A just economics

We need a just economy. The socially corrupting divide between rich and poor is growing at home and abroad. Future generations will suffer as we plunder the earth, leaving them an inheritance of deserts and climate change.

Consumption and growth dominate conventional politics, but when we measure the things that determine quality of life, it is clear that Britain is getting poorer. The costs of our increasingly stressful and over-industrialised way of life outweigh the material advances of the last thirty years.

The Green Party seeks a fundamental shift in economic policy. We need a new economics that produces for need not greed, distributes wealth equitably, operates within the ecological limits of the planet, and involves everyone in providing for their family and community.

Benefits of taxes

Installing solar panels Under the current regime of direct taxes and benefits the gap between rich and poor is increasing and many people are ensnared by the poverty trap. Indirect taxes such as VAT provide a major part of tax revenues yet, with few exceptions, they have no regard for the environment or public health. For example, a locally made ceramic plate carries as much VAT as a disposable one, transported across the world and sold in an out-of-town supermarket. The Green Party would right these wrongs.

Direct taxes and benefits

We would introduce a Citizen's Income scheme, with extra payments for people with disabilities and pensioners (see right). Income tax should become more progressive with higher bands for top earners. In the short term, students should become eligible to claim benefits again and the under 25s should receive full housing benefit.

Eco-tax not VAT

'Eco-taxes' should replace VAT. These would be levied on all products according to the health and environ-mental impacts of their full life-cycle. Eco-taxes on fossil fuels would be directly proportional to their carbon content. Import duties should be introduced to prevent imports from countries without Eco-taxes unfairly undercutting domestic prices. EU and world trade rules that prevent this must be reformed.

Taxing motoring

Vehicle excise duty should be abolished and incorporated into higher levels of fuel duty. This would link motoring costs more closely to mileage. Research shows that higher levels of fuel duty would create jobs, be more equitable and better for the environ-ment.

Protecting the poor

Indirect taxation hits the poor hardest. We would adjust the level of benefits and Citizen's Income to ensure all households can afford basic necessi-ties, such as heating, which will attract relatively high Eco-taxes.

Local taxation

National Non-domestic Rates and the Council Tax should be replaced by a local Land Value Tax (LVT). The rate of LVT would be related to a plot's rental value and varied locally according to the social and environmental desirability of the land use. Empty properties and vacant sites would attract high rates to discourage speculative land ownership.

Spending to save

Over the last twenty years a rigid orthodoxy has taken hold of monetary policy. Too much emphasis has been placed on controlling inflation. Public infrastructure and services are being starved of investment and privatised. We have failed to get new job-rich sustainable industries off the ground. The Green Party would spend where necessary to rebuild public services and fund the transition to a sustainable economy. This would yield massive savings, not just financial ones, in the future.

Public finance

Local authorities and health trusts are being forced into costly and undemoc-ratic Private Finance Initiatives and Public Private Partnerships. These should be scrapped and replaced by proper government funding and local bonds.

Investing in the future

The Government should invest in sustainable industries such as recycling, energy conservation and public transport, starting with the hundreds of millions currently spent to lure foreign investors to Britain.

Localisation - taming the tiger

The global economy has outgrown the planet's ability to support it. This is largely because the main players are removed in time and space from the so-called 'external' costs they inflict on the rest of us. Board members of the big companies and international financial institutions would be less keen on deforestation, industrial pollution, and the commercial exploita-tion of animals if these things were happening in their back yards. They would care more about poverty, redundancies, and the sweat shop conditions suffered by the remaining workers if the victims were people they knew.

Apart from 'internalising' these external costs by reforming the taxation system, the best way to reduce them is to make the impact of economic decisions as direct and localised as possible. We must decentralise economic policy, localise production as much as possible and give everyone affected by companies' activities a say in how they are run.

No Euro

The Euro is centralising the economy of western Europe. Interest rates are imposed by an undemocratic central bank, regardless of local economic and environmental conditions. The tight monetarist framework of EMU is destroying jobs and public services. Britain should not join the Euro.

Community wealth

Credit unions and community banks invest savers' money in local schemes on favourable terms. They should be supported so that wealth can re-circulate within local communities.

Controlling companies

Large companies should publish annual reports on the social and environmental impact of their activities, including an inventory of resource use and emissions. The reports will be as rigorous as traditional financial accounts. Company law should give all stakeholders - workers, consumers, local residents, suppliers as well as shareholders - a say in how the company is run. Corporation tax should become more progressive with higher rates for larger companies.

Globalisation directly undermines Green economics. The multinationals are desperate to expand into new markets and use their patronage to deregulate international trade and investment. This erodes the power of elected governments as hard-won social and environmental safeguards are overturned as 'barriers to trade'.

Local companies are being swallowed up and local markets swamped by cheap imports. Countries are forced to compete for foreign direct investment by dismantling their welfare systems. For what? Global unemployment is now at its highest since the 1930s, poverty and the gap between rich and poor nations are growing, and the global environment is deteriorating rapidly.

