A study of past changes in the law relating to the ownership and other rights to land provides some important ideas for the future.
ENCLOSURES AND AFTER
At one time, a great deal of English land was owned in common by many people. Grazing land of a village was used by the beasts of many farmers, who also had rights over woodland. Arable land was divided, but the pieces were re-allocated from time to time. After the harvest, everybody would have the right to graze animals on the arable fields. This pattern was not universal in England, and there were variations in other parts of the British Isles; but broadly the idea prevailed that there was a great deal of land over which nobody had absolute ownership, in the sense in which he had absolute ownership of his spade or his ox. The principle of common ownership of land was gradually eroded by enclosure.
By this process land – whether grazing land, woodland or arable – which was formerly held in common by many people was divided into holdings, each owned by one person or a small group of people. These pieces of enclosed land were often marked out by hedges or low walls. Enclosure has been taking place over many hundreds of years, for most of the time without recourse to legislation. There was, however, a period in the late eighteenth and early nineteenth centuries when a great deal of enclosure in England, and a little in Wales, was brought about by Acts of Parliament. Even in this period, however, not all enclosure was effected by legislation, and much resulted from agreement between landowners.
The argument in favour of enclosure turned mainly on the view that production could be carried out more effectively in that way: a view which in most cases was probably correct. The great objection to enclosure was not really an objection to enclosure as such, but to the way in which it was carried out. Rights to land recognised by law were generally respected in enclosures, but even there a small piece of land was hardly proper compensation for the right to graze animals on a large common, or to collect fuel from the woods. More acute still was the suffering of the many people who had used the common land, relying on long-established custom which was not recognised by law. Those people seldom received adequate compensation, if they received compensation at all. Some of them later got jobs as farm labourers, working on land which belonged to somebody else; but many could not even do that and were forced to leave the countryside altogether.
In rural areas, enclosure was of great importance in the development of a class pattern which was very widespread well into the twentieth century, and persists in some places to this day. There existed three great rural classes: landowners; tenant farmers; and more or less landless farm labourers. Having no prospect of living independent lives in the countryside as their ancestors had done, the labourers were wholly dependent on wages offered by other people, usually by tenant farmers. As there were a great many labourers in competition for relatively few jobs, wages were notoriously low – indeed, farm labourers’ wages remain low to this day.
The tenant-farmers’ position appeared better than that of the labourers; but matters often did not work out well for them. They only occupied their farms by permission of the landowners to whom they were required to pay rent; and they could easily be required to pay a great deal more rent when their exiting tenancy expired, or they could be evicted. To give but one example of the way in which they worked, there had been great difficulty of getting food from abroad during the French wars at the turn of the eighteenth and nineteenth centuries. Food prices therefore rose, and many farmers made considerable profits. When their tenancies fell in, the landlords frequently upped rents accordingly. At the end of the wars, when food could again enter the country, prices fell dramatically and many farmers were ruined. The only people who really profited were the landowners, who drew rent whether or not they did anything in return. It is surely no accident that many of the “stately homes” which people visit admiringly today were built or much extended in the period when enclosure was most active.
Farm labourers’ complaints against the bad conditions in which they worked and the low wages they earned were frequently directed against the tenant-farmers who employed them, rather than against the landlords who were ultimately responsible for the labourers’ plight. Thus, in the “Captain Swing” disturbances of 1830, labourers were much more likely to set fire to the farmers’ ricks than to the property of the landlords.
Enclosure, however, did not only affect conditions in rural areas. Many people could not find jobs in the countryside at all, and moved into towns or industrial villages. As the peak of the enclosures more or less coincided with the so-called “industrial revolution”, they were often able to get jobs in factories or mines. But the new urban workers were in intense competition with each other for those jobs, which forced down wages. Like the agricultural labourers, they tended to blame the wrong people for their plight, criticising their immediate employers, rather than looking for the real cause of their suffering, which was loss of land. If they had still had access to land, as their forebears had done, the “capitalist” employers would have been compelled to offer good conditions of employment, in order to attract the labour they needed.
Bad as the condition of the poor was in England, it was much worse in Ireland. The land law of the two countries was almost identical; the real trouble was that human relations were much worse in Ireland. There were many historical reasons for this; but in the nineteenth century differences of religion and often of language from the peasantry disposed many Irish landlords to regard their land in terms purely of the rent they could draw. In some parts of Ireland they divided their arable land into tiny holdings. Often they decided that cattle were more profitable than people, and former arable land was let to graziers. Many Irish landlords were absentees, whereas English landowners usually had strong local interests, and often a sense of responsibility for people living on their estates who had fallen on hard times. The essential difference between Ireland and England was that in one place the relationship between peasant and landlord was often almost exclusively economic, while in the other many human considerations softened the relationship.
