LVT doesn’t solve everything
We recognise that taxes, in themselves, can’t solve problems. They can, however, redress the historical unfairness in our distribution of wealth.
Problems are solved by economic understanding, empathy, good policies, good laws, wise spending, firm regulation and sound management. All are absent at the moment.
There is such a thing as “society”!
Society is run for the benefit of us, its citizens, and we are entitled to the same level and quality of services wherever we are in the country and for the costs of those services to be shared fairly across the country.
“Shared fairly” doesn’t mean we all pay the same - the beggar on the street pays the same as the Lord of the Manor - this has been tried and led to The Great Revolt of 1381 (“The Peasants’ Revolt”), to The Poll Tax Revolt of 1990 and to hundreds more revolts in between.
“Shared fairly” means that those with the most should contribute the most and the fairest way is in proportion to our income and wealth. Council Tax and VAT are bad taxes since those with the least contribute a much higher proportion of their income and wealth than those with the most.
Important note
The implementation of LVT is not contingent on any of the proposals here.
You may not agree with all these proposals - but LVT remains the fairest of all taxes.
We have provided links wherever possible so you can check the statements made.
Why do we need change?
People:
feel alienated, see “the system” as unfair and don’t trust politicians.
are fed up with the grossly unfair distribution of wealth in our society.
are fed up with the shortage of homes to buy or rent - and their cost!
are fed up with 16 years (so far!) of continuing austerity.
don’t like the apparent corruption of our politics (donations, gifts, special interest groups, foreign travel etc.).
are fed up with money being wasted: HS2, Heathrow runway, carbon capture, Hinkley Point nuclear power station, fighting other countries’ wars, etc.
are fed up with vague aspirations (“Growth”, “Change”) rather than specific policies.
are fed up that life is being killed in our rivers and we still have raw sewerage entering our rivers and seas because private water companies put profits before service.
are fed up with politicians strutting the world stage and not concentrating on our own country.
The best way to overcome alienation is to show that politicians care about our own citizens and want to make the system fairer for all.
Proposal for change
Political reform
We have a crisis in democracy.
In 2024 less that 60% of the electorate bothered to vote – the second lowest turnout ever.
Only 20% of the electorate voted Labour. 8 out of 10 did not vote for the government.
34% of votes cast went to Labour.
38% of votes cast went to Conservatives and Reform.
Political parties have failed to involve people in politics.
Labour has lost 50% of members since 2019 -10% since the election.
Conservatives have lost 60% of members since 2001.
People have lost trust in politics and politicians.
People are angry about the unfair distribution of wealth in our country.
People are angry about politicians and political parties taking money, donations and gifts.
The world sees the UK as corrupt - 20th in global rankings.
Political parties are no longer funded by membership subscriptions, they are paid for by rich individuals, financial institutions, companies and foreign governments. This is corruption.
Most MPs are not corrupt, and those who are, don’t think they are. As citizens we have a right to expect very high standards from MPs - we expect them to be squeaky clean with no skeletons in the cupboard and no lies or omissions on their CVs.
People don’t trust MPs and perception is everything.
MPs who fiddle their expenses or who accept “donations”, gifts, clothes, tickets to football matches, free trips abroad, free wallpaper, free lodging, free trips on private helicopters, planes or yachts, will be seen as corrupt.
Corruption varies in scale. At one end people make political donations and become lords. At the other end an MP may accept a free ticket to a sporting event. Some MPs happily accept donations “for my private office”, free trips abroad as a member of a special interest group and financial funding for “good causes” they promote. The Register of Members’ Financial Interests reveals some very strange bed-fellows, from major corporations (in the UK and abroad) to individuals promoting the interests of foreign countries.
It isn’t always about accepting money or gifts. Sometimes corruption is about who is dining with whom? Who belongs to which club? Who went to which school? Who has been promised a well-paid job by whom? Who intuitively knows what must be done to serve the interests of “people like us”? It can be very subtle - and sometimes blatant!
Government is heavily influenced by outsiders - the current government turns for advice to The City, hedge funds, “global investment managers”, international corporations, think tanks, and foreign governments - not to us, the people they are supposed to represent.
Governments come into power with lofty aspirations but very few specific policies - and having done very little research on how they intend to get things done - despite having years in opposition in which their almost single focus was on “gaining power”.
"Think tanks", "policy institutes" and lobbying companies are established to promote the economic interests of their founders with their funding often hidden and often coming from non-UK citizens, non-UK companies. foreign governments or international organisations.
