RE: The Great British Land Heist

A copy of some correspondence I have made on how a Land Value Rent system would greatly help rural planning and economics.

Sue you have hit the nail on the head for rural people and rural jobs, but increased need for food or wood fuel is just a small part of the overall picture and the majority of the reasons behind this is to form a legal mechanism for very rich people to speculate and avoiding paying tax on their earnings:

A rental charge on the value of land would remove the need for land purchase from speculators and so called ‘investors’. Only people wanting to use the land would want to buy it, so land prices would fall a lot, well over 70%, and it would be economic for small holders to purchase land if they are serious in farming it and thus incurring the rental charge as to its underlying value. (obviously there are ways to lower its value and thus rental charge to those who are serious about supporting wildlife on that land as I have described in previous communications)

The reasons the rich like land is because they can avoid Capital Gains tax on its purchase and sale. For instance a house building company or developer will purchase farmland, not to farm  but to avoid the capital gains tax associated with the huge profits they and the landowners of a housing estate they have just built have made. If the buy land with the profits within three years of the sale they can avoid all capital gains tax liabilities. This is the impetus behind the huge conglomeration of farm management companies who are funded by big city financial firms operating them as a tax dodging scam.

Land is becoming increasingly concentrated into the hands of a few and is well beyond the means of normal people. A rental charge on the value of land would put an end to speculations once and for all and would increase rural jobs by an order of at least 20%. Also rural houses would fall in price to a point where real rural workers could afford them.

A rental charge on the value of land would suppress second home owners as well as the real reason they buy second homes is for the tax free capital gains that can be made on their purchase and not just to live in or rent out.

It’s all win for 95% of rural people if we adopted a policy like this.

The big problem is the 2% of very rich landowners who do not feel they have to pay tax will do everything in their power to stop a policy like this – just like they did in 1912 when Winston Churchill and David Lloyd George tried to introduce it and sparked off our biggest constitution crisis in the last 200 years.

Peter Smith
Chief Executive
Wildwood Trust

Peter,

Agricultural land is currently worth an increasing amount of money as it is seen as an investment opportunity, what with pressure on land for woodfuel and food.

Prices everywhere are at an all time high making land an asset affordable only by the rich or institutions.

Opportunities for communities and smallholders, and new entrants to farming, are getting fewer.

Sue

I understand your fear but there is no problem with the system I propose in your case you would benefit much more than the current system (remember other taxes you pay would be abolished, especially for workers and business investors) Agricultural land is not worth that much and would attract a tiny amount of tax compared to developed land

So knowing you would pay a small tax there are still ways for you benefit to the community to be recognised through the real commercial value of the land you own.

If you were to somehow ensure that what you do is continued in perpetuity through a legal system such as a charity and keep the land held in trust then your land’s value would fall to nothing and you would suffer no taxes or a tiny tax burden. But if you want the right to do whatever you want with it or sell it to someone who would intensively farm it or develop it then you should pay the rest of the community for that privilege and it is only right and proper it should be taxed under the land and resource rent model for its commercial value. Of course wildlife friendly farming in the model I propose would have a tax break but nowhere near as much as if the land was legally and for perpetuity made of benefit to the community and wildlife. Such a model could would still allow you to ‘own’ the land and have full control of it and decide what to do as long as you did not break the legal trust that you entered the land into that reduced its commercial value and gave you the tax break.

If you think very hard the Land and resources Rent systems is exceptionally well thought out and extremely fair, there is a wealth of literature on the matter by the best economic brains this world has ever produced and

Peter Smith
Chief Executive
Wildwood Trust

Dear Peter

If one has much land of high wildlife value or a farm like mine which I manage with native plants, and half of it is ungrazed woodland, the productivity is very poor: the support scheme at least in Wales Tir gofal or Glastir does not begin to compensate for the loss of revenue compared to intensive and modern grass management, and if I had to pay high taxes on it, it might make it impossible for many people like myself to be on such places to conserve our wild flora and fauna.

yours sincerely Ruth 

By converting our tax system to a land and resource rental model there will be no incentive to develop wild land and farmland as you will have to start paying hugely greater taxes on it.

Land that is granted planning permission will mean the community will benefit from the increased tax take and not the landowner. At present landowners benefit from massive  un taxed capital gains if we allow planning permission.

Landowners should benefit for the improvements they make to land and the quality of the developments they make to the land, which is not taxed in a rental model I have outlined, just the underlining value of the land. The underlining value of land is created by the hard work of the community at large and the planning designation given to the land, both of which have nothing to do with the landowner. So  only the landowners own hard work will be rewarded for using land wisely and appropriately to the community’s needs.

The value associated to land that has been granted planning permission by the community should belong to the community. This will be harvested by a rental charge on the value of land. This source of taxes should be used to cut harmful taxes such as those on rural jobs and trade.(National Insurance, income tax, corporate tax and vat). With less harmful taxes on wages and trade, our economy would grow and extensive farming would be more economically viable.

All of the world’s greatest economists, from Adam Smith to Milton Friedman have recommended this, Even Einstein was a huge supporter of Land and resource rents as an economic system. Tolstoy wrote a book about it, ‘Resurrection’.

Also the Government's budget announcement that the default for planning applications is to allow them, means that every landowner in the country will now be thinking about how much money they can make from paddocks and fields around the edges of villages and towns. This will further cause land prices to escalate and make initiatives like community farms and allotments impossible.

See the RTPI website for their views on the announcement.

The planning system is now in disarray, and there will be a developer free for all.

Sue