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Land Value Taxation in Britain for the Benefit of the Community

History, Achievements and Prospects

Nathaniel Lichfield and Owen Connellan

January 1997, English

This report examines the economic and social rationales and century-old experience in Britain for taxing land (as distinct from land and buildings in combination) for the benefit of the community. In practice the experience shows attempts under two distinct kinds of legislation. The first relates to proposals for revenue raising, mainly for local government purposes; and the second to recoupment of community betterment and infrastructure funding as part of development and planning policy.

Part I deals with the first theme of land value taxation. Following an introduction relating to the principles of general taxation comes a statement on the current rating and taxation system in Britain relating to landed property. Then follows an exploration of economic theory and principles of land taxation as such, supported by Appendix (I.2) to which is added the distinctive theory of Henry George on the single tax, and his personal impact in Britain. Then follows a history of attempts in land value taxation in Britain, which is supported by Appendix (I.1), concluding with an evaluation of past proposals.

Part II deals with the second theme. It first introduces the town and country planning system in Britain, since the major efforts of recouping community betterment were made in relation to statutes linked with the town and country planning systems. Then comes an account of the legislation introduced by successive Labour Governments to this end, and of the unscrambling of those efforts by succeeding Conservative Governments.

Independently from the exactions in the legislation just described, there have been moves to ensure that funding of infrastructure, itself necessary to create development value, is placed upon the development industry as opposed to local government.

Then follows a summary of the existing situation on betterment, embracing both of the kinds just described. This Part ends with an evaluation of the past proposals that have been described.

On the whole, while the two distinct themes described in Parts I and II are both aimed at taxing the land for the benefit of the community, in past efforts at their introduction the two have had distinctive treatments. But they are clearly interacting. And while land taxation to Henry George did not have to deal, in the latter part of the 19th century, with the 20th century practice of town planning, that can no longer be the case. Accordingly Part III brings out the conflict between planning and land value taxation in practice and again goes on to describe how they will need to be made compatible if land value taxation is to be introduced.

The Report finally looks in Part IV at the political prospects for the introduction of both themes into Britain at the present time. It does so by reference to the programmes of the three political parties, leading to the conclusion that a window of opportunity is envisaged in 1997, following the return of Labour to power, for bringing new proposals forward for parliamentary consideration of an age-old problem which Britain in the 20th century has struggled to introduce, but with only modest enduring success.


Economics, Henry George, Land Value Taxation, Local Government, Public Finance