Edinburgh from the Pentland Hills
cc-by-sa/2.0 – © Jim Barton – geograph.org.uk/p/3343260

In September 2020, the Scottish Parliament held a debate on ‘dirty camping’. Many MSPs spoke out against the poor behaviour their constituents had witnessed over the summer. This behaviour was caused not only by a lack of understanding about how to interact with the land, but also by a lack of outdoor facilities. In a blog at the time, I commented on Scotland’s woeful outdoor infrastructure. Our public outdoor spaces often lack public toilets, basic camping facilities, access for disabled people and safe active travel routes.

Our country parks, regional parks and national parks are vitally important landscapes.

The Pentlands is just one of three regional parks in Scotland (the others being Lomond Hills and Clyde Muirshiel) set up under the Countryside (Scotland) Act 1981. Scotland has established no new regional parks since 1990, despite the powers still being in place to do so. Setting up a regional park signals an intention to manage the land for public recreation as well as conservation.

Christine Grahame MSP introduced a Member’s Bill in 2015 proposing to extend the boundaries of the Pentland Hills Regional Park, to include 100% of the range instead of 45%. The Scottish Parliament disagreed to the general principles of the bill and it fell – largely on the grounds of cost, a perceived lack of demand and a feeling that it was inappropriate for central government to concern itself with the operation of regional parks given that this responsibility rests with local authorities.

The City of Edinburgh Council manages the park on behalf of the three local authorities whose boundaries cross the park area. The Council is currently asking the public for views on access and camping in the Pentland Hills Regional Park.

The premise of this engagement exercise is that there has been “a rise in irresponsible wild camping, antisocial behaviour and a significant rise in car park usage” in recent months and years. Quite rightly, the Council have identified the provision of proper infrastructure as the solution. They are proposing:

  • Enhanced parking facilities at the four main car parks
  • Development of active-travel alternatives
  • Creation of Warden position with formalised camping area and toilets at Harlaw
  • Provision of improved toilet facilities
  • Introduction of parking charges

Unfortunately, the touted development of active travel alternatives appears to be little more than minor upgrades to the footpaths around the car parks and scenic areas. It is not clear whether the City of Edinburgh Council – which is the managing authority for the park – also has plans to create the kind of joined-up active travel network that would truly encourage people to choose walking or cycling over driving. The planned expansion of the car parks at Harlaw, Flotterstone and Threipmuir only underline the extent to which those wanting to access the Pentlands are encouraged to depend on their cars.

Prioritising active travel routes to the Pentlands would not only reduce congestion on access roads, but also benefit local businesses – the research is clear that people spend more when they leave their cars at home.

The council says that there has been an increased number of cases of anti-social camping at the reservoirs. It proposes a twofold solution. First, a warden to prevent camping around Harlaw Reservoir between March and October. Second, the establishment of a basic camping area for 8 – 10 groups on the north-east side of the reservoir. Those wishing to camp there would need to pay a “small charge”. Toilets and bins would be provided. The revenue from this would pay for the employment of the warden.

If we are to have camping permit zones at all in Scotland, they should be a last resort once all other methods of addressing poor public behaviours have been tried. Basic facilities such as toilets and waste disposal, funding rangers, investing in outdoor education – these are all ways to enhance how people use and relate to land. Drawing a line between which land can and cannot be accessed by the public undermines our statutory rights.

The provision of toilets is vital in enabling access to outdoor recreation opportunities – as well as preventing the obvious problem of mess. Proper toilet provision is even more important for marginalised groups in society – particularly women or people with gastrointestinal disorders. So of course I welcome the 10 additional toilets the council is proposing for the Pentlands.

However, I find it astonishing that these toilets will come with a charge. Years of cuts to council budgets have left us in a situation where even the most basic of facilities must be paid for at point of use. Proper financing of Scotland’s outdoor public spaces is essential – now more than ever.

Public parks in other parts of Europe provide better facilities; better habitats for wildlife; better cycle routes; and better access by foot or bike. Proper outdoor infrastructure opens up the countryside for everyone. Our impoverished and underpowered local authorities are simply unable to meet demand. Without action and fair funding from the Scottish Government, local authorities like the City of Edinburgh Council will simply have to do what they can with what they have.

The survey closes on 4 December 2020 and I encourage anyone who is interested to share their views:

https://consultationhub.edinburgh.gov.uk/sfc/pentland_hills_regional_park/

selective focus photography of green leaf

Text of a 15 minute speech

Good afternoon friends.

I am delighted to be with you this morning at our autumn conference.

