ENVIR0NMENTALISM

RESPECT
HOLYROOD HAS
THE POWER TO
IMPLEMENT
RADICAL LAND
REFORM
INDEPENDENCE
THE CASE FOR CHANGE - NOW
S0CIALISM
ENVIR0NMENTALISM
RISE.SCOT

Executive Summary
Land Reform Need Not Wait
Land reform has long been on the agenda in Scotland. The SNP made a firm commitment
to pursue a programme of land reform to ensure that ‘Scotland’s land be an asset that
benefits the many, not the few’. 1
This report finds:
Of the 62 proposals put forward in the detailed report 2 of the Land Reform Review
Group in May 2014, 58 could have been implemented with the powers Holyrood
currently holds.
Despite this, the draft legislation now being scrutinised by the Scottish parliament is
not a reflection of these recommendations, nor of the SNP’s claim that this constitutes
‘radical’ 3 land reform.
The Scottish government’s justification for dropping the proposal to limit ownership to
entities registered in an EU state - an attempt to address tax-haven registration - does
not stand up to scrutiny, and the measure should be inserted into the draft bill as a
matter of urgency.
Land Value Taxation was frequently mentioned as a priority in the public consultation,
but does not appear in the draft bill. This is unacceptable given the importance of such a
measure to any coherent and effective land reform agenda.
RISE: Scotland’s Left
Alliance
Who We Are
We are a pro-independence left-wing alliance launched in 2015. The alliance aims to
provide a socialist alternative to neoliberalism in Scotland.
Contact Us
You can visit our website - rise.scot - for full information. Press contacts are Jonathon
Shafi, who can be reached on 07983 537187, and Ken Ferguson, 07925 613145.
1. http://www.bbc.co.uk/news/uk-scotland-scotland-politics-30193791
2. http://www.scotland.gov.uk/Resource/0045/00451597.pdf
3. http://www.snp.org/media-centre/news/2014/nov/nicola-sturgeon-address-snp-conference

The Evidence Examined
Tax Havens
A key proposal missing from the draft of the Land Reform (Scotland) Act 2015 is a
measure to prevent the ownership of Scottish land by companies registered in offshore
tax havens.
The link between corruption, offshore corporate property and land ownership
is clearly established in a recent Transparency International report 4 . Land owned
in offshore jurisdictions such as the British Virgin Islands, Jersey and Guernsey is
particularly common in London, and 75% of properties under investigation for corruption
are using offshore ownership to hide their identities. The problem is not confined to
southeast England, however. A Private Eye investigation 5 recently found that as much as
750,000 acres in Scotland, particularly Highland estates, are owned in offshore tax
havens. This makes it potentially impossible to find the real owners as there can be a
series of shell companies and trusts. Particularly if they are registered in these offshore
‘secrecy’ jurisdictions, the legal means to reveal ownership are not available.
Consequently, the LRRG made a strong recommendation to tackle the problem:
The Review Group recommends that the Scottish Government should make
it incompetent for any legal entity not registered in a member state of the
European Union to register title to land in the Land Register of Scotland, to
improve traceability and accountability in the public interest. 6
This provision duly appeared in the public consultation, which was open from 2
December 2014 to 10 February 2015. Of the 1,269 responses, the vast majority were
from individuals. The remainder came from estates, NGOs, public bodies and commercial
groups. A very clear pattern emerges from the consultation responses - a large majority
of individual respondents strongly supported almost every measure proposed, while
the group of estates, landowner organisations and associated lawyers and estate agents
opposed many of the measures 7 .
This pattern can be seen in the tax haven proposal, with which 82% individual
respondents and 69% organisation respondents agreed. Among private landowner
organisations and private sector/professional respondents, however, only 34 and 35%
respectively agreed with the proposal. That the proposal was then dropped raises
questions about the consideration given to the consultation responses by the Scottish
Government.
The Scottish Government’s justification for dropping the measure, however, is that
it would not be effective. It states that the measure ‘would not have significantly
increased the accountability and traceability of land owners in Scotland’ 8 .
4. http://www.transparency.org.uk/publications/15-publications/1230-corruption-on-your-doorstep/1230-corruptionon-your-doorstep
5. http://www.andywightman.com/docs/privateeye_1395_26Jun2015.jpg
6. http://www.gov.scot/Publications/2014/05/2852/298195
7. http://www.gov.scot/Resource/0047/00477022.pdf
8. http://www.scottish.parliament.uk/S4_Bills/Land%20Reform%20(Scotland)%20Bill/b76s4-introd-pm.pdf

As much as 750,000
acres in Scotland,
particularly Highland
estates, are owned in
offshore tax havens
PRIVATE EYE INVESTIGATION

