Land Value Taxation Campaign

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Home Blog What our view on Brexit was

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.

 

FINANCE: the EU is funded primarily from a notional VAT income, and requires its members to impose a minimum rate of VAT of 15%. VAT is probably the most regressive tax conceivable, since everyone is required to pay it - even people who are receiving benefit, who have be paid benefit by the government so that they can pay tax back to the government. In practice, of course, most governments levy higher rates of VAT than this minimum, but the existence of a minimum rate is a hindrance to the necessary changes.

RESOURCES: EU membership resulted in the near-destruction of the important inshore British fisheries within a decade of joining. Previously, there had been a 12-mile restricted zone, informally policed by local fishermen. Membership brought French and Spanish fishing fleets which caught as much as they could, as fast as they could, without regard for the consquences. Matters were made worse by ill-conceived rules which meant that undersized fish had to be thrown back, dead. The problem was not the EU as such, but open access should have been accompanied by some kind of licence system in which the rights to fish had to be bid for, the revenue being used for inspection to ensure that the rules were complied with.

AGRICULTURE: the Common Agricultural Policy, which resulted in huge unwanted surpluses, was eventually replaced by a system of payments to landowners. It would be difficult to think of an arrangement that was more directly against our principles.

FREE TRADE: the EU is anything but a free trade area. As soon as the UK joined, import barriers - taxes - were erected against countries from which the UK had traditionally obtained inexpensive food, such as Australia, New Zealand and the Argentine. This immediately put up the price of food. It also had political consequences, as UK citizens lost their right to emigrate to the former, and it created bad relationships with the latter, which was an important supplier of beef. It is unlikely that the Falklands war would have happened if trade had continued as before.

This in turn had effects on the industry on the west side of the country, which had traditionally supplied world markets; although trade is not strictly two-way, if the UK does not buy from a country, then that country will not buy from us. Once goods are loaded into a ship in, say, Glasgow, it costs little more to send them to South America than it does to send them anywhere in continental Europe; the latter involves the long and expensive haul to Harwich or Dover on congested British roads.

INFRASTRUCTURE: Fringe areas of the EU receive substantial funding for infrastructure development under what is known as "Objective 1". In the UK, this means Northern Ireland, Scotland, Wales and Cornwall. The principal effect is to promote land price booms: in Cornwall, it means that the local people cannot afford to live there as the improved access attracts people from far and wide to snap up the housing for holiday homes. In the Irish Republic, the inflow of EU funds was such that it drove a property boom, and bust, from which the country's economy has still not recovered.

Of course we are not against infrastructure development, but if there is no clawback system in place to capture the consequential enhanced land value then the intended beneficiaries gain next to nothing.

SHOULD THE UK STAY INSIDE AND PROMOTE REFORM? The EU could reform itself, but it is not going to happen. Outside the EU, there is at least the possibility that governments can take things in the direction we would like to see. The CAP is unlikely to be replaced by a blatant payout to owners of farmland, and trade with the rest of the world will slowly recover, as a matter of necessity. The UK will also regain access to the cheapest food available on world markets. But as I said at the beginning, the Campaign cannot advise anyone about which way they should vote.

 

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