Green Manifesto 2010 Managing The Economy
Short-term management of the economy that returns to the basics – sound money, less debt, responsible lending, proper regulation and no risky financial instruments
Ending unemployment and repairing the Government’s finances are obviously currently top of the list. But we must also make important long-term changes to rebuild the economy: move to a zero-carbon economy, move away from an obsession with growth, and build a more equal society.
Unlike the Tories, we believe that this will require considerable Government intervention, both in terms of direct Government expenditure and in measures directed at the monetary system. Unlike Labour, we would not focus on encouraging consumption but protect public services, spend on investment in the new green economy and create greater equality. Labour’s approach will sow the seeds of future crises by encouraging crippling debt and unsustainable consumption.
We believe that only the following policies will deliver the equitable, stable and sustainable economy we so badly need:
• Invest in the green economy now – and if, in certain vital sectors such as energy generation, the private sector is acting too slowly and on an insufficient scale, then the Government must take the lead.
• Our programme has to be paid for, and we accept that the Government borrowing of 12% of GDP is unsustainable. Like the Government, we would aim to more than halve the deficit by 2013, and the programme of taxation and spending in this manifesto is designed to achieve that.
• Raise taxation from its current very low level of only 36% of GDP – for example it exceeded 40% in all Mrs Thatcher’s years in office.The fiscal gap is not caused by too much public spending but by taxation dropping to unacceptably low levels.
• Ensure that those most able to pay bear their fair share, and introduce a much-needed increase in environmental taxation.
• Regulate the financial sector more strictly, preferably at the international or EU level, but if necessary just in the UK. In particular, separate retail from investment banking.
• Support new institutions like a green investment bank and local community banks in the financial sector, and new ways of investing in the green economy, such as green national savings bonds.
•Reverse the trend towards an economy ever more dependent on financial services, and build a new and sustainable agricultural and manufacturing base to the economy.
• Protect basic public services, which are the foundation of an equitable society. Modest efficiency savings may be possible (perhaps £2–3bn, or 0.25% over the entire public service each year, and in particular by improving energy efficiency in schools and hospitals), but nothing on the scale relied upon by the other parties to make their figures add up. Cuts to health and education services will hit the poorest and most vulnerable first. We must help the poorest pensioners and children in particular.
• Abandon gross domestic product as the key measure of economic success, and seek instead to increase our overall welfare.
• Encourage greater sharing of intellectual property by reducing, but not abandoning, levels of patent and copyright protection. In particular we would legalise peer to peer copying where it is not done as a business and make it impossible to patent broad software and cultural ideas.
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