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Well, who'd have guessed it, the Liberal Democrats could now be in the position of being the only mainstream political party to go into the next election promising a lower tax burden and radical tax cutting measures for most. In today's speech Tory Shadow Chancellor George Osborne promises tax simplification: but refuses to promise tax cuts.

I wrote that a couple of days ago and and have been holding off writing more for 48 hours or so since I thought that with the Tax Commission meeting next Tuesday it would not be helpful, but today, says The Observer in "Lib Dems plan 2p cut in Income Tax" people are clearly briefing as if the Tax Commission report is done and dusted and only awaiting some formal endorsement from Conference so it seems open season.

There's not one mention in that article about the proposed Progressive Property Tax. So I assume that "the leadership" has decided either that it's best not mentioned or it's not going to appear in the final options. This was proposed as a first step towards shifting tax onto land values and off incomes. And I do hope we get to see the Tax Commission report before my membership renewal, because if there is no move in that direction it's so much easier not to renew than to have to write in and resign!

Here's what ALTER, of which I am secretary, says about the possibilities of a phasing in of Land Value Tax via a Progressive Property Tax:

In this article by a brand new member of ALTER, David Cooper points out that:-

&#8226; the richest 5% own 40% of real estate - &#163;1.2 trillion - but mainly pay <0.005% of it in council tax, but

&#8226; we make businesses pay 4% of the value of the property they occupy in rates and

&#8226; many poor wage-earning households pay >5% of their property value in CT

A 5% Progressive Property Tax (PPT) with &#163;0.5 million tax-free allowance per taxpayer (exceedingly generous!) could raise &#163;30 bn/yr -as much as 10% of income tax revenue plus all the income tax paid by people below National Minimum Wage.

How can that possibly be other than a massive vote-winner? We would not touch the middle-classes, who would gain on balance even taking into account the increase in Income Tax from Local Income Tax.

I can just see the campaign cry:

We would scrap Council Tax, replace it with a fairer local tax based on ability to pay - and by ensuring the wealthiest pay most of all we would also scrap Inheritance Tax, lift millions out of income tax and reduce the basic income tax rate for almost everyone.



When Party Conference passed the "Moving Ahead" mid-term manifesto in 1998 with the "Tax Shift" statement that has been quoted before here, the stated aim of the Shift was

taking millions of low earning income taxpayers out of paying income tax altogether.

If we merely set PPT at 1%, we will only be able to scrap IHT and have a pretty poor excuse for not taking those "millions of low earning taxpayers" out of income tax:

We thought it unfair to tax the richest 5% as much as the poorest 5% used to pay from their property wealth under Council Tax

And that, dear reader, is just the start. Once the precedent of taxing land values is established and becomes the main base for taxation - as Adam Smith, David Ricardo, Milton Friedman et al tell us they would prefer, there are all sorts of savings to be made. So instead of just being able to look at managed government expenditure, such as the health service running costs, in which efficiencies could make a few billion difference, we start to make an impact on the two fifths of government spending - approaching &#163;200bn now, that is just moving money around the country.

Why should the government move money around the country if what is known as "tax competition" does that for us by producing tax incentives for people and businesses to recolonise those areas that have become economically depressed with low land values and therefore low taxes? Think of Hull as the St Hellier of the north, rather than the H*ll-hole of the north...:)

Land Value Tax, replacing Income Taxes, Corporation Taxes, Capital Taxes, transaction taxes and nearly every other economically distortionary tax that does not itself achieve some stated behavioural aim such as taxing tobacco to stop lung cancer or fuel to stop us choking ourselves, is the best opportunity since 1909 when Lloyd-George first tried it. This was the measure in the Peoples' Budget that led to the Lords rejecting it and the eventual re-election of the government and emasculation of the powers of the lords in the Parliament Act of 1911. Ask yourself why. Why on earth would the vested interests of the landed and powerful give up most of their birthright to rule to avoid a tax? Because it's progressive, that's why.

Income tax funding government expenditures, especially on infrastructure and supply side measures really involves a massive shift of money from me and the millions like me, to those who happen to own land in the right place to reap the benefits of that particular infrastructure. Land Value Tax ushers in an economy in which the government can in fact spend new money (not debt) into existence on the "full faith and credit" of the people of these islands, and simply recoup as much of that expenditure as is necessary to avoid economic instability from those whose asset wealth gains as a result of that expenditure.

