Cui Bono? Who Leaked the Harassment Committee’s Conclusions?

17. March 2023 · 23 comments · Categories: Democracy, Governance, Legal affairs, Politics

TWO YEARS AGO

Two years ago, on 18 March 2021, the Committee on the Scottish Government Handling of Harassment Complaints (the Committee) met for the final time and signed off its Final Report which was published on 23 March 2021.

The day is infamous due to the leaking of some of the Committee’s conclusions before it had even completed its deliberations. At 18:58, James Mathews from Sky News reported the Committee’s conclusions in a tweet and live on air.

Later that evening, the First Minister, Nicola Sturgeon, who was one of those whose actions were under investigation, accused me and my opposition colleagues of having made our minds up before she gave evidence and claimed that we were responsible for the leak.

“What’s been clear is that opposition members of this committee made their minds up about me before I muttered a single word of evidence. Their public comments have made that clear. So this leak from the committee – very partisan leak – tonight before they’ve finalised the report is not that surprising.”

The next day, three of the four SNP members of the Committee (Alasdair Allan, Maureen Watt and Stuart McMillan) issued a media statement accusing me and my opposition colleagues of having ”railroaded though their prejudiced assertions based purely on political considerations,” and alleging that, “for the opposition, this was never about the truth. It was never about the evidence and, shamefully, it was never even about the women. All of these are being sacrificed in pursuit of political ends.”

I remain hurt and angry at having these false allegations made against me but chose to let matters rest at the time. Clearly the First Minister and her colleagues were determined to pin the blame for the leak on us and it was futile to engage in an ongoing war of words over the matter.

This blog seeks to determine who was responsible for the leaking of this information.

I am certain of the following:

  • I do not know how the Committee’s conclusions found their way into the hands of Sky News;
  • I know that I was not responsible;
  • I am confident that no member of the Committee leaked the conclusions directly to James Matthews.

CUI BONO?

In this blog, I ask cui bono? Who benefits?

This famous principle suggests that the party most likely to benefit from the leak is probably responsible for it.

What follows is first of all a report of the complaints made to the Ethical Standards Commissioner in the aftermath of the Committee’s work, then a chronology of the events leading up to the leak, and finally an analysis of who stood to gain from the leak.

COMPLAINTS

In October 2021, I received a letter from the Ethical Standards Commissioner containing over 50 complaints from individuals that I and other colleagues had breached the MSP Code of Conduct in two ways. The first (Category D complaints) was that I had openly discussed information in the public domain that was confidential to the Committee. The second (Category E complaints) was that I had leaked information (directly or indirectly) to the media that was confidential to the Committee. These latter complaints related to the 18 March leak to Sky News. None of the complainers to my knowledge claimed to have any evidence of any of the complaints that they were making.

The Commissioner used his statutory powers to require that all texts, emails and other information relating to any contact with named media outlets be handed over to him.

In May 2022, the Commissioner wrote to me to say that he had dismissed as inadmissible all of the Category D complaints.

On 6 September 2022, the Commissioner wrote to me to advise that he had concluded his investigation and had dismissed all of the Category E complaints that I had leaked confidential information to the media. Having assessed all interactions between Committee members and the media and related parties, he found no evidence to support the complaints.

However, he went on to say that he had sought legal advice on the possibility of obtaining information on the source of the leak from political parties and media outlets but that there were no reasonable prospects of success were he able to pursue such a course of action. This is not surprising in relation to the media where the protection of sources is a well established principle. But it is an intriguing claim in relation to political parties, given the powers in Section 13 of the Act which allow the Commissioner to compel the production of evidence from almost any person. Failure to do so is a criminal offence (Section 15 of the Act).

In any event, this particular investigation was over – as was another one initiated by myself.

I had long felt that the statement issued by the three SNP MSPs was defamatory and in breach of the MSP Code of Conduct (see end of this blog for full text of their statement). In particular the Code makes clear that MSPs must not provide the media with any comments on Committee reports until they are published.

I did not have the energy nor the presence of mind at the time to make a complaint. I was furious at them for their slurs but wanted to leave the whole sorry saga behind me. But on the first anniversary of the leak, I felt it was time to hold them to account for what I considered to have been a flagrant breach of the Code of Conduct and so on 20 March 2022, I made my own complaint to the Commissioner about their actions.

On the same day that complaints against me were dismissed (22 September 2022), the Commissioner wrote to me to rule that he had dismissed my own complaint against the three SNP MSPs. He did so on the basis that because the conclusions of the Committee were in the public domain as a result of the Sky News report, they could no longer be considered confidential and so were not covered by the confidentiality provisions of the Code of Conduct.

CHRONOLOGY OF EVENTS LEADING UP TO THE LEAK

WEDNESDAY 17 MARCH 2021

The Committee’s inquiry was broken down into four strands of work, namely

The development of the (harassment complaints) procedure
How the complaints were handled
The judicial review of the process
The Scottish Ministerial Code

The Committee agreed early on to present conclusions on all four of these strands.

Over many meetings in February and March 2021, the Committee considered drafts of the Final Report. By 17 March 2021, we had not yet agreed the section of the report on the Ministerial Code. We had agreed that we would not come to any conclusions on whether the First Minister had breached the Ministerial Code. This was the subject of a separate investigation by the Independent Advisor on the Ministerial Code, Mr James Hamilton. However as the Committee’s report makes clear:

653. Mr Hamilton will gather his own evidence and reach his own conclusions in his own report. He will do so independently of this Committee and he is not obliged to take into account any conclusions we reach. Nor do we think it would be appropriate for us to seek to direct Mr Hamilton’s work or influence his own conclusions.

654. However, it remains the case that the Ministerial Code is also in our remit. We have conducted our own evidence taking on this subject. We consider it important that we report to the Parliament on the Ministerial Code in order to fulfil our remit.

By 17 March 2021, we still had no draft conclusions on the Ministerial Code strand.

At 09:53 on the Wednesday, the Clerk sent an email to Committee members with an attachment containing some suggested amendments from three members of the Committee. None were drafted in the form of actual text that could be added to the report but were instead arguments about why we should say one thing or another.

Later that evening, a final draft report for discussion the next day was circulated. I was of the view that the Ministerial Code conclusions were weak. Clerks clearly felt reluctant to go too far in their suggested text as this was undoubtedly the most politically sensitive part of the report’s conclusions.

And so I began drafting some conclusions on the Ministerial Code together with some wider reflections. I sent these to the Clerk at 22:14 that evening and they were circulated the next morning to Committee members at 08:12.

THURSDAY 18 MARCH 2021

On 18 March 2021, the Committee met for the last time to debate and agree its Report. It met from 09:00 – 12:16, 13:38 – 14:30 and 18:29 – 19:35. All meetings were held virtually.

My proposed text came up for discussion shortly after 14:00 and was the subject of some heated debate, with SNP members very unhappy with the draft but having proposed no alternative texts of their own. I offered to take the text away and redraft it to take account of views that had been expressed. I sent a final draft with some modest amendments to the Clerks and it was circulated to MSPs at 16:31.

We reconvened again at 18:29. We had the Ministerial Code, Overall Conclusions and Wider Reflections texts still to agree. At around 18:45, I formally moved that we agree the text of the proposed conclusions to the Ministerial Code section (these ended up as paragraphs 717-721 in the Final Report). They were agreed by division.

Thirteen minutes later, at 18:58, James Matthews dropped his bombshell and reported the conclusions of the Ministerial Code section on twitter and on Sky News. The Committee was still meeting and the report was not due to be published until the following Tuesday. There was a fair degree of astonishment and anger. Stuart McMillan walked out of the virtual meeting.

OTHER LEAKS

This was not the only occasion when confidential material had ended up in the public domain. The weekend after the Sky News leak, confidential evidence from the two complainers, Ms A and Ms B, from whom the Committee had taken evidence earlier in the week on 15 March, appeared in the media. Members had been explicitly advised of the sensitive nature of the evidence we heard, of the potential for contempt of court and of the risks of breaching the agreement entered into between the Parliament and the complainers in relation to how their evidence would be heard and reported. Nevertheless, confidential material containing salacious detail ended up being briefed to The Sunday Times and printed on 21 March 2021.

In January and February 2021, the Committee was engaged in a protracted dispute with Mr Salmond about the publication of his evidence and arrangements for giving oral evidence. Mr Salmond’s legal representatives, Levy and McRae, chose to send various emails and evidence directly to Committee members rather than, as advised, directly to the Clerk of the Committee.

At 15:32 on the afternoon of 22 February 2021, David McKie of Levy and McRae, wrote to the Committee to report that his client (Mr Salmond) had just been approached by media representatives who advised him that the First Minister had organised a media interview at 4 p.m. to “rebut our client’s latest submissions to the Committee.” These submissions had been sent to the Committee on 17 February but were not published until after 19:00 on 22 February. Whether the First Minister’s media interview was in fact in response to Mr Salmond’s latest submissions or alternatively in response to the briefings that Mr Salmond’s team had themselves been providing to the media, I cannot say. But if it was the former, and she had sight of his written submissions, then clearly someone had leaked them.

CUI BONO?

The sources of leaks are seldom found. I still do not know how some of the Committee’s conclusions ended up being broadcast by Sky News ten minutes after we agreed them. But I can say something about the likely culprits.

Leaks typically occur when the person leaking considers that either they have something to gain from the leak or that it is in the public interest for information to be publicised. People do not leak confidential documents on a whim. It is a risky venture and tends only to be done when the stakes are high and when there is a clear rationale for doing so.

First of all it is important to note that James Matthews must had had the draft conclusions well before 18:58. It is inconceivable that whoever leaked them did so at 18:45, that James Matthews managed to assure himself of the authenticity of the documents and organise an outside broadcast live on TV all within 13 minutes. As we will see, I think there was contact with Mr. Matthews in that time window but it was not the first contact that had been made.

The first draft conclusions on the topic of breaching the Ministerial Code were circulated to the Committee at 08:12 on Thursday. The draft conclusions that James Matthews reported were circulated at 16:31. We voted on them at 18:45 and they were then revealed on Sky News at 18:58. Whoever leaked them must have provided them to James Matthews well before 18:45.

It is worth noting as well that the meetings held on the Thursday were all virtual. Anyone could have been present with any of the MSPs hearing the Committee’s deliberations.

So who leaked the document?

As I argued at the outset, I am quite certain that none of the MSPs on the Committee leaked it directly to James Matthews. This would have been highly risky and without any evident purpose. The report would be published the following Tuesday after the verdict from James Hamilton and two days before Parliament went into recess for the May election. The report would, in presentational terms, be the last word.