We must reverse the effects of globali-sation and reform the institutions that are driving it. The growing global dependence on fickle and unaccountable markets must be replaced with the dignity and security of self-reliance.

Building self-reliance

Import and export controls should be negotiated to reduce international trade to a fairly traded exchange of goods that cannot be produced locally. Developing nations should meet local needs by setting up import substitution schemes, with OECD assistance, based on appropriate technology and sustainable agriculture.

Taming the multinationals

'Site here to sell here' policies should make local production a condition of market access. Controls should be imposed on international transfers of capital, and action taken to close tax havens. UK companies should be banned from operating lower environmental or labour standards abroad than are required in Britain.

Time for Tobin

The proposed Tobin Tax on currency speculation should be introduced. A tax of just 0.25% would raise US $250 billion a year. This would help stabilise international financial markets and should be paid into an international fund to promote sustainable develop-ment.

No to the WTO

These policies require the World Trade Organisation (WTO) to be fundamentally reformed. There should be no new trade round or attempts to expand the WTO remit in issues such as invest-ment, competition, government procurement, public services or biotechnology. A UN body dedicated to the promotion of sustainable trade, economic justice and localisation should replace the WTO.

In the interim, WTO Agreements must not undermine the environment, sustainable development or human and animal welfare. The WTO must become democratic, transparent and inclusive. It should consult with civil society and actively encourage parliamentary scrutiny of trade policy.

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Manifesto home
Reach for the future
A just economics
Just society
Ecological justice
Securing justice globally
Democratic justice
Conclusion

THE CITIZEN'S INCOMETHE CITIZEN'S INCOME
The Citizen's Income (CI) is a non means-tested payment to every citizen, working or not. It will cover basic needs without removing all motivation to take paid employment. It will replace state pensions, tax-free allowances and most benefits (initially not including housing benefit). Pensioners and people with disabilities will receive supplements.
CI will abolish the poverty trap and free people to choose the type of work and hours they want. It will build a cohesive society by providing a basic wage for carers and community volunteers.
Can we afford it? Here is an example.
Child (0-18 years)
Current 16-17 Income Support level (significantly more than Child Benefit)

Adult (18-60 years)
Current level of Job-seeker's Allowance

Pensioner (60+ years)
Adult rate supplemented without means test to Minimum Income Guarantee level

Person with special needs
Supplements to at least the level of current benefits
Raising basic income tax just 7% would fund this. CI paid to those in work would offset most of this increase (in effect, more than doubling the tax-free allowance).
Only the top 20-30% of earners would be less well off.

Source: Citizen's Income Trust
 
MIND THE GAPMIND THE GAP
The UK poverty gap has widened since Labour took office. The top 20% of earners receive 45% of national income - up 2%. The lowest-earning 20% receive 6% - down 1%.

Guardian 13 April 2000
 
QUALITY OF LIFEQUALITY OF LIFE
The Index of Sustainable Economic Welfare (ISEW) is a measure of quality of life. It adjusts the Gross Domestic Product (GDP)* by adding the value of 'free' goods such as housework and subtracting the costs of 'defensive' spending on things like crime and pollution. It also accounts for the long-term costs and benefits of current production and the social effects of the distribution of work and income. Even though Britain's GDP continues to rise, ISEW has been falling since the early 1980s.
* GDP is a measure of the total flow of goods and services produced by the economy.

(See diagram 'Richer but no better off')
 
PRIVATE FINANCE INITIATIVEPRIVATE FINANCE INITIATIVE
"perfidious financial idiocy that could destroy the NHS"

Editorial, British Medical Journal, July 1999
 
GOING GREENGOING GREEN
A 1.25 billion annual investment in insulation and energy efficiency for the homes of the fuel-poor could create up to 138,000 jobs.

Generating just 10% of UK energy from offshore wind could create 30,000 jobs.

Replacing conventional energy sources with wind power could treble employment in the energy sector.

Unsustainable farming practices have cut UK farming jobs by two-thirds in 50 years. Organic farming employs 10-30% more people per hectare than intensive farming. Converting one-quarter of UK farms to organic could create 30-45,000 new jobs.

Recycling supports ten times more jobs than landfill and four times more than incineration.

Rail projects yield approximately twice as many jobs as road building, per pound invested.

Source: Jenkins and McLaren (1994) Working Future?
 
THE RESULTS OF GLOBALISATIONTHE RESULTS OF
GLOBALISATION
Throughout the late 1990s, one-third of the world's willing-to-work population was unemployed or underemployed - the worst situation since the 1930s.

International Labour Organisation


I n 1961 the income of the richest fifth of the world's population was 30 times greater than the poorest fifth, by 1991 it was 60 times greater and by 1998, 78 times greater.

Source: UN

The wealth of the world's three richest people equals the combined GDP of the poorest countries with a total population of 600 million.

Source: UN

The Earth's natural ecosystems declined by 33 per cent between 1970 and 1999.

WWF's Living Planet Index

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