Agricultural Holdings (Scotland) Bill: Stage 1
The next item of business is a debate on motion S1M-3396, in the name of Ross Finnie, on the Agricultural Holdings (Scotland) Bill, and on one amendment to that motion.
I am pleased to open the debate. I have a sore throat, but will continue my Satchmo impersonation.
This is the first opportunity for the Parliament to discuss the Agricultural Holdings (Scotland) Bill. The Executive is committed to a mixed system, with a healthy tenanted sector performing an important and distinctive role alongside the owner-occupied sector. The bill aims to revitalise the tenanted sector for the benefit of our agriculture industry and rural Scotland as a whole. In doing so, it reforms current legislation, which essentially dates from the immediate post-war period and is recognised by tenants and landlords alike as being badly in need of updating.
The strength and breadth of support for the bill cannot be overstated, but are probably too easily forgotten, because attention has focused on one element of the bill, which is the tenant's right to buy. That is certainly an important element of the bill, but for the industry as a whole, other features that will introduce new tenancy options, extended rights for tenants and simpler and cheaper dispute resolution arrangements are even more important.
I read with interest the evidence on the bill that was presented to the Rural Development Committee and I am delighted that the committee endorsed the bill's objectives. The committee also made several recommendations. In the limited time available to me, I will focus on the committee's recommendations and will perhaps respond to other points in summary as they arise.
The bill will introduce new tenancy options that will exist alongside current types of tenancy. The short limited duration tenancy will have a maximum life of five years, and the limited duration tenancy will have a minimum term of 15 years. The new options will provide tenants with strong security of tenure throughout an agreed term and will give landlords the means to reclaim the land at the end of the term.
We also welcome the committee's broad expression of support for the bill's diversification proposals. The committee expressed concern about the fact that a landlord's grounds for objecting to a tenant's proposal to diversify might not strike the right balance between the respective rights of landlord and tenant. The important point is that section 35(9) sets out a landlord's grounds for objecting to a proposed diversification, but will not give the landlord the power to block a tenant's proposal, and no landlord will be able to withhold consent unreasonably. The grounds for objection have to be broad to remain relevant against a wide range of potential non-agricultural uses, particularly as the bill deliberately does not constrain the types of non-agricultural activity into which a tenant will be able to enter. If a landlord objects to a tenant's proposal, we intend to make it clear that the tenant will be able to ask the Scottish Land Court to approve the proposal nevertheless.
Is it not the case that any landowner who objected could put in a written objection under section 35(9)(iii)? That was the committee's point. The description is wide so they could object almost automatically.
Yes. The bill now includes provisions that allow the landlord to grant consent subject to conditions. We intend to make it clear in the bill that the Land Court will be able to strike out, modify or insert conditions, which will be an important way of ensuring that restrictions on a tenant's freedom to diversify will be proportionate to a landlord's reasonable grounds for objection. I am sure that we will be able to come to an agreement with the committee on that particular point.
As members will know, our most recent consultation on the draft bill revealed many tenant farmers' dissatisfaction with the operation of the Agricultural Holdings (Scotland) Act 1991. In giving evidence to the Rural Development Committee, Mr Finnie acknowledged those concerns and said that we were considering ways of dealing with them. The first concern relates to the practice whereby landlords ask tenants to conclude an agreement that quickly writes down the amount of compensation the tenant is entitled to at waygo for the value of improvements made by the tenant to the farm. I can confirm that we intend to lodge amendments at stage 2 that will prohibit landlords and tenants from concluding write-down agreements in future, in relation to both existing and new leases. We continue to consider whether and how action might be taken in relation to current write-down agreements, but potentially complex legal issues would need to be overcome.
I fully accept that the issues are complex, but does the minister agree that the mischief to be corrected relates to past agreements? Will he advise whether the amendments he will propose will have retroactive effect? If they will not, I believe that we will not address the problem that he has correctly identified.
I understand Mr Ewing's point but, to a certain extent, he answered it himself when he referred to complex legal issues. I suspect that those are, indeed, the issues that will concentrate our minds at stage 2.
Tenants have complained about landlords who have demanded that they enter into post-lease agreements that transfer responsibility for renewing fixed equipment from landlord to tenant. As with write-down agreements, we propose to render as void any post-lease agreement entered into in future that purports to transfer responsibility for renewals, and we are considering how we might allow tenants to revoke existing agreements.
We are also considering sympathetically further issues surrounding the correlation between rental values and the profitability of farms.
Does the minister accept that the Agricultural Holdings (Scotland) Bill is likely to lead to a reduction in the value of land in Scotland? As that value currently underpins the borrowings of the Scottish agricultural sector, does he accept that the bill will lead to increased hardship for Scottish farmers, particularly owner-occupiers?
No. I will come to the issue of blight when I come to the absolute right to buy, which is supported by some but not by others.
I have been struck by the enthusiasm of the industry to find solutions to the issues. Bodies representing tenants, landowners and other interests have worked together in an effort to resolve the outstanding issues quickly. We are liaising closely with the industry and will continue to do so. I recognise that, if Parliament approves the principles of the bill, we will need to move fast, because time is not on our side. However, the bill has been built on consensus and I would like that to continue with regard to the outstanding issues.
That brings me to the aspect of the bill that has attracted most interest: the pre-emptive right to buy, which is a right for tenants under the Agricultural Holdings (Scotland) Act 1991 to buy the farm they rent when it is offered for sale. I am pleased that the majority of the committee stated its support in principle for a pre-emptive right to buy.
The right to buy in the bill operates whenever a landowner wants to sell the land. It provides a guaranteed right for the tenant to buy the land at market value. In effect, that gives a statutory basis to a procedure from which the tenant and the landlord both benefit. It is usually cheaper for a tenant to buy the farm that they rent than an equivalent farm elsewhere, while landlords can usually expect to receive a higher price by selling land to a sitting tenant than to a third party. However, at present, some landlords not only sell land to a third party without giving the tenant the opportunity to bid, but sometimes do not even alert tenants to the change of landlord. That is why it is important that we create a statutory pre-emptive right to buy. That will mean that it will no longer be possible for land to be sold over the head of the tenant. Everybody should welcome that.
Crucially, the right-to-buy provisions in the bill are entirely consistent with our aim that the bill should revitalise the tenanted sector in Scotland. The bill extends tenants' rights but does so in a way that does not prejudice the legitimate rights of landlords. We have provided a right that tenants want and which the Scottish Landowners Federation has stated that landlords can live with.
There is, of course, a body of opinion that believes that tenants should have an absolute right to buy, which they could exercise against the will of the landlord. Regardless of the way in which an absolute right to buy was introduced, it would undermine our efforts to revitalise the tenanted sector in Scotland. [Applause.] I thank the Conservative members for that applause, even if it came from strange quarters.
Those of us with a brain in the chamber can see that those who advocate an absolute right to buy and suggest that it should apply only to tenants with tenancies under the 1991 act have completely failed to explain why they believe that an absolute right to buy would be right for those tenants but would not be justifiable for other tenants. Tenants who would not share the right to buy would, I am sure, be interested to know why the distinction was appropriate. So, too, would landlords, who would not let land if there were a risk that they would be unable to reclaim the land at the end of the lease. That is why the introduction of an absolute right to buy, even if only for tenants under 1991 act tenancies, is likely to affect the availability of agricultural land for let. Indeed, it could depress confidence in letting in other non-agricultural commercial sectors, too. I would argue that it has implications across the commercial sector and in retail and other areas.
Will the minister give way?
