Land Value Tax

So said Nick Clegg today, when visiting some college somewhere with housing "supremo" Sarah Teather and national "bread head" Vince Cable to announce something or other about housing policy.

Oh yes, they want to take a bunch of my money, who does have a job but not a house, mash it up a bit in some kind of Westminster alchemy pot, which gives out less than you put in, naturally, and give it - yes, give it free, at least nearly half of it, or lend it "cheaply" to the others, to some people who own a spare sodding house but are too lazy or miserly to do anything with it, even if it would make them money if they did. 

Then, if I am lucky, which I won't be because there aren't enough of those spare houses here to make one iota of difference to me, because, you see, a lot of them are in places nobody actually wants to live, I can start shelling out to those same people to whom I have already had money stolen from me, there is no other word for it, stolen from me - I'll say it again - to give to them, to put a roof over my head.

Now, Vince and Nick, well they're both Vice-Presidents of the party's land tax campaign group, so one might think that they would know better.  Sarah, well we can forgive her cos she just glazed over when several of us tried to explain it to her a while back when we took a day off work (without expenses) paid to go to London (without expenses) for a meeting which turned out after we had arrived to be a bit inconvient for the three MPs (with expenses) we had arranged to meet with a month before.

Which Lib Dem manifesto theme does this fit into?  "Fairness"?  Bollocks does it.  Not unless fairness suddenly means taking from the beleaguered tax-payer and giving to the lazy landowner who can't be buggered to make use of the assets he or she owns.  Even if you believe it is the state's right to try and tell those landowners what to do with their property, giving them my money to do it is not "fairness".

Five years ago nearly now, when we sat around a table in a Westminster Hall committee room to inaugurate the Housing Policy Working Party the first question I asked was "when are we going to talk about Land Value Tax" to which the housing policy team responded that "oh, that's a fiscal measure, we can't discuss that, the Treasury policy team will deal with that when they do a review" and so we spent months developing housing policy with our best hand tied behind our backs.  And when the Treasury policy team, better known as the Tax Commission, did get round to discussing policy, they welched on Land Value Tax too.

Steve Goddard is a lucky man, our PPC for Oxford East is one of the nicest politicians you could want to meet, if that's not an oxymoron, and if it weren't for the fact that I so badly want Andrew Smith out of this seat, with policy like this, it might very easily be "the 964 club" rather than "the 963 club" tonight.

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Adam Posen, a member of the Bank of England’s Monetary Policy Committee has opened a catering sized can of worms, reported in today’s Telegraph

“Adam Posen, a member of the Bank's Monetary Policy Committee, said that the Government should consider slapping extra taxes on British properties, suggesting that in future homeowners should have to pay an extra charge if prices rise too fast. In comments which will cause extreme disquiet in the Treasury, he even indicated that this may mean imposing capital gains taxes on first homes and raising stamp duty”.

Now, fair play to the guy, I guess for even broaching the subject. Such bubbles are not earned rewards, but the result of existing policy preventing the market adjusting to the demand quickly enough and other policies putting more pressure on particular areas. Not only that, but they are effectively a zero-sum game - for those who gain, others have to lose out - on the cost of renting often or on their increasing inability to afford to join in the housing boom.

But the real and permanent mechanism is to base all our tax system on land value taxes instead of incomes and profits and sales. A land value tax will collect more, naturally, when the market overheats and prevent bubbles forming, not punish them when they do, or wait till sales happen to charge an extraordinary tax.

I am a "land taxer".

Some people seem to believe one cannot be both. On the one hand, we find people like Lib Dem Matthew Huntbach, who in the comments to this Lib Dem Voice piece on my opposition to the suggested "Mansion Tax" claims that as a self-described libertarian I am likely to drop the idea of land taxes, however much I may talk about them (much more than him I'd wager but there we are) as soon as the opportunity to enrich what he thinks of as my fellow wealthy libertarians allows. For the record, I don't think that I know any truly wealthy libertarians or anarchists, and indeed I know of not a few who, despite being not very well off at all, subsisting on benefits, campaign actively for the destruction of the welfare statist system that seems to sustain them at the moment. On the other hand, we find lots of other libertarians who resolutely refuse to accept even as libertarian those who would appear to want to "confiscate" the value of private property in land they hold as a near sacred element of libertarian thought.

