What are the Green Party’s economic plans?

The Green Party’s by-election win in Gorton and Denton in February 2026 brought it a record fifth parliamentary seat. Party membership has more than tripled from under 70,00 to over 220,000 since Zack Polanski became leader. Polling support has increased substantially, and in the local elections in May 2026, the Greens saw gains of two mayoralties, 376 council seats and control of five councils.

Alongside rising public support, the Greens have faced greater scrutiny of their economic plans. The party’s 2024 general election manifesto – the most recent comprehensive statement of Green policy – proposes big increases in government spending (see Figures 1 and 2).

Figure 1: Additional current (day-to-day) spending

Source: 2024 Green Party Manifesto
Notes: Additional spending above Office for Budget Responsibility (OBR) March 2024 baseline

Capital spending would rise by £90 billion per year by 2030, with over £70 billion allocated to the green transition (shifting the economy towards low-carbon energy sources to combat climate change), alongside additional spending on social housing, health and education. Day-to-day spending would rise to £160 billion annually by 2030, with health and social care, income support, overseas aid, transport and education making up the bulk of the increases.

Figure 2: Additional capital spending

Source: 2024 Green Party Manifesto
Notes: Additional spending above OBR March 2024 baseline

The Greens are also committed to big increases in taxation. Alongside the flagship policy of introducing a wealth tax, a wide range of other tax-raising options have been proposed, amounting to total increases of £170 billion annually by 2030 (see Figure 3). 

Figure 3: Additional taxation

Source: 2024 Green Party Manifesto
Notes: Additional tax revenue above OBR March 2024 baseline

The party’s tax and spending plans imply that it is committed to a significant increase in public sector borrowing: the manifesto rejects a ‘self-imposed fiscal straitjacket’ and states that the Greens are ‘prepared to borrow to invest’. The gap between the pledged increases in spending and taxes amounts to an additional £80 billion of annual borrowing by 2030.

In addition, the party has pledged to nationalise water, rail and energy companies, raise the minimum wage to £15 per hour and introduce a four-day working week. Workers’ rights would be strengthened, including repeal of ‘all anti-union and anti-strike laws introduced since 1979’. Universal credit (a means-tested benefit for those on low incomes) would be increased, and the possibility of rent controls (regulations on how much landlords can charge) has been suggested. Over the longer run, the Greens are committed to introducing a universal basic income.

Taxes on wealth and capital gains

The wealth tax, referenced repeatedly by Polanski, is perhaps the most iconic Green policy. The party proposes imposition of a tax of 1% annually on individual assets above £10 million and 2% on assets above £1 billion, claiming that this would raise £15 billion per year.

The party also proposes reforms to capital gains tax to align rates with income tax, and reform of national insurance to extend the main 8% rate to all income above the upper earnings limit, removing the current lower 2% rate that applies above that threshold.

Adding these wealth-related tax increases alongside the wealth tax, the party claims, would increase the revenues raised to £33 billion. Alongside other personal direct tax changes, the manifesto claims that total revenue from personal income and wealth would increase by £70 billion annually by 2030.

A substantial recent review of the evidence on wealth taxes estimates that an annual tax of 1% on assets above £10 million could raise around £9 billion per year (Advani et al, 2020). The authors conclude that major reforms to existing taxes on wealth – including inheritance tax, income tax, capital gains tax and council tax – should be the first priority. An annual wealth tax could be justified in addition to these reforms, the authors claim, if the aim of the policy was to reduce inequality by redistributing wealth.

Equalisation of capital gains tax with income tax is supported by the 2011 Mirrlees review of taxation and by recent academic work by Arun Advani and colleagues (Mirrlees et al, 2011; Advani et al, 2024). But both sets of authors pair the proposal with investment allowances – an element that is absent from the Greens’ proposal. 

Advani has estimated that equalisation could raise around £16 billion annually; the Greens have cited this number in support of the policy (a more recent estimate in Advani et al, 2024, revises the number down slightly to £14 billion once investment allowances are taken into account). Under different assumptions about how taxpayers would respond to the tax, HM Revenue and Customs estimates that capital gains tax reform could reduce tax revenue by £2 billion per year (HMRC, 2024).

