Edward Lucas has published a great article in the Times on why sitting on our hands while the housing crisis spirals out of control is no way forward. He concludes:
"If we do not deflate the housing bubble and make its beneficiaries pay more, we will sooner or later have a government elected by the majority of the population who are suffering from its effects. It will run housing policy based on what it regards as fairness; property rights will come second - or nowhere."
ALTER Vice Chair Dr Tony Vickers has published a position paper which shows how the housing crisis should be solved through tax reforms, beginning with LVT. At present home owners cream off unearned income from the economic activities of others, a harmful effect which reduces GDP by 20%. He shows that any strategy which reforms only business rates will lead to market distortions, and advocates a Homestead Allowance and combining property and income taxes. The full report can be found at The Real Hope for Home-ownership.
London faces an acute shortage of developable areas. A new report 'Tax Trial: Land Value Tax for London?' was released today by London Assembly Member, Tom Copley which estimates that a new Land Value Tax (LVT) could provide the incentive to build over 200,000 new homes in the capital.
Author of the report for the Planning Committee, Tom Copley AM, said:
Fractional reserve banking (where banks lend out more money than they have in reserve) has made a lot of bankers very rich, but the taxpayer is forced to bail them out when things go wrong. Some of the Swiss are sick of giving money to bankers and have lauched a bold initiative which will now be put to a popular referendum: The Swiss Sovereign Money Initiative.
ALTER MEMBER Jhonti Bird reports...
General Situation in Scotland:
In a damning report produced for the League against Cruel Sports, Andy Wightman and & Dr Ruth Tingay shows how Scottish grouse shooting estates receive lavish govermnent subsidies. One estate, Glenogil, which is managed as a grouse shooting estate, receives agricultural subsidies from the Scottish Government. The presence of a sheep flock (used to 'mop up' ticks that would otherwise attack the grouse) is sufficient to qualify the estate as an agricultural holding. In 2010, the estate received £368,787 in public funds and in 2011, £346,757. Such taxpayer provided funds allows the building of electric fences and private roads that scar the countryside so that well heeled grouse shooters are saved the effort of trekking across the moors. Meanwhile, employees on grouse estates are paid less than the national minimum wage.
NO DEBT, HIGH GROWTH, LOW TAX
Governments around the world are wrestling with the problems of enormous debts, low growth, high unemployment and a gap between the demands of public expenditure and what can be raised through taxation. This problem has been acute since the financial crisis, but has been a hallmark of western economies for decades.
Ahead of the Housing debate at Bournemouth, ALTER's Dr Tony Vickers has written a paper that points out that the "Housing Crisis" is not really about how many new homes can be built but about how we make better use of the 98% of homes we already have. Drawing on research by the Intergenerational Foundation, he points the finger at massive under-occupation by pensioners of owner-occupied family homes, encouraged by government.
Freeman's Wood is a plot of land on the edge of Lancaster. The land has been used by local people for decades, and they have regarded it as common land, but fencing was installed around it in 2012, resulting in public unrest and reports in the local press.
The land is owned by a property investment company which is registered in Bermuda, and its owners are thought to be based in Hong Kong. The director of the UK development company for the site is a Punjab-born, polo-playing friend of Prince Charles. His son plays polo with Prince Harry. So this scrubby semi-derelict patch of land has direct links to global economic, political, and social networks.
Answers to questions from ALTER from leadership contenders Tim Farron and Norman Lamb have been published on Libdem Voice.
ALTER is actively advocating Land Value Taxation in Scotland, and has provided a detailed submission to Scottish Local Tax Commission. It is authored by ALTER member John Howell and can be found here.
A good article by Edward Lucas on the Economist blog, outlining the economic advantages but the considerable politicial difficulties of introducing Land Value Tax. One of the comments to the article makes the interesting point that China has substantial land taxes which no doubt increases the ability of the Chinese state to invest in infrastructure. Where better infrastructure leads to higher tax receipts, public investment flows. While western nations stagnate due to rent seeking behavior by land owners, the emerging economies in the East forge ahead.
George Osborne wants to introduce Mugabe-style property grabs into the UK. His latest wheeze is to force the sale of private property owned by housing associations to their tenants at a huge discount. The associations will be 'compensated' for this confiscation by the taxpayer. By offering this electoral bribe, he hopes to win votes in marginal constituencies.
Is support for Land Value Tax becoming the "new normal"? In yesterday's Financial Times leader ( "UK's weak productivity invites a bolder response") the paper comments:-
...the challenge that remains is the dysfunctional market for land. Here, artificial scarcity acts as a tax on all enterprise, and drives up the price of a home (which indirectly raises wages). It also slows down the delivery of better infrastructure. To address this, measures would be needed: land value taxation, the greenbelt policy revisited, even more compulsory purchase of land...