Long Leases (Scotland) Bill

– in the Scottish Parliament on 28th June 2012.

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Photo of Elaine Smith Elaine Smith Labour

The next item of business is a debate on motion S4M-03408, in the name of Stewart Stevenson, on the Long Leases (Scotland) Bill.

Before I invite the minister to open the debate, I call the Cabinet Secretary for Rural Affairs and the Environment to signify Crown consent to the bill.

Photo of Richard Lochhead Richard Lochhead Scottish National Party

As the real cabinet secretary, I have pleasure in saying that, for the purposes of rule 9.11 of the standing orders, I advise the Parliament that Her Majesty, having been informed of the purport of the Long Leases (Scotland) Bill, has consented to place her prerogative and interest, so far as they are affected by the bill, at the disposal of the Parliament for the purposes of the bill.

The Deputy Presiding Officer:

Many thanks, cabinet secretary.

I call Stewart Stevenson to speak to and move the motion. Minister, you have 10 minutes.

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

Although this is quite a lengthy bill, its key principle is very simple: it converts to ownership ultra-long leases, which are defined as those that are more than 175 years long and which, in the case of residential property, have more than 100 years left to run at the appointed day or, in the case of non-residential property, more than 175 years left to run.

Under the bill, renewals that the landlord is obliged to grant are taken into account when calculating the duration of leases. Examples of that can be found in Blairgowrie. We estimate that the bill will cover around 9,000 leases, but it excludes leases in which the annual rental is more than £100 and in which, therefore, the landlord has retained a genuine interest.

The bill is a modest simplification of property law. Although ultra-long leases are akin to ownership, they are not quite ownership and that can cause problems. For a start, there may be inappropriate conditions in what are often quite old leases. Lenders might not fully understand the precise nature of the title, which might make it harder for the tenant to obtain a loan using the property as security. Moreover, conveyancing lawyers have told us that they groan at the sight of an ultra-long lease, as it makes completing a transaction relating to the property more complex.

Reform was therefore needed. At the end of 2006, the Scottish Law Commission produced the report that we are now seeking to implement. As the Law Commission said when it issued its report, the aim is to

“bring law and reality into line by converting such leases into ownership.”

The implementation of the report is part of the implementation of a series of reports on property law by the Law Commission. The work includes the Abolition of Feudal Tenure etc (Scotland) Act 2000, the Leasehold Casualty (Scotland) Act 2001, the Title Conditions (Scotland) Act 2003 and the Tenements (Scotland) Act 2004. Indeed, work on the reform of property law and the abolition of feudal tenure has been going on for some time. For example, the Land Tenure Reform (Scotland) Act 1974 prohibited new feu duties, conferred a right to redeem feu duties voluntarily and provided for the compulsory redemption of existing feu duties when a property was sold. So this bill completes an aspect of property law reform. I take this opportunity to record my thanks to the Law Commission for its work on property law reform.

We have, of course, just appointed a new chair of the Law Commission: Lady Clark of Calton. Lynda Clark will be known to many of us, and the Government looks forward to working with her on the reports that the commission produces and on helping to implement those reports.

The value of the commission’s work is shown by the detail of the bill. I said that the bill has a simple concept at its heart—conversion to ownership—but it has to protect landlords’ rights, too, which is one of the reasons why it is fairly lengthy.

The bill makes provision for a number of leasehold conditions to convert to real burdens in the title deeds; it allows landlords to preserve sporting rights; it makes provision for compensatory payments to be made, based on the rent that the landlord will lose; and it makes provision for additional payments to be made, to reflect other rights that the landlord may lose.

In many cases, the detail of the bill may not have much impact on individual leases. On sporting rights, the commission noted in paragraph 5.13 of its report:

“Although not common in the context of ultra-long leases, the rights where they exist may be of considerable value.”

The typical annual rental in an ultra-long lease is less than £5, so the compensation for the loss of rent will, inevitably, not amount to very much either. The commission noted in paragraph 6.28 of its report that cases where additional payments will be claimed

“are likely to be rare”.

However, the provisions will be needed in some cases and they are there to protect landlords’ rights.

There has been vigorous debate about some of the provisions of the bill when it was considered during the previous parliamentary session by the Justice Committee and when it was considered this time around by the Rural Affairs, Climate Change and Environment Committee. The bill has been improved as a result. The scrutiny that the bill received at stage 1 showed the benefit of the Parliament’s processes, and we have had the benefit of two excellent stage 1 reports.

Before the bill was introduced to Parliament again in January, we made some amendments to reflect the Justice Committee’s report. We added an exemption for harbours, we clarified the exemption for pipes and cables, and we made provision to allow landlords to register an exemption where the rental is over £100 a year. That reflects the fact that the lease may include variable rental, which can mean that the annual rent paid is more than £100 a year.

In this parliamentary session, further amendments have been made to reflect the evidence that was taken. We have amended the requirement in relation to the unexpired portion of a lease, to draw a distinction between residential and non-residential leases; and we amended section 2 to reflect the fact that the annual rent payable under a lease can be varied by a registered minute of variation or agreement.

I appreciate that much has been made about the common good—the debate that we have just had reflects that. The Government is taking very seriously the issues that were raised in that debate. However, we are very reluctant to cut across the general principle in the bill, which is that ultra-long leases akin to ownership should convert to actual ownership.

The bill is part of wider work that has been carried out to reform property law. Clarifying the law in this way will make life easier for tenants in ultra-long leases and lenders and solicitors engaged in transactions relating to the properties. Ultimately, I presume that its simplification will relieve many transfer transaction costs. The bill is not magically going to transform the world, but I think that I can say without fear of contradiction that the simplification will be welcomed by practitioners in the field.

