Scottish Land and Estates, the organisation that represents some landowners in Scotland, attracted a fair bit of press coverage last month for their claim that potential reforms to Scotland’s agricultural tenancy laws could leave the Scottish Government open to compensation claims of £600 million (see Telegraph, Press & Journal, Herald). (1)

The claim was made in written evidence to the Rural Affairs, Climate Change and Environment Committee on 25 March 2015. The £600 million figure was derived from a study undertaken for SLE by estate agents Smiths Gore which purports to calculate the potential loss faced by landowners were reforms to be enacted.

The heart of the matter, however, is not the quantum of any possible claim. Compensation would only be relevant if there is a breach of the rights to property enshrined in the European Convention on Human Rights (Article 1 of Protocol 1). Moreover, such rights are not the only human rights that come into play when the Scottish Parliament enacts legislation.

As Professor Alan Miller, Chair of the Scottish Human Rights Commission, noted in evidence to the Scottish Parliament’s Rural Affairs, Climate Change and Environment Committee on 3 December 2014,

I am struck by how narrowly framed the debate has been. I am a little embarrassed that the way in which human rights has been interpreted is contributing to there being quite narrow parameters around debate about land reform and community empowerment..” (2)

Professor Miller expanded on this point at a very well-attended Scottish Parliamentary meeting was last week hosted by Michael Russell MSP on the topic of land reform and human rights. In attendance were several MSPs, a Government Minister and more than six civil servants including one from the Crown Office.

The meeting was addressed by David Cameron from Community Land Scotland and Professor Miller. In their presentations and in the discussion that followed, it was evident that convention rights of the sort being deployed by SLE are only part of a much wider spectrum of human rights that Scottish Ministers and the Scottish Parliament have to balance in framing legislation. Section 7(2)(a) of the Scotland Act 1998 obliges the Parliament to observe and implement all international obligations including a wide range of human rights that are not covered by the ECHR such as the Covenant on Economic, Social and Cultural Rights and the Covenant on Civil and Political Rights.

This perspective is diligently and authoritatively explained in a paper by Dr Kirsteen Shields from Dundee University’s School of Law published in the current edition of the Scottish Human Rights Journal entitled “Tackling the Misuse of Rights Rhetoric in Land Reform Debate”. (download available here) All with an interest in the topic and, in particular, MSPs, would be well advised to read this carefully.

None of these arguments will be new to anyone with any experience of international development where, since 1997, the rights-based approach has been adopted not only by the UN but by Governments and NGOs around the world.

Indeed the UK Government is an enthusiastic advocate of such an approach in its overseas aid programme. The Scottish Government is also bound by the terms of the Scotland Act to do all in its power to further the realisation of international human rights obligations.

The claims by SLE that landowners could be entitled to £600m of compensation is predicated on there being a breach of ECHR. Crucially, SLE has not published the legal advice upon which the £600m claim is based. During the Parliamentary meeting, I called for the organisation to do so and share this with MSPs. I await developments with interest since only by understanding the legal basis upon which any claim rests, can we judge whether any financial consequences might flow. Moreover, as the above paper makes clear, there is more to human rights than the ECHR.

All of which led Cabinet Secretary, Richard Lochhead, to dismiss such claims at the Rural Affairs meeting on 1 April 2015. In response to suggestions that compensation claims might be as high as £1.78 billion, he said,

First, the cabinet secretary is too broke to afford £600 million, let alone £1.78 billion. It would be more constructive and helpful in moving the debate forward if we had fewer silly reports such as that. SLE’s intervention and the figures in its report – which came when we are supposed to be saying that there is unprecedented collaboration and understanding of some of the key issues facing tenant farming – were unconstructive and unhelpful. It escapes me how those figures were arrived at. Given that we have not even published the legislation yet, there is no way for those with a strong view on one side of the debate even remotely to begin to work out any potential figures.”

Now that Parliament has been made aware of the wider human rights context in which it is, by law, required to work, it is to be hoped that such speculative and outlandish claims can be put to rest.

