Our aims and mini-manifesto


Our aims: We are a 'Georgist' Party
Our strategy: What we can learn from The Green Party and UKIP/Brexit Party
Our 2019 General Election Mini-Manifesto

Our aims: We are a 'Georgist' political party

Georgism (named after Henry George, who popularised these ideas in the 19th century) is a political and economic philosophy which is neither traditionally left-wing nor right-wing but combines the best elements of social democracy and the best elements of free-trade, free-market capitalism.

The cornerstones of Georgist policy are that, as far as possible:
a) public services should be funded out of taxes on land values ('Land Value Tax'), and
b) taxes on output and employment should be reduced.

Why tax land values? Because land-ownership is only possible within the borders of a civilised and stable country and land values are created and sustained by public services. Public services are superficially supposed to benefit everybody equally, but to access them, you have to live somewhere or have your business premises somewhere.

If housing is near good state schools, good public transport links (roads are publicly provided and owned even if cars aren't), nearby NHS hospitals, low crime rates, protected views and green spaces etc, then that creates a higher rental value.

Landowners and owner-occupiers can sit back and enjoy these benefits virtually 'for free', but anybody else who wants to access them has to pay rent to a landowner or take out a large mortgage (which is indirectly paying rent to the bank until the mortgage is paid off).

To have enough net income to pay the rent or mortgage, they also have to give up nearly half their earnings in VAT, National Insurance and income tax - money which is used to fund the public services which they are paying to access. So today's tenants and first time buyers are paying twice over. (Business premises are already subject to 'Business Rates', which are actually pretty close to Land Value Tax and would require relatively minor tweaks.)

Why reduce taxes on output and employment (Value Added Tax and National Insurance contributions)? Because these taxes are job-killers and a huge drag on the economy. VAT acts like a 20% tariff, far higher than most tariffs on international trade. Most employees pay more in National Insurance than they do in income tax, so it is double-taxation of employment. They are also regressive (low and middle income households pay a disproportionate share) so they cause unemployment and inequality.

Collecting more tax from land values and less from output and earnings will lead to lower and more stable house prices, so no 'boom and bust' and ensuing financial crises; a faster growing economy; more profitable businesses; more jobs and less inequality; and more efficient/intensive use of valuable urban land, which has knock-on environmental and economic benefits.

Those are the cornerstones, but the basic thinking also includes reducing state interference in businesses and people's lives, and just letting people get on with it, provided they are not harming others. See our page About Georgism for a longer article.

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Our strategy: What we can learn from The Green Party and UKIP/Brexit Party

Georgism as a philosophy is surprisingly wide-spread. There are non-party groups and educational organisations, as well as pressure groups within The Labour Party and the Liberal Democrats. There are surprisingly many Conservative MPs who have mentioned it favourably.

However, come election time and when put on the spot, politicians from all major parties suddenly row back and damn it as a 'Garden Tax' or even 'Communism' because they are scared of losing votes from owner-occupiers, most of whom can be bribed with promises of ever rising house prices courtesy of the Magic Money Tree (taxes on output and employment).

What have Georgists achieved over the decades? Very little, because they have missed the obvious...

We have to accept that we have a two-party system in this country. 'The Big Two' are the Conservatives and Labour. One or the other has formed every government since 1922.  Whichever party is in power does not care about what people think. They are not interested in readers' letters in newspapers or even mass demonstrations. All they care about is how many votes they will get at the next election. The only way to influence them is at the ballot box; and it takes surprisingly few votes to get them to change course.

Experience also tells us that trying to influence any major party from the inside is futile because new or radical ideas will be shouted down. It is the minor parties like the Greens and UKIP/Brexit Party (whether you agree with them or not) who have managed to influence The Big Two by simply taking votes from them at elections.

The Greens and UKIP/Brexit Party are perceived - rightly or wrongly - as single issue parties. Neither has achieved much more than 5% of the popular vote in domestic elections (ignoring EU elections) and they have only ever had two or three elected MPs between them. So they have been an electoral failure... but they have been a political success - because The Big Two shift their positions and adopt their policies in order to claw back enough votes to win marginal constituencies (which is what decides elections in this country).

To sum up, YPP does not realistically hope to have electoral success any time soon; our aim is to have enough members prepared to stand in elections and win enough votes to influence The Big Two to adopt more Georgist policies = political success. Our goal is to get enough votes from natural Labour voters as well as from natural Conservative voters who'd just like to encourage those parties to adopt our policies and who will vote for them again if they did.

