Pre-budget report for a Green New Deal
21 November 2008
Green
Party leader Caroline Lucas has published proposals towards a Green New
Deal budget, ahead of the Chancellor's Pre-Budget Report next week.
Dr
Lucas co-wrote the seminal Green New Deal report[1], and was advised by
some of her co-authors, including Richard Murphy, Director of Tax
Research LLP, and Colin Hines, Co-Director of Finance for the Future,
on her new budget plans.
The report, "Budget for a Green New Deal"[2] claims
that Alastair Darling's Pre Budget Report must have at its core an
increase in public expenditure to fund hundreds of thousands of green
collar jobs in a 'carbon army' that will be trained to make every
building in the UK energy efficient and increase the use of renewables.
Investment
in this ‘Green New Deal’ will create jobs all over the country, whereas
tax cuts will have fewer benefits as people are likely to increase
immediate spending largely on imported goods.
The
report proposes public investment of £30 billion that will save energy
and have the added advantages of helping to address climate change and
increase UK energy security. In the short term it will address the
threats to the real economy from an economic downturn that threatens to
rival the crash of 1929.
It proposes:
• A
£30bn stimulus package, creating thousands of green-collar jobs in
environmental works that will dramatically reduce the carbon emissions
of UKbuildings
• The
creation of new national investment products, such as local government
bonds, to fund this work and provide a safe haven for pensions and
savings
• Keeping interest rates low to encourage investment in the green economy
• Shifting
from VAT to pollution taxes, cutting the standard rate of VAT to 15%,
and reducing it to 5% for some items, and abolishing road tax whilst
increasing pollution taxes on fuel
• Closing
offshore tax havens to stabilise the financial sector, discourage tax
avoidance and to help provide funds for the Green New Deal
Caroline Lucas said today:
"It’s
time to put to rest once and for all the false option of choosing
between economic success and environmental sustainability. We must
engineer the green economy of the future to compensate for the collapse
of a discredited economic model dependent on credit binges, gravity
defying house prices and increasing consumption. In short it’s time for
the Green New Deal."
Richard Murphy,
Co-Director of Finance for the Future and Director, Tax Research LLP,
and a member of the Green New Deal Group, added:
"This
is a package for the short term that makes sense for the long term; a
package where the debt we must incur now produces employment, green and
financial benefits that more than pay for its cost; a package where the
economic causes of the crisis are tackled at their root and a package
that the people of the UK need - help in delivering them from a problem
that was not of their making"
NOTES
[1]
A Green New Deal, the first report of the Green New Deal Group. Larry
Elliot, Colin Hines, Tony Juniper, Jeremy Leggett, Caroline Lucas,
Richard Murphy, Ann Pettifor, Charles Secrett, Andrew Simms, July 2008.
[2]
The full report, "Towards a budget for a Green New Deal" can be downloaded here as a pdf.
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