Opinion: Lib Dems must support LVT

I’ve been asked to preview the conclusions and argument for my book Location Matters: Recycling Britain’s Wealth here. If you subscribe to Liberator or Challenge (the Green Lib Dems’ journal) you will get reviews by others of the book before Conference. In the current Challenge you will also see a piece by me about how the Liberal Democrats’ Tax Commission got in such a depressingly non-radical place with Land Value Taxation (LVT) – which is what my book is about.

What I want to do here is explain the conception of the book, its purpose and what I hope happens next. But first, as requested, in a single sentence: conclusions and arguments. If the Liberal Democrats do not go into the next General Election campaign with a pledge to retain some form of nation-wide property tax at the same time as scrapping Council Tax, they will have betrayed their forebears and – more importantly – future generations of British people and will not deserve the support of voters.

I wrote to Charles Kennedy in 2003 asking for the Party to undertake a full review of tax policy and involve ALTER (Action for Land Taxation and Economic Reform) in it, as the only group in the Party that exists to promote radical economic reforms. He confirmed straight away that this was his intention and, true to his word, I was made a member of the Tax Commission (TC) which met more than fifteen times between June 2005 and March 2007.

Having studied LVT for ten years, I felt that a treatise on the subject was needed to inform the TC. Richard (now Lord) Best, then Director of Joseph Rowntree Foundation, kindly gave me a small grant to enable me to take time off from my PhD studies in 2004/5 to write it. Duncan Greenland of Centre for Reform agreed in 2004 to publish the outcome. However in late 2005, CfR became CentreForum and decided to publish ‘Ignition Pieces’ such as my Tax Shift Now! only on their website.

Originally I planned to make the treatise almost entirely a ‘how to do LVT’ paper but was persuaded by ALTER colleagues to include the ‘why’ as well. Hence much of the paper explains the UK policy context within which the debate has arisen. Disappointingly, the CentreForum draft never attracted much attention. I discovered other authors found the same, so I decided to press for a printed and updated version this year, as soon as Party Conference passed last year’s Motion including a call for ‘further policies to be developed on land tax’ and clear support for LVT.

There was much new to include in the revised version and it was especially useful to have a non-political publisher. Although aimed at people of the centre-left with an interest in public affairs, the book avoids ‘washing the Party’s dirty linen’! I only had six weeks from the time I found a publisher to having the book out and reviewed for my target market. Hopefully a future reprint can incorporate more new thinking that has been stirred up by Location Matters.

For Conference Voting Reps, I would like minds to be concentrated on the consequences of the two policy options that face us, assuming we achieve Liberal Democrat Government. On the one hand: abolition of all domestic property tax, immediate rise in house prices; most first-time buyers having increased income tax (albeit Local); site value rating on only the harder sites to value; asset-rich becoming even richer, undeservedly and unsustainably. On the other hand: a trigger for completing the land registry and national land valuation, with all the spin-off benefits for sustainable strategic land management; a huge incentive to use land and the built stock of housing more efficiently; significantly (not marginally) reduced taxes on enterprise and earnings by those most able to meet the challenge of climate change; massive boost to public investment in infrastructure paid for by beneficiaries; and many other benefits set out in the book.

Conference asked the TC to develop new policies on land tax, not simply to flesh out old ones. It hasn’t done that. It must be told to go back and prepare another paper on LVT now. And meanwhile we must start preparing the voters for a real Green Tax Switch, not a sham. ALTER will ask Conference to remove the words implying a Local Income Tax is the only fair alternative to Council Tax: a fairer, national, property tax is what we need.

* Tony Vickers is a Newbury councillor and Chair of ALTER (Action for Land Taxation and Economic Reform).

Read more by or more about .
This entry was posted in Books, Conference and Op-eds.
Advert

6 Comments

  • Paul Griffiths 12th Sep '07 - 6:48pm

    The reason why the CentreForum piece attracted little attention was because it was turgid in the extreme and comprehensible only by people with degrees in economics. Sadly, every ALTER publication I have ever seen suffers the same defect. Maybe “Location Matters” will be different, but given its provenance I’m not holding my breath.

  • Sadly have to agree with Paul at 2 above. ALTER should put some real effort into designing some kind of shadow campaign pack (in digestable, Focus-ready form, complete with photos and no more than 50 words per article). That would be the real test of whether this is a remotely saleable policy rather than a theoretical pipe-dream.

    The absence of any such work strongly suggests to me that this is a non-starter as party policy.

  • Paul Griffiths 15th Sep '07 - 11:09am

    “It is far fairer than LIT, taxing wealth rather than work.”

    Now, right there Tristan you’re running in to trouble. I believe that most voters would find those eleven words completely baffling.

    Wealth is what other people have. No typical voter thinks of themselves as wealthy, and they will not take kindly to your proposal to tax them as if they were.

    Nor do people regard the accumulating value of their homes as wealth. Certainly I don’t. The market value of my flat has gone from £45,000 to £125,000 in just over 15 years. Presumably the value of the land on which it is built has increased proportionately. But when I come to sell my flat in the next few weeks, it will cost me at least £140,000 to buy an equivalent property, and I’ll be even deeper in debt than I am now.

    If I continue getting wealthy at this rate, I’ll spend my retirement eating cat food straight from the tin.

    In contrast, people have an intuitive grasp of income tax as “the subscription we pay to live in a civilised society” (as somebody famous once said). If asked, I reckon they could even come up with an reasonable explanation for progressive income tax.

    But if you asked them to explain why they should instead be taxed according to the value of the land on which their over-mortgaged house is built, they will stare at you blankly. And frankly, so will I.

  • Grammar Police 15th Sep '07 - 11:53am

    As someone who, admittedly, has paid little attention to LVT, I don’t really understand how it is necessarily fairer to tax the value of someone’s property as opposed to their actual income – from all sources. That is the major problem I have with council tax (which, originally at least, is linked to the value of the building that stands on the land). Most people won’t appreciate the difference between land value and building value – and I’m not entirely sure that I do. Legally, at least, the price of a house is actually the price of an estate in the real property. I can see that unbuilt land is going to sell for less than built land (at least on the housing market) . . . anyway, I’m just getting confused now – and that’s going to be a real problem if I had to explain to the voting public.
    Will the removal of a domestic property tax really lead to such an unbridled rise in house prices? Disposable income of the better off will reduce with LIT, meaning a reluctance to buy expensive properties, thereby reducing demand, whilst the monthly income of the less well off will actually be improved, meaning that many attempting to get on the housing market will find it easier? Isn’t that the theory at least in basic terms?

Post a Comment

Lib Dem Voice welcomes comments from everyone but we ask you to be polite, to be on topic and to be who you say you are. You can read our comments policy in full here. Please respect it and all readers of the site.

To have your photo next to your comment please signup your email address with Gravatar.

Your email is never published. Required fields are marked *

*
*
Please complete the name of this site, Liberal Democrat ...?

Advert



Recent Comments

  • Jenny Barnes
    It's clear that the human population is in overshoot. Well over the carrying capacity of the Earth. However, there is some goodish news. Fertility rates are...
  • expats
    I went onto the Daily Express website (reckoning that most support for Sunak's 'National Service' would be from a readership that are right wing and JUST too yo...
  • Peter Hirst
    Scandals are part of our life but we can minimise their effect. One way is to detect them earlier through better transparency and accountability. We have endure...
  • Jack Nicholls
    Thank you Yusuf 😊...
  • Peter Hirst
    The elephant in the room to your blog is inequality. Many of the policies you outline reflect the disastrous levels of inequality that corrupt our society. Many...