Bring in Land Value Tax to replace Council Tax
As part of my platform for the Labour leadership, I'm advocating the replacement of Council Tax and business rates with a Land Value Tax. This is something long campaigned for by the Labour Land Campaign.
We all know that council tax is a regressive tax, with those in Band H paying only three times as much as those in Band A. Rises in Council Tax are therefore hitting the poorest hardest. There is also £1.8bn in unclaimed Council Tax benefit.
Last week the Lyons Review published a report into the Council Tax review, which recommended that the large homes of the super-rich should be charged double what they are currently paying to allow for a rebate of £150 per year for the poorest. This was immediately rejected out of hand by Gordon Brown's Treasury. As David Hencke writes in the Guardian: "The man who would be prime minister threw away an opportunity for a real change that would have hit the rich and helped the poor".
A Land Value Tax (LVT) would simplify matters and accords with our sense of justice. Land is a gift of nature and its value rises according to the social and economic environment to which all of us contribute - yet only landowners benefit. For example land values in East London have risen due to the Olympics, yet it is the investment of public money that has enabled the Olympics to take place and for land values to rise. A tax on land values will return some of this unearned wealth to the community and the income used to reduce or replace regressive taxes such as council tax.
LVT is fair, transparent, impossible to avoid (you can't store land in an offshore tax haven), simple to collect, and would help tackle the growing inequality of wealth. It also encourages efficient use of land in towns and cities for jobs, affordable homes and leisure and thus avoid urban sprawl.
In 1906, Keir Hardie said "The slums remain, overcrowding continues whilst the land goes to waste. Shopkeepers and traders are overburdened with rates and taxation whilst the increasing land values that should relieve the ratepayer go to people who have not earned them". 100 years later we have an opportunity to make LVT a reality.
We all know that council tax is a regressive tax, with those in Band H paying only three times as much as those in Band A. Rises in Council Tax are therefore hitting the poorest hardest. There is also £1.8bn in unclaimed Council Tax benefit.
Last week the Lyons Review published a report into the Council Tax review, which recommended that the large homes of the super-rich should be charged double what they are currently paying to allow for a rebate of £150 per year for the poorest. This was immediately rejected out of hand by Gordon Brown's Treasury. As David Hencke writes in the Guardian: "The man who would be prime minister threw away an opportunity for a real change that would have hit the rich and helped the poor".
A Land Value Tax (LVT) would simplify matters and accords with our sense of justice. Land is a gift of nature and its value rises according to the social and economic environment to which all of us contribute - yet only landowners benefit. For example land values in East London have risen due to the Olympics, yet it is the investment of public money that has enabled the Olympics to take place and for land values to rise. A tax on land values will return some of this unearned wealth to the community and the income used to reduce or replace regressive taxes such as council tax.
LVT is fair, transparent, impossible to avoid (you can't store land in an offshore tax haven), simple to collect, and would help tackle the growing inequality of wealth. It also encourages efficient use of land in towns and cities for jobs, affordable homes and leisure and thus avoid urban sprawl.
In 1906, Keir Hardie said "The slums remain, overcrowding continues whilst the land goes to waste. Shopkeepers and traders are overburdened with rates and taxation whilst the increasing land values that should relieve the ratepayer go to people who have not earned them". 100 years later we have an opportunity to make LVT a reality.
Labels: Council Tax, Land Value Tax
posted by John at 3:19 PM
31 Comments:
Have looked on Labour Land Value Tax campaign website but still bit clueless. How does it work in day-to-day terms, anyone?
I usually agree with you John but this time i don't. The fairest taxes are based on income and i think a local income tax (as suggested by the Scottish Socialist Party and the Lib Dems) would be fairer and more practical.
It would also be easy to collect since the inland revenue already has a system for determining income tax.
Low earners could be exempt from it.
Not all land brings its owners any income - so in many cases they'll be forced to sell it - and it'll be bought up by Tescos or some hotel chain.
A land value tax risks more land being sold to big companies or government who will be the only ones who will be able to afford to own any land if there's a land value tax. There is a lot of land owned by councils already being sold off (including parks which were given to the people of Glasgow in peoples' wills).
There are ways income tax evasion could be cracked down on - e.g through EU and/or OECD agreements.
