Introduction

On Monday 4 July, the Scottish Government published its consultation paper “Land Reform in a Net Zero Nation” (1). The consultation is designed to inform the introduction of a Land Reform Bill by the end of 2023.

I spent last week wandering in the hills around Glen Affric during which time I had plenty opportunity to think about where land reform needs to go now and how the proposals set out in this paper contribute to that process. This blog sets out my relatively high level thoughts. More blogs will follow on more detailed aspects of the proposals.

In short, these are significant proposals which, in principle, would introduce some major changes to how parts of the land market operate in Scotland and deserve serious consideration. It is disappointing, however, that the opportunity has been missed to enact more fundamental change. The proposals appear to be designed merely to introduce more accountability and transparency to the land market rather than enact structural reform.

In that regard, I am currently in the process of drafting a Land for the People Bill – a comprehensive set of proposals to democratise land governance in Scotland. This should be published by the end of August. I am also in the process of investing £8000 in updating and upgrading my whoownsscotland.org.uk website which will also be launched in September (if you want to be informed of its launch, visit the site and send me your details).

So, how to respond to this consultation?

This really depends on your perspective on what you want land reform to achieve. My own long-standing position is that land reform is about redistributing power over land in Scotland, democratising land governance and modernising the framework of law governing landownership and use. Land is about power. How that power is defined, distributed and exercised is the central concern of land reform.

In relation to the legal framework, land reform can be secured through reform,

• to the tenure system,
• to the fiscal framework and
• to administrative law (eg environmental and planning legislation).

For land reform to be successful there needs to be a comprehensive, sustained and coherent programme delivered systematically over a period of years involving all three.

In that context, the proposals set out by the Government, though of some utility, are very partial and are unlikely to achieve significant change in how Scotland’s land is owned and used. After twenty years of devolution and with no shortage of ideas over the past few years on how to reform Scotland’s land, it is disappointing that the proposed Bill is not more ambitious and comprehensive. Here are just four examples of what could have been included

• reform law of foreshore and seabed (been on agenda since 2003)
• common good (been on agenda since at least 2005)
• land taxes (long standing debate)
• inheritance law (been on agenda since 2009)

The proposals in the paper are based on recommendations made by the Scottish Land Commission and it is worth reading its paper for further background to the proposals. (2)

These recommendations were for large landholdings,

• to be required to produce a management plan,
• to be made subject to strengthened duties under the existing Land Rights and Responsibilities Statement and
• to be subject to a public interest test when large landholdings change hands.

Approached from a different point of view, the proposals can be seen as a set of useful measures that are of some utility. I agree that they will bring benefits. But they will not deliver the outcomes claimed by Government and they do not represent more than a modest intervention in the way land is owned.

As SLC said in its 2021 paper,

It is very important that the proposed legislative mechanisms described in this paper are understood within this broader context, as part of a comprehensive package of land reform interventions

and

The measures will not, on their own, deliver the longer term systemic change in patterns of land ownership that are required to realise the full benefits of Scotland’s land resource. Achieving this will require more fundamental policy reform, probably including changes to the taxation system.

The Proposals

The proposals seek views on the following questions,

• The definition of large-scale holdings (Part 4)
  (this definition is the used to define those landholdings that will be subject to)
• Strengthening the Land Rights and Responsibilities Statement (Part 5)
• requiring compulsory management plans (Part 6)
• a public interest test when land is transferred (Part 7), and
• introducing new constraints on what entities can own land (Part 11)

The consultation also proposes,

• new conditions for those in receipt of public subsidy (Part 8)
• a new land use tenancy for tenet farmers (Part 9)
• review of smallholdings legislation (Part 10) and,
• an invitation to submit other ideas (Part 12).

Commentary on the Proposals

I will be blogging in more detail on these proposals over the coming weeks.

Meanwhile here are some initial thoughts and questions.

Will these reforms deliver?

There are two key issues here.

The first is the focus on tackling the scale and concentration of landownership in Scotland. The Minister states in her introduction that “we are driving forward reform to historically iniquitous patterns of landownership.” On page 6, it is stated that “The first three proposals we put forward are aimed at tackling the issues associated with scale and concentration of land ownership in Scotland.”

However, there is very little in these proposals to suggest that they will much if any have any impact on the scale and concentration of landownership. I will explore this in a future blog.

It is notable that there are no proposals to reform the law of succession (giving children the legal right to inherit land) or to reform land taxation. These are the two measures that have been proven historically to dismantle concentrated patterns of landownership.

