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”.

He stressed the need for the APPG to be supported by “thinkers and practitioners who can help us with advice”. Within a few months, they expected to publish short papers and hold witness sessions, and to search for ways in which the political parties could advance the policy of land value taxation. He noted that all of the parties represented on the APPG had some reference to the policy in their manifestos, and “the step now is to get beyond the exploratory to something concrete, to get results”.

Baroness Jenny Jones explained that land value taxation had been Green Party policy for more than 40 years, and that “it really is time it happened. I can’t tell you how thrilled I am to have the APPG set up. It is absolutely the time for this, especially at this time of social inequality”. She said that, while she was not an economist, “I can hear something when it has the ring of justice”. Land value taxation was just such an idea. “It is fair and feasible.”

David Drew, the Labour MP, argued that the state had to collect some of the land value to fund the state’s services. In the general election Labour were accused of ‘grabbing people’s back gardens’. The level of public debate needed to be raised, “so that people can see why and how we are doing it, why its time has come. We have to explain to people, because it is quite a complicated issue, in a way that people can see the benefit of it.”

He said “It is about fairness. We live in an unfair society now, and the biggest unfairness of them all is land”. In particular, it was necessary for the state to share in the astronomic gains that accrue to land developers. He noted that the political parties would get nervous about this proposal, “so they have to be pushed”.

* Joe is a Vice-Chair of Hounslow Liberal Democrats, Chair of ALTER and PPC for Brentford and Isleworth

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26 Comments

  • Lorenzo Cherin 13th Dec '17 - 12:39pm

    Joe

    This would be good if you and your friends explained there would be a level it would start from that would not grab back gardens and homes of people, their only home.

    I lost my home , a small house, and garden. If that is lost through tax, or if building is encouraged for the purpose only of being supposedly of a proactive nature rather than economically or socially passive, the land, merely for personal use, this needs to be explained in stark terms, are you proposing those with bigger gardens pay more.

    You have to emphasise wealth as far more than land. Off shore is acceptable to you, you said on here the other week, business need have no obligation beyond making a profit , good for the economy , etc. When the business pays low wages and emphasises immigrant workers as the reason for their dislike of brexit, we need an economy far more understanding of people , as individuals or beyond, far more aware of absconding from the ethics of decency.

    It is very acceptable to desire to own a little piece of land and enjoy it.

    Wholly unacceptable to hoard profits , whether earned or not.

  • Sue Sutherland 13th Dec '17 - 1:59pm

    I agree Lorenzo, this has to be part of an attempt to redistribute wealth however it is expressed, because we need to help people who have nothing and people who have very little. The problem is that wealth is often hidden rather than displayed ostentatiously as it was in the past when wealthy landowners built their stately homes. Instead people own several homes and property developers leave land undeveloped until it’s value increases. According to the Times 1 in 30 people are landlords but many are now trying to sell their properties due to less profitable rental income and changes to mortgages, but I think these will mostly be people who are landlords in a small way, for whom buying property has made more sense than putting money in the bank in recent times.
    I would rather the very wealthy paid what they should than this sort of investor be clobbered by tax when all they have done is respond to attempts to increase private sector renting, which were popular in the 90s as a way of ameliorating the dearth of homes to rent.

  • At the reception, the Chair stressed the need for the APPG to be supported by “thinkers and practitioners who can help us with advice”. Within a few months, the group expect to publish short papers and hold witness sessions, and to search for ways in which the political parties could advance the policy of land value taxation.

    The first witness session is likely to be a City Mayor’s conference. London Mayor Sadiq Khan has said “it is now vital that the Government grants them greater powers and resources to take the action that is required to tackle London’s affordable housing crisis https://www.london.gov.uk/press-releases/mayoral/mayor-calls-for-bold-housing-reforms,
    Noting that in 2015-16 London’s stamp duty receipts were £3.37bn while affordable housing investment was just £73m. The London Finance Commission has called for devolution of the full suite of property taxes, including council tax, business rates and Stamp Duty to the capital.

