On Thursday this week, the Devolution (Further Powers) Committee will take evidence on the Smith Commission proposals to devolve responsibility for the administration and management of the property, rights and interests that comprise the Crown Estate in Scotland (paras 32-25 of the Smith Commission report). (1) With the property rights of the Crown already devolved under the Scotland Act 1998 and with other Crown property rights already administered by the Crown Office in Edinburgh, this should complete the full devolution of the Crown’s property, rights and interests in Scotland. (2)

Unfortunately, the Command Paper (Scotland in the UK: an enduring settlement) published in January, recommends a complex “transfer scheme” whereby the functions of the Crown Estate Commissioners (CEC) will be devolved. It also recommends that the CEC be able to continue to acquire property in Scotland – a proposal that is a recipe for confusion and chaos.

All that is required to implement the Smith Commission proposals is a series of simple legislative amendments to the Scotland Acts of 1998 and 2012 and the Crown Estate Act 1961 – all to the effect that the CEC no longer operate in Scotland, that the Scottish Parliament has full legislative competence over Crown land in Scotland and that statutory responsibility for exercising the function of the CEC is henceforth vested in Scottish Ministers. A discussion and debate can then take place in Scotland as to how to implement a programme of decentralisation – a recommendation endorsed by all the political parties represented on the Smith Commission as reflected in paragraph 33 of its final report.

I have outlined my full views in written evidence if you are interested in further detail. Meanwhile, I look forward to giving evidence to the Committee on Thursday.

NOTES

(1) Papers for the meeting are here and here.

(2) The Crown’s property rights are devolved under Section 3(1) of Schedule 5 of the Scotland Act 1998. The Crown’s property rights that are already administered in Scotland are those under the control of the Queen’s and Lord Treasurer’s Remembrancer whose revenues have been paid into the Scottish Consolidated Fund since devolution in 1999.

25 Comments

  1. Is it just me or is there two Kirkwalls?

    • There are two Kirkwalls – it’s an error on the map produced for the Land Reform Review Group that has now been corrected (but I don’t have a copy of the corrected image).

  2. The Crown Commission make much play of the Broad Shoulders /economies of scale argument , familiar from ththe Better Together Campaign narrative . Good luck on Thursday ; get stuck in to them .

  3. Dear Sir / Madam,

    Does the disputed area of the North Sea come under the Crown Estate area under consideration?

    • Probably not though it is one of the issues that has to be clarified. The southern line is the boundary of the civil jurisdiction of Scotland but the solid yellow is the areas within which the powers of the Scottish Parliament extent to.

  4. The boundaries should be returned to give back the part of the North Sea that was stolen from Scotland just before the devolved parliament was introduced, I noticed the small dotted line on the map, that I am sure was the boundary.

  5. Why would they make it complicated? Perhaps something to do with making it easier to declare a crown protectorate over part of Scotland (Shetland) should it vote no in any future referendum. Thereby securing the bulk of the oil revenues for Westminster.

  6. george gordon

    recommends that the CEC be able to continue to acquire property in Scotland? and will control of these properties also be devolved?

  7. David, you are absolutely correct. That is exactly why they’re making it complicated. There is always a hidden agenda behind anything they do “for” Scotland.

  8. It’s important to remember that Smith did *not* recommend:-

    “There shall cease to be a Crown Estate in Scotland and accordingly ownership of the CE so far as located in Scotland shall be transferred to the Scottish Ministers to do with as directed by the Scottish Parliament.”

    What Smith *did* recommend was, in effect:-

    “The CE so far as located in Scotland shall continue to belong to the Crown but henceforth shall be managed by the SMs instead of the Crown Estate Commissioners and its revenues shall go to the Scottish Consolidated Fund instead of the UK Treasury.”

    When that’s understood, the proposals in the Command Paper (CP) make perfect sense.

    The “scheme” (which is just a statutory instrument) is necessary because there’s more to it than just the headline transfer of management: you’re picking apart a going concern so there’s mundane stuff to consider like transfer of employment contracts, pensions, and divvying up currently shared assets etc. There are precedents for such schemes in other contexts like breaking up nationalised industries into component parts prior to privatisation. There’s also the matters in para. 34 of Smith (devolution of CE to be not detrimental to UK-wide critical national infrastructure etc.) reflected in draft clause 90B(6).

