Levellers: Birnam: Improving the transparency and accountability of land ownership

Levellers | A wiki for collaboratively developing left-wing policy for rural Scotland.

Proposal 2: Limiting the legal entities that can own land in Scotland

Points of information:

Responses to Government proposals

\1. Paragraph 45 proposes that it should be "incompetent for any legal entity not registered in a Member State of the EU to register title to land in the Land Register of Scotland". RIC agrees with this proposal.

\2. Paragraph 47 says "the restriction would just relate to entities: it would not relate to private individuals". The workshop suggested that it should apply to all legal persons, including individuals: thus, it should also be incompetent for any individual not domiciled in the EU to register title to land in Scotland.

Ian disagrees with this suggestion, after thinking about it more, for the following reason. The consultation document describes the problem: "in some cases, it can be difficult to trace and contact landowners etc." (paragraph 44) and identifies the policy objectives: "improving traceability abd accountability of landowners". Unfortunately it does not identify the cause of the problem, but RIC assumes it is the fact that a company seeking to hide the identity of its individual share-holders and office-holders can do so by registering in states where the company register is not open to the public, e.g. certain tax havens. This assumption is supported by the proposed solution to the problem, because (presumably, although again the consultation document is not explicit) the company registers in all EU member states are open to the public (as they are in the UK). Individuals behind companies that own land are as traceable as individuals who own land - so it is not individuals that are the problem. RIC is not seeking (I hope) to prevent non-EU ownership of land in Scotland per se, nor would RIC (I hope) have a problem if the individuals behind EU-registered companies were not EU-domiciled, so I don't think it is appropriate to require individuals who own land to be EU-domiciled.

\3. Paragraph 47 says the Government thinks "it would be difficult to apply the proposal to existing landowners". It might be legally more problematic, but that in itself is not a reason not to try. And it would be woefully unambitious not to try, because there is no reason why a company registered in a tax haven could not continue to own a registered title in perpetuity: in order to pass land onto the next generation of individuals behind it, it does not have to transfer the title, it simply has to transfer the shares. Thus, limiting the restriction "to entities seeking to own land .... after a [future] date" could in theory fail to meet the policy objective completely. RIC considers that the restriction must apply retrospectively to have any real chance of achieving the desired outcome. Land-owning companies registered outwith the EU could (if traceable) be required, within a defined period, to open a branch office in the EU at which legal notices can be served and not ignored. (Ian comments: the previous sentence was not a suggestion made at the workshop, but one I have made now which seems plausible to me.) The ultimate sanction for non-compliance could be to take the land into public ownership.

\4. Another way of tackling the problem (in part) would be for the UK Government to require UK dependencies or tax havens which do not have public company registers to make them public. That is beyond the scope of this consultation.

\5. There is scope within this proposal for RIC to push much further. For instance, there is a separate but related problem with charitable bodies that own land, but are not managing it in the public interest, as their charitable purposes should require them to do. This can be deliberate, or it can be caused by a failure of internal governance. They are accountable to the Office of the Scottish Charity Regulator (OSCR), but OSCR has not had the resources (or time) to scrutinise all land-owning charities because of higher priorities (such as independent/private schools). This problem could be addressed by more funding for OSCR, stricter statutory requirements on governance of charities, and/or a Ministerial direction requiring OSCR to prioritise inspections of land-owning charities.

\6. RIC could also push for a restriction on ownership of undeveloped land to individuals: there appears to be no good reason for companies to own such land.

Ian comments: this suggestion was not discussed at any length.

\7. Third parties (e.g. tenants and perhaps even neighbours) should be given access to 'land justice', i.e. they should have the means to challenge land-owners in court or at tribunals where it is in the public interest and regulation is not working.

Proposal 3: Information on land, its value and ownership

Points of information:

Responses to Government proposals

\1. RIC agrees with the fundamental proposal, but understands that farmland is exempt from it. There appears to be no justification for this, so we consider that there should be no exemption for farmland.

\2. The (final) report of the Land Reform Review Group to the Scottish Ministers said: "The Review Group considers that the patterns of land ownership in rural Scotland are an important factor in delivering the [Scottish Government's] Land Use Strategy’s community objective, because of the control that ownership gives over land use decisions and benefits. The Group recommends that the Scottish Government should map and monitor the patterns of land ownership in rural Scotland as part of implementing its Land Use Strategy (emphasis added)." We support this recommendation, because a map is the best way of clearly presenting multiple data on land ownership (cf. the Land Register). In addition the map should contain information on land uses and values.

\3. Again there is scope within this proposal for RIC to push further. For instance, there is a separate but related problem with landowner abuses of public subsidies. A map showing land ownership, value and use would go a long way to addressing this problem, but a consistent, transparent, standardised method for land valuation also needs to be applied to all rural land in Scotland.

Ian comments: I'm not sure I picked up this suggestion fully or accurately, or indeed whether a standard valuation method would in any way address the problem of subsidy abuse. These might have been separate matters.

There was also discussion about housing shortages and over-valuation caused in some areas by second home ownership, and how this might be addressed by making second home ownership a change of use in land use planning terms. I am not sure if we want to include that at all, and if so, whether it should be here or elsewhere in RIC's response.

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