Official Report 190KB pdf
I am sorry for the slightly late start to the meeting. I will have to defer consideration of agenda item 1, which is a declaration of interests.
Thank you for your welcome and the chance to discuss the Crown Estate review working group's report. I was chairman of the working group from when its work started to its submission of its report to the Scottish Government and the United Kingdom Government before the May elections. Norman Macdonald is on my right; George Hamilton is on my left. As members are aware, we are representing the six local authorities that cover the Highlands and Islands, the Convention of Scottish Local Authorities and Highlands and Islands Enterprise. Those public bodies produced the CERWG report and have fully endorsed it at the highest level. That reflects the great importance that those partners attach to the issue. They are pleased and grateful that the committee is taking an interest in the Crown Estate in Scotland.
I hope that you are heartened by the fact that we looking at your report and considering some of the issues.
The process started about three and a half years ago. I am a tenant farmer to trade in my everyday life, as well as being a councillor. I had been selected as chairman of the Highland Council land and environment select committee. While we were discussing that committee's four-year work programme, reference was made to the view, shared across officialdom and folk in the Highlands, that the Crown Estate in the Highland context was more a taker than a giver. Within the terms of its remit, it was doing nothing wrong. However, it was taking rent and never contributing. In terms of harbours—
I do not want to get into that, because we shall come back to some of those issues. I wanted to be clear about where the impetus for the review came from. Are you saying that it came from within your council area?
In the very first instance, yes.
So the initiative came from your council and, specifically, your committee?
Yes.
That helps us to understand the genesis of the review. How was the composition of the working group decided?
It was put to the committee by officials that the working group should be made up fundamentally of local authority workers.
So, again, it was officials advising a specific committee, saying, "If we're going to do this, we think it should be as wide as this."
Yes.
The proposal would then go through the full council process. The council would then write to the other councils and to Highlands and Islands Enterprise, inviting everybody to be involved in the review working group.
Indeed.
Thank you. That helps us.
There has been a change, but it does not affect the thrust of the report.
That brings me to my final question, which is about the mechanics of the process. I presume that the review working group reported back to the individual councils concerned and HIE.
Yes.
Was the report endorsed by each and every one of those bodies, or was it noted?
It was endorsed by all the bodies.
Was it endorsed by HIE as well as by the Convention of Scottish Local Authorities?
It was endorsed by COSLA, HIE, Western Isles Council, Orkney Islands Council, Shetland Islands Council, Highland Council, Moray Council and Argyll and Bute Council.
Are you saying that it was endorsed, not noted?
It was endorsed by all the councils through the democratic process.
Right. Does that include HIE? I am not quite sure about that.
I assume that the HIE board endorsed it.
We just have to understand that we are looking at a set of recommendations or assertions that have been taken on board by the six councils, Highlands and Islands Enterprise, and COSLA.
Yes.
That helps us enormously, if it is the case. There has been no further discussion from the point of view of those organisations. The report was signed off, it went to the Government, and you received an acknowledgement from the Secretary of State for Scotland.
Indeed. I have it here; I cherish it dearly.
Was there no acknowledgement from the then Scottish Executive?
Not to my knowledge.
Right. The background is fairly clear. We will now ask questions about the more substantive issues. Bill Wilson and Peter Peacock want to talk to you about your views on the original decisions about the Crown Estate commission in terms of restructuring.
The Crown Estate commission appears to have taken almost the opposite response to that of the Forestry Commission with regard to structural changes and devolution. One might have the impression that it fled Scotland on devolution. Have the people of Scotland, as opposed to the Crown Estate commission, gained any benefit from the structural changes?
No. Originally I was the only political representative on the working group and I learnt—
May I stop you there? Do you mean that you were the only elected representative on the working group?
I was, yes.
It was not that you were the only one with a party political badge, but you were the only elected representative.
I was the only elected representative.
The rest were officials.
They were. There were lawyers, planners, natural resource managers, fisheries experts, and harbour engineers. They were people from the Highlands and Islands who all had expertise to put into the process.
That helps us.
The report suggests that the structural changes might have been made in response to some economic conditions, or directly in response to devolution. I am curious about that. Do you have an opinion about either of those two?
I honestly think that you would have to ask that question of the Crown Estate commission.
When I get the chance to do so, I will ask the commission as well.
I never understood it. Devolution happened and we all accepted it. Of the two Government commissions that we are talking about, the Forestry Commission embraced devolution and the Crown Estate seemed to walk away from it.
Can you think of any reason why the Crown Estate commission could not be organised in the same way as the Forestry Commission is currently organised?
