SummaryIn this submission I seek to argue that land in Scotland is grossly inequitably distributed, which is a public policy problem in its own right; and that, partly as a consequence of the inequitable distribution of land, our uplands have been catastrophically mismanaged, leading to a nexus of other public policy concerns. I seek to show that a progressive land tax would significantly address the first of these problems and should contribute to remedy of the remainder. However, some change in planning law is also required.
Introduction: on the basis for private land ownershipThe lands which now comprise Scotland did not come into existence private. No god gave out property deeds graven on tablets of stone. Rather, over the past four thousand years, successive peoples have come into Scotland and taken land more or less by force from its previous occupiers. There can be no square inch of Scotland now, which has been passed down peacefully within the family from generation to generation from its original settlers. On the contrary, all land in Scotland has changed hands by murder, theft, extortion or deceit, most of it many times. There is no land-holding in Scotland now which is not based at some remove on malfeasance.
The most iniquitous malfeasance has been in the enclosure of commons. Until the eighteenth century, most of Scotland's land was not enclosed; rather, local people had rights of common across it. The legal theory under which land 'owners' were able to arbitrarily extinguish those rights was, to say the least of it, novel. In this part of Scotland at least, the enclosure was fiercely resisted by 'levellers', which is to say, the dispossessed majority. Enclosure progressed across Scotland slowly, and by the time the far north west was enclosed, the public mood had begun to swing against the 'right' of enclosure. So instead of 'the Highland Enclosures' we now speak of 'the Highland Clearances', but in fact the process, whether called 'clearance' or called 'enclosure', has been the same. The people of Galloway were just as deprived of ancient rights and livelihood, just as driven off the land, as the people of Caithness. It's just, for us, the process happened earlier.
Having said this, land in Scotland is (by and large) now held privately and that is established political fact. While one may argue about the outcomes for which farming is optimised, by and large lowland Scotland is farmed productively. A revolution which made our farming significantly less productive would not be a good thing.
However, ownership of land is both a good and a monopoly. That it is a good is demonstrable in that people both desire it and defend it; that it is a monopoly is simply demonstrated in that if one person owns a piece of land, another cannot also own it. Goods, and especially monopolies, are not normally subsidised. Goods, and especially monopolies, are normally taxed. There is no obvious reason why land should be different.
Finally, land is a critical national asset. It is in the interests of the community of Scotland that the community has effective oversight of the management of that asset.
Birthright: land area per headScotland has a land area of 78,000 square kilometres and a population of five million, which equates to 67 people per square kilometre or one and a half hectares per person. In natural justice it seems hard to assert that one person has more right to the enjoyment of the land than any other. Yet Richard Walter John Montagu Douglas Scott monopolises 111,369 hectares, arrogates the birthright of 74,000 Scots. The landed lobby complain that redistribution of land would be 'theft' which, they claim, would violate their 'right to property'. But, as I shall argue below, redistribution can be achieved not by compulsory purchase but by the simple processes of ordinary taxation. Land which the owners voluntarily vacate because the burden of taxation is too onerous is not stolen, it is given up.
Andy Wightman from figures supplied by the Office of National Statistics shows, 1% of the population own more property by value than the other 99% put together. A community built on such gross inequity cannot stand.
House prices and the local economyMuch has been made of the depopulation and social disruption that has afflicted the 'crofting areas' - the Highlands and Islands. I do not wish to minimise that in the least. But depopulation and social disruption has affected areas of Galloway on an equally devastating scale. My home village of Auchencairn had, in the 1880 census, around 2400 inhabitants; it now has 180. That raw figure sounds devastating, and it is; but the truth is worse. Of the eighty or so stone built houses which make up the core of the village, only three are now occupied by people born in the village, and they are all in their seventies and eighties. The price of even a modest house is now of the order of two hundred thousand pounds, and local wages are depressed: the average working wage in the region is £20,800. So it simply isn't possible for people earning their living in the local economy to buy a house.
The reason for this is that people retiring from the cities, with the proceeds of selling an urban house, can outbid local people, and have done so. Most of these people are resident - only about 10% of houses stand empty - and many of them make a positive contribution to the community. But nevertheless their interests are different from the interests of people who need to earn a living in the local economy, and that does skew communal decision making away from economic development.
Furthermore, with the local private housing monopolised by incomers, what 'native' - second or third generation, or more - villagers remain are corralled into a bantustan of 'social housing' on the other side of the burn, leading to a community divided between white settlers in the increasingly gentrified village and natives in the social housing. This is not a good thing.
