According to a “Guardian exclusive” the Labour party has plans to get land for housing on the cheap by making landowners sell it at a price before planning consent is given, eliminating most of the so-called “hope value” and enabling new council housing to be built at lower cost land:

Now while this is a step in the direction of capturing for the community some of the land value created by the community, in this case the one off increase conferred by a planning change of use, and one that has been tried before (such as in the 1947 Town and Country Planning Act), it is what one might describe as “all stick and no carrot”. It is true that the windfall gains from local communities making planning decisions can be huge but they are only one type of gain currently privately accumulated as a result of whole community actions.

“Windfall” taxes, of which this idea is a variety, are often seen as somehow more palatable to enough voters to give it support. They affect, usually, a small group of people (such as the energy companies at the start of the Blair ministry), that most don’t feel part of, and often try to address a gain that has become seen as obviously and egregiously unfair. But if society sees it as unfair that people make a one off fortune from a planning officer merely signing off a policy or decision,  is it not even more egregiously unfair to make constant gains from the spending of everyone else’s taxes on services and infrastructure that daily increase (and occasionally decrease of course) land values everywhere.

The solution appears obvious…instead of punishing people for what they earn, through economically beneficial activities such work, trade or capital investment by taxing them, at the same time depressing both when we need it the most, collect instead all the “ground rent” of the country to pay for the very improvmenets that create it as well as to compensate people from being locked out of the most advantageous locations such that they can’t take up valuable economic, social and cultural opportunities.

If it is becoming politically acceptable to regard unearned land value increased as “windfalls” and somehow to be taxed, a switch to what is usually called “land value tax” (though many now prefer something like “location subsidy repayment/recovery” to make it clear it is simply collecting what has been put into those locations by others’ funding and effort) would capture the land value uplift from all public policy decisions and expenditures, instead of funnelling it from workers’ earnings and investors’ profits to land owners, unearned.

To tax one kind of land value uplift just because it affects only a few people and not those which benefit, and cost (for those without land of any kind to their name), many millions of others, does seem like the wrong step, albeit in the right ddirection.

A wrong step in the right direction