None at all.
As someone who, over the years of my political career in the Highlands and Islands, has taken the odd sideswipe at the Crown Estate, I found the report interesting and revealing. As Richard Durham said, it has opened up thinking about the Crown Estate that was not possible before because the facts were not fully understood. I therefore welcome the report and its contribution to the debate.
There is a headquarters office, but I think that that fine distinction exists. You are a member of the Parliament. I am unaware of the extent to which the Crown Estate commission relates to the Parliament; I am from the Highlands, so I hope that the commission does so and is responsive. After devolution, it seemed to retreat to London, but since the issue has emerged, it seems to be coming back.
Okay. There is no disagreement about whether the Crown Estate has a Scottish office, but the point that you make in your report is that that office seems to have a lower status than it previously had, when it had a headquarters function.
Yes.
That is fine. I just wanted to clarify that.
The working group said that there would be "greater public benefits" if the Scottish Government took control of the land and marine environment that the Crown Estate represents. What would those benefits be?
As Richard Durham said, a key issue for us is that the Crown Estate commission has historically been regarded as an organisation that has taken from some of our more remote and fragile communities. Until very recently, the commission was extremely reluctant to invest in the marine infrastructure and environment from which it took rentals—
Is it investing now?
It is more prepared to consider doing so. Perhaps the political climate—I do not mean the party political environment—in which it operates has been a catalyst in that regard.
Does the commission provide research and development money?
It is more open to discussing environmental and infrastructure projects than it has been in the past. However, the lack of investment, in the marine environment in particular, has been a key issue.
I presume that what you are telling me is that the commission is regarded throughout the Highlands as a bad landowner and a bad landlord for fish-farming tenants.
I would say so, yes.
I have to say that that has never been my perception of the Crown Estate, but I am interested to hear you say on the record that that is the public view.
That view is widely held by people who have operated fish farms, in particular—
I want to discuss fish farm rentals. I made a calculation, which I am trying to find in my papers.
While John Scott is checking his papers—sorry, have you found what you are looking for?
No, but I had calculated the rental per fish farm—is £8,500 per year correct? I apologise for not having my calculations to hand. Perhaps we can move on to another question.
We will come back to you if there is time.
I do not think that it has ever been suggested that the Crown Estate is acting outwith its function.
Okay. Let us be clear about that.
I am sorry, but may we return to the figure that I was trying to find?
Let us allow Richard Durham to finish.
I am proud of our report, because it represents a tremendous advance. It lays out the reality of the Crown Estate in Scotland. It is for the Parliament to decide—
We understand that, but we must get to the nub of the matter. I will bring John Scott back in.
There is revenue of £800,000 from 930 sites throughout the Scottish west coast, which by my rough mental arithmetic works out at an average rental per fish farm of £850. Forgive me for saying so, but that rental hardly appears to be punitive and it appears to have been reduced this year. Given that you regard £850 per fish farm as being much too high and a figure that only a bad landlord would charge, what do you suggest would be a proper rental for a fish farm?
Regardless of the rent on the individual fish farms, any landlord has a responsibility to manage the asset. If there are concerns about the way in which that asset is being managed—
It is up to the tenant to manage the asset.
Reducing the rent, or having a low rent, does not necessarily deal with the issue. Many communities have to live with developments such as fish farms and deal with the more unpleasant aspects of such developments. Little investment is being made, particularly by the Crown Estate, to resolve the issues—regardless of what the rental is.
So, £16 a week is too much.
It is not a question of the money; it is about the management of the asset and dealing with the concerns that have been raised about such developments. Fish farming is only one issue. The Crown Estate has an income of more than £6 million per annum from the marine side.
The published figure for the marine estate's rental income is £4.1 million, which includes oil and gas pipelines. I do not know where you get the £6 million figure from; in my view, that figure is spurious.
The £4.1 million figure comes directly from the Crown Estate commission's figures.
I cannot answer that precise point, but I can describe the Crown Estate's approach to the management of its assets over many years. Scrabster and Tarbet, for example, were communities that were struggling to improve. Highland Council experienced the approach of the Crown Estate over a number of years to the Scrabster Harbour Trust. The Crown Estate was not helpful in attempts to develop Scrabster harbour. My perception was that, if a bigger and better harbour were to be built that could take in bigger ferries or ships from Norway, all that the Crown Estate would be interested in would be increasing the rental as a result.
You made the point that the Crown Estate is a taker rather than a giver in the Highlands and Islands. The relevant figures are in the Crown Estate's own report—it sent us a copy—which states that
I agree entirely.
