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Lib Dem policy as basis for Treasury discussions

December 22, 2010 5:18 PM

A "Ten Point Plan" prepared for the Lib Dem Tax Commission in 2006 and largely incorporated in the subsequent policy papers endorsed by Party Conference is being dusted off for recycling, as ALTER's New Year Offer to Government. It will form the basis for a Discussion Paper being prepared in response to a request from HM Treasury Property Tax officials for ideas on how a land value tax might be introduced in Britain in current political and economic circumstances. ALTER Chair Dr Tony Vickers has drafted the paper Transitional Issues for the all-party Coalition for Economic Justice (CEJ) to consider over the New Year break.

A group from CEJ, including Dr Vickers, met officials soon after the General Election. It was clear that there is a good understanding of the economic benefits of the kind of Tax Shift (off enterprise and earnings onto resource rents) that LVT constitutes. CEJ was asked several specific questions, concerning valuation, the impact of LVT on the financial sector, and in particular whether it should be a local or a national tax. Several papers have been submitted to Treasury or are in preparation for discussions to be held early in 2011.

There is, of course, no certainty that any political moves will be made towards further Tax Shifting, although George Osborne's language in the June Budget was in some ways promising. The lifting of the basic tax threshold and rate of capital gains tax were moves in the right direction. If the Coalition Government wants to stimulate the economy well before it has to face the voters in 2015, it may require more of the same - which could involve LVT.