Chamber and committees

I hear what you say and I understand the sincerity behind those thoughts. I think that it is fair to say that larger lets in the self-catering sector in particular have hardly had any [Inaudible.] Covid rules, quite correctly, so they have had a tough time over the past wee while, and uncertainty remains for the whole sector.

My point is that registration is what the sector proposed. It denies that there was consultation in 2019. Incidentally, it also maintains that it proposed a fit and proper person test—I just place that on the record. I was able to attend the meeting two weeks ago, when what we heard was that the whole short-term let sector is united in favour of a registration scheme. The sector has support from the Federation of Small Businesses, Scottish Land & Estates, Scottish Agritourism and the NFU Scotland, as well as all the short-term let organisations.

Several of those bodies left the short-term lets stakeholder working group because they felt that it was—I will not mince my words—a sham and that it was not addressing their concerns in any way. Recently, as the cabinet secretary will know, the Highland Council voted in favour of registration, not licensing.

I am grateful, convener, for the opportunity to ask these questions today, because it is essential for my constituency and the Highlands and Islands, in particular.

My last question for the cabinet secretary is this. When we will have such a draconian power of the state, via local authorities, to terminate businesses, is not it a serious failing of regulation that there are no set clear rules or criteria that govern how such crucial decisions should be taken? I have searched in vain among the regulations to see what criteria local authorities must follow; there are no criteria whatsoever.

Last week, someone who spoke on behalf of the Association of Local Authority Chief Housing Officers said in evidence that

“we need to simply select those”

businesses

“that can no longer operate”—[Official Report, Local Government, Housing and Planning Committee, 14 December 2021; c 6.].

To be told by a senior figure who was speaking on behalf of the local authority family that some businesses must be selected for closure before the regulations have even come into force must surely strike fear into the hearts of businesses.

There must be a judicial review on the grounds of irrationality, arbitrariness and the lack of a clear set of rules. It is not too late for the Scottish Government to reconsider a registration scheme that would deal with the fit and proper person test, as the registration scheme for longer-term letting of residential properties does. We have seen such reconsideration with one or two other schemes, including the named person scheme.

The public generally appreciates our accepting that we got it wrong. Surely, the licensing scheme is too draconian and unfair and there is no set of rules. There will now be a period of division, difficulty and anxiety among tens of thousands of law-abiding small businesses that have done nothing to deserve the threat that is now being held over them.

I absolutely agree with the sentiments expressed by the cabinet secretary about the need to provide a system that protects the public, as far as we can. I will get to the nub of things, if I may, because I have made my remarks already, and I do not want to repeat them.

If we needed licensing simply because of the reasons that the police set out in their evidence to us, the regulations should have said that the licence will be granted unless there are good reasons not to grant it. One of those good reasons would have been that the applicant was not a fit and proper person on the basis of the police information. However, that is not what we are presented with. I made the point to the cabinet secretary that there are no criteria or rules; there is nothing to fetter the discretion of local authorities in their decision as to whether to grant or refuse a licence. I think that everyone would agree that, if a hoodlum, money launderer or drug dealer is laundering money through property—an issue that I think actually exists—there must be a means of dealing with that and he should not be given a licence to conduct such a business or any other businesses.

However, that is not what the regulations say. They do not delimit the discretion of local authorities to that particular issue. Moreover, I think that I have already proven, by reading out from the Scottish Government’s website, that the fit and proper person test does apply to a registration scheme. It applies to me, as a landlord, and rightly so. I am glad that it applies. Therefore, the case that we need a licensing scheme to deal with the police concerns seems to me not to have been made.

The second point that I want to make is this. Earlier, I alluded to concerns that, because the rules have not been specified and local authorities have unfettered discretion—paving the way for 31 different varieties of decision making, incidentally—businesses, many of which have operated for decades, may face the unilateral withdrawal and confiscation of their business by the decision of a local authority, which they cannot challenge on the basis of any clear rules.

Although I am no legal expert, I am aware of cases where the Scottish Government has failed because of breach of article 1 in the first protocol of the European Convention on Human Rights—namely, the provision that says that every natural person has the right to protection of their own possessions, except in the interest of public policy. If a clear public policy interest had been expressed in the regulations, that might have enabled the Government to say that it had acted reasonably. However, because there is none, it appears to me—although I am a non-expert—that there is a risk of arbitrariness, and the Wednesbury test, which I believe applies, seems to me to be at serious risk of being at issue.