Now I realize that one blog post by an insignificant in Oxford is not going to settle this argument once and for all. Far better economists and political theorists than I have tried. But it is a personal battle for me, because it was the ideas of Henry George that brought me to libertarianism - for his is a libertarian idea, in direct response to the "land question" raised by so many in the history of liberal and anarchist thought - from Locke, Paine, Proudhon, Spencer, Mill, and the individual anarchists Spooner and Tucker. And it is as I have heard, read and hopefully understood more by the likes of the Austrian school market anarchists that my views on George's "single tax" solution have been challenged. Yet I still hold them.

First, a bald statement: I do not believe there are many libertarians of whatever branch or flavour (and we are truly a Baskin-Robbins ideology on that score, whatever the misinformed Lib Dem detractors believe) who do not appreciate that there is an issue of equitable access to land - that which has historically been called the "land question" by many (including Murray Rothbard [pdf] even as he criticized Henry George's solution to it). Sure some place more emphasis on it than others - but I really believe that any who denies there is any issue has not thought terribly deeply about it. I'd go further - that before the early part of the twentieth century it was a touchstone of most or even all of the emerging theories of libertarianism and anarchism; that the four "great monopolies" - of land, of money, of intellectual property and of government - that the individualist anarchists and mutualists described were commonly held to lie at the root of the inequity caused by the statist systems of privilege which they wanted to smash.

It may be that it is merely a difference of emphasis. George, for example, like Proudhon believed that the land monopoly was the "mother of all monopoly" and that solving that, for Georgists as for Proudhon, will tend to render the other three insignificant. When we sat down to discuss the content of the Lib Dems ALTER's recent book "The Case for a New People's Budget" I wanted it to include pieces on the money system and intellectual property but one of the other editors, a better schooled Georgist than I felt that such was completely unnecessary, since solving the land question would solve these others.

On the other side, the Austrians today believe, perhaps, that the fiat state controlled and cartelized money system is at the root of monopolistic behaviour and that sorting that out will render the others nearly insignificant. To this extent, whilst we acknowledge there are other problems, if all we are saying is that sorting this one or that one out first will resolve those others, we are, by different means, aiming at the same ends, of equitable economic distribution of scarce goods.

Others still acknowledge that there is an historical problem - that most land title ultimately and historically descends from aggression or statist privilege - such as monarchs kicking off serfs to give rewards of land to favoured courtiers, or the state sanctioning enclosures without any recompense to those who required the land to maintain life and limb. And they might suggest, as in the excellent introduction to libertarianism by Morris and Linda Tannehill - "The Market for Liberty" (available here as a free audiobook) suggest that at the advent of a truly libertarian society such ancient titles would be revoked since they would be next to impossible to prove and that everyone would have to stake their claims anew. But to me this resolves the problem as a "one off" and not the ongoing problem that land distribution necessarily is given the propensity for populations to change and land requirements with them.

Since it is as a result of hearing Hans-Herman Hoppe on the "Idea of a Private Law Society" nearly a year ago now at last year's Libertarian Alliance Conference that I have become more interested in "full blown" non-state ideas, it is, perhaps naturally, to the Austrian School and in particular the Mises Institute that I have turned to learn more; devouring several years' worth of podcasts of the Mises University series, but also listening to various contributers to the FEE's Freedom University series. And whilst they do indeed talk very little about land, I can glean some of the following with which I find myself in agreement that relates to the "land question" in their thinking:

• If we did not have the corrupting influence of inherently inflationary and statist fiat money there would be much less speculative froth in the system to be ploughed into land values.

• If we did not have state controlled zoning and planning restrictions, more land would be made available as development was needed and land values elsewhere would tend to fall.

• If we did not have state enforceable land titles, we would have to find another mechanism for protecting our rights of ownership of land which would tend to release land that land owners felt was uneconomic to protect compared with the utility they got out of holding it.

