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Response to the Scottish Executive Justice Department: Abolition of Feudal Tenure etc,

August 1999
Compiled by Henry Law and David Mills




The Land Value Taxation Campaign (“The Campaign”) responded to the Scottish Office Land Reform Policy Group consultation documents, “Identifying The Problems” (February 1998) and “Identifying The Solutions” (September 1998). The Campaign also received and studied “Recommendations For Action” (January 1999).

The Campaign is currently making a submission to the Land Reform Branch of the Scottish Executive on the latter’s document, “Proposals For Legislation” (July 1999).

The Campaign assumes that the Justice Department is already familiar with, or has easy access to, both of the Campaign’s submissions of last year, and will similarly have access to its latest submission. If this is not the case, the Campaign will at once respond to a request to supply copies.

For the record, the Campaign formally reconfirms the stance taken and the comments made in its responses to “Identifying The Problems”, “Identifying The Solutions”, and “Proposals For Legislation”.

Against that background, the Campaign now sets out its comments on the Abolition of Feudal Tenure etc. (Scotland) Bill (“The Bill”).


The Campaign is a non-party organisation whose purpose is to secure legislation which would change fundamentally the basis of raising public revenue. It proposes that existing taxes on wages, goods, and services be progressively replaced by a property duty on the annual rental value of all land. This is known historically as land value taxation (“LVT”). LVT is levied exclusively on the site value of land: buildings and other improvements are not included in the valuation. The Campaign wishes to see, as closely as is practicable, 100% of the land value collected in this way. Within the present Scottish context, the Campaign seeks powers for the devolved Parliament in Edinburgh to bring in LVT in place of any or all existing taxes, including the council tax and the uniform business rate. To the extent that this reduces calls on payments by H.M. Treasury, it constitutes a programme that will commend itself mightily in Westminster and Whitehall!

In treating of political economy, the Campaign uses the word, land, in the meaning attributed to it in classical economics (the whole of the material universe outside of man and his products). This use is different from that given it at law, and different again from its treatment in book-keeping. A landowner in economics is not necessarily the superior. Anyone or any body corporate with a beneficial interest in land (a holding which could be let or sold at profit) is to that extent a landholder.

LVT makes land owners accountable to the community through the annual payments they are required to make in exchange for the benefits they gain from holding land, in direct proportion to the value of those land holdings. Land values are created and sustained by the presence and activities of the community. These values rest on the assumption that public services and a state of civil order will be maintained to-day and for the foreseeable future. In the present context, however, the Campaign does not lay stress on the practical and moral justification for its case, nor on the gains, economic and otherwise, which it claims will arise from full and correct implementation of the policy. A copy of the Campaign’s simple, introductory leaflet on the subject, called, appropriately, “What Is Land Value Taxation?”, accompanies this submission.

In its response to “Identifying The Problems”, the Campaign argued that retaining the principle of Crown as Paramount Superior creates an elegant constitutional situation if a system of LVT is applied throughout Scotland, urban as well as rural, under a title such as “Crown Feu Duty”. Until paid, this would be a first charge upon the land in priority over all other incumbrances whatsoever. Payment would be a condition of holding the land.1 The Crown in Parliament would be in possession of a source of revenue obtained without resort to taxation. With a feu duty close to 100% of the annual rental value of the land, it could well be that no other taxes would be required.

[ 1 The superior under the Crown is responsible for paying LVT, but the Campaign has proposals for apportionment provisions in the legislation to cover the phasing-in period.]

The Campaign considers the underlying concept of feudalism to be sound. This does not of course mean that the Campaign supports its modern transmogrification, whereby vassals have appropriated the benefits of perpetual tenure whilst shrugging off the corresponding responsibilities, nor does it mean that the Campaign in any way objects to a trawl through the attendant burdens and casualties.