Reforms required
Reform is straightforward - but requires political will carry it out
Media reform must go alongside political reform.
End all political “donations” and freebies. MPS and ministers are well paid and get very generous expenses - they don’t need money from elsewhere.
Parties to be funded by membership subscriptions only (*) - where all members pay the same.
Election funding will be limited to that provided from taxation and will be provided in direct proportion to a political party's membership (*).
First-past-the-post will be replaced with proportional representation so those of us who have never been represented can have our voices heard. The UK is the only country in Europe that uses first-past-the-post - apart from Belarus!
The House of Lords will be replaced by an elected second chamber (a senate) based on proportional regional representation.
End all "friends of ..." special interest groups in parliament. Individual MPs are free to join, and declare their membership of, UK-based organisations outside parliament but special interest "clubs" inside parliament are not acceptable - especially since many of them receive funding (often from outside the UK) by way of "research support" or all-expenses-paid trips abroad.
No politician to take payment (via employment or fee) from any individual, company or organisation operating in the area for which that politician has or had any political responsibility. This restriction will continue for 5 years after the politician leaves office.
End the farce of "blind trusts" whereby ministers pretend that their financial interests are no longer under their personal control. All politicians and candidates must declare all financial interests so we can judge their actions accordingly.
When speaking in parliament MPs must declare any personal financial, religious or other interest relevant to the topic under consideration. "As a shareholder in ...", "As a Catholic ...", "As a Freemason ...".
Funding for "think tanks", "policy institutes" and lobbying companies must be openly declared and must come exclusively from UK citizens resident in the UK for tax purposes or UK companies/organisations registered in the UK for tax purposes.
A redesigned parliament, preferably outside London, will enter the 21st century with enough seats for all MPs and electronic voting to replace the archaic and time-wasting lobby system.
Compulsory training (with exams) for MPs before taking up ministerial positions of responsibility. At the moment the highly experienced are frequently led by ill-informed, short-term, "here today, gone tomorrow" donkeys.
One month per year compulsory hands-on work experience for all MPs. Over the years this will cover jobs in the public sector (education, social care and health) as well as in manufacture, distribution and retail.
* note: this will encourage political parties to build up their membership at a constituency level - thus involving more people in policy making while preventing corruption.
Rewarding work
The Labour government of 2024 inherited a Conservative stealth tax - incomes have risen but the threshold for paying tax has not changed since April 2021 and is unlikely to change until 2028. Some people are now paying tax for the first time and others are now in higher tax brackets - people are paying more tax on their incomes.
Work, creativity, initiative, entrepreneurship - these are all good things that should be rewarded - people deserve the fruits of their labour.
There are at least two ways this could be done:
Reduce taxes on earned income and increase them on unearned income.
Perhaps set the initial threshold for paying tax on earned income at the mean or median earned income.
Increase a general tax, like LVT, while reducing the tax on earned income.
Abolition of trusts and special status
Trusts have only three purposes:
to obscure ownership of an asset,
to protect property,
to avoid tax - sometimes billions!
(Let us know if you think we are wrong.)
HMRC refuses to make public details of trustees or beneficiaries on the grounds of “privacy” and “security”. Details of company directors and shareholders are not kept secret and are available free of charge on the Companies House web site - why should trusts be different?
Huge amounts of our land are held in trusts registered in tax havens.
Reform is simple:
Trust status should be abolished.
Trust should be converted into UK registered companies with trustees as directors and beneficiaries as shareholders. This information is then freely available from Companies House.
Chatsworth
Chatsworth House in Derbyshire is a great place to visit (£84 for a family) and a great place to go for a walk (free!). Some of us live close by and enjoy a stroll round the grounds a few times every year.
Chatsworth, along with multiple estates and tens of thousands of acres of English countryside, is held by Peregrine Andrew Morny Cavendish, 12th Duke of Devonshire (known to his chums as "Stocker"), whose ancestors came over with William the Bastard in 1066. Peregrine is not short of a bob or two, nor is his son, William "Bill Burlington" Cavendish, Earl of Burlington, owner of Pratt's Club in St James's Street, London..
Despite being worth almost £1 billion, Peregrine is now making a public appeal for cash to restore The Cascade.
The Chatsworth House Trust was established in 1981 "to look after the house, collections, garden, woodlands, and park" - the Trust is also a charity to benefit from additional tax-free income.