If you are interested, see our pages Join and support and Standing in elections.

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Our 2019 General Election Mini-Manifesto

We started off with a long manifesto and kept adding bits, but decided to strip it back to its bare bones. We can't fight on all fronts!
- the media took minor parts out of context,
- there is no point saying what we'd do if we are elected because that is not going to happen, and
- our whole strategy is to give voters the chance to send The Big Two a clear and coherent message.
So we have reduced it down to five bullet points:

1. A quick fix to the 'housing crisis'
2. Move towards Land Value Tax (and reduce VAT and National Insurance Contributions)
3. Simplify the benefit system and replace it with a flat-rate Basic Income
4. Fix Brexit by rejoining EFTA and remaining in the EEA
5. Legalise cannabis

1. A quick fix to the 'housing crisis'

First of all, the Help To Buy scheme has to be scrapped as soon as possible. This has just led to higher profits for home builders and more indebtedness for first time buyers, exactly the opposite of the official aims.

Politicians and commentators have spent the last decade wringing their hands about the 'housing crisis'. Most pretend, or are stupid enough to believe that it's down to lack of supply (we have more housing per person than ever) or immigration (see Notes below). They all have woefully short memories or are downright liars.

The 'housing crisis' only happened because the UK abandoned all the housing policies which we'd had for most of the 20th century (and which many countries still have) which prevented a 'housing crisis'.

These policies successfully prevented a 'housing crisis' from occurring for most of the century. These housing policies kept prices down, so owner-occupation rates climbed from 10% to 70%, with affordable council housing for the 30% who couldn't afford to buy. Private landlords nearly disappeared and the few private tenants left had affordable rents and security of tenure. All we need to do to fix the 'housing crisis' is to reintroduce these policies.

These were not purist Georgist policies, so YPP see them as stop-gap measures, but they did the job. For example:

Tenant protection
- Rent controls, which were abolished by the Housing Act 1998;
- Secure tenancies, which ended with changes to s21 Housing Act in 1996/97. This triggered the boom in buy-to-let lending and the private rental sector more than doubling. Until then, banks charged landlords higher interest rates, just like any business loan;
- These measures didn't just help tenants, they made housing less attractive as an investment for profit, so homes that came up for sale was bought by first-time buyers and people moving home.

Mortgage caps
- Until the 1980s, only building societies gave mortgages, and the loan-to-income ratio was capped at about twice joint or three-times main income, so house prices levelled out at about three times incomes;

Higher taxes on housing
- Taxes paid by landlords were much higher. Income tax rates have come down and down, while sales tax/VAT and National Insurance Rates have climbed ever higher. So nowadays, landlords only pay half as much tax as employees (no National Insurance Contributions) and half as much as proper businesses (no VAT);
- Schedule A taxation. Owner-occupiers had to pay income tax on the rental value of their own homes. This levelled the playing field with landlords/tenants and levelled the playing field between investing in housing or stocks and shares. This was abolished in 1964; in 1965, Capital Gains Tax was introduced, from which owner-occupied housing is exempt, making it more attractive than other investments;
- Domestic Rates (which were progressive i.e. closely related to the value of each home) were replaced in 1989 with the short-lived Community Charge (aka Poll Tax) and then with Council Tax (which is more of a flat-rate charge, so people in high value homes paid a lot less and people in low-value homes paid a lot more).

Council Housing
- Readily available council housing. By the 1970s, nearly 30% of households lived in council housing, which they have been selling off ever since to gain a few votes at future taxpayers' expense. This reduced demand for private lettings and was a source of income/profit for local councils.
- Council Housing also meant there was no need for Housing Benefit for private tenants, which now costs the taxpayer £10 bn a year. A lot of this goes to private landlords who are renting out ex-Council Housing, which the government sold off cheaply.

Obviously, these policies were all a bit of a jumble, but could be reintroduced as parts of a single overall strategy.

Note 1. Despite what the politicians and commentators say, there is no reason to assume that the private construction industry will ever increase new construction. Private sector output is the same as it has been for decades and they will stick to their profit-maximising output level of 150,000 - 200,000 new homes per year, whatever happens to planning laws. The period in the 1950s and 1960s when new construction hit 300,000 a year was because of construction of new council housing.

