A just economics |
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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
Direct taxes and benefitsWe 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 motoringVehicle 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 poorIndirect 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 taxationNational 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 saveOver 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 financeLocal 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 futureThe 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 tigerThe 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 EuroThe 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 wealthCredit 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 companiesLarge 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-relianceImport 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 TobinThe 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 WTOThese 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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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.