- Proposed Scottish Government changes to the legislation are a ‘major threat’ to the sector.
- Right of tenants and landlords can be protected without destructive ‘last minute’ changes.
Scottish Land & Estates said today that proposed changes to the Land Reform Bill by the Scottish Government posed a major and unnecessary threat to the future of tenant farming.
Scottish Land & Estates has submitted new evidence to the Scottish Parliament’s Rural Affairs, Climate Change and Environment Committee over a proposed Scottish Government amendment to a key section of the Bill relating to agricultural holdings. The Scottish Government wants to enable tenant farmers with secure tenancies and no successor to have the right to assign their tenancies for value to a new secure tenant.
In its evidence, Scottish Land & Estates appeals to the RACCE Committee to reject the amendment and to endorse the proposal recommended by the Scottish Government’s own Agricultural Holdings Legislation Review Group and supported across the industry. That proposal would enable secure tenants to ‘convert’ their secure tenancies for value to long-term, limited duration tenancies.
David Johnstone, chairman of Scottish Land & Estates, said: “We are appealing to the RACCE committee to stick to what the Review Group and the sector believe is in the best interests of tenant farming. There has not been sufficient justification, consultation or explanation for the change in policy by the Scottish Government at this late stage of the parliamentary process. The proposed amendment to section 79 directly contradicts the findings of the Agricultural Holdings Legislation Review Group which were set out clearly in their Report following extensive consultation. Also, the proposed amendment has to be considered alongside proposals to widen succession rights. The combination of these two proposals is very significant and means that there will a successor to a secure tenancy in almost every case.
“What is most frustrating is that the same objective of enabling tenants to retire with dignity can be achieved with the conversion model and be less harmful and destructive. As it stands, the proposed Scottish Government amendment will undermine confidence to let land on anything other than a short term basis. It is counter-productive, breaches property rights and will almost certainly lead to legal challenge and very substantial compensation claims. No-one wants to see that happening and it is unnecessary.”
In its evidence to the committee Scottish Land & Estates made the following points:-
- The Scottish Government is seeking to encourage landowners to let land on a long term basis whilst at the same time bringing forward a measure which disregards the rights and interests of landowners who currently let land under secure long term tenancies. Significant changes to one type of regulated tenancy will undoubtedly have wide ranging consequences for other types of tenancies and the way in which they are used.
- The policy aims could potentially be met by the “conversion to MLDT” model which is less detrimental to landlords’ interests as landlords would regain vacant possession of the holding after a fixed period of time. It would also deliver a more positive message about the value of fixed term tenancies to the industry.
- The measure will infringe landlords’ property rights. Having received Counsel’s Opinion, Scottish Land & Estates is of the view that the amendment could be subject to successful legal challenge on the grounds that it breaches the European Convention on Human Rights.
Following notification of the proposed amendment to members, Scottish Land & Estates has received representation from a wide range of members setting out their frustration at the proposal and, in some cases, advising that they fail to see why landlords would let land other than under a short limited duration tenancy in the future. This is entirely the opposite of what the industry is seeking to achieve and Scottish Land & Estates has raised the issue directly with the Cabinet Secretary and the Scottish Government.
The option to “buy-out” the tenancy has been put forward as a way of protecting the rights of landlords and ensuring that the measure is balanced. The “buy-out” option will be of little benefit to landlords who do not have sufficient financial resources and, in particular, small-scale landowners (who are the majority) who may own one or two farms are unlikely to be able to utilise such a provision.
Scottish Land & Estates understands that the aim of section 79 of the Bill is, firstly, to give farmers with 1991 Act tenancies a route that will enable them to exit their tenancies with dignity and security without being dependent on a family member succeeding the tenancy, and secondly, to increase opportunities for newer tenant farmers to establish themselves. Scottish Land & Estates supports that aim.
Scottish Land & Estates is strongly of the view that the “conversion to MLDT” model could potentially meet the aims of increasing the amount of land let in Scotland and allowing 1991 Act tenants to retire, as well as introducing new blood into the industry (provided that there are suitable safeguards in place to balance the rights of the landlord). This route would be less detrimental to the rights and interests of landlords, and benefit the sector as a whole. There seems to be no justification for pursuing a measure which causes more harm to the interests of landlords without any gain in terms of meeting policy objectives.