Ed Davey sets out Liberal Democrat vision of a brighter, more hopeful future

Ed Davey made his keynote speech to Federal Conference this afternoon. We’ll have the video when it is up but in the meantime, here are the words:

Good afternoon Conference.

Our country is hurting right now.

One hundred and twenty-five thousand lives have been taken by this cruel virus.

One hundred and twenty-five thousand mums and dads. Brothers and sisters. Sons and daughters.

One hundred and twenty-five thousand empty chairs at our kitchen tables.

So many families, mourning the loss of a loved one.

Even those who have been spared the agony of bereavement…

Even they are suffering enormous hardships.

Families kept apart by lockdown.

Parents who haven’t seen their children for over a year.

Grandparents who’ve missed out on the joy of holding the new baby.

Businesses closed. Jobs lost. Savings destroyed.

A whole year of isolation. Fear. Grief.

Government Failures

All compounded tragically by the failures of this Conservative Government. Poorly prepared. Slow to act. Ignoring expert advice.

Boris Johnson’s indecision and incompetence has failed our nation.

Leaving the most vulnerable – elderly people, disabled people – to be attacked by the virus in their care homes, where they should have been safe.

Leaving our country with a shockingly high death rate – one of the worst in the world.

This Government must be held to account. Britain’s bereaved families deserve answers.

So Liberal Democrats will continue to lead that charge.

Boris Johnson must set up now the independent inquiry he promised me in the House of Commons last June.

No more excuses. No more delays.

Sarah Everard and protests

And after all the pain inflicted by Covid, last week we were forced to confront another national anguish.


The shocking, tragic killing of Sarah Everard.


And the violence perpetrated by far too many men against far too many women.


The abuse, the harassment and the fear women face every day, walking down their own streets.


And then, those awful scenes from Clapham Common.


Women, wrestled to the ground by police officers.


Handcuffed and dragged away, simply for holding a peaceful vigil in Sarah’s memory.


Simply for saying enough is enough.


We have to do better as a country.


We must do better at tackling violence against women.


Believing survivors. Making clear that misogyny in any form is unacceptable.


And we have to do better as men.


Listening to women. Calling out other men. Never turning a blind eye.


Just as with the Black Lives Matter protests last summer, this pandemic makes these issues more urgent – not less.


And this Government – these Conservatives, who talk so much about their freedoms and their free speech –


Must stop their assault on everyone else’s freedoms.


Our fundamental rights to peaceful assembly and protest.


Rights that have always been so crucial to our democratic society.


Rights crucial to the struggle over decades to advance equality and end discrimination.


The recovery we need

After so much hurt, we need hope.


And that is what our wonderful NHS staff and volunteers are injecting into our lives as they work tirelessly delivering vaccines.


Hope, so we can finally look forward.


And as we do, we must put recovery first.


The recovery of our health, our freedoms and our communities.


The recovery of business, the economy and jobs.


A recovery that is fair.


Fair for the doctors and nurses, care workers, teachers, and countless more on the frontline who have gone to work every day – putting themselves at risk to keep the rest of us safe.

Fair for the people who have stepped up heroically to look after their loved ones.


The unpaid carers so often forgotten.


The parents who have somehow juggled home-working with home-schooling.


Fair for the small businesses who have adapted and innovated and sweated their way through this crisis.


All of you – together – have pulled our country through.


Thank you.


So we need a recovery that does justice to the sacrifices you have made.


A fairer, greener, more caring country

A recovery that delivers on our vision of a fairer, greener, more caring country.




Where everyone can have a good job and real opportunity, no matter where they were born or what school they go to.


Where small businesses and the self-employed can thrive, creating secure jobs with good pay.


Where every person’s rights and dignity are respected.


And fairer: where women no longer have to fear harassment, abuse and violence from men.




Where we invest in exciting new technologies and insulate every home – to create secure, well-paid, green jobs in every part of the UK.


