09. March 2021 · 9 comments · Categories: Politics

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I will be a regional list candidate for the Highlands and Islands in the Scottish Parliamentary election in May 2021.

To be elected, I will need around 15,000 votes. I have launched a Crowdfunder to raise £10,000 to pay for the development of a digital campaigning platform, newsletters and media and communications support. PLEASE do consider making a donation. https://www.crowdfunder.co.uk/andy-wightman-for-highlands-and-islands

As an Independent Candidate permanently based in Lochaber (from 26 March 2021), I am offering you the opportunity to vote for experience, integrity, independent thinking, a commitment to strengthening local democracy and a track record of success.

My background is as a land rights campaigner, author, and researcher. Since the early 1990s, I have worked with communities across the Highlands and Islands supporting them to achieve more local control of land and resources. For the past 5 years, I have been an MSP for Lothian Region.

Holyrood needs more independent voices. Over the past 5 years, I have campaigned successfully on a range of issues.

As an MSP (2016-21), I led the successful legal challenge in the European Court of Justice that ruled that Article 50 could be unilaterally revoked.

I launched the Homes First campaign to better regulate short-term lets and successfully led opposition to the latest regulations that adversely affect Bed and Breakfast businesses.

I introduced a Bill to incorporate the European Charter of Local Self-Government to strengthen local democracy. It will be voted on at its final stage in Parliament within the next few weeks.

I have championed tenants’ rights and the need for more affordable housing including the desperate need to make land available at affordable prices reflecting its existing use value.

As a long-standing land campaigner (author of Who Owns Scotland 1996 & The Poor Had No Lawyers 2010), a focus of my election campaign will be a Land for the People Bill to reform Scotland’s antiquated land laws and democratise the ownership and use of land and property.

Standing for election as an Independent is extremely challenging. I have no party machine, no corporate donors, and no party members to support me.

I will be relying on a digital, grassroots campaign to win support and spread the word of my candidacy to others. I will need 15,000 votes to be in with a chance of winning a seat.

IMPORTANT INFORMATION

Donations will be made to Andy Wightman.

For the purposes of complying with electoral law, I need to collect information on donors.

Anyone donating over £50 is deemed to have made a regulated donation and will be subject to permissibility checks.

All such regulated donations will have to be reported to the Electoral Commission in my election return.

This is a brief blog to explain the background to the rented housing amendments I lodged at Stage 2 of the Coronavirus (Scotland) (No.2) Bill on Tuesday 19 May and those I intend to lodge at Stage 3 to be considered on Wednesday 20 May.

The Coronavirus (Scotland) (No.2) Bill is the second piece of emergency legislation to come before the Scottish Parliament. The first was the Coronavirus (Scotland) Act passed in a single day on 1 April.

Both pieces of legislation are designed to respond to the challenges posed by Covid-19 and typically make some administrative changes to how the courts and public bodies work as well as some more substantive policy changes in housing, licensing and justice.

Many people are facing new hardships due to job losses, declines in incomes and wider insecurities. These include renters who, like everyone else, are required to stay at home but whose security in their home its subject to laws on housing tenancies and the attitudes of landlords.

Responding to this, the first Act extended the period of notice required to be given by a landlord to a tenant if they wished to evict them. This was designed to ensure that renters could not be evicted during the pandemic. These reforms, however, did nothing to stop evictions being initiated during the so-called emergency period. I lodged a series of amendments to prohibit any evictions being sought during the crisis (not simply require longer notice periods). These amendments were rejected by Parliament.

Since 1 April it has become clear that longer notice periods will not be sufficient to deal with the hardship likely to be faced by many tenants – hardships that will extend beyond the emergency period when landlords will, if nothing changes, be within their rights to seek to evict tenants once again on the grounds of rent arrears that may have accrued as a result of hardship during the crisis.

So, when the new Coronavirus (Scotland) (No.2) Bill was introduced to Parliament on Monday 11 May I took the opportunity to propose amendments that would seek to deal with the post-covid period. I notified the Housing Minister on Tuesday 12 May of my intentions and invited him to discuss my proposed amendments with a view to potentially supporting them at Stage 2 (or stating why he could not).

I received no response.

Thus I lodged amendments 16-20 which did four main things.

Amendment 16 established a tenant Hardship Fund to respond to tenants in particularly acute distress.

Amendment 17 sought to freeze rents for two years.

Amendment 18 provided that in certain circumstances (to be seat out by Ministers) rent liability for some tenants facing particular hardship could be extinguished.

Amendments 19 and 20 were deigned to ensure that any rent areas accrued during the crisis would continue to be payable to landlords but could not be ground for eviction. This would prevent tenants losing their home but they would continue to be liable to pay any rent arrears accrued.

A number of parties including social housing interests wrote to the Committee with their concerns. I was not copied in to any of these representations and thus was unable to respond to them.

All the amendments were defeated by SNP and Conservative members of the Committee with the Liberal Democrat member supporting three of them and opposing two of them.

The arguments can be seen in the draft Official Report of the Meeting. All the housing amendments were dealt with at the beginning of the meeting.

Debate now moves onto Stage 3, the amendment deadline for which is 0930 on Wednesday 20 April. I am lodging a similar suite of amendments again but further amended to reflect objections made at Stage 2.

