Image: Commission on Local Tax Reform. Oral Evidence Session 2
Today, the Commission on Local Tax Reform held its second oral evidence session. I am member of the Commission representing the Scottish Green Party. The event was streamed live and you can view the whole proceedings here together with the slides used by Stuart Adam of the Institute for Fiscal Studies. In addition to Stuart’s evidence, we heard from Professor John Baillie – a member of the Local Government Finance Review Committee (chaired by Sir Peter Burt), and the immediate past Chair of the Audit Commission and of Audit Scotland. We also heard evidence from Ken McKay who was Head of Local Government Finance in the Scottish Office between 1989 and 1997 and was the advisor to the Burt Committee.
The Committee was established in 2004. Its remit was:
“To review the different forms of local taxation, including reform of the Council Tax, against criteria set by the Executive, to identify the pros and cons of implementing any changes to the local taxation system in Scotland, including the practicalities and the implications for the rest of the local government finance system and any wider economic impact, and to make recommendations.”
The current Commission is keen to learn from the experience of Sir Peter Burt’s Committee and so invited Professor Baillie and Ken Mackay. You can watch the whole session and download the slide presentation here.
I relate the following exchange in order to highlight the potential political difficulties that might lie ahead and to alert interested parties to the vital need to achieve a degree of political consensus on the findings of the Commission. The exchange speaks for itself as to the challenges of making progress in this area of public policy.
After the Chair had opened question of the witnesses , I asked why Burt had died a death before it was even published. Here is the exchange at 52 minutes and 10 seconds into the session.
“I’ve got quite a few questions on the technical detail of all of this but first of all, Ken and John, perhaps on the politics of all of this because this appears to be where Burt stumbled and where possibly the biggest challenges facing this Commission are. Why did Burt die a death before it was even published?”
“We submitted our report and we actually gave an advance copy as you would expect out of courtesy to the First Minister among others. And we heard the day before we were publishing and having our press conference that it had been dismissed. I to this day do not know why and I think the easiest way to find out the justification for that wholesale rejection is possibly to invite those who rejected it. I can speculate but it’s worthless.”
“I have no …. I was inside the Scottish Office at one time and I have no idea .. and I have tried .. I have seen Jack McConnell on the golf course and I’ve often wanted to ask him .. because the Burt Committee .. well I’d better be .. I better bite my tongue a bit because there’s politics in this especially now but they were treated appallingly. They did a very, very good piece of work and it was rubbished the day before it was published.”
The Commission is currently undertaking a public consultation. Further details here.
Scottish Land and Estates, the organisation that represents some landowners in Scotland, attracted a fair bit of press coverage last month for their claim that potential reforms to Scotland’s agricultural tenancy laws could leave the Scottish Government open to compensation claims of £600 million (see Telegraph, Press & Journal, Herald). (1)
The claim was made in written evidence to the Rural Affairs, Climate Change and Environment Committee on 25 March 2015. The £600 million figure was derived from a study undertaken for SLE by estate agents Smiths Gore which purports to calculate the potential loss faced by landowners were reforms to be enacted.
The heart of the matter, however, is not the quantum of any possible claim. Compensation would only be relevant if there is a breach of the rights to property enshrined in the European Convention on Human Rights (Article 1 of Protocol 1). Moreover, such rights are not the only human rights that come into play when the Scottish Parliament enacts legislation.
As Professor Alan Miller, Chair of the Scottish Human Rights Commission, noted in evidence to the Scottish Parliament’s Rural Affairs, Climate Change and Environment Committee on 3 December 2014,
“I am struck by how narrowly framed the debate has been. I am a little embarrassed that the way in which human rights has been interpreted is contributing to there being quite narrow parameters around debate about land reform and community empowerment..” (2)
Professor Miller expanded on this point at a very well-attended Scottish Parliamentary meeting was last week hosted by Michael Russell MSP on the topic of land reform and human rights. In attendance were several MSPs, a Government Minister and more than six civil servants including one from the Crown Office.
The meeting was addressed by David Cameron from Community Land Scotland and Professor Miller. In their presentations and in the discussion that followed, it was evident that convention rights of the sort being deployed by SLE are only part of a much wider spectrum of human rights that Scottish Ministers and the Scottish Parliament have to balance in framing legislation. Section 7(2)(a) of the Scotland Act 1998 obliges the Parliament to observe and implement all international obligations including a wide range of human rights that are not covered by the ECHR such as the Covenant on Economic, Social and Cultural Rights and the Covenant on Civil and Political Rights.
This perspective is diligently and authoritatively explained in a paper by Dr Kirsteen Shields from Dundee University’s School of Law published in the current edition of the Scottish Human Rights Journal entitled “Tackling the Misuse of Rights Rhetoric in Land Reform Debate”. (download available here) All with an interest in the topic and, in particular, MSPs, would be well advised to read this carefully.
