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Last week Vince Cable seems to have unilaterally added to Lib Dem tax plans in response to repeated more-heat-than-lght stories in the media about private equity bosses and their tax treatment, "non-domiciles" and their property in the UK going untaxed and the continued cris de coeur of middle England against Inheritance Taxes on their homes. Later in the week it seems George Osborne joined in, on what must be pretty unfamiliar Tory territory.

And then yesterday there was a story on the BBC about how buy-to-let property owners are able to avoid up to £2bn in taxes by offsetting their mortgage interest against their rental income before tax.

This seems to me to be something of an unhealthy return to the politics of envy, where the only question the taxman asks is "how much have you got?" As I wrote last week at the 1909 Group website, our Liberal forebears wanted to change that attitude. They realised that "equity" in the tax system was not solely a question of how much someone has, but just as importantly of how they got that wealth. Whether it was through healthy economic processes, creating new wealth, or by exploiting such things as protectionist policies, negative externalities or land and other natural monopolies.

Take supermarkets as an example. Private Equity firms have been circling Sainsbury's recently. Though they may have been seen off by other investors such as Robert Tchenguiz, he himself, a noted property tycoon, said he was investing in a "property company with a retain business". Indeed, with a Stock Market capitalization of £8.7bn, estimates value their property estate at more like £10bn - more than the whole business! If someone were to take over Sainsbury's they would not be creating new wealth but releasing the embodied profit of land ownership.

Many new entrepreneurs are basically leveraging land values to make a killing, hiding behind diverse operating businesses. INTO University Partnerships is an international English Language teaching business, but the partnership deals it forges with universities all seem to revolve around land acquisition and becoming a successful and profitable landlord to the students it brings from all corners of the planet. Last year, the HBOS banking group attempted to become a major player in the UK house building industry, pipped by Barratts in a contested bid for what had been the fifth largest house builder - this last is a double whammy - not only do they get to build your home, and capture the land value profit for themselves, but they get to charge you for borrowing the money to pay them for that land!

As to "non-doms" why should only they be penalised for owning property in the UK? Why not a land tax that would fall on everyone regardless of domicile status and instead of income and other capital taxes, including the hated Inheritance Tax? The non-doms would not be able to avoid it - and neither, incidentally, would the company involved in the outsourcing of the HM Revenue & Customs property estate, Mapeley, who subsequently off-shored the ownership of the property to avoid any taxes on it.

Anyway, the point is there are ways of making a tax system which is fair and equitable, that is not complicated, and doesn't seek to fleece people just because they have made money, but on the basis of how they make that money, and where that wealth is accumulated by processes like land ownership, where the value is created not by themselves but by others' need for their monopoly locations, they will be taxed the most, automatically, and according to market valuations not intrusive tax assessors. Land Value Tax.

Technorati Tags: vince cable, lib dems, tories, land value tax, Henry George, property tax, george osborne

Paul Walter reminds me of the fuss created by this supposed request for the new-ish mosque in Oxford to broadcast an amplified call to prayer. Paul has some links in his post, but to recap, it has now managed to engulf two bishops, Rochester ("no-go areas") and Oxford ("my area, shut up, Rochester"), Peter Hichens ("I really don't mind Muslims so long as they only help me rail against modern decadence and don't wake me up") and, I understand, our own dear leader ("the sound of the divine, aagh, beautiful"). And many acres of newsprint, many billion pixels and several trees have been employed in railing against or jumping to the support of Oxford's beleaguered no go areas.

Well, I heard what I believe is closer to the true story today. Apparently, no such "request" has been made. What happened is that a well known local figure in "inter-faith relations" a retired Christian minister who did things like organize an interfaith cricket match after 9/11 and similar things, thought one day what a jolly good thing it would be to have the call to prayer sung out from our new city mosque. He went to the Imam and suggested it and they agreed to present a petition to the council. A petition, get this, apparently of two, yes, more than one, less than three, signatures - that of the interfaith dialogue chappy and the Imam himself.

The Imam had not consulted or particularly mentioned it to anyone else, and speaking to a couple of Muslim city councillors seems to confirm that there's been no popular movement, nor do they feel they want one, to get them the call to prayer - the responses seemed to be along the lines of - "do you think we're stupid, we know when we're supposed to pray and don't need reminding".

So, whilst it has stirred up an interesting debate, which however has occasionally turned into naked bigotry, it's all apparently based on virtually nothing at all. I can't help wondering whether the local story of a bunch of primary school parents getting upset about Halal meat is related to the anti-muslim hype that's been dredged up in some quarters by the non-story of the call to prayer.

I got an email late today from an LVT supporter saying that Nick Clegg had spoken about the role of LVT/SVR in enabling more affordable housing in a BBC panel discussion after the Queen's Speech today.

I've not been able to find it via the BBC website (it doesn't help not actually knowing what the program might have been - I'm guessing it was Daily Politics). So did anyone happen to see it and either point me to a "watch again" URL or explain what he said, specifically about LVT and housing. Because it would be quite significant since even LVT supporters in the higher echelons of the party have so far not been keen to discuss it as anything other than a taxation base and this could be the first time that someone has shown they understand it's got a whole greater relevance than that.

Health seems to have become the theme of the day in the Lib Dem leadership debate, at least amongst bloggers (John Dixon's "A Radical Writes" here, and Tristan's "Liberty Alone" here as examples). The two candidates themselves have both now produced manifestos of sorts with Chris Huhne (page 9) promoting "the principle of universal access on the basis of need" and Nick Clegg earlier (despite John Dixon's interpretation otherwise) setting down the principle that "our universal public services must be free to use and accessible to all".

