Land Reform Bill Consultation

This blog post is a response to the Scottish Government’s current consultation on a future land reform bill. Detaisl can be found here. The consultation closes on Sunday 30 October 2022.

The text below is not part of my consultation response as there is no provision on the consultation response form to allow respondents to make general comments about the scope and aim of the reforms. Instead the consultation asks questions about the proposals and I incorporate my answers to these below.

Introduction

I welcome the proposals for a new Land Reform Bill. Land reform remains unfinished business. it is also welcome to see attention turn to the question of Scotland’s concentrated pattern of private landownership.

After twenty years of devolution, however, the proposals (like previous legislation on community land rights) are focussed on dealing with the symptoms of Scotland’s dysfunctional land governance system rather than tackling the underlying structural features.

As SLC said in their Feb 2021 paper

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 need for such reform was also identified in the recommendations made by the Land Commission in 2019 and is the subject of ongoing policy work

The focus of the measures are on so-called large-scale holdings. Based on advice from the SLC that large-scale holdings can negatively impact communities, the proposals in Parts 5, 6 and 7, are designed to mitigate this negative impact.

This is where my analysis departs from the SLC and the Scottish Government. I want to see structural reform so that there are no adverse impacts to mitigate. I want to see the redistribution of landed power into the hands of local people, businesses, local authorities, community groups and social enterprises.

None of the proposals set out in this consultation paper will deliver that for the following reason.

The only market intervention is the public interest test. That will only apply to some land, will only apply where ownership of that land is being transferred, and even then will only result in a change in the pattern of ownership in a small number of cases where the test leads to that outcome.

The key reforms needed to tackle the concentrated pattern of landownership fall into two categories. The first is structural reform in the land market and the second is governance.

Structural Reform

The proven methods of structural reform in land markets is inheritance law reform and fiscal policy. The Land Reform Review Group recommended in 2014 that the distinction between heritable and moveable estate should be removed for succession purposes. Currently children and spouses have no legal rights to heritable property beyond the home. This stands in stark conntrast to virtually every other country inn Europe.

Fiscal reform is the other proven method of redistributing power over land by penalising the ownership of excessive landholdings.

Governance Reform

The Scottish Government has stated many times that it wants more involvement and engagement in the ownership and use of land. For example, in the consultation paper, Ministers restate key principles from the Land Rights and Responsibilities Statement

“There should be …more opportunities for citizens to own, lease and have access to land” – and
“More local communities should have the opportunity to own, lease or use buildings and land which can contribute to their community’s wellbeing and future development”.

The core means to achieve this ambition is to democratise land governance. In other words to ensure that communities have control over the ownership and use of land (whether they own it or not) and that individuals, social enterprises and others can have enhanced opportunities to own, lease and have access to land.

Democratising land governance means creating a governance framework that has local democratic institutions at its heart. In current circumstances that means local authorities. It has been a conspicuous feature of land reform in the last twenty years that central government in Edinburgh has been given most of the decision-making powers in relation to land reform rather than locally accountable democratic bodies.

Indeed in 2021 paper, the SLC noted that

“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.”

One example of why this matters in relation to this consultation is the proposal for compulsory management plans. Instead of management plans, what is really required are development plans to ensure the appropriate allocation of land to different uses in the interests of the community. The means by which this is achieved is through the planning system which is run by local authorities.

Conclusions

Comprehensive land reform should involve modernising land tenure, redistributing power through structural reforms of the land market, and democratising land governance.

The proposals outlined here offer some mitigations to the impacts of Scotland’s concentrated pattern of landownership but do nothing to tackle its root causes.

Given that the consultation does not allow for any views to be expressed about the merits of the approach taken. Instead, the consultation only invites views on the detail of what Ministers are proposing. In that light I have offered the following answers to the questions posed but the above analysis has not been provided to Government.

Apologies that some answers may be a bit unclear in terms of layout. I composed this blog offline.