    Cambridgeshire and Peterborough Mayor, James Palmer, wants government approval for a price cap on land values to get more homes built at prices people can afford http://www.cambstimes.co.uk/news/mayor-james-palmer-calls-for-land-value-cap-to-unlock-housing-growth-in-cambridgeshire-but-it-needs-government-approval-he-says-1-5128813

    Manchester Mayor Andy Burnham has set out his belief that HS3 ( linking Manchester to Leeds) should be the Crossrail of the North http://www.fieldfisher.com/publications/2017/06/infrastructure-and-housing-crossrail-2#sthash.NIWJsHGW.dpbs. Liz Peace, Chair of Old Oak Common Development Corporation and Michele Dix drew attention to the ability to use enhanced real estate value to fund infrastructure and therefore unlock development. Crossrail 2 as a scheme including rolling stock would cost circa £36bn. The importance of value capture from land and property was highlighted [at a recent conference] and very much commended . There were, it was recognised, a number of lessons learned from Crossrail 1 where more value could have been captured, particularly in increased values around stations. Although not mentioned by name, the great benefits to the Northern Line Extension of income through incremental business rates ( or Tax Increment Financing ) was mentioned as viable although understandably more difficult in the context of a scheme of the complexity and length of Crossrail 2.

  • John Probert 14th Dec '17 - 9:44am

    Because of the hardship which LVT would cause for many ‘asset rich, cash poor’ homeowners, why not apply the tax to residential property only when sold or a long lease is granted? The land value at the time of a sale would become the base from which to apply LVT when the property was next sold. What’s not to like?

  • Duncan greenland 14th Dec '17 - 9:53am

    Really good to see cross party initiative on this ; a way must be found to rescue the agenda from the ideological purists and draw on the real world examples of how variants of land value capture have been successfully implemented in other countries.

  • David Evershed 14th Dec '17 - 3:36pm

    John Probert

    Anyone cash rich can turn themselves into being cash poor, primarily by buying an asset like a property.

    Similarly, anyone asset rich can convert a property into cash by re-mortgaging or by sale and lease back.

  • Lorenzo Cherin 14th Dec '17 - 4:53pm

    Tony

    I value, no pun intended, your response to my comment , but think the excellent description given by you proves me correct, we need levels clear now!

    As fine comments by Sue make clear, we should not , as John says, be hitting property rich, cash poor , at all, if it is their only home and they have paid for it. Why should an elderly person in their family home with memories sell it because the state demands cash. Sell it to distribute amongst family, to down size, to go into a home, but not at the whim of the HMRC ideology.

    Tax those whose land is a certain value, or is more than one plot and of high worth.

    An old widower or widow in a three million pound home shall pay , or relatives, inheritance tax. Enough !

  • Land Value Capture mechanisms include, but are not limited to, Land Value Taxation..
    Value capture mechanisms seek to claw back at least some of the increased business revenue or land value arising from planning gains. These funds are then allocated towards the initial costs of infrastructure provision. In the case of a planning change, land value uplift can also help ensure that affordable housing for low income groups is included in new development.
    Transit value capture is used in Hong Kong and Japan to fund railway lines and new town development. This is a project-based approach which packages investment in railway and housing development together. Commercial holdings along the railway line deliver an ongoing revenue stream as does long term investment in residential development. In Hong Kong, a significant program of public rental and subsidised home ownership has also been delivered as part of this model..
    Tax Increment Financing (TIF) is used widely in the US to finance new transit and urban renewal projects. The model draws on anticipated increases in business revenue or rents in areas where incremental value uplift will occur. A portion of the increase is captured via a special property tax which is then allocated to repay the debt. This method was used in the UK to fund the extension of the Northern Line.
    Value capture through the planning process is another approach using S106 contributions, Community Infrastructure Levies and Sec 278 highway agreements. Another approach to capturing value created through public investment or planning is to levy the charge on the first property transaction (ie. land sale) following the change. This might be achieved by assembling public land banks (using compulsory purchase orders where necessary) or community land auctions http://www.centreforum.org/assets/pubs/community-land-auctions.pdf.
    Shelter points to the estimated £87 billion that could be unlocked for infrastructure and housebuilding http://blog.shelter.org.uk/2017/08/a-consensus-is-emerging-on-land-value-capture-what-we-need-now-is-political-action/
    These issues are the focus of the APPG. Addressing the housing crisis and Local Authority Financing, reviewing legislative changes needed to the 1961 Land Compensation Act as well as addressing inequality, economic inefficiencies in the tax system and inter-generational inequity.

