We Should Soak the Landowners: Lloyd George Favoured It; So Did Churchill and Adam Smith. Denmark Has One, as Does Sydney, Australia. So Why Won't Gordon Brown Have a Land Tax? (Features)

By Swinson, Antonia | New Statesman (1996), May 27, 2002 | Go to article overview
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We Should Soak the Landowners: Lloyd George Favoured It; So Did Churchill and Adam Smith. Denmark Has One, as Does Sydney, Australia. So Why Won't Gordon Brown Have a Land Tax? (Features)


Swinson, Antonia, New Statesman (1996)


How exhausting, expensive, maddening to live in a country where our destiny is to be squashed between a red-blooded feudal system and an even more rapacious market economy. So we have a Queen who receives a [pounds sterling]50m tax-free bunce from her mother in a jubilee year, and much happy swapping of palaces, at a time when every news story apparently points to a population on the verge of a nervous breakdown: lousy infrastructure (Potters Bar just the latest spasm), an NHS where catching a hospital infection is a one-in-ten shot, and an education system that offers our children lower horizons than their parents had. Yet making connections with these increasingly sore subjects is at last allowing the revival of a political big idea which, since David Lloyd George was chancellor before the First World War, has dared not speak its name: land value taxation (LVT).

If Tony Blair wants his place in history to be half as exciting as Lloyd George's -- and if he wants Cherie to stop griping about how much they lost from selling the house in Islington before prices soared -- now is the time to suggest LVT to the boy next door. This taxes the rental value of land annually, recognising that landowners, whether rural or urban, living in Cumberland or Islington, see their wealth rising not through their own efforts, but through the investment and activity of the local community. An office in the Hebrides has less rental value than one in Hampstead because of the huge difference in the numbers of people keen to live and work there. Local facilities provided by the taxpayer also create value; a house near a good state school attracts a 20 per cent premium. Owners of land near new infrastructure see values explode, yet none of these gains is returned to the community.

LVT eliminates tax dodgers because you can't take land offshore. It also delivers speedy social and environmental benefits: our million empty homes would soon be occupied (and so would brownfield sites), for who would want to pay tax on an empty asset? And taxes on labour, employment, goods and services could be reduced.

Pie in the sky? Perhaps not. Offshore property companies own huge tracts of undeveloped land in Liverpool: it helps their balance sheet collateral. The city council is lobbying Westminster to allow it to raise a land tax. In Edinburgh, businessmen propose that a suburban passenger railway could be wholly funded from the rising values of adjoining land. A property developer, Don Riley, in his book Taken for a Ride, estimated that surrounding land values along London's Jubilee Line rose by [pounds sterling]1.3bn per station--untaxed gains that could easily have provided the [pounds sterling]3.5bn costs of building the Tube line, which runs through some of the UK's most deprived areas.

Economists' arguments against LVT are long rehearsed, much bolstered over the years by the considerable public relations finesse of the big landowners who have positioned themselves as custodians of the national heritage. They argue that it is not possible to separate building values from land for tax purposes. (Land speculators and property developers manage this beautifully.) LVT, they say, would not provide an adequate fiscal base for the welfare state -- though no national statistical data has been given to support this. Then there is that little old lady in the big house who pays the same LVT as the millionaire next door. Finally, LVT is a violation of sacred property rights: that "Englishman's home is his castle" killer line. But LVT is not strictly a tax, rather a fee for benefits conferred by exclusive occupancy, and therefore no different in principle from a parking meter charge or a seat at the theatre, the price of which is dependent on its position.

It is difficult not to smell a conspiracy in a country where landowners, roughly equivalent in number to the population of Aberdeen, control and own more than 90 percent of the UK land mass (and receive around [pounds sterling]4bn in subsidies).

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We Should Soak the Landowners: Lloyd George Favoured It; So Did Churchill and Adam Smith. Denmark Has One, as Does Sydney, Australia. So Why Won't Gordon Brown Have a Land Tax? (Features)
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