As we prepare for a Scottish election next year and local elections the year after, green politics has never been more important. With other parties now admitting to the existence of the climate emergency that we recognized long ago, it is vital that Green voices are heard loud and clear in mapping the way forward for our planet and all who share it with us.

We have come a long way.

The first time I was invited to address the SGP conference was in 1996 when it was held in a Guest House in Aberfeldy. I had just published ‘Who Owns Scotland?’

Plenary sessions were held in the lounge in front of the fire.

And although our conference today is bigger and more digital, the arguments I set out in 1996 over our land remain.

20 years of devolution have barely scratched the surface of the radical redistribution of power over our land and natural resources that’s sorely needed.

Much like 25 years ago, half of the country’s privately-owned rural land remains owned by a mere few hundred landowners.

And much like 100 years ago, much of Scotland’s land mass is kept barren as intensively managed grouse moors, damaging ecosystems and destroying wildlife.

But friends, it doesn’t have to be that way.

Over these past 25 years it’s been clear to me that the 4 core green principles of equality, peace, environmental sustainability and radical democracy hold the answers to this and many other problems.

After all, most folk don’t routinely seek out or actively pursue inequality or conflict.

Most folk want a world that is green with clean water, clean air and abundant nature.

They want a world that is just and fair to all.

And they want to play a part in shaping the world in which they live.

What stands in their way? Populism, narrow nationalism, totalitarianism, and the insane imperatives of capitalism itself all seek to corrupt and frustrate the realisation of these basic human instincts.

Democracy provides a vital path through this corruption. Not just democratic parliaments and councils but Democracy in the workplace, in political institutions, in finance, and of course, in land.

Fundamentally green politics is about redistributing power from the few to the many, from capital to workers, from elites to the public, from corporations to customers and from centralised government to decentralised government.

Tony Benn famously asked five questions of those who claimed to enjoy a position of power:

“What power have you got?

Where did you get it from?

In whose interests do you exercise it?  

To whom are you accountable?

and finally

How do we get rid of you?”

Benn would explain that: “Anyone who cannot answer the last of those questions does not live in a democratic system.

As some of you may know I first got involved in environmental politics whilst studying forestry at Aberdeen University.

In the 1980s there was a raging controversy over commercial afforestation of the deep peatlands of Caithness and Sutherland. This was driven by tax breaks for the wealthy and whilst I was as concerned about the environmental issues as many others, it was the politics of the situation that really caught my attention.

The Chief Executive of the company responsible for this activity gave a lecture and I asked him why the Government was giving millions of pounds in tax breaks to wealthy people in London to plant trees in the far north of Scotland?

Why, for example, did the Government not use the money it was foregoing in tax receipts to provide grants to the farmers and landowners who owned the land in Caithness so that they could plant the trees?

I don’t recall his answer but afterwards, my Professor pulled me aside and suggested it was not a good idea to ask such political questions.

And so I decided that asking such questions was in fact a splendid idea and, the more it made folk uncomfortable, the more I enjoyed it. Indeed it is a good life lesson for all of us. Never stop questioning things.

This was an environmental conflict – over the use of what to some people was cheap land from which to derive a profit but to others was an precious habitat, and one of the largest  carbon sinks in Europe

It was, in short, a power struggle.

But has much changed?

Who has been funding current reforestation efforts trumpeted by the Scottish Government? An oil giant, Shell.

Shell’s £5m so they can advertise their green credentials on petrol pumps is greenwashing, pure and simple.

And the recent Forestry Act perpetuates power in Edinburgh. Wealthy private interests continue to be privileged in Scotland’s forestry sector.

Equally lucrative tax breaks remain, together with an equally generous grants scheme that is largely captured by wealthy land owners.

For example, if you have a spare £7.5 million, you can buy Kinrara Estate in the Cairngorms National Park and then pocket £2-3 million of public money to restore woodlands.

No wonder our pattern of forest ownership remains skewed.

Indeed Scotland has the most concentrated pattern of private forest ownership and the lowest proportion of the population involved in owning forests in Europe.

Forest industries in Sweden and Finland for example include huge member-owned industrial co-operatives such as Sodra and Metsalitto corporation

In France there are 11,000 local forest communues owning around 3 million hectares of forest – a fifth of French forests.

As in so many matters of public policy, Scotland is not a normal European country even with the devolved powers we have.

And so I am pleased to announce that in the next couple of months Scottish Greens will launch a campaign called Woodland Nation – a plan to become a normal European country through a socially responsible and environmentally restorative programme of reforestation owned and controlled by local people.

