Merryn's Blog

How we can pay to make the Nimbys go away

The best way to deal with objections to new rail lines, home or fracking wells is to buy the Nimbys off via a negative land tax, says Merryn Somerset Webb.

Currently, if your life is ruined (and the value of your house destroyed) by the building of a new infrastructure project near you, there is little or no compensation available. It's just considered bad luck.

That, of course, is why we are such a nation of Nimbys.

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

Why agree to put up with new trains/roads/housing estates/fracking wells when there is nothing in it for you? Instead, you will just oppose it as much as possible for as long as possible. It makes sense. That's why we aren't getting on with fracking, and why it is verging on impossible to build enough new houses in the UK.

But there is an easy way to make Nimbyism go away: a negative land tax. Imagine if you were out there Nimbying about HS2, or a nasty new wind farm going up in clear sight of your hill-top cottage, or perhaps the way that fracking was about to ruin your sense of rural idyll. Would you complain so hard if you never had to pay council tax again, or got a cash lump sum? Or if the tax benefits (and lump sums) came attached to your house, so that should you prefer rural peace to money you could sell it at a pretty price and move on? My guess is that you would not.

Advertisement
Advertisement - Article continues below

We've written about this idea frequently (see my last post on the matter here and other views on the land value tax here). But interestingly and pleasingly it is becoming a little more mainstream.

Alice Thompson almost gets there in the Times today talking about how "the Norwegians have always understood that their citizens should benefit directly from energy production". The result is a five-trillion krone fund for the people, and a nation that sees its oil rigs as "part of its heritage". But a national fund isn't enough, given that it treats everyone equally. What we need is wads of cash for those directly affected.

More interesting is a piece in the Guardian (to which my attention was drawn by Paul Goodman of Conservative Home) which suggests that not only will local councils be able to keep the all the money raised from shale-related business rates but that "direct cash payments may be made to homeowners living near fracking sites". Friends of the Earth reckons this marks a "new low" in the government's attempts to "curry fracking favour". We reckon it could be the beginning of a very useful debate on who benefits from infrastructure change, and how.

P.S Goodman also points to this piece by Alex Morton that discusses the need to give local people around new housing estates "incentives for those closest to new homes to compensate them for loss of view"

Advertisement

Recommended

Visit/519223/how-can-we-raise-more-money-in-tax
Economy

What are the best ways of raising more money in tax?

Given that whoever wins next week's election will be going on a massive spending spree, we're going to need to raise at least some of that money throu…
5 Dec 2019
Visit/518715/what-are-the-biggest-mistakes-investors-make-when-it-comes-to-tax
Investment strategy

What are the biggest mistakes investors make when it comes to tax?

The tax implications of an investment are something we rarely consider until after the event. That could prove to be an expensive mistake, says Domini…
27 Nov 2019
Visit/516758/beyond-the-brexit-talk-the-british-economy-isnt-doing-too-badly
Economy

Beyond the Brexit talk, the British economy isn’t doing too badly

The political Brexit pantomime aside, Britain is in pretty good shape. With near-record employment, strong wage growth and modest inflation, there is …
17 Oct 2019
Visit/516603/how-tax-has-shaped-the-course-of-human-history
Economy

How tax has shaped the course of human history

Taxation is as old as civilisation itself. But how much is too much? Dominic Frisby looks at how taxation, war and society have evolved together over …
16 Oct 2019

Most Popular

Visit/investments/commodities/silver-other-precious-metals/600812/buy-silver
Silver and other precious metals

You should all own some silver. Just don’t expect it to make you rich

Silver is cool, beautiful and immensely useful. But for investors it's the most frustrating of metals. Dominic Frisby explains why you should own some…
12 Feb 2020
Visit/economy/600802/money-minute-wednesday-12-february-grim-times-for-european-industry
Economy

Money Minute Wednesday 12 February: grim times for European industry

Today's Money Minute previews industrial production in the eurozone, plus the latest from America's central bank.
12 Feb 2020
Visit/investments/investment-strategy/600804/the-secret-to-avoiding-being-panicked-out-of-your-portfolio
Investment strategy

The secret to avoiding being panicked out of your portfolio

With the coronavirus continuing to occupy headlines, investors still aren’t sure how to react. But the one thing you mustn’t do is panic. Tim Price ex…
11 Feb 2020
Visit/investments/commodities/600729/the-rare-earth-metal-that-wont-be-a-secret-for-long
Sponsored

The rare earth metal that won't be a secret for long

SPONSORED CONTENT – You can’t keep a good thing hidden forever; now is the time to consider Pensana Rare Earths and the rare earth metals NdPr.
31 Jan 2020