Greens’ tax rises are modest, insists co-leader

The co-leader of the Greens has defended the scale of his party’s tax plans, calling them “fairly modest” by European standards.

Adrian Ramsay told the BBC the extra £172bn per year his party would raise by 2030 was needed for public services and lowering carbon emissions.

The Institute for Fiscal Studies (IFS) has accused the party of making “wholly unattainable” promises to voters.

But Mr Ramsay said his party’s proposals would take the UK “closer to where the average European country is”.

In an interview with the BBC’s Nick Robinson, he said the Greens were the “only party being honest” about the need for additional revenue.

It is Labour and the Conservatives, he added, that are “way out of step with what other countries are doing”.

Both parties plan to keep tax rates frozen until 2028, dragging more people into higher bands as wages rise.

But amid the backdrop of rising debt and the UK’s overall tax levels rising to a post-war high in the wake of Covid, they have been otherwise reluctant to propose large-scale tax increases.

By contrast, the Green Party of England and Wales says it wants to raise an additional £172bn in tax annually by the end of the decade to fund extra investment in public services, particularly the NHS.

It also says it would increase government borrowing by around £80bn a year and spend an extra £90bn on long-term investment in decarbonising the economy, health and education, and social housing.

Key to the party’s plans is a proposed new tax on carbon emissions generated by domestic fossil fuel extraction and imports, which it estimates would raise an extra £91bn a year by the end of the decade.

It also wants to introduce a 1% “wealth tax” on assets worth over £10m, and 2% on assets worth more than £1bn, and raise National Insurance (NI) on annual wages above £50,270.

The IFS think tank has previously said that also some measures would target the wealthy, “the effects of the package would be much broader”.

In an analysis of manifestos on Monday, it added that the Greens’ tax and spending plans, along with Reform UK, are offering “much bigger numbers” than the main parties.

“But the way they suggest that they have radical ideas which can realistically make a positive difference, when in fact what they propose is wholly unattainable, helps to poison the entire political debate,” it added in an analysis of manifestos.

Pressed on the comments, Mr Ramsay said other economists had said praised the Greens for offering a “different way of thinking, that by European standards is actually fairly normal”.

“The Institute for Fiscal Studies has been very clear that the next government is either going to have to cut public services, or increase taxes,” he added.

“The Green Party is the only party being honest in this election, that says, actually, by European standards, we can make fairly modest changes to the tax system, asking those with the broadest shoulders to pay modestly more.”

In 2022, the most recent year for international comparisons, the amount of tax raised in the UK as a proportion of the size of the economy was 35.3%.

According to the Organisation for Economic Co-operation and Development (OECD), this is higher than some European countries such as Poland (35.2%), Hungary (33.2%) and Ireland (20.9%), the lowest in Europe.

But it is still lower than many other countries, including Germany (39.3%), Italy (42.9%), Austria (43.1%) and France (46.1%).

The effect of the Greens’ plans, however, would ultimately depend on how much revenue they raised and the effect on economic growth.

The BBC is interviewing major party leaders in the run-up to the election in The Panorama Interviews with Nick Robinson.

The full interview with Adrian Ramsay will be broadcast on BBC One at 19.00 BST on Monday 24 June and will also be available on BBC iPlayer.