Land reform in Scotland: what lies ahead
Geographical, by Malcolm Combe
The recent Scottish parliament elections raised the expected issues of things like education and healthcare, but another less mainstream subject also caught the attention of both the public and politicians and continues to reverberate – the so-called Scottish land question, ie. how Scotland’s land is owned and used.
One reason land reform featured as an election issue was a statute passed just before the devolved administration at Holyrood was suspended for that election, namely the Land Reform (Scotland) Act 2016. This contains a number of important measures, but one of the first happenings in the new Holyrood session was a successful amendment to a Scottish government motion proposed by longstanding land reform campaigner – and now a Scottish Green Party MSP – Andy Wightman. That called for ‘radical and ongoing reform to democratise land and ensure that it is owned and used in the public interest and for the common good’.
In any regulatory area, it would be striking for new legislation to be faced with calls for further reform. That is what is happening, from some quarters, in Scotland.
So where is Scotland going? Where has it got to? And why?
The ‘why’ is contentious. There are many reasons why the Scottish land question lingers to this day. Proponents of land reform might look to history, particularly the Highland Clearances, but contemporary commentary tends to eschew that and look at the present day pattern and concentration of ownership in (primarily rural) Scotland. That, the argument goes, is stifling enterprise and preventing economic, social and environmental benefits from being unlocked. Others argue the use of land is more important than ownership of it, or perhaps that breaking up larger estates might remove economies of scale. Land reform also (inevitably) entails a certain amount of upheaval and uncertainty for the market, so there can be a balancing act of short-term pain for long-term gain.
As to where Scotland is now in its land reform process, it should be recalled that the new law is not the full story. This is not Holyrood’s first dalliance with land reform. In fact, we now have two Land Reform (Scotland) Acts, one from 2003 and a younger namesake from 2016.
The 2003 Act gave everyone the right to access Scotland’s land and inland waters, even without an owner’s prior consent, provided such access is taken responsibly and subject to certain exclusions relating to the character of land. It also provided for some rights of community acquisition in rural and crofting areas of the north and west of the country.
Important as those innovations were, calls for further land reform continued to be made from some sections of society. Such calls were answered in part by the Community Empowerment (Scotland) Act 2015. As its name suggests, that legislation aims to empower communities, which it does by giving them a number of entitlements to participate in local decisions and a new right of acquisition for abandoned, neglected or environmentally mismanaged land. It also widens the right of first refusal the 2003 Act introduced to rural Scotland by expanding it into the cities.
This newest land reform statute contains a mix of measures. Two of those might lead directly to a change of landowner, either in terms of a community buying land to further the cause of sustainable development, or by allowing a secure agricultural tenant to buy land from her landlord in certain circumstances where that landlord is in material breach of a court order or an award made at arbitration.
Land reform can be about facilitating a change of ownership, but this land reform statute does far more than that. There are important changes that aim to make land reform a more permanent feature of the legal landscape, particularly a new non-party body called the Scottish Land Commission. When it is fully staffed and mobilised, the SLC will have a role in ensuring land reform stays in the foreground of Scottish policy, while maintaining proper oversight of the various measures that have been introduced.
Further innovations include the promised ‘land rights and responsibilities statement’, which will be a standard against which landowners will be measured in future, and guidelines for engagement with local communities when important decisions are made by landowners.
A matter sometimes related to community engagement is whether a community knows who to engage with, as there have been occasions when an entity owning land in Scotland might not be entirely transparent (an issue which resurfaced with the recent ‘Panama Papers’). One part of the 2016 Act is designed to boost transparency. Together with a drive to complete the map-based Land Register of Scotland by 2024, new rules relating to the disclosure of who has a controlling interest of a landowning entity might mitigate such issues in future.