To the extent that any opposition party MSP considered that there was any political advantage to them from the conclusions, they just had to wait just over four days. In any event, if they thought that the press should see them before Tuesday, they would, given the sensitivity of the leak, consult their own media teams and leaders. Even then, if there was any partisan gain to be had, the Sunday newspapers were the obvious channel for any such leak. There was one party for whom there was an evident benefit in leaking the conclusions, however.

Whilst not at first appearing to be of benefit to the First Minister, the leaking of the conclusions could be used by the First Minister’s political operatives as the precursor to the fury and condemnation directed at the Committee and effectively neuter the impact of the final report when it landed on Tuesday. It was a high risk strategy but there was little to lose. The Committee’s recommendations would have to be dealt with one way or another on the following Tuesday. James Hamilton’s report was due on Monday.

There was a channel of communication from the Committee that had been revealing confidential material for some months. I spoke to two political journalists, both of whom claimed that they received briefings from Scottish Government Special Advisers (SPADs) at various points during the inquiry. Much of the content of these briefings was spin on oral and written evidence that was in the public domain, but on a number of occasions it concerned details about process and evidence that was not in the public domain. Such information had to have come from the Committee, but neither myself, nor Liberal Democrat, Labour or Conservative MSPs were in the habit of briefing SPADs.

All of which leads me to conclude that it was the SNP which stood to benefit from the leak, as it provided an excuse to trash the Committee, its opposition members and, by extension its report and conclusions.

SO WHAT HAPPENED?

Here’s my best assessment.

The briefing provided to journalists by SPADs came from information supplied to them by an SNP member of the Committee. At some point on Thursday after 08:12 when the first draft was circulated, a SPAD was provided with the draft conclusions. They were perhaps emailed or perhaps the SPAD was present with the member at what was a virtual meeting.

Either way, the Government needed to know as soon as possible what was going to hit them on Tuesday and the job of the SNP member was to provide advance warning of what was to come.

During Thursday, a plan was devised that, for reasons of plausible deniability, was never shared beyond a very small circle of advisers and certainly not with the First Minister, who could not be seen to be part of the operation and who needed to be able to react with genuine surprise and fury at the leak.

Advisers got hold of the early 08:12 draft and decided that it should be leaked. This would not be the first time that James Matthews had been given stories by sources close to the First Minister that were damaging to Mr. Salmond. James Matthews was offered the exclusive. But SPADs and Mr. Matthews had to wait until the Committee had voted on the the text. After 16:00, it would be clear that the Committee was going to divide on the text and that it would pass by a majority. James Matthews got organised and ready to go on air at a moment’s notice. Shortly after 18:45, when the vote took place, he was given the all-clear to broadcast the text.

THE FURY

After James Matthews had dropped his bombshell, the journalist, who was known for his assertive interviewing style, waited for Nicola Sturgeon at her home. This is unusual. Journalists by convention do not doorstep the First Minister at her home unless there is a major news story breaking involving her – which there was. James Matthews was the only journalist there. Was he there on his own initiative or had he been tipped off?

The First Minister accused me and other MSPs of being partisan and having made up our minds before hearing her evidence.

This was followed the next day by Alasdair Allan, Maureen Watt and Stuart McMillan, with their faux outrage and accusations, trashing the committee’s reputation. Social media was awash with condemnation of myself and my opposition colleagues. The narrative was established that we were partisan and had debased Parliament by leaking sensitive information.

The First Minister’s spokesperson released a statement questioning the integrity of the Committee’s members (presumably excluding the SNP members, though at this stage that hardly needed saying), accusing us of “baseless assertion, supposition and smear”. The irony of this last accusation was clearly been lost on whoever wrote the statement.

Spin doctors held private briefings with journalists to try to undermine my personal integrity in particular.

Meanwhile, I responded to over a dozen queries from journalists about the authenticity of the leak, by saying that I was barred from commenting until the report was published.

How naive of me.

To cap it all, the leak of Ms A’s and Ms B’s evidence on the Sunday amplified this narrative a hundred-fold, with further accusations of bad faith and betrayal by us.

The plan was a success. The reputation of myself and my opposition colleagues was in the gutter. Un-evidenced claims that one of us had been the source of the leak became alleged established fact.

The Committee’s reputation was in tatters and its conclusions derided.

AFTERMATH

We still do not know who was responsible for this leak. But it is notable that the Ethical Standards Commissioner wanted to interview political parties but for, following legal advice, concluded that he couldn’t..

I have said nothing about the leak of Ms A’s and Ms B’s evidence, but cui bono?

Finally, the MSP Code of Conduct is not fit for purpose. It is now abundantly clear that any MSP can, for malign motives, leak Committee reports and, indeed, any other confidential information.

They can then conduct a systematic demolition job on the Committee’s conclusions, since the rules on confidentiality no longer apply.

Meanwhile mugs like me follow the spirit of the rules and make no comment. I shall be writing to the Presiding Officer on the matter.

Thanks for reading.

——————————————————————————————————-

 

Statement by Alasdair Allan, Maureen Watt and Stuart McMillan

STATEMENT FROM MSP [sic] MEMBERS OF SGHHC COMMITTEE

“This Committee was meant to carry out a dispassionate search for the truth.

But, at the very last minute, without full consideration of the evidence, the opposition railroaded through their prejudged assertions based purely on political considerations.

On the question of the First Minister offering to intervene, there are two sides of the story and we have evidence from both sides, but opposition MSPs chose not to reflect that by selectively referencing only the evidence which supported their preconceived narrative.

We have also heard clear, consistent evidence that the First Minister had no knowledge of concerns of inappropriate sexual behaviour by Alex Salmond before November 2017.

Yet, without a shred of evidence to the contrary, the opposition simply used their majority on the committee to insert 11th-hour predetermined political assertions that have no basis in fact. That is simply disgraceful and wrong.

For the opposition, this was never about the truth. It was never about the evidence and, shamefully, it was never even about the women. All of these are being sacrificed in pursuit of political ends.

This is the politics of desperation by the opposition members.”

Alasdair Allan
Maureen Watt
Stuart McMillan

Note:

We the above Members release this joint statement to address issues raised by the leaking of information – in blatant contravention of the MSP code – relating to the unfinished and unpublished report from the Committee on the Scottish Government Handling of Harassment Complaints.

We have previously refused to give a running commentary on the Committee’s work but media speculation has compelled us to comment solely on accounts recently placed in the public domain and we will not comment further until the full report is published.

Land Reform Bill Consultation

26. October 2022 · 3 comments · Categories: Democracy, Land Reform, Land Reform Bill 2023, Land Rights, Land Use

This blog post is a response to the Scottish Government’s current consultation on a future land reform bill. Detaisl can be found here. The consultation closes on Sunday 30 October 2022.

The text below is not part of my consultation response as there is no provision on the consultation response form to allow respondents to make general comments about the scope and aim of the reforms. Instead the consultation asks questions about the proposals and I incorporate my answers to these below.

Introduction

I welcome the proposals for a new Land Reform Bill. Land reform remains unfinished business. it is also welcome to see attention turn to the question of Scotland’s concentrated pattern of private landownership.

After twenty years of devolution, however, the proposals (like previous legislation on community land rights) are focussed on dealing with the symptoms of Scotland’s dysfunctional land governance system rather than tackling the underlying structural features.

As SLC said in their Feb 2021 paper

The measures will not, on their own, deliver the longer term systemic change in patterns of land ownership that are required to realise the full benefits of Scotland’s land resource. Achieving this will require more fundamental policy reform, probably including changes to the taxation system. The need for such reform was also identified in the recommendations made by the Land Commission in 2019 and is the subject of ongoing policy work

The focus of the measures are on so-called large-scale holdings. Based on advice from the SLC that large-scale holdings can negatively impact communities, the proposals in Parts 5, 6 and 7, are designed to mitigate this negative impact.

This is where my analysis departs from the SLC and the Scottish Government. I want to see structural reform so that there are no adverse impacts to mitigate. I want to see the redistribution of landed power into the hands of local people, businesses, local authorities, community groups and social enterprises.

None of the proposals set out in this consultation paper will deliver that for the following reason.

The only market intervention is the public interest test. That will only apply to some land, will only apply where ownership of that land is being transferred, and even then will only result in a change in the pattern of ownership in a small number of cases where the test leads to that outcome.

The key reforms needed to tackle the concentrated pattern of landownership fall into two categories. The first is structural reform in the land market and the second is governance.

Structural Reform

The proven methods of structural reform in land markets is inheritance law reform and fiscal policy. The Land Reform Review Group recommended in 2014 that the distinction between heritable and moveable estate should be removed for succession purposes. Currently children and spouses have no legal rights to heritable property beyond the home. This stands in stark conntrast to virtually every other country inn Europe.

Fiscal reform is the other proven method of redistributing power over land by penalising the ownership of excessive landholdings.

Governance Reform

The Scottish Government has stated many times that it wants more involvement and engagement in the ownership and use of land. For example, in the consultation paper, Ministers restate key principles from the Land Rights and Responsibilities Statement

“There should be …more opportunities for citizens to own, lease and have access to land” – and
“More local communities should have the opportunity to own, lease or use buildings and land which can contribute to their community’s wellbeing and future development”.

The core means to achieve this ambition is to democratise land governance. In other words to ensure that communities have control over the ownership and use of land (whether they own it or not) and that individuals, social enterprises and others can have enhanced opportunities to own, lease and have access to land.

Democratising land governance means creating a governance framework that has local democratic institutions at its heart. In current circumstances that means local authorities. It has been a conspicuous feature of land reform in the last twenty years that central government in Edinburgh has been given most of the decision-making powers in relation to land reform rather than locally accountable democratic bodies.

Indeed in 2021 paper, the SLC noted that

“The potential role of local authorities should also be considered. Running through all three proposed mechanisms is the underlying intention to better connect landownership and decision-making with local democratic accountability. In most northern European countries that have regulatory mechanisms for land ownership, decision-making is generally embedded at a municipality level. Sufficient connection to local authorities, as a means of connecting decisions with local and regional circumstances, should be built into consideration of these measures.”

One example of why this matters in relation to this consultation is the proposal for compulsory management plans. Instead of management plans, what is really required are development plans to ensure the appropriate allocation of land to different uses in the interests of the community. The means by which this is achieved is through the planning system which is run by local authorities.

Conclusions

Comprehensive land reform should involve modernising land tenure, redistributing power through structural reforms of the land market, and democratising land governance.

The proposals outlined here offer some mitigations to the impacts of Scotland’s concentrated pattern of landownership but do nothing to tackle its root causes.

Given that the consultation does not allow for any views to be expressed about the merits of the approach taken. Instead, the consultation only invites views on the detail of what Ministers are proposing. In that light I have offered the following answers to the questions posed but the above analysis has not been provided to Government.

Apologies that some answers may be a bit unclear in terms of layout. I composed this blog offline.