I commend the bill to Parliament and look forward to the concluding debate.

Photo of Claire Baker Claire Baker Labour

I am pleased to take part in this stage 3 debate. As the parliamentary term comes to an end there is a cluster of stage 3 debates, although we are more concise this morning than we were yesterday. If it had not been for Jim Hume raising the thorny issue of common good land, there is a chance that we would have had no amendments to the bill at all.

After our recent cautious approach to the Agricultural Holdings (Amendment) (Scotland) Bill, in relation to which we took a wait-and-see approach on many issues, the rural portfolio may be starting to get a reputation, although the minister might welcome that.

Although we did not support Jim Hume’s proposal today, I welcome the debate that we had on the issue of common good land, which I am sure will be discussed in more detail this morning. I thank the Rural Affairs, Climate Change and Environment Committee for its scrutiny of the bill, and I thank all the witnesses who submitted evidence.

The bill has been thoroughly scrutinised, having gone before the Justice Committee in the previous session of Parliament. Changes were made to the previous piece of legislation to take into account the concerns that were raised during that process; I imagine that that has played a role in our having a limited number of amendments this time round.

The disadvantages of ultra-long leases are evident, although a very small income stream is provided to the landlord. The landlord can still place restrictions and other obligations on the tenant, although the length of the lease means in effect that the tenant is the owner and the landlord has very little real interest. On the appointed day in 2015, all appropriate ultra-long leases will convert to ownership. That all sounds quite simple, but the bill is a technically complex piece of legislation, and the contribution from all parties should be recognised.

Our stage 1 debate raised many points to which we returned at stage 2, most notably the concerns around Waverley market. Many members called for a solution to the prospect that Waverley market would transfer from public authority to private ownership. The City of Edinburgh Council argued that that would severely compromise the public interest in the site, and that its location within a United Nations Educational, Scientific and Cultural Organization world heritage site meant that the transfer of ownership would not be appropriate. It also argued that the—admittedly unusual—terms of the lease meant that the grassum should be taken into account as rent to move the site out of the scope of the bill. Others argued that the site should be recognised as common good land, and as such should be exempt from the provisions in the bill.

Initially, the Scottish Government appeared to be reluctant to accept any of those arguments. Although the minister was technically correct in his view of grassum, for example, I and other members were pleased to receive at stage 1 a commitment from him to look at the detail of that particular case in order to find a solution. The minister’s solution appeared at stage 2, although the fact that no member of the committee asked any questions about his amendment suggests that the minister’s relatively lengthy remarks—as he referred to them—did not explain the amendment’s significance in plain language.

I admit that I was not at the committee meeting, and it took me a few readings of the Official Report to appreciate the amendment’s significance for Waverley market. However, it appears that, by splitting the conditions for residential and non-residential leases and changing the length of time left on the lease of non-residential leases from 100 years to 175 years, a neat solution was found. That has little impact on other long leases, and results in the City of Edinburgh Council retaining ownership of Waverley market.

Common good land continues to present challenges for public bodies and communities. Whenever the Scottish Parliament considers issues of land ownership, persistent frustrations with common good land arise in relation to identification, ownership and use of the land.

With regard to the bill, neither the Justice Committee nor the Rural Affairs, Climate Change and Environment Committee came to a firm decision about the best way to proceed on exemption during their stage 1 discussions. Although we did not support Jim Hume’s amendment today, for reasons that Claudia Beamish identified, I appreciate his focus on retaining the public interest.

Photo of Jim Hume Jim Hume Liberal Democrat

Claire Baker mentioned that Labour changed its mind because of new evidence from Claudia Beamish. Can she repeat what that new evidence was?

Photo of Claire Baker Claire Baker Labour

There was a discussion on Waverley market at stage 2. Once it became clear that the amendment exempted Waverley market, that was an important factor. I will go on to explain the reasons why.

The narrowness of the criteria in the bill—principally, the length of the lease and the amount of money involved—limits the impact on common good land. Although we accept that the minister cannot be definitive about the amount of land that may be affected—Alex Fergusson raised that point—and that the complexities of common good mean that we probably never can be, I accept that if further land is identified that will be of limited significance.

I was not entirely convinced by the minister’s argument on legal challenge, as that would depend on additional identification. I have a level of confidence that the level of legal challenge would be extremely limited, if there was any such challenge at all, although given that the number of affected parcels of land continually increased—albeit that it never reached double figures—that confidence may be misplaced.

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

I suspect that most members will have experience of constituency work that involved considering whether a piece of land in their community was common good land. The concern that arises is that if we were to adopt the approach to which Claire Baker refers, it might create a charter for anyone to use the process to challenge almost any disposal of property that a council might make, which would hold up many projects that we would all wish to see progress. It would introduce uncertainty and, potentially, substantial expense for no substantial public benefit. Dealing with matters in the way in which we plan to do in the consultation that is open—to which I encourage everyone to respond, by the way—is probably a better way to proceed. We all agree that the issue is complex and not well understood.

Photo of Claire Baker Claire Baker Labour

Reconciling the Government’s confidence that only eight pieces of land were affected with its argument that legal challenges might arise in the future was what I had difficulty with. However, now that Waverley is out of the equation, I believe that the principle of protecting the public interest is upheld, in the vast majority of cases, by the transfer from public to public authority.

