Political Support

In the UK support for LVT can be found in all the major political parties. At the 2015 General Election the LibDems, the Green Party and Co-operative Party all included LVT in their manifestos. 

The CEJ has been engaging with a number of figures to promote the idea of using land rent for public revenue. Leading political figures who have been advocating LVT recently include Jeremy Corbyn, Leader of the Labour Party, John McDonnell Lab MP and Shadow Chancellor, Tim Farron Leader of the LibDems MP and Nick Boles Cons MP. Andy Burnham Lab MP included LVT in his 2015 leadership bid. Senior members of the Green Party, including the leader Natalie Bennett, MP Caroline Lucas, Jenny Jones and MEP and economic spokesperson Molly Scott Cato speak of its advantages. 


In February 2016 the Planning Committee of the London Assembly published a report entitled "A Land Value Tax for London" which explored the possibilities of adopting such a tax in the capital and examined in particular how it would improve the housing situation. It received a favourable response from Mayor Sadiq Khan in November and with the release of the London Finance Commission Report in January 2017 the idea was given a further boost by Tom Copley Chair of GLA Housing Committee.





































































































The Labour Party Manifesto for the 2017 election has just been published and shows support for the policy saying

“We will initiate a review into reforming council tax and business rates and consider new options such as a land value tax, to ensure local government has sustainable funding for the long term.”

The Liberal Democrats also support the policy. Their 2017 manifesto says:

4.2 Fair taxes

In order to balance the books and build a sustainable economy for the future we must ensure that everyone pays their fair share. Liberal Democrats have a long- standing commitment to fairer taxation, and in government we raised the personal allowance for Income Tax. It remains our ambition to make taxes fairer and simpler, to help those on low and middle incomes, and to ensure that those on the highest incomes, and large international companies, make a fair contribution. We will: …...

  • ........Reviewing the Business Rates system, prioritising reforms that recognise the development of the digital economy, lessening the burden on smaller businesses, and ensuring high streets remain competitive. We will also consider the implementation of Land Value Taxation. 

Many think tanks on the left of the political spectrum including the Fabians, CLASS, Compass, and Progress  have published literature supporting annual Land Value Tax. From the opposite side of the political spectrum The Institute of Economic Affairs the and  Adam Smith Institute also recognise the efficiency of this form of collecting public revenue. The Mirrlees Review, a comprehensive review of the British tax system produced the Institute of Fiscal Studies, explains fully the benefits of shifting taxation onto location values.


The concept of LVT is not new in the UK, and has had significant support over the past century - perhaps the most well known historical advocate being Winston Churchill. Lloyd George, included a diminished version of LVT in his 1909 People’s Budget and in 1931 the Labour Government included LVT in their Finance Act (see here) but when Ramsay McDonald formed a National Government with Conservatives, to tackle the economic crisis, one of their first decisions was to discontinue the land valuation making it impossible to collect LVT. The 1935 Conservative Government took LVT off the statute book.  Herbert Morrison also moved a Private Member’s Bill in 1939 calling for the Site Value Rating (local LVT) of the LCC.   In 1985 Tony Benn promoted a Ten Minute Rule Bill in Parliament calling for “The Common Ownership of Land” and suggesting the creation of a Community Land Trust to collect land rent.  In 2013, Caroline Lucas, Green MP, moved a Private Member’s Bill (with Lab and LibDem MPs supporting) calling for a study of the benefits and practicality of LVT.

In recent times there has been much discussion in the press about LVT.  The Financial Times has carried articles promoting LVT by Nick Boles (now a Conservative Minister), Sir Sam Brittan and Martin Wolf.  Similarly The Guardian, The New Statesman, The Economist, Tribune and other publications have published articles supporting LVT by George Monbiot (environmentalist), Andy Wightman (Scottish land reform campaigner and now MSP representing the Scottish Green Party), Richard Murphy (Tax Research UK), Will Hutton (political economist and former Chief Exec of The Work Foundation), Merryn Somerset Webb (Editor of Money Week), Phillippe Legrain (economist and author), Larry Elliott (The Guardian’s Economics Editor) and Polly Toynbee (journalist and former BBC Social Affairs Editor). 


The OECD, The World Bank, UN Habitat and other international organisations have drawn attention to the benefits to be gained from adopting LVT.