I would like to, but I am out of time.
I have much more to say, but I will say it in my closing speech. The bill is fundamentally about much more than the tenant's right to buy. It contains several important elements that work together to stimulate the tenanted sector. I have attempted to outline a few of those in the time that is available to me. The Executive will be happy to consider other points at stage 2. I look forward to that process.
I move,
That the Parliament agrees to the general principles of the Agricultural Holdings (Scotland) Bill.
While sympathising with the minister's hoarse voice, I must congratulate him on what I assume was an excellent rendition at the karaoke at last night's Labour party party.
I draw members' attention to my entry in the register of interests: I am the owner of a farm that is run by a partnership in which I am the limited partner. Some would say that I am very limited.
In January 1999, the land reform policy group suggested, among other things, that agricultural holdings legislation should be amended to provide more flexible tenancy arrangements, to permit more farm tenants to diversify, to allow tenants to plant woodland, to encourage tenants to indulge in good conservation practice, to provide greater protection for tenants, to strengthen a tenant's right to compensation, and to simplify and reduce the cost of dispute resolution. Accordingly, the bill tries to do that and, as the minister said, seeks to reinvigorate the tenanted sector.
The Conservatives endorse those aims whole-heartedly. We agree entirely that, in some cases, there is room for considerable improvement in the relationship between lessor and lessee, but we strongly dispute that that relationship has turned sour at every instance, across the board, as some would argue. We must consider the bill in the realisation that the vast majority of landlord-tenant relationships are perfectly healthy and productive. I refer members to a letter that they received just a week ago from five tenants on five different estates. That letter says clearly:
"as tenant farmers, we have benefited from the innovative enterprise of different estates. It is often not acknowledged just how much of the infrastructure of every farm on an estate has been provided by the landlord".
Likewise, we should acknowledge that the majority of tenanted landholdings are not owned by the big estates that attract so much publicity, but are often single units and are sometimes owned by the widow of a former farmer or by a former farmer who has chosen to retire. There is a vast range in the size of ownership and of tenancy throughout Scotland. We would do well to realise that as we consider the bill's general principles.
In the light of that, and bearing in mind the bill's intentions to reinvigorate the sector, we very much welcome the provision for the new limited duration tenancies and the provisions that address diversification, compensation and dispute resolution. We look forward to scrutinising the amendments that the minister has promised to lodge on those issues at stage 2. We particularly welcome those provisions because, as the minister said, they have been brought about largely by agreement among all the relevant stakeholders. Essentially, they are the product of consensus. That is exactly as the situation should be on issues such as land reform.
The problem arises when the Executive departs from the agreed stakeholder concerns and embraces antagonism, as it has done by introducing at a relatively late stage in the proceedings the section that will give secure tenants under the 1991 act a pre-emptive right to buy. The Executive did that in spite of the fact that Ross Finnie said in the Parliament in May 2000:
"We are trying to move towards a situation of greater diversity, in which more leases will be offered. Neither the consultative group that existed before we took office nor that which was set up afterwards proved that instituting a tenant's right to buy would do anything other than dry up a limited supply. We were not persuaded that that was consistent with our aim of getting new tenants."—[Official Report, 17 May 2000; Vol 6, c 695.]
As Alex Fergusson opposes the pre-emptive right to buy, does he also oppose the rights of pre-emption that feudal superiors hold and have held for centuries?
That is a matter of legal contract. As a lawyer, Fergus Ewing should certainly know that.
The sentiments that Ross Finnie expressed in May 2000 were right then and they are equally correct now. The available land has already dried up.
Does Alex Fergusson accept that the introduction of the pre-emptive right to buy is beneficial if landlord and tenant are willing to participate, because the right benefits both in securing a suitable market value?
I fully support such sales where there is a willing buyer and a willing seller, but why on earth do we need legislation for that? As I said, available land is already starting to dry up. In the past five years, an average of two farms a month have been available for rent in The Scottish Farmer magazine. Since last May, there has been none. The only reason for that is the justifiable fear that a pre-emptive right to buy may be extended to all tenancies at the whim of a future minister. Worse, the right to buy might be turned into an absolute right to buy.
Oh, come on.
It is true. Such an absolute right to buy is a right to expropriation—a right that will ensure that even the new tenancies that the bill envisages never even get off the ground.
I was recently contacted by a farmer who had tried to rent six neighbouring fields from three willing neighbours in order to maintain a sustainable number of sheep under the organic aid scheme. None of the neighbours was willing to enter into any arrangements other than a short-term grazing lease, because of their fears over the right to buy. At least St Paul had a heavenly experience before his biblical U-turn; the only experience that the minister seems to have had before his own volte-face was intensive lobbying from George Lyon—an experience that I would describe as anything but heavenly.
Not one stakeholder group that gave evidence to the Rural Development Committee wanted an absolute right to buy, other than the Scottish Tenant Farmers Action Group, which does not even speak for the majority of Scotland's tenants.
One columnist recently stated:
"there is evidence that a Bill designed to stimulate the tenanted sector is in danger of killing it. That would be a notable triumph for the Parliament, would it not".
The damage has already begun, and the very good parts of the bill have been hidden behind the disastrous smokescreen of the right to buy. We know that that right will have the opposite effect to that which the minister seeks to achieve. For that reason—and that reason alone—we are unable to give the bill the whole-hearted support that it should have deserved.
I move amendment S1M-3396.1, to insert at end:
"but, in doing so, regrets that the provision in the bill of a right to buy for some tenants has already led to a significant reduction in the amount of land let under medium- and long-term arrangements, and believes that the enactment of such a provision will minimise land available for rent, including holdings under the new tenancies proposed in the bill, confining tenancies to those of a very short-term nature with a resultant negative impact on the management of the tenanted sector."
I start by thanking the clerks, in particular Mark Brough, for the excellent work that they did in helping the Rural Development Committee produce its stage 1 report.
I emphasise that 98 per cent of the committee's conclusions were arrived at by consensus. The committee spent a great deal of time and effort working on the parts of the bill that are not the subject of any great controversy. We all welcome the introduction of new vehicles that will allow leases to be entered into and we are all aware that the purposes of the Agricultural Holdings (Scotland) Act 1991 were circumvented to an extent by—I have to say this—smart lawyers.
I also note that the percentage of farmers who are tenants decreased from 32.5 per cent in 1982 to 16.6 per cent in 2001; over 20 years, the percentage of farmers who are tenants halved. If that is not an indictment of the current system, I do not know what is. It is difficult to see how anything could be worse than the current system from the point of view of creating new land for leasing.
I will quote the words of some farmers, and I note the work of the Scottish Tenant Farmers Action Group, which I think has done a brave and good job. I also commend the efforts of the other leading players, whose submissions have been extremely helpful.
Stuart Black, a farmer in Strathspey, said:
"I see the value of a right to buy in terms of the effect it would have on my position as a tenant. I would love to be able to go along to the estate as an equal partner, and I think that a right to buy would have a radical effect on the way in which individual tenants were regarded and treated by the estate."
Donald Gibbon of Middleton, Fintray, said:
"There has been no significant investment by the estate in farm infrastructure for over a decade, and it upsets me to see the way the place is suffering. The new generation of landlord has little common interest with the likes of me, and a right to buy would give me the chance to stand on my own feet and run the place properly. We could develop the engineering business to its full potential, and investigate some other ideas for diversification that I have in mind."
Stewart Jamieson said:
"Since I took over the farm from my father in 1975 we have invested over £290,000 in this farm while the estate's contribution has been a mere £40,000 … When I retire I will get almost no recompense for this. All of the value that we have created will revert to the estate".
