Official Report 422KB pdf
Public Services Reform (Agricultural Holdings) (Scotland) Order 2011
Item 2 is consideration of an affirmative instrument. Members will recall that we took evidence in November on a previous draft of the order under the super-affirmative procedure.
I say on behalf of my colleagues and myself that it is a pleasure to appear before the committee. This is my last appearance before the committee in this parliamentary session—
I referred to this parliamentary session. Working with the committee in the past four years has been a pleasure.
I will start off on the legal issue. In your opening statement, you noted that the Subordinate Legislation Committee suggests that part of the order may be ultra vires, and you said that you respectfully disagree. Can you give us absolute clarity that you are asserting that the entire scope of the order that is before us is vires?
That is my firm view. On the specific issue of the two-man rule, we believe that it is a burden, and that by taking forward today the order to amend the agricultural holdings legislation, we can use the PSR act to reduce burdens that arise from existing legislation.
I am sure that colleagues will talk about the policy issues, as the committee will want to explore that area. In legal terms, however, you are stating without ambiguity that the order is vires and that there is no question of it being ultra vires.
I will bring in Caroline Mair, who may wish to add a couple of points from that perspective.
Yes, that is right. We note the SLC’s comments in its report, and we respectfully disagree with them. Our view is that the order meets the requirements of, and all the preconditions that are set out in, the PSR act. We do not agree with the SLC’s interpretation that there is doubt as to whether the provision that substitutes the definition of “two-man unit” is intra vires. Our arguments are set out fully in the explanatory document, which was laid alongside the order.
The use of the word “or” in your answer means that only one of those items needs to be satisfied for the order to be intra vires. You mentioned efficiency, financial viability and something else.
Yes—profitability.
So only one of those requires to be satisfied, not more than one
Yes.
I call Peter Peacock.
Stewart Stevenson has put on record exactly the territory that I wanted to cover, so I do not need to ask the question.
Is it the Government’s argument that the burden has a greater effect on the tenant than the landlord? Rather than being an equal burden on both, is it a burden on the tenant who wishes to succeed?
Yes. The amendment will be advantageous to the tenant but maintains the status quo as far as the landlord is concerned, because the landlord will still be able to resume possession of land in circumstances where the holding is no longer capable of sustaining a viable business. How we assess that viability will change. Instead of a two-man unit test of viability, the viability will be predicated on the ability of the holding to generate employment for the occupier in addition to paying for adequate maintenance and for the rent of the unit.
Your view is that the landlord would basically experience the status quo. There is no particular reason why anybody would challenge the change in court, is there?
There would be no grounds to do so.
I asked the legal adviser to the Subordinate Legislation Committee under what circumstances she envisaged that the change could be challenged in court and she thought that a landlord could challenge it. However, from what Caroline Mair says, there would be no reason for the landlord to wish to challenge it if they did not experience any reduction in their rights.
There are two issues. First, there is the question of viability. The 2010 act would continue to say that viability was the criterion that would have to be taken into account for any challenge but, at the moment, viability is partly defined by the two-man rule, which is now outdated, so we are changing it.
Because there is general sympathy for the policy intention of the order, I am trying to get my head round any circumstances under which it could be challenged in the court if it is passed.
It is fair to comment that the TFF proposed the amendments after a great deal of discussion and negotiation among the various parties round the table from all sides of the tenant farming sector. Therefore, there is a lot of support from landlords and tenants for the amendment to the definition of viability.
Assuming that somebody managed to mount a successful legal challenge to the provision, I presume that the Government would then have to effect the policy in primary legislation.
In theory, yes.
Was the wording that you now propose universally agreed with all the industry stakeholders in the discussions that you had with the TFF, the Scottish Rural Property and Business Association and other bodies since the evidence-taking session in November? Are they all content with it? There was some dispute about the wording of the amendment. Has it now been resolved to everybody’s satisfaction?
Yes. My understanding is that that is the case. I do not want to name Professor Philip Thomas, who is in the public gallery and is the chair of the TFF, but in my discussions with him, he indicated that there was widespread support for the amendment under the current proposed wording.
Widespread support, though, as opposed to universal.
Bruce Beveridge was at the meeting in question, so I invite him to comment.
