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Map from "Minerals in Britain, Gold, Past production, Future potential", 1999 'Reproduced with the permission of the British Geological Survey ©NERC. All rights Reserved'
Map from “Minerals in Britain, Gold, Past production, Future potential”, 1999, ‘Reproduced with the permission of the British Geological Survey ©NERC, All rights Reserved’ http://www.bgs.ac.uk/downloads/directDownload.cfm?id=1325&noexcl=true&t=Gold

Robert Burns spoke of the bribery of Scottish commissioners who voted the 1707 Act of Union:
But English gold has been our bane –
Such a parcel of rogues in a nation!
… We’re bought and sold for English gold-
Such a parcel of rogues in a nation!
http://en.wikipedia.org/wiki/Such_a_Parcel_of_Rogues_in_a_Nation

But, was it English gold? Probably not. It may have well been an “advance” on Scottish gold, or other mining interests. The gold itself most likely would have come from Wales, Scotland, Devon, or Cornwall.

Although a violation of long-time Scottish property rights tradition, decisions regarding gold mining, uranium mining, coal mining, oil and gas, whether on or offshore, are centred in London-Westminster. Any profits seem to be sucked to London before being redistributed, or not, back to Scotland. Strangely enough there are no longer “royalties” on North Sea oil and gas, either, but only taxes (which seem to be lower than in the past). Does this have to do with at least one oil executive, former BP CEO, “Lord” Browne of Madingley, sitting in the House of Lords? We suspect that it makes identification of what revenues should return to Scotland, more difficult. Obviously, no more royalties, in conjunction with lower taxes, means less revenue for Scotland and the UK.

This seems a classic case of internal colonisation-hinterland exploitation, as the London core sucks resources out (and shits out its nuclear waste to the exploited hinterland, as well as leaving unremediated open cast-surface mines behind). While both “Crown” regimes are centred in London, and largely outside of Scottish control, there appear to be two regimes – one called “Crown Estates” and one called “The Crown”. The first seems to fall under a special “Crown Estates Commission” (CEC). The second is part of the UK government, (e.g. Dept. of Energy and Climate Change). Gold and Silver falls under the supervison of the “Crown Estates Commission”, which means that 15% of any gold mine profits in Scotland would go directly to Queen Elizabeth’s expenses, too. Any control which Scotland could exercise, outside of independence, would apparently need to stem from environmental impact complaints. If UK reserved and Scottish devolved matters (e.g. environment) conflict, devolution is supposed to win, under the law. But, who will enforce that? Furthermore, on radiation, the Scottish Environmental Protection Agency (SEPA) appears spineless, or worse. Whether they do better on other topics, we can’t say. There is actually even a third exploitive regime, called the “Coal Authority”, which permits open cast (surface) mining in Scotland; appears to make little profit, and will not help with clean-up costs! [Update: The Coal Authority is tied in with the UK DECC – so you have Ed Davey and “Baroness” Verma, again.]

Were the Highland and Lowland Clearances a Shakedown Related to Mineral Rights?

The Battle of Culloden, 1745, by David Morier, oil on canvas (1776).
The Battle of Culloden, 1745, by David Morier, oil on canvas (1776)

While having still not have assembled a case, we remain convinced that there was something greater than sheep at stake in the Highland and Lowland Clearances. Certainly there was geostrategy, too, but the clearances clearly resembled the treatment of the American Indians during the Georgia Gold Rush (Trail of Tears), the Black Hills and California Gold Rushes. Ironically, the London-Westminster government, which so suppressed Irish and Scottish Catholics out of fear of French or Spanish invasion and killing of protestants (aforesaid “geostrategy”), has of late facilitated both invasion and killing in the form of EDF nuclear (France) and FCC (Spain) nuclear waste.

According to the British Geological Survey: “Gold has been worked intermittently in Britain since pre-Roman times. Production peaked between 1860 and 1909 when over 3500 kg were recovered: 90% came from the Dolgellau gold belt in North Wales while the remainder was produced from the Ogofau mine in mid-Wales and the Helmsdale area of northern Scotland. Prior to this, Devon and the Leadhills district of the Southern Uplands of Scotland were the most important centres of gold production. Since 1938 there has only been intermittent minor production from the Clogau and Gwynfynydd mines in Wales.

During the last 20 years new gold deposit models and improved analytical methods have led to a better understanding of the distribution of gold in Britain, the identification of new exploration targets, and new mine development.

Gold deposits and prospects in Britain are now known to occur in rocks ranging in age from Proterozoic to Permian. Most are of mesothermal lode type although several examples of other styles are also present. Terranes prospective for gold now include the Dalradian (Neoproterozoic) of the Scottish Highlands, the Lower Palaeozoic rocks of southern Scotland, the English Lake District and Wales, Devonian volcanic rocks of Scotland and northern England, and the Variscan and overlying Permo-Triassic rocks of south-west England.“…
In the Scottish Highlands several prospects have been found in rocks of the Dalradian Supergroup. The most important deposit so far identified is at Cononish in the historic Tyndrum lead-mining district, close to the major north-east-trending Tyndrum Fault. …
The Southern Uplands of Scotland have a long history of gold production, principally from alluvial sources…” Excerpted from “
Minerals in Britain, Gold, Past production, Future potential”, 1999 ‘Reproduced with the permission of the British Geological Survey ©NERC. All rights Reserved” http://www.bgs.ac.uk/downloads/directDownload.cfm?id=1325&noexcl=true&t=Gold (Emphasis our own).