• And, I really do appreciate the arguments in favour of the protection of private property (well, I'd rather, after Proudhon, say "possession" than "property") being the mainstay of a civil society, that without which original appropriation and therefore economic production would be all but impossible. And allied to this I feel a sense of unfairness that someone who has, in the Lockean term, "mixed his labour" with "land" and thus brought it into production in the first place, might find that simply because others have later agglomerated around his far-sighted piece of appropriation, he would be subject to paying rent on it that may price him off it.

But...and you knew there would be one...what I cannot get round is the idea that, whilst anarchists anathematize taxation as confiscation of the legitimate product of labour and therefore an attack on Lockean self-ownership, the rental value of land is really a tax on everyone else who cannot use a particular location, even though they may have a more productive capacity to use a particular piece. All of us pay for the monopolization of locations of better quality in terms of our needs, than what we are then forced to settle for. If we have to live further away from work, we pay in time and travel costs to get past those locations that would serve us better. These values feed into land values. It is not merely that land value increment is unearned by the land-owner, but it costs the rest of us in like measure. And it is a huge burden - in the UK it amounts perhaps to about a third of what is the salaries portion of GDP. This effect, whilst it may be smaller if all the other Austrian remedies above were implemented, would never, in my opinion, disappear.

Austrians, of course, reject the value theories on which this hypothesis of land values is based - the labour, or cost theories of Smith, Ricardo and other Classical Economists. They prefer their subjectivist or utilitarian theories based on the work of the likes of Carl Menger and Eugen von Böem-Bawerk. And, whilst I also do not agree with a wholly unmodified labour theory, I am becoming more and more convinced by the likes of Kevin Carson's critique of Menger's and Böem-Bawerk's criticism of the Classical cost theories in his "Studies in Mutualist Political Economy" - which is just as well since I describe myself as a "mutualist"!

On the other hand, I am with the anarchists in that I do not want a government or quasi-government institutional structure to value and collect such "rent". And so I am attracted to ideas such as those of geo-libertarian Dan Sullivan in the US, of how it could be handled by a voluntarist system of community management companies. And it is on his ideas that I think can be developed a system that fits with both the Georgist aims of collecting land rents and the anarchist aims of not having government structures impose taxes on us. In his essay "Are you a Real Libertarian or a Royal Libertarian" he says, toward the end:

Can't we do this without the state?

There are, in fact, proprietary communities operating on the single tax model. Arden, Delaware, with a population of 4900, has had no local taxes since 1900. The Arden Corporation collects a fair market rent on each land parcel, which is reappraised annually. (They actually collect only about a fourth of the rent to which they are entitled.) From that they not only pay for all the municipal services, but rebate all property taxes levied by the county and school district.

There are excellent reasons for libertarians to prefer the land trust route over the political route. Private communities can be built on explicit contracts (leases) with the citizens, can have internal democratic processes that are vastly superior to electoral democracy, can be far more flexible and free of state intervention, and can be downright profitable (even with trust investors pocketing a mere fraction of the rent). Most of all, dealing with investors is far more pleasant and self-affirming than dealing with politicians.

But what worries me about this approach, taken literally at least, is that we might end up with one agency acting as a local monopoly that becomes a de facto government, just like Nozick says that private protection would combine into one agency with a monopoly in an area (though I am yet to read "Anarchy, State and Utopia" - I bought it and promptly lost my copy! - and so haven't read his arguments, I instinctively disagree with this as an inevitable outcome) and be to all intents and purposes a coercive albeit limited government.

However, I think there is a resolution. Admittedly I have not gone into this too deeply as yet. I have not followed all the economic incentives through the processes. It is based on the idea that in a "private law society" (necessarily the case of course in a no-state anarchist system), defense of one's life and property would be handled by competing insurance, protection and arbitration agencies.

In the absence of a single, state-provided, system of land titles, one's ability to hold onto a piece of land (that is, not to fight for, but legally to defend one's right of occupancy against any other claims) would usually be handled by your insurance and protection agencies. Of course, you could opt out, but then you would have to pay for such physical protection and legal protection against claimants by yourself and on a simple division of labour basis it is likely to be more cost effective joining with others via an insurance and protection agency system. But your premiums would likely rise to be something similar to the market rent value of the location - because it is on that basis that other possible claimants would be likely to be basing their claims on. If your insurance agency were a mutual agency operating with profit policies, they would effectively disburse the equivalent of the statist "citizen's dividend" to the members with with-profit policies.

