Licensing the Commons
In some senses this is not really a tax at all, but merely a charge for the use of a common resources. If a local authority owned a village hall and you wanted to use it for a private event, you would expect to have to pay for it. Similarly, an Oil company extracting oil from under our seas, or an airline or internet service provider using our airways should expect to have to pay for use of that public space.
|Oil & Gas tax (£bn)||2.2|
|Air routes/Current Air Passenger Duty||3.20|
The Transformation Deal treats the permission to create money, charge interest and provide financial service as a common resource (the currency is collectively owned by us all ultimately). In addition the financial services sector has much of the risk of doing business shouldered by the public purse. Therefore it will be experience an increase in the amount it pays for these things. The old business taxes will disappear from financial services, but the new licences will require payment to cover the use of these common resources. Overall, this will mean an increase in taxation on the financial services sector of over £10bn*, but this is a fair price for the risk and supported already provided by the public.
Another way to look at it is that the Financial Services sector receives implicit subsidies from the government equivalent to at least £30bn per year (according to the Bank of England) so should be repaying that amount back to the public.
*PwC estimate that the Financial Services sector already pays £26.2bn in taxes annually (including unrecoverable VAT). The new figure is £3.8bn higher than that, and the sector will also continue to be liable for approx £6.5bn in unrecoverable VAT, taking the total to £36.5, which is £10.3bn higher
By the same token, pollution can be viewed as a use of common space and resources for which the public should be compensated. If you pollute the land, air or sea, you encroach upon the common resources on which we all depend. I have used the idea of a Carbon Tax here, based on all UK emissions, but there is a strong case that it should extend to all forms of pollution, enabling taxes on non-polluting activity to be reduced. This is an area that needs to be more fully explored
|Total emissions (m tonnes)||514.4|
|Tax @ £20 per tonne (£bn)||10.2|
Extraction of Natural Resources
Much of the value that is extracted from the land will be captured by the standard Land Value Tax, but what about those resources not on or under the land? Offshore Oil & Gas production should be subject to a Commons Licence in or to return fair value to the public, who ultimately own these resources. The amount used here is equivalent to the amount currently paid in taxes by that sector, so it cannot be accused of being excessive or disruptive, however, there might be a case for extending that charge if the value of those resources increase.
Licences to catch fish are already required in the UK, but there might also be other commercial uses of our lakes, rivers and seas that require a Commons Licence (feel free to suggest any below)
It might seem a bit of a stretch to try to tax the air around us, but this air is used for commercial purposes and in some ways is already licensed (radio licences, spectrum bandwidth auctions).
Air routes and landing slots are another obvious area of commercial use of the air which can and should be licensed to the highest bidder. The amount listed here is equal to the duty levied against passengers on current air journeys, so should not increase any burden on the airline sector. However, air route/landing slot licence auctions might well bring in more than the current duty, while not taxing transactions might also increase sales and revenues for the airlines. Either way the amount shown is really a minimum amount this could expect to raise.
Spectrum bandwith is already licensed but only raises about £200m per year. Increasing this to £1bn will increased end costs to consumers (by about £1.50 per month for each mobile phone user), but the corresponding decrease in VAT should help reduce bills by at least half of that.
Any pollution of the air counts as use of it for private or commercial purposes and should also be licensed. However, I do not have comprehensive or reliable breakdown of costs for this, so further work needs to be done. For that reason I have not included the figure in these costings (though they could be added at a future date)