Next weekend sees the launch of a campaign to wrest control of Shetland Charitable Trust away from Shetland Islands Council where it has lain since its inception in the 1970s. Former Labour candidate Peter Hamilton, one of the gang of four behind the move - and a self-confessed "political anorak" - sets out his philosophy for reform.

Peter Hamilton

22 November, 2007

WHY REFORM Shetland Charitable Trust? The short answer is that Shetland suffers from too few fingers in too many pies. So at a point when a big decision about what to do with the people's oil money is taken, like deciding to buy Viking Energy from the council, there was no debate between the two bodies, and no reference to the public.

The longer answer to why reform Shetland Charitable Trust is more complicated, one perhaps for political anoraks. But if change is thought necessary, there has to be some consideration of what democratic principles have been breached, so that we can be sure the new body is likely to be an improvement.

Many people in Shetland, including some trustee-councillors, will not be familiar with the history of the democratic principles currently at issue. Before more recent events are considered, it is worth revisiting some of the arguments that are the basis of our understandings and expectations of modern democratic governance.

Much has surely been achieved, and at great human cost, since monarchs declared themselves divinely appointed, and were thus able to exercise unchecked power over an ignorant and largely powerless people. But, for the purposes of this piece, and because I am scarcely an expert, I will focus on the contributions of one or two key thinkers to guide us through the change from fearful obedience to our basic expectations of democratic governance.

Act of submission

Thomas Hobbes, writing in the middle of the 1600s, argued we had to create and then bow to a single source of absolute authority to save us from infinite bickering and bloodshed - such was his view of human kind. That act of submission would make us safer than to fail to bow to authority at all. Because the people will the authority to exercise power over them, they in turn must not question that authority. After all, the right of the authority to exercise power is the people's will. Therefore the powers-that-be can not be accused of treating its subjects unjustly, or indeed be set aside by them.

This was circular logic at its worst. Those who went before us chose such a set up and so we are meant to suffer it unquestioningly. Surely not? For all some similar ideas still linger on today, Hobbes's settlement could not last and the various challenges to it were, later the same century, brought together in the writings of John Locke.

Status quo

In one sense Locke agreed with Hobbes. People join together to ensure the preservation of their lives, liberty and property. There is thus an agreement that binds the people to those who rule over them. But crucially, for Locke, the agreement cut both ways. For all the rulers could make demands upon the ruled, the ruler themselves had to stick within reasonable limits. "If the governing authority (whatever form it takes) misapplies its powers, the people with whom it stands in contractual relationship have the right to resist and depose it." Grayling:259⁽¹⁾

This idea, that the people must, as and when necessary, overturn the way things are (also known as the status quo and what has 'aye been' ), now lies at the heart of Western democracy. Others have added that democracy, as an imperfect beast, requires regular attention, without which those with power may happily forget to check the arrangement is still to the people's liking. This echoes older concerns. A fundamental question used to be asked by Mortimer Manson in Latin in the council chamber: "Who guards the guards?"

Locke indeed went so far with this idea as to be credited with paving the way for British Liberalism. He rejected absolute, arbitrary power, arguing humankind cannot willingly forego established rights. Helpfully, he stated at the very point [where] those in power go beyond the limits of their agreement with the people, when they cease to promote the 'publick good', the agreement itself dissolves. Once those in power go too far we no longer owe them loyalty. Our loyalty at that point is to ourselves to assert our rights; to life, liberty and, critically to us now, to property. The status quo becomes illegitimate and a new arrangement must be sought.

No consultation

In this light the whys and wherefores of how the councillors, as trustees of Shetland Charitable Trust, have acted on behalf of the people of Shetland are worth revisiting to check if they have tried to renew the agreement. They haven't. Indeed there has been no consultation with the people of Shetland regarding their oil money - their property right. The domination of Shetland Charitable Trust by councillor-trustees strengthens their power in our community considerably, even excessively, albeit not to the point that it is quite absolute.

It is also worth re-considering if and when councillor-trustees have overstepped themselves. This is a particularly important matter to which we must give our minds if we are to accept the status quo. John Scott, as an independent trustee, has given his opinion on this matter with regard to the purchase of the Viking windmills project, but there may be other instances worth considering.

So in as much as it could be argued that buying the £1.5m debt of Viking windmills for £900 is risking the people's money, especially given a further £3m seems to be at stake, it can equally be argued that a relatively safe investment in a hospital should have had a fairer wind.

How convenient

But John Scott's point was more acute than this. He identifies there is a problem of conflicts of interests. If it is convenient for the councillors to find a buyer for the Viking gamble, and so discharge the debt from the council, how much more convenient is it for the same people then to buy the same non-existent windmills from themselves? For all the previous council seem to have got themselves into a bit of a windmill ownership mess, is that really our problem as beneficiaries of Shetland Charitable Trust?

Are the interests of the buyer really the same as those of the seller? Common sense suggests otherwise. Yet our advice on this matter comes from the same people. Our interests as beneficiaries of the trust are not well served by risky investments obtained without securing independent advice open to public scrutiny. Our interests as council tax payers are to be shot of the Viking debt-gamble. Selecting separate groups of representatives for each set of interests provides the necessary check on arbitrary and excessive power. A fully separate body could have determined if the purchase was really in our interests.

John Scott is open minded about the virtues of the project, but is deeply troubled as to the process. And it is right that he shares this. For myself, although it is hard to oppose harnessing renewable energy for the maxim advantage of everyone in Shetland, I remain sceptical of the proposal. I just can't see that the goal of securing maximum advantage for the people of Shetland has been foremost from the outset. Had that been the case, low cost renewable power would already be heating the majority of our furthest flung housing schemes.

