Agriculture Bill

Lord Grantchester Excerpts

Report stage & Report: 2nd sitting (Hansard) & Report: 2nd sitting (Hansard): House of Lords
Thursday 17th September 2020 Lords Chamber

[Baroness Scott of Needham Market (LD) [V]]

My Lords, in 2016, before the referendum, I chaired the EU Energy and Environment Sub-Committee. We carried out an inquiry into resilience in agriculture, so I can say from the beginning that I agree with the noble Lord, Lord Carrington, that insurance is quite often not an appropriate solution for farmers, however it might appear to be so superficially.

Having said that, I find these amendments somewhat problematic. I will explain why. First, it is because the Bill as drafted talks about the disturbances being acute. The amendments would add “chronic” to the description of the disturbances, but all the interventions have been about the results of that disturbance. To my mind, that is quite an important distinction, because you could have a short-term problem with a long-term impact. I am not clear whether, as drafted, this talks about the original problem or the impact.

I am also genuinely unsure why existing provisions are not good enough. I heard with some interest what the noble Baroness, Lady McIntosh of Pickering, said, so I look forward to the Minister clarifying that, but this is one area where I feel the Government have farmers’ backs in the event of these sorts of disturbances. I do not recall seeing anything from the NFU on this so I am not sure it regards it as a big issue, but perhaps when he winds up the noble Lord, Lord Carrington, will enlighten me on that.

I am reassured that the amendment would provide a power, not a duty, because a duty to continue to offer support for a “chronic” disturbance could be for years and years. I do not think that would be appropriate; I would be pleased to see it as a power and not a duty. Nevertheless, the Government can move quickly when they need to, as they did in bringing in the furlough scheme, for example. I am not entirely convinced by these amendments, I am afraid.

[Lord Grantchester (Lab)]

I thank the noble Lord, Lord Carrington, for returning to the subject of crisis management in his amendments. The clauses in Chapter 2 bring further into domestic legislation the powers that the European Commission exercised to provide emergency assistance in extreme market circumstances. The Secretary of State may modify the retained direct EU legislation from the withdrawal Act. This would usually involve intervention on storage. At this stage, once again, as I join another day’s proceedings on the Bill, I declare my interest as recorded in the register as being in receipt of funds from existing systems derived from the CAP.

We noted the Minister’s reply in Committee that

“farmers already manage the effects of fluctuating everyday weather conditions”,

and that the existing powers contained here and elsewhere

“are sufficiently broad to ensure that agricultural producers will be covered”

should it be necessary to provide emergency financial assistance

“due to exceptional market conditions”—[Official Report, 21/7/20; col. 2184.]

brought about by unforeseen economic, environmental or welfare factors.

The term “chronic conditions” is interesting, as this would suggest exceptional circumstances becoming endemic and longer lasting. This would suggest that the market would need to adapt on a wider basis after any exceptional market disturbances caused by economic or environmental factors had been provided. It would suggest that the adverse effect on the price achievable for agricultural products may not return to normal. This circumstance would become subject to far more extensive dialogue and analysis, and when such a situation may warrant the actions wanted by the noble Lord, Lord Carrington, needless to say it would be controversial and subject to much debate.

We understand that Welsh Ministers are aware of these details and have not drawn attention to any aspect with which they are uncomfortable. The Minister has advised the House that the Welsh Government have agreed to these provisions; that would be our position also. We are generally content with the current drafting. I thank the noble Baroness, Lady Scott, for her remarks, which reflect many of our thoughts.

[Baroness Bloomfield of Hinton Waldrist (Con)]

I thank noble Lords for their contributions to this short debate.

I recognise the concern to ensure that farmers in England and Wales are protected against acute and chronic disturbances, including those caused by natural phenomena. The exceptional market conditions powers could be used to address acute and severe market disturbances caused by natural phenomena, such as extreme weather, so long as there is an adverse effect on the price achievable for one or more agricultural products. I hope that that reassures my noble friend Lord Northbrook.

The UK Government and Welsh Ministers are confident that the existing powers are sufficiently broad to ensure that agricultural producers will be covered should they need financial assistance due to exceptional market conditions caused by economic, environmental or other factors. The current Covid-19 pandemic is a disturbance caused by environmental factors and is exactly the type of exceptional circumstance that these new powers are intended to address. We could not have foreseen that this pandemic would be as wide-ranging or prolonged as it has been, and farmers could not have been expected to prepare for the disturbances in daily life that it has caused. I feel confident in saying that if these exceptional market conditions powers were at our disposal now, the Government could have used them to support farmers during these difficult times.

