Land and land ownership
No apologies for this being a fairly long page - land is at the heart of so much of English history.
It's all about The Normans
The Financial Times asked Gerald Grosvenor (Duke of Westminster - land assets of over £10,000,000,000) for his advice to entrepreneurs. He replied:
"Have some relatives who were friends with William the Conqueror."
Nice to see his analysis is exactly the same as ours.
- What is history?
- Why is land so important?
- Does anyone really "own" land?
- Understanding land and power
- Why no tax on land?
- Distorting the market
- Tax avoidance: trusts
- Tax avoidance: tax havens
What is "history"?
Since land and land ownership are at the heart of English history (and at the heart of the English class system), and since the history we are taught at school, is, by definition, things that have been recorded, it is worth thinking about what history is.
History is about rent
History is about acquiring land (through invasions, wars, battles, violence, murder, theft, forced marriages or the purchase of stolen goods) and then extracting rent (under the threat of law) from those who do the work while you sit back in your castle, manor, hall, palace, country pile, stately home, or "big house" and live a life of idle leasure - while doing everything possible to avoid contributing to the common good through taxation.
Said by Winston Churchill by the way!
This applies to both rural and urban areas. The wealth of the Duke of Westminster ("Grosvenor Group") and the Earl Cadogan ("Cadogan Estates"), over £17 billion between them, is made up almost entirely of land, much of it in central London (Westminster and Chelsea) - yet they pay no tax on the value of that land.
Of course, this isn't how we are taught things at school because history is about what has been recorded, the printed word, so it is usually the history of those who control the presses.
This continues to this day where day-to-day events are filtered, interpreted and relayed to most people by a media (The Mail, The Sun, The Times, The Daily Telegraph, The Express) controlled by people who don't live here and who do their best to avoid their social responsibilities by not paying tax here.
History is ...
- rarely about facts,
- always about questions,
- highly selective,
- often used to support someone's view of the present,
- never neutral. It always depends on the point of view of the person who is describing it.
For example, is history simply a list of kings & queens and battles & wars?
Is it the story of those in power ("the ruling class") or does it include the story of those who work and provide the taxes to keep them in power?
We must always ask:
- Why did something happen?
- How many different viewpoints are there?
- Who benefitted and who lost out?
- What lessons were learned?
Why is land so important?
- To understand modern England you need to understand land - its ownership and its power.
- To understand the world you need to understand capitalism.
South Derbyshire is mainly rural - so we will deal with the issue of land.
Taxing homes but not land
Home owners pay Council Tax on the value of their homes but there is no tax on land.
If you own 1 acre you pay no tax on it. If you own 400,000 acres you pay no tax on it.
Land is a community asset, it belongs to us all (well, it belongs to "the crown" - but that's us since we chopped the head off one monarch!) and should be used for the common good - for agriculture, for infrastructure, for homes, for business and for leisure.
Land is a finite asset (they are not making it any more!) and should be looked after for the future.
Land ownership is the backbone of the English class system - and has always been associated with power. The relationship between land owners, tenants and labourers was at the heart of almost all national and local conflicts before the Industrial Revolution - and at the heart of many since then.
Land ownership, and the power that goes with it, is so important in England that even today, in the 21st century, we have no comprehensive record of who owns what.
The Land Registry came into existence in 1862 and local areas gradually came into the scheme but there was no national compulsion to register land or transfers of land. Today it is compulsory to register transfers but we still have no compulsory registration of land ownership where there has been no transfer since 1862.
Who owns England?
We don't know.
The Land Registry records transactions only and there is no easy way (like an online map!) to see who owns what. Land Registry data is incomplete and Ordnance Survey, owned by taxpayers, charges a fortune for mapping data.
In 2016 there was an attempt to privatise the Land Registry so it would not be subject to Freedom Of Information requests - another way to make things more difficult to find. Fortunately public protests stopped the government going ahead.
One look at the answer given by the Land Registry in response to the question: "who owns unregistered land?" shows how bad things are - they recommend you become a detective! Who resists registering the ownership of all land in England - and why?
Useful independent sources of information include:
In these high tech days when everyone carries a computer around in their pocket, is there any reason why we should not be able to bring up a map, click on any piece of land or property to find who owns the freehold, what its Open Market Value (OMV) is, what type of land it is, what tax should be paid on it (LVT) and when the Land Register (LR) was last updated? A quick link would take us directly to the Land Registry site to see full details including a history of all transactions relating to that land.
