Oral evidence: Land Reform in Scotland, HC 877-vTuesday 4 March 2014
Oral evidence, 4 March 2014.
Witnesses
Stuart Adam, Senior Research Economist, Institute for Fiscal Studies, and Professor Jim Gallagher, Gwilym Gibbon Research Fellow, Nuffield College, University of Oxford, gave evidence.
Chair
Gentlemen, could I welcome you to this meeting of the Scottish Affairs Committee? As you are aware, we are having hearings into the question of land reform in Scotland. We had a session earlier on, which I am afraid has slightly overrun, and, therefore, we apologise for keeping you waiting. We’ve got to be out of here by 10 o’clock—don’t laugh, don’t laugh—so, as long as we rattle through the evidence, we will get things heard. Could I start off just by asking you to introduce yourselves? Mr Gallagher, you are known to us as an adviser in another capacity, but you are here actually giving us evidence today. Maybe you could tell us the basis on which you are here.
Professor Gallagher
Thanks very much, Chair. As you know, I advise the Committee, but this is an entirely different matter. I am here in a purely personal capacity. As you know, I am a research fellow at Nuffield college in Oxford, and my interest in taxation and land taxation goes back a very long way, to the days when I was responsible for advising Scottish Ministers on it.
Stuart Adam
I am a senior research economist at the Institute for Fiscal Studies. I have been working there for 12 and a bit years now, mainly on design of tax and benefit policy. I was one of the main authors of the Mirrlees Review of the whole of the UK tax system that we published a couple of years ago, which covered pretty much the whole range of taxation but including land and property taxation. I have recently been thinking particularly about tax policy in Scotland, partly in the context of the Scottish independence debate but also a little bit more broadly given the Scotland powers that are being devolved.
Chair
Could you start off then, Mr Adams, just for the record, and tell us about the Mirrlees Review—what it is about, what its broad findings were, and how you think it impacts upon what we are discussing here in this session?
Stuart Adam
Sure. The Mirrlees Review was a very big five-year project looking at, essentially, the principles for design of tax policy for any modern economy, just starting from first principles and saying, in the modern world, what characteristics would a good tax system have? We then essentially assessed how the UK measures up to those generally applicable principles and made recommendations for how to get from A to B for, essentially, a long-run reform of the UK tax system. It was never intended to be a recipe for overnight reform. It is pretty radical in its recommendations, and the intention is for it to inform the debate and be at least one suggestion for a long‑term direction. One of the key features of it was the importance of thinking about tax policy as a whole and how it all links together, and so, while we address questions around the design of business rates, council tax, stamp duty land tax and so on, part of the importance of what we are doing is thinking of property as, for example, one form of investment and how that fits into how you would want tax saving and investment more generally, housing being something that you consume when you live in a house, and how that fits into how you would want to tax consumption generally and so on. It is, really, part of fitting property taxation into tax policy as a whole. The focus was on tax policy rather than on land reform specifically. I would not claim any particular expertise in the area of land reform, still less land reform in Scotland in particular, but more in terms of how we think about tax policy.
Chair
Could I ask whether or not Governments in Westminster or Holyrood have paid the slightest attention to what Mirrlees said and, if so, why, and, if not, why not?
Stuart Adam
Have they paid attention? I think, yes, in the sense that we had a couple of useful—I hope—meetings with the Exchequer Secretary around the time that it was launched. We had a series of seminars and meetings at the Treasury. I, similarly, was asked to give a seminar at DCLG about property taxation. I gave a seminar on property tax reform to the Scottish Parliament’s Finance Committee about a month or two ago, so we have been having engagement with them. How much notice they then take in the sense of doing anything about it I do not really know. Certainly, we have not seen commitments that implement the recommendations that we have made. In some areas there have been some moves in the right direction which may or may not be partly because of our recommendations. I make no bones about the fact that a lot of what we were recommending would be very politically difficult to implement, and, as much as anything, we are hoping to influence the long-running debate, get people thinking about what direction they want policy to go in, rather than expecting 2015 general election manifestos to propose implementation of the Mirrlees Review.
Professor Gallagher
I agree with that. The Mirrlees Review is a very impressive pile of work. I say that with Stuart sitting beside me, but I would say it if he wasn’t as well. I think it would have to be judged over a 20-year rather than a two-year horizon, and I would be surprised, if over 20 years, everything in it has been done, but I would imagine that some changes will be made that are consistent with it because, broadly speaking, it is a pretty good analysis actually.
Chair
In terms of looking at how taxes on land and property in general are applied at the moment, is that in line with any general principles of fairness and efficiency, or is it all just simply random?
Stuart Adam
To some extent, fairness is in the eye of the beholder. Someone could always come to me and say, “I think that this particular person paying this amount of tax is fair.” It is hard to discern defensible underlying principles behind the system, as far as I can see. There are too many things that just don’t look like they have a place in any rational tax system. Of all parts of the UK tax system, I would suggest that London property taxation is a pretty good candidate for the worst designed part. I would also say, not coincidentally, that it is going to be one of the most politically difficult areas to reform, but there are aspects of the system that really are hard to justify: why we should be taxing housing on the basis of what properties were worth 23 years ago and counting; why buying a property with a £1 higher price should be associated with stamp duty of up to £40,000 more. With regard to these features, it is really hard to see any first principles that would get you there. We are partly there on the basis of historical accident, plus the difficulty, once you are in a particular position, of reforming it radically.
Professor Gallagher
I would agree with that. Property taxation has just “growed”—it has never been designed. There are, in effect, four property taxes that are relevant in Scotland: non‑domestic rates, council tax, stamp duty land tax—soon to be land and buildings transaction tax—and then capital gains and real property. Of those four, three are now devolved to the Scottish Parliament, and that provides them with an opportunity to look rationally at the design of the system. The important thing, which is very clearly stated in the Mirrlees Review, is that one does not simply look at the ideal but thinks of how you get from where you are to where you want to be, because, obviously, changing the taxation system can be economically disruptive. You need to think very carefully about it and do it stage by stage. The two big property taxes—non‑domestic rates and council tax—have, of course, been completely broken on the wheel of local government finance. It was not the taxing particularly that was the problem; it was the spending that they were required to support throughout the 1980s and 1990s. We have ended up with a council tax which was a very well-designed fix to a terrible problem, the terrible problem having been the poll tax. It is, as Stuart says, completely absurd that no Government has had the courage to do any revaluation since the thing was introduced in the 1990s. There is also the issue of why domestic property is taxed in one way, which is a hybrid of a personal and a property tax, and non‑domestic property taxed in another way. The system is ripe for some reform. Property is, in my view, under rather than overtaxed, particularly in the context of a devolved system. Property has the great advantage that it does not move around and is, therefore, eligible to be taxed in a decentralised way. Property is overvalued and fetishised in this country. The ownership of land and buildings is seen as a good thing in itself, irrespective of any economic benefits they bring. One contributor to that—only one—is the fact that they are not taxed as much as they might be.
