The party will kick-start the building of new homes and drive the low carbon economy in a one-off first year spending spree for builders.
More controversially the Lib Dems plan to do a VAT balancing act. VAT on building repair and new build will be brought to the same level, set at a revenue neutral balancing point.
In a fully costed manifesto that promises a fairer society, the Lib Dems go farther than Labour and the Tories towards embracing the industry’s call to get people working bt ploughing money into housing .
But even the Lib Dems fall short of the scale of ambition demanded by the construction industry. And much of the gains will be overshadowed by stinging cuts to prison and road building.
Overall, the Lib Dems say they can save around £10bn in Government spending each year.
Launching the manifesto, Lib Dem leader Nick Glegg, said: “The other parties have airbrushed the economy out of this election. They are treating people like fools.”
Savings would come from scrapping ID cards and the national intercept database, the Eurofighter military jet contract, and scaling back the HomeBuy shared ownership scheme.
Other savings are expected from reform of the regional development agencies and scrapping seven quangos.
The Lib Dems have set aside £1.1bn to bring 250,000 empty homes back in use. Grants will be available to social housing providers while private owners will have access to cheap loans to encourage them to renovate buildings.
To get councils building again, the Lib Dems say they will explore reforming public sector borrowing requirements to free councils to borrow money, secured against assets, to build a new generation of council homes. Councils would be allowed to keep cash from the sale of these new homes.
Nick Clegg’s party also promises to begin a national programme to insulate homes, paid for by the savings from lower energy bills. There will also be a programme to better insulate public buildings, costing around £400m.
At the same time they plan to tighten the building regulations to ensure all new homes are made more energy efficient.
An Eco Cash-Back scheme will be launched for one year that will pay out £400 to households that upgrade boilers or install double-glazing. Money will also be set aside for schools to improve the energy efficiency of their buildings.
The package of measures includes investing up to £400m upgrading shipyards in North East and Scotland to build offshore wind farms.
The Liberal Democrats will scrap the current Government’s prison building programme in a prison reform plan that should save around £700m a year. The Lib Dems will put emphasis on rigorously enforced community sentences and scrap the programme to build new prisons.