PART 4 – Criteria for large-scale landholdings
1. Do you agree or disagree with the criteria proposed for classifying landholdings as ‘large-scale’:
a) A fixed threshold of 3,000 hectares	No
b) 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	No
c) Land that accounts for more than a specified minimum proportion of a permanently inhabited island	No
Please give some reasons for your answers and outline any additional criteria in the text box below:
I do not agree with the concept of large-scale landholdings as proposed. The existence of a defined extent of land does not necessarily correlate with the impact that decisions made about land can have on communities. For example, there is a case of an individual purchasing virtually all the hotels and many of the guest houses in a village (the guest houses to house the hotel staff). This has had a major impact on the local economy and other businesses. Such a case would not be covered by the proposals. Similarly, many large-scale landholdings as defined consist of extensive areas of upland with no-one living. There is no community to be affected. The concentration of landownership in Scotland is driven more by the accumulation of several landholdings of less than 3000ha to build a large landholding. This is true in the forestry and agricultural sectors. Very little of the concentration is due to trading in holdings of over 3000ha. The idea has its origins with the Scottish Land Commission (SLC) 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. Do you agree or disagree that family farms should be exempt from the proposals outlined in Parts 5 to 7 even if they are classified as a ‘large-scale’ landholding?
NO
Please give some reasons for your answer in the text box below:
No definition of family farms is provided but on the assumption that it means farms that are managed by a family business then I do not see why this should exclude them. Moreover, if family farms are to be excluded, what about family estates and family forests. Is there some feature of family businesses that means they are less likely to have adverse impacts when they exist at large-scale? if so, this evidence should be provided. In its absence, I do not see any rational for this exclusion.
3. Do you think that the proposals considered in this consultation should be applied to the urban context?
YES
Please give some reasons for your answer in the text box below:
Monopoly control of land can exert itself anywhere (see example above about hotels). In the absence of any evidence that there is any good reason to exclude urban land I would propose that it be included. The one other area of land that is not discussed here is the marine environment which is in effect under the monopoly control of Crown Estate Scotland. Ownership of the foreshore and seabed should be transferred to local authorities.
Part 5: Strengthening the Land Rights and Responsibilities Statement
4. We propose that there should be a duty on large-scale landowners to comply with the Land Rights and Responsibility Statement and its associated protocols. Do you agree or disagree with this proposal?
YES
Please give some reasons for your answer in the text box below:
The LRRS as it stands is voluntary and vague in its terms. It is vital that it be made statutory  but should apply to all owners of land. Moreover, it should form the basis for direct incorporation in the tenure system and thus individual titles to land making landownership conditional rather than absolute and ensuring that breaches fall within the scope of the Lands Tribunal.
5. If there was a legal duty on large-scale landowners to comply with the Land Rights and Responsibility Statement and its associated protocols, we propose that this should be enforced by having a formal procedure for raising complaints, and by making provisions for independent adjudication and enforcement.
a) Do you agree or disagree with the proposal above?	YES
Please give some reasons for your answer in the text box below:
It is pointless to create legal duties if there is no enforcement.
b) Do you agree or disagree that only constituted organisations that have a connection to the local area or the natural environment should be able to report breaches of the Land Rights and Responsibility Statement?	NO
Should these constituted organisations have a remit on:
Community	YES
Charity	YES
Public Sector	YES
Please provide some reasons for your answers and any additional suggestions in the text box below:
If breaches of the LRRS are to made unlawful then, in common with most other things that are unlawful, there should be no restrictions on who can report alleged breaches.
c) Do you think the responsibility for investigating and dealing with complaints should sit with:
Scottish Government	NO
a public body (such as the Scottish Land Commission)	NO
Please provide some reasons for your answers and any additional suggestions in the text box below:
Neither Scottish Government nor public bodies should have any role as both are unaccountable to local communities. The responsibility should rest either with the Land Court or with a quasi-judicial committee with the local authority.
d) Should the potential outcome from an investigation of a breach be:
Recommendation for a mediation process	YES
Recommendation on how the landowner or governing body could comply with the Codes of Practice/protocols	YES
A direction to the landowner or governing body to implement changes to operational and/or management practices	YES
Please provide some reasons for your answers and any additional suggestions in the text box below:
These three options are not the only possibilities. I think the remedies for a breach should include all of them but also include a statutory fine, compulsory acquisition of land, or enhanced levels of taxation.
e) Should the enforcement powers for a breach be:
Financial penalties	YES
“cross-compliance” penalties	YES
