How to pay for a Green New Deal

4th March, 2024

The Green New Deal Group has published a series of briefings outlining some responses to the question ‘How can we pay for a Green New Deal?’

The five two-page briefings cover personal and corporate taxes, regulating private finance, making use of savings, and public borrowing. They are intended to support politicians and campaigners to make the case for major investment in public services, infrastructure and green measures as part of a Green New Deal; and to challenge the myth that we ‘cannot afford’ to invest.

The briefings make clear that there is no shortage of money available to pay for upgrading the electricity grid, modernising our public transport, insulating our homes, supporting the transition to nature-friendly farming, or any of the other investments needed to move our society beyond fossil fuels. There are major barriers to overcome to end our dependence on fossil fuels and build a fairer society where we can all thrive – but availability of finance should not be one of them.

Click on the links below to read the briefings.

Personal taxes – we could raise about £28 billion a year by taxing income from wealth more effectively and scrapping the reduced rate of national insurance for high earners.

Corporate taxes and subsidies – we could raise about £25 billion a year by closing a loophole for oil and gas investment, reducing a hidden subsidy paid to commercial banks, and ensuring all companies file their tax returns correctly.

Harnessing private finance – the Bank of England could steer investment away from fossil fuels and into green projects by fully recognising the risks of fossil fuel investments, refusing to accept fossil fuel assets as collateral, and introducing a lower interest rate for banks lending to green projects.

Putting savings to productive use – as much as £100 billion a year could be found for investment in Green New Deal projects if new savings in ISAs, and some pension contributions, were required to be invested in this way. This would help ensure that savings which benefit from tax-free status are benefiting society in return.

Public sector borrowing – a summary of why government can and must borrow to invest in a Green New Deal, without fear of simplistic ‘fiscal rules’.