A number of Scottish estates have written an open letter to Cabinet Secretary Richard Lochhead, expressing their concern about the proposal to enable tenants to assign their tenancies to new secure tenants and the widening of rights to succeed to secure tenancies:
Dear Cabinet Secretary
LAND REFORM (SCOTLAND) BILL 2015
During the Stage 1 debate of the Land Reform (Scotland) Bill 2015 you repeated the Scottish Government’s assertion that ‘good’ landowners had nothing to fear from the forthcoming legislation.
The signatories to this letter are rural businesses wholeheartedly committed to Scottish agriculture. Some of us are estates with extensive letting businesses. Others are small estates which let only one or two farms. Some of us are private businesses, others are charities. Regardless of the scale of our operations or our type of ownership, what unites us is fear of what may become of the tenant farming sector in Scotland should certain proposed amendments to the Bill in relation to agricultural holdings go ahead.
In particular, the proposal to enable tenants to assign their tenancies to new secure tenants, coupled with the widening of rights to succeed to secure tenancies, is another serious and destructive blow to tenant farming.
The Agricultural Holdings Legislation Review Group (AHLRG), chaired by you, put forward a proposal that would enable tenants - with or without successors - to convert their secure tenancies to Limited Duration Tenancies. There were differences of opinion across the industry as to the appropriate term and there is no doubt that such a measure would not be in the best interests of the agricultural landlord. That said, landlords and farming representatives do understand that some churn in the sector could be achieved through such a measure and recognise the good that would do.
However, the AHLRG was not persuaded of the merits of assignation for value, effectively ring fencing '91 Act tenancies, nor did it see such a measure providing any additional incentive over the proposed conversion approach. Indeed, the AHLRG specifically concluded "that the public interest case for such a change has not been made".
It is therefore bitterly disappointing to see the Scottish Government now discarding the conversion option in favour of something that will clearly not be in the interests of tenant farming. Even with a right for the landlord to buy the tenant out (albeit at a higher price than a tenant would pay) the reality is that many will not be able to afford to buy back farmland and buildings which, of course, they already own. Surely this cannot be a balanced approach and how many landlords will relet once they have bought out the tenant? Landlords see this as nothing more than a discriminatory measure driven mainly by a desire from some quarters for the Bill to be made more ‘radical’. We are certainly asking ourselves why otherwise would there be a change to the carefully considered recommendation of the AHLRG.
From every angle this measure looks like a fundamental breach of property rights and one that is much more likely to face challenge than the alternative conversion model which most of the industry, including ourselves, could accept. We all know the damage that flawed legislation can do and no-one wants to see any repeat of that in Scottish farming, an industry that is already facing enough significant challenges on several fronts. We make the point that this is not a ‘threat’ from landlords but a view on the importance of striking the right balance of property rights, something that has also been clearly underlined by two parliamentary committees considering the Bill.
We want a successful tenanted sector as letting farms is an important part of our businesses. However, to enter into often very long term arrangements, the climate has to be right before doing so. As things stand, particularly with the new Section 79 proposal, the Scottish Government is in real danger of forcing landlords away from letting. Those of us whose businesses have the letting of farms at their core are acutely aware that agricultural landlords will not be in any way attracted to let land on a long-term in the face of such an unwarranted measure. It is a misconception to believe that serious and damaging retrospective legislation applied to one type of tenancy will not impact on other types of tenancy. As landlords, we can state that it will. The impact of such a measure will not be good for tenant farming and therefore Scottish agriculture.
Sarah Troughton, Atholl Estates
Richard Buccleuch, Buccleuch Estates
Jamie Carruthers, Dormont Estate
Charles Pearson, Dunecht Estates
Ian Stewart-Fergusson, Dunfallandy Estate
Neil Hannay, Kirkdale Estate
Chris Hockley, MacRobert Trust
John Moray, Moray Estates