
interests of the French Government. The present Common Market structure is not what we voted
for and the Liberal representatives in the European Parliament have lost no opportunity to
point the way in which we feel the Community should develop. Liberals are thus effective but
constructive critics of the policies of the Common Market. We want to reform its institutions
to see real power exercised by an elected European Parliament. We want to see the progressive
reduction of the protectionist aspects of the Common Agriculture Policy, an imaginative and
effective regional policy and the harmonisation, not bureaucratisation, of economic and
social policies, for the benefit of all members. Finally, we want to see the adoption of an
outward-looking trade policy towards the rest of the world and particularly the developing
countries. We believe that the great purposes of the Community can be achieved with
far-sightedness and vision.

### Foreign Affairs and Defence

Looking beyond the **EEC** we are in favour of the maintenance of **NATO** until such
time as a new European security system based on mutual withdrawal and the mutual reduction of
forces in the East and West has been successfully negotiated. Within this limit we support
efforts at détente and in particular the Ostpolitik of the West German Government. We
are opposed to the admission to the European Community of any country which has not a
democratic form of government, and are unhappy about the association with **NATO** of
countries like Portugal and Greece which are not democratic. The purpose of **NATO** should
be to defend democracy.

But the maintenance of our traditional alliances is also of critical importance if we are to
return stability to world commodity and money markets and absorb the massive disruption that
has and will continue to be caused by the quadrupling of oil prices. Positive international
agreements are vital to bring a new radical world monetary framework that could save the world
from damaging economic recession and exacerbated racial tension. Finally, it is essential
that through a new monetary framework Britain and the developed world recognise the plight of
the third world and begin to grant realistic exchanges for raw materials and commodities that
will raise the Third World from starvation and deprivation.

## Conclusion

This is the Liberal Party's programme for national reconstruction. It is fundamental
because we believe that the crisis which faces us as a nation is deep-seated and requires a
fundamental response. It is ambitious because the multiple crisis that faces us offers the
opportunity to put the past behind us and embark on a new era of reconstruction. Above all it
is idealistic because we must raise our sights beyond selfish personal concerns, we must stop
internal feuds which weaken and divide us and look to a future without class conflicts,
partisan bitterness and excessive self-criticism.

**Liberal / SDP / Libdem Manifestos**