Chair
Presumably, nothing is taxed as much as it might be. You mean it is not taxed as much as it should be.
Professor Gallagher
Relative to other economic assets, it is undertaxed.
Mike Crockart
You talked about getting to where we want to be. Perhaps we can just concentrate on where we are for a moment, and look at the particular taxes and the effects that they have on land values. Some of the evidence that we have already had from a number of witnesses indicates that the way in which land is taxed and, in particular, tax reliefs and exemptions push up the price of land. Would you agree with that?
Professor Gallagher
Broadly, yes.
Stuart Adam
Yes.
Mike Crockart
Okay; short answers. That is good.
Stuart Adam
I can give you a longer one if you want.
Chair
I said we’d got to be out of here by 10 o’clock.
Mike Crockart
Let me come in with a supplementary and elicit a longer response then. How easy would it be to quantify the relative impact of those individual elements on the value of land?
Professor Gallagher
That is a bit of economic modelling. There is one big tax relief in relation to land that is huge, and that is the abolition or the non‑rating of agricultural property, which, of course, is geographically the largest part of land in the country. That is the biggest one that is around. It is sometimes seen as a law of nature that farming does not pay tax on land. It is not a law of nature; it is a public policy from the 1920s, at a time when agriculture was in some trouble and the remaining rates in agriculture were abolished then. It is not obviously economically rational that land use for one purpose is taxed and land use for another purpose is not. However, making the transition from here to there would be very difficult and complex, and potentially destabilising.
Sir James Paice
Why should that affect the value of land?
Professor Gallagher
Because if somebody has to pay money for owning something, they will pay a smaller price to buy it. I look to my economist on the right. I think that must be right.
Stuart Adam
Yes; I think that is broadly right. You can apply a similar analysis to any tax, but, if you impose a tax on property, either that could be paid by the occupier of property, who just has to pay the tax, or the rental price could be reduced so that the burden of that tax is passed on to the ultimate owner. In economic theory, the extent to which it is passed on to the owner versus the occupier depends on how responsive the supply and demand for land and property are to price. Generally speaking, we think that the supply of land is pretty much completely fixed. The supply of property is pretty unresponsive to tax, not least because it is much more constrained by the planning system and so forth, whereas demand for property relative to the supply is more responsive. In those circumstances, theory would suggest that the tax would largely get passed on to the ultimate owners, at least in the long run, simply because people can respond to a tax by saying, “I will buy less housing,” say, “or use less commercial property for my business and use my money somewhere else instead,” whereas if you own the property you are pretty much stuck with it, and if people are willing to pay less for it you can’t produce less in response because it is just sitting there fixed. There is some evidence to suggest, certainly in the case of stamp duty and business rates—I think there is evidence for council tax as well—that empirical research as far as there has been supports that contention. In the short run, changes in the tax can affect the price you pay to occupy property or, in the case of stamp duty, the price that you pay to buy it. In the longer run, it does tend to get reflected into the underlying value of the assets and therefore passed on to ownership. Some of that evidence is getting on a bit now from, say, the mid- 1990s, which I am sorry to say is already 20 years ago, but I would certainly expect that still to be broadly the case.
Mike Crockart
The example that you are using is where a tax is levied and it is then reflected in the value of the land or property longer term. Is the same true in the opposite where land benefits from a lack of tax, effectively? Is that then reflected in inflated values?
Stuart Adam
Yes. Broadly speaking, if you reduce the tax, it should, in the long run, have the opposite effect from introducing or increasing it, so the same thing should apply. Again, it is going to vary slightly from case to case. If, for example, you introduce a temporary reduction in business rates, it may well be that rents don’t fall if you know that the tax is going to go back up in a couple of years and, therefore, it is actually a benefit to the business that is running in that premises at the time. So it is not always going to be equally true, but, overall, in the long run, the level of property taxes should mostly be reflected in the value of land and property to its owners.
Professor Gallagher
To take a simple and perhaps less emotive example, the non‑domestic rates system has a lot of small and rather random exemptions—for rural petrol stations, for example. If you have commercial property which is rented, it will typically be on a five-year rent review, and reducing the rates bill simply gives the landlord an opportunity to put the rental half up because there is so much value you can take out of the business that supports the rent and rates. That is a pretty common experience, and anybody in the commercial sector will tell you to expect that.
Sir James Paice
I am still slightly puzzled by this in the context of our investigation, which is into land reform in Scotland. The main issue is the large areas of Scotland that are owned by a relatively small number of people; we need not go into the details. Any business rate is based on a notional rental value of the land. If that land has really no or very low economic value in terms of running a business on it—indeed, most Scottish estates lose money—or they may not have it and may just be sporting estates with very little income, then the rental value is going to be minimal, and therefore the rates are going to be minimal, if anything. In the context of our inquiry, I fail to fully understand how the absence or presence of business rates is of any significance. I thought, when you were going to talk about tax exemptions, that you were going to move on to talk about the inheritance tax issues about which we have heard a lot from different perspectives, but I am not entirely convinced that putting business rates on a lot of Scottish land is going to make a lot of difference to its value.
Stuart Adam
Certainly—
Sir James Paice
Because you are implying that people buy land to run a business on it, but that is not what we are hearing.
Stuart Adam
I did not mean to imply that. There are lots of reasons that people might buy land and property, and running a business on it is only one. It is true that the value per square foot or hectare, or however you want to do it, of agricultural land is typically much lower than commercial residential property. There is no doubt about that. Therefore, I would expect the rateable values of agricultural property and other undeveloped land, if you started levying business rates, to be low, and therefore the revenue per hectare to be low and it would not make that much of a difference. Now, as Jim says, you are going to have to weigh that against the fact that there is just an awful lot of this stuff, and so adding up a lot of low value things could still make some revenue difference. But, no, I wouldn’t suggest that the tax burden that would be imposed on a particular area of agricultural land, say, would be enormous and reduce its value hugely. To my mind, the principal argument for starting to levy business rates on it, aside from just a general fairness thing as to why one particular sector should be favoured like that, is just the economic efficiency argument that taxing land put to residential use under council tax to commercial use under business rates and not taxing land put to, say, agricultural use, simply distorts patterns of land use. It favours putting it to one use rather than another. Unless I am given a strong reason, I am going to be inclined to say that that should be left for buyers and sellers, plus whatever planning system you want to put in place to deal with it, rather than being something that is primarily a tax matter.
