Powers old and new: or, land reform hits the headlines

This is a blog in two parts, on the powers of the Scottish Parliament as at: 1) 27 November 2014; and 2) some future date when (or if) the Smith Commission’s proposals are enacted.

Powers Old

The Scottish Government’s Programme for Government pitched land reform into the spotlight. A number of Scottish papers put it on the front page today, while the BBC gave the “controversial” proposals a fair amount of coverage yesterday.

At a professional level, I am delighted to see the discussion being played out on mainstream media. The Land Reform Review Group rekindled the land law reform debate. Now legislative measures will be discussed and (considering the current make-up of the Scottish Parliament) in all probability enacted before the Holyrood election in 2016. As an aside, it seems the No vote in the #indyref has (arguably) provided time for such matters to be considered: a Yes vote would have involved the slight complication of setting up a new nation state, as opposed to tinkering with what is already in place. (More on tinkering below.)

So what is proposed? As I was an adviser to the LRRG, I am going to restrict my commentary to three things that other people seem to be commenting on, in the hope that I might shed a little bit of light on the issues of: 1) succession (aka inheritance); 2) reform of rates relief, with specific reference to sporting estates; and 3) a power to intervene in the land market in certain circumstances.

Succession

This matter was addressed at a recent event at the University of Aberdeen, digested in a previous blog. The implications of the proposals in the Programme have been analysed by Andrew Tickell and Andy Wightman. More notably (sorry, chaps) is the welcome the proposal has received from the Scottish Law Commission, which is now closer to seeing the recommendations of its 2009 Report implemented.

It is a bit premature to comment on what might be enacted or what work-arounds might be attempted to seek to avoid any new rule, but I will make two important observations.

First, the people who are most likely to get caught out by the new rules (i.e. not benefit from any new work-arounds) are the people who do not know about or cater for the changes and therefore do not engage in lifetime planning to accommodate any new rules. So there might be a chance that smaller landowners would be caught up in the proposal (generalisation alert: such small landowners may be thought to have less finances or wherewithal to seek legal advice). Second, there may be situations where a surviving spouse or civil partner had been expecting to inherit a house from a deceased partner only to suddenly have to deal with an indefeasible claim from the offspring of his or her spouse/civil partner (which offspring may or may not be her or his offspring). Are you still with me? Perhaps not. But suffice it to say these matters will need to be considered and explained better than I have here, lest unfortunate arguments happen in families at a time when bereavement is still fresh.

Rates

The Programme highlights to potential withdrawal of ‘the business rate exemptions for shooting and deerstalking.’ This is a fiscal step towards land reform, rather than substantive change in the law. I am not a tax lawyer, so no further analysis of finer points of revenue policy will be made here. In terms of the impact it will have, well, rather unsurprisingly it would make shooting and deerstalking more expensive by (re)introducing a liability to Her Majesty’s Revenue and Customs. Over to others to discuss whether that is a good thing or not.

Intervention

This is where it gets interesting, especially for students of Article 1, Protocol 1 of the ECHR (which guarantees the peaceful enjoyment of possessions, including land). The Programme suggests:

New powers for Scottish Ministers to intervene where the scale of land ownership and land management decisions are a barrier to local sustainable development.

Again, no further analysis is offered here, other than to note Lord Sewel’s Land Reform Policy Group argued for two slightly similar powers which have never reached the statute books. In its ‘Recommendations for Action’ (1999), the LRPG (not to be confused with the more recent LRRG) suggested there should be a “Time to assess the public interest” when large estates were to be sold. This which would have given the Scottish Government a power to intervene to delay such a sale (i.e. to stop a quick sale before a community was able to swing into action).

Naturally, intervention to extend a “closing date” falls well short of an intervention to force a sale, but the 1999 LRPG’s proposal for a ‘new compulsory purchase power exercisable where it appeared to them to be in the public interest‘ is a bit more similar. That power was to ‘for example, deter evasion of the community right to buy‘. The new proposal in the Programme is similar, but different. Either way, perhaps that 1999 (Labour) proposal serves to highlight the 2014 (SNP) proposal is not actually that radical at all.

