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
Benefits of taxes
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.
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
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
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.
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
Localisation - taming
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.
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.
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.
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.
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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