Sir James Paice
I follow your reasoning, and from a purely academic perspective I can see exactly what you are saying and wouldn’t argue against it. In the context of our inquiry, though, which is about land reform and access to the ownership/possession of land in Scotland, I can’t see how the issue of business rates, on or off most land in Scotland, is going to have any significant difference to its accessibility, whether it is communities or other individuals or—
Professor Gallagher
I do not think either of us is suggesting that making the tax system more rational in respect of land would deal with issues such as access or community ownership. What it would do in the long run, I would think—I am back to being an economic fundamentalist here, and perhaps Stuart is not one, but I will be one for this purpose—is that it would result in a more rational allocation of land for different purposes. Whether those purposes are community ownership or access is a separate question, but, in so far as there is an issue about land taxation, it is that the system is irrational and patchy and therefore is economically inefficient. That is the argument we are both making in this context.
Sir James Paice
To expand on that, Jim, how would it improve access or not—the objectives of the Committee? Your point is that it is economically inefficient and it leads to differential use of resources and so on. Can you put that into English as to how it would impact on how accessible and how available land would be to other people other than the existing owners in the imposition of what would seem to be agreed would be a very low level of tax?
Professor Gallagher
What the tax would be would depend on the value of the land, and whether that is a rental value—
Sir James Paice
Value or rental value?
Professor Gallagher
Whether that is a capital or a rental value, because we are in a very odd world in which there is no connection between capital value and rental value.
Sir James Paice
Precisely.
Professor Gallagher
So I don’t think capital or rental is the issue here. There is a market, of course, for that—both a capital market and to a lesser degree, depending on the land, a rental value. You can buy a sporting estate or you can rent a sporting estate. There are numbers available to measure these potential tax liabilities. What would this mean in the long run? I caught a little bit of the previous evidence session. One of the striking things about land—not in Scotland and not just agricultural land, but land in general—is that in the UK, for as long as I can remember, it has been a speculative asset. People buy land and buildings in order to have land and buildings because they think they are going to go up in value. One of the reasons—only one—that land and buildings go up in value is that they are, in my view, undertaxed as a class. If they were taxed a bit more, they would not go up in value quite so much and there would be less of a temptation to use land and buildings as a speculative asset. To be fair, I don’t think this is as relevant in relation to highland sporting estates as it is to Edinburgh New Town flats.
Sir James Paice
No, quite.
Professor Gallagher
But, nevertheless, that is not, in my view, a good thing. Part of the solution to that—only part of it—is a rational system of taxation.
Sir James Paice
Do I understand, therefore, from what you are both saying that you take the view that it would make economic rationale and sense to levy business rates on agricultural land?
Professor Gallagher
As a matter of principle, yes. The first thing that should be done is make some assessment of what the rateable value might be, whether on capital or revenue, and then to consider what the economic effects are on the agriculture industry of doing that. I would imagine it would have to be done over a very long period of time. Over time, as Stuart says, in the long run, taxes on property affect the capital value of property. It is the long-run economic effect.
Sir James Paice
Given the disconnect, which you rightly identified, between value and rental value, would you prefer that tax to be on actual value or rental value?
Professor Gallagher
My own view is that, in the long run, there is not a disconnect between capital and rental value, but in the long run we are all dead, as The Economist said. There may well be a short-run disconnect.
Sir James Paice
Do you favour it to be therefore—
Professor Gallagher
I would begin with market rentals because they are available. If they were not available, I would do what the assessors do in every other case where market rentals are not available, which is apply a straightforward percentage to a capital value—a so‑called contractors’ test.
Sir James Paice
Can I turn, therefore, to the elephant in the room that we have not touched on with this particular angle, which was the inheritance tax angles, which, as you say, you probably heard from the earlier exchanges. From what you are both saying, you clearly believe that that tax of agricultural property relief does impact the value of land. Can you put a quantum on that?
Stuart Adam
The short answer is no, just off the top of my head. Again, I would expect it to have an effect on the land price. I wouldn’t want to say how big that effect is.
Professor Gallagher
I have no views on inheritance tax, I am afraid. I have not studied it.
Chair
Could I just clarify, following up some of Sir Jim’s points? Given that there is very unlikely to be much community demand for bare rock, if we leave that to one side for the moment, if land is taxed, and if it is clear that the taxing of that land reduces the price, then a lower price is almost, by definition, going to make it more affordable for those who seek to buy it under either compulsory purchase or any other measure. Almost then, by definition, as one follows the other, the imposition of a tax of land would make it more affordable for the community to buy.
Stuart Adam
No, because the land price falls directly by the amount of the tax that you then levy on it. I could buy the land for less, but I then have to pay this tax every year, so, actually, I am neither better nor worse off buying it than I was before.
Chair
That is interesting because the community argument, by and large, has always been, as I understand it, that the difficulty is not in the production of revenue from the land, as it were, because they believe they would be able to use it much more productively. Their problem is raising the capital to buy it in the first place. That difficulty that you identify then would be dealt with, as it were, by the mechanisms that they would adopt—once they own it—to run it.
Stuart Adam
Sure. If the problem is that you can afford it on an ongoing basis and it would be a good thing to buy, but you can’t afford the up-front cost, the usual answer to that is, “I will take out a mortgage.” In a sense, I suppose you could think about the tax as having a similar effect—that it makes the up-front price lower but you have to pay this tax every year instead, a bit like you would pay mortgage interest every year. You can think of it a bit like that, but, frankly, if the aim is to try and give loans to people for things that would be viable if only they could get a loan, then you would probably want to address that through the credit market rather than through the tax system.
Professor Gallagher
I have certainly heard people often say that the community could make more money out of a piece of land than the landowner, but that is an empirical proposition. I am not always sure that it is true.
Chair
Sir Jim, you wanted to raise the issue of inheritance tax?
Sir James Paice
I think we just touched on it. It stemmed from your comment, Jim, in your evidence that, basically, all property taxes were devolved, whereas I would have thought issues—
Professor Gallagher
There are two taxes—you are quite right—which impact on property. One is capital gains, which I mentioned. The other is indeed inheritance, but I have made no study of inheritance, I am afraid.
