Land Value Tax research values Scottish land at £120bn

For immediate release 4 October 2010

The Green MSPs are today launching a ground-breaking report on how Land Value Tax could work in Scotland, prepared by leading land reform researcher and analyst Andy Wightman. "A Land Value Tax for Scotland: Fair, Efficient, Sustainable" is available here, and calculates that the value of Scotland's land alone - setting aside developments on it - is currently £120.3bn, and that a Land Value Tax of 3.16p in the pound would be sufficient to replace both Council Tax and the Uniform Business Rate.

Land Value Tax, proposed as part of Lloyd George's 1909 "People's Budget" when it was backed by Winston Churchill, is designed to encourage land improvements by exempting them from property taxes, and to ensure that the community benefits when infrastructure investments would otherwise give windfall gains to landowners. For instance, when taxpayers invested £3.5bn in the Jubilee Line Extension, land values around the project increased by at least £9.75bn. (3) A Land Value Tax would have returned a proportion of this gain to the community to fund future investment, which could provide an alternative to other funding mechanisms like PPP/PFI or the Scottish Futures Trust.

In 2006 a motion supporting a Land Value Tax in the Scottish Parliament was backed by four current SNP Ministers, and Andy Burnham also proposed a shift to Land Value Tax during his recent run for the Labour leadership. Today's launch event will also hear from the Glasgow City Assessor, Hugh Munro, who conducted a Land Value Tax pilot in Glasgow's Ward 18, which includes Haghill and Dennistoun.

Patrick Harvie MSP said:

"Land Value Tax is an idea whose time has come. For generations, property based local taxes have hit the poorest hardest and stifled enterprise. Our tax revenues are invested in the community, providing improvements to the environment, infrastructure or local services. As the amenity of an area increases it is landowners who benefit most as the value of land increases. This is one of the causes of land speculation, and for too long this kind of unsustainable commercial behaviour has been allowed to distort our economy.

"The future of taxation in Scotland has long been mired in sterile arguments over Council Tax and Local Income Tax. Today's report from Andy Wightman shows how Land Value Tax would work as an alternative for Scotland, encouraging efficient development, reducing the tax burden on those on lower incomes, and replacing both PFI and the Scottish Futures Trust.

"My hope is that the next session of the Scottish Parliament will see the Council Tax scrapped for good, and I know there are people in all parties who want to look more closely at Land Value Tax, including Labour leadership contender Andy Burnham and a number of SNP Ministers. After May's election, as the Scottish finances come under increasing pressure, a move to Land Value Tax would be one progressive way to plug the gap."

Andy Wightman said:

"Land reform is still unfinished business in Scotland, and land ownership continues to be rife with inequalities. A Land Value Tax would make three quarters of Scots households better off, tackle urban blight and land banking, and stabilise the housing market. Business, retail and industry will see major gains, and new incentives to develop their operations within the planning limits set by local government.

"The public is increasingly weary of the house price escalator, and young people remain impoverished and alienated by the high cost of buying a house. Scotland is crying out for a fair, efficient and sustainable tax system, and introducing a Land Value Tax is the obvious place to start."

Andy Wightman is a writer, researcher and analyst specialising in land reform, land tenure and land ownership, and is a leading advocate of land reform in Scotland. He is the author of numerous publications including "Who Owns Scotland" (1996), "Scotland: Land and Power" (1999), and "Community Land Rights: A Citizen’s Guide" (2009). His forthcoming book "The Poor Had No Lawyers" will be published by Birlinn in October 2010. He also runs the project. His current interests include research on burgh commons and other forms of common land, land restitution and community land rights.