Tax

Put the UK’s savings to good use for the future

I, with Caroline Lucas MP and Andrew Simms had this letter in the FT this morning. For some reason Colin Hines did not have his name published, which was a mistake:

Put the UK’s savings to good use for the future

From Caroline Lucas and others

Paul Mason is right to point out that the Labour party will need to think radically about funding if it is to secure the £100bn required to enact a comprehensive Green New Deal (“Labour is planning its own Green New Deal”, November 2). The Green New Deal group, of which we are members and which developed the first comprehensive plan for a Green New Deal here in the UK in 2008, is used to proposing radical alternatives. We have long said that borrowing (issuing bonds) by the government, a national investment bank and local authorities has to be the primary source of funds for this essential programme.

Crucially, we have to identify who might buy the government bonds. At present more than 80 per cent of UK personal financial wealth is invested in tax incentivised assets. Since incentives are already provided by the government, simple rule changes could encourage savers towards Green New Deal bonds. For example, if an interest rate of 1.5 per cent or more was paid on such bonds with a government guarantee being provided, then the £70bn that goes into Isas each year could be directed towards the Green New Deal. Changes to pensions rules could also be a significant source of funding.

Such simple changes, which would impose no additional cost in terms of tax relief, could guarantee the funds a Green New Deal requires and put the UK’s savings to use for the benefit of the future.

Caroline Lucas Green party candidate for Brighton Pavilion

Richard Murphy Professor of political economy, City University

Andrew Simms Co-director, New Weather Institute

Let’s hope some people notice.

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