Scottish Crown Estate Bill: Stage 1

– in the Scottish Parliament on 19th June 2018.

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Photo of Linda Fabiani Linda Fabiani Scottish National Party

The next item of business is a stage 1 debate on motion S5M-12846, in the name of Roseanna Cunningham, on the Scottish Crown Estate Bill. Before I invite Joe Fitzpatrick to open the debate, I call Michael Matheson to signify Crown consent to the bill.

Photo of Michael Matheson Michael Matheson Scottish National Party

For the purposes of rule 9.11 of the standing orders, I advise Parliament that Her Majesty, having been informed of the purport of the Scottish Crown Estate Bill, has consented to place her prerogative and interests, in so far as they are affected by the bill, at the disposal of the Parliament for the purposes of the bill.

The Deputy Presiding Officer:

I c all Joe Fitzpatrick to speak to and move the motion.

Photo of Joe FitzPatrick Joe FitzPatrick Scottish National Party

In the absence of the Cabinet Secretary for Environment, Climate Change and Land Reform, I will open the stage 1 debate on the Scottish Crown Estate Bill.

The bill proposes a new framework for management of Scottish Crown Estate assets, including reform of the main duties of the manager, because those duties are more than 50 years old. The bill will also confer on the Scottish ministers new powers to change who manages Scottish Crown Estate assets, and opens up the possibility of local authorities and communities taking control of management of assets in their areas.

We want to maximise the benefits of the Scottish Crown estate for communities and for the country as a whole, while ensuring that assets are well maintained and managed, with high standards of efficiency, openness and accountability. That is vital, because the Scottish Crown estate is a diverse portfolio that includes 37,000 hectares of rural land, half of Scotland’s foreshore, urban property and sea-bed leasing rights for activities including renewable energy generation.

Until recently, the assets were managed on a United Kingdom-wide basis; the Scottish Parliament received legislative competence for management of the assets under a key recommendation of the Smith commission. At the point of devolution of that management last year, Crown Estate Scotland (Interim Management) undertook management of the assets.

The bill was introduced in January 2018. In line with the Smith commission recommendations, it provides opportunities for councils and community organisations to manage assets themselves. There are two mechanisms in the bill for changing who manages a Scottish Crown Estate asset: first, it can be done through transfer of management to a local authority, community organisation or Scottish public authority, and secondly it can be done by direction of the existing manager to delegate day-to-day management to a local authority, community organisation or Scottish public authority. Under a delegation, the existing manager may continue to hold the ultimate responsibility for managing the asset.

The cabinet secretary’s intention is to use the new powers to enable devolution of management on a case-by-case basis. That approach will enable decisions to be taken carefully and with the approval of Parliament, while recognising that a one-size-fits-all approach is not suited to such a diverse range of assets.

The effective and continuing management of the Scottish Crown estate is important for Scotland as a whole. We have therefore made provision in case things go wrong, at any point. We have specified that regulations may require a community organisation to notify us of changes to its constitution that result in that transferee ceasing to be a community organisation. We can also transfer management of an asset from a local manager to Crown Estate Scotland or to the Scottish ministers, as a holding measure, to ensure that tenants are not affected if a community organisation struggles to fulfil its duties in managing an asset.

We have included new duties to maintain and enhance the value of assets, and to obtain market value in a way that is likely to contribute to the promotion or improvement of economic development, regeneration, social wellbeing, environmental wellbeing and sustainable development.

Although buying and selling property is part of management of the Scottish Crown estate, there is a presumption against sale of the sea bed. We have, in the bill, taken powers to restrict or control the power of a transferee or delegate to sell part or all of the asset that they manage. In particular, sales of the sea bed by any manager would require ministerial consent. We think that that will maintain the integrity of the Scottish Crown estate.

Photo of Alex Rowley Alex Rowley Labour

The minister will be aware that many organisations in Scotland believe strongly that sale of the sea bed or foreshore should require the consent of Parliament, too. What is his view on that?

Photo of Joe FitzPatrick Joe FitzPatrick Scottish National Party

Alex Rowley has made a good point. I think that the cabinet secretary has made it clear that Parliament will be an important part of all processes. I am sure that she will carefully consider that point, in due course.

The financial flows from the Scottish Crown estate are not straightforward. I will explain what is entailed in that regard. The Scotland Act 1998 places restrictions on how revenues from assets and activities, minus the cost of managing the assets, are paid to the Scottish consolidated fund. The UK Government’s annual block grant to Scotland has been reduced by the estimated amount of net revenues that Scottish Crown Estate assets earned in 2016-17—a reduction of £6.1 million. Whoever manages the assets clearly has to maintain and seek to enhance their value, and the income arising from them, otherwise Scotland will be out of pocket.

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

I am sure that the minister will welcome the fact that how Crown Estate Scotland is to manage assets will not be simply a financial issue, and that sustainable management will also be an important part. I am sure that that will be widely welcomed.

Photo of Joe FitzPatrick Joe FitzPatrick Scottish National Party

Stewart Stevenson has made a good point. The bill makes specific allowance for that, and for the importance of maintaining and potentially enhancing the assets that we have, which are assets for Scotland.

Outwith the bill, we are committed to distributing to island and coastal local authorities the net revenue that is generated by marine assets out to 12 nautical miles. That local function will not be hypothecated, but we expect local authorities to be transparent and to be accountable to their communities for how that money is spent.

When management of the Scottish Crown Estate’s assets was devolved, we inherited arrangements that allowed the manager of an asset to retain 9 per cent of the gross revenue for investment in the estate—for example, for new farm buildings or for purchase of new assets. We are keeping in the bill the ability for a manager to retain a proportion of gross revenue for investment in maintaining the estate. However, we are taking the power to be able, in the future, to vary the percentage that can be invested. It might be that some assets need more capital investment than others, so we want to provide for that.

The bill also seeks to ensure that assets can, in the future, be maintained through cross-subsidy. It is important to keep the ability to cross-subsidise when there are several local managers of Scottish Crown Estate assets. We are therefore taking powers to direct a manager to transfer money to other managers’ accounts. In that way, a community could take over management of a local asset if there were a good case demonstrating the benefits of that to Scotland, even if the asset did not currently generate enough income to cover costs. To be clear, such money would come from a manager’s Scottish Crown Estate accounts and not from their other accounts. The bill requires a strict separation between a manager’s Scottish Crown Estate accounts and any other accounts that are held by them.

We are clear that a robust governance framework is required in order to provide the Parliament and citizens of Scotland with assurances and transparency concerning management of the Scottish Crown estate. The bill sets out a national governance framework that specifies accounting and reporting procedures to ensure sufficient openness about the management of assets—local or national.

The framework also comprises a national strategic management plan, managers’ management plans, annual reports from managers, and measures to promote consistency in reporting and accounting. The strategic management plan and annual reports will be laid in Parliament so that members can oversee management of the Scottish Crown estate. The bill provides for members to approve transfer of the management of assets, and accounts will be audited by the Auditor General. That all provides a robust but proportionate framework for governance and oversight of a valuable portfolio of assets, of which this Parliament now has stewardship.

I have set out the purpose of the bill, which enables the Scottish Crown estate to be used for the economic, social and environmental benefit of Scotland and its people. I appreciate that it is a highly technical piece of legislation, so I thank members of the Environment, Climate Change and Land Reform Committee for the careful and constructive way in which they have dealt with the various issues.

I move,

That the Parliament agrees to the general principles of the Scottish Crown Estate Bill.

The Deputy Presiding Officer:

I call Graeme Dey to speak on behalf of the Environment, Climate Change and Land Reform Committee—for up to eight minutes, please.

Photo of Graeme Dey Graeme Dey Scottish National Party

As convener of the Environment, Climate Change and Land Reform Committee, I very much welcome the opportunity to highlight its views, as contained in its stage 1 report, on the Scottish Crown Estate Bill—albeit that time constraints will curtail the detail that I will be able to go into on our views.

The committee welcomes devolution of the Crown estate as a significant recommendation of the Smith commission report, having previously supported the interim arrangements for management of the estate that were put in place in April 2017.

The committee welcomes the Scottish Crown Estate Bill and its provision for the longer-term management of Scottish Crown Estate assets, including 37,000 hectares of land, sea bed, mineral and fishing rights, coastlines and rural estates. The bill provides a clear focus on ensuring that the estate’s assets are managed sustainably by those who are best placed to do so—whether that be Crown Estate Scotland, a local authority or a community group.

The committee supports the intention of the bill, which seeks to move beyond a focus on profitability and to encompass other factors including regeneration, social wellbeing, environmental wellbeing and sustainable development, when deciding how an asset should best be managed. That is the right approach, which seeks to recognise that there is a different ethos in Scotland.

However, the committee believes that there is scope to go even further. The committee therefore welcomes the Scottish Government’s commitment, in its response to our stage 1 report, that it will consider guidance to ensure not only that the wider environmental factors are taken into account, but that their consideration can be clearly evidenced.

