Is the Scottish Government blocking a Land Tax because they can’t control it?

Common Weal was featured in a news article in The National on Sunday, rebutting a claim made by former Scottish Government Cabinet Secretary Shona Robison’s claim that Westminster blocks Scotland from creating a Scottish Land Tax.

In an in depth interview with the Scottish Left Review, Robison claimed that while Scotland “definitely” needs a tax on land and that the Scottish Government has been working on it, there are two major barriers against making it happen which are the lack of data on registered land ownership and Westminster blocking Scotland from creating new taxes.

The first is the more legitimate and harder to solve problem, but it is one that could be solved by the Scottish Government alone. It has been multiple Land Reform Ministers, several First Ministers and two elections since the Government set the Land Register of Scotland to the task of filling the gaps in its data but the deadlines have been repeatedly missed.

Part of the problem is that unless land is sold or inherited, the process of registering land was for a long time voluntary and even though it is now mandatory, the penalties are still slight and poorly enforced. Land Reform Campaigner Andy Wightman recently revealed that there have been zero instances of anyone being charged or prosecuted with what is now the criminal offence of not registering a controlling interest in land.

Even if this was not the case, the registration of land and the valuation of land are still considered separate issues in Scotland which makes it somewhat difficult to plan an appropriate land tax. This was a question Common Weal wrestled with in our proposal for Taxing Land in Scotland where we concluded that rather than trying to come up with theoretical use valuations common to some forms of Land Value Tax, it would be better to base the tax on market valuations (we used valuations based on soil grade as a rough proxy for this) so that land speculation could be priced into the tax and that the tax could be used to bring down land prices that have been inflated by that speculation. Bringing in a land tax could also make non-registration of land not just a criminal matter in itself, but also a matter of tax evasion.

The other problem – the limits of devolution – is a much easier problem to solve. Westminster does indeed require its agreement if the Scottish Government wants to create a new national tax where the revenue flows into Holyrood. But this is explicitly not true when it comes to local taxation. The Scotland Act explicitly devolves the power to create and manage “local taxes to fund local authority expenditure (for example, council tax and non-domestic rates)”.

This means that a new tax can be created so long as the revenue from it flows to local government. This is precisely how Scotland created the Visitor Levy or ‘tourist tax’. It is precisely how we are ‘allowed’ to have discussions about reforming Council Tax. In fact, Common Weal’s proposal for a Land Tax would involve reforming Council Tax into a fairer and more general Property Tax and then extending it to cover land as well. All of this would be entirely within the power of the Scottish Government to do today.

So why won’t they?

The answer possibly lies in them pulling out precisely the same excuse last year to block a public energy company. That policy, too, could be done today so long as the company is not owned by the Scottish Government or Scottish Ministers but is instead owned by Local Authorities or as a public mutual company.

But just as with a local energy company, a local land tax would not be controlled by the Scottish Government. Its revenue would not flow through the purse of Ms Robison’s successors. The Scottish Government used to believe in the principle of subsidiarity – where political control is be exercised from as local a level as possible and only devolved up to regional or national level when absolutely necessary – but here seems to be withholding powers from local governments because if the Ministers can’t have the power, then no-one else should. The other possibility, if not one of control, is simple cowardice in the face of upsetting a powerful land owner’s lobby despite overwhelming support from party members and the general public in favour of taxing land.

Either reason would be a severely detrimental approach to governance. We hope to be proved wrong. The Scottish Government could prove us wrong by introducing a Scottish land tax that at least one former Cabinet Secretary now believes should “definitely” happen.