Duncan, if you look at the proposals of the Labour Land Campaign, these issues have already been dealt with.
Land value would also be based on a categorisation (i.e. industrial, commercial, residential, agricultural) with a threshold and sliding scale.
Council/government owned land would be exempt (what's the point of taxing yourself?!)
What it would certainly do is ensure those who profit from public investment do no make a private profit.
There are many scenarios but the concept demands serious debate and enquiry (not suggesting you were against that Duncan) - and it's good that John is raising it.
Hi,
Please consider heading over to the e-petitions site at No. 10 to sign Defend Council Housing's 'Fourth Option' petion.
Ta,
Duncan (PS, click on my name and it should take you there...)
What I always think would eb really helpful when it comes toi unclaimed benefits for council tax, tax credits and various other benefits such as free prescriptions etc would be if the government ads promoting these would all include a chart of the income levels needed to claim each benefits which you usually have to go fishing deep into leaflets to find or try and get through on the phone which is often very difficult what with the cuts to public services New Labour has engineered. It would save a lot of incorrect claims and also queries from people not qualified to claim. There should still be better telephone access for when you do need to phone up and you alway should if in any doubt as sometimes you can claim when you think you can't or can't yet. I remember claiming for free prescriptions while on a full student grant only to be told after I had filled it all in tha I didn't qualify as they were taking my student loan into account even though that first year I managed without one and hadn't taken one out but they said on the phone that it was "money available to me!!". If money we don't even have and would put us into debt is being taken into account surely the ads should tell us this in the first place!!! But there is no substitute for things like tax ofice roadshows and face to face interviews at the CAB etc because several times through these type of things I've found I've been entitled to claim a benefit sooner than I'd thought; so of course I'm campaigning against all cuts to thsese vital services tha tBRwon keeps trying to make every so often as he slowly dismantles our welfare state.
We should also deal with the issue of green taxes where Brwon has really missed his opportuntiy in his recent budget - at present the media is also discussing whether councils should charge people if they don't recycle or give them a discount if they do as an incentive.
In some areas such as mine there is ALREADY a £30 discount off the council tax which I've campaigened for and now claimed if you use washable nappies as disposables add 50% to the rubbish to go to landfill and there are health issues as basically untreated sewage form disposables can leach into ground water supplies as well as the fact that they take about 500 years to biodegrade!
Apparently most textile bins are only operating at 25% capacity so there's a lot more recycling to be done there! But apparently in this country we do recycle or at least re-use more items than we think as we often pass things like outgrown clothing or toys etc to friends and family and there are yahoo grous and websites like freecycle etc to help with this process now or you could just go to a car boot sale!
Apparently one man owns most of the land in my local high street and although it's an hour from London I've seen that the rents are as high as the King's Road in London; apparently £100,000 a year since the M and S food shop opened so all we've now got are coffee shops and gift shops and the like but if you need something like flea powder or kids plimsolls you'll find them hard to track down so most residents drive to neighbouring towns to shop. So a Land Value Tax would be more than welcome in my view.
Is SNP really doing as well as papers say re:forthcoming elections?
Did you all see "Guido Fawkes" arguing with Michael White on Newsnight.....they even had a dig at Paxman over the "empty chair" - brillinat stuff!
Tony Blair - you're fired
(dramatic pause)
John McDonnell - you're hired
is what we need to hear!!
ha ha that the Lords defeated the Manchester casino, sounds like the Dome fiasco....how New Labour can have the gall to even try to get a supercasino when you read of the increase in child poverty (one in three children is in poverty)in Britain due to the widening gap between rich and poor and growing inequality as John details on this website and also is quoted in a very good article on it on the front page of today's Morning Star.
Let alone breaking theor pledges on things like child povery New Labour are jsut incompeptent, insensitive and totally lacking in political judgement.
They are also breakign up the Home Offce - bound to end in tears and cost millions if only for the new stationery, what a waste of money.
Good point anonymous - the rules on who can claim what are Byzantine. I don't know if the intention is to put people off trying to claim but that's often the effect.
Signed your petition Duncan H - good petition.
It's crazy for councils to sell off all council housing.
