November 2010 Archives

Among the "radical changes" recommended by the Institute for Fiscal Studies (IFS) in its Review of the Tax System by Nobel Laureate Sir James Mirrlees is Land Value Taxation. (see Chapter 16 of the Interim Report for details).

The full Mirrlees Review is published by Oxford University Press and was launched by IFS as a free download on 12 November. The first volume (Chapters 1 to 13) is in its final form: a series of discussion papers, commissioned from various "distinguished authors". The second volume, by the Review's own editorial team, is still only available as "pre-publication draft" chapters. PLRG would like to hear from anyone who has comments, before the final version comes out early in 2011.

Whilst not in any way representing official Government views on tax reform, early indications are that the Coalition will take this "coherent view" extremely seriously. So the findings on land & property taxation are very encouraging for those who favour further 'tax shifting' off enterprise and onto resource rents.

Most significant is the fact that Mirrlees sees LVT mainly as a national tax, not a local one. Whilst calling for it to specifically only replace Business Rates and Stamp Duty Land Tax on non-domestic property (in the summary headline findings on "Business taxes"), the details in Chapter 16 indicate a more comprehensive approach is favoured.

A project to help devise a methodology for calculating and demonstrating the tax yield for infrastructure projects from Tax Increment Financing (TIF) could become the first research originating within the Professional Land Reform Group (PLRG).

Dr Seraphim Alvanides of Northumbria University approached PLRG Hon Sec Dr Tony Vickers only last month, after a story appeared on Landvaluescape about Newcastle wanting to be a pilot for Land Value Taxation.  Dr Alvanides had been a member of Dr Vickers' "Policy Delphi" during the latter's PhD on Value Mapping. He was interested in following up this work with a practical exercise in Value Mapping a part of Newcastle.

Then last month the Government announced that it was going to allow Councils to use TIF to fund infrastructure projects. Vickers & Alvanides put together a research bid that would help with TIF as well as LVT, because any project relying on land value uplift needs to be able to reassure funders that the revenue will flow back from their investment outlay.

Vickers has now written to the Department for Business Innovation & Skills (BIS), whose White Paper Local Growth included the TIF announcement, to ask BIS to persuade the Valuation Office Agency (VOA) to release property tax data for this research. In the past, researchers have not been given access to VOA data unless it was for a tax-related purpose that was in accord with Government policy, as this project would be.

Stephen Hill, who gives the next PLRG talk on Wed 24th November, was opening keynote speaker at a Waterfront Conference on The Future for Housing Delivery yesterday (17th November). He clearly pointed to Land Value Taxation as the answer to the UK's stalled housebuilding programme.

In what he called "the presentation he'd like [Housing Minister] Grant Shapps to give", Hill's wide-ranging talk was peppered with graphics, quotes and statistics that built up a powerful case for reform of the land market through Value Capture.

"Public debt is not the first-order we face. Private debt is far higher. And property debt is the main problem. If land didn't cost so much, we could do so much more with housing funds."

The conference also heard from Nick Cuff, former planner now turned Chair of Planning Applications Committee on Wandsworth (Conservative run) London Borough. Cuff is one of the youngest councillors in England and co-authored a Bow Group paper on planning reform before this year's elections. Another Bow Group paper was authored in 2006 by Mark Wadsworth - on tax simplification through switching the burden to land. [I must try an 'off the cuff' pun on this....]

Hill will recycle much of the content of his Waterfront talk - for free - to PLRG at London South Bank University on 24th, starting at 6pm. Contact Tony Vickers (07950 202640) if you plan to attend, as accommodation is limited. Enter LSBU via Borough Rd (door 1 on map)

Simplifying the tax system.ppt.pdf has been offered to PLRG by Mark Wadsworth, the author of a Bow Group (Conservative centre-right think-tank) contribution to the present Government's tax policy thinking - which wasn't accepted in 2005. But the global economy is very different now, in 2010.

Scotland's Green Party has commissioned a report by land reformer Andy Wightman which sets out a path towards Land Value Taxation.

This comes days after a Liberal Democrat conference in Oxford, of the South Central English Region, called unanimously for Lib Dem Ministers to campaign harder in government for LVT.

A few days later comes a letter in the Independent, from a Conservative councillor in Hampshire (John Kennett), calling for the same policy.

We already have nearly 30 Labour MPs, who fought the election earlier this year with support from the Cooperative Party (whose manifesto - page 17 - prominently included LVT), signed up nominally to what increasingly looks like an idea whose time has come.

Campaigners for LVT are due to meet with the Co-op group of MPs shortly in Parliament, to discuss how to take forward an All Party Parliamentary Group to develop the thinking which, at present, seems most advanced among the Greens in Scotland.