Lib Dem leader Ed Davey visited Devon at the weekend to congratulate the party’s new MPs, saying he was “proud” of their achievements in last year’s general election.

Mr Davey, whose first port of call was the Sirona Therapeutic Horsemanship charity in Totnes, said: “I'm really proud that we got our best result in 100 years at the last election and in Devon.

“To have six Liberal Democrat MPs in the county is just really brilliant. I'm really proud of the way they've been championing their local communities.”

But although the Liberal Party gained six new MPs in Devon last July, it is the Reform Party that is now surging ahead in the polls.

According to recent analysis published by The Observer newspaper, moderate voters are turning to Nigel Farage’s party and even threatening to take more seats from Labour than from the Conservatives.

Mr Davey, who was accompanied by South Devon MP Caroline Voaden, hit back, saying: “People look at us and see us as local champions, and we're far more rooted in the community than Labour, the Conservatives or Reform.

“We don't have an agenda like Reform do of privatizing the NHS...or of undermining British farmers by having a trade deal with Trump to allow American farmers to sell their produce,” he said in reference to suggestions the UK government would be forced to make concessions in order to reach a trade agreement with the US.

Mr Davey’s visit comes shortly after the Bank of England’s decision to lower interest rates to 4.5 per cent in response to a sluggish economy, amid fears the country was sliding towards stagflation - a combination of high inflation and low growth.

There are also concerns about the impact higher energy and water bills, and the hike in employers’ National Insurance (NI) contributions, will have on businesses and the wider economy when they come into effect in April.

Asked how his party would address the UK’s flagging fortunes, Mr Davey said: “After the mess the Conservatives made of the economy, it's extremely disappointing that Labour haven't turned things around, and if anything, made them worse.”

He said raising NI employer contributions had “clobbered” not only businesses but health care providers and charities.

He declined to say whether he would consider raising corporation tax, or a one-off wealth tax, which could raise as much as £262bn for the economy, according to a 2020 study by the Wealth Tax Commission.

Instead, he called for an EU-UK customs union, which he said would boost trade and help local farmers, fishermen and small businesses.

“We first need to find ways to get growth...to see if we can improve trade with Europe. We've advocated for a customs union because we can take the barriers down,” he said.

He addressed the financial crisis surrounding local councils, with Devon County Council (DCC) facing huge debts, including a £163m deficit on special needs education (SEND) funding, hinting it could be a decisive issue in the forthcoming local elections.

“Devon County Council have a very bad record on highways and a very bad record on SEND, and one of the things that will be a big issue in the May local elections will be holding the Conservatives to account for their failure over many years.”

He said DCC had “made a complete hash” of both highway repairs and children’s services, saying that the council had been letting down “our children”.

Another hot issue in the county is river pollution and the performance of South West Water, which has been accused of under-investing in the sewage system for decades.

Mr Davey said all water companies have “got away with blue murder for a long time”, but rejected calls to renationalise the industry, opting instead for the creation of US-style public benefit companies.

He said: “They have obligations to things that are vital for the wider public, so they can't make a profit unless they've met their environmental obligations. I don’t have a problem with profit, but you've got to do your job first, and your job is to make sure the water’s clean and that it's not dangerous for animals or for human beings.”

In response to the widespread criticism of the effectiveness of regulatory bodies, he said he also supported calls to bring Ofwat, the Environment Agency and the drinking water inspectorate under one umbrella, called the ‘Clean Water Authority’.

Regarding the international stage and US president Trump’s highly controversial comments on trade tariffs and his intention to force Palestinians out of Gaza and redevelop the strip, he said:

“Trump is just full of rambling nonsense, and I don't want to give him credit for having any credible thought at all. What he said is deeply worrying and troubling - if you can make sense of it.

“I think any reasonable people realize that these ramblings are dangerous. We have a very fragile ceasefire and he comes along like a bull in a china shop.”

He declined to say whether he agreed with statements from the UN and a raft of humanitarian aid organisations that Mr Trump was calling for the ethnic cleansing of Palestinians, but added:

“It's bad for the security of Palestinians and Israelis that he talks like this. The priority should be getting aid in for the Palestinians who've suffered so much, as well as keeping the ceasefire and getting the hostages out.”