At the start of the year we decided the priorities for the year should be: pressing for LVT in Scotland; noted that there was a review of business rates in England; getting our message across; and reforming the university curriculum.
Members put in a considerable amount of work on the first priority, pressing for LVT in Scotland. Three of us - Louanne Tranchell, David Hirst and John Lipetz - attended conferences organised by the Scottish Land Revenue Group which in each case had a range of excellent speakers. The Commission on Alternatives to Council Tax had been set up by the Scottish Government. The CEJ, its member organisations and individual members had put in a total of eight submissions to the Commission which are on our web-site. Carol Wilcox also gave oral evidence on behalf of the LLC. See below for further action on this in 2016. Also, the LLC, the SES and Heather and Dave Wetzel (jointly) put in submissions for the review of business rates in England. The Treasury’s response contained little of interest.
There was little action on getting our message across although member organisations may have done some work on this. Although there was not much happening to reform the university economics curriculum there was a useful Rethinking Economics Conference which was reported at one of the CEJ meetings. CEJ organisations (HGF and SES) helped sponsor this event and participated by presenting sessions on tax reform and ethics in economics. The New Economics Foundation held a seminar on ‘Rethinking public assets: land and capital’, summarised for the CEJ by Anthony Molloy.
We omitted in the last annual report to include Ed Randall’s talk in February 2015, at the CEJ General Meeting, entitled: ‘Banks – what are they good for?’ Ed began with an account of John Maynard Keynes’ challenge to orthodox economics. He insisted that the UK’s biggest banks weren’t simply depositories for the public’s cash and cautious suppliers of credit. He argued that modern banking embodied a financial culture that was antithetical to shared prosperity. Ed went on to advocate: (i) a break up of banks too big to fail; (ii) a dual mandate for the bank of England; (iii) a ban on opaque and risk laden derivatives; (iv) encouragement and support for regional and specialist banks; and (v) separation of retail and investment banking.
At an ordinary Steering Group meeting in July, Ed Randall introduced what he hoped would be the first in a series of discussions, prepared by SG members, designed to stimulate debate about the Coalition’s objectives and strategy. He presented two propositions which he said he hoped the SG would return to in the next few years: (i) (In the wake of the recent General Election result) Prospects for building the momentum needed to achieve radical tax reform in the UK will depend on how the UK economy performs during the lifetime of the current parliament; and (ii) Some proponents of radical tax reform believe that prospects for radical reform have worsened (because the UK appears to have come through the Great Recession and there is a growing - albeit grudging in many quarters - acceptance of a ‘return to business as usual’).
He argued that these two propositions gave rise to a series of questions, which included: (1) ‘Are there reasons to believe that the performance of the UK economy will be significantly worse than anticipated by forecasters such as the Treasury, the Office for Budget Responsibility and the Bank of England?’, and (2) ‘Should forecasts and official statements about the UK economy make any difference to what members of the CEJ say or do?’
In the course of the discussion that followed it was agreed that (a) the impact of China’s economic woes on economic activity across the globe had probably been underestimated; (b) that an economic heart-attack similar to that in 2007-2008 was not very likely to recur in the course of the next five years; and (c) that the UK Government’s concentration on monetary policy (and the absence of a developed industrial policy) would prove damaging to UK economic performance. Some of those present thought that these (and other) matters should be taken into account by the CEJ in reviewing the strategic approach to its goals. The CEJ will need to consider these matters in future as the political situation develops.
For much of the year there was a lack of action on a number of areas. Meetings were thought necessary with the Land Registry and the Valuation Office Agency but did not take place. This was due to key members of the CEJ not attending our meetings. There was little progress on producing a report of the useful Colloquium held in late 2014. And, likewise, in the report for the RMT on the effect of LVT on the London Underground. However, at the end of the year the RMT report was ready to be delivered and there were real signs of progress on the Colloquium report. We therefore need to ensure in future that we have the resources to ensure we can take action on issues as needed. However, in the latter part of the year more activity did take place (see below).
During the year we held three useful general meetings. The first was a talk by Michael Lloyd, a heterodox economist. He said there is no problem financing the budget deficit as it is self-financing, if the country, like the UK, is monetary sovereign i.e. it issues its own currency and has a flexible exchange rate. So there is no problem with the public debt which is mainly owned by UK institutions and its average maturity is 14 years. But the private household debt is very high and the budget must respond to the private sector and the trade balance.
