Agricultural Holdings (Amendment) (Scotland) Bill: Stage 1
The next item of business is a debate on motion S4M-02495, in the name of Richard Lochhead, on the Agricultural Holdings (Amendment) (Scotland) Bill. I call Richard Lochhead, the Cabinet Secretary for Rural Affairs and the Environment, to speak to and move the motion. You have 10 minutes, Mr Lochhead.
14:33
Thank you, Presiding Officer.
This Government has two key policy objectives for tenant farming in Scotland: first, to ensure that tenant farmers have legislative protection; and, secondly, to have a vibrant tenant farming sector in Scottish agriculture so that the sector can continue to put food on our tables and help to care for Scotland’s environments.
I think that all members recognise the important role played by all our diverse agriculture in Scotland, and I am sure that members agree that Scottish agriculture continues to punch above its weight in our economy. That is underlined by the incredible success of our food and drink sectors that was announced only yesterday, with overseas exports of Scottish food and drink increasing by a massive 19 per cent in 2011 alone. Those exports are now worth around £5.5 billion to the Scottish economy and are achieving our national targets about six years early—that is just an illustration of the booming success in recent years of our food and drink sectors.
Our tenant farmers are of course an integral part of Scottish agriculture. Prior to 1883, the relationship between tenant farmers and their landlords was determined by freedom of contract. Since then, farming leasing arrangements between landlords and their tenant farmers, and their relationships, have been regulated by a series of acts of Parliament.
Before the Agricultural Holdings (Scotland) Act 2003 was passed, the only formal leasing arrangements that legislation permitted were a seasonal let of less than one year—my notes refer in brackets to a lease of 364 days, not 365 days, in the legislation—or secure tenancies, such as those in the Agricultural Holdings (Scotland) Act 1991, with which we are all familiar. When a tenant farmer has a long-term protected lease that is heritable, it can now be broken only by non-payment of rent or a material breach of the lease.
Many factors—not just legislation—influence the trends in agricultural tenancies. Economic factors, the availability of land and labour, our farming systems, the health of the marketplace and changing rural communities all influence the sector’s health.
The purposes of agricultural holdings legislation are to protect the rights of the tenant and the landlord and to do what we can to enhance the productiveness of our land in Scotland. The legislation achieves that by encouraging tenant farmers to maintain proper husbandry of the land until the end of their lease while enabling them to receive value for the improvements that they have made to the land. The aim has been to ensure that neither party is disadvantaged by a tenancy agreement, and the bill has the same aim.
For some, tenant farming provides the first foothold on the farming ladder. It is a family tradition for some and it provides for others the opportunity and flexibility to farm in a way that suits their needs.
I am well aware that some tenant farmers face extreme hardship or economic difficulties, because they tell me that when I travel the length and breadth of Scotland. I know that there are difficult landlords and unscrupulous land agents, and we all wish that that was not the case. I know that tenant farmers provide some of our best produce and are dynamic businessmen. Many have contracts with leading retailers and provide some of the best beef and lamb that can be got anywhere. It is important to recognise that there are also excellent proactive landlords and fair-minded agents.
It is not easy to achieve growth and dynamism in an industry that is based primarily on the relationship between two individuals, in a country in which available land is limited. Balancing the needs of both parties is often challenging. It would be easy to sidestep some of the difficult issues that need to be addressed. I expect that I speak for many members when I say that we in the Scottish Government do not wish to take the easy option. The Government and I are committed to tenant farmers and to a vibrant tenant farming sector. The bill is one of the many tools that we are using to achieve that.
The bill marks the final stage in implementing the package of recommendations that were made to the Government by the Scottish tenant farming forum, with which we have worked closely in recent years to achieve our aims. I was disappointed when we could not include in the Public Services Reform (Agricultural Holdings) (Scotland) Order 2011 the two main amendments that are in the bill, but we could not abuse the power to make that order. I introduced the bill to enable the Government to complete its commitment to implement the final two parts of the package of measures that our key tenant farming stakeholders proposed and to implement a further recommendation from the industry on VAT.
Section 1 of the bill amends part III of schedule 2 to the 1991 act to extend the definition of a “near relative” to include grandchildren. The current definition includes a surviving spouse or civil partner and a natural or adopted child of the deceased tenant farmer. The amendment will help to meet our objective of widening the class of people who are entitled to a degree of protection when succeeding to a secure 1991 act tenancy. It should also make it easier for grandchildren to inherit farm tenancies and should help new and younger entrants to get a start in tenant farming, which will be a key benefit to the agricultural sector.
Section 2 will amend section 9 of the 2003 act to nullify lease terms in limited duration tenancies that provide for upward-only and landlord-only initiated rent reviews. In a limited duration tenancy under the 2003 act, the tenant and the landlord enjoy freedom to contract and are not restricted in any way when agreeing the contractual provisions on rent review that appear in the lease. It is therefore possible at present for parties to agree to upward-only rent reviews or to a provision whereby only the landlord and not the tenant farmer can instigate a rent review. Our amendment will help to prevent landlords from burdening their tenants with limited duration tenancies that have uneconomically high rents. Our proposals will ensure that, when such clauses appear in leases in the future, any such terms should be struck out.
We do not propose to make the provision retrospective in order not to interfere with the contractual position of parties who have already entered into leases that contain such terms. Agreements between landlords and their tenant farmers that are already in place will continue to be unaffected by the provision until their expiry.
Section 3 contains the third provision, which will amend section 13 of the 1991 act, which relates to VAT and rent reviews. Under section 13 of that act, rent reviews take place in a three-year cycle, and any variation in rent prevents the parties from having a rent review for a further three years. The amendment simply clarifies that, if the VAT rate changes or the landlord chooses to change the VAT treatment of the rents, that will not qualify as a variation of rent. The amendment therefore avoids the situation in which a landlord and a tenant are unable to go to the Scottish Land Court for a rent review. Again, that has been agreed by the tenant farming forum and it mirrors a recent amendment to English legislation that arose from a recent court case. An agreed and carefully negotiated set of proposals has been provided that commands the support of the tenant farming forum, which includes all the main stakeholders in tenant farming in Scotland.
I know that the sector faces many other challenges and that many of those difficult issues have featured in the debate on the bill, but I also know from speaking to many tenant farmers and others that they wish their legislators to tread quite carefully, given the deep complexity that we are dealing with. Stakeholders have certainly said to me that they wish to avoid embarking on a further round of rushed changes to the legislation that may be well intentioned but which those with the necessary expertise to ensure that the changes will work have not been able to fully think through and analyse at this stage. I for one wish to heed their advice.
That is why, following my consideration of all the background information and the stage 1 evidence and committee reports, I will lodge only one of the amendments that the Rural Affairs, Climate Change and Environment Committee proposed. There will be a stage 2 Government-led amendment to the transition provision that is contained in section 4 so that the changes to the definition of “near relative” will apply in cases in which a tenant has died before the bill comes into force but notification has not yet been given to the landlord under the relevant provisions.
I have also considered the recent decision of the Court of Session in the Moonzie rent review case. As I indicated to the committee yesterday in writing, I will not lodge a stage 2 amendment to amend section 13 of the 1991 act. Some stakeholders may take the view that the Moonzie case highlights deficiencies in the formula for undertaking rent reviews in 1991 act tenancies, but all stakeholder groups agree that the rent review system is a complex topic and that any legislative change should be carefully considered to allow full consideration of potential impacts. We need detailed consultation on and discussion of that issue with the industry. Indeed, we have met the TFF to discuss the way forward on it, and I will hold a summit meeting with the TFF on 4 April in Inverness, at which we will discuss such issues. Let me be clear: I recognise that we need a system for determining rents that is fit for purpose. In that forthcoming meeting, we will consider whether an independent panel should be set up to assist in the process and to enable progress to be made in a much shorter timescale than might otherwise be the case.