The potato was the principal Irish crop, essentially because it was the only one which could provide enough food from a tiny farm. When potatoes were blighted in the middle 1840s, there was famine on a huge scale. It is well known that wheat was being exported from Ireland at the height of the famine. That was shocking; but it was not the principal cause of the disaster. Dependence on the potato was so great that catastrophe was inevitable once the mould Phytophthora infestans struck the crop, and would have developed with or without grain exports – and, indeed, even if peasants had been wholly exempted from rent while the Famine persisted. For years it had been a disaster waiting to happen. By a strange coincidence, an official enquiry had reported in 1845, the year before the Famine started, and gave a graphic account of rural poverty. When the disaster struck, something like a million people died of starvation, or of the diseases which accompanied starvation, out of a population rather in excess of eight millions. This was not the first large-scale Irish famine; a century earlier there had been another famine which killed a similar proportion of the population, and there had been other famines and near famines in between.
The famine of the 1840s was followed by mass evictions and large-scale emigration of the survivors, often in appalling conditions. British people noticed this horror, and many realised that it was closely related to the problem of land ownership in Ireland. Eventually, in 1870, Gladstone’s Liberal government carried an Irish Land Act, which made the first halting steps towards improving the conditions of the peasantry through legislation. Not much came of it; but towards the end of the decade bad harvests led to a great deal of disturbance – the so-called “Irish Land War” – and another Irish Land Act carried by the Liberals in 1881 made more important concessions. In particular, tribunals were established to control rents, while the Act also provided that peasants who kept the covenants of their tenancies could not be evicted when those tenancies expired, and peasants should receive compensation for the value of improvements which they had introduced on their farms. Public interest, not only in Ireland but in Britain as well, began to be focused on land questions.
Before the Union of 1707, land ownership was considerably more concentratedin Scotland than in England, and poverty was greater. The Englishman ate wheaten bread; the Scotsman ate the cheaper oatmeal. Enclosures in Scotland did not require individual Acts of Parliament. The Union was followed swiftly by conversion of much arable land into grazing, for feeding beasts to satisfy the new English market. The consequential evictions led to a serious revolt in the south-west in 1724. Before the Jacobite rebellion of 1745-46, the Highland chieftains had power of “pit and gallows” – life and death – over their clansmen; but, on the other side of the medal, they saw themselves in a quasi-paternal role as trustees for the clan lands. After the ’45, all this changed. They became in effect landlords, and acted as such. The Highland Clearances, of which the most notorious were in Sutherland in the early 19th Century, displaced people in favour of sheep. Later, when sheep for ordinary folk to eat became less profitable than deer for rich men to shoot, land which had once been cultivated but had been turned over the grazing, became in its turn “deer forest”. Many traditional Highland proprietors squandered their wealth and became bankrupt, giving place to incomers who – like so many Irish landlords – saw their land in almost exclusively economic terms.
In parts of the Hebrides and the adjacent mainland, conditions in some ways resembled those in Ireland, notably in the poor relationship between landlords and their impoverished tenants, and the widespread dependence on the potato. In 1882 ideas from the Irish “Land War” spread to Skye, and there were soon disturbances there and on other islands: disturbances which persisted, off and on, for the remainder of the decade. These Hebridean disturbances were not as violent as those in some parts of Ireland, but were sufficiently serious to demand the attention of police, marines and soldiers, and the use of gunboats.
Throughout Scotland, interest was intense, as a glance at the Glasgow and Edinburgh newspapers of the period will show. Many people living in the Scottish towns, particularly those whose recent forebears had been driven there from the highlands and islands, began to wonder whether their own, often bad, conditions of employment were in some way related to matters about which the Hebridean crofters were complaining.
In 1879 the American economist and philosopher Henry George produced a book entitled Progress and Poverty. This book had an enormous influence on contemporary thinking, and for many years to come anybody with a serious interest in politics was likely to possess a copy. George set out to explain why the phenomenal increase in human capacity to create wealth which had been brought about by the “industrial revolution” had not swept away poverty. His conclusion was that the basic cause of poverty, urban as well as rural, was the existing land system, for “the ownership of the land on which and from which a man must live is virtually the ownership of the man himself, and in acknowledging the right of some individuals to the exclusive use and enjoyment of the earth, we condemn other individuals to slavery”. It was landlessness which reduced people to dependence on others for the opportunity to work and produced the competition for jobs among the landless which forced down wages.
