The ‘UK idea’, as currently structured, cannot work for most Scots

By Ian Kirkwood

Life at the UK margin, including much of Scotland, is blotted out by taxes on wages and trade. It’s why enterprises and jobs hardly exist at Scotland’s more remote or otherwise marginal locations. But this imbalance can be addressed: by instead collecting the site values we all generate together. Because site rental values are high at the economic centre and low at the margin. If these were treated as state revenue, everyone would pay their surplus and no more: life would be revived and enterprises reborn at the margin.

Wages and trade taxes are jealously guarded at Westminster with ‘good’ reason: Taxes invested in London and the southeast automatically boost site values by 400% (e.g. site values were multiplied by a factor of four to five on completion of the Jubilee Line extension).

But those returns belong to tax payers, including those attempting to live at the geographic and economic periphery. The UK Idea could and would serve all its citizens – even at the margin – if the returns on invested taxes were fairly shared. But only site owners get them (and in outrageous disproportion at the economic centres), despite the fact that they do nothing to earn the £millions they pocket largely tax free. It is unearned wealth extracted form its producers (…you and me!). Hence underfunded public services, widespread social dislocation and rampant inequality.

It’s time to replace damaging VAT and income taxes with AGR/LVT. Holyrood now has devolved power to cancel one third of the annual Westminster damage (1/3 of up to £72bn/year in Scotland) by replacing a large slice of Income Tax with locally collected AGR/LVT.

What will Holyrood do?

241 years and we’re still not listening

“Both ground-rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own. Though a part of this revenue should be taken from him in order to defray the expenses of the state, no discouragement will thereby be given to any sort of industry. The annual produce of the land and labour of the society, the real wealth and revenue of the great body of the people, might be the same after such a tax as before. Ground-rents, and the ordinary rent of land, are, therefore, perhaps, the species of revenue which can best bear to have a peculiar tax imposed upon them.”

The Wealth of Nations, Adam Smith, 1776:Bk.V: 370.