Why Osborne is wrong to reject property tax reform

The Chancellor has missed another opportunity to make our tax system fairer and more economically efficient.

Ahead of Wednesday’s Autumn Statement, the Chancellor is eager to show that the wealthy will contribute to the on-going process of deficit reduction. Although the Liberal Democrats have repeatedly called for a ‘mansion tax’, this will almost certainly be achieved by further restricting the tax-free amount that individuals can pay into private pension pots. Opposition to raising taxes on property-owners from within the Conservative Party has been too great, indicating that the coalition will fail to deliver serious reform of property and wealth taxes in this Parliament. 

This is a missed opportunity given the endemic weakness of the current system. Inheritance tax is deeply unpopular and raises little money, while the ‘wealthy and healthy’ can avoid it with judicious tax planning. Stamp duty is easy to collect but lacks any economic justification and unnecessarily distorts people’s decisions about moving house. Council tax raises the most revenue among the three, around £26bn a year, but is regressive and levies the same amount of tax on properties of hugely different value. This is the result of the unwillingness of successive governments to revalue domestic properties since the introduction of council tax in 1993.

Properly designed property (and land) taxes make economic and fiscal sense according to the OECD, particularly if levied annually on regularly updated property values. These taxes tend to have the smallest negative impact on incentives to work or invest, provide a relatively stable tax base and could improve the use of land and property. This suggests that reforms to council tax could seek to increase the amount of revenue raised over the long-term, as well as increasing fairness and efficiency in the tax system. This could help to pay for the extra public services we want as we get older and richer, or offset cuts in business or labour taxes that might help boost jobs and growth.

There is no shortage of ideas about how Britain’s property taxes could be reformed, with sensible solutions put forward by the authoritative Mirrlees Review, the Joseph Rowntree Foundation and Shelter. For example, a flat rate tax of 0.6 per cent on current property values would raise roughly the same revenue as council tax but with lower bills for people living in homes worth less than £250,000. In the long-term, stamp duty could be scrapped entirely and the revenue found elsewhere, but reformed in the medium-term to lessen its impact on house prices at particular price points. More radical would be a land value tax, popular with economists but operated in relatively few countries. As a first step, the economic and fiscal impacts of a tax on high-value but undeveloped land should be assessed. This could help free up underused land for house-building.

The biggest block to reforming property taxes is the fear that large numbers of middle class families will end up paying more tax. However, the UK’s devolved administrations have shown that these political constraints can be overcome. The Welsh Assembly Government re-valued properties in 2003 and added an extra council tax band, while in Northern Ireland, which runs a system of domestic rates rather than council tax, the administration successfully updated the valuation base in 2007. An initial revaluation would probably be controversial but this would lessen over time if properties were regularly re-valued, which many countries do every one or two years without much fuss. And let’s not forget the removal of mortgage interest tax relief, a massive subsidy to middle class homeowners, which was gradually phased out by 2000 with little public outcry. Incremental change coupled with some off-setting of losses among those paying more seems to have been important. We can’t expect new proposals on property and wealth taxes in the Autumn Statement, so learning the political lessons from these reforms will be crucial to making further progress in the next Parliament.

Kayte Lawton is senior research fellow at IPPR.

Chancellor George Osborne and Danny Alexander, the Chief Secretary to the Treasury leave 11 Downing Street on 4 December, 2012 in London. Photograph: Getty Images.

Kayte Lawton is senior research fellow at IPPR.

Photo: Wikimedia Commons and Getty
Show Hide image

“Rise like lions after slumber”: why do Jeremy Corbyn and co keep reciting a 19th century poem?

How a passage from Percy Shelley’s The Masque of Anarchy became Labour’s battle cry.

“If I may, I’d like to quote one of my favourite poets, Percy Bysshe Shelley,” Jeremy Corbyn politely suggested to a huge Glastonbury audience. The crowd of nearly 120,000 – more accustomed to the boom of headline acts than elderly men reading out romantic poetry – roared its approval.

“Rise like lions after slumber, in unvanquishable number!” he rumbled. “Shake your chains to earth like dew, which in sleep had fallen on you: ye are many – they are few!”

The Labour leader told the crowd that this was his favourite line. It’s the final stanza of Shelley’s 1819 poem, The Masque of Anarchy, written in response to the Peterloo Massacre earlier that year, when a cavalry charged into a non-violent protest for the vote.

Though it was not published in Shelley’s lifetime – it was first released in 1832 – the poem has become a rallying cry for peaceful resistance. It has been recited at uprisings throughout history, from Tiananmen Square to Tahrir Square.