Claudia Beamish correctly raised concerns about the transfer of parcels of land from Dumfries and Galloway Council to Buccleuch Estates, which will be a transfer from public to private ownership. In that case, the length of the lease impacts on our understanding of the public interest. By the time the lease expires, I am not confident that there will still be a Dumfries and Galloway Council to return the land to. We are dealing with the consequences of decisions that were made in the early 1800s and although that may not be the outcome that we desire, we are limited in how the situation can be resolved. In that context, the minister’s comments that the bill is an attempt to bring law and reality into line are relevant.

The law and practices surrounding common good land, its use and its identification are tangled. As MSPs, we are all aware of those challenges. In evidence to the committee, the representative of Brodies LLP said:

“It seems to me that common good has been an issue for a few hundred years and is a matter that is not going to resolve itself. If it were to receive the attentions of the Parliament, that may be a favour to all concerned with it.”—[Official Report, Rural Affairs, Climate Change and Environment Committee, 22 February 2012; c 624.]

The minister may wish to reflect on that point.

Finally, although the bill does not address this issue, there are concerns about implementation and the role of the Registers of Scotland. The fact that a specific exercise will not be undertaken to update the land register of Scotland to reflect the conversion of ultra-long leases to ownership raises concerns that the register will not be accurate and correct. We recently passed the Land Registration etc (Scotland) Bill and it seems incongruous that we are now passing a bill that is likely add to the inaccuracy of the land register. The Economy, Energy and Tourism Committee called for further information to be provided on plans to complete the register, including a target date for completion of the register. That call reflects concerns about the accurate inclusion of ultra-long leases once they are transferred to ownership. Perhaps the minister can provide more detail on that in his closing speech.

The bill makes a contribution towards Scotland’s land laws becoming more transparent and more relevant to modern expectations.

Photo of Alex Fergusson Alex Fergusson Conservative

Like Claire Baker, I was not present for the stage 2 discussions at which the two amendments were debated but, like her, I have spent some time studying what the minister referred to as his relatively lengthy remarks on the subject of one of them. Unlike Claire Baker, I was not much the wiser having studied those remarks. That is not a reflection on the minister; it is entirely a reflection on my ability to absorb fairly technical information.

Despite that inability, I am happy to take part in today’s debate, the outcome of which will mark the final stage of the Scottish Law Commission’s structural review of land law and, therefore, the abolition, in effect, of the feudal system in Scotland. No one in the chamber will mourn its passing.

The Scottish Government has estimated that there are currently some 9,000 ultra-long leases in Scotland that are eligible for conversion under the bill. As we are all very well aware by now, broadly speaking, an ultra-long lease, as the minister said, is defined as a registered lease of more than 175 years. The Abolition of Feudal Tenure etc (Scotland) Act 2000 prohibited the granting of any type of lease for longer than that and converted other types of quasi-ownership to true ownership.

The leases that are eligible for conversion under the bill are those that have more than 100 years left to run. The main policy rationale for the bill is that a tenant’s right under a long lease is akin to a right of ownership. The bill therefore provides for such a right to be automatically converted to a right of ownership, with compensation being paid to the former landowner if necessary.

I apologise for the repetition, Presiding Officer, but I guarantee that it will not be the last bit of repetition that we hear in the debate.

I am pleased that the bill has passed through the Parliament relatively swiftly and with little contention, but a couple of points continue to be grounds for a little concern. In his opening remarks, the minister described the bill as modest, and so it is, but as he acknowledged, it is also complex. There are a lot of complexities in the issue, and where there is complexity, there is concern.

One of those issues is the common good. I am sorry that Jim Hume’s amendment was defeated this morning. I remain somewhat mystified as to Labour’s change of position, but it is not the first time that we have seen such a thing. As a result of the defeat of the amendment, the bill is not as tidy as it could have been. Members can call me old fashioned if they will, but I do not believe that we should be in the business of passing untidy legislation.

The second issue about which I remain to be convinced—Claire Baker touched on it—is the lack of a statutory requirement for Registers of Scotland to update the land register to reflect the change in ownership once an ultra-long lease has been converted to ownership. In response to my intervention on the issue during the stage 1 debate, the minister tried to appease me by arguing as follows:

“Registers of Scotland has decided not to carry out a bespoke exercise to update the land register as a result of the bill as it now stands, because updating the land register is not required for the bill to work.”

He went on to say that the conversion

“will happen independently of any action that is taken by Registers of Scotland.”—[Official Report, 25 April 2012; c 8366.]

I remain concerned that, as a result of that, the land register will wrongly show the original landlord as the owner and the new owner as the tenant. Surely, if only for the sake of the accuracy of Scottish property law, it is important that the register can be relied upon, yet if there remains no requirement to update the register, it cannot be.

The minister mentioned the Land Registration etc (Scotland) Bill, which was recently agreed to, and indicated that perhaps that would be the correct vehicle through which to address the issue. I understand that his officials will work closely with Registers of Scotland to ensure that the land register is kept as up to date as possible. I welcome that, but even if, as the minister stated in the stage 1 debate, the two pieces of legislation will work in tandem, I remain to be convinced of the reasoning behind the refusal to make a particular provision in the Long Leases (Scotland) Bill merely because of the possible complexity involved. Others might expand on or otherwise comment on the issue during the debate, but I cannot accept that complexity alone is a reason not to address an issue.

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

There are perhaps two things to say on the subject. Similarly to the position with the abolition of feudal payments, which essentially crystallised on the sale or disposal of property, transfer of ownership at a later date will ensure that, from that point onwards, the register is clear. However, even today, the register will note the interests of the tenant and landlord. Lawyers are perfectly aware of the bill and will be aware that the ownership has transferred. Also, it will be open to the tenant, if they wish to have the register updated, to take action to do that.

