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Newcastle offers to revive Smart Tax research

October 12, 2010 5:25 PM

ALTER's Fringe at the Liberal Democrats' conference in Liverpool last month heard the recently en-nobled former leader of Newcastle City Council announce that his city could be a study area for the Party's policy of Land Value Taxation. Cllr Lord John Shipley, who has served on the Council for 35 years, was speaking a month after resigning as Leader to become a full-time working peer. The Liberal Democrats have run Newcastle since 2004.

ALTER Chair Dr Tony Vickers, reflecting on the announcement after the meeting, said: "Newcastle's announcement is personally very welcome but ironic, coming as it does ten years after I began to work with Liverpool's City Council on a 'Smart Tax' pilot. It is ironic because, in the year Lib Dems lost control of that city to Labour, its Liverpool-born leadership contender Andy Burnham started calling for LVT. Why wait 13 years?!

"It took a non-Lib Dem councillor in Liverpool to persuade the Council then - against Labour opposition - to carry out a pilot. The Labour Government failed to support any LVT research when it was in power. So for a Lib Dem city council leader to take this initiative in Newcastle so early in this Parliament, under a Con/Lib Dem Coalition and just after two leading Labour MPs have 'come out' for LVT, must be progress."

Lord Shipley surprised some of his audience by expressing support for 'right to buy', also admitting that the council tax - which Lib Dems spent most of the last 13 years under Labour campaigning to abolish - "is not a big subject for complaints" in Newcastle. He said that trying to change property taxes needs "a big PR job" but that he feels the Coalition has tapped into a popular basic idea that taxing work is regressive. He has always opposed a Local Income Tax.

He drew attention to the importance of governments retaining economic rent from land, citing the decision of Newcastle City Council to buy the Northern Rock HQ site when the bank collapsed. Rental income from the site allowed the city to borrow and, he claims, helped Newcastle obtain 'Green Star' status recently from the Audit Commission for its response to the recession. "Would LVT help us do better still?", he said. "Would it help bring some of our derelict sites, like Newcastle Brewery, into productive use? How would such sites be valued for LVT? These are the questions we'd like research to answer for us."

Three days later, the Lib Dems' Conference in Liverpool voted overwhelmingly to support a motion on Fairness in a Time of Austerity, which called for (among other things) Lib Dem ministers in Government to be allowed to commission research into "viability and practicalities of increasing taxation on wealth, including land values."

In the weeks since the Party Conference, Dr Vickers has been busy preparing a Briefing Paper for the Coalition on how LVT could help stimulate the economy. He has also been in discussion with various potential research funding bodies.

Geographer Dr Seraphim Alvanides, who joined Northumbria University only this summer and specialises in mapping urban social phenomena, has already expressed interest in being involved in any LVT research in Newcastle.