Stuart Adam
I might add to that, but, again, thinking from a very big picture of a Mirrlees Review-type perspective, I would say there are more taxes on property that are not devolved. You can think of things like income tax that landlords pay on rental income and what happens to corporation tax from companies’ own profits. You can think about the VAT exemption for housing that is there at the moment. There are lots of parts of the tax system— and actually very important parts of the tax system—that are also relevant to property and are not devolved. In terms of inheritance tax, I wouldn’t say I could quantify the impact on land prices. Again, from a design of inheritance tax point of view, it does seem odd that you would want to exempt this particular form of asset. It seems like a fairly gaping invitation to tax avoidance, if nothing else; you buy this particular asset, subject to various restrictions, you then pass it on and there is no inheritance tax. If people worry about how effectively inheritance tax is actually taxing the biggest estates, that would seem to be a problem as well.
Sir James Paice
I would not dispute that with you, except to point out that virtually everybody whom we have interviewed on the subject says if you got rid of agricultural property relief then they would, almost without exception, be entitled to conventional business relief, which is much bigger.
Stuart Adam
I would get rid of that as well. The same argument applies.
Sir James Paice
Yes, but that applies to all businesses. You would get rid of all business relief.
Stuart Adam
Yes, essentially. Again, you can go into the details of that. That is one of our less radical propositions.
Sir James Paice
I think we have covered it, Jim.
Chair
Jim?
Jim McGovern
Thanks, Chair, and thanks for coming along. Jim, I have a question for yourself. I think you argued for a three-step plan towards a more rational system of land and property taxation.
Professor Gallagher
Yes.
Jim McGovern
Again, I think you are quite clear that this needs to be a cross-party exercise—
Professor Gallagher
Yes.
Jim McGovern
—to avoid “the temptation…to court popularity”—those are your words—by retaining tax quirks.
Professor Gallagher
Yes.
Jim McGovern
Given the importance of this, how likely do you think that will happen cross-party?
Professor Gallagher
What ought to happen and what will happen are often, as you know, Mr McGovern, two different things. One of the things that the Mirrlees Review has done is begun to set an agenda for tax reform. When one looks at the history of tax reform in relation to land—I am thinking here of the rates, the poll tax, and the council tax in particular—short‑term approaches are catastrophic. You really need to plan for the long run and you do need to plan on a cross-party basis, because the temptation in taxation is to do the popular thing, particularly if the taxation isn’t all that important to you as a Government. The temptation to paint your opponents into a corner on this is very strong. We have got to the situation in Scotland at the moment where the local government finance system and local taxation system is profoundly broke. It is unsatisfactory in all sorts of ways, but the political incentives for the three or four parties who might have a say in changing it are all not to talk about it. The first party who proposed, for example, a revaluation—or, even more radically, increasing the level of the council tax—would pay a political penalty. Therefore, none of them will, and that is not a satisfactory arrangement for the long run.
Jim McGovern
So you don’t think there will be some sort of cross-party—
Professor Gallagher
In the immediate political climate of Scotland, I think that is unlikely. Over the term of the next Scottish Parliament I think it is conceivable.
Jim McGovern
Stuart, do you think that the UK Parliament, the Welsh Assembly and the Northern Ireland Assembly all face much the same challenges in trying to modernise land and property taxation, or does it differ according to region?
Stuart Adam
Qualitatively, the challenges are similar. There are differences in the land and property market in the different areas. In Scotland, for example, property values are less unequally distributed than they are in England, and that makes some difference. More of the land is agricultural land, but the qualitative recommendations that that would mean you wanted to do and the nature of the challenges you are facing are broadly similar. One difference, I would say, is that, property taxation having been devolved to some extent for some time and being devolved further now, the different parts of the UK have introduced reforms that are in some cases improvements. So the land and buildings transaction tax in Scotland is a significant improvement over stamp duty land tax. What Northern Ireland has done to domestic rates is almost completely a model for what I would say we would ideally like to do to council tax. The fact that it has at least happened in a part of the UK is encouraging to me that there may be reform elsewhere, though I have to say, in terms of searching for cross-party consensus, I find it quite depressing that one of the few areas where there is cross-party consensus at Westminster is that there should not be a revaluation of council tax, which is again—
Chair
Why were they able to do it in Northern Ireland? Northern Ireland is an area that you would normally associate with division, so the fact that they seem to have got unity there would tend to run contrary to the point that agreement is not possible.
Stuart Adam
It does suggest that in some circumstances agreement can be reached. What the political factors are that allowed for agreement in Northern Ireland that are not currently allowing for agreement elsewhere in the UK, I’m afraid I simply do not know. I don’t know enough about the politics of it in Northern Ireland; I just know what they did.
Professor Gallagher
I think one of the critical factors, though I am going from memory here, is that the average household bill is markedly smaller.
Chair
Right.
Jim McGovern
I have a question for both of you gentlemen. Do you think it is logical that agricultural land, forestry land and sporting estates are not business assets for the purposes of the non‑domestic rating system but can be for the purposes of tax relief?
Stuart Adam
For the purposes of inheritance tax relief is this?
Jim McGovern
Just tax relief generally.
Stuart Adam
To my mind, all property should either be classed as domestic and therefore fall within council tax, or non‑domestic and therefore fall within business rates, though I may want to reform council tax and business rates, but there should not be some gap into which it falls where it is currently subject to neither. That is the problem we have at the moment. In terms of whether it qualifies for reliefs in inheritance tax and all the rest of it, I would first of all need convincing why there should be such reliefs in the first place. Given that I wouldn’t want to have a relief for unquoted businesses in inheritance tax, as we have, or agricultural land and property and inheritance tax, as we have, I don’t really mind whether agricultural land is also classified as business property or not. I would like the relief to apply as narrowly as possible because I would like it not to be there at all.
Chair
Can I just clarify? You have never been elected to anything, have you?
Stuart Adam
No—strangely enough, no.
Chair
There is a contradiction, isn’t there, with you getting elected and putting forward proposals that nobody likes?
Professor Gallagher
To defend Stuart for a minute, if I may, the great advantage of abolishing tax reliefs is that it means that you can reduce tax rates.
Chair
Do you believe that that one would follow the other, though?
Professor Gallagher
If you do them as a package, that is a way of doing it.
Stuart Adam
Also, in terms of addressing the political difficulty, I would have thought the way to make it happen is to get everyone who benefits from the tax cut—the cut in the tax rate—on side.