It is not only the TFF that unanimously supports the wording in the revision; a wide range of cross-sector representatives who are represented on the TFF but were not at the table have discussed it with me and signalled the same degree of support. Indeed, I have not received any representations from anyone in recent times that gainsay the current wording or provision and I have not been made aware of any dissent, either in the TFF or much more widely across the sector.
One might reasonably interpret the replacing of the two-man test with, as it were, a viability test as essentially exchanging one burden for another. Given that if the earlier test was a burden the lesser test of viability will also be intended to be a burden, I presume that you are telling me that simply reducing a burden does not, of itself, make the order ultra vires.
The power in section 17 of the 2010 act refers to removing or reducing burdens or overall burdens. The Subordinate Legislation Committee suggested that as the viable unit test will still operate to the benefit or detriment of either party, it cannot be said to be removing a burden. However, we disagree. Although the test will still operate to the advantage or disadvantage of one party in determining who gets possession of the holding, we think that the overall burden that the current definition gives rise to will be reduced. Although we agree that the outcome of applying the test will be to determine whether a landlord or successor tenant gets possession of the land in question, the purpose of that test is intrinsically linked to productive use of the land. If a tenant farming business in occupation of the holding is able to use that land productively—in other words, is able to sustain a viable tenant farming business—it should be able to continue. If a tenant farming business in such circumstances cannot do so because the holding is simply not viable, the landlord will be able to resume possession. We are changing the test but, instead of imposing a burden, we are reducing the overall burden presented by the current definition.
With regard to legal challenge, the TFF has been an effective representative body that has reflected very effectively what the public have often perceived as competing interests. However, as it takes only one individual to take issue with a measure in order for a legal challenge to arise, you can offer only fairly limited assurances in that respect.
I hope that you have taken some comfort from our response to your questions about the legality of the measure regarding the two-man unit rule. Eight measures were proposed by the TFF, each of which we have considered very carefully. As you can see, six of the measures have been brought forward using the legislation. We felt that we could not do that with two of them, so we are looking for alternative means as far as they are concerned.
You have referred, a couple of times I think, to the two-man unit rule being outdated. I do not think that anybody would necessarily dispute that. However, many bits of statute could readily be said to be outdated. In fact, each time we put something on to statute, presumably it starts to become outdated almost from that point onwards.
Only on the fact that, because the rule is outdated, it has become a burden, and we have been able to identify it as such. Where there are burdens, we want to address them, and we have the opportunity to do so in this case.
Not only is the rule inconvenient, as are many outdated legislative provisions here and there, but the weight of the burden that the outdated nature of the provision adds could result in a tenant being dispossessed; that is a significant burden, in our view. It is the fact that the condition is outdated that gives rise to the burden. We are seeking to make the amendment to the law not just because the rule is outdated, but because of the significant burden that could arise as a consequence, and because of the fundamental nature of the existing provisions.
The Subordinate Legislation Committee seemed to suggest that the rule could not be qualified as a burden, because even if one side did not get possession of the land, the other side would. Therefore, the land would be worked. Your argument is that the rule is effectively a burden because the test is so outdated that it has become biased towards one side. Therefore, one side is burdened by an unfair disadvantage and loses the opportunity to work the land profitably.
Yes—that is part of the rationale.
Given the views that have been expressed by the Subordinate Legislation Committee, is it your view that a legal challenge is made more likely? Have you made any assessment of whether a potential challenger would be able to pray in aid the concerns that the Subordinate Legislation Committee has highlighted?
All I can say is that we have considered the views of the Subordinate Legislation Committee, and you have heard a response to them today. We remain in the same position as before that committee issued its report. We are confident that we have chosen the right route to go down.
It is being suggested that someone might pray in aid the Subordinate Legislation Committee’s concerns, and somebody might well wish to advance any material that they could get, if they were minded to make a challenge. However, we are extremely confident that the Scottish Land Court would view the matter on the basis of a burden, rather than considering it to be about an unfair use of the provisions. The support that the provision has and the recognition of the outmoded nature of the rule have also attracted comment from the judiciary, as stakeholders. Someone could raise a challenge if they so wished—people can do that with regard to many things—but we do not consider that any such challenge has the prospect of being successful.