The particular powers in respect to England, in Clauses 18 and 19, and in respect to Wales, in paragraphs 6 and 7 of Schedule 5, are framed to deal with unforeseen short-term shocks to agricultural markets rather than chronic conditions. These powers allow Ministers to act swiftly to deal with a crisis situation. These amendments would lower that bar and risk creating open-ended powers that allow the Secretary of State to make payments to farmers in much wider and undefined circumstances.

In most cases, farmers already manage the effects of fluctuating weather conditions. There are also powers in existing legislation that allow the Government to act in exceptional circumstances to support farmers in the event of extreme weather conditions. For example, the Natural Environment and Rural Communities Act 2006 could be used to make one-off payments to farmers affected by extreme weather. In response to recent flooding, as my noble friend Lady McIntosh acknowledged, the UK Government launched a new farming recovery fund for England, using powers under the NERC Act.

I have some details about the fund because I was interested to find out why some claims were not being met. I am afraid that I do not have the numbers here for my noble friend but I commit to writing to her with the details of the scheme, which are quite complex, and to furnish the numbers on how many grants have been made available. When I write, I will of course let noble Lords have a copy.

The Government want to encourage farmers to manage their own risk and become more resilient to foreseeable and longer-term disturbances. Elsewhere in the Bill, there are provisions to support farmers to improve their productivity, as well as to provide financial assistance for the delivery of public goods. For example, the Government will help farmers to invest in equipment, technology and infrastructure, and will support high-quality research to promote innovation and productivity in agriculture, horticulture and forestry. Part 3 also sets out powers to strengthen fairness and transparency in the supply chain. This will enable food producers to respond more effectively to market signals, strengthen their negotiating position at the farm gate and seek a fairer return.

I hope that I have given sufficient reassurance and that the noble Lord will feel able to withdraw his amendment.

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[Baroness Scott of Needham Market (LD) [V]]

My Lords, I had an exchange of emails yesterday with the noble Lord, Lord Empey, to make sure that I understood his amendments correctly. He basically put it to me that he wishes to place an obligation on government rather than for it to have a discretion, which is as the Bill is drafted, to make regulations on fair dealing. I have told him that I support the fair dealing provisions in the Bill—I said so in Committee—particularly with regard to food waste, which is often in effect forced on farmers, making them less competitive and environmentally more wasteful, by the requirements of supermarkets, which I do not think is fair dealing. I am all in favour of that, but I am less convinced about the placing of such an obligation on Ministers. However, these issues can be well discussed in the next set of amendments, about the role of the Groceries Code Adjudicator.

[Lord Grantchester (Lab)]

I thank the noble Lord, Lord Empey, for his amendments, for the significance in which he holds them as necessary for the Bill, and for leading the House in returning to Clause 27 on fair dealing obligations. I am sorry he has not been able to stay tonight to make his case due to personal circumstances, and I hope all continues well. Nevertheless, I thank the noble Baroness, Lady McIntosh, for stepping in and moving his amendment. I concur with much of what she said. The distribution of market returns from food between the primary producer and the rest of the supply chain, especially in regard to the retail sector, certainly appears unbalanced. The proportion returned to the farmer has steadily declined over many years.

That regulation is needed to ensure further provision to introduce a greater measure of fair dealing obligations on the supply chain is recognised in Clause 27. Following the establishment and workings of the Groceries Code Adjudicator, the specific task of monitoring relationships between the UK’s largest supermarkets and their direct suppliers has proved very effective. I would go so far as to say it has proved critical in delivering effective change down the supply chain.

We would not be able to support the noble Lord should he wish to press his amendment. The specific details of each statutory code are being developed in consultation with industry and will be set out in secondary legislation. It will be extended across all sectors of agriculture. This is already in progress.

[Baroness Bloomfield of Hinton Waldrist (Con)]

My Lords, I am grateful to my noble friend Lady McIntosh for introducing this amendment on behalf of the noble Lord, Lord Empey. I confirm that my noble friend Lord Gardiner has agreed to meet the noble Lord, Lord Empey, at the earliest opportunity.

