Economy

	We will re-establish Britain's strong independent economy, following the brilliant examples set by the tiger states of East Asia such as Japan, South Korea, and Singapore in defying neo-liberalism. Britain does not need to be in the EU in order to trade and co-operate with it.
We have the fifth largest economy in the world in terms of market exchange rates and the sixth largest by purchasing power parity (PPP) exchange rates. Freed from the EU straitjacket, an independent Britain will be in a strong position to develop its massive trade and investment links further.
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Our Policies 1a. The reason for an independent British economy. Our policy to withdraw from the EU will not just have a far-reaching positive effect in the way we govern Britain, but also in our economy. Labour currently pay around £12 billion per year to the EU (£30 million per day), so our policy of leaving the European Union will place us in the uniquely favourable position of having cash to spare. We intend to invest this sum wisely into the NHS, the war on crime, pensions, education and asylum reforms. Our release from the EU's common external tariffs will also enable us to strengthen our trade relationships with countries outside the EU such as the countries of the North American Free Trade Area (NAFTA), European Free Trade Association (EFTA), the Far East and our natural trading partners in the Commonwealth who share our language and business methods. The EU has never considered preferential trading arrangements with Australia, Canada, New Zealand, Singapore, America and Hong Kong, all of which have English as a native tongue or widely spoken second language. Britain would benefit from negotiating free trade agreements with each of these. Of course, leaving the customs union would mean leaving the single market, too. That would involve losing the right to free movement of goods, and would have complex consequences for a number of industries. But overall we would be able to negotiate at least as good a deal through an inter-governmental trade agreement with the EU as we now have through the supranational single market. 1b. The benefits of an independent British economy. The prize to Britain of recovering control of its trade policy would be glittering indeed. Even if the EU insisted that we pay the usual customs duties, were subject to the normal quotas imposed on ex-EU trade, the UK would benefit by 2.5% of GDP*. We will be in the uniquely favourable position of having over £12bn a year in surplus by not ploughing taxpayers money into the EU to keep it going. Every British taxpayer pays around £600 a year for our membership with the EU. For every £1 we receive from the EU, British taxpayers must hand over £5. As a result of EU policies, the average British family has to pay an extra £1,500 on food. Outside of their customs union, we will benefit from importing food on our own terms, thus saving the average family of four some £1,500* a year. As Britain buys much more from EU countries than it sells, it would not be in the interests of the EU to disrupt trade. More open trade will also do far more to help less developed countries than any amount of aid or debt forgiveness. *Source: Professor Patrick Minford CBE. Currently Professor of Applied Economics at the Cardiff Business School, Cardiff University.
2. Reforming the regressive Council Tax. We will completely reform the Council Tax, replacing it with a system which is based more on the ability to pay. This will mean tax cuts for millions of individuals, families and businesses. Property based tax is still a solid foundation for more affluent individuals, who are often able to evade income tax by employing clever accountants. Therefore we propose a hybrid system whereby lower to intermediate Council Tax bands are abolished in favour of income based taxation. This will allow many low income families and pensioners to pay tax proportionate to their incomes. Other tax bands will remain ensuring the more affluent are accountable for their taxes. It is our aim to reform the Council Tax so that it is far more consistently proportionate to wealth and income. Presently Council Tax penalises pensioners and people on low incomes, because they pay a far higher proportion of their income in tax than the very rich. This is because Council Tax is an unfair and regressive tax. In addition to this we will introduce a new 45% rate of tax on very high individual incomes, which will apply to those whose earnings equate to ten times that of the minimum wage*. This change would affect less than 1% of the population and generate an estimated £4.5bn per year, which we will use to increase state pensions. Furthermore this would more evenly spread the burden of taxation. We will use the existing Inland Revenue Income Tax mechanism for Council Tax reforms - so saving hundreds of millions - while at the same time ensuring that the typical household and pensioner pay hundreds of pounds less. * Based on 40 hour week. For example current minimum wage is £5.35. So 40 hours @ £5.35 is £214 a week and £11,128 per year. Thus the 45% income tax threshold would currently be £111,280.
3. Wholesale deregulation. As part of our initiative to repeal UK laws and statutory instruments that have originated in the EU, small businesses that provide most of British jobs will be free of current employment regulations. These interfere with job creation, especially part-time jobs which offer opportunities to women, the under-25s and older workers. We promise wholesale deregulatation, particularly for small businesses. We recognise the contribution that smaller employers make to the UK economy, and we would pay particular attention to scrapping unnecessary rules for businesses employing fewer than 20 people. Freed from excessive rules and red tape, enterprise will thrive and this will lead to a marked improvement in private sector employment. There were 4,323 company insolvencies in England and Wales in the fourth quarter of 2002 on a seasonally adjusted basis. This was an increase of 11.1% on the previous quarter and an increase of 14.9% on the same period a year ago. This represents the highest level of company insolvencies since 1994, with over 300 firms a week going bust.
4. Supporting British farmers. Despite recent 'reforms', the European Union's Common Agricultural Policy remains the worst example of centralised, one-size-fits-all management and it still absorbs 45% of the EU budget. Release from the CAP will, at last, allow Britain to organise farming policy in our own interests, not those of other EU countries or large agri-business. We recognise however, that British farmers will always merit financial support. We still want them to produce our food in the face of cheaper imports and to play their part in caring for the countryside. They must be fairly rewarded. Therefore we will replace CAP with Environmental Care Payments. In addition to the new ECP, we will ensure that farmers are protected from the excessive buying powers of big business by allowing the expansion of farmers' co-operatives. We will also reward farmers who use 'green' and 'organic' methods and those who farm in difficult terrain like hill farmers and coastal marsh farmers.
5. Supporting British fishermen. The UK is one of the world's leading fishing nations, with our fleets bringing home fish of every kind. However the utter failure of the Common Fisheries Policy, with stocks of several common species now facing exhaustion, is the most glaring example of mismanagement and the futility of the EU vision of 'common' natural resources. Yet the CFP is one of the EU's core 'competences' - the Conservative Party's promise to 'negotiate' out of CFP cannot be fulfilled until Britain leaves the EU. Our aim is to re-establish British control over our coastal waters with sufficient rebuilding of our fisheries protection fleet to enforce this. New fishing licences will stipulate acceptable practices such as mesh sizes of nets, and fishing will be prohibited in temporary 'fallow' zones to allow stocks to recover.
6. Cuts in foreign funding. A cash boost for Britain. We will heavily reprioritise funding for international projects, in favour of making investment in Britain our top priority. We plan to increase funding considerably into: The Armed Forces- Vital upgrades to equipment. Education - Raising standards of recruits. The NHS - Creating jobs and improving conditions. The Police Force - More officers and less paperwork. We will look primarily to invest in improvements to wages, equipment and training. More NHS staff and more police officers are our main aims.