Note 2. Even if new construction did increase, there is little evidence to show it will depress selling prices. There are more homes inside the M25 than in the whole of Scotland, but houses inside the M25 cost twice as much as in Scotland. Simple fact is, large cities are more attractive because wages are higher; so rents are higher; and selling prices are higher. If they build more homes in expensive areas, i.e. large cities, this is like throwing twigs onto a fire to try and cool it down. And whatever happens to prices, it won't even help first-time buyers as long as buy-to-let landlords can outbid them.

Note 3. There's no real evidence to show that immigration has had much influence on house prices. (YPP is not anti-immigration, this is a whole new topic). New construction, as low as it has been, has more than matched increases in the general population (and immigrants were building many of those houses anyway).

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2. Move towards Land Value Tax (and reduce VAT and National Insurance Contributions)

As a very modest start, our suggestion is that we merge the following housing and wealth related taxes and replace them with a single, national tax on housing:
- Council Tax (annual revenues approx. £25 billion)
- Stamp Duty Land Tax and its equivalents in Scotland and Wales (£10 billion)
- Inheritance Tax (£6 billion)
- The TV licence fee (£4 billion)

These taxes raise about £45 billion a year, which is about 6% of all UK government revenues and less than the amount that Domestic Rates and Schedule A tax would be raising (see above) if they had been retained and uprated in line with inflation.

So the new single/replacement tax would have to raise £45 billion a year from a total value of UK housing of over £7,000 billion - the required tax rate would be 0.65% (£45 billion ÷ £7,000 billion). In other words, the tax on a £100,000 home would be £650 a year and the tax on a £1 million home would be £6,500 a year.

This would be similar to Domestic Rates in Northern Ireland. All housing was revalued on 1 January 2005 and the rates are 0.7% - 0.8% of that value. The Council Tax valuation, banding and collection system can easily be adapted to achieve this.

There will be huge savings in administration and compliance costs (one tax instead of four); it will make buying and selling houses a lot cheaper (no SDLT) and it will shut down the Inheritance Tax-avoidance industry (lawyers, accountants and trustees make as much money from Inheritance Tax avoidance as the government collects in Inheritance Tax).

Once the system is up and running; we can move to a more sophisticated valuation system based on the rental value of each home minus a deduction for the bricks and mortar; and gradually replace the damaging and regressive taxes like Value Added Tax and National Insurance. This will ensure that working households - whether home-owners or tenants - end up paying less tax each year. YPP is not anti-home-ownership - if these policies were implemented, home-ownership rates would go up!

And yes, we are aware that there are a lot of pensioner households in the South East whose homes have rocketed in value who wouldn't be able to pay the new tax in cash each year. So the tax would be rolled up and collected out of their estates (Northern Ireland introduced this in 2005 after they did their last revaluation. The scheme was closed a few years ago because only a dozen people actually used it); for most heirs for the foreseeable future, the rolled up tax will be a lot less than Inheritance Tax would have been.

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3. Simplify the benefit system and replace it with a flat-rate Basic Income

Please note - The UK State Pension is moving ever closer to a flat-rate Citizen's Pension of £160 per week payable to everybody over state pension age, which is a good model for how the whole welfare system should work. (Most men will receive less under the new State Pension rules than under the old rules; most women will receive more). We would not merge disability- and housing-related benefits into the Basic Income and they would be kept as separate benefits.

Before we start thinking about reform, let's look at what we've got. The UK tax system is complicated enough, the welfare system is far worse and the way the welfare and tax systems overlap is insane.

For example, lower and middle earners are simultaneously paying income tax and NIC and receiving Working Tax Credits. Besides the bureaucracy and hassle, this leads to very high marginal deduction rates. For every £1 such a person earns, they lose 32p in PAYE. Of the 68p that are left, they lose another 28p in Tax Credits, meaning they keep only 40p, which is like an effective tax rate (called 'marginal withdrawal rate') of 60%.

The position is worse for those on Universal Credit. That is a massive disincentive to taking on a temporary or low paid job; what is worse is coming off and going back on benefits is a time-consuming and difficult process, which can leave people penniless for weeks (Universal Credit was deliberately designed to do this).

Some benefits are mutually exclusive, you can only claim one of Income Support, Jobseeker's Allowance, Carer's Allowance, Incapacity Benefit (or their equivalents under Universal Credit). There is Statutory Maternity Pay, Statutory Sick Pay, all students get soft loans to cover living expenses; students from low income households get modest grants. Working Tax Credits, Child Tax Credits and Child Benefit (which is clawed back in full from higher earners) can be claimed in addition to these.

