Guest Blog by Brian Wilson

Brian Wilson’s column is reproduced here with kind permission of the West Highland Free Press.

Reading reports by Parliamentary committees is normally a pastime more likely to act as an antidote to insomnia than to lift the spirits. So it is pleasing to report on a rare and uplifting exception to that rule.

In the long and generally unproductive history of the land reform debate in Scotland, I have never come across any more hopeful document than the Interim Report of the House of Commons Scottish Affairs Committee on Land Reform, published last week.

Here at last is a lucid setting out of the issues at stake, the wider context within which they have developed and the areas of reform which must be addressed if anything is to change. It is a report devoid of rhetoric and outstanding in clarity of words and thought. Let me offer you one statement from it as an example.

“The Committee accepts the evidence that the system of land ownership in Scotland is a direct consequence of choices made in the past in relation to the legal and fiscal framework within which the land is held. These choices were political decisions in the past and they will continue to be in the future”.

In other words, there is nothing sacred or unchangeable about the fact that we have the most inequitable system of land ownership in Europe. It has been constructed in law and repeatedly shored up by tax benefits and assorted hand-outs, all of which reflect subjective political choices. Make different political choices and an inequitable system will crumble.

The importance of the report lies in the fact that it so clearly identifies the fundamentals of this debate rather than merely railing against the symptoms. For example, it could not be clearer in its criticisms of the entirely deplorable absence of public information about the most basic question of all. Who owns the land? Even where answers ostensibly exist, their purpose is often to conceal the reality rather than to enlighten.

This takes me back to the 1970s when old John McEwen was almost a lone voice in making this point. It was impossible to talk about land reform until you knew who owned the land. A land register was the essential starting point. When government refused to do it, he tried to do it himself (Who Owns Scotland?) and eventually embarrassed them into initiating a Land Registration process which remains hopelessly incomplete today and excludes questions of beneficial ownership.

Let this paragraph from the Committee’s report be a monument to the fact that John McEwen was right: “The first step in any meaningful strategy of land reform must be the creation of data on ownership and land values which is comprehensive and accessible. Regrettably, Scotland lags behind most European countries in providing such data and we therefore call for the Scottish and UK Governments to give priority to this matter”.

Will this clear recommendation now be acted on? It recalls the exchange last May between Ian Davidson MP, who chairs the Scottish Affairs Select Committee and has driven its interest in land reform, and the Prime Minister. Very astutely, Davidson picked up on an inititative agreed by the European Council of Ministers at UK instigation to make declaration of beneficial ownership by all companies a legal requirement.

In advancing that very major reform to tackle tax evasion on a vast corporate scale, the UK Government certainly did not have Scottish landowners in mind. But David Cameron could scarcely dissent when Davidson asked if his government would cooperate with the Scottish Affairs Committee “in establishing who owns and controls the great landed estates in Scotland, in order that they can minimise both tax avoidance and subsidy-milking”. Cameron confirmed: “That is the intention.” There was to be no opt-out clause for landowners.

Against that background, it is more relevant than ever to start the “comprehensive and accessible” land registration process as quickly as possible. There is no need for delay and the Scottish Government should now take an immediate lead. A mouse of a Bill which they put through Holyrood in 2012 to update the Land Registration legislation was dismissed in expert evidence to the committee as “a lost opportunity”.

The report deals extensively with ways in which hereditary land ownership is sustained by the taxation system without regard to the public benefit which is obtained from these arrangements. What this reflects is the success of the Scottish landowners’ lobby over many years in constructing a network of benefits and exemptions which is entirely unique to themselves and solely in their own interests.

For example, there is a little known scam called the Conditional Exemption Tax Scheme in which landowners guarantee certain rights of public access in return for another layer of tax concessions. HMRC “occasionally” ask Scottish Natural Heritage to monitor whether the terms of each deal are being acted upon. The Scottish Affairs Committee asked HMRC for annual reports on how the scheme was operating but were refused on grounds of commercial confidentiality. They now recommend that public access to these reports should be allowed and the “public benefits” reviewed.