The theory that all land is ultimately owned by the Sovereign is based on the doctrine that land, because it was not created by man, may not morally be the property of any person and is therefore vested in the Sovereign as representative of God and the community at large. The Sovereign has special duties towards his subjects which he can discharge only if he receives services or their equivalent from his subjects. This revenue is related to the benefits individual subjects receive in the way of specially prescribed rights over particular parcels of land.

This analysis notes the development of subinfeudation, on which the remaining existing feu duties are based. The practice derives from the responsibility of tenants in capite to perform duties towards their feudal inferiors corresponding to those which the Sovereign performs towards them (notably, in the past, protection against outside enemies). In the Highlands, the traditional function of a clan chief was at one time comparable to that of a tenant in capite, with a sense of quasi-parental responsibility towards his clansmen.

Retaining the Crown as Paramount Superior is highly desirable as the basis for land holding. It implies that the Crown owns the land on behalf of the entire nation. Holdings, as such, continue as possession under the Crown, not as absolute, outright private ownership. The feu simply becomes an obligation to pay the annual rental value to the public exchequer in the form of LVT. This arrangement is an ideal revitalisation of ancient practice and its adaptation to modern conditions.

In that feudal holding of land is an allodial pre-feudal estate, the Campaign thinks it opportune to take this occasion to declare it formally included within the modernised concept of feudalism described above.


Part I

Clause 2 Abolition of the Paramount Superiority of the Crown is a retrograde measure, strenuously opposed by the Campaign. It will not of course affect the reality of the economic, political, and social debate on land and fiscal policy, but it represents a wholly unnecessary symbolic gesture of submission to the landed interest, as well as being a gratuitous affront to the office of Sovereign.

Clause 3 For the record, a switch to a system of LVT (whether or not as Crown Feu) does not prejudice a proprietor in possession. As the site value of land is collected, taxes on buildings and other improvements attached to land are abated, as are taxes on production (wealth creation), the earnings of labour and capital, and trade. Titles remain. No confiscations are involved. Security in possession is guaranteed by payment of the annual rental value of the land in the form of LVT.

Part II

Clause 6 Registration of udal land, currently without a recorded title, is to be welcomed. Information on land holdings is compiled in the LVT registers and maps, and is of course made public. All land holdings must be registered, though, purely for the purposes of LVT, there is no interest in having details of buildings and other improvements, which are private and are untaxed. No doubt others can justify including information on man-made hereditaments, but it has to be stressed that it is superfluous for LVT assessments and land valuation rolls.

Part III

Clause 8 This and subsequent clauses deal with transactions between different levels of participants in enjoyment of the beneficial ownership of land. The Campaign holds that the location value of land is a community value that is not to be privately appropriated. For that reason, it has no view on this specific issue and therefore no comment on how it is proposed to handle it in the Bill.

Part IV

Clause 28 This and subsequent clauses likewise deal with payments between beneficial landowners, specifically where development value arises as a result of the land becoming free, within twenty years after the day appointed in the Bill, to be used in some way not permitted under an existing grant in feu. The Campaign reiterates its view that the location value of land arises from a collective demand for space for living, working, and recreational purposes, and that neither the former superior nor the former vassal has right to it. The Campaign therefore has no comment on how it is proposed to handle the matter within the context of this Bill. It is simply wrong that the question should be allowed to arise at all.

Clause 32 Sub-section (1) does call for comment, since it demonstrates a total absence of appreciation of moral and economic principle. To use the example from the explanatory notes, “if. . . the burden prohibited all building and the owner. . . has built a small shed, the compensation would only be the difference between the value of the land on the assumption that a shed could not be built and the value of the land on the assumption that a shed could be built. Building the shed would not trigger a claim for compensation based on the fact [sic] that a supermarket could be built.” If the new owner could gainfully have built a supermarket but did not, he is deliberately mis-using valuable land; he is either depriving the community of a valuable facility altogether, or is forcing it to be built on an alternative, poorer site, with attendant social costs and lower profitability. Neither the original superior nor the new owner deserves anything. Be it noted that the new owner, after twenty years, can sell the land at enormous gain, and in the meantime can use the prospect of that gain as security for a bank loan. To build a shed instead of a supermarket is to indulge in land speculation at the expense of the community as a whole withholding valuable land until it becomes even more valuable. This type of activity is a social crime. Politicians are of course primarily responsible for permitting it, but it is never attractive to see the law as handmaiden to injustice.