Where we work together with other nations to tackle the global climate emergency.


Where we clean our air and protect green spaces, and so improve people’s mental and physical health.


And more caring…


Where we look after one another, and finally recognise the true value of care.


Where we stand up for carers and give them the support they deserve.


Where people with mental ill health get quality care, quickly – not least children and young people.


And where we pay our nurses and care workers properly.


How dare Boris Johnson say all he can afford is a one per cent pay rise for nurses and other NHS staff?


How can he find billions for contracts for his Tory cronies, but not for the amazing people who have put their lives on the line for us?


How dare he boast about the vaccine rollout they are delivering so brilliantly, while he treats them so disgracefully?


Prime Minister: pay NHS and care staff properly. Do it now.


Put recovery first

Friends, that’s the recovery our nation needs.

That’s the fairer, greener, more caring country that lies ahead of us.

I know the British people can get there. But it will take the Liberal Democrats to lead the way.

Just as Liberal Democrats have already led the way towards a fairer, greener, more caring country –

With the progress we have delivered in Parliaments and councils across the UK –

Wherever and whenever we win elections.

And we can do it again now.

Because we will put recovery first.

If only the others would.

But the Conservatives won’t.

They have put Brexit ahead of the national interest, with their disastrous trade deal.

The Conservatives have put enriching their wealthy friends ahead of fair pay for nurses or support for small businesses.

And they are putting their right-wing, shrink-the-state ideology ahead of working with industry, even junking the very idea of an industrial strategy. Just when we need a recovery.

And the Nationalists in Scotland certainly won’t put recovery first.

Because they put their obsession with independence ahead of everything else.

Even as Covid claims thousands of lives, devastates businesses and threatens jobs across Scotland –

The SNP want to plunge our economy into years of chaos and uncertainty.

They divide the Scottish people.

They are seeking to divide our United Kingdom.

Now, they’re even divided among themselves.

What Scotland needs is a leader who will bring people together: Willie Rennie.

And a party who will put recovery first: the Liberal Democrats.

The Party of small business

The UK’s economic recovery starts with small business.

Small businesses are at the heart of every local community, and every local economy.

They create the jobs people need.

In Government, Liberal Democrats championed small businesses and helped them create two million new jobs.

And during this pandemic, it’s been the Liberal Democrats pushing for more action to support small businesses and the self-employed, every step of the way.

We know how tough the past year has been, for almost every small business.

Many have seen their incomes evaporate.

Many have had to stay closed all year.

And for so many, the support from the Treasury hasn’t been nearly enough.

A chaotic series of last-minute announcements, short-term sticking plasters and unpredictable U-turns.

Three million people – mostly the self-employed – excluded altogether.

The result?

Almost a million jobs lost.

Small businesses saddled with unmanageable debt.

Many worried they won’t make it much longer.

So here’s the mission now for Liberal Democrats at every level –

In Cardiff and Holyrood –

In London and all across England –

At May’s elections and beyond:

Let’s work with local small businesses to help their recovery, and so help our communities recover too.

And let’s challenge the Chancellor to give small businesses a bold new tax cut to support thousands of new jobs.

Slash their National Insurance Contributions by – not doubling, not trebling – but quadrupling the annual Employment Allowance from four thousand pounds to sixteen thousand.

So no small business pays a penny in National Insurance Contributions on their first five employees.

A Liberal Democrat tax cut to back small businesses, create jobs, and put recovery first.

Trade and Brexit damage

And there’s another critical part of our plan to back British business and put recovery first.

And it’s trade.

Trade with our European neighbours is critical for so many businesses and jobs in every part of the UK.

But Boris Johnson’s trade deal with the EU –

The first trade deal in history to put up new barriers to trade –

Is hurting our businesses and seriously harming our recovery.

An act of economic vandalism at the worst possible time.

In January – the first month of Johnson’s deal – these new barriers cost British exporters more than five billion pounds.

