To many of us, notably Vince Cable, it has for long been blindingly obvious that the property boom would end – and end in pain for millions around the world.
The scale of the crash may have surprised even most who expected something like it at this time, as borrowing against unsecured ‘bubble’ land values was bound to lead to massive default.
However the Lib Dems’ campaign group on land value taxation (LVT) which I chair, ALTER, believes that the ‘Credit Crunch’ can be turned into a major opportunity for the Party, if it can press home its renewed conviction that, in order to prevent future “Boom/Bust” cycles, land values must be progressively removed from the banking system and restored to their rightful place as a major source of public revenues.
So the centenary of Lloyd George’s last Liberal Government’s attempt to introduce LVT to Britain was bound to be marked by ALTER this year with a “we told you so” publication of some sort.
The Case for a New People’s Budget comes at 5p a page (£5), with a Foreword by Vince that sums up why it is a “must read” for Party activists who are serious about Lib Dem prospects for power after next year’s General Election.
In Vince’s own words:
The booklet demonstrates that LVT is not just another property tax, important though it is that property should not go untaxed. LVT is already part of our taxation policy. As a first step we want to see commercial rates replaced by site value taxation. But this is only a first step towards a wider system for taxing land values. The writers argue that LVT has far-reaching effects on breaking down monopoly land-holdings, on encouraging new enterprises and raising the levels of earnings, on recovering the cost of major and minor public works, on supporting small-scale farming and the cultivation of marginal land, on stabilising house prices and, perhaps most importantly, reducing the disparity between the rich and the poor.
These are large claims but they spring from a fundamental view that the wealth produced over the centuries by the efforts of the community is reflected in land values and is therefore a proper target for taxation. ALTER has done us a service by assembling these arguments at this time.
Most of the book’s contributors are Lib Dems, but the first essay is by Geoffrey Lee, author of The People’s Budget, a detailed history of what Lee calls “that Edwardian tragedy”, with Fife farmer (and UKIP supporter) Dr Duncan Pickard offering perhaps the most thought-provoking essay on Food Scarcity & Farming.
The essay on Banking & Finance is by a former Tory, now a banking fraud expert witness, Chris Glover, who was attracted to the Lib Dems largely by the soundness of our policies on taxing unearned wealth. As he says:
A rise in land prices serves no useful economic purpose. It represents a transfer of wealth from the younger to the older generation. It brings in train rising unemployment and lower output. Land values are community created. Taxing them would go to the root of the problem of imprudent, speculatively-driven, bank lending.”
In my own concluding essays, I first set out “How We Do It” – a way to develop existing Party policy so that, in government, we would move swiftly to make fiscal policy both fair and efficient. Then I look at how classical Liberal philosophy needs to develop, so that we look in the same way we have looked recently at Land as terra firma, over coming decades, at all finite and/or reusable natural resources. I draw heavily on a newly published academic thesis A Liberal Theory of Natural Resource Property Rights, by Joseph Mazor of Harvard, published this summer.
How to buy The Case for a New People’s Budget: The publisher is ALTER. The book is available for £5 from our stand (no.132) at Bournemouth, alternatively add 50p and email [email protected] with a snail-mail address (UK) for delivery. We are also making the book available as an online audio download, as soon as possible after Conference.
* Cllr Tony Vickers is Chair, Lib Dems ALTER (Action on Land-value Taxation & Economic Reform).