Environment and Rural Development Committee, 24 Nov 2004

Meeting date: Wednesday, November 24, 2004

Official Report 225KB pdf

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Subordinate Legislation

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Draft Agricultural Holdings (Right to Buy Modifications) (Scotland) Regulations 2004

I welcome the Deputy Minister for Environment and Rural Development, Lewis Macdonald, and his officials. We will consider an affirmative instrument—the Draft Agricultural Holdings (Right to Buy Modifications) (Scotland) Regulations 2004—which the Parliament must approve before it can formally be made. The committee is invited to recommend to the Parliament that the instrument be approved, and the minister is here to move motion S2M-1973, in the name of Ross Finnie, the Minister for Environment and Rural Development. The Subordinate Legislation Committee considered the instrument and indicated that it had no comment to make.

We will follow our usual practice and have a session to clarify any purely technical matters and allow explanation of details while officials are at the table. When we move to the formal debate, the minister will be on his own. I invite Lewis Macdonald to introduce his officials and make opening remarks. We will then move to clarifications and factual questions from members.

David Milne, on my left, and Graham Fisher, on my right, are the officials who are here to deal with any technical points that arise.

The regulations are fairly straightforward, and members who were involved with or took an interest in the Agricultural Holdings (Scotland) Bill will be familiar with the concept. Others who have a close knowledge of Scottish agriculture will also be familiar with the circumstances in which the requirement for the regulations arises. Their purpose is to make clear how the pre-emptive right to buy a farm, which the Agricultural Holdings (Scotland) Act 2003 gives certain tenants, should apply in certain cases, particularly at the stage when tenants have to register their interest in acquiring a farm.

The regulations apply to cases in which the tenant is a limited partnership and the beneficiary of the right to buy is a general partner in the partnership. As I said, some members will be familiar with that situation, but for those who are not I point out briefly that a limited partnership may be formed by the landlord as limited partner and the de facto tenant as general partner. That device, which has been employed in some tenancies in recent years, has the effect of limiting the tenant's security of tenure when compared with a direct individual tenancy. We are keen to ensure that the provisions of the 2003 act that confer the right to buy on tenant farmers should apply also to those de facto tenants whose legal status is that of a general partner in a limited partnership. That, in essence, is the purpose of the regulations.

The detail of the right to buy is set out in part 2 of the 2003 act and the provisions are the only remaining provisions in the act to be brought into force. We consulted on the proposals behind the draft regulations and the other instruments that are required to bring part 2 into force.

The convener mentioned the response of the Subordinate Legislation Committee, and members will see from the Executive note that accompanies the draft instrument that there was broad support for our proposals. We have made one change in response to a suggestion that was made by the Law Society of Scotland and the Scottish Agricultural Arbiters and Valuers Association in amending the draft instrument that we consulted on; the change makes it clear how the instrument will apply when there is more than one general partner in the partnership. For example, if the general partners were a husband and wife who were the de facto tenants, we have made specific provision in order to allow for that. That provision reflects exactly the same provision that is in the act where a husband and wife are the direct tenants of the landlord.

The regulations speak for themselves, and I would be happy to answer questions before we move to the formal debate.

Thank you. Having a sense of how you consulted on the statutory instrument is useful. Does any member have any points of clarification or questions that they want to ask?

I want to cover the same ground that the minister has covered, but I would like further clarification. The impact of the regulations will extend not to any relationship in respect of full tenancies under the Agricultural Holdings (Scotland) Act 1991, but exclusively to the limited partnerships that, as we are all aware, were created in essence to circumvent the 1991 act. The Executive has chosen as a matter of policy to include them in the legislation as de facto tenancies. Therefore, there will be no impact beyond that specific policy intention, and the regulations are designed to implement that policy intention in so far as the right to buy is concerned.

That is correct.

You mentioned husbands and wives. How would things operate between fathers and sons, or between generational relationships?

I should be clear. I mentioned husbands and wives as an example, but the regulations refer to cases in which there is more than one general partner. That could include any relationship in which there is more than one general partner who is part of the legal tenancy, which is the limited partnership. It is the same application.

Such a person would require to have been associated in business terms with the partnership when it was created. We are not talking about something that could be inherited by someone who might have a right to heritable property, but who is outside the business arrangement.