Corbyn’s turn on the Pyramid Stage was not the first time he’s used it. He recited the stanza during his closing speech on election night in Islington, and the audience began quoting along with him:


It was also used by comedian and celebrity Labour supporter Steve Coogan at a rally in Birmingham:


During Corbyn’s second leadership campaign, his ally Chris Williamson MP told a public meeting that this part of the poem should be “our battle cry” . He delivered on this the following year by reciting the poem to me in his Renault Clio while out on the campaign trail in England’s most marginal constituency (which he ended up winning).

You can hear it echoed in Labour’s campaign slogan: “For the many, not the few”.

Corbyn’s election guru, James Schneider, told the Standard at the time that “it would be a stretch” to say the slogan was taken directly from the poem, but that “Jeremy does know Shelley”. Yet even he took the time to recite the whole stanza down the phone to the journalist who was asking.

Corbyn is famously a fan of the novelist and author Ben Okri. The pair did a literary night at the Royal Festival Hall in London’s Southbank in July last year, in which the Shelley lines came up at the end of the event, as reported by Katy Balls over at the Spectator. Okri announced that he wanted to recite them, telling Corbyn and the audience:

“I want to read five lines of Shelley . . . I think there are some poems that ought to be, like you know those rock concerts, and the musician starts to sing and the whole audience knows the lines? And sings along with them? Well this ought to be one of those, and I’d like to propose that we somehow make it so that anytime someone starts with the word ‘Rise’, you know exactly what the lines are going to be.”

Which, of course, is exactly what Corbyn did at Glastonbury.

“We have this huge, abundant literature on the left and it’s hardly known”

The former left-wing Labour leader Michael Foot loved the poem and recited the lines at demos, and Stop the War – the campaign group Corbyn supports and chaired – took a line from it as the title of its 2014 film about anti-Iraq War action, We Are Many.

So why does the Labour left rally around some lines of poetry written nearly 200 years ago?

“It’s a really appropriate poem,” says Jacqueline Mulhallen, author of Percy Bysshe Shelley: Poet and Revolutionary (Pluto, 2015). “Shelley wrote a poem about the fact that these people were protesting about a minority taking the wealth from the majority, and the majority shouldn’t allow it to happen.

“He was writing at the beginning of industrial capitalism, and protested then, and 200 years later, we’ve still got the same situation: food banks, homeless people, Grenfell Tower, more debts – that’s why it has great resonance when Corbyn quotes it.”

“Shelley said there’s loads of us, it’s just a little corrupt crew – well, of course that applies now”

Michael Rosen, the poet and former Children’s Laureate, also describes the poignancy of Shelley’s words in Corbyn’s campaign. “You’ve got a sense of continuity,” he tells me. “Shelley was campaigning for freedom, for free thought, for free love. He was campaigning for a fairer society; it was a time of incredible oppression. He said there’s loads of us, it’s just a little corrupt crew – well, of course that applies now.”

Rosen celebrates the poem’s place in the Labour movement. “When any of us from the left quote people from the past, we’re saying that we have traditions... We’re making a claim on our authenticity,” he says. “Just in the same way as the right and the establishment draw on the pageantry of the Queen, or talk about Parliament or quote Winston Churchill. These are our traditions, which are different. You hardly ever come across it, either in newspapers or history lessons or anything.”

Rosen, a friend of Corbyn’s, believes his speech brings a left-wing tradition alive that is often forgotten. “We have this huge, abundant literature on the left and it’s hardly known. What’s great about Jeremy calling on it is to remind us . . . This stuff sits in old museums and libraries, gathering dust until it’s made active and live again. It’s made active and live particularly when being used in an environment like that [Glastonbury]. He was making the words come alive.”

Read more: 7 things we learned from Jeremy Corbyn on The One Show

The Masque of Anarchy’s final stanza has been recited at high-profile protests throughout history – including at the 20,000 garment workers’ strike in 1909 in New York, the student-led demo in China’s Tiananmen Square in 1989, anti-Poll Tax protests, and at Tahrir Square in Egypt during the Arab Spring, according to Mulhallen. The way civilians were treated by the authorities in many of these protests echoes what happened at Peterloo.

So does Corbyn’s penchant for the verse mark a similar radical turning-point in our history? “It’s indicating a change in attitude that people should start thinking about redistributing the wealth again,” says Mulhallen. “People are becoming much more aware.”

Anoosh Chakelian is senior writer at the New Statesman.

0800 7318496