Members will be aware of the recent Court of Session decision in the Salvesen v Riddell case. That case is still before the courts, so I am quite limited in what I can say about it, but we are considering all our options, including the option of appeal.
I am only too aware that there are other important tenant farming issues that need to be addressed and to be acted on within a realistic timescale. At the summit that we will hold in a few days’ time with the tenant farming forum, we will discuss many of those issues, which cover rent reviews, dispute resolutions, broader succession issues, waygo arrangements and issues to do with fixed equipment. I do not want to pre-empt the TFF work plan, but I want a strict timetable that we can stick to.
Members will be aware that we have given a commitment that we will have a full review of all the legislation within 18 months of the bill becoming law. We will then take any action that requires to be taken in the Parliament, provided that the opportunity arises.
Given the complexity of the issues that we are considering, ours is the right course of action. The Government believes that it is important that the bill, which has been developed in close partnership with the key stakeholders, deserves members’ support, which I urge all members to deliver.
I move,
That the Parliament agrees to the general principles of the Agricultural Holdings (Amendment) (Scotland) Bill.
I call Rob Gibson to speak on behalf of the Rural Affairs, Climate Change and Environment Committee.
14:44
There is an old Highland joke about a croft being a small piece of land surrounded entirely by large amounts of legislation. Given the amount of legislation on agricultural tenancies that has come forward in recent years and the time that such tenancies have taken up in the Scottish Land Court—and, sometimes, the Court of Session—we can be forgiven for thinking that the same joke can now be told about tenant farming.
Scrutinising the Agricultural Holdings (Amendment) (Scotland) Bill has been a process of two halves for the Rural Affairs, Climate Change and Environment Committee. On the one hand, we looked at the three modest, albeit necessary, changes that the bill proposes to agricultural tenancy law. On the other, we considered many other issues that are not directly covered by the bill, but which were raised by stakeholders, often anonymously, and which are fundamental to the policy behind the bill.
During our scrutiny of the bill, the Scottish Government published statistics that show that, between 2005 and 2011, there was a decline of almost 10 per cent in the number of agricultural tenancies in Scotland. There were 727 fewer holdings with tenancy agreements in 2011 than there were in 2005. That is a significant reduction, and we need to know what is leading to that trend. Those statistics focused the minds of the entire committee and led us to consider the fundamental issue that is at stake, which is how best to address the balance between landlords’ rights and tenants’ rights so that Scotland can, at last, have a healthy tenant farming sector to pass on to successors.
Will the member take an intervention?
I will take a brief one. I have a lot to say.
Given that the tax regime is the same throughout the United Kingdom and that farm business tenancies south of the border are similar to limited duration tenancies in Scotland, would the member care to speculate on why the number of tenancies has fallen in Scotland at a time when the number of tenancies has significantly increased south of the border?
I think that there has been enough speculation, but I suppose that, even in the member’s devo plus proposals, there might be a decision to take forward these kind of things in Scotland.
Our scrutiny showed that there are significant gaps in the data that is required to make informed, evidence-based decisions on how to address the challenges that are facing tenant farming. We simply do not have a full picture of what is happening in tenant farming across Scotland to underpin the decisions that we need to make. I welcome the Scottish Government’s commitment to review the questions that are posed in the agricultural census to ensure that the most beneficial questions are being asked, with a minimum of bureaucracy.
I turn to the three specific provisions in the bill, which correct anomalies in the law. The committee unanimously supports all of them in principle and hopes that they will lead to more land being made available to let and the creation of a more conducive environment that will encourage new entrants to join the industry.
The bill follows many years of protracted debate in the tenant farming forum. It aims to achieve compromise between landlords and tenants in order to make progress on tenancy law. It is important to note that it was intended that two of the three provisions would be included in a 2011 order, but they were delayed due to the need for primary legislation, as the cabinet secretary said. That prevented them from being included in earlier instruments. Those provisions are long overdue, and the changes will complete the first phase of the tenant farming forum’s consideration.
The committee unanimously supports the extension of the category of tenants who can serve a counter-notice to a notice to quit that is issued by a landlord on the death of a tenant. The current definition of what constitutes a “near relative” in such circumstances is too restrictive, as it includes only the spouse or civil partner and any children, and it should be widened. The bill extends the definition to include grandchildren, which we welcome.
Many farmers made a case to the committee that the definition should be further extended to include, say, nieces and nephews. The committee was not unsympathetic to that call, but it was aware of possible unintended consequences of a further extension to the definition. We asked the Scottish Government to consult the TFF to see whether there was any appetite in that group for extending the definition to include other relatives. The TFF says that it does not support a further extension at this stage—although it will keep the matter under review—primarily because, as Scottish Land & Estates states:
“it would effectively extend tenant rights and send another negative message to landlords.”
There was also a debate in the committee about when the change in definition should come into force and how the transitional arrangements should work. Some of my colleagues will discuss those aspects in greater detail.
The other two provisions were unanimously backed by the committee—first, the changes that will see upward-only and landlord-only initiated rent reviews prohibited in future limited duration tenancies; and, secondly, the disapplication of VAT rate changes and options to tax from being variations in rent that prevent rent reviews. The TFF agrees to those changes, as does the Scottish Government, and the committee supports them unanimously.
That brings me to the other issues that the committee received evidence on. We had a significant number of submissions, including anonymous and private submissions, from landlords and tenants, which gave the committee a startling insight into the challenges facing the tenant farming community in Scotland. Those included issues of wider land reform; how to attract more new entrants into farming and how best to support them; how to create the best environment for investment in holdings by landlords and tenants; how to make it clear beyond any doubt who is responsible for paying for what; and how tenants will be compensated for that investment when they move on or retire.
We called on the Scottish Government to consider establishing a register for prospective new entrants and also to work with the TFF in re-examining the issues of investment responsibility and appropriate compensation. Thankfully, the TFF is to produce a work plan setting out those priorities. I hope that that will not take another seven years and I am also pleased to learn that the industry is to take forward the idea of a new entrants register.
We heard evidence on the practices of land agents, and we support the development of a code of practice, which would, we hope, ensure greater consistency of practice and behaviour among all those providing land-agent services.
Members need to be aware of the legal disputes surrounding agricultural tenancies, which sadly end up in the Land Court and the Court of Session. The committee heard evidence on the establishment of a more effective system of dispute resolution and called on the Government to urgently look at arbitration.
In my speech during the stage 1 debate on the Land Registration etc (Scotland) Bill, I spoke about the need to dovetail that bill with the Agricultural Holdings (Amendment) (Scotland) Bill and the Long Leases (Scotland) Bill, which the Rural Affairs, Climate Change and Environment Committee is also scrutinising, and I stress that need again. We must develop a comprehensive picture of land use and ownership in Scotland, with better mapping.
The Agricultural Holdings (Amendment) (Scotland) Bill is not the solution to the many challenges facing the tenant farming community. Further legislation will be needed and we should not rule it out for fear of overregulation. The important thing is that the legislation does what we want it to do and helps those whom we intend it to help.
The fundamental question behind the bill still remains that of how we can improve the lot of tenants in the balance between the rights of agricultural landlords and the rights of agricultural tenants to ensure that Scotland can look forward to a healthy and vibrant tenant farming sector.
14:52
I am pleased to be speaking in this afternoon’s debate. As an MSP who is not on the Rural Affairs, Climate Change and Environment Committee, I thank the committee for an informative, well-argued and interesting report. I thank all the stakeholders who responded to the consultation and improved and challenged our understanding of the issues. I particularly thank the tenant farming forum. Its work on improving agricultural holdings legislation to encourage the release of land to rent has been invaluable, and the bill responds to its concerns.
