Changes to Planning Obligations: a Planning-gain Supplement consultation
We have already responded to the original proposals for a Planning Gain Supplement at a meeting in the Treasury over a year ago, when our President, Dave Wetzel, spelled out our objections to the idea, which, he pointed out, had been tried three times since 1945 with very poor results.
We repeat that, although we are very pleased that the Government is considering a land-based tax, we are opposed in principle to this particular plan.
If the supplement is modest or light touch it will have very little impact on the release of land and will raise relatively little income for the Treasury.
If, on the other hand, the level of the supplement is high it is certain to prevent the very outcome which is intended. It will deter developers from developing.
In any case, it would be far more effective, and fairer, to impose a much more comprehensive annual Land Value Tax on all land. This really would encourage “good” much needed development, especially on brownfield sites.
The advantages of our approach have been attracting increasing support. Within the Labour Party, the Compass pressure group have joined the Labour Representation Committee in advocating LVT. The Liberal Democrats’ medium and long term aim is to have some form of site value rating and/or land value tax. The Green Party are also in favour.
We strongly advise the Government to listen to leading journalists who, like Samuel Brittan, Martin Wolf and Ashley Seager, are also expert economists. They are convinced that LVT is a better answer to the questions you are asking.