As part of the committee’s consideration of the bill at stage 1, we heard from a range of stakeholders, including representatives of Crown Estate Scotland’s four rural estates, representatives of its non-agricultural assets, and stakeholders who are involved in the strategic direction and governance of Crown Estate Scotland. The committee also carried out a confidential survey of existing Crown Estate Scotland (Interim Management) staff to ensure that their views or concerns would be captured in our work. The committee records its thanks for the evidence that was provided by them all, and for the constructive engagement that we enjoyed.

The committee was pleased to note that many of the Crown Estate’s tenants had already noticed significant improvements since management of the estate was devolved to Scotland, including the creation of tenants groups on the four rural estates, which has led to improved communication between tenants and factors. The committee is hopeful that the bill offers an opportunity to make further progress.

Although the committee is broadly supportive of the general principles of the bill, we have made a number of recommendations about what should be included in it, and what should to be left to regulations and guidance. The Delegated Powers and Law Reform Committee also made a number of recommendations with which the Environment, Climate Change and Land Reform Committee agrees. Broadly, those recommendations seek to ensure that when significant decisions are taken about the future of the Crown estate, there is sufficient parliamentary scrutiny of each decision—although the committee is conscious of the need to strike an appropriate balance between matters that are operational decisions for Crown Estate Scotland and those that require further scrutiny.

The bill offers opportunities to local authorities and community organisations to take on management of Scottish Crown Estate assets, but the committee believes that the sea bed, as a national asset, should continue to be managed nationally and that the bill should be amended to ensure that it cannot be sold, under any circumstances. The committee recommends that the Scottish Government outline clearly which Crown Estate Scotland assets it anticipates will continue to be managed on a national basis and which can be devolved to local management.

The extent to which the Crown estate in Scotland is likely to become fragmented as a result of the bill was a cause of concern among some stakeholders. The committee also considered cross-subsidisation, which happens when the income from one asset subsidises a less-profitable asset. That process currently works well on a national basis, but it might prove to be problematic in the future. The committee has therefore recommended that Crown Estate Scotland establish and maintain a list of assets that outlines which of them are profit making and which are loss making, and that clearly sets out any associated liabilities.

The committee is also of the view that the process to manage cross-subsidisation of assets should be subject to affirmative procedure, and that a definition of what constitutes “significance” or “significant value” in relation to an asset should be clearly set out in the bill.

Managers of Crown Estate Scotland assets can currently retain 9 per cent of gross revenue for reinvestment in an asset. The committee is keen to ensure that the definition of “community” extends to communities of interest, in order to allow broader interest groups to be able to take on management of assets, and it is keen that such groups be appropriately supported in doing that. I therefore welcome the Scottish Government’s undertaking that it will consider the matter further in advance of stage 2.

The committee sees clear benefits in retaining national oversight of the Crown Estate’s rural estates, offshore renewables, energy-related assets and other cables and pipelines, although it acknowledges that, on occasion, it might be beneficial for an asset to be managed locally, and that we therefore need to retain provision for that.

The committee is content that local authorities should, when they can demonstrate appropriate expertise, be able to manage smaller-scale tidal and wind projects within 12 nautical miles of their shores. The committee therefore welcomes the Scottish Government’s commitment that that process and the criteria for it will be included in guidance, that the guidance will be available by the time the sections on transfer and delegation come into force, and that there will be further consideration of the inclusion in guidance of a definition of “good management”.

Crown Estate Scotland tenants are generally happy with how Crown Estate Scotland is being run. Tenants feel that devolution has brought an increased feeling of connectivity with the estate, improved communication and more involvement in decision-making processes. Tenants regard Crown Estate Scotland as a good landlord, and feel that the Scottish Crown Estate Bill offers the opportunity to make further improvements to how the estate is run.

The Committee seeks further clarification from the Scottish Government about the rationale for setting the figure for retention at 9 per cent, why there are no plans to alter that, and what arrangements it will put in place to ensure that 100 per cent of net revenues that are generated out to 12 nautical miles will be used for the betterment of coastal communities.

The bill contains a number of useful mechanisms that are designed to improve transparency and accountability. The concept “good management”, however, remains undefined. The committee suggests that the Scottish Government consider including a definition of that in the bill or in guidance, and that the process and criteria for deciding the suitability of a potential manager be clearly set out in guidance.

The committee agrees that the bill will bring benefits not just to the Crown estate, but to Scotland as a whole, by ensuring that community empowerment and sustainability are at the heart of Crown Estate Scotland’s future. I am therefore pleased, on behalf of the Environment, Climate Change and Land Reform Committee, to commend the general principles of Scottish Crown Estate Bill to the Scottish Parliament, and to recommend that the motion be agreed to.

Photo of John Scott John Scott Conservative

I begin by declaring an interest as a farmer and for other interests I refer members to my entry in the register of members’ interests. I welcome the stage 1 debate on the Scottish Crown Estate Bill and say at the outset that Scottish Conservatives will support the bill at decision time.

It is worth noting at this stage that the income for Crown Estate Scotland that previously went to the UK Treasury will now accrue to the Scottish Government, and how the Scottish Government manages those assets in the future will determine the level of income that the Scottish Government will receive from them. Under the bill, as well as delivering an income to the Scottish Government, Crown Estate managers might also be expected to deliver additional benefits, including contributing to sustainable development, delivering on economic regeneration, and delivering on social and environmental wellbeing.

It is also important to note that the bill will allow for management of assets to be devolved to local authorities and other community groups and bodies. Scottish Conservatives welcome that further devolution of the management and transfer of assets, always provided that potential new managers and owners have a full understanding of the obligations and responsibilities such transfers require. However, landlocked local authorities such as South and North Lanarkshire and East Renfrewshire must not lose out on the benefits of the seas simply because they do not have a coastline.

Ambition alone will not be sufficient for such transfers to local authorities and communities, and any application to either manage or own assets that are currently under the care of Crown Estate Scotland must be subject to a strong business case being presented and due diligence being carried out by Scottish ministers. Any such proposal must also be subject to Scottish ministers assuring themselves that those who wish to embark on managing or owning Crown Estate assets have a full understanding of the actual and potential risks and liabilities that are attached to their proposals.

Scottish Conservatives are concerned that the transfer of the management of assets from Crown Estate Scotland could lead to the fragmentation and loss of expertise in the Crown Estate itself. Self-evidently, the more assets that are transferred from the Crown Estate, the harder it will be for Crown Estate Scotland to provide income to the Scottish Government, and a balance will need to be struck and an understanding reached between the Scottish Government, Crown Estate managers and interested third parties on the cost to the Scottish Government of transferring assets out of the current management structure.

Further, the more assets that are transferred from the Crown Estate, the harder it will be for cross-subsidisation between different parts of the estate if the size of the portfolio of the whole estate reduces year on year. If the portfolio of assets is reduced regularly, the income due to the Scottish Government and the 9 per cent investment income will also reduce.

On land management issues, Scottish Conservatives fully support the view of the Scottish Tenant Farmers Association, NFU Scotland and the tenants themselves that the national management of the four rural estates should be continued through Crown Estate Scotland. In principle, of course, that should not be subject to ministerial micromanagement and interference. That is why it is important to be clear from the outset—in the bill and in the guidance issued—what the remit of Crown Estate Scotland will be in that regard.

In practice, however, the temptation for ministers to interfere and the pressures on them to intervene in the day-to-day running of Crown Estate Scotland will be huge. A perfect illustration of that is the proposed sale of Auchenhalrig farm—part of Fochabers estate—by Crown Estate Scotland. Clearly, the proposed sale is, in Crown Estate Scotland’s view, being done for sound business reasons and for the benefit of the estate as a whole, yet the STFA is seeking to stop the sale as it will further reduce the dwindling amount of tenanted land available to incoming tenants across Scotland.

Although that is just an early example of the difficult decisions on which Scottish Government ministers will be under pressure to intervene, the proposed new criteria under which Crown Estate land managers will have to work will only make the pressure for ministerial intervention even greater, as we move away from the delivery of revenue to the Treasury as the sole measure of success of Crown Estate Scotland and towards the measures of success including the delivery of sustainability, social and mental wellbeing, and economic regeneration.

A whole new lobbying industry is probably about to be born that will seek to spend the revenues that the Government hopes to receive from Crown Estate Scotland. The need for clear direction in the bill and for guidance to be in place from day 1 could not be more important for the managers of Crown Estate Scotland if they are to provide a reasonable yield on their assets to the Scottish Government in the face of the much greater expectations that will be placed on them.

Photo of Alex Rowley Alex Rowley Labour

I appreciate that there may be a new lobbying industry, but do you think that there is an opportunity for tenants themselves to have a greater say?

The Deputy Presiding Officer:

Always speak through the chair, please, Mr Rowley.

Photo of John Scott John Scott Conservative

Yes, I do, and I think that it is working well at the moment. I am pleased about the recent improvements in that regard, such as the tenants forum that has been set up.

I turn to other assets of Crown Estate Scotland. The Scottish Conservatives share the view of the committee that the sea bed should not be sold off, except perhaps in the most exceptional circumstances—that is just my own view—and we urge the Government to address that issue at stage 2.