Henry George not only considered the causes of poverty, but also proposed a remedy. While there was no practical way of physically dividing all the land equably, yet it was possible to ensure that all citizens could benefit from all land if current taxes were replaced by a tax on the value of land. A Land Value Tax (LVT) would be assessed on the quantity and quality of land held – the word “land” meaning the bare site occupied, exclusive of buildings or other human artifacts placed on it. Those who occupied the most sought-after sites – the ones which benefited most from qualities bestowed by nature (like fertility) or from amenities provided by the community (like transport or schools) would pay most. The revenue from this tax could be applied for public purposes, while other taxes could be greatly reduced, or even abolished altogether.
IMPACT ON POLITICS
Those who read Progress and Poverty came to realise that the existing disparity of wealth and poverty was not inevitable. George made important early converts, like the Irish peasant leader Michael Davitt. Throughout the 1880s, George’s influence spread. He paid several visits to Britain. Many people began to see that events in Ireland and in remote parts of Scotland were linked with urban problems. Those who had been driven, penniless, from the land had flocked into the great towns, where they were at the mercy of employers, slum landlords, moneylenders and others.
The idea that LVT was vital for the conquest of poverty influenced bodies like the National Liberal Federation, who in the late 1880s and early 1890s began carrying resolutions calling for legislation wholly consistent with the doctrines of Henry George. Many young people whose ideas were developing around this time: people as diverse as Lloyd George, Philip Snowden and Winston Churchill: were profoundly influenced by George’s views.
About that time, the attention of land reformers began to centre on the idea of achieving LVT through a simple change in local finance. Local government was financed largely by rates, which was a tax based on the value of landed property i.e., the value of buildings, crops and other “improvements”, plus the value of the site on which they rested. Land reformers proposed that rating assessments should be based exclusively on the value of a site, discounting the value of any “improvements”.
This idea caught on. By the early 20th Century, 518 local authorities throughout Britain had petitioned Parliament for the right to levy rates on the basis of site values. This was called Site Value Rating – SVR – and was simply LVT applied to the special needs of local government.
A LAND-TAXING GOVERNMENT
Before land could be taxed or rated, it had to be valued. At the General Election of 1906, the Liberal Party secured a large majority. Most of its MPs gave more or less support to LVT, and many were enthusiastic for it. So were members of the new Labour Party, while some Conservatives appreciated the merit of SVR for local government. A deputation representing 118 municipal bodies waited on Ministers, and received an assurance of the Government’s intention to go ahead with the valuation of land and the application of SVR.
Interest in LVT was particularly strong in Scotland. As Scots land law is substantially different from English law, it was possible to treat Scottish land in a different way from the land in England and Wales. So it appeared a good idea to begin with a pilot scheme there. In 1907, the Government promoted the Land Values (Scotland) Bill, which duly passed the Commons, but was rejected by the Lords. In the following year it was again passed by the Commons, but was so mutilated by the Lords that it was abandoned.
At that time it was generally acknowledged that the House of Lords had the legal right to reject or wreck most kinds of Bill from the Commons, but it was also thought that the Lords would not interfere with an annual Finance Bill, even if they did not like it. In 1909, Chancellor of the Exchequer Lloyd George submitted his famous “People’s Budget”. More revenue was needed both to finance the new Old Age Pensions and to meet defence commitments, and so everybody knew that more taxation would be required.
The Finance Bill which embodied the Budget proposals had many new features, not all of which were connected with land, but Lloyd George sought to get round the difficulties which the House of Lords had made with the Scottish Valuation Bills. First he proposed three new taxes, which were called Land Value Duties. A tax of 20% on increments in land values which derived from the activities of others and not of the landowner himself would be payable on sale of the land or on death. A tax of just over 0.2% would be imposed on the capital value of undeveloped land and minerals which had not yet been extracted. There would also be a reversion duty of 10% on any benefit accruing to the lessor on the termination of a lease.
These Land Value Duties were by no means LVT; they were selective and discriminatory duties whose yield was never likely to be very great; but they provided a good excuse for a general valuation of land, which was far more important and was also introduced in the 1909 Budget. It was hoped that the valuation would be sufficiently closely linked with the new Duties for the Lords to allow the whole measure to pass. Once the valuation was complete, LVT could be introduced in another Budget.
The result was quite different from the original intention. The Lords threw out the Budget. A great struggle ensued between the two Houses of Parliament, entailing two General Elections in the course of 1910. Each gave a majority to the Liberal government with its Labour and Irish Nationalist allies. The Finance Bill was resubmitted; this time the Lords let it pass. As has been seen, the actual land taxes were of minimal importance, but the far more important valuation was able to commence. Unfortunately the valuers were required to seek a great deal of information which was not necessary, and so the business, which should have been brief and simple, proved long and cumbersome, and was not complete when war came in 1914.
