UK Markets closed

UPDATE 1-Claiming to be UK's new 'party of business' UK Lib Dems enter election spending race

By William James

(Updates after speech)

By William James

LEEDS, England, Nov 15 (Reuters) - The anti-Brexit Liberal Democrats claimed the mantle of Britain's "party of business" on Friday, setting out their proposed fiscal rules while dismissing rivals' plans for the economy as unrealistic and undeliverable.

Much of the early stages of the campaign to win a Dec. 12 election, and with it the right to take the country's next step on Brexit, have focused on spending plans for the world's fifth largest economy.

The two main parties, Boris Johnson's Conservatives and Jeremy Corbyn's Labour, have been promising large investment in infrastructure and public services, marking a clear shift towards more borrowing after nearly a decade of austerity.

On Friday, the third-placed Liberal Democrats' set out their own plans, promising 100 billion pounds ($128 billion) to tackle climate change, and budget rules that would allow higher capital investment alongside a commitment to a small budget surplus.

Davey said the business community's frustrations over three years of uncertainty caused by voters' decision to leave the European Union - and the government's failure to deliver it - had created an opportunity for his centrist party to win over voters who typically back the Conservatives.

"Brexit is precisely the wrong answer to all of Britain's economic problems, and will make them all worse," Davey said.

"Liberal Democrats are now the party of business," he said. "Not just because we would stop Brexit ... But (because) in our economic plan we want to back business with tax reform with digital networks and with strong competition policy."

The Liberal Democrats trail the Conservatives and Labour in opinion polls and are expected to fall a long way short of winning the election outright. But they could have an important role if neither the Conservatives nor Labour win a majority and have to find a partner in order to form a government.

Speaking in the northern English city of Leeds, Davey said there would also be a 50 billion pound dividend from cancelling Brexit.

Last week, Labour and the Conservatives both set out large increases in infrastructure spending - a sign that whoever wins the election, borrowing is likely to increase.

Labour's plans were the larger at 400 billion over 10 years, the Conservative pledged an extra 20 billion per year for five years.

Davey said both plans would be derailed by Brexit-related labour shortages and economic disruption. The Liberal Democrat plans would amount to 130 billion pounds of infrastructure investment over five years.

"This is the new political economy: Liberal Democrats as the party of fiscal rectitude, versus the Tories (Conservatives) and Labour as parties of fiscal incontinence," Davey said. (Reporting by William James; editing by Stephen Addison and Andy Bruce)