The Green Party has plans to put the country back to satisfying and meaningful work What we’ve seen over the past year is an economy in turmoil, leaking jobs and eating into pensions and savings. It’s so obvious that business as usual doesn’t work.We have to build a sustainable economy and society, otherwise there’s no future for anyone.
Cutting investment now could lead to a double-dip recession, while the Green New Deal promises job security and economic stability.
The financial system of Britain and the world has grown out of all proportion to the real economy it is supposed to serve. By building on easy credit and financial speculation, it has lost touch with its physical underpinnings.
Casino capitalism has become more important than making things and providing services. Houses have become speculative investments instead of somewhere to live.
Part of being sustainable is being more equal. An unsustainable, polluting economy affects us all, but it’s worse for the poor than the rich – the poor live where the air and water is most polluted, the environment least healthy. We have one planet, and the best way to take care of it is to share its riches more fairly. No one must be so poor that they don’t have a stake in the eventual success of our efforts.
We need policies for both sustainability and fairness – one doesn’t work without the other. That is why we argue for the same carbon quota for all, better pensions and free insulation – because they are fair, and good for both people and planet.We must use resources wisely and divide them up fairly.
Inequality in British society begins at birth, or even before, with low birth-weight and infant and child mortality significantly higher among economically disadvantaged groups.
Around one in five children continue to live in low-income households. Children from these groups are less likely to complete GCSEs and A levels, and to attend universities.
Minority ethnic groups, lone parents, and people without formal qualifications have an unemployment rate of about double that for the total working-age population. The richest 1 per cent of households own more than 20 per cent of Britain’s wealth.
The gross inequalities continue throughout life, with around 25 per cent of pensioners living in poverty, and significant disparities in life expectancy, particularly among men, associated with income.
And inequality has risen in recent years, most steeply under Mrs Thatcher’s Conservatives since 1979, before declining a little in the early years of New Labour, only to rise again in recent years. Inequality is not just wrong in itself. It makes us ill, causes us to die earlier, raises crime levels, depresses educational achievement, and creates stress and mental illness.
New research has shown that more equal societies do better, and that equality – rather than simple average wealth or even lack of poverty – is the main route to a better society for everyone, rich and poor.
Underpinning all this is green economics, which is the only realistic economics. Greens understand that we need a one-planet economy that uses no more than the resources it gives us, not the fantasy multi-planet economy of the other political parties that will one day hit the buffers with a catastrophic crash. The very way we measure economic ‘success’ today shows the bankruptcy of business as usual.
‘Gross Domestic Product’ measures all the economic activity in Britain – even the money spent on picking up the pieces of our unfair and unsustainable society. Prisons and pollution are as ‘productive’ as schools and sanitation in the world of conventional economics.
We want to improve the welfare of people and the health of the planet rather than the size of the economy. Because size matters: if the economy gets too big it will grow beyond its ecological limits. Now we are up against a very challenging limit: the capacity of the atmosphere and the Earth to absorb our greenhouse gas emissions without overheating.
Only the Green Party is willing to face up properly to these limits, and to say that limitless economic growth without thinking about the consequences is a dangerous and careless fantasy.
There is much work to be done to create a secure and stable economy. The transition to a sustainable, fair economy will create hundreds of thousands of jobs in manufacturing, design, building and engineering. And there is much work that is already being done but not yet recognised, like work in the home.
Carers should be rewarded for the work they do. Job-sharing, part-time work, and time off for study or recharging should not be the poverty trap they are under the current benefits system.
In sum, we will create a fair and sustainable economy through redistributing income and assets, reclaiming the tools of economic management, and freeing the diverse talents of our citizens.
Short-term management of the economy that returns to the basics – sound money, less debt, responsible lending, proper regulation and no risky financial instruments
Ending unemployment and repairing the Government’s finances are obviously currently top of the list. But we must also make important long-term changes to rebuild the economy: move to a zero-carbon economy, move away from an obsession with growth, and build a more equal society.
