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Liberal Democrats Propose Replacing UK Treasury

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  Published in Business and Finance on Thursday, February 12th 2026 at 7:59 GMT by BBC
      Locales: District of Columbia, Virginia, Pennsylvania, UNITED STATES

London, UK - February 12th, 2026 - The Liberal Democrats have today unveiled a sweeping proposal to fundamentally restructure the UK's economic governance, advocating for the complete replacement of Her Majesty's Treasury with a newly established, independent economic body. The plan, presented by Treasury spokesperson Sarah Olney, aims to shift the focus from reactive, short-term fiscal management to proactive, long-term strategic planning, and a greater emphasis on regional economic development and tackling inequality.

The Liberal Democrats argue the current Treasury structure is inherently flawed, prioritizing immediate political considerations over sustainable economic growth. They contend this cycle of short-termism hinders the UK's ability to address crucial long-term challenges such as climate change, an aging population, and the persistent regional disparities that plague the nation. The proposal isn't simply a renaming exercise; it's a complete reimagining of how economic policy is formulated and implemented.

"For too long, the Treasury has been held hostage to the political cycle," Olney stated during a press conference this morning. "Each budget becomes a battleground for short-term wins, rather than a considered effort to build a resilient and equitable economy for future generations. This new body would be shielded from that pressure, allowing it to focus on the big, long-term challenges facing the UK economy - challenges like leveling up, green technology investment, and future-proofing our industries."

The proposed new body, currently unnamed, would operate with a significantly broadened mandate. Unlike the Treasury, which primarily focuses on managing government finances and taxation, the new entity would be responsible for shaping overall economic strategy, identifying emerging trends, and advising the government on long-term investment priorities. Crucially, it would also have a dedicated focus on regional economic development, aiming to reduce the gap between London and the South East and other parts of the country. This commitment is seen as a direct response to criticisms of the 'London-centric' nature of current economic policy.

The Liberal Democrats envision a structure that promotes greater accountability to the public. This would involve regular public reporting on economic forecasts, policy recommendations, and performance metrics. Olney suggested the possibility of a board comprised of economists, business leaders, and representatives from civil society to provide independent oversight and ensure transparency. "We want a body that is truly answerable to the British people, not just to the government of the day," she emphasized.

While details are still being fleshed out, the Liberal Democrats have indicated the new body would require significant legislative changes, including a restructuring of existing economic powers and responsibilities. Funding would likely come from repurposing existing Treasury resources, with the potential for increased funding allocated to regional development initiatives.

Predictably, the Conservative party has already voiced strong opposition. Shadow Chancellor Richard Harding dismissed the proposal as "economically naive and destabilizing." He argued that the Treasury provides vital economic stability during periods of uncertainty and that dismantling it would create unnecessary risk. "The Treasury's experience and expertise are crucial, particularly in a volatile global environment. Replacing it with an unproven entity would be reckless," Harding said in a statement. Conservative sources suggest the plan is a political maneuver designed to portray the Liberal Democrats as bold and innovative, but ultimately lacking in practical economic understanding.

However, some economists have cautiously welcomed the proposal, acknowledging the limitations of the current system. Dr. Emily Carter, a Professor of Economics at the London School of Economics, stated: "The idea of an independent body focusing on long-term strategic planning is appealing. The Treasury is often forced to react to immediate pressures, and a dedicated body with a longer-term perspective could be beneficial. The key will be ensuring that the new body has sufficient authority and resources, and that it remains genuinely independent."

The Liberal Democrat plan is expected to dominate the economic debate in the lead-up to the next general election. While the Conservatives are likely to strongly oppose the overhaul, other parties may see it as an opportunity to address long-standing concerns about economic inequality and regional imbalances. The proposal raises fundamental questions about the role of government in managing the economy and the balance between short-term political expediency and long-term sustainable growth. It also sparks a wider discussion about whether existing institutions are fit for purpose in a rapidly changing world.