Here, there could be competition. My insurance agency would make a (probably class action on behalf of all their clients inconvenienced by your monopoly holding of land that costs us money to avoid) claim against yours, yours would pay up and that would go into the profits of my insurance firm for distribution to the with-profits members. And these firms could compete across whole areas of productive land. So, for example, you couldn't have only those in expensive locations in Mayfair joining together and insuring against each other and effectively doing so cheaply because you're hardly likely to lay claim to your neighbour's similar property if it's going to cost you money and you're both pretty happy with your lot and are not costing each other anything by your occupancy of neighbouring sites. My firm may be based in Sutton or Dagenham and have most of its clients there, but will still be likely to be making claims against yours.

Eventually it is likely that these individual claims would not be processed at all, but that reciprocal arrangements between these agencies would spread premiums around amongst them such that the dividends paid to each one's clients would tend to even out, but all the same, the claims mechanism would remain available where there were disputes, just as, for land taxers operating within a state system, there would be tribunals to adjudicate on land value disputes.

UPDATE:  I've thought of perhaps a simpler way of understanding this - it might be looked on as competing land registries paying each other premiums for recognizing and upholding each others' clients' titles.  Does that make sense?

As I say - I have not followed the economic incentives right through such a system. But I think it contains the germ of a possible solution that does not rely on confiscatory quasi-state bodies but does equitably distribute the values created by and paid for in other ways by all who need to use land within an agglomeration area.

Remember please, this is a genuine search for a reconciliation between two sets of ideas with which I generally agree but which in contemporary libertarian discourse seem to be all but irreconcilable. But if you've read this far, I'd love to hear your responses.

It seems I might be a wee bit out on a limb here - a familiar position it has to be said; but this leopard (out on his limb you see) is not going to change his spots.

It seems colleagues from around the Lib Dems, including folks from ALTER, and also land tax campaigners from outside the party seem to think the so called "Mansion Tax" announced at Conference the other day, in which residential properties worth more than a million pounds will attract a new half pence in the pound property tax, is "A Good Thing" or a "Step In The Right Direction". I absolutely disagree.

I'll go further: I think it is "A Bad Thing" and a "Step In The Wrong Direction". It threatens to undermine a broader implementation of a proper land tax. It raises very little, by way of a tax deliberately targeted on a particular group of people; a group of people who have considerable clout, in the main, and who have already shown, through the successful agitation of a similar group in getting Tory policy on Inheritance Tax changed, to whip up the fear of an "envy tax" amongst people unlikely ever to fall under its regime.

It combines everything we know to be bad about the Council Tax with none of what we promote as good about Land Value Tax. It sends precisely the wrong signals about land tax - that it is about raising a bit more revenue, not creating a new fiscal system where tax can be used to benefit directly the least well off (in the case of the land taxes by reducing markedly their costs of maintaining a basic living in the form of their shelter).

It seems to me that it is primarily aimed at sating the desire for a particular type of modern liberal to hammer the wealthy in order to "redistribute" to the less well off, rather than to create a genuinely more equitable system in which taxation is transparent, applied as far as possible to everyone of a similar class - ie land owners or income earners and so on.

The greatest benefits of land taxes can only be gained when land taxes are applied to the sort of land that those of us struggling to find a home need to be cheaper - which means taxing all land. If we cannot show these benefits, and quickly, then the arguments for land taxes will go stale before the benefits are apparent, and this sort of measure will foreshorten that process.

Also at conference, ALTER published their long awaited book of essays on the benefits and effects of land taxes. For those who read it, I cannot imagine that they would not conclude that land taxes are, in fact a "no brainer". We should get on and do it, or not at all. Not trifle around with a measure that will act to galvanize opposition to "any idea of a property tax coming out of the Lib Dems". In his foreword to the book Vince Cable says that, in contrast to 1909 we now need to know precisely what it is we want to implement and have a plan for doing so.

The "Mansion Tax" is part of neither.