If the freehold is not owned by a clearly identifiable person (i.e. owned by a company or trust etc.) is there any reason why there should not be a link to take us directly to details of the owner - whether or not it is in a tax haven?
The Land Registry is a public body. The Ordnance Survey is a public body, Geographic Information Systems (GIS) are tried and tested and it is simple to do. (Contact us of you don't think it is simple to do - we will be happy to go through it with you.)
Given that these details are public anyway (apart from some land not yet being registered and all land not being taxed) can there be any objections to such a system that would make land ownership and land values transparent to us all?
The mockup below does not imply real ownership, value or tax. It is for imaginative and illustrative purposes only.
Land owners have always resisted compulsory registration because they don't want people to know what they own and they want to avoid any tax on land. Some of them may find it difficult, and expensive, to prove they own the land - simply saying "it's been in my family since the Battle of Hastings" won't cut the mustard in court.
Click the image for a short film (4.5 minutes) by Douglas Ray and starring Rafe Spall, Ruth Wilson and Robert Glennister.
The film makes a number of interesting points:
- It is perfectly reasonable to take a walk in the countryside as long as you cause no harm to animals or crops.
- Footpaths are often poorly marked.
- Styles are often non-existent or poorly maintained - it should not be necessary to climb over gates.
- All land was originally acquired by violence - someone fought for it.
- Landowners will revert to extreme violence if they feel their ownership is threatened.
Time and time again, throughout history, the landowning class has used the law and violence to suppress any threat to land ownership and their interests - and it is usually working class lads who end up doing the sword waving and shooting on behalf of their "betters".
This is a saluatory lesson for any future government that seeks to rectify the problems caused by almost 1,000 years of tax-free land.
William Hutton, a landowner and coal mine owner who lived at Hutton Park near Bolton, was Chairman of the Lancashire and Cheshire Magistrates, and did not hesitate to call in the army to put down a demonstration taking place in St Peter's Square, Manchester on 16th August, 1819. This led to a massacre in which 11-15 were killed and 600-700 were injured. The first victim was two year old William Fildes, killed when his mother was knocked down by a cavalry horse. Some of those who died or who were injured had fought under Wellington at the Battle of Waterloo - hence the incident has gone down in history as the Peterloo Massacre.
The following day the magistrates published a poster in an attempt at a post hoc justification for their action.
Mike Leigh has directed a recent film about Peterloo.
Does anyone really "own" land?
It often comes as a surprise to home owners and land owners that they don't actually "own" their land at all.
The clue is in the word "freehold" - we can "hold" land as "freehold" under the system of "socage" developed by the Normans after The Great Theft of land following the Norman French invasion of 1066 when Guillaume Le Batard declared himself King William 1st and absolute owner of the entire country - to "use and abuse" as he saw fit.
William handed out parcels of land to those who had supported him in battle and in return he got their loyalty, their military service and goods - usually in the form of agricultural produce.
Over the centuries the military service etc. may have been dropped but the principle of "holding" land under "socage" remains at the heart of English property law.
The law has developed in the interest of those who own ("hold") land so it remains untaxed and may be passed from one generation to the next free of inheritance tax. Where there are legal difficulties, inheritance tax can be avoided by placing the land into a trust.
How would you feel if someone walked into your home, stole your TV and HiFi then:
- passed a law saying that everything he had stolen belonged to him,
- gave it away to his mates or sold it down the pub to someone who knew it had been stolen?
In the first case you would be outraged - but legally you could do nothing about it. That's exactly what William did.
In the second case you would say that the person in the pub was guilty of receiving stolen goods. That's exactly the case with every sale or transfer of land since The Great Theft of 1066.
Makes you think doesn't it?
Understanding land and power
- In England all land was acquired through violence, theft or via the receipt of stolen goods.
Get it and keep it
Once you own land you want to ensure a continuous source of unearned rental income by:
- Legitimising your ownership of that land.
- Holding on to it from generation to generation.
To achieve these you need power through:
- The legal system and the judiciary
- To hold power you need your children educated alongside those whose aims are the same as yours - the legitimising and holding of land. You create the English public school system and the English University system.
- What do you teach? You teach those topics useful for holding power: politics, law, theology, economics (your interpretation of economics), history (your interpretation of history).