A farmer in Sutherland said:
"Our landlord, Sutherland Estates, owns a huge part of Sutherland including much of the land around Brora and Golspie. Throughout this area there is a shortage of land for housing and business development, and the local economy is strangled by this monopolistic system of land tenure. It's a tragedy really. So much enterprise and opportunity stifled when our communities should be retaining their people and encouraging new blood in."
I have quoted the words of a few farmers; I could quote many more. The points that I wish to draw from those comments are as follows. First, we do not imagine that every landlord is a bad landlord—quite the contrary. I know that people such as Jamie Williamson in my constituency do their utmost to promote diversification and new opportunities. I know that because I have visited his farm—I hope that I understand what he is doing. However, I am afraid that many landlords have the motto "let it and forget it" and that their concern is that they get the rental cheque once a year. I have spoken to many farmers in my constituency who could tell many a tale. However, many of them do not speak out. Perhaps that is why the situation has not been sorted out before now.
Once we begin to scrutinise the detail of the bill at stage 2, we will have to consider some serious issues relating to the right to buy. The proponents of the principle of the right to buy must take serious issues seriously, and we will do that. However, the quotations from farmers and communities that I have read out make the case strongly that there is considerable public interest in having a right to buy, whether pre-emptive or absolute.
Issues such as sporting rights are important. We must ensure that those rights continue to be exercised and I think that that can be achieved. Compensation at waygo, post-lease agreements and writing-down agreements must all be dealt with and must apply to existing tenants. We must also consider the value of land. Since 1995, farm incomes have fallen by 60 per cent, while average levels of rent have increased by 30 per cent. That does not seem to indicate that the market and rental levels correspond to farm viability. The rent determination procedures must reflect economic viability.
I know that the minister, his civil servants and the various parties have done a great deal of work, including during this week, for which I commend them. We all want to get a better deal for the tenant; that is my principal aim and if we achieve it there will be more economic development and opportunities in the countryside, which we all want. For that reason, we must take the issue very seriously.
In a speech in September 1998 that he made in reference to tenants' responses to a consultation on land reform, the late Donald Dewar said:
"The words stifling and stultifying occur again and again in these case histories. These are not people looking for an easy life—quite the reverse. These are people keen to make the best of the opportunities that should be available to them—keen to build a better life for themselves and their families and communities, but held in check by the action or often, inaction, of external powers."
I hope that we can all subscribe to the aims that the former First Minister set out, and that at stage 2 we will be able to consider seriously the issues that members of the Rural Development Committee, who have grasped this task, and other members who have an interest, understand and care deeply about. We must ensure that we do not create turbulence or turmoil in order to avoid the Armageddon that some people are predicting in an exaggerated and somewhat extreme fashion. A way ahead can be found and I look forward to working to achieve our objectives at stage 2.
I support the Executive motion.
The Liberal Democrats recognise that there is broad support across all sectors of the agriculture industry for the proposals that are contained in the bill.
In its stage 1 report, the Rural Development Committee said that it
"shares the hope that the Bill will contribute to a revitalisation of the let land market, increased investment in agriculture and the wider rural economy",
as was outlined by the minister. In 1999, the Liberal Democrats' manifesto for the Scottish Parliament elections stated that the party would
"Introduce term tenancies of a minimum of 15 years to replace landlord/tenant partnership agreements",
and that it would legislate to
"Give tenants a right of pre-emption if the holding is placed on the market."
Both those commitments are met in the bill.
It is clear that the reforms are essential because previous efforts to reform the system have not succeeded in increasing the availability of tenancies or in encouraging the diversity that is needed on our farms. The last attempted reform, by a Conservative Administration in 1991, failed because mechanisms were found to circumvent the intended security of tenure. In its report, the Rural Development Committee recommends to the Scottish Executive that it ensure that the new reforms are not similarly frustrated.
I turn to the point that the minister made about section 35(9) and the Rural Development Committee's feeling that it might not strike the right balance between landlords' rights and tenants' opportunities. Section 35(9) states:
"The landlord may object to the notice of diversification if … the landlord reasonably considers that the intended use of the land for a non-agricultural purpose … would … be detrimental to the sound management of the estate".
If I were a landlord, I would consider that to be a catch-all and I would automatically issue an objection to anything that I did not consider to be effective use of the land. That is what the committee was trying to say, so perhaps section 39 could be tightened up a little bit.
I turn to the element of the bill that deals with a tenant's right to buy land. It must be wrong for a landlord to be able to sell a farm over the head of a sitting tenant. The committee received compelling evidence of that from Stuart Black, who told us that his property
"was finally sold some months later, the only notification we received, and only goodbye, was a legal notice to pay future rents to Salingor Holdings, incorporated in the Bahamas, the new owners are a French/Belgian family".
Under the bill, that farmer would have an opportunity to purchase his farm when it came up for sale. Another tenant farmer—Mr Mann—told us that his property had had six different owners in his time. The bill is designed to help such farmers.
The right of pre-emption that is contained in the bill is a real step forward and it is a win-win proposal—I cannot understand why the Tories oppose it. The tenant will gain by having first refusal on the property that he farms and the landowner will gain by selling to a sitting tenant, thus increasing at a stroke the value that he would otherwise gain from selling the farm on the open market while it had a sitting tenant.
I thank the member for giving way. He is clearly an enthusiast of the bill, which I very much welcome. Will he explain why he voted against the committee's report when his Liberal colleague John Farquhar Munro and the Labour and SNP members found it perfectly possible to recommend it to Parliament?
Stewart Stevenson has raised the issue, so I will explain. Fergus Ewing said that 95 per cent of the report had general agreement—indeed it did. On 26 November we had completed the report, apart from topping and tailing it. What happened? On 3 December we went back and at the request of SNP members, we inserted a paragraph about the absolute right to buy, which I could not support, because it was against what I believe in and against the principles of the bill. I did what I did so that my objection would be recorded in the Official Report of the meeting.
The only people to oppose the reform in committee and again here in the chamber are the Conservatives who, true to form, seem to be content simply to oppose reform for the sake of it. Some 74 per cent of landowners who responded to the National Farmers Union of Scotland survey that was published in February supported the pre-emptive right to buy. Why? They supported it because it is so obviously in everybody's interests.
I turn to the issue that dominated the deliberations of the Rural Development Committee, even though that issue is not covered in the bill. I refer, of course, to the proposals to demand compulsory sale and transfer of farm property from one private individual to another. Throughout the evidence-gathering sessions I asked witnesses continually whether they could identify the specific public interest in transferring property in such a manner, but none could do so. We came close only when Andy Wightman agreed with the proposition that it did not matter whether there were a few injustices to individuals should the greater good prevail. I am sorry, but I cannot disagree more. I see no justification whatever for the state's demanding the compulsory sale of property by one individual to another when no public interest is at stake. If there is a public-interest argument, compulsory purchase powers are already available to the state. It seems to me that, unlike in relation to the community right to buy, under which ministers must be assured that there is a public interest argument to sustain a proposal, the proponents of the argument have failed to support their case.
In conclusion, there is much to commend in the bill. The proposals in the bill, such as the new short limited duration tenancies and the limited duration tenancies, the pre-emptive right to buy, the diversification provisions and the dispute resolution procedures are worthy of our support. I urge colleagues to support the motion and to reject the negative and destructive Tory amendment.
Perhaps you could tell me how long I have, Presiding Officer.
You will have to keep quite tightly to four minutes.