(Technorati claim code: d529s7ntuk)

Just a brief post to recall that today, 29th April, is the hundredth anniversary of David Lloyd-George's 1909 "People's Budget". Thanks to the wonders of the interwebs you can now read the whole budget online.

He ended (the main section - in the "Balance Sheet" section) with these words which have stood for a century accusing his successors of all parties for not having solved the problems he set out on the road to do:

"This, Mr. Emmott [in the chair of the Ways and Means Committee to which the budget was addressed], is a War Budget. It is for raising money to wage implacable warfare against poverty and squalidness. I cannot help hoping and believing that before this generation has passed away we shall have advanced a great step towards that good time when poverty and wretchedness and human degradation which always follow in its camp will be as remote to the people of this country as the wolves which once infested its forests."

[from "Balance Sheet": Budget 1909

From the financing of the newly created Old Age Pension and Disability insurance to the funding of the preparations for real war in the form of spending on Dreadnought battleships there was much for Lloyd-George to find in his budget. He didn't miss a trick, and more or less anything that could conceivably be taxed was, in many cases for the first time, taxed.

But for many of us it is for what ended up not being taxed that this budget is most remembered. The debate surrounding this budget, with speeches up and down the country by Lloyd-George himself and more notably perhaps Winston Churchill, must be one of the best documented in history, for it was a first attempt to implement some permanent form of Land Value Taxation. A tax shift that Churchill described as:

"the new attitude of the State towards wealth. Formerly the only question of the tax-gatherer was, "How much have you got?" We ask that question still, and there is a general feeling, recognised as just by all parties, that the rate of taxation should be greater for large incomes than for small. As to how much greater, parties are no doubt in dispute. But now a new question has arisen. We do not only ask to-day, "How much have you got?" we also ask, "How did you get it? Did you earn it by yourself, or has it just been left you by others? Was it gained by processes which are in themselves beneficial to the community in general, or was it gained by processes which have done no good to any one, but only harm? Was it gained by the enterprise and capacity necessary to found a business, or merely by squeezing and bleeding the owner and founder of the business? Was it gained by supplying the capital which industry needs, or by denying, except at an extortionate price, the land which industry requires? Was it derived from active reproductive processes, or merely by squatting on some piece of necessary land till enterprise and labour, and national interests and municipal interests, had to buy you out at fifty times the agricultural value? Was it gained from opening new minerals to the service of man, or by drawing a mining royalty from the toil and adventure of others? Was it gained by the curious process of using political influence to convert an annual licence into a practical freehold and thereby pocketing a monopoly value which properly belongs to the State—how did you get it?" That is the new question which has been postulated and which is vibrating in penetrating repetition through the land."

[From "The Spirit of the Budget", a speech given in Leicester in Sept 1909, recorded in Churchill's own memoirs "Liberalism and the Social Problem" and put online by Project Guttenberg.

When at last the Finance Bill of 1909 was rejected by the House of Lords (an action that led directly to two General Elections and the eventual imposition of curbs on the Upper House's power in the form of the Parliament Act 1911) Richard Cobden's comments in the Corn Laws debates in 1845 had come to its most extreme conclusion:

"For a period of one hundred fifty years after the [Norman] Conquest, the whole of the revenue of the country was derived from the land. During the next one hundred and fifty years it yielded nineteen-twentieths of the revenue. For the next century down to the reign of Richard III it was nine-tenths. During the next seventy years to the time of Mary it fell to about three-fourths. From this time to the end of the Commonwealth, land appeared to have yielded one half of the revenue. Down to the reign of Anne it was one-fourth. In the reign of George III it was one-sixth. For the first thirty years of his reign the land yielded one-seventh of the revenue. From 1793 to 1816 (during the period of the land tax), land contributed one-ninth, from which time to the present [1845] one-twenty-fifth only has been derived from the land. ...Thus, the land which anciently paid the whole of taxation paid now only a fraction. ...The people had fared better under the despotic monarchs than when the power of the state had fallen into the hands of a landed oligarchy who had first exempted themselves from taxation, and next claimed compensation for themselves by a corn law for their heavy and peculiar burdens."