Do we really need nonsense like trusts and charity status to preserve our heritage? Can we not think of better ways of doing it than opening the doors to tax avoidance? Separating how tax is raised from how it is spent is the first step towards good law.
National Trust
The National Trust is a good thing - we are all for it - in fact, some of us are members!
However, there are far better ways to protect the National Trust than to blanket it along with legal fiddles to avoid tax!
Much of the land held by the National trust is “inalienable” - it can never be sold. It will have a value of zero for LVT purposes if it is not used commercially and will therefore receive a bill for zero.
The abolition of all trusts (and their charity status), and finding better ways to handle things such as the National Trust and Chatsworth, would go a long way to ending massive tax avoidance.
Ending non-dom status
“Non-doms” claim “not to be resident in the UK for tax purposes” - even if they are resident in the UK!
Jonathan Harmsworth, owner of the Daily Mail, is not resident in the UK for tax purposes and his residence is Ferne Park in Wiltshire - the classic example of the wealthy avoiding tax by claiming non-dom status. His ownership of the Daily Mail, and others assets including land, is hidden behind a tortuous network of obscure companies, many of them located in tax havens. Jonathan Harmsworth is a great British patriot!
This must end - but look how the Government has reacted! We know who is wagging the dog!
Ending dual citizenship
The UK permits dual citizenship - you can be Russian and British or American and British!
Dual citizenship provides many advantages for an individual but there appear to be no advantages for a country to allow its citizens to also be citizens of other countries.
Some countries believe you are either a citizen of their country or you aren’t.
Ending dual citizenship would clarify people’s rights and where their loyalties lie - and bring an end to the fiddle where some UK citizens have freedom of movement in Europe (by accident of birth) while others don’t. This is a classic example of “one law for them, another law for us”.
This would also remove any potential security problems resulting from having to decide which country someone should support.
Ending the use of tax havens
Why does anyone use a tax haven? Answer: to hide ownership of assets and to avoid tax.
Please let us know if there are acceptable reasons that have nothing to do with avoiding tax.
The OECD's Comprehensive Reporting Standard (CRS) means that almost all UK residents with overseas bank accounts have their name, tax ID, and the balance and income on those accounts automatically reported to HMRC every year.
However, this assumes that tax havens will maintain a public register of company ownership. The British Virgin Islands is the largest UK controlled tax haven and refuses to do so.
It is embarrassing that London is the money laundering capital of the world (open to dictators, oligarchs and major fraudsters) and UK controlled countries are the world's favourite tax havens. Is it something to be proud of?
UK citizens and residents should be given six months to repatriate all funds from tax havens.
The Land Registry makes available a free spreadsheet of all properties in England and Wales held by overseas companies (not individuals). It is worth downloading to see how many properties in your area are held in tax havens. There is also an interactive map that allows you to zoom in to find such properties. Unfortunately the data only covers the period 2005 to 2014.
Abolition of inheritance tax
People should be free to do what they wish with the money they have earned - even after death! They can leave things to organisations (the local animal sanctuary, wildlife trust, Macmillan Cancer Support, RNLI, church, National Secular Society, etc.) or to individuals.
Income received from wills is unearned and will be taxed accordingly.
Introduction of a lifetime gift allowance
Is it fair that someone can lead a life of idle leisure simply by being born?
Should tax be structured to favour those who work, rather than those who don’t?
Our article. “Fairness, equality and silver spoons” discusses this.
A lifetime gift allowance, set at something like £500,000 now and rising annually by the cost of living, would still enable wealth to be passed as gifts from generation to generation but would ensure that society benefits from tax on those gifts.
Housing
Housing, to purchase or rent, is a market subject to supply and demand. Young people can’t afford to buy homes unless they are subsidised by wealthy parents - which itself pushes prices up!
On its own, LVT can’t solve the housing problem but it can help to stabilise land prices, discourage land speculation, end land banking and encourage development on vacant land. LVT is collected nationally, unlike Council Tax, so it will enable Local Authorities to increase staff in their planning departments to speed up planning decisions and to ensure developers meet all their obligations.
Transfer of wealth
Building new homes transfers wealth from those who work to those who don't.
Example:
A new home sells for £300,000.
£75,000 (*) contributes to the cost of buying the freehold from the landholder.
£75,000 goes to directors' bonuses and shareholders of the development company.
£296,000 goes to the bank to cover a 30 year mortgage at 5.25%.
£4,000 goes in professional fees and moving costs.
There is no Stamp Duty to pay for a first time buyer.
