Dear Sir,

I welcome the decision of the Scottish Land Commission to sponsor an investigation into the feasibility of introducing Land Value Taxation (also known as Annual Ground Rent, AGR), in Scotland.

For Peter Chapman and Mary Munro to condemn LVT and pre-judge the outcome of the investigation shows that they neither know what LVT is, nor what it involves. Both of them say that that LVT would be an additional tax but they are wrong. LVT would only be acceptable as a replacement for existing harmful taxes, such as Income Taxes and VAT, which have huge detrimental effects on employment and trade.

As one of the owner-occupiers of a 650-acre farm in Fife, I calculate that the farm would be more profitable after the introduction of LVT. The rental value of land would be basis for assessing the amount payable. The current market price of land would not be used because it is almost five times that which is justified by current product prices and costs of production.

Farmland would be charged LVT according to its productive capacity, and therefore, according to its owners’ ability to pay. The NFUS uses a similar system when charging for membership subscriptions.

Much of the land in “areas of natural constraint” would have very low or zero rates of LVT per acre. More productive land such as ours would have higher charges per acre. The overall contribution of rural land to the total amount of LVT charged nationally would be about 10% because it constitutes only about 10% of the total land value of Scotland. Urban land has about 90% of the total land value and would easily be capable of contributing 90% of the total LVT revenue when all the harmful taxes such as Income Taxes and VAT are abolished.

Peter Chapman, like Richard Wright in his article, is content to believe that the official statistics of farm incomes provide a reliable guide to the profitability of farming. Our farm does not depend on subsidies to make a profit and when I calculate its Net Farm Income according to the formula used to produce the official statistics, the figure is much lower than our taxable profit. The people at the Centre on Constitutional Change, referred to by Richard Wright, have also failed to realise that the official average income figures do not represent the real average income of farmers. It is impossible to produce a sound policy for agriculture using statistics which do not represent the true picture of farm incomes.

Those who want to know more about LVT, and the damage done to the working people of Scotland by our current tax system, can do so by reading the information on the website of the Scottish Land Revenues Group. The economic case for LVT is invincible. I would like everyone to learn about LVT, for politicians of all parties to promote it and have the will to introduce it.

Duncan Pickard

Straiton Farm