This will not be achieved by funneling grants and tax breaks to the wealthiest nor does the current Cabinet Secretary, Fergus Ewing, who is little more than a lobbyist for powerful private interests, have any interest in such a programme.

Scottish Greens will be making the case for fundamental change.

With a target to reach 40% woodland cover by 2040, achieved by a programme involving communities, local authorities and local people to create a Woodland Nation.

A programme where 50% of all grant support will be targeted at community and local forestry projects.

A programme linked to a strategic programme of community land acquisition across Scotland secured at economic value and not the inflated market value associated with scottish land.

We will promote new national public forests financed by community shares but managed locally for local benefit.

We will make it mandatory to restore natural forests on our most denuded landscapes.

And we will reform the governance of Forestry and Land Scotland so that it is accountable to elected regional boards.

And all of this needs to be tied into an industrial programme that provides high quality, energy efficient timber homes for rural families.

In short, land must be owned and used in the public interest and for the common good.

But today, up to a fifth of Scotland’s land mass is currently used as a playground for the ritual slaughter of grouse and other wildlife for the privileged.  Let us be clear. Grouse moors have no place in a Scotland that needs communities empowered and forests and peatlands restored.

Scotland also has substantial renewable energy potential but much of the industry is now dominated by large multinationals rather than community and local businesses, and just this week we have seen the betrayal of the workers at Bifab, denied any role in supplying the enormous new offshore wind farm being developed off the coast of Fife.

And For all that we like to compare ourselves with similar European countries such as Denmark, the current heat networks bill going through Parliament is a reminder of how far we fall short

Denmark’s district heating schemes are the responsibility of the municipalities who also own most of the pipe network with consumer-co-operatives owning the rest.

And by law, in Denmark all suppliers of heat must operate on a not-for profit basis.

In contrast the proposed arrangements in Scotland exclude local communities, centralise power with Ministers and there is no not-for-profit requirement.

What is normal in Denmark should be normal here.

And in no area of public policy is our departure from European norms so pronounced as in housing.

Scotland continues to face a housing crisis.

Homelessness is on the rise.

Many young people in particular are struggling to afford housing being forced into the private rented sector with exorbitant rents in places like Edinburgh.

We are failing.

Because housing is framed as a property rights issue rather than a human rights issue.

Because housing is seen as a financial investment rather than a place to call home

Back in 2019 a constituent, Colin Brown, got in touch with me.

Colin was a tenant of an Edinburgh property company called Express Investments Ltd who owned multiple properties across the city.

Colin received a notice to quit his home of 27 years in May 2019. He refused to leave and I assisted him with contesting the eviction order at the tribunal. Colin lost the case but is thankfully now safely rehoused.

Whenever I met Colin, the first thing he would always say to me is “this is my home, it is not a property”.

Yet even if Colin had been covered by the new private sector tenancies introduced in 2018, he would still have been facing eviction.

Because the reason the landlord wanted to evict him was so that they could sell his home.

Colin had no objection to his landlord selling the property. He merely wanted the right to remain  in this home. But the law says that the landlords right to sell trumps the tenants right to a home.

In few other countries in Europe are the rights so skewed so much in favour of landlords.

In few other countries in Europe do housing costs contribute so much to poverty.

The Recent Edinburgh Poverty Commission found that 29% of households in this city were living in poverty solely due to housing costs.

In short, there is no pathway to eradicating poverty that does not run through housing.

And that is why Greens will be proposing a new deal for Scottish housing.

Realistic and effective rent controls including the right to request a rent reduction.

An end to eviction grounds such as the wish of the landlord to sell.

Fairer taxation and a replacement for the regressive council tax.

Elimination of the speculative volume house building industry that denies consumers any say in their housing options – unlike normal European countries where the bulk of new housing is self-procured to higher standards.

A right for councils and communities to acquire land at its existing use value – not the inflated value arising as a consequence of planning permissions.

And a significant expansion of affordable housing – like normal European countries where in Vienna for example over 60% of households live in affordable social housing.

To conclude friends:

From our land and forests, to renewable energy and housing, Scotland is not a normal European country.

The odds are always stacked in favour of the wealthy, whether they be the big land owners, landlords, or corporates.

And as a result, the rich get richer and the poor poorer.

This is not an accident. It’s a policy choice, and for all their talk about building a wellbeing economy, over the last five years of this Government, time and time again we’ve seen the SNP choose to side with powerful vested interests rather than the public interest.

Standing up for landlords when the pandemic hit us whilst joining with the tories to block my proposals for better protection for tenants. In no other country in Europe would a Private Sector Resiliance group set up to safeguard tenants during the coronavirus pandemic have no representatives of tenants on it.

