16 Apr 2015

3 key ideas in the UK Green Party Manifesto

I am delighted to see that the UK Green Party's Manifesto includes commitments to three of my favorite reforms:
  • Stop commercial banks creating money and use a central authority to handle money creation
  • Introduce a tax on Financial Transactions
  • Introduce a Basic Income
Are there any other political parties around the world that have all three ideas in their programs?

I would certainly vote Green if I was able to. Unfortunately, I've been living in France for too long to be able to vote in the UK.  Why can't the Greens in France follow the example set in the UK?

Here are some extracts from the manifesto.

Regaining control of our money (page 47)
One of the most fundamental tasks of government is maintenance of the currency. Without stable money accepted by all we can’t buy and sell things or plan for the future. Inflation in particular makes it hard to take the long-term view that the environmental crisis demands.

Most people believe that our money is currently created by the nationalised Bank of England. It isn’t. A pound in your bank account is no more than a promise by the bank to pay you that pound; you don’t actually own any publicly created money. In fact, commercial banks create new money (in the sense of money in bank accounts) whenever they make loans, and that money disappears when the loan is paid back.

The fact that the size of our money supply – the total amount of money in circulation – is dependent upon millions of separate commercial lending decisions by banks makes it hard to maintain economic stability. During the great recession of the past few years, the unwillingness of banks to make new loans and the desire of people to pay down their debts has meant that the money supply has shrunk, and the government has had to resort to the emergency policy of printing money (called ‘quantitative easing’) to prevent an even worse slump.

We believe that the time has come to recognise that the creation of currency and the control of the money supply is far too important to be left to profit-seeking private sector banks and should be brought back under the democratic control of the state. Quantitative easing was but a first step. Commercial banks should be no more than the custodians of publicly created money in current accounts, and the creation of that money should become the function of a new monetary authority, independent of day-today government control. This policy would protect ordinary bank accounts, and

  • allow banks to fail safely
  • separate ordinary and investment business
  • provide some control on overall lending and debt

Tax Financial Transactions (page 51)
Introduce a Robin Hood tax of 0.1% on transactions in bonds and equities and 0.01% on derivatives, replacing the existing stamp duty on share transactions. This would raise up to £20 billion a year later in the Parliament and would help stabilise financial markets.

Introduce a Basic Income (page 54)
Scrap most of the existing benefits apart from disability benefits and Housing Benefit. Abolish the income tax personal allowance. Then pay every woman, man and child legally resident in the UK a guaranteed, non-means-tested income, sufficient to cover basic needs – a Basic Income. For those who earn, the Basic Income compensates for the loss of the personal allowance.
Children will receive a reduced Basic Income, Child Benefit. Pensioners will receive their Basic Income at a higher level, as a Citizen’s Pension.

The advantages are many and we support the principle of a Universal Basic Income because it has the potential to:
• Act as a springboard rather than a safety net; people can take jobs without fear of prosecution for working while on benefits;
• Prevent people falling into absolute poverty rather than trying to help them when they are already there;
• Reward people for all the work that’s done outside the formal economy, and most of this work is done by women;
• Encourage more of this unpaid activity, much of which – such as food growing, fixing things that have gone wrong, converting older buildings, protecting the natural environment – is a vital part of a transition to a more sustainable economy;
• Avoid the poverty trap in which an increase in wages leads to a massive loss of benefits;
• Make everyone who earns, however little, a citizen who contributes to society by paying taxes, giving almost everyone a stake – raising the personal allowance takes us in precisely the wrong direction;
• Be simple to administer and easy to understand.

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