  • A great initiative, particularly the stress on getting the politics right and not just the economics.

    One practical suggestion. At present as I understand it, properties are all revalued together for council tax – which inevitably creates a political hurdle if there’s likely to be a big jump. This could be avoided if property were valued only when sold (or long leased) and then on every (say) 10th anniversary of that date so staggering revaluations.

    One of Thatcher’s legacies was the destruction of local government finances. We need to put them back on a sound footing.

    Meanwhile, for those not already familiar with it, here’s a link to Winston Churchill on the subject back in 1909.

    http://www.landvaluetax.org/current-affairs-comment/winston-churchill-said-it-all-better-then-we-can.html

  • The major problem of land taxation is applying it to residential property and not having a true zero rate for those who don’t have the income to pay the tax. It is a shame that those party members who support land taxation don’t support a true zero rate. Instead they support taking the tax once the owners of the land die, so those who would inherit the residential property don’t because their parents had a smaller income than other inheritors of identical residential property whose parents had enough income to pay the tax. I don’t understand why liberals would support such an arbitrary unfair tax.

    The other problem is regarding rented residential property. If the owner of the land can’t obtain the land tax by increasing the rent then renting the property is likely to be uneconomic and so result in a decline in the number of homes in the private rented sector.

  • Katharine Pindar 16th Dec '17 - 9:03am

    Those seem important points about proposed land taxation, Michael, with a really challenging idea about the effect on owners of rented property. Just one small query – the word ‘don’t’ at the end of the fifth line: don’t what? I welcome elucidation on this subject, and agree with you about the seeming desirability of zero rating for poorer people.

  • @ Katharine Pindar

    I am sorry that I didn’t express myself clearer. My point was that if the LVT is rolled up to be paid when the owner dies those who would have inherited the whole property will not because they will have to pay the back tax from the value of the property, while those whose parents had a greater income would inherit the whole value of the property. This produces an advantage for those whose parents had the larger income.

    @ Tony Vickers

    I did read your earlier post. Say for arguments sake you set the ‘Homestead Allowance’ at the band B rate; you own a second home in band C and so want to pass the band B discount to your tenants; to pass the full amount I think you would need to get them to buy an interest in the property worth the amount of a band B house. Therefore you have to sell more than 50% of the value of the property. You would be happy to do so. However, a person who wants to maximise the income from their rented property will not do this. (He wouldn’t want to lose control of his property. How difficult would it be to evict a tenant for non-payment of rent if they owned some of the property?) He will simply put the rents up by the amount he has to pay in Land Value Tax (and the government will pay some of the extra rent if the tenants receive housing benefit). If he can’t get the new rent (unlikely with the current state of the housing market) he would sell the house if he could invest the money elsewhere to generate the same return. Therefore rents will increase and the number of homes in the private rented sector will decrease.

    I note you didn’t address the idea of a true zero rate to apply to all properties. Your 2005 scheme must have included many losers – the following groups who owned a band C or above property – unemployed people, long term disabled or those with health issues not in employment, pensioners and those on low wages.