The second major focus is on helping to deliver climate policy. Indeed the consultation paper is titled Land Reform in a Net Zero Nation. It is far from clear, however, how any of these proposals will help to secure net zero. The two proposals with the most claims in support are the prior notification to sell and the new land use tenancy.

The prior notification to sell is suggested as a means by which community bodies could be assisted in acquiring large-scale holdings. However there is little evidence that community bodies are interested in acquiring large-scale holdings beyond those which have either been historically badly managed or where there are substantial crofting interests.

Furthermore, the consultation suggests that these proposals could tackle the inflation in land values as a result of carbon speculation and offsetting. But the cost effective way to achieve that is not (as the Government currently wishes) to support carbon markets for offsetting but to ban them altogether. Every ton of carbon sequestered in Scotland and used to offset emissions elsewhere is a ton of carbon that is not contributing to cooling the planet.

Overall, the proposals will probably deliver some much needed accountability, engagement and transparency among large-scale holdings but they will not eliminate the concentrated pattern of landownership in Scotland. As mentioned above, it is measures such as taxation and succession law that will achieve that.

What are large-scale holdings? (Part 4)

The most significant proposals in the consultation are targeted solely at “large-sclae landholdings”. Part 4 of the paper seeks views on how to define this and suggests that meeting any one of the proposed criteria would classify a landholding as large-scale. These criteria are,

• A fixed threshold of 3,000 hectares
• Land that accounts for more than a fixed percentage of a data zone (or 
adjacent data zones) or local authority ward(s) designated as an Accessible Rural Area or Remote Rural Area, through our six-fold urban/rural classification scheme
• Land that accounts for more than a specified minimum proportion of a permanently inhabited island.

Key issues are whether the proposals should indeed focussed exclusively on large-scale holdings and whether, if they should, that these are the correct criteria. A question also arises as to the data used to estimate the extent of Scotland covered by holdings of over 3000ha is accurate and I will explore this in a future blog.

Most importantly here is the question of why the proposals are only to apply to large-scale holdings (however they might be defined – do they for example include aggregate holdings across the country which would exceed the threshhold?).

The idea has its origins with the Scottish Land Commission whose advice to Government was that large-scale holdings are the most likely to pose a risk to the public interest by the excessive concentration of power over a large area.

However, the inclusion of criteria b) and c) is an admission that other circumstances can lead to concentrations of power also. Indeed the SLC itself argued that monopoly ownership of strategic infrastructure such as slipways, petrol stations as well as important cultural facilities and housing land supply can also be characteristics of concentrated landownership that could create a structural risk of excessive power. (2).

It is hard to see what objective justification there is for proposing a land reform bill whose key powers are only to be used in relation to large-scale holdings. I will explore this further in a future blog but key questions relate to avoidance (easy to transfer 100ha of a 3099ha holding into another company or trust and circumvent provisions of the Bill) and what benefits to communities or the environment is expected to be delivered.

The focus of the proposals is very much on providing communities with greater opportunities but for many parts of Scotland dominated by large-scale landholdings there are no communities to speak of.

For much of Scotland that is covered by large-scale landholdings, the biggest challenge is the restoration of nature. I was walking in Glen Affric last week (see image b elow) and was delighted to see the extensive work on woodland restoration undertaken by Trees for Life.

If we live in a climate emergency and want land reform to help transition to net-zero then there is a strong argument that environmental bodies should be given new rights and powers as well as community bodies.

There is also a vital question of why existing legislation covering deer management and nature conservation is not being used more vigorously. Again, such questions expose the lack of a clear set of desired outcomes and anticipated timescales for reform.

There is further lack of logic in the proposal to exclude “family farms” (however they may be defined). What’s so special about family farms? And if family farms are to be excluded, why not family forests and family estates?
The image below (apologies for the quality) is of severe environmental degradation on a landholding of less that 3000ha on a family farm. The land is in a National Park and has recently been sold to a Danish company. Why should land which is part of a National Park be excluded from the provisions of the Bill?

Strengthening the Land Rights & Responsibilities Statement (Part 5)

The Land Rights and Responsibilities Statement was introduced by Part 1 of the Land Reform (Scotland) Act 2016 and is an expression of principles to guide land policy but has no statutory force.

My own view has long been that some form of statutory responsibilities should be embedded within the land tenure system (a system which currently bestows only rights to those who own land). The next best solution is give them statutory force and provide remedies for any breaches. The proposals here do the the latter but again only in relation to large-scale landholdings.