Five billion pounds, in one month.

So I’m proud that the Liberal Democrats voted No.

I’m proud it’s Liberal Democrats leading the argument that the Government must get back round the table…

Talk with our European neighbours. Rebuild those relationships.

And I’m proud that – as we have affirmed once again this weekend – Liberal Democrats remain a strongly pro-European party… Making the argument for the closest possible relationship with the EU – so we can put recovery first.

The climate emergency

And let’s be clear: when we say recovery, we mean a green recovery.

A recovery that faces up to the existential threat of climate change.

We’ve seen the warnings.

Floods devastating communities across the UK.

Fires burning the Amazon, burning Australia.

This is a global emergency.

The world must act. Before the fires burn out of control and the flood levels rise beyond measure.

And the UK must lead. At the crucial climate talks in Glasgow this year, and beyond.

Just as we did before, when the Liberal Democrats were in Government –

And I led the UK delegation for three UN climate summits –

Securing an ambitious EU climate agreement, critical for achieving the landmark Paris Climate Agreement.

Now Boris Johnson has recently started talking  about climate change.

But talk is cheap. It’s actions that matter.

And just look at the Conservatives’ actions since twenty-fifteen:

Our zero carbon homes law? Scrapped. Our Green Investment Bank? Privatised. Liberal Democrat initiatives on onshore wind, solar power, community energy? All binned by the Conservatives.

When Tory Ministers talk about the strong progress the UK has made on climate change, let’s be clear:

Those are Liberal Democrat achievements, delivered by Liberal Democrat Ministers in Government.

Because back when Boris Johnson was going round saying wind farms couldn’t pull the skin off a rice pudding…

We were investing eight billion pounds to help make the UK the world leader in offshore wind.

And look what we achieved as a result: Four times as much clean, renewable power generated here in the UK. Offshore wind now even cheaper than gas. Thousands of good new jobs – in parts of the country that need them most.

Sovereign green wealth fund

And there’s something else that Liberal Democrat investment has created…

A whole new source of green wealth for our nation.

Just last month, an auction for the right to build wind farms off the coast of England and Wales attracted bids far, far higher than anyone expected.

Raising nine billion pounds. With more to come.

Now you probably haven’t heard about that nine billion – because the Tories don’t want you to know.

They don’t want you to know that green investments really do translate into green wealth.

They’d rather slip the cash quietly into the Chancellor’s wallet, to pay for all their dodgy contracts.

No. This green wealth doesn’t belong to Rishi Sunak, or the Tories.

It belongs to the British people.

So I say: let’s invest it in a Sovereign Green Wealth Fund.

Let’s invest this windfall from wind power into more climate action…

To build new infrastructure and attract more private investment.

To grow our green wealth even further, and create thousands of manufacturing jobs here in the UK.

By investing in the green technologies and industries of the future – tidal power, hydrogen, green flight –

Britain can not only recover but become the world’s first green powerhouse.

And with our new Green Wealth Fund, we can also invest in an emergency ten-year programme to insulate every single home.

Lower heating bills for everyone – and an end to fuel poverty.

Warmer homes for everyone – and green jobs in every village, town and city across the UK.

Real climate action to slash Britain’s carbon emissions.

If the Tories had invested the windfall from North Sea oil in the eighties, they could have created a Wealth Fund worth more than five hundred billion pounds today…

But they squandered the nation’s wealth then, just as they are doing now. But we must not let them.


Liberal Democrats. Putting recovery first. A green recovery. To build a fairer, greener country.

May’s elections

Conference, after all the darkness of the last twelve months –

All the sadness and sacrifice –

This is the brighter, hopeful vision our country needs.

Where Governments and councils put recovery first.

A green recovery, with small business at its heart

Where, together, we build a future that is so much better than the past.

A fairer, greener, more caring country.

The Liberal Democrats offer that vision.

We can deliver that future.