It seems that Scotland, if it remains in the UK, would also have virtually no control over any uranium mining:
Although uranium is not currently mined in the United Kingdom, minor occurrences of uranium mineralisation are widespread in south-west England and in northern Scotland. Exploration for uranium was conducted between 1945 and 1951, between 1957 and 1960 and again from 1968 to 1982. These investigations identified sub-economic mineralisation at several localities in the UK… In Scotland the most important uranium mineralisation occurs in three locations:-
1. in low-grade, phosphatic and carbonaceous horizons in the Middle Devonian lacustrine basin of the Orkneys and Caithness; 2. in Devonian arkosic breccias marginal to the Caledonian Helmsdale granite at Ousdale on the east coast of Caithness; 3. in veins marginal to the Caledonian Criffel granodiorite at Dalbeattie.
” (p. 17) “Minerals UK, “Uranium”, March 2010, BGS. ‘Reproduced with the permission of the British Geological Survey ©NERC. All rights Reserved’https://www.bgs.ac.uk/downloads/directDownload.cfm?id=1409&noexcl=true&t=Uranium%20 (Emphasis our own)
The map in this document shows some possible uranium in the heart of England, itself, which might make England itself take note, as the possibility of fracking has.

There has been a gold mine in the works in the National Park at Loch Lomond:
Loch Lomond goldmine approval sparks fears for national park
Park authority gives go-ahead to Britain’s only commercial goldmine despite opposition from environmental groups
“, by Kirsty Scott, The Guardian, Sunday 30 October 2011
http://www.theguardian.com/environment/2011/oct/30/loch-lomond-goldmine-national-park

Loch Lomond
Loch Lomonde

It does not seem to be doing so well, right now, however, as the developer, Scotgold Resources, has recently floated shares at one penny (US). The Scotgold Resources Limited Chair is John Bentley and Bank Consultant is Simon Rothschild.

This is the short version of the Crown Estate Gold, Silver, Oyster and Salmon problem, from “Scottish Affairs Committee – Seventh Report , The Crown Estate in Scotland, The published report was ordered by the House of Commons to be printed 7 March 2012http://www.publications.parliament.uk/pa/cm201012/cmselect/cmscotaf/1117/111702.htm

GOLD AND SILVER

164. The final ancient right considered here, is the separate right of the Crown in Scotland to mine gold and silver, which the Crown holds over most of Scotland.[259] This right is governed by Acts from 1424 and 1592, which are amongst the oldest extant legislation of former Scottish Parliaments.[260] There has been no commercial gold mining in Scotland during modern times and the CEC list the right as one of their non-revenue generating responsibilities.[261] The responsibility for this ancient Scottish Crown property right should be devolved to the Scottish Parliament. If there should be revenue in future, as the CEC expects there to be at Colonish in Perthshire,[262] the money should be administered with the hereditary revenues of the Crown in Scotland already devolved through the Scotland Act 1998.[263]

165. We recommend that the CEC’s responsibilities for the administration and revenues of the ancient Crown property rights in Scotland to naturally occurring oysters and mussels, to coastal and freshwater salmon and to gold and silver, should be devolved to the Scottish Parliament. The Secretary of State for Scotland should enter discussions with the Scottish Government, with a view to securing a consensus over the devolution of these responsibilities, including a commitment that the freshwater salmon fishing still held by the Crown will continue to be held for community and wider public use:“. http://www.publications.parliament.uk/pa/cm201012/cmselect/cmscotaf/1117/111709.htm#n244 Contains Parliamentary information licensed under the Open Parliament Licence v1.0. http://www.parliament.uk/site-information/copyright/open-parliament-licence/
[A longer explanation of the problem by the Scottish government, and lack of progress, along with the oil and gas topic, appears below.]

Coal Mining in Scotland

The United Kingdom produces about ten million tons of coal a year from open-pit mines. The majority comes from Scotland, with the largest operator there being the Scottish Coal subsidiary of Scottish Resources Group; they are rather unforthcoming about the locations of their mines.

Statistics on open-pit coal mining are compiled by the British Geological Survey from information provided by local planning authorities, and available at “Opencast coal statistics”…

Any given site does not last very long – four or five years at extraction rates of up to a quarter-million tons a year.” Emphasis our own; References and more here: http://en.wikipedia.org/wiki/Open-pit_coal_mining_in_the_United_Kingdom#UK_Coal_.28England_and_Scotland.29
(Read more about the history of the Coal Authority and its environmental abuses
below.)