  • The homestead allowance is used for state property taxes on residential properties in the USA and typically will be set at 50% of the median property value or rateable value for a local area.
    Tax Deferral programs for Seniors are also commonly used. Minnesota has a scheme that limits the amount payable directly to 3% of income. The balance due is provided as an interest free loan until the property is sold or bequeathed http://www.revenue.state.mn.us/propertytax/factsheets/factsheet_07.pdf. California https://www.cga.ct.gov/2000/rpt/2000-R-0836.htm, Oregon http://www.oregon.gov/DOR/forms/FormsPubs/deferral-disabled-senior_490-015.pdf and other states have similar programs.
    Canada also has schemes such as the Seniors Property Tax Deferral Program (SPTDP) that allows eligible senior homeowners to defer all or part of their property taxes through a low-interest home equity loan with the Alberta government http://www.seniors-housing.alberta.ca/seniors/property-tax-deferral.html

    Asset Rich Income Poor homeowners are relatively small in number. The mansion tax proposals based on properties of over £2m in value estimated there were approximately 7,000 such households in the UK. Birmingham University estiimated only 4% of those who were retired in 2010 had both an income below the official poverty line1 and housing equity over £100,000 – not anywhere close to a mansion tax level of £2m https://www.birmingham.ac.uk/Documents/college-social-sciences/social-policy/CHASM/briefing-papers/2012/briefing-paper-temp-wealth-tax-sept2012.pdf. Moreover Replacing council tax with LVT transfers the tax liability from occupiers to Landlords/owners. Property rental businesses and investment property owners would be treated as other businesses are and assessed to business rates on the rateable value of land. The rent from buy to let properties is estimated at £55bn-£65bn a year in the UK. As this Economist article notes, young folk who would prefer to own a house complain that the buy-to-let boom is one of the great injustices of modern Britain and Institutional investors that can deploy economies of scale and access lower cost financing are poised to buy-up much of the rental property currently in the hands of smaller landlords https://www.economist.com/news/britain/21732481-new-regulations-and-cooler-market-are-causing-landlords-sell-up-britains-buy-let-boom
    Ultimately, the issue of exemption or deferment of taxes for seniors with lower income is a question of where to focus tax benefits – on the young trying to get on the housing market or on the beneficiaries of modest estate. Any of the 7,000 estates identified in the mansion tax research with property over £2m will be dealing with inheritance tax of £400, 000 or more and deferred LVT assessments would be a minor charge in comparison.

  • Vince Cable is quoted in this article criticising a £110m bonus payment to the CEO of Persimmon house builders https://www.theguardian.com/business/2017/dec/15/persimmon-chair-resigns-chief-executive-obscene-bonus saying, “scale of this bonus is obscene” and built on a “government subsidy”.
    “It is reminiscent of the worst excesses of corporate greed that helped to create the financial crisis, when short-termism was heavily incentivised and long-term planning ignored,” he said.

    “This is also a perverse situation where a corporate fortune has been built on what is essentially a government subsidy in help to buy. This situation shows just why help to buy is so flawed: it fuels demand rather than supply, putting house prices even further out of reach of young people, while adding zeros to the bank balances of housebuilding executives.”

  • Richard Underhill 16th Dec '17 - 7:30pm

    Vince is right and has been right. These issues were set out by the chief executive of AVIS in his commendably brief and radical book “Up the Organisation”. He disapproved of remuneration committees and preferred incentives in shares. Avis went from loss making but second to profitability and first, overtaking Hertz.

  • @ Joe Bourke

    Your answer to the question of a true zero rate tax for the following groups who own a band C or above property – unemployed people, long term disabled or those with health issues not in employment, pensioners and those on low wages, is to state they are too few in number to be bothered about. I can’t imagine you saying this regarding the 3.01% of the UK which defines itself as black. You could have argued that as they are so few in number of course they can have a zero rate. We know that about 4.5% of the working age population is unemployed and about 9% receive Employment and Support Allowance. We also know that about 64% of the population are owner-occupiers and 34% of those in the age group 16-34 are owner occupiers. It seems reasonable to assume that of these 4.5 million people (possibly households) at least 49% (2.2 million [6.615]) are owner occupiers. It is therefore possible that about 1 million households of working age would have their Land Tax rolled up to be paid when they die assuming that band A and B properties are exempt. We can then add the retired. Using Birmingham University’s 4% of all retired people we can add about another half a million. Therefore without looking at those in work on low incomes we have more than 2.6 million people who you don’t want to provide assistance to. I know previous Conservative and Labour governments have not bothered with how their policies affect these people. I still can’t get over the Coalition government abolishing the National Council Tax Benefit scheme so that those who are unemployed or receive Employment and Support Allowance in most parts of the country have to pay some Council Tax where before they paid nothing.