PART 4 – Criteria for large-scale landholdings
1. Do you agree or disagree with the criteria proposed for classifying landholdings as ‘large-scale’:
a) A fixed threshold of 3,000 hectares No
b) Land that accounts for more than a fixed percentage of a data zone (or adjacent data zones) or local authority ward(s) designated as an Accessible Rural Area or Remote Rural Area, through our six-fold urban/rural classification scheme No
c) Land that accounts for more than a specified minimum proportion of a permanently inhabited island No
Please give some reasons for your answers and outline any additional criteria in the text box below:
I do not agree with the concept of large-scale landholdings as proposed.

  1. The existence of a defined extent of land does not necessarily correlate with the impact that decisions made about land can have on communities. For example, there is a case of an individual purchasing virtually all the hotels and many of the guest houses in a village (the guest houses to house the hotel staff). This has had a major impact on the local economy and other businesses. Such a case would not be covered by the proposals.
  2. Similarly, many large-scale landholdings as defined consist of extensive areas of upland with no-one living. There is no community to be affected.
  3. The concentration of landownership in Scotland is driven more by the accumulation of several landholdings of less than 3000ha to build a large landholding. This is true in the forestry and agricultural sectors. Very little of the concentration is due to trading in holdings of over 3000ha.

The idea has its origins with the Scottish Land Commission (SLC) whose advice to Government was that large-scale holdings are the most likely to pose a risk to the public interest by the excessive concentration of power over a large area.

However, the inclusion of criteria b) and c) is an admission that other circumstances can lead to concentrations of power also. Indeed the SLC itself argued that monopoly ownership of strategic infrastructure such as slipways, petrol stations as well as important cultural facilities and housing land supply can also be characteristics of concentrated landownership that could create a structural risk of excessive power.
2. Do you agree or disagree that family farms should be exempt from the proposals outlined in Parts 5 to 7 even if they are classified as a ‘large-scale’ landholding?
NO
Please give some reasons for your answer in the text box below:
No definition of family farms is provided but on the assumption that it means farms that are managed by a family business then I do not see why this should exclude them. Moreover, if family farms are to be excluded, what about family estates and family forests. Is there some feature of family businesses that means they are less likely to have adverse impacts when they exist at large-scale? if so, this evidence should be provided. In its absence, I do not see any rational for this exclusion.
3. Do you think that the proposals considered in this consultation should be applied to the urban context?
YES
Please give some reasons for your answer in the text box below:
Monopoly control of land can exert itself anywhere (see example above about hotels). In the absence of any evidence that there is any good reason to exclude urban land I would propose that it be included. The one other area of land that is not discussed here is the marine environment which is in effect under the monopoly control of Crown Estate Scotland. Ownership of the foreshore and seabed should be transferred to local authorities.
Part 5: Strengthening the Land Rights and Responsibilities Statement
4. We propose that there should be a duty on large-scale landowners to comply with the Land Rights and Responsibility Statement and its associated protocols. Do you agree or disagree with this proposal?
YES
Please give some reasons for your answer in the text box below:
The LRRS as it stands is voluntary and vague in its terms. It is vital that it be made statutory  but should apply to all owners of land. Moreover, it should form the basis for direct incorporation in the tenure system and thus individual titles to land making landownership conditional rather than absolute and ensuring that breaches fall within the scope of the Lands Tribunal.
5. If there was a legal duty on large-scale landowners to comply with the Land Rights and Responsibility Statement and its associated protocols, we propose that this should be enforced by having a formal procedure for raising complaints, and by making provisions for independent adjudication and enforcement.
a) Do you agree or disagree with the proposal above? YES
Please give some reasons for your answer in the text box below:
It is pointless to create legal duties if there is no enforcement.
b) Do you agree or disagree that only constituted organisations that have a connection to the local area or the natural environment should be able to report breaches of the Land Rights and Responsibility Statement? NO
Should these constituted organisations have a remit on:
Community YES
Charity YES
Public Sector YES
Please provide some reasons for your answers and any additional suggestions in the text box below:
If breaches of the LRRS are to made unlawful then, in common with most other things that are unlawful, there should be no restrictions on who can report alleged breaches.
c) Do you think the responsibility for investigating and dealing with complaints should sit with:
Scottish Government NO
a public body (such as the Scottish Land Commission) NO
Please provide some reasons for your answers and any additional suggestions in the text box below:
Neither Scottish Government nor public bodies should have any role as both are unaccountable to local communities. The responsibility should rest either with the Land Court or with a quasi-judicial committee with the local authority.
d) Should the potential outcome from an investigation of a breach be:
Recommendation for a mediation process YES
Recommendation on how the landowner or governing body could comply with the Codes of Practice/protocols YES
A direction to the landowner or governing body to implement changes to operational and/or management practices YES
Please provide some reasons for your answers and any additional suggestions in the text box below:
These three options are not the only possibilities. I think the remedies for a breach should include all of them but also include a statutory fine, compulsory acquisition of land, or enhanced levels of taxation.
e) Should the enforcement powers for a breach be:
Financial penalties YES
“cross-compliance” penalties YES
Please provide some reasons for your answers and any additional suggestions in the text box below:
The problem with any financial penalties is that they are not likely to be at a sufficient level to effect change and could be seen my many as just part of the cost of doing business. Enforcement powers should include (as noted above) confiscation of land.
6. Do you think the proposal to make the Land Rights and Responsibility Statement and its associated protocols a legal duty for large-scale landowners would benefit the local community?
NO
Please give some reasons for your answer in the text box below:
It is impossible to say. The LRRS principles are vague and the bar for compliance is likely to be low.
7. Do you have any other comments on the proposal to make the Land Rights and Responsibility Statement and its associated protocols a legal duty for large-scale landowners?
Instead of the vague administrative law framework represented by the LRRS, all ownership of land should be made conditional rather than (at present) absolute and the principles of the LRRS should be incorporated in a new land tenure system such that the principles have the same status as real burdens, act in the public interest and are enforceable.
Part 6: Compulsory Land Management Plans
8. We propose that there should be a duty on large-scale landowners to publish Management Plans. Do you agree or disagree with this proposal?
YES
Please give some reasons for your answer in the text box below:
The publication of management plans is unlikely to bring about much greater accountability. Most landowners already have management plans and some additional consultation and publication would be beneficial as would associated cross-compliance mechanisms. But what is needed instead are land use development plans agreed through a democratic process and bringing rural land use within the existing planning system. Such plans would include all the options for inclusion set out in Question 10. Such plans would be accompany red by powers of compulsory purchase to deliver local land use priorities
9. How frequently do you think Management Plans should be published?
Every five years seems reasonable
10. Should Management Plans include information on:
Land Rights and Responsibility Statement compliance YES
Community engagement YES
Emission reduction plans YES
Nature restoration YES
Revenue from carbon offsetting/carbon credits YES
Plans for developments/activities that will contribute to local and inclusive economic development or community wealth building YES
11. Do you think the responsibility for enforcing compulsory land management plans should sit with:
the Scottish Government NO
a public body (such as the Scottish Land Commission) NO
Please provide some reasons for your answers and any additional suggestions in the text box below:
Responsibility should rest with democratically elected local authorities.
12. Do you think the proposal to make Management Plans a legal duty for large-scale landowners would benefit the local community?
MAYBE
Part 7: New Public Interest Test
14. We propose that a public interest test should be applied to transactions of large-scale landholdings. Do you agree or disagree with this proposal?
DISAGREE
Please give some reasons for your answer in the text box below:
Such a public interest test needs to be tied to more objective criteria than simply that a holding is large scale. Environmental sensitivity, community development needs, local plan proposals, housing needs assessments, business needs are the kind of criteria instead that need to be applied (and to all land). it is unlikely that a public interest test will have much impact if it is restricted to large scale holdings.
15. What do you think would be the advantages and/or disadvantages of applying a public interest test to transactions of large-scale landholdings?
Unless there are objective criteria beyond scale then I don’t see many advantages.
16. Do you think the public interest test should be applied to:
The seller only N/A
The buyer only N/A
The seller and buyer N/A
Don’t know N/A
Please give some reasons for your answer in the text box below:
For the reasons given in Question 14, I do not think these options are relevant. They are predicated on the large-scale landholding premise.
17. If the public interest test was applied to the seller, do you think the test should be considered as part of the conveyancing process?
YES
Please give some reasons for your answer in the text box below:
Any conditions associated with the sale of land have to be considered as part of the conveyancing process unless there is an alternative statutory process put in place.
18. Do you think that all types of large-scale landholding transactions (including transfers of shares and transfers within or between trusts) should be in scope for a public interest test?
YES
Please give some reasons for your answer in the text box below:
This is vital for tackling avoidance if this proposal is to be adopted but see response to Question 14
19. Do you agree or disagree with these conditions? We have proposed that if a public interest test applied to the seller concluded there was a strong public interest in reducing scale/concentration, then the conditions placed on the sale of the land could include:
i. The land in question should be split into lots and could not be sold to (or acquired by) one party as a whole unit YES
ii. The land, in whole, or in part, should be offered to constituted community bodies in the area, and the sale can only proceed if the bodies consulted, after a period of time, indicate that they do not wish to proceed with the sale YES
Please give some reasons for your answer and suggest any additional conditions in the text box below:
Subject to my answer to Question 14 (in which I do not agree with the public interest test applying only to large-scale holdings), the conditions would depend on the reason for failing the public interest test. I think such a test is difficult to apply in the way proposed (“to assess whether, at the point of transfer of a large-scale landholding, a risk would arise from the creation or continuation of a situation in which excessive power acts against the public interest.”) and that it would be far preferable to adopt other mechanisms to reduce the scale and concentration of landownership rather than simply mitigate it with complex public interest tests.
20. Do you think that a breach of the Lands Right and Responsibilities Statement should be taken into account when determining the outcome of a public interest test?
POSSIBLY
Please give some reasons for your answer in the text box below:
Again, the answer to this question depends upon the reason why the public interest test is being applied. it is is merely “to assess whether, at the point of transfer of a large-scale landholding, a risk would arise from the creation or continuation of a situation in which excessive power acts against the public interest.” then there is no reason to take into account any breach (at least on the part of the seller).
21. Do you think that a public interest test should take into account steps taken in the past by a seller to: a) diversify ownership – b) Use their Management Plan to engage with community bodies over opportunities to lease or acquire land

Please give some reasons for your answer in the text box below:

Again, the answer to this question depends upon the reason why the public interest test is being applied. it is is merely “to assess whether, at the point of transfer of a large-scale landholding, a risk would arise from the creation or continuation of a situation in which excessive power acts against the public interest.” then there is no reason to take into account any breach (at least on the part of the seller).
22. Do you think the responsibility for administering the public interest test should sit with:
the Scottish Government NO
a public body (such as the Scottish Land Commission) NO
Please provide some reasons for your answers and any additional suggestions in the text box below:
Responsibility should rest with democratically elected local authorities.
23. Do you think the proposal that a public interest test should be applied to transactions of large-scale landholdings would benefit the local community?
DON’t KNOW
Please give some reasons for your answer in the text box below:
It is probably unlikely to have much benefit as the proposal only applies to large-scale holdings, many of which change hands only very infrequently, comprise extensive areas of upland with no resident populations and the outcome of which is uncertain.
24. Do you have any other comments on the proposal that a public interest test should be applied to transactions of large-scale landholdings?
NO
25. We propose that landowners selling large-scale landholdings should give notice to community bodies (and others listed on a register compiled for the purpose) that they intend to sell.

a) Do you agree or disagree with the proposal above?
DISAGREE
Please give some reasons for your answer in the text box below:
Mechanisms such as Community Right to Buy and Asset Transfer schemes already provide means by which community bodies can acquire land. Few communities wish to take over large-scale holdings and the addition of yet another complex administrative process to be complied with by exhausted and udder-capacity voluntary groups is not desirable.
Question 25 b & c Not answered
Question 26 Not answered
Part 8: New conditions on those in receipt of public funding for land based activity
27. Do you agree or disagree with these requirements?

