Sunday 8th September 2013
5 years after Lehmans’ collapse: ‘National Plan’ to detoxify UK economy
- Green New Deal Group set out ‘National Plan’ to detoxify the UK economy.
- Plan would end zero-hour contracts, remove hidden bank subsidies, cancel PFI, end tax avoidance and evasion, stop the controversial HS2 rail link and end the destructive ‘Dash for Gas’
- In their place, the Green New Deal Group propose a plan that would transform the UK economy to meet environmental and social challenges, create quality jobs in every constituency in the UK, end austerity and ignite a sense of shared national purpose.
Almost five years after the collapse of Lehman Brothers sent shockwaves around the global financial system, the Green New Deal Group, whose groundbreaking ideas were taken up around the world in 2008, publish a ‘National Plan for the UK’ that would shift the nation from the politics of austerity and rapidly-growing inequality to the age of the ‘Green New Deal’.
Building on their original proposals, the Green New Deal Group’s plan outlined in their report A National Plan for the UK: From Austerity to the Green New Deal, is designed to fundamentally transform a still-broken financial system and reduce the deficit, while transforming the UK’s aging infrastructure to meet a range of environmental and social challenges.
The Green New Deal Group – which includes the Green MP, Dr Caroline Lucas, tax-expert Richard Murphy, Economist and Debt Campaigner Ann Pettifor, Oil-expert Jeremy Leggett, and Economist and Environmentalist, Andrew Simms – argue that unless this ‘Green New Deal’ is implemented, any hopes of sustainable economic recovery, or meeting pressing environmental challenges, are doomed to fail.
“The Green New Deal represents an economic detox diet to correct the consequences of the worst current financial, work place and environmental abuses.” says Green New Deal Group member Andrew Simms.
“It is crucial that government replaces destructive austerity policies that have created a low-investment, low-wage, heavily indebted, unbalanced ‘Alice in Wongaland economy’ with massive investment in a Green New Deal. Central to this must be the creation of real jobs that pay a living wage, helping to transform every corner of the UK while overcoming the present lack of sustainable and adequate effective demand in the economy. This could be financed, in part, by a form of ‘Green QE’: with government co-operating with the Bank of England via its money market operations, to create financial products at very low rates of interest to fund green infrastructure investment. This investment would, thanks to the multiplier, pay for itself.” says Green New Deal Group member, Ann Pettifor.
“A crackdown on tax dodging which we believe stands at £95 billion a year could fund the Green New Deal. A significant part of this could easily be recovered if H M Revenue & Customs had enough staff, and were backed by stronger laws. Further tens of billions could come from a programme of ‘Green’ Quantitative Easing to fund infrastructure and create jobs across the country” says tax expert and Green New Deal Group member, Richard Murphy
The Green New Deal plan calls initially for a £50 billion-a-year programme to boost real economic activity in a way which provides quality jobs on a living wage in every community in the UK, while reducing the UK’s overall ecological impact. To begin with, this involves:
- Putting in place a nationwide project to make every building in the country energy efficient and building hundreds of thousands of new, affordable, sustainably-sited, energy-efficient homes, creating jobs, affordable homes where they are needed most and reducing fuel poverty.
- Realising the huge job creation potential in renewable energy – according to the Centre for Alternative Technology, the job creation potential of a zero carbon economy could be as high as 1.5 million new jobs spread across the country, covering a range of skills and sectors of the economy – more than enough to provide quality employment for every person in the UK currently employed on a zero-hour contract.
- Cancelling HS2, making low-carbon travel a reality: government should replace discredited plans for a HS2 rail link with a programme of improvements to the existing network particularly at pinch points, and the creation of new urban cycle networks in every town and city in the UK.
“There is huge, and as yet untapped, potential in renewable energy, energy and resource-use efficiency and the transformation of our transport system that would create high-quality jobs across the country and reduce the UK’s overall ecological impact. If we are serious about staying below 2C warming, as we have legal obligations to do, then to invest in a destructive Dash for Gas when there is a Green New Deal on the table borders on criminal negligence by my parliamentary colleagues” says Caroline Lucas MP.
And, the Group say: the resources can be found for the Green New Deal. The investment needed to implement the plan is not only readily available, but a carefully targeted programme would also help to reduce the UK’s budget deficit, according to the Group’s analysis. The programme would be funded by a range of measures, ending some of the worst financial abuses:
- Tackling tax evasion and avoidance; £70 billion in tax evasion and £25 billion in tax avoidance can and must be drastically reduced. This can be done by: increasing obligations on individuals and companies to prove tax paid is tax owed, measures like automatic information exchange agreements with tax havens, and employing enough tax inspectors.
- Controls to ensure that banks that were bailed out by the taxpayer also invest in the Green New Deal at low, sustainable rates of interest. The terms and conditions of finance from the bailed out banks should include investing in sustainable productive activity including the Green New Deal. This is a fundamental quid pro quo for the taxpayer guarantees and low interest rates that have enabled the banks to survive.
- A form of ‘Green Quantitative Easing’ channeled directly into the transformation of the UK’s energy, housing and transport infrastructure – providing quality employment, revitalising the economy and reducing fuel poverty. This would be very different from any previous round of QE which have benefited the finance sector and speculators, not the productive economy.
- Buying out costly PFI schemes using Green QE, and then using the money that would otherwise have been spent on interest payments to fund the Green New Deal.
- Encouragement for pension funds and other institutional investors to support the Green New Deal: these will be vital for longer term investments in areas like energy efficiency and building new low-carbon homes, earning a constant income stream and providing secure returns for pensioners and increase intergenerational solidarity.
As broad-based economic activity and a sense of purpose returned, government would see revenues rise as the tax take increased, balancing the government budget without punishing the poorest. More than that, the Green New Deal would fundamentally transform the economy for good.