Andrew Dixon, founder of Fairer Share

Andrew Dixon is founder of ARC InterCapital, founding trustee of The Woodhaven Trust, and an Enterprise Fellow at The Prince’s Trust.

In 2020, Andrew launched Fairer Share to reform England’s poorly designed, out of date, and unfair property tax system.

In this interview he talks about his motivations for setting up the campaign, its proposals, and how to get involved.

How do you think the world has changed over the last few years?

AD: The big story of the last few years has been growing levels of social discontent. Many people feel they have been left behind by economic growth, are struggling to keep up with the higher costs of living, and are frustrated with politics.

One of the main reasons for this discontent is rising levels of inequality. In the UK, the top 10% of households have 45% of the country’s wealth while the bottom 50% own just 8%.

Add to this regional and intergenerational inequality:

  • The UK has greater levels of regional inequality than 28 other developed countries, including the US, France, and Germany, according to a recent academic study.
  • 60% of families headed by people born in the early-1950s were home owners by the age of 33 compared to just 40% of those born in the early-1980s, according to the Resolution Foundation.

As a country, we are bound together by ties of mutual responsibility, social trust and most importantly a sense of fairness. We feel passionately about our fellow citizens and their circumstances and want to live in a society where everyone has a fair shot at life. When we see something which is grossly unfair, it bothers us.

This sense of fairness is part of our national character. As a country, we have a proud history of pulling together to fight for each other’s rights and liberties – from the signing of the Magna Carta to the creation of the NHS. Our society was founded on principles that seek to uphold fairness and equal opportunities for all in education, work, health, justice, security and living standards.


How has growing inequality changed how people feel about the country?

AD: Despite our strong sense of fair play, people increasingly feel that the country is only working for the country’s most fortunate people and everyone else just has to get by on their own. 71% of the public say there is “one rule for some and a different rule for people like me.” According to one recent survey, 69% say “rich people get an unfair advantage.”.


How has growing inequality impacted our politics?

AD: People feel alienated from politics. This has fuelled the rise of anti-establishment parties on the left and right and, I believe, was one of the reasons behind the Brexit vote. Regardless of your view on Brexit, the Leave campaign was undoubtedly successful at tapping into people’s frustrations.


Has coronavirus affected this trend?

AD: It has made the situation worse. It has shined a light on the growing divides in society. On one hand, it has revealed the deep flaws in our broken adult care system on which many vulnerable and elderly people depend. Many of our care homes have suffered from decades of underinvestment, especially in less well-off parts of the country.

People with pre-existing health conditions, those in insecure and low-paid work, and ethnic minorities have been adversely affected by the pandemic. People in lower paid jobs are more likely to work in industries that expose them to the virus, such as retail and construction, and as contractors do not have many employment protections, they have continued working despite the obvious risks.


What do you think the future holds?

AD: If we don’t tackle the deep-seated problems endemic in our society, we will all lose out. Inequality will increase, the country will become more divided, and frustration will continue to rise. We will have a country that is fractured, with tensions rising between the UK’s regions and between the generations.

We need to make sure that society is working for everyone. We need to bridge these divides.


Do you think this had an impact on the 2019 General Election?

AD: Regardless of your opinion on the election result, the Conservative Party’s manifesto promise to ‘level up’ the country resonated with voters outside of the south east. Over the last few decades, London, in particular, has benefited from economic growth, while the rest of the country has stagnated. Suddenly, you had a political party that said they were going to tackle this problem. This won over huge numbers of voters in the north of England and led to the collapse of the Labour’s ‘Red Wall’ seats.


Is there an alternative?

AD: Yes, there is. The alternative is a country where we all pay our fair share; an equitable society in which those with the means to do so are proud to contribute to well-funded public services. Tax revenues play an important role in creating a fairer society that provides everyone with improved opportunities in life through quality healthcare, welfare and education systems.

A fairer system is one where sufficient tax revenue is raised to pay for our important public services, while ensuring that the burden is based on people’s ability to pay. While we may not like paying taxes, we accept them because of the safety net they provide as well as our desire to support others in the community.

We want to live in a country where we are not riven by divides but, instead, brought together by our shared commitment to each other.


Are property taxes part of the problem?

AD: Yes. Council Tax is emblematic of the inequality in our society. It allows people who can afford the most valuable homes to pay relatively little while placing an unreasonable burden on those with properties worth much less. Meanwhile, Stamp Duty is one of the key reasons as to why it is so expensive and difficult for young people to buy their first home or older couples to downsize.


