Lesley Riddoch: The problem with land in tax havens

Buccleuch Estates, controlled by the Duke of Buccleuch, holds land in companies based in the Caymen Islands. Picture: Ian Rutherford

Buccleuch Estates, controlled by the Duke of Buccleuch, holds land in companies based in the Caymen Islands. Picture: Ian Rutherford

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OFFSHORE ownership puts more barriers between estate owners and the local community, writes Lesley Riddoch

Offshore tax havens are suddenly toxic places to do business, as David Cameron has found to his cost. But land reform campaigners have had these ports of remote control in their sights for years.

Researcher and Green candidate Andy Wightman estimates 64,000 acres of Scottish land are held by companies registered in Panama and the value of Scottish land owned in all tax havens could be as high as £100 million. But does it matter? Of course tax lost must be made up by everyone else and tax haven ownership makes it harder to apply legislation like the recent Land Reform Act which aims to re-impose business rates on sporting estates.

But there is a more everyday story of frustration, depopulation and decline for many of the locals living on Scotland’s tax haven estates.

Take Wanlockhead – a tiny community which contests the title of Scotland’s highest village with neighbouring Leadhills. The two ex-mining villages straddle the boundaries of Dumfries and Galloway and South Lanarkshire, sitting on land owned by the Duke of Buccleuch and the Marquess of Hopetoun respectively.

Indeed the fact they sit one mile apart yet fall into different councils says much about the way “local” government boundaries map feudal sporting estates, not human geography.

Last month it emerged that companies owned by Buccleuch Estates use tax havens in the Cayman Islands – that at least explains the secrecy surrounding the precise ownership of land on the Duke’s vast 240,000 acre landholdings. But not recent actions that threaten the villagers’ very survival.

An American firm had taken a 25-year lease on the Leadhills and Wanlockhead estates and planned to spend millions improving access and shooting facilities. But they pulled out two years ago – less than half way through their lease, complaining of obstruction by landowners and interference with their development plans. Twelve gamekeepers lost their jobs and the knock on effect was felt by every other venture from the pub to the local garage, which soon closed.

Finally, in June 2015, the reason for the development standstill became clear, as villagers read in the press about the Duke’s plans for a £1 billion 142 turbine windfarm to be built across a large swathe of moorland east of Sanquhar and across the hills around the village. Ninety per cent of inhabitants opposed the plan and work visualising an alternative future began.

Reforestation, tourism and community-owned energy would be the mainstays of the new Wanlockhead economy. Presently the hills are bare after centuries of intensive sheep grazing – locals aim to plant trees, creating shelter, softening the landscape, providing cheap fuel for wood burning stoves and sustaining a small sawmill. One of many resourceful incomers, Anjo Abelaira from Galicia in Spain led a group that created Lowther Hills – Scotland’s most southerly ski club. It has very basic facilities, 400 members, 22 ski-able days of snow this year and must develop because landowners have imposed an upper limit of 100 on the hill at any one time. The Southern Uplands Way goes through the village, but since no-one can buy land, it’s hard to provide enough accommodation to make the most of passing trade. Locals aim to expand the existing museum of lead mining, the miners’ library (the second oldest subscription library in Europe) and the small geology centre and find a way to honour local man William Symington who designed the engine used to power the world’s first steamboat.

Couldn’t all these things be explored within Buccleuch estate ownership? Currently the most mundane things can take years to sort out. Take the bus shelter which sits on ground so uneven that folk with walking problems cannot use it. The village council raised the matter with the Duke and sparked a lengthy debate about whether he actually owns the land. The problem is unresolved. The same happened with attempts to fix a small bridge over a fast running burn, where children play on the way home from school. The estate suggested the land was part of a core path network and it took 18 months to fix.

The bowling green has been rented from the Duke for years but new paperwork suggests it is actually owned by the village. Nevertheless the Duke retains the club house key. James ­McKelvey runs the Wanlockhead Inn (the highest pub in Scotland) which also houses the 1531 micro-brewery run by his 23 year old son Dean – the name reflects the village’s height above sea level. “Beer with Altitude” has been well received and Dean needs new premises to expand. But there are no opportunities to get affordable land in Wanlockhead.

All these small problems explain why Wanlockhead is determined to press ahead with a community buyout – even though the prospect of earning millions means the Duke of Buccleuch will hang onto his windfarm, hoping locals will be deterred by bureaucratic obstacles and the difficulty of establishing which company or trust actually owns the land. Meanwhile his own plans for the massive wind farm inch closer to reality. A Freedom of Information enquiry last year revealed the Duke lobbied Energy Minister, Fergus Ewing behind closed doors.

The Scottish Government is faced with a fairly straight choice. Does it give the go-ahead to a large, badly sited, community-riling, tax-haven-linked windfarm which nonetheless ticks boxes on climate change mitigation and energy self-sufficiency? Or does it choose local empowerment and the slower, smaller scale progress on renewables from a community buyout?

The new Scottish Government must soon decide which path to take – watched by landowners and their lawyers and a growing network of Scots determined to make their communities sustainable.

One thing’s certain. In the wake of the Land Reform Act, the final decision will be very significant.

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