The Liberal Democrats say traditional business can rebuild the UK’s economy. Peter Elson reports

THE reintroduction of regional stock exchanges is among Liberal Democrat business manifesto proposals.

Liberal Democrat shadow business, innovation and skills minister John Thurso, a successful hotelier, wrote the proposals with leader Nick Clegg.

“I’ve tried very hard with this manifesto to create something credible which we can deliver,” he said.

“You can’t have a civil society without wealth, but governments can’t create wealth, businesses do that.

“Therefore, business drives the Treasury in getting a stable economy and putting public finances in order.

“That has to be done before we get off the starting line. We must sort out the financial sector.

“The financial services industry is essential, but it must be the servant of commerce and industry, not the master of speculation.

“Too much money and human resources has been poured into the City of London and not enough into industry.

“We need a fundamental rebalancing which takes longer than one Parliament.”

The economy must be protected by breaking up the banks and reducing the budget deficit.

There must be a high-level philosophical discussion on the role of government in business and how to promote it.

There should be a review of the goods and services people need, with the goal of creating a long-term mixed and sustainable economy.

In creating conditions for businesses to thrive, the Government must also establish a stable tax platform.

The tax system must be rebalanced and made less complex, employment taxes reduced and business rates reformed.

“There are two matters in particular to be addressed,” he said.

Firstly, the Government needs to make regulations much more business friendly, cutting red tape.

Secondly, it should give more positive support to business.

“Ken Clarke, the Tory business shadow, has likened this to the 60s and 70s government habits of picking winners and losers,” said John Thurso.

“But look to growing economies like India where its government makes strategic decisions to back certain IT or green companies.

“There is a time before the market takes over when government has to help strategically.

“We need a cultural change to alter the drivers of wealth so we can invest in real jobs.

“By relying on banking and the financial services sector, we’ve gambled our entire wealth on City derivatives.

“Instead, we should be using business knowledge to form a higher degree of innovation and engineering.

“The UK is good at inventing things, everywhere from the hi-tech lab to the local workshop or someone’s garden shed. But we’re not turning this into commercial reality, partly due to a lack of available funding.

“There has to be more equity finance, which has not been tried sufficiently.

“We must ensure affordable access to credit for businesses and create new mechanisms to provide equity finance to smaller businesses.

“The regional development agencies should be reformed to provide focused business support and give smaller businesses fair access to public sector procurement.

“I meet businessmen around Britain who have built up companies and made £10m-15m,” he said.