A council tax isn't a wealth tax

How should the government settle the inequalities in property wealth?

Very important, this one: the council tax isn't a wealth tax. That's a claim I've seen repeated around the place with relative frequency recently, most notably in Polly Toynbee's Guardian column today. She writes:

Wealth taxes only deliver 5.9% of revenues, mostly in council tax (which often falls on renters, not owners). Inheritance tax brings in just 0.5%, only paid by 3% of estates, halved since Labour unwisely doubled couples' exemption: it's the most avoided of all.

As she says, the incidence of council tax falls on the occupier, not the owner. If you have very little wealth but high income, you may rent a Band-H house and end up paying the same council tax as someone with very high wealth and very low income.

In practice, then, council tax is a tax on residency, not on property wealth and certainly not on wealth overall. (Legally, it's not quite that simple. A lease is still a form of ownership, so it's not quite the case that non-owners are taxed.)

It may be the case that, at the top end, that doesn't matter. If we were to introduce the "mansion tax" by adding a new band on top of council tax for properties over £2m, for instance, there would be few renters hit. But even then, there would still be some.

The distinction is important to make, because as the movement for a true mansion tax—or better still, a land value tax—grows, the opposition will try to claim that what we already have is good enough. It isn't.

The inequalities in property wealth are astronomical. A chart put together by researcher Andy Whightman makes that astoundingly clear. He writes:

This data was obtained from the Office of National Statistics by Faiza Shaheen of the New Economics Foundation and shows the average net property wealth for each 1% of the income distribution. The top 1% of the population has net property wealth of £15,040,000 whilst the bottom 33% has nothing. The top 1% own more net property wealth than the rest of the 99% combined.

But there's another way the government could take advantage of the discrepancies in property wealth to earn some income, settle the housing market and reduce inequality. Michael Darrington, former CEO of Greggs, writing in the Telegraph today, suggests a £100bn housebuilding programme funded by quantitative easing. But in focusing on the revenue source, he's missed the most impressive part of his plan, because he also suggests that:

While there are plenty of suitable sites for building already available, a programme on the scale I envisage would clearly require more.

One way to achieve this would be through the compulsory purchase of farmland at a sensible multiple of its agricultural value—say three or four times—which would give farmers a very good profit but not the lottery-winning values currently ascribed to development land.

But rather than the expensive and illiberal procedure of compulsory purchase, there's a more radical option available. As Darrington implies, land with planning permission is worth more than land without—a lot more. Frequently well over 20 times as much, in fact. And the institution with the power to convert land without planning permission into land with planning permission is the same one trying desperately to build houses.

In other words, an entire housebuilding program could probably be funded on the difference between the purchase price of agricultural land and the sale price of land with planning permission.

Councils could buy up agricultural land, award themselves planning permission, build houses, and sell some off while keeping the rest for social housing. In fact, such is demand for land with planning permission, they wouldn't even need to build them; they could just sell the land without houses, but insist that part of the sale price be that some houses built on the land be used for social housing.

In fact, councils wouldn't even need to buy the land. They could just grant planning permission with the same requirements on more land than they have been now. Because the real bottleneck is there, and not really with housebuilding at all.

Former council houses, refurbished and made energy-efficient. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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The Women's March against Trump matters – but only if we keep fighting

We won’t win the battle for progressive ideas if we don’t battle in the first place.

Arron Banks, UKIP-funder, Brexit cheerleader and Gibraltar-based insurance salesman, took time out from Trump's inauguration to tweet me about my role in tomorrow's Women’s March Conservative values are in the ascendancy worldwide. Thankfully your values are finished. . . good”.

Just what about the idea of women and men marching for human rights causes such ill will? The sense it is somehow cheeky to say we will champion equality whoever is in office in America or around the world. After all, if progressives like me have lost the battle of ideas, what difference does it make whether we are marching, holding meetings or just moaning on the internet?

The only anti-democratic perspective is to argue that when someone has lost the argument they have to stop making one. When political parties lose elections they reflect, they listen, they learn but if they stand for something, they don’t disband. The same is true, now, for the broader context. We should not dismiss the necessity to learn, to listen, to reflect on the rise of Trump – or indeed reflect on the rise of the right in the UK  but reject the idea that we have to take a vow of silence if we want to win power again.

To march is not to ignore the challenges progressives face. It is to start to ask what are we prepared to do about it.

Historically, conservatives have had no such qualms about regrouping and remaining steadfast in the confidence they have something worth saying. In contrast, the left has always been good at absolving itself of the need to renew.

We spend our time seeking the perfect candidates, the perfect policy, the perfect campaign, as a precondition for action. It justifies doing nothing except sitting on the sidelines bemoaning the state of society.

We also seem to think that changing the world should be easier than reality suggests. The backlash we are now seeing against progressive policies was inevitable once we appeared to take these gains for granted and became arrogant and exclusive about the inevitability of our worldview. Our values demand the rebalancing of power, whether economic, social or cultural, and that means challenging those who currently have it. We may believe that a more equal world is one in which more will thrive, but that doesn’t mean those with entrenched privilege will give up their favoured status without a fight or that the public should express perpetual gratitude for our efforts via the ballot box either.  

Amongst the conferences, tweets and general rumblings there seem three schools of thought about what to do next. The first is Marxist  as in Groucho revisionism: to rise again we must water down our principles to accommodate where we believe the centre ground of politics to now be. Tone down our ideals in the hope that by such acquiescence we can eventually win back public support for our brand – if not our purpose. The very essence of a hollow victory.

The second is to stick to our guns and stick our heads in the sand, believing that eventually, when World War Three breaks out, the public will come grovelling back to us. To luxuriate in an unwillingness to see we are losing not just elected offices but the fight for our shared future.

But what if there really was a third way? It's not going to be easy, and it requires more than a hashtag or funny t-shirt. It’s about picking ourselves up, dusting ourselves down and starting to renew our call to arms in a way that makes sense for the modern world.

For the avoidance of doubt, if we march tomorrow and then go home satisfied we have made our point then we may as well not have marched at all. But if we march and continue to organise out of the networks we make, well, then that’s worth a Saturday in the cold. After all, we won’t win the battle of ideas, if we don’t battle.

We do have to change the way we work. We do have to have the courage not to live in our echo chambers alone. To go with respect and humility to debate and discuss the future of our communities and of our country.

And we have to come together to show there is a willingness not to ask a few brave souls to do that on their own. Not just at election times, but every day and in every corner of Britain, no matter how difficult it may feel.

Saturday is one part of that process of finding others willing not just to walk a mile with a placard, but to put in the hard yards to win the argument again for progressive values and vision. Maybe no one will show up. Maybe not many will keep going. But whilst there are folk with faith in each other, and in that alternative future, they’ll find a friend in me ready to work with them and will them on  and then Mr Banks really should be worried.