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Part of the debate – in Westminster Hall at 11:29 am on 24th July 2002.

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Photo of Adrian Sanders Adrian Sanders Liberal Democrat, Torbay 11:29 am, 24th July 2002

I am talking about not a development land tax, but land value taxation. It was attempted in the 1920s but sadly, it was blocked for one simple reason: we did not then have a comprehensive land register, which would have been necessary for the policy to be successful. Such a tax would raise significant sums and could replace the uniform business rate altogether. We could do away with the uniform business rate and simply tax the site value of businesses and land. That might also help to iron out regional differences such as the overheating of particular regions. Developers would be encouraged to develop land with a lower land value tax, moving development away from the hotspots to other areas that we wish to be regenerated. Such a tax would also end windfall gains to which people contribute nothing. People lucky enough to live near the Jubilee line saw their properties rocket in price, but made no contribution to its costs. Such windfall gains are unjust, and the Government should consider mechanisms to put that situation right.

There are fairer mechanisms than section 106 agreements, which are mainly dependent on the negotiating skills of a particular local government officer with a particular developer. There can be two identical schemes in different districts, but one will get much more out of its section 106 agreement than the other. That system, too, must be reformed.