SLRG – Focussing on Equality, Shared Prosperity and a Fair Society

Introduction: Holyrood’s powers

Of course Westminster should have shared socially-generated wealth with all parts of the UK from the start (1707). Instead it sacrificed peripheral UK prosperity so that vast public value could continue to be directed into London site owner pockets.

However, devolved tax raising powers now provide Holyrood with the opportunity to start changing damaging taxes to benign AGR. Any missed opportunities to enact AGR reforms would transfer responsibility for Scottish inequality from Westminster to Holyrood.

Instead of repressing jobs and enterprise by taxing them, Holyrood should collect Scotland’s socially produced surplus to properly fund public services.

The mechanism that would redistribute our socially produced surplus (much of it today unjustly awarded to site owners) is Adam Smith’s Annual Ground Rent. Replacing taxes on wages and trade with AGR (aka Land Value Tax) would not only share that surplus fairly – tackling embedded inequality – but also boost and share prosperity, reversing the age-old flow of people and resources out of our country.

Devolved tax powers allow Holyrood to cancel at least £12bn of annual Scottish Deadweight Losses immediately. That’s about one third of the total avoidable damage automatically inflicted on the Scottish economy each year by Westminster taxes on wages and trade.

Our report, Scotland’s Path to Prosperity (submitted to the Scottish Land Commission in 2018) is a fully costed and highly detailed proposal demonstrating how Holyrood should use devolved powers to replace a proportion of Income Tax with AGR/LVT. Adopting our proposals would boost the Scottish economy by over 9% a year without raising any extra revenue.

Holyrood should undermine the central pillar on which Westminster is built. And confront the reason why the UK Idea, as currently packaged, could never work in Scotland’s interests: the menace of Rent-seeking.

Site rent as revenue is the policy which has powered the economies of Hong Kong, Singapore and Taiwan, allowing ultra-low taxes on incomes, sales and profits. You will also be setting in motion forces that will automatically…
• tackle austerity
• boost Scottish growth
• fully fund Scottish public services
• escape annual deficits
• address the housing crisis
• reduce concentrated land holding
• halt premature deaths attributable to poverty (e.g. 17 years lost to men in Drumchapel)
• end social exclusion with its associated maladaptive coping mechanisms
• provide full employment
• share prosperity
• reverse depopulation
• remove the burden of debt we are currently placing on our children and future generations of Scots
• curb pollution and the reckless use of natural resources
Holyrood, please listen to the advice of the retained Nobel Prize winning members of your Council of Economic Advisers, Professors Joe Stiglitz and the late Sir James Mirrlees, who consistently advocate(d) such a revenue policy. The alternative is to allow Scotland to remain a Rent-seeking zone. In which case, responsibility for sustaining the problems that characterise such cultures will begin to be shifted away from Westminster on to the shoulders of Holyrood.