Chamber and committees

Again, because it is the approach that was agreed previously. I realise that there has been a lot of discussion about it over the past few years, but because the model was previously agreed, we intend to maintain it.

I appreciate that there is a debate and discussion about the general approach that has been taken. I have listened carefully to members’ views, including those of Fergus Ewing in relation to his amendments, which offer an alternative valuation methodology.

Tim Eagle’s amendment 240 proposes to decrease the amount of time between the landlord serving a notice of resumption to a tenant and the date of that resumption, which would interfere with the valuation process following the serving of a notice of resumption. Given the range of factors at play in a valuation, that would unnecessarily restrict the timing of that part of the process.

I am grateful to Fergus Ewing and others for raising these issues in their amendments, but I have not heard anything to convince me that we need a different approach to the valuation of 1991 act claims. The bill already provides for an affirmative power that enables the Scottish ministers to revise the valuation method for resumptions for 1991 act tenancies, so I am committed to proceeding with the measures that we have set out in that regard.

However, I agree that we need to explore whether a different approach would be better for 2003 act tenancies. It is important that we do everything that we can to reach a consensus about how to value that type of claim. It is also important that we do not kick the issue into the long grass. Accordingly, I reiterate the offer that I made last week in relation to working with Fergus Ewing and other members of the committee and having discussions to enable us to lodge an amendment at stage 3 that would give ministers an appropriate regulation-making power for 2003 act tenancies.

I also intend to lodge a similar amendment at stage 3 to address the points that Rhoda Grant will no doubt speak to in relation to her amendment 382, so that we can deal with concerns about ensuring fair compensation for a tenant who receives an incontestable notice to quit from their landlord. Of course, that is different from resumption, but the concerns were raised as part of this debate.

To conclude, I ask members not to support the amendments from Fergus Ewing, Tim Eagle and Rhoda Grant.

Thank you, convener. I hope that I will be able to address some of the points that have been raised in relation to the amendments in this group.

Tim Eagle’s amendments 290 to 296 are intended to shift costs from the landlord to the tenant, so the tenant would not then be able to claim compensation for damage that had been caused by poor game management. Ultimately, that is unfair. The tenant farming commissioner has already published a code of practice on the management of relationships between agricultural tenants and holders of sporting rights. There is already a lot of help and guidance for landowners, and I touched on that last week when we were discussing similar issues. We know that poor practice persists, as we have been hearing from stakeholders. That is why the changes in the bill have been introduced, and they are important.

The tenant would not be able to claim compensation for indirect damage under the amendments, and that is unfair. Tenants could claim for damage to the crop, but not for further real costs that they have incurred. The tenant would not be able to claim compensation for damage to fixed equipment and habitats, as we have also touched on. That is unfair. Fixed equipment includes many things that many of us would recognise as the fixtures and fittings of the holding, including dry-stone dykes and fencing.

Habitats include the natural areas of the farm that the tenant is paid to maintain, and they would have to pay to restore them if there is damage to them by game. In addition, if the amendments were passed, the tenant would not be able to claim compensation for damage to shelterbelts. A shelterbelt is part of the infrastructure of a holding and it directly supports the running of the farm, whether it acts as a windbreak or shelters livestock.

That all comes back to the point that any claim that is put forward has to be evidenced. The damage has to have led to loss or to injury. Those are real costs that tenants suffer, for reasons that are completely outwith their control. That is why I think that it is only fair that they are compensated for all those matters, and that is what the bill seeks to do.

I can see that you are looking at me, convener, as if you wish to make an intervention.

My amendments 297 and 301 reverse a language change made by the bill. I recognise that concerns were raised about replacing the word “similar” with the word “comparable”. That change was supported by tenant farming stakeholders and was recommended by the Agricultural Law Association.

My amendments 298 and 302 amend the bill provisions to list the matters that should not be taken into account by the Land Court when fixing the rent for a holding. Again, stakeholders have asked for that, as they consider that the equivalent provision in section 13 of the 1991 act, as now in force, is well understood by the sector.

My amendments 299 and 303 amend the 1991 act and the 2003 act by listing elements that the Land Court must have regard to when determining a fair rent for a holding. The amendments make specific provision about the improvements that must be taken into account as part of a rent review and matters to be taken into account when rental value is reduced. Those changes are supported by stakeholders, who consider that they are necessary elements that will enable the court to determine a fair rent for the holding. The amendments take account of the list of matters in section 13 of the 1991 act that require to be taken into account when calculating rent.

