Roof tax to replace much-slated tax

News

Peter Bill

15 July 2006

But it’s not trebles all round. Instead, ministers are looking hard at a so-called “roof tax”: a much more difficult-to-avoid tithe based on the number of homes, or number of square feet of commercial space, completed. This tax would be based on the cost of extra transport and social infrastructure needed. To overcome the fact that the local authority might have to build the roads or schools before completion of the works, it’s thought that a “promise to pay” contract will be signed, so allowing the authority to borrow the money.

The moral case for imposing a “super-tax” on the huge increase in land values of greenfield sites is hard to deny if the developments require public money to build supporting infrastructure. Indeed, it has been argued here three times in the past 12 months, latterly on 25 March, that the PGS should be scrapped and that a “roof tax” would be an acceptable alternative. But, as was said then, the roof tax must be restricted to large-scale sites where there is a proven link between the uplift in land values and the need for public expenditure.

Don’t count on help from ranks of one-armed bandits

Now that Lord Levy has been arrested, the hyena pack yelping after John Prescott has veered away to pursue bigger prey. But the unedifying story (pp52-54) of how the global casino industry has come to these shores, and is now thinking hard about leaving, will provide a sharp lesson for dozens of developers who, quite rightly, thought that slot machines would make their fortune.

The lesson is this: don’t gamble on a rational argument when it comes to gambling. Even the editor of the Daily Mail knows perfectly well that his C2 readers would have been at the front of the queue of those flocking to the eight regional “super-casinos” proposed in the Gambling Bill. But, like the leader of a latter-day Temperance movement, Paul Dacre knows what’s best for his readers and what’s a good brush with which to tar ministers. So, self-righteousness triumphed in a spirited campaign that forced the government to reduce the super-casinos from eight to one — and let an independent panel make the choice.

Not that this climb-down has stopped the yelping: a new low was reached this week when the Mail smeared the five perfectly respectable members of that panel by suggesting they had conflicts of interest and so, by implication, could not be trusted. They can. Leave them alone. But a naive casino industry must share the blame. This is not America. Influence must be earned, not sought through PR and the odd pair of cowboy boots. For developers seeking salvation for their schemes, the lesson is clear: never again gamble on gambling.

It appears the government is seeing sense (p21) and abandoning the idea of imposing a windfall tax on the increase in the value of land when planning permission is granted. Good. The so-called planning gain supplement was a variant of a tax that was first tried in the 1909 “People’s Budget” by Lloyd George and which resurfaced at least four more times over the next 67 years; in its last guise it was called the 1976 Development Land Tax Act. All attempts failed, destroyed by the same unworkable concept: trying to tax a valuer’s opinion of what the land is worth. But it’s not trebles all round. Instead, ministers are looking hard at a so-called “roof tax”: a much more difficult-to-avoid tithe based on the number of homes, or number of square feet of commercial space, completed. This tax would be based on the cost of extra transport and social infrastructure needed. To overcome the fact that the local authority might have to build the roads or schools before completion of the works, it’s thought that a “promise to pay” contract will be signed, so allowing the authority to borrow the money. The moral case for imposing a “super-tax” on the huge increase in land values of greenfield sites is hard to deny if the developments require public money to build supporting infrastructure. Indeed, it has been argued here three times in the past 12 months, latterly on 25 March, that the PGS should be scrapped and that a “roof tax” would be an acceptable alternative. But, as was said then, the roof tax must be restricted to large-scale sites where there is a proven link between the uplift in land values and the need for public expenditure. Don’t count on help from ranks of one-armed bandits Now that Lord Levy has been arrested, the hyena pack yelping after John Prescott has veered away to pursue bigger prey. But the unedifying story (pp52-54) of how the global casino industry has come to these shores, and is now thinking hard about leaving, will provide a sharp lesson for dozens of developers who, quite rightly, thought that slot machines would make their fortune. The lesson is this: don’t gamble on a rational argument when it comes to gambling. Even the editor of the Daily Mail knows perfectly well that his C2 readers would have been at the front of the queue of those flocking to the eight regional “super-casinos” proposed in the Gambling Bill. But, like the leader of a latter-day Temperance movement, Paul Dacre knows what’s best for his readers and what’s a good brush with which to tar ministers. So, self-righteousness triumphed in a spirited campaign that forced the government to reduce the super-casinos from eight to one — and let an independent panel make the choice. Not that this climb-down has stopped the yelping: a new low was reached this week when the Mail smeared the five perfectly respectable members of that panel by suggesting they had conflicts of interest and so, by implication, could not be trusted. They can. Leave them alone. But a naive casino industry must share the blame. This is not America. Influence must be earned, not sought through PR and the odd pair of cowboy boots. For developers seeking salvation for their schemes, the lesson is clear: never again gamble on gambling.