The report describes how all these tax benefits accompanied by subsidy-milking have the effect of driving up land values and making it even more difficult for working farmers to gain access to land. In other words, public money and publicly-funded tax benefits invariably enhance the capital value of the land, further enrich the landowners (whoever or wherever they might be), shore up the inequalities which are inherent in the system and block the door to even incremental change.

When the Scottish Affairs Committee announced its intention to instigate this report, it was condemned by Scottish Land and Estates (successor body to the Scottish Landowners Federation) as “unwarranted, unnecessary and bizarre”. It is even easier to understand now why the last thing they wanted was a review which dug deep into the fundamentals of the system and called into question, in a clear and rational way, the incredible structure of privilege they have built for themselves over the decades.

The good news is that the Scottish Affairs Committee has realised that it has alighted upon “an important, neglected and intensely political” aspect of Scottish society and now intends to produce a “more comprehensive report than we have originally envisaged”. Excellent, but there is no need to wait for what that final report says in order for action to begin.

For example, the way in which the Scottish Government intends to implement the CAP reforms should be reviewed immediately to find if they represent (as they almost certainly will) another “subsidy-milking” racket for the big landowners. Addressing that question in the spirit of the House of Commons Scottish Affairs Committee Interim Report on Land Reform would at least suggest a long-overdue interest in this “important, neglected and intensely political” subject.

Today, Scottish Labour published “Together We Can” – a document outlining its vision for the future of Scotland. This follows the publication of its Devolution Commission (2.1Mb pdf) proposals on Wednesday – see my blog on that in relation to the proposals on the Crown Estate which I still don’t understand.

Anyway, today’s document has some interesting things to say about how Scottish Labour sees the land reform agenda in the years to come and I reproduce the relevant extract here in full from page 44. It includes a statement on the Crown Estate.

“Alongside promoting safe and secure communities, we want people to have more ownership of them. Under the last Labour-led Scottish Government, we began the process of giving our communities their land back.

Community ownership of assets is a powerful vehicle not just to tackle social injustice and inequality, but also to deliver economic growth. It gives power to the people and allows them to transform their communities.

The Isle of Gigha is a fantastic example of how community ownership can transform an area’s future. The people who live there are building new homes, developing renewable energy schemes and reversing population decline. Together, they are breathing new life into their community.

The 2003 Land Reform Act, which gave rural communities the right to buy land in their neighbourhood, has allowed remarkable progress to be made, with almost half a million acres now in community ownership.

Despite that, Scotland’s land ownership patterns are significantly out of line with what is the norm in most of Europe. It is shocking that just 16 owners possess 10% of Scotland’s land, and get tax breaks for the privilege. If we want to have any real hope of changing the current pattern of land ownership in Scotland then we have to be bold and radical.

Scottish Labour will commit to extend rights for the community to buy land across Scotland. If it is in the public interest for communities to own their land, then they should have the right to buy it, even when the landowner is not a willing seller – that is a power worth having.

Just as community-owned renewable energy schemes work in rural areas, the same principle can work in urban communities. We believe in a community’s right to own land and assets, and they also have the right to enjoy them. Scotland’s stunning landscape and fascinating wildlife are some of our country’s best assets, and the success of our two National parks, in the Cairngorms and Loch Lomond and The Trossachs show that they can bring economic benefits as well as environmental ones. We will explore how best to build on this success in those parts of Scotland where national parks could work.

In addition, we are convinced of the strong case that has been made to devolve the administration and revenue of the Crown property and rights and interests in Scotland, which are currently managed as part of the Crown Estate. This would ensure that the Crown Estates expertise and capital would assist local communities to manage and develop the seabed and foreshore.”