Taxes on land and carbon

Other tax proposals from the Greens include a land value tax and more aggressive carbon pricing. Land value taxes – which have a long intellectual tradition going back to founding fathers of economics Adam Smith, David Ricardo and John Stuart Mill – attract unusually wide-ranging support, with the New Economics Foundation, the Institute for Fiscal Studies (IFS) and the Institute for Economic Affairs among those in favour of the policy, as well as academics such as John Muellbauer (2023).

Carbon pricing is widely supported among economists, at least in principle: if climate change is regarded, in narrow terms, as an externality – something for which the price does not reflect the true cost to society – then a tax that ‘internalises’ the social cost into the price is the conventional textbook response. The price proposed by the Greens – £120 per tonne rising to £500 within ten years – is high compared with most proposals. In the European Union’s Emissions Trading System, for example, carbon currently trades at around €75 and is forecast to rise to nearly €150 by 2030.

The Greens claim that their carbon pricing policy would raise £90 billion per year – a remarkably high number. The Economist notes that this would be roughly equal to the combined yield of all 80 carbon pricing schemes worldwide in 2024 (The Economist, 2026).

There is growing acceptance, however, that carbon pricing in isolation will be insufficient to achieve the green transition, and that a structural shift in investment patterns is required. For example, Nicholas Stern (author of an influential report on climate change in 2006) and Nobel laureate Joseph Stiglitz argue that standard cost-benefit frameworks systematically underestimate the cost of climate inaction. Other leading economists also view carbon pricing as inadequate (Stern et al, 2022; Blanchard et al, 2023).

There is widespread support for a substantial increase in investment spending. Not only would this accelerate the green transition, but economists have argued that the UK’s poor productivity and wage performance is, at least in part, the result of insufficient public investment (Stern et al, 2024).

Policies on infrastructure and housing

Beyond taxation and spending, the Greens’ manifesto commits the party, if elected, to nationalising water companies, the railways and the ‘Big Five’ retail energy companies.

The UK’s fully private ownership of water infrastructure makes it an international outlier. Following privatisation, water companies across England and Wales have been criticised for paying substantial dividends to shareholders while underinvesting in infrastructure and accumulating debt of over £60 billion. By some estimates, over a third of water bills are spent servicing debt interest and paying dividends.

Thames Water has become the poster child for the pitfalls of privatisation. Whether nationalisation will solve these problems is a more difficult question. The corporate and financing structures that will need to be unwound are complex. What’s more, estimates of the potential cost to the taxpayer vary enormously, not least because of the range of public ownership models and associated on- and off-balance sheet financing structures that could be deployed.

Labour has already brought the rail operating companies into public ownership, but the Greens’ programme goes further, proposing full nationalisation and integration including rolling stock and freight, and nationalisation of the Big Five retail energy companies. As with water, the case for these further nationalisations involves complex legal, financial and regulatory questions.

Rent controls are perhaps the most contested part of the Greens’ programme. Economists are generally cautious (or openly hostile) about outright price interventions, including interventions in rental markets, given the potential for unintended consequences.

Recently, however, dissenting academic voices such as JW Mason have argued that views on regulation of rent are in a similar situation to those on minimum wages 25 years ago. According to a comprehensive review of economic research on this topic, the evidence is more nuanced than is often assumed (Gibb et al, 2022).

The macroeconomics of Green Party economic policy

The aggregate fiscal implications of the Greens’ programme have attracted substantial scrutiny. Combined day-to-day spending commitments amount to around £160 billion (see Figure 4). Alongside planned increases on capital spending of £90 billion per year, total spending would increase by a quarter of a trillion pounds annually – equivalent to 7% of GDP and a substantially greater increase than that proposed by Jeremy Corbyn’s Labour party in the 2019 general election campaign (see Figure 5).