How the Wealthy, Heartless, Crown Estate Treats HM’s “Subjects” and Its Profits

Queen Asked To Stop ‘Heartless’ Crown Estate Evictions By Desperate Residents” The Huffington Post UK, By Charlotte Meredith, 26/04/2014 http://www.huffingtonpost.co.uk/2014/04/26/crown-estate-evictions-qu_n_5217413.html

Crown Estate, ranging from retail parks to windfarms, valued at record £10bn, Queen benefits as commercial property empire raises more than £267m in profits for Treasury and monarch, by Terry Macalister, theguardian.com, Thursday 26 June 2014 00.01 BST
The chief executive, Alison Nimmo is quoted as saying that “it was not the job of the Crown Estate to tackle the problem of homelessness or Britain’s north-south divide“. http://www.theguardian.com/uk-news/2014/jun/26/crown-estate-commercial-property-10bn-queen-267m-profits

The Mineral Rights Problem Overview and Efforts to Regain Control, by the Scottish Government (Includes the history)

Section 10 – Publicly Owned Mineral Rights

1 The land under Scotland’s land surface is also an important resource because of the economic value and potential of the material or ‘minerals’ that can be extracted from it.[1]

2 ‘Mineral rights’ are a distinctive component of Scotland’s system of land ownership. In this context, mineral rights might be summarised as a type of property right covering the authority to quarry, mine or otherwise extract sub-surface materials.

3 While the starting point in Scots law is that the owner of land owns everything above and below land, mineral rights can be owned separately from the surface of the land. Thus, generally, the mineral rights go with the land unless they have been sold or reserved by a previous owner, who may subsequently have sold them. Reserving the mineral rights has, for example, often been the practice of large private estates when selling land“.
[NB: the UK Crown Regimes appears to undermine Scots law, literally and figuratively.]

4 There are very few other examples in Scotland’s system of land ownership of property rights in or over land that can be owned separately from the land itself (as a ‘separate tenement’ in legal terms). After mineral rights, the other conspicuous example of a right capable of being held as a separate tenement is the right of salmon fishing which is discussed in Section 31. Other examples are a number of Crown property rights discussed in the following section.

5 The ‘mineral rights’ that might be reserved or sold is a general right and not specific to any particular mineral. However, the rights to a number of specific minerals are held in the national interest. They are the right to gold and silver, the right to petroleum (oil and gas) and the right to coal. The public ownership of the rights to these natural resources is a very important part of public land ownership in Scotland. Therefore, the nature of the ownership and management of each is described briefly below“. [“National interest” here appears to mean UK, not Scotland, as is made clear below.]

Gold and Silver

6 The right to gold and silver in all land in Scotland was reserved by the Crown early in the country’s history and this continues to be the case. The current legislation, the Royal Mines Act 1424, is the oldest Act still in force from Scottish Parliaments before 1707.[2] The other current legislation related to the right is an Act of 1592 and thus also amongst the oldest Acts.

7 The Crown in Scotland still owns the right to gold and silver throughout Scotland, except for over a few areas where the ownership was conveyed to others in ancient grants (Fig. 8). Scotland’s Crown right to gold and silver is administered by the Crown Estate Commissioners (CEC) as part of the UK wide Crown Estate and discussed further in Section 11.

Oil and Gas[3]

8 During the First World War, when the British Government wanted to encourage companies to drill onshore for oil, the Petroleum (Production) Act 1918 was passed to confer on the Crown the right to control exploration and production in Great Britain and to grant licenses for that purpose.

9 The Board of Trade was made responsible for managing the Crown’s right, with ‘petroleum’ defined in the Act to include “any mineral oil or relative hydrocarbon and natural gas existing in its natural condition in strata, but does not include coal or bituminous shales”.

10 The Petroleum (Production) Act 1934 repealed the 1918 Act, while reaffirming that legal title to petroleum existing in its natural state in Great Britain was vested in the Crown. The Act provided for the Government to continue to license other persons to search for and get oil.

11 When the United Nations Conference on the Law of the Sea’s Continental Shelf Convention 1958, was enacted into UK law by the Continental Shelf Act 1964, the rights over the UK continental shelf to the 200 nautical mile limit were vested in the Crown. The Act also applied the licensing provisions of the 1934 Petroleum Act to the UK continental shelf.

12 The Petroleum Act 1998 consolidated a number of the earlier enactments and contains the legislation that currently determines matters such as the vesting of ownership of oil and gas within Great Britain and its territorial sea in the Crown, the granting of oil licences and rules relating to submarine pipelines and the decommissioning of offshore installations.

13 Today, the UK Government issues licences for oil and gas through the Department of Energy and Climate Change. An annual rental is charged under each licence, but there is no longer a royalty regime on production. This was abolished on 1st January 2003. The UK Government raises the majority of its revenue from oil and gas through taxation“.
[OIL AND GAS LICENCED THROUGH THE DECC; NO MORE ROYALTIES SINCE 2003 (at least for new licences. Funny it’s a problem when Haiti doesn’t charge high enough royalty but not when the UK charges zero for mostly Scottish oil and gas.]