And that’s why if you believe in a building a fair and green Scotland then the Greens are the party for you.

The reason there is a global green movement is because the planet is imperilled. Our economic and political systems are designed for endless growth on a finite planet.

And we need to work together across international boundaries in solidarity.

To secure the future for the planet, Greens have long recognised the need for social, economic and political change.

That change involves of course Scotland becoming a self-governing independent nation. But it also involves creating genuine self-governing local government and communities.

And it involves doing what we can within the devolved settlement to make Scotland a normal European country in how we run our communities, plan our public transportation, own and govern our land and natural resources and organise our housing systems.

Conference, it is the Scottish Greens who have been working for Scotland. We can deliver a fair and greener European country. Through democratizing society. By giving power back to workers and communities who are fighting for a fair, just and sustainable Scotland.

So colleagues Take heart from their efforts and believe that together we can make the kind of progress in the year ahead that will make a truly green normal European Country.

blue dome tent on green grass field near mountain under white clouds during daytime

Last Wednesday I spoke in a debate on ‘dirty camping’. Over the summer, we have seen some careless, reckless, and anti-social behaviour by people visiting scenic areas of Scotland. This is a matter of great concern to many people, especially those who live in the Highlands and Islands, Perthshire, the Borders and local beauty spots across the country.

I unequivocally condemn that kind of behaviour.

However, disturbing as these incidents have been for local residents, they have not been – as media reports might have led to you to suppose – a widespread occurrence. For example, the Cairngorms National Park Board considered a paper last Friday that looked at the summer visitor experience. It observes that:

“Early August was very busy with large numbers of visitors to the park… Despite a noticeable increase in irresponsible behaviour the vast majority of visitors have been reacting favourably to information offered by the Rangers with few, but significant, occasions of difficult behaviour.”

A more detailed analysis of Badenoch and Strathspey, Deeside and the Atholl and Angus Glens says that the data “shows a relatively small… but noticeable increase in irresponsible behaviour.”

Punitive action against anti-social behaviour and littering – involving police, permits and permissions – might be appropriate in particular cases, in the short term and in specific locations, but is not an appropriate response in the medium and long term. I know from conversations with rangers and outdoor activities instructors, many of whom have engaged with so-called dirty campers, that many are cutting live wood and leaving litter out of genuine ignorance. Who is responsible for that ignorance?

For centuries the law has sought to punish those who camp, who travel and who use land for recreation. Luckily we now have some of best access legislation in Europe: it is a statutory right to camp responsibly in Scotland. During the debate, some MSPs questioned whether the laws in this area are adequate. There were suggestions that the law as it stands is not working. One suggested route forward was expanding permit zones – areas where campers must buy a permit in order to camp.

Rather than responding by reacting solely to the most extreme examples, we should ask ourselves how we can encourage people to act responsibly. We need to focus on education and on inspiring a love of outdoors amongst a generation more used to Mediterranean beaches and music festivals.

Scotland has woeful outdoor infrastructure – basic camping facilities, a woeful lack of public toilets, and so on. I have cycled in the Netherlands, Germany and Denmark – these countries take outdoor recreation seriously and provide the appropriate facilities. Outdoor recreation should not be only for those who can afford a car or expensive equipment.

Outdoor recreation is also concentrated in a small number of over-visited hotspots, which have borne the brunt of recent incidents. We have a statutory right to roam, but often the land over which it is most pleasant to roam is far away from the cities where most people live.

A great deal of the accessible information online relating to outdoor activities in Scotland is ‘hitlist’ style. It focuses on must-visit spots, such as the Fairy Pools on Skye, Glencoe and Loch Lomond. As a consequence, these spots receive a disproportionate number of visitors.

We need to democratise the countryside.

That means supporting outdoor education centres, many of which are facing serious financial challenges. The Scottish Government have now said that no domestic residential school trips can go ahead in the Autumn 2020 term, leaving these centres bereft of income.

It also means ensuring ranger services have sufficient funding to protect fragile landscapes and educate visitors. The Scottish Countryside Rangers’ Association estimate that over 140 ranger posts have been lost since 2008. Rangers

Land around cities should be managed primarily for recreation, community food projects and recreational hutting rather than low output publicly subsidised agriculture so that the public have easy access to leisure opportunities.

Hutting provides a valuable opportunity to change the shape of domestic tourism and the relationship people have with the outdoors. It would also mean affordable, low-impact holidays.

Diversifying ownership of land is also part of this. I hope that where communities take over the management of the land around them, they also take the opportunity to improve access and to provide the kind of basic facilities that would allow so much more responsible enjoyment of the countryside.

