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image of globe nestled in green leaves | accountingweb | The Green Party’s Manifesto for a Fairer, Greener Country
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Greens’ tax plans are fresh but lacking in detail

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The Green Party’s radical tax system reimaginings for a fairer, greener country have caught Amy Chin’s attention.

20th Jun 2024
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We weren’t planning to cover the manifesto pledges of the Green Party. Despite notable gains in the latest local elections, the chances of Carla Denyer and/or Adrian Ramsay getting their pineapple-leather loafers under the table in Number 10 remain slim.

That said, increasing concerns around the climate emergency, support for a ceasefire in Gaza and scandals and gaffes abundant in the Conservative and Labour parties contributed to record Green gains in the local elections in May. While a Green victory on 4 July is probably still out of the question, they are predicted to win a handful of seats and those few MPs will seek to influence legislation. 

We were also not expecting tax to feature enough in the Greens’ manifesto to warrant an article on AccountingWEB. Imagine my surprise then to find – nestled between predictable pledges to push the government to transition to a zero-carbon society more than a decade before 2050 and significant restrictions on air travel and fossil fuels – a fairly radical reimagining of the tax system including some brand new taxes. 

Taxing wealth fairly

Put simply – and without further detail as there is little alternative here – the Green Party’s proposed wealth tax will be an annual charge of 1% on “the wealth” of individuals with assets above £10m and 2% if assets exceed £1bn. How this would work in practice is not explained and the estimated tax take of £14bn in the first year feels very optimistic to put it mildly.

Continuing with the commendable goal of “shifting taxation away from employment and towards wealth” there is a long-term plan to replace “regressive” council tax with a land value tax “so that those with the most valuable and largest land holdings would contribute the most”. The first step towards this would be to re-evaluate council tax bands.

With tackling the wealth imbalance at the heart of its tax proposals, the Green Party would also reform capital gains tax and inheritance tax (IHT); align the rates paid on income tax and taxable gains; and bring tax rates on investment income in line with national insurance contributions (NIC) and employment income. This, they say, would have the added benefit of simplifying the rates paid on earnings and investment. 

It all sounds very intriguing, but as Dan Neidle highlights, the numbers are not sufficiently backed up. For example, the party reckons that the frustratingly vague promise to reform IHT would boost the coffers by an estimated £3bn in 2027 and £4bn per annum thereafter. As Neidle points out, “That’s a significant amount from a tax that currently raises £7bn.”

The Green goose

A tax that both incentivises sustainability and generates an extra £80bn of tax take is surely the vote-grabbing golden goose of this manifesto. Step forward the “carbon tax”. If elected, the Green Party proposes levying a carbon tax on all fossil fuels, whether produced here or imported. 

Aligning all existing taxes on fossil fuels and carbon emissions to aid compliance, the carbon tax would apply at an initial rate of £120 per tonne, rising over a decade to a maximum of £500 per tonne of carbon emitted. This sliding scale approach to the charge is “deliberately designed to make it cheaper for the emitter to take steps to reduce emissions rather than pay the tax”.

Educational fairness

As widely reported and fiercely debated, the Labour Party plans to end the VAT exemption for private schools. The vagueness of this statement has raised questions around fairness, impact and how the measure would work in practice. The Green Party makes the same pledge, but with added detail, promising to remove charitable status from private schools and charge full VAT on fees, except for children with special educational needs.

Elsewhere in the classroom, the Greens would increase funding for sixth-form education, including the restoration of the education maintenance allowance to financially support young people to extend their studies after the age of 16. They would also “fully fund every higher education student, restoring maintenance grants and scrapping undergraduate tuition fees”. This will be music to the ears of many parents of school-age children currently facing an eye-watering average cost of £50,000 to put one student through university in the UK.

Other tax tweaks

Elsewhere, the manifesto is peppered with tweaks to VAT and other pledges designed to redistribute wealth and address the climate emergency, including to:

  • exempt cultural events, including everything from theatre and museum tickets to gigs in local pubs, from paying VAT
  • end the implicit subsidy for flying that results from kerosene being exempt from fuel duty by applying the carbon tax to all kerosene for aviation sold in the UK
  • making road tax proportional to vehicle weight
  • increasing VAT on financial services, and
  • requiring banks and non-bank financial institutions to remove fossil fuel assets from their portfolios, securities and balance sheets by 2030.

Aspirational tone

The tax proposals in the Green Party manifesto are radical, and there is a disappointing lack of detail on how they would be achieved. They do admit that “without access to the full modelling capability available to the Treasury we can only estimate the additional revenue that would be raised from our proposals”. Undeniably, some of the figures do seem pretty dubious.

Nevertheless, against a backdrop of uninspiring nips and tucks (and similar lack of mechanical detail) offered up by the other three main parties, the aspirational tone of the Greens’ manifesto is, in my opinion, a welcome breath of fresh air.

Replies (3)

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By Paul Crowley
21st Jun 2024 15:31

They can make up fantasy tax plans with no one interested in checking their credibility.
They will be such a minority that they could even be beaten by Reform. Neither will have any significant influence on the ruling party.
Still good fun for a month or so.

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By indomitable
22nd Jun 2024 14:19

"fairer, greener country"

Actually increased CO2 concentrations increase "greening".

The level of warming caused by CO2 is not settled, there are atmospheric scientists that say that some of the forecasts are to put it mildly impossible

chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://co2coalition.org/wp-content/uploads/2024/06/Net-Zero-Averted-Tem...

I think everyone needs to UNDERSTAND the science.

I myself am undecided and so is the scientific community, but what disturbs me most is science being politicised and becoming almost a new religion.

Everyone READ the science on BOTH SIDES of the argument before you reach a conclusion

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Replying to indomitable:
By ireallyshouldknowthisbut
24th Jun 2024 14:25

You would do very well to look at the tobacco industry and their lobbying against science which worked for a good 30 plus years.

Lots of people were taken in by it, as it was very convincingly done and pulls all the right emotional triggers. And its being done even better now in certain circles.

Go further back, and the Church vs Darwin.

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