We propose the following eligibility requirements for landowners to receive public funding from the Scottish Government for land based activity:

  1. All land, regardless of size, must be registered in the Land Register of Scotland.
  2. Large-scale landowners must demonstrate they comply with the Land Rights and Responsibility Statement and have an up to date Land Management Plan.
Requirement i. NO
Requirement ii. NO
Please give some reasons for your answer in the text box below:
The question is posed very broadly – “landowners” and “public funding”. Fore the purposes of i., landowners includes everyone holding a title to land in Scotland, urban, rural and marine. Public funding includes grants for the arts, agricultural subsidies, tax reliefs (eg small business bonus scheme), and grantees for tree planting. Without knowing what is in or out of scope, it is impossible to answer this question.

In general terms, however, I do not think it is proportionate to require landowners to undertake voluntary registration on the Land Register to receive public funds. There is no direct link between the two. Public funding should be transparent without the need for land registration. Some public funds will be paid to tenants and they cannot be required to register the ownership of the land they lease.

On the ii point, the purpose of public funding varies. So long as the outcomes sought by the funding are achieved and the funding is transparent, I do not see the justification for compliance with LRRS to be a condition but having an up to date management plan would be beneficial.
Question 28 not answered
Part 9: Land Use Tenancy
29. Do you agree or disagree with our proposal that there should be a Land Use Tenancy to allow people to undertake a range of land management activities?
AGREE
Please give some reasons for your answer in the text box below:
Tenants of land need to be free to use land for the widest range of purposes. This tenancy will be useful bot ONLY if existing tenants have the right to convert. As a stand alone new tenancy, it will be of limited utility as few if any are likely to be granted.
30. Are there any land management activities you think should not be included within a Land Use Tenancy?
NO
31. Do you think that wider land use opportunities relating to diversification, such as renewable energy and agri-tourism, should be part of a Land Use Tenancy?
YES
32. Do you agree or disagree that a tenant farmer or a small landholder should, with the agreement of their landlord, have the ability to move their agricultural tenancy into a new Land Use Tenancy without having to bring their current lease to an end?
DISAGREE
Please give some reasons for your answer in the text box below:
A tenant farmer or smallholder should not have to have the agreement of the landlord to convert and agricultural tenancy into a new land use tenancy. History is replete with examples of new tenancy laws being introduced to strengthen the rights nor tenants and would have had no effect if the tenants had first to secure the agreement of their landlord. This proposal should be seen as a modernisation of tenancy law just as Section 42 (tenant’s right to timber) was in the Agricultural Holdings (Scotland) Act 2003.
33. Do you agree or disagree that when a tenant farmer or small landholders’ tenancy is due to come to an end that the tenant and their landlord should be able to change the tenancy into a Land Use Tenancy without going through the process of waygo, with parties retaining their rights?
AGREE
34. How do you think the rent for a Land Use Tenancy should be calculated?
DON’t KNOW
35. Would you use a Land Use Tenancy if you had access to a similar range of future Scottish Government payments which other kinds of land managers may receive?
DON’t KNOW
36. Do you think that there should be guidance to help a tenant and their landlord to agree and manage a Land Use Tenancy?
Might be helpful
37. Do you think there should be a process to manage disputes between a tenant of a Land Use Tenancy and their landlord?
YES
Please give some reasons for your answers and outline how this process could be managed in the text box below:
it should be broadly the same process as is used to manage disputes under existing agricultural tenancies.
38. Do you agree or disagree that tenants of a Land Use Tenancy and their landlords should be able to resolve their legal disputes in relation to the tenancy through the Scottish Land Court?
AGREE
39. Do you have any other comments on our proposal for a Land Use Tenancy?
NO
Part 11: Transparency: Who owns, controls and benefits from Scotland’s Land
41. Do you agree or disagree with our proposal to explore:
Who should be able to acquire large-scale landholdings in Scotland AGREE
The possibility of introducing a requirement that those seeking to acquire large-scale landholdings in Scotland need to be registered in an EU member state or in the UK for tax purposes AGREE
Please give some reasons for your answer in the text box below:
Greater transparency is vital and I have long argued that the ownership of any land (not just large-scale holdings as defined) should be owned by entities registered in the EU. Now that the UK has left the EU, however, I would restrict the criteria to those registered within the UK. Many EU states have limited transparency and there is no benefit to enabling non-UK EU entities privileges not available to entities from other countries such as Norway or the USA.

The paper argues that this could “help deal with instances of absenteeism” but fails to say how this is to be achieved. In fact it will do no such thing unless there is a requirement for those in control of such entities to live on their landholdings or at least in Scotland and be a Scottish taxpayer.
Part 12: Other land related reforms – tax
42. Do you have any views on what the future role of taxation could be to support land reform?
Fiscal reform is a vital part of land reform and I am disappointed that there are no concrete proposals presented for consultation. The following are suggestions that I plan to elaborate on inn the coming months.

  1. All non-domestic land should be one the valuation roll
  2. All land should be liable to at least some property tax even if at a modest level
  3. It is inconsistent that the occupiers of non-domestic businesses inn urban areas are liable for non-domestic rates but large rural holdings are exempt.
  4. It is inconsistent that (for example) Danish landowners in Scotland pay local land taxes on their Scottish holdings to the municipalities in which they live in Denmark but not to Scottish local authorities.
  5. Scottish local authorities should be given much wider tax powers by repatriating the system of non-domestic rates, providing capital gains tax powers, and transferring LBTT to local authorities.
  6. Non-domestic valuations should be split into one for the land and and one for the improvements thus providing local authorities with the ability to levy non-domestic rates on each part in the proportion that they choose (100% on land would be a land value tax).
  7. Council tax should be scrapped and replaced with a progressive domestic property tax
  8. Local authorities should have flexibility to set the rates and bands of domestic property taxation together with any supplements or reliefs they consider appropriate.
43. How do you think the Scottish Government could use investment from natural capital to maximise: a) Community benefit and b) National benefit
I do not agree with the proposal to create natural capital markets. The restoration and maintenance of essential natural ecosystems should be a legal responsibility of land ownership.
44. Do you have any additional ideas or proposals for Land Reform in Scotland?
Yes, lots. I will be publishing a draft Bill incorporating them in the coming months. Some elements include the following

  1. Enhanced protection for common land
  2. Transfer of ownership and management of Crown land from Crown Estate Scotland to local authorities
  3. Powers for local authorities to acquire land for developement at existing use value
  4. Introducing a new Use Class for second homes as has been enacted in Wales.
  5. Democratising charities that own land such as Mount Stuart Trust (Bute) and the Applecross Trust (Applecross) to allow local people to join as members
  6. Transfer decision making on community rights to buy to local authorities
  7. Modernise the Land Settlement (Scotland) Act 1919
  8. Reform inheritance law to allow children to inherit land
  9. Introduce residency requirements for landowners
  10. Enact mandatory targets for nature restoration
  11. Make the destruction and ongoing decline in native forests a criminal offence unless otherwise approved.
  12. Reform District Fishery Boards
  13. Democratise hunting though a licensing system operated by local authorities

and much more.

 

Why should tenants be evicted because the landlord wants to sell?

11. March 2016 · 36 comments · Categories: Democracy, Edinburgh, Housing, Land Reform, Land Rights, Legal affairs, Urban

lornestreet_citychambers_670

Lorne Street tenants protesting at City Chambers, Edinburgh November 2015

The American land and tax reformer, Henry George, observed in his book, Progress and Poverty, that “thirty thousand people have legal power to expel the whole population from five-sixths of the British Islands. The vast majority of the British people have no right whatsoever to their native land, except to walk the streets.”

The history of much of the world is a history of property, of the appropriation of territory and the framing of laws designed to protect the novel concept of private property. Those frozen out of this process – the poor and the landless – had to make do with belated concessions to protecting their rights – concessions that came too late for many as James Hunters’s new book on the Sutherland clearance, Set Adrift Upon the World, makes painfully clear. In the year of the Strathnaver Clearances in 1814, Sir John Sinclair, Caithness landowner and author of the first Statistical Account of Scotland ,observed that, “in no country in Europe are the rights or proprietors so well defined and so carefully protected.”

To be a landowner was to be endowed with economic, legal, social and economic power. On the basis that the primary responsibility of government was to defend the country, those who owned the country presumed to be best placed to monopolise the electoral franchise and undertake that task.

During the 18th and 19th century, fortunes were made through the ownership of urban land in particular. As cities expanded, demand for land enriched those fortunate enough to hold the title deeds to the fields and meadows that were acquired to build the houses, factories and infrastructure necessary to support a modern urban economy.

In Edinburgh, the street names reveal this history in Buccleuch Street, Hopetoun Crescent Roxburgh Terrace, and Moray Crescent. One of the beneficiaries of this legal dispensation was George Heriot, the Edinburgh jeweller, whose death in 1624 established the Heriot Trust which was run by the Provost, Baillies and Councillors of the City together with the Ministers of the town. It rapidly established a virtual monopoly on land around Edinburgh

“An exclusion zone was imposed upon Edinburgh by the activities of the Heriot Trust’s acquisitions” wrote urban historian, Professor Richard Roger. “Scarcely an acre in the neighbourhood came into the market which they did not instantly acquire for the benefit in perpetuity of Heriot’s Hospital”. By the end of the 19th century, the Trust owned over 1700 acres of land around the City. Much of this comprised land between Edinburgh and Leith.

edinburgh_1852_670

Samuel Hunter’s timber yard in Leith, 1852. Lorne Street was built along the south.

