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, 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"