Everybody is entitled to the income-tax free personal allowance and the National Insurance earnings threshold (there are then extra personal allowances for pensioners, savings income and small trade profits), but low earners do not get the full benefit. Higher earners benefit from tax breaks for pensions saving and tax exemptions for income from their ISA-savings. Low- and non-earners are penalised if they have savings because of asset-based means test.

YPP support the idea that we add up the cost of all these benefits and tax-breaks and replace them with two benefits/one tax break, leaving the total cost the same and tax rates unchanged:

1. Child Tax Credits and Child Benefit would be replaced with a flat rate Child Basic Income of £75 per week for the first child in each family and £50 per week for second and subsequent children.

2. The National Insurance Threshold (£8,632 a year) should be increased to £12,500 (same as the income tax personal allowance)* and each working age adult would have a straight choice:
a) Claim the personal allowances (and NOT be entitled to the Basic Income), or
b) Claim the Basic Income of £77 per week (and NOT be entitled to the personal allowances, so would pay 32% on all their income).

For middle and higher earners, there would be no point claiming the Basic Income, because the extra income tax and NIC they would be paying would exactly cancel out the Basic Income; they would barely notice a difference. For some reason, right-wingers prefer the idea of Negative Income Tax, but mathematically, it comes to exactly the same thing as what we have outlined here.

The Basic Income would be available to all UK citizens and legally resident non-citizens who aren't entitled to claim from another country. All means all. Unemployed, stay-at-home parents, students, non-working spouses, low- or part-time workers, able-bodied or disabled (who would be entitled to separate disability-related payments), single, married or co-habiting; regardless of the income of other members of the household etc. It is no more controversial than every resident being entitled to use the NHS or every child being entitled to a state school place.

Such a system would leave very few households much better or worse off; that is not the point.

The point is to get bureaucrats off people's backs; to get rid of the high marginal withdrawal rates; and to trust people to make their own decisions. People should not be discouraged from being in education or volunteering because they would lose their benefits. People should not be discouraged from forming households. People should not be discouraged from taking a low paid or temporary job (for fear that they will never get back on benefits again when the job ends).

(The closer you look, the madder it gets. There are at least five parallel systems for providing or subsidising nursery places, some means-tested, some not, and not all of which are mutually exclusive. The total cost averages out at £80 per child per week, which is pretty much the maximum that can be claimed under the Tax Credits system, once caps and withdrawal rates are taken into account, so why not just make it a flat rate payment of £80 per week for all children at a private nursery?)

* The day after we published this, the leader of the Conservative Party vaguely promised to do this in the medium term.

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4. Fix Brexit by rejoining EFTA and remaining in the EEA

YPP's members are split between Remain voters, Leave voters and non-voters. YPP had no particular view either way.

There are benefits to being an EU-Member State (freedom of movement, free trade, etc); there are benefits to not being a Member State (scrap subsidies for farm owners; no need to bail out European banks via the ECB; phase out EU-imposed VAT; better immigration controls; lower import tariffs on trade with third countries; less protectionism for large corporations; etc). It's a question of trying to get the best of both worlds.

Rejoining the European Free Trade Association (EFTA) and remaining in the European Economic Area (EEA), like Norway or Iceland. (Switzerland is in EFTA. It is to all intents and purposes in the EEA as well due a multitude of side-agreements and side-treaties, so there are no mobile roaming charges and they are part of the EHIC system). Negotiations should be relatively simple because the UK would be signing up to two arrangements that already exist and work in practice. It would also strengthen the hand of the more free-trade oriented EFTA against the more centralising EU.

It is also a real situation. When extreme Leavers or extreme Remainers criticise this version of Brexit, the response is simply this: "Norway and Switzerland manage just fine. Why do you think the UK wouldn't?"

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5. Legalise cannabis

Until a few years ago, the debate was largely based on principles and unknowns. We now have lots of examples to learn from - the Netherlands; Portugal; several US states; Canada (each deals with it differently) and observe that it has had mostly positive effects.

Drug use does not increase (some studies show it has gone down); crime goes down (no turf wars or acquisitive crime); which frees up police, courts and prison system for dealing with actual criminals; the legal trade crowds out stronger varieties ('skunk'); the government can collect taxes on it (like on alcohol or tobacco); unlucky users do not get stuck with a criminal record; it's a long list.

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