In the autumn Fred Harrison spoke on an alternative to the Barnett formula. He spoke historically on how the taxation system has not favoured Scotland as it should have at the Treaty of Union. The Land Tax was replaced by regressive taxes. Now that Holyrood has the power, the Scottish Government could ensure that radical land reform would raise revenue from the social rents created by the whole population and no longer be dependent on the Barnett formula.
The third talk was given in February by Jerry Jones and Heather Wetzel, each of them presenting their view of how LVT should initially be introduced. There was a very full range of views expressed by the audience, a stimulating evening.
The CEJ was approached in October 2015 by Alanna Hartzok of the IU asking whether we would be interesting in holding a joint conference. This was received with enthusiasm and Alanna informed. The lead person in organising the event would be David Triggs, president of the IU. After discussion with him it was agreed that the conference would concentrate on methods of implementing LVT, perhaps at national level. At our January meeting we held a very full discussion on the planning of the conference, prepared a detailed report and passed this to David Triggs. Realising at our March meeting that little further progress had been made we came to the view that the conference should take place in 2017 rather than 2016.
Having established that the GLA was investigating the potential for LVT in London and noted that the rapporteur for this exercise was Tom Copley, Assembly Member, we (Peter Bowman, John Howell, Dave Wetzel and John Lipetz) held a meeting with him and his officer at City Hall. This gave us the opportunity to make the case for LVT in London. Some time later the report was produced. It covered the advantages and disadvantages of LVT but contained a very sensible outcome.
In its recommendations the new mayor was asked:
To examine the new powers necessary to implement and operate an LVT to replace council tax, business rates and stamp duty land tax;
Within the first year of office to commission an economic feasibility study to implement, operate and assess the likely yield of LVT in a geographically defined area; and
If the study established economic benefits, eg for housing development and supporting infrastructure, then to trial it in such an area for a fixed period of time to assess the impact of this approach.
We have written to those standing as mayor, enclosing the report, to ask for their response. Only the Labour office has so far responded.
Early in 2016 the CEJ arranged meetings with MSPs from both the SNP and the Labour party. The MSPs seen in Edinburgh by Dave and Heather Wetzel, John Lipetz and Clive Seddon (an ALTER representative) were Marco Biagi of the SNP and Sarah Boyack and Jackie Bailey of the Labour party. Also, we (D & H W, JL and Peter Bowman) met in London with Roger Mullin MP (Shadow Chancellor) from the SNP. It has to be said that the report of the Commission was very disappointing as was the SNP action on Council Tax. It should be noted, however, that the SNP conference rejected the lame approach to land reform proposed by the government. More work needs to be done with both the SNP and the Labour party in Scotland.
Peter Bowman and John Lipetz had a meeting with John McDonnell, the Shadow Chancellor, with a view to making out a case for LVT and encourage labour to include it within their manifesto. The meeting was held with a range of organisations seeking actions in their areas. Nevertheless, John McDonnell, being a member of the LLC, gave a positive response to holding a meeting in parliament aimed at MPs, Peers and their advisors.
The CEJ went ahead with planning such a meeting and managed to get a meeting in March at which Heather Wetzel of the LLC, Stuart Adam of the Institute for Fiscal Studies and Molly Scott Cato, a Green MEP, were the speakers with Kelvin Hopkins, a labour MP, as chair. A number of CEJ members were present but, as we expected, the number of MPs etc were very few. The quality of the speakers and of the questions from the floor made it worthwhile. John McDonnell did attend for a short time and did say that we need to pursue this further. We will follow this up.
During the year Peter Challen reported that the CCMJ continued its exploration of ‘principled pragmatism’ by identifying LVT in the context of the global system of life and its inter-generational replenishment. It kept in view the initiative of the Independent Constitutionalists [www.constitutionalists.uk]. to evolve and seek to implement a new ‘Peoples’ Political-Economy of Trusteeship in the Harmony of Nature’, with LVT deeply embedded in this structural change. They had held two conferences on ‘People Power and New Constitutional Settlement’ one of which was attended by John Lipetz and Ed Randall. At the year end Peter Challen reported that the Institute for Solidarity Economics planned a meeting in Oxford in April hoping to set up a network of Solidarity Economics. Dave and Heather Wetzel hoped to attend. The CEJ can then make an assessment of its value.
It is not appropriate for a person to hold the position of chair for too long. I have therefore given notice that I stand down at the end of this year but expect to stay as a member of the CEJ.
As a result it has been decided that Peter Bowman will take over as chair. He will be supported by two vice-chairs, David Hirst and Ed Randall. The Secretary remains as Rob Blakemore with Ed Randall as his deputy. I wish them all success.
Our appreciation as always must go to the SES for providing such excellent facilities for our meetings.
JL
April 2016