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ConservativeHome on Sunday included this little piece of hubris. Now, it is true that, somewhat inexplicably to me, Gideon's announcement about raising the Inheritance Tax threshold, something that everyone seems to acknowledge affects just 6% of estates (about 30,000 families each year) currently, seems to have done them a lot of favours, positioning them in the public perception at least as a tax cutting party.

But it would be quite wrong on a number of levels to say that they are lowering taxes:

• First, they are simply shifting the burden. Sure, it is shifting from a few relatively wealthy households (with average house prices once again below £200k having a housing asset over £350k is still in the top quintile nationwide) who can and generally do vote to a very tiny number of households who generally can't and don't vote. But shifting, rather than cutting, it undeniably is.
• Second, even if it were not the "revenue neutral" shift (after all they have also promised to stick to Labour's spending plans so need the money from somewhere) it would amount to a tax cut of just 0.88% of the government tax take (that's central government by the way - i.e. excluding local taxes). If a party that has regularly claimed to be managerially superior and capable of saving government wastage cannot "lose" less than a measly one per cent of its revenue in efficiency savings, they're clearly not the competent financial managers they would have us believe!

It astonishes me that a measure that would be felt my fewer than 30,000 families per year can be spun as some major step forward in tax shifting, let alone tax cutting. Compared to the Lib Dem proposals - abolishing the Council Tax (the tax most respondents found unfair in recent polling by the Tax Payers' Alliance) would be immediately felt by virtually all households; reducing national Income Tax by four pence in the pound would be felt by every individual earning anything more than the personal allowance, the Tory changes to IHT and Stamp Duty on homes, are small fry - mere plankton in fact.

But both parties of course propose changes that are "revenue neutral". Nobody seems to be advocating real tax cuts. And maybe when the population wakes up to this fact they will see through the spin and reject those attempting to hood-wink them into believing they will somehow be much better off. On balance of course, the Lib Dem proposals would leave far more people better off, if they tread lightly on the resources of the planet, for most of our tax cuts are to be funded by increases in taxation for environmentally damaging behaviour and life-styles.

Vince Cable - the best prospective Chancellor by far?

So why is it not us that have made eleven percentage point gains in the polls? For I have to say, compared with either Gideon, Gordon, Balls or Darling I find Vince Cable the most palpably honest and certainly best briefed potential Chancellor of the Exchequer in mainstream politics right now. Might I suggest that it is a lack of clarity, especially about who gains and who loses under our proposals. This was most obviously apparent when Charles Kennedy famously fluffed his interview on Local Income Tax during the 2005 General Election campaign.

Our Green Taxes and local tax reform ideas have been criticized by others:

• as affecting the annual family holiday (wrong - they do however aim to penalize those very lucky tiny few who have the time, lack of domestic commitments and financial wherewithal to take weekend breaks abroad every month or two - where their flight costs pale into insignificance compared with hotel and entertainment costs)
• to hit the poorest households' motorists (wrong again - the 33% poorest households by and large still do not even have access to a private car and would in fact be likely to benefit from the resultant investment and better efficiency in public transport)
• or to greatly increase the income tax of those two young nurses of CK's fluffed interview (still wrong - the four pence in the pound reduction in national income tax is intended to more than cover the Local Income Tax and they won't be paying Council Tax on top).

So why can't we get that across to people? It's a far more compelling package than the Tories and their tax cuts for the rich - which is jam tomorrow for even those who might benefit and jam never for most of us.

Now, you would not expect me to comment on tax policy without mentioning my pet pair of elephants - Land Value Tax and Citizens' Income . I maintain that by adopting the "Single Tax" of Henry George - that is taxing the unimproved value of all land as a replacement for (most*) Income Tax, Capital Gains Tax, Inheritance Tax, Corporation Tax, and, if Europe were to agree, Value Added Taxes and returning most of even that Land Value Tax to the people to spend in the form of "an unconditional, non-withdrawable income payable to each individual as a right of citizenship" (the description used by the Citizens' Income Trust) would so transform our economy and environment that government expenditure could be reduced to just a fraction of the proportion of the national income it is today.