Many committee members are aware of the harbours and ports issue—how the Crown Estate commission handles them has been a long-standing concern for several years. I appreciate that that issue is enormously important for the whole area that the review working group covers, but apart from that, do key problems exist with the Crown Estate commission's management? Do you have a view on the management of any urban assets?
Not really.
You have expressed some views about fish farming, which does not involve harbours and ports, strictly speaking. Do you have other serious concerns or, in principle, do your concerns boil down to the problems that derive from the commission's management of ports and harbours?
I will chip in quickly about the potential that exists. There is significant potential for offshore renewable energy—
Before we talk about the potential, does the existing scenario mostly concern the ports and harbours problem?
It is mostly about ports and harbours, but to a lesser extent it is about fish farming, because that is in decline.
I appreciate that you have a view about where the future potential might go, but I was focusing on the current scenario. Does anybody want to ask about that before we discuss changes to governance?
I would like an answer to the question about what the enormous public benefits would be that Councillor Durham said would come from taking the land back into Scotland's ownership. I have yet to hear that answer.
The benefit would come from the potential. I do not severely criticise the Crown Estate commission—
I misunderstood you—I thought that you did.
I do not severely criticise the Crown Estate commission, but as I have got into the subject in the past three years, I have realised that it is time for a review. The last review of management of the Crown's estate took place in 1954 and was done by a parliamentary committee at Westminster. As a result of that review, the commission was formed. From the 1830s until then, the Crown's estate was managed by two or three civil servants and by secretaries of state at Westminster.
Is not the Crown Estate putting up the money for the relevant study?
Yes. I feel that the Crown Estate commission sees itself as a public limited company. It sees itself fulfilling its role under the 1961 act as a plc to generate money. Its reaction to devolution has been nil and it has not changed its process.
Can we follow that up?
I am conscious of the fact that we do not have a huge amount of time. I ask Mike Rumbles to be very quick.
I will very quickly follow up John Scott's specific question. The Crown Estate's revenue surplus in Scotland is £10.3 million. The percentage value of the property that it owns in Scotland and the percentage of its income here are different, so the Crown Estate gains £10 million that would otherwise be £7 million. Is your point that that goes into the UK Exchequer and does not return to Scotland? Even under the Barnett formula, that £10 million returns to a lesser degree than it would if we controlled it ourselves.
Is the answer yes or no? Loads of other people want to ask questions.
The answer is yes.
I invite Karen Gillon to ask a question, although we will have to go back to item 1 on the agenda—Karen's declaration of interests—once we are finished with this item.
Before I start, I draw members' attention to the interests that I have recorded in my entry in the register of members' interests.
No—not in any way at all. The organisation would be smaller, but it would focus differently. In essence, the Crown Estate report suggests that it is time for a review of the way in which the current structure works, to find out whether there are better ways of delivering public good for Scotland under devolution. We on the working group hope that the Government will carry out a review.
The Crown Estate commission is coming to give evidence on 24 October.
The questions are questions that I would like you—
Right, will you put the questions in writing, because many members want to ask questions now and I want to move on? If there are specific questions that you think should be asked, it would be helpful if you could send them to the clerks.
They are very simple questions. We will send them to you.
Am I right in understanding that you believe that your objectives for the Crown Estate can be achieved only by a completely separate organisation? Could they also be achieved if there were a change in attitude, or a sub-devolution?
Change can come in a number of ways. On page 3 of the summary of the report, three ways of influencing change are outlined.
Which is your preferred option?
I do not think that my preferred option is particularly relevant. It will be for a review to decide which option is the best way forward. I am a devolutionist: I want Scotland to control its own affairs and I want there to be full devolution of the system. Whenever we say that in discussion with the Crown Estate commissioners, we are always told, "Oh, but that will require constitutional reform." I do not believe that. The structure that was here before 1707 is still in place. The Crown Office is here and the Queen's and Lord Treasurer's Remembrancer is here. I would like the management of the Crown Estate to be devolved, but I would be perfectly comfortable if the Crown Estate commission took the Forestry Commission route and engaged with the process.
I call Bill Wilson and then Peter Peacock. Could you try to keep your questions as brief as possible?
I had wanted to confirm that the main problem was reinvestment, but the witnesses have already confirmed that that is their main concern.
I am still trying to get to grips with what exactly you want the outcome of the review to be. You are calling for a review, but behind that call must lie some view of what you want the outcome to be. Do you have a principled opposition to the current constitutional structure of the Crown Estate, such that you are seeking fundamental constitutional change? That is one possibility.
The answer is no.
