Top UK government adviser calls for consideration of land taxation Kate Barker has reasserted the need to change the way the community shares the value of land.
Speaking at the Institute of Economic Affairs 22nd annual State of the Economy Conference in London today, Barker said there was "a need for a rational long-term plan for taxing the profits from land values".
Barker, who sits on the Bank of England's Monetary Policy Committee, carried out the government's recent review of housing. The review recommended the introduction of a new point-of-development tax in the form of a ’planning supplement'. Reformers condemned the proposal as unworkable and unjust.
Barker's statement today suggests a subtle but critical change of heart, and seems to go some way further than her previous stated positions.
She agreed there was a great difficulty with housing affordability. She said that many first time buyers were able to buy first home only because of equity-funded gifts from parents. She highlighted the increasing incidence of people relying on equity in house prices to fund their pensions in retirement. She also expressed concern at the extraction of housing equity to fund consumer spending.
Barkers remarks on the taxation of land values were unscripted, but her prepared script is available on the Bank of England website.
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