Couple this with monetary reform that would see a national credit authority, free of government and politicians' interference, creating just the right amount of new currency needed by the economy to account for each year's growth in the economy instead of privatised debt creation doing the same job with a lot less stability as recent weeks in the financial markets have shown, we would have virtually no need for taxation at all (except perhaps as a behaviour modifying mechanism)

Pie in the sky? Well, it may be. But surely that sort of promise is worth investigating at the highest level. We assume the way we currently operate - coercive taxation and state capitalism - is the only one possible. It is true that, as the joke goes, in order to get to that fiscal nirvana one would not start from where we are, but the potential attractions are so enormous that we ignore them at our peril. Land Value Tax has some heavy-weight supporters historically - Adam Smith, J S Mill, Winston Churchill, Lloyd George, Albert Einstein, George Bernard Shaw, Milton Friedman and others cannot all have been wrong, surely?

I stumbled across this group of bloggers the other day called the "Low Tax Coalition" .  I considered applying to join their number, but so far as I can see not one of them even dares to imagine the sort of low/no tax economy I set out above.

*I say "most" Income Taxes (and possibly CGT too) because I am becoming more convinced that some of these taxes on (some of) the highest earners may be necessary in the short to medium term to recoup the "embodied advantage" they have gained under the current less fair system. For an example of what I mean, look at the current Sainsbury take-over where the shareholders are about to crystalize property values worth up to around £10bn effectively valuing the grocery business at nothing despite its obvious earnings history and potential.

An article on the BBC today about housing and nationalists:

BBC NEWS | Politics | Housing 'key to far right rise':
By Dominic Casciani

Competition for housing is the "frontline" of a battle to prevent the far right's rise, MPs have warned.

Labour MP John Cruddas and Lib Dem Simon Hughes said policymakers had failed to recognise BNP gains were linked to anger over who gets homes.

...reminded me of a scene in "Cathy Come Home" the other night where the women in the hostel are arguing with a black woman that "her type" was getting all the available housing.

Plus ca change...

Health seems to have become the theme of the day in the Lib Dem leadership debate, at least amongst bloggers (John Dixon's "A Radical Writes" here, and Tristan's "Liberty Alone" here as examples). The two candidates themselves have both now produced manifestos of sorts with Chris Huhne (page 9) promoting "the principle of universal access on the basis of need" and Nick Clegg earlier (despite John Dixon's interpretation otherwise) setting down the principle that "our universal public services must be free to use and accessible to all".

Both have admirable reasons for wanting to retain this universality and free access; that if we choose any other paradigm the poorest will miss out by not being able to afford to pay in a non-free system. But, as I've said about education, and more recently touched on in my piece about protectionism last week to me this seems, if you pardon the terrible health-related analogy, merely a sticking plaster. The ideal revolutionary liberal position surely would be to ensure that everyone had the financial wherewithal to participate properly in a market system and then to trust them to make their own choices.

On the day that the Marmot report into diet and cancer appeared, and whilst acknowledging that he said that his commission was still to deal with policy recommendations, one can be fairly certain that they are not going to recommend that the government, local or national, takes control of what dietary choices people are allowed to make. And yet our knowledge increases all the time that such choices are likely at least as important to our health outcomes as the treatment we may receive once we are ill. So why do we not do the same for illness care when all the evidence suggests that despite £110bn a year public expenditure, we are still the "sick man of Europe"?