What else?

Andy Wightman considers more points on his blog. Scottish Land and Estates provides a completely different perspective on its website.

Powers New

The_Smith_Commission reported today. Its report contains an awful lot worthy of comment. I am only going to comment on one proposal, beginning at paragraph 32.

Crown Estate

32. Responsibility for the management of the Crown Estate’s economic assets in Scotland, and the revenue generated from these assets, will be transferred to the Scottish Parliament. This will include the Crown Estate’s seabed, urban assets,rural estates, mineral and fishing rights, and the Scottish foreshore for which it is responsible.

33. Following this transfer, responsibility for the management of those assets will be further devolved to local authority areas such as Orkney, Shetland, Na h-Eilean Siar or other areas who seek such responsibilities. It is recommended that the definition of economic assets in coastal waters recognises the foreshore and economic activity such as aquaculture.

One of the Land Reform Review Group’s proposals is relevant here:

…the Crown Estate Commissioners’ statutory responsibilities in Scotland, under the Crown Estate Act 1961, should be devolved to the Scottish Parliament.

The Smith Commission is a strong indication that this might indeed happen, and happen soon. What the Scottish Parliament (and any relevant local authorities) do with this new power will be watched with interest.

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About basedrones

Bachelor of Laws. Scots lawyer working at the University of Aberdeen. English law qualified. Took far too long to write this bio. Blogs on legal issues, with occasional veering into other purportedly intellectual stuff from time to time. Tweets about legal issues, education, law clinics, fitba, music, rogue cell division and not at all about politics at @MalcolmCombe.
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4 Responses to Powers old and new: or, land reform hits the headlines

  1. neilking says:

    Malcolm, well done for resisting the temptation to garnish the facts with a few untruths (such as “owners of sporting estates don’t pay rates”) as one sees all too often in other quarters from people who ought to know better. I would, however, take issue with you that succession has been “analysed” by either Andrew Tickell or Andy Wightman.

    It’s utterly misleading to view succession as Tickell did solely through the prism of the great estates of the aristocracy, many (if not most) of which are already held by trusts or companies such that any conversion from heritage to moveable will not affect them anyway. You were spot on to highlight that where this will hit home is more modest landholdings whose owners are less likely to have prioritised any avoidance chicanery and who are motivated by considerations totally unrelated to upholding the tradition of primogeniture.

    The thing that gets me is that, on the one hand, you empower tenant farmers by making them owners so they’re rid of the tyranny of the “near relative successor” implicit in tenancy. Then with the other hand, you tell them they’re still not free to bequeath their hard won property to whom they choose! Of course I get it that farmers are in a sense privileged as the owners of SMEs which are primarily heritable unlike most but we need to at least recognise that’s where the issue lies rather than with dukes and earls.

    Andy W’s take on this is the observation:-

    “Plenty of other types manage perfectly well in multiple ownership so why can’t land? … a farm can still be run efficiently if owned by four brothers and sisters – they merely need to co-operate and manage it as a single entity.”

    Good luck with that! Next we’ll be hearing about repeal of the divorce laws on the basis there’s no reason why a couple can’t get along in a relationship! Andy is also obviously unaware of the reality which is that, if one sibling isn’t happy that the farm has been bequeathed to the other(s), then the practical result is more likely to be that NONE of them gets it.

    • basedrones says:

      Thanks for the comment, Neil. If you are only taking issue with my use of the word ‘analysed’, I must have chosen my other words sensibly!

      I take the point that the Peat Worrier blog was hitting at a caricature, but I think Andrew T would be of the mindset that the caricature is not (completely) a straw man.

      Caricature/straw man/whatever, from a law reform point of view it is interesting that the SLC’s much more detailed consideration of the indefeasible inheritance point (e.g. in the 2009 Report) might now be relying on a land reform angle to push succession reforms through.

  2. Pingback: Land Reform (Scotland) Bill introduced to Holyrood | basedrones

  3. Pingback: Consultation on the Law of Succession – Some Thoughts | basedrones

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