There is no doubt that the Government will use these powers. The introduction of fair dealing obligations is vital in the creation of a more equitable supply chain. This is a point on which there is wide agreement. However, the Government believe it is equally important that these obligations are appropriate and proportionate and produce the right outcomes.

To ensure this, the Government intend to consult industry before regulations are made, to ensure that they are properly tailored for the issues at hand. In this regard, a UK-wide consultation exploring contractual issues in the dairy sector has recently been concluded. The consultation invited a broad range of views about future regulations, asking specific questions about various issues. Some of these issues, such as contractual exclusivity, are almost unique to the dairy sector. The Government intend to repeat this approach for any future exercise of the powers in Clause 27, allowing the views from industry and other stakeholders, often about very detailed sector-specific issues, to inform final decisions.

The introduction of blanket obligations across the whole of UK agriculture would hinder the ability to reflect the specific nuances of each sector and potentially fail to address the specific problems experienced by particular types of producer. Also, given that certain agricultural sectors are far better integrated than others, comprehensive obligations could ultimately lead to provisions being introduced into sectors where they are simply not required.

I hope I have given sufficient reassurance and ask my noble friend to withdraw the amendment on behalf of the noble Lord, Lord Empey.

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Moved by

[Lord Grantchester]

63: Clause 27, page 23, line 15, leave out “a specified person” and insert “the Groceries Code Adjudicator”
Member’s explanatory statement
This amendment is intended to ensure that the role of regulating agricultural contracts is given to the Groceries Code Adjudicator’s office.

[Lord Grantchester (Lab)]

I thank the noble Baroness, Lady Bakewell of Hardington Mandeville, the noble Lord, Lord Curry, and my noble friend Lord Whitty for adding their names to this amendment and to many of my following amendments, which introduce the office of the Groceries Code Adjudicator as the mechanism by which these fair dealing provisions under Clause 27 will be administered. At this stage I will mention that the noble Lord, Lord Curry, asked me to express his disappointment that he has had to leave tonight because of the late sitting of our proceedings; he cannot get home without leaving immediately. He would have liked to have been present to make his remarks on this important series of amendments to this clause.

I introduced these amendments in Committee as probing amendments to draw out from the Government how they expected to take these provisions forward. As with many features of this framework Bill, so much of the detail and the governance arrangements are not being made explicit in the Bill.

That these provisions have been recognised as needed and necessary to the better conduct of a fair market is something that the Government can be congratulated on. The debate in Committee underlined how effective the GCA Act has been in setting out and policing business practice in the GSCOP, which now regulates the behaviour of the retail industry, which must abide by it in its relationships with its direct suppliers. There was universal praise for Christine Tacon on how she, as the adjudicator, successfully encouraged effective change to become embedded down the supply chain.

In response, the Minister explained that his department, Defra, would be the lead department in delivering these obligations. The Government intended to commence these regulations agricultural sector by sector, starting with the dairy industry. This has already started, with a consultation on the operation of contracts that is drawing to a close next week, as I understand it, on 24 September—that is, three months after the opening of the consultation in June. However, I may be corrected, as on a previous amendment the noble Baroness the Minister said that it has already closed. That it is on the cusp of closing or has already closed is regrettable in that we are not able to deliberate on the consultation in our considerations on the Bill.

I table these amendments again to give the House a chance to debate these important provisions and reflect further on the Government’s approach. I state again that Clause 27 is a very bold and ambitious step that the Government have taken. I express concern that, although the groceries code has proved very effective in stabilising fair dealing provisions in the retail sector, difficulties remain regarding whether this was the appropriate mechanism to cover the whole of the supply chain: the service sector as well as the retail sector, the widespread diversity of food products in the supply chain and how they are delivered across many forms of enterprise and business practice.

The Government are undertaking a huge task and care must be taken, as a one-size-fits-all regulatory regime may not fit all in the appropriate manner. The problems and solutions in one sector and the relative merits in the behaviour of various participants may not be suitable to be applied across the board to all sectors, each with differing market imperatives, regarding how the various markets may be made to work more effectively. That there is an imbalance in negotiating power between the primary producer through the processing, manufacturing and product development supply chain and the end market is not in doubt.

I shall not press these amendments tonight, nor support other amendments, including Amendment 87 should it be pressed. The Government have set out on the task and already started a consultation with the dairy sector. As I set out in Committee, I was concerned that these provisions had a narrow focus on contracts. Indeed, Clause 27(1)(a) specifically addresses contracts. Fair dealing provisions should examine the business relationship in its widest implication and interpretations that encompass many various circumstances that arise in primary production. However, it must be recognised that a first step is being taken, and it is starting at a very pertinent point—the contract.

