Rural businesses say Scotland’s rural economy faces a potential “sledgehammer” if the government presses ahead with current land reform legislation.
Scottish Land and Estates (SLE) warned MSPs that the legislation must be “workable, reasonable and evidence-based” to avoid lasting harm.
With the third phase of the bill set to begin today (October 28), the SLE has given an emergency briefing to parliament, highlighting what it calls “serious flaws” in the bill and warning that some amendments could make it “even more harmful” to local business and investment.
The Bill aims to address long-standing concerns about the concentration of land ownership in Scotland, where a small number of individuals and groups own a significant proportion of local private land. But SLE says that without significant changes, the law risks doing more harm than good.
In its submission to MSP, SLE identified several key problem areas, including new forces that it says are interfering with land markets, creating bureaucratic burdens on land managers and undermining investor confidence across the region.
One of the most controversial measures is to allow the division of properties for sale through subdivisions and introduce a property transfer test, a proposal the SLE describes as a “serious and unworkable interference with the land market”. The group said these measures lacked clear evidence and risked discouraging long-term investment.
SLE also highlighted that there is widespread confusion about which land holdings are actually subject to the new rules. The bill’s “very complex” mechanism for identifying large land holdings could make it nearly impossible to know what land would be covered, with authorities unable to clarify definitions of things like “continuous ownership” and “related parties.”
Another area of concern is the proposed advance notification process. This means the Scottish Government needs to warn not just local communities, but potentially “anyone around the world” who has expressed an interest in purchasing land from large estates.
The SLE said this would effectively place ministers in the role of “global estate agents”, creating cost and disruption while “receiving few tangible benefits for rural Scotland”.
The group also warned that the proposed land management planning requirements risked becoming a “bureaucratic nightmare” for large farms and estates. Some proposed amendments would require annual reporting to the Scottish Land Commission, creating an “excessive” administrative burden without clear benefits for local communities or the environment.
While stressing that the Bill supports the principles of land reform, the SLE said the current legislation was not suitable for implementation and could stall local development, discourage investment and undermine job creation, climate and biodiversity projects across Scotland.
Concerns about the drafting of the bill were echoed by a range of voices, including former Green MSP Andy Wightman, several parliamentary committees and local law and accountancy firms.
Mr Wightman and Don McLeod, head of wealth at a major Edinburgh firm, have jointly written to Cabinet Secretary Mairi Goujon asking her to postpone Stage 3 and refer the bill back to committee for further scrutiny.
SLE also said it had provided formal legal advice to the government identifying “significant issues” with the draft key provisions.
Sarah Jane Lane, the group’s chief executive, warned that the bill, if pushed through in its current form, could have serious unintended consequences.
“Scottish Government-approved research has demonstrated that housing estates generate an estimated annual GVA of £2.4 billion to the Scottish economy and support around 57,000 jobs – equivalent to around one in 10 local jobs,” she said.
“The reality is that if passed in its current form, this bill risks putting a hammer to the rural economy by discouraging investment, increasing red tape and threatening to dismantle successful real estate, large farms and land-based businesses.”
Lane said that while some deficiencies have been ironed out as the bill progresses, fundamental issues remain and “much of the detailed work will fall on secondary legislation, regulation and guidance.”
“The scale and complexity of that task should not be underestimated. It could be many years before the key elements of the bill become actually actionable, if at all,” she added.
SLE reiterates that it is not opposed to reform, but calls for a measured, evidence-based approach that supports rather than punishes local businesses.
“We know the Scottish Government wants to move forward with land reform and there are many areas in which we can help,” Mr Lane said. “However, many of the current bills and proposed amendments risk creating bad law, a view shared by campaigners, legal experts and experts in finance, real estate and land management.”
Discussion on the stage three amendments has begun and SLE says the coming days will be crucial in determining whether land reform strengthens the future of rural Scotland or sets it back a generation.
