Markets are a tool for society, not as the primary reason for it. The economy should work for everyone, not just billionaires, hedge funds and investment banks. Excessive rent-seeking (gaining wealth from from financial speculation and intellectual property) increases inequality. In the short to medium term, we seek to rebalance the economy to reduce this by ensuring wage income is closer to rentier income.
Re-nationalise the UK Green Investment Bank and rename and restructure it as the National Investment Bank (NIB). The NIB will also be merged with the Public Works Loan Board and the Infrastructure and Projects Authority.
The NIB shall be capitalised with £20 billion, drawn primarily from the sale of the government’s shares of private banks following the financial crisis, the removal of subsidies for fossil fuels, and the existing funds held by the UK Green Investment Bank.
The aim will be to raise £500 billion in investment over the next 20 years and invest that into infrastructure and technology.
The NIB will target particularly deprived or underfunded regions, and local authorities will also be able to make the case for investment in their region.
The minimum wage should be set to the same value as the living wage (currently £14,458.50 based on 252 working days of 7.5 hours per day at £7.65), and automatically adjusted in line with that figure.
We must improve fairness in the tax system by closing tax evasion loopholes and reducing the gap between corporation tax and income tax.
Tax laws and the tax system must be simplified. Much tax avoidance happens because the tax code is excessively complex and full of loopholes, so simplifying the system is a big step towards reducing avoidance.
As a general rule of thumb, tax policy should focus on simple direct taxation (such as income tax, corporation tax and land value tax) for the bulk of revenue raising, and use minimal indirect taxes to discourage certain activities (such as fossil fuel use, drug use, and so on).
The personal income tax allowance will be set at the level of a full time living wage and will rise in line with the living wage. This means that someone working a normal full-time job at the minimum wage would not pay any income tax.
Capital Gains Tax will be replaced by an Asset Tax, based on an annual self-assessment. It will apply to those whose assets amount to greater than £350,000. Debt, such as mortgages, will be offset against any assets and the remainder will be assessed as the taxable value of assets. This ensures those who accumulate wealth purely through accumulation of assets, rather than direct income, are contributing to the economy whilst avoiding an unnecessary burden on the average family.
The rate of Asset Tax for individuals will be harmonised with the rate of tax on earned income, and all allowances for each will be pooled, in order to ensure that work is rewarded and incentivised to the same extent as investment.
Investigate possible reforms to the way VAT is applied to goods and services with a view to making it less regressive and, ultimately, to remove the poorest from having to pay entirely. This may require renegotiating our obligations to the EU, which makes VAT compulsory for all member states.
Tampons should not be considered a luxury item and should be considered a necessity
Introduce a tax on financial speculation, commonly known as a “Robin Hood Tax”. We will do this by joining the proposed EU Financial Transaction Tax system, which is planned to start in 10 countries across Europe during 2016 (including France, Germany, Belgium, Italy, Spain and Estonia). We would also work with international organisations to broaden such a regime beyond the EU.
Close down all tax havens under British jurisdiction. This means reforming tax rules in the Channel Islands, the Isle of Man, the Cayman Islands, the British Virgin Islands, and others.
In parallel, work at an international level to get rid of tax havens outside British jurisdiction, and close international loopholes such as the “Double Irish Dutch Sandwich”.
As more jobs, both skilled and unskilled, become automated we will introduce a universal basic income, with the aim of eradicating poverty and providing a basic standard of living for all in a future where permanent employment is less necessary. In the near term, we will support research into such a scheme and its effects on society and the economy, and run pilot projects similar to those taking place in other countries.
Improve rental rights, such that residential tenants cannot be evicted if they are paying market rate rent and have not damaged the property. Create a general principle that for tenants a property is their home and core to their life, whereas for landlords it is but a piece of property and simply a financial asset.
Adopt Land Value Taxation (LVT)1, a charge on the rental value of land not including any improvements made on the site (such as buildings, drainage and services). Valuation to be based on market evidence, in accordance with the optimum use of the land within the planning regulations and updated regularly (at least every 2 years)23. LVT would replace Council Tax, Uniform Business Rates, and Stamp Duty. There will be two rates of Land Value Tax - a national rate and a local rate. The national rate will be decoded after consultation and research. The local rate will be set at the discretion of each local authority. Public open space, public transport infrastructure and open water will all be exempt from LVT. Local and national government property will not be exempt, to encourage the efficient allocation of publicly owned assets.
Personal income tax is calculated on income generated prior to expenses being deducted. But in business, corporation tax is calculated on any profit generated after expenses have been deducted from income. It is proposed that a study is conducted into the feasibility and fairness of calculating them both in the same way: either personal income tax being revised and only calculated after household costs have been deducted (i.e. taxing household surplus or amount put into savings rather than income), or corporation tax being calculated on the basis of revenue alone.
Given that there is a current tax gap (between tax due and tax received by the exchequer) of £120 billion, we propose the introduction of country-by-country reporting and a general anti-avoidance principle, in order to ensure that everyone living or doing business in the UK pays all the tax they owe.
We will complete the metrication of the UK started in 1965, but never completed. The remaining uses of imperial units should be phased out and replaced with the modern metric equivalent, as recommended by the UK Metric Association.
Ensure worker-owned cooperatives and mutuals are given priority with all government contracts.
All private companies who receive public money must be subject to the same transparency requirements as governments when it comes to the goods and services they deliver4.
In order to stimulate adoption of the living wage, and act as a good example, all public sector organisations and National Infrastructure Organisations will be required to pay employees at least a living wage.
All public sector organisations will have to use open source software and services where available. Proprietary software that is currently in use should be examined for open source alternatives. A timeline should be created and made public to show how and when the body will convert to this alternative in a reasonable period of time. This is to cut down on public sector costs and increase our society’s participation in the open source culture.
We will instruct HM Treasury to produce a roadmap for the future of currency and the role of central banks in a world with non-state-issued digital currencies, such as Bitcoin.
Follow recommendations regarding transparency in the Lyons Housing Review - “To ensure greater transparency in the land market, the Land Registry should open up land ownership information to the public in a similar manner as the property price paid data set and make it a legal requirement to register land option agreements, transactions and prices.”
When you buy something, it should be owned (not a license to use). A preventative measure to reduce risk of vendor lock-in and promote ability to fix and modify purchased products.
“A Land Value Tax for England”, Andy Wightman, March 2013: http://www.andywightman.com/docs/LVT_england_final.pdf ↩