Wealth and Want
... because democracy alone is not enough to produce widely shared prosperity.
Home Essential Documents Themes All Documents Authors Glossary Links Contact Us



Justice or Injustice:
The Locational Benefit Levy
by Dave Wetzel
Chair of the Labour Land Campaign, UK

We all have our own personal interpretation of how “justice” can be achieved.

Often “justice” is interpreted in a very narrow legal sense and only in reference to the judicial system, which has been designed to protect the status quo.

That isn't to say we do not require a legal framework, which resolves:

    * the international relationships of Governments,
    * the regulation of business and trade and the certainty needed in agreeing contracts and commercial relationships,
    * the compliance with Government rules and regulations,
    * the safeguarding of civil liberties,
    * protection from criminals,
    * employment rights or
    * the settlement of civil disputes.

Of course, all citizens (and subjects in the UK) — need to know exactly what are the legal boundaries within which society operates.

But, supposing those original rules are unfair and unjust. Then the legal framework, being used to perpetuate an injustice — does not make that injustice moral and proper even if within the rules of jurisprudence it is “legal.”

Obvious examples of this dislocation between immoral laws and natural justice is
  • South Africa's former policy of apartheid;
  • the USA's former segregated schools and buses;
  • discrimination based on race, religion, disability or sex;
  • slavery;
  • the oppression of women;
  • Victorian Britain's use of child labour and colonialism.
All these policies were “lawful” according to the legal framework of their day but that veneer of legality did not make these policies righteous and just.

Any society built on a basis of injustice will be burdened down with its own predisposition towards self-destruction. Even the most suppressed people will one-day, demand justice, rise up and overthrow their oppressors.

Human survival demands justice. Wherever slavery or dictatorship has been installed — eventually, justice has triumphed and a more democratic and fairer system has replaced it. It is safe to predict that wherever slavery or dictatorship exists today — it will be superseded by a fairer and more just system.

Similarly, let's consider our distribution of natural resources.

By definition, natural resources are not made by human effort. Our planet offers every inhabitant a bounty — an amazing treasure chest of wealth that can supply our needs for food, shelter and every aspect for our survival.

Surely, “justice” demands that this natural wealth should be equally available to all and that nobody should starve, be homeless or suffer poverty simply because they are excluded from tapping in to this enormous wealth that nature has provided.

It obviously would be totally impractical for every person to have complete personal access to every part of the planet, to every mineral deposit, to every fertile field, to every city centre office site or every desirable residential location beside a river or an ocean. But as soon as two people want to enjoy the benefits of the same part of the planet that only one can enjoy – a system of distributing nature's gifts has to be devised.

In the past, this has been resolved by the physically, mentally, military strongest, the most cunning or the first settlers claiming possession, and much of our current ownership of land and natural resources descends from this obviously unjust method of distribution.

If our whole economy, with the private possession of land and other natural resources, is built upon an injustice — then can any of us really be surprised that we continue to live on a planet where wars predominate, intolerance is common, crime is rife and where poverty and starvation is the norm for a huge percentage of earth's population.

Is this inherited system really the best we can do?

There must be a method for fairly utilising the earth's natural resources.

Referring to the rebuilding of Iraq in his recent speech to the American Congress, Tony Blair stated “We promised Iraq democratic Government. We will deliver it. We promised them the chance to use their oil wealth to build prosperity for all their citizens, not a corrupt elite. We will do so”.

Thus, Tony Blair recognises the difference between political justice in the form of a democratic Government and economic justice in the form of sharing natural resources.

We have not heard any dissenting voice from this promise to share Iraq's natural oil wealth for all the people of Iraq to enjoy the benefits. But if it is so obviously right and proper for the Iraqi people to share their natural wealth – why is it not the practice to do the same in all nations?

No landowner can create land values. If this were the case, then an entrepreurial landowner in the Scottish Highlands would be able to create more value than an indolent landowner in the City of London.

No, land values arise because of natural advantages (e.g., fertility for agricultural land or approximity to ports or harbours for commercial sites) or because of the efforts of the whole community — past and present investment by both the public and private sectors, and the activities of individuals all give rise to land values. Why do we not advocate the sharing of these land values, which are as much a gift of nature and probably in most western economies are worth much more than Iraqi oil?

One solution would be to introduce a Location Benefit Levy, where each site is valued, based on its optimum permitted use and a levy is applied – a similar method to Britain's commercial rates on buildings but based soley on the land value and ignoring the condition of the building.

The outcome of this policy would be to give all citizens a share in the natural wealth of the nation.

The Government should use the income to abolish all other property taxes on buildings (including stamp duty and Council Tax), it could also pay for the building of new infrastructure which adds to the nation's wealth (such as railways) or more importantly to reduce those other taxes which most distort our economy and are a burden to collect.

With a Location Benefit Levy,
  • empty sites would be brought into use as landowners sought an income from idle land,
  • the purchase price of land (and hence homes and commercial premises) would become more affordable,
  • reduced interest rates would not create a housing boom and
  • the property cycle of booms and slumps would be evened out.
Because it is based on immovable property, the Location Benefit Levy would be cheap to collect and difficult to avoid. With annual valuations it would be fair for landowners, (even automatically compensating those landowners whose land has decreased in value), it would help reduce the North/South divide and by encouraging better use of brownfield sites, the propensity for urban sprawl would be diminished and thus our countryside and invaluable urban green field spaces would be better protected.

It is an injustice that landowners can speculate on empty sites, denying their use for jobs or homes.

It is an injustice that a factory owner can sack all their workers, smash the roof of their building to let in the rain and be rewarded with elimination of their rates bill.

It is an injustice that the poorest residents pay the highest share of their incomes in Council Tax.

It is an injustice that people are denied their share of the earth's resources.

The Location Benefit Levy is a simple way to start addressing the world's last great injustice

To share this page with a friend: right click, choose "send," and add your comments.

Red links have not been visited; .
Green links are pages you've seen
Top of page
Essential Documents
to email this page to a friend: right click, choose "send"
Wealth and Want
... because democracy alone hasn't yet led to a society in which all can prosper