Figure 4: Additional spending, tax revenue and deficit

Source: 2024 Green Party Manifesto
Notes: Additional taxation and spending above OBR March 2024 baseline

Figure 5: End-of-parliament fiscal plans compared

Source: Green Party: 2029/30 figures above OBR March 2024 baseline (source: Green Party Statistical Appendix); GDP from OBR October 2024 EFO.
Labour 2019: 2023/24 targets above OBR March 2019 baseline (approx., source: Resolution Foundation, 'Doubling down on a bigger state', Nov 2019); GDP from OBR March 2019 EFO (T3.10).
Note: the Green Party deficit includes additional debt interest costs (included in their 'Other' day-to-day spending). The Labour deficit is a straight arithmetic gap between spending and revenue and does not account for additional interest payments — it is therefore likely an underestimate.

The macroeconomic effects of such a programme – the effects on employment, inflation and growth – are hard to predict and would depend on how financing is divided between tax increases and borrowing. On this, there is disagreement. The Greens claim that £90 billion of the £170 billion that they will raise in additional revenues would come from carbon taxes. The IFS has questioned whether this sum is plausible; as noted above, questions have also been raised about the party’s claims about other tax revenues.

If potential revenues turn out to have been overestimated, this implies higher borrowing unless other tax increases are found. Even setting aside potential shortfalls on day-to-day spending, the additional capital spending of £90 billion per year implies substantial additional borrowing. 

While the Greens have challenged the assumptions made by the IFS about fiscal multipliers and the valuation of public investment – arguing that public investment generates productivity gains that standard fiscal analysis systematically undervalues – it is clear that the party is committed to substantial increases in public borrowing.

Its position on the institutional frameworks within which fiscal and monetary policy and operate is less clear. When challenged on these issues, Polanski has responded with statements such as, ‘the fiscal rule we need to have is to make sure that inflation doesn’t go higher than the skills and resources we have in our economy.’

This and other similar statements appear to be influenced by modern monetary theory (MMT): Polanski named Richard Murphy, a UK-based proponent of MMT, as one of his three favourite economists (alongside Gary Stevenson and Grace Blakeley).

MMT argues that the capacity of the Bank of England to issue sterling means that the public sector can never face financial constraints. As such, inflation, not public debt, should set the limit on government spending. The implication is that inflation targeting by the Bank of England should be abandoned and, instead, the Bank should set interest rates so as to accommodate borrowing by the Treasury.

Few economists think that MMT provides a workable policy framework: while it is widely accepted that the current institutional framework – the fiscal rules in particular – are flawed, MMT provides an oversimplified account of the messy reality of exchange rates, interest rates, financial markets, inflation and employment.

The recent launch of Verdant, a think tank connected to the Green Party and co-directed by James Meadway – a notable critic of both MMT and the current institutional framework – suggests that there will be pressure on Polanski to turn away from MMT. As Meadway has put it, higher interest rates mean that ‘we can’t do Corbynism any more’.

Overall assessment

Overall, the Greens’ economic policy proposals indicate a clear direction of travel: a substantially larger state, higher public investment, higher taxes and higher borrowing. Some parts of the green programme such as land value taxes and a green investment programme attract substantial support from economists and think tanks. 

The larger uncertainty is whether a programme of this fiscal scale can be financed in a way that is credible to financial markets, avoids inflation and remains consistent with the party’s stated ambition. That question will not be resolved until the Greens publish revised plans, which the party has indicated it intends to do before the next general election.

Where can I find out more?

• The Green Party’s 2024 general election manifesto.
• The IFS response to the Greens’ 2024 manifesto.
• Verdant: recently launched think tank connected to the Greens.
• The manifestos of the Scottish Greens and the Welsh Greens ahead of the 2026 elections to the Scottish Parliament and the Senedd: analysis from the IFS. 
• Doubling down on a bigger state. Resolution foundation's assessment of Labour's 2019 manifesto.

Who are experts on this question?

• Arun Advani
• James Meadway
• Jo Michell

Author: Jo Michell

Photo: effledee for Shutterstock