The bill is a narrow piece of legislation that discusses only three areas, yet it has highlighted the wider arrangements in Scotland and the need to improve the system for current farmers and future generations. This slim bill is recognised as a move in the right direction. Although no one is denying that there is more to be done, it is fair that we use this focused bill to bring the measures into law as quickly as possible. Labour will support the bill at stage 1.
At the heart of the debate around tenant farming is how we secure a sustainable future. We must question why we have seen a fall in the total number of holdings with tenancy agreements while, at the same time, there seems to be a rise in contract farming. The landmark land reform programme produced the Agricultural Holdings (Scotland) Act 2003 and, among other measures, introduced limited duration tenancies and short limited duration tenancies. There has been an increase in both of those, although there are perhaps still not as many as we would like there to be. However, the number of 1991 act tenancies and limited partnerships has declined and overall, as Rob Gibson pointed out, there has been a reduction of 10 per cent in the number of tenancy agreements.
By contrast, England’s tenanted sector has developed differently, with the decline in rented land being halted and even reversed. However, that is a complex comparison. In England, there is little security of tenure, and there is little evidence that any increase is due to new entrants. In Scotland, our tenanted sector must encourage long-term investment from the tenant and the landlord and ensure that they feel confident that their investment will be recognised. It must also support new entrants not just through the availability of land but through investment and other support.
The answer is not simple. We should recognise, as the cabinet secretary pointed out, that there is a lot of good practice in the sector and that there are good relationships. However, there is also an ageing population in farming, and we must make new opportunities easier to find.
The better the evidence, the easier it is to provide the correct policy response and, as the committee identified in its report, there are concerns about the lack of reliable data. We can assume that a number of the tenancies under the 1991 act are historical but, as the Government identified, we do not really know what happens when such a tenancy comes to an end. That gap is contributing to falling numbers, so the Scottish Government must take measures to improve data collection.
The bill looks to expand the options that are available when a 1991 tenancy comes to an end by extending the meaning of “near relative”, where the person concerned is a successor, to include grandchildren. In principle, we very much agree with extending the definition of who qualifies as a near relative, but I expect that it is an issue that will be returned to at stage 2. The Scottish Tenant Farmers Association and NFU Scotland question the difference in the interpretation of a near relative, depending on whether an assignation or a succession is involved, and the STFA, in particular, would like to include nephews and nieces. Others have expressed concerns about getting the right balance between landlords and tenants, and I agree with the committee that the Scottish Government needs to look at the issue again. Consensus is a good thing and events are moving along, albeit slowly, but we are continuing to see a decrease in tenant farming. If a further extension of the definition of a “near relative” would play a part in addressing that decline, we should consider that.
In relation to transitional provisions, I am pleased that the Scottish Government has responded to the committee and has indicated that it will lodge an amendment at stage 2. That is a sensible move that will capture those people who are in the middle of the process at the time of the bill’s passing.
Section 2 addresses rent reviews and prevents upward-only and landlord-only initiated rent reviews in a limited duration tenancy. I welcome the widespread support for that sensible measure, which I believe will be a positive move for future contracts.
The committee helpfully considered wider tenancy issues. The progress that has been made through devolution should be recognised, but we can make further improvements. The Government has an opportunity in this session of Parliament to make progress on tenant farming through legislation, if necessary, but also through policy direction. We can improve conditions for new entrants. Although starter units, a new entrants register and the introduction of mentoring are all positive, the common agricultural policy subsidy system does not support new entrants, whose needs must be central to discussions. I would like to see a more level playing field for new entrants when it comes to accessing subsidy support.
The RSPB proposal for conservation tenancies is worth further consideration. The RSPB argues that such tenancies could solve the current limitations that it and other non-governmental organisations face in letting land.
The committee identified another area that can act as a barrier to successful tenancies: the lack of clarity on investment in holdings and waygo payments. If a tenant does not feel secure in their current farming interests or in what will happen to their investment in the future, they will be reluctant to invest, while the landlord may not be convinced that investment will give them a return. It would be good to hear more from the Government on what it thinks the extent of the problem might be and how it could improve the present system.
From my discussions with the tenant farming forum and other stakeholders, I am aware of the work that they are doing on a code of practice for land agents and on proposals for dispute resolution. The recent decision by the Court of Session in the Moonzie case must raise questions about the effectiveness of the current legislation. I understand that 18 applications for rent review are still in the process, and the outcome of the Moonzie case will have an impact on those. Although the cabinet secretary has indicated that he does not intend to use the bill to address that issue, I welcome his announcement that a summit is to be held and his recognition of the significance of the decision to how we make progress.
This Parliament has been ambitious in addressing the historic legacy of Scotland’s land. That reflects the importance of access to our land in our culture and in our identity, and of modernising our relationship—working and leisure—with this great Scottish resource. The bill is narrow, but it goes to the heart of concerns about ownership and fairness, and although it will receive support today, I am sure that the bigger debate will continue.
14:59
The Scottish Conservatives are pleased to support the bill’s general principles. A vibrant tenanted sector is vital to Scottish farming. As a Parliament, we should do all that we can to create a better environment for the letting of farmland to tenant farmers and to encourage new entrants to tenant farming. I believe that the bill goes some way towards achieving that.
The Scottish Conservatives are happy to support a number of proposals in the bill, such as the extension of the definition of “near relative” to include grandchildren and the prohibition of upward-only rent reviews. However, I remain concerned about a number of issues, on which I will focus today.
On the suggestion that the definition of “near relative” should be extended, it became clear during scrutiny of the bill that some members of the Rural Affairs, Climate Change and Environment Committee—particularly those from the Scottish National Party—would like the definition to be widened to include not only grandchildren, but nieces and nephews. The logic behind that is that some tenant farmers may not have children or grandchildren, and so the tenancy could be forfeited on their passing. However, if the tenancy rights were conferred on nephews and nieces, the tenancy could be carried on in the wider family, which would restrict the landlord’s ability to retake possession of the property.
On that point, I fully agree with the Cabinet Secretary for Rural Affairs and the Environment, who in his evidence to the committee cautioned that any extension of the succession rights could have unintended consequences. An overly broad definition could further limit the landlord’s confidence and create even more uncertainty in the tenanted sector. If such a definition was implemented in an attempt to protect the tenant’s rights, the landlord’s rights could be seriously undermined, which would make it more unlikely that a landlord would lease his land in the future in order to avoid the effective loss of his property.
John Lamont will obviously have read the committee’s wonderful report, which he was involved in producing. Paragraph 37, which refers to the oral evidence that was taken, mentions that not only the Scottish Tenant Farmers Association but the NFU Scotland indicated support for a broader definition. I felt that it would be helpful if I pointed that out.
That was very helpful, but it does not necessarily mean that I have to agree with that view. I agree with the cabinet secretary’s view that there could be unintended consequences. We must think very carefully before further reforming the definition.
I raised in committee the issue of the bill’s impact on the ability of landowners and prospective tenants to freely negotiate their tenancy agreements, and the impact that that has on new entrants. There is a view that the freedom to contract is being undermined. That is having an impact on the supply of land, which in turn has an impact on new entrants’ ability to come into farming.
Tenant farmers and landowners have told me that, because they are unable to negotiate freely, they are entering into short-term arrangements rather than secure tenancies. As a consequence, tenant farmers are not prepared to invest in the land and the farm steadings in the way that they would have done if they had the benefit of a more secure tenancy.