Thank you.
I am pleased that the vast majority of the bill is not controversial and that many organisations are signing up to the new form of tenancies that will be created and to the added opportunities for diversification that the bill will provide. The general principles of the bill are to be welcomed. However, amendments will be required at stage 2 to ensure that the bill's aims can be fulfilled.
The most contentious issue, which has not been included in the bill, is the absolute right to buy. The bill provides for a pre-emptive right to buy, but in truth the pre-emptive right to buy will not make a huge difference to current land-ownership patterns in Scotland. Needless to say, tenant farmers look with envy at their crofting neighbours. However, the plea for an absolute right to buy is not based only on envy; it is sought for practical reasons.
Will the member accept an intervention?
I honestly do not have time, because I have a lot to say.
Some landowners, many of whom are now rushing into dialogue with tenant farmers, have used every trick in the book to ensure that the rights of tenants are flouted. Secure tenancies place obligations on landlords to maintain farms and farmhouses, but many landlords have refused to do that. They either end up in arbitration or leave the tenant to carry out the work. If the tenant does not get permission for an investment, the tenant forgoes any compensation for that investment on leaving the farm. If the tenant asks for permission, landowners insist that the value of the investment be written down over a number of years in a write-down agreement, which ensures that the tenant again forgoes the right to compensation.
I welcome the minister's assurance that that loophole will be closed to ensure that landowners cannot have write-down agreements. However, will landowners be prevented from withholding permission for investment? How can we ensure that landowners will compensate tenants if they say that they are cash poor at the time when the tenant gives up the farm?
If we had an absolute right to buy, tenants who face difficulties could buy their farms. Compensation could be paid to the landowner at that time for loss of ownership and the tenant could raise money for investment to improve the farm, which would make farming more viable. However, we are told that the absolute right to buy would be against the European convention on human rights because it would mean the straight transfer of land from one owner to another without any greater community benefit. I want to argue against that assertion.
If secure tenants could buy their farms, they would be able to invest and have collateral against which they could raise money for investment. That would lead not only to more vibrant farming and more vibrant communities, but to the creation of jobs through diversification. Creating stable communities leads to support for local schools, services and businesses. That would be public gain.
If tenants could buy their farms, they would also have assets that they could sell on their retirement. At present, because of write-down agreements, farmers who give up their tenancies have no access to the investment that they made and which would allow them to give up the tenancy, which is also their home. That means that tenants remain on farms long after they should have retired, which causes a shortage of tenancies, prevents young people from taking on new tenancies and blocks rural development. That happens through no fault of the tenants, who are unable to release the investment in the farms. For that reason, it would be in the public interest to resolve the problem; the argument that such a policy would be in breach of the ECHR does not hold water. I could give many examples to illustrate those points, but I want to ask the minister to consider the issue seriously and to seek a resolution that leads to a vibrant farming industry.
As the first member to speak in this debate who is not a member of the Rural Development Committee, I commend the committee for its report. The report was honest in seeking agreement where that was possible and in reflecting some of the difficulties in what is a complex area.
As other members have said, vast parts of the bill have attracted cross-party agreement. There is crucial agreement about the problems surrounding tenancies and the need for diversity of ownership and land use. There is agreement about some of the bill's measures that will apply to new tenancies; those measures will allow the right balance between flexibility and the possibility of long-term investment, which is exactly what we want.
I want to draw attention to a couple of areas on which more work will definitely be required during the bill's future stages. The first area is the rental assessment. The Rural Development Committee's report makes the point that evidence was received that rent levels were driven more by the subsidy-attracting capacity of the land than by its overall profitability or farm income. That is a very interesting point from which to start. If we are now saying that it is in the nature of public subsidies that they potentially push private rents higher, that is an odd way of reflecting the public interest. I do not see who will benefit from such a system. If subsidies are the primary driver of rents, I suggest that more research and work is needed. Perhaps some of the stage 2 amendments and innovative ideas about forums can be acted on.
There is also the question of how to encourage the diversification that we are all keen to see. The Rural Development Committee was clear that substantial barriers to diversification exist. The phrase "non-agricultural use" and the threat of resumption of land on the back of that is something that the committee and the minister will want to tackle. Some sensible diversification is being unnecessarily blocked, which cannot be to the benefit of the rural economy.
How do we allow tenants to diversify? I note that a number of suggestions have been made, one of which is to use a prescribed list of allowable diversification—a mouthful at any time. I suggest that that is far too rigid a procedure. It seeks to dot all the i's and cross all the t's and to give to diversification an exact nature that is probably not appropriate. As I understand the procedure that is outlined in the bill, we will have a system whereby notification of any planned diversification can be given and there will be a right to object and appeal to the Scottish Land Court. That suggests that all the various players have an opportunity to have their say and to test what is the best way forward. That is a fair balance and the bill is right in that regard.
There were controversial areas about which there was no agreement, particularly with regard to the right to buy. I support firmly the pre-emptive right to buy, which will impose a fair balance once a property is on the market. We should reflect on the fact that in the National Farmers Union of Scotland's survey of opinion—although some members doubted the result—82 per cent of NFUS members supported the pre-emptive right to buy including, importantly, 75 per cent of the landowners they asked. That is a useful statistic to have on public record because it shows that it is possible to build consensus on the issue. As Rhoda Grant suggested, in many cases all the bill will do is give a statutory basis to good practice, which is to be encouraged.
With regard to the absolute right to buy, the committee has acknowledged that however sympathetic many members might be to that right, the case for it is probably not proven. Substantial issues remain to be resolved about the reduction in confidence in letting land. There are questions about the ECHR and about public interest and there are questions about investment in land. That is not to say that the Rural Development Committee might not come to a consensus at a later stage in the bill's progress and resolve to support the absolute right to buy. As matters stand, we can support the principles at stage 1, but it is an absolute requirement at stage 2 that the committee come back to the Parliament with some answers to those very important questions.
Every form of flexibility must be used to keep the Scottish agricultural sector competitive. For that reason alone, I am pleased that the bill seeks to address landlord and tenant agreements by making them better for both parties. That would represent progress. It should be possible for those who have agricultural expertise to rent farms—professionalism has always been a strength of our agricultural industry.
It must also be possible for landlords and tenants to make agreements that are honoured by both sides. I see value in the proposed legislation on short limited duration and limited duration tenancies and there are certainly advantages in the diversification and dispute resolution proposals. Since the enactment of the first Agricultural Holdings (Scotland) Act 1883, arbitration has been the primary method of dispute resolution between landlords and tenants and, in recent years, the cost of arbitration has escalated while incomes have plummeted and been the subject of much criticism.
The bill seeks to diminish costs by taking prime jurisdiction away from the arbitrator and placing it in the hands of the Scottish Land Court. The bill seeks to give the Land Court much wider powers, including the ability to decide on whether a tenancy exists or has been terminated. That is a major improvement because, until now, that question had to be determined either in the Court of Session or a sheriff court, with a consequent multiplication of costs.
There is relief that the proposed legislation appears to recognise that limited partnerships have been in use for many years and that, in order to not disturb long-standing commercial expectations, section 42 of the bill will apply only to tenancies that are entered into after the commencement of the proposed act. If the new forms of tenancy meet the economic needs of the industry, limited partnerships will disappear anyway, which means that there will be more privacy for tenants in conducting their affairs and—from a landlord's point of view—they will know more precisely where they stand under one or other of the new statutory tenancies.