And finally, it's even worse than that. The people of my generation born in the village who remain in the village are the children of farmers who inherited the family farm, and those families who have subsisted largely on social benefits, and who therefore qualify for social housing. There's virtually no-one in between. Everyone else went away to university and never came back. There are no jobs for them, and there is no housing they can afford.
I'm painting a bleak picture. Driving through, you'd see a pretty village, and a vibrant village, with its own newly built, community owned post office, with its recently renovated village hall, with new community allotments, with its generally well kept and pretty houses. It's true that, by comparison with many other villages in Galloway, Auchencairn is doing well. Nevertheless, my picture is also a true one, and it is a picture of depopulation and social disruption every bit as bad as that experienced in the West Highlands. It's just less visible.
Auchencairn, of course, is by no means unique. In villages throughout remote rural Scotland this pattern is repeated. A second clearance is being perpetrated; local people with real knowledge of and investment in the locality and its landscape are being progressively driven out, to be replaced by a population of incomers who, because of their age when they arrive, are active and effective members of the community for only a few years before being replaced in their turn with new strangers. These are not social conditions in which community can be sustained.
Subsidy of the rich by the poorIt is an accepted fact that the primary cause of the French revolution was the subsidy of the very rich by the poor and middle classes. Yet we are repeating this mistake, generally throughout modern British society but especially in remote rural areas. For example, the subsidy granted to the owner of the Auch and Inchmurran estate, currently for sale, is stated by the selling agents to amount to £12,000 every single week - two thirds of a million pounds every year. That equates to the income of thirty ordinary rural folk working full time and paying their due income tax; or, alternatively, to the entire income tax take from one hundred and fifty of those ordinary hard working rural folk. There is no way this can be considered either equitable or tolerable.
Furthermore, in addition to subsidies received directly from the state, the landowning rich benefit from many other subsidies paid indirectly by the poor. They receive payments for electricity transmission across the land and from wind turbines erected on the land, which come ultimately from the energy bills of ordinary folk. And this is particularly galling, because the ownership of the hilltops on which many turbines are erected is particularly hard, historically and legally, to justify. This is, largely, stolen common land, stolen from those very ordinary folk whose energy bills are now inflated.
Holding SizeQuite apart from the issue of large estates, the average agricultural holding in Scotland is very large, much larger than comparable countries in Europe. The average holding in Scotland is 101 hectares, as compared to 62.9 in Denmark, 43.1 in Sweden, 25.9 in the Netherlands or 21.6 in Norway.
|Territory||Average holding size (Ha)||Source||Notes|
|USA||181||US Department of Agriculture||Quoted as 449 acres|
|Czech Republic||152.4||European Commission|
|Scotland||101||Scottish Government||2010 data|
|UK||70.8||European Commission||2007 data|
I believe that there is a public interest in more people having an active engagement with the land. I believe there are many people who would like to own and manage their own land if they could afford to do so, and that many of them could do so very productively.
Conservation and biodiversity
Forest cover and species povertyNo part of Scotland is naturally treeless. The natural treeline is above the summits of all but the very highest hills - boreal forest in Norway extends to above 1200 metres in altitude. There are no natural moorlands in Scotland, and extremely few natural bare hilltops. There is nothing 'natural' about a grouse moor: it is just as much a man-made environment as an open-cast mine - and almost as depleted of wildlife. To quote Shaw and Thomson
"wooded habitats in the Cairngorms are about 13 times richer than heather moorland and 11 times richer than grassland, in terms of nationally important species. These disparities are even more pronounced when the extent of each habitat is considered. Despite being the main habitat for some 39% of important species, woodlands cover only about 17% of the land area of the Cairngorms. In contrast, moorland appears to support only 3% of the Cairngorms’ important species, but covers some 42% of its area."The stripping of forest is partly due to unsustainable logging in earlier centuries, but is mainly due to the hunting to extinction of all our natural climax predators, leading to uncontrolled expansion of herbivore populations particularly deer - and, of course, greatly aggravated by the grazing of sheep. Deer and sheep, uncontrolled, will graze out all shoots and saplings, preventing the natural regeneration of forest and leading to total deforestation in only two or three centuries.
Without the durable and deep root systems of forests, fertile topsoil is easily scoured off steep hillsides, leading to impoverished soils and open screes which will not sustain even sheep. Our overgrazed, barren uplands are a man-made wet desert, a testament to generations of catastrophic land management.