Given the drop in the number of tenancies, which we have heard about already, we should be concerned that, by further interfering with the parties’ contractual freedom, we could be indirectly undermining the parties’ ability to enter into arrangements as they wish to. I know that that is not the Government’s intention, but we must keep the unintended consequences of such changes in mind when we consider further reform.
In the brief time that is available to me, I will focus on the lack of data. In January, the Government released figures that showed a 10 per cent drop in the number of holdings with tenancy agreements between 2005 and 2011. However, it became apparent during the committee’s scrutiny of the bill that there is an issue around the lack of accurate data in a number of areas, including rented land, which makes it much more difficult to understand fully the extent of the implications of the bill or of any possible future reform.
The briefing note from Scottish Land & Estates states that there is scepticism about those numbers, which show only a snapshot of the issue and fail to take into account that there are a number of destinations for the land once the tenancy comes to an end. Some of the land is bought back by the tenant, some is taken back to be farmed by the landowner and some is split to support existing businesses and current tenants. I agree with the committee report that the Scottish Government must, as a matter of urgency, work with the relevant parties to ensure that more accurate data is collected.
The fundamental issue is that we must get the balance right between the rights of the tenant and those of the landlord. The relationship between the two parties must be based on mutual respect and confidence in the other party, rather than leave those involved fearful of letting their land or unwilling to invest in their tenanted property.
The bill will make progress in the right direction, and we are happy to support it, but we must be careful about further reform.
15:05
Although I have the privilege of being the deputy convener of the Rural Affairs, Climate Change and Environment Committee, I speak not on behalf of the committee but as an individual MSP. As the convener said, however, there is considerable common ground in the committee on both the narrowly framed bill and the need to look at the wider issues concerning agricultural tenancy law in Scotland. I refer members to paragraph 80 of the report, which states:
“The Committee recommends that, following the completion of this Bill, the Scottish Government continue to work with the TFF and other stakeholders, landowners and tenants across Scotland, to review the operation of agricultural legislation and address the other challenges facing the tenant farming community in Scotland as soon as possible.”
In the short time that is available to me, I will focus on a matter on which some progress on the detail is already being made: succession—which we have already heard a bit about—and, specifically, persons who would have putative rights to a tenancy on the death of the tenant. Currently, although the tenant can assign the tenancy to a wider group of people, upon the tenant’s death it is only “near relatives” who will be afforded protection as successor tenants, in that they can serve a counter notice following a notice to quit being served by the landlord. As we have heard, the phrase “near relative” is narrowly defined and does not currently include grandchildren of the tenant, but the bill proposes to extend that protection to grandchildren of the tenant. In doing so, it acknowledges the consensus that was reached in the tenant farming forum, which is the industry body that was set up inter alia to consider improvements in the operation of agricultural tenancy law and practice.
As I said in my intervention on Mr Lamont, others also spoke in favour of there being a wider definition when they gave evidence to the committee, including the Scottish Tenant Farmers Association and the National Farmers Union Scotland. Although the committee had sympathy with those who support a wider definition, it felt nonetheless that, in accordance with the very delicate compromise that was achieved by the TFF, we should forge ahead with the approach as it stands.
It is a matter of some disappointment to me that matters cannot progress more quickly, but taking into account the hard work that has been done to get us where we are, on balance it is more important to respect the consensus and hope that it spurs people in the TFF on to more speedy work and the creation of more consensus on the broader issues that have been alluded to.
We have also heard about the important issue of lack of data. In order to inform our debate on the way forward, we must secure accurate and meaningful data. Otherwise, we will have a debate that is based on assertions and speculative figures, which would be no help to anybody.
On a conciliatory note, I believe that Scottish Land & Estates is to be commended for its change of heart during the committee process—which the cabinet secretary mentioned—on when the extended succession provisions should apply. The matter is not expected to affect too many people in practice but, nonetheless, Scottish Land & Estates showed willingness to compromise on the issue, so it should be given the credit that it is due. I hope that that signals a willingness to engage on the wider issues in the same spirit of consensus, because it is the wider issues to which we now need to turn.
I commend all the committee members for their hard work in producing a consensual report.
15:09
It might seem to be a great leap of imagination to compare this consensual stage 1 debate on the Agricultural Holdings (Amendment) (Scotland) Bill with the radical, pioneering and tempestuous work of the Highland Land League of the 1880s, but I will show that there is a link, if members are patient.
As members will know, the Highland Land League was the radical crofters’ movement that won a clutch of Westminster seats, including my home city of Inverness, in the 1885 general election. Members will probably know that the Highland Land League was instrumental in the passage of the Crofters’ Holdings (Scotland) Act 1886, which gave tenants—mainly crofters—security of tenure, rights and compensation for improvements, which survive today. I understand that the league’s best-known slogan was:
“The people are mightier than a lord”.
It has a contemporary ring to it, and would not be out of place in this week’s edition of the West Highland Free Press.
The relationship between landlords and tenants, access to land, security of tenure and the role of community ownership have all radically changed since the days of the battle of the braes, when the famous dispute between crofters and landlords on Skye in the 1880s culminated in that battle between the police and crofters. As members may know, that led to the Napier commission, which radically changed crofting legislation. Coming to the present day, one of the great successes of devolution has been community land buyouts, from the island of Eigg to Eriskay in the Western Isles.
I agree with other members that the bill is not, on the surface, contentious, but there are deeper and wider issues, which many members have raised. That was touched on in particular by the Scottish Tenant Farmers Association, which I will come to later.
I congratulate Rob Gibson—who, unfortunately, is not in the chamber—and his committee for their thorough work on the stage 1 report. As we have heard, the committee has asked the Scottish Government to re-examine the definition of “near relative” to consider including, for example, nieces and nephews.
As for rent reviews, the committee is right to support the removal of upward-only rent reviews. The other main substantive area in the bill is the disapplication of VAT-rate changes from being variations in rent that prevent rent reviews.
I welcome the theme that emerged in the committee’s evidence sessions that the bill will not end the need for further reform of agricultural tenancy law. However, a number of fundamental issues need to be resolved in future legislation—dispute resolution being the main one. As members will know, until 2003 arbitration was a statutory requirement. The Scottish Land Court is—outwith the Court of Session appeal powers—the only body that is able to rule on disputes, but that is not a very practical option for most tenants. There has been only one order setting the rent in one rent review since the 2003 act came into force. Clearly, expense and time are huge barriers to tenant farmers.
What is needed? I believe that alternative cheaper methods of dispute resolution are required, including facilitated dispute resolution and mediation. Perhaps the minister could say whether other opportunities that could be helpful are available under the Arbitration (Scotland) Act 2010.
I am also concerned about the current tenancy laws. We have heard about the Court of Session ruling in the case of Salvesen v Riddell. Lord Gill ruled that section 72 of the Agricultural Holdings (Scotland) Act 2003 was not compatible with the European convention on human rights. The STFA’s chairman, Angus McCall, has said that the mood among farm tenants is now one of despondency. That is not surprising, given how the law has failed them and is sending out the wrong messages to wealthy and powerful landlords. It is of great concern that talented and able young tenant farmers are being lost to the sector.
I support the bill, but it is a work in progress. Future legislation is required to deal with the issues of new entrants, access to land and dispute resolution.
15:13
One issue that came through loud and clear in the committee’s inquires on the bill was that of land agents and their practices. In his evidence, NFUS chief executive Scott Walker summed up the situation when he said that
“it is extremely rare for the land agent to be breaking the law ... but we tend to find that some of their practices might leave a little to be desired”.
He called for the introduction of
“a strongly enforced code of practice”
that would be signed up to and—more important—adhered to by all sides of the industry.