- What don't you teach? Power doesn't depend on science, engineering, entrepreneurship - you don't want your children dirtying their hands - you want them holding the reins of power.
- This explains why, in the 21st century, we have a country which has rejected "making things" in favour of "making money from money" and where politicians and lawyers create and interpret the law in favour of those who have land.
- An example of legislation in favour of land ownership is a "trust" (see below) - a device to ensure that land passes from generation to generation without taxation.
"If it's legal it must be right " - lawyers continue to profit from legislation created to protect landowners.
- Church and land - who ran the church?
After the break with Rome the Rector was usually the second or third son of the landowner. The landowner's income came from rents and the Rector's income came from tithes - just as a modern day evangelical preacher in the USA becomes rich on the 10% tithe levied against "the flock". Where the Rector knew nothing about religion, or had more interesting things to do, he employed a Vicar to do the work.
- What did religion teach? It taught you to know your place.
God defines the status quo
The 19th century hymn, "All things bright and beautiful" contains a verse which is rarely sung today - but it defined the hierarchy in rural society:
Rich man in his castle,
poor man at his gate.
God made them high and lowly,
and ordered their estate
The physical structure of churches, the system of box pews, made sure everyone was kept in the right place - even before their God. Trusley in South Derbyshire retains some fine examples of such pews.
- Kings knew they held land only through the blood on their swords so they also sought to legitimise themselves. By the time of Charles 1st kings believed they ruled "by the divine will of God."
- The English Civil War and the execution of Charles 1st was not to do with the rights of the common man - it was to do with land. The middling classes, like Oliver Cromwell, had acquired land and, like the large landowners before them, they wanted their hands on the reins of power - in their own self-interest.
- When, during and after the Civil War, the common man began to make noises: the Diggers, the Levellers, the Agitators within the Model Army, they were ruthlessly cut-down and murdered by those who saw their newly acquired land threatened by those who felt land should be held for the common good.
- By the 19th Century many of those who worked in the rural economy were no longer willing to spend their day off, Sunday, with their landlords and masters - the rapid growth of non-conformist Chapels in the countryside is testament to this - there are at least four within a short walk of Sutton on the Hill.
Why no tax on land wealth?
Winston Churchill, war-time leader and himself descended from a long line of landowners, said:
"Roads are made, services are improved, lights turn night into day, water is brought from reservoirs and all the while the landlord sits still. Every one of these improvements is created by the labour and cost of other people and taxpayers.
Those who own the land contribute nothing, as land owners, and yet the value of their land is increased. The land owner provides no service to the community and nothing to the process by which he is made richer.
The unearned increase on the value of land is not in direct proportion to the service done but to the disservice done."
We pay Council Tax (previously "rates" then "poll tax" until riots forced Margaret Thatcher to back down) yet a Saudi prince owning a £100 million apartment in London pays exactly the same as someone in the same borough whose home is worth £320,000 (Council Tax band H).
Those of us living in South Derbyshire pay 213% more than those living in Westminster for a home in the same Council Tax band. How can this be justified?
The wealth of the Grosvenor Group (owned by Richard Grosvenor, Duke of Westminster) and the Cadogan Estates (owned by Charles Cadogan, Earl of Cadogan), over £17 billion between them, is made up almost entirely of land, much of it in central London (Westminster and Chelsea) - yet they pay no tax on the value of that land. Richard Grosvenor also holds the 10,000 acre estate at Eaton Hall in Cheshire while Earl Cadogan's son, Edward Cadogan, Viscount Chelsea, has to get by with the rather smaller 2,800 acre Snaigow Estate, near Dunkeld in Scotland.
Income for many land owners comes from unearned rent on which they are supposed to pay taxes - though tax avoidance schemes, overseas tax havens, contributions to political parties, seats in the House of Lords, the power of the "establishment" and pressure on politicians ensure that they pay the minimum they can get away with. The use of trusts ensures that they pay no inheritance tax when the land is passed from one generation to another.
The increase in the value of land comes about through no effort of those who own it. In many cases they have been made even richer by the mineral wealth found under that land - such as the discovery of coal on the Chatsworth estate. That mineral wealth has not been used for the common good, it has been used to further increase the wealth of those who made no effort whatsoever to earn it.