We will build that country.

And that’s why, in May’s bumper crop of elections, we must get out there and make our case across the UK.

Because our communities need us.

They need us to campaign harder than ever before.

To knock on every door. Speak to every voter. Deliver every leaflet.

And they need us to win.

After all the pain our country has endured, our communities cannot afford the Tories to take us backwards or the SNP to tear us apart.

It’s up to us to stop them – and to offer something better.

So let’s get Scottish Liberal Democrats elected to Holyrood…

To invest even more in schools, mental health services and local communities across Scotland.

Let’s get Welsh Liberal Democrats elected to the Senedd…

To support small businesses and the self-employed across Wales.

Let’s get Liberal Democrats elected to the London Assembly…

To build homes in the heart of London and take real action for clean air.

Let’s get Liberal Democrats elected to councils across England…

Who will work tirelessly for their communities, to revive our high streets and protect our precious environment.

Let’s get Liberal Democrats elected.

Let’s put recovery first.

And let’s get to work for our communities.

Building the fairer, greener, more caring country we all want to live in.


* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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  • Brad Barrows 21st Mar '21 - 6:30pm

    Surprised to read Ed calling on the party to ‘knock on every door’ in the run up to the elections in May. I thought leafleting was allowed but canvassing? Really? In a pandemic?

  • A welcome speech from Ed Davey with a strong focus on small business as the engine of economic recovery and a fair distribution of the proceeds of growth.
    A land value tax in the form of a seabed licence auction last month raised £9 billion and was heavily over-subscribed. Ed is calling for this kind of funding to be invested to create manufacturing jobs and fund a ten-year programme to insulate every home, cutting energy bills and usage.
    “By investing in the green technologies and industries of the future – tidal power, hydrogen, green flight – Britain can not only recover but become the world’s first green powerhouse.”
    “If the Tories had invested the windfall from North Sea oil in the Eighties, they could have created a wealth fund worth more than £500bn today,”
    The different approaches of Norway and the UK to the North sea oil bonanza are described in this article https://eandt.theiet.org/content/articles/2021/01/north-sea-oil-a-tale-of-two-countries/
    “What the two countries did with their surplus revenue has effectively mapped their economic futures for half a century. As the UK’s former Secretary of State for the Environment (and later Defence) Michael Heseltine said recently, Britain under Prime Minister Margaret Thatcher “squandered the windfall” on short-term consumerist policies such as subsidised housing and mortgage tax relief policies. Heseltine says he would have preferred to see the money invested in a ‘sovereign wealth fund’, a state-owned financial instrument for securing long-term benefits for the nation’s citizenry.”
    “This is exactly what Norway did, investing its surplus revenues in the so-called ‘Oil Fund’ which owns 1 per cent of the world’s stocks, is valued at more than US$1tn and, according to The Economist, is the largest fund of its type in existence.
    Today, the economic fortunes of the two countries differ vastly: in terms of GDP per capita Norway is currently the second wealthiest country on Earth (after Luxembourg), while the UK comes in 20th, with a GDP per capita of almost exactly half of Norway’s.

  • Donald Cameron 21st Mar '21 - 7:22pm

    An excellent and uplifting speech by our Party leader rallying the Party to do well in the coming elections. He outlines the villainies of the present Brexit Tory Party and even harks back to their crimes in the 1980 ties of the Thatcher era when they stole billions from Oil that could now be a 500 Billion Development Fund.
    He then lists the large number of good Political Plans that a Liberal Democrat Party with some Parliamentary power could bring to our now harassed people.
    Unfortunately these good things are never going to happen unless we get a lot more Lib Dem MP in an anti-Tory Government. He should have mentioned the fundamental Root of our Electoral Problems. It is F P T P, unless this is abolished we risk bad greedy governments like Johnson/Thatcher Tories or selfish ones like Tony Blair Labour who never co-operated with Paddy over Electoral Reform.
    It is very disappointing that he never even mentioned the possibility of creating a parliamentary majority to ABOLISH ELECTIONS by F P T P.