Alex - i'm not an economist and i admit i don't know exactly what you're proposing - i've had a read at your website now but I'm still dubious of taxes that aren't based on income.
Debate is definitely a good thing and your proposals deserve to be highlighted and debated. There may be a lot i don't understand yet.
Councils have a tendency to sell land to developers - including football pitches , woods, parks and other places that improve peoples' quality of life.
Lots of new houses is not necessarily a good thing if they're mostly over-priced and they're built over green spaces.
So i'm not convinced getting most land publicly owned won't result in that public ownership being brief before councils sell it off to developers. They do this already with most land they get hold of.
A local income tax combined with stopping selling off council housing would be my own preference.
I've no quarrel with taxing ownership of land that isnt a green space amenity as long as parks, football fields and woods and fields where people walk and wildlife lives arent classed 'brownfield'.
Duncan - the fairest taxes are based on income?
Surely all wealth needs to be taxed - I don't see why aristocratic families should be able to use inherited wealth to maintain vast estates without getting taxed on them (preferably past the point where the pips squeak).
But land value is potential wealth, not actual wealth. It might not make a dent in the already wealthy's coffers but someone less well-off living in a recently regenerated area might find a huge hike in their taxes, while their actual income hasn't risen at all, which might force them to sell up and leave. How is that a fair system?
I agree Allan. The poll tax was completely unfair because it wasn't based on income.
Rates were unfair because they were based on property value rather than income and so penalised, for instance, pensioners who had worked all their life to get a slightly bigger house with a garden but whose income had fallen because they were on pensions not in employment.
The council tax is unfair because its a hybrid of rates and the poll tax.
Taxes on income are not only fairer they will actually provide a steady revenue to government instead of a one-off tax on land or property that risks hitting a lot of people who'll have to sell up before its introduced - probably resulting in big companies (hotel chains , builders and supermarkets) getting their land.
Tim F - We already have a tax on inheritance - Inheritance Tax at 40%.
If council taxes were based only on land value then pensioners who really aren't that well off would suffer - not just wealthy aristocrats but people on fairly average incomes.
I wouldn't object to some modest land tax on land that e.g isn't part of someone's garden - but when councils get hold of peoples' land they more often sell it to Tescos or Wimpey than they build council houses on it - and everyone needs some green spaces to walk, play sports , for wildlife and for general quality of life.
The problem just now is most of the new housing is very pricy and most of the councils have sold off most of their council housing.
Good letter by John in the Guardian -
http://www.guardian.co.uk/letters/story/0,,2046009,00.html
Nice one - rising above the pettiness of the Brownite/Blairite squabbling :-)
Allan / Duncan,
Again these genuine potential problems have already been dealt with.
There are two solutions: 1) residential land values would not be hiked up (for LVT purposes) because of rising house prices (just as they haven't under council tax) as people do not make commercial profit from the house they're living in; or
2) LVT could be deferred until the house was sold and the profit then realised.
But what LVT would do I believe, certainly within the medium-term is get rid of spikes in the housing market - especially when combined with greater social control of housebuilding and housing.
The view that only income taxes are fair is just not true. The income of the Royal Family, for example, is not in the league of the Bransons, Phillip Greens, etc, but they own half of Cornwall and plenty of the rest of the country - and if they suddenly had a tax bill for it, they might think about either selling it (income then taxed) or using it more productively (income then taxed).
How can we take McDonnell seriously when on Wednesday he voted in the same lobby as Tories and Lib Dems after the casino debate. How radical of him to vote against creating jobs in one of Manchesters most deprived neighbourhoods. and before he starts about gambling blah blah blah, 1) that debate has been had already. it's not what weds vote was about. 2) If he believes in devolving power can he let Mancunians decide what is good for them, not a combination of Tories, treachourous Lib dems (including shamelss John Leech) and assorted swivel eyed lords loons. I'm not sure he ever had much support in Manchester. He's got a dasmn sight less now.
What a prat you are 'John Hacking'. The vote delays the entire implementation of the casino project.
There is no evidence that the casino would close the inequality gap, or solve deprivation. Has Canary Wharf in East London done much for the poorest people in Tower Hamlets? Has it bollocks.
