The Green party manifesto pledges to increase taxes to fund a £160 billion boost to day-to-day public spending.

But do the sums add up?

FactCheck takes a look.

What does the Green party pledge to spend?

The Green party manifesto pledges to spend just over £160bn by 2030 on health and social care, income support, nature, food and farming, education, transport and overseas aid.

It plans to fund this by increasing taxes by over £170bn per year on personal income and wealth, business taxes and carbon taxes.

The Institute for Fiscal Studies (IFS) said that “some” of the party’s tax plans “could raise substantial sums”. For example, the increase in National Insurance contributions on those earning over £50,000 and the restriction of pension tax reliefs, which the IFS says would “affect a large number of higher earners”.

The planned wealth tax could also “raise revenue”, but “would be tough to implement”, the think tank added.

The Green party told FactCheck: “Taxing the wealthy can be difficult, because they prefer to consider paying tax as a voluntary matter. The Green Party disagrees. We have led work on legislation to trace the assets of the wealthy and we would do our very best to prevent evasion and ensure that the wealthiest pay their fair share.”

The party also intends to spend an additional £90 billion a year on capital spending – that’s long term on things like building rather than day-to-day spending – which the IFS said would be “a particularly big increase”.

The Greens said: “We agree that this is a large increase but we believe it is essential to mend our broken public services and investment in the infrastructure of a sustainable economy.”

What about the carbon tax plans?

Some £90bn of the party’s £170bn tax plans is for a “carbon tax”. But the IFS said it’s “doubtful” that the Greens could raise this amount, “not least because the more successful the tax is at changing behaviour, the less it would raise”.

The idea of the carbon tax is to penalise companies that emit large amounts of greenhouse gases. If the scheme works, it will incentivise firms to change their production processes. That’s good for the climate but will mean those firms are no longer liable for the carbon tax – which means less money in government coffers.
The Green party told FactCheck: “It is hard to accurately predict the yields as it depends on the responsiveness of sectors to the incentive created by the tax itself.”

And when it comes to individuals, it’s not just the wealthy that would feel the impact of the Greens’ proposed tax measures, especially the carbon tax plans. The IFS says it would be “impossible” to raise the £90bn target “without the effect being felt by everyone”.

In response, the Green party said the IFS is “right that the carbon tax ‘would be felt by everyone’ but they have failed to connect this tax with the dividend that would be produced by our investment in building more social homes and providing a nationwide programme of home insulation, as well as subsidising public transport and making significant uplifts to welfare payments”.

Would it cost the taxpayer more than planned?

Although some of the tax plans may initially work, the IFS said it is “unlikely that the specific tax-raising measures they propose to help achieve all this would raise the sorts of sums they claim – and certainly not without real economic cost”.

The Greens told FactCheck: “We are surprised to see the IFS suggesting that our really high levels of public investment would come at an economic cost. It is clear that investment in infrastructure and public services would help to address the productivity crisis (better transport, fewer people out of the workforce waiting for medical treatment)”.

Overall, government borrowing “would end up around £80 billion a year higher” – if the figures are taken at face value – with debt expected to rise throughout the next Parliament, the IFS says.

Additional tax-raising measures would be needed “to fund their planned permanent spending increases,” the researchers added.

The Green party said it is “accepting that we will need to borrow to invest because we need to shift our economy onto a different long-term path,” but noted that “we do not foresee any rises in personal taxes over the course of this Parliament, other than those we have identified”.

(Image credit: Simon Chapman/LNP/Shutterstock)