Author Archives: Joe Bourke

Liberal Democrat Branding and Relevance

Mark Pack recently addressed Hounslow Liberal Democrats on his views concerning growing party support. During his talk he focused on branding and relevance
Listening to Mark I was reminded of the work of Michael Porter and his approach to strategy development. Porter in the 1980s determined that there are only three possible strategies that any commercial organisation can adopt – Low cost, differentiation or focus (market niche). Within a focus strategy, a low-cost or differentiation approach can be adopted.
According to Porter, what is fatal for any organisation is to get stuck in the middle. Essentially, organisations must seek cost leadership …

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Reforming Council Tax

Manchester Lib Dems have launched a local manifesto calling for a reverse of Labour’s 22% Council Tax increase for the least well off in Manchester.

The 2018 report of the APPG on Land Value Capture http://bit.ly/APPG-LVC-Report-1 concluded that: Council Tax …is overdue for replacement with a fairer system of property taxation.

The IPPR report on council tax reform https://www.ippr.org/research/publications/a-poor-tax-council-tax-in-london notes:
“…leaving council tax unreformed is becoming ever more unsustainable. Local authorities across the country are increasingly cash strapped as a consequence of government cuts to their core grant funding and limits on their ability to raise funds through council tax and other sources.”

The resolution foundation report https://www.resolutionfoundation.org/media/blog/its-time-to-properly-abolish-the-poll-tax/ suggests council tax reform would leave a large majority of people better off even while raising enough cash to …increase funding for health and social care and reverse government cuts to council tax reduction schemes.

The Joseph Rowntree Foundation 2014 report After the Council Tax: impacts of property tax reform on people, places and house prices https://www.jrf.org.uk/report/after-council-tax-impacts-property-tax-reform-people-places-and-house-prices found that:
– A progressive property value tax would reduce the size of median gross bills by £279 a year compared to the council tax.
– The bills of almost two-thirds of households would fall by more than 10%, while less than one quarter would see increases of more than 10%.
– A progressive property tax would reduce the gross median bills for the poorest tenth of households by £202, and increase them for the top tenth by £184.
The housing economist Professor Muellbaeur argues “that a radical reform of property taxation makes economic sense and could be more acceptable politically than tinkering at the edges, by adding a few more bands to Council Tax.

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Fiscal Rules and Land Value Tax

Much of the debate around austerity has focused on three principal areas; the underfunding of key public services at both national and local government level, welfare reforms and the adverse effects of constrained public spending on economic growth.
As a general fiscal rule when the economy is operating at what is considered by the Treasury as normal capacity with relatively low levels of employment, tax receipts should be sufficient to cover outgoings including the amortised cost of prior capital expenditure i.e. there is no structural deficit. In normal times, capital expenditure and the associated borrowings will be budgeted to allow for …

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The Planning (Affordable Housing and Land Compensation) Bill

In between all the furor around Brexit, there is continuing cross-party work on other issues of import in Parliament.

In a press release this week, Vince Cable noted:

“…the major effect of Help to Buy is to drive up demand while having no effect on supply. Prices go up and buyers are forced off the housing ladder. The result is not help for those who need it, but a boost to the profits of big developers.
Liberal Democrats have set out how government could be delivering 300,000 homes a year over the next decade, by creating a British Housing Company as a dedicated, not-for-profit body to build on land acquired compulsorily without profits from land scarcity.”

Also this week Norman Lamb co-sponsored a ten-minute rule bill concerned with affordable housing to rent. The bill was presented by Helen Hayes, Labour member for Dulwich and West Norwood, with cross-party support, and is available on the BBC Parliament Channel https://tinyurl.com/y5zfdfs3.

The bills principal aims are to:

1. To re-establish the link between the definition of affordable homes for rent and income, replacing the current definition of up to 80% of the market price with a definition of:
“No more than 35% of net household income for lowest quartile income groups in each local authority area.”

2. To create a new requirement in planning law for local planning authorities to have a duty to include a policy in their local plans to capture betterment values where they arise, formally establishing a legal duty in the planning system to capture land value to be used for the benefit of communities.

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The Impact of Business Rates on Business

The Treasury Select Committee has launched an inquiry into Business Rates, to examine their impact on business, including Business Rates retention and alternatives to property-based taxes, such as the proposed digital services tax. Crucially the inquiry will consider the impact of changes (proposed and actual) of Business Rates on Local Authorities and Councils, and the High Street.