None of these arguments will be new to anyone with any experience of international development where, since 1997, the rights-based approach has been adopted not only by the UN but by Governments and NGOs around the world.
Indeed the UK Government is an enthusiastic advocate of such an approach in its overseas aid programme. The Scottish Government is also bound by the terms of the Scotland Act to do all in its power to further the realisation of international human rights obligations.
The claims by SLE that landowners could be entitled to £600m of compensation is predicated on there being a breach of ECHR. Crucially, SLE has not published the legal advice upon which the £600m claim is based. During the Parliamentary meeting, I called for the organisation to do so and share this with MSPs. I await developments with interest since only by understanding the legal basis upon which any claim rests, can we judge whether any financial consequences might flow. Moreover, as the above paper makes clear, there is more to human rights than the ECHR.
All of which led Cabinet Secretary, Richard Lochhead, to dismiss such claims at the Rural Affairs meeting on 1 April 2015. In response to suggestions that compensation claims might be as high as £1.78 billion, he said,
“First, the cabinet secretary is too broke to afford £600 million, let alone £1.78 billion. It would be more constructive and helpful in moving the debate forward if we had fewer silly reports such as that. SLE’s intervention and the figures in its report – which came when we are supposed to be saying that there is unprecedented collaboration and understanding of some of the key issues facing tenant farming – were unconstructive and unhelpful. It escapes me how those figures were arrived at. Given that we have not even published the legislation yet, there is no way for those with a strong view on one side of the debate even remotely to begin to work out any potential figures.”
Now that Parliament has been made aware of the wider human rights context in which it is, by law, required to work, it is to be hoped that such speculative and outlandish claims can be put to rest.
(1) SLE is the representative body of 1351 landowners in Scotland who own 29% of Scotland.
(2) A fuller extract of his evidence..
“I am struck by how narrowly framed the debate has been. I am a little embarrassed that the way in which human rights has been interpreted is contributing to there being quite narrow parameters around debate about land reform and community empowerment. I will just make a couple of points about the perception of human rights and its relevance to the committee’s consideration of the bill, because I am sure that others have more value to add.
The language that is being used – I heard the term “absolute right to buy” being used again this morning – is very unhelpful, although I understand why people are using it. The European convention on human rights is not understood as providing a framework in which the legitimate rights of landowners and the public interest are reconciled and a balance is struck, with compensation being paid to the landowner if necessary. The right to buy is a qualified right: there has to be a competing public interest to override the right to peaceful enjoyment by the person who owns the land. Therefore, language such as “right to buy” or “absolute right” polarises the debate in an unhelpful way and does not reflect a clear understanding of what the ECHR contributes to the debate.
The bigger frustration that I have with the policy framework is this: human rights does not begin and end at the European Court of Human Rights in Strasbourg; there is a much broader framework of international human rights that are relevant to the Government and the Parliament, but which are largely invisible.
The Scotland Act 1998 calls on the Scottish ministers to observe and implement international obligations, of which one—but only one—is the International Covenant on Economic, Social and Cultural Rights, which places a duty on the Scottish ministers to use the maximum available resources to ensure progressive realisation of the right to housing, employment, food and so on—that is, it sees land as a national asset, which is to be used for the progressive realisation of what we might call sustainable development.
Therefore, what human rights provides is a broader impetus for land reform, rather than an inhibition, as is suggested in the way that the issue is currently couched—that is, in questions about whether a landowner has a red card that can be used with reference to the ECHR to stifle discussion about different use of the land. That is what is missing from the policy framework.”
The Scottish Government has announced the remit and membership of the Commission on Local Tax reform. I am very pleased to have been nominated as a member of the Commission on Local Tax Reform and look forward to meeting the other Commissioners on Monday at our first meeting.
The Commission will be co-chaired by Local Government Minister Marco Biagi and President of COSLA Councillor David O’Neill. The Commission will meet for first time on February 23 and will report to the Scottish Government and COSLA in the autumn.
Marco Biagi said:
“The Scottish Government believes the current council tax system is unfair and we are acting on our manifesto commitment, and the recommendations of the Local Government and Regeneration Committee, to look at alternative approaches to local taxation.
“The Commission on Local Tax Reform will consider progressive, workable and fair systems, taking into account domestic and international evidence on tax powers and wealth distribution, the autonomy and accountability of local government and the impact on individuals who pay the tax.
“The members bring a broad range of expertise and experience and I look forward to starting this important work.”
David O’Neill said: “A great deal of work lies ahead, but this Commission is a chance to take a step back and think about the best way to pay for the local services that communities rely on every day.
“Across Scotland people are looking for the debate to break new ground, and that’s why I am determined that this Commission will be listening to people and organisations from all parts of the country, and setting out what it would take to give our local communities a real say about what matters most to them, and the best way to pay for it.”
