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
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
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
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,...