WAR AND INTER-WAR
The Government then suspended the valuation, in the alleged interest of wartime national unity. At the end of the war a Coalition, in which the Conservatives were the dominant partners, was confirmed in office. In those days great landowners were much more influential in the Conservative Party than they are today. In the next few years the valuation was formally abandoned, and the tiny land taxes ceased. By a strange historical irony, Lloyd George – the land-taxing Chancellor of 1909 -was Prime Minister of the Coalition government which swept away the vestiges of his reforms.
In 1931, Philip Snowden, Chancellor of the Exchequer in the weak Labour government, attempted to do roughly what Lloyd George had tried in 1909: to slip in land valuation, linked to taxation – though in this case the actual taxation was not to commence for two years. By this time the Lords had lost the power to block “Money Bills” from the Commons. The Finance Bill passed into law; but long before it could take effect the government fell. The valuation was promptly suspended, and in 1934 was formally abolished.
Interest in local land taxation through SVR remained keen in many local authority areas, and in 1939 the Labour-controlled London County Council submitted to Parliament a Bill designed to apply SVR. The original Bill was rejected by the Speaker for technical reasons, but it was resubmitted in a different form, whereupon the MPs then voted it down.
When a new Labour government was returned in 1945 with a large majority, many people hoped that it would push ahead with LVT. Not so. The Town and Country Planning Act of 1947 was largely designed to control the haphazard urban development which had disfigured much of Britain in the inter-war years, and in that respect it proved of great value. Many people had hoped, however, that it would also ensure that increased land values resulting from the prospect of development would be collected for public purposes.
Unfortunately this did not happen. The new legislation imposed many new restrictions on land development, and also set up a huge fund to compensate landowners for loss of development values. Landowners who were permitted to develop were required to pay a Development Charge when they did so. The government had hoped that increased land values resulting from planning permission would revert to the community, but the result in practice was completely different from what would have happened if they had adopted LVT. While LVT would require a landowner to pay the same tax whether he developed the land or not, and would therefore encourage development when the planning rules permitted it, the Development Charge discouraged development. It could be avoided by doing nothing with the land, but simply holding on to it while prices rose. Thus it completely failed to halt land speculation. The Development Charge was repealed by a Conservative government in 1952, and few people mourned its passing.
PRESENT AND FUTURE
There followed half a century of inactivity in the most important aspects of land politics. Meanwhile, new problems were building up. The familiar alternation of booms and slumps intensified, and was fed by, land speculation. At the same time, soaring prices of land – most particularly land required for housing – produced great distortions in the whole economy. The housing market became completely bizarre. The price of what we call a “house” soared. But the price of a “house” is not just the price of the bricks and timber and glass and labour which have gone into its construction. What has gone up most rapidly was not the price of those things, but the price of the land on which the building sat. As a result, young people have found it increasingly difficult to afford a “house” at all, and many have been forced to rely on public authorities (and taxpayers’ money) to secure accommodation. Some at least of the people who were worried about the environment were coming to realise that land speculation had a good deal to do with the matters which concern them. All this was going on fifty years ago, and it is still going on today.
The old problems also remain with us. Unemployment is less in the early twenty-first century than it was some years ago, but it is still much higher than it need be. There is a still a lot of real poverty lurking in many places – not poverty in the Third World sense, perhaps, but certainly the absence of comforts and facilities for some sections of society which others take for granted. Lots of inner-city land is still idle, not because it is interesting or beautiful, but because people are holding on to it in the hope and expectation that the price will rise. The old boom-slump cycle continues, and is still fuelled largely by land speculation. The slump which began in 2008 is avicius reminder of this. A great deal of taxpayers’ money is spent on schemes affecting transport and communications, and when that happens great benefits accrue to people who were not intended to be beneficiaries, and who do not return anything to the community for what they receive. People still get rich at the expense of everybody else, not because they are doing anything useful but because they happen to own a piece of land. These, and other cognate matters are discussed more fully in other Topic Papers in the present series.
In the nineteenth and early twentieth centuries, a lot of the political argument turned on the special claims of traditional landowners, like territorial magnates and rural squires. Today those people are less important than they were. People of all political parties should consider how far the injustices and absurdities of modern society are the result of distortions of the land system. There is no reason today why people of all parties should not unite in support of LVT.
Douglas Roy Land, People and Politics
Shoard Marion This Land is our Land London 1987
Shoard Marion The Theft of the Countryside London 1980
Hammond JL LeB and LiB The Village Labourer, 1760-1832