To me, there are no half measures here. Any tax policy that makes a step in that direction must be rooted in the philosophy that taxes that put people off working and earning are economically destructive and should eventually disappear. If we don't use the opportunity of the Tax Commission to do start this process, we will all lose.

Technorati Tags: land value tax, lib dems, localism, taxation

Oops - see, it's happening already...

Earlier I wrote about an announcement that the Metropolitan police were to get a real time feed from London's congestion charge cameras, but only if they promise faithfully only to use it in the tracking of "car borne terrorists" (does that include those who support terrorism by selling the odd dodgy DVD do you think?. But it appears there's to be legislation to enable all police forces everywhere to use such a feed from their local cameras for any sort of crime fighting:

'Big Brother' plan for police to use new road cameras | Special Reports | Guardian Unlimited Politics:

· Home Office leak reveals clash between ministers
· Millions of motorists could be tracked

Alan Travi, home affairs editor
Wednesday July 18, 2007
The Guardian

"Big Brother" plans to automatically hand the police details of the daily journeys of millions of motorists tracked by road pricing cameras across the country were inadvertently disclosed by the Home Office last night.

Leaked Whitehall background papers reveal that Home Office and transport ministers have clashed over plans for legislation this autumn enabling the police to get automatic "real-time" access to the bulk data from the traffic cameras now going into operation. The Home Office says the police need the data from the cameras, which can read and store every passing numberplate, "for all crime fighting purposes".

Nick Clegg's on the case though:

The Liberal Democrat home affairs spokesman, Nick Clegg, said the "unintended act of open government" had revealed the disingenuous attitude of ministers towards public fears about a creeping surveillance state: "No wonder Douglas Alexander was keen to tone down these proposals, since he must know that public resistance to a road charging scheme will go through the roof if it is based on technology which poses a threat to personal privacy. Bit by bit, vast computer databases are being made inter-operable and yet the government seems to running scared of a full and public debate."

Technorati Tags: surveillance state

For the first time ever I think, I have managed to get a consultation document that has clearly been sent to all households in Oxford. Usually these affairs seem to be "all households except Jock's". Or perhaps it's just that as a "tied worker" it's usually my employer that gets to answer on my behalf. Anyway, aside from the fact that over a thousand of them have been delivered to a now empty hall of residence, as consultations go I quite like it. And its ten questions about how we want to see Oxford develop over the next twenty years was very apt for me on Friday.

I'd just come home from a "Question Time" style debate on Oxford, its future development and the pressures this puts on Oxfordshire as a whole and in particular its natural and rural hinterland, organized by the Campaign for the Protection of Rural England. For anyone not familiar with the situation, as in most of the south of England there is tremendous pressure for housing, in and particular affordable housing, and in Oxfordshire Labour, whose remaining strength is largely in the city, are promoting urban extensions as part of a "Central Oxfordshire Growth Area" while the Conservatives, Lib Dems and Greens are largely against the sort of large extensions envisaged.

For their part, Labour point to evidence based housing need far outstripping both actual supply of housing and the potential land availability for more in the city. They claim that only their proposals can relieve the plight of the many artisans and other workers needed by the city who cannot afford decent housing, and believe that extensions to Blackbird Leys and Kidlington will prove to be the most sustainable and be somewhere people will aspire to live and magically create new communities of 7,000 homes each.

And their former housing portfolio holder on the city council, Ed Turner, now group deputy leader and Malik hugger, was on the panel to defend their different viewpoint alongside Christine Drury, chair of CPRE South Eastern region, Evan Harris, Lib Dem MP for Oxford West and Abingdon whose constituency straddles the town and country divide, and environmentalist and author Paul Kingsworth.

Now, not wanting to blow my own trumpet too loudly, but having got involved in strategic housing policy when on the City Council, I've done a lot of research and reading around the subject and my biggest personal project is all about providing affordable housing in innovative ways. And my vision for Oxford belies any accusation of wanting our fabulous city to stagnate. But I fundamentally disagree with Labour's approach, and here's why:

1.The evidence they cite does not in fact make a case for planning new homes, but for better organising the existing housing stock the better to match market needs.

2. It perpetuates the idea that outward growth (sprawl) is the only answer to housing affordability problems.

3. Crucially, it effectively ignores the need of the existing housing stock for regeneration and renewal, which, as I argue, is urgent and growing.