Those are the good points of what was originally intended in the consultation, but that has all been hijacked by the inclusion of the pre-emptive right to buy leading to demands for an absolute right to buy. To be frank, if that approach wins favour with Parliament, there is little point in spending a lot of time on the other aspects of the bill, because no one will let agricultural land. There is already evidence that new letting is not taking place, which is disastrous for the agricultural industry because tenancies are the first rung on the ladder for agricultural workers who rightly aspire to running their own farming businesses. It seems to me to be unfair that those workers should be denied fulfilment of their ambitions because of preferential treatment of one sector of the industry, namely those who have secure tenancies.
We must always remember that permanent security was introduced to encourage tenants to invest in farming improvements, in order that the UK could be self-sufficient in food. That was in the 1940s. It was a national strategic goal and was deemed to be in the public interest, but things have changed dramatically since then. There are food surpluses, and if we continue to import Black sea grain at £35 per tonne, no amount of production and investment facilities will enable our farmers to compete on price.
New investment must be made in marketing and diversification. Far from its being in the public interest, the absolute right to buy will simply increase fragmentation and reduce investment, and will possibly produce a situation similar to the one in Ireland, where arable land is £5,000 an acre, there is no land to let, and tenants are coming over here to try to get leases.
There are hundreds of agricultural workers who would give their eye teeth for a secure tenancy, but that will be denied them if an absolute right to buy goes ahead. Members should bear in mind the fact that secure tenants often pay less rent for their holding than the house alone would fetch on the open market; in fact, the house is often thrown in free. They enjoy the same security that we will have in Parliament, if we ever reach our new dome—sorry, I mean home—in Holyrood. Unfortunately, one can hardly say that that house was thrown in for free.
Yes—thank you very much.
Like Duncan Hamilton, I am pleased to speak in this debate although I am not a member of the Rural Development Committee. However, I have constituents who have secure tenancies, and they have been approaching me for some time about the right to buy.
I am an outsider to the Rural Development Committee, but I have read the evidence and the press reports. It strikes me that the Agricultural Holdings (Scotland) Bill has to be welcomed, if only because it raises a number of very important issues, three of which have been mentioned already: the compensation provisions, the rental determination, and the notice to quit. The National Farmers Union of Scotland briefing deals with those issues adequately, in particular the compensation issue.
There is a widespread feeling of discontent among tenant farmers about the compensation provisions in the Agricultural Holdings (Scotland) Act 1991. I welcome the fact that the minister said that he will examine those issues and return to them at stage 2. An issue that has been raised with me, and which Rhoda Grant mentioned, is the fact that tenants do not feel that they can invest in their farms, because they feel that the investment will not be recovered, which prevents them from selling. That is a big issue.
The crux of the matter is whether the pre-emptive right to buy should be extended to an absolute right to buy. A tremendous amount of evidence is gathering on both sides of the issue. The Scottish Tenant Farmers Action Group draws parallels with crofting rights, because individual crofters have an absolute right to buy, although I believe that ministers' discretion applies. Indeed, the group also points out that in England, under several acts, there are leaseholders with long leases who can purchase outright the property from the landlord.
As Duncan Hamilton said, big issues still have to be debated at stage 2. Another point is that the bill is considered part of the land reform programme. The various bills must be consistent. As has been suggested, we must bear it in mind that the bills are really social reform bills.
The pre-emptive right to buy is expected to make not much difference for some secure tenants, but I accept that the situation will be helped if the system has more triggers. However, many of the arguments that have been made for having an absolute right to buy for secure tenants must be answered.
The ECHR considerations go against having an absolute right to buy. In his report, Sir Crispin Agnew says that they are not insurmountable, but I accept that they are big issues. The Conservatives talked about a reduction in land values and said that such a right would be bad for the industry and would immediately produce a major reduction in confidence. Those matters must be addressed, but they must be balanced by the arguments for such a right.
There is much in what Rhoda Grant said about regeneration. If it is the case that secure tenants want to buy their property or to diversify, that goes against what the Conservatives say about reducing confidence.
One hopeful sign is the meetings that are taking place between the Scottish Landowners Federation, the Scottish estates business group and the Scottish Tenant Farmers Action Group. Those meetings will be helpful for the future.
I imagine that all members who speak in the debate want the development of a framework for our agricultural communities that will enable them to survive and grow by encouraging new entrants into farming and sustaining existing tenants. How we achieve that aim is where some of us differ. When most of us consider the relationship between landlords and tenants, our sympathies lie predominantly with tenant farmers.
The bill contains much that is good—especially the creation of the new short limited duration tenancies and limited duration tenancies. They are badly needed to replace the scam of limited partnerships, which are no more than a Tory ploy to enable their landowning Conservative friends to rid themselves of their unwanted incumbent tenant farmers. I ask my Tory friends to confirm or deny that a large donation—£7,500—was made to the Tory party's funds by one of the biggest landowning estates in the Borders. I wonder why that was given.
Much in the bill must be toughened to protect tenant farmers' rights. I will consider the differences between farming tenants and housing tenants. Could we imagine a social housing tenant paying to repair a leaking roof or to replace their windows? If they were forced to sign a post-lease agreement, as tenant farmers are, they would be responsible for all repairs. Post-lease agreements for tenant farmers should be done away with. What adds insult to injury is the fact that when tenants undertake improvements, many landowners insist on write-down agreements. They agree to set a devaluation period for the improvement, which often lasts only five years, after which the tenant's investment becomes wholly the landlord's asset.
That is why the bill must be tougher. Otherwise, the advantage will remain with the landowner. That is why I support heritable farming tenants winning an absolute right to buy. The argument that that would prevent the creation of new tenancies has no legs, because no new heritable tenancies have been created in the past 20 years. Such arguments are bogus.
Will the member take a brief intervention?
I will, but I am running out of time.
If what he says is the case, will the member tell the chamber why not one farm has been available for let since May this year?
I suppose that the landlords have a great interest in ensuring that their argument is supported. They can do that by not releasing land into the farming community. I repeat that those arguments are bogus.
As for the idea of a land grab, if landlords of secure heritable tenants have in effect lost the right to the use of their land, what landlords have not lost is the ability by mismanagement and neglect to undermine their tenants' businesses.
An absolute right to buy would finally give tenant farmers an escape from bad landlords. The Scottish Parliament has supported the right for social tenants to buy their property and the absolute right of crofters to purchase their crofts. It has voted for communities to be able to buy the land in which they have an interest and also for crofting communities to purchase their rivers. If only to be consistent, the Scottish Parliament must vote for farming tenants to have an absolute right to buy. Their case is just and it is worthy of the Parliament's support.
I remember asking a question of Ross Finnie after the statement that he made on agricultural tenancies in Glasgow in 2000. The fact that it has taken us three years to get this far says something about the complexity of the issue.
I welcome the short limited duration tenancies and limited duration tenancies. It is clear that we need to stimulate the tenanted sector. I want to touch on one or two matters other than the right to buy. The bill also has the objective of promoting more effective diversity in the rural economy, although it does not say so explicitly in the long title; it uses other words to do so.
I note the Rural Development Committee's concern about section 35(9). The committee is concerned that the landlord's right to object to a notice of diversification may shift the balance too far. I accept what the minister said, which was that the provision is a right to object and not the right unilaterally to block such a notice. However, I am concerned that the provision gives landlords the right to put a spoke in the wheel of the system.
I am also concerned about the effect of section 44(1) which, among other things, provides for compensation to landlords on the termination of tenancies where
"the value of the holding has been reduced by … the carrying out of conservation activities".