Amendment 16 will be taken forward by Pauline McNeill MSP (note that these numbers relate to the Stage 2 amendments, the amendment numbers for Stage 3 will be different)

Amendment 17 will now apply only to the private rented sector and the baseline date will be 1 April so as not to disadvantage landlords who have reduced rents during the crisis.

Amendment 18 now makes clear that writing off rents is only for tenants facing unusual or extreme hardship and it will be for Ministers to define this in regulations. It is NOT and NEVER was framed as a broad writing off of rent.

Amendments 19 and 20 now apply only to the private rented sector and make explicit that arrears can only be disregarded for the purpose of evictions (but remain payable) if the arrears are directly liked to coronavirus.

The redrafted amendments focus the intentions more explicitly, respond to objections and remain a modes but important suite of reforms designed to afford proportionate protections to tenants facing hardship because of factors beyond their control.

Scotland still lags behind many continental European countries in tenants rights and politicians continue to instinctively protect propertied interests rather than the interests of tenants. Since the propertied class have assets, they are relatively well off. For tenants, however, we are talking about their homes, the schools their children attend and the jobs they have. Tenants stand to possibly lose all of this and be kicked out of their homes. Landlords will still have a valuable asset.

It is time to stand up for the human right to a home.

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?”

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.

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.

 

 

There is a lot of complete nonsense being spun in the media today about the alleged refusal of Scotland to contribute to the financial support of the Royal family. Front page splashes on the Times and the Telegraph has been gleefully picked up by broadcasters and others. The population  has now been led to believe that Nicola Sturgeon and the Scottish Government are somehow snubbing the Queen and refusing to pay a fair share of the costs of maintaining her in the style to which she is accustomed,

We have been here before.

Last December, the journalist Hamish Macdonnell spun stories in the Daily Mail and the Spectator. I debunked them here.

So what are the facts?

The Crown Estate is public land and the Crown Estate Commissioners a statutory corporation responsible for managing the Crown Estate. The net revenues from the Crown Estate are public revenues which are currently paid to HM Treasury.

The Royal Family is financed by through a Sovereign Grant established under the Sovereign Grant Act 2011. Section 1 of the Act provides that the Grant is paid by the Treasury each year from funds voted by Parliament (the UK Parliament).

The Scottish Government has no responsibility whatsoever to provide any funding for the Royal Family since it is a reserved matter. Scottish taxpayers pay towards the Sovereign Grant in the same way as they contribute to all areas of reserved expenditure.

The sum of money comprising the Grant is calculated by reference to the net surplus revenue paid to the Treasury by the Crown Estate Commissioners. The first step in the calculation (Section 6 of the Act) is to calculate 15% of the revenue in the financial year two years prior.

The money is not paid directly from the net Crown Estate revenues. That would be illegal. The Crown Estate revenues are merely used as a reference point. Other reference points could (and should have) been used.

I suggested at the time the Bill was rushed through Parliament (see here and here) that the profits of the Stilton cheese industry might be a candidate. Ian Davidson MP suggested GDP. George Osborne himself said “I completely accept that I could have brought other mechanisms before the House, but the Crown Estate is a large commercial property company that is run in a pretty conservative way. It is not a bad proxy for how the country and the economy are doing.”

With the proposed devolution of the management and revenues of the Crown Estate in Scotland the net profits remitted to the Treasury will shrink slighty from any given base and thus the 15% will reduce very slightly (Scotland only contributes around 3% of the net revenue).

The UK Parliament and the Treasury are free at any time to alter the formula and the Smith Commission recognised that it might be necessary. Indeed, a statutory review is due in April 2016. The problem they have at the moment is in fact that the Sovereign grant has grown faster than expected due to the London property market and George Osborne and the Royal Trustees are busy negotiating a reduction in the Grant.

The Palace official who briefed the media would, in a more distant age, probably have been taken out and shot. Quite why the Palace wants to pick an entirely unfounded and counter-productive attack on the Scottish Government is not clear.

Meanwhile, confusion reigns at precisely the moment when, with the Scotland Bill being debate in Parliament, we need calm negotiation.

UPDATE 2130

Buckingham Palace has released a statement as follows.

“Sir Alan Reid Keeper of the Privy Purse said today: “Yesterday’s media briefing on the Sovereign Grant report 2014-15 was intended to highlight some of the issues that may arise when the first review of the Sovereign Grant begins in April next year. The comments and observations were about a principle and never intended to be a criticism of Scotland or of the First Minister or to suggest that the First Minister had cast doubt on the continued funding of the Monarchy.

The principle is about what happens if profits from certain Crown Estate assets, such as those in Scotland, are not paid to the Treasury and the impact that may have on the calculation of the Sovereign Grant in future years. This question will form part of next year’s review.

As we made clear at the briefing, Scotland contributes in many ways to the Treasury’s consolidated fund – out of which the Sovereign Grant is paid. We said explicitly that to imply Scotland would not pay for the Monarchy was simply wrong and we accept unreservedly the assurances of the Scottish Government that the Sovereign Grant will not be cut as a result of devolution of the Crown Estate.”

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