Author Archives: Tony Vickers

According to ONS, the land value alone of UK accounts for 60% of its net worth and is “the most valuable asset in the economy, estimated at £6.3trillion (2020).

It accounts for 98% of all non-produced non-financial assets and these – as a proportion of all national assets including those produced (buildings, goods and services) or ‘financial’ (such as stocks and shares) – rose from 39% in 1995 to 58% in 2020. Almost all that rise in non-produced assets was due to increased residential land values.

The role of land wealth in our economy is commonly overlooked. Yet the cost of land, and access to it, affects all aspects of life. Land has no cost of production. Its value only arises from our demand for homes, businesses, food production, leisure, public services, transport etc. The same applies to all natural resources – oil, gas, minerals, the radio spectrum, solar energy, wind, water, rivers, oceans, etc.

In 2018, helped mainly by ALTER and its allies in the Coalition for Economic Justice (CEJ), a new All Party Parliamentary Group (APPG) on Land Value Capture (LVC) was set up. Vince Cable was its first chair and the then Chair of ALTER, Joe Bourke, acted as its Secretary. He still does.

When Vince stepped down from Parliament, John McDonnell took over the Chair. The Labour Party has an active group of MPs – mainly on the left and including Jeremy Corbyn – who support Land Value Tax, called the Labour Land Campaign. The Green Party is a member of CEJ – north and south of the border. The SNP also supports it.

An APPG can’t exist without support from members of the governing party in the Commons and plenty of Conservative MPs in the last Parliament across a wide spectrum in that party also favoured various forms of LVC, albeit few backed LVT as strongly as the Liberal Party did in the 20^th century. Tory led governments consistently blocked all efforts to implement any form of LVC throughout that time.

Would-be Prime Minister Liz Truss agrees with the Homes & Planning Working Group (HPWG) about scrapping the top-down national housing target! “Cakeism”? Could a Sunak Government spend more while cutting taxes?

It depends what taxes are cut – and how. Perhaps there is a way, which today’s politicians and their advisors have ignored. From John McDonald to Milton Friedman (with David Ricardo, Adam Smith and Vince Cable as classical Liberals) some have supported: the “Tax Shifting” way.

Our traditional taxes are almost all “welfare negative”: causing a huge “deadweight loss” of real growth. Taxes on earnings, dividends, profits and most transactions such as house sales (“Stamp Duty Land Tax”), fall on those parts of the economy that create wealth and prosperity.

However, it is those who simply hold title to the passive element in human activity – what economists used to call “Land”, i.e. everything not made – who are the main beneficiaries. Land exists in finite quantity and without it Labour and Capital cannot operate. The growth in national wealth since the 2008 financial crash has, according to ONS figures, gone almost entirely into inflating land values.

It is this deadweight loss that keeps the poor in poverty and causes inequality to grow unless governments act: corrective action including ‘progressive’ taxation which is unproductive. This is unintelligent and wholly unfair.

We Lib Dems have traditionally understood this. Hence our policy of Land Value Taxation (LVT).