Chair
Again, that is interesting, but I am not sure that it necessarily corresponds to reality. Those who lose something are always much more vociferous than those who are liable to gain.
Stuart Adam
Absolutely. I made clear right at the outset that one major reason why no political party is proposing to implement the recommendations from the Mirrlees Review is that they are very politically difficult. I make no bones about that. We make some suggestions as to how some things might be made a bit politically easier, how you might go about approaching transition and so on, but there are no bones about it. Radical reform entails losers as well as winners. Losers tend to be vengeful, while winners tend to be ungrateful, and that means that radical reform is unusual. I am not that hopeful about much of what we propose on land and property taxation happening in the short‑term. I am, if anything, less optimistic than Jim is about even the next Parliament and so on, but one thing that gives me a little bit of hope is, for example, the experience of Northern Ireland and domestic rates, and the experience of Scotland with the land and buildings transaction tax. Neither of those is a perfect tax, but they are both big improvements on what we see in England and Wales, for example; so improvements are possible.
Chair
As to the Scottish parallel you used there, there was not a clearly identifiable and substantial number of losers though, was there?
Stuart Adam
No. One thing that makes stamp duty a little bit easier than council tax and business rates is that it is only paid when there is a transaction. Other than those people who think, “Aha, I am looking to buy a house next year or, for that matter, sell a house next year, and therefore this will affect me,” unless you are in that position, you do not see it in the way that council tax and business rates land on your doormat every year, in addition to which of course LBTT may not have had all the problems it is going to have yet because they have not yet said what the rates and the thresholds are going to be. Even if you think, “Aha, I am going to buy a property next year,” you don’t know whether your particular bill is going to go up or down yet. Some of those political problems may be still to come, but stamp duty may be easier than the other two for that reason.
Jim McGovern
I think it was yourself maybe, Jim, who said that the losers tend to be more vociferous.
Professor Gallagher
I think we would all agree with that, yes.
Jim McGovern
Would it also be the case that the losers tend to be more powerful?
Professor Gallagher
Sometimes. Obviously it depends who the losers are. My soul was burnt by this as long ago as 1997 in the rates revaluation—it was actually 1975—which produced very large numbers of losers. They were very vociferous, and quite a lot of them were not particularly well off people—the money mattered to them. Stuart raises or illustrates a general issue about taxation that those taxes that you spot and see and perceive directly are much less popular than those taxes that go on in the background. No one really complains about VAT; it is just on every transaction you do. Most people don’t spot stamp duty land tax because it is all part of the ghastliness of buying and selling a house. It is all part of the transaction and you only do that transaction once every 20 years. On the other hand, rates, particularly council tax, are one of the few taxes that most people pay in cash every month. Even income tax, which they pay every month or every week in their wages and salaries, is money they don’t see. Council tax is money that they have to spend. That makes it unusually unpopular, which is why, over time, it has been really a very difficult political problem for all parties. It is true for the Scottish National party in Edinburgh at the moment; it was true for the Conservative party in the 1980s and 1990s, and it was true for the Labour party in the last decade—the first decade of this century.
Mr Reid
Farming in Scotland particularly is struggling. They are faced with cuts in common agricultural policy support. This is an e‑mail I got in from a farmer last night: “At the moment the price for our fat stock has dropped £140 per head in six weeks. It is obvious the supermarkets are never going to pay the realistic price for food.” Why do you think that taxing farmers higher is going to be beneficial to the country?
Professor Gallagher
This will sound hard-hearted, but, when I work with the Government, every conversation I ever had with a farmer began with a story of that sort. I simply don’t understand—this is my ignorance—why, if farming is so unsuccessful a business, farmland is so expensive. I just don’t understand that.
Mr Reid
What do you think the effect of, say, charging rates on a farm will be? If the farmer who owns that farm has to pay extra rates, that is going to be an extra cost on his business. If the price falls as a result of that rate increase, what is the benefit of that to society?
Professor Gallagher
A tax on property is, in the long run, a tax on the ownership of property. That is the conversation that we had earlier. Therefore, its effect on farmers who are owner occupiers will be different from the effects on farmers who are tenants. This is about not the farmer who is a tenant of a landlord but a farmer who owns his own property. It is undoubtedly the case that, if you apply tax on property, the owners of property will own something which is less valuable, and that will be true for the farmer.
Mr Reid
As well as owning something less valuable, their business costs every year are higher.
Professor Gallagher
Yes, and you are absolutely right to say that the other issue, which we always come on to in the taxation of property, is the person who is asset rich and revenue poor, which is the story which I imagine lies behind the kind of e‑mail that you are getting there.
Mr Reid
Yes.
Professor Gallagher
That is a difficult one, I agree. It surfaces in relation to agriculture. It will surface more painfully in relation to domestic property, if that is ever revalued, or if there is ever any move back to a more linear relationship between tax bill and capital value of the kind that we had under domestic rates.
Mr Reid
You haven’t answered—
Professor Gallagher
I am coming to the answer. The answer is that we live now in the most sophisticated, financially aware society we have ever had. We have machinery in the City of London and elsewhere which can transform any form of capital or any form of revenue into the other. If there is a problem of someone who is asset rich and revenue poor, the financial services industry exists to enable them to deal with that.
Mr Reid
Could you expand? So your message to the farmer would be—
Sir James Paice
Sell.
Professor Gallagher
Let me do it by analogy first of all because I have not really thought this through in respect of the farmer, but I have thought it through in respect of the elderly lady in the big house. It is that, if you do not have the revenue to pay your property tax, there are financial mechanisms which essentially turn it into an appreciating liability, which is only to be met when the property changes hands.
Mr Reid
What are you suggesting for the farmer?
Professor Gallagher
In principle, I can imagine you could do the same thing for a farmer. I have not thought that one through in detail.
Mr Reid
You are saying the farmer should go and take out a loan. Is that what you are saying?
Professor Gallagher
It is certainly possible to imagine that somebody who does not have the revenue to pay their tax bill, which is a result of the value of their property, could accumulate a lien against their property which would only ever be crystallised when the property changed hands.
Mr Reid
Yes, but, by putting the tax on the property as well as making the farmer pay an annual rates bill, which has to be paid at the moment, you have also reduced the value of his property.
Professor Gallagher
There is only one economic transaction, which is either the cash paid or the reduction in value.
Mr Reid
But he loses both ways. He has to pay the rates and the value of his property is reduced.