I do not make that argument enthusiastically or lightly, but because I am genuinely concerned. I also point out that, as the cabinet secretary knows, the Association of Scotland’s Self-Caterers has already shared an opinion that it has had from an eminent firm of solicitors in Scotland. Although I have not seen the evidence myself, I have been informed that three other equally eminent firms of solicitors in Scotland have also opined on the issue. I stress that I have not seen whether it is their view that there is a prima facie breach and that judicial review might therefore be successful.

I put this to the cabinet secretary and to committee members as a matter of common sense. If there is a system in which someone’s property can be taken away and their business terminated, there should surely be a very clear set of rules to govern in what circumstances that can happen. It is all very well to say that the fears that have been raised are alarmist or scaremongering, but what are people to think if there is no clear set of rules in the regulations? Moreover, if there is the possibility of a licence being withdrawn but the licensing system can take several years to operate, there will be a long period of uncertainty between the application for the licence and the determination. What happens to bookings and cancellations during that period? What happens to the business if the licence is refused? None of that has been answered.

There are many other arguments that I could put, but I think that I have said enough to indicate that I am not a fan of the order. I say to the cabinet secretary that it is never too late to look at this again. If the order is passed today, as I suspect it will be, I hope that the cabinet secretary will—as she has promised—engage with the sector before the order comes to a plenary session in order to look further at the real concerns and at the real, serious and sincere alternative proposals. Such proposals, including the exemplar from Portugal, operate in Europe and are favoured by the EU.

My final sub-clause is to say that those proposals should provide a clear way forward.

Good morning. You have discussed the desirability of the licensing scheme. One reason that you have given for that is that it would enable the fit and proper person test to be incorporated so that police concerns can be addressed. That is a fair point. Are you suggesting that the fit and proper person test cannot be part of a registration scheme?

I am interested by that reply, because I got the impression from your evidence earlier that your argument was that a mandatory registration scheme, which is what is being proposed—a statutory scheme could be incorporated, of course—could not enable the fit and proper person test to be introduced. I am looking on the Scottish Government website at “Landlord Registration in Scotland: Statutory Guidance for Local Authorities”, which was published in 2017. Under heading 4—“The ‘Fit and Proper Person’ Test”—the guidance states:

“Local authorities must refuse an application for registration if not satisfied that the applicant is a fit and proper person to let houses.”

Therefore, the fit and proper person test applies already to the existing landlord registration process—and rightly so.

As Mr Fraser does, I let a property long-term; I recall the form, which I believe requires people to submit information on whether they have had problems with the police, for example. It seems to me that a fit and proper person test is already part of the registration scheme that applies to long lets, so there is therefore absolutely no reason why it should not be applied to a registration scheme for short lets, is there?

The fundamental difference between a licensing scheme and a notification scheme is very simple: Scotland’s local authorities will have the power to refuse a licence, which means that business will be terminated. That is not part of a notification scheme. Therefore, the difference is inherent and draconian.

There are 17,794 self-catering properties in Scotland, which contribute £867 million to the economy, and there are 23,979 full-time equivalent jobs. I think that it is estimated that there are about 30,000 Airbnb properties. The owners of all those tens of thousands of properties will now have fear that their business might be confiscated or terminated. That is the difference between the two types of scheme.

Since the cabinet secretary has raised the issues of antisocial behaviour and safety standards, I wish to probe her answers to colleagues’ helpful questioning on a couple of aspects. The law on fire and electrical safety standards already exists. When you wrote to the committee on 7 October, you made it absolutely clear that the provisions will not enhance or change the existing law, which already—quite rightly—applies to all properties. You wrote:

“We are reviewing the fire safety and electrical safety requirements to ensure that they do not go further than existing law.”

If the rules will not enhance or increase the standards, the only way that the protection that the cabinet secretary referred to would be conferred by the provisions and could apply would be if every single property were inspected regularly. I read the revised business and regulatory impact assessment yesterday; it makes it absolutely clear that inspections are by no means required; it specifically says that they are not a requirement. If there will be no mandatory inspections—I am not arguing that there should be—and if the law will remain exactly as it is, how can you justify the assertion that the provisions, if passed, would provide additional protection?

Thank you for those answers.