Source: School of Co-operative Indivdualism, Quoted authors on the land question

The course of that "implacable war against poverty and squalidness" was set and as we know today, continues now and will continue until we learn to stop taxing production and honestly gained incomes and start instead to undermine the fundamental inequities of the economic system that traps so many in inescapable poverty, as people like Lloyd-George, Churchill, J S Mill, Henry George, and many of the individualist anarchists of the nineteenth century, like Benjamin Tucker knew only too well.

A century is long enough - real poverty reduction will never be achieved by redistributing the power of real economic growth but in eradicating these fundamental inequities that prevent people from bettering themselves. Alistair Darling, you have no hope of matching Lloyd-George. Learn from them, or give it up!

I am reminded by Henry Law's blog also that this month sees the 350th anniversary of the take-over the Diggers under Gerard Winstanley of various bits of land across several counties of the south of England and south Midlands.  Later in summer sees the anniversary of their arrest and removal.

I've blogged about the future of money and the possibility of virtualizing most of your monetary transactions before. With the current campaign against tax havens it's perhaps worth pointing this one out:

Online game gets banking licence Entropia has regularly mixed real and virtual finances. Online game Entropia Universe has been granted a licence to be a bank. Issued by the Swedish Financial Supervisory Authority, the licence means the game can be more closely tied to the real world finances of players. [From BBC NEWS | Technology | Online game gets banking licence]

Now the article goes on to say that the Swedish banking authorities will be regulating the system, able to inspect accounts to ensure it's not being used for money laundering and so on. And that accounts in the online system will be covered by the same depositors' insurance as "real world" banks. But with the technology now quite well established there seems no reason why such systems could not run as virtual financial centres without any regulation at all.

Indeed, in researching software for my own mutual partnership banking project I even discovered that there is an open source "central bank" management system out there. I believe these development are inevitable. Governments that seek to prevent them will have to become extremely intrusive into their citizens' affairs. They had better get used to the idea and find different things to tax (like land, that you can't very easily "disappear" into the ether) or risk becoming ever closer to totalitarian.

Over at ConservativeHome there's a post about George Osborne's predicament over the Labour proposal for a 45% tax rate on incomes over £150,000 per year. Now, as we know when we did our work on the Lib Dem 50% tax rate it seems likely that such a move will collect very little and annoy many people whom the country needs for investment. And of course I don't like taxes at all and would abolish all but land rents in my empire, but this particular piece of criticism by Fraser Nelson due in tomorrow's News of the World attracted my attention:

> Fraser Nelson in the News of the World (not yet online) THE 45p TAX HIKE MAY RAISE "NOTHING" "Right now, the richest 1 per cent pay 23 per cent of all income tax collected. They pay their fair share – and the fair share of 22 other people. When the tax rate rises too much, the rich just bugger off. We saw this in the seventies. But as Tory peer told me: “Those too young to remember the seventies are destined to repeat its mistakes”. Yesterday George Osborne now said Brown’s proposed 45p tax on the rich is “difficult to avoid”. Difficult if you have no imagination. Experts say this proposed 45p tax will raise NOTHING. Because the super-rich will emigrate, or work less. Just like in the 70s." [From George Osborne hit by quadruple whammy]

It is frequently argued that the wealthy pay enough, and as in this piece that they pay the equivalent of many other people put together - more than their fair share. However, it is just plain wrong.

The top 1% by wealth in this country also own nearly 25% of the financial wealth in the country. While the very poorest tax payers (the bottom two fifths of the population that is) own no financial wealth at all yet still pay tax. So, whether we approve of taxation at any level at all, let's please once and for all get rid of this idea that the wealthy pay more than their fair share because of simplistic tax take ÷ number of taxpayers calculations.

Of course, as a Georgist, I would also say that of the financial wealth the richest do own, much of it directly takes money from the poorest, both in interest and rent, and should probably be more heavily taxed to drive them to invest in productive assets rather than zero-sum assets.

