Introducing the Land Issue Part 1: How Scotland is Owned.
Part 2 will be posted this afternoon
Whenever I have a conversation about Scottish nationalism, someone always argues that Scotland, for whatever reason, is somewhat to the left of England on a number of issues. While there is some empirical basis for this claim, it risks externalising Scotland’s problems and ignoring the trickier issues that we can deal with already, regardless of whether or not a referendum on independence is passed. In this context, confronting the land issue very important. The Scottish government can and has legislated on these matters and, unless it continues to do so, talk of an egalitarian Scotland will ring somewhat hollow. In part 1 of this account, I’m going to try and introduce the problem as briefly as possible.
First, however, it’s worth stressing the following point: while there will be a few references to value and efficiency, I am in no way implying that Scottish land reform is about rationalization or the creation of a completely free market in land in which money is the dominant force. On the contrary, the land has a great deal of cultural, community-related and historical significance which would be ill-served by these approaches and, more importantly, land reform is first and foremost about securing justice. This means approaching the land, the country’s most important and non-renewable resource in a way which reflects the needs, views and aspirations of all and is not governed by historical accident or the capricious whims of finance.
In total, Scotland is a country of around 19 460 000 acre, an acre being roughly the size of an American football field. The approximate population of Scotland, going by the most recent mid-year population estimate, is 5, 220, 100. All told, if the land was divided equally between everyone here, this would give us about 3.72 acres each.
The numbers are of course different in reality. While information is incomplete, what we do know suggests that of the rural land, which comprises about 18, 924, 516 acres (i.e. 97.4% of Scotland) a total of 15 722 287 acres, 83.1% of this, is held privately. Of this land, 60% is owned by just 969 people, with the average holding of 9, 735 acres.1 To put that in perspective, this tiny minority within the population (less than 0.001 per cent) own an average of 2616 times as much as an equal distribution would provide. Regarding the upper end of the spectrum, Buccleuch Estates, a company founded in 1923 of which the Duke of Buccleuch is the Chairman, own 241, 887 acres.2 In the Highlands, the situation resembles feudalism even more closely, with over 50% of the area covered in ‘sporting estates’, primarily for hunting. These are divided between 340 estates, which typically range from 5000 to 8000 acres.3 Scotland, as it turns out, has the most concentrated pattern of land ownership in Europe.4
The history of this highly concentrated ownership is beyond the scope of this article but given the sheer volume of fraud, banditry and deceit it involves, it’s something well worth looking into. Andy Wightman’s recent book The Poor Had No Lawyers: Who Owns Scotland and How They Got It is a good place to start. The consequences of this imbalance, however, are very much in effect today. While it’s difficult to obtain all the relevant information and identify all the beneficiaries – as we’ll see below – the anecdotal evidence is striking.
Landowners can and do make considerable sums in a number of ways. Sometimes this involves leasing or selling parts of their land for farming and related activities. Some maintain holiday homes for tourists or wealthy holiday-makers or offer shooting facilities. All told, this can be a profitable business. Seafield and Strathspey Estates, owned by the Earl of Seafield, report an annual revenue turnover of £2.8 million from Cullen Farm, and £1.4 million from the Straphspey Estates, which I think we’d all agree is quite a profitable business to inherit. At the upper end of the UK spectrum, ownership of the 66 000 acre Duchy of Lancaster provided the Queen with £5.9 million in revenue in 2000.5 As for the land’s value, Kevin Cahill cites the Inland Revenue as putting the average value of an acre of UK development land in 1999 at £404 000.6 In Scotland, the cost of quarter acre of rural land for housing has been estimated at about £20 000.7
Large landholdings are also among the major recipients of subsidies from the Common Agricultural Policy, the EU’s subsidy for farmers. After a prolonged investigation by the Sunday Herald, it was revealed that between 2000 and 2004, around £115 million was handed out to the one hundred largest beneficiaries in Scotland. This included, for example, Moray Estates, run by a company owned by the Earl of Moray and comprising of 33, 143 acres, who received around £2.2 million. Cullen farm, a farm on the Seafield Estates mentioned above, received just under £1.9 million. The article also notes: “Southesk Farms near Brechin, owned by the Earl of Southesk, David Carnegie, got £1.5 million, while Dunecht Home Farm near Aberdeen, belonging to Viscount Cowdray, got nearly £1.4 million.” For the full figures, I would recommend the link above. The 2009 figures, which the government refused to release before the election, showed little difference, with “…the top 1,200 landowners and companies on the continent receiving more than €5bn between them” according to the Guardian.