The effect is to distribute the work over a much longer period, so we will have a much more cost-effective solution to the issue without creating unnecessary legal issues.

Photo of John Scott John Scott Conservative

Briefly, please, Mr Fergusson.

Photo of Alex Fergusson Alex Fergusson Conservative

I am grateful to the minister for that explanation. I hear what he says. The Presiding Officer has indicated that my time is up, so I will reflect on that before I make my closing remarks.

For the time being, I am pleased to note that the bill has got to stage 3 with relatively little contention. I welcome the fact that the end of the feudal system is now within our grasp.

Photo of Annabelle Ewing Annabelle Ewing Scottish National Party

As the Rural Affairs, Climate Change and Environment Committee’s deputy convener, I am pleased to speak in the debate. Our committee was the lead committee on the bill in this parliamentary session, but I pay tribute to the Justice Committee in the previous session for its hard work. That committee secured significant progress on a similar bill but could not complete that work because of what could be regarded as an immutable deadline in this place—an election. I say well done to that committee.

As we have heard, the bill will complete a substantial piece of work by the Scottish Law Commission on the reform of Scots property law. The key element of that reform was the abolition of feudal tenure, which was a significant development in Scots property law. Like the minister, I pay tribute to the commission for its hard work. I, too, am pleased to hear that Lynda Clark will take on a new role, in which I wish her well.

The bill will facilitate the objective that was set forth—abolishing the feudal system—by converting to ownership instances of what could be termed de facto ownership, in which a tenant holds over land a registered long lease, as defined in the bill. That is akin to being the owner of the land, but the tenant is not the heritable proprietor, as we have heard.

Conversion will be automatic if the relevant thresholds are passed—they are defined as a rent of more than £100 and, as we have heard, a lease duration of more than 175 years with 100 years or more left to run for residential long leases or with more than 175 years left to run for non-residential long leases. It is important to bear it in mind that a tenant may opt out of automatic conversion. Compensation will be payable to the landlord, although—in keeping with the terms of long leases—the compensation will not be a hugely significant sum.

Those are the bare bones of the bill. As we have heard, some amendments were made to it. As the minister said, they have served to improve the bill’s drafting. We have heard about the contentious part of the debate and in particular about the common good—that was discussed at stage 3 this morning. It is absolutely clear that, if we have an automatic trigger date for the entry into force of the key provision on automatic conversion and if we have a system in which the keeper is not on the face of it in a position to know whether land is common good, it cannot be in the public interest that legal uncertainty could be created by asking who the owner is, if that is not the tenant who would become the heritable proprietor on automatic conversion.

As a conveyancing lawyer in a previous life, I understand absolutely the mechanics of how the system would work in practice, and I know that the proposal in the stage 3 amendment would not have worked in practice. I am pleased that the Labour group changed to a much more sensible position and listened to the debate, and I am also pleased that the Parliament rejected the unworkable amendment that was lodged.

I am pleased to support the bill, which represents a significant further step in reforming Scots property law. That is important, and it is very important to practitioners—as I said, I was one in a former life. I commend the bill’s tenets to the Parliament.

Photo of Margaret McDougall Margaret McDougall Labour

I welcome the opportunity to speak in the debate. As has been said, the bill’s aim is to convert ultra-long leases into ownership. That means that leases that are for more than 175 years and which have more than 100 years left to run will convert to ownership, unless a tenant opts out. The bill will protect landlords’ rights by providing compensation and will move the system away from an unnecessary and complex form of land tenure.

It is estimated that there are 9,000 ultra-long leases in Scotland that the bill could affect, but getting an exact figure is difficult. I welcome the cabinet secretary’s responses to the concerns that were raised at stages 1 and 2—[Interruption.] I am sorry; I have promoted the minister again. However, I feel that a few issues with the bill remain. We will need to monitor how the bill interacts with the Land Registration etc (Scotland) Bill. I believe that Registers of Scotland needs to update the land register, so that it holds an accurate record that reflects the conversion of ultra-long leases to ownership under the Long Leases (Scotland) Bill. However, I accept the minister’s assurance—he has been demoted again—that the Long Leases (Scotland) Bill will not require any further amendments to reflect that and that the land register will be updated independently.

I note that there are still concerns surrounding common good assets. As the issue is extremely complex, that is of little wonder. I welcome the minister’s comments this morning, because there is still a lack of confidence on accuracy where common good assets are concerned. For example, there was some confusion in Kilmarnock recently over whether the land on which the new athletics centre at Queen’s Drive was to be built was common good land. In 2010, the matter was discussed by the council and the idea of a long lease was floated. The council then decided that it was not common good land and that the common good land was on the other side of the river. The latest information that I have, which I received yesterday, is that it is common good land. Having a comprehensive list of what is and is not a common good asset would help with such issues in the future, and there would be cost savings in the long run.

I welcome the minister’s agreement that it would be useful to compile a register of all common good assets at some point in the future. In recognition of the fact that that will be an extremely difficult and expensive exercise for local authorities, the Scottish Government should work with councils to find better ways to collect the information. I wonder whether funding support could be found to make that happen.

I welcome the bill, as it dispenses with the archaic system of ultra-long leases, but we need to ensure that Registers of Scotland updates the land register.

