When a form may be a Trojan horse for bigger things
Igot time the other evening to make a minor dent in the pile of pointless paperwork which has, as ever, been building up in the farm office.
But as I filled in the entirely unnecessary one on shooting rates for the farm – no, nothing has changed since last year and we still don’t shoot anything, let alone get any income from it– a wee chord was struck somewhere in the back of my mind.
After some thought it finally came back to me when I’d last heard the shooting rates mentioned.
It was at NFU Scotland’s AGM a few weeks back – in what at the time sounded like a bit of a throwaway line from president Andrew Mccornick as he listed all the various fronts on which the industry seemed to be fighting an uphill battle.
And, provided I picked him up correctly, he was worried that the exercise of gathering details of who owned and occupied what land for the allocation of shooting rates might be a bit more sinister than at first appeared – and suggested that it might be a back door route for getting hold of the sort of details needed to introduce a land value tax.
But with the Brexit debate eclipsing almost every other issue, I don’t think it was a line which was picked up by anyone.
While it might have sounded a bit too close to one of those conspiracy theories to be taken too seriously, it’s true that there has been a lot of work done by the Scottish Land Commission (SLC) on the possibility of using a land value tax to raise revenue for the Scottish Government
– and to help it deliver some of its land reform objectives.
While a study carried out for the SLC which looked at how such taxes were used in different countries around the world concluded the idea might be a runner, it also pointed out that there would be several hurdles to overcome before such a radical change could be introduced.
Coincidentally, one of those challenges was the lack of any truly comprehensive register of land ownership and occupation in Scotland…
With a total estimated value of around £5 trillion – which is apparently just over half of the total net worth of the UK, the report claimed land is the most valuable asset in the UK.
It also claimed that land values had increased by more than 450 per cent since 1995 – a level of growth which has outstripped most other areas – yet those benefiting from this uplift in asset value have considerable opportunity to avoid being taxed on its growth.
Now to be honest I don’t think that the actual intention of a land value tax would be to place yet another heavy burden on the farming industry which tries to eke a meagre living out of this capital asset which has been priced well beyond its ability to cover its costs – a situation has not only acted to create a huge barrier to those wanting to come into
the industry but has also stymied many developing businesses as well.
Instead, I suspect the main groups being targeted would be individuals and organisations which bought up sites with development potential and held them in a land bank to reap capital growth profits later.
But if Brexit has taught us anything then it is that the law of unintended consequences is one which should never be ignored – and it’s made it pretty clear that protecting the farming sector from collateral damage isn’t high on many politicians’ to-do lists – so there’s no guarantee that the industry wouldn’t end up in the firing line.
However, while the report stated that the theoretical case for the introduction of a land value tax was strong, it also concluded that where this tax had been introduced, there was a lack of evidence that it delivered the desired outcomes – and several countries had dropped the idea.
And while the SLC commissioned the report, it did so for the Scottish Government which would have to assess the magnitude of the political gamble it would have to take in introducing such a measure.
So, while the shooting rates have impacted on far more than the big estates originally targeted, only time will tell if the process has actually been a Trojan horse for bigger things.