  • Laurence Cox 21st Mar '21 - 7:40pm

    @Joe Bourke
    Actually, even the Dutch who had a smaller windfall slightly earlier from North Sea Gas used it better than we did as they principally spent it on improving their infrastructure. Certainly in the 1980s there was plenty of infrastructure in this country that needed improving, not least the railways, which would have provided employment opportunities for those in the declining industries, rather than paying them unemployment benefits long-term.

  • Although I supported Ed for the leadership and advocate a liberalism on all fronts I do feel a bit disappointed because Ed has not addressed the fundamental problem namely that voters of the left see the Lib Dem’s as a party of austerity and neo-liberal economics whereas voters of the right see them as a party of niche issues and identity politics.

  • I also find it distasteful when politicians say things like:

    “One hundred and twenty-five thousand empty chairs at our kitchen tables.”

    As this rather overlooks the fact that in the same time period almost 500,000 people have died from a non-Covid cause (as happens every year) and their loved ones are grieving just as much and it won’t help that Covid deaths receive more attention.

  • “… an auction for the right to build wind farms off the coast of England and Wales attracted bids far, far higher than anyone expected.
    Raising nine billion pounds. With more to come.
    Now you probably haven’t heard about that nine billion – because the Tories don’t want you to know.”


    The money is for ‘option fees’ to be paid annually until planning permission is granted which could take up to 10 years. The annual amount is £879m so it looks like the £9bn quoted is derived by assuming that planning will take 10 years. That’s optimistic insofar as it allows the government to boast of a huge sum raised; it’s pessimistic insofar as 10 years seem like an awfully long time to get planning permission.

    There are at least two problems with this.

    Firstly, bidding was expected to be high because this was a small leasing round – only 8GW of capacity compared with 32GW in the previous (2010) round so companies that lost out risked having an interruption in their order flow. That looks uncomfortably like blackmail – pay up or be left behind. It is NOT a good way to support the development of a new industry that should investing heavily in R&D to gain global leadership.

    Secondly, whatever is eventually paid in option fees, be it £9bn or rather less, adds to the cost of the electricity generated so consumers will eventually pay for it (plus accrued interest) through their electricity bills. The extra cost will make commercial customers less competitive in world markets while for domestic customers it’s an increase in the cost of living.

    So, I suspect the real reason it’s been kept quiet is because it’s a typical Tory scam, benefitting current government finances by shuffling costs onto future generations (with interest, naturally).


  • Joseph Bourke 22nd Mar '21 - 4:36pm

    The crown estate manages a commercial public land valued at circa £14 billion. The profits of around £300 million per year go to the treasury. They have an extensive portfolio of commercial property in central London and retail developments around the country. The seabed portfolio includes offshore energy, marine aggregates, cables and pipelines. The rural portfolio includes working farms, strategic ;and and the Windsor estate.
    The argument around auction fees stems from Gordon Brown’s 3G auction in 2000 that raked in some 22.5 billion. It is claimed that operators massively overpaid and this stifled investment in mobile infrastructure
    Much lower sums were paid for the 4g and 5g rights on 2013 and 2018. I don’t think we can call it a a typical Tory scam, benefitting current government finances by shuffling costs onto future generations. If anything, it looks more like a sop to the business community in the hope that relatively modest upfront fees will incentivise greater levels of investment down the line. With Research and development tax credits, 130% capital allowances for the next two years and near zero interest rates, I am not so sure that further incentives are actually needed.
    The auction does have the benefit of letting markets establish the price and Hong Kong has long used a similar process for auctioning of land leases that funds much of their public infrastructure development.