As Rachel Nicholson has just confirmed, the duties apply to everybody anyway. Obviously, we all want the law to be applied and observed by everybody. I make the point that neither hotels nor long-term lets are subject to licensing requirements. Therefore, if consistency is meant to be the sine qua non—the essential element—it ain’t there, because various types of premises do not have to follow that licensing requirement. The requirement carries with it the risk that people will lose their business. As they come out of the pandemic, that is a pretty serious threat to hang above them like a sword of Damocles, over the next few years.

I turn to antisocial behaviour because—contrary to what seems to have been said previously—specific legislation deals with antisocial behaviour in holiday lets: namely, the Antisocial Behaviour Notices (Houses Used for Holiday Purposes) (Scotland) Order 2011. That legislation exists; local authorities have powers to deal with antisocial behaviour that occurs in short lets. Why is it necessary to introduce a licensing requirement, given that local authorities already have the powers that are required to deal with antisocial behaviour, should it occur in short-term let properties?

Thank you, Frank and Katie, for your answers. I recognise everything you have said from previous discussions. They are very practical issues, so I will not repeat them.

I agree entirely with the analysis and the points that you have made; they are all very reasonable. I do feel, however, that the shared apprenticeship is a model that has not yet been cracked but could be. I wonder whether it might be worth your engaging further with small business representatives—both generic ones, such as the Federation of Small Businesses, and particular trade associations, such as the Scottish and Northern Ireland Plumbing Employers’ Federation. They are often very well informed about the details and they have a lot to offer in terms of being practical and driving things forward.

I accept that we have to look at the interests of young people as well as those of employers, quite obviously, and what Frank Mitchell said about using digital platforms instead of kids having to travel 100 miles to a classroom must surely happen. If we have learned anything from the pandemic, it is that.

Convener, I will finish by asking for two things for after this meeting. Could SDS provide us with some statistics about the performance in rural and small business in so far as it is able to? I appreciate that the compilation of statistics involves classification and definition, but we need a picture of what is happening in rural and small businesses, particularly as we are a small business country.

Finally, I want to make a specific plug. There is a pre-apprenticeship scheme involving training for young people through an organisation called Ringlink, which is a farming machinery and labour co-operative operating in the north-east and elsewhere in Scotland. As Frank Mitchell knows, Ringlink set up an excellent scheme for young people that provides a great model whereby groups of farmers provide training for a host of young people. The model is to be rolled out throughout Scotland. Ringlink was funded on a pilot basis until 2021, and I am keen to see that funding continued and mainstreamed by SDS. I did not raise this with the witnesses previously, so I would not expect them to answer questions about it now—I never like to ambush anybody, do I?—but perhaps they could take both of those questions away and get back to us.

Not at all, convener.

Good morning. I want to start off by thanking our witnesses for all the terrific work that they, their members and their colleagues do throughout Scotland. Over the years, I have seen countless examples, not only in the University of the Highland and Islands and the forestry college in Balloch, in my patch, but throughout the country. As some of you know, I have been involved in a number of matters, in a different capacity, over the years.

The material that SDS submitted is illustrative of a very positive story, not just among universities and colleges, many of which are world leading, but in the scale of apprenticeships. As Frank Mitchell well knows, the number of apprentices increased from 10,579 in 2008-09 to 29,000 10 years later. A threefold increase in 10 years is a tremendous success. On top of that, of course, the pandemic has brought unprecedented challenges. I wanted to preface my remarks on what is a huge topic with that general comment.

I want to address two issues. These are primarily questions for Frank Mitchell, although, of course, others can chip in if they wish to. From what I have seen over 22 years in this institution, the needs of rural Scotland and of small businesses are quite difficult to accommodate when it comes to skills and training in general, for logistical and practical reasons to do with distance and scale. Small businesses do not have a human resources department, they tend to be extremely busy just doing their work and they might comprise only two or three people. However, such businesses could have shared apprenticeships. Is work being done to develop shared apprenticeships?

Secondly, in relation to rural Scotland, do you agree that more needs to be done? Is SDS committed to doing more in that area? How is the rural skills action plan, which was launched not that long ago, faring in meeting the potential of young people, in particular, in rural areas?

As I said, those questions are primarily for Frank Mitchell—it is good to see you again, Frank. I think that you have heard me say all that quite a few times before.

I will ask the minister and her officials two simple questions for clarification.

Is it right that, before any individual is removed from the barred list, there is, must be and will continue to be a full and robust consideration of whether that person remains unsuitable and, moreover, that these regulations will not change that? At the moment, there is a robust test of detailed, careful consideration, and that will remain the case if the regulations are not annulled. Is that correct?