Surgeons operating
Originally uploaded by el Reino

The NHS was, I believe, a fantastic idea at the time, in the context of the war on the five wants. In a near bankrupt nation post-war it was also clearly in the national interest to try to use economies of scale and national bargaining to ensure that you could provide a basic level of universal service to all. But let's face it, right now it is a gigantic protection racket, the mother of them all if you ask me. We also heard today that the average GP salary is now at £110,000 - a ten per cent rise in the second year of their new contracts - and yet the Department of Health today has said that 1200 British medical graduates are unlikely to get training places in the UK this year. So there's almost certainly an economic rent arising from the triple protectionism of the NHS, the GMC and the BMA.

Hopefully at least this and the national bargaining for other staff would end with localization so that those parts of the country where it is difficult (read near impossible) to live on a Grade D nurse's salary can offer decent packages, but I haven't even touched on the protectionism of NICE, NHS drugs contracts, the drugs patenting system as a whole and the stifling bureaucracy surrounding anything innovative by way of ways of treating and so on.

None of this is to say that the "private sector" is necessarily the best solution in all areas. I'm against monopoly and public protectionism, not public service per se - after all the nature of the hippocratic oath is dedication to a public service. And the worst of all worlds could be one in which there's a certain amount of public funding up for grabs by private operators who have no incentive to innovate and be really efficient - that's simply transferring the protectionism to shareholders.

No, the problem is really one of how to ensure that everyone would have the ability to pay for their choice of provider. And I return to the Citizen's Income and the systemic economic imbalances that concentrate unearned wealth, or more correctly the wealth created by the community as a whole rather than by an individual's or firm's own innovation, investment and labour. I'm not a good one to talk on health issues - the last psychiatrist I saw reckoned my attitude to my developing diabetes was one of the "slow suicide". But I'll bet if I was faced with a bigger insurance premium or buying more fruit and veg instead of eating crap, I'd probably plump for the healthier lifestyle to minimize my insurance. Redistribute the common wealth properly to everyone as is our birthright and we have these choices.

Just look at Nuffield Hospitals Group right now - it's buying up private gym firms like Cannons (effectively turning private companies into social enterprises of course). Why would it be doing that? Because BUPA really wants its members to live healthily, not to call on them when they're in a preventable medical condition. I'm also sure that insurance firms are likely to be better, with safeguards against abuse, at sifting out bad clinicians; it's in their interests to do so. Their actuaries will be poring over doctors' success and failure rates to ensure they're not granting accreditation to people whose patients inexplicably drop like flies, or who routinely over-diagnose or over-prescribe. Nor would they be likely to allow their members to spend a single night in a hospital where they're more likely to come out with a worse illness with attendant higher costs, if they come out at all.

One model I've looked at, for example, would see a GP as a "personal health adviser" who advises their clients through the maze of choosing lifestyles, treatments, clinicians and therapies that will be efficient and varied. I'd like to see surgical firms organized more like barristers' chambers with large national firms specializing in different clinical areas ready to hot-foot it to a treatment centre several hours away at the drop of a hat to do an op in their specialism rather than a patient wait on a list for the local, perhaps only semi-specialist to have a free spot in a tight general surgery list. You could have a choice of a large general hospital sized treatment centre thirty miles away in the local city, or a ten bed rural town cottage hospital with one theatre with the same surgeon prepared to visit either for the right fee but with different approaches to aftercare based on different needs of patients and families.

Sure, there's still a role for some kind of local democratic input - most especially in procuring facilities and staff for emergency medicine, but even their funding options could be varied - with some able to provide that by engaging local charitable resources, others perhaps by raising a local tax of some kind, perhaps even through planning obligations, who knows. But one thing is certain: these options and innovations are unlikely to appear when the system is riddled with protectionism and political game-play.

The Oxford Mail/Times reports today that the New Westgate [shopping centre is..] Vital For City

Confidential documents have revealed that Oxford would suffer serious economic damage if a hash is made of the Westgate redevelopment.

Plans for the £300m scheme to transform the shopping centre are due to be considered by a specially-convened planning committee later this month.

But papers leaked to the Oxford Mail show real concern at the consequences of the project failing.

