It’s time for an All Party Parliamentary Group on Land Value Taxation

The rioting in Hamburg on the occasion of the meeting of the G20 this month highlights the oftentimes violent confrontation that exists between alternative theories of capitalism and socialism, as represented by the established orthodoxy and those that would seek to tear it down.

At the heart of this conflict lies differing interpretations of economic theory, often depicted simplistically as left v right; Keynes v Hayek; socialism v capitalism; social liberalism v economic liberalism; or progressives v conservatives.

Henry George's Progress and Poverty envisioned a capitalism that would allow all people to own the product of their labour, but that things found in nature, particularly land, belongs equally to all humanity.

The Coalition for Economic Justice is a cross-party group that proposes the introduction of an annual Location Value Tax (LVT) (also known as a Land Value Tax) to reduce existing taxes on enterprise and labour in order to rebalance the economy and prevent future economic crises.

Sir Vince Cable in a 2010 conference speech opined "…in a world of internationally mobile capital and people it is counterproductive to tax personal income and corporate profit to uncompetitive levels. … But a progressive alternative is to shift the tax base to property and land which cannot run away and represent, in Britain, an extreme concentration of wealth."

Andy Burnham, now Mayor of Manchester, ran his 2010 campaign for Labour leader on the basis of radical tax reform with Land Value Tax at its heart and Labour's 2017 manifesto continued the theme promising to "…review council tax and business rates and consider … land value tax, to ensure local government has sustainable funding for the long term."

Nick Boles (former conservative minister for planning) in the 2012 Macmillan Lecture proposed a land tax, using the New South Wales' Land Tax as a successful example, suggesting that a UK Land Tax on similar terms could raise over £5 billion a year - and encourage productive use of under-utilised development land. The conservative 2017 manifesto included a commitment to registering all UK land and reforming land value capture as a means of funding local infrastructure.

Caroline Lucas of the Green Party introduced an LVT Bill in 2012; and the SNP conference passed a resolution in March this year backing LVT as a mainstay of Scotland's land reform program.

The critical insight of Lloyd George in the1909 peoples budget, and subsequently the labour chancellor, Philip Snowden, who introduced a Land Value Tax bill in 1931; was that taxes levied on income and profits and redistributed as subsidies to the working poor are ultimately captured as economic rent principally by owners of land and other natural monopolies. Conversely, taxes levied on land do not generate increases in market rents in the same way.

If substantive progress in tackling inequality is to be made in this Parliament of cross-party working, is it not time for the formation of an All Party Parliamentary Group on Land Value Taxation to consider the application of Henry George's theories to present day societal conflicts?

* Joe Bourke is an accountant, former parliamentary candidate and Treasurer of Hounslow Liberal Democrats