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25 April 2012

S4M-02682 Long Leases (Scotland) Bill: Stage 1 [Closing Speech]

The Deputy Presiding Officer (John Scott): The next item of business is a debate on motion S4M-02682, in the name of Stewart Stevenson, on the Long Leases (Scotland) Bill. As we have quite a bit of time in hand for the debate, interventions will be welcomed.

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16:48

The Minister for Environment and Climate Change (Stewart Stevenson): The debate has been interesting if somewhat technical. It carried with it the danger of being that kind of political debate that is over not when everything has been said but only when everyone has said it. However, we managed to avoid falling into that trap. Right up to the very last moment, we were hearing about new aspects of the issues around the bill, which was very welcome.

Alex Fergusson referred to the word “cumulo” as an issue and to clouds in that respect. Perhaps I should draw to his attention the fact that one of the variants of cumulo clouds is, of course, cumulonimbus clouds, which are thunderclouds. Perhaps he might be on to something in dealing with the issue. I know that he just wanted me to make that particular point.

Claire Baker asked whether we would look at this bill and the Land Registration etc (Scotland) Bill, and I can say that we will.

The issue of grassum is complex. In legal terms, it is not a substitution for rent but a transfer of value.

I listened carefully to Alison Johnstone’s detailed comments on the bill that was taken through Westminster on behalf of the City of Edinburgh District Council and I will study carefully what she said. Mr Biagi has indicated that he would be happy for all three of us to sit down and discuss the issue, and I would be equally happy to do that. I ask the members to use my private office to make that happen.

Claire Baker talked about the three Glasgow common good sites that are among the nine common good sites that will be affected. Of the three Glasgow sites, it is interesting that one is Balloch country park. The bill will transfer ownership of that site from Glasgow City Council to West Dunbartonshire Council, which is the tenant. In principle, that should not greatly concern us. The other two sites are recreational areas in Pollok park and, because of how things work, their tenant will remain unchanged in practical terms.

We have talked about the site in Stonehaven—Nigel Don referred to that.

One site is a tiny bit of land at Stevenlaw’s Close in Edinburgh that provides long-established access to somebody’s house. In Ayr, a little bit of Rozelle house—an ancient house that is looked after by a public trust—is common good and would fall under the bill. Reference was made to the three pieces of land adjacent to Sanquhar that were subject to lease between 1800 and 1810. In practice, the effect of the bill on the nine leases that are known to be common good will not really be of great concern.

Claudia Beamish made a number of references to common good, as did many other members. It is worth saying that the Local Government (Scotland) Act 1973 provides that common good funds do not form part of general funds. That is a more recent provision. It is therefore naturally assumed that, if common good assets are sold, the proceeds cannot be transferred simply on a whim to the general fund. Without giving a definitive legal opinion—I would not want to appear to do that—I think that what we are discussing would remain in the public area.

Rob Gibson talked about registration, as did many other members. One provision in the bill covers one of the tricky issues, which is leases that may or may not be registered. We will look further at section 65 in relation to that.

Variable rent has been mentioned. There is uncertainty because the existence of some leases is uncertain or unknown and owners might be dead. We have to deal with much bigger issues in Scotland’s land tenure system.

We heard further comments about Blairgowrie leases as we went through the debate. They are essentially 99-year leases that can be perpetually renewed, but they are not necessarily written down—that is where much of the mischief has come from.

Marco Biagi made a reasonable point about the context in which the Waverley market lease was written—it was almost a gun-to-the-head job on the part of Edinburgh. On that basis, it differs from the overwhelming majority of leases that the bill will affect. I will certainly take forward with officials the complex legal issues that the existing legislation raises. I am certainly motivated to deliver the kind of outcome on which views are broadly shared across the Parliament.

Nigel Don raised the issue of ECHR. I assure him that we have looked at the issue very carefully.

I repeat that we will not take a view on whether or not Waverley market is common good. The lease was entered into in 1992. It was originally for 125 years. Through a complex process of sub-leasing and transfers of interest, the money associated with the asset that went to the City of Edinburgh Council was £6.25 million and other people received £23 million. The lease is a peppercorn rent. I do not believe that the penny is collected, for obvious reasons, as it would be rather difficult to justify the economics of doing so.

As members have said, sections 50 to 55 of the bill provide for reversionary payments. Ultimately, that can be a matter of agreement between the tenant and the landlord or it can be determined by a tribunal. In the case of Waverley market, the lease expires in 2188. On that basis, it would be open to the council to consider claiming an additional payment.

It is certainly likely that any assessment by a tribunal of the residual value that might be due on the return of the asset to the council in 2188 would take account of the grassum that was paid. My own back-of-an-envelope calculations suggest that a 7.5 per cent discount rate on £6.25 million takes us to £25 million today, which is probably there or thereabouts. It may well be that there is not much residual value.

I acknowledge the points made by the City of Edinburgh Council, Andy Wightman and Margo Biagi about Waverley market. The council briefly mentioned the City of Edinburgh District Council Order Confirmation Act 1991 when it gave evidence to the committee, but that act focuses on issues such as the height of Waverley market, which can be controlled by the planning system. We must look at the interaction between the bill that is before us, which I hope will become an act, and other acts. We will take that extremely seriously.

The whole debate around common good is one that is worthy of revisiting in another context at another time. We cannot legislate away some of the practical problems that may exist, but the debate has certainly thrown some of the issues into public view.

I have been grateful for the help that we have had from local authorities in providing information on common good land that might be affected by changes to ultra-long leases. That has been very helpful. We expected the number of such leases to be low, and it is, as we believe that the figure is nine.

When the Justice Committee considered the previous bill, James Kelly asked Andy Wightman,

“Do you therefore accept the view that the number of ultra-long leases of common good property is limited?”—[Official Report, Justice Committee, 18 January 2011; c 4036.]

He responded, “Yes." There is a shared recognition that we expected the figure to be low and it is.

To date, we have not received from the City of Edinburgh Council a terribly convincing argument that helps us to see how we can deal with Waverley market differently. However, the work that we are now doing picks up some important issues.

Paragraph 135 of the committee’s report

“welcomes the Scottish Government’s intention to write to local authorities recommending that the proceeds of any compensation should be directed to its common good fund.”

Albeit that it will not be very much money, I will write to the authorities again if Parliament passes the bill.

On the land register, we will certainly see how best to achieve what needs to be done. We believe the current proposals to be proportionate and we will work with the Registers of Scotland. Ultra-long leases are concentrated in particular areas of the country, so we will target those areas.

I am delighted to have the privilege of bringing forward this law reform measure. The principles of the bill have been widely accepted and I urge members to agree to the motion at decision time.

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