The Commission’s Remit is:
“To identify and examine alternative systems of local taxation that would deliver a fairer system of local taxation to support the funding of services delivered by local government. In doing so, the Commission will consider:
The impacts on individuals, households and inequalities in income and wealth;
The wider macro-economic, demographic and fiscal impacts, including housing market and land use;
The administrative and collection arrangements that apply, including the costs of transition and subsequent operation;
Potential timetables for transition, with due regard to the 2017 Local Government elections.
The impacts on supporting local democracy, including on the financial accountability and autonomy of Local Government;
The revenue raising capacity of the alternatives at both local authority and national levels.
In conducting its work, the Commission will engage with communities across Scotland to assess public perceptions of the emerging findings and to reflect this evidence in its final analysis and recommendations.
The Commission will be supported by an independent secretariat comprising staff seconded from COSLA and the Scottish Government.
The membership is as follows (the Scottish Conservative Party has declined to take part).
Councillor Susan Aitken, SNP Local Government Convenor and Leader of SNP Group, Glasgow City Council;
Councillor Catriona Bhatia, Leader of Liberal Democrat Group and Deputy Leader, Scottish Borders Council;
Marco Biagi MSP, Minister for Local Government and Community Empowerment (Co-Chair);
Councillor Angus Campbell, Leader of Comhairle nan Eilean Siar and Leader of the Independent Group at COSLA;
Councillor Rhondda Geekie, Leader Of East Dunbartonshire Council and Leader of Labour Group at COSLA;
Dr Angela O’Hagan, Research Fellow in the Institute for Society and Social Justice Research and Convenor of the Scottish Women’s Budget Group;
Isobel d’Inverno, Convenor of the Tax Committee of the Law Society of Scotland and Director of Corporate Tax at Brodies LLP;
Mary Kinnonmonth, Manager of Dundee Citizens Advice Bureau and Member of Citizens Advice Scotland Board of Directors;
Dr Jim McCormick, Scotland Advisor, Joseph Rowntree Foundation;
Councillor David O’Neill, President of COSLA (Co-Chair);
Don Peebles, Head of CIPFA Scotland;
Alex Rowley, MSP for Cowdenbeath and Shadow Minister for Local Government and Community Empowerment;
Andy Wightman, Writer and Researcher, representing the Scottish Green Party.
I will be using this blog to explore in an open manner some of the issues to be resolved in devising an enduring and robust system of local taxation. The focus is very much on what to replace the Council Tax with but of course that replacement could involve not just a better system of domestic property taxation but the repatriation of non-domestic rating, sales taxes, local income taxes and other sources of local finance.
I am very clear that we need a new system of local government finance. Any new property tax should be designed in such a way as to endure over the long-term. It should be more reflective of land and/or property values, more transparent and be capable of contributing a greater proportion of autonomous local finance than is currently the case. Local finance and taxation is a vital part of rebuilding and strengthening local democracy.
Finally, this job is unpaid. On the face of it, this means that I will have to inevitably devote less time some of my other unpaid work on, for example, land reform. However, I plan to launch a crowd-funding appeal soon that will allow me to continue (and indeed increase) the time I can devote to that topic in what is a vital year ahead.
Later this afternoon I will publish a link to the Commission’s website. Meanwhile I welcome all views on the challenge that lies ahead.
“The latest developments in the story of Parliament House (see previous blog) are as follows.
Scottish Green Party Councillor Gavin Corbett has had meetings with senior officials in the Council and shares his thoughts here.
The Leader and Deputy Leader of the Council (Andrew Burns and Steve Cardownie) have tabled an urgent motion for the Corporate Policy and Strategy Committee on 24 February 2015. It will require to be ruled urgent by the Convener if it is to be considered. The full text can be read here. it concludes by recommending that the Chief Executive of the COuncil writes to the Scottish Government Permanent Secretary to seek a voluntary resolution of the issue.
There is quite a bit of interest in this motion.
Under item 5, the Committee is invited to note that in June 2008 it was resolved that a review of common good would only be carried out if and when property was being sold. The motion omits to mention, however, that the question of Parliament House had already been raised in my report of April 2006 in which I asserted that Parliament House should have been included in a list of common good assets that had been supplied to me in 2005. The Council’s responded by preparing a Review of the Common Good for a meeting of the Resource Management and Audit Scrutiny Committee on 12 October 2006 in which, under the heading “Parliament House/The Old Royal High School”, it said nothing about Parliament House but narrated the history of the High School (click here for relevant extract).
I replied in a further paper here in which I argued that,
“It should be noted that Parliament House and the Old Royal High School, as listed on page 3 of my October Report are not the same. Parliament House is located off Parliament Square opposite the City Chambers. The Old Royal High School is on Regent Road.