In the interval between Committee and Report over the Summer Recess, I spoke to many in the dairy sector, especially those at the foot of the supply chain—the dairy farmer and his or her processor. I can tell the Minister that the department’s consultation has been widely promoted among the many sections of the industry: the farmer, the producer group representing the farmer’s suppliers, and the processing industry. Many have shared their submissions with me, and I am sure that the Minister’s department will receive a widespread response. Here and now is perhaps not the place to debate this further; I will add merely that the voluntary code of practice—VCOP—in contracts, introduced in 2012, has proved ineffective in improving fairness and transparency on a wider scale and, as has been experienced during this pandemic, urgency is needed to tackle the problem more extensively and in a comprehensive fashion.

I also note that this is a widespread problem throughout the industry that now extends across borders, with the overseas ownership structure covering the dairy industry in both the UK and Europe. The EU is also pressing on with its solutions, through directive 2019/633 on unfair trading practices in business-to-business relationships in the agricultural and food supply chains. Can the Minister make any comment, even though the consultation has barely closed, on the progress of the consultation, concerning the numbers, extent and general features beginning to become clear? Even in the immediacy of the lockdown, the retail relationship with the supply chain is today much better than it has been, due to the activities of the Groceries Code Adjudicator.

Will the department be separating out submissions from the retail sector and the service sector from this consultation? The consultation does not mention the wider farmer-processor relationship with the ongoing supply chain, and specifically with the retailer. Will the Minister give a commitment that further inquiries will be conducted as the submissions are considered? It may prove difficult to make immediate recommendations. Reflecting across other sectors in the industry, can the Minister give any indication as to when further consultations will be progressed? Which sector has the department next in mind? Furthermore, how might the various sectors combine to find comprehensive answers to this very difficult problem of fair dealing in the industry, a problem that is now being tackled by the Bill? I beg to move.

[Baroness McIntosh of Pickering (Con)]

My Lords, I congratulate the noble Lord, Lord Grantchester, and the co-signatories for bringing forward Amendment 63 and others in this little group. Amendment 67, in my name and that of the noble Baroness, Lady Ritchie of Downpatrick—I thank her for supporting this amendment —seeks to achieve precisely the same ends. I join with the noble Lord, Lord Grantchester, in expressing regret that the noble Lord, Lord Curry, is not able to speak to this group, but I entirely understand the circumstances in which he felt he had to head north.

Again like the noble Lord, Lord Grantchester, I pay tribute to the Groceries Code Adjudicator, who has done a sterling job in regulating the relationships between the major retailers and direct suppliers. I was most grateful to have the opportunity to discuss this amendment with my noble friend the Minister, who I understand may be able to signify some movement in this regard. I look forward to that with great interest.

I hope that the Government are minded to widen the remit to cover the gap that needs to be plugged by including the indirect supply chain, such as dairy, which is currently excluded from the process. For dairy producers and fruit growers, many of whom are quite small in size, it is extremely difficult to bring a complaint to the Groceries Code Adjudicator. That is why I am very keen—and it is something that we concluded some seven or eight years ago on the Environment, Food and Rural Affairs Select Committee next door—that it should be incumbent on the Groceries Code Adjudicator to bring forward, on her initiative, investigations in this regard. The indirect supply chain, as well as the direct, is extremely important for these small suppliers, and things do sometimes go awry. We should not be entirely reliant on complaints from small producers and growers who can too easily be identified and may, as a result, lose their contract, livelihood and mainstay of their income.

I very much support the Groceries Code Adjudicator taking over this role. I understand the difficulties, as she reports to a different department. If there has been some movement and my noble friend is able to see a way forward in this regard, I think it would be very welcome to the House.

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[Lord Gardiner of Kimble (Con)]

My Lords, this has been an interesting debate, and I thank all noble Lords for contributing toward it. Of course, I regret that the noble Lord, Lord Curry of Kirkharle, is not with us. He sent me a note, and I will have further discussions and considerations with him, because I am very keen to hear what he would have said in this debate.

