A land value tax should be at the heart of London's economic recovery Fairer, smarter taxes are needed for London to recover from the double-dip recession. Therefore I fully support the Mayor of London's move to have another look at them with his London Finance Commission . Earlier this week I asked its chair, Professor Tony Travers, whether he will look at putting a tax on rising land values as one way to promote useful economic activity in a more fair way . Land value taxation can get complicated to explain, but could potentially keep down house prices, finance major transport infrastructure projects and switch more of the burden of taxation onto unearned wealth . The basic idea is very easily explained with an example. The 15 billion Crossrail project is expected to benefit many businesses in London, so they were required to contribute to the cost. A Business Rate Supplement has been levied on businesses with a rateable value greater than 50,000, raising 4.1bn towards the cost. But building this new railway line will also benefit land owners along its route, estimated at a minimum to be a 5.5bn windfall gain by property consultants GVA. Their land becomes more valuable when the line is built without their lifting a finger but, unlike businesses paying rates, these landowners get their windfall gain tax-free. The Jubilee line extension to Stratford is an even more stark example. The 3.5bn cost to the public purse was dwarfed by the estimated 10bn plus in