    I do agree with Andy that paragraph 5.5.8 of the CP isn’t well worded: strictly speaking, the legislative competence isn’t devolved by the scheme but by the legislation (draft clause 23(2) to the effect only the parts of the CE managed by the CECs, i.e. not the parts managed by the SMs after the transfer, will henceforth be reserved).

    With management of the Scottish CE (SCE) as at the transfer date thus devolved, it will be open to the Scottish Parliament to enact further subsidiarity of management to local authorities etc. if it chooses. No doubt this will be co-ordinated and synchronised with the making and coming into force of the scheme but, in case not, para. 5.5.11 of the CP explains that the Crown Estate Act 1961 will remain the default statute governing the SMs’ management of the SCE unless and until the SP legislates otherwise. (That being so, one of the consequential provisions the scheme may have to include per clause 90B(11)(b) is that the CEA61 is amended along the lines that references to the CECs include references to the SMs in relation to Scotland after the transfer date although that wouldn’t be necessary if the SP has already enacted alternative management for the SCE due to come into force contemporaneously with the scheme.)

    The only criticism I have of the draft clauses so far is that I would have expected to have seen more clearly on the face of the primary legislation provision that the revenues from the SCE will go to Scotland. Maybe that’s envisaged to be in the scheme but in light of the unequivocal statement of political will to that effect in para. 5.5.7 of the CP, that’s a detail that can be ironed out when an actual bill comes forward.

    But in general terms, what’s proposed all makes perfect sense to me and is entirely consistent with Smith. It only doesn’t make sense if you want to go further than Smith and remove the CE in Scotland from the Crown and give ownership (i.e. not just management) of it to the SMs. (And to do that, you need more than Andy’s suggested legislative amendments in his submission to the SP.)

    As for the CECs being able to buy property in Scotland after the transfer, I don’t see the problem with that (and I think I’m right in saying the Scottish Affairs Committee was OK with it as well.) The CE *as it exists at the transfer date* will be apportioned between the CECs and the SMs along the Scottish border. But why shouldn’t the CECs be allowed to buy property in Scotland after that? Why shouldn’t the SMs buy property in England to add to their CE portfolio if it seemed a prudent investment? After the transfer, strictly speaking, it’s the part of the CE that’s managed by the SMs which will be devolved, not the part of the CE in Scotland: they’re not necessarily the same thing.

    • Neither of your two headline statements are what Smith says. Smith says what Smith says in paras 32-25. The intention is full devolution of the admin & revenues of the property, rights and interests that currently comprise the crown estate in Scotland to add to the existign devolution of the property rights. No-on is arguing for going further and removing ownership from the Crown. That could be done of course in future and is one reason why giving the CEC a continuing right to acquire property in Scotland makes little sense since it would then be owned by the Crown over which property rights the Scottish Parliament currently has full legislative competence.

      It makes no more sense that saying the Secretary of State for the Environment should be able to acquire land in Scotland to be managed by Forestry Commission England.

      The SAC did indeed recommend that this be possible – partly in response to an ill-thought out comment by me at the end of a long session before the Committee back in 2011.

      I do agree of course that there needs to be some sort of scheme to deal with all the ongoing contractual agreements etc. That can be done by an Order in Council.

      • It’s like dividing up the Crown Estate Commissioners’ record collection. Imagine one partner gets artists whose names begin A to L and the other gets M to Z: that’s the general principle but you need a more detailed agreement (“scheme”) to resolve who gets Hall & Oates. And whatever’s decided doesn’t prevent the A to L partner buying a Sam Smith album in the future.

        So, putting the no more CEC investment in Scotland after devolution thing aside, if you’re not arguing for ownership of the CE in Scotland to be transferred to the SMs as I thought you were (sorry), then you’re actually almost in full agreement with the Command Paper bar some minor detail.

        Let’s test that by reference to your five legislative proposals in your submission to Parliament:-

        1A. Repeal of para. 2(3) of Sch. 5 of the Scotland Act 1998 – Agreed: this is achieved by cl.23(2) of the draft clauses (albeit by a formula allowing continuing CEC continuing investment powers in Scotland which let’s park for now.)