Why is Council Tax unfair?

AD: Firstly, Council Tax is based on property valuations that are almost thirty years out of date, despite dramatic growth in house prices, particularly at the top of the market. This means that those who have benefited the most from house price growth over recent years are the biggest beneficiaries of the Council Tax system.

Secondly, due to the band structure – in which all properties in a specific band pay the same amount – homes at the bottom of each band pay proportionately more than those at the top of each band.


How is Council Tax contributing to growing regional inequality?

AD: Property prices have risen much faster in some parts of the country than others. The average property price in London has increased by nearly 640% since 1995 while it has increased by 298% in the North East.

A modest property in Middlesbrough worth £150,000 may pay a Council Tax bill of £1,702 while a £10 million home in Westminster will pay just £1,560. These flaws mean that Council Tax is only weakly linked to property values. In London, homeowners pay an average of just 0.28% of their property value in Council Tax, while in the North East that number is 0.77%, nearly three times the proportion.


How is Council Tax making economic inequality worse?

AD: Another problem is that Council Tax is levied on tenants rather than landlords. As tenants are more likely to be younger people in lower paying jobs without access to the resources to buy a home, we have a situation where those with much less are, again, paying more. This is not the norm. In most other countries, including the USA, Australia, the Republic of Ireland and the Netherlands, the property owner pays property taxes.


But if we want to tackle regional inequality, shouldn’t we start with infrastructure first?

AD: There have been many great schemes to boost regional economies, like the Northern Powerhouse, led by my former colleague Jim O’Neill and good friend Jürgen Maier. Their focus on business, infrastructure, and creating good-quality, well-paying jobs is critical, but there is an additional important element. As well as creating new jobs, we also need to make sure people’s cost of living is fair and proportionate, which is why it’s important to reform residential property taxes.


How else is Council Tax impacting people’s lives?

AD: Council Tax is also trapping many people in cycles of debt. Council Tax arrears account for 60% of cases sent to bailiffs by local authorities and, in 2017-18, more than 300 people were sentenced to prison for not paying Council Tax.

Council Tax is also riddled with well-intentioned but self-defeating exemptions for second homes and single occupants, which encourages under-occupation and exacerbates the housing shortage. Councils, for example, are able to give second homes a Council Tax discount of up to 50% on their bill and yet recent Government statistics show that over 216,000 homes have been empty for over six months. Additionally, undeveloped plots of land with planning permissions pay no Council Tax, which encourages land banking where developers simply wait for the value of their plot to increase prior to development.


If your analysis is right, why was Council Tax so badly designed in the first place?

AD: Not enough thought was put into the system when it was first introduced in 1993. It was a rushed replacement for the even less popular Poll Tax and the long-term consequences were not properly considered. Since then, new well-intentioned exemptions and dispensations have been added but these have made the system even more complicated and distortionary. The system is so poorly designed, unpopular, out of date and unfair that if it did not exist already, nobody would suggest its creation.


What are the problems with Stamp Duty?

AD: Stamp Duty is a better designed tax than Council Tax in the sense it is progressive, linked to property values and is more generous to young people thanks to its first-time buyer discount. However, by taxing property transactions, Stamp Duty discourages homeowners from moving that would lead to a more effective use of housing. This has wider economic consequences when it leads to people turning down job opportunities outside of their local area due to the cost of moving home. This contributes to regional unemployment and local skill shortages.

And Stamp Duty makes buying a home prohibitively expensive for many potential homeowners, especially younger people who have already had to raise money to put down a deposit on their mortgage. Many young people have no option but to keep on renting.

Stamp Duty also prevents older couples from downsizing, something many couples want to do now their children have left home. Faced with the prospect of having to pay Stamp Duty on their next, albeit, smaller home, they end up staying put. The result is that many people are now living in homes that are too large for them. Meanwhile the housing crisis deepens.


Do you think people realise how unfair our property taxes are?

AD: No. It is a well-kept secret, and this is one of the other reasons why very little has changed over the last 30 years.


How could we design a fairer system?

AD: We need root-and-branch reform of our property tax system. These reforms should be grounded in clear and straightforward principles of fairness that everyone will accept and understand, and not knee-jerk reactions or vested interests.


What would those principles be?