Unlike the Tories, we believe that this will require considerable Government intervention, both in terms of direct Government expenditure and in measures directed at the monetary system. Unlike Labour, we would not focus on encouraging consumption but protect public services, spend on investment in the new green economy and create greater equality. Labour’s approach will sow the seeds of future crises by encouraging crippling debt and unsustainable consumption.
We believe that only the following policies will deliver the equitable, stable and sustainable economy we so badly need:
Working to live, not living to work
The loss of jobs that has gone with mismanagement of an unsustainable economic model is a criminal waste of talent and aspiration, and has turned life into a daily struggle for survival for millions of our fellow citizens.
As top bankers continue to pocket your money in the form of unearned bonuses, factories, firms and farms are forced to lay off more and more workers by the day, week and month.
This must end. Our major and immediate priority is the creation of an extra million jobs and training places within a full year of operation of our major investment plan, the Green New Deal. This would address both the employment and the environmental problems.
It would consist of a package of measures described throughout this manifesto, including workforce training, investment in renewables, public transport, insulation, social housing and waste management. We would also:
Our energy policy is not just the best for climate change – it also produces the most jobs:
Energy source/jobs per year per terawatt hour:
But the real winner for creating jobs is energy efficiency, like our proposals for insulation.
It has been estimated that an energy efficiency increase of 1% a year, sustained over a ten year period, would create 200,000 additional jobs in the EU sustained over ten years.
Let’s start with decent pensions
After 13 years of Labour rule we still have unacceptable levels of poverty. It is particularly offensive that 25% of pensioners and 20% of children still live in poverty. Our creaking welfare system gets ever more complex as it attempts to fill the gaps, yet it often fails to reach those entitled to benefits but who do not claim them.
In the longer run a fundamental reform is needed, where most of the complicated benefits, means tests and qualifying contributions are swept away, and all citizens receive as of right a basic income – a Citizen’s Income. The cost of this would be recovered through a more progressive income tax system.
We recognise that with the public finances in their present state this is not the time to introduce such a scheme. However, we can make a start by helping the two vulnerable groups above, with a decent Citizen’s Pension scheme and a major increase in Child Benefit.
Our present pension system is a disgrace.We pay an inadequate state pension (only £97.65 per week for a full state pension for a single person), the level of which is still not linked to average earnings (and which is not up-rated at all for UK pensioners living abroad in certain countries). It depends on an individual’s contribution record, discriminating in particular against women, but also against others with poor contribution records such as those with poor health or a broken work record, or who have been carers.
This is in theory topped up by means-tested Pension Credits, which discriminate against anyone with very modest savings, creating a massive disincentive to save to provide for yourself. As many as one in four pensioners live in poverty.
We need a new system of Citizen’s Pensions. The Citizen’s Pension would be paid unconditionally to all pensioners in the UK (independent of contribution record) at the rate of the official poverty line (currently £170pw for someone living alone, and the rate would be £300pw for couples), and would be linked to average earnings.
It would also be paid to, and up-rated for, the one million pensioners living abroad.
Housing Benefit and disability benefits would continue to be paid. The demeaning Pension Credits would be abolished.
And it is right too to do something significant about child poverty. Rather than add further to the complex and means tested Child Tax Credits system, we would simply more than double the existing and universal Child Benefit payment, by paying an extra £20pw, which would be taxable, for each child. This would cost a further £14bn per year, much of which would be recovered by increased taxation on the most wealthy.
A vast proportion of social care in the UK is provided by unpaid family carers who save the NHS £87bn a year. Carer’s Allowance (CA) is an income-capping straitjacket. CA paid to family carers aged 16 and over is the ‘Cinderella Benefit’: £53.10 for a 35-hour week minimum commitment is no real compensation.
Child carers under the age of 16 receive nothing at all. They are perhaps our most vulnerable child labourers, often working very long hours and bearing emotional burdens far beyond their years.
