Land Value Tax

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Churchhill

Given the importance of the current debates, the history that gives rise to them, and above all how they relate to today’s disadvantaged renters, we invited Mark Lake, historian and long-term advocate for a Land Value Tax, to submit a guest blog for our website. We hope that you will find it enlightening.  

Land Value Tax, social justice and Black Lives Matter 

The wealth generated by slavery has been passed from generation to generation, often without tax, through the ownership of land. The same can be said of the wealth generated by those labouring on the land and in early industry in appalling conditions for little or no pay. Chatsworth House wasn’t built from the labour of the Cavendish family!

All of history is about the struggle to own land and to live off the labour of others via rent or, in the case of the Church, via tithes.

Trace any land ownership back and it will have been seized through violence and theft. Examples range from The Great Theft of 1066 when William The Bastard took personal possession of all land in England (all land in England is still owned by “The Crown”) to the displacement and slaughter of the original inhabitants of land seized during the expansion of the British and other Empires.

Slavery has been around for thousands of years – up to 1.25 million Europeans were captured and enslaved on the Barbary Coast of North Africa and over 12 million Africans were shipped across the Atlantic primarily to Brazil, the Caribbean and North America. Those who became wealthy from the trade came from Portugal, Great Britain, Spain, France, the Netherlands and Denmark.

The toppling of the statue of Edward Colston in Bristol on 7th June, 2020, is a historic moment. As Deputy Governor of the Royal Africa Company, Colston oversaw the purchase and transportation of over 80,000 Africans, 19,000 of whom died on the journey. The Society of Merchant Venturers, to which Colston belonged and which still exists, originally objected to placing a plaque alongside Colston’s statue describing his role in the slave trade but have since changed their minds.

Where did the wealth generated by slavery go?

Then, as now (James Dyson is the second largest landowner in England), wealth is frequently used to purchase the freehold of land – “because they aren’t making it any more”.

  • How is the ownership of land protected? By laws drawn up by those who own land.
  • How is tax avoided on the value of land? By laws drawn up by those who own land.
  • Why do we have the concept of a “trust” in English law? To protect ownership of land and to avoid payment of tax.
  • Why do we allow people to “roll over” wealth generated in one activity to wealth in another (especially land) often free of tax? Because the laws were drawn up by those with wealth who wished to own land, avoid tax and live off the labour of others through rent.

Land Value Tax – partial restitution

We can’t seize the land purchased with wealth generated by slavery, just as we can’t seize the land distributed to the sword-wielding friends of William the Bastard in 1066 and, in some cases, still owned by the same families who are currently making millions by selling it off for housing.

What we can do is to ensure that land, owned by us all through “the crown”, contributes to the common good by way of Land Value Tax (LVT).

The general rule amongst landowners was, and still is in some cases, that the first son inherited, the second lived off tithes from the local church whilst putting the fear of God into uppity tenants, the third became a lawyer to protect family interests and the fourth joined the military – to crush the uppity tenants should they turn to rebellion.

Control of the law, and the “instruments of the state”, is the key to maintaining wealth, particularly land wealth.

LVT doesn’t threaten people’s freehold, it doesn’t prevent them acquiring land and it doesn’t prevent them leaving it to whoever they wish. It simply taxes the value of land. LVT is fair (those with most, contribute most), simple (the person registered as the landowner pays the tax) and unavoidable (you can’t move land to the British Virgin Islands or hide it in a Swiss bank account).

When asked for the best advice about business, Gerald Grosvenor, the billionaire landowning Duke of Westminster, replied: “have some relatives who were friends with William the Conquerer“. Second best is to put land into a trust so it can be free of tax.

LVT is what it says on the tin: a tax on the value of land, it is not a tax on land itself, nor on gardens! Value is determined by only two things: where the land is (“location, location, location”) and what it may be used for.

So, an acre of land in Snowdonia is worth rather less than an acre of land in central London – especially if the acre of land in Snowdonia may be used only for raising sheep while the acre of land in London has planning permission for offices and expensive homes.

It is worth remembering that the use of land is determined democratically by society as a whole – through the planning system. If the value of land goes up, for example, because society grants planning permission for housing, the tax will go up – society benefits as well as the landowner.

LVT is not an additional tax, it would replace existing taxes such as Council Tax and Business Rates, so taxes would be lower for the vast majority of people and businesses.

The introduction of LVT needs to go alongside at least one other reform to laws drawn up by landowners in their own interest: the introduction of the concept of “clearly identifiable individual ownership” into English law to replace the concept of “trusts”.

Statues

The other statue that has been in the headlines is that of Sir Winston Churchill.  Well, apart from the fact that he led this country in the war to defeat fascism, he is perhaps less well known for his support for a Land Value Tax.  Despite being born into a very wealthy land-owning family he could see that the system was wrong. Here’s an extract from one of his speeches,

“Roads are made, services are improved, lights turn night into day, water is brought from reservoirs and all the while the landlord sits still.  Every one of these improvements is created by the labour and cost of other people and taxpayers.

Those who own the land contribute nothing, as land owners, and yet the value of their land is increased.  The land owner provides no service to the community and nothing to the process by which he is made richer.”

Those who wish to find our more can visit my website, http://bitbarn.co.uk/lvt/index.html

Mark Lake

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