The cornerstone of any land reform package

Giving secure tenants the right to buy their farms could be the way out of a log jam

Robert Mercer-Nairne

Lord Robert Mercer-Nairne runs the 4,200-acre Meikleour Estate in Perthshire

Land reform in Scotland must achieve five things: it must enable more Scots to own their land; it must be completely fair to all existing members of the rural economy; it must strengthen the rural economy; it must permit a co-ordinated approach to land management; and it must recognise the need of the urban population to enjoy the countryside.

There is a feeling in Scotland that too few own too much; that we are stuck with a historical pattern of land ownership that is no longer appropriate. Giving secure tenants the right to buy their farms is likely to be the only way out of this log-jam, and must form the cornerstone of any government’s land reform package.

But giving secure tenants the right to buy is not enough. The farm economy is exceptionally weak, and few secure tenants will have the money to make such purchase. The reform package must, therefore, include a low-cost loan scheme, to be administered through Scotland’s banks. Let’s call the loans rural development loans (RDL). The interest rate on the loans will have to be nominal.

The purchase price of farms will have to be based on full market values, with the secure tenant paying 1 per cent of that value (from 75 percent to 50 percent), and the existing owner being given a tax credit for the balance, to compensate for the fact that an important part of his business has been removed from him. Along-side the tenant’s right to but must come reform of tenancy laws, with the elimination of secure tenancies, and their substitution by tenancies of fixed terms with no right to buy. Without a farm rental sector, many young farmers will not be able to get started.

RDLs, if taken up by secure tenants, will introduce much needed capital into the rural economy, and the tax credits extended to those selling farms, provided they are restricted to tax on rural business, will ensure that the money stays in the rural economy. Reform of the tenancy laws, along with the right to buy for secure tenants, is likely to encourage greater movement into the industry by those with energy and new ideas, and help out of the industry those who have played their part and wish to retire or pursue other interests.

Tourism is now as important as agriculture to the rural economy. RDLs should be available to people seeking to develop rural business generally, and businesses related to tourism in particular. The Government will need to prioritise access to RDLs annually, as demand should exceed supply. Land reform must go hand-in-hand with other policies related to the rural economy, such as low-cost housing and transportation. The greater the extent to which rural enterprise can be encouraged, the larger will be the rural tax base.

One of the benefits of large estates has been their ability to plan over the long term in respect of large areas of land, and on an integrated basis. This has enabled them to develop amenity and wildlife areas, which, on their own, would not have been economic, and to ensure that new housing and local industry met high standards of quality and appearance.

With the fragmentation of land ownership, this function will increasingly have to be performed by local authority planners. It may be that general standards have to be mandated centrally - such as the visual standard of all rural development and the fixed percentage of each land holding which must be dedicated to wildlife etc - but they should be implemented locally.

In a modern urban society, public national parks are surely a necessity. Public footpaths are an essential part of access, and various associations have done an excellent job in publicising them. Landowners’ associations and local authorities have also produced some fine walks through voluntary co-operation, and this should be encouraged.

A generalised right to roam, however, would probably cause more problems than it would solve. Landowners have a legitimate right to privacy, certainly within the grounds of their homes, and people who earn their living from the land must surely be protected from thoughtless, uninformed or criminal access, which could damage that livelihood.

In the end, if there are adequate public parks and public footpaths, and good education about the countryside, people will do the right thing. The law is at its best when it upholds only what people consider reasonable.

Source: Scotman, 26 June 1998.

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