Professor Gallagher
He could pay them, in principle, when he disposed of the property, which obviously people always do at some point.
Mr Reid
Yes, but the farms are often passed from one generation to the next, so—
Professor Gallagher
Which takes us back to the question of inheritance, doesn’t it?
Mr Reid
You also want to hammer the farmer by removing the exemption.
Professor Gallagher
I am not here to be beastly to farmers, but—
Mr Reid
It sounds like you are.
Professor Gallagher
But the economic logic of saying that you must require people to be able to keep an asset, even though they are not making good economic use of it, is what lies behind the argument you are making.
Mr Reid
What effect do you think your proposals, if implemented, would have on farming in Scotland?
Professor Gallagher
It would depend on how substantial the phasing-in period was. I don’t think anyone would suggest that you suddenly applied rates to the farming industry. Non‑domestic rates run at 46p in the pound, is it, of rental value? No one would suggest that. Would a non‑domestic rate of 1p in the pound make that much difference to the industry? It is worth thinking about.
Mr Reid
What is the point in setting up an administration to collect rates of 1p in the pound?
Professor Gallagher
Because over a prolonged period you could gradually increase them.
Mr Reid
What impact do you think that would have on the farmers?
Professor Gallagher
No tax is ever popular with the people who have to pay it.
Mr Reid
You said that three of the property taxes were devolved to Scotland and one—inheritance tax—is not. Is it practical to devolve inheritance tax?
Professor Gallagher
In principle, yes, I think it would be possible to devolve inheritance tax. It is a personal tax, and other personal taxes are devolved. People generally have a reasonably well-defined location for tax purposes; so, yes, it would. I would come at this not from the point of view of taxes in here, but from the point of view of what works as a devolved tax. The trouble with inheritance tax is that it doesn’t raise very much money because of all those aforementioned exemptions, principally the exemption of domestic property actually. That is the one that means it does not raise very much. Certainly, the experience in Australia, where it is some time ago now that inheritance tax was decentralised, there was an immediate race to the bottom. Everyone went to die in Queensland—I think it was. That did not work for anyone because they all then had to reduce their inheritance tax. I see some practical challenges with devolving.
Mr Reid
Stuart, you do not have anything you wanted to add.
Stuart Adam
On the devolving inheritance tax point, as I said, in principle, you could devolve it. Which are more or less sensible taxes to devolve depends, to a reasonable extent, on how mobile your tax base is. You do have to worry about the issues of, yes, people moving to one place if they are going to die, or, for that matter, whether you would be able to avoid inheritance tax by having trusts that were based in the other parts of the UK. So you do need to think carefully about the practicalities. In terms of being beastly to farmers, essentially my argument is an economic efficiency argument: I don’t want land and property use to be distorted towards an untaxed form. Whenever you do that, there are going to be winners and losers from tax reform. In this case, if you just start imposing business rates on farmers, that would make them worse off, undoubtedly. You can alleviate that by phasing it in gradually. You can think about their access to loans and so on. I am not sure quite how well the capital markets work for these things. You can address those types of things, but, in the end, it would make them worse off. That, per se, is not my agenda. In principle, I would be perfectly happy to say, well, let’s take the revenue that you would raise by ending this tax relief and, rather than using it to reduce the general rate, let’s hand it out as one‑off lump sums to the existing owners of those properties. That is the compensation for the reduction in the value of your land, or, if you prefer, that is compensation for the tax bill that you are going to have to pay or the reduced rent that you will get over however many years. Whether that is the best use of revenue that you could devise for this is another matter. In principle, I have no particular axe to grind saying I want to hit farmers harder, but the current system does lead to inefficient allocation of assets and inefficient land use, and that is the bit that I want to get at now again. Whether one‑off windfall giveaways are really a sensible way forward is another matter, but I am using that as an illustration rather than as a recommendation.
Mr Reid
But Europe as a whole has decided that there are good reasons why we have to subsidise our farming industry—that has been long established—so what is the point suddenly, for the sake of some economic theory, in penalising our farmers? They would—
Professor Gallagher
It is quite interesting that agricultural derating was introduced in the 1920s as a subsidy to farmers and is now a subsidy to farmers that no one notices is there. If it were the case, the logical thing to do would be to pay the tax and increase the subsidy as a result.
Mr Reid
But you would run into European problems there.
Professor Gallagher
There are lots of things you can do.
Stuart Adam
If you want to subsidise farming, there is still the question of what is the best way to do that. It is not obvious to me that a tax break that is, in effect, proportional to the rental value of the property occupied is actually the right way that we want to subsidise farming.
Mr Reid
Have you any counter-proposal?
Stuart Adam
You would want to ask what precisely the reason is that you want to subsidise it. What precisely is the activity you would want to encourage, and then let’s subsidise that? If it is something about production, then subsidise farming production. If it is something about employment, then subsidise employment. If it is something about keeping the land in a nice condition by some definition, then subsidise that, but, whatever it is that you want to achieve, identify that carefully, define it and target that. It is not obvious to me that agricultural relief in business rates or inheritance tax is doing that.
Chair
Alan makes the point, as you might expect from a Member of Parliament with a substantial farming community, that this would be punishing the farmers. As somebody with no farmers in my constituency, is this not a case not so much of punishing farmers but of removing a privilege that farmers have had?
Stuart Adam
To some extent, yes, but not entirely. I would undoubtedly say my problem with it is that it is removing an advantage to farming as an activity. That is the thing about it; you are distorting economic activity in the country. In terms of whether it is of benefit to farmers, that is where I would say, when you announce these tax changes, broadly speaking, what you would expect to happen is that the land or property value changes on the day you announce it. That means that in the 1920s, when this thing was introduced, whoever owned the land at that time said, “Great; my land has just shot up in value. I now own a more valuable asset than I did and/or it is more valuable because I can rent it out for more because whoever is occupying it does not have to pay it,” which could of course be the farmer themselves. It may have been passed through the generations and therefore still be of benefit to that dynasty of farmers, if you like, but it could also perfectly well be that I as a farmer bought this land in the mid-2000s, or whatever it is, and I will have paid a higher price for that land because the lack of tax is reflected in the higher price for the land. So it is not necessarily the case that I am currently getting a benefit because, while I do not have to pay business rates, I had to pay more to buy the land in reflection of that. It is known in the economic literature as capitalisation. The first lesson is: don’t do things that get capitalised, because what ends up happening is you have big windfall gains and losses at the time you announce them, but for people who are buying and selling it years down the line that may well not be true. I wouldn’t have a particular view as to whether you want to be more or less nice to farmers than we are at the moment. Again, I am not trying to come at this from a distributional fairness angle. What I would say is that the current system favours using land for farming rather than using land for other purposes, and I would need some convincing that that is what we want to do and that is the way we want to do it.