Andrew Wood of the Royal Institution of Chartered Surveyors advised the committee that the RICS already has rigorous guidance in place for chartered surveyors, but suggested that the problem is that
“not all agents are chartered surveyors.”
He also pointed out that sharp practice does not happen solely among landlords, but that tenants’ agents can be equally guilty of it. Mr Wood undertook to work up and present a code of conduct to the TFF, with consideration being given to what he termed
“the wider range of people who are involved in advising landlords and tenants and how they might deal with issues.”—[Official Report, Rural Affairs, Climate Change and Environment Committee, 18 January 2012; c 538, 539.]
It was the unanimous view of the committee that greater consistency in practice and behaviour among people who provide land-agency services—whether they act on behalf of landlords or agents, and irrespective of whether or not they hold membership of the RICS—is desirable; that the code must have teeth; and that the Scottish Government should monitor development of the code to ensure that it is fit for purpose. The commitment from the Government to work in partnership with the TFF during the development phase and then to assess the need for further strengthening once it is being utilised is therefore welcome.
It is also positive that Scottish Land & Estates has indicated a willingness to explore proposals to improve relations between tenants, agents and landlords. However, it should be said that that commitment might sit better were it not for the organisation’s other recent pronouncement on the subject. According to its chief executive officer, there is little evidence to support the recent claims regarding the behaviour of landlords and agents. In the organisation’s in-house magazine, he said:
“It is clear to us that there is a determined campaign by those with a land reform agenda to hijack the current constructive discussions around the tenanted sector. The reality is the vast majority of tenants and landlords enjoy healthy working relationships. It is therefore apparent that those generating this propaganda simply want to see the break-up of Scotland’s estates.”
Of course, not all landlords, or those who act for them, behave poorly, but it is to be regretted that SLE appears to adopt that view on such an important issue. The majority of landlord-tenant relationships might function adequately or even well, so to claim that things are almost entirely hunky-dory is somewhat wide of the mark.
The negative influence that individuals or organisations acting as land agents can have on landlord-tenant relationships should not be underestimated. I am aware of one situation in the north-east of Scotland in which a tenant family and their landlord enjoyed a first-class and problem-free relationship for many years. The landlord then changed land agents, after which plans by the tenants to install a wind turbine on their land were met by a demand from the new agent for a cut of the profits from the turbine, which created resentment and mistrust where none had existed. Perhaps more concerning for the wider rural community was that a halt was then called to plans for further diversification that had the potential to create new jobs in the community.
Better regulation of land agents is a must, as is consideration of dispute resolution, which the TFF identified as a priority. The Scottish Government’s commitment to consider the outcome of the work that is being undertaken by TFF member the Scottish Agricultural Arbiters and Valuers Association on developing a short-form rent arbitration system, is also welcome. As the stage 1 report makes clear, there is a need for an appropriate, fast and cost-effective dispute resolution mechanism.
The changes that were brought in by the Agricultural Holdings (Scotland) Act 2003 were widely supported at the time on the grounds that the existing set-up was too costly and overly bureaucratic. However, the situation today is that the Scottish Land Court is the only body that can rule on disputes, which is not a viable state of affairs, particularly for people in the tenanted sector. I understand that the Scottish Land Court has settled just one rent-review case since the act came into existence, which is proof—were it needed—that the present arrangements are not fit for purpose.
You must close now, please.
The TFF is looking to arbitration as a way in which to resolve that issue. I suggest that that is the way forward.
15:17
I am pleased to speak in this stage 1 debate. Although I am not a member of the Rural Affairs, Climate Change and Environment Committee, my Economy, Energy and Tourism Committee is working on the Land Registration etc (Scotland) Bill, and I have an interest in the agricultural sector, as I originally hail from a farming family from the Isle of Lewis, although that feels like a lifetime ago.
I am particularly pleased that the SNP Government is committed to supporting Scotland’s tenant farmers and to having a vibrant tenant farming sector in Scottish agriculture. Those of us who have followed the Scottish Government’s plans from day 1 in 2007 are heartened by the success to date of the measures to encourage new entrants into farming. In 2007, the SNP Administration was the first Administration to introduce a dedicated new-entrant scheme, which so far has resulted in 63 new entrants securing funding totalling more than £1.1 million. The funding can include interest-rate relief of up to £40,000, plus an establishment grant of up to £30,000, which is the maximum support that is allowable under European Union rules. The work of the tenant farming forum and the recommendations in its report “Assisting New Entrants into Scottish Farming” must also be acknowledged and appreciated.
I was extremely encouraged by the announcement last week that the Scottish Agricultural College is to deliver a new programme of activities, funded by the Scottish Government, to address concerns about the lack of new entrants to farming. I believe that the Scottish Government is aware of the calls for the development of a broader range of opportunities and the creation of new opportunities for the next generation of farmers. The Scottish Agricultural College will help to deliver the skills that are required to ensure that new entrants have the capability and confidence to develop and build successful businesses. That will enable new entrants to grasp the opportunities that are created by related initiatives that are run by other sector stakeholders.
Attracting and assisting new entrants to agriculture are seen as key components in ensuring that Scottish agriculture continues to be a dynamic and competitive industry. That is acknowledged by a number of organisations, including the NFUS, Forestry Commission Scotland, Scottish Land & Estates and the Crown Estate.
The Scottish Agricultural College’s senior business consultant Douglas Bell, who will manage the new programme, has said:
“It is important that potential new entrants are aware of possible opportunities, including industry initiatives and that they have the knowledge and skills to take advantage of them. They need encouragement and an awareness of their supply chain as well as the skills to identify and capitalise on business opportunities.”
The new programme will be available to new entrants from April this year and, this autumn, the potential new entrants will be invited to a starter workshop, which will be delivered in four locations in Scotland. That collaborative workshop will offer an overview of support measures and knowledge of the issues that are involved in getting started.
Next year, there are to be a series of guidance notes and a dedicated website for new entrants. Throughout the project, a number of case studies will be developed to illustrate the range of entrant opportunities, show how barriers were overcome and identify key success factors. We wish the SAC well with it. It is
“a project which will help to contribute to the long term viability of rural communities ... It offers an opportunity for a new generation of farmers ... to play their full part in achieving sustainable growth through food production and the environmental management of agricultural land”.
I congratulate the Scottish Government on introducing the initiative.
I am pleased to note that members of the Rural Affairs, Climate Change and Environment Committee have highlighted the urgency of the situation and the need to reverse the current trend of falling numbers of agricultural tenancies, which requires long-term policy making. I note that the committee highlighted issues that Scottish Land & Estates raised regarding possible negative consequences of provisions in the Land Registration (Scotland) Bill—which is currently going through the Economy, Energy and Tourism Committee—on landlords and tenants who enter limited-duration tenancies of longer than 20 years, and I note the cabinet secretary’s response. The Economy, Energy and Tourism Committee will take note of that—in particular, the request from the Rural Affairs, Climate Change and Environment Committee that there be regular communication between officials.
15:21
I declare a farming interest.
The provisions in the Agricultural Holdings (Scotland) Bill are overdue. It is important that trust between tenants and landlords be restored in order to ensure that more land is let to farmers. It is worrying that the Government publication that the minister mentioned revealed that there are 10 per cent fewer holdings in Scotland now than there were six years ago. Indeed, the Rural Affairs, Climate Change and Environment Committee’s stage 1 report on the bill stated that the Government still has much work to do to attract new entrants.
The policy memorandum for the bill states that it is intended
“to create a better environment for the letting of farmland”.
I will speak briefly about the first two of the three provisions, because the third provision, which concerns VAT, is mainly consensual.