This proposal is fairly uncontroversial but could be strengthened further by applying it to all land across Scotland.

Compulsory Land Management Plans (Part 6)

The paper proposes compulsory land management plans for all large-scale landholdings. This is not an unreasonable expectation but as with the Land Rights and Responsibilities Statement proposals, there is no good reason why it should not apply to all landholdings (or certainly far more of Scotland’s land than is encompassed by large-scale landholdings). They should be compulsory for example for all land in National Parks and National Scenic Areas.

Whilst such plans will produce some grater accountability, they (like the Land Rights and Responsibilities Statement proposals) do nothing in and of themselves to tackle the concentrated pattern of landownership. Indeed they risk doing the opposite by (in the words of the consultation paper) allowing landowners to benefit “from being able to demonstrate they are responsible stewards of the land”.

There is nothing revealed about how such management plans will be drawn up where the land is tenanted either by agricultural tenants, crofting tenants or hunting tenants.

Public Interest Test and Notification of Intention to Sell (Part 7)

The proposed public interest test would apply to the acquisition and sale of large-scale landholdings and the purpose is stated as being

“to assess whether, at the point of transfer of a large-scale landholding, a risk would arise from the creation or continuation of a situation in which excessive power acts against the public interest.”

Where the test is met, the Government proposes that the sale could only proceed subject to specific conditions reflecting the reason that the sale was not considered to be in the public interest. Two examples are provided. The first is compulsory lotting where no one party could acquire all of the lots and the second is where the land could be offered to constituted community bodies.

The concept of a public interest test is sound but restricting it to large-scale landholdings has little logic. Equally the public interest will inevitably extend far beyond the two conditions provided by way of illustration and could include, for example,

• the sale of land to environmental bodies
• the sale of land or property (leased mountaineering huts or tennis courts) to sporting bodies and
• recreational organisations
• the sale of land or property to local individuals, businesses and associations
• the sale of strategic land to local authorities
• compulsory leasing to such bodies

This proposal is fraught with complexity and is a good example of a measure that is only being proposed because of the existence of concentrated patterns of power. It is an ideological choice to choose to mitigate concentrated power structures rather than eliminate them.

The other proposal covered in Part 7 is the prior notification to community bodies to sell large-scale landholdings. The paper argues that

“This proposal responds to concerns that a combination of rapidly rising land values, and a rise in off-market transactions, is in effect excluding communities from access to ownership of large-scale landholdings.”

I am not convinced by these concerns and they are a poor basis for such a major reform. Few communities have expressed any interest in acquiring the kind of large-scale landholdings that have been the focus of recent market activity associated with carbon sequestration (many of which do not exceed anything like the 3000ha threshold). A better approach is to eliminate the market in carbon altogether so as to eliminate this speculative gold rush.

Key to reducing land values is better regulation of the market in general (such as insisting that owners live join their holdings) and, crucially, reform of land taxes. It is ironic that the owner of the largest extent of Scottish land, a Danish businessman, is paying substantial taxes to his home municipality in Denmark and next to none to the local authorities in which his land is situated.

New Conditions on Receipt of Public Funding (Part 8)

Part 8 introduces proposals that, unlike this in Parts 5, 6 and 7, apply to all land in receipt of “land-based-subsidies” and require them to comply with the Land rights and Responsibilities Statement.

The paper is silent on what constitutes such a subsidy and only mentions tree planting and peatland restoration. The largest subsidies of course are provided by means of agricultural subsidies (over £500million per year). All such public subsidies should be within scope of this proposal.

Subsidies are also provided by way of tax breaks such as the Small Business Bonus Scheme which is claimed by some of the wealthiest landowners in Scotland including the North Affric Estate which I walked through last week (owned in the Seychelles) and Cluny Estate in Inverness-shire owned by the Qatari royal family. Such tax breaks should also be encompassed by these proposals.

The proposal also includes a requirement that all recipients of such subsidies be registered and liable to pay tax in the EU or UK (though neither Question 27 nor 28 ask for views on this). This is sensible though it is unclear why the EU is included given the lack of transparency in some EU member states and that fact that the UK is no longer a member state and thus no longer subject to freedom of movement to capital.

Finally, a proposal is floated that all land in receipt of land-based subsidies be registered in the Land Register thus stimulating more rapid completion.