  • Ed Davey did say that the British people need hope and we need to put the recovery first. A fair recovery. He repeated his vision of a fairer, greener and more caring country. (Why not society?) But he only policy set out two policies. He said we had a policy of “quadrupling the annual Employment Allowance from £4,000 to £16,000”. So no business will pay employers National Insurance Contribution on their first five employees. But conference didn’t agree this policy. Ed didn’t move an amendment to do this to the policy motion F4 on Supporting Businesses, Workers and the Self-Employed during the COVID-19 Pandemic or F14 Fixing the Government’s response to the Covid-19 Pandemic. Instead of using the party’s policy making mechanism he has bounded the party into having this policy without any debate.

    The other policy he said we had was auctioning the rights to build wind farms off our coast and using the money to invest in green technologies and the industries of the future – tidal power, hydrogen, green flight. And to use this money to pay for the insulation of every home in the UK. I can’t see the auctioning of the rights to build off our coasts in our Environmental Policy Paper (139) “Tackling the Climate Emergency”. It would seem that again Ed is making up party policy without involving members by proposing them at conference.

    I would have preferred him to set out a vision of a liberal society where no-one lives in poverty, is held back by health issues, or by discrimination, or by the lack of the education or training needed for them to obtain a job right for them, where everyone who wants one has a home of their own, where everyone who wants a job has one and where the government has a plan to have net zero emissions by 2045.

    I even prefer Jane Dodds’ vision where “We will create a Wales where everyone is equal, where no one is enslaved by poverty, ill health or circumstance. We will not tolerate poverty and we will push hard for positive change in all we do – particularly when it comes to saving our planet.” And “My pledge to you is that the Welsh Liberal Democrats will put the wellbeing of our people and planet first. We will balance the needs of our people with the needs of our planet, and concentrate on the jobs, housing and healthcare we so desperately need. We will put recovery first.” (But again there is a lack of what our policies are to achieve these things.)

  • There are broadly three ways (which are not mutually exclusive) the government can take a cut above that delivered by normal business taxes – up front, for ‘excess’ profit when in operation, or by lower prices.

    The first has the obvious attraction for government of money now but from the POV of investors it increases the capital they have to find and the interest element of the project cost. It’s good for banks, not so good for the eventual customers. Also, it may well end up favouring the big established players at the expense of challengers which could lead to a supply oligopoly over time.

    The ‘excess’ profit route works well where profits can be very high because costs and prices vary as with oil.

    Roads are an example of the ‘lower prices’ (zero, in fact) alternative. I have long believed that the eventual result of moving away from fossil fuels will be cheaper electricity and that appears to be coming true very fast; utility-scale solar is heading towards $10-20/MWh in sunnier climes than ours (Hinckley Point C is £92.5/MWh). We MUST keep up or we won’t have any industry and that means not unnecessarily loading renewables with extra costs just because we can to make current budgets look slightly better.

    Actually, I suspect that it won’t take anything like 10 years to get planning permission and that the £9bn quoted was made up by the PR folk simply to impress the unwary.

    Michael BG – Interesting points. So, the party’s policy making process isn’t working – in the instances you give because the leader just made it up with advice and advisors unknown (at least to me and probably 95% of members). This is not a new failure which suggest a design flaw rather than a quirk of any of the current players.

    What is to be done?

  • Donald Cameron 23rd Mar '21 - 2:42pm

    Michael BG All very well, but to get these good policies needs Bills to get voted for in Parliament by MP who support them. Has nobody got serious interest in removing FPTP and getting a fair proportion of Liberal Democrat MP elected to support your policies at a vote ? Does nobody else see removing FPTP as a Priority by reasonable campaigning arrangements or agreements with others before the next General Election ?

  • Helen Dudden 23rd Mar '21 - 3:02pm

    I totally agree with Ed on the need to take this country into a better place.
    Johnson must get an Inquiry into place as soon as possible. It’s not a witch hunt, now, is time for accepting the decisions made.
    Someway has to be found to improve the outcome of the long waiting lists, this should never be allowed to happen again.