What else does the 2016 Act do? There is a fiscal step towards land reform, changing the treatment of shootings and deer forests – or, to be exact, removing a relief that was conferred in the 1990s. Deer management will also be affected by a regulatory as well as a fiscal change. Amongst other things, the new law will allow for the imposition of deer management plans in certain circumstances and will provide a power for the relevant authority to request information about a landowner’s planned management activities, rather than simply report on what has taken place (as was previously the case under the Deer (Scotland) Act 1996).
What if you want to go for a walk in an area where deer are found, or indeed anywhere else in the great outdoors? You still can. There are some technical reforms to the rights of access introduced by the 2003 Act also included in the 2016 Act, but these largely leave the existing rights as they were.
The last point to mention about the 2016 Act relates to its effect on the law of leasing, particularly the raft of reforms to the agricultural holdings regime. For many years, tenants with a certain type of rural lease have enjoyed something called security of tenure. This allows the tenant (and, in some cases, a successor or a transferee of an original tenant) to keep the lease of the rented property even after the original contractual term has finished, provided they have paid rent when due and generally maintained the property properly.
There has been a perception for a number of years that this system has not got the balance between the interests of tenants, landlords and indeed society as a whole quite right. The regime has contributed towards an environment where landlords often seek recovery of ‘vacant possession’ of the land whenever they can, and traditionally this might have happened when there is a ‘break’ in the succession of a lease. Aware of these issues, the Scottish government appointed a specialist group to consider agricultural holdings legislation, which reported in 2015. The work of the group is reflected in the 2016 Act, which reforms the law relating to matters like rent review, assignation (assignment/transfer) and succession (inheritance).
Those changes to assignation and succession do not allow a lease to be passed to absolutely anyone, and as such the landlord still has a chance of getting the land back without being subject to a lease where there is no-one suitably close (in terms of relationship by blood or marriage/civil partnership) to the outgoing tenant to take it from them. That said, late in the parliamentary process a reform was made which might allow a secure lease to be passed to someone without those recognised proximate relationships.
This controversial, and highly complex, reform will change the law in a way that makes it more difficult for a landowner to wash land clean of a lease. The current position is being changed to one where an outgoing tenant can effectively cash-in the tenancy. The 2016 Act does still allow a landlord to get the land back, but not for free: it introduces a mechanism for the landlord to pay a sum to the tenant to buyout that lease. Where the landlord does not wish to buy it out, the tenant can then assign the lease to ‘an individual who is a new entrant to, or who is progressing in, farming’.
As noted, this is a complex area, and there have been indications that landowners may challenge this particular reform on human rights grounds as an unfair interference with their property rights. Scottish legislation is susceptible to challenge in court if it is not within devolved competence, for example by not being compatible with the European Convention on Human Rights. Notwithstanding any potential court challenge, there is also the wider issue of what these reforms will do in terms of landowner confidence to make further land available for lease.
The 2016 Act covers a lot of legal ground. It will make a difference to landowners, land managers, communities, tenants and Scottish society as whole. That being said, it could have covered more ground still: for example, there have been suggestions about a cap on landownership above a certain level, restrictions on landholding entities registered outside the EU, and the possible introduction of compulsory sale orders. None of those appear in the 2016 Act.
Land reform activists might be angling for more, but what about landowners? Land reform is not exactly the kind of thing that will always please existing owners, but the above highlighted example about agricultural holdings reform demonstrates that they do have specific concerns which might yet lead to litigation.
What is clear is that land law remains in a state of reform. When the promised Scottish Land Commission, the preparation and ongoing review of measures to do with community engagement and land rights and responsibilities, the post-Holyrood election climate, and a new Cabinet Secretary for the Environment, Climate Change and Land Reform are all mixed together, land reform is not going to retreat into the background any time soon.
Indeed, the recent Holyrood election campaign demonstrated that many political parties are committed to further land reform. The fact that the Scottish National Party lost majority control of the Chamber at the election means it will be looking for support from other political parties to implement its plans, which will have implications for any further legislation. The Land Reform (Scotland) Act 2016 will have implications for Scotland’s (legal) landscape, but there could yet be more to come.