14 Thus, while all Crown property rights in Scotland belong to Scotland as a sovereign territory, the Crown’s ownership of ‘petroleum’ in Scotland is administered by the UK Government“.

Coal

15 The ownership of mineral rights in Scots law included coal until the 1942. That year, the British Government nationalised coal reserves in the UK into the ownership of the Coal Commission. Coal in the Forest of Dean was an exception to protect the ancient rights of the Free Miners of the Forest of Dean. The Coal Commission had been constituted as a statutory corporation under the Coal Act in 1938.[4] In 1946, the coal industry was nationalised and the Coal Commission replaced by the National Coal Board (NCB).

16 The coal industry was subsequently privatised through the Coal Industry Act 1994. In that year, to replace the NCB, the Coal Authority was also established as a non-departmental public body under the Department of Energy and Climate Change (DECC). “The Coal Authority owns, on behalf of the country, the vast majority of the coal in Great Britain, as well as former coal mines”.[5] Amongst other responsibilities, it grants licenses for coal exploration and extraction.

17 The ownership of Scotland’s coal reserves in Scotland was therefore nationalised to the UK Government through the Coal Commission and its successor, the Coal Authority. This position appears to reflect the fact that the nationalisation of the coal industry in the 1940s involved the UK Government in substantial expenditure in acquiring the rights to existing mines and compensating the private owners. In that situation, claiming ownership of any unknown reserves through the legislation was an obvious step to take at the same time. However, the ownership of a separate property right across Scotland by the UK Government, as with coal reserves and the Coal Authority, appears to be unique. All other such presumptive property rights to particular assets in Scotland seem to be owned within Scotland by either the Crown or Scottish Ministers, rather than the UK Government. [Does this mean that there are three exploitation regimes? Yes and no, it seems. The Coal Authority IS tied in with the DECC]

18 The Review Group also noted this ‘disconnect’ in the current issues over restoring opencast coal mining sites in Scotland. The issues have arisen where a private owner mining a site has gone into administration and the insurance bonds placed with the local authority for the restoration of the site are inadequate to meet the costs. There are a number of these opencast sites in Scotland where this is currently an issue, with an estimated potential shortfall of £200 million.[6] In this situation, where it appears there will be a need for public funds to contribute to the restoration, the Group considers there may be role for the Coal Authority.

19 The history of opencast or surface coal mining in Scotland has been relatively short. It was introduced as an emergency measure during the Second World War and grew to a peak of 21 million tonnes in 1991.[7] While production has declined significantly since, surface mining exceeded deep mining production for the first time in 2005. As the deep mining decline has continued, surface mining’s percentage share of production has grown. However, surface mining production is itself down to less than 5 million tonnes.[8] As part of this decline, and contributing to issues over site restoration, the number of opencast coal mines producing coal in Scotland halved between 2000 and 2008.[9]

20 The Coal Authority is, as described above, responsible for granting licences and leases for coal mining. In doing this, the Coal Authority seeks various securities from the operators to cover liabilities. However, while these include factors such as ground subsidence as a result of the mining, they do not include provisions for site restoration after surface mining. This is because, while “the Coal Authority owns the coal and abandoned underground coal working, once a surface mine is worked, the Coal Authority does not own any void that may be created or left above any seams”.[10] Therefore, with surface mining, it is the local authority that is responsible for putting in place securities for the site restoration through insurance bonds.

21 This position means that, while the Coal Authority requires payment for every tonne of coal mined, none of that income from surface mining contributes towards site restoration if there is a shortfall in the securities. All the money that the Coal Authority collects from these coal payments is remitted to the Treasury, except a small percentage retained by Authority to carry out its licensing function.[11] It has been calculated that since privatisation in 1994, some £15.1 million has been collected for coal worked in Scotland, mostly from surface mined coal.[12] In early 2014, the Scottish Government wrote to the UK Government to ask that “at least some” of the levies raised from coal produced in Scotland, should contribute to the shortfall over opencast site restoration costs.[13]

22 The £15 million raised by the Coal Authority is a relatively small amount in relation to the overall costs of restoration. The real issue within the current debate is the shortcomings of the bonds. Having said this, the Review Group finds the degree of ‘disconnect’ between coal revenue and expenditure to be unacceptable and within the context of devolution, suggests it would be more appropriate for Scotland’s coal reserves to be owned by Scottish Ministers and the licensing responsibility to be devolved to the Scottish Government.

23 While coal mining is a contracting industry within Scotland, it is still important in some areas. The Group considers making the proposed change would enable a substantially closer integration of the licensing and planning consents governing coal mining in Scotland, as well as a wider integration of coal mining with other aspects of public policy in Scotland“. http://www.scotland.gov.uk/Publications/2014/05/2852/298137 (Emphasis our own; comments added in brackets our own.)

Section 11 – Crown Property Rights
11.1 Background to the Rights

1 The abolition of feudal tenure in Scotland by the Scottish Parliament ended the Crown’s position as the Paramount Superior or ultimate owner of all land under feudal tenure. However, a diverse range of other Crown property rights continue to be part of Scotland’s system of land ownership. As described earlier, in Section 1 of this report, the distinct legal and constitutional identity of the Crown in Scotland means that Crown property rights in Scots law are different from those in the rest of the UK and belong to Scotland.