Please provide some reasons for your answers and any additional suggestions in the text box below:
The problem with any financial penalties is that they are not likely to be at a sufficient level to effect change and could be seen my many as just part of the cost of doing business. Enforcement powers should include (as noted above) confiscation of land.
6. Do you think the proposal to make the Land Rights and Responsibility Statement and its associated protocols a legal duty for large-scale landowners would benefit the local community?
NO
Please give some reasons for your answer in the text box below:
It is impossible to say. The LRRS principles are vague and the bar for compliance is likely to be low.
7. Do you have any other comments on the proposal to make the Land Rights and Responsibility Statement and its associated protocols a legal duty for large-scale landowners?
Instead of the vague administrative law framework represented by the LRRS, all ownership of land should be made conditional rather than (at present) absolute and the principles of the LRRS should be incorporated in a new land tenure system such that the principles have the same status as real burdens, act in the public interest and are enforceable.
Part 6: Compulsory Land Management Plans
8. We propose that there should be a duty on large-scale landowners to publish Management Plans. Do you agree or disagree with this proposal?
YES
Please give some reasons for your answer in the text box below:
The publication of management plans is unlikely to bring about much greater accountability. Most landowners already have management plans and some additional consultation and publication would be beneficial as would associated cross-compliance mechanisms. But what is needed instead are land use development plans agreed through a democratic process and bringing rural land use within the existing planning system. Such plans would include all the options for inclusion set out in Question 10. Such plans would be accompany red by powers of compulsory purchase to deliver local land use priorities
9. How frequently do you think Management Plans should be published?
Every five years seems reasonable
10. Should Management Plans include information on:
Land Rights and Responsibility Statement compliance	YES
Community engagement	YES
Emission reduction plans	YES
Nature restoration	YES
Revenue from carbon offsetting/carbon credits	YES
Plans for developments/activities that will contribute to local and inclusive economic development or community wealth building	YES
11. Do you think the responsibility for enforcing compulsory land management plans should sit with:
the Scottish Government	NO
a public body (such as the Scottish Land Commission)	NO
Please provide some reasons for your answers and any additional suggestions in the text box below:
Responsibility should rest with democratically elected local authorities.
12. Do you think the proposal to make Management Plans a legal duty for large-scale landowners would benefit the local community?
MAYBE
Part 7: New Public Interest Test
14. We propose that a public interest test should be applied to transactions of large-scale landholdings. Do you agree or disagree with this proposal?
DISAGREE
Please give some reasons for your answer in the text box below:
Such a public interest test needs to be tied to more objective criteria than simply that a holding is large scale. Environmental sensitivity, community development needs, local plan proposals, housing needs assessments, business needs are the kind of criteria instead that need to be applied (and to all land). it is unlikely that a public interest test will have much impact if it is restricted to large scale holdings.
15. What do you think would be the advantages and/or disadvantages of applying a public interest test to transactions of large-scale landholdings?
Unless there are objective criteria beyond scale then I don’t see many advantages.
16. Do you think the public interest test should be applied to:
The seller only	N/A
The buyer only	N/A
The seller and buyer	N/A
Don’t know	N/A
Please give some reasons for your answer in the text box below:
For the reasons given in Question 14, I do not think these options are relevant. They are predicated on the large-scale landholding premise.
17. If the public interest test was applied to the seller, do you think the test should be considered as part of the conveyancing process?
YES
Please give some reasons for your answer in the text box below:
Any conditions associated with the sale of land have to be considered as part of the conveyancing process unless there is an alternative statutory process put in place.
18. Do you think that all types of large-scale landholding transactions (including transfers of shares and transfers within or between trusts) should be in scope for a public interest test?
YES
Please give some reasons for your answer in the text box below:
This is vital for tackling avoidance if this proposal is to be adopted but see response to Question 14
19. Do you agree or disagree with these conditions? We have proposed that if a public interest test applied to the seller concluded there was a strong public interest in reducing scale/concentration, then the conditions placed on the sale of the land could include:
i. The land in question should be split into lots and could not be sold to (or acquired by) one party as a whole unit	YES
ii. The land, in whole, or in part, should be offered to constituted community bodies in the area, and the sale can only proceed if the bodies consulted, after a period of time, indicate that they do not wish to proceed with the sale	YES
Please give some reasons for your answer and suggest any additional conditions in the text box below:
Subject to my answer to Question 14 (in which I do not agree with the public interest test applying only to large-scale holdings), the conditions would depend on the reason for failing the public interest test. I think such a test is difficult to apply in the way proposed (“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.”) and that it would be far preferable to adopt other mechanisms to reduce the scale and concentration of landownership rather than simply mitigate it with complex public interest tests.
20. Do you think that a breach of the Lands Right and Responsibilities Statement should be taken into account when determining the outcome of a public interest test?
POSSIBLY
Please give some reasons for your answer in the text box below:
Again, the answer to this question depends upon the reason why the public interest test is being applied. it is is merely “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.” then there is no reason to take into account any breach (at least on the part of the seller).
21. Do you think that a public interest test should take into account steps taken in the past by a seller to: a) diversify ownership – b) Use their Management Plan to engage with community bodies over opportunities to lease or acquire land Please give some reasons for your answer in the text box below:
Again, the answer to this question depends upon the reason why the public interest test is being applied. it is is merely “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.” then there is no reason to take into account any breach (at least on the part of the seller).
22. Do you think the responsibility for administering the public interest test should sit with:
the Scottish Government	NO
a public body (such as the Scottish Land Commission)	NO
Please provide some reasons for your answers and any additional suggestions in the text box below:
Responsibility should rest with democratically elected local authorities.
23. Do you think the proposal that a public interest test should be applied to transactions of large-scale landholdings would benefit the local community?
DON’t KNOW
Please give some reasons for your answer in the text box below:
It is probably unlikely to have much benefit as the proposal only applies to large-scale holdings, many of which change hands only very infrequently, comprise extensive areas of upland with no resident populations and the outcome of which is uncertain.
24. Do you have any other comments on the proposal that a public interest test should be applied to transactions of large-scale landholdings?
NO
25. We propose that landowners selling large-scale landholdings should give notice to community bodies (and others listed on a register compiled for the purpose) that they intend to sell. a) Do you agree or disagree with the proposal above?
DISAGREE
Please give some reasons for your answer in the text box below:
Mechanisms such as Community Right to Buy and Asset Transfer schemes already provide means by which community bodies can acquire land. Few communities wish to take over large-scale holdings and the addition of yet another complex administrative process to be complied with by exhausted and udder-capacity voluntary groups is not desirable.
Question 25 b & c	Not answered
Question 26	Not answered
Part 8: New conditions on those in receipt of public funding for land based activity
27. Do you agree or disagree with these requirements? We propose the following eligibility requirements for landowners to receive public funding from the Scottish Government for land based activity: All land, regardless of size, must be registered in the Land Register of Scotland. Large-scale landowners must demonstrate they comply with the Land Rights and Responsibility Statement and have an up to date Land Management Plan.
Requirement i.	NO
Requirement ii.	NO
Please give some reasons for your answer in the text box below:
The question is posed very broadly – “landowners” and “public funding”. Fore the purposes of i., landowners includes everyone holding a title to land in Scotland, urban, rural and marine. Public funding includes grants for the arts, agricultural subsidies, tax reliefs (eg small business bonus scheme), and grantees for tree planting. Without knowing what is in or out of scope, it is impossible to answer this question. In general terms, however, I do not think it is proportionate to require landowners to undertake voluntary registration on the Land Register to receive public funds. There is no direct link between the two. Public funding should be transparent without the need for land registration. Some public funds will be paid to tenants and they cannot be required to register the ownership of the land they lease. On the ii point, the purpose of public funding varies. So long as the outcomes sought by the funding are achieved and the funding is transparent, I do not see the justification for compliance with LRRS to be a condition but having an up to date management plan would be beneficial.
Question 28	not answered
Part 9: Land Use Tenancy
29. Do you agree or disagree with our proposal that there should be a Land Use Tenancy to allow people to undertake a range of land management activities?
AGREE
Please give some reasons for your answer in the text box below:
Tenants of land need to be free to use land for the widest range of purposes. This tenancy will be useful bot ONLY if existing tenants have the right to convert. As a stand alone new tenancy, it will be of limited utility as few if any are likely to be granted.
30. Are there any land management activities you think should not be included within a Land Use Tenancy?
NO
31. Do you think that wider land use opportunities relating to diversification, such as renewable energy and agri-tourism, should be part of a Land Use Tenancy?
YES
32. Do you agree or disagree that a tenant farmer or a small landholder should, with the agreement of their landlord, have the ability to move their agricultural tenancy into a new Land Use Tenancy without having to bring their current lease to an end?