Subsidies are also helping to ensure that large Landowners benefit from the move to renewable energy. A particularly shocking example of this involves the Duke of Roxburgh, who owns 55 136 acres. As the Times reported in 2010, his plan to develop a 48-turbine wind farm “would generate an estimated £30m a year, shared with developers. About £17m of this would come from subsidies from consumers.” Let me emphasize: I am not against wind power. Rather, I’m against massive profits from renewable energy accruing to people whose entitlement to it is based around who their parents were, particularly when it comes at great public expense.
Still, these are only partial indicators of the money involved. Matters are complicated by the fact that, in some cases, the real beneficiaries of land are hidden in legal black-holes. For example, in 1995, the Duke of Buccleuch had his wealth re-evaluated from £300 million to £40 million in the Sunday Times Rich List because his estate was owned by a company in which he did not own any shares. The shares, it turns out, are owned by four Edinburgh lawyers and are worth £4. The money is ultimately held in a trust, and the beneficiaries are unknown.8 As Wightman writes: “…over 22 per cent and perhaps as much as 25 per cent of the privately owned rural land in Scotland is held in some form of offshore or beneficial ownership where, to varying degrees, the beneficiaries are unknown and tax is being avoided.”9 In an investigation undertaken in 2003, Wightman and Torcuil Crichton analysed 500 estates and estimated that the annual loss of tax revenue was around £72 million due to offshore ownership, noting that: “The true figure would be much more if it were possible to survey all of Scotland.”
Finally, a smaller but no less important land issue in Scotland is the Common Good Land. This is the land formally held by Town Councils (and now held by the regional authorities) intended for the benefit of town communities. While much of this has been depleted by centuries of corruption and mismanagement considerable assets still exist. In 2009 Scotland’s Councils published a partial account, which included around 1, 610 assets in 144 separate common good funds with a reported value of £2.5 billion.10 At .present, the Local Authorities determine the use of this money, although this system could certainly be improved. As Wightman writes:
“There are literally hundreds of millions of pounds floating about in the form of previously unaccounted-for assets, undervalued assets and underused assets. This wealth belongs to local people and not to the Council. It should be used to begin a process of civic renewal and physical regeneration, to deliver wealth and prosperity and to give back to towns across Scotland some self-respect, belief and power to improve the welfare of their community.”11
As egregious as this state of affairs is, it is not the only problem with the land distribution in Scotland. In part 2, therefore, I’m going to look at some of the distorting effects that this pattern has on the Scottish economy as a whole, and then look at some of the ways in which we might start to move forward.
Joseph Ritchie blogs at http://ascannerdespairingly.wordpress.com/
1 Wightman, A, The Poor Had No Lawyers: Who Owns Scotland and How They Got It (2010) Birlinn.pp. 106
2 Ibid. 115
3 Ibid. pp.163
4 Wightman, A Scotland: Land and Power – the Agenda for Land Reform (1999) Luath Press pp. 30
5 Cahill, K Who Owns Britain? (2000) Canongate pp. 76
6 Ibid. pp. 14
7 Wightman, n. 4 pp. 46-7
8 n. 5, pp. 280 and Wightman, n. 2 pp. 232
9 Wightman, n.1 pp. 234
10 Wightman n.1. Pp. 223
11 Wightman n.1. pp. 224
I look forward to the second part. I would only say that revenue is a really really different thing from profit. You can have lots of revenue and still make a loss.