Both have admirable reasons for wanting to retain this universality and free access; that if we choose any other paradigm the poorest will miss out by not being able to afford to pay in a non-free system. But, as I've said about education, and more recently touched on in my piece about protectionism last week to me this seems, if you pardon the terrible health-related analogy, merely a sticking plaster. The ideal revolutionary liberal position surely would be to ensure that everyone had the financial wherewithal to participate properly in a market system and then to trust them to make their own choices.

On the day that the Marmot report into diet and cancer appeared, and whilst acknowledging that he said that his commission was still to deal with policy recommendations, one can be fairly certain that they are not going to recommend that the government, local or national, takes control of what dietary choices people are allowed to make. And yet our knowledge increases all the time that such choices are likely at least as important to our health outcomes as the treatment we may receive once we are ill. So why do we not do the same for illness care when all the evidence suggests that despite £110bn a year public expenditure, we are still the "sick man of Europe"?

Surgeons operating
Originally uploaded by el Reino

The NHS was, I believe, a fantastic idea at the time, in the context of the war on the five wants. In a near bankrupt nation post-war it was also clearly in the national interest to try to use economies of scale and national bargaining to ensure that you could provide a basic level of universal service to all. But let's face it, right now it is a gigantic protection racket, the mother of them all if you ask me. We also heard today that the average GP salary is now at £110,000 - a ten per cent rise in the second year of their new contracts - and yet the Department of Health today has said that 1200 British medical graduates are unlikely to get training places in the UK this year. So there's almost certainly an economic rent arising from the triple protectionism of the NHS, the GMC and the BMA.

Hopefully at least this and the national bargaining for other staff would end with localization so that those parts of the country where it is difficult (read near impossible) to live on a Grade D nurse's salary can offer decent packages, but I haven't even touched on the protectionism of NICE, NHS drugs contracts, the drugs patenting system as a whole and the stifling bureaucracy surrounding anything innovative by way of ways of treating and so on.

None of this is to say that the "private sector" is necessarily the best solution in all areas. I'm against monopoly and public protectionism, not public service per se - after all the nature of the hippocratic oath is dedication to a public service. And the worst of all worlds could be one in which there's a certain amount of public funding up for grabs by private operators who have no incentive to innovate and be really efficient - that's simply transferring the protectionism to shareholders.

No, the problem is really one of how to ensure that everyone would have the ability to pay for their choice of provider. And I return to the Citizen's Income and the systemic economic imbalances that concentrate unearned wealth, or more correctly the wealth created by the community as a whole rather than by an individual's or firm's own innovation, investment and labour. I'm not a good one to talk on health issues - the last psychiatrist I saw reckoned my attitude to my developing diabetes was one of the "slow suicide". But I'll bet if I was faced with a bigger insurance premium or buying more fruit and veg instead of eating crap, I'd probably plump for the healthier lifestyle to minimize my insurance. Redistribute the common wealth properly to everyone as is our birthright and we have these choices.

Just look at Nuffield Hospitals Group right now - it's buying up private gym firms like Cannons (effectively turning private companies into social enterprises of course). Why would it be doing that? Because BUPA really wants its members to live healthily, not to call on them when they're in a preventable medical condition. I'm also sure that insurance firms are likely to be better, with safeguards against abuse, at sifting out bad clinicians; it's in their interests to do so. Their actuaries will be poring over doctors' success and failure rates to ensure they're not granting accreditation to people whose patients inexplicably drop like flies, or who routinely over-diagnose or over-prescribe. Nor would they be likely to allow their members to spend a single night in a hospital where they're more likely to come out with a worse illness with attendant higher costs, if they come out at all.

One model I've looked at, for example, would see a GP as a "personal health adviser" who advises their clients through the maze of choosing lifestyles, treatments, clinicians and therapies that will be efficient and varied. I'd like to see surgical firms organized more like barristers' chambers with large national firms specializing in different clinical areas ready to hot-foot it to a treatment centre several hours away at the drop of a hat to do an op in their specialism rather than a patient wait on a list for the local, perhaps only semi-specialist to have a free spot in a tight general surgery list. You could have a choice of a large general hospital sized treatment centre thirty miles away in the local city, or a ten bed rural town cottage hospital with one theatre with the same surgeon prepared to visit either for the right fee but with different approaches to aftercare based on different needs of patients and families.

Sure, there's still a role for some kind of local democratic input - most especially in procuring facilities and staff for emergency medicine, but even their funding options could be varied - with some able to provide that by engaging local charitable resources, others perhaps by raising a local tax of some kind, perhaps even through planning obligations, who knows. But one thing is certain: these options and innovations are unlikely to appear when the system is riddled with protectionism and political game-play.

On the occasion of his visit to Iraq on a "fact finding mission" the BBC report that "Gordon Brown has said lessons must be learned on use of intelligence in the run-up to war" and that "in future intelligence analysis must be kept independent of politics."

One nice idea might be that when the international community appoints a civil servant with no particular political axe to grind to look into the whole business, rather than agreeing with your ally in a stand up row about the guy's conclusions, you try hard to believe what your appointed on the ground investigator has been telling you.

Technorati Tags: dodgy dossier, intelligence, gordon brown, iraq