Parliament House was ascertained by Hunter and Paton to form part of the Common Good in 1905 (p.31). I know of nothing that has happened since then that would have removed it from the Common Good but perhaps it has. If so, it would be useful to have the information.”
The 12 October 2006 Review, however, was withdrawn and never tabled. As I wrote at the time,
“Then I waited. I looked at the agenda for the 12 October meeting but there was no mention of the Common Good Review. Likewise, at the next meeting on 16 November, there was no mention of the issue. What had happened? Why had the Review of Common Good in Edinburgh not been tabled?
As of today (25 November 2006) I do not know the answer to this question. Hopefully I will know soon.”
I never did find out. But in December, a paper was tabled at the Executive of the Council which says nothing about the investigations reported in the October 2006 review. Then in January 2008, a further Review was published which this time contained exactly the same wording under the heading “Parliament House/The Old Royal High School” and said precisely nothing about Parliament House.
We now know from item 1 in the motion tabled today that the Council knew in April 2006 that Parliament House (in its mistaken view) did not form part of the common good and was not owned by the City. My report was tabled in April 2006 So why, in 2006 and 2008, did the Council not divulge that Parliament House was not (in its view) owned by the City and, instead, stay silent on the matter? DId they know and rather not admit it?
Given that Scottish Ministers had no prior title to Parliament House, it would have been normal practice for the Keeper of the Registers of Scotland to have withheld indemnity for that part. In other words, the Keeper would say, “maybe you (Scottish Ministers) do indeed own it but I am not satisfied that there is sufficient evidence“. The state guarantee granted in the Land Register would have been withheld and the title would have been open to challenge by the true owner (City of Edinburgh Council) for ten years i.e. until November 2015.
Why did the Keeper not withhold indemnity? I asked the Registers of Scotland this question today and they provided the following statement.
“When the first registration application was presented the Keeper undertook a detailed examination of the prior titles. As one might expect with such property the Sasine titles were mostly old and contained fairly vague common law descriptions. Notwithstanding the evidence of title that was presented in support of Scottish Ministers, we sought additional assurances in respect of a small number of other bodies who may also have been able to demonstrate an interest to the area in question – this enquiry reflected the historic nature of the evidence of title that was presented. That included Edinburgh City Council. We asked Scottish Ministers, as applicant, to confirm the position in relation to these other bodies. All of the bodies identified confirmed they had no right title or interest to the area in question. Accordingly, we considered an exclusion of indemnity was not required.”
Image: De Wit version of Gordon of Rothiemay’s original 1647 plan showing Parliament House seven years after construction. Reproduced with the permission of the National Library of Scotland.
Regular readers of this blog will be familiar with the subject of common good land. This is land and property in the Burghs of Scotland that is the historic property of the burgh held on behalf of the citizens. (1) This blog has reported on many cases of maladministration of these assets where Councils have been sloppy in their record-keeping and where the interests of the citizen has been poorly served by the Councils that replaced the Town Councils in 1975.
But Scotland’s four ancient cities do not have any real excuse. Unlike Kirkcaldy or Hawick, Glasgow, Edinburgh, Dundee and Aberdeen have enjoyed continuity in having always had a council governing the affairs of the city. So one might expect them to have a good idea of what properties they hold as part of the common good. Which makes this tale of unmitigated incompetence just that little bit more shocking.
As revealed in the Evening News today, the City of Edinburgh Council has lost the ownership of one of the handful of the most historic properties in the City. It didn’t sell it by accident in some fearful and misguided property deal. It didn’t even know that it no longer owned it. It just realised one day that something had gone very horribly wrong. Quite why remains unclear since the history of the building is very well documented in the Council’s own records.
The building is Parliament House which sits largely hidden from view behind the High Kirk of St. Giles and can be glimpsed from George IV Bridge just north of the National Library of Scotland. The history of the building is recounted in great detail in “The Municipal Buildings of Edinburgh – A sketch of their history for seven hundred years written mainly from the original records”, a book commissioned by the Town Council in 1895 and written by Robert Miller, the Lord Dean of Guild. The actual construction is recounted over 79 pages in “The Book of the Old Edinburgh Club”, Volume 13, 1924. This is a building about which a great deal is known.
Image: Ordnance Survey 1852 Reproduced with the permission of the National Library of Scotland.
In the 16th century the Scots Parliament had no fixed abode and sat in Perth, Linlithgow, Stirling and Aberdeen as well as in Edinburgh. (2) In 1632 Charles I requested the Town Council build a new home for the Parliament and construction extended from 6 April 1632 to 11 November 1640. (Update – see comment from Alan MacDonald to effect that this is not so and that the Town Council took their own initiative. My source for this was Historical Monuments Commission). The land upon which Parliament House sits was part of the old churchyard of St Giles which was gifted to the Town Council in a Charter by Queen Mary in 1566.
