The main parties could learn a thing or two from the Greens

Editorial: With its refreshing fiscal frankness and cheerful advocating for a wealth tax, Carla Denyer’s party has shown their larger rivals’ plans for public expenditure to be based on heroic assumptions and essentially fictitious. For this, at least, they should be applauded

Green Party co-leader Carla Denyer has pledged to ‘mend broken Britain’ by overhauling the tax system – not least, with a new wealth tax (Getty)

With relatively little to lose in this general election, or indeed win – the outer limit of their hopes is four parliamentary seats – the Green Party of England and Wales is to be congratulated for an outburst of candour rarely witnessed in politics.

Tax may be the issue that the bigger parties don’t like to talk about, but the Greens’ spirited co-leader Carla Denyer seemed to relish the opportunity to find the cash to fund their ambitious programmes for public services, including nationalisation and investment in the national infrastructure.

Unabashed, they cheerfully advocate personal tax changes that would raise between £50bn and £70bn per year. The centrepiece is a proposal that hasn’t been seriously considered in the UK for half a century – a wealth tax.

In the unlikely event of Ms Denyer and her colleagues seizing control of the Treasury, this would be levied on individual taxpayers with assets above £10m at 1 per cent, and assets above £1bn at 2 per cent. The Green Party estimates that less than 1 per cent of households will pay this tax.

The reality, sadly, is that close to nobody will – so well-developed are the methods whereby the super-rich protect their wealth, and the Greens, if serious, would need to attack people of more conventional means to achieve their ends.

Still, at least the Greens aren’t indulging in what might be termed “vegan cakeism”, an environmentally sound version of the political philosophy espoused by Boris Johnson – that in life it is possible to have one’s cake and eat it.

The Greens, to their credit, do not pretend that ending the cost of living crisis and transforming Britain’s health, education, social security, energy generation, water and other systems can be achieved without anyone paying more tax – or, indeed, that taxes can be lowered while simultaneously improving public services. It is the state that will have to take a lead and, with public and private debt levels so high, the money needs to be found from fair taxation.

The two main parties would do well to follow more of the Greens’ example – not only in their clarity about the climate crisis, but also their fiscal frankness. The fundamental problem for both parties seeking to form a national government is that they insist their plans for public expenditure over the next few years are realistic, when they are not.

As that trusted independent think tank, the Institute for Fiscal Studies, never tires of pointing out, the present path of planned expenditure on vital public services makes heroic assumptions about reducing waste and increasing productivity, as well as ignoring unstoppable demographic changes that will pile on the pressure in the NHS and the care system. The Treasury plans are basically fictitious because they imply very large reductions in real-term spending across large areas, such as prisons, social security and the courts system, and inadequate increases for priorities such as the health service and defence.

These are practically impossible and politically unacceptable. They are not formally called out by the Office for Budget Responsibility because they lie beyond its remit, but others have done so. And, let it be noted, all these plans come after a decade or more of the austerity programmes launched in the coalition years. The police officers, for example, that are supposed to be being recruited now are merely replacements for the 20,000 experienced ones cut by the government a decade ago.

These public spending plans were hatched by the chancellor, Jeremy Hunt, to fund his reckless pre-election cuts in national insurance, which have now been joined in the Conservative manifesto by even more irresponsible post-election cuts in national insurance.

In other words, only by pretending that good public services can be maintained, while cutting real-term budgets, can taxes be cut – and the national debt be brought under control. Labour, nervous of being branded profligate (ironically) by a government that has presided over much fiscal chaos since it came to power, feels that it has little choice but to accept broadly the Conservatives’ plans, allowing themselves just a few specific and limited changes. Yet Sir Keir Stamer and his shadow chancellor Rachel Reeves must be conscious of the reality that faces them: trying to have their cake and eat it.

Ms Reeves, a trained economist who well understands the situation, gives every impression that she is determined to make the best of a difficult inheritance, and will not play fast and loose with public finances or personal taxation. That means no changes to rates on income tax, national insurance, VAT and, by the sounds of it, capital gains tax, leaving only smaller levies, such as fuel duty, stamp duty and windfall taxes to do some very heavy lifting indeed.

Nor does she wish to “borrow to invest”, if that means endangering set targets to reduce the national debt as a proportion of the national income – thus reducing the scope for investment to boost growth and GDP, and ameliorate the debt ratio. Ms Reeves will be very fortunate if, at the end of the next parliament, debt is coming down, “taxes on working people” remain roughly where they are now, and the quality of public services is as improved as the public expects.

To effectively rule out tax rises is to admit that the public services are not about to be much improved – and perhaps not at all, once the pledge to reduce migration is also implemented.

Both the main parties, then, are not being entirely transparent with the British people about just how challenging the next few years are going to be. The prospect is of modest increases in real wages, improved public services (marginally, at best) and pretty stagnant standards of living. Even so, it will be difficult to avoid raising some taxes, stealthily or otherwise.

If Labour does win its supermajority landslide, it will be difficult to control expectations, and the years ahead will inevitably bring disappointments and disillusionment. As with the experience of the last few years, and the abject failure of Johnsonian cakeism, the voters will not appreciate being taken for fools again.

A landslide is no defence against such a revolt as is taking place now. It is not the general election of 2024 that Labour should be worried about – but that of 2028.