    I don’t understand why someone owning a band B property pays no tax, but a person owning a band C property does even if their income is below the poverty line. You need to look again at the blanket exemption for lower valued homes and instead have discounts (benefits) linked to incomes.

  • Michael BG,

    It is not reasonable to assume that long term unemployed are sitting on valuable property assets. There is a high correlation between high incomes and high property wealth as has been shown in numerous studies.

    The principal reason that the relatively small number of people falling into the category of asset rich income poor is significant is – because the numbers are relatively low, exempting such individuals or deferring tax payments until properties are sold or bequeathed is not an expensive choice for the treasury. It is therefore a political choice more so than an economic one as to how tax benefits are prioritised. As noted in the links above, deferral in commonly adopted overseas where property taxes are a significant element of local government finance.

    Lib Dem policy is to replace business rates with Site Value Rating (land value taxation). The party passed a motion https://www.libdems.org.uk/conference-autumn-17-f32-protecting-small-business calling for a fundamental review of the Business Rate system including consideration of Site Value Rating, During a question and answer session Vince Cable said there were both short-term remedial issues with the levy (businesses not getting promised relief because government software has broken down) and also bigger long-term issues of principles. Cable said he thought business rates were “not a very good form of taxation. If you’re trying to get an underlying value of physical assets you should be taxing the value of land on which it rests.”
    The 2017 Manifesto also called for an investigation of the feasibility of LVT. There are a number of areas to be addressed:
    1. Firstly, LVT as a replacement for business rates and bringing property letting businesses, unoccupied investment property and development land into the reformed business rates regime.
    2. Secondly, LVT as a replacement for council tax and other property related taxes such as SDLT and inheritance tax on owner occupied homes. These are the real issues for Asset Rich, Income Poor homeowners.
    3. LVT as part of a economic shift from taxes on income and consumption to taxes on wealth primarily aimed at addressing issues of tax inequality.

    Policy needs to be developed with the final destination of addressing tax and inter-generational inequality in mind.

  • John Mulbaeur is professor of economics at Nuffield College and senior fellow at INET Oxford. He wrote this FT article:
    The British property market is both alluring to foreign investors and peculiarly dysfunctional. One of the flaws at its heart is the council tax system, which is monstrous and unique. No other advanced country has such an unfair property tax.
    For a start, it is a mystery why the UK is so attached to the value bands that applied when the tax was introduced by the Conservatives in 1991, when most nations base taxes on recent market values. This would not be hard to fix: most owners can value their homes from Land Registry information processed by property websites such as Rightmove.
    Retaining outdated bands only magnifies the system’s unfair anomalies. For example, a household at the bottom of band H (for the highest value properties) — where homes are on average worth perhaps £1.2m (the equivalent of £ 320,000 in 1991 prices) — pays 30 per cent of the tax, as a percentage of value, paid by a household at the top of band A (lowest value properties), where the average home costs about £ 120,000 (£ 40,000 in 1991). A family in a £ 2.4m home pays only 7.5 per cent of the rate faced by a band A taxpayer in a £ 60,000 home in the same local authority.
    Council tax relief, a sticking plaster for the poor, in fact traps many in poverty. From April 1 2013 hundreds of thousands of people became liable for council tax for the first time, after the Conservative-led coalition government cut by 10 per cent the amount available for relief and allowed local authorities to set their own eligibility criteria. “Council tax has overtaken credit cards as the most common debt problem in Britain”, according to Citizens Advice .
    Introducing a progressive element would be simple: borrow features of income tax. Making the first £40,000 of value free of tax would take hundreds of thousands out of the poverty trap. A higher tax rate for the value above £ 5m would tap a little of the taxable capacity of the plutocrats. Successful reform would require overcoming the inability to pay of the cash-poor and asset-rich. A good method would be to offer everyone a tax deferral in return for an equity stake in their property. Those paying cash would be offered a small discount since managing deferral incurs costs.
    Suppose the tax rate was 1 per cent. For those choosing deferral, the government would register a 1 per cent gross equity stake, to be paid out at the next transfer of ownership. After 10 years of deferral, the government would own a 10 per cent stake. The combination of the discount and the prospect of having to share capital gains with the government (that is, other taxpayers) would ensure many chose the cash option.
    Such a tax would encourage down-sizing; helping to ensure that a regular supply of properties came on to the market. This would in turn generate tax revenue. Central government should take tax deferrals on to its balance sheet and supplement local authority revenue with the annual cash equivalent of the deferred tax payments for that year .
    There would be many economic benefits, not least productivity gains from better use of housing stock. Higher revenue from reformed council tax would permit cuts in the stamp duty land tax, improving labour mobility. Where there are pockets of negative equity, prices would rise. At the upper end of the market prices would fall, inducing a temporary decline in house price indices, making property more affordable for the young. With lower prospective capital appreciation, many of the thousands of empty upmarket homes owned by foreign investors would be sold or offered for rent. Upward pressure on London rents would moderate. As foreign speculators pull out, sterling should fall, shifting the UK recovery towards exports and away from consumption.
    A fairer society, higher productivity and a more sustainable recovery are thereby achievable. Council tax reform deserves to be high on the agenda.

