Land Value Taxation Campaign

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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.

Government by tabloid

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Commenting on the U-turn over the proposals for prison reform by Justice Secretary Kenneth Clarke, veteran journalist Simon Jenkins said this

'As long as politicians pander to media-fed paranoia rather than calmly publicise facts, and as long as they delegate policy to the worst recesses of the press, money will be wasted. Families will be destroyed, drugs will proliferate and penal policy atrophy. Cameron can shout "consultation is good," but the crushing of Clarke was not consultation, it was panic. There is only one lesson to be drawn from this sad saga. Those who live by the tabloids, die by them.'

Sadly this has been the story of British politics for decades. Its politicians are followers not leaders. This bears out what it says about democracy in Plato's Republic, which is that democracy leads to tyranny.

Perhaps democracy is not the ultimate value. And what does this episode mean for LVT?

Link to Guardian article

Believe this if you like - 1

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"Wealth is created when Capital is invested to give a higher return than putting it in the bank, and for that you need to take a risk."

Wealthy sending their wealth offshore

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This is an oft-heard complaint at the moment but what does it mean? What exactly has moved offshore? Truckloads of their money, in bundles of £50 notes? Containers filled with furniture? Houses, dismantled and put onto low-loaders?

None of the above of course. And that is the trouble with economics as presently discussed and commented on. It does not look at actual physical objects and the real movements and transformations they undergo. The subject is so abstracted that we have all been able to lose sight of these underlying realities.

What free market?

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This site is right in the middle of Brighton. It has been vacant since 1986, for most of that time with planning consent for development. A few months ago it was occupied by squatters who turned it into a garden. The owners promptly woke up, applied for a Court Order and got the squatters evicted. Then they applied a scorched-earth tactic and got a few truckloads of chalk dumped on the site.

This is the unacceptable face of the British property "industry". Not very industrious, is it?

Railways debate erupts again

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The McNulty committee has produced a 350 page report on whether Britain's railways give value for money and how things might be improved. Proposed changes to fares have naturally received the most attention and comment. Matters are, however, more subtle. The railways have suffered from a series of bad technical and engineering decisions since the mid-1950s, in part due to political interference. This is one reason why costs are high and capacity is squeezed. A fundamental mistake is the near-universal replacement of locomotive-hauled stock with unit trains such as the ones above. Of fixed length, extra vehicles cannot be added to cater for extra traffic at peak periods. This is one of the main reasons for the complicated structure of fares which are meant to tailor a variable demand to a fixed supply. Until about 1970, the railways had traditionally kept a pool of older vehicles in reserve, which would be brought out at peak periods, but modern methods of railway operation, and modern types of rolling stock rule, out this option. It is a point that McNulty has failed to spot.

There is a need for politicians and commentators to familiarise themselves more closely with the technical aspects of railways and their operation. It is essential if good policy decisions are to be made. Unfortunately, those who understand the technicalities of railways tend to be dismissed in pejorative terms.

An important issue that is also passing unnoticed is the external value that railways generate in helping to sustain land values. On this view, outfits such as the Institute of Economic Affairs argue that subsidies for railways should be abolished. The IEA is utterly wrong. Railways generate wealth which cannot be captured through the charges it makes to those who use them. This value is generally described as "externalised value" or "externalised benefit".

Commentators who do not understand externalised costs and benefits are not worth taking seriously. Unfortunately, they represent a widespread view.


Spat with Tax Justice Network again

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Our relationship with the Tax Justice Network (TJN) is not what it ought to be. One might have thought that they would be foremost in leading a clamour for our promotion of land rent for public revenue. Instead, the approval is grudging. The most TJN will concede is to see it as "part of a comprehensive system of taxation".

But if LVT is part of a comprehensive tax system, which other taxes should be kept and why?

No win for UK

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A win for the Alternative Vote (Yes) could have opened the door to other political groupings that could present other ways of looking at the world than the received ones. So in the long run it might have helped change things for the better. With the two party system entrenched for a least a generation, political discourse will remain locked down whilst both groupings collude in sustaining the false and illusory left/right dichotomy.

The country has passed up the opportunity to dig itself out of its intractable mess. Why? There are allegations of dirty tricks, such as the suggestion that a Yes vote would let in the BNP, and it is true that PR systems have put extremist parties into parliaments in countries in continental Europe. But the AV is not a proportional system of that kind and the allegation was absurd.

Another suggestion is that it was a vote against the LibDems and coalition governments in general. The party has certainly not covered itself in glory and the government is perhaps not a good advertisement for coalitions. If that is the case, then the No vote can be taken as a vote against the possibility of coalitions in the future.

For the LVT movement, it cannot be an encouraging result as there is insufficient space within which the idea could be inserted. The two party system leaves LVT in the wilderness. Moreover, any party that proposed LVT would find the policy hard to sell to the public.

The lesson for the LVT movement is that we ourselves need to be fully informed about what this tax reform actually means and what its effects will be, before we try to spread the message to a wider audience, which must necessarily include practising politicians.

From the bigger perspective, however, it seems that the British public has thrown away the opportunity for much-needed reform by using the referendum as a chance to kick a party and its leader whom it feels have let them down. That is not a good result.

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