Sebastian McCarthy in City Am quotes Nicky Morgan MP, chair of the treasury committee: “Many high street businesses are struggling to remain competitive. It has been estimated that 10,000 shops will close this year. Unless action is taken, closures could continue and job losses …

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A Land Value Capture approach to Social Housing Provision

Shelter has published the final report of its cross-party commission on  Social Housing setting out the need for 3.1m new social homes over the next 20 years.

The report makes the case that council houses and social housing should be available to more than just the people in greatest need and those saving to buy. As well as the 1.3 million people it estimates are in greatest need because of hazardous homes, overcrowding, homelessness and disabilities, the new homes should be accessible to a further 1.2 million young people and 700,000 older people trapped in private rent. The commission puts the provision of housing on a par with health and education.

The plans have been costed at up to £225bn. But savings to the £21bn annual housing benefit bill and the economic boost created by the programme means it would pay for itself inside 40 years, according to fiscal modelling for the commission by Capital Economics

The analysis suggests that that two-thirds of the annual investment cost of £10.7bn a year would be clawed back through housing benefit savings and extra tax revenue and the programme would pay for itself in full after 39 years.

Delivering 3m+ social homes by 2040 will require half of the 300,000 annual house building target to come from the public sector.

Key to this objective is the cost of Land. Build costs of new developments have increased by more than 40% since the financial crisis almost entirely due to the cost of land.

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A Residential Land Value Tax approach to Funding Adult Social Care

Sir Andrew Dilnot in his evidence to the HCLG select committee on funding of adult social care said:
“there is no consensus on where the money should come from. That is what is always politically most toxic for Governments. The debate is much more now about where the money should come from than about what the money should be spent on. My advice for any institution trying to build consensus would be try to focus on that.”
Council tax in its present form and the supplementary social precept creates an inequitable distribution of the tax burden. A Land Value Tax is not …

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Homelessness and Universal Credit

Panorama this week revealed large numbers of social housing tenants on Universal Credit owe more than double in rent arrears on average than benefit claimants on the legacy Housing Benefit scheme.
The new benefits scheme is sending many council tenant’s rent arrears spiralling. Research conducted by the show revealed that across much of the UK, Universal Credit (UC) claimants owe local authorities an average of £662.56, compared with £262.50 on the Housing Benefit scheme…

Universal Credit was rolled out in Flintshire, North Wales in April 2017. UC claimants there owe the council an …

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Housing First

Housing First is an approach to homelessness that focuses on housing homeless people immediately, whatever their needs, and giving them direct control over their own support and treatment. The programme works by putting people in touch with housing providers, health workers, social care staff and other services.

While there are about 4,750 rough sleepers in England (many with mental health and addiction problems), there are far larger numbers of homeless families in temporary accommodation. Few homeless families have the high support needs of rough sleepers; most are poor. What these families need first and foremost is an adequate, affordable home.

Housing First …

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All Party Parliamentary Group on Land Value Capture calls for urgent action on housing crisis

Tacking the housing crisis requires a concerted cross-party effort at all levels of government from Downing Street to the parish council.

The All Party Parliamentary Group (APPG) report Capturing Land Value for the Public Benefit to be published on 31st October 2018 says:

There needs to be greater devolution of Land Value Capture mechanisms to mayoral and local authorities. Following the announcement by the Prime Minister of the government’s intention to remove the cap on local authority borrowing, consideration should be given to a netting of land assets from existing prudential borrowing limits; reform of the 1961 Land Compensation Act, to provide

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Radical Liberalism and Taxes

Radical Liberalism is a distinctive philosophy that presents a superior alternative both to capitalism in its established form and to socialism. Existing capitalism, as propounded by the Conservatives, and socialism as proposed by Labour, are systems both based on the concentration of property and power in few hands.
The central principles of capitalism in its purest form are the free exchange of goods in an unregulated market; limited taxes to pay for limited government, and
private ownership of property.
The central principles of socialism are government control or regulation of the market; high taxes to pay for expanded government services; and government ownership …

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Legacy of Grenfell

One year on from the tragedy of the Grenfell fire a public inquiry is underway to ascertain how such a thing could have happened in a modern building in the middle of London.

What has struck me about this whole event is the frustration and powerlessness that tenants and leaseholders express over the ability to control their own lives and safety.