        1B. Repeal of para. 3(3)(a) of Sch. 5 of the Scotland Act 1998 – lawyerish disagreement: this repeal might allow the concept that the Crown Estate continues to be owned by the Crown to be devolved which, whatever one may think of that, is NOT recommended by Smith.

        2 & 3. Subject to the quibble that s.1(4) of the CE Act 1961 needs to *amended* to remove reference to the Sec. of State rather than be repealed, this conforms with the Command Paper – these will become spent enactments to be disposed of in the schedules dealing with consequential amendments and repeals in the bill when it comes forward. No need to detain parliamentary committees with this sort of minutiae at this stage in proceedings, however.

        4. CE Act 1961 will continue to apply in Scotland unless/until new provision is made by the Scottish Parliament as it almost certainly will be consequent upon devolution. So likely to be academic but, if not, the 1961 Act should remain in place to set out the SMs’ duties as regards the devolved CE as a default in the absence of alternative provision by the SP.

        5. & “a few more consequential amendments” – yes, this is the proposed scheme in CP – the Order in Council in your last line above.

        I shall be interested to hear your evidence to the committee tomorrow. Which bit of my second headline glossing Smith (though not in his exact words) did you not agree with?

  9. George McQuilkin

    Andy, just to let you know that I used several of your arguments (without mentioning you) at a stakeholder meeting held this morning at the Glasgow Concert Hall by the Scottish Office. Notes were taken. It doesn’t make sense to me either that the Crown Estate Commission should continue after devolution to invest in (i.e. purchase) land in Scotland and administer it.

    I’m not sure that I agree with Neil King that there is nothing wrong with the CEC buying land in Scotland, and managing it and the SM likewise buying land in England. That might even end up with them competing to purchase a parcel of land. Let keep them separated by the border, with only SM investing in and managing more parcels in Scotland.

  10. A retired private QS, living and working in England until retirement 15 years ago. Been living in East Lothian since then. I am interested in my new environment, it’s laws, government, religion, education and ownership. I have family here, 2 future generations, and wonder what is the future for them. Thank you for the website and being able to read and think about what various indigent people think. “Good Reasoning” on Thursday and remember the old definition of “Discussion” and “Argument” – Discussion is the exchange of ideas, Argument is the exchange of ignorances.

  11. The smith commision is merely transferring control not ownership of CE in order to sidestep the pre emptive right to buy registered by many CE farm tenants.
    The Crown estate is simply a state sponsored speculation in land which has no place in scotland.It serves no purpose other than an ego trip for its commisioners and the continuing denial of ownership to a large number of people. Our country would be greatly improved if all such estates were removed from the map.

    • hector, you can correct me if I’m wrong but my understanding is that the Scottish Crown Estate Commissioner, Gareth Baird, is a tenant farmer on Makerstoun. He doesn’t strike me as someone who does it only for an “ego trip”.

      • The fat salary helps too.
        Smiths gore make a tidy sum from CE too, hence their opposition to change. Perhaps a freedom if information request might reveal the actual sum.

  12. Why don’t the SM use the transfer of control of CE agricultural holdings as a pilot scheme to assess the effectiveness of their proposed policies for the tenanted sector? We all know that Fochabers and Glenlivet are predominantly, if not entirely occupied by ag. tenants. Why not transfer ownership on the normal RTB basis (reflecting true community engagement?) and publish figures every 5 years for the next 50 years (one farming generation) to demonstrate how much land continues to be farmed by ag. tenants? Surely both sides will be supportive of new ag tenants being encouraged in to the sector and if the system works like are we are told it should, there should be a gradual shift back to a more balance pattern of occupation.

    • If right to buy is rolled out on Crown Estate as it should be under pre emptive rules, there will be a sudden reduction in ag tenants, which has to be a good thing. Some tenants may not buy, but that will be their choice.
      Montoring should be carried out , yes, but on the resulting uplift in the rural economy in jobs, investment, diversification etc.
      It will be a good indicator of the possibilities if ARTB was rolled out over scotland, especially on estates which are much more run down than the crown.