One of those who held a feu from the Heriot Trust was Samuel Hunter, a stonemason and builder who owned a yard on Leith Walk at Smith Place. He ran a successful business as a property developer and builder and in 1879, was granted a further feu by the Heriot Trust to erect blocks of tenements at the western end of what is now Lorne Street.

When he died in 1893, his daughter Agnes Hunter inherited a substantial property portfolio including her own elegant house on Dalrymple Crescent in the Grange. Upon her death in 1954, her executors established the Agnes Hunter Trust which continues to own over 90 tenement flats in Lorne Street occupied by over 200 residents. The Trust is a charity and provides grants to health and social welfare projects.

The Trust established a reputation as a landlord that provided long-term secure tenancies. “We were promised a tenancy for life”, said one tenant. “Stay as long as you like”’, another was told. The Agnes Hunter tenants comprised a close-knit community of all ages. The oldest resident has lived there for 74 years, having moved in aged 2 years old. The younger children all attend Lorne Primary School adjacent to most of the tenement blocks.

But whilst tenants felt secure, their homes suffered from poor maintenance. Damp persisted for years in flats, waste water rose through bath and kitchen pipes, window frames rotted and repairs were ignored. Many tenants undertook work themselves, installing bathroom sinks and even a heating system. Some tenants began leaving and others were evicted. In July 2015 all 200 of the Trust’s tenants were informed by letter that “retention of The Agnes Hunter Trust’s property portfolio was no longer in the interests of the Trust” and all households were to be evicted by the end of the year.

A determined campaign by residents was launched and the Lorne Community Association secured a stay of execution until the end of January 2016. Following a petition to Edinburgh Council, this was extended to July 2016 in order to allow time to try and establish a housing co-operative or similar solution.

To the wider world, evictions on this scale came as something of a shock. Few knew anything about the Agnes Hunter Trust. I had some vague recollections of my own from 7 years spent living in a flat on Lorne Street but I forgot all about it until the story appeared in the newspapers.

At a time when the Scottish Parliament is, at long last, considering a Bill – the Private Sector (Tenancies) (Scotland) Bill – to modernise tenants rights and provide greater security of tenure, it is worth reflecting on what a shocking state of affairs these evictions represent. Most tenants are on Short assured tenancies. Despite the assurances of lifetime security, most tenants in law were never more than 2 months from eviction.

The short-assured tenancy was introduced in the 1988 Housing Act. The idea was that these tenancies would provide a landlord-friendly tenure for the private sector, allowing it to grow at the same time as Housing Associations were given the freedom to access private finance. The result has been the growth of one of the most unregulated, liberal and (from a tenant’s perspective) insecure rental markets in Europe. Britain’s obsession with homeownership has led to eye-watering levels of private debt, house prices outstripping earnings, a speculative volume housebuilding industry that profits from land value appreciation and consumers spending growing proportions of their income on housing costs.

Sometimes it takes a case like Lorne Street to focus minds on long-standing policy failures. The private rented sector has grown in a haphazard manner driven by buy-to-let landlords and little in the way of a strategic plan. A system where 200 tenants can be evicted on a whim reveals serious flaws in Scotland’s housing tenure. One of the most glaring question (which has, as yet, not been addressed) is quite simple.

Why should 100 families have to be evicted merely because the landlord wishes to sell their homes?

The short answer is, of course, because the law allows it. But this situation would never arise in, for example Germany. The fact that a pension fund might wish to sell its portfolio of flats in Hamburg to another investor does not mean that all the tenants have to be evicted. To the Germans such an idea would be ridiculous. Owning rental property is perfectly legitimate but if you sell it, tenants stay put in their homes. Tenants enjoy security of tenure and the landlord a regular return on their investment.

The complacency in addressing such fundamental questions was evident when the Chair of the Agnes Hunter Trust, Walter Thomson, spoke at the City of Edinburgh Council Petitions Committee on 5 November. In a statement that had tenants draw breath for its audacity and cold logic, he claimed that,

“The Trust is not in existence to provide housing.The properties are an asset which enables the Trust to make funding available for charitable causes. Miss Hunter’s trust has never been a social landlord.”

In other words, we have no responsibility to families we have housed for over 60 years. They are merely an asset to generate a revenue stream – this from the Chair of a Scottish charity which, among other things, funds homelessness projects.

Such attitudes are an indictment of 15 years of devolution. The Scottish Government’s Private Housing (Tenancies) (Scotland) Bill will have its final reading next Thursday 17 March. It introduces welcome changes to the private rented sector including a new tenancy that affords greater security for tenants. But, crucially, the wish to sell a tenanted property remains a lawful reason to evict a tenant. Whilst such a provision has a role in a transitional period, it will do nothing to contribute to the kind of long term security enjoyed by tenants in Germany.

Whilst crofting tenants, agricultural tenants and commercial tenants are lawfully entitled to remain in occupation of their crofts, farms and offices when the property is sold, people whose tenancy is their home are rendered homeless on the arbitrary whim of the owner. It is an antiquated state of affairs that has no place in a modern democracy.

As Tony Cain, the Policy Manager for the Association of Local Authority Chief Housing Officers observed recently,

The unstated, and unquestioned, view that underlies these provisions is that eviction and homelessness are appropriate management tools to address business failure or change.

These provisions ensure that private landlords or lenders can remove tenants when thing go wrong with the business or they want to disinvest. And most importantly, the value of the asset is protected by ensuring that it is linked directly the property values in owner occupation.  It also means they can borrow more to invest and make bigger returns on capital values.

Equally importantly what they also do is transfer the cost (aside from the personal trauma and disruption to the tenant) on to the public sector.

By protecting the value of private rented houses in this way and transferring the risk and costs of business failure on to the tenant and local authorities, landlord and investors can be confident that they can sell out relatively quickly and at very little cost to them. 

The Lorne Street tenants have been given until July 2016 to see whether they can devise a solution whereby they form a co-operative to take over ownership of perhaps persuade a housing association to step in. They deserve all the support we can provide.

Meanwhile MSPs should question whether it is right that folk who have lived in their homes for decades deserve to be treated as little more than collateral damage in pursuit of the owner’s short term interests. In particular, they should examine critically Schedule 3, Part 1 1(1) of the Private Housing (Tenancies) (Scotland) Bill – namely, “It is an eviction ground that the landlord intends to sell the let property”. If tenants are to feel secure in their homes, this provision should be removed.

Patrick Harvie MSP has tabled an amendment to remove this ground for eviction.

Scotland needs investment in a sustainable, high-quality, affordable rented sector. It needs to learn from successful countries such as Sweden and Germany. Above all, it needs to ensure that never again is a community treated with the contempt and arrogance faced by the families of Lorne Street.

Land Reform (Scotland) Bill Stage 2

18. January 2016 · 12 comments · Categories: Democracy, Land Reform Bill 2015, Land Registration, Who Owns Scotland

This Wednesday the Rural Affairs, Climate Change and Environment Committee (RACCE) holds it first meeting to consider amendments to the Land Reform (Scotland) Bill at Stage 2. Once the Committee has completed Stage, its amended Bill will go forward to Stage 3 to be debated and further amended by a sitting of the whole Parliament.

This blog is a brief update on where we are with the one provision that has been the subject of much debate and where the RACCE themselves want the bill strengthened – namely the Part 3 provisions on transparency over who controls corporate entities that own land.

BRIEF HISTORY

Proposals to make it incompetent for non-EU companies to own land and to make declarations of beneficial ownership of companies mandatory in the Land Register were tabled during the passage of the Land Registration (Scotland) Act 2012 but were rejected by the Scottish Government.

– The Land Reform Review Group recommended that such a measure be adopted to improve transparency in the ownership of land.

– The Land Reform Bill consultation in December 2014 sought views on the proposal and it was widely endorsed by consultees.

– The Land Reform Bill was published in June 2015 but did not contain provision for such a bar. Instead, it contained a mechanism whereby questions could be asked about the beneficial ownership of companies in tax havens and elsewhere but there is no obligation on such jurisdictions to co-operate.

– The RACCE Committee took evidence on the Bill and, in its Stage One report, recommended that the original proposal be introduced to the Bill.

– Scottish Ministers responded to the Stage One report by, once again, rejecting the non-EU proposal on the grounds (they argue) that it is outwith the competence of the Scottish Parliament.

– Scottish Ministers then last week announced that they would be tabling an amendment at Stage 3 [link to letter] that would create a public register of person who exert control of companies that one land. The amendment would merely be a regulation making power with the details of how such a register would operate being left to the next Parliament to draft and enact.

AMENDMENTS

We now have three distinct proposals for the way ahead with regard to transparency – two amendments to be considered this Wednesday (see full text here) and one amendment to be tabled at Stage 3.

Graeme Dey (SNP) Amendments 29, 30 and 36

The first is a series of amendments in the name of Graeme Dey MSP (numbers. 29, 30 and 36) to the Bill that would require the beneficial owner or “controlling interest” in any corporate entity (not just non-EU ones) to declare their identity in a new section of the Land Register (Amendments 29 and 36 merely remove existing Sections 35 and 36. Amendment 30 is the substantive amendment). This is not a bar to non-EU entities but is a disclosure provision to be incorporated in the Land Register. Verification of the identity of the beneficial owner will still be tricky but appropriate penalties can act as a deterrent. This amendment has ben developed following considerable effort by Megan McInnes of Global Witness and Peter Peacock of Community land Scotland.

Patrick Harvie MSP (Scottish Green Party) Amendments 105 and 106

Patrick Harvie has tabled an amendment (Nos. 105 & 106) that reinstate the bar to non-EU corporate entities and fulfils the original recommendations of the Land Reform Review Group,  the December 2014 consultation paper and the  RACCE Stage one Report. Whilst some EU disclosure requirements are not fully transparent, bringing corporate entities “onshore” exposes them to the ongoing work across the EU to improve transparency through a variety of processes such as the requirements of the Fourth Anti-Money Laundering Directive that requires member states to establish registers of beneficial ownership of companies.

The Scottish Government Amendment

The Scottish Ministers will table an amendment at Stage 3 to replace Sections 35 and 36 and introduce a new regulation making power for Ministers to establish a “Register of Controlling Interests in Land”. The details of this register, what it would contain, how it would operate and how compliance would be enforced would then be the subject of secondary legislation to be introduced in the next Parliament. It is thus hard to know what is involved with this proposal and there will be no time for any debate as it will be introduced at Stage 3. Critically, it is not clear whether Ministers are proposing yet another Register or whether they are open to the idea within Graeme Dey’s amendments to make such disclosure part of the Land Register and thus visible on the title to ownership of the land.