NOTES

(1) SLE is the representative body of 1351 landowners in Scotland who own 29% of Scotland.

(2) A fuller extract of his evidence..

I am struck by how narrowly framed the debate has been. I am a little embarrassed that the way in which human rights has been interpreted is contributing to there being quite narrow parameters around debate about land reform and community empowerment. I will just make a couple of points about the perception of human rights and its relevance to the committee’s consideration of the bill, because I am sure that others have more value to add.

The language that is being used – I heard the term “absolute right to buy” being used again this morning –  is very unhelpful, although I understand why people are using it. The European convention on human rights is not understood as providing a framework in which the legitimate rights of landowners and the public interest are reconciled and a balance is struck, with compensation being paid to the landowner if necessary. The right to buy is a qualified right: there has to be a competing public interest to override the right to peaceful enjoyment by the person who owns the land. Therefore, language such as “right to buy” or “absolute right” polarises the debate in an unhelpful way and does not reflect a clear understanding of what the ECHR contributes to the debate.

The bigger frustration that I have with the policy framework is this: human rights does not begin and end at the European Court of Human Rights in Strasbourg; there is a much broader framework of international human rights that are relevant to the Government and the Parliament, but which are largely invisible.

The Scotland Act 1998 calls on the Scottish ministers to observe and implement international obligations, of which one—but only one—is the International Covenant on Economic, Social and Cultural Rights, which places a duty on the Scottish ministers to use the maximum available resources to ensure progressive realisation of the right to housing, employment, food and so on—that is, it sees land as a national asset, which is to be used for the progressive realisation of what we might call sustainable development.

Therefore, what human rights provides is a broader impetus for land reform, rather than an inhibition, as is suggested in the way that the issue is currently couched—that is, in questions about whether a landowner has a red card that can be used with reference to the ECHR to stifle discussion about different use of the land. That is what is missing from the policy framework.”

 

 

Highland Titles Ltd. is one of those websites that offers you a small plot of land as a souvenir purchase. Yesterday, on twitter, some merriment was had by challenging the claim that such plots conferred any ownership of the land. Highland Titles Ltd. claims that you will become a landowner in the absence of any recording of title in the Land Register. It backs up this assertion by reference to this legal advice from J&H Mitchell WS. But a series of lawyers on twitter challenged this. See this Storify by Malcolm Combe, his subsequent blog, and this lengthy legal explanation by @loveandgarbage.

So if these “plot-owners” don’t own the land, who does? The answer is Highland Titles Ltd. It owns two parcels of land – Keil Wood near Duror extending (originally) to 90.7ha (see map below) and Paitna Green Wood, near Invergarry (to west of A87 above Loch Loyne), extending to 75.1ha. Keil Wood was acquired in 2007 by a company called Lochaber Highland Estates (CI) Ltd. This company changed its name in February 2012 to Highland Titles Ltd. See here for a Scotsman Business video.

Keil Wood title here and plan here.

Paitna Green Wood title here and plan here.

Several half-acre plots have been sold at Keil Wood reducing the extent owned by Highland Titles Ltd. to approximately 75ha meaning that the company owns around 150ha of land which it is offering “for sale” in plots from 1 square foot to 1000 square feet in extent.

What makes this story that little bit more interesting is that Highland Titles Ltd. is a company registered in Alderney and, in a phone call today to the Greffier of the Court of Alderney, it was confirmed that Highland Titles is owned by Douglas Wilson and Helen McGregor as Trustees for The Highland Titles Charitable Trust for Scotland, a charity registered in Guernsey.

According to the five-year plan of Highland Titles Ltd., over 100,000 plots have been sold. Each plot costs anything from £29.99 to £499.99. The larger plots are all in Paitna Green (or BumbleBee Haven as Highland Titles calls it) which is little more than a high altitude sitka spruce plantation on the A87 from Invergarry over the hill to Cluanie (see below)

The revenue from over 100,000 plots is at least £2,999,000 and probably a good deal more. This revenue is paid into a company registered in Alderney but as no accounts are published, it is impossible to be sure. The sole share is held by Wilson and McGregor as Trustees for the Guernsey charity. Under the law of Guernsey, no charity is obliged to provide accounts for public inspection and it need only file accounts under certain circumstances.