2 Scotland’s Crown property rights are of ancient origin and continued to be managed in Scotland following the Union of Crowns in 1603 and Union of Parliaments in 1707. However, in the 1830s, the administration and revenues of most of these Crown property rights were transferred from Scotland’s Lord Advocate’s responsibilities to a Whitehall government department, the Commissioners of Woods, Forests, Land Revenues and Public Works.

3 That department had evolved into the Commissioners of Crown Lands by 1924, following the creation of the Forestry Commissioners (FC) in 1919. At this time over 100,000 acres of Crown land in England was transferred to the FC, with one small area in Scotland. There were two Commissioners of Crown Lands, the Secretary of State for Scotland for Crown lands in Scotland and the Minister of Agriculture for Crown lands in the rest of the UK.

4 In the 1950s, the UK Government decided to replace this arrangement with a new statutory corporation with an appointed board of Commissioners modelled on the FC. The Crown Estate Act 1956 created the Crown Estate Commissioners (CEC), with the Crown property rights and interests managed by the CEC to be known as the Crown Estate. This Act was then replaced by the Crown Estate Act 1961, which continues to be the legislation governing the operations of the CEC.

5 While the Crown property rights and interests managed on behalf of the Crown by the Crown Estate Commissioners (CEC) are called the Crown Estate, there can often be confusion between the organisation and the property it manages as the CEC has branded itself as The Crown Estate since the 1990s.

6 The general duty of the CEC under the Crown Estate Act 1961 section 1(3) is, ‘while maintaining the Crown Estate as an estate in land’, ‘to maintain and enhance its value and the return obtained from it, but with due regard to the requirements of good management’.

7 The CEC is a statutory corporation that reports to the Treasury and transfers its net revenue surplus (profit) to the UK Government’s Consolidated Fund for use in public expenditure. The CEC is formally accountable to the Chancellor of the Exchequer and the Secretary of State for Scotland, who each have powers of direction over it. The Secretary of State for Scotland has responsibility for matters relating solely to Scotland, reflecting the distinct status of the Crown property, rights and interests managed in Scotland as part of the Crown Estate.

8 At devolution, the Scotland Act 1998 reserved the CEC’s management of the Crown Estate in Scotland to Westminster and that remains the case. Fig. 9 provides a list of the Scottish Crown property rights which currently make up the Crown Estate in Scotland. The list also includes an indication of the ‘modern acquisitions’ which the CEC has purchased as investments.

9 The Crown Estate does not include all of Scotland’s Crown property rights and, at devolution, the Scottish Government became responsible for the management of these other rights. The example of the Crown right to ownerless property has been described earlier in the Report (Section 7). The other Crown property rights for which the Scottish Government is responsible are described later in this section. They are not of commercial value and some are archaic, such the Crown’s right in Scotland to ‘larger whales’“. (cont. below whale photo)

Does the Baby Wale Belong to Scotland and the Mother to the Crown Estate?
Mother and Baby N. Atlantic Whales NOAA
Photo by NOAA

11.2 The Crown Estate in Scotland

Response to Devolution

10 The reservation of the CEC’s management of the Crown Estate in Scotland to Westminster in the Scotland Act 1998, means that CEC is not accountable in any formal way to either Scottish Ministers or the Scottish Parliament for its operations in Scotland.

11 This lack of accountability in Scotland over the management of the Scottish Crown property rights which make up the Crown Estate in Scotland, was compounded by the CEC’s response to devolution in 1999. Two years later, the CEC radically downgraded its management arrangements in Scotland and centralised the control over its operations in Scotland to London.[1]

12 Historically, the CEC’s predecessors since the 19th century had managed the administration of the Scottish Crown property rights and revenues for which they were responsible, through legal agents in Scotland. When the CEC was created in the 1950s, it continued and developed this Scottish based approach. At the time of devolution, the CEC’s operations in Scotland’s were one of the CEC’s five distinct business divisions, with separate accounts and its own headquarters in Edinburgh and a senior member of staff as the Manager of the Crown Estate in Scotland.[2]

13 Then, in 2001/02, two years after devolution the CEC ended Scotland’s position as a distinct business division and integrated its operations in Scotland into the CEC’s other business divisions in the rest of the UK (Urban, Rural, Marine, Windsor). The post of Scottish Manager was discontinued, separate accounts were no longer kept and the CEC no longer gave a specific report on Scotland in its Annual Reports. The CEC also sold its Scottish HQ building and opened a new Edinburgh Office in rented accommodation nearby.[3]

14 This was an major change for a public body to make at that time against the flow of devolution. The CEC explains the change in terms of administrative efficiency, but the change could be seen as a tactical decision to minimise engagement with the new devolved Scottish Parliament, because of the longstanding issues in Scotland over the CEC’s operations here. The Crown Estate in Scotland was, for example, one of the major land reform issues identified at the time of devolution by the Scottish Office’s Land Reform Policy Group under Lord Sewel.[4]

Lack of Progress

15 The longstanding issues over the CEC’s operations in Scotland have been considered in recent years by a sequence of parliamentary committees and other public interest inquiries. The most comprehensive and detailed of these was the authoritative Crown Estate Review Working Group (CERWG) report on ‘The Crown Estate in Scotland’ (2007).[5] This was produced by the six Highlands and Islands local authorities, the Convention of Scottish Local Authorities and Highland and Islands Enterprise after a two year inquiry. The CERWG report recommended the devolution of the CEC’s responsibilities in Scotland.