  • @ Joe Bourke

    I don’t understand why you object to exempting those owner occupiers who have an income lower than the poverty level.

    I hate the idea that you want to abolish inheritance tax and replace it with a land tax. We need to instead advocate a gift tax so stop people getting round the inheritance tax and bring in ways to tax trusts when the beneficiaries die in line with inheritance tax.

    The link you give states that instead of party policy being the replaced of Business Rates with Land Value Tax it is “reviewing the Business Rate System including consideration of Site Value Rating”. What the 2017 manifesto actually had was “reviewing the Business Rate System and considering “the implementation of Land Value Taxation” (page 40). The policy you linked to calls on the government to allow some Councils to run pilot schemes for “Site Value Rating”. As I have stated numerous times, I support replacing Business Rates with a Land Value Tax.

    The 2017 manifesto did not contain anything about investigating a replacement for Council Tax. It is replacing Council Tax with your preferred system of LVT that I object to. I don’t object in principle to replacing Council Tax with a LVT if it ensured than no one with an income under the poverty level paid the tax and didn’t have the tax rolled up to pay after they die. Inheritance Tax should deal with residential properties which we consider too valuable to be inherited without paying tax on them. I don’t object to taxes on wealth, but I do object to increasing taxes on the homes that people living under the poverty line live in. Reforming Council Tax to make it a fixed percentage would be acceptable so long as those living under the poverty line didn’t have to pay it. The recent Joseph Rowntree Foundation report states that 8 million working age people and 1.9 million pensioners live in poverty (https://www.jrf.org.uk/report/uk-poverty-2017). It is vital we ensure that these people don’t pay the new LVT. So rather than giving a fixed tax free amount to everyone and leave most likely at least 5 million people living in poverty paying this new tax we need to ensure that no one living in poverty has to pay the tax no matter what the value of their home.

  • The Gladstone club is hosting an event titled ‘Hope for Housing’ this evening from 7pm at the National Liberal Club.

    It is an uncomfortable truth that as one generation sees their property prices rise the effect is that their children struggle to pay the rent. Average house prices are now 9.5x the average salary and in many areas of London they are well over 20x the average salary.

    However there is a ray of hope from a growing community-led housing movement which seeks to provide an alternative model to fixing the broken housing market by giving back control to communities and local residents. The idea is simple: to help people and communities build their own homes with the needs of the community in mind and with prices that are truly affordable. This may be a community for students, or families, or communal housing for the elderly. There are different models of funding this including holding the land in trust, long term leases of land or developments which houses sold at market price subsidise the houses which are let at affordable rents. The Housing Minister Alok Shama MP affirmed his support for the movement by launching a £240 million Community Housing Fund, the first of its kind, over the next four years, providing £60 million of funding a year to support the community-led housing movement. The Mayor of London also supports the movement and has developed the Homes for London Community Housing Hub to offer support to Londoners and community groups who want to build in the capital offering technical advice, access to funding and advice how to unlock land.