We also recommend the retention within Crown Estate Scotland of the expertise to deal with offshore wind applications in particular and offshore energy and renewable energy applications in general.

The Scottish Conservatives believe that there is a significant and valuable body of knowledge within the Crown Estate staff that is at risk of being dispersed if too many assets are transferred from the Crown estate to local authorities and community groups, and the loss of such expert knowledge could reduce the critical mass of the management team, which is vital for good decision-making.

I turn to communities—

The Deputy Presiding Officer:

No—you will have to close very quickly, please, Mr Scott.

Photo of John Scott John Scott Conservative

I conclude by welcoming the bill. We will support it at decision time and we will seek to improve on it at stage 2.

Photo of Claudia Beamish Claudia Beamish Labour

Scottish Labour supports the principle of the Scottish Crown Estate Bill. However, we would like to highlight some concerns about some aspects of the bill before we proceed to stage 2. I also intend to reflect on the recommendations of the ECCLR Committee, building on the comments of our convener, Graeme Dey.

In its briefing, the Law Society of Scotland rightly highlights the need for

“full transparency and accountability in relation to management of the Estate”, and the RSPB Scotland briefing stresses that this is a “step change”. Although both might seem to be obvious comments, they are at the core of the future of the Crown estate once its management is devolved, a move that Scottish Labour heartily welcomes.

I have long argued, along with others, for the mission of the Crown Estate to have a social remit and indeed an environmental one, setting sustainable development at its heart. Now, by devolving the powers and setting out the governance arrangements in this bill, Parliament has the opportunity to enshrine this inclusive and empowering way forward in statute.

The bill seeks to enshrine the principles of good management of the Crown estate. I ask the minister and, indeed, the cabinet secretary—I wish her well and perhaps she can reply to this when she is better—what the criteria are for good management of a public asset in the 21st century. Scottish Labour is pushing to strengthen the principles and looking to place an obligation on managers to take account of enhancing regeneration, social wellbeing, environmental wellbeing and sustainable development, in parallel with the obligations for a financial return. Thus, managers could be required to consider issues beyond financial ones and report on how they take those into account. In my view, the most straightforward way to do that would be to change “may” to “must” in section 7(2) but, then, I am not a lawyer.

The ECCLR Committee felt that the Scottish Government should consider rewording the duty on decision makers in section 7(2) in deciding how an asset should be managed. Further, the committee

“believes this should be the case even if such consideration leads to the conclusion that a factor may not be relevant.”

The cabinet secretary has recognised that concern and I am pleased that she will consider it carefully.

Although Scottish Labour recognises the national significance of the Crown estate to Scotland, that should in no way prevent further devolution from taking place to local authorities, and particularly although not exclusively to island authorities, as highlighted by the Smith commission. There must be a process for that in relation to Highland Council, Orkney Islands Council or any other council. We wish the councils well in that process if and when the bill is passed. Steven Heddle, the environment and economy spokesperson for the Convention of Scottish Local Authorities, has stated:

“Paragraph 8 is at the start of the section titled ‘Local versus National Management’. It is worth stating that we do not view the future of the Crown Estate in such binary terms. Much like for Scottish devolution, we view the devolution of the Crown Estate as an evolving process which can change over time.”

Other members have talked about the ownership of the sea bed, which is a national asset. That is indeed a challenge. The ECCLR Committee says that the sea bed should be sold only in very rare circumstances. The Scottish Government will consider our recommendations for amendments to ensure that the sea bed cannot be sold. There should be a little more consideration of that before stage 2.

Photo of Edward Mountain Edward Mountain Conservative

I take the point about the sale of the sea bed, but there is also concern about very long leases on the sea bed, which might not have break clauses in them. Does the member share my concerns on that?

Photo of Claudia Beamish Claudia Beamish Labour

I have not considered until now the issue of break clauses but, with long leases, there should be very clear criteria as to appropriate management, as with the other arrangements for the devolution of management.

The committee made the argument, which Scottish Labour supports, that community managers should have support where necessary. However, we should not assume that, simply because they are community organisations, they will need more or less support than any other managers. Scottish Labour concurs with the committee’s belief that

“the current definition of ‘community organisation’ in ... the Bill is based around geographical factors alone and, as such, may not encompass ‘communities of interest’.”

That is a concern. The committee says that it would be helpful if the bill was in line with the similar provisions in the Community Empowerment (Scotland) Act 2015, and the committee recommends that the Scottish Government reconsiders the definition of community ahead of stage 2. I look forward to hearing from the cabinet secretary on that after she has reflected on it.

Scottish Labour believes that the consideration of community ownership in the bill is a significant issue, in view of the unjust patterns of ownership that continue intractably in Scotland. We should not rule out enabling communities to have ownership of particular assets and allowing them the autonomy and democratic process as community landowners to shape how those assets are used in practice. However, I grasp the point that there is a need to avoid fragmentation of the Crown estate.

The Deputy Presiding Officer:

You must come to a close, please.

Photo of Claudia Beamish Claudia Beamish Labour

I will—thank you.

My colleague Colin Smyth will go into some detail about tenant farmers, who also need to be protected.

As I said, we support the principles of the bill.

Photo of Andy Wightman Andy Wightman Green

This is a historic moment, as the Parliament debates legislation on the Crown estate. For the best part of 40 years, there has been an active campaign by, for example, the

West Highland Free Press and politicians such as Brian Wilson and Michael Foxley to eliminate the malign influence of the Crown Estate Commissioners. I particularly commend the Crown estate review working group, which reported in 2006. That report from seven local authorities and COSLA brought the issue to public attention.

The estate comprises a range of Crown property rights, which are an intrinsic part of Scotland’s system of land tenure, as well as other conventional modern property acquisitions. Those rights were administered in Scotland until the 1830s, when control went south, leaving only bona vacantia, ultimus haeres and treasure trove rights, which, to this day, are administered by the Crown Office, with revenues paid to the Scottish consolidated fund.

Photo of John Scott John Scott Conservative

On a point of order, Presiding Officer. Is it parliamentary language and reasonable to use the word “malign” in describing Crown Estate officers who have been only, and absolutely properly, discharging their duties entirely within the law and their remit and doing that job extremely well?

The Deputy Presiding Officer:

I will look carefully at the

Official Report

, although what members say in the chamber is their responsibility. I did not hear the phrase very clearly. No offence to Mr Wightman, but I was not listening closely at that point. However, I will consider the matter and come back to you on it, Mr Scott.

Photo of Andy Wightman Andy Wightman Green

It is important to note two substantive things. First, Crown property rights and interest in Scotland have, for centuries, been defined by Scots law and that remains the case. Secondly, for most of their history, those rights have been administered in Scotland and the revenues have flowed to the Scottish exchequer, with only a short hiatus between 1830 and 2017. For example, they never formed part of the civil list, although England’s Crown revenues were surrendered in 1760. In other words, it is a distinctive, historical set of rights that belong to Scotland.

Attempts to devolve the powers in 1998 were blocked by the Treasury and the palace, with only the Crown’s property rights and the Crown prerogative included in the Scotland Act 1998. In 2014, the Smith commission recommended that management and revenues be devolved. Despite UK Government guarantees that the Smith commission report would be implemented in full, legislative competence for the revenues of the Crown estate was not devolved as it should have been.

The bill proceeds on the assumption that the Crown estate is a coherent suite of assets that, by law, must be maintained as an estate in land on behalf of the Crown. The Greens reject that assumption. The Crown estate is a feudal relic. It is an ad hoc estate of rights that includes everything from gold and silver, everywhere from a lock-up garage in the new town to the island of Rockall. Our goal should be to sweep away that anachronism and not perpetuate it in a framework of complicated management and delegation powers.

To put it simply, Scotland’s ancient Crown property—the regalia majora and minora—should be abolished and the rights converted or transferred as appropriate to other legal bodies. For example, despite the transfer of administration in 2014, there is no good reason why the mediaeval right of the Scottish Crown to naturally occurring mussels and oysters has any place in the modern statute book. The bill should abolish that right and confirm the species as ferae naturae—wild animals.

More substantially, the Crown’s right to the foreshore should be abolished. As the Scottish Law Commission notes in its 2001 “Discussion Paper on Law of the Foreshore and Seabed”, the Crown’s right to the foreshore is a patrimonial right that is derived from the Crown prerogative, although even that is, in the commission’s words, “The predominant modern theory”. The bill provides the opportunity to modernise the legal basis for the ownership of the foreshore, abolish the Crown’s rights and vest title in Scotland’s local authorities rather than a complicated scheme of delegated management.

Similarly, as there is no statutory basis for the Crown’s ownership of the seabed, the bill could vest it in the Scottish ministers and create an equivalent to the national forest land scheme to enable transfers of title to Scotland’s 248 local authority harbours and 46 trust ports. That would end decades of legal disputes and conflict.

The Smith commission recommended that the responsibility for the management of Crown property be further devolved to local authorities. The bill makes provision for regulations to enable that but contains no statutory right. We will lodge amendments to make it clear that that transfer is a statutory right that is subject only to due process.