When I was on the council I was wary of confidential documents that only councillors were supposed to see. If one were leaked there was always an outrage and often a bit of a witch hunt to try to find out who did it if it weren't already obvious. But most of the time, they did not relate to the specific wellbeing of an officer, as perhaps would details of a pay or disciplinary issue, but that much wider catch-all of "protecting commercial confidentiality" for the council's business affairs.

Well bugger that. It sounds to me from what little is in the Oxford Mail report that this is exactly the sort of information that is needed to help inform the public debate about what will be a massive disruption to our city for many years and which we are now led to believe could have more devastating long term efects on not just the city council's finances, in which we all have an over-riding interest since it is our money they are looking after but the general economic wellbeing and vitality of Oxford's city centre.

So. What precisely was confidential about these reports that the Oxford Mail got hold of? Perhaps the cabinet member for a better value Oxford could shed some light?

This project is already contentious. Has been in the air for, what, six years now already and has yet even to get planning permission. Frankly, I'm sceptical about the whole thing still and I hope they don't roll over and accept an application just because it might prove least worst for the city council, but local people have got to have a fully informed debate, which now cannot happen before the planning hearing happens if there really are such far reaching potential consequences for the city.

Yes, it's not a planning matter. they can still give planning consent and then pull out of the contract as landowner, but that is the bit we, the people, need to give a steer to our servants in government on.

When I saw the first press mention of the "Cities Unlimited: making urban regeneration work" report from the Policy Exchange think tank in the Oxford Mail yesterday screaming that "Oxford should get a million new homes" and I noticed prominent Lib Dem economics boffin Tim Leunig was involved I'm afraid I at first reacted with my heart, yelling "Not In My Back Yard, you heartless economist you" before engaging my head.

You see, all too often Tim has come out with some great ideas that have been instantly presented as the works of the devil himself. There were "community land auctions" which, for those who didn't think about it too much, was presented as the state confiscating land from private owners at a fraction of its value. Then more recently his idea for allowing people to sell the social housing home they rent in order to buy another one of their choice elsewhere which would in turn become a social housing home. Even I had to think about that one for a while before I thought it was anything other than a great council house give-away scam. Such is the fate, almost inevitably I suspect, of people who write about "agglomeration economics" and "gross value added" measures of local economic activity.

And so it is also with this report. It is, despite the economic jargon at times, quite an easy read, with what I find to be compelling arguments. It is counter-intuitive for sure, for anyone who has worried about what to do about the "North South divide" and traditional regional policy which has been focussed on using regeneration money to try and repopulate declining towns, to keep people where they are and bring the economic prosperity to them. It has enough controversial suggestions for any mischievous media outlet or politician in denial to pick out the one that seems to say most about their area and have a go at it.

And boy, have they had a field day with it. If you're vaguely northern, or Welsh, you are to be outraged that the report says regeneration has failed, and not only failed but unlikely ever to recover your town's fortunes. If you're in Oxford or Cambridge you've got a million new homes to get outraged about. If you're anti-Tory you will like the portrayals of it as demanding no more money should go to Labour heartlands in the north. It is, in some senses, a perfect storm - there's something for absolutely everyone to criticize about it. But I would suggest they read it first as it is apparent that many who have commented on it, from John Prescott down, have not.

Yes, it does say that the regeneration money lavished on declining cities and towns (and over the past four decades not just Labour's tenure) has been wasted. Of course, the Labour ministers and MPs who championed this money more recently going into their heartlands are outraged. But the report, or rather its predecessor data collection exercise, "Cities Limited", shows pretty conclusively that this failure is real - that, whilst they may be declining slightly less slowly in comparison with more prosperous areas than before the money was spent, they are certainly not catching up, or keeping up. But it does not, as Adam Bienkov writes at Liberal Conspiracy, call for that money to end, for the rest of the country to just "fuck off".

