John Bald is a former Ofsted inspector.
This sentence appears on page 86 of Labour’s manifesto:
‘A Labour government will give local government extra funding next year. We will initiate a review into reforming council tax and business rates and consider new options such as a land value tax, to ensure local government has sustainable funding for the long term.’
If Labour is elected, these innocuous words will herald the biggest exercise in confiscation since the Norman Conquest. Here’s how it will work.
Labour believes that the value of land in its undeveloped state can be set at 55 per cent of the current value of the land, and whatever buildings are on it. The Labour Land campaign, the originator of the scheme, suggests an annual tax of “up to” three per cent of this value. A quick way to assess the outcome for any property is to multiply its current value by 0.0165. Calculators are allowed, and you may want to sit down before you do it. A house with a value of £300,000 would be liable for tax of £4,950 a year, and there would be no upper limit.
The paper proposing the scheme suggested an initial “concessionary rate” for owner-occupied property of 0.85 per cent – which would double my council tax – but that the two rates would merge in the longer term. However, it adds, in a footnote, that “In fact, a tax on land values should not be regarded as a tax at all, but more a payment for actual benefits received, just as the charge for a parking space is a payment for a benefit.” The implication is that we have no more right to our own home than to a place in a public car park.
Amber Rudd said that Labour believed in a money tree, and this is it – our tree, our garden, our house or our flat. It is not, incidentally, a “garden tax” – every owner of a house or land would pay, whether it has a garden, a window box, or is simply left undeveloped. And, of course, it is not easy to evade. Money or securities can be hidden and transferred electronically around the world, but land can’t. The idea will also enable Labour to attack wealthy pensioners who would not be affected by its proposals on income tax.
The proposal has been reported in several newspapers over the past few days, to the fury of leftist news outlets, who are borrowing Donald Trump’s expression, “fake news”. There is, however, nothing fake about this at all, and it has been a long time in preparation. The Chair of Labour Land, still in office despite joining the Green Party, is Dave “Yours for socialism” Wetzel, a former colleague of John McDonnell and Ken Livingstone on the GLC. Livingstone once said his aim at the GLC was “to get as much money out of the building as possible”, and McDonnell, who described himself as “The GLC’s Chancellor of the exchequer”, eventually had to be sacked for carrying this too far.
We have not seen much of McDonnell in Labour’s campaign, because he tends to speak his mind and frighten the voters. This speech to the Bakers’ Union during Corbyn’s election campaign, is typical. Watch it, and you will see that he really does not like us, and is a most determined opponent, advocating resistance to everything we do. The land value tax will be his first lever of power, and he has praised Labour Land’s idea for “providing us with the funding we need”, by which he clearly means as much as he wants.
The logic of the tax, from a leftist perspective, is simple. The biggest inequality in society is that between people who own houses, eventually outright, and those who don’t. If you don’t own a house, you have to pay rent to someone who does, and may never be able to get ahead of the game. The council house safety net for people in this position has been reduced, and high rents are taking an increasing proportion of their income. To the left, from the revolutions of the last century onwards, property exists by permission of the state. William the Conqueror had much the same idea. So, charging the owner of a large house £15,000-£20,000 a year for permission to live in it has the de facto effect of making him or her pay rent, just as other tenants have to pay rent. At the same time, McDonnell can promote his equalities agenda by making the landlord liable, and not the tenant. This kind of charge is not easy to pass on, even in the current market, and, of course, social housing tenants would not pay it at all.
We have developed a new convention that the inclusion of an item in an incoming government’s manifesto constitutes a mandate, and we can be confident that, if Labour wins on Thursday, this tax will be put into operation, and quickly. It is not “fake news”, but a real and present menace to the property and savings of every householder and every pensioner. Press coverage of the scheme has come late, but is welcome and the issue should be on every front page. Electors I met while canvassing for Lucy Frazer last night had, with one exception, not heard of it, and we need to mention it every time we knock on a door. Anyone thinking of voting for any party other than ours should make the calculation set out above, and think very carefully.