Thus nobody knows if in fact the charity is in receipt of any funds whatsoever. As the sole shareholder it is not entitled to have any of the revenues of Highland Titles Ltd. transferred to it. These revenues may well be paid out by the Alderney company as management fees or any manner of other payments to third parties.

The 150ha owned by Highland Titles is enough to provide over 16 million square foot plots which, at £29,99 per plot is a potential gross revenue of over £479 million. And, because the “plot-owners” do not legally own their plots (their ownership is limited to a few bits of paper and perhaps a tartan teddy), these plots can, in theory be sold multiple times.

I find it odd that such an arrangement appears to be lawful in Scotland. Because the charity does not technically operate in Scotland, the Office of the Scottish Charity Regulator has no role (see ruling from May 2014). And, because the company that owns the land is registered in Alderney, it pays no taxes to HMRC.

In December 2014, another company by the same name – Highland Titles Ltd. – was registered in Scotland. it is unclear what role this company plays.

Finally, the Directors of this Scottish company are Peter Bevis and Helen McGregor who live at Tulloch Farm, Spean Bridge.

Tulloch Farm is owned by Quexus Ltd., a company registered at Trident Chambers, PO Box 146, Road Town, Tortola, British VIrgin Islands.

Which leaves an obvious question. Where is all the money going?

Image: Steven Camley Cartoon, The Herald.

It’s been a remarkable few days.

Last Wednesday, the First Minister, Nicola Sturgeon announced a legislative programme that included a Land Reform Bill and other land policy measures on harbours, domestic property taxation and inheritance laws.

The following day the Smith Commission published its report on further devolution for Scotland. After decades of campaigning on the topic by many activists, the Crown Estate is to be devolved in its entirety together with other powers such as the licensing of onshore oil and gas extraction.

Then, today, the Scottish Government published a consultation paper on land reform in Scotland which provides more detail on the measures that are to be incorporated in the Bill. This all amounts to the most significant political advance on the topic since the establishment of the Scottish Parliament and the series of reforms implemented in 1999-2003.

In the words of the Scottish Government,

The aim of this paper is … to ensure you and everyone in Scotland are given the chance to influence this debate, provide your thoughts and suggestions, and to shape both Scotland’s vision for the future of land rights and responsibilities policy and future land reform.”

The Paper begins by proposing a Land Rights and Responsibilities policy statement (page 7). This in itself is very significant. It provides a draft statement of principles that will inform the development of land policy for the years ahead. One would hope that the final version will be agreed and adopted by whatever political parties are in power in Holyrood. Such a statement puts Scottish land reform firmly in an international context where land rights are seen as an important means of strengthening communities and individuals. It opens the door to the Scottish Government adopting the UN Guidelines on Responsible Governance of Tenure that have already been adopted by the UK government.

The paper then goes on to highlight some further detail on the eleven measures that are proposed to be included in the Land Reform Bill. Some of these were highlighted in the First Minister’s legislative programme last week – see previous blog  but some are new.

Here follows all eleven proposals.

1. A Scottish Land Reform Commission

Announced last week and implements a key recommendation of the Land Reform Review Group.

2. Limiting the Legal Entities that can own land in Scotland This is a new proposal and very welcome. Again it follows a recommendation of the Land Reform Review Group  and previous debates around the Land Registration Act (see my evidence here)  It also addresses the concerns of law enforcement and taxation authorities about money-laundering (1) There has been a long-standing problem of land owned by companies registered in offshore tax-havens. Some own large tracts of rural land and some own urban property – including quite a bit of Charlotte Square in Edinburgh near the First Minister’s official residence. It is quite ludicrous to permit this state of affairs to continue any longer.

3. Information on land, its value and ownership

Announced last week and implements a key recommendation of the Land Reform Review Group. We need to move towards a comprehensive and freely available system like the State of Montana.