The new homeowner will have paid over £600,000 by the time everything is paid off.
* note: agricultural land costs between £8,000 and £12,000 an acre. By the time society has granted planning permission the windfall profit for the landholder will have grown to between £250,000 and £3,500,00 per acre depending on location. The example uses the average contribution to land cost.
Reforms required
End Right to Buy.
LAs have been forced to sell over 2 million homes under Right to Buy without an equivalent right to use the proceeds to build more social housing.
41% of houses sold under Right to Buy are now in the hands of private landlords.
Allow LAs to Borrow to Build to replenish our social housing stock - not everyone wants to be saddled with a mortgage!
Repeal the 1961 Land Compensation Act and limit the increase in value of land when it acquires planning permission for development The limit set at two times current use value.
Make it easier, and quicker, for LAs to use compulsory purchase for building land.
The Levelling up and Regeneration Act of 2023 (LURA) goes some way towards this but it is incredibly complex and will generate years of work for lawyers.
Encourage LAs to work together on the Best of the Best designs for new social housing. No more high rises (nothing over 4 storeys), no more massive blocks and no more rabbit hutches.
Average new UK house sizes are the smallest in Europe - an average new UK house is half the size of an average new house in Denmark.
Encourage LAs to cooperate on the establishment of their own workforces if the private sector is not up to the job or demands excessive profit margins.
Learn from Ireland and set up a Residential Tenancies Board to protect both landlords and tenants.
A citizens' bank
Reckless gambling ("trading") by the financial sector in 2007/2008 brought the world to its knees.
In the UK the collapse of some building societies was prevented by absorbing them into others. Why was the little Derbyshire Building Society (absorbed by Nationwide) engaged in financial gambling by risking the savings of thousands of local people? The sheer stupidity of those wanting to "play with the big boys" remains hard to forgive. None of them went to jail.
While writing this section the author looked back at what was said at the time. Big business and the financial sector are very good at "gloss": painting glowing pictures with words and avoiding the truth. They talk "management speak" and address everything in favourable terms: "deals were made because they were an attractive proposition for the Nationwide". People forced to resign in 2008 were described as "a pivotal member of the management team" who "has had a distinguished career".
The words: "reckless gambling", "arrogant stupidity", "naked greed", "lack of personal responsibility" don't crop up much in corporate press releases.
We are still living with the consequences of the financial deregulation introduced by the Conservatives in the 1980s to line the pockets of their friends in the City - and supported ever since by the Labour Party - see George Brown's sycophantic speech and Keir Starmer's recent contribution. Their lack of understanding of the naked greed that motivates the financial sector is astonishing - how naive can they get? We regulate people because they will get away with whatever they can in their own self interest!
The run on banks in 2007 led to the collapse of major banks - including Northern Rock and RBS. The government stepped in to guarantee all savings and the banks were effectively nationalised. This was a perfect example of privatising the profits and socialising the losses - it cost us £23 billion to sort it out and was used as an excuse for 14 years of austerity where the rich got richer and the rest were left behind. The Conservative government gradually returned RBS to its friends in the financial sector by selling its shares at a loss!
Bankers were gambling with our money - and they still gamble with our money. Some people are happy with this, they are happy to accept the risk of their savings being wiped out in the hope they will make a killing.
Others are not happy. They want their savings used for the social good, not for gambling, and they want lower risk. Savers in Building Societies assumed their money was used to enable local people to get mortgages for homes - instead their savings were used to buy bundles of worthless "Mortgage Backed Securities" (dreamt up by highly paid nerds in major financial institutions) based on sub-prime, zero deposit, borrowings in Florida! There is no difference between the gambling dens of Las Vegas and the financial institutions of the City - at least in Las Vegas you accept that the system is out to screw you.
A government backed Citizens' Bank would:
accept salaries and personal deposits - but not company deposits,
look after people's savings with a 100% unlimited guarantee,
pay a fair rate of interest on savings,
offer debit cards - but no credit cards,
offer online banking - but no branches,
offer mortgages for homes - but not for "buy to let",
invest in startups and businesses - but not with grants or loans.
Existing banks would continue with their self-funded Financial Services Compensation Scheme (FSCS).
The introduction of a Citizens' Bank would make it clear that the government would not bail out any collapsed bank or financial institution nor would it guarantee deposits over those covered by the FSCS. Risk is risk so a clear, cigarette packet type, statement would be sufficient:
"You may lose all your savings and investments not covered by this institution's guarantee"
History of the Girobank
The Girobank was created in the late 1960s and run through Post Offices. It was one of the first major parts of government to use commercial computers - when they occupied the space taken up by a football field!
