Nationalisation of land — reality or farce?
The Earl of Kingston
The pamphlet published recently by the Campaign for Nationalising Land (CNL) failed to draw an official comment from either the Conservative Or Labour parties. The whole question of land and property has become such an • emotive subject that both parties are apprehensive of being seen to commit themselves to any extreme of political thinking.
Written by five members of the Labour Party, including Nicholas Kaldor, one-time adviser to the Chancellor of the Exchequer, the 'Case for Nationalising Land' Proposes that all freeholds should be nationalised and converted into statutory ninety-nine year leases from the Crown. By the end of the ninety-nine year period the state would own and manage all landed Property.
Public Land Management Authorities (PLMAs) would be set up as agents of the state and would be empowered to end any lease if there was a change of use or user or if the land or building was required for development. In either case the leaseholder would be entitled to eompensation and have a right to be granted a new lease on terms which the PLMA would stipulate.
There would be no exceptions to the nationalisation. The legislation would cover all land, even that Owned by the churches and the Queen herself.
In a recent article in the Times, Richard Crossman, that eminent elder statesman of the Left, was lavish in his praise of the Pamphlet. He described it as "brilliantly simple.” However, he did not attempt to analyse the Possible reactions to the proposals of the 50 per cent or more of the country's voters who are owneroccupiers. On this point the authors of the pamphlet launch into a political diatribe against the Tories and state that they do not believe the Labour voters who Own their own houses would be deterred by the proposals. Simple indeed, Mr Crossman!
It is difficult to imagine that voters faced with the nationalisation of their property would not seriously consider the implica tions. For most people a house is the largest and most important single purchase of a life-time. For many, the final payment is the result of years of hard work. How can these people be expected to endorse, without a murmur, any proposal which denies them the right to decide the fate of one of their personal possessions? It is true that the substitution of a ninety-nine year leasehold for a freehold would have little or no direct effect on a well-settled individual, but it is the psychological factor of the exchange which is of the greater political significance.
Nationalisation is synonomous with a monopoly in so far as they both create a situation where competition is non-existent. A non-competitive atmosphere can often lead to apathy. Also, it is a basic business-school concept that size is no criterion of efficiency. The combination of these two factors within the PLMA could lead to a general mistrust and lack of confidence in them. The absence of any incentives for the PLMAs to speed the exchange of all leases, the possible hold-ups in cases of compensation arguments, and the abolition of a free market in property, could result in a severe restriction on the ability of individuals or companies to move around the country. Industrial chaos and rapid increases in 'twilight areas' could be two final results. 'Gentrification' would cease to exist, putting an additional strain on the Exchequer.
For a short time after the 'appointed day' (say, one year), it would be fairly easy to arrive at a compensation figure because, presumably, all properties would be valued at their existing use value at the time of nationalisation. Later, the method of arrival at a compensation figure would need to incorporate a system of base valuation allied to some form of indexation. The CNL makes no allowances, in its document, for the fact that ninety-nine year leases invariably increase in value for forty years or so, before depreciating towards expiry. If the CNL assumes, as it appears to, that leases will begin to depreciate on the 'appointed day' then this must only mean that compensation figures will be imposed and not subject to free negotiations or subsequent appeal procedures. Hardly a way to win friends!
Many other economic anomalies would arise if the proposals were adopted. There would appear to be no death duties payable on land or property. An individual would have a greater ability to ac cumulate capital because of the absence of a mortgage or a large capital payment. It would be impossible to raise finance against the value of land or buildings. This in itself could restrict freedom of choice, private enterprise and the independence of individuals. Pension funds and insurance Companies who have invested heavily in land and property, would have this medium of investment terminated and the subsequent losses would be borne by all sections of the community. Any Labour Party which adopted the proposals would be flying in the face of many of their dearest principles.
Mr Victor Lucas, the chairman of the National Association of Property Owners, takes a realistic view. He said last week, "The opinions and proposals given in the document are those of five individuals, and are not representative of any accepted body of political opinion. We could not
imagine, for one moment, that the Labour Party would adopt such unworkable proposals. If they are adopted, then we will spend time making comments."
Unlike the Fabian Society report, 'The End of the Private Landlord,' which makes a constructive and realistic analysis of many of the problems involved in the compulsory purchase of all rented accommodation, the CNL document appears to rely for its success on principle rather than on a serious examination of the facts. The proposals which it makes would place an intolerable burden on the financial resources of the state. Far from being a benefit to the community, as claimed, the nationalisation of land would, be paid for by those who had 16urchased their own property in the first place. This situation would create a comedy which is unlikely to be enacted.
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