The first provision concerns extension of the definition of “near relative” from a spouse, civil partner or child to include grandchildren. Although the tenant farming forum has endorsed that provision, it is clear from the evidence that the committee received that there are diverging opinions. The Scottish Tenant Farmers Association and NFU Scotland would like the definition to be extended to include, perhaps, nieces and nephews, whereas Scottish Land & Estates draws a line in the sand after the inclusion of grandchildren. I acknowledge the committee’s recommendation that the Government re-examine extending the definition, but I recognise the compromise provision that is outlined in the bill and the importance of injecting trust back into land letting. As the committee has said, any movement on that could risk destabilising the consensus.
There is also a divergence of opinion on when the changes to the definition of “near relative” should come into force. As it stands, the new succession provisions will not come into force until two months after royal assent, but most TFF members believe that the changes should apply if a tenant has died before the act comes into force but the acquirer of the lease is still to give notice. I do not believe that to permit that would be an example of retrospective legislation, and I support the committee’s call for the Government to reconsider the issue at stage 2. I would be grateful if the cabinet secretary could shed some more light on that today.
The second provision concerns the prevention of upward-only and landlord-only initiated rent reviews. I was surprised to learn that a number of upward-only rental agreements are in place, but that fact is not sufficient to prevent Parliament from legislating against such agreements being used in the future. Holdings agreements need to be market led, and there should be scope for tenants to request a rent review and to negotiate the price down if there are legitimate business reasons for doing so.
The available data on the amount of land that is rented was highlighted during the committee’s scrutiny of the bill. In committee, I highlighted the agricultural censuses that come out in June and December, which could be used to gather that information. I welcome the cabinet secretary’s admission that there is a problem with the data, and I look forward to the Government addressing it in the future.
Like the Government and the TFF, I am keen for the measures in the bill to become law as soon as possible. I was disappointed when they were not introduced in last year’s order, but the bill has been shaped by the sector and I acknowledge the good work of the TFF that has brought us to this point.
The Scottish Liberal Democrats will vote for the bill to progress to stage 2. As for the Salvesen v Riddell case, which the cabinet secretary mentioned, obviously it is sub judice, but a judgment is about to be made on it. If the decision goes against the Government, I would support it in any move to appeal.
15:25
As many members have already discussed the “near relatives” provision in the bill, I will not go down that route. Instead, I want to focus not on the legislation itself but on attitudes. In its briefing, Scottish Land & Estates paints a picture of itself as being ruthless. It is not for me to say whether landlords on estates in Scotland are ruthless but, as Jim Hume pointed out at the start of his speech, we need to consider the issue of trust. It is very important that landlords and tenants trust each other, but the fact is that such trust does not seem to exist at the moment; indeed, there is a degree of mistrust, with tenants feeling that they do not have the say that they should have.
I welcome TFF’s work. I certainly think that it is the right body to progress the agenda and so I urge it to examine attitudes and the relationships between our landlords and tenants. After all, if we are to move forward and if the legislation is to have the hoped-for impact, we must ensure that the attitudes of both parties are more agreeable than they are at the moment.
Does the member share my view that tenants are concerned about Lord Gill’s decision in the Court of Session, which effectively says that the Scottish Parliament’s first civil act was actually outwith its legislative competence? In other words, the 2003 act needs to be remedied—and soon.
We are moving forward and the bill and amendments to it will try to address what happened in 2003.
We certainly need to consider the arbitration provisions in the 2003 act. There is a voluntary code of arbitration, but I am not sure that our tenants know about the process and about how to enter into it, so they need to be given more information in that respect.
We must encourage more people into our vibrant and world-class farming community. As the cabinet secretary said, there is no doubt that Scotland’s produce is the finest and the best; produce from nowhere else in the world can compare. However, we must ensure that, through the legislation, we protect the future of tenants in farming.
I endorse Claire Baker’s comments and welcome the RSPB’s proposal for conservation tenancies. That kind of diversity is part of the future for our tenant farmers and I hope that the cabinet secretary will encourage such an approach in his discussions with the TFF.
15:29
The bill aims to create a better environment for the letting of farmland to the tenant farming sector of the agricultural industry and to encourage new entrants into the sector by making three main changes to the existing legislation. First, it seeks to amend the definition of “near relative”; secondly, it will prevent certain restrictions with regard to rent reviews in limited duration tenancies; and thirdly, it will disapply VAT-rate changes and options to tax as being variations in rent that prevent rent reviews. I will discuss those three changes individually.
The bill aims to expand the definition of “near relative” to include grandchildren; the definition currently covers only a surviving spouse, a civil partner or a natural or adopted child. Although the committee agreed unanimously on the need to widen the definition, there was debate about whether the bill goes far enough. I agree with the Scottish Tenant Farmers Association and the NFUS, which want the definition to be widened further. In its evidence to the Rural Affairs, Climate Change and Environment Committee, the STFA stated that it wants the definition
“to be extended beyond a grandchild to include nephews and nieces.”
The NFUS noted:
“It seems a little bit strange that, during your lifetime, you can assign a tenancy to a wider class of people, yet, at the point of your death, it is restricted to certain categories.”—[Official Report, Rural Affairs, Climate Change and Environment Committee, 18 January 2012; c 520, 522.]
I see no practical reason why the definition of “near relative” cannot be extended. Fears were expressed by Scottish Land & Estates that extension could destabilise the balance between the rights of landlords and the rights of tenants, but that would be unlikely if the definition were extended just to nephews and nieces. That part of the bill needs to be explored further.
We must be careful in applying transitional provisions retrospectively. Applying legislation retrospectively seems to be a bad idea, and if the bill were to be applied retrospectively it would need to be extremely clear about whom it would and would not affect, in order to avoid any confusion. I welcome the Government’s commitment to lodge an amendment to clarify that at stage 2.
There is widespread support for the provision on rent reviews. In its written submission, the STFA argued that
“This proposal will remove the disadvantage felt by tenants finding themselves in a position of weakness when negotiating the terms of a lease in a sellers’ market and having to agree to such conditions.”
Although there is no empirical evidence of any such upward-only or landlord-only rent review clauses, it is known that such leases exist. They may be only small in number, but they need to be tackled. Although the provision might restrict some freedoms in negotiating contracts, it should have no unforeseen negative effects. Therefore, the committee welcomes the change for now, as long as it is not retrospective.
The provision that disqualifies VAT-rate changes and options to tax from being variations in rent that prevent rent reviews was supported in almost all the evidence that was submitted to the committee. The STFA notes that the changes will
“bring Scotland in line with England”,
and the committee fully supports the changes, and sees no issues with them.
There are still some issues with the bill, and certain aspects need to be refined. However, the committee currently agrees with the provisions, although more evidence needs to be taken on what some of them would mean in practice and whether further changes need to be made. I welcome the cabinet secretary’s meeting with the TFF next week and hope that it will be fruitful in relation to land availability and support for new tenants.
15:33
Presiding Officer, as a former member of the Rural Affairs, Climate Change and Environment Committee—although, to be frank, if you had blinked, you would have missed me—I always take great pleasure in contributing to rural affairs debates, especially because I represent North East Scotland, which has a vibrant farming sector.
I will focus on the issue of new entrants, which has come up quite a lot in the debate and is vital to the emphasis behind the bill. The point was made by Dennis Robertson that in no way should the bill, or any attempts to improve the situation for tenants, be viewed as a threat to landlords. In improving the situation for tenants and new entrants, we also have the opportunity to improve the situation for landlords. Given the decline in the number of tenancies, anything that we can do to boost that will improve the situation for many landlords.
