Planning and Infrastructure Bill

Baroness Rock Excerpts

Report stage
Monday 3rd November 2025 Lords Chamber

Moved by

[Baroness Rock]

253: After Clause 108, insert the following new Clause—
“Tenant farmers (compensation for disturbance following change of use for farm business tenancies let under the Agricultural Tenancies Act 1995)In the Agricultural Tenancies Act 1995, after section 21 insert—“21A Compensation payable to the tenant for disturbance(1) This section applies where a farm business tenancy terminates in whole or in part by reason of a notice to quit given by the landlord following the granting of a planning consent for change of use and the tenant quits the holding in consequence of the notice.(2) Where this section applies there shall be payable by the landlord to the tenant by way of compensation for disturbance a sum equal to the tenant’s actual loss limited to the extent of the farm business tenancy and any consented activities connected to this.”.”Member's explanatory statement
This amendment introduces reasonable compensation provisions payable to farm tenants within the Agricultural Tenancies Act 1995. It will ensure that farm tenants receive compensation equivalent to their real loss for any land removed from their tenancy agreements for development. There are currently no compensation provisions within the Act.

[Baroness Rock (Con)]

My Lords, you will be delighted to hear that we are now in the home stretch as we debate just before midnight. I shall speak to the three amendments standing in my name, which, unsurprisingly, deal with matters connected with agricultural tenancies. I am grateful to the noble Baroness, Lady Grender, and my noble friend Lady Coffey for their support, and for the many sympathetic responses to the amendments I have had from all sides of the House from people who recognise the important role tenant farmers play. I refer to my interests in the register as a tenant farmer and the author of the Rock review into agricultural tenancies.

From time to time, landlords of holdings that are subject to agricultural tenancies may secure planning consent for a change of use from agriculture, either through a planning application considered by a local authority, which may also go to appeal, or as part of a nationally significant infrastructure project. When that occurs, depending on the nature of the agricultural tenancy, the landlord will be able to secure vacant possession of the holding or part of the holding involved, either by statute or by contract. Agricultural tenancies subject to the Agricultural Holdings Act 1986 have a statutory process, set out in Schedule 3 to the Act under what is known as case B, which will allow the landlord to recover possession but paying only a statutory maximum level of compensation, which is just six times the rent being paid by the tenant for the land being removed. That rarely, if ever, comes close to the tenant’s actual commercial loss. For example, if a tenant farmer is paying £65 for an acre of land, compensation for that acre would be just £390. Amendment 253A seeks to redress that by providing a default position, setting out that the compensation will either be a multiple of the rent or the tenant’s actual loss, whichever is the larger.

I take as an example of the problem the case of the tenant arable farmers Rob and Emma Sturdy, who farm on the Fitzwilliam Malton estate in North Yorkshire. The local planning authority rejected a planning application by the solar energy developer Harmony Energy to take away almost half their farm, but that was appealed by Harmony. Before that appeal, Harmony Energy made an offer of compensation that was above the statutory minimum but, as far as Rob and Emma were concerned, below what would have been their actual commercial loss.

On appeal, the refusal of the solar farm by the local planning authority was overturned, but the inspector failed to make it a condition of that consent that the compensation offered by Harmony, and alluded to throughout the entire appeal, should be paid to Rob and Emma. Unfortunately, Harmony Energy has now taken that compensation offer away and reverted to offering only the statutory minimum compensation of six times rent for half the Sturdys’ farm. That is wholly unacceptable.

The case is made doubly worse by the fact that it was called in by the Government and the decision of the inspector was fully supported by the Planning Minister, despite the promise made to tenant farmers by the Prime Minister when, as Leader of the Opposition, he said that solar energy schemes must not be taken forward at the expense of tenant farmers and that tenant farmers needed to know that the soil beneath their feet was secure. Unfortunately, Rob and Emma are now feeling the emptiness of those words. That is why this provision is so ripe for change. Furthermore, in the solar road map that the Government published in June, they said that statutory compensation for tenant farmers must be addressed, so there is no reason why it cannot be addressed for all development that causes dislocation to tenant farmers.

The situation for tenants under farm business tenancies, regulated by the Agricultural Tenancies Act 1995, is arguably worse. There is no statutory fallback position as to compensation when a tenant loses land following a planning application obtained by the landlord for change of use which allows the landlord to use a contractual clause to remove land. Amendment 253 merely seeks to add a legislative fallback position. Again, this will operate to provide tenants with a level of compensation equivalent to their real loss in losing land to a change of use following the granting of planning permission.

Amendment 253B seeks for the compulsory purchase regime to fully recognise the way in which tenant farmers are impacted. Other noble Lords, including the noble Lord, Lord Cameron of Dillington, have spoken expertly on the need for wider reform of the way in which compulsory purchase operates, but this amendment focuses its attention on tenant farmers, who are often left out of discussions and end up with little or indeed no compensation when they see their businesses, homes and livelihoods devastated by a compulsory purchase acquisition.

