One of our members Jamie Williamson of Alvie and Dalraddy Estates in the Highlands, wrote a letter to the Scottish Field editor, in response to Jim Hunter’s article entitled ‘The case for Land Reform’ printed in the September edition. A shortened version of Jamie Williamson’s letter was published in the October edition of the magazine, the full version of which you can read below:
Hunter’s Case for land reform
Jim Hunter pillories those who have chosen to invest in Scotland’s rural economy to provide goods and services that we as a nation require from our rural land. This is not a good basis on which to attract further investment to strengthen and develop our rural economy.
Professor Hunter suggests that there is something wrong in the 28,300 acre west Highland Auch and Invermearan estate being eligible for as much as £12,000 per week (£624,000 per year) of public funding. He doesn’t explain what this funding is for and why this estate is paid to provide these goods and services.
Most developed countries support home production of basic necessities such as food and energy. Governments recognise the advantage of our nation providing a proportion of these basic essentials of life. To achieve this European farmers are provided with funds under the Common Agricultural Policy (CAP) to provide certain goods and services. This helps keep the price of food in our shops down whilst still sustaining food production in Europe, maintaining a healthy environment and ensuring a sustainable future.
Auch and Invermearan estate has made a substantial investment in sheep and cattle production in what is categorised as a less favoured area for agriculture. Their total payment from the various schemes and subsidies in 2011 was stated as £606,909. Whilst some might criticise the amount paid, farming in the west Highlands is still financially marginal, despite this support. As a result sheep are disappearing off our hills and livestock numbers in Scotland are in decline. Livestock farmers in Scotland are amongst the poorest paid businesses providing the basic essentials that we require. In the current economic climate larger livestock units that can take advantage of economies of scale are the most likely to survive. Smaller farm units, including crofts require even greater public support to remain economically viable.
The Scottish Government wants more forestry. Over the last 200 years our woodland cover has expanded from around 4% of our land area to 18%. The Scottish Government would like a further expansion to 25% woodland cover. Auch and Invermearan estates has obliged by investing in expanding their woodland with the help of government support. They have established 157 acres of young woodland with plans to plant a further 70 acres. As a contribution towards this investment in our future economy they should receive around £95,600 in capital grants plus annual support for maintenance of £13,500. This Estate has plans for further woodland expansion which will contribute to the Scottish Government’s target.
Is this a good investment by the tax payer? If we want more trees and a forest industry, it is more cost effective to subsidise private sector landowners to establish and manage woodlands and produce wood products than doing this through the Forestry Commission Scotland.
The Scottish Government wants further investment in renewable energy. Auch and Invermearan estates have responded to this request. They have invested in a biomass heating scheme and a hydro-scheme. They have identified a further 15 locations where further hydro-schemes could be developed on their land holding. To encourage capital investment in renewable energy schemes the UK government provides funding in the form of Feed in Tariffs and Renewable Heat Incentives.
The Scottish Government wants a strong vibrant rural Highland economy capable of providing the basic requirements of our nation. This can only be achieved by attracting further investment. Higher taxation combined with reduced public support for those who can invest will discourage further investment. Jim Hunter criticises landowners who are investing in what the Scottish Government wants.
The private sector currently own most of our land and are willing to invest in what the Scottish Government wants providing the economic prospects are favourable. On balance the private sector are more efficient and cost effective at running businesses and producing goods and services than the public sector. The most successful economies in the developed world are a mix of public sector incentives and constraints that provide a favourable climate for private sector investment targeted at the goods and services that the nation desires.
Most Community buyouts have required public sector funding to purchase the assets and further public sector funding to invest in infrastructure and productive activities. Where investment has failed to make the landholding financially viable, public sector funding has been required to sustain the enterprise. The South Uist Estate has managed to make their landholding financially viable through investing in a wind farm. Yet Jim Hunter criticises private landowners such as the Duke of Roxburghe, Sir Alistair Gordon-Cumming and the Earl of Moray of doing likewise.
Some land is owned by charities with tax favourable status, some land is owned by organisations or individuals based outside the UK that may not pay the same taxes as UK residents. This is the same with many assets and businesses in the UK and not confined to investments in Scotland or in land. Tax mitigation or evasion along with the advantages gained will increase as taxes increase. This is an international problem that should be addressed by those who levy taxes. If Jim Hunter is advocating a level playing field in taxation that includes landowners with charitable status and those who reside outside the UK, there will be many landowners who will support him in this view.
Draconian regulation by the State or the threat of compulsory purchase of assets will discourage private sector investment. The threat of a tenant’s right to buy has already seriously undermined confidence in assets where land use, investment and expertise are shared through tenancy arrangements. As a nation our objective should be to strengthen and improve our economy by attracting further investment; not to threaten investors with confiscation of their investment.
State control of assets and production proved to be a disaster in Eastern Europe. I hope even the most die hard left wing activists such as Jim Hunter can move on and accept that state or even community control of assets and production is not a panacea to sustaining and improving our rural economy.