Environment, global warming and sustainabilityThere's another problem with overgrazing our uplands. All that good, fertile topsoil that's scoured off the slopes and hilltops has to go somewhere, and it does. The rich organic matter which supported life on the high slopes is lost to the sea, and the mineral part - the gravels and sands and silts - are laid down in beds of our streams and rivers and estuaries, gradually strangling them.
FloodingAnd in winter, now there is no longer forest and moss on the high lands to hold and buffer the rain, to release it slowly through the turning of the seasons, all that good revivifying rain has to go somewhere, and it does, too: rushing uncontrolled down those fragile hillsides into our choked rivers, and then, with an impatient shrug, rolling on over our flood defences into our homes and workplaces. Floods are not natural disasters. They're man made disasters. They're made by deforesting hillsides just as surely as they're made by building on floodplains.
LandslipsBut there's another man-made disaster that's made by overgrazing hillsides. As the earth is scoured off the hillside, everything that is built on that earth is scoured off with it. The road builders of the Rest and be Thankful can never rest, whether thankfully or not, while the sheep are killing the plants whose roots once bound the hillside.
Biomass/carbon capture and storageAnd there's a third issue, which is carbon. Millions of pounds are being invested in developing technologies for carbon capture and storage, but they don't work yet. Meantime, the Earth has its own mechanisms for carbon capture and storage. Principal among them are the ones called 'trees' and 'bogs'. The deforestation of Scotland's hills has released two trillion metric tons of carbon, and that's before we count the bogs that we've lost (30,000 tons per Km^2 x 78,000 Km^2 x 83% (because 27% is still forest) = 1942200000 tons). Or to count it another way, the forest we've lost - just the forest - is equal to 23 years of our current total carbon footprint.
Reforesting our hillsides and uplands would recapture much of that - far more than pumping the output from Longannet under the North Sea ever could - and at the same time those forests could be managed sustainably for fuelwood, providing carbon neutral heating for very large numbers of homes, or burned in biomass power stations to generate electricity (and, hopefully, integrated local area heating).
RemedyI believe that a great deal of the remedy both to the problem of the inequitable distribution of property and to the ecological catastrophe of our uplands can be achieved through simple measures: the removal of subsidies, and the imposition of tax. Obviously, nothing in life is this simple. There will inevitably be need to be policy tweaks. But in this section I intend to argue that land tax is the place to start.
Flat land tax vs land value taxThe first thing to say is that while the idea of a land tax is undoubtedly good, the right land tax is better. At present, in Scotland, it is proponents of land reform who are promoting land value tax. And they shouldn't be; it is at best a distraction, at worst actively counter-productive. Land should be taxed. Ownership of land is a good, and it's a monopoly, since only one owner can own any piece of land. Land owners, just by owning land, exclude others from the full enjoyment of that land. Of course it should be taxed. But land value tax goes about it in precisely - diametrically - the wrong way.
Land value tax does not address the issues of the inequitable distribution of land, nor of the exploitation of marginal land. The land value tax on ten thousand hectares of remote highland estate is precisely nil. There is no incentive provided by the land value tax for the estate owner to divest themselves, to break up their estate into smaller holdings. Land value tax essentially subisidises grouse moors and deer 'forests'.
Land value tax on a thousand hectares of lowland arable is the same whether that land is held as one holding or as ten; but as one holding, there will be economies of scale, so again the land value tax militates against the breaking up of larger holdings into smaller ones.
Land value tax discourages the use of the land on which the public has invested infrastructure. If oil refineries are to be built, it's in the public interest that they should be built near deep water ports and railways. If factories and warehouses are to be built it's in the public interest that they should be built near transport infrastructure. If the land which is appropriately serviced for industrial development is so taxed that there's no incentive for industrialists to use it, they'll build their factories elsewhere; which means the public expenditure on infrastructure will be wasted, and the overall efficiency of the economy will be reduced, benefiting no-one.
But it's worse than that. Under land value tax, valley lands, closer to public roads, will be taxed more, and hill lands taxed less, giving an incentive to farmers to move from lands which are suitable and convenient for grazing, but are taxed, to lands which are less suitable and less convenient but are not. In other words, land value tax will inevitably contribute to the further over-exploitation of marginal lands.
Finally, Land Value Tax does not tax land. Nor does it tax the value of land. It taxes a notional, uncertain element of the value of only some land - it imposes no tax on marginal lands distant from public infrastructure. And because that element of the value which is to be taxed is notional, it requires sophisticated assessment and is open to contest by people who by definition have access to the best, most devious accountants and lawyers in the land. In short, it would be an extraordinarily expensive and inefficient tax to collect, and would be the cause of interminable court-room battles fought at cost to the public purse.