16 In 2009, the CEC operations in Scotland were highlighted as a prominent issue in the report by the Calman Commission on Scottish devolution. The following year, an inquiry by Westminster’s Treasury Select Committee into the Crown Estate recommended much more accountable management arrangements in Scotland. In 2011, the consensus recommendations in the report of Holyrood’s Scotland Bill Committee included the devolution of the CEC responsibilities in Scotland. Then, in 2012, Westminster’s Scottish Affairs Committee published a major report on ‘The Crown Estate in Scotland’ which also recommended the devolution of the CEC’s responsibilities in Scotland to the Scottish Government. The Scottish Affairs Committee has also recently repeated its call for the devolution of the CEC’s responsibilities in a follow up 2014 report on the Crown Estate in Scotland.

17 The Review Group considers that the evidence to these inquiries and the cross party agreement in Committees of both Parliaments that the CEC’s responsibilities should be devolved reflects a very wide consensus in Scotland that this should happen because of the public benefits it would bring. However, despite all these inquiries and reports over nearly 10 years, there has been scarcely any improvement in the situation.

18 One measure relating to the public accountability of the CEC in Scotland was included in the Scotland Act 2012. However, the change only converted the CEC’s tradition of having a Commissioner on the CEC’s Board with knowledge of Scotland, the ‘Scottish Commissioner’, into a statutory appointment upon which Scottish Ministers would be consulted. As Gareth Baird, the Scottish Commissioner then and still said, this will have no significance for his role.[6]

19 There has also been slow progress with the other measure to improve the public accountability of the CEC. The UK Government’s one positive initiative in response to the Scottish Affairs Committee’s (SAC) report of March 2012 was to propose annual Inter-Ministerial Meetings about the CEC’s operations in Scotland, with these meetings involving the Secretary of State for Scotland, a Treasury Minister, a Scottish Minister and representatives from the CEC and CoSLA.[7] An ‘officials group’ to support the Inter Ministerial Group met in February 2013 to agree terms of reference for the Inter- Ministerial Group and the first Inter-Ministerial Meeting was to have taken place in March 2014, but was cancelled. The UK Government has still to provide an alternative date for the meeting, two years after the original recommendation.http://www.scotland.gov.uk/Publications/2014/05/2852/298139 [Emphasis added]

The CEC

20 The Review Group considers that the key issue is not about improving the CEC’s public accountability, but ending its responsibilities in Scotland. As the Committee reports calling for those to be devolved have shown, the CEC is an inappropriate type of organisation to be responsible for the management of Scotland’s seabed.

21 The CEC is a statutory corporation with a statutory duty to manage the Crown Estate “to maintain and enhance the value of the estate and the return obtained from it”.[8] This a financial remit to generate revenue for the Treasury and as the CEC’s Annual Reports reflect, the CEC’s core business is operating as a major commercial property investor measuring its performance against industry sector benchmarks. The nature of the way it operates in this role resulted in the Treasury Committee considering it necessary in its report on the Crown Estate, to emphasise for clarity, that the “CEC are a public body charged with managing public resources for public benefits”.[9]

22 The CEC’s operations in Scotland are a very small part of the CEC’s overall business. Over 95% of both the capital value of the Crown Estate and the CEC’s annual revenue are in England. Scotland accounts for only 4% of the capital value and 3% of the CEC’s revenue.[10] The scale of this disparity reflects the very different natures and histories of the Crown and Crown property in the two countries over the centuries.[11] The CEC manages a very substantial portfolio of urban property in England, with particularly major holdings in London. The property value of the Crown Estate is now over £8 billion, with urban property accounting for between 75-80% of the capital value during the ten years to 2011 and 70-75% of the CEC’s annual revenue.[12][13]

23 The composition of the Crown Estate in Scotland is very different, however, with hardly any urban property and only four rural estates. In Scotland, the CEC’s main business is developing marine activities involving the seabed and foreshore. Since devolution, while there has been very little change in the capital value and revenue levels of the Crown Estate in Scotland, coastal and offshore marine activities have increased from 50% to nearly 70% of the CEC’s revenue from Scotland.[14] These marine activities include marine renewables, which although in a relatively early stage of development, are of enormous potential benefit to Scotland’s coastal communities and the general betterment of Scotland.[15]

24 A fundamental problem with the CEC’s responsibility for managing Scotland’s seabed and much of the foreshore, is that the CEC’s legislation gives it only a financial objective. Therefore, subject to meeting the standards required of any owner of land, the CEC’s approach is based on maximising capital values and annual revenues. The CEC’s interpretation of its financial remit in these narrow terms has been raised with the CEC in the Committee inquiries mentioned above. However, the CEC firmly maintains that its legislation requires it to pursue this approach. The CEC argues that it has no flexibility to alter its charges, for example, for the use of an area of seabed to accommodate other public objectives rather than only generating money for public funds. The CEC is not prepared, for example, to make any distinction in its charges between a private developer carrying out a commercial development and a public body carrying out a public project, such as the use of areas of seabed required for the columns of the new Forth road bridge.