AD: In our view, a fair system is one where:

  • Property taxes are based on actual property values;
  • They are re-distributive, like Income Tax, with wealthier parts of the country paying more;
  • They are based on a household’s ability to pay;
  • The system is simple, easy to understand and easy to administer;
  • It should encourage the most efficient use of our limited land.


What reforms are you recommending?

AD: These core principles led to the key elements of Fairer Share:

  • We replace Council Tax and Stamp Duty with a single Proportional Property Tax, charged at a fixed percentage of the property’s value;
  • The new tax is payable by property owners and not tenants;
  • The tax can be deferred if the homeowner genuinely cannot afford to pay;
  • We scrap the ineffective and unfair reliefs and exemptions, such as those on single occupants and undeveloped plots of land;
  • A surcharge would be applied to second homes, empty properties, and those bought by foreign buyers.

Fairer Share’s reforms focus on England in the first instance as Council Tax is already devolved in Wales, Scotland and Northern Ireland.


How would you bring property taxes up to date?

AD: It is essential for properties to be revalued as soon as possible with updated and annual revaluations to stop the situation where large increases in property prices are not factored into the taxes that households pay. While valuing properties every year may sound challenging, new technology now makes this very feasible.


What would the new flat rate for the Proportional Property Tax be?

AD: After looking at the data, we have set the rate at 0.48%, with a higher rate of 0.96% for second, empty and non-resident owned homes. Factoring in administrative savings and the abolition of distortionary exemptions, the new Proportional Property Tax would be revenue-neutral.


If the new tax will be payable by property owners, won’t the costs simply be passed down to renters in any case?

AD: Landlords may pass some or all of the Council Tax down to renters, but given 75% of properties will pay less tax, the new effective tax rate is likely to be much less than renters are already paying. The abolition of Stamp Duty will also make it easier for renters to get on the housing ladder should they so wish.

I also expect that there will be an increase in the supply of rental housing, reducing average rents; this is because second homes, unused properties and undeveloped land will be brought into the tax system, which will incentivise more efficient use of the current housing stock.


Why is the time right for this reform?

AD: The Conservatives won the last election on a wave of support from outside of London on a commitment to ‘level up’ the country. The party will need to deliver on those promises and a first step would be reform the country’s regressive Council Tax and punitive Stamp Duty.


What would be the benefits of the reform?

AD: 18 million households would pay less, with 75% of households better off, and it would level the playing field between London and the rest of the country. The average household in the North East would enjoy £615 tax savings each year and an average household in the North West would save £510 each year. A total of £6.5 billion would be saved by households outside of London giving a huge boost to regional communities.


And why hasn’t our property tax system been reformed already?

AD: On one hand, politicians are still chastened by the memory of the negative reaction to the bungled and unpopular Poll Tax. On the other, Council Tax and Stamp Duty are so unpopular that politicians are anxious about even raising the topic. Just 29% of the public believe that Council Tax is calculated fairly and only 26% believe that their own bill is set at the correct level.

Also, as soon as you start talking about reforming property taxes, ideas are incorrectly labelled as a ‘Mansion Tax’ or a ‘Garden Tax’. Given that many powerful individuals benefit from the current system, it is not surprising, but it is still frustrating.


Why would anyone object to a fairer property tax?

AD: People with the good fortune of owning more expensive homes, or even multiple properties, will pay more. While they may initially object to the new system, I believe they will be supportive of a fairer system when they recognise the adverse impact the current system is having on other people’s lives. We all want to live in a fair society.


How can the new system be fair if it means London paying for more of the country’s public services than other regions?

AD: Everyone benefits from a fairer, redistributive system. More prosperous areas of the country should support less prosperous areas. Just think of coronavirus. We need well-funded health services and adult social care up and down the country for society as a whole to benefit.


Why should second home owners pay a higher rate?

AD: Second homes remove properties from the market that could have been used by local families, meaning the government needs to invest in new roads, schools and supply new housing elsewhere. The higher rates ensure these owners pay a fair share for the increased costs.


Why should foreign home buyers pay a higher rate?

AD: Foreign owners are much less likely to pay Income Tax, National Insurance, Capital Gains Tax and Inheritance Tax, despite being able to access the same services as everyone else. The proposal ensures that foreign owners pay their fair share of these services.


Won’t people be able to find a loophole to avoid the tax, like buying it through an offshore company?

AD: No. One of the reasons proportional property taxes have been called ‘the perfect tax’ is because they cannot be avoided. Unlike other assets, like investments paintings and income, property cannot be hidden nor moved overseas.


What will happen to pensioners who live in expensive homes with little or no income?