The total cost of construction was £10,554,17s,7d. with 64% of the funds paid out of the common good fund and the remainder raised by public subscription from the citizens of Edinburgh. (3) The buildings were to be occupied rent free by the parliament of Scotland and the College of Justice. The Town Council paid for the upkeep of the building and for nearly two centuries Parliament House was the public hall of the city hosting civic receptions and even musical festivals. The Edinburgh Festival of 1815, 1819 and 1824 witnessed concerts of Haydn’s Creation and Handel’s Messiah.
In 1816, the Town Council handed over responsibility for the upkeep of the building to the Exchequer since the Courts of Law made almost exclusive use of it. The most recent known civic use of the building was for a reception on the occasion of the state visit of the King of Norway in 1962.
City of Edinburgh Council loses ownership
In 2004, work began on a plan to redevelop the Court of Session including Parliament House which was by now under the day-to-day administration of the Scottish Courts Service. The £60 million project was completed in 2013. In order to expedite the project, Scottish Ministers decided to record a title to the complex of buildings by way of a voluntary registration in the Land Register.
In 2005, Scottish Government solicitors appear to have been under the impression that, since the Scottish Courts Service had occupation of Parliament House, it was owned by Scottish Ministers. My understanding of what follows is derived from a source within the Scottish Government.
The Keeper of the Register of Scotland was not satisfied that Scottish Ministers had any evidence of ownership and so advised them to contact Edinburgh Council who, it was thought, was the true owner. The question was put to the Council who apparently confirmed to the Scottish Government that the it had no right, title or interest in Parliament House. The title was then registered in the name of Scottish Ministers.
Scottish Ministers’ Title – MID83631 title and plan (1.2Mb pdf)
Thus did the Council lose ownership of one of the most historic buildings in the City – a national Parliament in the capital city of an ancient European nation and a building constructed on common good land and funded by the common good fund and members of the public.
But stranger things were then to follow. The Faculty of Advocates has for centuries regarded Parliament House as theirs. They had almost exclusive use of it and so, by means as yet unclear, within a month of Scottish Ministers taking ownership, the Faculty persuaded Scottish Ministers to convey to its ownership for no consideration the room known as the Laigh Hall within Parliament House. The subjects are a bit odd comprising “the room on the lower floor shown edged red on the title plan (said subjects extending only to the inner surfaces of the walls, floor and ceiling thereof)”. The use is restricted to a library and study area for members of the Faculty of Advocates and for associated seminars and exhibitions. Scottish Ministers retain a right of pre-emption should the Faculty ever choose to sell this historic block of fresh air.
Faculty of Advocates Title – MID86039 title and plan
Why did this happen?
On what basis did the Council claim to have no interest?
The Council’s records demonstrate quite clearly that Parliament House belongs to the City.
The Council has good records of ownership
As noted by Miller in 1895, the accounts of the city 1875-76 puts on record the City’s ownership of Parliament House which had been built by the City on land owned by the City and formed part of the common good of the City. It noted that, despite the day-to-day management being in the hands of the Courts, “ownership had never been forgotten but there had not arisen any necessity to assert it.”
In the famous Report of the Common Good of the City of Edinburgh by Thomas Hunter (Town Clerk) and Robert Paton (City Chamberlain) published along with a beautiful map in 1905, it is recorded that “The large hall with certain portions around it, still belongs in property to the Corporation. The rooms underneath the large hall appear to have been handed over by the Corporation for the use of the Advocates’ Library”.
The Council responded in October 2006 with a Review of the Common Good in Edinburgh. It appeared to confuse Parliament House with the Old Royal High School and, uniquely among the properties being discussed, failed to address the question of Parliament House’s history. (4) I now suspect why it did this. – it was aware of the inadvertent ceding of ownership to Scottish Ministers.
What happens next?
The Council issued a terse statement to the Evening News in response to its enquiry.
“We are aware of this issue and have raised it with the Scottish Government and the Scottish Court Service.”
The owner of Parliament House is now, in law, Scottish Ministers and the Faculty of Advocates. Under the law as it was in 2006, the Council has no legal means of recovering ownership. The best that can be hoped is that Scottish Ministers and the Faculty agree to return the property to the Council’s ownership. The full council should then pass a resolution to the effect that the building is owned by the Council and forms part of the common good of the City.
This is a shocking display of incompetence by the Council. It begs the question whether anyone noticed it since 2006. Perhaps the author of the October 2006 Report did and chose to conceal the fact. The fiasco underlines the need for a proper register of common good properties and for an open and freely available land register so that the citizen can spot land transfers like this. (5)
I await developments with interest.
Blog Updated 1045hrs 16 February after realising that October 2006 report of Council referred exclusively to Old Royal High School.