I hope that RACCE will support both Graeme Dey and Patrick Harvie’s amendments. They provide a “double lock” arrangement whereby tax havens are outlawed as jurisdictions within which land and property in Scotland can be owned AND those entities registered within the EU are obliged to publish details of the controlling interests on the face of Land Register titles.

If you wish to support these amendments, contact any member(s) of RACCE and tell them you support amendments 29, 30, 30, 105 and 106. Contact details are here.

Sunlight or shadows – will the Government’s new public register of land ownership be effective in improving transparency?

14. January 2016 · 3 comments · Categories: Democracy, Land Reform, Land Reform Bill 2015, Land Registration, Politics, Uncategorized

Sunlight or shadows – will the Government’s new public register of land ownership be effective in improving transparency?

by Megan MacInnes, Land Adviser with Global Witness

Yesterday the Scottish Government announced that their solution to the problem of not knowing who is behind the opaque corporate structures owning Scotland’s land was to create a public register of those who control land, (media release here and letter to RACCE here) as part of the Land Reform (Scotland) Bill currently passing through parliament. This step should be broadly welcomed and is a significant step forward from the previous proposals in the Bill to improve transparency of Scottish land ownership.

On paper this announcement appears close to the improvements to transparency of land ownership which I blogged about two weeks ago, but is it really as good as it sounds?

No-one disputes that not knowing who is really behind major swathes of land in Scotland is a problem. It prevents local communities living on or affected by land from contacting the true owner if they have a problem (rather than an anonymous shell company), it prevents law enforcement agencies from investigating crimes and it’s ironic that having won the right to roam, Scotland’s citizens don’t have the right to know who truly controls and makes decisions about the land they are walking on.

In a letter accompanying the Government’s announcement, Minister for Environment, Climate Change and Land Reform, Aileen McLeod MSP, describes their intention to “requir[e] the public disclosure of information about persons who make decisions about the use of land in Scotland and have a controlling interest in land”.

However, the devil is certainly in the detail and there are many ways in which this commitment may not provide us with what we really need to know about who truly owns Scotland’s land. The potential for loopholes and exemptions which would render this register meaningless are substantial.

Most importantly (and let’s get the boring technical stuff out of the way first) this register needs to consist of the “person(s) of significant control” of the legal entities owning land in Scotland. This term is the technical definition of what’s more commonly known as “beneficial ownership” and means that what is registered are the names of the individual people who either own or control land in Scotland. This term already applies in Scotland through a UK-wide register of company beneficial ownership which was introduced in 2015. Adopting this technical definition is the only way to ensure the register will include what we need it to.

This register has the potential to finally shine a light on some of Scotland’s most shadowy corporate entities, for example Scottish Limited Partnerships and the shell company structures used to hide land ownership in Scotland in overseas tax havens and secrecy jurisdictions. Therefore, it’s essential that there are no loopholes or exemptions which these kinds of corporate vehicles can exploit.

The register should of course be free and fully publicly accessible.

We also have questions about process. What the Government’s proposal does is push the more difficult discussions into the next Parliament. So it’s important that the Bill describes the register in robust enough language that it cannot be later watered down, as well as introducing a firm duty and deadline by which the regulations providing for this register have to be adopted.

One major question remains however – why the Government has proposed this register to be separate from the Land Register? My earlier guest blog outlined the reasons why expanding the Land Register requirements to include beneficial ownership appears to be the simplest and most administratively straightforward route to achieving this goal.

But still – what a difference a week makes. This announcement has completely changed the terms of the debate about transparency in land ownership in Scotland and this can only be good. What we need now though are tough ideas and quick thinking to close potential loopholes and ensure this commitment once and for all brings Scottish land ownership out of the shadows.

Transparency in the Land Reform Bill

07. January 2016 · 23 comments · Categories: Democracy, Land Reform, Land Reform Bill 2015, Land Registration, Politics

Transparency in the Land Reform Bill: the only effective solution is disclosing the human being, the ‘beneficial owner’, behind companies owning land

by Megan MacInnes, Land Advisor with Global Witness

The Scottish Government has responded to the Rural Affairs, Climate Change and Environment Committee’s Stage One Report on the Land Reform (Scotland) Bill and rejected its recommendation that companies that wish to own land in Scotland should be retired within an EU member state. I will be publishing a wider commentary on this in the next few days. In this Guest Blog, Megan MacInnes, Land Advisor with Global Witness, explores this issue and recommends an alternative solution.

As the new year brings us to the next stage in the debate over the Land Reform (Scotland) Bill, one issue continues to be controversial – whether we shall get to learn who really owns Scotland’s land?

This controversy relates to the fact that large areas of Scotland are owned by companies registered in secrecy jurisdictions known for providing anonymity from the prying eyes of the State and public scrutiny. The Government has made repeated commitments that this Bill will improve transparency of land ownership, but the measures proposed so far have been widely criticised. In their Stage 1 report on the Bill, the members of the Rural Affairs, Climate Change and Environment (RACCE) Committee concluded that “people in Scotland have a right to know who owns, controls and benefits from the land” but that currently the relevant sections of the Bill would “not achieve the policy objectives of improving transparency of land ownership”.

So if the Bill’s current proposals are not enough, what more can be done? Most of the discussions so far have focused on the proposal (originally made by the Land Reform Review Group) to require anyone who wants to buy land in Scotland via a company, to have to have incorporated that company within the EU. But a simpler and more direct solution exists with the potential to be much for effective in letting us really know who owns Scotland’s land – the requirement that when you register a land title with the Land Register under the name of a company, you also have to provide the names of the human beings who own or control that company. Technically, this means the registration of the ‘beneficial owner(s)’ of the company.

The RACCE Committee recommended both requirements be introduced to the Bill. In its response the Government ruled out the EU company registration requirement entirely but with regard to the requirement to register the names of the people owning or controlling those companies, the Government stated that there are “many complex legal and practical issues” being considered and that they will respond in more detail in due course.

The Bill’s current provisions for transparency, under what it calls the “right of access to information on persons in control of land” in fact provide no ‘rights’ at all. Section 35 enables only those who can prove they are directly affected by a landowner to submit a request about who owns or controls that land to a so-far unidentified “request authority”, who would then attempt to obtain that information. Section 36 enables the Keeper of the Registers of Scotland to also make such requests. Applications for such information are first made to the landowner, but if there’s no response then it is expected (but not specified in the Bill) that the request will be passed on to the authorities of the jurisdiction where the company owning the land is registered.

Not only are these ‘rights’ to request such information limited, they will not even work in practice. Neither provision require the landowner to hand such details over, but more importantly, these powers are meaningless in the secrecy jurisdictions where many companies owning land in Scotland are registered. This is because the reputations and economies of these jurisdictions (including Overseas Territories and Crown Dependencies of the UK) depend on providing safe haven and anonymity from prying eyes. These jurisdictions either are only able to share such information with tax authorities (for example, Jersey and the Cayman Islands, where the 71,000 acre Glanavon and Braulen Estate is registered), or are where the relevant authorities don’t maintain company ownership details in official records (for example, Panama, where the 56,000 acre Loch Ericht Estate is registered). Consequently any requests made by either the Keeper or request authority for information on who actually owns either estate will almost certainly be turned down.

The most comprehensive solution to knowing who owns Scotland’s land lies instead in publicly disclosing the names of those who ultimately own or benefit from the company which is buying the land, as the title is being registered. In doing so, the Scottish Government brings these transparency requirements directly within its own purview, rather than relying on the regulations of other countries. It also includes such requirements within existing administrative procedures, rather than burdening the Keeper and request authority with the task of trying to identify who is behind endless structures of shell companies expertly hidden away. If based on the model of the Crofting Register, then we’d not only learn about those behind newly owned parcels of land as they are registered, but this information would also be updated every time the smaller details of the title changed, so-called trigger or update events.

Ironically, despite the RACCE committee’s recognition of the right of people in Scotland to know who owns land in their Stage 1 report on the Bill, much greater consideration so far has been paid to how such transparency provisions would impact on the rights of landowners to privacy and property. Under the European Convention of Human Rights article eight protects an individual’s right to privacy and article one of protocol one protects the right to property. But, neither is absolute; States are allowed to interfere with both, as long as it is in the public interest and such action is proportionate – by which they mean that what is proposed will achieve the desired objective and is deemed to be reasonably necessary.

The public interest arguments for this disclosure are clear and supported widely across Scotland, including associations representing land owners. A number of existing laws and policies (not least the Community Empowerment (Scotland) Act 2015 and other sections of the Land Reform (Scotland) Bill) are likely to be compromised unless we have full knowledge of the ownership of land. But more broadly, land use and its management impacts on all of Scotland’s citizens and therefore there’s a legitimate reason for why everyone should have access to such information. For example, our participation in public consultations, such as the current one underway on Scotland’s 2016-2021 Land Use Strategy, are hindered by not knowing who owns land or the land-use decisions they are making.

Would such a change in the registration requirement also be proportionate? Asking those who ultimately own or benefit from land in Scotland to disclose their names to the Land Register is the most straight forward way to access that information. Critically, it is the only measure available which the Scottish Government can itself enforce.

So it appears that we shall not learn if we are ever to find out who owns Scotland’s land until the Government tables its amendments to the Bill on the 13th January. It’s hard to imagine how the continued anonymity behind such large areas of our land and heritage can continue to be justified. But until the human beings behind anonymous shell companies used to own land are required to disclose themselves, we may be left within nothing in this Bill but empty promises.

Rates exemption was windfall gain for landowners

15. December 2015 · 17 comments · Categories: Democracy, Fiscal Policy, Land Reform, Land Reform Bill 2015, Politics

The Rural Affairs, Climate Change and Environment Committee (RACCE) of the Scottish Parliament published its Stage One Report on the general principles of the Land Reform (Scotland) Bill on 4th December. The plenary Stage One debate will take place in the Scottish Parliament on Wednesday 16th December.

The Report is thoughtful and considered. I don’t agree with all its conclusions but it provides might food for thought during the Stage 2 deliberations when the Bill is scrutinised in detail and amendments considered.

With the steadily growing interest in land reform, it is important at the outset to make clear that this Bill is not the sum total of land reform and cannot be expected of itself to deliver the kind of radical change that many are seeking. Further reform in land taxation, inheritance law, housing tenure and compulsory purchase are all being progressed separately. In addition, the demand to make the Bill more radical is constrained. Generally speaking, it is difficult to add a lot of new provisions to a bill as it is going through parliament.

Having said that by way of preamble, what of the Committee’s report? In this blog I highlight some of the points that strike me as interesting and explain why, in one part of the Bill, the Committee has come to very mis-informed conclusions.

