Introduction

One of the Smith Commission agreements was that responsibility for the management and revenues of the Crown Estate in Scotland should be devolved to the Scottish Parliament. (1)

This Agreement reflected the widespread consensus in Scotland that the management of  the Crown Estate should be devolved. There have been several inquiries into this topic over the last ten years, from the Crown Estate Review Working Group (2007) to Westminster’s Scottish Affairs Committee (2012), which also recommended the devolution of the Crown Estate in Scotland. (2)

The Smith Commission also agreed, like the Scottish Affairs Committee before it, that devolution should be followed by further decentralisation to local authorities, communities and others, of responsibilities for the various Crown property, rights and interests that make up the Crown Estate in Scotland. Both the Scottish Affairs Committee and the Smith Commission were clear, however, that this decentralisation was to take place after the devolution of the management of the Crown Estate to the Scottish Parliament. (3)

The Scotland Bill was published on the 28th May by the UK Government and is now on its hurried passage through the UK Parliament. (4) It is intended to implement the Smith Commission agreements.  Clause 31 of the Bill that deals with the Crown Estate, however, completely fails to do this and needs to be re-drafted.

But, first, some background.

The Crown Estate

The Crown Estate is the name given in the Crown Estate Act 1961 to the various Crown property, rights and interests that are managed by the Crown Estate Commissioners (CEC).  The CEC is a statutory corporation first constituted by the Crown Estate Act 1956 and now operating under the 1961 Act.  The CEC transfers its net surplus revenue or ‘profit’ each year to the UK Government’s Consolidated Fund for use in public expenditure. (5)

The CEC is thus the manager of property rights that belong to the Crown. However, there can often be confusion between the manager and the property, because the CEC has branded itself for its corporate identity as ‘The Crown Estate’.  The Treasury Committee also felt it necessary to emphasise in its report on the Crown Estate, that “the CEC are a public body charged with managing public resources for public benefit”. (6)

The Crown property, rights and interests that make up the Crown Estate in Scotland are legally and constitutionally distinct from those in the rest of the UK, because they are owned by the Crown in Scotland and defined in Scots law.  Scotland’s Crown property rights are of ancient origin and continued to be administered with their revenues in Scotland following the Union of Crowns in 1603 and the Treaty of Union in 1707.  Some of these Crown rights continue to be managed in Scotland by the Scottish Government and Crown Office. However, the administration and revenues of many of Scotland’s Crown property rights were transferred from Edinburgh to a government department in London in the 1830s.  That department and its successors, were the predecessors of the current CEC.

The Crown property rights managed by the CEC in Scotland include Scotland’s territorial seabed and Crown rights over the Scotland’s continental shelf zone (see map above), around half of Scotland’s foreshore, the right to mine gold, salmon fishings, four rural estates and two urban properties.  The Crown Estate in Scotland only accounts for around 3-4% of the value attributed to the UK wide Crown Estate and revenue produced by it. The CEC’s annual ‘profit’ from its operations in Scotland, has been around £5m in recent years. (7)

The Scotland Act 1998 devolved legislative competence over Scots property law, including Crown property rights, to the Scottish Parliament.  The first Scottish Parliament, for example, used this legislative authority to abolish the Crown’s ultimate ownership of land in Scotland under feudal tenure.  However, the reservation of the management of the Crown Estate in the Scotland Act, precludes the Scottish Parliament from being able to legislate over the rights managed by the CEC and also means that the CEC is not accountable to either the Scottish Parliament and Government for its operations in Scotland. Implementing the Smith Agreement would complete the devolution process started in 1999 and bring the rights and the management together under the legislative competence of the Scottish Parliament.

The Scotland Bill

The Smith Agreement to devolve the management and revenues of the Crown’s property rights should be straightforward to implement in legislation.

The two main requirements are to amend the Scotland Act 1998, Schedule 5 Part 1 by;

1. removing clause 2(3) that reserves the management of the Crown Estate in Scotland and,

2. removing clause 3(3)(a) that reserves the revenue from the Crown Estate in Scotland.

Removing these two reservations would mean that responsibility for managing the Crown property rights that currently make up the Crown Estate in Scotland, automatically falls to the Scottish Parliament.