As taxpayers we fund infrastructure projects that increase the value of land that benefits from those projects. The classic example is the London underground system where land closest to tube stations has a higher value than that further away. Crossrail has increased land values dramatically in areas closest to its stations. Taxpayer funded motorways increase land value - e.g. in the Cotswolds following the development of the M4 and M40.
Distorting the market
Governments have frequently intervened to distort the market for land - sometimes claiming to help the housing market, sometimes to promote the business interests of their financial backers (land owners, property developers, hedge funds, speculators etc.) and sometimes out of ideological bloody mindedness.
- "Right To Buy" was introduced by Margaret Thatcher and continued by every government since.
"Rent to Acquire" was introduced in 1993 and is, in effect, "Right to Buy" for housing association tenants.
The sell-off of social housing, and the refusal to allow local authorities to borrow to build more social housing, is the direct cause of the shortage of low cost rental housing today - it has provided a gold mine for landlords and has been made worse by legislation to permit low cost "buy to let" mortgages.
The primary reasons for the scheme were "pride of ownership" and "a stake in society" - those who owned property were more likely to look after it and become interested in things that affected it - and this has indeed proved to be the case. Of course, it was incidental that once they became "land owners" (albeit in a tiny way) they were more likely to vote Conservative - which also turned out to be the case.
Given the dilapidated state of parts of the countryside (particularly buildings, woodland, hedges, fences, ditches, gateways, lanes) resulting from short-term tenancies, perhaps what was good for urban areas should apply equally to the countryside and tenants should be given the Right to Buy and the right to take pride in the buildings and land they own and farm.
- "Help to Buy" is a subsidy to property developers, further distorting the market by keeping prices artificially high.
- "Land Banks" are built up by developers and others (hedge funds, speculators, large supermarket chains) to limit the number of new houses coming onto the market and to be released when they can maximise profits.
- "London weighting", in all forms, is a distortion of the market. Rather than address the problem it is made worse by special payments made "because the cost of housing in London is so high". There are many ways to address the excessive cost of housing in London (e.g. move parliament, move the BBC and other media, end property speculation by foreigners) but London Weighting is not one of them
Tax avoidance: trusts
Income tax was first introduced in 1799 to pay for the war with Napoleon. It was abolished in 1802 but was back, for ever, in 1803.
Death Duties were introduced in 1796 because inheritances represent unearned wealth - the person who inherits has contributed little or nothing towards that wealth. It was therefore felt fair that a proportion of that wealth should be shared by all - through the tax system.
Trusts are a unique feature of English law introduced by land owners to protect their wealth. (The Napoleonic Code, followed by most European legal systems, has no concept of a "trust".)
Trusts were designed to serve three main purposes:
- To hide the ownership of land and other assets. This avoids any personal obligations associated with land - in the past this would have included things like providing a local militia etc.
- To avoid tax. English law treats trusts as if they were people who can never die - hence they never pay death duties (Capital Transfer Tax, Inheritance Tax.)
- To avoid the break up of estates by sharing between offspring or forced sale to pay taxes.
For landowners trusts are a god-send - they should be, they used their power in Parliament to create them in their own self-interest.
In recent years trusts have found a community use - to hold land in common - a return to the days before enclosures!
When exploited by large estates they represent a lost source of social income - and therefore increase the tax burden on those who do not own significant amounts of land.
Tax avoidance: tax havens
Landowners and their political representatives were quick to generate a set of circumstances that allow them to hide their ownership and to avoid their fair share of taxes.
Many large estates are not owned by individuals, or even trusts, but by companies often registered in tax havens such as Liechtenstein or the Caribbean. In many cases these are "holding companies" making it impossible to trace who is the beneficial owner of the land.
Establishment tax avoidance
A perfect example of an offshore trust is the 20,000 acre Tarbert Estate on Jura owned by David Cameron's father-in-law (William "Viscount" Astor) and currently registered in the British Virgin Islands - also used by many other massive tax avoiders including Richard Branson.
The fact that land is not taxed means that it can be used to avoid inheritance tax. James Dyson, of vacuum cleaner fame, has purchased over 30,000 acres of land in the last few years and, as well as avoiding tax, is in receipt of over £1.8 million in taxpayer subsidies on that land.
You can spot a few overseas-registered recipients of grants and "aid" on this web page.
This is tax avoidance on a grand scale - it makes benefit fraud look trivial.