DISAGREE
Please give some reasons for your answer in the text box below:
A tenant farmer or smallholder should not have to have the agreement of the landlord to convert and agricultural tenancy into a new land use tenancy. History is replete with examples of new tenancy laws being introduced to strengthen the rights nor tenants and would have had no effect if the tenants had first to secure the agreement of their landlord. This proposal should be seen as a modernisation of tenancy law just as Section 42 (tenant’s right to timber) was in the Agricultural Holdings (Scotland) Act 2003.
33. Do you agree or disagree that when a tenant farmer or small landholders’ tenancy is due to come to an end that the tenant and their landlord should be able to change the tenancy into a Land Use Tenancy without going through the process of waygo, with parties retaining their rights?
AGREE
34. How do you think the rent for a Land Use Tenancy should be calculated?
DON’t KNOW
35. Would you use a Land Use Tenancy if you had access to a similar range of future Scottish Government payments which other kinds of land managers may receive?
DON’t KNOW
36. Do you think that there should be guidance to help a tenant and their landlord to agree and manage a Land Use Tenancy?
Might be helpful
37. Do you think there should be a process to manage disputes between a tenant of a Land Use Tenancy and their landlord?
YES
Please give some reasons for your answers and outline how this process could be managed in the text box below:
it should be broadly the same process as is used to manage disputes under existing agricultural tenancies.
38. Do you agree or disagree that tenants of a Land Use Tenancy and their landlords should be able to resolve their legal disputes in relation to the tenancy through the Scottish Land Court?
AGREE
39. Do you have any other comments on our proposal for a Land Use Tenancy?
NO
Part 11: Transparency: Who owns, controls and benefits from Scotland’s Land
41. Do you agree or disagree with our proposal to explore:
Who should be able to acquire large-scale landholdings in Scotland	AGREE
The possibility of introducing a requirement that those seeking to acquire large-scale landholdings in Scotland need to be registered in an EU member state or in the UK for tax purposes	AGREE
Please give some reasons for your answer in the text box below:
Greater transparency is vital and I have long argued that the ownership of any land (not just large-scale holdings as defined) should be owned by entities registered in the EU. Now that the UK has left the EU, however, I would restrict the criteria to those registered within the UK. Many EU states have limited transparency and there is no benefit to enabling non-UK EU entities privileges not available to entities from other countries such as Norway or the USA. 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.
Part 12: Other land related reforms – tax
42. Do you have any views on what the future role of taxation could be to support land reform?
Fiscal reform is a vital part of land reform and I am disappointed that there are no concrete proposals presented for consultation. The following are suggestions that I plan to elaborate on inn the coming months. All non-domestic land should be one the valuation roll All land should be liable to at least some property tax even if at a modest level It is inconsistent that the occupiers of non-domestic businesses inn urban areas are liable for non-domestic rates but large rural holdings are exempt. It is inconsistent that (for example) Danish landowners in Scotland pay local land taxes on their Scottish holdings to the municipalities in which they live in Denmark but not to Scottish local authorities. Scottish local authorities should be given much wider tax powers by repatriating the system of non-domestic rates, providing capital gains tax powers, and transferring LBTT to local authorities. Non-domestic valuations should be split into one for the land and and one for the improvements thus providing local authorities with the ability to levy non-domestic rates on each part in the proportion that they choose (100% on land would be a land value tax). Council tax should be scrapped and replaced with a progressive domestic property tax Local authorities should have flexibility to set the rates and bands of domestic property taxation together with any supplements or reliefs they consider appropriate.
43. How do you think the Scottish Government could use investment from natural capital to maximise: a) Community benefit and b) National benefit
I do not agree with the proposal to create natural capital markets. The restoration and maintenance of essential natural ecosystems should be a legal responsibility of land ownership.
44. Do you have any additional ideas or proposals for Land Reform in Scotland?
Yes, lots. I will be publishing a draft Bill incorporating them in the coming months. Some elements include the following Enhanced protection for common land Transfer of ownership and management of Crown land from Crown Estate Scotland to local authorities Powers for local authorities to acquire land for developement at existing use value Introducing a new Use Class for second homes as has been enacted in Wales. Democratising charities that own land such as Mount Stuart Trust (Bute) and the Applecross Trust (Applecross) to allow local people to join as members Transfer decision making on community rights to buy to local authorities Modernise the Land Settlement (Scotland) Act 1919 Reform inheritance law to allow children to inherit land Introduce residency requirements for landowners Enact mandatory targets for nature restoration Make the destruction and ongoing decline in native forests a criminal offence unless otherwise approved. Reform District Fishery Boards Democratise hunting though a licensing system operated by local authorities and much more.