Mr Reid
If you increase taxes, as you suggest, would you anticipate that would mean an increase in the price of food?
Stuart Adam
Principally, no. Principally, I would expect it just to reduce the price of the land. One way to think about that is, if these farmers are still competing with, say, imported food to get into supermarkets, they cannot charge supermarkets any more to buy their food because they are still competing with the same competitors they had before. Even if it is just all farms in Scotland, they are still competing on the same basis as before. What is happening is that there is a one‑off hit that your land is worth less than it used to be because there is this extra tax to pay by whoever is occupying it and therefore they will pay less rent.
Mr Reid
But, as well as the land being worth less, there are also greater running costs on the business because the business has to pay these rates every year.
Stuart Adam
Sure.
Mr Reid
Are you suggesting then that it would have no impact on food prices and it would just mean that the farmers would have less income coming in?
Stuart Adam
Basically, yes.
Mr Reid
Do you think that would then reduce income so much that it would then force farmers out of business?
Stuart Adam
Whether it would force them out of business is a slightly different question. Whether it would force them out of business, it would have basically the same effect as if one day you said to them, “Okay, we are just going to put a one‑off bill for £1,000 or £1 million”—whatever you care to do—“on your doormat.” Ultimately, it has that kind of effect.
Mr Reid
It is not a one‑off bill; it is a bill every year.
Stuart Adam
Yes. That part depends on how the capital market functions, because in that sense it is a charge on your income you are going to have to pay every year, regardless of your behaviour. If the capital markets are functioning, then, in principle, fine; it is a one‑off borrowing you have to do in order to be able to pay that bill going forward. As to the question whether simply making farmers or any other business worse off like that forces them out of business, if it is still a profitable, viable business, then they ought to be able to get loans and it is still better off doing that than they would be doing something else. If they had just run out of cash—ultimately, most businesses go under not because of lack of solvency but because of lack of liquidity—if they just don’t have the cash to pay it, then they presumably go under in the same way as any other business.
Mr Reid
One of your justifications was that it would make, you said, a more efficient use of land. That would seem to imply that we would have less people in farming and more people doing other things with the land. Is that what you would expect to happen?
Stuart Adam
Presumably, yes.
Mr Reid
What other things would you expect to replace the farming?
Stuart Adam
It depends. Again, to some extent the extent to which that can happen would depend on whether someone wants to buy the land to build an industrial park on it or whatever it may be.
Mr Reid
You are suggesting that the dairy farms in Kintyre will be forced out of business and that somebody else will come in and build an industrial park. Is that really what you think will happen?
Professor Gallagher
To be fair, of course this is not a perfect market, and the description that Stuart and I are giving is about the underlying economic system. Of course it is a very lumpy market, and of course land use is heavily constrained by planning and other things. You will see throughout the agricultural sector at the moment very strong pressure, for reasons completely unconnected with land value taxation, to diversify into other activities that produce income, because, if indeed the farmers are facing, as I am sure they are, falling prices for many of the things that they produce, then they already have a strong incentive to try and find something else to do. There has been a lot of diversification, much of it encouraged, of course, by Government subsidy of one form or another, but at least that is an explicit subsidy. An important point which Stuart makes, which is worth reflecting on, is that, if you wish to subsidise farming, would you choose to subsidise the richest farmers the most?
Stuart Adam
Or who has the most property, which is not necessarily the same.
Professor Gallagher
Quite so.
Stuart Adam
My example of the industrial park was—
Mr Reid
The person that owns the farm with higher rateable value does not necessarily have the personal wealth. The two don’t necessarily go together.
Professor Gallagher
It depends what you mean by “personal wealth.” The value of the land is wealth.
Mr Reid
What impact would the change that you are suggesting have on tenant farmers?
Professor Gallagher
Again, in economic theory, it would go straight through to the owner of the land, depending on the contract they had with the owner and the rent review. The rent payable would have to be smaller because the tenant is—
Mr Reid
Tenancy clauses often have rules in them that rent reviews only go one way: they go up.
Professor Gallagher
Yes, but inflation usually takes care of that, even under the present Government.
Stuart Adam
I should emphasise that we are talking about the long run here. It may take some time for rents to—
Mr Reid
I am still not clear what the benefits are to society of what you are suggesting, but we could argue this all day, Chair.
Chair
I wonder if I could just ask a final couple of points about land value tax. The Mirrlees report says, and I quote: “The economic case for a land value tax is simple, and almost undeniable. Why, then, do we not have one already?”
Stuart Adam
Are you looking for an answer to that question?
Chair
I think so, yes.
Stuart Adam
The rest of the paragraph goes on partly to answer that. I think we have actually discussed a large part of the reason already.
Chair
It is just simply because it is so tough and it is such a drastic set of proposals.
Stuart Adam
Yes. There would be big winners and losers from it, and that kind of thing is always politically difficult. There are other things I could add to that. One thing is that the attention of officials and practitioners who are most closely involved in these areas—again, this applies across the range of taxation—tends to be on the minutiae of the current system and of small reforms that are proposed to it. Actually, it is just not that common for the policymakers to step back and really engage with these arguments. A third reason is that it depends on the kind of proposals being made. In the Mirrlees Review we were proposing replacing business rates in a revenue-neutral way. Other proposals have been just for adding a land value tax on top of everything else. In terms of political difficulties, that would be about as popular as any other additional tax that you introduced. Then there is a group of land value tax campaigners who argue, essentially, for the replacement of almost the whole of the rest of the tax system with a joint land value tax, and, therefore, those kinds of proposals get associated with the idea of land value taxation. Those are a range of political and perception—but not very good economic—reasons why the kind of proposal that we make in the Mirrlees Review for land value taxation does not happen. There is a genuine obstacle to land value taxation, which is the practicality of valuing the land separately from buildings. That is a hard thing to do. When we talk to people with expertise in various aspects of that, I get astonishingly polarised views as to whether it will be quite easy or it would be next to impossible. I suspect the truth is somewhere in between, but it is undoubtedly a difficult thing to do. It is for that reason that we make the recommendation of introducing a land value tax with a big caveat of “subject to confirming practical feasibility.” The first thing that is needed would be a serious official review of the practicality of land value taxation and how you would go about doing it, looking at the kind of methodologies and techniques that are available, looking at what is done in other countries. Land value taxation is in place in some other countries, but I don’t know personally quite how satisfactory those systems are. There is a genuine question about how accurately you could value land, and that is a genuine obstacle, but I am not convinced that that is the main reason why it has not happened. The main reason why it is not happening is because it is considered big and radical and slightly eccentric, and would create lots of losers, and therefore will all be too difficult and just does not get on the agenda very much.