4. Creating communities is difficult, expensive and time consuming, and Labour's proposals primarily tag their new housing onto existing areas of multiple deprivation that prove that very point.

5. The proposals are less sustainable than other alternatives and are not, as they claim, likely to lead to places where people aspire to live.

6. The proposals, frankly, pander to rent seeking by local landowners at the expense of good sense and investment in our urban core (how ironic that Labour should side with big landowners!).

So, first and most crucially, the evidence of need is being wrongly interpreted.

Ed Turner on Friday evening trotted out numbers from a Housing Needs Assessment report carried out by Fordham Research in 2003/4 for Oxford City Council. Strangely, an otherwise very good council website does not seem to have this report on public view, but they do regularly review the figures and publish an annual report on housing need. But I've read the Fordham report and whilst I fully acknowledge that it concludes that 1750 more affordable housing units are needed every year for the next decade to cope with the backlog and emerging demand, that does not in my opinion translate into a need to build net new housing units.

Fordham state that some 75% of those they included in this figure are already living in the city. Yes, they may be in difficult, sometimes horrendous, conditions - overcrowding or substandard housing - but the basic message is that they need more affordable housing, not just more housing. Despite what Kate Barker might have said (the self confessed economist with no experience of housing markets before she was commissioned by Gordon Brown to do a national review of housing supply), house prices are not simply determined by supply and demand, but by the ability to finance more and more debt. Increasing the overall stock of housing in Oxford is not simply about having to build twice as many as you want to be affordable under planning obligations - it will also increase demand.

14,000 new homes, as Labour propose, is the equivalent of a twenty five per cent increase in the city's population. Now, they may think that is desirable, but it is a political position, not an evidence based projection, and not something they have spelled out as starkly as that, nor have they a mandate for such dramatic change. When they talk of relieving the housing needs for the citizens that are here already, they do not explain that it's also provision for major growth in the overall population, somewhat against national trends. Indeed the last set of projections based on the 1991 census about the population expected at 2001 were significantly undershot and subsequently revised downwards. Though admittedly the reason for this could be that people simply cannot afford to move here to fill the essential jobs we need to fill.

Actually what they'll find, I'd suggest, is that new incomers to the city will continue to desire to live in the urban core by and large, close to employers and so on, and the people who will be driven out to the new estates will be the poorer households - further gentrifying the core and impoverishing the peripheral estates.

Secondly, sprawl is no long term answer.

In refusing to face up to the undoubted challenges, which should not be underestimated of course, of finding ways of fitting more households into the already built up area, and instead opting for urban extensions at the first sight of housing pressure, it is, whatever Labour claim, the thin end of the wedge. Their 14,000 homes, coupled with the difficulties of redesigning a Green Belt that took fifty years to put in place in the first place and is only a decade old in its final form, will not even meet the Fordham demand even if we accept the city's interpretation that it translates easily into a demand for net additional housing. For they'll only get 50% of them affordable, and with the Green Belt issues it will likely take at least a decade to get started.

So whilst putting their eggs into that longer term basket, they will continue to accumulate that 1750 annual demand and by the time the new estates are ready for occupation they will be a drop in the ocean of affordable housing need. Then what? Propose another extension? And another? It is quite disingenuous in fact for them to propose an extension that won't even meet their own claimed need as if it's a solution. They are building up expectations that that solution cannot meet.

Thirdly, by focussing on urban extensions, they will ignore the pressing needs of the existing housing stock and the opportunities redevelopment and renewal present for more sustainable living.

Already we know that 30% of Oxford's privately owned housing stock fails to meet the government's very minimal "decent homes" standards, as well as the same proportion of the social rented stock. Most failures are because they do not meet current standards for energy efficiency and thermal comfort. As I have blogged before, these standards themselves will be worth little if we are entering an age of greatly increased energy costs and even overall shortages. Oxford University's Environmental Change Institute's 40% House project reveals the extent of the problem according to one group of experts. Others go further and suggest that our housing stock in the future will have to operate on just 10% of its current energy use.

And for all the problems of overcrowding and affordability in this city, whilst we don't have many actual empty homes, you can bet that for every teenager having to share a box room with their opposite gender sibling there's an empty bedroom somewhere in the city because of underoccupancy in the older population and other factors. You see, all the urban capacity studies only focus on where land can be changed to housing use from another use. Brownfield sites are important, and Oxford is making the most of converting such sites (though not as much as Site Value Rating for local business tax would achieve of course) but they ignore the fact that all built land, including that occupied currently by existing housing, is in fact "brownfield" - one day, like the slums of St Ebbe's, it will become ripe for redevelopment.