You may have noticed that the Government forced through Trident, the Iraq war and Trust schools by voting in the same lobbies as the Tories - how the fuck can you take them seriously?
If you spent as much time as we do in Manchester fighting the Lib Dems hand to hand then you would want to spit at the sight of Labour MPs trooping through the lobby with them to vote against our own Government. John McDonnell and Christie Hospital hoaxer John Leech MP in the same lobby. It makes me want to spew.
If you can get off your high horse long enough do you think you could allow the people of Manchester to be the judge of what they need not you, a joke leadership candidate and a bunch of crackpot lords. The people of east Manchester know what is better for them that you do. If you don't like the tone of my reply you might want to reflect on how comradely it is to start a reply with 'prat' in the first 3 words. How the fuck can I or the people of Manchester take you seriously. (to use your delightful turn of phrase)
John,
If you're going to resort to this sort of hysterical abuse then I don't really think you can expect anyone to take you seriously.
You seem to think that a Labour MP should be a New Labour drone. If anything, that's disloyalty to the Labour party - for it is New Labour that has caused 200,000 party members to rip up their cards in the last decade, and to result in millions of Labour supporters deserting their party.
I also note that you don't talk about the disloyalty of the Government to Labour party policies as overwhelmingly voted for at Conference - such as renationalisation of the railways, an end to PFI, an end to privatisation of the NHS, an end to Foundation Hospitals, an immediate restoration of the pension-earnings link, direct investment in council housing, etc. John McDonnell is actually loyally standing for these Labour policies - unlike the Government.
To be quite frank with you, you're quite clearly incapable of reasoned debate and are more interested in these sort of wide-eyed rants which just make you look like a total loon.
As for the gambling bill - over 80 MPs signed an EDM opposing the measure. I don't think we should be shocked that many in the Labour party are unhappy at building a supercasino in an extremely deprived area given the terrible blight of gambling in poor communities.
Anyway, I'd suggest you take a deep breath or else take your rants elsewhere.
Daz
darren.
Your lack of self awareness is quite amusing.
In my experience probably as many people have left the party in despair at your kind of po faced pomposu bullshit as anything else.
Don't worry we'll be back in opposition soon enough and you can relax.
The people of Manchester will be the judge of what is good for them not you.
Is this one of those blogs where if someone expresses a view which does not suit the prevailing orthodoxy (in this case the sainthood of the blessed McDonnell) that they get jumped on by a gang of blogging outriders. John Hacking is entitled to his view without recieving a repsonse which included the words prat and fuck.
The idea anyone has left the Labour party because of the Labour left is one of the most farcically ridiculous things I've ever heard and hardly worth engaging in.
Thousands have ripped up their party cards in disgust at policies such as the invasion of Iraq, privatisation of our public services and attacks on civil liberties. Paper membership has halved in the past decade; active membership is but a fraction of that.
If we are driven into opposition it will be because sufficient numbers of Labour voters will refuse to vote for the party because of New Labour's Tory policies. What's worse is that we will be left with a hollowed out shell of a party.
As for "outriders" attacking John - well, all I'd say is that he didn't come here for a debate, he came to denounec throw abuse about and therefore shouldn't be surprised at the responses he received from supporters of this campaign.
Why should I "come here for a debate" . Are you policing these blogs? people can come along, make their point and leave if they want to. They don't have to get permission from you on what they can say and not say. Could you also tell me which part of my original post you would describe as "throw(ing) abuse about"
As for the point about people leaving the party I'll tell you what I have witnessed more than anything else on this matter is new people arriving at branch or CLP meetings (or other Labour Party events) and being ignored/harangued/bemused/dismissed and generally made to feel unwelcome by people who display the sort or proprietorial attitudes to the Labour Party that you have exhibited on this blog.
And back to my original point which you clearly don't want to "debate". How can you take seriously a man who votes against jobs and investment in an area which really needs it. The vote on the Gambling Bill took place in Ja uary 2005 . this wasn't about the rights and wrongs of gambling, that discussion has been had. this was about Jobs in Manchester - YES or Jobs in manchester - NO. He voted no. Along with Lib Dem MP John Leech who at least has the excuse of being a spineless arse. Well thanks a lot. What is his alternative. I am dying to hear it.