These children receive no financial support and in many cases work longer hours than their older counterparts. Their schooling and education are often compromised and some simply never have the chance to ‘play’.
The Green Party is committed to:
How would we pay for Citizen’s Pensions?
There are about 12 million pensioners living in the UK and a further 1 million living abroad.
Paying a single rate of £170 per week and a couples rate of £300 per week will cost £110 billion a year.
But the basic state pension already costs £56 billion, and when certain other specific pensioner benefits like the Pensions Credits paid to those of pension age are abolished the total saving will be almost £70 billion.
That leaves £40 billion to find. Abolishing tax relief on pension contributions raises £20 billion, and a further £19 billion would come from abolishing employer national insurance contributions and employee National Insurance rebates associated with pension schemes.
The final £1 billion will come from increased income tax receipts from pensioners. Because the number of pensioners is gradually rising, and we would link the pension level to average earnings, Citizen’s Pension will cost a further £0.8 billion by 2013–14. This figure is included in our figures for general taxation.
There will also be savings (not quantified here) on Council Tax Benefits and Housing Benefits.
Promoting fairness, sustainability and citizenship
This manifesto is not an uncosted wish list. It is a practical and realistic plan to move towards a more equal society, fight climate change and protect public services.
Unlike the other parties, we argue that increases in taxation for the better off are required. This is no bad thing in itself.
Taxes are the fees we pay as citizens for services that are best provided collectively. They are also an instrument for fairness. The corrosive belief that taxes are no better than a necessary evil, nurtured by successive Governments over the past 30 years, is at the root of the difficulties in financing public services during the same period.
So the Green Party wants to rehabilitate progressive taxation. This requires two things: raising taxes fairly and explaining them honestly. Labour’s plans depend upon wishful thinking about how quickly the economy and tax revenues will recover. They are unwilling to tell you about the cuts and tax increases coming later. The Conservatives will cut public spending, but have not put forward a plan that adds up to remotely enough cuts without tax increases to cut the deficit.
In contrast, the Green Party is open about what we would cut, what we would defend, and about the fact that we need to raise taxation from 36 per cent of GDP in 2009–10 to around 45 per cent in 2013. This would halve the gap between Government expenditure and revenues by 2013–14 (as the Labour Government proposes) and progressively close the gap thereafter.
We favour a Robin Hood Tax – a tax on financial transactions (see page 47) – but because that would work best with wide international agreement we do not rely on it to fill the gap in the Government’s finances, though we believe there is also scope to act unilaterally by introducing a tax on sterling foreign exchange transactions, and that the UK should demonstrate global leadership.
Our tax changes come in two groups – those that close the gap between rich and poor, and those that mainly discourage environmentally damaging activity.
We support a special tax on bankers’ bonuses, though we would make it permanent.
Also, no one in one of the wholly or partly state-owned banks should get a bonus of more than £25,000. And our changes to pension tax reliefs (see box on page 13) will radically reduce the huge advantages the present pension system gives to the most wealthy. But this is only a beginning.
We would also:
We would reform the tax system to put far greater emphasis on taxes that discourage environmentally or other damaging behaviour.
If these changes were implemented the share of environmental taxation in total taxes would double from about 7 per cent now to 14 per cent in 2013. Some of these proposals involve raising existing taxes, some are new taxes and some modify existing exemptions and reliefs to achieve environmental purposes. In the long run we would aim to replace VAT by environmental taxes, but the current state of the public finances does not allow this in the short term.
We also recognise that some of these changes, for example on VAT or placing fuel duty on aviation, may involve international negotiation and cannot be introduced immediately.
Taken together, these tax changes are sufficient to pay for the entire programme set out in this manifesto, and also to more than halve the deficit as a proportion of GDP by 2013, setting the economy on a path that will almost eliminate the deficit by the end of the Parliament. The details of how we would pay for our programme are set out in the box below.
How we would pay for our programme?
