Green Party MP Caroline Lucas: her power is growing
Hardly a week goes by without business standing up to Ukip, and making the case for Britain to stay in the European Union (EU). Chief executives, the Confederation of British Industry, and big companies have all argued robustly that the UK should stick with the EU. A few have even been willing to make the case for free movement of labour, and high levels of immigration, especially from eastern Europe.
That is exactly as it should be. Major economic issue are at stake and businesses have every right to make sure they are heard. But companies do not just need to make a case against the extremists of the right they need to take the fight to the Greens as well.
A permanent force in British politics?
Like Ukip, the Green Party is never likely to form a government, certainly not alone but it can still shift the debate in its direction. And the Greens have now established themselves as the Ukip of the left. They have one MP and regularly score 5%-10% in the opinion polls.
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It remains to be seen whether that holds up at the general election. But they may well overtake the collapsing Liberal Democrats and establish themselves as a permanent force in the political landscape as they have in Germany, for example.
It is easy to ignore small parties, on the grounds that they do not have much power. And yet, just as Ukip has shifted the Conservative Party towards an anti-EU position, the Greens may well have the same impact on Labour, shifting the party towards environmentalism. Even with only 7% or 8% of the vote, they can still have a big impact on policy.
The trouble is, the party's economic policies are bonkers. The Greens are not just interested in preserving the environment. They are very hostile to free markets and dogmatically anti-business. You might expect them to oppose fracking, for example, and to favour wind farms. But on closer examination, their policies go much further than that.
A radically anti-business agenda
Take trade. The Greens' manifesto calls for import tariffs. Levies would be imposed on all imports, from raw materials to finished goods, based on how ecologically damaging the products were. That would apply to imports from both within and outsidethe EU, and there would be higher levies on imports from countries that were not especially green.
However, such tariffs would break all our trade deals, and get us thrown out of the World Trade Organisation, as well as the EU. That would decimate exports and since about 36% of the British economy relies on selling stuff to the rest of the world, that would make us a lot poorer.
Then there's the Citizen's Income. Everyone would get a basic income from the state, regardless of whether they worked or not. Now there are arguments for and against this idea, which has been proposed before by thinkers from various points along the political spectrum but in the version suggested by the Greens, it would cost about 14% of GDP, with no clear idea of how to pay for it.So we could expect to blow out the budget deficit at the very least.
There are other detailed, but equally crackpot ideas. The Greens want strict regulation of all lending to individuals, and for all mortgages to be on fixed terms for their duration. Banks would no longer be allowed to create money through fresh deposits that would be controlled by a new National Monetary Authority. The nationalised banks presumably RBS would be turned into a People's Bank. VAT would be abolished, and replaced with unspecified eco taxes. Peer-to-peer file sharing would be legalised for personal use so presumably the music and publishing industries, both key to the UK, would disappear quickly.
Needless to say, the Greens are all in favour of higher capital gains taxes although, rather oddly, they still think a person's main home should be exempt. Taxing our houses is too radical a step even for the Greens, although of course you can in fact make a perfectly respectable economic case for it. The list goes on and on but you get the general idea.
The truth behind zero growth
It would be easy to dismiss all that as student union politics. Much of the manifesto reads like something put together in a college bar after a few too many beers. None of it is very realistic, and they probably don't expect to implement much.
Yet that does not mean it will not be influential in the medium-term. Once other parties start to court the green vote, they will trim their polices to make sure they don't get condemned by the environmentalists. The Green Party argues for zero growth. But most people probably don't know what that means in terms of fewer jobs, lower wages, and decimated industries.
So businesses need to use some of the energy and resources currently devoted to fending off the threat of leaving the EU to take the fight to the environmentalists instead. They need to explain that without growth, jobs don't get created, wages don't get paid, and neither do pensions or taxes. Left unchecked the Greens will create a radically anti-business culture and companies along with everyone else will suffer from that.
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Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years.
He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.
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