The Deputy Presiding Officer:

No, Mr Dey. Mr Wightman has to close.

Photo of Andy Wightman Andy Wightman Green

Greens were elected to bring bold and transformative ideas to Holyrood. The Crown estate is a perfect example of where that is needed.

Photo of Tavish Scott Tavish Scott Liberal Democrat

It is a good step that the Parliament is taking the powers of the Crown Estate, but I am with Andy Wightman—I am for a much more radical approach to the organisation. I will give John Scott two further examples of why we should do an awful lot more than just adopt an incredibly complicated and highly technical approach—the minister was right about that—to sorting out the issues.

When any trust port in Scotland decides to extend a quay or deepen a navigation channel, what does the Crown Estate do? It charges for that. The Crown Estate owns the asset, but does it invest in that? No—the trust port invests in it. The trust port deepens the navigation channel to allow for bigger ships or it reclaims land to improve the quay space, but it pays for the privilege of improving the asset that the Crown Estate owns.

If John Scott doubts the need for radical reform, I will give him a further example. When I handled such issues in a previous job back in Shetland, the Crown Estate passed to councils the job of handling applications for licences for aquaculture development, but the Crown Estate took the rental income. We did the work, but it took the income. The need for reform is considerable.

I will speak in particular about the sea bed. In relation to Crown Estate assets on land, other members might talk about farm tenants and others, but a much stronger devolved approach is needed to the sea bed inside 12 miles—there is an argument for dealing with the area outside 12 miles, too. A different approach for Scotland is needed that is based on the assets that exist.

Steven Heddle’s letter, which Claudia Beamish quoted from, sets out a coherent case for why island authorities—and others, if they so wish—should take on such responsibilities. The issue concerns local versus national management. The logic of the argument that everything must be done nationally suggests that Shetland Islands Council could never run the Sullom Voe oil terminal, which it has run for 40 years. In 1978, we dealt with the spillage of oil from the Esso Bernicia tanker in the confines of the voe. We had to put in place pollution prevention measures and we established what became a gold standard for dealing with oil spills. I do not remember anyone saying then that we should sweep away such powers and have all such facilities run by a quango—[

Interruption

.] If Edward Mountain wants to intervene, he is welcome to, but he should stop telling me that I am wrong from where he is sitting.

Photo of Edward Mountain Edward Mountain Conservative

I am not telling you that you are wrong.

The Deputy Presiding Officer:

Please speak through the chair.

Photo of Edward Mountain Edward Mountain Conservative

I am sorry, Presiding Officer. I am not telling the member that he is wrong, but I wonder whether the law that applies to the sea bed and the coastline is exactly the same on the islands of Shetland and Orkney as that for the rest of Scotland. It would be helpful if Tavish Scott clarified that for me and other members.

Photo of Tavish Scott Tavish Scott Liberal Democrat

I will not get into udal law—Andy Wightman, Stewart Stevenson and I might debate it, but not today—although an interesting question needs to be teased out by our learned friends on the bench. If Mr Mountain was referring to that, he will forgive me for not mentioning it today.

My point is about local versus national management. Shetland Islands Council and other local authorities that have marine responsibilities have been doing what we call marine spatial planning and what the Government calls the Marine (Scotland) Act 2010 approach for a lot longer than this place has been thinking about marine acts. I therefore do not accept the central contention that local government cannot be innovative and cannot come up with the right solutions to move the powers on and enable them to drive forward sustainable economic development in island and coastal communities.

That is why we need a much stronger approach, which is the epitome of what the Smith commission discussed. In the week when we discussed everything about the devolved powers of this place—a week that I will never get back—one of the few areas that all the political parties were in absolute agreement on was the need for change, for the Crown Estate’s powers to be devolved to this Parliament and for us to make decisions. However, we must get that right.

I cannot disagree more with the suggestion that nothing should ever be sold, because trust ports have been able to sell small parcels for many a year. Members who think that that ability should be taken away from trust ports would reinstate the worst management that we dealt with from London for decade after decade. If we asked those in trust ports around Scotland’s coast, they would say that such an approach was not right. It would not be right to replicate in Edinburgh the management that we did not care for from London.

I do not know what evidence the Environment, Climate Change and Land Reform Committee took on that, but the committee needs to reflect on an issue that is about the sustainable development of trust ports across Scotland, including the sensible provision to allow the purchase of small areas of sea bed under a pier after a trust port has invested in them. There is much that needs to be done here.

Although there is much in the bill that is good, the minister made a fair point, which is that we should not get bogged down in highly difficult, technical details and constructions of systems. We should do some radical things to shake the situation right up.

The Deputy Presiding Officer:

We move to the open debate. Time is quite tight, so I ask for speeches of no more than 5 minutes, please.

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

I draw members’ attention to my registered small agricultural holding.

I will respond first to something that Tavish Scott said. I cannot find where it says in the bill—although I know that it is there—that it is possible to sell assets, provided the proceeds are used to purchase another heritable asset. That may not be a complete answer to Tavish Scott’s point.

I respond to the suggestion that this is a technical bill by making a few technical points that go beyond the Environment, Climate Change and Land Reform Committee’s consideration of the bill. A particular point relates to section 6(2)(a), which requires that a body that takes over the management of an asset has to have

“no fewer than 20 members”.

I invite the Government to have a wee think about that and build in some flexibility. I am thinking in particular of the recent buyout at Ulva, where, because of the way in which the community was defined, consent was required by a large number of people who were not on Ulva. There might be similar circumstances in future.

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

I will make progress, if the member does not mind.

I want to make a few points about finance. Managers of assets that have been devolved to local communities are allowed to have other interests, although they have to keep the accounts for the Crown Estate asset separate from the accounts for any other assets. That is a perfectly proper provision. However, the aggregation of a Crown Estate asset with one that is not from the Crown estate may add to the value of the two assets. There is an unresolved question in the bill as it is currently drafted about how the income and liability should be divided.

Speaking of which, I refer to section 3(4)(a), which relates to a transferee ceasing to exist. It says:

“the function, and any rights or liabilities, transferred to the transferee ... are to transfer to another person”.

There is a wee bit of an awkward construct there in relation to liabilities if a community organisation becomes insolvent. Such an organisation is likely to be registered under the companies acts and therefore there will be provision for insolvency. It would be very unusual for the liabilities not to be extinguished at the point of insolvency; instead, we are legislating that they be transferred to someone else. In some very unlikely circumstances, a degree of irresponsibility could arise, where liabilities never rest on the shoulders of those who should be responsible for them. I invite ministers to have a wee think about that.

Section 14 limits the granting of a lease to 150 years. The period is a slightly odd choice; the period in the Long Leases (Scotland) Act 2012 is 175 years. Mr Wightman in particular will remember that because, as minister, I worked with him on that subject. I heard Edward Mountain refer to long leases of the sea bed. If a lease was more than 175 years, the 2012 act converted it to ownership. I post that as an interesting little aside, because I do not know whether there are any cases in which that has happened.

Primarily, I want devolution in relation to Crown Estate assets to work to the maximum possible degree. I am less interested in local authorities taking responsibility, although clearly there are areas in which that is appropriate. The success of what we are doing here will depend on our getting good, effective devolution down to quite small communities for which it may make a substantial difference.

The bill is relatively silent on the issue of community and there is some advantage in that. The Ulva buyout illustrates that as, although we were able to make the land reform provision for community buyouts work, it worked in a very odd way, because only a tiny minority of those who had to give permission were on Ulva. It is worth looking at that.

Paragraph 342 of the report draws attention to the absence of an

“up-to-date assessment of the condition of Crown Estate assets in Scotland”.

I welcome the fact that that is being remedied, because lack of knowledge of one’s assets is the road to economic and financial perdition.

I wish the bill every success.

Photo of Peter Chapman Peter Chapman Conservative

I declare an interest as a partner in a farming business.

I am pleased to be involved in today’s debate on an important piece of legislation that follows from the Smith commission recommendations in the Scotland Act 2016. The act was delivered by a Conservative Government and it allows the devolution of the management of the Crown estate to the Scottish Parliament.

Photo of Christine Grahame Christine Grahame Scottish National Party

There was a big heavy sigh, but the member will take an intervention, Mr Wightman.

Photo of Andy Wightman Andy Wightman Green

Does the member agree that, contrary to what the Smith commission recommended on devolving the management of the revenues, the revenues remain reserved under paragraph 3(3)(a) of part 1 of schedule 5 to the Scotland Act 1998

?

Photo of Peter Chapman Peter Chapman Conservative

I must bow to the member’s superior knowledge. I cannot comment, as I really do not know.

We are broadly in support of the recommendations in the ECCLR Committee’s report.

The Crown estate in Scotland comprises a wide range of assets that includes rural estates; rights to fish wild salmon and sea trout in river and coastal areas; rights to naturally occurring gold and silver in most of Scotland; some moorings, ports and harbours; the sea bed out to 12 nautical miles; the rights to offshore renewable energy and gas out to 200 nautical miles; and business property in Edinburgh.

