Chamber
Meeting of the Parliament 28 March 2012
28 Mar 2012 · S4 · Meeting of the Parliament
Item of business
Agricultural Holdings (Amendment) (Scotland) Bill: Stage 1
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
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
In the same item of business
The Presiding Officer (Tricia Marwick)
NPA
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 ...
The Cabinet Secretary for Rural Affairs and the Environment (Richard Lochhead)
SNP
Thank you, Presiding Officer.This Government has two key policy objectives for tenant farming in Scotland: first, to ensure that tenant farmers have legislat...
The Presiding Officer
NPA
I call Rob Gibson to speak on behalf of the Rural Affairs, Climate Change and Environment Committee.14:44
Rob Gibson (Caithness, Sutherland and Ross) (SNP)
SNP
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 ...
Alex Fergusson (Galloway and West Dumfries) (Con)
Con
Will the member take an intervention?
Rob Gibson
SNP
I will take a brief one. I have a lot to say.
Alex Fergusson
Con
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 tena...
Rob Gibson
SNP
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...
Claire Baker (Mid Scotland and Fife) (Lab)
Lab
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 comm...
John Lamont (Ettrick, Roxburgh and Berwickshire) (Con)
Con
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 ...
Annabelle Ewing (Mid Scotland and Fife) (SNP)
SNP
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 th...
John Lamont
Con
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 un...
Annabelle Ewing (Mid Scotland and Fife) (SNP)
SNP
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 commi...
David Stewart (Highlands and Islands) (Lab)
Lab
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 r...
Graeme Dey (Angus South) (SNP)
SNP
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 e...
The Deputy Presiding Officer (John Scott)
Con
You must close now, please.
Graeme Dey
SNP
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
Angus MacDonald (Falkirk East) (SNP)
SNP
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 a...
Jim Hume (South Scotland) (LD)
LD
I declare a farming interest.The provisions in the Agricultural Holdings (Scotland) Bill are overdue. It is important that trust between tenants and landlord...
Dennis Robertson (Aberdeenshire West) (SNP)
SNP
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 legisla...
David Stewart
Lab
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 Parliam...
Dennis Robertson
SNP
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...
Margaret McDougall (West Scotland) (Lab)
Lab
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 entra...
Mark McDonald (North East Scotland) (SNP)
SNP
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 hav...
David Stewart
Lab
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 rent...
Mark McDonald
SNP
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....
Alex Fergusson (Galloway and West Dumfries) (Con)
Con
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 ...
Claudia Beamish (South Scotland) (Lab)
Lab
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 contex...
Alex Fergusson
Con
Why does the member feel that disharmony would be a good thing in an area—that is, the TFF—where harmony exists?
Claudia Beamish
Lab
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,...