Highland estates and multi-millionaire landowners banked more than £1m of taxpayers’ money through Covid-19 support grants, The Ferret can reveal.
Using freedom of information legislation, we obtained the full list of Covid-19 support grants paid out by Highland Council and found grantees included 26 large Highland estates.
The list includes former Harrods owner, Mohammed Al-Fayed whose firm, Balnagown Castle Properties Ltd, claimed £154,000 from the council for his Easter Ross estate.
The estate is ultimately owned by a firm in Lichtenstein called Ocarina Trustee AG. It was previously reported that Balnagown Properties claimed up to £40,000 in staff furlough payments.
In 2013, Al-Fayed sold Fulham Football Club to US auto parts billionaire Shahid Khan for a reported $300m.
The data obtained by The Ferret shows that around £178m was paid to more than 8,000 recipients by Highland Council.
The grants were designed to keep firms affected by the pandemic afloat whilst they could not trade. There is no suggestion that any grants were wrongly obtained.
However, Tax Justice UK expressed concern that at least one company in receipt of taxpayers’ money was based abroad, arguing that “legally-binding” conditions should have been imposed on grants.
Labour MSP Paul Sweeney described some of the grants as “eye watering sums of money” and argued that conditions should be attached to the “awarding of public funds to large, profitable businesses”.
In reply, companies pointed out they were major employers and that the grants helped them survive the pandemic. Highland Council told The Ferret that all grants met the eligibility criteria.
Most of the recipients were small businesses, each typically receiving a median payment of £17,500. But some firms received much larger sums.
Highland estate, Ardnamurchan, claimed £81,850. The 30,000 acre estate is owned by Donald Houston, who built the Adelphi Distillery with the help of a £1.7m grant from the Scottish Government. He was also reportedly the second largest donor to the Better Together campaign.
Hugh Magnus MacLeod, 30th hereditary chief of the MacLeod clan, claimed £151,850 for his Dunvegan estate. He has also received more than £1m to support the rewilding of his 42,000 acre estate on Skye.
Santon Highlands Ltd, the firm behind The Highland Club at Fort Augustus received £180,000. It is ultimately owned by The Santon Group, which is run by the Sandu family. The family charitable trust, which is largely funded by the firm, handed out more than £500,000 in grants to UK charities during the pandemic.
Elsewhere, Lochsheil Limited got £74,000 and Inverness-based Carlton Clubs Ltd claimed grants for its venues in Scotland – banking a total of £771,550. Craigton Foods Ltd, which operates a portfolio of McDonalds food takeaway businesses throughout the Highlands, claimed £191,000.
Hospitality firm Whitbread PLC, best known for the Premiere Inns budget hotel chain, got £165,000. In its last annual report the company said it received £270m in total public sector support during the pandemic.
Whilst all the firms named above were entitled to these grants, some concerns have been raised.
Robert Palmer, executive director at Tax Justice UK, said: “It is concerning to note that at least one of the companies included in this list is based in Liechtenstein. It’s infuriating when companies that are set up in tax havens in the good times, come cap in hand for a bailout when things get tough. It would have been better if the government had imposed legally binding conditions on grants.”
Paul Sweeney, Labour MSP, said: “I’m not querying the legitimacy of claims made by small businesses or those who received what they needed and were due. My concerns lie with why large landowners and multimillionaires, many with businesses registered offshore for tax purposes, are being handed hundreds of thousands of pounds of taxpayers money with no strings attached.”
Dave Moxham, of the Scottish Trades Union Congress, said: “We need an end to no questions asked blanket support for businesses of all sizes and instead target support at those who need it.”
Ailsa Raeburn, chair of Community Land Scotland, said it was “vital” that public investment to support post-pandemic recovery does not “inadvertently exacerbate structural economic inequalities associated with Scotland’s uniquely concentrated pattern of large-scale, and in some cases, absentee private land ownership”.
She added: “It’s clearly in the public interest to rigorously ensure that such investment generates and retains benefits within communities, for communities.”
A Highland Council spokesperson said that when delivering the various Covid-19 business grant schemes, it did so in “full accordance with the eligibility criteria and specific grant terms and conditions set by the Scottish Government”. They added: “The council received dedicated funding from the Scottish Government to enable it to make the required payments to eligible businesses.”
A McDonald’s spokesperson said: “Like all businesses, the pandemic has presented a series of unprecedented operational challenges including mandatory closures and lockdowns. Some of our franchisees have independently utilised the support available to them to help navigate this crisis.”
A spokesperson for Whitbread said: “Whitbread applied for a number of closed and restart grants under provisions set out by central government and devolved governments. This was to aid businesses, including those in the hospitality sector such as Whitbread, who had to close due to government restrictions aimed at reducing the spread of Covid-19.
“As one of the largest employers in the hardest hit sector the grants have supported businesses like ourselves who are large employers and contributors to the exchequer.”
A spokesman for Ardverikie Estate said: “Our company has been registered in Scotland since its inception in the 1950s, has no offshore ownership elements and does of course pay in full all its UK tax liabilities.
They added: “The covid grants we received were in direct compensation for the significant and lengthy closure of the self catering element of our business. Like many other businesses in this sector, we have (and continue to) suffer significant losses as a result of travel restrictions.
“The grants we received played a significant part in enabling us to continue our normal staffing levels – which in our case means not only that families have jobs, but are provided with housing as well – these are our social responsibilities which we take very seriously.”
“All of the income generated by the estate (from any source) remains here and is re-invested in the estate – almost entirely in local suppliers and of course in providing jobs and housing. No funds are ever removed by owners or shareholders, either inside or outside the UK.”
A spokesman for Donald Houston said: “On our estate we are doing everything we possibly can to create jobs, keep and bring back young families in the Highlands, reduce carbon, develop alternative energies, provide products for export and generate income into the Highlands, all of which tick every single box that governments around the world are advocating.”
Photo thanks to iStock/espy3008