So is there a better solution? Of course there is. A flat land tax - the same tax levied on every hectare of Scotland - would make it uneconomic to own marginal land.
Progressive land taxHowever, the flat land tax does not address the issue of large holdings. Fortunately, income tax already provides us with a model for how to deal with this. If you have a small amount of income, you currently pay a small proportion of tax on it. If you have larger income, you pay proportionately more. The same principle should apply to land tax: a larger holding should be taxed more per hectare than a smaller one. I've suggested, as a mechanism for this, an exponential land tax, because I think having a continuous scale (rather than the stepped one we currently have with income tax) produces fewer quirks and anomalies. But in any case, if larger holdings are proportionally more heavily taxed than smaller ones, there's a positive fiscal incentive to break up larger holdings into smaller units, and that's precisely what land reform ought to be setting out to achieve.
Explicitly, the progressive scaling of land tax should be aimed at making the ownership of large holdings, especially of marginal land, unaffordable.
All holdings with common beneficial ownership taxed as oneWhat large landowners, faced with this scheme, will do, of course, is to set up hundreds of separate limited companies each holding a small amount of land, and the scheme will not work unless this evasion is explicitly designed around. Therefore, two or more holdings which are found to have substantially the same beneficial owner will be counted for the purposes of the exponential land tax as the same holding. This must be so whether or not the holdings are contiguous; every beneficial owner must be taxed on the entirety of their holding. Where a land-owner, through anonymous overseas trusts or however, manages to evade tax for a number of years, the tax authorities must be empowered to levy back tax when the evasion is discovered. As the back tax on large holdings would bankrupt any entity on Earth, no-one is going to take the risk of doing this, so avoidance should not be very much of a problem.
Title defaults to commonObviously, the question arises what happens if the land tax is not paid. My answer is this: after a reasonable grace period - say a year - title in the land on which tax is unpaid should lapse, and the land should revert to common. Title in buildings and other permanent structures on land which reverts to common should also revert to common.
It should be open to the landowner to negotiate with the tax authority, to say 'I will pay tax on only this part of my lands, and allow the remainder to revert'. But of course one consequence of that in these days of wind turbines and similar infrastructure is that landowners will seek to pay tax on only ten square metres around the base of each turbine, so it ought to be open to the tax authority to refuse such an offer.
Benefits from land should be localSo who - what public body - should benefit from the proceeds of the land value tax, and who should manage the common lands?
Size of local government areasTo answer that I'd like to make reference to the size of Scottish 'local' government areas. They are by far the largest in the Western world. They're (by population) on average thirty-six times the size of average Icelandic local government units; twelve times the size of Norwegian ones; four times the size of Swedish or Dutch; three times the size of Danish. Or, startlingly, eighty four times the size of French communes. This isn't local government at all. Fully one sixth of the independent countries in the world have smaller populations than Dumfries and Galloway.
So I would propose that land tax should be levied - by a central authority, perhaps - on behalf of community councils. Where tax is unpaid and land reverts to common, the common lands should be managed by the local community council, or, if the local community council is unable or unwilling, by a Common Lands Factor on behalf of the community council. This would, of course, imply a significant switch in discretionary public money from the existing local authorities to community councils, and inevitably some or all of the duties and responsibilities of the local authorities should switch too. That is a reform which is separate from land reform, of course, and one which should be considered separately- but it is one which I believe would benefit much of Scotland.
Of course it is by no means inevitable that local community councils would choose to reforest their upland commons; they might even choose to manage them as common grazing or for deer stalking, which would not improve the ecological situation in the least (although it is now in most places so bad that it could not, at least, be made much worse). To a degree this is a matter of local democracy: local people ought to be empowered to make their own decisions, even if to outsiders these look wrong. However, central government might seek to advise and encourage community councils to reforest.
Planning policyRedistribution of land into smaller holdings is of no benefit if people cannot live on the land. The issue of house pricing is a very thorny one, since people with money are mobile. To ban urban people from retiring to the countryside would make a mockery of a free society, but as long as they do, with a fixed housing stock, it's inevitable that they will continue to raise the price of rural housing to a level which the rural economy cannot sustain.
Planning policy must be revised to address this problem. The Rural Housing Burden goes a considerable way towards this. However, the size of an agricultural holding on which a dwelling for the family of the owner of the property can be built also needs to be substantially reduced, although it is reasonable to impose the condition (as is frequently done now) that the dwelling should not be sold separately from the holding.