The bill allows for further devolution of management of powers to local authorities, public bodies and community organisations. The ECCLR Committee is of the opinion that, although powers may be further devolved, some assets should remain under national management. The Scottish Government needs to make it clear which assets must be retained under national control and those that may be devolved to a local level. My concern is that the devolution process might lead to the wholesale fragmentation of the estate, which, if it were to happen, would be a mistake.

Crown Estate Scotland tenants are generally happy with how the Crown estate is being run during the transition phase. Tenants report that devolution has brought significant benefits, including connectivity with the estate, improved communication and more involvement in decision making.

The bill provides for a number of mechanisms that are designed to provide transparency and accountability in the management of assets. However, more needs to be done in the bill to provide clarity on how suitable, able and knowledgeable those who are applying to manage assets actually are. A further issue is that, although a policy of operating cross-subsidies across different assets works well at present, there is the potential for that to become more complex once assets are devolved to a local level.

I endorse the ECCLR Committee’s concern about the lack of financial flexibility in the bill. I agree that there are significant benefits in Crown Estate Scotland having the ability to hold capital reserves for strategic investment, and to retain revenue to service capital expenditure. The historical figure of 9 per cent gross revenue that can be retained needs to be reassessed.

Agriculture tenancies should remain centrally managed, reflecting the wishes of the tenant farmers. Tenants are concerned that local authorities might take control of the agricultural holdings of the Crown Estate. We are also concerned about that and recognise that the Crown Estate is seen as an excellent example of a landlord that works well with its tenants, and that is prepared to offer long-term stable tenancies and to invest in its farms for the long-term good of the estate.

Photo of Peter Chapman Peter Chapman Conservative

I do not have time—I am sorry.

There is also the possibility that new young entrants into farming might be offered subsidised rents for an initial period to allow them a start. National management is therefore vital. That is what the tenants wish to see, and it must happen in the long term.

The bill is clear that assets must be managed in a way that leads to sustainable development. Factors such as social and environmental wellbeing, as well as profitability, must be taken into account in all management decisions. We on the Conservative side of the chamber recommend a measured approach to how island communities and island local authorities are dealt with in the process of devolving management powers. The Islands (Scotland) Bill that has just been passed by Parliament has raised expectations, and island authorities may be well placed to take on the management of assets around their coasts. Pilot schemes should be put in place as soon as possible to allow that to happen.

We are broadly supportive of the bill at stage 1, and I look forward to opportunities to strengthen and fine tune the bill as it makes its way through the process to becoming law.

Photo of Richard Lochhead Richard Lochhead Scottish National Party

I welcome the debate and thank the committee for the stage 1 report, the Scottish Government for all the effort that it has put in and all the campaigners down the years for the achievement of the devolution of the Crown estate.

According to the Scottish Parliament information centre briefing, this journey has been long—it has taken us 953 years to get here, so I understand the impatience of those who wanted to get everything right on the first day of devolution. However, according to the briefing note, the Crown Estate dates back to 1066 and, since 1760, the net income has been transferred to the Exchequer under successive civil list acts. It has, indeed, been a long journey and we should celebrate that we have got here. We are now 19 years into devolution, so it has been a lot longer than any of us expected, especially for those of us who have been involved in this debate for many years.

A few years ago, when we finally persuaded representatives of the Crown Estate to come to the Parliament’s committees, they gave bare outlines of financial figures but there was not a lot of transparency. At that time, it was seen as a breakthrough because for many years—those 953 years—there had been no transparency. The debate has been around the fact that our natural assets should be used for the benefit of the people of Scotland, particularly the communities that are closest to the Crown estate; our tenant farmers should not be working their socks off, nor should other more tangible assets be being used, to generate net revenues to go to the UK Exchequer in London. We are now much further forward and there is huge potential to ensure that our natural assets work for the benefit of our communities and the Scottish national interest.

In my Moray constituency, I have had a long-standing interest because of the Fochabers and Glenlivet estates, the coastline of the Moray Firth, fishing rights in the rivers and other assets, such as the harbour in Portgordon, which is owned by the Crown Estate. Our local communities in Moray have called for change for a long time and they welcome the devolution of the Crown estate. The key will be to show that things are different. It is fantastic that, in the bill, the Scottish Crown Estate has a new remit of

“economic development ... regeneration ... social wellbeing ... environmental wellbeing” and

“sustainable development”.

Although we must address the balance between continuity and change, because we want to show that things are different, we will need an element of continuity. The tenant farmers in the farm estates in my constituency, for example, want to ensure that we get the benefits of devolution but that the Crown Estate as a whole will continue to benefit from the ability to invest in the many tenant farms in Moray and throughout the whole of Scotland. We must strike that very careful balance.

I am pleased that the committee report recognises that point in the division between what should be managed nationally and locally. Many issues should be managed locally; representatives of the Findhorn Village Conservation Company, which has now taken over land through an award from the land fund, reminded me when I met them just yesterday that Findhorn bay has mooring fees that go to the Crown Estate. They, of course, would like those fees to support Findhorn’s local community. Therefore, there is a strong case for further devolution of management of the assets in some areas, but for other assets, such as tenant farms and the farming estates, to be managed nationally. I know that my local tenant farmers loathe the idea that Moray Council—a more local body—should take control, because that would raise all kinds of issues about the viability of those estates in the years ahead.

That takes us to another key tension, which is how to have cross-subsidisation at the same time as the ability to allow a local community to take control of some assets to generate revenues for the overall Crown Estate. Of course, that would be made very difficult in the years ahead if there was fragmentation of those assets. I therefore agree with the Scottish Government that, as we move forward, we should take a cautious approach to some of the tensions and debates. If there was fragmentation of the Crown Estate’s assets, there could not be that cross-subsidy, which would lead to financial and liability issues for the tenant farms in particular but also for other assets.

However, we have to have that balance as people will want to know that things are different and that the Crown Estate will be much more responsive to local needs and will work in partnership on them. I would like the Scottish Crown Estate to be given the ability to have joint ventures and more commercial operations. I am pleased that the stage 1 report addresses that as well.

During the debate over the devolution of the Crown estate, I remember that we could not persuade the UK Government to devolve the Fort Kinnaird asset to Scotland. In that regard, I note reports in the media last week that the Crown Estate—not the Scottish Crown Estate, but the Crown Estate for the rest of the UK—which refused to devolve the Fort Kinnaird asset, despite the fact that it is in Scotland, which was an absolute scandal, has sold that asset for £167.3 million to M&G Real Estate. Now we know why the UK would not devolve that asset to Scotland: it is because it wanted to con us out of that £167.3 million.

The Deputy Presiding Officer:

I am afraid that you must conclude.

Photo of Richard Lochhead Richard Lochhead Scottish National Party

I wish the Scottish Government well in consulting communities as we move forward.

Photo of Colin Smyth Colin Smyth Labour

I a m pleased to speak in this debate, which paves the way for another of the Smith commission recommendations to be delivered. I commend the work of members of both the Environment, Climate Change and Land Reform Committee and the Delegated Powers and Law Reform Committee in scrutinising the bill. There is a great deal to welcome in it and I am happy to support the bill’s general principles.

One of the important themes to come from the Smith commission was the view that devolution cannot just be about powers transferring from one Parliament to another but must also be about devolving powers to our local councils and communities. The bill is an opportunity to halt the centralising drift that we have seen in Scotland in recent years and to enact the view of the Smith commission that the management of the Crown Estate assets in Scotland should be devolved as far as possible to our local communities. The ECCLR Committee’s report notes that

“local communities have unique local knowledge, are motivated to ensure the continued success of an asset and are likely to have imaginative ideas about how to develop that asset further in future.”

The bill makes welcome provision for both local authorities and community organisations to be managers. However, there remains a lack of clarity on what that means in practice. I therefore support the committee’s view that the Scottish Government should

“clearly outline which assets it anticipates will continue to be managed on a national basis and which can be devolved to a local level.”

In its submission to the committee, Orkney Islands Council rightly stated that the bill as currently drafted does not sufficiently deliver on the recommendations of the Smith commission and should go further. The Scottish Government must listen to local authorities and communities and respond to such concerns. It is not enough simply to give groups the legal capability to manage assets; they must be equipped with the support and guidance that they need to be able to do that in practice. In its submission to the committee, the Law Society of Scotland emphasised that

“community organisations will require access to professional advice and planning in order to properly manage assets.”

Likewise, the ECCLR Committee’s report recognised that

“ongoing advice and guidance ... will be vital in ensuring smaller community groups are able to successfully manage assets”.

Similarly, safeguards must be added to ensure that tenant farmers are not put at a disadvantage and that steps are taken to improve the standard and consistency of the support that they receive. I agree with the committee’s recommendation that priority should be given to repairs to accommodation for tenant farmers and their families. However, that must be funded sustainably. In recent weeks, we have seen the Crown Estate selling off tenanted farms to fund investment while other public agencies are looking for land to help young people make a start in farming. I appreciate that there are financial challenges facing Crown Estate Scotland, but selling off tenanted farms to fund other investment is a short-term, unsustainable fix.