Notwithstanding your certainty, if a successful challenge were to be raised, would that destroy the whole value of the order, or would it eliminate only the measure that we are discussing? You will appreciate that the committee has only a yes or no option, in that we can vote on the order only in its entirety. If the provision that we are discussing were subject to a successful legal challenge, would the whole order fall, or would only the provision that was challenged fall?
My legal colleagues will correct me if I am wrong, but I think that it is fair to say that the decision that is before the committee is whether to accept or reject the amendments in the order. If, as we hope, the committee accepts the order, it will amend existing legislation. Should there be a challenge to that legislation on any grounds, that will be for the courts to analyse, but it would not impact on any of the other amendments that are made through the order. I am not sure that there would be a link.
Does Bruce Beveridge have a view on that?
Caroline Mair might want to comment on the impact of legal challenge on primary legislative provisions, but I point out that a challenge would have to be about a particular case in which the provision was deployed and complained about, rather than just a general challenge. There would have to be a specific interest to challenge the provision.
To be clear, as the effect of the secondary legislation is to amend primary legislation, is it the expectation of the minister and his advisers that any challenge would be not about whether it is valid to amend the primary legislation, but about the amended primary legislation? It is not the order that would be challenged, but provisions in the amended legislation. Therefore, it is overwhelmingly likely that any challenge would be focused on a narrow point, rather than seek to strike down the validity of using the secondary legislation to amend the primary legislation per se.
We do not anticipate any challenges to the legislation on the basis of the proposal that we have brought to the committee today. That is our starting point. As Bruce Beveridge said, if a challenge were to arise to the agricultural holdings legislation, the issue would depend on the grounds that were used for the challenge and on the view of the whole act that was challenged.
We are trying to establish whether—
Sorry, but Karen Gillon is next.
I beg your pardon.
If we vote for the order, we will have accepted the legal advice that the cabinet secretary has put before the committee and accepted that his argument is right. We surely all want tenant farming to continue to be a viable option for those who want to do that in Scotland. In our discussions in the past few weeks, we have considered how agriculture can continue to be a viable part of the Scottish landscape. Through what we do today, we do not want to undermine tenant farming as part of the framework for agriculture in Scotland. If I vote for the order today, I will be accepting the legal advice that is before me. That will be my position.
At the risk of labouring the point—
Do not.
I am told not to, but I want to hear from Caroline Mair whether, if challenged successfully, the order in its entirety would fall, or only the part that we are discussing.
It would depend on the nature of the challenge. It is difficult to speculate on what would happen or what the nature of any challenge might be. I cannot give any more definitive answer than that.
Thank you.
Cabinet secretary, given that you are here, and that you mentioned other proposals that you wanted to take forward but could not—Liam McArthur mentioned your caution on the matter—I will ask whether you have ideas on how the Tenant Farming Forum’s other proposals might be taken forward.
Yes. Notwithstanding the dissolution of the Parliament, it is our intention to introduce as soon as possible the necessary proposals to implement the two remaining measures that the TFF recommends are essential to introduce the flexibility and the assistance required to encourage more tenancies in Scotland.
Would that require primary legislation?
Both measures would require primary legislation.
As there are no further questions for the cabinet secretary, we move to the debate on the order. As I said earlier, officials cannot participate in the debate.
Does any member have a contribution to make?
I support this piece of secondary legislation. I want to put it on the record that I accept and agree with the legal position as laid out by the cabinet secretary and his advisers.
I guess we would not be having a debate on the order if it were not for the Subordinate Legislation Committee’s report. I support the order’s policy objectives, as do other members—they said that in the course of questioning the cabinet secretary. Indeed, I was one of the committee members who supported the proposal to write to the cabinet secretary calling on him to go further than he has been able to go. We wanted all eight points to which he referred to be in the order, not just the six that are in it. I think that it is fair to say that we are disappointed in policy terms that that is the case. As Liam McArthur indicated in his earlier questioning, that indicates a degree of caution by the Government in relation to the powers that it has under the 2010 act. The Subordinate Legislation Committee raised that point with us.
Much of what I intended to say has already been said, so I will be as brief as possible. I, too, will support the order and I welcome the policy objectives behind it. I very much regret that the proposals on the prohibition of upward-only rent reviews and the inclusion of grandchildren are not part of the order, but I look forward to those being introduced in primary legislation.