AD: A key component of our scheme is that the tax is only payable if households can afford the tax. Households will have the option to defer payment until a later date such as when they sell the property. A modest interest will be charged to those who wish to take up this option.


Is this a Mansion Tax or Garden Tax?

AD: No. Unlike a ‘Mansion Tax’ this new system charges everyone at the same rate, and unlike a ‘Garden Tax’, it is based on the value of a property and not the size of the plot.


When did you first start thinking about property taxes?

 AD: Our property tax system has always seemed peculiar to me. It is bizarre that more expensive properties can end up paying relatively less tax than more modest homes. In 2017, I came across Dr Gavin Kerr’s excellent article, ‘Predistribution’, property-owning democracy and land value taxation. This led me to the 19thCentury American political economist Henry George. Inspired by George, in 2018, I commissioned a team to draw up the Commercial Landowner Levy – a land value tax to reform business rates and support the struggling high street.


Who has shaped your own thinking on property taxes?

AD: There are many economists and politicians who have pointed out the problems with our property tax system in the past and proposed alternatives, including Henry George, Lloyd George, Milton Friedman, and even Winston Churchill. But one particularly influential publication was The Mirrlees Review, which was edited by Nobel Prize-winning economist Sir James Mirrlees. I liked its recommendation to abolish Council Tax and Stamp Duty and replace it with something like the Proportional Property Tax.


Why does this campaign need to be led by me and you rather than politicians?

AD: We have been plagued by an unfair and irrational property tax system for decades now. Time and again it has been ignored by the governments of the day, and it is challenging for politicians to solve this problem on their own. We need to show policymakers the strength of feeling around the country on this issue.


How do you intend to build on the momentum of the campaign?

AD: This is a grassroots campaign, and there needs to be a groundswell of support to show there is real appetite for change. But we also need to build a broad coalition of supporters. We need the support of charitable foundations, think tanks, local councils, celebrities, media, local community groups, business leaders and forward-thinking politicians.


How can people get involved?

 AD: We need to build momentum. Our biggest challenge right now is that not enough people know just how unfair our current system is, so the best way to get involved is to sign our petition and start sharing the campaign.


How can I share the campaign?

AD: Please post our campaign video on social media, send our ‘Savings Calculator’ to friends and family, email your MPs and local councillors, and write to your local newspaper.

It’s time to show our politicians change is needed.



What do you do outside of Fairer Share?

AD: I spend most of my time investing in early stage businesses. Since 2000, I have invested in more than 40 British businesses through my company ARC InterCapital, and my portfolio now employs more than 1,500 people across the country.

I also support The Woodhaven Trust, a charitable foundation that I founded in 2008, championing prison reform, supporting ex-offenders establish businesses after leaving prison, and helping them find other routes into employment. I am also an Enterprise Fellow at The Prince’s Trust and an Adviser to The Entrepreneurs Network.

Before founding ARC InterCapital, I started my career in banking. I was a Vice-President at Goldman Sachs in Sydney, and before that I worked at Société Générale in Tokyo.


Biography of Andrew Dixon


Andrew Dixon, ARC

Andrew Dixon is an angel investor, founder of ARC InterCapital and founding trustee of The Woodhaven Trust.

Starting his career in finance at Société Générale and Goldman Sachs, Andrew has spent over two decades investing in small and medium-sized businesses. Through ARC InterCapital, he has invested £20 million in over 40 British companies and his current portfolio employs more than 1,500 people.

Meaningful investments have included Infinitesima, the Abingdon-based high-tech firm that developed the Rapid Probe Microscope for the semiconductor industry; call answering service Cymphony and LIVE IT, the global online ticketing platform for live events. He was the first seed investor in Gamesys, which went on to become one of the most successful businesses in the online gaming space

In 2008, he founded The Woodhaven Trust to support initiatives that provide offenders and ex-offenders with pathways into employment and self-employment. The Trust also supports causes that champion progressive tax reform and teach leadership skills to young people.

Inspired by San Quentin prison’s Last Mile project, in 2016, Andrew co-founded social enterprise Code4000, which teaches coding skills in prisons to increase offenders’ prospects of meaningful employment upon release. And in 2013, he co-founded Prosper 4 Group, which runs the UK’s only national jobs board for ex-offenders.

An Enterprise Fellow at The Prince’s Trust, he lives with his wife and two daughters in Surrey, and enjoys cricket, golf and the occasional glass of wine.