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?”

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