Welsh Lib Dem AM Mick Bates joins Don Foster in ignoring party policy over local business rates:

Bates calls for review of Small Business Rates Relief Scheme Montgomeryshire Welsh Liberal Democrat Assembly Member, Mick Bates has written to the First Minister to highlight the plight of small businesses in Wales and is calling for a review of the Small Business Rates Relief Scheme to help businesses survive through the recession. Mick said:“Small businesses are an integral part of the local economy and I am deeply concerned that many are being forced to close due to the high threshold for small business rate relief. [From Freedom Central: Bates calls for review of Small Business Rates Relief Scheme]

No Mick, all rates relief is a subsidy to landlords. If there's anyone you should be haranguing over business failures or near failures it is the landlords who think thaey can continue to rake in the same rent levels as last year when the property market has fallen out of their arses. Retail average property costs are now below levels last seen five years ago.. Landlords, as in 1909, are the only ones continuing to profit from this gloom. But it will be a short lived profit for if they see their tenants go to the wall they are unlikely to find other ones in a hurry and at some point in the closure of the high street there's a tipping point at which not only the empty plots are hard to shift but everyone else starts to want to leave.

It's an easy bandwagon to jump on. In theory at least government has more control over rates than rents (though in this case all local business rate relief has to be made up by other businesses in the collection area so you literally are robbing Peter to pay Paul) and so could do something. But when that something is the wrong something (further subsidy to landlords in this case), it is the wrong bandwagon to jump on.

If you have any control over rating policy in Wales then please, use it to promote our party policy would you!

Via Sharon Ball's blog I see that Don Foster has become a signatory on Peter Luff's Private Members' Bill:

Make Small Business Rate Relief automatic Bath MP Don Foster has become a signatory to a Parliamentary Bill that would see Small Business Rate Relief paid automatically to those businesses that qualify. [From Sharon Ball: Make Small Business Rate Relief automatic]

Oh dear! Given that it's a private member's bill and therefore unlikely to become law, do we really need to have our MPs supporting things that are directly contrary to party policy?

Yes, it sounds nice. I support the aims of supporting small and independent business where we can.

But rate relief is not a subsidy to business, it is a subsidy to landlords. It means that landlords can keep up higher rents because they know their tenants are not facing the whole of their usual property costs.

And not only that, but it is paid for directly by increasing the rates bill on only slightly larger businesses. Also, probably, often those local and independent traders we want to keep.

So, Don, do you know our policy on National Non-Domestic Rates? To replace it with Site Value Rating? A tax that, assuming these traders were paying the rent the market can bear, would be borne entirely by the landowners and that would encourage landowners furthermore to make more efficient use of their properties and, for example, build up the "living over the shop" market - something which brings 24/7 vitality and sustainability to suburban and small town shopping areas.

The last thing we want to be doing, perhaps especially in this centenary year of Lloyd-George's land taxing People's Budget, is to be supporting ideas that, whatever their good intentions, go against the principles of both L-G's purpose in proposing land taxes and our current policy.

If, on the off chance, this bill does make past its Second Reading - which is possible because it's the sort of unthinking "stimulus" that might get support from lots of MPs worried about how to support their local small businesses - I hope our Lib Dems will take the opportunity to amend it to reflect better our much superior policy.

A while back, when the Competition Commission demanded that Ferrovial sell off its other London airports because it had been decided that it posed a monopoly problem, I suggested that a "Land Value Tax" in the form of landing slot auctions would more effectively break up its monopoly, or rather render it impotent.

Well the same solution offers itself as a response to the third runway problem. Whilst I appreciate the arguments made by Willie Walsh on Question Time the other week about Heathrow being an essential international hub airport we have to remember that his company has a pretty well undeclared interest in the form of billions of pounds worth of subsidized landing slots, the most valuable of which are, of course, at Heathrow, under so called "grandfather rights".

I just cannot believe that all our regional airports are operating at optimum capacity - that people are not traveling halfway across the country to take flights from Heathrow or the other London airports that could just as easily be taking off from regional airports closer to home. Auctioning landing slots, a policy approved at South Central regional conference last year, would create an economic incentive for airlines to use any spare slots at those regional airports before we have to decide whether to increase capacity at Heathrow.

It would also of course capture a revenue source for the public purse arising from the use of our airspace that currently disappears onto airlines' balance sheets. And be good for regional economies.