I agree we should lay off terms of abuse.
Having said that John Hacking your criticism of John McDonnell for voting in the same lobby as Lib Dems and Tories is totally illogical (and if you are Blairite or Brownite also hypocritical) since, for instance, lots of Blairite and Brownite MPs have voted in the same lobby as Conservatives many times in the past - for instance for going to war on Iraq - something that very few of their constituents supported.
Whether you're for or against Trident Blairites and Brownites also voted in the same lobby as the Tories on it.
John McDonnell voted the right way on that and the right way on casinos.
Casinos would bring far greater costs than benefits - they are not meaningful economic regeneration.
Senior Met Officers and Manchester's Chief of Police have already warned that casinos could well bring organised crime with them.
http://observer.guardian.co.uk/print/0,,329685288-102279,00.html
http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/02/04/ncasino04.xml
It's not worth giving criminal mafias like the ones that run Las Vegas footholds in our towns and cities.
Casinos will bring profits for organised crime at the expense of gambling addicts ( there are already an estimated 350,000 in the UK - http://news.scotsman.com/topics.cfm?tid=1211&id=106902007) - hardly a good deal.
Organised crime already costs Britain a tens of billions of pounds every year.
Fair points. Don't agree with any of them but fairly ( and comradelfully (!?) made.
What about the jobs. We know about the downside. Though the independent advisory panel agreed that Manchester was best placed to deal with the social impact. Something that John McDonnell clearly didn't agree with as he voted against it.
Also whilst the Chief of Police in Manchester is entitled to his opinion they are just that, an opinion. One among many, lots of whom don't agree with him.
Also many Manchester residents living in areas where the police performance is woefully inadequate would be more impressed with his opinion on 'organised' crime if his forces record on'dis-organised crime' was a little bit more up to snuff.
You got anyone else other than Tories, Fib Dems, Loopy Lords, clergy or Senior police officers to back up your case against more jobs for Manchester residents.?
Hi John - No - though i think the Salvation Army and some other anti-poverty groups are against super casinos too (- and i'm sure with more time to search there'll be others)
I have to admit i dont know whether Manchester Council held a referendum on this. Did they? And what was the result.
I accept you have an argument that the people of Manchester should have the final say.
The question is does parliament have the final say or do local councils or referenda of the council area have the final say?
If it's parliament that decides then John has the right to vote for what he (and his CLP and constituents) think is right.
I'm not saying i know which should have the final decision - just that when parliament votes John has a right to vote on it the same as any other MP.
We don't govern by referendum in Manchester but there was extensive community consultation in the run up to the bid. something which the advisory panel remarked on in particular.
If Parliament wants to decide who shoudl get the casino licence then that is what it should vote on. However what it did was set up the advisory board and then some parliamentarians decided that they didn't like the conclusion and set about wrecking the process. Some other parliemantarians saw an opportunistic chance to defeat the government. The latter group should grow up and the former group should know better.
As a matter of interest Manchester Labour would I am sure class itself as an anti-poverty group and it supports the jobs that the casino dvelopment will bring. the casino element of the development by the way will constitute just 7% of the overall development with a new hotel , housing, shopping faciclities and much need public ice rink making up the rest. Most importantly many of the jobs are entry level or accessible and local which is what we need in est manchester.
There is more to this than what the constituents of Hayes and Harlington expect their MP to do or not do.
He had a chance to vote for jobs in Manchester and he decided (along with others) to indulge in some self indulgent posturing.
Duncan ,
This (as you know!) is from your website.
"I'm interested in politics but I don't associate with any one political party "
Does this mean that you are not a member of the Labour Party?
1. If not a member, then what has who will be Leader of the Labour Party got to do with you?
2. If a member then what does the above statement mean?
Curious!
I was a party member for years and voted Labour up until after the 1997 election.
There are a lot of former Labour members and voters who left because of Blair and PFI among other issues - and many more over Iraq.
We have as much interest in who runs the Labour party as the Blairites and Brownites.
I won't get to vote in the leadership election obviously but since the leadership of the Labour party affects the whole country (including the soldiers being sent to kill and die in Iraq) frankly i've as much right as anyone to support any Labour leadership candidate.