The argument was that EU states do not necessarily provide any guarantee of
transparency. This approach ignores the recent EU directive on money laundering,
which mandates that ‘central registers be kept of the ultimate beneficial owners of
….legal entities’. 9 Though this will not be a magic bullet in corporate accountability and
transparency, it surely should not be ignored in consideration of legislation.
The Scottish Government also argued that this measure would not prevent complex
company structures and land being held in trust, both of which obstruct transparency
and accountability. This is true - for instance, the largest landowner in Scotland, the
Duke of Buccleuch, owns his properties through a complicated web of shell companies
and trusts. 10 But this is not sufficient for dropping the measure entirely. There are
many legal entities currently owning land in Scotland which are registered in offshore
jurisdictions such as the British Virgin Islands and Guernsey. The LRRG’s proposal would
have addressed this situation and should therefore be re-instated in the draft of the Land
Reform (Scotland) Act 2015.
The problem of secrecy, tax avoidance and corruption in the property market is so bad
that Transparency International warned, ‘Britain is in danger of becoming a country for
corrupt capital.’ 11 The UK government’s proposals to crack down on corruption in
offshore ownership 12 , though not particularly robust, now represent a more radical
and pro-active stance than our own government are willing to pursue.
Land Value Taxation
One recommendation carried forward (in part) was the re-establishment of business
rates for sporting estates. The revenue raised is to be put into the Scottish Land Fund,
which grants money to communities seeking to buy their land. The Fund will now receive
£10m per year until 2020, which is a substantial increase, and is to be welcomed. The
larger issue remains, however, that this substantial figure becomes far less so when the
vastly inflated price of land is taken into consideration. If one small island costs almost
£2,000,000 13 and farmland has soared to £10,000 per acre - a fact actually celebrated
by landowning bodies 14 - then the ability of a government land fund to help more than
a handful of communities succeed in buyout bids must be questioned. As ever, it is
the cost of land which must be addressed by government action; other measures,
while welcome, are sticking-plaster solutions.
As such, the strong recommendation of the LRRG that Land Value Taxation be seriously
considered in a detailed study was a vital one. This recommendation did not even
make it into the consultation, let alone the bill. The Scottish government responded,
‘No work initiated. Potential for this to be within scope of our manifesto commitment
to “consult with others to produce a fairer system based on ability to pay to replace the
Council Tax”’. 15 This is a deflection, and given that the Commission on Local Tax Reform
9. http://www.europarl.org.uk/en/media/news/uknews2015/jan15/antimoneylaundering.html
10. http://www.andywightman.com/archives/942
11. http://www.theguardian.com/uk-news/2015/mar/04/uk-properties-held-by-offshore-firms-used-in-globalcorruption-say-police
12. http://www.ft.com/cms/s/0/4d83097a-34ef-11e5-bdbb-35e55cbae175.html#axzz3odKGYgsT
13. http://www.ckdgalbraith.co.uk/property/inv120050-tanera-mor-summer-isles-achiltibuie-ullapool-wester-rossiv26-2yn
14. http://www.scottishlandandestates.co.uk/index.php?option=com_content&view=article&id=2227:scottishfarmland-performing-well&catid=71:national&Itemid=107
15. https://consult.scotland.gov.uk/land-reform-and-tenancy-unit/land-reform-scotland/supporting_documents/
The%20Land%20Reform%20Review%20Group%20Summary.pdf

The UK government’s
proposals to crack down
on corruption in offshore
ownership, though not
particularly robust,
now represent a more
radical and pro-active
stance than our own
government are willing
to pursue.

has been running for a decade now, it suggests that those interested in land value
taxation should not hold their breath. Given that the need for a supporting system of
taxation to accompany land reform measures was rated as one of the top three priorities
by respondents to the government’s consultation on land reform, its absence suggests a
failure to reflect the views of these respondents. 16
These legislative proposals are currently being examined by the Rural Affairs, Climate
Change and Environment Committee. Subsequently there will be a chance for scrutiny by
the parliament and for amendments. RISE believe that the draft bill, as it currently
stands, is weak and will not tackle the fundamental inequalities caused by our
system and pattern of landownership in Scotland.
What would RISE do?
RISE is currently bringing together our collectively agreed policy platform. The following
are ideas which outline a radical approach to Land Reform.
• Landholding size: Cap the amount of land any one entity or individual can hold
• Tax havens: Make the purchase of land by entities registered outwith the EU illegal, in
order to crack down on offshore tax haven ownership. Applied retrospectively.
• Information: Only 21% land in Scotland is on the register, and it’s not freely
accessible. Establish an accessible, online, map-based register and ensure it is
completed within 10 years.
• Compulsory purchase: communities should have the right to request compulsory
purchase orders
• Taxation: Establish a system of land value taxation. Tax second homes and holiday
homes heavily to help address the rural housing crisis.
• Tenant Farmers: would be granted automatic right-to-buy
• Succession law: Modernise the law to remove the distinction between moveable and
immoveable property that has permitted the continuation of such vast tracts of land
• Planning: reform the planning system to encourage small-scale, affordable
developments including self-build and hutting
16. http://www.gov.scot/Resource/0047/00477022.pd

© RISE: SCOTLAND’S LEFT ALLIANCE
2015