It’s easy to feel powerless these days. Jobs are scarce and insecure, wages are flat, fuel prices are soaring, rents are going up and all the while the rich keep getting richer. At my age, it’s tempting to leave it to someone else to fix. But as a parent and a patriot, I can’t and I won’t. An entire generation of Brits is being left behind. 1 in 5 young people are unemployed. Those who can find work often end up in part-time, poorly paid, dead end jobs. Then there’s the significant matter of putting a roof over their heads. There’s a chronic lack of social housing and most young people don’t have a hope in hell of getting a foot on the property ladder, especially when the majority of jobs are being created in and around London where the average mortgage deposit for a first time buyer is projected to hit £100,000 by 2020.
That’s no typo. It really is one hundred thousand pounds. Talk about a hefty punch in the face.
For centuries, the British tax system has been rigged to benefit wealthy land owners. It’s no surprise then that 70% of the land in the country is owned by 1% of the population. The majority (i.e. the working classes and the squeezed middle classes) put up with the arrangement so long as children had a good shot at a better life than their parents. But all that’s changed now. We have reached a dangerous tipping point in our economy. Our children face a future of declining living standards. The lucky ones will claw their way into social housing while the rest will be condemned to either live rough or spend their lives beholden to rich landlords who bleed them dry.
We don’t have to stand by while our children are railroaded into serfdom. We are not powerless. We can make affordable housing a reality, and boost the economy in the process. By demanding a LAND VALUE TAX.
A LAND VALUE TAX or LVT is an annual tax on the value of a plot of land. Unlike VAT, income tax, council tax and business rates which hit people of modest means the hardest, an LVT shifts the tax burden to the wealthiest land owning members of society. As things stand now, land owners do not pay taxes on land they haven’t developed, which means they have everything to gain by sitting on real estate instead of putting it into productive use by building houses or businesses on top of it. It’s a simple study in supply and demand. The fewer houses/buildings there are the more valuable the existing stock becomes. This is precisely why we have housing bubbles. A LAND VALUE TAX would change everything by unlocking the value of the nation’s vast tracks of under-utilized real estate. Hoarding would become very unprofitable, forcing land owners to either sell to developers or build on it themselves. As the housing stock increases, prices would drop, recapturing the dream of home ownership for the nation’s youth. And all that building would kick start the economy by creating much needed jobs, not to mention providing an incentive to improve our crumbling infrastructure which would make us more competitive.
Affordable housing. More jobs. Economic growth. Competitiveness. That’s what a LAND VALUE TAX can do for us. And unlike other forms of taxation, this one is very tough for the rich to dodge. You can’t hide a piece of land offshore.
The LVT is not a new idea. It was first floated to parliament back in 1909, but the British aristocracy blocked it and they have been throwing up spanners ever since. But now that our economy is in such dire straits, the LVT is finally gaining support on both sides of the political divide. Liberals like it because it’s fair and progressive, while enlightened free-market conservatives embrace its potential to unlock economic value and makes us more competitive. The Lib Dems have even formed a pressure group, ALTER, to push for an LVT.
The most significant development is the Land Value Tax bill currently winding its way through Parliament. Introduced by Green MP Caroline Lucas, the private member’s bill calls for a feasibility study on LVT—the first crucial step toward making it a reality. Miraculously, this bill is still alive and kicking despite an early Parliamentary debate in which Exchequer Secretary David Gauke (the conservative Minister with strategic oversight of the UK tax system who responds to questions on the bill), refused to even consider the benefits of an LVT.
We have the power to make him consider it. The bill is set for another reading next month, so if you believe in an LVT, CONTACT YOUR LOCAL MP, tell them you support the LAND VALUE TAX bill, and to voice your position to Mr Gauke. As your elected representative, your MP has a duty to take up your request.
This is our best shot in a century to end the gross inequalities in our tax system and force wealthy land owners to finally pay their fair share. Please do not stand by while our country sleep walks back into feudalism. Exercise your voice, rescue our economy and create a better future for all of our children.
9 thoughts on “Want to Get the Economy Moving, Create Jobs and Make Housing More Affordable? Here’s How We Get It Done.”