Property tenure has changed greatly in recent decades. Right to buy has changed the composition of public housing developments. They will frequently include a mix of leasehold apartments, shared ownership and traditional …

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Money in Switzerland

Switzerland’s system of direct democracy includes the right to submit a federal initiative and a referendum, both of which may overturn a parliamentary decision.
Last year they held a referendum on a Universal basic income and last Sunday they had one on re-establishing sovereignty over money creation as per this economist article https://www.economist.com/finance-and-economics/2018/06/09/a-referendum-on-the-way-money-is-created.

The proposal would have brought an end to the fractional reserve banking system in Switzerland. The central bank would have become the only provider of Swiss francs in a full reserve system. In other words, commercial banks would no longer …

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Land Value Tax – Where are we as a party?

ALTER will address this question in our conference fringe at Southport next month to be held on Friday, 9th March at the Ramada Plaza, from 20:15 to 21:30 in the Promenade room.

Leading the discussion will be two LVT experts and experienced Liberal Democrat campaigners – Michael Meadowcroft and Tony Vickers.

All mainstream parties are now beginning to address the Land problem in the context of an ever worsening housing crisis. The Chancellor announced a raft of measures in the last budget including the Letwin review that is to be informed by a number of consultations.

Among these consultations, the Communities and Local Government Committee (CLG) are conducting an inquiry into the effectiveness of current land value capture methods and the need for new ways of capturing any uplift in the value of land associated with the granting of planning permission or nearby infrastructure improvements and other factors . ALTER’s submission will argue that attempts to capture uplifts in land values by one-off levies have largely been unsuccessful and that an alternative is to go for annual levies as with a site value rating.

Posted in Party policy and internal matters | Tagged | 90 Comments

Vince speaks at launch of All Party Parliamentary Group on Land Value Capture

Sir Vince Cable opened the proceedings by emphasising the importance of approaching this fiscal reform in a way that was not “tribal or sectarian”. They valued the fact that representatives of four political parties had agreed to form the Group – Liberal Democrats, Conservative, Green and Labour. He noted the idea, in different forms, has been around seemingly forever” but that “very little in reality has happened.” The message was “for goodness sake let’s do something that takes this forward. Let’s have a practical route map”.

Vince noted that the proposal for land value taxation was supported by “a long history of economic reasoning that wants to base taxation on land.” He referred to the report chaired by Nobel laureate Sir James Mirrlees which had argued for “shifting the tax base in this direction on standard economic grounds as well as the practicality of this approach”. But there was also “the social justice point of view: inequalities of wealth, underlying which were land values”.

Vince stressed the problems associated with property development, including distortions in the planning system, the issue of who captures land values, and how to finance infrastructure. He pointed out that an obvious approach to funding was “to look at the appreciation of land value”.

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Christmas Books and Grenfell


In the introduction to his second book on the financial crisis, Vince noted:
“…one of the main tasks of opposition parties to redesign the archaic, inequitable and unpopular system of property taxation… to make council tax more closely proportional to the value of property. A more radical and far-reaching reform would be to give practical substance to long-mooted ideas for the taxation of land… The practical problems of valuation and making the transition from a land market massively distorted by planning have so far frightened away reformers. But such a reform is …

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Recent Comments

  • User AvatarDavid Evershed 19th Apr - 1:34am
    I agree with Caron. Extinction Rebellion are earning themselves and their cause a reputation for irresponsibility and lack of concern for the public. Getting media...
  • User AvatarDavid-1 19th Apr - 12:54am
    People take to the streets in protest for whatever cause they may have, not because they are thoughtless and undisciplined, or because they just like...
  • User AvatarGlenn 19th Apr - 12:26am
    Roland Remain is a valid form of Leave! Yeah and dogs are a valid form of cats and eating meat is a valid form of...
  • User AvatarTony Greaves 18th Apr - 11:53pm
    For once in a while, I think you are so so wrong, Caron. The word extinction is not an exaggeration. so what are you going...
  • User AvatarTony Greaves 18th Apr - 11:48pm
    Elliott Dodds would approve! (I suppose I would too though it would have saved me a load of grief.)
  • User AvatarMichael Sammon 18th Apr - 11:31pm
    I think this is a good article. I can't get behind Extinction R. The way they are behaving goes against a democratic principle. It just...