It is fair to say that there is wide recognition among parties and stakeholders that something needs to be done to improve the situation and encourage new entrants. I note with interest that the committee said in its report, at paragraph 87, that
“attempting to reverse the current trend of falling numbers of agricultural tenancies will require long-term policy making, using a range of tools, including legislation.”
The committee’s comments acknowledge that although the bill will make a welcome contribution, other aspects will need to be looked at if we are to encourage new entrants into the tenant farming sector. I do not think that any member disagrees with that.
The Court of Session overturned the Scottish Land Court in relation to the role of single farm payments and argued that they are a factor in open-market rents. Does the member share my concern that that will affect new entrants’ ability to get into the market?
A number of factors prevent new entrants from coming into the sector—I certainly do not think that there is just a single contributory factor in that regard. I will come on to that.
Ideas will no doubt come forward from many places on how to encourage new entrants and on how to encourage landlords to take on tenants and give them land. I will throw out what I hope is a constructive suggestion from the NFU in my area—North East Scotland—which is that priority be given by landlords to new starts in relation to rural priorities, as part of the Scotland rural development programme. That approach would be attractive to landlords, because there would be more likelihood of investment if they leased to a new-start tenant. The potential for a new-starts category could be looked at, as part of the wider picture.
Dave Stewart and Alex Fergusson—in intervening on Rob Gibson—raised the parity of tax regime but disparity of outcome that exists north and south of the border. There is no silver bullet. I have heard complaints from farmers in my region about the difficulty of obtaining finance from the banking sector. Where we can apply specific Scottish solutions, we should consider doing so. I look forward to that debate taking place.
15:37
This has been a welcome debate on the general principles of the Agricultural Holdings (Amendment) (Scotland) Bill.
I am happy to welcome the three changes to the current law that the Government is seeking to introduce through the bill. As we heard, the Government proposes, first, to amend the definition of a “near relative” who may succeed to a secure agricultural tenancy, to include grandchildren; secondly, to prevent certain restrictions for rent reviews; and thirdly, to disapply VAT rate changes and options to tax as variations in rent that prevent rent reviews. The proposals are to be broadly welcomed and there will be no argument or opposition to them from the Conservative benches.
There is much to be applauded in the committee’s stage 1 report, but I have reservations about some of the committee’s thoughts and recommendations, on which I will concentrate. In doing that, I am transported back to the heady days of the previous Agricultural Holdings (Scotland) Bill—those halcyon days when I convened the Rural Development Committee and the cabinet secretary and indeed the Minister for Environment and Climate Change were but enthusiastic members of it—[Interruption.] Oh, they were happy days, Mr Gibson.
During the debate on the previous bill, which was somewhat hijacked by the current Minister for Energy, Enterprise and Tourism’s enthusiastic advocacy of the absolute right to buy for agricultural tenants, I warned that, although no one wanted a reinvigorated, vibrant and effective tenanted sector more than I did, Ross Finnie’s genuine attempts to bring that about would be more likely to have the opposite effect. All these years later, it gives me no pleasure to say that I appear to have been proved right. The number of let farms has fallen dramatically. That has happened for a number of reasons, but I think that I can safely say that a principal reason is the suspicion of the right to buy that still exists, which has stifled an important sector for the past decade.
However, there is good news. There is at long last a glimmer of light at the end of a particularly long and dark tunnel. Through sitting together in the tenant farming forum, all parties are slowly but surely achieving agreement and trust—several members have rightly mentioned trust—and are finally beginning to break the deadlock that has existed for the past 10 years. The prize is immense because, if we allow the tenanted sector truly to flourish, then we solve the new entrants problem, or much of it, at the same time.
For generations the tenanted sector has provided the door into agriculture, but we politicians have done a lot to close that door. I think that it is up to us politicians to try to open that door again. That is why I shudder at the thought of any attempt to extend the definition of “near relative” and why there is still a degree of nervousness among those who have land to let that, if they let it, it could be lost to them for ever through the introduction of a right to buy.
I heartily commend the cabinet secretary’s efforts to resist those possibilities. If he, too, genuinely wishes to bring about a reinvigorated, sustainable and vibrant tenanted sector, he must continue to resist. If he does, he will have our solid support. The way to success is surely through agreement in and through the tenant farming forum. Anything that is imposed from outside, be it by Government, by Parliament, by committee or by any other body, will simply extend the current difficult situation. Frankly, that would do nobody any good at all.
15:41
I am pleased to speak in this debate, which is so significant for Scotland’s vibrant agriculture sector. I thank the cabinet secretary for setting the context and Dave Stewart for giving us an historical update. I commend the tenant farming forum for working towards a consensus on these challenging issues from a wide range of perspectives. As has been highlighted by a number of members, the committee broadly welcomes the three proposals in the bill and Scottish Labour will support the bill at stage 1.
Section 1, “Succession by near relatives”, defines “near relative”. Margaret McDougall and other members dealt in some detail with the issue, on which there are differing views. I stress that, although the committee wishes to show respect for the TFF consensus wherever possible and is keenly aware of the need to support a fair way forward for landlords and tenants, Scottish Labour finds it disappointing that the Scottish Government is unable to support the committee’s recommendation that the Government re-examine the issue and seek further comment from the TFF and its individual members ahead of stage 2.
Why does the member feel that disharmony would be a good thing in an area—that is, the TFF—where harmony exists?
That is certainly not what I am saying. Whenever consensus is possible, it is an excellent idea. However, a range of perspectives must be taken into account, which is what the committee has done, listening very carefully. The consensus is important, but it is also important that we take account of views as a committee, which is what we did. We simply ask the Scottish Government to look again at the issue of the definition of “near relative” at stage 2.
On a more positive note, the committee believes that it is good that the Scottish Government will introduce a stage 2 amendment on the transitional provisions.
The committee notes the widespread support for the provision on rent reviews and supports the removal of upward-only rent reviews and landlord-only initiation of rent reviews in a limited duration tenancy, believing that to be a positive and welcome measure. I note the cabinet secretary’s announcement of the meeting on 4 April, and I wish him and all those involved well in their deliberations.
The committee notes the unanimous support for section 3, “Effect of VAT changes on determination of rent”. As the cabinet secretary stressed in his opening remarks, the provision is in the interests of both landlords and tenants.
The committee received evidence on and discussed a number of important issues that lie beyond the scope of the bill, which my colleague Claire Baker and other members have highlighted. Annabelle Ewing emphasised the committee’s unanimous view in recommendation 80 that it is important that we continue to look at the issues from all perspectives to try to resolve them in the fairest way possible. I share the concern that our convener, Rob Gibson, expressed about the fact that some of those who submitted evidence felt the need to withhold their name. I would simply like that noted in this debate.
I welcome the Scottish Government’s acknowledgement of the committee’s concern about the lack of available data on many issues. It is essential that that situation is addressed. The committee suggests that the Scottish Government and the TFF should re-examine the issue of investment in holdings in order to clarify who is responsible and find the most appropriate balance for the creation of a vibrant and healthy tenant farming sector, while of course taking landlords into account.
As I live in rural Clydesdale, I am keenly aware of the barriers that are faced by new entrants to farming—by relatives of farmers and totally new farmers. The committee believes that the bill makes a modest contribution in relation to new entrants but is concerned about the decline in the number of agricultural tenancies in that regard and for broader reasons.
Along with others, I have spoken in support of a register of new tenants, and I am pleased that that will be taken forward. I welcome the Scottish Government’s commitment to plans to develop the new advisory service for new entrants in April. I hope that the Government will find funding for that.
The committee supports further examination of conservation tenancies, which Dennis Robertson and my colleague Claire Baker highlighted. They are vital if we are to have new tenants and new entrants on environmentally supported land.