As more and more people and organisations engage with the fundamentals of land reform (changing the legal, fiscal and governance framework for how land rights are defined, distributed and exercised), a range of refreshing perspectives is emerging. Two of these relate to inequalities and human rights.

NHS Scotland submitted valuable evidence on health inequalities and how land reform can both help to overcome some of these but can also be exacerbated if existing patterns or inequality are not confronted. Similar observations were made by Professor Annette Hastings during the passage of the Community Empowerment (Scotland) Act. The Committee makes important recommendations (90-93) on this topic which will help to ensure that equalities become a core part of land reform in the decades ahead.

Human rights is also an area that has received significantly more attention in relation to land rights in recent years. Community Land Scotland provided valuable focus on this in its Bunchrew Declaration from 2014 which highlighted the range of human rights issues associated with land reform. These go far beyond the traditional and rather narrow concerns of the protection of property rights in Article 1 of Protocol 1 of the European Convention on Human Rights (ECHR) which is embedded in the Scotland Act 1998. This paper by Megan McInnes and Kirsteen Shields elaborates this point.

It is often overlooked that the observance and implementation of all international human rights instruments (indeed all international treaty obligations) that relate to devolved matters are within the competence of the Scottish Parliament (1).

Recommendations 121 and 122 helpfully address this important point.

Parts 1 and 2 of the Bill deal with the Land Rights and Responsibilities Statement and the Scottish Land Commission. Here, RACCE make some sensible recommendations that will clarify and improve the proposals in the Bill.

Part 3 deals with transparency of information about who owns land and, in particular the proposal originally contained in the December 2014 consultation that any owner of land in Scotland that was a legal vehicle such as a company or a trust should be registered in a member state of the EU. This proposal would end the ownership of land registered in tax havens such as Grand Cayman and Panama.

The Scottish Government has been very resistant (see here) to proceeding with this reform but the Committee recommends that it be looked at again and that it be applied retrospectively (thus existing non-EU entities would have to comply within a defined period of time). This is very welcome and should open up this important issue to further scrutiny.

Parts 4 and 5 on engagement with communities and the right to buy land for sustainable development. Again, the Committee’s recommendations are measured and helpful in improving the  detail of how these provisions will will work in practice.

Part 6 is one of the simplest and straightforward reforms in the Bill – the removal of the 1994 exemption from non-domestic rates (NDR) granted to shootings and deer forests. Here, the Committee has expressed strong criticism of the proposal to end this exemption and made a number of recommendations. In broad terms, it is not convinced of the case for removing the exemption because of the potential impacts this might have. In coming to this conclusion, however, the Committee appears to have been seriously misinformed by the special pleading of those who stand to be affected by the proposal and to have relied solely on assertions made in evidence from landowners, shooting interests and gamekeepers, all of whom predicted impacts on rural jobs, economic and communities if the exemption was removed.

A key error in the Committee’s conclusions is to view NDR as a tax on businesses. A number of opponents of the proposal were keen to persuade the Committee of this. Scottish Land and Estates, for example, in its written evidence to RACCE claimed that,

“The proposal completely fails to recognise that sporting rights per se are not in fact a business”

“We believe that there would be a negative impact on rural jobs, tourism and land management”

“For all subjects where the sporting rights are not exercised as a business, this produces the entirely illogical and potentially unlawful situation whereby business rates are being levied on subjects which are not in fact businesses.”

Non-domestic rates are not a tax on businesses. They are a property tax – a tax on the occupation of land and property and based upon the rental value of of land and property. Many businesses of course occupy land and property but NDR is not a tax on their business (newspaper shop or factory). It is the capture of part of the rental value of the land and property they occupy. NDR is paid by many occupiers that are not businesses such as cricket clubs and secondary schools. Even the Scottish Parliament pays NDR.

Paragraph 310 of the report states that –

The Committee seeks a thorough, robust and evidence-based analysis of the potential impacts of ending the sporting rates exemption (including what impact imposing the exemption had in 1995).

There is little need for such an assessment for the simple reason that the impact of any reform of property taxation is well understood. By definition it has no impact on environmental matters (it is not an environmental tax) and no impact on social matters (it is not a welfare or employment tax). Of course, no-one likes have to pay tax especially if it is a tax that someone had gained an exemption from. But the special pleading made by landed interests is little more than a veiled threat that if the exemption is ended, those responsible for paying it will choose to do things that might have negative effects (reduce environmental management inputs or reduce employment). The tax itself has no such impacts and the potential impacts are straightforward to determine.

The impact is succinctly described in the Mirrlees Report as follows (this is in relation to land value taxation but the impact is exactly the same for any tax on the occupation of land or property).

“The economic case for taxing land itself is very strong and there is a long history of arguments in favour of it. Taxing land ownership is equivalent to taxing an economic rent—to do so does not discourage any desirable activity. Land is not a produced input; its supply is fixed and cannot be affected by the introduction of a tax. With the same amount of land available, people would not be willing to pay any more for it than before, so (the present value of) a land value tax (LVT) would be reflected one-for-one in a lower price of land: the classic example of tax capitalisation. Owners of land on the day such a tax is announced would suffer a windfall loss as the value of their asset was reduced. But this windfall loss is the only effect of the tax: the incentive to buy, develop, or use land would not change. Economic activity that was previously worthwhile remains worthwhile.” (2)

When rates on shootings and deer forests were abolished in 1995, the impact then was straightforward. It resulted in a windfall gain for landowners either because their land rose in value as a consequence of the removal of the recurrent liability or they could extract more rent since the occupier (who paid the tax) was relieved of the liability and thus able to afford a higher rent whilst being no worse overall (the new rent equalled the previous rent plus rates).

Given that the Committee is not routinely involved in fiscal policy, it perhaps not surprising that it has swallowed the assertions of those whose evidence was based on a flawed understanding of property taxes.

Over the past 20 years, the owners of shootings and deer forests have been granted an exemption from tax that has had to be paid for by increasing the burden on other non-domestic ratepayers. Over the course of two decades they have profited from this tax break. It is entirely reasonable when public finances are tight that such exemptions (which exist for no good reason) should be removed.

The re-establishment of a local tax liability on land devoted to shooting and deer forests ends the indefensible abolition of this element of non-domestic rating by the Conservative Government in 1994. To most people, it might seem odd that, whilst the hair salon, village shop, pub and garage are subject to rating, deer forests and shootings pay nothing. To take one example, the Killilan deer forest near Kyle of Lochalsh is owned by Smech Properties Ltd., a company registered in Guernsey which, in turn, is owned by Sheik Mohammed bin Rashid al Maktoum, the King of Dubai and Prime Minister of the United Arab Emirates.

Killeen was included on the valuation roll in 1994 at a rateable value of £3500. By comparison, the local caravan site had a rateable value of £3100. Today, the caravan site has a rateable value of £26,250 and pays £12,127 per year in rates whilst one of the worldʼs richest men, whose land is held in a tax haven has (unlike the local caravan site) paid no local rates for twenty years on the land he uses for shooting.

Why should caravan sites, pubs and local shops subsidise those who occupy shootings and deer forests? Non-domestic rates contribute to the revenue of local authorities used to pay for schools, roads, refuse collection, care homes, environmental and leisure provision and social care.

Back in the early 1990s, the abolition of the rates on shootings and deer-forests attracted considerable criticism at the time from opposition parties and by the then Chairs of Scotland’s Rating Valuation Tribunals who, in a memorandum to the Secretary of State for Scotland, wrote,

“Sporting estates like to describe themselves, when it suits them as being part of a sporting industry. In fact they are part of an inefficient trade which pays inadequate attention to marketing their product, largely because profit is not the prime objective. 

These sporting estates change hands for capital sums which far exceed their letting value and which are of no benefit to the area, and are often bought because there are tax advantages to the purchaser, not necessarily in the UK.”

Dismissing the argument that sporting estates provide employment and should therefore be freed of the rates burden, the chairmen’s report points out that,

“..local staff are poorly paid, their wages bearing no relation to the capital invested in the purchase price, and it is not unusual to find a man responsible for an investment in millions being paid a basic agricultural wage. Many of the estates use short-term labour during the sporting season, leaving the taxpayer to pay their staff from the dole for the rest of the year. Estates can in many cases be deliberately run at a loss, thereby reducing their owner’s tax liability to central funds elsewhere in the UK.

Finally, the Committee is recommending analysing the impact of the exemption in 1995. Again, this is straightforward – the removal of the liability was capitalised into land values and resulted in windfall gains for existing owners. This was well understood at the time by landowners themselves.

In a letter written to members of the Scottish Landowners Federation in April 1995, the President, informed them that abolition make a “great success” for the Federation “culminating many years of negotiation”. “Many members will be relieved of substantial expense”, he observed and then went on to appeal to members to donate some of the windfall gains to the Federation to contribute to a contingency reserve that would be used, among other things to fight new environmental constraints “being imposed on certain classes of land” which, as a result “must lose some of its capital value”.

Members who were being “spared Sporting Rates” were invited to donate one third of their first year’s savings to the Federation. By June 1995, over £54,000 had been donated. It is not known if further appeals were launched.

Therefore, as far as the impact of the exemption is concerned, the windfall gains ended up in landowners pockets and some of it was used to fund lobbying activity.

Conclusions

The challenge for the Stage 1 debate is to address the observations made by RACCE and to clarify what further progress can be made to address them within this Bill. In addition, it is an opportunity to explore what outstanding issues (and there are many) might be addressed in the manifestos of the political parties for the 2016 Holyrood elections when Parliament will have a five year term to push ahead with further reform.

NOTES

(1) Schedule 5 Part I 7(2)(a) of the Scotland Act 1998

(2) See Chapter 16 of Mirrlees Report.

The SNP and the road to radical land reform

18. October 2015 · 27 comments · Categories: Democracy, Land Reform, Politics

On Thursday evening last week, Channel 4 news broadcast the above 11 minute film on land reform in Scotland. It’s worth a watch. It highlights, among other things, how grassroots members of the SNP are campaigning for a more vigorous approach to land reform.

The film was broadcast on the first day of the SNP conference where I was a speaker at a fringe meeting hosted by the League Against Cruel Sports as one of the co-authors of a report on the intensification of grouse moor management. I was also scheduled to speak at an unofficial fringe meeting on land reform on Friday evening.

I noticed that there was a debate at the conference on a motion which congratulated the Scottish Government on its land reform and community empowerment bills. (1) I had heard that amendments had been submitted to the conference organising committee but that they had not been accepted for debate. I knew that some delegates were frustrated. So, when the security guard was gazing out the window, I sneaked past and into the main hall to listen to the debate. It lasted 42 minutes and if you click on the video above it will play from the beginning at 1:15:25.

