Letter: Extracting value

Ron Greer's suggestion for a charge on land rental values (Letters, 20 May) would be the most constructive use of the opportunities provided by Calman. Given the precarious state of the economy, further reliance on income tax or any other form of deadweight taxation, whether at national or local level, would be dangerous and irresponsible.

Despite being traditionally lumped together as "property", land and buildings are quite distinct and ought to be treated as such. Land has no production cost and its value is publicly- generated, reflecting the levels of public demand for different locations and further enhanced by publicly-funded infrastructure and services.

It is right that these values should be returned to the public purse, rather than going into private pockets.

Post-war Labour governments have made several attempts to capture revenues from land value enhancement, but these amounted to one-off, up-front charges levied at the time of development. They were readily avoided by landowners sitting tight awaiting the inevitable repeal, and so had the effect of discouraging legitimate development.

An annual charge on the rental value of the land alone, excluding the value of the buildings on it, would have no exemptions for land held deliberately idle or under-used. It would encourage optimum permitted use, would discourage neglect and dereliction and would eliminate the speculative element that drives the boom-bust cycle.

JOHN DIGNEY

Lochard Road

Aberfoyle, Stirling