Appropriate legislation also needs to cover some consequential amendments to other legislation, in particular to the Crown Estate Act 1961 to reflect that it would no longer apply in Scotland.  In addition, the legislation requires some procedural provisions dealing with the transfer date and process.

Unfortunately, clause 31 in the Scotland Bill manifestly does not implement the Smith Agreement.  The clause does not devolve the responsibility for the management of the Crown Estate in Scotland to the Scottish Parliament. Instead, the clause delegates existing functions of the CEC as a statutory corporation to Scottish Ministers or others transferees through a Treasury ‘scheme’.

The current clause 31 attempts to enable the CEC to continue to operate in Scotland and to bind those to whom functions are transferred to the restrictive terms of the Crown Estate Act 1961 under which the CEC operates.  The clause’s provisions to try to achieve this are, as others have commented, complex and unclear. (8) They are a recipe for confusion and legal anomalies.  They do not devolve legislative responsibility over the Crown property rights and revenues involved in Scotland to the Scottish Parliament and will frustrate the widespread consensus for the further decentralisation of these within Scotland. (9)

Re-framing Clause 31

The Smith Agreement to devolve responsibility over the Crown Estate in Scotland reflects the longstanding agreement in Scotland over this matter and it should be straightforward to implement through the Scotland Bill.  Why then does the existing clause 31 fail to do this?

This blog argues that this current state of affairs has arisen because of the degree of influence that the CEC has had on the nature of clause 31. The sequence of Committee inquiries and reports into the operations of the CEC show how CEC corporate policies have been aimed at maintaining it as a UK organisation.  IN 1998, the CEC declined to participate in the devolution process in the way that the Forestry Commissioners did (and have continued to do).  The starkest example, however, was in 2001/02 when, against the flow of devolution, the CEC ended its management of the Crown Estate in Scotland as a separate management unit with its own manager and financial accounts, so that the CEC could assimilate its operations in Scotland into those in the rest of the UK. (10) The current clause 31 with its stretching and twisting of the Crown Estate Act 1961, can be seen as the CEC’s latest move to try to retain the Crown Estate as a UK wide estate.

Furthermore, it is distressing to note the continuing mis-understanding of what exactly the Smith Commission agreed. For example, a briefing issued by the Scottish Parliament, claims that it is the “powers of the Crown Estate Commissioners [which are set out in the 1961 Act] which would be transferred to Scottish Ministers.” (11)

This is wrong.

The Smith Agreement patently does not say this. It says that responsibility for management will be devolved to the Scottish Parliament. That is an entirely different matter from a mere delegation of functions to be exercised within the framework of continuing reserved powers.

The Scottish Government’s initial response to the Scotland Bill recognises the need to re-frame clause 31, so that the clause removes the reservations in the Scotland Act 1998 over the management and revenues of the Crown property rights in Scotland forming part of the Crown Estate. (12) The terms of the Scottish Government’s proposed alternative clause 31 still suffers from some other weaknesses. However, it is to be hoped that all the parties involved in the Smith Commission will recognise that the issues over clause 31 are not party political.

Solving this problem is a simple matter of re-framing the clause in a competent was so as to implement the Smith Agreement in as straightforward a manner as possible.

  1. Smith Commission page 16
  2. See Crown Estate Review Working Group Report and Scottish Affairs Committee Report.
  3. See, for example, Lord Smith’s evidence to Scottish Affairs Committee 3 December 2014. Q137-Q140
  4. Scotland Bill
  5. Section 1(2) Civil List Act 1952
  6. House of Commons Treasury Committee Report, 2010 para 10
  7. Scottish Affairs Committee Report para 39
  8. See Devolution (Further Powers) Committee report
  9. For example, the Bill amends the Civil List Act 1952 to obligate the payment of all Crown revenues to the Scottish Consolidated Fund. Decentralisation to, for example, to harbour trusts will be constrained by a continuing legal constraint to hand over all revenues to the Scottish Government.
  10. Scottish Affairs Committee Report para 21
  11. See SPICE/Clerks/Legal Briefing page 15 “Provision has been made to amend the Crown Estate Act 1961 to reflect the new role for Scottish Ministers (SMs), but to retain the requirement to manage and improve etc the property, rights and interests being transferred subject to the remaining provisions of the Crown Estate Act 1961. This reflects the Smith Commission recommendation that it would be the powers of the Crown Estate Commissioners [which are set out in the 1961 Act] which would be transferred to Scottish Ministers.”
  12. See Scottish Government alternative clause, pages 12-13 and 43

OTHER DOCUMENTS

House of Commons Library Briefing on Scotland Bill

 

This blog is long overdue (as indeed are many) but I understand that the City of Edinburgh Council’s Audit Committee will shortly be considering a report into the Parliament House fiasco. It is therefore appropriate to publish this second update on the affair. The original story is here and Update 1 is here).

