Draft Agricultural Holdings (Fee) Regulations 2022
(2 years ago)
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The Committee divided: - Ayes: 9 / Noes: 4 - Question accordingly agreed to.
The Minister for Food, Farming and Fisheries (Mark Spencer)
I beg to move,
That the Committee has considered the draft Agricultural Holdings (Fee) Regulations 2022.
It is a pleasure to serve under your chairmanship, Mr Twigg. I declare my farming interests, as set out in the Register of Members’ Financial Interests. As agricultural tenancy matters are devolved, I speak for England only, but I want to highlight that we worked closely with the Welsh Government on this instrument, and the same composite instrument was debated and approved by the Senedd on 22 November. I therefore trust that my Opposition colleagues will follow their Welsh colleagues and approve the regulations.
Many tenants and landlords work collaboratively and progressively to resolve issues that may arise during their tenancy agreement, but sometimes that is not possible. In that case, our agricultural tenancy legislation enables either party to the tenancy agreement to apply for a professional authority to appoint an independent arbitrator to help to resolve any disputes. The legislation also enables the professional authorities to charge a small statutory fee to cover the administration costs of delivering an arbitration appointment service. The current statutory fee was last set in 1996, at £115. Because of inflation, that sum no longer covers the costs incurred by the professional authorities in delivering that arbitration service, so the purpose of this instrument is to update the statutory fee on a cost recovery basis, to £195. That is in line with His Majesty’s Treasury guidance on managing public money. The increase was supported by 73% of the respondents to the Government’s consultation on the issue.
The instrument also updates the regulations in line with changes made in the Agriculture Act 2020 to include a wider list of professional authorities that can now offer an arbitration appointment service. The list now includes the president of the Central Association of Agricultural Valuers, the chair of the Agricultural Law Association and the president of the Royal Institution of Chartered Surveyors. Tenants and landlords have more choice between different service providers, which will help to drive continuous improvement and the provision of an efficient and quality service. In addition, the instrument includes a new duty to review the regulations every five years. Reviews will be carried out in consultation with the industry to check that the level of statutory fee is appropriate and in line with the cost-recovery principles.
I am aware that the recently published report on tenant farming—the product of a review led by Baroness Rock—includes recommendations on the operation and oversight of dispute resolution. I put on record our thanks to Baroness Rock and members of the working party for their work in producing the report. I welcome the report and the focus on supporting a vibrant tenancy sector. The Government are considering recommendations, and I will be meeting Baroness Rock to discuss the report soon. The Government will publish a formal response in due course.
I hope that I have assured you, Mr Twigg, and members of the Committee, of the need for this instrument. It will ensure that tenant farmers and landlords continue to have access to the appointment of an independent arbitrator when they need it, funded by an appropriate statutory fee set on a cost recovery basis.
Daniel Zeichner (Cambridge) (Lab)
It is a pleasure to serve with you in the Chair, Mr Twigg.
The instrument looks like an innocuous proposal, but I am afraid there is rather more to it than meets the eye, which is often the case when it comes to tenancy issues. The Minister has already referenced the Rock review. Baroness Rock produced her excellent report some weeks ago, and despite plenty of prompting from me and others, we have not yet had a full response from the Government. I understand that “in due course” can mean many things in this place, but I encourage the Minister to speed up that response. It is an important report and people are waiting on the Government to respond. That is relevant to this statutory instrument because the whole question of the arbitrator, whose fee is raised by this SI, is central to the debate, and, indeed, the Rock review is referenced in the explanatory memorandum, in paragraph 10.4.
I am, as so often, indebted to George Dunn of the Tenant Farmers Association for his advice on this matter. He tells me that the TFA is objecting to the proposals. He cites the recommendations of the Rock review, which expresses concern about the way in which agents operate in general, and how arbitration is in need of some oversight and reform. The report highlights the need for a commissioner or ombudsman to oversee the operation of arbitration. The TFA’s view is that that needs to be implemented preferably before or alongside any decision to increase the appointment fee. He says that the increase in the fee would land much better with his members if they had some sort of indication or assurance that the Department for Environment, Food and Rural Affairs will take seriously the recommendations set out in the Rock review on the appointment of a commissioner or ombudsman whose role is to look at the operation of arbitration.
George Dunn also tells me that most of the costs associated with accreditation, assessment, training and continuing professional development of arbitrators fall to the arbitrators themselves. As a result, the cost of using arbitrators already reflects those increasing costs, as they pass on the costs to the parties involved in the process. It is unclear what costs the Royal Institution of Chartered Surveyors and others incur in the appointment process. None of that is on the record.
George Dunn argues that RICS should see the process of appointing arbitrators as part of its public interest work under its royal charter rather than as part of its commercial activities, particularly in the light of the recent conclusions of the Bichard review into the royal charter. Recommendation 3 of that review said that there must be a separation between the RICS portfolio of commercial activities, which the TFA would argue the appointment of arbitrators does not fall within, and its wider activities. I have not had the chance to pursue that with RICS, which may take a different view, but there is sufficient uncertainty to make me question whether it would not be more sensible to make the changes as part of a broader response to the Rock review. Indeed, having that discussion might accelerate any response from the Government. On that basis, we will not support the SI today and will divide the Committee.
Mark Spencer
I am disappointed by the Opposition spokesman’s comments. It appears fairly obvious to me that in Wales, where the Labour party is in charge and has the responsibility to sort the matter out, it is happy to go along with the increase, but here, where we are in charge, it somehow finds a political opposition to the increase. That is pretty disappointing.
There are two separate issues. One is the arrangements for the management of the arbitration service; the other is the cost. Today we are just sorting out the cost of the arbitration service, and £200 does not seem like a large sum for that service to be delivered. These occasions are quite rare, and in order to resolve challenges between tenants and landlords a fee has to be applicable. I think that £200 is an appropriate amount of money, particularly if we are talking about blocks of land where rents may be in excess of £150 an acre. We are talking about a fee equivalent to 1.5 acres on a block of land.
The hon. Member mentioned the Rock review. Of course, we will respond as soon as we can. I would gently say to him that it is more important to get it right than to do it quickly. He can have a response as quickly as he wants, but we want to get it right and consider it properly. There were 80-plus recommendations in that report. It deserves the Government to look at it properly, and consider how many they can adopt. I am keen to take onboard as many recommendations as possible. A lot of work went into the report, and it deserves due consideration. That is what it will get. I hope that the hon. Member will reconsider and support the motion, as his colleagues did in Wales.
Daniel Zeichner
I hear what the Minister says, but the increase in the rate has been waited on for eight, nine or 10 years.
The Chair
Order. Sorry, Mr Zeichner, but you cannot make another speech. You can intervene if you have a question for the Minister.