More information about attractions and paths would also help issues of crowding. Path mapping projects like that currently being carried out by the Ramblers are vital in spreading visitor numbers across many areas. Information about walkable paths would also open up the countryside for many without specialist knowledge.

Finally, it means communication. I welcome the Scottish Government’s commitment to increased campaigns around littering. However, tackling litter is just one piece of the puzzle. We need a grand reset of people’s relationship with the countryside.

None of this requires legislation. It requires funding and communication. Money spent on improved outdoor infrastructure and education saves public money – it means less money spent on cleaning up litter and policing camping hotspots. As the blogger Nick Kempe has suggested, it would be a good idea to focus the £43 million that Visit Scotland spent on marketing last year on improving infrastructure and promoting responsible enjoyment of the outdoors.

No rural community should have to feel besieged or threatened by a surge in visitors. However, this is not a problem that can be solved by punishing individuals. For decades, the services that support people to interact with the land around them have been cut. It should not surprise us when some people act out of ignorance.

Following my previous blog on the offshore interests of the Scott/Buccleuch family, the Panama Papers have emerged. I look forward to interrogating the 2.6 terabytes of data once it is made available for public examination in early May.

Meanwhile, I thought I should publish information sent to me by the Chief Executive of Buccleuch Group on 16 March in response to my blog and coverage of the story by Commonspace and The National.

“In view of media reports and comment on regarding Pentland Ltd., a wholly-owned subsidiary of Buccleuch Estates Ltd., and the Stage 3 debate on the Land Reform (Scotland) Bill tomorrow, Buccleuch wishes to clarify the position of this company.

1. Pentland Ltd is a UK trading company which is subject to UK taxation. All tax that has been due from Pentland Ltd has been paid in the UK throughout the existence of the company.

2. All directors of Pentland Ltd are UK residents and UK taxpayers and are members of the Buccleuch family.

3. The ‘beneficial’ owners of Pentland have never been concealed and any land holdings owned by the company have been clearly identifiable as ‘Buccleuch’ land holdings.

4. Pentland was originally registered in the Cayman Islands in the 1970s, not for taxation purposes but to accommodate a range of international assets and investments.

5. Since the late 1990s, the assets of Pentland Ltd have been wound down and the company has traded exclusively in the UK. It is not permissible to re-register the company which currently owns a small property development in Canonbie, Dumfries and Galloway.”

This is a very interesting statement and reveals the sophistry at the heart of discussions about the use of secrecy jurisdictions.

Take the first sentence, for example.

Pentland Ltd. is a company registered at HSBC International Trustee Ltd., PO Box 484GT, Grand Cayman, Cayman Islands.

That is a fact.

This cannot be spun as “Pentland Ltd is a UK trading company”

Two other observations are worth making.

The statement suggests that Pentland Ltd. has had an association with the Buccleuch family since the 1970s and point 4 explicitly claims that Pentland Ltd. was originally registered in the Cayman Islands in the 1970s. In fact, Pentland Ltd. was not incorporated until 1990 as evidenced by its incorporation certificate here. So what was going on between the 1970s and 1990?

There is also some confusion about the relationship between Peatland Ltd. and Buccleuch. In this media statement from 2009, it is stated that “Pentland Ltd is a company under the ownership of the Buccleuch Group” when in fact it did not become a wholly owned subsidiary until 2013. Indeed in 2002, Anderson Strathern had written to the Keeper of the Registers of Scotland in plain terms that “Pentland Ltd is registered in the Cayman Islands and is not part of the Buccleuch Group.” From the statement above, it would appear tat it has always been part of the Buccleuch Group.

Finally..

We know nothing more about Hayes One Ltd., Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman, KY1-1108, Cayman Islands.

And we still do not know who is the beneficial owner of of Buccleuch Estates Ltd.and how this is structured.

by Andy Wightman and Carole Ross

Buccleuch Estates Ltd.

Mr Richard Scott (sometimes referred to as the Duke of Buccleuch) is frequently cited as the owner of the largest extent of private land in the United Kingdom. Yet, this has never been entirely accurate. The 242,000 acres of land in Scotland is owned not by Mr Scott, but mainly by a company called Buccleuch Estates Ltd.

The shares in Buccleuch Estates Ltd. are not owned by Mr Scott and his family but by two companies – Anderson Strathern Nominees Ltd and MDS Estates Ltd.

Anderson Strathern Nominees Ltd. is a dormant company which is wholly owned by Anderson Strathern Asset Management Ltd. Anderson Strathern Asset Management Ltd. is wholly owned by Anderson Strathern LLP which, in turn is owned by the 53 partners in the law firm.