Actually quite the opposite. Anticipating an incoming Tory government will naturally be likely to have fewer "champions" of these northern former industrial towns, it suggests instead of these grand technocratically led regeneration projects controlled from the [London] centre, government should give pretty well the same total amount of money to the local authorities based on need but for them to spend on what they see fit for improving the quality of life in their own towns and cities. This, it says (or rather another predecessor report called "Cities for Success" said) will lead to stronger, better scrutinized and more responsive local government producing "quality of life" projects that people actually want, rather than what some central planner looking at house prices from Whitehall thinks is good for them.

So it's a document about devolution and decentralization of regeneration. About freeing those local authorities in declining areas to choose how they respond to that depopulation rather than how the centre says they should. It is not that spending money on a place always fails, it is that the over-riding concern of regeneration money and regional policy to date has been that these places need to be repopulated by that money, people actively encouraged not to up sticks and leave, despite the obvious fact that they stand to have greater opportunity and more possibilities for increasing their wealth by moving, when in fact the money might be best spent making the quality of life for those who remain far higher.

In fact, it says that this current regeneration policy has even worse effects. Because regeneration areas are still, despite the billions, growing at a slower rate than the successful areas, in insisting that they should be repopulated come what may, regeneration policy is "condemning" the people it persuades to remain or return there to a slow lane of growth. And that because the exodus is led by the more mobile, enterprising, adventurous and usually better skilled parts of the population, it means that what is being left behind is denuded of its greatest assets - the skilled people that might make it attractive for new businesses to set up there.

And of course, the other main controversy is about what those skilled people wanting to better themselves should do. Clearly, London is a huge draw - I always think if it personally as a black hole with government and the City at the singularity and threatening to swallow anything that falls into its event horizon which has been expanding for centuries. Others of course say they like London. So why would they want to prevent others having the same standard of living and opportunities as they do.

Adding an extra million homes around London, says the report, would be the equivalent of adding an extra two miles to the outskirts. Traveling along the M40 at Hillingdon at 70mph for example this, he says, would mean that it would take someone an extra two minutes to reach the countryside. Are we [in London that is] so selfish that we would deny that opportunity to others from "up north" for the sake of it taking an extra two minutes to get to open countryside? Conveniently, the response from the Lib Dem PPC for Hastings yesterday, reveals the answer:

Nick Perry, Lib Dem parliamentary campaigner for Hastings & Rye said, “I am a Northern lad hailing from St Helens, and our move to Hastings last year was a dream come true, however the calls from this Tory think tank are nothing short of bizarre."

So that's it is it. What's good for Nick Perry, indeed a "dream come true", is too bizarre to contemplate for everyone else who may want to better themselves. Ironically, had the Hastings Lib Dems read the report first they'd notice that Hastings is actually one of the exceptions in the South East. That it suffers by being connected only to the periphery of London's orbit and so would not be an ideal place for adding lots of people unless there was significant increased connectivity.

So, perhaps I can get more worked up about the section that talks about a million homes for Oxford and Cambridge, if I can't get excited about the thought of London expanding by two miles in each direction. Well actually, whilst personally I am in Oxford precisely because it is small, and probably would be one of those who would leave if it became terribly much bigger, that's because I can. My IT skills can be put to use anywhere. I could move to Liverpool and get similar pay in a similar academic institution to what I'm in here. But for others it's harder. Oxford and Cambridge, outside of London, are the only two UK academic institutions that get more in research money than they do for teaching students. On the global scale they are our only two really big knowledge generators. Leunig's position seems to be that if they are to remain it that position globally, and they'd damned well better as there is precious little else our economy will thrive on if not knowledge generation in the new global village, they too have got to capitalise on "agglomeration economics", to attract a real thriving community from around the world and the UK that services the expansion of the best brains in Britain in their subjects.