Chasing the debt

Regardless of that one issue, we still need to explore the background to our understanding of conflicts of interests and separation of powers. But before this I will qualify something Bill Manson stated last week. He said on BBC Radio Shetland that Shetland Charitable Trust has been becoming more and more independent of the SIC. In a cosmetic sense he is quite wrong. If you phone you can now get put straight through on the council's switchboard.

In a substantive way Bill is partly right. Shetland Charitable Trust has thankfully been moving away from SIC development issues and the buying and selling of land etc. via SLAP for some time. But, and this is a big but, that trust-building trend has been dramatically reversed by the Viking purchase, which, logic suggests, should have gone through Shetland Development Trust instead - otherwise why have such a body?

John Scott's concern, shared by others, is that trustees may now feel obliged to start chasing the debt. Their ability to make an impartial decision as trustees on what is in the beneficiaries' best interests is now plainly compromised by a decision to sell, which presumably was initiated by them as councillors. Yet their precise job, as trustees, is to determine what is in our best interests as beneficiaries, and act upon that above any other consideration.

Checks and balances

Our collective appreciation of the need for a separation of powers, and the need of checks and balances on power, dates largely from The Spirit of the Laws, by the Baron de Montesquieu in 1748. He saw checks and balances as a vital means of checking tyranny. Separate interests must be represented by separate bodies. Otherwise one group sits alone acting at the same moment as judge, jury and prosecution above the hapless accused.

Who then is to ensure fair play? Liberty is threatened where the same person or body acts
both as legislative and executive. Locke had similarly agreed the need for such a separation. The writings of both had a profound impact on the drafting of the constitution of the United States and informs how we have come to appreciate the fairness of government.

Locke and Montesquieus' approach strengthens the view that justice not only needs to be done but needs to be seen to be done. Thus ideas about what is to happen to the people's money need to be considered and contested in the light of day - not rushed through without a chance for the people to have a say. That contest can not adequately happen if only one body is responsible for deciding what can be considered; yet this is precisely the situation we find ourselves in when the councillor-trustees themselves determine, as councillors, prior to meetings of Shetland Charitable Trust, what is to be brought before Shetland Charitable Trust in advance. I was shocked to learn last week from John Scott that this is the case. If it is our cash, why can only they get at it?

Conflict of interest

Expected checks and balances on excessive levels of power may have been inadequate in Shetland for some time. The issue of conflicts of interests may thus deserve further scrutiny above and beyond Shetland Charitable Trust. It is hard, for example, to see how councillor Betty Fullerton can reconcile her responsibility to promote our interests as a trustee, as a councillor and as chairperson of Shetland Health Board, especially when the topic of the new hospital is being considered. This is not to say she is a bad person - merely badly advised.

Our interests can be promoted by her as chair of Shetland Health Board - go get us a hospital.

Our interests can be promoted by her as a councillor - go buy the Gilbert Bain for council offices.

Our interests can be promoted by her as a trustee of Shetland Charitable Trust - go find us a good investment.

But all these interests cannot properly be represented by one person - within whom one interest must prevail above the others.

Rather than the same people changing hats, we need clearly separate bodies. Rather than cosy chats behind closed doors, we need open public debate.

So it is that little of what I have restated here as basic principles essential to transparent democratic governance will be greeted as welcome news across Shetland. The net required to pull in all unacceptable conflicts of interests that have developed, under-checked in Shetland since the arrival of oil, would require a hefty collective haul. More shots may yet be necessary.

Fairer for all

This leads me to a point which was raised by J.S. Mill in his 1861 work, 'Representative Government'. Mill was concerned about the tyranny of the majority; that the majority might overstep the rights of minorities. He thus wanted an experienced (informed), educated and rational public to elect representatives.

In a fairer-for-all 21st century Shetland, our massive oil wealth would already have been used to extend the contemporary means of becoming better informed. The right to access to the internet is today a vital means for self-education and the accompanied extension of rights. Whilst current levels of inattention and ignorance may be convenient for some, there are depths of ignorance evident here which we should no longer afford.

From all this I hope it is possible for a novice to make a diagnosis of the difficulties which have beset all recent councils in Shetland. Our current agreement with those who would wield power over us on our behalf is plainly out of keeping with long established (and essentially liberal and democratic) principles regarding the separation of powers and avoidance of conflicts of interests which are necessary to ensure efficient governance and promote fair play. The prescription can hardly be more of the same. Indeed there is a sincere need to question which doctor to trust. Any prescription written up by those councillors who would least willingly surrender their excessive levels of power must certainly be considered with some caution.

It may be, of course, that there is something inherent in being a resident of Shetland that means we have surrendered our right to appropriate governance, but surely this would have been mentioned at the council election?

A necessary addition to Mill's line of thinking holds - if we value our rights we should seek to extend them to others. There is no better way to preserve them than this. So it could be that ideas like those above, which can be roughly be summarised as 'what has aye-been can be improved if we demand it from a reasoned basis' would become more widely appreciated.

To paraphrase a local radical Liberal, Arthur Anderson, we have to imagine how society should be if we are to improve it. As for the councillors, their real task might be to consider how to improve trust in themselves. It may require them to put further trust in the people.


⁽¹⁾ A.C. Grayling, Towards The Light, Bloomsbury 2007, London