Like others, I certainly support the policy intent of the measures. As Peter Peacock has already suggested, the majority, if not all of the committee has been keen to see the other two recommendations from the Tenant Farming Forum picked up and progressed. Nevertheless, the cabinet secretary’s response to Stewart Stevenson’s earlier question about the vires issue was pretty unambiguous, which is as much as we can look to achieve today.
I thank committee members for their comments. We can take at least some comfort from imagining what the Subordinate Legislation Committee’s report would have said if all eight measures had been brought forward under the Public Services Reform (Scotland) Act 2010.
The question is, that motion S3M-7875 be agreed to.
Cabinet secretary, thank you very much. As you said, this is probably the last time that you will appear before the committee this session. I thank you and all your civil service staff for the co-operative manner in which you have worked with the committee.
Thank you. I wish everyone the best of luck for the future.
I suspend the meeting for a few minutes to let the witnesses leave.
Marine Licensing (Exempted Activities) (Scottish Offshore Region) Order 2011 (SSI 2011/57)
Sea Fishing (EU Recording and Reporting Requirements) (Scotland) Amendment Order 2011 (SSI 2011/59)
Aquaculture and Fisheries (Scotland) Act 2007 (Fixed Penalty Notices) Amendment Order 2011 (SSI 2011/60)
Sea Fishing (Licences and Notices) (Scotland) Regulations 2011 (SSI 2011/70)
Less Favoured Area Support Scheme (Scotland) Amendment Regulations 2011 (SSI 2011/73)
Marine Licensing (Fees) (Scotland) Regulations 2011 (SSI 2011/78)
Marine Licensing (Consultees) (Scotland) Order 2011 (SSI 2011/79)
Marine Licensing (Register of Licensing Information) (Scotland) Regulations 2011 (SSI 2011/80)
Reporting of Prices of Milk Products (Scotland) Amendment Regulations 2011 (SSI 2011/81)
Milk and Milk Products (Pupils in Educational Establishments) (Scotland) Amendment Regulations 2011 (SSI 2011/82)
Dairy Produce Quotas (Scotland) Amendment Regulations 2011 (SSI 2011/83)
Drinking Milk (Scotland) Regulations 2011 (SSI 2011/84)
Rural Development Contracts (Land Managers Options) (Scotland) Amendment Regulations 2011 (SSI 2011/85)
Rural Development Contracts (Rural Priorities) (Scotland) Amendment Regulations 2011 (SSI 2011/106)
Town and Country Planning (Miscellaneous Amendments) (Scotland) Regulations 2011 (SSI 2011/138)
Town and Country Planning (Marine Fish Farming) (Scotland) Amendment Regulations 2011 (SSI 2011/145)
We move to consideration of 16 negative instruments. The Subordinate Legislation Committee made comments only on the Marine Licensing (Exempted Activities) (Scottish Offshore Region) Order 2011. The comments have been issued to all committee members along with their papers. No motions to annul any of the instruments have been lodged. I propose that rather than go through each instrument in turn, I will ask whether the committee has any points to make on any of the instruments. Does any member object?
Does any member have any points to make?
I declare an interest in relation to the Less Favoured Area Support Scheme (Scotland) Amendment Regulations 2011. In fact, there are possibly two instruments on less favoured areas.
I hesitate to say this. I have no problem with the policy intent behind the Sea Fishing (EU Recording and Reporting Requirements) (Scotland) Amendment Order 2011, but I note that, under “Policy Objectives”, paragraph 3 of the Executive note refers to
I do not think that anyone can answer your question. Do you want us to write to the cabinet secretary about it?
That would be helpful. We could add another point to the letter. I do not think that the Aquaculture and Fisheries (Scotland) Act 2007 (Fixed Penalty Notices) Amendment Order 2011 includes an explanation of the additional offences that will be covered. That is not particularly helpful. The measure does not seem to be at all controversial, but it would have been helpful to have had such detail.
Paragraph 5 of the Executive note states:
Paragraph 3 of the Executive note suggests:
In fairness, the order may list the offences; I will need to double-check. We do not provide hard copies of instruments because some while ago members opted not to receive them, although we provide members with the opportunity to access them.
We will write to the minister about the specific points that have been raised on two instruments. Does the committee agree that it has no recommendations to make on any of the negative instruments that are before it today?
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