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The LVTC blog, by Henry Law

The comments in the LVTC Blog are a personal view of our Hon. Secretary Henry Law and do not necessarily reflect the official policy of the Campaign.

This is a place for personal observations and comments on politics, economics, current affairs, on-going discussions on the potential for LVT to remedy some of the current ills, and the impact on Society of any of the above. 

Please read and enjoy, and feel free to respond to Henry if you have any thing you would like to add.


The Grosvenor Estate

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The death of the Duke of Westminster has drawn attention to the fact that the estate is not liable for inheritance tax as it is vested in a trust. This has led to indignant comments and charges of tax avoidance.

The Grosvenor Estate is one of several owned by aristocratic families, which together encompass a large area of Central London. The pattern of land ownership in Central London has hardly changed since 1700.

Their managers of these estates have done a good job in preserving the attractive character of at least part of the capital, protecting it from rapacious developers and local authorities who between them have ruined the London skyline.

However, it is important to remember that this land would be almost worthless if it were not for the infrastructure paid for and maintained day and night at the expense of the taxpayer, without which London could not function. In principle, it does not matter who owns land as long as those owners pay their contribution towards the cost of the services which sustain their rental income stream - ie a land value tax close to the full market rental value. From this perspective, breaking up these estates would in itself solve nothing. The land value tax is in principle just a service charge.

In practice, land ownership brings political influence. Wise owners would use that influence to secure legislation which was for the greater good. If they do not, sooner or later there will be a price to be paid.

 

Protection racketeering

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I have just been engaged in a correspondence in the FT. I argued that Brexit needs to begin by getting ourselves outside a tariff wall. I was challenged with this comment

"The EU's tariff wall is what is protecting us. Countries like the US can decimate the British wheat farmers. Japan can decimate the UK car industries (by switching the production back to Japan from the UK) and the US can do the same. New Zealand can destroy the British sheep and dairy farmers. You wouldn't remove your firewall from your computer. Why should the UK remove our EU's tariff wall?"

My response was

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Low-hanging Brexit fruit

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Exit from the EU opens up the possiblity of some quick wins, sometimes referred to as "low-hanging fruit".

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Protectionism debunked

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I came across this today in a newspaper discussion group.

"You misunderstand (bet that's not the first time someone has said that to you!) the tariffs you refer to protect the jobs of EU workers"

I responded as follows. "Yes I am well aware that is the aim but it has the opposite effect in the long run. It is one reason why unemployment is so high across the EU. It has not worked, has it?"

otherwise the markets would be flooded with products made at a cheaper cost.

"Great!

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Experts are sometimes worth listening to

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 "Macroeconomics is in a state of great confusion. The profession is deeply divided. Far from there being a body of knowledge which is generally accepted, almost every position is extremely contentious. Public discussion of economics has no coherent rationale, and governments, notwithstanding their emphatic rhetoric, cannot give a credible explanation of how it is that their policies fail to achieve the results they seek."

Wynne Godley, Professor of Economics, University of Cambridge, writing in the Financial Times in 1983.

 

 

What is government for?

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In the aftermath of the referendum, it does no harm to take a step back from the present febrile mood. Conveniently, there was this piece asking "What are governments for?

I came across this about forty years ago.

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What our view on Brexit was

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These factors were obviously not uppermost in the minds of most of those who voted "leave", but before the referendum we pointed out that EU has in practice applied policies which are entirely against the principles we are promoting.

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