Source:
https://www.landvaluetax.co.uk/about-lvt/what-is-lvt
The advent of Andy Burnham as Labour Leader and Prime Minister, has brought Land Value Tax into the spotlight as a way of addressing the iniquities of Council Tax. It is a tax favoured by some in the Labour Party and the not very prominent policy of the Green Party. The latter may change as politicians across parties try to address the crisis in local government financing.
Murad Qureshi, former chair of the London Assembly Environment Committee, has given Wembley Matters kind permission to reproduce his timely article first published in London List LINK. I publish it as a Guest Post.
In [a] previous piece for LabourList, I argued that Britain’s broken, regressive property tax system demands bold, systemic reform. Council Tax, frozen in 1991, economically damaging Stamp Duty, and punitive Business Rates do nothing but entrench inequality and stifle local growth. For a Labour government aiming to build an economy that works for the many, Land Value Tax (LVT) represents the most rational, growth-friendly path forward.
But the case for LVT extends far beyond national Treasury spreadsheets. If we are serious about shifting power out of Westminster, LVT is the foundational tool required to make regional devolution a reality. This reality was brought into sharp focus by Andy Burnham’s major policy speech at the People’s History Museum in Manchester.
Championing a philosophy he terms “Manchesterism,” Burnham laid out a sweeping vision for his forthcoming administration, headlined by a “No. 10 North” to coordinate regional growth and a radical overhaul of business rates. While his immediate focus is on practical adjustments—like slashing hospitality rates and penalising giant online distribution warehouses—these proposals directly align with his long-standing advocacy for LVT. Burnham has consistently argued that “land is under-taxed”. By blending his fiscal localisation strategy with the principles of LVT, we can fundamentally supercharge UK devolution in three key ways.
Smashing the “Whitehall Cap” with Financial Autonomy
True devolution cannot exist on an allowance. Currently, metro mayors and local councils are trapped, heavily relying on central government grants or highly regressive, outdated tax systems. As Burnham rightly points out, it is absurd that a modest family home in Blackpool can face a comparable tax burden to a multimillion-pound property in London due to outdated Council Tax bands.
To fund local infrastructure, leaders shouldn’t have to “beg” Whitehall. Transitioning toward an LVT—or a Proportional Property Tax as a stepping stone—allows local authorities to capture revenue directly from the unimproved value of the land itself. Because land value is largely created by the community through infrastructure, schools, and jobs, capturing this wealth locally grants regions stable, independent funding. This breaks the financial leash, giving areas like Greater Manchester the genuine autonomy to invest in their own futures.
Ending the “Housing Trap” and Spurring Regeneration
In his Manchester address, Burnham prioritised lifting Britain out of a chronic “housing trap” by accelerating council house building and revitalising empty town centres. Our current system penalises progress; if a developer improves a site, their taxes rise, but if they leave a storefront vacant or a plot empty, they face little penalty.
An LVT flips this incentive structure. By taxing the underlying value of the land regardless of what is built on it, land banking and speculation become financially unsustainable. Speculative landlords can no longer hoard vacant sites in hope of unearned windfalls. This creates a highly productive form of taxation that forces development, empowering combined authorities to reclaim brownfield sites and transform them into affordable homes.
Rebalancing Wealth Across the Postcodes
Devolution only succeeds if regional economies possess the baseline wealth to sustain themselves. Because land values are exponentially higher in London and the South East, LVT naturally shifts the national tax burden onto these high-value areas.
This shift provides a massive financial breather to middle and lower income postcodes across the North, Midlands, and coastal towns. By freezing or reducing the tax burden on working families, we free up local household income. This keeps wealth circulating within the regional economy rather than draining back into the capital, fostering what Burnham calls “good growth in every postcode.”
The Rational Path Forward
Burnham’s call for a “No. 10 North” and immediate business rates reform shows that the appetite for radical decentralisation is there. But temporary tweaks to business rates are just the beginning.
