Rural Economy and Connectivity Committee

Meeting date: Wednesday, September 13, 2017

Official Report 634KB pdf

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Small Landholdings Legislation (Review)

Item 4 is consideration of the recent review of the legislation governing smallholdings in Scotland. Part 11 of the Land Reform (Scotland) Act 2016 required the Scottish Government to review the legislation governing small landholdings and to lay a report on that review before the Scottish Parliament. The report was published in March.

The cabinet secretary remains with us. He is joined by Jen Willoughby, who is the team leader for agricultural holdings at the Scottish Government, and Claudine Duff, who is the policy manager for smallholdings. I invite the cabinet secretary to make some opening remarks before we move to questions.

Statutory smallholdings—around 74 of which remain in Scotland outwith the crofting counties—are tenanted holdings that are regulated by the Small Landholders (Scotland) Acts 1886 to 1931. They are part of Scotland’s agricultural heritage and form part of the fabric of land tenure in Scotland.

The Land Reform (Scotland) Act 2016 required us to conduct a review of the legislation governing small landholdings. The report on that review, which was laid before the Parliament on 30 March, made a number of policy recommendations, and they are what we are here to discuss.

A written consultation was sent to all 74 small landholders across Scotland and to their landlords, and a total of 22 responses, including five from landlords, were received. In other words, responses were received from 23 per cent of all small landholders. Officials followed up the written consultation with phone calls to small landholders and landlords, and a number of well-attended Government-led workshops and meetings with landlords were held. Officials also attended industry events.

The legal review focused on the issues that were highlighted through the consultation, such as the accessibility of the legislation and how it has impacted on the understanding of the rights of small landholders and landlords; how security of tenure is key to all small landholders; and issues to do with access to funding and banking. The issues that emerged centred on the clarity of the legislation, a possible right to buy and the idea of having a single representative body. I am sure that all members have read the recommendations and that we will have a good discussion about them.

Small farms play an important role in providing access to agriculture for new entrants, and they are essential for the sustainability of the industry and for those people who farm on a part-time basis or on a smaller scale. However, statutory small landholdings are in a unique position, and the review is the first step towards understanding how they contribute to land tenure, to the tenanted sector and to our vibrant rural economy. I would welcome members’ feedback, which I and my officials will consider as the policy work develops.

Thank you, cabinet secretary. John Mason will ask the first question.

As a city person—in other words, an outsider—I can play devil’s advocate. Given that there used to be 50,000 small landholdings and there are now 74, can we truly say that they are still part of the fabric of Scottish land? Are they dying out or could we try to expand their number?

They are pretty important to the 74 people concerned. It is obvious to say that each individual is important, and I am sure that Mr Mason agrees with that proposition. Nevertheless, Mr Mason makes a fair point. The number of small landholders has reduced substantially over the years. One reason for that withering on the vine might be that there has not been much opportunity to have discussions of the kind that we are having today to consider the issues that are of interest and concern to small landholders.

Because of the relatively small number of people who still possess this unique form of landholding, there is a question mark over it. The time that the committee is taking, at members’ instigation, to understand the issues involved is a worthwhile starting point in determining whether we can answer Mr Mason’s question positively.

You feel that there is at least a possibility that the sector could expand in the future.

Of course there is.

My colleague Alison Johnstone had a keen interest in the issue of small landholdings in the previous session. One of the challenges has been in understanding the legislation.

In the report, the Scottish Government undertook to do a number of things. One of them was to commission an independent legal expert to write a guide to the legislation. Can you outline the timetable for commissioning and publishing that guide?

Yes. The provision of a guide to the current small landholding legislation could help small landholders to gain a better understanding of the legal framework. The fact that there is no such guide at the moment is highly unusual. There are recognised legal texts in every area of law, some of which have gained authoritative status. Such works are an aid to understanding legal rights and responsibilities in all areas of Scots private law.

We are working with Sir Crispin Agnew, who is an expert in the field, and we fully expect that the guide will be available by the end of the year.

Thank you very much—I look forward to that coming out.

Another thing that the Government undertook to do was to set up a web page to provide advice and support to smallholders. When will that web page be made available to the public and what information will be provided on it?

Jen Willoughby will answer that.

The web page is already up and running on the Scottish Government’s website. It provides a variety of information that we think will be helpful to small landholders on the issues that they raised during the review. For example, there is information about how to access different sorts of funding and how to engage with colleagues in the rural payments and inspections division. The web page also provides links to other bodies that small landholders might find helpful as well as links to all our other web pages.