My amendments 300 and 304 update a cross-reference in the respective powers of the Scottish ministers to make further provision and regulations in relation to matters that the Land Court is to consider. Failure to make that change would result in a misalignment of the process.

Douglas Lumsden’s amendments 299A and 299B would alter the wording of my amendment 299 to make it use the exact wording from section 13 of the 1991 act. I do not think that they would deliver the outcome that Douglas Lumsden is looking for, but I am happy to give the matter further consideration ahead of stage 3, if he is willing to have that discussion with me.

Douglas Lumsden’s amendment 545 proposes to further amend the Agricultural Holdings (Scotland) Act 1991 to precisely mirror the wording of section 13 of that act. That would mean that the Land Court would be required, when determining a fair rent for a 1991 act agricultural tenancy, to have regard to the open market rental value of any fixed equipment provided by the landlord and used by the tenant for a non-agricultural purpose. The amendment raises some interesting points, and I hope that I can continue the discussion with Douglas Lumsden in advance of stage 3.

Emma Harper’s amendments 536 and 538 seek to amend the list of matters that the Land Court must not have regard to when determining the fair rent of a holding for 1991 act tenancies and 2003 act tenancies, by adding the term

“tenant being in occupation of the holding”

to that list. I ask the committee to support those amendments, because it is important that tenants are not financially penalised because of the very fact that they have a tenancy.

Amendments 537 and 539, in Emma Harper’s name, would require the Land Court to provide to both parties a list of comparable holdings that it had considered when determining the rent for a holding for 1991 act tenancies and 2003 act tenancies. However, I do not think that the amendments would deliver the intended outcome. This is part of an issue that appears to be handled differently north and south of the border. I would like to explore the issue further with Emma Harper prior to stage 3, so I ask her not to move the amendments at this time.

Emma Harper’s amendments 520 and 521 seek to take away the right of a landlord or tenant to refer a legal question about rent reviews to the Scottish Land Court and propose that arbitration be used instead. I completely appreciate the intent behind those amendments, but more development work is needed, including making sure that necessary rights of appeal are in place for ECHR purposes. Again, I would like to explore the issue further with industry so that we can get it right. For those reasons, I ask Emma Harper not to move those amendments.

Finally, Tim Eagle’s amendment 541 would enable the landlord to require an increase in rent if an improvement was required to be made in order for the landlord to comply with the duty conferred on them by any enactment. I understand the issues that tenants and landlords face when there is an increased regulatory burden that results in an increased financial burden, but I think that the amendment goes too far. A landlord who has breached a duty or is at risk of doing so should not simply be able to pass on the compliance costs to the tenant. Indeed, the breach of duty might mean that the landlord is also in breach of the lease agreement. That would be an issue for future legislation whereby we could scrutinise it appropriately. I ask the committee not to support amendment 541.

I press the amendment.

I understand Fergus Ewing’s reasons for amendment 528 and the need for clarity on the basis for the valuation for resumption. It is not necessarily necessary for the 2016 act to detail all the topics that the tenant farming commissioner can issue codes of practice on, but I appreciate why the tenant farming sector might also wish to see that in the bill itself. There are some particular issues with the wording of the amendment, but I am happy to work with Fergus Ewing to revise amendment 528 ahead of stage 3, so, on that basis, I ask him not to press the amendments at this stage.

Tim Eagle’s amendment 223 seeks to reverse the changes that the bill makes to provide that regard is given to the relevant code of practice during arbitration proceedings concerning a small landholding. The provision is equivalent to that for tenant farmers and reflects the expanded scope of the tenant farming commissioner in relation to small landholdings under section 9 of the bill. Ultimately, the amendment would mean that a code of practice would not have the same status in arbitration proceedings relating to small landholders as it would for proceedings relating to tenant farmers.

I was not sure what the rationale behind the amendment was, so I appreciate what Tim Eagle has outlined today. However, I want to clarify that the provision relates to codes in an arbitration context, not an absolute right to buy. However, if he wants to engage in further discussion with me about that, I am more than happy to do that.

I will now turn to Emma Harper’s amendments. Although I understand the reasons behind amendment 501, expanding the group of people who could apply to the TFC requires more consideration in order to assess whether the current procedures for reporting an alleged breach would continue to be suitable. I absolutely recognise the importance of RSABI’s work and its importance to the industry, which has been touched on, including in relation to some of the delicate situations that it has to navigate.

