Source of inequality

You lead on "Warning: inequality kills" (4 December), Steve Richards follows on taxes, then there's a piece on (groan!) the Third Way. But you fail, like the Labour government, to explore the links.

A century ago there was a clear understanding of the connection between taxation and inequality. Sir Henry Campbell-Bannerman intended to fund Liberal social reforms from the only just, progressive, non-inflationary, non-evadable source of revenue there is: "We will make land more of a treasure house for the nation," he said.

All wealth comes from the combination of labour, capital and land by enterprising individuals co-operating in communities. None comes from the actions of landowners per se. Yet, inevitably, all surplus wealth accrues to monopolistic owners of finite natural resources, unless government recovers rent from them.

There is a direct correlation between the degree of concentration of land ownership and the degree of wealth inequality. Nationalising land is not the answer; nationalising the rent from land is.

Without land value taxation, we will for ever suffer poverty alongside progress. All other "solutions" are mere palliatives: conscience-driven hand-wringing of no more use than sticking plaster on a tumour. And without a distinct economic dimension to the Third Way, so far lacking, there will be no progress without poverty.

Tony Vickers, Chief Executive,
Henry George Foundation of Great Britain, London E1

This article first appeared in the 18 December 1998 issue of the New Statesman, A time for unadulterated tradition