25 The CEC’s commercial approach has long been recognised in Scotland as completely inappropriate in Scotland’s marine environment. The great majority of that environment, whether measured by length of coastline, number of coastal communities, harbours, inhabited islands or other features, is in the Highlands and Islands. The levels of the CEC’s charges have been heavily criticised over many years in this region as a constant drain against the socio-economic objectives of public policy, with the CEC’s charges resulting in economic leakage out of many marginal local economies.[16]

26 The CEC’s approach means that, for example, while public funds in Scotland are used to subsidise lifeline ferry services to island communities, the CEC is maximising the revenue which it can extract from the use of piers and slipways by these services. The Review Group did note that the CEC confirmed that it had varied its standard terms to allow the laying of inter-island broadband cables to go-ahead on the west coast. However, the CEC clarified for the Group that the variation did not mean that they had foregone any potential income, but rather re-structured the contract so that some of the charge would be deferred until after the cables were laid.[17]

27 The CEC also give a high profile to money they invest in coastal and marine developments in Scotland, including their new Local Management Agreements. However, the CEC has clarified that they are all commercial investments based on the rate of return that the CEC will receive from them.[18] Also, as the CEC cannot make loans, cannot invest in companies and has to maintain the Crown Estate as an estate in land under its legislation, these and other investments are all in property with the rents charged by the CEC providing a commercial rate of return. While the CEC has highlighted its capital investment in Scotland as one of the benefits of its role, the Scottish Affairs Committee report in 2012 showed that the CEC had taken around £10 million more capital out of Scotland through sales since devolution, than the CEC had invested in Scotland.[19]

28 This narrow focus of the CEC on charging the “best consideration in money or money’s worth which in their opinion can be reasonably obtained,” has long been criticised as an inappropriate remit for delivering the optimum public interest outcomes in the use of Scotland’s seabed and foreshore.[20] In the face of all this criticism within successive reports, the Review Group is concerned at the lack of progress being made in ending the CEC’s responsibilities in Scotland. This is all the more surprising given the small amounts of money involved and the fact that the continued operation of the CEC in Scotland does not even seem good business for the Treasury.

29 The Scottish Affairs Committee established in its inquiry that, for 2010-11 when the CEC’s gross surplus revenue in Scotland was £9.9m, only about £5.7m of that was net surplus or ‘profit’ after costs.[21] The gross surpluses were at similar levels to this in 2011-12 and 2012-13, indicating a similar general level of profits.[22] This modest annual net surplus to the Treasury from the CEC’s operations Scotland, was then substantially reduced by the Coastal Communities Fund (CCF) set up by the UK Government. Under this scheme, the Treasury gives an amount equivalent to 50% of the CEC’s marine revenues calculated on a regional basis, to the Big Lottery to distribute as grants in those regions. Scotland is divided into two regions and, because nearly 70% of the CEC’s revenue in Scotland is from marine activities, Scotland received back an amount equivalent to a high proportion of the CEC’s total net income from Scotland. Thus, in 2010-11, when the net surplus was about £5.7m, the amount Scotland received back through the CCF was £3.9m (i.e. equivalent to nearly 70% of the £5.7m). In the two subsequent years, the CCF amount has been £4.1m and £4.8m.

30 These figures illustrate that the Treasury is deriving virtually no net income from the CEC’s operations in Scotland. The question of whether the CEC’s continued operation in Scotland might actually result in an annual net deficit to the treasury has also arisen within Committee hearings.[23] This position was arrived at on the basis that, because Scotland’s percentage contribution to the net income that the CEC transfers to the Treasury each year is less than Scotland’s population share, Scotland receives more back under the Barnett Formula than it contributes.

31 The Review Group considers that ending the Crown Estate Commissioners’ involvement in Scotland would deliver wide ranging and important benefits in Scotland. The Group recommends that the Crown Estate Commissioners’ statutory responsibilities in Scotland, under the Crown Estate Act 1961, should be devolved to the Scottish Parliament.

11.3 Future of Crown Property Rights

32 There seems a broad agreement between the Scottish Affairs Committee report recommendations and the positions of the Scottish Government and Scotland’s local authorities, that ending the CEC’s responsibilities in Scotland should be a two stage process. After the devolution of the responsibilities to the Scottish Parliament, there should then be further changes to decentralise the management of some Crown property rights where appropriate and to abolish other archaic rights.