Exactly two years ago today, the Scottish Affairs Committee of the House of Commons published its report on the future of the Crown Estate in Scotland. Its conclusions were unequivocal. The responsibilities of the Crown Estate Commissioners in Scotland (CEC) should be ended and, subject to agreement on a scheme of devolution to the local level, the administration and management of the Crown Estate should be devolved. This recommendation was based upon the first comprehensive inquiry into the matter since the CEC was formed in 1956. Earlier this month, the Committee re-iterated its original findings in this follow-up report.

Yesterday, the Scottish Labour Party published its Devolution Commission proposals (2.1Mb pdf) on further devolution of powers from Westminster to Scotland. Here is what is said about the Crown Estate (on pages 239-240).

602. Another area where it has been suggested scope for devolution to local authorities exists is in regard to the Crown Estate. In March 2012, the House of Commons Scottish Affairs Select Committee published a report on the Crown Estate Commissioners’ (CECs) management of the Crown property, rights and interests which make up the Crown Estate in Scotland. The Committee concluded: “at best, the organisation [CEC] has a fundamental misunderstanding of the needs and interests of local communities and indigenous industries on the Scottish coast … At worst, it behaves as an absentee landlord or tax collector which does not re-invest to any significant extent in the sectors and communities from which it derives income”. Accordingly, it was recommended that the administration and revenues of the ancient Crown property, rights and interests in Scotland, which are currently managed as part of the Crown Estate (including the seabed and the foreshore) should be devolved then decentralised as far as possible to local authorities and local communities, with devolution to the Scottish Parliament conditional upon an agreement between the Secretary of State for Scotland and the Scottish Government on how such a schemes should be implemented, on the basis of the principle of subsidiarity. This agenda has also been adopted by the Our Islands Our Future campaign.

603. There is clearly potential for devolution of the Crown Estate Commission’s powers. We agree with the analysis of the Scottish Affairs Select Committee report on the Crown Estate, and hope the government will act on the recommendations in their report of March 2014

604. We see merit in the argument for full devolution of the Crown Estate’s responsibility for the seabed and foreshore to local authorities. On the other hand, we are conscious that this could potentially undermine cross subsidy of investment and technical expertise on renewables. We need to balance these two competing viewpoints. We agree with the Crown Estate that the default assumption is that the seabed and foreshore should be managed by local authorities or local communities and that they have developed leasing arrangements which make this possible. If this can be made to work, allowing the Crown Estate to take an interest in particular developments, we will support this. Thus, we propose to use the Crown Estate’s expertise and capital as necessary, but allowing local councils and local communities to manage the seabed in other respects, in order to achieve real devolution to very local areas while preserving the benefits of the wider Crown Estate resource.

605. We therefore endorse the idea of the Crown Estate developing more effective partnerships at community, local authority, and Scotland levels. This means two things in practice. Firstly, local management agreements between local authorities and the Crown Estate, which are an example of best practice, should be applied as widely as possible, with the Crown Estate establishing appropriate mechanisms to facilitate maximum local authority and community engagement. Secondly, a Memorandum of Understanding between the Scottish Government and Crown Estate should be agreed in respect of their common objectives on the development and management of the seabed and foreshore, and those local authorities with an interest in this area should be fully consulted throughout as to its contents.

In another document published by Scottish Labour – Together We Can (2.8Mb pdf), the party states that,

“…we are convinced of the strong case that has been made to devolve the administration and revenue of the Crown property and rights and interests in Scotland, which are currently managed as part of the Crown Estate. This would ensure that the Crown Estates expertise and capital would assist local communities to manage and develop the seabed and foreshore.”

So – the Scottish Labour Party agrees with the Scottish Affairs Committee’s recommendations (full devolution) and hopes that the Conservative/Liberal Democrat Coalition Government will implement them (despite it having made clear that it won’t).

But – if Labour form the next UK Government, it will not implement the recommendations and, instead, adopt the partial (and as far as I can see) a rather muddled approach outlined above.

What is going on?