  • Joseph Bourke 23rd Mar '21 - 3:56pm


    the Hoover Dam was subsequently paid for by electricity users https://www.latimes.com/archives/la-xpm-1987-05-31-mn-9239-story.html. The 50 year mortgage at 3% interest was paid off in 1987. The capital and interest payments coming from the South Western states would have been hardly noticeable in the Federal budget after the Pearl Harbour attack had cranked up military spending from 1941 onwards.
    There is a strong argument for taxing polluting activities, just as there is a strong argument for differential taxation of economic rents i.e. returns over and above a normal rate of return. The linked article above writes ” The Institute of Fiscal Studies stated that “the growth of North Sea oil revenues is the most important fiscal development in the British economy in the 1980s”. In fact, during the 1980s, taxation on oil from the North Sea delivered to the UK’s Treasury (when adjusted for inflation) an average of £18bn per annum, or 10 per cent of its entire income.”
    Low cost loans to get capital investment and operations up and running, yes. But, capture of excess profits, where they arise from the utilisation of public land and natural resources has to follow.

  • Joe,

    Thanks for that interesting link about the Hoover Dam. It describes how the Federal Government gave a mortgage at 3% over 50 years to build the dam. I don’t know what commercial terms would have been back then, but certainly a lot more.

    It goes on to note, “The dam provided an abundance of cheap electricity for California and the Southwest, and is credited with paving the way for much of the growth that has occurred in the last 50 years.”

    That’s a perfect example of what I referred to earlier as the ‘lower prices’ (i.e. lower for consumers) route. Lower power prices made for a more prosperous economy, more and better jobs, more firms making more money and paying more tax, less unemployment etc. The government benefits indirectly but with a big multiplier. If, instead, it had chosen to tax the supplier heavily, power prices would have been higher and the economic benefits correspondingly less. Tax on that smaller economy would also have been less.

    What the US government did NOT do back then was to charge a fortune merely for the right to develop the site although good dam sites are rare so they presumably could have. In that alternative universe, the dam would likely have been smaller, generated less power sold at a higher price and the development of the American southwest would have been that much slower and poorer.

    Yet that is the course the Tories are taking by charging ‘option fees’ which will inevitably raise the cost of electricity eventually generated at a time when world electricity prices are going to be falling. The auction should be run on the basis of lowest strike prices bid.

    Back in the 19th century landowners supported corn laws (restrictions on importing wheat) to keep land rents artificially high so enabling them to cream off the resulting excess profit via high rents but simultaneously harming industry and workers by the high cost of living. This is just the same under the skin but with electricity in place of wheat.

    The North Sea oil case is different because prices are set in a global market. Government doesn’t control the price so it must look to taxing what I earlier described as the ‘excess’ profit just as you say.

  • Joseph Bourke 24th Mar '21 - 1:11pm


    I think we are saying much the same thing. This article https://energynews.us/2021/02/26/will-californias-desert-be-transformed-into-lithium-valley/ describes how the State of California is providing grant funding to turn derelict and polluted land into an economic resource for the provision of Lithium batteries that can power electric cars.
    However, once business operations are established state property taxes will be levied. These local property taxes fund the state school system in the USA as well as most municipal activity below state level.
    The incidence of all taxation ultimately falls on the end user or consumer of goods and services – whether it is direct or indirect taxation. Land Value taxes are recognised by economists and political economy academics as among the least distorting of tax bases with almost zero deadweight costs compared to taxes on productivity activity.

  • @joseph & Gordon – I think we are saying much the same thing.
    I think not quite. Joseph your comment about the Crown Estate had me scratching my head.
    Fundamentally, I suggest if we reposition the Crown Estate as a “Sovereign Investment Fund” things start to become a little clearer. The challenge for the Crown estate is how to effectively and responsibly utilize its circa £14bn landholdings for the benefit of the nation (which is not the Treasury).
    I get the impression that people still believe that the 3G spectrum auction wasn’t a one-off that actually damaged an industry, and that despite the evidence of the 4G and 5G auctions, they believe if something is coated in the ‘auction’ fairy dust that maybe this one will be another cash cow for the Treasury – ignoring the fact that the more that is paid at auction, the longer it will take before that winning business breaks even and becomes profitable.