      • Andrew Howard

        Hector
        I’m not so sure that the pre-emption rules do apply. That depends whether the CE continues to exist just under different “management”. One thing does appear clear the existing tenants were pretty happy with the CE and seem concerned about some of the alternatives.
        It’s interesting that despite suggesting monitoring you proceed to describe all the good that would come. Quite an assumption. No mention of the likely farm aggregation / reduction in farm numbers etc that would come from such a shake up. Also no commentary on whether this would represent good value for the tax payer – as the CE is after all essentially the tax payers. Thats where all the profits go.
        From a farming efficiency point of view I’m not going to argue that aggregation isn’t likely to help matters but it won’t help many of the groups – new entrants etc – that you often espouse to support.

        • The CE should be sold and not just have a change of management, so triggering RTB.
          The few tenants who are”happy” will not buy, and the rest will.
          There will be no meaningful reduction in farms, there more likely will be an increase.
          The best way to support new entrants is to keep them out of the clutches of landlords. Far better that they get a good salaried job and farm part time on OWNED land where they will not be robbed blind.
          Best value for the taxpayer will come from a thriving rural economy, free of parasitical landlords.

  13. Andy – I’ve watched the D(FP) Committee meeting on Thursday and it’s become clear to me there’s a bit of talking at cross purposes going on.

    If all the Smith Commission Report had said about the Crown Estate was para. 32 (management of CE to be devolved), I would have more sympathy with your attitude to the draft clauses and you might, on reflection, agree that the core objection to them is not so much the notion of the “scheme” but rather that they say that the Treasury *may* (not *shall*) make it. In other words, it looks like it’s optional to the UK Gov to devolve the CEC.

    But there’s more to Smith on the CE, there’s also para. 33 (decentralisation from Edinburgh post devolution). You think that’s just a statement of what’s assumed is going to happen post-devo. I used to think that as well. But having watched the Committee, it’s clear there are others (including Tavish Scott (a member of Smith) and Lewis MacDonald) who think it goes further and is a *condition* of devolution. Or in simple language, the Smith deal is “if you don’t decentralise, we don’t devolve”.

    I expect you will say that’s not the correct interpretation of Smith. But it’s entirely consistent with what the SAC said (p.60, para. 11): “Upon receiving satisfactory assurances [of decentralisation], the Secretary of State should make the necessary legislative provision [to devolve].” And why were essentially UK Gov bodies like the SAC and Smith meddling in a devolved matter like decentralisation of the CE from Edinburgh if they didn’t intend that it be hard wired in as a condition of the devolution?

    But even if one disagrees with that interpretation of Smith, there’s also para. 34 (devo of CE not to prejudice UK wide defence and energy interests) about which there still has to be a negotiation to reach mutual agreement.

    Viewed in that light, the draft clauses now make perfect sense. They have to be worded as “may” rather than “shall” because the Treasury cannot be bound to devolve until agreement on para. 34 has been reached and the Scottish Parliament has legislated to decentralise. (In that regard, Mark Macdonald MSP was right to mention that a s.30 Order will presumably be required: the more I think about this, the more it seems to me that the draft clauses are fine, it’s the accompanying text in the Command Paper that’s weak by not clarifying the issues I’m mentioning here.)

    Your five proposed legislative steps would just hand everything to Scotland with no means of ensuring we implement the rest of Smith by decentralising and negotiating over para. 34.
    Now, you could say the “may” formula allows the Treasury to do nothing at all and thereby frustrate devo of the CE despite what Scotland may enact on decentralisation or offers on para. 34. But is that any more likely in practice than Scotland welching on these matters? But if one is going to be so paranoiacally mistrustful, then it might be possible to come up with a form of words like:-

    “Within one month of the later to occur of (a) the Scottish Parliament passing legislation further to devolve responsibility for the management of the CE in Scotland to local authority areas such as Orkney, Shetland, Na h-Eilean Siar or other areas who seek such responsibilities; and (b) agreement being reached on the text of a draft scheme (i) transferring all the existing Scottish functions of the Crown Estate Commissioners to the Scottish Ministers or a person nominated by them; and (ii) [dealing with the matters referred to in draft clauses 90B(4), (5), (6) [para 34 of Smith], (10) & (11)], the Treasury *shall* make a scheme in terms of that agreed draft.”

    In short, your five legislative steps would work if all Smith had said about the CE was para. 32. But it didn’t: there’s paras. 33 & 34 as well and the “may make a scheme to be agreed” (or if you prefer “shall make a scheme once it’s been agreed”) formula is required to accommodate them.