Land for the Many
“Dig deep enough into many of the problems this country faces, and you will soon hit land. Soaring inequality and exclusion; the massive cost of renting or buying a decent home; repeated
financial crises, sparked by housing asset bubbles; the collapse of wildlife and ecosystems; the lack of public amenities – the way land is owned and controlled underlies them all. Yet it scarcely
features in political discussions.” Editor George Monbiot’s opening paragraph outlines the potential importance of this new Labour Party document, Land for the Many.
It’s good news that Labour is starting to think seriously about a policy for the land. The report is wide-ranging, so we can’t deal here with all the issues and policies it raises and proposes. In a previous posting we found that:
· Less than 1% of the population own half of all the land in England
· Land ownership is often surrounded in secrecy in the form of shell companies situated in tax havens, in trusts concealing the beneficial owners and other devices
· Land consists of more than half of all the net wealth in the country.
What should Labour do? Let’s start with tax:-
Taxes on land
The main form of local tax on households is council tax, introduced by the Tories in 1993 after Thatcher’s hated poll tax was defeated (along with Thatcher herself). Council tax is regressive, hitting the poor harder. For instance houses in the top band costing eight times as much as those worth less only pay three times as much council tax. The top band H means that houses all the way from £320,000 to Buckingham Palace pay the same rate. The tax bands themselves haven’t been modified since 1991. Land for the Many proposes to replace council tax with a progressive property tax payable by owners, not tenants. Empty homes should automatically be taxed at a higher rate of local tax. Business rates would be replaced by a Land Value Tax, calculated on the rental value of local commercial land.
Inheritance Tax is virtually a voluntary tax, avoidable by the rich at will. One of the easiest ways to doge it is to give property away before death. Labour suggests a lifetime gifts tax instead on donations of more than £125,000, levied on the recipient. This could raise £15bn. Still, there are plenty of other dodges the rich can pull to avoid paying Inheritance Tax. According to a recent report, How Inheritance Tax Breaks Favour The Well-Off, 51 families recorded as having business property worth more than £5m shared a tax saving of approximately £327m. This works out to an average saving of £6.4m per estate.
Capital Gains Tax is levied on profits, calculated on the difference between the purchase price and the later selling price of items. There are different rates, varying from 0 to 20%. Labour believes that ‘investment’ properties and second homes should be taxed at the higher rate of Capital Gains Tax.
One of the problems in taxing landed wealth is tracing ownership - who should pay. Many properties are owned in tax havens, often in the name of shell companies. Labour proposes that a 15% offshore tax should be levied on properties owned through tax havens. That’s hardly a scratch. A more rigorous effort will be needed to stop the myriad ways the super-rich have of avoiding tax.
Labour is valiantly trying to plug the loopholes which the Tories have supinely allowed to grow and suppurate. This is all good stuff. But will it work? Probably obscenely paid lawyers and accountants are sitting down at this very moment to work out the scams that they will sell to the rich to get round the proposed legislation.
The Labour policy document proposes firm action on private housing tenancies. At present landlords have the right to turf tenants out for no reason with just two months' notice. It's called a no-fault, or section 21, eviction. Often tenants face eviction under this clause as soon as they ask for repairs or improvements they are entitled to under the terms of tenancy. According to Land for the Many that type of eviction will go, and high time too. (https://labourrep.com/blog/2019/3/19/rogue-landlords)
Rents will not be permitted faster than the rate of inflation. That is also welcome. Though the document expresses goodwill towards Labour’s programme to revive social housing, it doesn’t mention abolishing council tenants’ right to buy at a discount. This policy has destroyed the stock of council homes. The document concentrates on the problems associated with land rather than investigating the provision of social housing. In fact the two issues are intertwined and must be dealt with together.
House prices and land
When planning permission is granted to build on farm land, the price can increase 250 times over. Under the Land Compensation Act the existing owners get this terrific bonanza! Labour is poised to stop this racket.
Why are house prices so high? 70% of the cost of a house is the land beneath. Monbiot reckons that if we could buy agricultural land at its price as farm land to build on, prices of new houses in the south-east could fall by almost 50%.
The aim of Land for the Many is to stabilise house prices, to repair a broken housing market, rather than looking at alternative means of putting roofs over people’s heads. In our view the housing market is irretrievably broken. A proper roof over our heads is a basic right. Capitalism has never been able to offer working people decent housing at a price they can afford. The only exceptions were the mass council housing programmes undertaken in the twentieth century. These were sabotaged by Thatcher’s ‘right to buy’ council houses at a steep discount.
Land for the Many proposes a Common Ground Trust with the power to buy the land beneath houses so that purchasers only pay for bricks and mortar, which is 30% of the price of property on average. This would make homes much more affordable to buyers. This proposal seems to be aimed at a gradual socialisation of land rents rather than the letting the benefits all flow to private landlords and banks. It is described as ‘a non-reformist reform’. The document warns, “The Trust does not replace the need for social housing. It serves an entirely distinct purpose.” It seems to argue that the housing market can be mended with a bit of tweaking. We disagree.
There have been previous attempts to bring land into social ownership. Many in the labour movement argue for a Land Value Tax. Such a tax was actually initiated in the Liberal ‘people’s budget’ of 1909. It foundered during the First World War and was abolished by a Tory-dominated government in 1920.
The basic problem was that we can’t bring land in to social ownership or even tax it until we know who owns it:-
Who owns land?
Guy Shrubsole was a contributing author to the Report. As he points out in his book Who Owns England it is in the hands of a very few rich people. Land ownership is wrapped in secrecy. We have had a Land Registry since1862. But for all that time we still don’t have a complete list of who owns the land. The establishment, of course wants to keep its ill-gotten gains a secret
None of the proposed reforms will mean much unless we know who actually owns the land. Land for the Many insists on transparency. There should be a complete and open register of land ownership. Stop the secrecy. But, as we have seen, it is enormously profitable for the super-rich to conceal how much they own.
It is grotesque for instance that the richest in the land get enormous subsidies from us taxpayers via the Common Agricultural Policy. The document argues for no subsidies without registration with the Land Registry. But a complete record of land ownership inevitably requires compulsion. It means taking on the landed interests who have lorded over our countryside for so long.
Access to the land
Not only do most of us not own an inch of land, even access to it is severely restricted. The laws of trespass go back to Norman times and remind us that we are strangers in a country we call our own. As Guy Shrubsole points out in his book Who Owns England? the right to roam introduced by the 1997 Labour government at present only covers 10% of the uncultivated land of England and Wales. Land for the Many wants to massively extend this, for instance to urban, suburban and rural areas not covered by the 1997 Act, such as forest and river banks.
Marion Shoard, a longstanding campaigner for improved public access, goes further. She points out that, under Labour’s proposals, land has to be identified and mapped. This is bound to cause endless disputes with the powers that be. She also argues that environmentally valuable roughland would doubtless be ploughed up to render it ‘cultivated’. She concludes that a universal right should be a citizen’s entitlement, not something that can be delivered piecemeal.
Land for the Many raises many issues and suggests important reforms. To implement it means an all out clash with the people who have dominated our countryside for so long. Land for the Many is a start, but Labour should ultimately aim to end private ownership of land altogether.