The attitude that the good of the party comes before the good of the people of the country its meant to represent is a bad one in my opinion - and Blair's view that the good of the party and the country is whatever he thinks is good for him is most definitely wrong.
Many former Labour members would re-join the party if it had a leader with the kind of policies say Meacher or McDonnell (maybe even Hain) would have - but not while it maintains PFI, privatisations and continues keeping our troops dying in Iraq to prop up the Bush admin.
I back John because i back his policies - not because of the label on the tin. The contents of the tin have changed beyond recognition under Blair - there's not much Labour left in it beyond the party label.
My parents were both Labour voters, my grandfather was a Labour MP and i've relatives in the Labour party.
I was in the Scottish Socialists for a few years after i left the party and i stood as an independent in the 2005 general election.
I'll not apologise for any of that - the policies i supported were the same throughout - it was those of the Labour party's leadership that changed beyond recognition.
Also - to quote John McDonnell's article above "The John4Leader campaign is built up on a coalition of different interests reaching out in a completely non-sectarian way to all manner of different campaigns and political groups who share our values."
A Labour leader needs to have the support not only of Labour members but also the wider electorate - John McDonnell is prepared to reach out to people beyond the Labour party who support the same policies - and thats one of the reasons he'd make a good party leader - and a good Prime Minister.
You have an interest as a voter and citizen who is leader of the country (or more accurately who is Prime Minister.
As a non member who is Leader of the Labour party is none of your business.It might interest you, as it will no doubt interest others but it is none of your business.
You have stood against Labour candidates, presumably when you were an independent candidate and you have belonged to a party which is opposed to the Labour Party both idealogically (presumably otherwise why not join us) and electorally. That means that in my opinion this election for Leader of the Labour Party is none of your business. It is not a case of Party before everything (that is blind ignorance). But we must have some discipline as a party and part of that discipline (or if you like) rules is that generally speaking we take a dim view of outsiders meddling in our affairs, for whatever reason.
My plea to you would be to rejoin the Party, fight for what you believe in from inside and a) I would have a lot more time for your views and 2) you would have a vote in the leadership election!
Re: John McDonnell quote. He presumably didn't mean political groups that actively campaign aganist Labour candidates at elections. Did he!!?
Large numbers of current and former Labour party members are opposed to most of the policies of the current Labour leadership.
I'm not against the Labour party - I'm against some of its current policies - rail privatisation (and subsidies to private rail companies), keeping British troops in Iraq, PFIs/PPPs (among other things).
On re-joining the party I take your point. Some of my relatives have stayed in the party for the reasons you give.
The trouble is there's no real internal democracy in the party. When i was a member CLP decisions were often ignored by our MP and its no secret that party conference votes are ignored by the party leadership - or that the leadership have often vetoed candidates selected by CLPs and imposed their own.
I'll re-join as soon as the Labour party has a leader who supports policies like rail renationalisation, withdrawal from Iraq and and end to PFIs/PPPs - if it ever does - and if the party will let me re-join.
If John or someone with similar policies is party leader i'll campaign for Labour again like i did in 97.
John Hacking wrote "the casino element of the development by the way will constitute just 7% of the overall development with a new hotel , housing, shopping faciclities and much need public ice rink making up the rest."
I didn't know that - nor do i know John's motive for voting against the bill. But since the government knows casinos will face a lot of opposition why not remove the casino element if its only 7% of the total package?
I know a lot of MPs backed Blackpool rather than Manchester (though again i admit i dont know why)
John Hacking wrote :
"You have an interest as a voter and citizen who is leader of the country (or more accurately who is Prime Minister.
As a non member who is Leader of the Labour party is none of your business.It might interest you, as it will no doubt interest others but it is none of your business.
My interest in who is leader of the Labour party is entirely justified since the leader of the Labour party will be Prime Minister before the next election - and hopefully after it too - and i have a valid interest in who is PM since it affects the whole country - not just Labour party members.
Duncan : "I'll re-join as soon as the Labour party has a leader who supports policies like rail renationalisation, withdrawal from Iraq and and end to PFIs/PPPs.
Duncan, unless you and others like you rejoin now we'll never have a leader that supports these policies. This lack of votes from the left is EXACTLY what the right are depending on.
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