I recognise that the amendment would also appear to enable representative bodies in the sector to report alleged breaches to the TFC in relation to their members or people they might be engaging with. Again, we will have to consider the wider implications of that and any potential unintended consequences. However, I would like to work with the member to explore the issue further and to ensure that the process for reporting breaches meets the needs of those in the sector. I would ask her not to move amendment 501 today.

In relation to amendment 502, I appreciate that some in the tenant farming sector would like to see increased powers for when the TFC finds that a person has not complied with a code of practice. The purpose of the codes of practice is to encourage and promote best practice in how landlords and tenants manage their relationships. However, parties are not required to comply with the terms of a code of practice—it is guidance. That means that there would be significant difficulty with imposing penalties for non-compliance. Any changes to the role of the tenant farming commissioner in that context would need to be considered more widely than solely looking at the question of enforcement. We would have to go through some robust stakeholder engagement as part of the process.

I am happy to commit today to consulting on the role of the tenant farming commissioner in inquiring into and reporting on alleged breaches of codes of practice. Any consultation could consider wider matters, and I would aim for such a consultation to take place and to report before the end of the current parliamentary session. On that basis, I ask Emma Harper not to move amendment 502.

I do not have anything further to add, convener.

Amendment 497 agreed to.

Amendment 218 moved—[Tim Eagle].

I realise that amendment 379 follows similar amendments that we have discussed previously. Although the matter is of interest in my constituency, I make it clear that I am appearing before the committee today in my capacity as a minister of the Scottish Government. The position that I am presenting reflects the collective view of the Scottish Government and concerns a matter of law and policy for which I have ministerial responsibility. Separately, and in line with the Scottish ministerial code, I have made my views and those of my constituents known to the responsible minister in the appropriate way. The issue that is under discussion today is distinct from that constituency interest, and my contributions should therefore be understood as reflecting the Government’s position, not a personal or constituency-specific stance.

As members will be aware, the powers to legislate for the generation, transmission, distribution and supply of electricity are reserved in the Scotland Act 1998. Although I completely understand the concern that tenants might have about electricity infrastructure, amendment 379 is beyond the legislative competence of the Scottish Parliament and, accordingly, I urge members to oppose it.

Yes, it would.

Yes.

The purpose of the amendments in this group is to update the assignation and succession provisions for tenant farmers so that they align with the small landholdings provisions in the bill and to make a number of related and minor changes for clarity.

The main amendments in the group, amendments 230, 233, 305, 306 and 308, update the descriptions of the people to whom a lease under the 1991 act or the 2003 act can be assigned or passed in a person’s will. Those amendments make related changes to the definition of “near relative” across the assignation and succession provisions applying to tenant farmers, to reflect the updated descriptions.

The amendments also make procedural and technical changes, including the alignment of timescales in which a landlord can intimate that they are withholding their consent or are objecting to a proposed new tenant with those for small landholdings and the requirement that a person who succeeds a lease in a succession scenario must specify their relationship to the deceased tenant in order to help determine whether the person is a near relative. Those changes align the provisions for those forms of tenure with those in the bill for small landholders.

Amendments 208, 210, 212, 215 and 306 modify the succession provisions for small landholders and tenant farmers regarding the date on which the tenancy applies to an incoming small landholder or tenant following an objection by the landlord. Under the current provisions, those dates are inconsistent in relation to intestate scenarios and where the landlord objects to the person becoming the new tenant or small landholder. The amendments clarify and align the positions for both small landholders and tenant farmers.

Amendment 307 modernises the language in section 12C of the Agricultural Holdings (Scotland) Act 1991 to reflect the equivalent provisions for small landholdings in the schedule. The other amendments in the group are mainly minor. They are consequential or technical changes to the small landholdings or tenant farming provisions.

Amendments 184 to 205 and 213 make minor drafting changes. As you will probably be relieved to hear, the majority of those just make a grammatical change to the small landholdings provisions.

Amendments 206, 207, 209, 211 and 214 are minor drafting changes to the small landholdings provisions, amending references to “tenant” to “small landholder” for consistency with other parts of the schedule.

With that, I hope that the committee can support the amendments in my name in this group.

I move amendment 184.

Amendment 184 agreed to.