MS Estates Ltd. is wholly owned by Anderson Strathern Nominees Ltd. though the Directors include Mr Scott and other family members

Anderson Strathern Nominees Ltd. is ….. (but you know this).

So the ultimate owner of Buccluech Estates Ltd are 53 solicitors?

Well, not quite. Because what the Nominees do is to act on behalf of persons unknown on their behalf. These persons are likely to be members of the Scott family but we can’t know because the arrangements are not made public.

The first inkling I ever got that there was something odd about Buccleuch’s arrangements was 20 years ago in 1995. I was helping Philip Beresford compile the Sunday Times Rich List and he faxed me a copy of a letter he had received from Richard Scott’s father.

Dear Sir,

Much as I would like to be No. 33 in your chart of the richest 500, I fear I am there under false pretences.

As you rightly mention the calculation is based upon a hypothetical valuation of works of art. What you may not realise is that if I were to sell items in the collection, 80% of the proceeds would go straight to the Treasury. This is because 80% was the rate applicable to my father’s estate when he died in 1973. 

My worth on that score should therefore be reduced from £200m to £40m and as I own no shares in Buccleuch Estates Ltd., I might find myself level-pegging with Gordon Baxter and Sean Connery. 

Can you please take this into account next time? 

In recent years the top rate of inheritance tax was reduced to 40% but even this would affect the positioning of many others whose worth is based upon art collections. 

Yours faithfully 

Buccleuch

Two things stood out in this letter which would later become of interest. Buccleuch’s art works were the subject of a heritage tax exemption (meaning that the public could have access at certain times in exchange for a deferral of inheritance tax) and that Buccleuch, despite being regarded as the owner of Buccleuch Estates, admits that he owned no shares in the company.

A few years later and at his request, I had a private meeting with a senior adviser to Buccleuch. In exchange for some intelligence he wanted on the likely impact of land reform, I requested information on who really owns Buccleuch Estates. I was told that it was controlled “by the family”, that there were “firewalls” between different parts of the business and that there were “offshore interests”.

Madonna of the Yarnwinder

Some years passed and my file on the topic lay dormant until in 2003 when the Leonardo da Vinci painting, the Madonna of the Yarnwinder was stolen from Drumlanrig Castle. Given the 80% inheritance liability that was due, I wondered what would happen in the event that the painting was never recovered. In 2007, the painting was recovered and is now on loan to the National Galleries of Scotland.

One thing that did happen was that the ownership of the painting changed hands shortly after the theft and was transferred to a charity, The Buccleuch Heritage Trust by a Deed of Gift on 16 April 2004.

The Buccleuch Heritage Trust transferred a total of £12 million of assets to a new charity, The Buccleuch Living Heritage Trust in 2011. The charity’s membership and Board is appointed exclusively by Mr Scott. The assets included Dalkeith House (which was not included in the valuation of £12 million) and title to the Madonna of the Yarnwinder.

The accounts of the Buccleuch Heritage Trust are no longer in the public domain. I asked Anderson Strathern for copies of the 2004 accounts but they demanded a fee of £100 which I could not afford and which I refused to pay. In the 2011 accounts of The Buccleuch Living Heritage Trust (2Mb pdf), there is a loan noted in the accounts for £749,692 that had been assigned from the Buccleuch Heritage Trust to finance the purchase of the Leonardo da Vinci painting (page 17). To understand this loan, we need to go back to the original theft of the painting.

In August 2003 the stolen painting was insured by John Scott for a figure of slightly less than £4 million. This seems to have been because, as outlined in Buccleuch’s letter in 1995, there was an 80% tax liability on the painting and that part of the value was never insured. Following the robbery, the insurers settled an insurance claim by Mr Scott of approximately £3.8 million. That settlement gave the insurers a right of ownership in the stolen painting. Around the same time the insurance policy in respect of the stolen painting was varied to enable the Buccleuch family to buy back the insurers’ right of ownership in the stolen painting, in the event that it was ever recovered.

My understanding is that the £749,692 that was loaned to the Trust in around 2004 was to enable this buy back agreement. The loan was fully paid off in 2012.

Pentland Ltd.

The loan to the trust was from a company called Pentland Ltd and the 2011 accounts note that Richard Scott, who is a Trustee of the charity, is also a Director of Pentland Ltd.

And so to the substance of this blog. Who is Pentland Ltd.?

There is only one company called Pentland Ltd. registered in the UK and it is a wholly-owned subsidiary of Galliford Try, a UK construction company that has nothing to do with the Scott family.

