Measuring social value

Here's my letter to the FT, sadly not printed.

"Sir,

Your article "New philosophy blurs party lines" (13 May) states "The Tory leader said ministers in his government would take account of 'measures of social value' - the added benefit of having a local GP, library or post office - to promote 'not just economic efficiency but also social efficiency'. But how would this championing of social values be squared with the harsh realities of needing to close thousands of post offices to stem losses of £3.5m a week?"

The answer is simple.

The 'social value', in other words the value to society, of subsidised or taxpayer funded services that benefit any particular locality, can be measured by looking at location values - the additional price that people are prepared to pay for properties in that locality as opposed to one that lacks these services - and hence on local land values. The revenues from a tax on local land values, however measured, could in turn be compared with the cost of funding that "local GP, library or post office".

As long as the proceeds from the tax at least covered the cost of the subsidies, then we would have not just economic but also social efficiency.

In the specific case of post offices, for example, annual losses of £182 million could - should property owners so wish - be funded by an annual land value tax of one per cent of one per cent on UK site-only land/location values (which currently stand at approximately £2,000 billion).

Yours sincerely"

Note: the blanket tax to subsidise all post offices was just to illustrate the sums involved - I explained how this would work in practice here.