Tinkering at the edges?

Earlier this summer, the Scottish Government launched a consultation paper seeking views on proposals for a land reform bill to be introduced by end of 2023.

Although other issues are included, the proposals focus on measures to tackle Scotland’s scale and concentration of landownership whereby so much land is held by very few landowners who exercise a form of monopoly power in local areas.

I write this looking out over the land owned by Simec Lochaber Hydropower 2 Ltd., part of the GFG Alliance which owns the Lochaber aluminium smelter.

Quite apart from questions over the future of the smelter and associated employment, the use and management of this vast estate is important and there is no doubt that more effective regulation is required of holdings such as this which extends to over 100,000 acres of land.

The consultation proposes that large-scale landholdings be subject to a statutory code of responsibility, mandatory management plans, and a public interest test when they are sold. The proposals derive from recommendations from the Scottish Land Commission, which was established in 2017 to advise government on land issues.

Any measures designed to deliver greater accountability over decision-making concerning Scotland’s largest landholdings are welcome. The key question is whether they will secure the objectives set out.

The proposals are designed (according to ministers) to tackle “the issues associated with scale and concentration of landownership in Scotland”. Read this carefully. They are not designed to deal with the underlying issue (scale and concentration) but merely to mitigate the impacts associated with this.

The Scottish Land Commission admitted in the advice to ministers that:

“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.”

There are two proven means of reducing the scale and concentration of private landownership – inheritance law and tax. Succession law reform since the French Revolution (where children enjoy legal rights to inherit land) has delivered a very diverse small scale pattern of landownership.

In Scotland, by contrast, children have no legal rights to inherit land and the pattern of singular, usually male, succession has perpetuated the concentrated pattern of power.

Succession law reform takes a long time to have any effect, however, which is why tax policy needs to be taken far more seriously. In an over-heated land market where corporations and speculative investors are pushing up the price of land, taxation instruments can make a huge difference. 

Even a modest one per cent annual local land tax would raise millions of pounds in revenue for local government and effect a commensurate reduction in land prices. Allied with greater powers of intervention for local government (for example to allow it to buy land for development at a value set by its existing use and not by its potential future use), a virtuous cycle of private and public sector investment could be generated.

But tax is considered as an afterthought in the government’s consultation paper. Indeed, at one public meeting an official stated that any ideas on tax would not be considered for inclusion in the forthcoming bill. 

Concerning too is the lack of any consideration of what role local government can and should play. The Scottish Land Commission themselves in their advice to ministers noted that:

“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.”

Since the very early days of devolution, ministers have ignored local government in their various land reform measures. It has always struck me as absurd that if a community in Caithness wishes to acquire a disused water treatment plant, it needs to have the consent of Scottish ministers rather than Highland Council. Similarly, the proposals being consulted upon right now suggest that ministers or the Scottish Land Commission should administer the new regulatory powers.

Ironically, whilst ministers are proposing measures to curtail the power of the owners of larger landholdings, it is at the same time concentrating even more power in the hands of civil servants and themselves in Edinburgh.

Land reform is fundamentally about democratising land.

In a book I wrote at the beginning of devolution, I observed: “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.”

Those power structures include government.