The UK needs to rethink its local taxes. It’s time for land value tax

We’re saying nothing. Image: Getty.

Labour London Assembly member Tom Copley on the future of property tax.

Last week Chris Williamson left the Labour frontbench after he suggested changes to council tax that are not Labour Party policy. Jeremy Corbyn was right to ask for Williamson’s resignation: shadow ministers floating policy ideas that are not part of their briefs, particularly in relation to taxation, is a recipe for chaos. However, the question of how we should reform local taxation is something the Labour Party needs to consider.

Council tax is fundamentally flawed. For a start, taxing people based on the notional value of their property in 1991 is absurd. Indeed, even calling it ‘their’ property isn’t quite accurate, given the tax is paid by the occupier not the owner – so poor tenants living in expensive properties pay more than richer homeowners whose property is worth less.

Council tax bands have never been revalued, so billionaires living in multi-million pound houses pay the same amount as middle-income homeowners. The most expensive property sold in the UK in October last year went for just shy of £16m in Westminster. The cheapest was £18,500 in County Durham. The owner of the Westminster property would pay just £250 a year more in council tax than the owner of the County Durham property. Council tax bands can’t be varied individually either, so if a council wants to raise taxes on the most expensive properties it must raise taxes for the cheaper ones as well.

There is nothing progressive about council tax. It’s time we scrapped it, along with stamp duty and business rates, and replaced it with a fairer system.


In 2015 I led an investigation for the London Assembly into Land Value Tax (LVT). This led to the Tax Trial report which called for the mayor of London to be given the power to trial LVT in part of the capital. LVT is a tax on the annual rental value of land in its “optimum use” (as defined by a public authority).

Unlike council tax and business rates it is not a tax on the property that sits on the land. It is paid by the land owner, not the tenant, and applies regardless of whether the land is developed or not. It is not only a source of taxation but a disincentive for landowners to “land bank” sitting on undeveloped land and waiting for its value to rise.

Since 1995, the value of land in the UK has risen by 544 per cent whereas the value of the buildings sitting it has only risen by 219 per cent. And the value of land is largely determined by its location, not by any effort on the part of the landowner – a point made by Winston Churchill, a proponent of LVT, in 1909:

“Roads are made, streets are made, services are improved, electric light turns night into day, water is brought from reservoirs a hundred miles off in the mountains – and all the while the landlord sits still. Every one of those improvements is effected by the labour and cost of other people and the taxpayers. To not one of those improvements does the land monopolist, as a land monopolist, contribute, and yet by every one of them the value of his land is enhanced. He renders no service to the community, he contributes nothing to the general welfare, he contributes nothing to the process from which his own enrichment is derived.”

When the state invests large sums of public money in a project like Crossrail, land values rise along the route. LVT would allow some of that rise in value to be recouped by the taxpayer.  

Some of the same problems with council tax would apply to LVT: for example, what about homeowners who are asset rich but income poor? I’m convinced that a more progressive system could be constructed to allow people to choose whether to defer their payments until they sell their home, and most people wouldn’t be paying any more than they currently pay annually in council tax in any case. 

What LVT would do is generate a lot more revenue from very wealthy landowners such as the Duke of Westminster who can afford to contribute more. Surely that’s a proposal that everyone in the Labour Party can get behind?

Tom Copley is a Labour member of the London Assembly.

 
 
 
 

London’s rail and tube map is out of control

Aaaaaargh. Image: Getty.

The geographical limits of London’s official rail maps have always been slightly arbitrary. Far-flung commuter towns like Amersham, Chesham and Epping are all on there, because they have tube stations. Meanwhile, places like Esher or Walton-on-Thames – much closer to the city proper, inside the M25, and a contiguous part of the built up area – aren’t, because they fall outside the Greater London and aren’t served by Transport for London (TfL) services. This is pretty aggravating, but we are where we are.

But then a few years ago, TfL decided to show more non-London services on its combined Tube & Rail Map. It started with a few stations slightly outside the city limits, but where you could you use your Oyster card. Then said card started being accepted at Gatwick Airport station – and so, since how to get to a major airport is a fairly useful piece of information to impart to passengers, TfL’s cartographers added that line too, even though it meant including stations bloody miles away.

And now the latest version seems to have cast all logic to the wind. Look at this:

Oh, no. Click to expand. Image: TfL.

The logic for including the line to Reading is that it’s now served by TfL Rail, a route which will be part of the Elizabeth Line/Crossrail, when they eventually, finally happen. But you can tell something’s gone wrong here from the fact that showing the route, to a town which is well known for being directly west of London, requires an awkward right-angle which makes it look like the line turns north, presumably because otherwise there’d be no way of showing it on the map.

What’s more, this means that a station 36 miles from central London gets to be on the map, while Esher – barely a third of that distance out – doesn’t. Nor does Windsor & Eton Central, because it’s served by a branchline from Slough rather than TfL Rail trains, even though as a fairly major tourist destination it’d probably be the sort of place that at least some users of this map might want to know how to get to.

There’s more. Luton Airport Parkway is now on the map, presumably on the basis that Gatwick is. But that station doesn’t accept Oyster cards yet, so you get this:

Gah. Click to expand. Image: TfL.

There’s a line, incidentally, between Watford Junction and St Albans Abbey, which is just down the road from St Albans City. Is that line shown on the map? No it is not.

Also not shown on the map: either Luton itself, just one stop up the line from Luton Airport Parkway, or Stansted Airport, even though it’s an airport and not much further out than places which are on the map. Somewhere that is, however, is Welwyn Garden City, which doesn’t accept Oyster, isn’t served by TfL trains and also – this feels important – isn’t an airport.

And meanwhile a large chunk of Surrey suburbia inside the M25 isn’t shown, even though it must have a greater claim to be a part of London’s rail network than bloody Reading.

The result of all these decisions is that the map covers an entirely baffling area whose shape makes no sense whatsoever. Here’s an extremely rough map:

Just, what? Image: Google Maps/CityMetric.

I mean that’s just ridiculous isn’t it.

While we’re at it: the latest version shows the piers from which you can get boats on the Thames. Except for when it doesn’t because they’re not near a station – for example, Greenland Pier, just across the Thames to the west of the Isle of Dogs, shown here with CityMetric’s usual artistic flair.

Spot the missing pier. You can’t, because it’s missing. Image: TfL/CityMetric.

I’m sure there must be a logic to all of this. It’s just that I fear the logic is “what makes life easier for the TfL cartography team” rather than “what is actually valuable information for London’s rail passengers”.

And don’t even get me started on this monstrosity.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.