On Friday, Caroline Lucas, Green Party MP for Brighton Pavilion, will have the opportunity to present the case for LVT in her Private Member’s Bill, which would “Require the Secretary of State to commission a programme of research into the merits of replacing the Council Tax and Non-domestic rates in England with an annual levy on the unimproved value of all land, including transitional arrangements; to report to Parliament within 12 months of completion of the research; and for connected purposes.”

She will have just a few minutes to present the case. What might one of us say, given the opportunity?

Several times a week I receive emails with scare stories about the imminent collapse of the UK economy. Most of them come from outfits trying to sell subscriptions to expensive investment advice magazines so they need to be taken with a pinch of salt. But some regular journalists are asking the same question, as here.

All of these gloom-and-doom forecasts draw attention to the same fundamental issues. Private and public debt remains at record levels. The economy is in the doldrums, with record levels of unemployment. It has failed to respond to Quantitative Easing, the government's chosen instrument for stimulation. Economic stagnation has affected the government's tax revenues and is leading to growing debt. There is no scope for tax rises under the present tax system because these will further reduce economic activity due to their deadweight cost.

These considerations leave the government with fewer and fewer policy options.

A new report on trends in house prices in Britain has just been released by Savilles. According to its annual "Valuing Britain" analysis, "The total value of the UK’s housing stock has risen slightly to £5 trillion over the past year, but housing wealth is becoming increasingly concentrated in London and the South East."

"Ten years ago the UK’s housing stock was worth just £2.9 trillion, rising to £5.4 trillion at the peak of the market in 2007. However, the UK total value remains -6.4 per cent below peak, though London’s residential real estate is now worth 14.2 per cent more than in 2007, having risen by 6.8 per cent over the past year alone.  At the other extreme, Northern Ireland’s stock is worth £72 billion, having fallen -10.2 per cent in the past year."

The extreme geography of land value

The Private Member's Bill promoted by Caroline Lucas calls for a feasibility study for the introduction of a Land Value Tax. This Bill is expected to have its second reading debate on 25 January 2013. I checked on We feel it important to clear up some misconceptions appearing in the press – such as ‘LVT is a stick to beat property firms …’ and it will ‘shift the burden of taxation to wealthy businesses and individuals.’ Nothing could be further from the truth.

Land value tax has had a bit of an airing this year, usually associated with the idea that wealth ought to be taxed more. We are absolutely opposed to the taxation of wealth.

The views expressed on this web site are almost never voiced by mainstream economists, politicians and journalists, even those who purport to be radical. Were they to do so they would be quickly silenced. One result is that there is no effective challenge to the Neoliberal project, now in full flood in Britain and the US. This lack of effectiveness manifests both as a failure to argue against neoliberalism from a philosophical and theoretical perspective, and a failure to construct alternative policies.

We in the LVT movement have been part of the problem too. It has taken most of us a long time to understand the true role of the contemporary banking system and its relationship to land. Banking has evolved into a machine for the capture of land rent, under the guise of interest payments. The banks are in reality landowners for the duration of the loans they make. This sleight of hand has deceived a lot of us.

Attention is thereby removed from the source of the problem. Thus, the present economic crisis is described as a banking crisis, but what the banks have really been doing is acting as land speculators. Most of the comments and all of the proposals currently in circulation consequently fail to address the underlying state of affairs.

This speech, "Veblen’s Institutionalist Elaboration of Rent Theory", by Michael Hudson, digs down into the issue and is worth studying. It was given at the Veblen, Capitalism and Possibilities for a Rational Economic Order Conference, Istanbul, Turkey, June 6th, 2012.

Why do opponents of LVT wheel out the argument that farmers could not afford to pay LVT? This is taken from the latest statistics from DEFRA.

"General cropping and cereal farms had large increases in rent in 2010 and the prices now stand at £249 and £176 per hectare respectively. This may be due to the improvement in the profitability of arable farming." The main findings were

• 2010 rent prices for Full Agricultural Tenancy (FAT) agreements have risen across all regions.
• Cattle and sheep farms in less favoured areas (LFA) showed the largest FAT proportional increase (21%) from £52 in 2009 to £62 in 2010.
• Average rent for dairy farms increased by 16% between 2009 and 2010 and now stands at £180 per hectare.

The idea that farmers could not pay an LVT is absurd.