I may have missed the evidence that would tell me what kind of conservation activities could reduce the value of the land, but if there are such beasts, we should reconsider our approach to encouraging conservation.
As a representative of one of the most afforested constituencies in the country, I share the concern that has been expressed about section 36, especially the reference to limited duration tenancies. Section 36 gives tenants the right to cut the timber that they have planted. Given the growing cycle of timber, unless some new kinds of tree are to be introduced into Scotland, that benefit would seem to be pretty illusory. Perhaps the minister will explain the thinking behind section 36.
I am very disappointed, although not surprised, by the Conservative members' approach to the bill. I am not referring to their approach to the absolute right to buy, as I recognise that that is a contentious issue on which strong views on both sides of the subject are to be expected. The two Tories on the Rural Development Committee voted against the pre-emptive right to buy for secure tenants and against the general principles of the bill. They even voted against section 47, which suggests extending the range of transfers that trigger the pre-emptive right to buy to ensure that mechanisms such as limited companies, trusts and companies registered abroad cannot be used to frustrate the policy intentions of the bill. John Farquhar Munro referred to that. By their actions, the Tory members of the Rural Development Committee have in effect said that they are happy for methods such as offshore companies to be used to frustrate the modest provision of the bill for a pre-emptive right to buy for secure tenants.
This is not just about having a willing buyer and a willing seller; it is about having a seller who is willing to sell to the willing buyer who is the sitting tenant rather than somebody else. Many of the arguments against the absolute right to buy are totally spurious. The argument that no one will lease out anything for other than a few months because of the danger of the right to buy ignores the fact that there is a fundamental difference between a secure tenancy and a tenancy that is let for a limited duration.
The argument that if the Parliament passes this absolute right to buy it will go on to grant other kinds of absolute right to buy is the same argument that was used by the same people in respect of fox hunting. They said that if fox hunting were to be banned, fishing would be banned. It was just as wrong then as it is now.
Jamie McGrigor spoke about fragmentation. If he is against fragmentation, I presume that he will say that he is in favour of the ultimate consolidation, which is the nationalisation of all Scottish land into one big estate. What nonsense of an argument that is.
We need a vibrant tenanted sector. If we do not get the absolute right to buy, we need to put in place measures to remedy many of the injustices that exist at the moment.
I declare my peripheral interest in agriculture as a dormant partner in a family farming business.
The background to the bill is the fact that agricultural holdings legislation has been comprehensively overtaken by the device of limited partnership tenancies. We now have a diminishing number of secure hereditary farm tenancies and a limited number of insecure and unregulated partnership arrangements. That is all that is on offer, and there is not much of that.
I come at the question with the objective of opening up a proper career structure in agriculture. At present, there are just three ways into farming: patrimony, matrimony or lottery money. Far too many graduates from the Scottish Agricultural College and other institutions who do not have any of those advantages have not got the remotest chance of running their own farming businesses at any stage in their careers. That is a criminal waste of talent for rural Scotland. We have a fossilised land tenure system, with no way into the industry for bright, young land managers.
If we want to create business opportunities for new farmers, there are only two ways of doing it. The radical way, which I might prefer, would be to take a lot of land into public ownership and for the state to let farms through local community agencies. I have argued for that policy in the past but, whether we like it or not, there is no serious prospect of taking substantial areas of good farmland into community ownership in the foreseeable future. Bluntly, we will not take resources out of health and education for the acquisition of farms to let. That leaves us with the only other way of creating new opportunities for new entrants into agriculture, which is by persuading private landlords to let farms on fair terms. That is what the bill is all about.
I have probably made this clear already, but I should confess that I am instinctively hostile to the landowning fraternity. Not for nothing have I been described as a class traitor, and I have certainly not paid any attention to the interests of the Scottish Landowners Federation. However, I have listened carefully to the representations from tenant farmers in my constituency and elsewhere in Scotland, and one thing is crystal clear. The objective of increasing the availability of farms to let depends on the confidence of landowners. It seems that the risk, let alone the reality, of an absolute right to buy would put the kibosh on any prospect of achieving that confidence. That is the reality with which we must live, whether we like it or not.
At present, no farms are becoming available to let. The bill has evolved from a carefully balanced and exhaustively negotiated framework for new tenancies, and as such it might just work. I hope that it does.
The call for an absolute right to buy is a distraction. It has nothing to do with the objective of increasing opportunities for new tenant farmers. It would just increase the number of owner-occupied farms, which is fair enough, but would not address the important problem of the need to create opportunities for new tenants. Indeed, it could harm the prospect of creating new tenanted farms by wrecking the only prospect of increasing the availability of farms to let on fair terms.
On balance, I believe that we should support the bill as it stands, including the pre-emptive right to buy. That is abundantly fair and right. At this stage, we should resist calls for an absolute right to buy but, in doing so, give a good old Labour warning to the landowners of Scotland. If the bill fails to achieve an increase in the number of tenanted farms, the Parliament should return to the subject in the not-so-distant future to consider the case for community ownership of land to let.
I draw members' attention to my entry in the register of members' interests, which shows that I am a landowner, although neither a landlord nor a tenant as I am an owner-occupier. I am also a paid-up member of the National Farmers Union of Scotland and the Scottish Landowners Federation, although sometimes I begin to feel that I am keeping an expensive dog and doing all the barking myself.
The main test of this vital piece of legislation is what it does to the tenanted sector. I am prepared to admit that the bill is, by and large, necessary, welcome and long overdue. However, I have grave reservations, for many of the same reasons that John Home Robertson has just expressed.
We must apply the vital test of whether it is genuinely desirable to continue to run down the amount of land that is available for let. Indeed, Fergus Ewing ably made that point in his opening speech. We know that the amount of land available for let is decreasing, and I do not think that that is desirable. As John Home Robertson pointed out, the availability of new land is necessary if we are to have new entrants to the farming industry. However, we should not make land available through state intervention; after all, the mechanisms that would allow that to happen already exist.
The legislation threatens and undermines the confidence of people who are willing to let land. People have argued that we are talking simply about the pre-emptive right to purchase land under long-term tenancies. However, if the Parliament decides once to legislate retrospectively on previously existing tenancies, it could do so again. No member of the Parliament can say that it would not or could not. John Home Robertson suggested that if the bill does not succeed in its aims, we should revisit it in the near future. However, that could well be the future that John Home Robertson described in his speech.
As I have said, we are seriously undermining the confidence of the people who already let land or who, because of the bill's provisions, own land and are considering whether to let it. Such confidence is necessary to give the boost to the tenanted sector that the bill is capable of delivering.
In the short time that I have left, I want to make a couple of points that I would have raised if I had been allowed to intervene earlier. Rhoda Grant expressed some extraordinary ideas that were given lip service by one or two other members. It is easy for someone to make comparisons with crofting communities if they have gained their experience in the crofting counties. However, that experience of crofting is not shared by the vast majority of Scotland. Although such comparisons might be relevant in the Highlands, I do not believe that they are relevant across the lowlands of Scotland, where a genuinely competitive market in let land is essential to ensure that those who can farm effectively and efficiently will be able to take on and maintain tenancies when the bill is enacted.
It must also be said that, when she was listing the advantages of a tenant becoming an owner-occupier, Rhoda Grant missed one enormous point: the millstone of debt. People who become owner-occupiers have to find the money somewhere. Banks will be the main source of that money and at the moment not many banks are willing to get involved in such schemes. Furthermore, those who are able to borrow money to become owner-occupiers will not have the confidence that she suggested they will have, because they will have to manage that debt.