Land Use Tenancy (Part 9)

The paper proposes a new tenancy that would enable tenant farmers to engage in activities such as agroforestry, nature restoration and peatland restoration alongside conventional agricultural activities. This is possible under existing agricultural tenancies but freight with difficulty in many cases. The proposal is to allow existing tenants to convert to a land use tenancy.

This proposal is a sensible modernisation of agricultural tenancies to reflect modern land use priorities. Again, however, if the aim is to redistribute power and tackle concentration of landownership then an absolute right to buy for tenant farmers is what would represent serious land reform.

Small Landholdings (Part 10)

No proposals are presented in Part 10 which is about modernising smallholdings legislation. Consultees are invited merely to be kept informed of a separate small landholding consultation.

Transparency (Part 11)

A sense of deja vu here as the Government finally accepts that land (or at least large-scale landholdings) can only be acquired by legal entities registered for tax purposes in the EU or the UK. It is unclear why the proposed restriction is not simply a requirement to be registered in Scotland or at least the UK when the UK is no longer a member state of the EU.

The paper argues that this could “help deal with instances of absenteeism” but fails to say how this is to be achieved. In fact it will do no such thing unless there is a requirement for those in control of such entities to live on their landholdings or at least in Scotland and be a Scottish taxpayer.

This reference to absenteeism is curious as tackling this could and should be a central plank of land reform. It is hard to justify crofter with a few acres of bog and rock having by late to be resident within a set distance of their holding but owners of tens of thousands of acres can live anywhere they like in the world.

Other land related reforms (Part 12)

Finally, Part 12 asks consulters if they have any views on the future role of taxation to support land reform and about community benefits from natural capital.

Taxation has always been the ghost in the room of land reform. I have hinted above at how significant it is and will blog in more detail about it. The Scottish Government has been extremely reluctant to engage seriously with this question. During the passage of the Non-domestic Rates Bill in 2016-21, for example, opposed (together with the Conservatives) proposals to ensure that all rural land was on the Valuation Roll so that even if it were to be given 100% relief, could at least help to quantify the cost of such relief in relation to all other ratepayers.

Much of the intellectual work in this area has already been done by, for example, the Mirrlees Review and the Land Reform Review Group but Government has neglected it to such an extent that it offers no concrete proposals.

This is an area therefore where consulates should make suggestions (a more detailed blog on this topic will be published soon).

Some Final Thoughts (for now)

This blog is already very long and thus I shall not say much more but conclude on three final reflections.

Firstly, the neglected role of local government must be addressed. Far too much land reform decision making is centralised in Edinburgh when local authorities are perfectly capable of administering the kind of new regulatory functions envisaged by these proposals. As the Scottish Land Commission note in its 2021 Legislative proposals paper, (2)

“The potential role of local authorities should also be considered. Running through all three proposed mechanisms is the underlying intention to better connect landownership and decision-making with local democratic accountability. In most northern European countries that have regulatory mechanisms for land ownership, decision-making is generally embedded at a municipality level. Sufficient connection to local authorities, as a means of connecting decisions with local and regional circumstances, should be built into consideration of these measures.”

There is no evidence that they have been. Indeed aside from some contemporary context, local authorities do not feature at all in the proposals.

Secondly, it is very unclear how exactly the proposals are envisaged to actually tackle Scotland’s uniquely concentrated pattern of private landownership. As mentioned previously, proven methods include inheritance land and taxation but neither of these feature as proposals.

As a consequence, the proposals legitimise the existent of large scale landownership whilst only introducing some accountability (a worthy aim) rather than the systematic elimination of concentrated patterns of power over land.

In my 1999 book, Scotland, Land & Power: an agenda for land reform, I wrote that

“Land reform is not simply about tactical interventions in the status quo.¨ It involves reform in the way power is derived, distributed, transferred and exercised. It involves meaningful reform of the tenure system, the ownership of land, the market in land, the division of land, the use of land, the fiscal status of land and the occupation of land. And it involves eliminating those characteristics of the current system which serve to perpetuate the status quo, which frustrate the public interest and which are antithetical to a just, fair and open society in a new Scotland. It is thus a highly political venture because in order to promote social, economic and environmental advancement, it needs to challenge and reorganise existing power structures.”

These proposals are a good example of tactical interventions in the status quo.

This blog has been supported by donors to my defamation crowdfunder who kindly donated their eligible refunds to my work on land reform.

NOTES

Details of the consultation can be found here.

(2) See Legislative proposals to address the impact of Scotland’s concentration of landownership. A discussion paper from the Scottish Land Commission, February 2021