The election campaign
What are we to make of the election campaign? As we have no party political affiliation, we are restricted about what we can say. A little bit of support for LVT could be found in all the main parties. But there was next to nothing to enthuse about.
Labour was judged on its miserable record, for having come up yet again in the last five years with variants on the tired old failed development land taxes; for having ignored Lyons and Barker (Round One version); for having failed to do a revaluation of Council Tax after 19 years; and for having nothing new to say on fiscal policy.
The Conservatives had nothing new to say on fiscal policy, and displayed cowardice in having declared there will be no Council Tax revaluation in the course of the next Parliament if they get in.
The Liberal Democrats were in favour of replacing the business rate with a site value tax, which from our point of view would be a move in the right direction, but the proposal to put the tax under local control would raise problems which we have discussed at length elsewhere on our web site. The main difficulty is that in some local authorities, land values would provide a solid tax base, whereas in others, land values do not add up to a sufficiently high figure and a high rate of tax would have to be levied to yield a useful amount of revenue.
Poisoned chalice
The LibDem proposal also raises practical difficulties as it is still intended to replace Council Tax with a local income tax, supposedly based on “ability to pay”. This is grasping at a poisoned chalice, as the Scottish Nationalists discovered. The studies by Lyons (England), Burt (Scotland), and the Northern Ireland Executive, all dismissed it, as did a Glasgow study. The LibDems are seemingly ignorant of the attendant cost and administrative burdens, and the unpredictability of the yield. Furthermore, LIT proposals seem to regard the “income” as being earned income, not dividends or interest – an admission of defeat by local income tax proponents on both administrative and cost grounds even before square one!
The LibDem proposal for a hybrid system poses particular problems where land is occupied by buildings in both commercial and residential use. There are large differences in the amounts that could be raised by a local income tax in different areas, for example, as between Westminster and West Hartlepool. The LibDems have also not explained whether land in agricultural use should be exempt from the revised business rate.
The Green Party policy actually included LVT much as we would like to see it implemented, but most Green Party activists – at least in England – know nothing about it. Caroline Lucas, the candidate for Brighton Pavilion, only one to be elected, refrained from uttering one word on the subject even when prompted. What is one to make of that?
Both the Liberal Democrat and the United Kingdom Independence Party were in favour of raising tax thresholds, and in the latter case, of merging Income Tax and National Insurance contributions. We would support this in principle, again as a move in the right direction, but only if it were a part of a switch to raising public revenue through the collection of land rental value.
Europe issue
Both the LibDems and UKIP made an issue of Europe. This is to their credit, because ‘Europe’ is not a topic Labour or the Conservatives want to to discuss in public. The Campaign has, in principle, no view on membership of the Eurozone or the EU. The difficulty LVT supporters must have with EU membership is that it remains profoundly undemocratic and excessively influenced by powerful lobbyists. This would present a further obstacle to the introduction of LVT, as the big landowning interests from all over the EU would promptly intervene to block any measure that went further than a specific, probably bowdlerised, kiss-of-death, little application. Anything more would attract opposition on the grounds that the landowners’ human rights had been infringed.
The EU is also firmly committed to Value Added Tax as a means of raising public revenue, as well as a complex system of subsidies to buy off the different interest groups. The LibDems are in favour of greater integration with Europe and joining the Eurozone. It is also strange that anyone should be advocating joining the Eurozone at a time when the currency is coming under its first big testing time, with an outcome that remains to be seen.
The UKIP might have been an acceptable choice, had it not taken on a load of other, and unnecessary, baggage, such as a proposal to double the number of prison places – a strange notion since Britain already has a higher proportion of people in prison than anywhere else in western Europe. It may be that the British are a uniquely villainous race but one would want to know what underpins such an assumption and why locking up more people would help matters.
The overall picture was just confusing, and this was ultimately reflected in the inconclusive result.