It need hardly be stressed that ‘the land question’ is again at the centre of the political stage. Soaring city centre prices make rational land-use planning virtually impossible, while on the fringes of our urban areas, and in regions of new development, speculators increase the costs of new ventures while returning to the community none of the associated gain in land-values. The objectives of a land policy should be clear. In the first place, speculation in land must come to an end. Secondly, those real increases in the value of land which will nonetheless result from developments which change an area’s potential must be recouped for the community. Thirdly, the public should have control over the allocation of land as a valuable scarce resource.

The problem is to design a land policy which can achieve these objectives and at the same time be politically, financially and administratively feasible. In the design of any such land policy, there are certain major questions which must be resolved. These key questions are central to any understanding of the failure of past policies, and critical for the formulation of any future successful approach.

Firstly, much previous discussion has centred around the choice between taxation of increases in the value of land, and outright public ownership. The arguments for the taxation approach include on the one hand that it generates income through securing ‘betterment’ for the community, and on the other hand that its costs in compensation are zero. Outright ownership, however, can also generate a continuous income through rents. Although this income will admittedly probably at first be smaller because it will have to be set against compensation, the reduction can be minimized by careful phasing of compensation. Moreover, ownership represents a less easily reversible policy, and therefore a more permanent income. Furthermore, the taxation approach suffers from a major disadvantage not shared by outright ownership. This is the crucial question of the level of recoupment of the increase in value. If the whole of this increase is taken by the state through tax, the market in land seizes up altogether.