Who are the lairds lording over us?

<em>New Statesman Scotland</em> - The anonymous owners of vast tracts of Scotland could be anybody f

If ever a product looked the part, it is the mineral water they called "Highland Spring". In its pale bottle and discreet blue tartan labelling it looks the essence of Scotland, one of those vaguely upmarket products that the business-booster of Scotland, Beverage Brands, wants to see in the world's shopping malls. Highland Spring has been a genuine success. From its factory and bottling plant at Blackford in Strathallan the company pumps out millions of gallons of the stuff (sparkling and still) to slake the western world's irrational thirst for expensive drinking water in bottles.

But few things are quite what they seem. Highland Spring is owned by the estate company that bought the 15,000 acres of the Blackford and Quoiggs Estate back in 1977. And that estate company was the subsidiary of a corporation that called itself Park Tower Holdings Establishment, which has an address in Vaduz, Liechtenstein. The whole operation is probably the property of a mega-rich Saudi called Mohamed al Tajir, but that has never been confirmed. For all we know, al Tajir (if he is the owner) may have sold the whole estate plus the bottled water operation to Saddam Hussein. We have no way of finding out. The laws of Liechtenstein see to that.

There's the rub, and it's an important one. As the law stands, not only can anyone from anywhere buy as much of Scotland as they can afford, but they can do it anonymously. Nowhere is it written that the purchasers of even the biggest estates have to say who they are. The "beneficial ownership" (as lawyers call it) can remain completely hidden. And it often does - usually in some shadowy corporation registered in one of the world's tax bolt-holes such as Liechtenstein, the Dutch Antilles, the Bahamas or the British Virgin Islands.

As a result there are sporting estates and farms all over Highland and Lowland Scotland whose ownership vanishes into offshore companies in tax-shelter countries. The secret lairds are a syndrome of modern Scotland. And they can be a serious practical problem. Crofters, for example, need their landowner's permission to apply for grants and other assistance. If their landowner happens to be some shell company registered in, say, the Cayman Islands or the Bahamas, then even getting the appropriate forms signed can be a nightmare.

There is nothing ancient about this. Scotland's vulnerability to the secret lairds has nothing to do with Celtic land use or even Norman feudalism. It is down to a little-known act of the Westminster parliament passed when Britain was at the height of its pomp. The offending measure is the Naturalisation Act 1870, section two of which states that "real and personal property of every description may be taken, acquired, held and disposed of by an alien in the same manner in all respects as by a natural-born British subject". But there was no requirement in the act for the aforesaid alien to reveal his/her identity.

Those were days when the very idea of Johnny Foreigner buying huge chunks of Britain was risible. Britain was probably the richest nation on earth. The price of property and land was, in international terms, stratospheric. British commercial and social confidence was at its zenith. A few American multi-millionaires (Andrew Carnegie, for example) might have bought their way into the Scottish end of the imperial paradise, but run-of-the-mill foreign businessmen were just not in the picture.

Since then, many foreigners have become seriously rich. Rich enough to exploit the Naturalisation Act. As a result, over the past 40 or so years huge tracts of Scotland have fallen into the hands of the folk the 1870 act describes as "aliens": Dutch, Germans, Danes, Americans, Hong Kong Chinese, Saudis and gents from the United Arab Emirates. One of them, incidentally, is Mohamed Fayed, whose Liechtenstein-based company, Bocardo SA, has acquired huge acreages around Ross and Cromarty and eastern Sutherland over the years. There is a slight historic irony here: the 1870 act that allowed Fayed to buy big lumps of Britain also makes it clear that he has no right to a British vote or British citizenship.

In the past few decades the ownership of large sporting/farming/crofting estates at Balnagown and Drumchork in Ross and Cromarty, Glenturret, Ardoch and Blackford in Perthshire, Inverinate and Killilan in Wester Ross and Glenfeshie in Strathspey have disappeared into "offshore" companies. We know, however, that the lands of Inverinate and Killilan are the properties of the al Mahtoum family of Dubai (who are better known in Britain as big-time racehorse owners).

All of which begs the question, does it matter? After all, many of these secret lairds are no worse - and some of them are better - than a lot of the Anglo-Scottish toffs who have been lording it over the Bens and Glens ever since Victoria and Albert made the heights of Scotland the height of fashion. But that is to miss the point. At least when things went sour on the estates of the McStaircase of that Ilk or the Countess of Wapping Basin we knew where to point the finger. But if the only persona we have is a lawyer in Vaduz or Gibraltar, the laird is unaccountable.

He or she could also be anybody. The chances are that the secret laird is a perfectly respectable European or Middle Eastern businessman or banker. But then again, that Cayman Islands company might be a Colombian drug cartel looking for an entrepot to Europe. Or a New Jersey mafia family looking to launder gambling money. Or even (and perhaps more likely) a dodgy local councillor buying up land he knows is about to be developed and doing it through an anonymous firm in the British Virgin Islands. Almost anything is possible.

These anonymously owned estates are the point at which Scotland joins that global network of locations for the mind-boggling sums of money that washes around the world looking for a "confidential" home. Most of it is avoiding tax: much of it is criminal spoils. But the secrecy that surrounds it is the despair of organisations such as Interpol, the FBI and our own National Criminal Intelligence Service, all of which are struggling to keep the lid on big-time international crime.

The sheer scale of the problem was brilliantly articulated by Raymond W Baker in the current issue of the right-wing Washington Quarterly. "The combination of criminal money laundering and illegal flight capital constitutes the biggest loophole in the free-market system," he writes. "Drug kingpins and global thugs thrive because money laundering is easy, and money laundering is easy because illegal flight capital is pursued and facilitated." And sinking it anonymously into Scottish land is one way it can be "facilitated".

There is nothing that Holyrood and/or Westminster can do about the secrecy laws of countries such as Liechtenstein, the Bahamas and the Dutch Antilles. But Holyrood and/or Westminster can change our own law so that the beneficial - and not just the legal - buyers of land in Scotland can be properly identified. If we cannot get rid of the laird classes, at least we should have the right to know exactly who is lording over us.