I’ve never heard of this LVT before but it sounds a great idea. We were all saying at work how none of our kids will ever be able to buy a place for themselves. We were lucky in that we bought our first flat in Essex, sold it just 2 years later for 50% more, bought a house and sold that after 5 years for double what we paid. If we hadn’t started when we did we never would be able to buy our own home.
One thing is a certain, David Cameron and his public school chums would block this at every turn as its their rich land owning, political party donors that would have a heart attack if it went through.
Nice to hear from you again Bob. Keep them coming.
Bob i couldnt agree more !!!!!! Well said !!!!
Trouble is, Julian, that hardly anyone has heard of land value tax. Strange, since the idea has been around since the days of Adam Smith and has been advocated by Keir Hardie and by Winston Churchill, not to mention an army of other noteworthy people of all political shades and of none.
And yet ordinary people don’t know about it. Something wrong there. So like Bob, I’d say tell your MP that you support the LVT bill before its next reading. But in addition, spread the word. People deserve to know that there’s a much better alternative to Council Tax, local income tax, etc.
a very sound idea and it would solve a good deal of problems but what about the rapidly reducing countryside? Surely most of that undeveloped land is green space that is on the decrease? You can’t be having the SAS marching through estates as part of their training 🙂
P.S. i commented on your article Finding Myself in the Mud and was wondering if you’d managed to deal with your old scar tissue?
Thanks for your comments.
On the scar tissue, going well, I use the back of a soup spoon to break down and stretch my scar tissue. Painful but effective and it works for me.
On the LVT (land value tax), the military rarely exercises on private land. Very little of it would be built on overall. If the landowners can’t pay for the tax on their land, building is a very workable option, however renting for other purposes is another.
Thanks again Tim.
TimmyM, only 7.7% of the UKs land is settled. The UK is empty. See:
Propaganda is put about that the UK is short of land. The opposite is the case. This why.
About LVT, there is another angle of viewing LVT. Firstly it is not a tax, it reclaiming community created value. This will become clearer.
Secondly, you have to understand where land values come from. The value come from economic community activity. The landowner did not make the value, we the community did. It is “our” value, wealth created by us, but the landowner pockets it. LVT “reclaims” what is ours, socially created wealth. LVT stops “freeloading”.
We can use commonly created wealth to pay for common services and eliminate taxes that penalise production – income and sales taxes. We reclaim “economic rent” to fund common services – economic rent is an economic term, and do confuse it with rent for say hiring a car for the week. Economic rent is where there is no enterprise or costs of production. In short someone else created the wealth. When it is appropriated by individuals it is really “economic freeloading”. Economic rent comes in many forms, however the most obvious is the value uplift in land.
Reclaim the values in land and many great side effects emerge and this blog outlined only a few. Land Value Tax is a misnomer as it does not tax, it “reclaims” wealth we collectively created, leaving private wealth in private pockets.
Hi Bob, love your posts.
Do we really need to build on more “land” or do we need to utilise the spaces we already have used the value of, such as brown field sites, unused shops(hereford is full of them). Councils want more new housing built at any cost as it ( the Council) via rateable value, increases their monetary budget. Money they then often waste, I.e the Blueschool project in Hereford. I hope that the young people of today are unwilling to squander their true inheritance our natural and beautiful world and understand that in 2003 the interest rates on my mortgage was over 15% now it is less than 2%, my parents generation also had little access to o the housing market post war. My dad a Burma veteran took on a virtual hovel outside Hereford without any amenities and dug, in his one week of paid holiday, a trench to house running water and electricity over 3 miles with just a shovel. This was only 50 years ago.
I know we cannot “turn-back the clocks” nor would I wish to as we have fought for the freedoms our children have but our children need to understand that cheap affordable housing comes at a very high interest rate and only benefits house builders and local councils that are not meeting their budgetary requirements.
I hope this makes some sense too!
Sorry wrong date 1993 not 2003!
Absolutely Frances, completely agree with your comments there. Lots to do in cities and towns around the country…it would certainly benefit the younger generation for future housing. My thoughts are born through the scary statistics of both the fact that the world’s population has doubled in only 50 years, plus for the UK, only an extremely small percentage of very wealthy people own over 80% of our land. The way to capture the financial, economic and social benefits from that land is to place an LVT on it. Lots and lots to be done to make the UK and the world a better place for the young.