To permanently shift civil service power and economic gravity away from London, we must alter the tax foundation beneath our feet. As the Labour Land Campaign has long championed, LVT is not a radical fringe theory; it is a market-efficient, progressive mechanism backed by modern digital mapping and Land Registry data.
If Labour wants to deliver on the promise of national renewal, it should look to the trailblazing vision emerging from the North. By backing Land Value Taxation, the party can provide leaders like Andy Burnham with the permanent fiscal teeth needed to make devolution a lasting success.
EDITOR'S ADDITIONAL NOTES
www.economicsobservatory.com notes that tax proposals from the Greens include a land value tax and more aggressive carbon pricing. Land value taxes – which have a long intellectual tradition going back to founding fathers of economics Adam Smith, David Ricardo and John Stuart Mill – attract unusually wide-ranging support, with the New Economics Foundation, the Institute for Fiscal Studies (IFS) and the Institute for Economic Affairs among those in favour of the policy, as well as academics such as John Muellbauer (2023)
The case for a land value tax is overwhelming Martin Wolf Financial Times
Labour Land Campaign
Briefing Paper for Motion: The GPEW Manifesto 2024 and Economics
So if I have worked incredibly hard all my life, paid all my taxes, and as a result have purchased freehold property or share of freehold, to ensure i am financially secure, will I be penalised by having to pay a yearly tax? I will simply pass on to my tenants by increasing their rent.
ReplyDeleteMy neighbours on the other hand, many of them, don't work, receive council and housing benefits, are antisocial and the rest of it, will continue to pay nothing into the system?
I know many British people who have left this country recently to live somewhere where they pay less tax or because they are fed up with being taxed on everything but see no benefit to them or society/community. What a joke we have become. I think i should consider moving abroad and take my money with me.
If the government changed the rules so that those doubling the size of their properties paid more council tax immediately rather than only when it was sold it would mean fairer tax.
ReplyDeleteWhy should a family (parents with a couple of kids) living in a 3 bed house pay the same council tax as those living in the house next door which has been extended to 6 bedrooms and is full of full time working adults???
All of our relatives outside of London have absolutely huge gardens so assume they will start subsidising us Londoners that have postage stamp gardens?
ReplyDeleteSo many shops closing in our area because of the impact of so many Wembley Stadium event days which cause huge traffic jams and major parking issues.
ReplyDelete“A fair tax” ? - no this is not a fair tax, particularly for those of us who have the misfortune to live in London. This makes the poll tax look fairer and we know what happened there
ReplyDeletePeople will start selling green spaces, and they’ll be destroyed or: built on with a LVT.
ReplyDeleteThe problem with the LVT campaign is that it always seems to end up in the same place: whatever the problem is, the answer is apparently Land Value Tax.
ReplyDeleteBrent’s housing crisis wasn’t caused because landowners pay the wrong tax. It was caused by years of austerity, the collapse of council house building, speculative development and planning decisions that have too often put developers ahead of local communities.
Take Wembley. Thousands of new homes have gone up, the skyline has completely changed and land values have shot up. Yet the housing waiting list is still enormous and plenty of local people still can’t afford to live in the homes being built. That isn’t because we don’t have LVT. It’s because too much development has been driven by what makes the biggest return, not by what local people actually need.
The article talks about London as if it’s just one big pot of wealth, but Brent shows how misleading that is. You can walk from streets with million-pound homes to overcrowded flats, temporary accommodation and families relying on food banks in a matter of minutes. Rising land values don’t magically mean people are well off.
And let’s not pretend LVT is the key to devolution. Brent Council wasn’t brought to its knees because of Council Tax. It was brought to its knees because central government hollowed out council funding over years. Changing the tax base doesn’t reverse that.
What really jars is the claim that one tax reform can fix housing, regeneration, local government finance and regional inequality all at once. Brent has already lived through years of regeneration, rising land values and luxury developments, but many residents have seen little benefit. If anything, they’ve watched public land disappear, communities come under pressure and housing become even less affordable.
This reads less like a serious answer to Brent’s problems and more like an attempt to make one favourite policy fit every question.