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Green Party backs NI rise, wealth tax and capital gains reform in manifesto

Green Party backs NI rise, wealth tax and capital gains reform in manifesto
Matt Browning
Written By:
Matt Browning
Posted:
12/06/2024
Updated:
12/06/2024

The Green Party has released its election manifesto, which has plans to raise National Insurance contributions (NICs) and tax multi-millionaires to “create a fairer society”.

Speaking from Sussex County cricket ground in Brighton and Hove, Carla Denyer and Adrian Ramsay targeted raising between £50bn and £70bn with a mix of tax reforms.

One was aimed at the wealthier members of society, through a wealth tax for taxpayers with assets above £10m at 1%. Those with £1bn in assets would pay a 2% tax, and the party predicts both taxes will impact fewer than 1% of households in the UK.

Denyer and Ramsay will also align capital gains tax (CGT) with the income tax bands should they win the general election on 4 July. If successful, fewer than 2% of all income taxpayers would be impacted by those reforms.

Under the proposals, if you earn over £50,270, you’ll be required to pay an 8% National Insurance rate on your salary, which works out at £283.74 per year if you earn £55,000.

The Green Party noted in its manifesto that the decision to increase tax was to improve public services, which are “crying out for investment”. It also said that the election comes at a time when “the number of billionaires in the UK rose from 29 to 171 since the Conservatives were elected in 2010.”

After Green Party’s manifesto tax cuts ‘it is now over to Labour’

While Prime Minister Rishi Sunak promised to cut taxes across the board, the Greens “are headed in the opposite direction”, says Laura Suter, director of personal finance.

Suter said: “The Green Party clearly have their eyes on wealth taxes as a way to raise revenue to support the rest of their manifesto pledges. Put together, their plans to equalise certain taxes and levy a new wealth tax would hit both investors and business owners.

“It’s now over to Labour, who release their manifesto tomorrow, to outline any tax rises they believe are needed to fund their plans for the country ahead of the election.”

On CGTs, Suter believes “it’s likely that many investors and business owners would be hit by the move”.

Suter added: “However, the Government’s own estimates show that if the highest CGT rate rose by 10 percentage points, it would actually cost the Government £2bn by 2026-27.

“That’s because big increases in tax tend to impact investor behaviour. For example, investors may hold on to assets for longer rather than realising gains, find different ways to shelter their gains from the taxman, or own second homes through companies to avoid the tax altogether.”

Affordable housing and fuel poverty ‘tackled’

In terms of housing, one of the Green Party’s pledges is its ‘Our Right Homes, Right Place, Right Price’ charter, which aims to protect green spaces, reduce climate change, tackle fuel poverty and offer affordable housing.

The charter would mandate local authorities spread small developments across their areas, require new developments to be accompanied by extra investment in health transport and other services, and ensure new homes meet Passivhaus or equivalent standards.

Housebuilders should also include solar panels and heat pumps on new homes “where appropriate”.

The Green Party’s other measure on housing would be a push for a “local authority-led, street-by-street retrofit programme” to insulate properties.

To do this, it would invest £29bn over the five years to insulate homes to an EPC rating of B or above as part of a 10-year programme.

A further £4bn would be paid over the next five years to insulate other buildings to a high standard, and another £9bn would be invested in the next five years for low-carbon heating systems for homes and other properties.

Ending Right to Buy

A further Green Party housing measure was a pledge to build 150,000 new social homes per year through new build and purchase and refurbishment of older housing stock, community Right to Buy for local authorities, and ending individual Right to Buy to keep social homes in local communities.

Finally, the Green Party focused on renters, noting that it would push for rent control, stale rental tenancy, an end to no-fault evictions and private rental tenancy boards.

This week, the political parties are unveiling their manifestos. The Liberal Democrats promised to build more homes, bring back rental reforms and give local authorities more planning power.

The Conservatives pledged to permanently scrap stamp duty for the majority of first-time buyers, while reintroducing the Help to Buy equity loan scheme.

Some pledges have left industry experts a little cold, with some experts saying the Conservative manifesto had good measures but was a little too late.