Is it to ensure that the Crown works more fully with the grain of what has been happening in the Highlands and Islands, such as changes in land ownership patterns and differences in the way in which economic development takes place, is it about securing Crown income locally, is it about securing local accountability in the communities of the Highlands and Islands, or is it about local authority foreshore control, as the report suggests? You must have a view on what you want the outcome of the review in which you want everyone to take part to be. What spectrum of outcomes do you favour?
I am a devolutionist—
Are you answering personally or on behalf of the review working group? The two things may be quite different.
The review working group has not taken a clear view on what should happen. It has made the case for a review.
That clarifies matters.
In its report, the working group lays out the routes by which change could take place. It is for any review that is carried out to reach conclusions.
So the review's single recommendation is that there should be a proper Scottish Government review of the Crown Estate commission in Scotland?
Absolutely.
The review working group identified three potential ways—some minimal, some maximal—in which change could happen. However, the group took no view on the advisability of those approaches. Indeed, there could be a fourth, fifth and sixth approach that you have not identified.
Absolutely.
We are clear on what is being sought.
I am still not clear on why a review is needed, because the group has not made the case for that, despite the time and expenditure that HIE and all the councils involved have spent on it. You say that enormous public benefits would accrue from a change. Have you produced a worked-up business case showing what those benefits and cost benefits would be? You made the comment that the Crown Estate is a bad landlord and that the position is not sustainable, but last year it received a northern lights gold award. That is not compatible with poor management.
Where in the report is the Crown Estate said to be a bad landlord?
I asked you about the matter, and you said that it was.
I did not say that.
One of your colleagues said it.
I did not say that the Crown Estate is a bad landlord.
You said that it was perceived to be a bad landlord.
That is different from saying that the Crown Estate is a bad landlord.
I sense some backtracking.
No, there is no backtracking.
There is a difference between reality and perception.
What is the case for making improvements?
The Crown Estate commission decided—I cannot give you the precise date on which it did so—to look into salmon fishings in Scotland. It went round the whole of Scotland and identified fishings that it believed were still in the right of the Crown. It then asked the people who had those fishings to sign leases. They replied that they had had the fishings since time immemorial and that the fishings were theirs. The Crown Estate told them that if they could not prove that, the fishings belonged to the Crown. Various legal cases were pursued. The people who had the fishings could not afford to go through the whole legal process and eventually signed leases. I am a tenant and accept that fact, but I regard what the Crown Estate did as bad practice and intimidatory.
It would be useful if each of you would go back to the relevant bodies and provide us with specific examples of what you regard as unhelpful things that the Crown Estate commission has done. We take note of the example that you have just given, but it would be helpful if you could provide us with others.
Examples of missing investment would also be helpful.
Could you provide us with examples of areas with potential in which the Crown Estate commission could be investing but is not? We are looking for specific examples rather than generalities. Tavish Scott, who is not a member of the committee, lodged a motion on the problem with using material that is dredged from the sea bed when ports and harbours are cleared. If the material is disposed of at sea, no questions are asked, but the moment people bring it on to the land and try to use it, the Crown Estate commission levies a charge. That generates income for the commission, but it is a disincentive for people to do things in a renewable way. If we have specific examples like that, it will help us to make progress. Will you be able to provide examples by 24 October?
Yes.
Thank you.
Can we also have a reaffirmation from all the councils, please, that they utterly support this being—
We can deal with that separately, John.
Unlike my colleague John Scott, I clearly see the benefits that would accrue to Scotland. The Crown Estate's revenue surplus from Scotland should be about £7 million, but it actually takes in about £10 million. That money is not reinvested. The economics of the case are clear to me.
It would, but in the long term the Scottish Parliament and the Westminster Parliament have to work in unison to help this devolution. I do not think that it would be helpful for Scotland to go it alone. The subject is complicated because of its history and the constitutional aspects. I disagree with John Scott. The report makes the case that it is time for a review. I do not think that a report could be more conclusive than the one that is in front of you.
Okay. Let us not reopen that discussion.
I understand your point. The commission is a reserved matter, but my point is that the property is a devolved matter.
Absolutely.
The Scottish Parliament could legislate on that now, without asking for help from the UK Government, and achieve the group's objectives. Is that the case?
Yes.
In court, we would call that a leading question.
I am happy to be led.
Thank you for coming along today. As you know, we will take evidence from the Crown Estate commission on 24 October. It would be useful if you could forward the information that we asked for before then, along with anything else that might be helpful to us. You are welcome to come to the meeting on 24 October as observers if you want to make another trip to Edinburgh, but the proceedings will be reported in the normal way.
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