Photo of Graeme Dey Graeme Dey Scottish National Party

When I learned that I was to serve on the Rural Affairs, Climate Change and Environment Committee, I expected to expand my—at that stage—limited knowledge of farming, fishing and environmental issues. I am not sure that I expected to deal with a bill on long leases, and I am not sure that my committee colleagues would have expected to do so either. The subject matter, however, has proved fascinating, as were the committee’s evidence sessions even if they failed to provide compelling reasons to amend the bill to exclude common good land from its reach; at the outset, it might have been thought that we would do that.

It is believed that only nine out of an estimated 9,000 ultra-long leases in Scotland are of a common good nature, but it is a case of “it is believed” rather than “the facts show”. Whatever else the process of getting to stage 3 has demonstrated, it has shown that councils are some way short of being on the case when it comes to understanding the common good portfolio. Members should not just take my word for that, but should consider the evidence that was given to the committee by Bill Miller, the property management and development manager for the City of Edinburgh Council.

Mr Miller revealed that land campaigner Andy Wightman, in researching his respected book, “The Poor Had No Lawyers”, wrote to all councils in Scotland for details of their common good properties. The council responded, but with what Mr Miller acknowledged was “very poor information”. He went on:

“Mr Wightman replied to us and said, ‘But what about’ and listed a number of properties that he felt should be common good and which were not on our register. At that point, we carried out a major exercise to look at those properties and ... agreed that a number of the properties that he suggested should be common good”.—[Official Report, Rural Affairs, Climate Change and Environment Committee, 29 February 2012; c 651.]

Mr Miller expressed the view that, following Mr Wightman’s contribution, the council now has “a fairly good register” but admitted that there remained a “however”.

I cite the example of City of Edinburgh Council not to have a pop at our capital city—indeed, Mr Miller’s candour was very welcome in informing the committee’s deliberations—but to illustrate the complexity of the issue. Given that the task involves going back to the 12th century in seeking to ascertain the status of properties, as has happened in Edinburgh, the process is clearly full of challenges. It is interesting that witnesses representing other local authorities in Glasgow and Fife also admitted that they could not guarantee the absolute accuracy of their registers. We were told that it was thought that

“most of the significant common good properties in Glasgow are on the common good register”.—[Official Report, Rural Affairs, Climate Change and Environment Committee, 29 February 2012; c 653.]

They did not claim that the list is comprehensive.

As the bill has proceeded, a number of changes were made to what we were told regarding the number and the specific nature of common good assets that are subject to long leases. By my recollection, the number started out as five, went down to four and ended up at nine. On the way from four to nine, we were told that Rouken Glen park fell into that category only to be told, subsequently, that it did not. That is just one reason why the bill could not make an exemption for common good land.

The minister made a point during a committee evidence session, and reiterated it today, regarding what would happen if the common good exemption that has been mooted was agreed to. What would happen if a lease was converted under the bill and then the council in question discovered that the asset had been common good in nature and so should not have been converted? Who would own that asset?

Claire Baker questioned the extent to which legal challenge might come forward. Ahead of stage 3, I posed that question to a lawyer who specialises in land matters. His reaction was informative: a broad smile spread across his face at the prospect of arguing the case backwards and forwards, and I am sure that I saw pound signs in his eyes.

I understand the genuine motives behind Jim Hume’s amendment, but the Parliament was right not to exempt common good long leases, with the uncertainties that that might have thrown up. The case for exempting common good land from the reach of the bill was not made, just as happened with the session 3 bill on the same subject at the Justice Committee. That is not to say that we do not have a general issue to address with common good, and I welcome the fact that the status of common good will be included in the consultation on the community empowerment and renewal bill.

As the minister and others have acknowledged, the latest process highlights the wider issue of just how accurate information about common good is. That requires to be addressed—

The Deputy Presiding Officer:

I would be grateful if you could close, please.

Photo of Graeme Dey Graeme Dey Scottish National Party

As the Rural Affairs, Climate Change and Environment Committee recommended in its stage 1 report, the Scottish Government should work together with local councils and relevant professionals to identify better ways to gather, verify, record and maintain common good information.

Photo of Jim Hume Jim Hume Liberal Democrat

I thank fellow members of the Rural Affairs, Climate Change and Environment Committee for all their hard work on the bill. I also thank, of course, the clerks, the Scottish Parliament information centre, the Scottish Law Commission, which has been mentioned, and our witnesses, too.

The Long Leases (Scotland) Bill has been fairly consensual, although I thought that it was more consensual until about half an hour ago. The bill goes a long way towards addressing remnants of what may be called feudalism in Scotland. I say “fairly consensual” because the SNP Government did not budge in its opposition to my amendment, the purpose of which was to give further protection to common good assets. I believe that my amendment would have helped to do that.

Even though other parties recognised the threat of the bill’s unintended consequences on common good, the SNP dug in its heels on the matter and has hardly taken into consideration others’ views. That is not quite the consensual politics that we were promised at the beginning of this parliamentary session.

Photo of Annabelle Ewing Annabelle Ewing Scottish National Party

Consensual politics are all well and good, but if the fundamental basis of the amendment can be challenged on the grounds of legal uncertainty—as has been explained at some length—why on earth would people want to promote that?

Photo of Jim Hume Jim Hume Liberal Democrat

The uncertainty is the difference between our two views on the matter; I will clarify that point later.

From the start of the bill proceedings, it was clear that there was a lack of knowledge on the number of common good properties that may be affected. That number rapidly increased, and the minister has stated in evidence and again today that there can be no “absolute certainty” about the number. That leaves me baffled about why the Government decided not to yield to the concerns that were expressed by other parties in the political world and others who gave evidence.

