Reader's Letter Of The Day

DBC draws my attention to this in The Guardian:

Ed Miliband's proposals to prevent the hoarding of land by developers and unhelpful neighbouring councils (Report, 16 December) marks the return of the land value question to the mainstream political agenda, which was once taken up by the issue and its proposed solution, the land value tax, with pro-LVT arguments from the Physiocrats, Adam Smith, the Mills, father and son, and, most spectacularly, Henry George.

Significantly, though it was once thought more important in an agricultural economy, the big pushes for LVT were in the People's Budget of 1909 (Lloyd George and Churchill) and the 1931 Finance Act (Philip Snowden) as it became obvious that cheap money from the banks does not stimulate consumption and production in an industrial economy but just sets off land price inflation, leading to house price bubbles which actually reduce spending on manufactured goods by heavily mortgaged households and those paying high inflated rents.

Ed Miliband should not underestimate the strength of the opposition in the UK: the entire political system, including some in his own party, is based on the practice of homeownerism, which means being voted in and staying in power by keeping up house prices to offer a working majority of voters huge unearned capital gains in their house prices as a something-for-nothing reward for their quiescence over falling real wages.

DBC Reed, Northampton