Political positions
Davey identifies as a liberal politically, telling the Total Politics magazine: "I personally think liberalism is the strongest political philosophy in the modern world. Socialism has failed. I think even social democracy, the watered down version which Labour sort of understand depending on which day of the week it is, is not very convincing, and I don't really understand where the Conservatives are coming from because they have so many philosophies within one party. There's no philosophy of the modern Conservative Party." He has said that he believes "in the free market and in competition", and during a parliamentary public bill committee debate in November 2010 argued in defence of privatisation, deregulation, and the private sector against Labour MP Gregg McClymont.
Davey describes himself as "an economist by trade." He was a supporter of the coalition government, writing in a 2011 column for London newspaper Get West London that the coalition would "restore liberty to the people" and that "Labour's nanny state will be cut back" in reference to the coalition's policies on civil liberties. In 2012, Davey predicted the coalition government would be more pro-European Union than Tony Blair's Labour government, praising Conservative ministers and the then Prime Minister David Cameron for relations they had developed with European counterparts. Retrospectively, Davey said of the coalition in 2017: "I think the coalition government, when history looks at it, will go down as actually a pretty good government."
In 2017, Davey warned against a Conservative Party proposal for fines on large internet companies who fail to remove extremist and terrorist material from their platforms within 24 hours, which he claimed could lead to censorship if companies are forced to rush to remove such material and pointed to Germany as an example of where this approach has the potential to lead to censorship. He thinks technology giants must not be treated as the "enemy" and accused the Conservatives of declaring an "all-out war" on the internet. Similarly he is critical of Conservative proposals to weaken encryption because, according to Davey, encryption is important for individual security and helping businesses to thrive.
In 2018, after the government's Investigatory Powers Act mass surveillance law was declared to be in breach of EU law, Davey commented that UK surveillance needed a "major overhaul" which puts "our freedoms and civil liberties at its very core." Davey's party opposes the mass surveillance law and had voted against it.
Davey is supportive of market solutions in the conventional energy sector, The Guardian describing him as a 'zealot' for markets. He has been highly critical of price controls such as those proposed by former Labour leader Ed Miliband; he considers them to be detrimental to competition and lowering prices for consumers. He has promoted removal of barriers to entry to encourage new entrants into the energy market; "We began with deregulation. This stimulated a doubling of smaller firms" he wrote of his policy as Energy Secretary in 2014. Additionally, he welcomed the rise of consumer switching websites. He has, however, supported "properly designed and carefully targeted" short-term subsidies for some emerging green energy technologies in order to meet climate change targets.
When cutting green energy subsidies as Energy and Climate Change Secretary, Davey said he "tended to try and marketise the reduction so people were competing for any remaining subsidies" through Contracts for difference (CfDs). After leaving the office of Energy Secretary in 2015 he explained that he had planned to "eliminate subsidies over the coming years" and had previously stated, "ultimately I don't want the government—the Secretary of State—to decide what that low carbon mix is ... I want the markets and technology development and innovation to decide what that mix is."
He has argued in favour of both nuclear power and fracking as potential energy sources, and natural gases as transitional fuels, though he has warned that there should not be an over-reliance on them. Davey has previously argued against nuclear power but in 2013 he urged fellow Liberal Democrat members to support nuclear power, stating, "I've changed my mind because of climate change."
Davey does not support the United Kingdom rejoining the European Union in the short term, in 2020 stating that the idea that people would want to consider re-joining the EU in two or three years' time as "being for the birds". In January 2021 he clarified this position, stating that he is "determined the Liberal Democrats remain a pro-European party committed to the UK being members of the European Union again", adding that his party is "practical" about the matter.
Davey opposes a second Scottish independence referendum arguing in 2022, that it would be "damaging to recovery."
Following the murder of Sarah Everard in March 2021, Davey said that "men have got to change" and suggested that we "educate boys and men to show more respect". In May 2021, alongside celebrities and other public figures, Davey was a signatory to an open letter from Stylist magazine which called on the government to address what it described as an "epidemic of male violence" by funding an "ongoing, high-profile, expert-informed awareness campaign on men's violence against women and girls".
A supporter of transgender rights, Davey believes that transgender women should be given the same rights as cisgender women, which he made clear in a series of interviews on the day that a report into violence against women, commissioned in the wake of the Everard's murder, was published.
Davey criticised Boris Johnson after the 2021 North Shropshire by-election where a Lib Dem candidate, Helen Morgan overturned a Conservative majority of nearly 23,000 to win the seat. Davey said it was a "watershed moment in our politics. Millions of people are fed up with Boris Johnson and his failure to provide leadership throughout the pandemic and last night the voters of North Shropshire spoke for all of them."
Responding to Keir Starmer and Rachel Reeves' first budget in October 2024, Davey described the government's plans on social care as “a good start” but inadequate. He also said that he thought that the budget may not offer British people "a sense of hope, urgency and the promise of a fair deal" and that more could have been done to help the more vulnerable people in society. In October 2024, Davey said he was “very minded” to vote against the Terminally Ill Adults (End of Life) Bill to legalise assisted dying for terminally ill adults, saying the UK should “do much better” on palliative care.
Davey has used the scandal surrounding Peter Mandelson's relationship with sex offender Jeffrey Epstein to attack Starmer's judgment and call for greater transparency. Davey's criticism has focused on the handling of the appointment, the vetting process, and the impact on Epstein's victims. He described Mandelson's appointment as "another car crash" for the Labour government and questioned why Starmer proceeded with the appointment despite Mandelson's well-known history. After Mandelson's sacking, Davey demanded that Starmer "come before Parliament and explain" his decision-making process. In a parliamentary debate, Davey agreed with a Labour MP's argument that professional diplomats should be appointed as ambassadors instead of politicians. The Liberal Democrats have called for an independent investigation into what was known about Mandelson's links to Epstein at the time of his appointment. Deputy Leader Daisy Cooper called for a full review of vetting procedures, stating it was "extraordinary" that Mandelson could have been appointed without the Prime Minister knowing all the facts. Like the Conservative leader Kemi Badenoch, Davey called on Starmer to apologise directly to Epstein's victims for appointing Mandelson. He asked how it must have felt for victims to see "another of Epstein's closest friends" made a British ambassador. Davey also voiced concern about the timing of the scandal, just before a state visit by Trump, who also had connections to Epstein. Davey urged Starmer to question Trump about his relationship with Epstein during their meeting.