    The Hoover Dam, the “angel investment” by the California Energy Commission (and the UK government’s investment in CoViD19 vaccine development) , show there is another way – that public monies can be used to make risky but potentially profitable investments, with the profits accruing to the public. With the Crown Estate’s being an investment fund (at arms length from the Government) the monies would be reinvested and/or used for the public good (like the Lottery monies).

    The challenge is keeping the daftness of the Tories in check, as their mindset would be to auction off the Crown Estate to balance the budget, just as they did with the North Sea revenues…

  • Donald Cameron 25th Mar '21 - 6:03pm

    Roland, Joe and Gordon ; Very interesting posts on the wisdom of investing in the Hoover Dam and other similar developments. However, they are never going to happen unless we remove the way FPTP keeps the Conservatives in power, they know that and are planning to make it Standard for ALL elections. Removing FPTP has to be a Priority for better government.

  • Peter Martin 25th Mar '21 - 8:45pm

    @ Joe Bourke.

    “The crown estate manages a commercial public land valued at circa £14 billion. The profits of around £300 million per year go to the treasury.”

    I’ve just checked and the total value of UK land is £1.8 trillion. This is 129 times as much.

    So on this basis if it was all owned by the Crown the Treasury would, by my arithmetic, receive £38.7 bn

    But this wouldn’t all be extra money because there will already be some tax revenue from land. So, can we assume about £30bn extra?

    Even so a fair anmount. But, total tax revenue is around £650 bn, So we’re looking at around 4.5% of the total tax take.

    So a handy extra amount, we might think, but it’s not quite enough to solve all our taxation issues.

  • Joseph Bourke 26th Mar '21 - 2:44pm

    Peter Martin,

    Income tax was first implemented in Great Britain in 1798 as an temporary emergency measure to pay for the Napoleonic Wars. Abolished after Waterloo, it was reintroduced in 1841 by Robert Peel. It was imposed for three years, with the possibility of a two-year extension. A funding crisis in the railways and increasing national expenditure together with the repeal of the Corn Laws ensured that it was maintained.
    Gladstone outlined plans for phasing out income tax in his 1853 budget over seven years (which the Crimean War was to upset). Gladstone had set 1860 as the year for the repeal of income tax, but he had to tell the House that he had no choice but to renew the tax.
    Disraeli and Gladstone agreed about little, although both promised to repeal income tax at the 1874 General Election. Disraeli won the election in 1874, but the tax remained. At the time it was contributing about £6 million of the Government’s £77 million revenue, while Customs and Excise contributed £47 million.
    The first world war was financed by borrowing large sums at home and abroad, by new taxes, and by inflation. The highest rate of income tax peaked in the Second World War at 99.25%. After WW2, the tax slightly reduced and was around 90% through the 1950s and 60s. In 1974 the top rate of income tax on earned income was 83%. A surcharge of 15% kept the top rate on investment income at 98%.
    The income tax is still a temporary tax to this day that has to be renewed by Parliament every tax year. The Mirrlees review looked at the tax system in the round and recommended replacing business rates with a land value tax and council tax with a proportional property tax.
    Steve Keen has had a go at integrating energy and the ecological effects of using energy into economics https://www.forbes.com/sites/stevekeen/2016/08/19/incorporating-energy-into-production-functions/?sh=7bf6971d47cc drawing on the Physiocrats who were among the first to to properly consider the role of energy in production. They ascribed it solely to agriculture exploiting the free energy of the Sun, and specifically to land, which absorbed this free energy and stored it in agricultural products.

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