As well as looking at who is managing assets, however, we must consider how they are run. I am glad that the bill seeks to expand the objectives of those managing the estate to include other considerations, namely economic development, regeneration, social wellbeing, environmental wellbeing and sustainable development. That broadened remit is a welcome improvement, but the provision needs to be strengthened. Under the bill’s current wording, although managers “must” seek to enhance the value and profitability of assets, they “may” do so in a way that promotes those other objectives, which means that there is no real requirement for those objectives to be given any consideration. In its submission to the committee, Highlands and Islands Enterprise expressed concerns that the current wording might

“make it very difficult, if not impossible, for managers to take account of the wider benefits”.

Similarly, Professor Ross and Professor Reid of the University of Dundee stated that the provision

“gives undue pre-eminence to pursuing economic interests over other concerns.”

The reality is that other considerations will be consistently overlooked in favour of profitability if the provision is not strengthened. I am pleased that the Government recognises that point in its response to the ECCLR Committee’s report.

Related to that is the need to define more clearly what constitutes good management of Crown Estate assets. I support the ECCLR Committee’s recommendation that a definition that reflects

“the wider public objectives, including socio-economic, environmental and sustainable development considerations” should be set out. Therefore, I am disappointed that the Government has indicated that it does not plan to include such a definition in the bill. I hope that, at the very least, it will commit to including a definition in the guidance.

The transition period will create uncertainty for existing Crown Estate Scotland staff. I echo the ECCLR Committee’s recommendation that

“staff should be provided with a realistic indication of how their role might change, or not, as a result of the Bill”, and that staff should

“be meaningfully consulted and engaged in planning processes both now and following the passage of the ... Bill.”

I am pleased that the Government has provided a positive response to those recommendations, and I hope that that means that there will be full and proper discussions with the relevant trade unions.

I am happy to support the general principles of the bill. However, I hope that the points that have been raised by the two committees and by members across the chamber will be taken on board by the Government. I look forward to seeing more detail—and, indeed, amendments—on the plans as the bill moves forward.

Photo of Angus MacDonald Angus MacDonald Scottish National Party

As a member of the ECCLR Committee, I am pleased to speak in today’s stage 1 debate, not least because the bill is a welcome step forward from previous work that Parliament has done on community empowerment.

Before I speak about the report, I place on record my disappointment and frustration, along with that of my colleague Richard Lochhead, that Edinburgh’s Fort Kinnaird retail park, which the Crown Estate has, or had, a 50 per cent stake in was not included in the transfer to Crown Estate Scotland, despite the calls in 2015 from the Scottish Government to the UK Government for the retail park to be included. The UK Government signalled that it had no intention of doing so, and two weeks ago, on 7 June, we found out exactly why when it was announced that M&G Real Estate had acquired the Crown Estate’s 50 per cent stake in Fort Kinnaird in a £167 million deal. I cannot help feeling a tad bitter about that, not least because, as I understand it, that £167 million could have been used to cross-subsidise other CES assets, such as the Glenlivet, Fochabers, Applegirth and Whitehill estates. I am sure that the tenant farmers on those four estates would have welcomed capital investment to improve their farm buildings—and, indeed, their farm houses—and ensure that the farming units are fit for purpose to meet tenants’ needs.

As it stands, Crown Estate Scotland will see none of that £167 million, which is another prime example—along with the convergence uplift money, which has not come to Scotland as it should have done—of Scotland being short changed yet again. Perhaps if that had not been the case, there would have been no need for Crown Estate Scotland to consider selling off Auchenhalrig farm on the Fochabers estate, with an asking price of more than £1.6 million, which will remove land from the tenanted sector. The Scottish Tenant Farmers Association has described that as a “grave error”, considering the scarcity of available land to let. I understand that the STFA has written to the cabinet secretary to that effect.

I go back to my original point: if one of the reasons for putting Auchenhalrig on the market is to raise the investment that is required to bring the buildings and fixed equipment up to tenantable condition, the £167 million from the Fort Kinnaird sale, had it been available, could have helped to avoid the sale of much-needed tenanted land. However, we are where we are. I am sure that members can understand the frustration that I feel that Crown Estate Scotland is being forced to sell off tenanted land when that could have been avoided if the UK Government had agreed to the transfer of the stake in Fort Kinnaird.

Turning to the report, the sale of Auchenhalrig farm to cross-subsidise other assets highlights the need for an audit of existing Crown Estate assets. The committee was surprised to hear that there is no up-to-date assessment of Crown Estate assets in Scotland. It is clear that understanding the current state of assets and the cost involved in addressing any issues is vital to determining the value of the assets and associated liabilities. It is also a necessary starting point for identifying a future programme of work and investment. The committee has therefore recommended that the bill

“makes specific provision for the creation of a ‘record of condition’ of Scottish Crown estate assets that identifies the cost to address issues and places a requirement on the Scottish Crown Estate to ensure that ... assets are properly maintained.”

The idea of such an audit was warmly welcomed by tenants. However, they were clear that the audit should be designed and co-produced with them, and that it should not be a top-down exercise with no input from them. That would help to address a perception, which seems a valid one, that problems, some of which are of very long standing, are often picked up only when they are reported by tenants and that they are budgeted for only then. Tenants suggested that planning proactively now will help to budget for better maintenance in the future. That makes sense to me.

The committee has also recommended that the record of condition

“should be reviewed on a regular basis” and that

“tenants must be involved in agreeing a schedule of works for repairs. Priority should be given to repairs to accommodation for tenant farmers and their families and agreed repairs should be carried out without unreasonable delay.”

The condition of accommodation for tenant farmers was an issue that came to light in the previous parliamentary session when the Rural Affairs, Climate Change and Environment Committee took evidence on the Land Reform (Scotland) Bill. It is clear that it would be good if Crown Estate Scotland could lead by example in that regard and ensure that dilapidated outbuildings and accommodation are made fit for purpose. The committee looks forward to amendments being lodged at stage 2 to address those issues.

I had hoped to touch on devolving the management of some Crown Estate Scotland assets to local authorities and community organisations, particularly given that that was a significant recommendation of the Smith commission; suffice to say that the inclusion of that in the bill is very welcome.

Given the time constraints on us, I will leave it at that.

Photo of Edward Mountain Edward Mountain Conservative

I welcome this stage 1 debate on the Scottish Crown Estate Bill and join my Conservative colleagues in supporting the bill in principle. Before anyone corrects me, I declare an interest: I am a member of a farming partnership.

In the our islands, our future campaign, Orkney, Shetland and the Western Isles made the case for more local control of the Crown estate. That was evident to me as a member of the Rural Economy and Connectivity Committee when I visited the islands. When the committee visited Orkney and the Western Isles, there was a general appetite for double devolution. Expectations on the islands are indeed high, and many islanders believe that the Scottish Crown Estate Bill along with the Islands (Scotland) Bill will allow island communities to assume control over Crown Estate assets. However, I caution the Scottish Government to think very carefully about how it will enable double devolution to the islands without compromising the big picture. In particular, it needs to consider how devolving the sea bed to the three island councils can be done without comprehensive guidance. Unless that guidance exists, the best outcome might not result. After all, the sea bed is an asset that benefits all users, not just the islands.

The Scottish Conservatives support double devolution to the islands in principle, but we are concerned about the dangers of fragmentation. If there is to be more local control, that must be accompanied by an overarching national policy that safeguards the assets that we believe are there. The last thing that I want to see is the complete break-up of the Scottish Crown Estate, with assets either being sold off or put out on long and irrevocable leases that we have no control over.

It is clear to me that the tenant farmers at Glenlivet, Fochabers, Applegirth and Whitehill are satisfied with the current arrangements that were established by Crown Estate Scotland (Interim Management). The setting up of rural working groups has proved popular, and tenants feel that the Crown Estate is more accessible and responsive to local issues than it has ever been before. Tenants want further devolution.

Photo of Claudia Beamish Claudia Beamish Labour

Does Edward Mountain agree that it is very important that the tenants on each of the four estates should have an equal opportunity to get the same repairs and maintenance and that we should not see Glenlivet, which some would call the jewel in the crown of the Crown Estate, as the one that gets more?

Photo of Edward Mountain Edward Mountain Conservative

I know many of the tenant farmers at

Glenlivet and Fochabers, and I know that the standard of their fixed equipment is extremely high—I sometimes look at it with a green eye. I do not know the state of the buildings on the other farms, but it is important that things are kept up to the required standard, as laid down in the leases, and that the Government ensures that that happens.

Bearing it in mind that responding to that intervention has taken up a bit of my time, I will move on to my concern that double devolution could lead to more managers and costs and less cohesion.

I welcome the minister’s reference to devolution max not being a one-size-fits-all solution. The fact that tenant farmers have found a solution that works for them—namely, a consultative approach with Crown Estate Scotland—should be welcomed.