Alex Fergusson, too, was baffled, as was I, at Labour’s U-turn. Claudia Beamish stated in committee:

“I feel that it is important to protect the public interest, and the amendment would provide an effective way of doing that”.

Margaret McDougall said that

“if common good land is not excluded, common good land and assets will pass to others over time and the common good will be lost to communities forever.”—[Official Report, Rural Affairs, Climate Change and Environment Committee, 16 May 2012; c 942-943]

They said that on 16 May and it is now just the end of June.

When Claire Baker was pressed on why Labour had changed its mind, she referred to the Waverley market evidence. My amendment was not to do with that; it concerned the general principle of protecting common good assets and any that are unknown to us. Graeme Dey made it clear in his speech that there is still a great lack of knowledge about common good assets and where they may be. However, we are where we are.

The Liberal Democrats will support the bill, even though it could have been dramatically improved. I am aware that there will be a compensation payment for a landlord who loses land that is affected by the bill. That is welcome. The Government intends to write to all local authorities to recommend that they put any funds gained from a long-term tenant gaining ownership of the common good asset to the common good fund.

Of course, as I said before, that is only a recommendation, not a must. I wonder how we can compensate fully for a common good asset that might have been held in trust since 1491 when the Scots Parliament passed the original Common Good Act 1491. Nevertheless, the Liberal Democrats will support the bill. It will go a long way towards ending what could be called feudalism in Scotland. I note how surprised I was to find out that the Government estimates that around 9,000 leases in Scotland could be affected by the passing of the bill, so I hope that we do not find ourselves in the future regretting not supporting the amendment to exempt common good assets from the bill.

Photo of Rob Gibson Rob Gibson Scottish National Party

As the convener of the Rural Affairs, Climate Change and Environment Committee, which has dealt with the bill and amendments, I know that we have changed and improved an important bill to add to the modernisation of the law of property and land in Scotland. It is a vital aspect of a modern nation’s ability to know who owns what and whether ownership can be conferred on people who have for many years been virtual owners. Making actual owners under the legislation is quite an important development.

I say that because we have been discussing the issue for a long time. In the excellent Scottish Parliament information centre briefing, Sarah Harvie-Clark noted that, under Lord Guthrie, the Scottish leases committee did a search in the register of sasines for the period 1905 to 1951, the results of which disclosed 13,151 such leases, almost 9,000 of which were found to have more than 100 years still to run. That shows for how long there has been concern about long leases. Indeed, I recall debates on Scottish National Party policy formation in the 1970s and conference resolutions by the late Willie MacRae and others that recognised that people have suffered from not being able to borrow on the basis of their assets. The SNP has recognised the need to change that. Vetoes from the House of Lords and others, and lack of time in London, mean that it is only the establishment of the Scottish Parliament that has allowed us to tackle any of those problems.

A comprehensive approach to the problem has thrown up the difficulties of having a register that matches our aspirations. After stage 2 of the bill, we received responses from the minister about books of council and session, which refer to very old arrangements for the ownership and leasing of land, and that made us realise how much had to be modernised and how complex the process would be.

Previous Governments have tried to find out who owns what in the country. In 1872 and then in 1910, a survey was conducted throughout the United Kingdom of who owned what. That was with a view to land value taxation, which the then Government was considering.

We need to think about two aspects of who owns what. The cost of bringing the land register up to date is a matter of concern, but it is worth considering the fact that people were compelled to inform past Governments about what they owned. It would be worth our looking at some way of people providing us with the information without it being a cost to the public purse. That might be difficult, but we must consider it because we are not going to complete our knowledge without it.

Up to 9,000 householders will benefit most from the legislation, and I always welcome more people having a direct stake in the land of Scotland and the properties thereon. It improves their grasp of their own country. If the bill goes a little way towards taking that opportunity, I am delighted. It goes hand in hand with other legislation and I recognise that the proposed community empowerment and renewal bill will deal with the common good issue if people choose to raise it. In the meantime, I welcome the changes to the Long Leases (Scotland) Bill made by the Rural Affairs, Climate Change and Environment Committee and the Parliament, and I hope that it passes.

Photo of Alex Fergusson Alex Fergusson Conservative

And so we approach the end of a process that will, in effect, bring about an end to the feudal system—something that I have no doubt is welcomed on all sides of the chamber, as I said in my opening remarks.

As one who served on the Rural Affairs Committee in the first session of the Parliament, and who is delighted to be serving on its later version, the RACCE committee, as it is referred to, I am only too pleased to note that, in this instance at least, the rural affairs committee has succeeded where previous justice committees failed, even if that failure was for an entirely justifiable reason—I think an election could be called that.

If I have a remaining concern about the bill, it is summed up by comments from various members highlighting the modest nature of the bill, to which the minister rightly referred, while raising the issue of the complexities within it. Most of those complexities are legal in nature and highly technical. Anyone who knows me even reasonably well knows that my mind is not one that easily absorbs legal complexities. Graeme Dey suggested, accurately, that the topic is not one that most of us might have expected to be dealing with when we first came together as a committee.

I tend to accept the minister’s assurances that all will be well, which is, in effect, what he is saying in relation to the concerns that I and others have raised about common good and the updating of Registers of Scotland, which Margaret McDougall mentioned. They are and remain genuine concerns.

If I have picked him up right, Graeme Dey stated that the exemption of common good leases would have thrown up complexities. The problem as I see it, however, is that by not accepting Jim Hume’s amendment to exempt common good leases, we continue to promulgate complex matters in an inconclusive way. I remain unhappy that the minister was content to say, as he did at stage 2, that there is not absolute certainty in relation to the number of common good leases. I repeat my claim that the complexities of this small bill mean that we are about to pass untidy legislation that could easily lead to future challenge and further complexity.