Thank you—that is very helpful.

My question is along the lines of John Mason’s. Back in 1880, there were 50,000 smallholdings; now, there are 74 of them covering 0.2 per cent of tenanted land or 0.05 per cent of agricultural land. Small landholders do not have a pre-emptive right to buy, as farmers with secure 1991 tenancies do, or an absolute right to buy, as crofters do. Why is that, given that the agricultural holdings legislation review group and the land reform review group recommended that small landholders should have a right to buy? Why have you chosen not to provide them with such a right? After all, there are only 74 small landholders. We would resolve the situation by allowing them to buy.

Mr Lyle mentions the fact that the number of small landholders has reduced, and it is fair to say that the use of this form of tenure has fallen into desuetude and disuse and has been replaced by the use of other statutory forms of tenancy, such as those under the Agricultural Holdings (Scotland) Act 2003 or private contractual arrangements that have been devised by parties entering into contracts on a private basis. It is fair to say that, in respect of new instances of this form of land tenure, it has fallen into disuse.

11:45  

One issue that has been raised is the right to buy. Because we are in the early stages of the debate following the review, the first step is to explore the exact nature of the current legal tenure and its peculiarities relating to ownership. I think that it is unique in the respect that, as I understand it, the house but not the land is owned. Therefore, the first step would be to see the guide that Sir Crispin Agnew will provide in relatively short order. Looking at that as a statement of the law would be a good starting point in considering any move on from the current situation.

A right to buy would be a significant undertaking, and a number of issues would have to be considered. There are significant legal and European convention on human rights issues—members will be aware of the provisions in the case of Salvesen v Riddell, for example. I am not expressing a legal opinion but merely making the point that those are sensitive and difficult legal areas, and the Scottish Government has no plans to legislate in them at the moment.

On the other hand, we are willing and keen to commence the debate, which we are doing, and it will be informed by Sir Crispin’s welcome contribution to it.

Has any of the 74 small landholders made a request to buy? Have we spoken to or otherwise been in contact with them?

They are free to make private arrangements, and it is up to each individual to do so. I would be astonished if private contractual arrangements have not been made over the years by individuals with their landlords after coming to a negotiated conclusion. That is always the best way to move on and to reach an alternative arrangement.

Small landholders are free to make private arrangements, but some of them have identified the right to buy as being of interest. As I think I pointed out, we have had formal responses from only just under a quarter of the small landholders who are involved—which is a quarter of 74.

That is 18 or 19.

The last primary legislation on small landholdings was passed back in 1931, so there is no modern small landholdings legislation. Given that situation, why have you chosen not to ask the Scottish Law Commission to review the law on small landholdings and to recommend reforms? Also, do you agree that the current legal situation of small landowners is unfair?

As I said, the first step is to provide some clarity on what the law actually is. Sir Crispin Agnew has agreed to do that and he is working with us on it. I imagine that the second step will be for the committee to consider that in the light of the small landowners’ responses.

We have not considered whether we will ask the Scottish Law Commission to do any work on the matter, but that option is open to us and it might well be appropriate. I am certainly not ruling it out, but we need to go in stages and not ignore the fruits of the work that we are doing at the moment in direct response to the review. I hope that the committee will welcome that work.

As to whether the law is fair or unfair, that is a matter of subjective judgment. Because, as the minister, I have a duty to consider things in the round, it would be premature for me to opine on the general concept of its fairness until the completion of the work that we have agreed to do, which will be fairly soon.

Today is perhaps the first time in half a century or more that the matter has been considered at all, so the fact that we are having the debate is a good thing. To any small landholders who are listening to this or reading the debate, I say that we are interested in your position, we value the role of small farmers in Scotland and we are debating the matter because we want to see whether there are ways in which we can help. We also have a duty to consider things carefully when it comes to possible law reform.

It appears that the 74 small landholders have been left behind somewhat. The law has moved on in various areas and they seem to have been missed out, on the whole. That suggests that there is an unfairness.

If the member has any proposals, I am happy to consider them.

In the conclusions section of the report, the Scottish Government said that it would consider whether smallholdings should be included in the remit of either the Crofting Commission or the tenant farming commissioner. Do you agree that an umbrella body is needed? Who should that be?

It is correct to say that small landholdings do not fall within the remit of any organisation. Given their relatively small number, it would not be sensible to go to the expense of creating an entirely new commission. That would not be practical. Therefore, the review recommends that work be undertaken by either the Crofting Commission or the tenant farming commissioner. Coverage by an umbrella body could provide the sector with an independent source of information and dispute resolution for some issues. Those bodies do not and would not replace the jurisdiction of the Scottish Land Court, but we are in discussions with the Scottish land commission and the Crofting Commission about the potential options.