Turning to Amendments 63, 64 and 67, I would like to assure noble Lords that work is ongoing to determine the most appropriate mechanism of enforcement for the provisions under this part of the Bill. No decisions have been made about who will be appointed as the enforcement body for Part 3. It is important to note, with particular reference to Amendment 67, that while all the measures contained in this part of the Bill will collectively work to improve supply chain fairness, the Government believe enforcement will work best when each particular policy area in Part 3 can be addressed individually. I say that because it is very important that we get to grips with the issues in each sector, identifying those that are distinct as well as those that may be common. I think that would be a pragmatic consideration.

On the suggestion that the Groceries Code Adjudicator should be given enforcement responsibilities, it is important to note that one of the key factors in the adjudicator’s success is its targeted focus on the behaviours of the UK’s largest supermarkets with their direct suppliers. This has enabled the adjudicator to work closely with the industry in developing supply chain solutions. I join other noble Lords in acknowledging in the work of the Groceries Code Adjudicator. It has been a considerably successful tenure of office.

A government call for evidence in 2016 explored the possibility of extending the adjudicator’s remit beyond those directly supplying the largest retailers. The review found insufficient evidence of widespread problems further down the groceries supply chain and concluded that there was no justification to extend the remit. However, it did identify some remaining concerns. These were sector-specific and predominantly concerned with the first stage of the supply chain. Following on from this, we feel that such issues are best addressed with the appropriate and targeted interventions included in the Bill.

Preliminary analysis of the responses to the Government’s consultation on the dairy sector has shown that there are a range of views about appropriate enforcement. I emphasise that an adjudicator-style model is only one of many potential means to resolve contractual disputes and ensure compliance with any new regulations. Amending the Bill to appoint the Groceries Code Adjudicator as the enforcement body would serve potentially to tie the Government’s hands to only one of the many possibilities available. This would also preclude the ability to listen to the views of industry and respond accordingly, which is really important and, we think, critical in creating effective solutions.

The Government are, of course, aware of the issues that farmers face in the supply chain and that is not confined to the dairy sector. To answer one of the questions from the noble Lord, Lord Grantchester, the Government will carry out similar consultations to explore the issues facing other sectors in turn. Discussions with stakeholders have already begun, to look at the situation in the red meat sector and what sort of interventions could improve the position of producers in that supply chain.

On Amendments 65 and 66, I thank the noble Lord, Lord Grantchester, for highlighting the importance of a robust enforcement regime to ensure that the fair dealings obligations are effective and sustainable. It is important to state that no decisions have been made about the nature of enforcement, or the body responsible for enforcement. The reason is robust and strong: the Government want to work with industry and listen to its ideas and concerns before any final decision is made.

The noble Lord, Lord Grantchester, asked about the consultation on the dairy sector. To be precise, I can confirm that the consultation closed on Tuesday. The consultation included a specific question about dispute resolution and, while the detailed analysis is still being carried out, it is already clear—this is broad-brush, because I asked whether there are any indicators—that stakeholders have a broad range of views about the most appropriate form of enforcement and finding the best solution will obviously require some consideration. The Government aim to publish a summary of responses later this year, which will be very important and will provide greater detail about the views shared and the options available. I hope it will not be too long before there will be scope for that consideration. The Government will exercise due diligence in designing the enforcement regime and appointing a regulator.

I say to the noble Baroness, Lady Bakewell of Hardington Mandeville, that I do not recognise her description of the rigour with which I and other Ministers consider appointments to public bodies. It is a very serious matter; we recognise that it is a matter of people coming forward to help in the public service. I reassure her that it has no input other than that it must be done rigorously, and the right people need to be chosen.

The Government intend the fair dealing obligations to create positive change for the industry. That is why we are doing it and why this is such an important feature. I am very glad that the noble Lord and other noble Lords have raised this, because this is all part of the prism of this Bill. A lot of people are worried that we are talking too much about the environment, but a lot of the guts and detail of what will come out in the provisions of the Bill are designed to help the farmer in the great production of food, and so that we can help the farmer get fairer dealing.

I have a note relating to the remarks of my noble friend Lady McIntosh on the GCA launching its own investigations. The Groceries Code Adjudicator can launch its own investigations, if it has reasonable grounds to suspect that a large retailer has broken the code. Again, I think the adjudicator’s work has been essential. I think and hope that, in the spirit of this debate, the reason the Government would at this time resist putting forward a particular body, however successful the adjudicator has been in this area, is that the best way to deal with difficulties in certain sectors is to work with the sector to see what is the best mechanism for enforcement. Let your Lordships be in no doubt that these are provisions that we recognise must be attended to, and in short order, because they are the way that will help the farmer in this situation.