(1) Read more here and under Blog Category/Common Good
“I’m deeply dismayed that this issue has been re-opened again. I can understand that there are always going to be some people who object to large-scale landownership but we felt that that was dealt with at the time of the establishment of the Scottish Parliament.
What is being done challenges the nature of the society we live in and property rights. It also, in practical terms creates deep uncertainty in planning for the future and I think that’s going to be the disadvantage of the rural economy……..”
Last Wednesday, the First Minister, Nicola Sturgeon announced a legislative programme that included a Land Reform Bill and other land policy measures on harbours, domestic property taxation and inheritance laws.
The following day the Smith Commission published its report on further devolution for Scotland. After decades of campaigning on the topic by many activists, the Crown Estate is to be devolved in its entirety together with other powers such as the licensing of onshore oil and gas extraction.
Then, today, the Scottish Government published a consultation paper on land reform in Scotland which provides more detail on the measures that are to be incorporated in the Bill. This all amounts to the most significant political advance on the topic since the establishment of the Scottish Parliament and the series of reforms implemented in 1999-2003.
In the words of the Scottish Government,
“The aim of this paper is … to ensure you and everyone in Scotland are given the chance to influence this debate, provide your thoughts and suggestions, and to shape both Scotland’s vision for the future of land rights and responsibilities policy and future land reform.”
The Paper begins by proposing a Land Rights and Responsibilities policy statement (page 7). This in itself is very significant. It provides a draft statement of principles that will inform the development of land policy for the years ahead. One would hope that the final version will be agreed and adopted by whatever political parties are in power in Holyrood. Such a statement puts Scottish land reform firmly in an international context where land rights are seen as an important means of strengthening communities and individuals. It opens the door to the Scottish Government adopting the UN Guidelines on Responsible Governance of Tenure that have already been adopted by the UK government.
The paper then goes on to highlight some further detail on the eleven measures that are proposed to be included in the Land Reform Bill. Some of these were highlighted in the First Minister’s legislative programme last week – see previous blog but some are new.
2. Limiting the Legal Entities that can own land in Scotland This is a new proposal and very welcome. Again it follows a recommendation of the Land Reform Review Group and previous debates around the Land Registration Act (see my evidence here) It also addresses the concerns of law enforcement and taxation authorities about money-laundering (1) There has been a long-standing problem of land owned by companies registered in offshore tax-havens. Some own large tracts of rural land and some own urban property – including quite a bit of Charlotte Square in Edinburgh near the First Minister’s official residence. It is quite ludicrous to permit this state of affairs to continue any longer.
3. Information on land, its value and ownership
Announced last week and implements a key recommendation of the Land Reform Review Group. We need to move towards a comprehensive and freely available system like the State of Montana.
4. Sustainable development test for land governance
Again, announced last week but this is the opportunity now to consider how this might be designed and implemented. As the Paper argues,
“The vast majority of land in Scotland is owned by the private sector. Landowners are instrumental in promoting sustainable local development and supporting communities. However, in some instances the scale or pattern of land ownership, and the decisions of landowners, can be a barrier to sustainable development in an area. Providing mechanisms to address such situations could allow for potential barriers to sustainable local economic and social development to be overcome.”
5. A more proactive role for public sector land management
This is a new proposal and welcome. As the Paper notes,
“It is clear public land should be managed for the greatest overall benefit, balancing a number of differing and sometimes conflicting public needs. … However, the legal framework for some public bodies can be a significant constraint on the range of operations that they can undertake to deliver these benefits.”
If the legal framework and governance of all public land can be modernised and made more flexible, it will help to deliver many of the objectives of land reform can be met.
6. Duty of community engagement on charitable trustees when taking decisions on land management.
This was highlighted last week. What the Government propose is a new duty on the trustees of charitable bodies to “engage with the local community and consider the potential impact on the local community before taking any decision” Such a power would be useful but it does not go far enough. Where charitable status is granted to private landowners who then restrict membership of the organisation to a tight group of family and friends, what is needed is not better engagement but better democracy.
7. Removal of the exemption from business rates for shooting and deerstalking
Announced last week, the Paper makes clear that the proposal relates to the so-called sporting rates abolished in 1995. It would be helpful if the term “business rates” was done away with. It has no legal meaning and is misleading. Such rates are not a tax on businesses (mainly concerned with income tax and corporation tax), they are a levy on the rental value of non-domestic property. The Scottish Parliament is assessed for non-domestic rates (NDR) as are bus stops. Neither is a business. Much though needs to be given to how such rates are to be assessed. I will be arguing strongly that it be done on the rental value of land – an approach that the Mirrlees Review (Chapter 16) recommended should be applied to all NDR.