In summary, Parliament Hall forms part of the common good of the City of Edinburgh but, through a series of apparent blunders, title was granted to Scottish Ministers in 2005 (see the original story for full background). In 2010, Fergus Ewing, Minister for Business, Energy and Tourism signed the Transfer of Property etc. (Scottish Court Service) Order which vests the property in the hands of the Scottish Courts Service.

On 19 February 2015, four days after the story broke, Alison Johnstone MSP asked the First Minister whether the Scottish Government would co-operate in resolving the matter (see above video clip and Official report pg 16 here). Alison Johnstone then wrote to the Scottish Government and received a reply. At the same time a Freedom of Information request revealed other elements of the story. These are outlined in what follows.

Alex Neil Letter

On 9 March, Cabinet Secretary Alex Neil wrote to Alison Johnstone and outlined how, in the view of the Scottish Ministers, Parliament House (or Parliament Hall as it is called in the letter) came to be regarded as being in their ownership. It appears that Scottish Ministers are relying on the Commissioners of Works Act 1852 which, in Section 4, vested all the courts and buildings of the Courts of Session and Justiciary in the ownership of the Commissioners of Works. Since Scottish Ministers are the statutory successors to the Commissioners, the argument goes, so Scottish Ministers were entitled to seek to obtain a Land Register title from the Keeper of the Registers of Scotland.

I do not find this a credible explanation. Acts of this sort are passed by Parliament to transfer the ownership of property from one public body to another. The 2010 Order mentioned above is a contemporary example of such legislation. Such Acts cannot lawfully transfer land or property owned by third parties (which includes land owned by local authorities such as the Royal Burgh and Corporation of Edinburgh.

As noted in the original blog, Parliament House is a building about which much is known. The City accounts of 1875-76 place on record the Council’s ownership of the building. A comprehensive report of 1895 on the Municipal Buildings of the City does the same. And the comprehensive asset survey by the Town Clerk and City Chamberlain in 1905 (Report of the Common Good of the City of Edinburgh by Hunter & Paton) re-iterates the Council’s ownership.

It is inconceivable that theses officers of the Corporation could be recording the ownership of this building in 1875, 1905 and 1925 if, as argued by Scottish Ministers today, ownership of the property had been transferred by an Act of Parliament in 1852. Had the 1852 Act transferred ownership, the Council would know all about it. But the Act did not do this because such Acts cannot ( in the absence of a court order or other legal means of acquisition) transfer the ownership of property that is not already in the ownership of a public body accountable to Parliament.

Scottish Government Correspondence

In information released as part of a Freedom of Information request to Scottish Ministers (6,2Mb pdf here), it is evident that the Council had made contact with Scottish Ministers as far back as February 2014. Further internal correspondence relates to media enquiries made in February 2015 by Gina Davidson from the Evening News who worked on the story with me.

City of Edinburgh Council

The Council appears to have made contact with Scottish Ministers as far back as 6 June 2014 in a letter outlining its concerns (see here).

The fatal letter that was written on 9 May 2006 by the City of Edinburgh Council to the Scottish Government declaiming any interest in Parliament Hall has also come to light – extract below (full pdf here)

 Faculty of Advocates

Finally, I have obtained a fax from the Faculty of Advocates dated 19 June 1997 that claims that the Laigh Hall (which used to store the Maiden, the gallows and the City lamps) had come into the ownership of the Faculty from the Town in exchange for properties to the north of the Signet Library. There is no evidence that this claim has any foundation in fact.

To Conclude

Whether the City of Edinburgh Council will be able to recover ownership of Parliament Hall is yet to be determined. The most interesting revelation from the above is the assertion by Scottish Ministers that the 1852 Act was the basis upon which they proceeded to assert their title. I think this view is flawed.

The City of Edinburgh Council’s Audit Committee meets on 18 June.

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.”