When the Conservative government decided to sell off everything (we are still living with the consequences - polluted rivers and dilapidated infrastructure) the Girobank was privatised in 1989 and it became part of Alliance and Leicester which was eventually bought by Santander.
The world has moved on (and computers have become smaller!) so establishing a Citizens' Bank would present no major technical problems. While it would have no branches it would also use Post Offices for cash deposits and withdrawals - just as many other banks are now doing.
Media reform
We do not have a free press.
UK media is controlled by the wealthy in the interests of the wealthy.
We allow people (and companies and governments) from outside the UK to tell us how to run our country - via their control of the media. They also control our politicians - but that's a separate story.
Reform is straightforward - but requires political will to carry it out.
UK media to be owned exclusively by UK citizens resident in the UK for tax purposes or by UK companies registered in the UK for tax purposes.
In the case of ownership, in part or in whole, by UK companies, those companies shall have the majority of shares held by UK citizens resident in the UK for tax purposes.
"Scrap it and start again!"
Sometimes things have become so complicated, or are so broken, that the best solution is to "scrap it and start again" (the author has done this several times with complex computer software systems).
There is a sound argument that legislation for land holding and taxation has become such a dog's breakfast, and wastes so much valuable intellectual effort by lawyers and "tax advisors", that the best thing to do is abolish the lot and start again.
This sounds draconian and complicated to do - but it isn't because our current system of land holding was imposed on us by the Normans - it's easy to do at the point of a sword and it didn't take them long to do it! It is far from draconian because we would all gain from simplicity - legislation should be written clearly and unambiguously so the "average citizen" can understand it - none of our current legislation passes that test!
How can you have a fair and open society when citizens cannot understand the law?
National legislation, local delivery
Local Authorities (LAs) are best placed to assess the needs of their local communities and to deliver the services to meet those needs. During Covid national government became obsessed with central control and was slow to make use of LA resources on the ground - where local people could see what was required locally. Even when LA resources were used they were already unprepared after a decade of financial cuts.
National legislation imposes responsibilities on local government and funding is currently provided by national grants and council tax. Business Rates are a strange case, they are collected by LAs but passed to national government to be returned, in whole or in part, as part of national grants.
Council tax and business rates will be the first two taxes to be replaced by LVT.
National grants, at the whim of whichever political party is in power, become a political football - they were cut by over 40% in real terms between 2010 and 2020 because the Conservative party refused to raise additional revenue to cover the responsibilities they, and previous governments, have imposed on LAs.
According to the Local Government Association, there are over 800 different services provided by LAs including education, social services, social care, housing, planning, waste collection, police, fire services, recycling centres, local roads and footpaths, emergency planning, libraries, road safety, public parks, museums, markets, sport and recreation, business units, trading standards, environmental services, licensing, registrar services and pest control.
Nationally agreed service levels for all areas of local government responsibilities must be agreed and then fully funded by LVT. LAs who wish to provide services beyond the defined levels are free to put their case to local citizens and, if supported, to add a supplement to their local VAT rate. They will then be directly responsible to their citizens for how this supplement is spent.
Private v public
Both the Conservative Party and the Labour Party, along with the majority of the national media, promote the idea that "private good, public bad".
The Private Finance Initiative (PFI) was introduced by the Conservative Party under John Major and then taken up with ill-thought-out enthusiasm by the Labour Party under Tony Blair and Gordon Brown. PFI allowed costs to be swept under the immediate accounting carpet to be picked up by future generations.
Nowhere in the world has it been shown that PFI, and the related Private Public Partnership (PPP), has provided a good investment for the tax payer., Costs have escalated (because private companies insist on a profit margin over and above rising costs) and in some cases private providers have simply gone bankrupt leaving the taxpayer to pick up the bill. National and local goverments aren't allowed to go broke - though some have managed it!
"Privatising the profits and socialising the losses" has been a common theme worldwide.
There is no reason why a private company cannot be sub-contracted to provide a public service - as long as working conditions are agreed and service levels are met within an agreed budget. There is no reason why an LA's local work force could not do the same thing.
However, there are good and bad private providers just as there are good and bad public providers - it is not the "public v private" that determines the outcome, it is the establishment of the initial requirements, the quality of management and the level of monitoring and control exercised by the public sector.