The Pentland Ltd. that loaned £749,692 to acquire the da Vinci painting is a company registered in Grand Cayman, part of the Cayman Islands, a British Overseas Territory and notorious secrecy jurisdiction. Its registered office is ar HSBC International Trustee Ltd., PO Box 484GT, Grand Cayman, Cayman Islands.

Until recently, Pentland Ltd. had no direct links to the Buccleuch Group (the very complex network of companies controlled by Buccleuch Estates Ltd.). Instead it was part of a quite separate (and just as complex) network of companies controlled by the Scott family. Pentland was incorporated in Grand Cayman in 1990. By 2009, it had become a subsidiary of Dabton Investments Ltd. and in 2013, Dabton was acquired by Tarras Park Properties Ltd., a subsidiary of Buccleuch Estates Ltd.

Pentland Ltd. (Grand Cayman), Salters Land Ltd (British Virgin Islands) and Drumcork Ltd. (British Virgin Islands) are now all subsidiary undertakings, joint ventures and associates of Tarras Park Properties Ltd. which is wholly owned by Buccleuch Estates Ltd.

An investigation into the myriad companies associated with Pentland prior to 2013 reveals a series of loans from Pentland Ltd. to other companies in the Buccleuch Group. Some of these loans were repaid in full or in part and others were written off in full or part. Some details are provided in this  dossier.

Lending money to UK companies from companies registered in secrecy jurisdictions is one method of bringing offshore money onshore. Writing off such loans means that the money is never repaid.

Being 100% owned by the Buccleuch Group, loans and other related party transactions are now exempt from disclosure under Financial Reporting Standard 8 on Related Party Disclosures. It is thus no longer possible to identify the loans being made by Pentland Ltd. to other companies in the Buccleuch Group.

Given that Buccleuch Estate Ltd. is itself ultimately owned by a nominee company of solicitors, is Pentland Ltd. one of the offshore family trusts I was told about in the late 1990s?

Dalkeith Estate

Dalkeith Country Park is popularly assumed to be owned by Buccleuch Estates Ltd. But as we have already seen Dalkeith House and surrounding grounds are owned by The Buccleuch Living Heritage Trust.

The ownership of the majority of the rest of the Country Park and neighbouring land was revealed in correspondence entered into between Buccleuch Group, Anderson Strathern and the Registers of Scotland in relation to the registration of an agricultural tenant’s interest to buy their farm under Part 2 of the Agricultural Holdings (Scotland) Act 2003.

The eastern part of the Country Park is occupied by a tenant of the Home Farm and a further agricultural tenancy exists over Smeaton Farm on the Park’s eastern border, just outside the park

Half of Smeaton Farm was owned in the past by Pentland Ltd. but by 2012, it had transferred its ownership to a company called Hayes One Ltd., Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman, KY1-1108, Cayman Islands.

In correspondence relating to the Home Farm and Smeaton Farm in 2007, Registers of Scotland asked Buccleuch whether Pentland Ltd and Buccleuch Estates Ltd. “were connected  in any way for example with the same beneficial share ownership and whether the tenant did receive notification of the change of ownership and when this took place.”

In reply, Anderson Strathern wrote to RoS to state that ownership of the Home Farm had transferred from Pentland Ltd to Buccleuch Estates Ltd. on 26 November 2002 and this information had not been intimated to the tenant. The letter said nothing about beneficial ownership, merely that “Pentland Ltd is registered in the Cayman Islands and is not part of the Buccleuch Group.”

A search in the Register of Sasines and Land Register for “Pentland Ltd.” in Midlothian returned no results.

In an article in the Sunday Times on 21 July 2013, John Glen, Chief Executive of Buccleuch Estates Ltd. said,

It’s my job to run the Buccleuch companies and I can assure anyone that Buccleuch businesses pay tax where they fall due. All trusts linked with Buccleuch are subject to UK tax and all other family-related trusts are resident in the UK and subject to UK tax.”

It is not clear whether this statement covers the activities of Pentland Ltd., Salters Land Ltd., Drumcork Ltd. and One Hayes Ltd.

In a statement issued yesterday, a spokesman for Buccleuch said:

Pentland Limited is a Cayman Islands incorporated vehicle which is wholly owned by The Buccleuch Estates Limited which is UK registered. The company has always been wholly owned by Buccleuch and members of the Buccleuch family, all of whom are UK resident taxpayers.

“All profits arising in Pentland Limited are subject to UK corporation tax. Pentland Limited has historically owned land in the UK and currently owns an area of land near Canonbie in Dumfries and Galloway.”