And that day, if oil runs out, is coming quicker than ever. Of course here is one area where the city council could make a huge difference on its own. It owns some 8000 homes and the land on which they stand. They are in the middle of proving that densities can be increased without undue discomfort with projects such as the Rose Hill Orlits redevelopment where just over a hundred household units are being replaced with more than two hundred (though I'll bet any money you like that they will not meet the 40% House standards let alone the 10% energy footprint that we may require).

If and when these council estates sport better homes and more desirable places to live as a result the sort of far-sighted large scale redevelopment I propose than the privately owned suburbs, I'll bet the ball will start rolling on those private neighbourhoods coming together to secure their energy futures and sustainable living. Face it, we have a huge amount of inter-war semi-detached housing that will soon be unsustainable, and if not actually slum by the old definition of the word, then at least anti-social in the sense that they will be guzzling up more than their share of energy and land resources.

The city is in long term decline as far as its residential neighbourhoods go. You can't wander around for more than a few minutes to see the problems created by haphazard redevelopment, by the imposition of more cars crammed into residential streets, the lack of investment in infrastructure (check out the pavements in any part of the city). The pressures for more affordable housing, for living with climate change and/or dwindling fossil fuel reserves and for having generally nice places to live and play offer a great opportunity to get neighbourhoods, even private ones, redeveloped to everyone's benefit.

Fourthly, creating new communities is expensive, difficult and time consuming.

Most notably, the proposals to add 7,000 homes on the edge of Greater Leys, at the time the largest council estate in Europe I understand, are tagging more housing onto an area already plainly struggling to cope with its recent vast growth over the past couple of decades. Whilst much of the Northfield Brook ward is new or newish commuter housing, including the planners' holy grail of intermingling owner occupied and social rented housing, it is still amongst the most deprived areas of the country.

It is not the organic development of a community, but the dislocation of people from other areas to fill the (much needed) new housing that causes the problems. It is not a problem of people but of planning. Even somewhere like Bicester, a market town with all the facilities that self-sufficient settlements need, is struggling to cope with a similar amount of housing to what is proposed on the edge of an area with few facilities. And what facilities there are in Greater Leys are artificially subsidised in order to try to generate that elusive community feel.

Mgadalen College and the city's Labour party say that they plan to include such facilities in their new developments. But it's just not the same as reivigorating an existing community. Better by far to concentrate on areas that already have community. My proposals for redevelopment keep people in the communities in which they have heir roots whilst creating more space for new households to join those communities. If they focus on these peripheral extensions they will inevitably have to skimp on maintaining existing communities and they in turn will degenerate.

Fifthly, and related to the sprawl argument, Labour claim their proposals are more sustainable.

But this is only in relation to other proposals for housing further out into the county from which city workers will have to commute longer distances. Oxfordshire is a remarkably self-contained housing market. Most (95%) of its emerging households are self-generated - children wanting to leave the family home, pewople remaining single longer and so on. And most moves are within Oxfordshire. Promoting a single solution of urban extensions risks the destruction of rural communities. Village schools are dependent on young families with school aged children being able to afford to remain in the settlement they are rooted in. So whilst it might be more sustainable than building whole new super-settlements around the county towns of people predominantly dependent on Oxford itself for work, it is far less sustainable than ensuring our existing communities remain viable.

And the sustainable argument as I have already said, ignores the potential for increasing overall sustainability of the city by redeveloping existing communities in place.

And finally, we have the unholy alliance of Labour lobbying for the big landowners that surround the city.

We do not even know, for example, whether there are more suitable sites that other landowners may offer at a lower cost for development. If, and it is a big if, there is no alternative to building urban extensions, we should seek suppliers of land as we do suppliers of other goods and services - at best value. Lib Dem policy of "community land auctions" sounds interesting - where landowners seek to offer land free of planning consents to capture the hope values in their land, but the community captures the uplift in values arising from the actual planning consents and can use this money to provide infrastructure.

A Postscript on the CPRE.

