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

Non means tested income support to the country's wealthiest people

 

All Agricultural subsidies just end up in landowners pockets and are capitalised into increased land value - such is the logical extension of  Ricardo's Law of Economic Rent, for anyone interested classical economics.

 

We are essentially giving non means tested income support to the country's wealthiest people taken from the income taxes of hard working people.

 

I cannot believe that we do not have economists advising politicians and defra on this logical outcome of our agri environment system. Our land subsidies are basically saying the taxpayer must fund wildlife and the landowner is to be compensated for not destroying the wildlife on his land. The idea of subsidies giving a yearly rent to landowners for having some wildlife on their land is a logically very bad and is unsustainable for the tax payer, The privilege of holding freehold should conifer a duty to maintain its natural wealth without the direct input of the taxpayer. Landowners should be taxed if they take away the natural wealth of their land for their own private gain to its value to society.

 

I am very concerned that our economic and legal systems start from the premise that a freeholder has the right to destroy the natural wealth of his land  for his own private gain and that society then has a duty to compensate him if we introduce a regulation to stop him doing just what he wants. We should turn the system on its head and say a landowner has a duty to protect wildlife. If he wants to destroy it he must pay society through a land value tax equal to the rental value of the land for the licence to destroy those natural assets for his own private gain. This should go for mineral and oil extraction as well as land. 

 

The Great British Land Heist

by Peter Smith

The recent political turmoil provoked by the Government proposal to sell the nation’s woodland was a travesty of public policy. Unfortunately even though the Government has now ‘U turned,’ the sad fact is it will continue to sell off public woodland, but just at a slower pace. The historical trend of the loss of public land will continue, the taxpayer will continue to be burdened and wildlife will suffer because of the greed of the few. To understand the catastrophe that has befallen us we must first learn of the powerful political and economic forces that have been behind this policy.

The calamity of the land continues, as it has generation after generation, and whenever a strange political idea or tax break comes to be public policy you have to ask who will gain from this. Politics, as so well put by Ambrose Bierce, is best described as “a strife of interests masquerading as a contest of principle” and “the conduct of public affairs for private advantage”. So which interests want to see public woodland sold into private hands?

The answer is of course that a few rich and powerful people could gain enormously if the nation’s woodland is sold into private hands. The main beneficiaries are financial companies offering tax dodges to Britain’s wealthiest people, who can avoid paying inheritance tax and certain liabilities on capital gains. Woodland ownership will then allow their wealth to increase, tax free, above the rate of inflation as the hard work and innovation on mankind is capitalised into the value of all land. One can only speculate at the lobbying and shady deals that all political parties indulge in that sees them agreeing to such a policy. Often politicians do not understand the long term economic forces at play but are persuaded by very slick PR firms and lobbyists, but unfortunately some politicians are all too aware and seek to obfuscate or hide their true intent from the public.

The problem

The problem we see today is the same problem that has befallen our nation for a thousand years. When the Normans invaded they created laws which robbed land from the common people and gave it to the elite. The descendants of those Norman invaders are still very much in control of the land and the assets they stole.  Today, control is maintained by cleverly shaping our taxation, agricultural and legal systems to favour this continued privilege.

Over the last thousand years slowly but surely common land has been appropriated, without compensation, and put into the hands of private individuals for their private profit.  The huge political battles that have been fought over the ‘corn laws’ and ‘enclosure acts’ have really been about the theft of land from the people and its privatisation into the hands of the privileged few.

What many historians do not know is that alongside the human tragedy of the theft of the land from people has been the theft of the land from wildlife. With every major extinction of a mammal in the UK you can follow how changes in the laws of land and taxation have created that extinction.

They hang the man and flog the woman,
That steal the goose from off the common,
But let the greater villain loose,
That steals the common from the goose.

- English folk poem, circa 1764

The extinction of the wolf and brown bear and the near extinction of the pine marten and red squirrel have all happened as a direct result of changes to the laws of the land. Even today the humble water vole has been driven to the edge of extinction by our agricultural policies that have seen taxpayers fund huge subsidies to convert our rivers into drainage channels and flood plains into intensively farmed land. On top of these taxes we see massive subsidies given by taxpayers to landowners, effectively robbing from the poor to give to the rich. All the income that is created by taxes and subsidies is effectively capitalised into the value of the land. This land value goes largely untaxed, passed on generation to generation, with its wealth stolen forever from the descendants of the people who were thrown off the land and the wildlife it used to nurture.

This history of political and economic theft of the resources of the nation by the few has continued to this day and the policy of the sale of woodlands we see today and the massive system of agricultural subsidies and tax breaks is a continuation of the exploitation of the land by the few at the expense of the many.

The solution to the problem

We have some great examples today of how a change in laws of the land and taxation could revitalise habitats for wildlife. Across Kent often the best land for wildlife is common land or land that has been owned by the Church or State. Often this land has complex ownership systems with commoners’ rights. Because of these rights the land has maintained its character, often sheltering our most endangered plants and animals.

This can be witnessed at the nature reserves Wildwood is helping to manage in partnership with local councils, public bodies or held in public trust.  We need a new wildlife movement to take back the land from private exploitation and reinvigorate commoners’ rights in a modern legal framework.

Land reform is a very difficult issue and has often led to civil unrest and even civil war. It is therefore very important that solutions to land reform do not create political problems. Thankfully, the world’s leading economists have expended their energies and created economic models that can solve the land question.

The model favoured by most leading economists and Britain’s leading statesmen, such as Sir Winston Churchill and David Lloyd George and even by some forward thinking politicians such as Business Secretary Vince Cable , was to make a rental charge on the value of all land. This rental charge would be equal to the rental value of the land and would allow the Government to then abolish all the bad taxes we pay, such as income tax and VAT.

Such a public policy would allow landowners to retain their land and allow farms to pass from father to son. Economically, such a policy would vastly reduce unemployment, and stimulate a huge growth in rural and environmentally friendly jobs and industry. It would have a major impact on the division of incomes and provide the community benefits that more equality brings, such as lower crime, better health and better education. But, to those of us who love wild land and wild woods, it would systematically increase the amount of land given over to wildlife protection. Wild land would be free from tax and those that would seek to destroy it would then face paying taxes. Much of our economically unproductive land could be bought by charities and community groups cheaply and turned into community forests and nature reserve for us all to enjoy and share.

I have been working very hard over the last year assisting leading economist Fred Harrison, to write a book on this very subject; the book will be published later this year. We have also filmed a short documentary, which will be available for sale in the Wildwood shop, a trailer of which can be seen on YouTube (see the link below).

http://www.youtube.com/user/geophilos#p/u/3/yAn_o24mNi8

The documentary will be launched in a few months at a special screening and we will be inviting all of Wildwood’s supporters to their own special screening at the same time.

Peter Smith
Chief Executive of the Wildwood Trust

If you wish to explore further the ideas of a rental charge on land to our economy and wildlife please visit these websites:

http://www.theiu.org/

http://www.fredharrison.com

The history of the enclosure acts:

http://homepage.ntlworld.com/janusg/landls.htm

Peter Smith
Chief Executive
Wildwood Trust