The Crofting Commission has indicated that it might agree in principle to expand its remit to include statutory small landholders subject to further consideration of resource implications and discussion at board level. However, extending the Crofting Commission’s remit would require legislative change. We would welcome the committee’s views on the subject.

If legislative change is needed, that is one thing, but do you have a view? You have suggested that the Crofting Commission might be able to take the responsibility. The committee would like to know what your own suggestion would be. Would it be the Crofting Commission? If so, would you then produce legislation and timescales? Could you give us an idea of your opinion on that?

I have not formed an opinion yet because we are at the start of the debate and, generally speaking, it is prudent for ministers to wait until the debate is finished before coming to decisions. You will be aware that any view that I express here I express not as Fergus Ewing but as a Government minister.

I am not being overly cautious. This is the first time that we have debated these things and it would be wrong for me to rush to a view, particularly since we are talking about third parties. We are in discussion with the Crofting Commission and, as I have said, it is willing to take the responsibility. The Crofting Commission deals with crofters, of course, and the nearest analogy to small landholders would, I think, be crofters. There would be a fit, in principle, which I presume is why the Crofting Commission has expressed its willingness to explore the matter further. Festina lente should be the approach, and that is how I am minded to proceed.

I have an observation to make. Given that the Crofting Commission is an elected body in a geographical area, and given that a number of the smallholdings are outwith that area, I suggest that the Government proceed with caution because of that mismatch. Certain people would be differentiated from some of their number by being able to influence outcomes while others could not. That is all.

I have a keen interest in the subject, as many of the small landholdings are on the island of Arran, which is in my region. I should point out that Arran is a real island.

There are also many small landholdings in other parts of Scotland that are outside the designated crofting areas—in Ayrshire, Dumfriesshire and parts of the Borders. Given that we are considering whether we should link the strategy or legislation around small landholdings with crofting, what attention has been given to the complexities that might arise from the fact that many of those small landholdings are not in designated crofting areas? Since we last discussed crofting strategy, has the cabinet secretary had any further thoughts about whether we should be linking legislation and strategy for these different types of holdings?

Thank you for pointing out that Arran is an island.

Crofting and small landholdings have strong historical ties. We welcome all views on the relationship between the two and how it could be taken forward in the future. Mr Stevenson made a relevant observation about one of the practicalities in that the Crofting Commission is a body whose board members are elected. Small landholdings that lie outwith the crofting counties would not, by definition, have an elected voice on that body without legislative reform. If they were to be brought within the ambit of the Crofting Commission in those circumstances, it would create an anomaly that, I am sure, members of the Scottish Parliament would ask to be resolved or dealt with in one way or another.

The Crofting Commission has indicated that there is merit in bringing small landholding and crofting legislation together on the same register while retaining—as one would have to—the separate identities of both types of tenure. It might be possible for a new administrative register to be put in place, and that will be considered as part of our retrospective research project.

At the moment, for the reasons that I have set out, no final decision has been made on the inclusion of small landholdings in any crofting bill. However, the consultation on crofting that we launched recently is wide and will give consultees the opportunity to comment on the links with small landholdings. We will review the matter in the light of the consultation responses, including any that Mr Greene’s constituents in Arran might wish to make.

The final question is from Gail Ross.

It is a follow-up to that point. What is your timetable for taking practical action to progress the commitments that have been made?

We are taking forward the review recommendations now. I have indicated the timeline of some aspects. The web page is up and running and it is available now. The guide will be available and research is being progressed.

I would like to be able to come back to the committee sometime in the early part of next year to see what stage we have got to, particularly if that permits the guide to be published and lets us consider all aspects of the review recommendations.

I hope that that timescale is acceptable to the committee. These things do, of necessity, take time to develop but I am pleased that, for the first time in Scotland, we have made an effort to look into and show respect for and interest in a small but interesting and important part of Scottish rural life.

Thank you, cabinet secretary. We have asked all our questions. I confirm that the committee takes an interest in small landholdings because we think that they are important. As you have highlighted, the fact that the issue has not been addressed for a long time means that we are keen to make sure that it does not slip under our radar. We will look to ask you to come back when the legal opinions are clearer—we will take you up on your offer.

Thank you for your time this morning, cabinet secretary.

11:58 Meeting continued in private until 12:20.