Adam Smith Institute – Capturing Land Value Uplify is the Real Magic Money Tree

ASI Blog

The government faces a dilemma: it is under heavy pressure to row back on austerity without losing its hard earned reputation for fiscal responsibility.

Fortunately Dr. Madsen Pirie, President of the Adam Smith Institute, has come up with an idea that manages to bypass the objections that are seen of the classic ways of funding deficit spending: raising taxes, printing money, borrowing and the political problem of cutting tax to pursue growth.

A fifth way is to raise money from selling things.

‘This time it would mainly be land that was sold, partly land already owned by government, but overwhelmingly land acquired for the purpose.

‘Local authorities should be empowered to buy land in their areas, land without planning permission for development. They should be authorised to grant it planning permission, and sell it on for development.’

Read the whole paper relating to this idea here, and his words in the Telegraph here.

Local authorities should be empowered to buy land in their areas, land without planning permission for development. They should be authorised to grant it planning permission, and sell it on for development. This would command many times the price they paid for it, and would bring in billions of pounds of revenue. We calculate it could raise almost £30 billion for the first million units.

 

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3 thoughts on “Adam Smith Institute – Capturing Land Value Uplify is the Real Magic Money Tree

  1. You can’t possibly hold up Japan as an example of how you can build homes and keep prices down – we’re incomparable. They have literally millions of empty homes, their population is declining to the point where the Government wants to legislate to encourage bigger families yet hundreds of thousands of new homes are built every year. All delivered through a centralised planning system.
    I personally thought the problem was with our entire economy being geared up to treat every home as an asset. I’m sure my pension company is holding land as an asset, for example. So, how could any political party adopt this system when it would “risk” devaluing homes and housing land nationally, and never being voted for, ever again?
    Having said that, I’m willing to give it a go… and try something else if it doesn’t work. Anything, rather than see local communities dwindle.

  2. Great way to drive a great big wedge between the public and local authorities.
    As a parish Councillor i’m already subjected to abuse for taking back-handers, doing the dirty work of developers, pre-determining decisions that will deliver housing because we benefit through increasing the precept, etc.when decisions go against local opinion.
    This will also possibly create a bandwagon for candidates with extreme views to gain a foothold in local authorities.
    I see this as a great way to undermine the integrity of the current system and damage it beyond repair in the eyes of the public.

  3. Of course, as the plan-maker and decision-taker, the local authority should refuse any applications on all competing sites. This would lift the development value of their own sites thereby increasing their income to pay for essential public services.

    Isn’t this the problem with all land-value capture discussions? You eventually lose sight of the human dimension as the technocrats become more and more preoccupied with balancing the books?

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