    Stephen Hill, Chair, UK Cohousing Network and Trustee of National Community Land Trust Network will explore the land question and what reform is possible. He will explain Community Land Trusts and Co-housing and how it works. “The demand side has never had a place in housing policy making” he says. “The Community Housing Fund provides an extraordinary political opportunity to scale up our influence and change the mainstream of the politics of housing. The new network of housing hubs will provide a laboratory of information, wealth of locally gathered evidence of what is needed and what works in different places. We are the voice of the demand side.”

    RSVP [email protected]

  • Michael BG,

    In 2006, in the tax policy paper (largely written by Vince Cable) Fairer Simpler Greener,
    Liberal Democrats recognised that “the most important form of personal wealth” was
    landed property and in the following year the paper Reducing the Burden (of taxation
    on earnings) included “a long term commitment” to taxing the land value element of
    domestic properties, alongside reform of non-domestic rates onto a land-value basis
    within a single Parliament.

    LVT is part of the Libdems tax policy package. The most recent policy paper Fairer Taxes contained a promise which featured in our 2015 election manifesto for government: to consult widely in order “to determine how to implement LVT” – not whether to do so. You are correct on noting the 2017 manifesto was less committed on this point. It was, however, produced in response to a snap election in which Brexit was the domimant issue.

  • @ Joe Burke

    Within that old 2006 policy paper “Fairer, Simpler, Greener” (hopefully not written by Vince but produced by the 20 people on the Working Group [Vince wasn’t even the char!]) was reform of Inheritance Tax to make it a gift tax. Great idea we need to bring that back. On page 8 it states, “‘Ability to pay’ can relate to income or wealth or both, and so is relevant to capital as well as income taxation”. I looked in vain for your “the most important form of personal wealth (is) landed property”. It states, “Economic rent, the income which accrues from the ownership of resources beyond the cost of bringing them into productive use”. And it is this aspect it talks of taxing. It talks of the great landowners (page 23).

    Pages 24 and 25 raise the issue of reforming Inheritance Tax along lines I approve of, but concludes with no policy. We need to revisit this.

    The Executive Summary of Reducing the Burden (of taxation) has replacing Council Tax with a Local Income Tax.

    Page 11 (4.0.11) states our commitment to Site Value Rating to replace Business Rates. Page 13 (5.2.1) “whilst retaining a long term commitment to a system of land value taxation” rejects SVR for domestic properties for the next 8 years at least.

    The paper “Fairer Simpler Greener” does talk of some of the issues regarding those owning high value homes and having low incomes, but doesn’t talk of applying a similar benefit scheme as the one at that time applying to Council Tax to the new scheme. This must have been an oversight and hopefully as chair of ALTER you will put pressure on those making policy that this never happens again.

  • david thorpe 19th Dec '17 - 10:17pm

    land value capture should be the centrepiece of ouyr economic policy going forward, its actually radical and liberal, instead of just having conventional arguments about the top rate of income tax.

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    "Perhaps we should play the long game, keep on as we are and let people see us proved right on Brexit, but that’s a risky...
  • User AvatarMalcolm Todd 19th Jan - 2:41pm
    I think it we avoid getting caught up in the "left behinds" rhetoric (which I've no patience for either), Arnold is making a sensible point...
  • User AvatarJohn Marriott 19th Jan - 2:38pm
    Arnold Kiel says that “luckily in this game between Trump and Kim Jong Un one player is rational”. But which one?
  • User AvatarMalcolm Todd 19th Jan - 2:31pm
    Rob Parker 19th Jan '18 - 2:22pm If I may simplify: "Taking a new, more radical approach, might make a difference, such as [becoming the...
  • User AvatarNigel Ashton 19th Jan - 2:26pm
    What a lovely article Lucy, which brings back many fond memories of your grandfather. Gruff was a mentor to me as I worked my way...