Presiding Officer, there is much more that could be said about the bill. Indeed, much more will be said about it before we complete our stage 2 consideration.
But not by you, please.
No, not by me.
The debate has focused on the right to buy and, in particular, the pre-emptive right to buy. It seems that the Conservatives are the only people to have opposed that reform in committee and again in the chamber today. True to form, they seem content to oppose reform for opposition's sake. They have become so out of touch, even with the people who used to support them, that they must get a reality check. We have already heard that 74 per cent of landowners who responded to the NFUS survey that was published in February supported the pre-emptive right to buy. They did so because it is so obviously in everyone's interest.
Will the member give way?
No. The member will have his own say in a moment.
It seems to me that Alex Fergusson does not oppose the pre-emptive right to buy on principle. If he did, he would also have opposed the feudal superior's pre-emptive right to buy. He cannot see the relationship between a feudal superior's pre-emptive right to buy and a tenanted farmer's right to buy.
Jamie McGrigor highlighted the importance of the Land Court in the new tenancy agreements. However, he gave the game away about the Conservative position. The Conservatives oppose the pre-emptive right to buy, not because they disagree with it—they do not—but because it will lead to an absolute right to buy. The Tory position is basically dishonest. It is not a position of principle. They want a win-win situation for tenant and landlord.
Sylvia Jackson said that much evidence was gathering on both sides of the equation about the absolute right to buy. She said many sensible things, but I cannot agree on that one point. I have repeatedly asked witnesses in evidence sessions to provide specific examples of where it would be in the public interest to go down that route, and they could not, apart from the Scottish Tenant Farmers Action Group and Andy Wightman.
I respect the views of my friend and colleague John Farquhar Munro—he has a long-standing commitment to the absolute right to buy, as does my friend and colleague George Lyon. [Interruption.] Quiet, folks.
John Farquhar Munro talked about social tenants' right to buy from the state. That is not the same as the state forcing the sale of the private property of an individual owner to another individual against the will of the former.
If Mr Rumbles believes that, in a liberal democracy, the state should not force an individual to sell his land to another individual, why does he not apply that logic to the pre-emptive right to buy?
It is obvious that Murdo Fraser has not been following the argument. The landlord wishes to sell his land—that is the fundamental difference between the pre-emptive right to buy and the so-called absolute right to buy. The Tories have lost the plot completely. Even Robert Balfour, the convener of the Scottish Landowners Federation, is quite happy about the pre-emptive right to buy.
No he is not.
He is.
It is obvious from the views expressed by SNP members in committee that they might lodge amendments at stage 2 to create an absolute right to buy. Alasdair Morgan's contribution was interesting. I hope that SNP members have listened to the debate and that they do not risk throwing the baby out with the bath water—that they do not proceed down the route of an absolute right to buy. There are many things in the bill that we all agree on. We all agree with 95 per cent of it and it would be useful if the SNP did not lodge such amendments at stage 2.
I draw to members' attention the fact that I have recently acquired a 3-acre field from which I derive no revenue, but upon which another farmer has some sheep.
We must commend the Executive and all those who participated in the consultation process because they have formed a partnership of what we expected to be diverse interests, coming together in the SLF and the NFUS to agree proposals.
Unanimity was not achieved at the outset and the Scottish Tenant Farmers Action Group strongly believed that there was a case for an absolute right to buy. We welcome the discussions that have been taking place between that group and the NFUS with the aim of broadening the consensus and extending the provisions of the bill to meet many of the legitimate concerns that the Scottish Tenant Farmers Action Group brought to the committee and to the wider public.
To address Mike Rumbles's point, the paragraph that the SNP was happy to support, along with Labour members and John Farquhar Munro, is essentially a warning that if we cannot address those concerns in an adequate way, we simply must consider other options. I am relatively confident, however, that the minister has heard many of the arguments—I see him nodding—and we await with interest the amendment that he will lodge.
If that paragraph in the report is just a warning, why has the SNP rural affairs spokesman gone public with the fact that he will lodge an amendment at stage 2 to introduce an absolute right to buy?
It is interesting to note from listening to John Farquhar Munro, Rhoda Grant and John Home Robertson that the members on those benches do not have anything to do. The Tories are, as usual, isolated from the core of the argument and from the real needs of tenant farmers and farm owners throughout Scotland.
In his opening remarks, Fergus Ewing highlighted the point made on page 2 of the report—that the long-term reduction in the number of tenant farmers across Scotland is at the absolute core of the argument. The 1991 act, which was introduced by the Tories—without safeguards, so that its purpose could be avoided by a series of manoeuvres—is the problem that we are addressing today. That is perhaps one of the reasons why the Tories find themselves uncomfortable with the measure—it is addressing their previous failure. Paragraph 14 in the committee report highlights that matter.
On avoidance, we must look at what the committee has said in paragraph 17. I hope that the Executive has listened carefully to the arguments and evidence that have been brought forward and that amendments will be lodged to ensure that we have a robust way of dealing with any emerging avoidance tactics that may follow.
On diversification, the committee pointed in paragraphs 26 and 29 to the difficulties that there might be in limited partners and general partners having to agree jointly on certain matters. I hope that that matter will be addressed.
I remain somewhat unclear as to why Mike Rumbles could not support the report. However, I welcome his support for what is actually proposed in the bill. As paragraph 53 says, it is important that we consider an amendment to allow tenants in all tenancies a statutory right to notification of an intention to sell land, even if they do not have a pre-emptive right to buy. That would be of value, and it would be vindictive to oppose such a proposal, were it to be brought forward.
We must consider the Tories' amendment and recognise that they remain—on this issue as on so many others—out of touch with mainstream Scottish opinion. They are even cleaved, for the first time, from the SLF. We need a strong tenanted sector. The bill can, and must, help us to achieve that. I particularly look forward to John Farquhar Munro's amendments on an absolute right to buy. They will make interesting reading.
Unlike other members, I have no formal interests to declare, but in my legal practice I did some work on agricultural holdings. Indeed, I am one of the wicked lawyers referred to in the debate who set about circumventing the 1991 act with limited partnership agreements. I say to John Farquhar Munro that limited partnership agreements came in because the 1991 act still allowed security of tenure. If we did not have limited partnership agreements, we would not have land let at all under any circumstances. That is the important point.
As far as the bill is concerned, it is a piece of legislation that is overdue to modernise the law on agricultural holdings. There was consensus between the NFUS and the SLF, and many of the measures in the bill, such as the limited duration tenancies and the improved dispute resolution measures, were warmly welcomed. Sadly, the bill has been wrecked by the introduction of a tenants' right to buy. We have to wonder why there was a U-turn on the part of the Executive. As my colleague Alex Fergusson told the chamber, Ross Finnie set out in a ministerial statement on 17 May 2000 the Executive's opposition to a tenants' right to buy, which he said would not
"do anything other than dry up a limited supply",
and that that would not be
"consistent with our aim of getting new tenants."—[Official Report, 17 May 2000; Vol 6, c 695.]
We have to ask why there has been a change of heart on the part of the Executive. Could it perhaps have something to do with lobbying by George Lyon, who I see has ensured his diplomatic absence from the chamber this afternoon and who stands to benefit personally from the bill? It is interesting that, despite what Mr Rumbles said, the Liberals are all over the place with the bill. What is the Liberals' position? All Liberal members who have contributed to the debate have taken a different position.