8. Common Good
I particularly welcome the plans to reform the law around common good land. This is land owned by towns and cities across Scotland that is for the benefit of the residents and os often of great antiquity forming part of the original Royal Charter of the burgh. The legal framework around is complicated and out of date and leads to conflict between councils and communities. Common Good is the oldest form of community landownership and the vast majority of Scotland’s population who live in towns and cities deserve a better system of managing it.
9. Agricultural Holdings
Scottish Government confirms that the recommendations that will be made by the Agricultural Holdings Review Group (which is due to report later this month) will be incorporated into the Land Reform Bill.
10. Wild Deer
This is a new proposal to strengthen the powers of intervention of Scottish Natural Heritage over the management of wild deer. As the Paper notes, wild deer are a public resource but they are managed exclusively by landowning interests. I suspect many will be arguing that the proposals need to go further and introduce a modern system of wildlife management with proper democratic governance of this public resource.
11. Public Access
There are proposals here to make minor amendments to existing access legislation.
These proposals, together with the Community Empowerment Bill, reform of council tax, succession law reform, harbours reform and devolution of the Crown Estate and onshore oil and gas add up to a substantial package of powers that will reform land relations in Scotland. Reform is not going to happen quickly. This is the job of a decade or more but this is an important start
All of these proposals will be subject to extensive debate over the coming months and already there are powerful vested interests engaged in trying to derail them. Scottish Land and Estates issued a press release through Media House in which it expressed “disappointment that the Scottish Government continues to miss an opportunity to create modern and meaningful land reform.” I think modern and meaningful land reform is what is in fact beginning to take shape. There is a long way to go of course. But Scotland is changed now. Thousands of people were energised by the referendum campaign and now want to use the existing powers of the Scottish Parliament to secure a fairer and more prosperous country.
This blog is a brief overview of what is covered by the Consultation. I will be publishing further detailed blogs on individual topics as well as a series of briefing papers to assist people in responding to the consultation.
Nicola Sturgeon today announced the Scottish Government’s legislative programme for the remainder of this Parliament. It contains a proposal for a new Land Reform Bill as well as a Succession Bill and a review of the Council Tax. Announcements of further proposals are expected in the consultation paper to be published next week.
After a decade of absence, it’s great to see the land question back on the political agenda. This is an important, substantial and meaningful set of proposals. Taken as a whole, they will hopefully shift the baseline of the debate – that is to say the set of assumptions and norms that have too often been taken for granted and in which politicians have too often been reluctant to tackle.
“The relationship between the people living in Scotland and the land of Scotland is of fundamental importance. Our aim is to move the debate on land reform from one focused on historic injustices to a modern debate about the current balance of land rights in Scotland and how this can be managed to best deliver for the people of Scotland.”
Amen to that.
Scotland comprises its territory and its people.
How land is owned, used and governed is vitally important to the wellbeing and prosperity of all who live in this country – in particular to those who, because of inflated land values, cannot afford the basic human right of a home. For far too long, the ownership and control of Scotland’s natural resources have been in the hands of a small elite. Their political influence has been such that reforms that would, in any other European country, be regarded as normal, have been dismissed as extreme or an unjustifiable attack on property rights.
As for the proposals themselves, they represent a suite of important reforms.
Topics to be included in the Land Reform Bill include:-
Withdrawing the non-domestic rates exemptions for sporting estates
Sporting rates were abolished by the Conservative Government in 1994 and the non-domestic rates (NDR) on over 90% of Scotland were abolished back in the 1950s. It is clearly inequitable that, whilst the corner shop, the pub and the hairdresser all pay NDR, the multi-million pound assets outside the villages and towns of Scotland pay virtually none with all “agricultural” land (including sporting estates and woodland) removed from the valuation roll altogether.
One of the bizarre consequences of this is that there are Danish landowners who own large areas of land in Scotland who pay land taxes to their home municipalities in Denmark to pay for nice kindergartens for their children. They are asked to contribute no such levies to Scottish local authorities for equivalent services for their employee’s children here.
Powers for Scottish Ministers to intervene where the scale of land ownership and land management decisions are a barrier to local sustainable development
With such a concentrated pattern of private landownership (432 landowners own half of the privately-owned rural land in Scotland) and such an open and unregulated market, it is inevitable that there will be situations where the public interest should intervene. This can be because of local monopolies (where one owner owns most or all of the land in or around a settlement) or where there is a history of neglect and bad practice affecting tenants and others in the community.
A new duty on charity trustees to consult with local communities where decisions on the management and use of land may affect a local community
There are large estates in Scotland that are currently owned through charitable companies (such as Mount Stuart Trust on Bute and the Applecross Trust in Wester Ross) that were set up decades ago to avoid tax. Often they are run by the same family that once owned them and who appoint their friends as Trustees. The local community has no right to join as members and has no legal right to have any stake in the governance or management of the land despite receiving substantial tax benefits through charitable status and non-domestic rates exemptions.