I will mention briefly the sale of Auchenhalrig farm, which John Scott spoke about. That removes, rather than creates, an opportunity for young tenant farmers. There are young farmers across Scotland who are desperate for more tenancies to be made available, and to my mind the Scottish Government needs to reconsider whether it is appropriate to sell off Crown Estate assets.

I cautiously welcome the Scottish Crown Estate Bill at stage 1. The real test of the bill will be how it turns the recommendations of the Smith commission into reality, and I urge the Government to think carefully about how it might deliver devolution of the Crown estate to the three island councils. I also urge the Scottish Government not to sell the family silver, thereby losing assets that could work for the benefit of Scotland and its people.

Photo of Richard Lyle Richard Lyle Scottish National Party

The bill will provide for the devolution of Crown Estate Scotland assets. Those include, but are not limited to, rural estates, mineral rights, fishing rights, urban assets, the sea bed and the foreshore.

The bill could be life changing for many of our communities and should be supported. It will bring opportunities to communities and local authorities, and, with local decision making at its heart, it will ensure that many issues that local communities considered were not being addressed will be looked at.

The bill provides for consideration of other factors, such as regeneration, social wellbeing, environmental wellbeing and sustainable development, when the management of an asset is being considered.

I was a councillor for many years and I see in the bill an opportunity for local authorities, whenever possible, to participate in decision making on the management of assets in order to potentially increase revenues and deliver better outcomes for local people and the local authority. I am sure that the bill will be welcomed by all that it affects.

Many local councils that will be affected by the bill are better placed to discuss and support local community groups that want to be involved in the management of the Crown estate. I am not suggesting for one moment that we cut up Crown Estate assets in order to satisfy certain groups; I am suggesting that, together, local groups, local authorities and existing managers look at the required development in order to enhance assets.

To me, “enhancing assets” is the operative term. The bill should be seen as a way to increase local development of and enhance the asset base. The ECCLR Committee has made various recommendations in that regard. To my knowledge, the recommendations were supported by all committee members. I am sure that the Government will take on board the committee’s primary objective, which is that the process for deciding which assets should be managed nationally and which could be devolved to a local level should be made clear.

I turn to the cross-subsidy of assets. Under the present arrangement, some assets are more profitable than others, so the usual practice of some assets subsidising others applies. The bill will provide for the transfer of assets from one manager to another, but we must be mindful of concerns about overfragmentation. If that happens, the ability of one part of the estate to cross-subsidise another will be lost. I am sure that that matter will receive the attention that it deserves as the bill moves through its various stages. In fact, the committee made various recommendations on the issue, including recommending that

“Crown Estate Scotland establish and maintain a list of assets and ... liabilities.”

During the evidence sessions, I was struck by how tenants are generally happy with the way in which Crown Estate Scotland is being run. Tenants consider that devolution has brought them significant benefits, including a greater feeling of connectivity with the Crown Estate, improved communication and more involvement in decision-making processes.

However, tenant farmers have also suggested that more work could be done on regular contact with factors and that many buildings on some estates require urgent maintenance. They consider that there are specific problems with the maintenance of rural buildings and that issues relating to upkeep are not picked up early enough. That matter should be resolved. Buildings that are in a state of dilapidation, including out-buildings and accommodation for families, should be upgraded as part of an on-going maintenance programme. In my opinion, tenants should be involved more, whether an asset is controlled and run by the Crown Estate, the local council or a local community group. Everyone must play their part locally in the improvement of assets for the benefit of all.

On offshore renewables and related assets, Scottish Renewables made it clear that some assets require to be managed on a national basis. I am sure that that will be taken into consideration, particularly when it comes to large commercial offshore wind farms. In its report, the committee noted its view that the sea bed is a national asset, which should be managed nationally and should not be sold.

The committee discussed the role of port and harbour authorities in the context of the bill. Lerwick Port Authority said that there is a need to ensure that the bill does not encroach on, or permit others to encroach on, the jurisdiction of trust ports over the harbours for which they are statutorily responsible. The committee was mindful of the potential for conflicts of interest to arise. I am sure that that will be taken into consideration.

The bill presents an opportunity to devolve more to local communities and I welcome it.

The Deputy Presiding Officer:

We move to closing speeches. I am disappointed that Mr Stevenson has not graced us with his presence.

Photo of Mr Mark Ruskell Mr Mark Ruskell Green

Andy Wightman was right when he described the Crown estate as “a feudal relic”. It is the most surreal of Monopoly boards involving gold, mussels, the sea bed and even a missing shopping centre that the Westminster Government has sold off.

It is important that we consider the bill’s origins and purpose. Tavish Scott spoke passionately, from the experience of the communities that he represents in Shetland, about the need for local democratic control of public assets, which must be run in the public interest and in an accountable way.

A number of members quoted Councillor Heddle, from COSLA. In his letter, he said:

“like the original Scotland Act, to be a success ... the Bill will require a deliberate decision by legislators to devolve as much as possible and also to leave the door open to future devolution where circumstances change.”

It is important that we are deliberate in ensuring that local authorities and communities get the best chance to move towards new management in the public interest. It is therefore important that there is a presumption in favour of communities and councils managing Crown Estate assets. The issue will need to be considered again at stage 2.

Members have talked about sustainable development. Claudia Beamish asked what the criteria for good management will be. Good management absolutely is about sustainable development and ensuring that the livelihoods of future generations are protected because we are protecting the environment on which their economy is based. We should be looking for win-wins and growing the economy while protecting the environmental asset that sustains that economy and the communities who need livelihoods.

In that context, I am not sure that the guidance on sustainable development that the Scottish Government has committed to bringing forward at stage 2, which Graeme Dey mentioned, will be adequate. We will need to look carefully at the matter. There must be a duty in the bill to consider and deliver sustainable development.

The minister said that there will be a need to maintain and seek to enhance the value of the important assets that we are talking about, and flexibility will clearly be needed in that regard. There is a historical reinvestment rate of 9 per cent, to allow revenues to be reinvested in assets. If we are to invest in the assets, to give future generations a chance to grow their livelihoods, we might need to revisit the issue and set a much higher reinvestment level so that we can ensure that assets are there for the long term and can sustain communities.

Photo of Alex Rowley Alex Rowley Labour

I welcome the debate and, like other members, I acknowledge the work of the Environment, Climate Change and Land Reform Committee clerks and all the people who gave up their time to provide evidence to the committee.

When we took evidence from tenant farmers, it was interesting to hear them express the view that it was good to come to the Parliament and have their voices heard. We should do more of that, as Richard Lochhead said.

Richard Lyle said that there are issues for some tenant farmers. I hope that those can be addressed and that key stakeholders such as tenants can feel empowered in the future.

As Claudia Beamish and other members made clear, when we speak about assets in the Crown estate we mean many irreplaceable national assets, which we must ensure are protected and well managed so that they provide social, economic and environmental benefits for all of Scotland. The resources themselves are extensive, so their management is of vital concern to the future of our natural environment and rural economy as well as to the energy needs of our country moving forward in the 21st century.

Like Graeme Dey and other members of the committee, I welcomed the Smith commission’s recommendation to devolve the Crown estate but, as Colin Smyth said, devolution is not about simply shifting powers from one centralised Parliament to another. I strongly believe that, where it is appropriate and there is good reason to do so, we must be willing to devolve powers from Holyrood to local government and, indeed, to local communities.

When we devolve powers, they must be devolved for a purpose. As Joe FitzPatrick said, in devolving the Crown estate, we have an opportunity to strengthen the management of assets by creating a balance between local and central decision making. In particular, the Smith commission was clear in seeking full devolution to the three Scottish island local authorities, and I urge the Scottish Government to uphold that recommendation. That sentiment is echoed by the National Trust for Scotland, which has stated that emphasis should be put on ensuring that management is devolved

“as far as practically possible”.

As John Scott said, good management is central to the successful future of the Crown estate assets. For me, key to that will be local communities having a say over the land around them. This Parliament must also have an on-going ability to hold ministers to account for the Crown Estate, and I note the strongly held view, expressed by a number of organisations, that it should not be possible for the sea bed and foreshore to be sold off in any way without the agreement of this Parliament. The committee says that it should not be sold off—full stop. I note the point that Tavish Scott made about the islands.

The bill’s attempt to widen the focus of Crown Estate management beyond the duty of securing a commercial return is a welcome development. The wider objectives in section 7 now include economic development, regeneration, social wellbeing, environmental wellbeing and sustainable development. As RSPB Scotland has stated, Scottish Crown estate assets

“should be managed in accordance with the guiding principles of sustainable development to create and maintain a strong, healthy and just society capable of living within environmental limits.”

There must be a duty to strike a balance and achieve parity between financial obligations and the wider sustainable development of the assets. Devolution of the Crown estate can create opportunities for community land ownership, which should be explored by the Scottish Government, and for new partnership working, which should be exploited to the full.

The bill is a step in the right direction, and we now have an opportunity to come together as a Parliament to strengthen it so that it delivers for the people of Scotland, first and foremost. Those assets belong to all of us, and commercial profit should never be at the forefront of managing our land.