Professor Gallagher
The economic argument for land value tax is a perfectly good argument. We must not let the best be the enemy of the good here. My own view is that there is always scope for more research and that research is to ascertain just how big a difference there is between land value and our present systems of taxation. The economic argument for not including the building is an argument which says that that disincentivises people making buildings, and buildings are a good thing because they represent economic activity. I kind of accept that, but I wouldn’t be too purist about it. I would make some estimate of just how far away our present land taxes are from what a land value tax would produce, and see what changes you would make to them to get them rather closer to it, rather than to move to a radically different system of taxation.
Stuart Adam
To come back on that, I would certainly say there are plenty of things that you could do that would be small incremental improvements on our current system of property taxation. That applies within business rates, council tax, stamp duty, inheritance tax, CGT and all the rest of it.
Chair
Give me five.
Stuart Adam
Give you five?
Chair
I was partly jesting there, but in what we are looking at in terms of land reform, rural land and so on, tell me a number of changes that you think could be made relatively easily that would help us in our overall objective.
Stuart Adam
I wouldn’t say relatively easily but I would say more modest reforms rather than a complete overall of the system, such as things like removing exemptions within the current system rather than having complete overhauls; things like having valuations that more closely reflect current values, which is obviously a huge problem with council tax and a bit of a problem with business rates as well. I don’t think it has been perceived as a rather bigger problem in the current downturn, but there are things you can do to make those more sensible. Council tax could be made more proportional to property value, but that is not really the focus of your review. The kind of thing that Scotland has done on the land and buildings transaction tax is a sensible improvement on stamp duty, and I would like to see that elsewhere in the UK, but I would also like to see stamp duty gradually reduced and the other property taxes gradually increased to make up the revenue because stamp duty, or LBTT in the Scottish case, even as reformed under LBTT, is the most damaging of the property taxes. If you could move in that direction, in the long run I would like to see no transaction tax there at all and entirely raised by recurrent value taxes. In terms of the long run, one other thing to come back to and where I think Jim and I end up with slightly different positions, even for the long run, is this. While we would both like to see land value rather than property value as the basis for taxing business property—and I agree that, while it is better, I would not be that precious about that difference—the Mirrlees Review did not say the same for domestic property, where, essentially, we argued that we could see a case for taxing the buildings as well as the land, in effect as a substitute for the VAT that currently is not levied on housing. That is where, if you are thinking about the tax system as a whole, you do want to bring all of those together. We argued that, rather than moving council tax to be a land value tax but imposing VAT on housing, you can essentially envisage a reformed council tax substituted for VAT on housing. That is getting a bit outside the scope, but I thought I ought to make that distinction.
Chair
The difficulty for most of us is that this is not our life’s work, and you made the point earlier on about the best being the enemy of the good and so on. Maybe it would be helpful, given what the thrust of our report is following, if you were able to reflect on whether or not there were particular changes that you thought ought to be more closely examined, because we are going to produce a report fairly soon on an interim basis, but then we will probably consider what other issues we want to pursue more vigorously in the second phase of our inquiry. This area might very well be one of them, but rather than, as I say, make this our life’s work and last five years—is that how long you said the Mirrlees report took? I am not sure any of us want to spend that long. Sir Jim there is retiring, so he might very well want to commit us to five years of work, but the rest of us are not necessarily enthusiastic. However, we might be quite keen to look at some more incremental areas that would affect the question of land reform.
Stuart Adam
Sure. Our focus so far has not been on land reform. Clearly, in that sense, the things that are around agricultural land and property specifically are the obvious ones to focus on. One thing that you may want to be aware of is our annual green budget that we published at the IFS about a month ago. We wrote a chapter on business rates, which, relative to the Mirrlees Review, was more focused on the recent reforms and potential incremental reforms, and more looking at things like whether indexing multipliers in line with RPI inflation each year is the sensible thing to do. One thing that specifically looks odd in Scotland is the structure of small business rates relief, where, ironically, given the improvements they are making in replacing stamp duty with the land and buildings transaction tax, business rates in Scotland is designed in such way that having a £1 higher rateable value can be associated with a £2,000 higher business rates bill—in exactly the opposite direction from what they have done on LBTT. That seems a particularly peculiar one. Now, again, that is an improvement to business rates. To what extent you want to relate that to land reform I don’t know. If land reform is all about those things that are not currently subject to business rates, then the answer to that is to start taxing them. There are things that could be done relatively incrementally to make the business rates system better. Again, another one in terms of incremental reforms is what in Scotland is called the business rates incentivisation scheme, giving local authorities incentives to get less and then keep part of the business rates revenue. In many ways that is a perfectly sensible idea, but the way it is structured is that there is a reset, which says that the local authorities get to keep half of the revenue until the next point of revaluation. That means that five years before a revaluation they have a big incentive to do it. The year before a revaluation you would say, “Actually, we would rather discourage the development. We would rather delay it for a year because then we will get another five years’ revenue from this.” It would be much more sensible to design that scheme so that local authorities got to keep half the revenue for a five- year period rather than until a given calendar date. There are lots of things like that that you could do to improve the current system of property taxation over and above the long-term aims about how you think these should be designed. Again, as to the link between that and land reforms specifically, land reform is not an area that I claim expertise in.
Sir James Paice
Chairman, what we have established is that all taxes distort behaviour, so the simple solution is to abolish the lot.
Chair
Yes, you are you are retiring at the next election. I can understand that. On that happy proposal, put forward by our Conservative member, could I thank you for your evidence? The final point that we always make is whether or not there are any points that you feel we haven’t covered, but I don’t think you have many views left unexpressed.
Professor Gallagher
I think that is right, Chair.
Chair
We have covered almost everything. Is there anything else that you want to add?
Professor Gallagher
No.
Stuart Adam
No.
Chair
Could I finish by apologising for delaying the start of the meeting and thank you very much for the evidence that you have given us, which we have found most helpful. Oral evidence: Land Reform in Scotland, HC 877-v 20