Nonetheless, as Jim Hume said, we are where we are, and the end of the feudal system is in sight. When I look at the current designs of buildings on Princes Street and compare them with those in George Street, I ponder that feus were not necessarily a bad thing. However, they are behind us now. Times move, and we are moving with them. Overall, I welcome the end of the feudal system and, despite the concerns that I have raised, we will support the passing of the bill this evening.

Photo of Claudia Beamish Claudia Beamish Labour

I am pleased to close on behalf of Scottish Labour, and as a member of the Rural Affairs, Climate Change and Environment Committee, because the bill contributes in a limited way to moving Scotland further away from feudalism and closer to a system of property law that recognises where rights and responsibilities should fairly lie.

In the policy memorandum to the bill, the Scottish Government highlighted some of its benefits. It stated:

“Ultra-long leases amount to virtual ownership. It would simplify property law in Scotland to convert them to ownership.”

As highlighted by the Scottish Government, the bill will also further minimise any threat of title raiders—a point that has not yet been raised in the debate. It will also ensure that property rights lie where they should lie, in the 9,000 or so relevant cases. The Scottish Law Commission stressed that ultra-long leases are “barely distinguishable from feus”. As highlighted in previous stages, that can juxtapose very small rents with unreasonable and sometimes sudden obligations on the tenant.

Alex Fergusson stressed that the bill marks the end of the feudal system. I wonder whether that is the case—I very much hope that it is.

Rob Gibson stressed the importance of clarity for those who have been tenants in ultra-long leases, and said that the ownership of such property is an important step forward.

It is also important that there is clarity about ownership in relation to the land and property in question, due to the difficulties of seeking investment for anyone holding an ultra-long lease.

There will no longer be concern about the uncertainty of compensation for improvements at the end of an ultra-long lease, and no anxiety about the issue of renewal of a long lease in that category.

Annabelle Ewing highlighted the fact that tenants can opt out, which is also significant.

The rarity of ultra-long leases means that in some places in Scotland it can be the case that it is hard to find a legal practice where there is knowledge of them. The passing of the bill will end that concern.

The minister explained that land register arrangements will be distributed over time. Although Scottish Labour acknowledges the concerns that are connected with that, we note the fact that—if I understand the situation correctly—it is possible for a registration to be made through choice rather than only through time, as it were.

The issue of ownership, which is usually assumed in relation to tenements—again, something that is not mentioned in the bill—will be resolved, as ultra-long leases will no longer exist. That will end such complications. The externalities that could occur in that respect—if, for instance, a group of owners wished to improve a tenement and the long lease was in an unclear position—will now be resolved.

Since the bill was considered by the Justice Committee in the previous session of the Parliament, ports and harbours have, rightly, been exempted if there is a statutory port authority. That follows on from evidence that was given by the Peterhead Port Authority. Further, the pipes and cables issue, which could cause complications for owners, has been resolved.

There was much discussion at earlier stages about the exemption of common good land. In its stage 1 report, the committee argued that

“common good land is an extremely complex area”.

Many, including Graeme Dey, have highlighted that today.

We spent a great deal of time discussing Jim Hume’s amendment. The lack of an evident threat to the public interest, our concern about legal implications and the resolution of the Waverley market issue led us to the decision that we took today.

Photo of Jim Hume Jim Hume Liberal Democrat

Does the member now regret her support for the amendment at stage 2, and the words that she and her colleague spoke at that stage?

Photo of Claudia Beamish Claudia Beamish Labour

I think that I will just move on. I have tried to highlight the point. We considered issues as carefully as possible and arrived at the decision that we thought was best for the future in order to avoid complexities.

As Claire Baker highlighted, Brodies LLP, said that

“common good has been an issue for a few hundred years and is a matter that is not going to resolve itself. If it were to receive the attentions of the Parliament, that may be a favour to all concerned with it.”—[Official Report, Rural Affairs, Climate Change and Environment Committee, 22 February 2012; c 624.]

As Graeme Dey pointed out, the complexities of unravelling the issue might go back to the 12th century. I am confused about that, as I understand that the concept of common good land started in 14-something. We could have a debate about that, but perhaps not on the last day of the term. Common good land is a matter for another day, but Scottish Labour sees a resolution of the issue as essential to clarifying fair land ownership in Scotland.

The minister has highlighted the opportunity to explore common good in the context of the proposed community empowerment and renewal bill. We welcome that.

Ultra-long leases of over 175 years, with more than 100 years to run, are indeed a feudal anomaly and modern Scotland is better off without them, so we support the passing of the bill.

Photo of Stewart Stevenson Stewart Stevenson Scottish National Party

I welcome the positive contribution to the debate from members across the chamber and the indication that this highly technical bill, which has raised a significant number of issues, will be supported, unless people change their minds when we come to decision time.

I will say a little about the common good. I have been passed the Common Good Act 1491, which is a modest little act that contains two sentences. We have been having a little debate, and we believe that it was passed under James IV, but we will be certain if somebody can enlighten us. I will translate the act from Scots into English. It simply says:

“Item, it is stated and ordained that the common good of all our sovereign lord’s burghs within the realm be observed and kept to the common good of the town and to be spent in common and necessary things of the burgh by the advice of the council of the town for time and decades of crafts where they are”— in other words, for ever. That is it. That is what the approach is founded on. When such modest, little acts—it was the 19th act in 1491—are translated into the modern era, they leave certain interesting and important questions unanswered or uncertain. In talking about the common good, we must recognise that.