Photo of Finlay Carson Finlay Carson Conservative

I start by declaring my interest as a member of NFU Scotland, and I refer members to my entry in the register of interests.

I am pleased to have this opportunity to sum up for the Scottish Conservatives the stage 1 debate on this important piece of legislation. I reiterate my support, and that of my colleagues, for the bill in principle. However, as it goes thorough the parliamentary process, we will want to ensure that it is strengthened at stages 2 and 3 to deliver what is intended and ensure that the objectives of the Smith commission and the Crown Estate are met.

The bill has been introduced as part of the Smith commission’s recommendations, which is very refreshing on a day on which we have heard yet more nonsense about power grabs and the Scottish Government’s voice not being heard. Here we have a perfect example of extra powers and devolution in action.

I anticipate that the bill will offer benefits to local authorities, public bodies and community organisations right across Scotland by encouraging community empowerment while ensuring—as Stewart Stevenson and other members mentioned—that sustainability in its broadest sense is at the heart of the Crown Estate’s future.

Graeme Dey and Edward Mountain have concerns, as I do, about fragmentation and the possible consequential impact on the financial stability of marginal operations if the well-performing parts of the estate are sold off. An audit needs to be carried out to give a clear indication of the Crown Estate’s current and on-going assets and liabilities.

With regard to the agricultural estates, I am very concerned and surprised about the position that I understand that the Greens are to take in amendments on a presumption of devolution to local authorities. That is despite Mark Ruskell hearing the concerns that were expressed by tenants and others about the idea, which could ultimately remove the possibility of fully devolved community empowerment.

Photo of Graeme Dey Graeme Dey Scottish National Party

Does Finlay Carson wonder, as I do, why Mr Wightman failed to bring forward his proposals during the stage 1 consideration of the bill, when the committee could have examined them and stakeholders could have had their views on them heard? Does Mr Carson agree that that would have been more respectful of the parliamentary process and, most important, would have allowed stakeholders to have their voices heard?

Photo of Finlay Carson Finlay Carson Conservative

I thank Mr Dey for that useful intervention, and I agree with everything that he said.

I say with all due respect to Dumfries and Galloway Council that I do not believe that it has the expertise or experience—or the desire—to be responsible for the upkeep of the resources at the Applegirth estate, for example, whereas I am confident that a group of existing tenants has exactly the skills that are required. That is why any policies to enable more control to be handed down at a local level must be accompanied by robust guidance and must be subject to careful consideration. In addition, such handing down of control must be done transparently and in conjunction with stakeholders, not least the tenants. Decentralisation should not and cannot be railroaded through against the wishes of those who ultimately matter the most, who, in this case, are the Crown Estate tenants.

Believe it or not, Mark Ruskell was at the meeting at which the committee heard that the Scottish Tenant Farmers Association is firmly of the view that it would be more appropriate for the four rural estates to be managed directly by the Scottish Government. In addition, Jim Inness of the Glenlivet estate referenced the example of Moray Council. He said:

“We do not really want things to be devolved down to councils, because Moray Council, for example, has a big enough job running its own show.”—[

Official Report

,

Environment, Climate Change and Land Reform Committee

, 30 March 2018; c 30.]

Photo of Mr Mark Ruskell Mr Mark Ruskell Green

Will the member give way on that point?

Photo of Finlay Carson Finlay Carson Conservative

I am sorry; I do not have time.

The NFUS has rightly stated that the long-term stability and wellbeing of the rural estates and rural communities are paramount, and it shares the concerns about the devolving of assets to local authorities. The NFUS believes that local authorities simply do not have and will not be able to obtain the skill sets that are necessary to manage agricultural units. We share that opinion.

The Crown Estate’s management team at national level has a structure that is much more in tenants’ interests than control by local authorities could ever be. That is why the Scottish Conservatives agree with the Environment, Climate Change and Land Reform Committee’s unanimous recommendation—which the Greens supported—that the national management of the Crown Estate’s four rural estates should be continued.

Along with Richard Lyle, I am pleased to hear that the Crown Estate tenants have been generally happy with how Crown Estate Scotland (Interim Management) has been run, and that they feel that there is greater connectivity, improved communications and more involvement with the Crown Estate.

I believe that the expertise and experience that are currently in place represent the best solution for the upkeep of the resources at Applegirth and other rural estates, which is why it is important to retain something akin to the status quo.

Photo of Finlay Carson Finlay Carson Conservative

I am sorry, but I do not have time.

The Scottish Crown Estate Bill represents another important juncture in the history of the Scottish Parliament. The powers in question have been devolved to the Scottish Parliament as a result of cross-party work by the Smith commission. That is devolution in its best form, and we now must make sure that the bill meets the needs of stakeholders and that the most appropriate management structures are identified in each individual case.

I look forward to supporting the general principles of the bill shortly and to progressing it further after the summer break.

Photo of Joe FitzPatrick Joe FitzPatrick Scottish National Party

This has been an excellent debate, and the speeches that have been made across the chamber will, I am sure, give the cabinet secretary and her officials lots to reflect on. The cabinet secretary will take time to reflect on a number of the issues that have been raised. The bill team has been passing me lots of notes so, with their help, I will do my best to cover as many of the points that have been raised during the debate as I can.

Photo of Richard Lochhead Richard Lochhead Scottish National Party

On the point about reflection, a number of members have raised the issue of Auchenhalrig farm on the Fochabers estate in my constituency, and it has also been raised by many of my constituents. Will the minister urge the cabinet secretary to reflect on the concerns that have been expressed and perhaps intervene, if that is appropriate?

If the Crown Estate is looking to raise funds, will the Scottish Government make representations to the UK Government to get back the £167 million from the Fort Kinnaird share that was declared to be a UK asset and not a Scottish asset when it came to the devolution of the Crown Estate assets? That is Scottish money and the UK Government should not be conning us out of it.

Photo of Joe FitzPatrick Joe FitzPatrick Scottish National Party

The member has made two strong points. They are now on the record and the cabinet secretary will look at them both.

During the debate, Graeme Dey and Claudia Beamish made some points about the concept of good management. The bill contains a duty to maintain and enhance the value of Crown Estate assets, and the manager may do so in a way that is likely to promote socioeconomic and environmental matters. That duty is in the bill instead of a specific reference to good management, so although the words “good management” are not in the bill, it is encapsulated in that wording.

Graeme Dey also made a point about the scope of the bill and whether wider environmental factors should be taken into account. There is a duty to maintain and enhance the estate, but managers may meet that duty in a way that contributes to its economic value and to sustainable development, economic development and social wellbeing.

Graeme Dey, Mark Ruskell and Peter Chapman made points about the retention of 9 per cent of revenues by the manager. They questioned whether that is the correct figure and whether we should examine that. Although we have kept the existing figure of 9 per cent under the interim arrangements, the bill provides flexibility to vary that, and we will keep the figure of 9 per cent under review.

Tavish Scott made a specific point about trust ports and what they need to pay to the Crown Estate. There are new powers in the bill to weigh up the profit to the estate with the wider benefits. That is a new power that does not exist just now, so I hope that will help with Tavish Scott’s specific point.

Mr Scott and Mr Wightman made similar points about looking for a simpler approach, but we need to bear it in mind that management, not ownership, has been devolved. The bill will enable the local management of assets; no powers exist to do that at the moment.

Photo of Andy Wightman Andy Wightman Green

Does the minister accept that subparagraph 3(1) of schedule 5 to the Scotland Act 1998 covers

“property belonging to Her Majesty in right of the Crown”?

As the Scottish Law Commission has confirmed, the Scottish Parliament has always had the right to legislate on Crown property.

Photo of Joe FitzPatrick Joe FitzPatrick Scottish National Party

This specific bill relates to the devolution of powers over management.

John Scott, Claudia Beamish, Richard Lyle, Graeme Dey, Alex Rowley and others raised points about the sea bed, arguing that it should never be sold off, or different variations on that point. The bill makes it a requirement for a manager to obtain the consent of Scottish ministers before the sea bed can be sold. That is a new requirement and it goes further than ever before. The point is that there are some circumstances in which it might be the right thing to do, such as those around the sea bed under the footprint of the Queensferry crossing. We all agree that there are exceptions to that rule, so the power to sell the sea bed should remain, although there is a requirement for such cases to come to Scottish ministers, so there will be parliamentary oversight.

Andy Wightman and John Scott made points about Crown Estate staff and Scottish Government officials who are working with Crown Estate Scotland.

Claudia Beamish and Richard Lochhead both made points about transparency. The bill provides for that, and management plans will be published and accounts laid in Parliament. Those are all new things in the bill that will increase transparency.

I see that the clock is ticking. To go back to what I said at the start, the cabinet secretary will be paying close attention to everything that has been said in the debate today. If members have particular points that they want to take up with her or her officials, I am sure that she will be pleased to hear from them prior to stage 2.

Photo of Kenneth Macintosh Kenneth Macintosh Labour

That concludes our stage 1 debate on the Scottish Crown Estate Bill.