SA4. The Scottish Land Problem by John Digney

By John Digney – Re-established in 1999 after almost 300 years, the Scottish Parliament made land reform one of its priorities. This issue should be understood in its context, for interest in the land question has been particularly keen in Scotland for a very long time.

Depopulation and Balmorality

After the defeat of the Jacobites at Culloden in 1746, the Highlands underwent a process of social and economic upheaval. The culture and traditions of the region were suppressed and the clan system, already starting to crumble, collapsed. The clan chiefs, corrupted by Lowland and English influences, were encouraged to see themselves as landlords and the land as a tradeable commodity. Rents were raised exorbitantly during boom periods in the cattle and kelp industries and thousands of people escaped the oppression by emigrating. When the opportunity arose for big profits to be made from sheep-farming in the early 19th century, communities were evicted by brute force and in some cases their homes burned. The clearances began in the far north but spread to most parts of the Highlands and Islands.

Land was sold and re-sold, and a further major change of use occurred in Victorian times when deer-stalking became fashionable among the rich. Vast, treeless “deer forests” were established and extravagant Balmoral look-alikes sprouted in the depopulated glens as the new lairds tried to ape the aristocracy.

This shameful period of history has come to symbolize the ruthless greed of landed power, and has probably left Scotland more receptive to land reform than the rest of the UK.

The Revolt Begins

In 1882, revolt began on the island of Skye, where crofters had picked up ideas from the contemporary “Irish Land War”. Rent was refused, pending the return of land which had been appropriated by their landlord some years earlier. The agitation spread rapidly through the Hebrides and the adjacent mainland. Police were involved at an early stage, and then marines. Gunboats plied the waters of the Hebrides and trouble continued through much of the decade. A Royal Commission was set up, and a Crofters’ Bill was brought in to implement some of its recommendations. In 1886 the Bill received Royal assent, and fair rents, fixity of tenure and in some cases the right of crofters to acquire land by compulsory purchase became law. This checked the disturbances to some extent, but did not halt them. Crofters began to look beyond their immediate grievances, to understand what had brought about their poverty and how to deal with causes as well as symptoms. Henry George, the American land reformer, visited Skye. He contended that, as land is essential for all life, and no human being has ever made it, everybody has an equal moral title to land. It is impossible to divide the land up in vindication of that principle, but it is possible to share the value of land. This could be done by taxing land values, and devoting the proceeds to public purposes. Other taxes could then abate. At a time when public spending was far less than it is today, a single tax on land values (which some of George’s followers advocated) would probably have sufficed to meet all revenue requirements.

Urban Land Reform

George also visited Glasgow, where many people lived who had been driven, or whose recent forebears had been driven, from the Highlands and Islands. These people came to realise that their own poverty was ultimately due to the land problem. Land reform was not just something which affected remote places, but was very much an urban matter as well

Soon the idea of land value taxation was taken up in a special context. Rates, which were based on the total value of a property, had long been the principal source of local government finance. It was now proposed that these rates should be assessed on the values of the site alone, discounting the value of any improvements. This would encourage landowners to make best use of their property, for they would no longer be penalised through increased rates and discouraged from making changes such as demolishing slums and replacing them with decent houses. The proposal for site value rating (SVR) was merely land value taxation (LVT) applied to the needs of local government. This idea caught on rapidly in England and Wales as well as Scotland, and by 1906 no fewer than 518 local authorities had petitioned for the right to apply SVR.

Land Valuation

In the 1906 General Election the Liberals were returned’ with a huge majority. The overwhelming majority of Scottish MPs were Liberals, and committed supporters of LVT. But land could not be taxed until it had been valued, and the first step was therefore valuation. As the idea of LVT was particularly popular in Scotland, and Scottish land  law was markedly different from English; it was surely a good idea to start with a pilot scheme in Scotland. In 1907 a Bill for the valuation of Scottish land was passed by the Commons, but rejected by the Lords. A similar Bill was wrecked by the Lords in the following year.