There are many spending commitments in this manifesto. And there are proposals for new and increased taxes (see pages 14–16). Does it all add up, and in particular will they in total more than halve the deficit by 2013–14?
In summary terms ,our plans, compared to those of the Labour Government (as announced in the Budget Report 2010), are as follows (all figures in billions in 2010 real terms):
1 Labour Government planned public expenditure: 2010 £704 ; 2013 £700
2 Labour Government anticipated tax receipts: 2010 £541 ; 2013 £617
3 Labour Government fiscal deficit to borrow*: 2010 £163 ; 2013 £82
4 Green Party proposed basic public expenditure: 2010 £704 ; 2013 £704
5 Net additions to public expenditure in this manifesto: 2010 £72 ; 2013 £80
6 Total Green Party proposed public expenditure**: 2010 £776 ; 2013 £784
7 Green Party anticipated tax receipts on existing Government tax plans: 2010 £541 ; 2013 £603
8 Net additional taxation proposed in this manifesto: 2010 £73 ; 2013 £112
9 Total Green Party proposed taxation†: 2010 £614 ; 2013 £714
10 Green Party proposed fiscal deficit to borrow‡: 2010 £162 ; 2013 £70Notes: * Item 1 – item 2. ** Item 4 + item 5. †Item 7 + item 8. ‡Item 6 – item 9. Figures might not add up exactly due to rounding. In item 7, the Green Party figure for tax receipts on existing tax policies in 2013 is lower than that for the Labour Government assumption in item 2 as we assume a lower rate of GDP growth. Notice that Green Party borrowing plans in item 10 are lower than the Labour government plans in item 3.
We would freeze basic Government spending at £704bn (item 4 above). Our programme of additional spending and selected cuts (set out below) would add £72bn in 2010 rising to £80bn in 2013 (item 5 above).
We believe that the Government’s projections for GDP growth are too high, and that tax receipts on existing policies in 2013 will be only £603bn (item 7 above), £14bn less than the Government’s assumed £617bn (item 2 above).
On Government spending we have first of all a modest programme of savings totalling £20bn in 2010 rising to £28bn in 2013. We would save £8bn on defence in 2010 falling to £6bn in 2013 (including cutting Trident; see page 43), £1bn initially rising to £3bn on road-building (page 38), £2.5bn on ID cards and £0.5bn rising to £1.5bn on prisons (pages 24 and 26). We believe modest cumulative annual efficiency savings of 0.5% on 60% of Government spending are possible, saving £2.3bn in 2010 rising to £9.4bn in 2013. In addition our minimum wage policy would save about £6bn a year on tax credits throughout the period.
Apart from Citizen’s Pension we have a programme of additional expenditure totalling £52bn rising to £64bn in 2013. The major items are a £20pw rise in Child Benefit (£14bn; page 13), investment in public transport (£4bn, rising to £5bn; page 38), social housing and right to rent (£4bn; page 20), elderly care (£3bn in 2010 rising to £8bn by 2013; page 22), renewables and insulation (£5bn rising to £10bn in 2013; pages 20, 35), an increase in the aid budget (£3bn in 2010 rising to £4.5bn; page 48), training and community programmes for the unemployed (£5bn, but unnecessary by 2013; page 10), investment in waste management (£3bn pa; page 26), abolition of higher education fees (£1.8bn in 2010, but £3.6bn in later years; page 21), and about £9bn rising to £12bn for the 14 smaller commitments, all of which involve £1bn or less in 2010.
In terms of public expenditure, Citizen’s Pension will cost an extra £40bn rising to £44bn, so the overall increase in public expenditure will be £40bn (Citizen’s Pension) plus £52bn (gross cost of manifesto) less £20bn (public expenditure savings), or £72bn (as in item 5 above). The comparable figure for 2013 is £80bn.
On taxation our proposals are set out on pages 14 to 16, where it is clear that together with the tax changes on Citizen’s Pension these proposals will add £73bn in 2010 and £112bn in 2013 (item 8 above).
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