33 Ending the CEC’s involvement with Scotland’s seabed opens up opportunities for huge improvements. No other maritime country in Europe has an equivalent to the CEC operating its marine environment. The CEC would no longer be running its own system of approvals determining who can use Scotland’s seabed, based solely on its narrow financial objective and unaccountable to public policy in Scotland. Scotland would, like elsewhere, be able to have an integrated multi-objective system of permissions operated through the Scottish Government directorate, Marine Scotland, to cover both the activity involved (license) and the use of the seabed (lease). As the Scottish Affairs Committee report sets out, while the overall plans for Scotland’s marine environment would flow from the centre out, the distribution of any financial benefits from the uses of the seabed should flow the other way, with the local areas most closely associated with developments benefiting first.[24]

34 The Review Group considers that the agreement between the Scottish Government and the Western Isles, Orkney Islands and Shetland Islands Councils announced by the First Minister in the ‘Lerwick Declaration’, appears to demonstrate a commitment to the decentralisation of CEC responsibilities if they are devolved.[25] The Group considers however, that whatever arrangements might be reached to decentralise the control and use of the seabed, the overall integrity of Scotland’s ownership of its own territorial seabed should be maintained and safeguarded in the long term national interest. The Group considers that, as at present, the only areas of seabed which are not to be retained in national ownership, should be of limited extent and adjoining the shore.

35 There also seems wide agreement that, following the end of the CEC’s responsibilities, the ownership of the lengths of foreshore still held by the Crown should be conveyed to the local authorities for the areas in which the lengths occur. The Review Group considers that the scale and diversity of the benefits that could flow quickly and straightforwardly from the ending the CEC’s involvement with Scotland’s seabed and foreshore, mean that ending that involvement is of profound importance as a land reform measure.

36 The most appropriate reform for each of the ancient Crown property rights in Scotland managed by the CEC, have been described in other reports.[26] The ancient Scottish legislation vesting the right to gold and silver mining in Scotland in the Crown as described in Section 10, for example, should be abolished and replaced with a new statute vesting the right in Scottish Ministers on behalf of the people of Scotland.

37 Some of the rights managed by the CEC should simply be abolished, for example, as the Scottish Law Committee has recommended for the Crown’s archaic rights to naturally occurring mussels and oysters.[27] These species should, like all the other species of naturally occurring shellfish in Scotland, be managed under Scotland’s wildlife legislation. The Review Group was surprised to learn, however, that the CEC are proposing to convey these two Crown property rights which have no commercial value to the CEC, to Scottish Ministers as property transactions.[28] This transaction would not involve conveying a property, but an entire Crown property right subject to any grants made to others under that right. The Group questions whether this approach is competent in Scots property law, which defines Crown property rights as part of Scotland’s regalia.[29] If the transaction was accepted as legal, CEC would be able to start selling Scotland’s other Crown property rights if it chose to do so.

38 The Review Group discusses the reform of the Crown property right to salmon fishing in Scotland, which is currently managed by the CEC, in Section 31. The only other Crown property right to an animal in Scotland is managed by the Scottish Government and illustrates the archaic nature of some Crown property rights. This is the Crown right to larger whales. This ancient right is obscure and, for example, a rule was made up by government in the 1920s that a larger whale was one which measured 25 feet or more. The right also serves no function. While the right to a large whale might have been good news in medieval times, it is no longer the case and the Scottish Government does not accept any liability for a larger whale that washes up. The removal of a 50 ton whale from a beach to land fill for health and safety reasons can cost many thousands of pounds.[30] The clean-up responsibility therefore falls to the local Council. The Council can however apply to Marine Scotland in the Scottish Government for a grant towards the costs, if the whale measures 25 feet or more. Whale strandings on Scotland’s coast continue to increase and this arbitrary length for grant support makes no sense, because the length has no necessary bearing on the cost of dealing with strandings. A mass stranding of ‘smaller whales’ less than 25 feet, can cost more than a single whale over that length.

39 While the right to larger whales should simply be abolished, the Review Group recommends in Section 29 that the various public rights which the Crown holds inalienably in trust for the public over the foreshore and sea should be replaced by modern statutory provisions. These types of reforms to abolish or reform Crown property rights which do not form part of the Crown Estate, could be taken forward now by legislation in the Scottish Parliament as the rights are not covered by the reservation of the CEC’s management in the Scotland Act 1998. These property rights are part of Scots law and responsibility for that is devolved to the Scottish Parliament, as illustrated by the abolition of Crown property rights involved in ending feudal tenure in Scotland. The requirement in that reform, as with any now, is to obtain the Crown consent required by the Parliament’s Standing Order 9.11. That process is apparently carried out by the Bill Team contacting Buckingham Palace.

40 The Review Group considers that, following the abolition of feudal tenure, there should be further significant reductions in types of Crown property rights in Scotland. The Group recommends that the Scottish Government reviews the current Crown property rights in Scots law and brings forward proposals for the abolition of these rights or their replacement statutory provisions, as appropriate in the public interest.” http://www.scotland.gov.uk/Publications/2014/05/2852/29813 (Emphasis our own; NOAA whale photo and title added by us and not in original.)