A new Land Reform Commission to develop the the evidence base for future reform, to support public debate and to hold this and future Governments to account
Land reform is a topic that has been neglected for some time. It is also a topic that cuts across many areas of public policy such as housing, fiscal policy, regeneration, community development, agriculture, forestry etc. it is to be welcomed that the Scottish Government is willing to appoint a Commission to “hold this and future governments to account”!
A land information system to provide transparent, comprehensive and freely available data and information on the ownership, occupation, value and use of land
Scotland has a wealth of data on many aspects of land but they are disparate, costly to get hold of and difficult to interpret. Explore the Cadastral portal for the state of Montana to see what a modern land information system should look like.
Other reforms include:-
A review of the land and property tax that affects most people – the highly regressive council tax
The announcement of the long awaited reform of the council tax is welcome. To many people this might seem a totally separate topic but houses sit on land and how that land and property is taxed has a significant impact on perhaps the most important land market to most people – the housing market.
This regressive tax should be replaced by a far more progressive and equitable framework based on the findings of the Mirrlees Review Chapter 16 chaired by Sir James Mirrlees – one of the Scottish Government’s own economic advisers. Whilst no legislation is envisaged this session – a cross-party review will examine alternatives and report by Autumn by 2015.
The modernisation of succession law so that all children are treated equally when it comes to inheriting land
This reform has been resisted by the landed class throughout the whole of the 20th century. Read Chapter 28 in my book, The Poor Had No Lawyers and today’s blog by Lallands Peat Worrier In 1964, when Scotland finally got rid of primogeniture, Lord Haddington and other railed against reform arguing in the House of Lords that
“By assimilating heritable property, which from time immemorial has passed under the law of primogeniture, with moveable property and dividing it equally among the intestate’s next of kin, you are striking at the very roots of Scottish traditions and undermining the whole fabric of Scottish family life.”
Of course it only undermined the traditions of the lives of the aristocracy – particularly by discriminating against women. That Scotland should only now be catching up with the reforms that swept Europe in the aftermath of the French Revolution over 200 years ago says much about why we need such reform!
A Harbours Bill to provide a revised legislative framework from one of Scotland’s oldest forms of social enterprise – Trust Ports
Increasing the Scottish Land Fund to £10 million from 2016-20 to meet demand
Implementation of the recommendations of the Agricultural Holdings Review Group which is due to publish it’s final report in January 2015
A full consultation will be published next week and it is expected to propose additional reforms that require further work before they can be framed as legislation.
This is a very substantial package of measures. A lot of work lies ahead to bring them all to fruition and they will be opposed every bit of the way by powerful vested interests
Much more information will be published next week when the Scottish Government publishes its full consultation together with an important statement on Land Rights Policy.
Meanwhile everyone who believes that the land of Scotland should be owned and used in the public interest and for the common good should take the time to understand the issues at stake, participate in the consultation and make Scotland a country where land is owned and used for the many and not the few.
I have not had the time to submit any very full-some submission to the Smith Commission on further devolution but I did send the following email today. I would also commend readers to the submission by the Scottish Trades Union Congress which is particularly sharp on the kinds of tools needed to develop a prosperous and fair society in Scotland.
Dear Lord Smith,
There are two specific powers which I would like to see form part of a further suite of devolved powers to the Scottish Parliament.
The Crown Estate
I have argued on many occasions that the Crown Estate Commissioners should have no role in Scotland. Evidence presented to the UK Treasury Committee, Scotland Bill Committee and Scottish Affairs Committee can be found here at the foot of the page.
The Crown Estate is a public estate and it’s administration and management should (like all other public land in Scotland) be within the legislative competence of the Scottish Parliament.
This can be achieved by repealing Section 2(3) of Schedule 5 (Part 1) of the Scotland Act 1998.
Honours and Dignities
To promote a more equal Scotland it is no longer appropriate in my view that there be an official order of precedence in Scotland. I would like to see the abolition of almost all honours and dignities. Others may take a different view. To enable such a debate to take place, the system of honours and dignities should be devolved.
This can be achieved by repealing Section 2(2) of Schedule 5 (Part 1) of the Scotland Act 1998.
Scotland has voted to remain part of the United Kingdom but Scotland will never be the same again. The energy, passion and commitment to a fairer, more equal and sustainable Scotland has reached unprecedented levels. Matters with which this blog is concerned – the democratisation of land relations, economic relations and political relations – now have a constituency far beyond that which existed a few years ago.
We live in very interesting times.
Meanwhile, the graph above, created by Robin Parker, highlights one of the underlying messages of Thursday’s vote. As I tweeted on Friday morning, it looks like the poorest & most disadvantaged of Scotland’s citizens have cried the loudest for change.