Part V

Clause 44 The Campaign has no views on entails as such, this being a subject outside its self-appointed remit. From purely a LVT point of view, what matters to society at large is that the annual rental value of the land is paid to the public exchequer. The registered land holder on the valuation roll is responsible for ensuring this.

Clause 45 With LVT operating fully and, as nearly as practicable, the entire annual value of each parcel of land being rendered to the public exchequer, securing compensation (for disentailment) on land, is in practice meaningless, there being no residual annual value to capitalise for this purpose.

Part VI

Clause 50 Whilst extinguishing payments such as dry multure certainly advances the cause of tidiness, it nevertheless adds, however marginally, to the attraction of being in a position to appropriate land value. As such, it represents an outright gift by society to the new owner, and on that account is to be deplored. In this, it is of course a minor accretion on a far greater sore.

Clause 52 The position of the Crown as ultimate owner of all land, on behalf of the entire nation, should be declared and strengthened, to make clear the fundamental conditionality of all holdings. The Campaign opposes the alienation of land.

The Campaign draws to the attention of the Justice Department the recommendation of the Scottish Office Land Reform Policy Group in “Recommendations For Action” that “A comprehensive economic evaluation of the possible impact of moving in the longer term to a land value taxation basis should be undertaken.” LVT has been in the political arena in the U.K. for over a hundred years. Indeed, land taxes (none of them actually LVT, though talked about as such) were put on the statute book by the Finance (1909-10) Act, 1910, and LVT itself made up Section 3 of the Finance Act, 1931. Both measures fell victim to major catastrophes (World War I and the Great Depression) when opponents were able to nullify previous legislation. LVT has been kept alive, and anyone holding land or making a transaction in land has done so in the knowledge that LVT could be introduced. Ignorance of history and of the content of the wider political debate throughout the course of the Century is no reason for new land owners to be allowed to believe they may enjoy special favour. “Investment” in land (the inverted commas are deliberate) does not take place in a moral and political vacuum.

The Campaign notes with satisfaction that the Crown does at least retain the right of owner of last resort (ultimus haeres) in certain limited cases. Nevertheless, the principle ought to apply generally.

Clause 54 Owners of land having rights over the foreshore will, like all other landowners, have to pay their LVT. The Campaign is interested to note again that the Bill does in occasional matters of detail touch upon matters of principle. The explanatory notes are explicit at this point: “There is a public interest in the use made of the seabed and foreshore”. This is perfectly true, but there is a public interest in the use made of all land (not least, be it added, in its non-use, under-use, and mis-use). Land value is a function of the community’s demand for land it is a genuinely public value.

Clause 58 The Campaign does not approve of allodial ownership. It wishes to see Kindly Tenancies brought instead within the modernised concept of feudalism it has described.

Clause 61 The Campaign holds no views on the maximum permissible length of leases. The Campaign has proposals to ensure that initially the obligation to pay LVT is apportioned among those enjoying a beneficial interest in land. As leases expire, the obligation moves up the chain to the superior (new owner under the Bill) and any new grants of leases and tenancies are to be made on that basis.



The Campaign is sensible of the work of the Scottish Law Commission in producing the Report on which the Bill is based, and approves the opportunity for updating and simplification of the law which this affords.

The Campaign has recorded, en passant, a number of points of concern.

Overall the Campaign has no choice but to oppose passage of the Bill. This is because, in disposing of ancient debris, it embraces the error of absolute ownership of land and jettisons the concept of Crown as ultimate owner on behalf of the nation. It is the purpose of the Campaign to make that concept reality, by adoption and implementation of LVT.