4. Sustainable development test for land governance

Again, announced last week but this is the opportunity now to consider how this might be designed and implemented. As the Paper argues,

The vast majority of land in Scotland is owned by the private sector. Landowners are instrumental in promoting sustainable local development and supporting communities. However, in some instances the scale or pattern of land ownership, and the decisions of landowners, can be a barrier to sustainable development in an area. Providing mechanisms to address such situations could allow for potential barriers to sustainable local economic and social development to be overcome.”

5. A more proactive role for public sector land management

This is a new proposal and welcome. As the Paper notes,

It is clear public land should be managed for the greatest overall benefit, balancing a number of differing and sometimes conflicting public needs. … However, the legal framework for some public bodies can be a significant constraint on the range of operations that they can undertake to deliver these benefits.”

If the legal framework and governance of all public land can be modernised and made more flexible, it will help to deliver many of the objectives of land reform can be met.

6. Duty of community engagement on charitable trustees when taking decisions on land management.

This was highlighted last week. What the Government propose is a new duty on the trustees of charitable bodies to “engage with the local community and consider the potential impact on the local community before taking any decision” Such a power would be useful but it does not go far enough. Where charitable status is granted to private landowners who then restrict membership of the organisation to a tight group of family and friends, what is needed is not better engagement but better democracy.

7. Removal of the exemption from business rates for shooting and deerstalking

Announced last week, the Paper makes clear that the proposal relates to the so-called sporting rates abolished in 1995. It would be helpful if the term “business rates” was done away with. It has no legal meaning and is misleading. Such rates are not a tax on businesses (mainly concerned with income tax and corporation tax), they are a levy on the rental value of non-domestic property. The Scottish Parliament is assessed for non-domestic rates (NDR) as are bus stops. Neither is a business. Much though needs to be given to how such rates are to be assessed. I will be arguing strongly that it be done on the rental value of land – an approach that the Mirrlees Review (Chapter 16) recommended should be applied to all NDR.

8. Common Good

I particularly welcome the plans to reform the law around common good land. This is land owned by towns and cities across Scotland that is for the benefit of the residents and os often of great antiquity forming part of the original Royal Charter of the burgh. The legal framework around is complicated and out of date and leads to conflict between councils and communities. Common Good is the oldest form of community landownership and the vast majority of Scotland’s population who live in towns and cities deserve a better system of managing it.

9. Agricultural Holdings

Scottish Government confirms that the recommendations that will be made by the Agricultural Holdings Review Group (which is due to report later this month) will be incorporated into the Land Reform Bill.

10. Wild Deer

This is a new proposal to strengthen the powers of intervention of Scottish Natural Heritage over the management of wild deer. As the Paper notes, wild deer are a public resource but they are managed exclusively by landowning interests. I suspect many will be arguing that the proposals need to go further and introduce a modern system of wildlife management with proper democratic governance of this public resource.

11. Public Access

There are proposals here to make minor amendments to existing access legislation.

Conclusion

These proposals, together with the Community Empowerment Bill, reform of council tax, succession law reform, harbours reform and devolution of the Crown Estate and onshore oil and gas add up to a substantial package of powers that will reform land relations in Scotland. Reform is not going to happen quickly. This is the job of a decade or more but this is an important start

All of these proposals will be subject to extensive debate over the coming months and already there are powerful vested interests engaged in trying to derail them. Scottish Land and Estates issued a press release through Media House in which it expressed “disappointment that the Scottish Government continues to miss an opportunity to create modern and meaningful land reform.” I think modern and meaningful land reform is what is in fact beginning to take shape. There is a long way to go of course. But Scotland is changed now. Thousands of people were energised by the referendum campaign and now want to use the existing powers of the Scottish Parliament to secure a fairer and more prosperous country.

This blog is a brief overview of what is covered by the Consultation. I will be publishing further detailed blogs on individual topics as well as a series of briefing papers to assist people in responding to the consultation.

NOTES

(1) See Chapter 29 in The Poor Had No Lawyers