The consultation that is open, which includes questions on the common good, is an opportunity to start to understand the status quo and to work out what the new status of the common good might be in the future. Perhaps it is time to move away from the complexities of the past and state some simplicities that are fit for purpose for the future. However, that is for another day and, I suspect, another minister. I am taking the bill forward because the leases that are affected by it are largely rural leases, but it is perfectly fair to say that a range of ministers could have stood here to speak about this particular issue.

Alex Fergusson apologised for repetition. Obviously, he has forgotten one of the important rules of politics: a debate is not over when everything has been said; it is over only when everybody has said it. Perhaps this debate clearly illustrates that point.

Annabelle Ewing highlighted her experience as a conveyancing lawyer, and I listened carefully to what she had to say.

I am grateful to Margaret McDougall for the albeit transient promotion in the interstices of this debate. She effectively described some of the difficulties that she has experienced in local government in finding out whether something is a common good property. The reality is that a document in somebody’s file somewhere—not necessarily in the files of the council concerned, of course—that says that something is common good property may be all but impossible to find unless it is known that it exists in the first place. There are genuine and significant concerns.

Jim Hume in a sense recognised that consensus probably has been achieved. The Government has responded to the issues as they have arisen and I hope that, as he looks at Labour’s review of its position, he remembers a response given by someone else:

“When the facts change, I change my mind. What do you do?”

I suppose that that is a question that we might address to Mr Hume. Grown-up politics involves recognising that there is a debate, that the debate moves on, and that we take positions as it moves on, as we in the Government have done.

We will continue to work on the common good with local authorities. Local authorities were open and honest with the committees, gave it their best shot, and showed a depth of knowledge and understanding. Paragraph 55 of the Justice Committee’s stage 1 report says:

“This Bill is not about common good. It is about ultra-long leases.”

The conclusion in paragraph 61 of that report is:

“The desirability for certainty from this legislation and the provisions for compensation provided in the Bill have led the Committee to conclude that it is not persuaded, at this time, that there is a compelling case for exempting leases of common good property from this Bill.”

Paragraph 127 of the Rural Affairs, Climate Change and Environment Committee stage 1 report says:

The Committee is not persuaded by the arguments made thus far to exempt ultra-long leases on common good land, however, neither is the case against this exemption a clear and compelling one.”

There are a number of reasons against the exemption, as I said earlier. The bill does not take account of who the landlord and tenant are and is blind to that. Decisions on development should now be for the planning system. Alex Fergusson referred to enlightened feudal landlords who helped to build the attractive facades that we have in some of our cities. Of course, it is fair to say that not all feudal landlords were enlightened. That is why the feudal system has been addressed over recent decades.

We need to protect common good land and we will not forget about that. Indeed, our consultation document on the proposed community empowerment and renewal bill has two specific questions—25 and 26—on the issue. I draw members’ attention to the fact that that consultation does not close until 29 August, so if they are short of things to do over the summer recess they can read the consultation document and respond. I do not think that anyone should stand in this chamber or any in other forum and suggest that they have all the answers on common good—that would be specious. It is a genuine question that we should all turn our minds to. Those of us who have been involved in the debate are probably relatively well placed to understand some of the complexities and uncertainties and perhaps make a contribution to the consultation.

I confirm again that I will write to local authorities saying that any compensatory and additional payments should go to the common good fund if common good land is affected, while recognising that the amounts will be very small. We have prepared the letter and, assuming royal assent for the bill, it will go out shortly thereafter.

Land registration came up again in the debate. Our commitment to land registration is shown by the Land Registration etc (Scotland) Bill that we have just put through the Parliament. Again, that bill arose as the result of a Scottish Law Commission report. That highlights the value of having some of the best of the legal brains out there engaged in the issues of reforming Scotland’s law and identifying what needs to be done. Mr Ewing said on 31 May during stage 3 consideration of the Land Registration etc (Scotland) Bill that it

“provides the legal framework that will allow the land register to be completed.”—[Official Report, 31 May; c 9596.]

We will ensure that officials continue to work with Registers of Scotland on that.

We need to ensure that information on the provisions of the Long Leases (Scotland) Bill reaches landlords, tenants and their legal representatives. As ultra-long leases are concentrated in particular areas of the country, we can target the information at those areas. We will ensure that we have articles in relevant publications and will provide information on the Scottish Government website and the Registers of Scotland website.

Our intention is that the appointed day for the bill’s provisions will be in 2015, which should give sufficient time for parties to prepare. We will need some secondary legislation, particularly in relation to forms, and we will consult on those, in line with our best practice.

I am grateful to colleagues across the chamber for their work on the bill. It is a technical bill, but no one could accuse the process of having been dull. Indeed, there have been sparks of humour from many of those who have contributed to the debate.

The bill team had to advise a minister who usually works outside the justice area, but they were superb in their support and in ensuring that the minister was properly engaged and had a proper understanding of the complexities and the legal aspects. I have thoroughly enjoyed having their support.

The bill is an overdue bit of land reform that will reduce costs and complexities, and we have had an excellent debate on it. The common good debate that we have had will warm up the debate that will follow on the consultation that is currently on the table, as I said. I hope that members who have just joined us in the chamber will consider responding to the consultation on common good.

I commend the Long Leases (Scotland) Bill to members and I urge them to support it at decision time and to ensure that their constituents, when they meet them, are aware of the contents of the bill and the opportunities that come with it. We can all play a part in finally ending the feudal system in Scotland.