The committee wants a code of practice to apply to all land agents, whether or not they are members of the Royal Institution of Chartered Surveyors. As Graeme Dey emphasised, greater consistency of practice is essential.
SLE’s concerns about the break-up of estates seem misplaced but, as a way forward, the committee needs to assess the on-going scrutiny and change and to take all sides into account.
The committee believes that clarity is needed on waygo compensation as a matter of urgency. I hope that the Scottish Government will progress that.
The committee suggests that more legislation might well be needed on landlord and tenancy issues. The Scottish Government acknowledges that but says that that legislation is unlikely in this parliamentary session. That might well be acceptable for the consolidation of legislation but, in view of the uncertainty that the recent Scottish Land Court and appeal court cases have created, it is essential for the Scottish Government to look at the issue again, in order to clarify the position in relation to the 2003 act.
Dennis Robertson asked for information on disputes to be available to all parties. Any disputes that can be kept out of the courts should be kept out of them, given the time that court cases take from the lives of all concerned and given the cost.
I ask you to close now, please.
The committee supports calls for disputes to be looked at again. The Scottish Government expects the issue to feature in the new work plan, and the outcome will be looked at in future work.
Thank you very much. That is excellent.
15:47
The debate has been good. Many issues have been discussed that have been discussed for decades. David Stewart even took us back to the 1880s—a period that he remembers well. That indicates that some of the difficult and complex debates that we have had have been going on for more than a hundred years.
As he kindly compared me to someone from the 1880s, will the cabinet secretary give way?
I will give way as a one-off.
Will the cabinet secretary clarify the position on Lord Gill’s judgment? I take it that the cabinet secretary is reluctant to make decisions about on-going court cases, but Lord Gill has made a ruling, so the case is not sub judice. Is the cabinet secretary looking to correct the 2003 act so that it is compatible with the ECHR and still protects tenants who are in limited partnerships?
As the member knows, Lord Gill made a judgment on one element of the 2003 act. The member might have given the impression that the judgment related to the whole act, which I am sure he knows is not the case. We are considering our options. As I said in my opening speech, one option is seeking leave to appeal. We will keep Parliament updated on the course of action that we decide to take.
I congratulate the Rural Affairs, Climate Change and Environment Committee on its stage 1 report. The committee handled a lot of difficult and complex issues. The report was useful, particularly as it raised many issues that are outwith the bill’s scope but which the committee feels that the Government and the Parliament should look at. In my opening speech, I gave the commitment that we will look in the near future at many of the issues that the committee raised.
Like others, I commend the tenant farming forum. It involves many people and organisations that have different perspectives and backgrounds. It has been good that they have been willing to get round the table in the past few years to discuss many difficult issues that involve many vested interests. That helped the Government to conclude that it should introduce the measures that it brought forward in 2010 and those that are in the bill.
I remind members that we introduced a number of measures in 2010 that should help by giving more flexibility. They should help landlords to reach the conclusion that they should make more tenancies available and give tenants more security of tenure, given some of the issues that they face with their tenancy agreements. We replaced the two-man rule with a requirement for a viable unit, which the tenant farmers required; annulled post-lease agreements; reduced the minimum length of limited duration tenancies from 15 years to 10; allowed conversions of short limited duration tenancies to limited duration tenancies; and, of course, amended some of the fixed equipment provisions. On top of what we are debating, I hope that those measures give more comfort to tenants and landlords and will help to create more tenancies in the future and make both sides feel more comfortable with the current legislation.
It is key that we do everything that we can to increase the availability of land, as many members have mentioned, and to increase the number of tenancies that are available to help new entrants to get on the first rung of the ladder. At the moment, if a person’s family is not already involved in farming or if they are not from a very rich family, it will be difficult for them to get hold of land other than by means of a tenancy to enter farming. That is a challenge, as we all recognise that we want to attract new blood into agriculture in Scotland. Various issues impact on people’s ability to get involved in agriculture, but the availability of tenancies and therefore land is a key issue. I appeal to everyone who has influence on the matter, particularly landowners, to look at what they can do to make more land available. I have met landowners who are 100 per cent behind the aim of ensuring that more tenancies are made available on their land—that represents proactive and forward thinking—but, unfortunately, I have also met landowners in Scotland who are 100 per cent behind the opposite direction. They want less land to be made available for tenants on their own holdings, and they want to clear their land of tenants. That is not healthy, and it is clear that we want to discourage that.
Does the minister accept the broad principle that one is entitled to do as one wishes with one’s own property, whether it is a house or land for let or otherwise? As members have said, what is needed is a degree of trust that will allow people to let land as they might wish to do, and as the cabinet secretary and I would wish people to do.
I agree that a degree of trust is needed. Of course, we recognise that we are often talking about commercial relationships, in which there are two contracting parties, both of which must feel that there is a benefit from it. However, land ownership clearly brings extra responsibilities, and I think that most members recognise that it brings a social responsibility, if not also a moral responsibility, to help to make that land available and ensure that it is used productively for the benefit of the nation. That is an important principle to which many members would adhere, and that is why the issue that we are debating is important.
I am pleased that the Scottish Government is meeting its commitment to make more land available. As many members are aware, Forestry Commission Scotland is seeking applications for new entrants to farm small units of land on the national forest estate and—to give credit where credit is due—the Crown Estate has put four farms on the open market for let under a mixture of different types of tenancy. I hope that that will be a positive development for the rural communities concerned in Dumfries and Moray. Indeed, some estates in the private sector have also stepped up their efforts—I alluded to that before. We welcome the decision by Buccleuch Estates to let out 17 lots of farming land on its Queensberry estate in Dumfriesshire, and we hope that others will follow its example and that it will lead to positive developments. We want such arrangements to provide greater security for tenant farmers and to encourage long-term investment.
As many members have said, the availability of land is not the only obstacle for new entrants to agriculture. There is also the common agricultural policy, which is currently being renegotiated. CAP support is based on historical levels of payments, of course, so if farmers did not farm prior to 2002-03, they do not receive any support. They will have no access to land and tenancies or to support through the CAP.
The Scottish Tenant Farmers Association proposes to strengthen the double gate link to 2011 under the new CAP proposals. That suggests a possible way of dealing with the new entrant situation. I should explain to members that the double gate ruling means that, to qualify for new support under the new CAP, a person must have claimed at least one single farm payment entitlement in 2011, and they must put in a claim under the new system in 2014. That is known as double gate provision. As things stand, there will be little provision in the new proposals for anyone who enters farming after 2014. We want a policy that provides support to everyone who is farming, irrespective of when they entered farming.
We are taking many more steps to help new entrants. We have given support to the Scottish Agricultural College to provide a broader package of advisory support to new entrants, which will help to attract new blood into the industry. In addition, the Scottish Government is working with the industry to create a register of new entrants. Rob Gibson mentioned the need for that. A matchmaking service is perhaps required so that landowners who feel that they can make tenancies available will know who is looking for a tenancy. If we can help to support that, that will be a good thing as well.
In my opening speech, I touched on many of the issues that members raised. There are many other outstanding issues that are not addressed in the bill, but I have given a commitment that they will be addressed in the current five-year session of Parliament. We are at the beginning of a journey through the five-year session. Today, we have debated some measures that will help with the situation, but there is a lot more work to do. I accept that, and I know that the Parliament accepts it, too. However, at the heart of everything that we do in connection with improving tenancies and the tenancy sector in Scotland must be justice and fairness, as some members mentioned.
I would be grateful if you would close now, please.
We should recognise that many landlord and tenant relationships are ticking along just nicely, but many are not, and those are the ones that we have to address. I thank members for their comments and their constructive support, and I commend the motion to the Parliament.