I just want to say something about the Campaign for the Protection of Rural England who organized the debate that led to this essay. In my opinion they get a bad rap, especially over housing. They are seen by many as being made up of a hardcore of anti-development activists. I my experience, whilst there may be a few who are drawn to them because of that reputation, in fact they have a lot of constructive ideas of their own and are open to those of others. Already Oxfordshire Community Land Trusts has presented our ideas to their Oxfordshire executive committee and got, I think, a good reception for our vision of keeping rural communities sustainable.

Many of the issues aired on Friday were not about whether Oxford and Oxfordshire was full, but about how to address the obvious and pressing needs they too recognize as blighting the lives of many and putting the prosperity of the city and its hinterland and all its citizens at risk. They prompt us to look at alternatives to Labour's all to easy solutions of helter-skelter sprawling growth. Part of the attraction of Oxford is that it is compact. That will become even more important as fuel costs rise and working patterns and demographics change. There are better ways to achieve equity for all in meeting their housing needs, for anyone brave enough to promote them.

Technorati Tags: affordable housing, climate change, community land trusts, oxford, politics

...and we still don't seem to know what to do about bankers!

The Bank of Scotland, whatever is now left of it, is 312 years old. That of England just two years older. Ever since the banking system has been built on state protectionism, corporate welfare, monopoly privilege and, at its heart, a gigantic fraud.

The fraud was that a goldsmith could give both you and I receipts for my gold stored in his vaults and make money on both - from me a fee for keeping my gold, from you interest on the receipt you had borrowed from him. Indeed they found they could duplicate this so frequently, fraud upon fraud if you like, that though gold is perhaps regrettably no longer the basis of our money, the "hardest money", real "hard cash", amounts now to just three per cent of our total money supply in terms of everything we all have collectively borrowed and deposited.

To be fair, most goldsmiths at least issued notes of their own. Customers - both depositors and borrowers - chose which goldsmith to bank with on their reputation. If they became overstretched, issued what was felt to be too many receipts for the same gold, their notes would be less desirable in trade, there may even be a "run" when all the receipt holders tried to get their "real" money, the gold, out of the bank, which of course had much less gold than he had issued such receipts for. Nowadays, however, what they create and destroy in their lending business is denominated in the national currency, a currency issued nominally at least, by the state and guaranteed by the state.

This means it is no longer a private affair between a bank and its customers as to whether their business practices jeopardise their customers' savings; it is a problem for us all. We have ceded control of the supply of money issued in our name to private businesses whose main aim is to make profit for themselves and who, in the course of that otherwise noble pursuit, play fast and loose with the very air the entire economic system requires to function. And states protect them, bail them out as seems about to be the case in the US to the tune of almost countless billions, because they have to guarantee the currency they have so little control over.

Regular readers will know I am very fond of a quotation from Josiah Stamp, Liberal politican, Chairman of the Midland Bank in the 1920s and reputedly second wealthiest man in Britain in his lifetime:

"Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again.

"However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits."

It rather seems to me that with the events of the past few days, we may be "taking the earth away from them" (or, more accurately and nauseatingly, buying it back from them) which they have stolen from us with their inflationary approach to money, but leaving them the power to create those deposits all over again with which, in the next bubble, they will buy it all back again.

Everyone seems to think that money has somehow been pretty constant. The way it works I mean, not whether we call it shillings and guineas or pounds and pence. But the current confidence trick really began with the depression of the 1930s and the work of two extremely wealthy, powerful men in the US who persuaded the government of their day to set up the system that enabled them to create "our" money according to their corporate priorities. The results of John D Rockerfeller and John P Morgan Jnrs' work was the Federal Reserve and the rapid ramping up of fractional reserve banking, and the eventual demise of real solid backing for that currency.

If the current crisis really does turn out to be the "big crunch" at the end of the cycle begun by that 1930s "big bang" we should be ready with policy to replace that fraudulent, anti-competitive, oligarchical system, designed by the very wealthy to keep them that way for little actual productive work with something different. Entirely different. I do not detect any mainstream politicians with the cojones to say so. Our governments and politicians are but eunuchs to the bankers, and the longer that continues, the more the vast majority of us will suffer.

I've not been posting much recently. It's the worst week of my year. Getting everything ready for the arrival of my 550 new teenaged charges in halls of residence and so on. But also because I am working on another blog. I mean helping to write and debug a new piece of blog server software that will enable me to move mine over to my favourite web content management system.

I already use it a little at my Oxfordshire Community Land Trust site but it's not quite as robust as to work with all the editing tools and so on I use yet.

See, I'm more than just a set of wacky opinions...:)