The right extends to general partners within the partnership. I think that that answers the question.

It is a business relationship.

We are dealing with a partnership that is a contractual arrangement, so the normal rules of inheritance that would apply to a full secure tenancy under the 1991 act would not apply to a partnership arrangement. Partners could be added into the partnership by contractual agreement, but the normal rules of inheritance that apply under agricultural holdings legislation do not apply directly to the partnerships themselves.

As there are no other questions or points of clarification, we will move to the debate on the motion. I invite the minister to move motion S2M-1973, in the name of Ross Finnie.

Motion moved,

That the Environment and Rural Development Committee recommends that the draft Agricultural Holdings (Right to Buy Modifications) (Scotland) Regulations 2004 be approved.—[Lewis Macdonald.]

Do any colleagues want to say anything about the motion or to make any statements?

I am in a slightly difficult position, given that the Conservative party and I took a view that the measure should not have been included in the 2003 act when it was passed by the Parliament. However, I am fully aware that the change is desirable under the terms in which the bill was passed. Consequently, I find myself in a quandary as to whether I should give my support or abstain. I will therefore reserve judgment until the convener asks whether we agree to the regulations.

We have up to 90 minutes for the debate. We will see how long you have before you must make that judgment call.

I will try to take up at least 90 seconds of the 90 minutes.

I welcome the regulations. It has been clear for some time that there has been a campaign in Scotland—which many of my constituents support—to ensure that the pre-emptive right to buy includes as many tenant farmers as possible, and that any measures that are taken by landlords to circumvent that right should be overcome through the legislation.

It would be helpful to have the minister's comments or views, and any feedback that the department has received since Parliament passed the bill, on the measures that have been taken by landlords to try to circumvent the legislation. Is the minister confident that the regulations that we are considering will address all those measures, or will other legislation have to be introduced?

I welcome the fact that the regulations tidy up an anomaly that needed to be sorted out.

Minister, would you like to respond to any of the points that have been raised?

I would like to help Alex Johnstone to resolve his quandary and persuade him that, as it now stands, the spirit of the law clearly reflects the will of Parliament. It would be unfortunate if tenant farmers in one set of contractual relationships did not enjoy the same rights as tenant farmers in others. On the basis of equity within the farming community and to avoid any ambiguity or sense of inequity, it is sensible to apply a consistent provision to general partnerships and limited partnerships for tenant farmers.

On Richard Lochhead's query, we have no evidence of any pattern of landowners seeking to avoid the implementation of the pre-emptive right to buy by selling. If there was any such evidence, we would be interested to see it but we have none. Partly because of other matters arising from the reform of the common agricultural policy, there has been relatively little movement on the agricultural land market in recent months.

It might be worth noting the provision that we have made for situations in which there are two or more general partners. Each of those partners should consent at the outset to the registration, so whether the partners are a father and son or a husband and wife, the second partner should consent to the first partner registering an interest in acquisition. However, we have excluded from that definition of two or more general partners a general partner who might be an associate of the landlord, such as the landlord's agent or a member of the landlord's family. If that person is included in the partnership as a partner, the provision requiring their consent would not apply. That regulation should preclude attempts to evade the purpose of the regulations.

On those points, I rest my case.

The question is, that motion S2M-1973, in the name of Ross Finnie, be agreed to. Are we agreed? I am happy to take a division if we need to.

My comments are on the record.

Motion agreed to.

That the Environment and Rural Development Committee recommends that the draft Agricultural Holdings (Right to Buy Modifications) (Scotland) Regulations 2004 be approved

I thank the minister and his officials and invite them to leave.

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Marketing of Fruit Plant Material Amendment (Scotland) Order 2004<br />(SSI 2004/471)<br />Nature Conservation (Designation of Relevant Regulatory Authorities) (Scotland) Order 2004 (SSI 2004/474)

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Conservation (Natural Habitats, &c) Amendment (Scotland) Regulations 2004 (SSI 2004/475)

We have to consider three instruments under the negative procedure. The Subordinate Legislation Committee has considered all the instruments and had no comment to make on any of them. As members have no comment on the instruments, are they content to make no recommendation to the Parliament?

Members indicated agreement.

I thank colleagues for their hard work this morning.

Meeting closed at 11:39.