Of course here in Oxford, we can't even agree on whether it is right to have four thousand extra new homes, let alone a million. Our heads are simply not in the right place to hear the logic of what Leunig is telling us. But even if it does become someone's policy, should we be so scared of it? On the one hand, yes, clearly haphazard development of a million homes in a rural county is not on. But if we're looking at a new world order, with population migrations the like of which Britain has not seen since the Industrial Revolution urbanized Britain's population and gave rise largely to those northern towns, then we ought to be looking at new urban forms as well.

Here's a model from a book called "Car Free Cities" by a chap called J H Crawford I came across a decade or so ago in my reading up for the last Oxford Local Plan, that shows how a city of a million population can be fitted into a ten by ten mile area with development on only 20% of the square, where, thanks to rapid transit systems every home is no more than thirty five minutes traveling distance from any other location in the city, every home is less than five minutes walk from open countryside and which could be developed in phases linked into or threading between existing communities.

So, the worst I can say about the report is that "the truth hurts". The truth is that current regeneration projects have and continue to fail to bring less well off former industrial areas up to the standard and the ability to match in future seen in the more prosperous south east. It is cruel and heartless in the light of this to prevent people migrating from those areas to where their skills will be better rewarded and it would be but a small imposition on London in particular to host another million or so homes. We risk our place in the global future if we fail to recognise this reality and grasp the opportunities it presents to make more people better off than regeneration ever can. At the same time we need to make local authorities and local people in declining areas responsible for their own projects to make their quality of life better, whether in decline or otherwise. We need to empower them and finance them, and watch them compete with each other for the best ideas.

At the same time we need to free up from planning constraints land in the south east to accommodate inward migrants. We need to ensure also in the process that space is made for semi-skilled and unskilled also to come from those declining areas so that the balance of people moving out of them is not skewed too heavily towards the skilled sectors.

And all the signals that make this apparent are related to land value. That London is not yet at its optimal size is proven by the fact that people still pay more for their home than the capital cost of the home - ie that land still has some residual value that people are prepared to take a gamble on rewarding them by more than it has cost them to move. That some of the "Pathfinder" areas should not have housing replaced is indicated by the fact that housing costs less than it costs to build. We'd be better buying spare houses and allowing families in the neighbouring houses to expand into hem than knocking them down and replacing them, hoping against hope that they will fill up with bright young things who do not want to join the London black hole.

But there must be something I would criticize the report for, surely, and yes, there is indeed. Tim is always saying that his ideas are a new way of thinking about land, superior to and more suitable for the modern world than that other suggested reform a hundred years ago, Land Value Tax. But the report opens with a complaint that despite trying everything regeneration has failed. Well we haven't tried everything - we haven't tried land value tax. And if any of this report is to be taken on board and implemented we need LVT first. To ensure the timely release of non-housing land for housing, to ensure that Oxford is developed to its current optimum level before adding more, and so on. If Burnley has, as the report suggests, a negative residual land value, then people settling there under my suggested system of land tax and citizens' income , are going to actually be paid for living there. Any firm setting up there will face no taxes, either on its workers, profit or its location; it's going to be around 30% better off just for that and may indeed help attract skilled work back into tax free areas.

The report praises the London Docklands development. Docklands was primarily initially successful (key to regeneration is getting a critical mass of occupiers into a newly regenerated area quickly so it can start to form a community) because the LDDC declared a rates holiday for a decade. Rebasing our tax system to land values rather than incomes or productivity would help focus sustainable communities and give massive incentives, natural incentives, for communities to attract new settlers, especially in jobs that are not necessarily competing on a global scale. With that caveat, that full scale LVT should predate any of the changes suggested in this report, I think I support virtually everything else in it.

It's not comfortable reading necessarily, but I've long held that the rise of global communications and the internet is an epochal change the likes of the printing press or the steam engine. When the steam engine came along it reshaped Britain. Why should we expect, Cnut-like, to stand in the way of the next epochal technology changing the way we live on these islands?

One thing I would say though, Tim, if you read this - I reckon calling your own report "barmy" probably makes for worse press!