As the minister said, evidence to the committee suggests that most landowning interests do not have a problem with the pre-emptive right to buy in itself. I say to Mike Rumbles that the right to buy is not a problem in itself, but its introduction opens the door to an absolute right to buy—that is what the committee saw. The committee's evidence makes it clear that the threat of the absolute right to buy is causing huge concern to the agricultural community throughout Scotland. In the debate, we have heard that land agents are trying to terminate all leasing agreements, as they fear that the door has been opened to an absolute right to buy.
I made that point, too. Robert Balfour of the SLF stated:
"We are not attacking the pre-emptive right to buy".
Why are the Conservatives so opposed to it?
That should be perfectly clear to Mr Rumbles. We oppose it for the same reason that he has opposed the absolute right to buy: in a liberal democracy, it should not be the right of the state to tell a person to sell their property to another person. More seriously, it opens the door to an absolute right to buy and we have seen the damage that that has already done to the tenanted sector. If the intention of the bill is to rejuvenate the tenanted sector, it will not do that.
All the evidence on the ground is that an absolute right to buy would be a disaster for the tenanted sector. Far from expanding that sector, which was the bill's intention, it would further restrict the supply of land that is available to tenants, and the farming industry would be deprived of new entrants. That would be a disaster.
The minister could do one thing to help the situation—he could state here and now, on behalf of the Executive that, if the bill is amended at stage 2 to include an absolute right to buy, the Executive will drop it and not pursue it. If the minister did that, he would at least provide some assurance to landlords and tenants alike. In his response, I invite the minister to address that.
I am truly sorry that what should have been a sensible piece of reforming legislation has been wrecked by the minister for political purposes. The bill will further damage the fragile economy of rural Scotland. For that reason, the Parliament should support the amendment in the name of Alex Fergusson and ensure that there is a sensible bill that will achieve the stated aim of rejuvenating the tenanted sector.
Unfortunately, today's debate has been short, but it has nonetheless been passionate. That passion is a reflection of and tribute to the importance of the Agricultural Holdings (Scotland) Bill to the people of Scotland and to the people of rural Scotland in particular.
The bill is the culmination of an historic process. It has brought together all sides of the industry to agree on new tenancy arrangements after decades of recognition that the Agricultural Holdings (Scotland) Act 1949 tenancies are anachronistic, stifle the sector and have been avoided and evaded to the detriment largely of tenants. It is important that equilibrium in the relationship between tenant and landlord is restored.
I will start with a theme with which I suspect I will continue. I agree with Stewart Stevenson and other members that a successful tenanted sector can perform a key role in supporting our overall vision for rural Scotland. That vision involves a prosperous farming industry that can help to sustain our rural communities and protect our environment. Success is dependent on the industry embracing change and new opportunities. A successful tenanted sector can provide much of the flexibility that is required for change and can also play a major role in attracting new blood and new ideas into agriculture.
I say to Alex Fergusson that there are indications that there is genuine interest among landowners in offering the new tenancies. Where existing tenancies are ending, I suggest that many landowners want to offer the new tenancies as soon as possible.
I agree with Alasdair Morgan, whose reference to Glasgow was apposite. Devolution created the atmosphere that permitted a new consensus on how necessary change should be moulded to fit the industry for the 21st century and the long-term challenges that it faces. The bill was created from that devolutionary mould. I hope that members, particularly the Tories, understand how important the bill is to rural Scotland.
Attention has inevitably been diverted to the question of what kind of right to buy a tenant should have under the 1991 act, but the importance of the rest of the bill should not be subjugated to that consideration. I agree with Murdo Fraser that landlords must feel able to let land with confidence. Tenants, too, require the confidence that security of tenure brings, if they are to turn ideas into practice and invest in their businesses. As Rhoda Grant said, the bill will provide for compensation to the tenant. I inform Rhoda Grant and Stewart Stevenson that we are considering how to ensure that that cannot be contracted out from write-down arrangements.
I thought that the minister would appreciate a bit of a break because of his throat.
I refer the minister to recommendation 39 from the Rural Development Committee's report, which perhaps has not been specifically addressed:
"The Committee recommends that the Scottish Executive should examine the recommendation made by the NFU Scotland that the termination of a secure heritable tenancy (for example, by conversion to an LDT under section 2 of the Bill) should attract statutory compensation."
That would perhaps allow the new entrants that some of us would like to see, as well as giving a tenant farmer proper compensation.
I think that I referred to that matter in my opening address and we will obviously consider it in detail at stage 2. I look forward to that debate. I will come later in my speech to the issue of compensation more generally.
To work effectively, the tenanted sector requires trust between tenant and landlord. The amendment to the motion acknowledges that. However, I dispute the assertion that a pre-emptive right to buy, as provided for in the bill, will undermine such confidence. After all, the pre-emptive right to buy builds on what is already usual practice, whereby a landlord offers to sell a farm to a sitting tenant because to do so is to the financial advantage of both. The right to buy will be exercised when a landlord is willing to sell and a tenant is willing to pay market value for the land. I believe that landlords, their advisers and their representative bodies, who understand our provisions—unlike the Conservatives—know that to be true. Therefore, I call on members to reject the amendment.
Will the minister address the particular point that I put to him earlier? If the Rural Development Committee amends the bill at stage 2 by including in it an absolute right to buy, what would the Executive's response be to that?
I will come to Mr Fraser's point directly.
I accept that landlords are concerned about the risk that they might in future be compelled to sell land against their will. I have explained why we believe that an absolute right to buy would harm our efforts to stimulate farm tenancies. We also believe that an absolute right to buy would not achieve its desired purpose. I fully understand why the Scottish Tenant Farmers Action Group is concerned about the plight of tenants under the 1991 act who cannot afford to retire or buy a farm on the market or who have encountered difficulties in their relationship with their landlords. We have made it clear that we are sensitive to those concerns, but the only tenants who could afford to exercise an absolute right to buy at market value would be those who could afford to buy a farm on the open market. I think that Murdo Fraser made that point. To any tenant facing financial hardship, an absolute right to buy would be useless and superfluous. [Interruption.]
Order. I am reluctant to interrupt the minister, but clearly he is toiling with his sore throat. We have a couple of minutes to go and I would be grateful if members could keep the noise down so that we can conclude the business.
Hear, hear.
I think that they are all demob happy, Presiding Officer.
I think that they probably are.
Anyway, where were we?
We are grateful to Sylvia Jackson and Alasdair Morgan for their interventions. Members need to consider the possible expense of introducing an absolute right to buy. We believe that it could blight agricultural land values because the price that a potential purchaser would pay for the land if their freedom to own, use and manage that land were inhibited by such a right would be lower than they would be willing to pay for the same land at the moment. We believe that those losses could run into scores of millions or hundreds of millions of pounds. The potential loss arising from each reduction of 1 per cent of the marriage value of holdings with traditional tenants under the 1991 act could be in the region of £20 million. All members should bear that in mind.
Unusually for me, I will end on a note of consensus with the nationalists.
Careful.
It is all right, I will not go too far.
I cannot for the life of me understand the Conservative opposition to the pre-emptive right to buy. It is not for me to offer advice to the Conservative party on how to achieve electoral success—[Members: "Go on."]
I will, in that case. If the Conservatives find that they are in a hole, they should stop digging. They have again isolated themselves from the broad spectrum of political opinion in this country, which supports the pre-emptive right to buy that we intend to introduce.
I have referred to the main points raised by the committee, but I am aware that there is a range of other issues in the report that we will need to consider further at stage 2, and I look forward to that.
I am fully committed to taking the bill through the Parliament and I therefore urge members to support the general principles of the Agricultural Holdings (Scotland) Bill.