Commitments to implementing LVT can be found in the manifestos of these three major political parties:-
   
 
 
Liberal Democrat Manifesto, Page 26

http://ucrel.lancs.ac.uk/wmatrix/ukmanifestos2015/localpdf/LiberalDemocrats.pdf

Liberal Democrats remain committed to introducing Land Value Tax (LVT), which would replace Business Rates in the longer term and could enable the reduction or abolition of other taxes. We will extend the Business Rates review to ensure it considers the implementation of LVT, as well as interim reforms like Site Value Rating that could be completed within five years. We will charge the Land Registry with completing registration of all substantial land and property holdings in England and Wales by 2020


 

Co-operative Party Manifesto [a subsidiary of the Labour Party with 28 MPs and 16 Lords], Page 21
https://party.coop/wp-content/blogs.dir/5/files/2015/07/manifesto-final-web.pdf

A significant cause of this has been the rising cost of residential land. As economic growth has occurred, this has led to inflationary pressures on the prices of residential land in scarce supply, or restricted in the places where everyone wants or needs to be. There is nothing new in all of this. The last 200 years have seen regular 15-20- year cycles of economic growth and recession that have brought rapid uplift in land values, and ended in their implosion. A Land Value Tax could make a significant contribution to stability within the property market. It would act as a real incentive for people who are sitting on empty banks of land to develop it, building the new homes we need and kick-starting the economy in the process. It would ensure that when landowners benefit from investment by others in an area, they pay back a fair share. Devised carefully, it would demand a greater contribution from the wealthy – not least the international elite with their mansions in London – without affecting ordinary homeowners. And it would be one tax that the rich and powerful could not dodge. While this would be a new method of taxation in the UK, countries such as Denmark, Hong Kong and Taiwan utilise land values to help their economies. Local Authorities in parts of Australia, New Zealand and North America have also all adopted local forms of land value taxation. There they have not only improved economic stability but also stimulated investment in more productive elements of their economies. The government should replace business rates and stamp duty land tax, with a land value tax. This should be applicable to all land with the exception of land with an occupied primary residence on it. This would mean that land value taxes on empty homes would supplement council tax, which would be an added incentive for empty properties to be occupied or sold. It would also leave the vast majority of all UK land taxable, ending the perverse tax advantages that landowners currently enjoy over occupiers.
 
 
The Green Party Manifesto, Page 15
https://www.greenparty.org.uk/assets/files/manifesto/Green_Party_2015_General_Election_Manifesto_Searchable.pdf

Land Value Tax Land Value Tax is a system of local taxation where the landowner pays a proportion of the rental value of the land itself, but not of buildings or improvements upon it, in tax each year. It has many advantages: • It taxes the value of land and rents, which derive from nature and the efforts of the wider community and not from any effort by the landowner, rather than taxing wages and profits, which derive from labour and capital; • It is hard to avoid because land cannot be hidden or moved; • It dampens speculation in land and land hoarding; • It favours tenants in particular, since the tax cannot be passed on from the landowner, and would substitute for Council Tax, which tenants have to pay; and • It discourages landowners from not using derelict or vacant land. The land would be valued at the value that could be obtained if sold for the current planning permitted use. Commons, urban open space, some nature reserves and land used in common such as roads would be exempt. The rate would be set by the local authority. Special arrangements would allow those with land but a low income to pay their Land Value Tax upon the sale of their land or upon their death. A Land Value Tax set at around 2% of total land values would raise about the same amount as Council Tax and Uniform Business Rate combined. Moreover, 83% of properties would attract lower bills for Land Value Tax than for Council Tax (and many of these would be paid by the freeholder rather than the tenant).





A number of countries such as Denmark, Hong Kong and Taiwan utilise land values to help their economies.  Local Authorities in parts of Australia, New Zealand and North America have all adopted local forms of land value taxation. The map below show countries that have adopted land taxes in various forms with the date of adoption 

source: Dye and England (2009) Land Value Taxation: Theory Evidence and Practice Cambridge MA Lincoln Institute of Land Policy

Source: Dye and England (2009) Land value Taxation: Theory, Evidence and Practice, Cambridge, Ma, Lincoln Institute of Land Policy.

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Peter Bowman,
15 Jun 2016, 01:21