Simon Houison: Tenancy changes will be damaging
THE rights of landowners are being ignored in the government's proposals, writes Simon Houison
The Scottish Parliament’s rural affairs, climate change and environment committee will meet tomorrow to discuss amendments to be made to tenant farming provisions within the Land Reform Bill.
It is looking likely to be the day when the future of tenant farming receives a blow from which it may never recover – and the interests that I have as an agricultural landlord are disregarded by politicians who appear to be looking to “give the lairds a kick”.
Craufurdland Estate is a small family estate in Ayrshire and has been in my family for generations. I like to think – and I hope others locally do too – that we play our part in the community. Like many rural businesses, we have different interests, most notably tourism and leisure.
We are not a big landowning estate, but we do have a small number of farms let on long-term tenancy agreements, and we have a good working relationship with our farmers.
Yet now, with MSPs considering agricultural provisions in the Land Reform Bill, it is small-scale landowners who are most likely to be caught in the crossfire as relations between landowners and tenants are put under greater strain.
An erroneous assumption is often made that it is the “large” estates that let most of the land, where as the truth is that much of it is made up of people who let one or two farms.
Following a review of agricultural holdings legislation, chaired by rural affairs secretary Richard Lochhead, it was agreed across the industry and recommended that secure tenancies – where, if a tenant had no successor in place, the farm would normally have come back to the owner – could be converted to a new 35-year Modern Limited Duration Tenancy and then sold on by the tenant to another farmer (including the next generation of the family).
Whilst this was far from a perfect situation for a landowner, most of the sector recognised that such a measure would allow farmers the financial security to retire while allowing new blood to then enter the sector. Yet, sadly, this is where politics intervened.
Mr Lochhead, and the Scottish Government, after the stage one Bill scrutiny – with no consultation or explanation – submitted an amendment to disregard that recommendation and instead allow the “assignation” for value of secure tenancies.
This will mean that these secure tenancies can be sold on for cash and the owner has no prospect of regaining possession of his property. Tomorrow, it is likely that the committee will vote to pass this amendment, despite an expert review group ruling it out and the National Farmers Union of Scotland acknowledging that it is a bad move for Scottish agriculture.
One key point is the method by which these tenancies will be assigned. Due to the quirks of agriculture legislation, a landowner would be afforded the opportunity to buy out a tenant before they assign the tenancy to someone else. However, due to the calculation process being introduced, they will need to pay a higher sum to regain possession of their own property than a new farmer would have to pay to purchase the lease from the existing tenant.
Imagine renting out a flat in Edinburgh or Glasgow with this system. The tenant living in the flat can live there forever and pass it on to their children. Even if the owner wanted to live there and it is their only property, they cannot get it back.
What is being proposed is that any person in the tenant’s family can live there forever – and should they choose not to do so, then they can sell the lease to another tenant. Only at this point of selling the lease would the owner be allowed to step in and effectively buy their own flat – but not at the same price as the new tenant acquires it. They would have to buy the tenant out by paying between 30 per cent and 50 per cent of the value for something they have already paid for and own in the first place. Baffling.
The majority of landowners across Scotland own and work less than 1,000 acres. They are the people who will be most affected by the draconian measures being pursued by the Scottish Government. These are people who live and work in, and do their best for, rural Scotland. All this does is disincentivise all landlords from letting land.
Richard Lochhead maintains there are some tenants who support this measure. Some do, but they are not the majority of farmers.
If policymaking is going to be governed by appeasing radical voices rather than listening to an almost united industry voice – which is underpinned by a report that he helped produce – then we cannot expect the best outcome.
Miserably, if the amendment is supported tomorrow, it is likely that the industry is going to be in strife for quite some time – the very last thing it needs in these already challenging times for farming.
• Simon Houison Craufurd is owner of Craufurdland Estate, Ayrshire