I knew something was up when a young man called Nicky Lowden MacCrimmon took to the stage (at 1:25:45) to propose that the motion be remitted back for further consideration. Coming after workable contributions from two Ministers, Aileen McLeod and Marco Biagi, Nicky made it very clear that the grassroots membership were not satisfied with the ambitions of the party leadership. Here’s a flavour of his contribution.

“This motion talks about a road to radical land reform and I don’t think as a party we can say we’re being as radical as we can be, as we should be and as we have the powers to be right now.

I cannot support the motion wholly as I and many other grassroots members of the SNP believe that our vision for land reform is not radical enough and that we’ve not had an opportunity to debate that as a party and think where are we going to go with land reform.”

[Claps from audience]

“Does radical land reform leave 750,000, three-quarters of a million acres of Scotland, in the hands of unaccountable, nameless corporations based in tax havens across the globe? No, it doesn’t and we have the power to change that now.”

[More claps and whoops]

Does radical land reform leave tenant farmers with no right to buy, no security of tenure – farmers who have invested in that land, worked that land for generations, who have kids in the local school, who contribute to local economies being told your tenancy’s up, find somewhere else to live, work, raise a family. No it doesn’t and we have the power to change that now.

[Claps]

At the end of the debate, the delegates voted to remit the motion back by 570 votes to 440.

Nicky had watched the Channel 4 broadcast and later told broadcaster, Lesley Riddoch,

“Seeing Andrew Stoddart on TV and the stories from Islay just made me think someone has to say something. It was one of those, ‘if not me then who, and if not now, then 
when?’ ” moments. I take it very personally when the SNP is characterised as feart or bottling it on radical land reform. I know this isn’t how people feel in my branch or on social media. What I stood up and said was what other members have been saying to me.”

Jen Stout (here) and Calum McLeod (here) both blog about the aftermath of this debate whilst Lesley Riddoch discusses it and the unofficial fringe we held in Aberdeen with tenant farmer Andrew Stoddart in her podcast here.

I will publish a blog on the offshore tax havens issue tomorrow. See here.

NOTE

(1) See motion here.

Land Reform (Scotland) Bill 1

01. August 2015 · 49 comments · Categories: Democracy, Land Reform, Land Reform Bill 2015, Politics

Image: Land Reform Minister, Aileen McLeod at launch of Land Reform Bill with Carluke Development Trust. Photo by Scottish Government.

UPDATE 13 August 2015 My Written Evidence to the Rural Affairs Committee

The Land Reform (Scotland) Bill was published by the Scottish Parliament on 22 June 2014. The Rural Affairs, Environment and Climate Change Committee has issued a call for evidence on the general principles of the Bill at its Stage 1 scrutiny in Parliament. The call for evidence closes at 1700hrs on Friday 14 August 2015.

I have prepared a Briefing on the Bill designed to provide a non-exhaustive analysis and to help those wishing to submit evidence.

The Bill forms part of a much wider programme of land reform. Other ongoing work by government includes reform to succession law, council tax, private rented housing, land registration and compulsory purchase law. The Bill should thus be seen as part of a wider programme and not the sum total of land reform measures. It should also be stressed that, as the first two parts of the Bill make clear, land reform is a process that will necessarily not be concluded by the end of this Parliament. Indeed it will probably take a generation before Scotland’s land governance is set on anything like a modern footing.

The Bill itself contains welcome measures and these are analysed in the briefing. The most worrying aspect of the Bill as it stands is the abandonment of proposals made in the December 2014 Consultation to bar companies in offshore tax havens from holding title to land and property in Scotland. This would have been a progressive move and one in which Scotland could have been taking the lead in a UK context. Instead, the Bill proposes a meaningless right to request information.

Last month, Private Eye revealed that over 750,000 acres of land in Scotland – an area larger than Ayrshire – was held in tax havens. It applauded Nicola Sturgeon for taking a lead in tackling the problem. Their enthusiasm was premature.

Prime Minister David Cameron has announced plans to publish details of offshore corporate ownership in the English and Welsh Land Registry and pressure from NGOs like Transparency International to clamp down on the use of offshore shell companies is proving effective in westminster. The Scottish Government, however, now finds itself being outflanked by the Tories in efforts to crack down on secrecy and tax evasion. The Scottish Parliament has an important role in scrutinising exactly why this has happened.

Other parts of the Bill are broadly welcome though important matters remain to be debated further as the Bill proceeds through Parliament.

 

The Scotland Bill & the Crown Estate (2)

21. June 2015 · 22 comments · Categories: Crown Estate, Democracy, Governance, Land Reform, Legal affairs, Politics

The provisions in the Scotland Bill for the devolution of the management of the Crown Estate in Scotland are complex and unclear (see previous blog for background).

Last week, the Scottish Parliament’s Rural Affairs, Climate Change and Environment Committee (RACCE) heard evidence from representatives of the Crown Estate Commissioners (CEC) and some significant points came up. (1) Here are my latest thoughts on why Clause 31 of the Scotland Bill fails to implement the Smith Agreement on this topic.

In 1999, Crown property rights were devolved under the Scotland Act 1998. However, the management and revenues were reserved and remained under the control of the CEC. The Smith Agreement is to devolve the management and the revenues. To achieve this is straightforward. The two reservations (of management and of revenues) in Schedule 5 of the 1998 Act need to be removed.

Once these removals take effect, the responsibility for the management and revenues of the Scottish Crown property, rights and interests that currently make up the Crown Estate in Scotland would fall by default to the Scottish Parliament and Scottish Government. While Scottish Ministers would need to put in place the necessary administrative arrangements to deal with these new responsibilities, there is no need for any further legislation. Once this has happened, the Scottish Parliament can begin the process of decentralisation (to which all political parties are committed) and some of which will require legislation to put into effect.

In contrast with that approach, the Scotland Bill provides for a “transfer scheme” whereby functions of the CEC may be transferred to a transferee in Scotland and continue to be governed by a modified Crown Estate Act 1961, until such time as the Scottish Parliament determines otherwise. One of those giving evidence to RACCE was Rob Booth, the Head of Legal at the CEC. He said, in response to a question that,

“The position after the transfer date will be that the Crown Estate Act 1961 will be applied as a fallback, to fill a potential vacuum. At the transfer date, if no Scottish legislation has been brought forward to set up the structure to take on the new role, a modified version of the 1961 act will be applied as an interim measure until Scotland has had an opportunity to pass that legislation. 

In my reading of the Scotland Bill, it is not anticipated that there will be an on-going application of those 1961 act principles to management in Scotland. After the transfer date, as things stand, the 1961 act will apply only to the Crown estate in the rest of the UK, so Scotland will have freedom as far that particular aspect is concerned.” (2)

In other words, the Scotland Bill would remove the Schedule 5 reservation on management (we will deal with revenues shortly) but rather than keeping things straightforward as outlined above, Clause 31 would put in place a Treasury transfer scheme which binds nominated transferees into a legal framework governed by the Crown Estate Act and which needs to be undone by the Scottish Parliament if and when it wishes to do so in relation to the various Crown property rights and interests involved.

It remains unclear why this added complexity is necessary. Four other aspects remain unclear.

The first is the question of the revenues. It is now clear that the Scotland Bill will not devolve the revenues. Instead, it amends the Civil List Act to the effect that all revenues will be paid to the Scottish Consolidated Fund. The reservation in Schedule 5 remains in place, however, and so it will be incompetent for the Scottish Parliament to make any change to this arrangement. This, in effect, makes decentralisation very problematic. The promise that the First Minister, Nicola Sturgeon made in Orkney two weeks ago, that “coastal and island councils will benefit from 100 per cent of the net revenue generated in their area from activities within 12 miles of the shore” is made rather difficult if all of the revenue has, by law, to flow to the Scottish Consolidated Fund. (3)

The second matter relates to the idea that, after devolution, the CEC will continue to be able to acquire land in Scotland. This is legally incompetent. The CEC does not acquire land or property interest in its own behalf but does so on behalf of the Crown. Constitutionally and legally, the Crown is a distinct entity in Scotland from the rest of the UK. Were the CEC to acquire, say a shopping centre in Scotland in 5 years time, it would be owned by the Crown in Scots law but acquired from revenue derived from the English Crown. Constitutional experts will be better placed to address this question than I but I do not think this is constitutionally possible.

Thirdly, the Scotland Bill at Clause 31(10) stipulates that any management of Crown property in Scotland shall maintain the property, rights and interests as “an estate in land”. Rob Booth described this as “a fundamental founding principle of the Crown Estate”. (4) But after devolution there will be no Crown Estate in Scotland (the term will only apply outside Scotland). Crown property rights have been devolved since 1999 and this constraint represents a reversal of the current competence of the Scottish Parliament for no good reason.

Finally, the Fort Kinnaird retail park in the east of Edinburgh will not be included in the devolved settlement. Rob Booth explained this in the following terms.

“As a lawyer reading the Smith proposals, I can see that Smith talked about Crown Estate economic assets in Scotland being devolved to Scottish ministers. There is a statutory definition in section 1(1) of the Crown Estate Act 1961 of what the Crown estate is, which is those assets that are managed by the Crown Estate Commissioners. Fort Kinnaird undoubtedly is an economic asset in Scotland, but we do not manage it. The underlying asset is not owned by the Crown; therefore, to my mind as a lawyer, it does not fit the definition of a Crown Estate economic asset in Scotland as described by the Smith report.” (5)

Fort Kinnaird is owned by a partnership – The Gibraltar Limited Partnership. In Scots law a partnership is a legal entity and may own property in its own right. The Gibraltar Partnership, however, is governed by English law, specifically the Limited Partnership Act of 1907. Such partnerships are not legal entities and it is the partners that are the legal owners of the property. There are two partners in the Partnership – the CEC on behalf of the Crown and the Hercules Unit Trust. Since Fort Kinnaird is in Scotland, the interest that the CEC has is an interest owned by the Scottish Crown. (6)

Rob Booth’s explanation is unconvincing, disingenuous and wrong. The underlying asset (the interest) is owned by the Crown, the CEC manages that interest, and it does therefore form part of the Crown Estate.

To conclude, the Scotland Bill does not implement the Smith Agreement. Instead it creates a complex and incoherent muddle where there should, instead, be clarity and simplicity. The Scotland Bill is about devolving further powers to the Scottish Parliament. That is achieved by removing the two key reservations. That’s all, in essence, that it needs to do (although there are minor consequential amendments) and it doesn’t even achieve that. In the Committee stage of the Bill on 29 June 2015, MPs should ensure that it does.

NOTES

(1) Official Report here
(2) Official Report Cols 12-13
(3) See Shetland Times, 21 June 2015
(4) Official Report Col 14
(5) Official Report Col 6
(6) See here for Companies House filing history on the Partnership

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