In the Land Reform (Scotland) Bill debate on Wednesday this week, Patrick Harvie MSP has tabled two amendments that would bar all legal entities registered in British Overseas Territories or Crown Dependencies from registering title to land in Scotland (Amendments 105 & 106 pages 11 & 12).

This is merely the latest in a long series of attempts in Parliament to crack down on offshore ownership. At First Minister’s Questions on 9 October 2003, Jack McConnell responded to a question from Stewart Stevenson MSP on the topic and concluded that “I am sure that the matter will be discussed in Parliament over a long period.

In 2012, in response to further attempts to amend the Land Registration (Scotland) Bill in 2012, Fergus Ewing MSP, responded to concerns raised by the Economy, Energy and Tourism Committee, by saying that nothing could or would be done. In a meeting with the Minister at the time, I specifically raised the question of the use of secrecy jurisdictions by landowners like Buccleuch. Barely able to disguise his contempt for me, he said that he had visited Buccleuch and that the company had created lots of jobs. On Wednesday, Parliament will once again debate the matter after months of pressure from campaigners for greater openness.

Meanwhile, despite what we have discovered here, we are no closer to being able to determine for sure the real owner of Buccleuch Estates Ltd.

See the story with further comment in The National by Commonspace journalist, Michael Gray and a summary of this blog here.

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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.

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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.

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: 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.

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 Scottish Tenant Farmers Association issued the following media release today.

WITHOUT ACTION, FARM EVICTIONS WILL BECOME SCOTLAND’S SHAME

The Scottish Tenant Farmers Association has welcomed the focus given to land and tenancy reform at last week’s SNP conference and the clear signal from SNP grassroots support for strengthening the land reform proposals in the current bill.  The delegate’s call followed a powerful documentary on Channel 4 TV which highlighted what are seen as some of the worst areas of bad land and estate management in Scotland.

The conference also heard pleas to halt the impending eviction of tenant farmer Andrew Stoddart whose tenancy on Colstoun Mains in East Lothian is due to come to an end in a few short weeks.  Andrew Stoddart, who also spoke at a fringe event, is the first of the Salvesen Riddell tenants to be forced to quit their farms following the Remedial Order passed by the Scottish Parliament last year.

Commenting on the grassroots “rebellion” at the SNP conference, STFA Chairman Christopher Nicholson said: “STFA has been concerned that the government may have been wilting in the face of intense pressure from landed interests, intent on weakening what can only be seen as an already diluted bill.  We hope that this message from the conference will strengthen the government’s resolve to deliver more radical and much needed reforms to create fairer conditions for tenant farmers, stimulating investment on agriculture, greater access to land and encouraging opportunities for new entrants.”

STFA has also become appalled at the recent treatment of tenant farmers affected by the Salvesen Riddell Remedial Order, including Andrew Stoddart who faces imminent eviction without having had the opportunity to take part in the government’s mediation process or be considered for any recompense which should be due from the government following the implementation of the Remedial Order.

STFA Director, Angus McCall who has been involved in the Salvesen Riddell debacle for the last few years said: “This whole episode has become Scotland’s shame which has seen the victims of a legal error hung out to dry by uncaring government lawyers and an inflexible government process.

“This tragic episode stemmed from legislation passed in 2003 which was proved to be defective.  The UK Supreme Court then instructed the Scottish parliament to remedy the situation and, as a consequence, 8 families will lose their farms and livelihoods.  However, rather than seeking to fulfil commitments made by government to parliament and the industry,  government lawyers are abdicating all responsibility and liability and refusing point blank to consider any compensation package for the affected tenants.  These tenants are now faced with a lengthy and expensive court battle to exert their rights.

“STFA has already written, and is writing again to the First Minister, Cabinet Secretary, Richard Lochhead, the RACCE committee and MSPs to get the matter resolved and allow these tenants and their families to move their lives on, but all to no avail.  Ministers, MSPs and some officials have expressed a willingness to help, but seem to be held to ransom by lawyers.

“We all appreciate that this is a complex situation, but the rulers of this country must accept a moral responsibility for the damage done though the actions of a previous government to these families and move without further delay to find a way towards an equitable settlement rather than forcing them into a long drawn out, expensive and life sapping legal battle.  This has been devastating for all concerned and, after 18 months of prevarication, the tenants’ lives are still on hold and they are no further on in knowing their future.

“This affair has been a well-kept secret, but it must be time for the Scottish people to wake up and realise what is going on and allow common decency and a sense of fair play to prevail and put an end to this sorry affair before any lives are tragically lost as has happened in the past?”