At that time, the assumption was that while the House of Lords could go on rejecting or wrecking valuation Bills from the Commons indefinitely, it would accept a Bill for taxation, even though it did not like the proposals. In 1909, Chancellor of the Exchequer Lloyd George submitted his famous “People’s Budget”. Various taxation changes were proposed, but what attracted most attention was his land recommendations. A few very small taxes were proposed which applied to land and were included in the Finance Bill but these were really no more than excuses to enable a general valuation of land to take place. Lloyd George’s intention had been to slip the valuation through in a way which the Lords would accept; instead, a great confrontation between Lords and Commons ensued. A new General Election confirmed the Liberal Government in office; the Lords reluctantly permitted the Finance Bill to pass, and the valuation commenced. Unfortunately the valuers were required to ask a lot of questions which were irrelevant to the main requirement, which meant that a job which should have been quick and simple took a very long time and was not complete when war broke out in 1914. The Government then decided to halt the valuation in the interest of wartime national unity. At the next General Election, in 1918, most of the MPs returned were opponents of LVT and the valuation was soon abandoned altogether. For many years to come, Scotland was in no position to secure the application of land policies which were of particular interest to her own people. Nevertheless, the Budget of 1931 made a serious attempt to introduce land valuation throughout Britain as a preliminary to LVT, but the Labour government which promoted the measure fell before the legislation could take effect. The valuation was promptly suspended, and the legislation formally repealed three years later. Post-war attempts to capture land values through one-off charges on development inevitably failed, and undoubtedly dampened public enthusiasm for further land reform.

The issue, however, continued to simmer in Scotland. Increasing awareness of environmental matters in the late 20th century focused attention on rural land-use. The Scottish press was full of reports about the plight of remote, marginal communities at the mercy of absentee landlords who were either subsidy junkies or simply, as one commentator put it, “rich ninnies” seeking the romance of owning a Highland estate with no consideration for the resident population.

The Scottish Parliament

When Labour came to power in 1997 the Scottish Office established a Land Reform Policy Group which produced a series of consultation documents to prepare for legislation by the promised new Parliament. Ominously, the opening paragraph of the first document stated that “Land reform issues relate primarily to rural land”, suggesting that the high-value land on which most Scots lived and worked would be largely ignored.

One of the first actions by the new Parliament was to abolish feudalism in Scotland. Although archaic and open to unscrupulous exploitation, this tiered system of tenure had at least embodied the concept of public interest in the land resource. Despite warnings from many leading academics, Parliament allowed this crucial element to be ditched along with all the feudal baggage, and pressed ahead with legislation that conferred outright ownership on existing titleholders.

The Land Reform (Scotland) Act of 2003 was a separate piece of legislation. It enshrined the right of public access to most land and gave greater powers of acquisition to crofters, but its flagship policy was the Community Right-to-Buy. Although this gave them a head-start, communities still had to raise the funds to purchase their land. The “lottery­financed” Scottish Land Fund often provided most of the money, but despite some high profile success stories, the policy could never hope to achieve a radical change in the monopolistic pattern of ownership in Scotland. Furthermore, it served to perpetuate the flow of money from the public purse into the pockets of landowners, rather than reversing it.

Local Government Finance

Although the Land Reform Policy Group had examined the case for LVT, it had not included it in its recommendations. The issue was kept alive in Parliament, however, by the Green Party MSPs. Public discontent with the Council Tax prompted the Scottish Executive to set up a committee under Sir Peter Burt to assess the options for local government fmance, over which the Scottish Parliament has devolved powers. LVT was duly considered but rejected in the subsequent report published in 2006. Despite acknowledging some of its positive aspects, the committee seemed particularly anxious about the electorate’s unfamiliarity with LVT and the upheaval they predicted it would cause. There was also some muddled thinking about who, tenant or landlord, would or should pay the tax in the case of rented property.

Burt also rejected the idea of a local income-based tax favoured by the SNP and Liberals. Instead he proposed a Local Property Tax based on house values. In principle this was a simplified version of the Council Tax but was dismissed by the Scottish Executive almost before the ink was dry on the report. With the SNP forming a minority government after the 2007 election, it can be assumed that they will press ahead with. their proposals for a local income tax with the support of the Liberals. If so, we shall probably have to wait for that to fail and be consigned to the dustbin before the idea of LVT is seriously revisited in Scotland. By then we must hope that Scottish politicians come to recognise the link between land reform and tax reform, and use their devolved powers to show the way for other Governments to follow.

Further reading

The Lie of the Landby Duncan Pickard pub Land Research Trust 2004The Highland Clearances by John Prebble (Secker & Warburg 1963 – how the “great sheep devoured men” in the 18th and 19th centuries)

Land, People and Politics by Roy Douglas (a history of the land question in the United Kingdom, 1878 to 1952. Included a study of the “Highland Land War” of the 1880s and the impact on Scottish and general UK politics)

The Land Question by Henry George (many editions, a classic work, originally published 1881)

The Making of the Crofting Community by James Hunter (John Donald Edinburgh, new edition 2000)