While the landlord might receive a level of compensation which may or may not be reasonable in the circumstances, we must ensure that tenant farmers are also in receipt of a level of compensation which adequately covers their losses. In the same way that tenant farmers facing loss of land due to change of use being taken forward by their landlords need adequate compensation, the same must be true when the land is removed through compulsory purchase.

I confess I was increasingly dismayed this evening to note that the Minister in early responses on CPOs constantly referred to landowners. Some 64% of England’s land is wholly or partly tenanted, and yet the Minister fails to address the issue of tenant farmers who do not own land but will still be affected by CPOs. I therefore urge noble Lords to support this amendment to level the playing field for tenant farmers.

The Government should, and I believe should with ease, support these amendments, as they sit firmly within their own policy that the compensation payable to a farm tenant should be “adequate and fair” following a change of use to give way to a solar energy scheme as set out in the Government’s own recent solar road map. In already accepting that compensation provisions are not fit for purpose for solar energy schemes, the Government surely must also recognise that they are not acceptable for other types of development where the tenant farmer, through no fault and no decision of their own, loses occupation of land where they pay rent. I beg to move.

[Baroness Pinnock (LD)]

My Lords, my noble friend Lady Grender has cosigned the amendment in the name of the noble Baroness, Lady Rock. Unfortunately, she is not well and so is not here tonight. She has asked me to make it clear that she fully supports the amendments.

--- Later in debate ---

[Baroness Taylor of Stevenage (Lab)]

I thank the noble Lord, Lord Blencathra, for those kind comments about my noble friend Lady Hayman. She was here earlier this evening, but it was not fair to keep her here when she is still recovering from quite a nasty bug.

I am grateful to the noble Baroness, Lady Rock, for her Amendments 253 and 253A, which seek to ensure that farm tenants receive compensation equivalent to their real loss where a farm business tenancy is terminated, in whole or in part, as a result of planning consent being granted to a landlord for a change of use. The stories she gave were indeed truly shocking. Existing legislation in the Agricultural Holdings Act 1986 sets out the compensation provisions for tenant farmers, but we genuinely recognise that it needs to be revised so that tenant farmers receive adequate compensation, reflecting real loss for land removed from their tenancy agreements for development.

The Law Commission announced its 14th programme earlier this year, which will consider whether existing agricultural law appropriately balances giving tenant farmers the security and opportunity to maintain viable businesses, while providing landlords with the confidence to let land and supporting opportunities for new entrants into farming. That is something I am sure the noble Baroness would want to see, as we all do.

The review is also likely to consider the scope and design of appropriate compensation provisions, drawing on the Law Commission’s specialist expertise in legal reform. This would typically include a detailed consultation and thorough examination of the law, resulting in the most comprehensive and balanced outcome. I suggest that the compensation provisions be considered within this wider review of agricultural tenancy law, not in isolation. As such, we recommend that the amendment be rejected pending the Law Commission’s 14th programme review into agricultural tenancies, which will commence when resources allow. Further steps and timings will be announced in due course.

[Baroness Rock (Con)]

These reviews take years and years, but this is a clear and present danger now. Therefore, before the Minister sits down, will she agree to meet with me and the Tenant Farmers Association to discuss what can be done in this Bill to protect tenant farmers immediately, rather than waiting for a review that could take years and years? Otherwise, I reserve the right to bring this back at Third Reading.

[Baroness Taylor of Stevenage (Lab)]

I genuinely do not believe that this Bill is the place to deal with this, but I am very happy to meet with the noble Baroness, and I am sure that my noble friend Lady Hayman would be prepared to meet as well. Within Defra, there may be more scope for dealing with some of the issues the noble Baroness raised, so I am very happy to have that meeting. It may also be worth the noble Baroness speaking to the Law Commission about the urgency of this, because the commission will be dealing with it. Stressing the importance and urgency of this with the commission will be helpful. Meanwhile, I ask the noble Baroness to withdraw her amendment.

Amendment 253B seeks to allow tenants whose homes are subject to compulsory purchase to claim compensation for disturbance to their business where it is carried out from home. While I appreciate the sentiment behind this amendment, we do not believe it is necessary. As part of their entitlement to compensation, occupiers, including tenants, can already claim disturbance payments where they lose possession as a consequence of compulsory acquisition. These payments cover losses caused by losing possession of the land as a consequence of the compulsory purchase order, as well as other losses not directly based on the value of the land, which could include any associated with running a business from home. In the light of this explanation, I hope that the noble Baroness will not press her amendment.

[Baroness Rock (Con)]

I am very grateful to the Minister for her response. As I said, I am disappointed. This is absolutely the right place to address these issues around tenant farmers. I have given very clear examples of why these amendments sit firmly in government policy and are desperately required. I look forward to the meeting with the Minister and, as I said, I reserve the right to bring this back at Third Reading. On that basis, I beg leave to withdraw my amendment.

Amendment 253 withdrawn.