In that spirit, I very much hope that the noble Lord will feel able to withdraw his amendment.

[Lord Grantchester (Lab)]

My Lords, I thank all noble Lords who have come forward to speak tonight. I certainly appreciate the remarks of the noble Baroness, Lady McIntosh, in calling for the extension of the role of the adjudicator, and the various discussions with the Minister. I agree that the widespread experience of the Groceries Code Adjudicator should give rise to exploring how the role of that office may be extended.

I remind all noble Lords that agriculture can be characterised as unusual: it is almost unique in that producers invariably buy retail yet sell wholesale. I certainly appreciate the Minister’s comments and the gracious way in which he is going to include the noble Lord, Lord Curry, in further discussions. He has also come forward with a very helpful update on his department’s ongoing deliberations. I appreciate that the Government need flexibility to get the right solutions to each sector’s issues, and I look forward to clarity being provided in the publication of this consultation and to the debates we will have on that later. In the meantime, I beg leave to withdraw the amendment.

Amendment 63 withdrawn.

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[Baroness Bakewell of Hardington Mandeville (LD) [V]]

My Lords, it is a pleasure to follow the noble Lord, Lord Inglewood. This is an important group of amendments, to which others have spoken eloquently. I added my name to Amendments 81, 82, 83, 85 and 86 in the name of the noble Baroness, Lady Rock. I congratulate her on her speech and agree wholeheartedly with her detailed comments.

The noble Earl, Lord Devon, moved Amendment 69 and spoke to Amendment 89, which would remove agricultural tenancies from the Bill. I listened carefully to his speech and I am afraid I cannot agree with him. Removing reference to tenant farmers from the Bill because insufficient importance is given to them is not the answer. Tenant farmers are a vital part of the patchwork of agricultural holdings across the country. If they are removed from the Bill, I am unclear on just how we can safeguard their survival. However, I agree that three years is far too short for a farm tenancy business.

The amendments I will speak to all apply to Schedule 3 and would ensure that those currently involved in agriculture on a tenancy basis can function effectively. I support the comments of the noble Lord, Lord Wigley, and those of the noble Baroness, Lady Rock, on financial assistance schemes. These must be open to all tenant farmers. It is unacceptable for their landlords to refuse consent for them to engage in these schemes. Those who work the land and do the back-breaking jobs involved should be able to reap the rewards. It is unacceptable for landlords to block the rewards, cream them off for themselves or alter the tenancies to the disadvantage of the tenant, as the noble Baroness indicated.

I turn to the amendments that relate to the rights of succession to a tenancy on death. Many tenant farms will be run by extended family members. For some, the nephew, niece or grandchild of the farmer will have been helping to run the farm for some time and see it as the only way they themselves can get into farming. It is therefore imperative that they should be able to succeed to the tenancy. They have experience and expertise, often gained over many years, and the farm will be in safe hands. Similarly, those in civil partnerships or cohabiting should be able to succeed to the tenancy where they wish to do so.

We have on previous days on the Bill debated the importance of encouraging new entrants into farming. To shut out those who wish to carry on the family tradition by refusing succession to the tenancy would be both cruel and unwise. These are the very people the Government should be encouraging to take up the reins and carry on. They are also the ones likely to welcome a move to a more environmentally friendly way of farming. I disagree with the noble Lord, Lord Carrington: no one related to a farmer or his extended family could possibly think that farming is an easy option.

Lastly, I support the letting of longer farm business tenancies. In Committee, the noble Earl, Lord Devon, referred to the woefully inadequate length of farm business tenancies of three years. This is hopeless for anyone wanting to plan ahead and make the best use of the land.

While I accept that short tenancies mean that others can come on to the land, it is not likely to encourage proper management of the land if, at the end of three years, the tenant farmer has to give up and move on. Often, there are no farms for them to move on to, as the popularity of pony paddocks means that some farmers have sold off land piecemeal for this purpose. A longer tenancy agreement is vital if the Government are to ensure that ELMS are successful. The Government cannot insist that it will take farmers seven years to convert from CAP to the ELMS system and then legislate only for three-year farm tenancy businesses. These are all vital issues, and should the noble Baroness, Lady Rock, wish to test the opinion of the House, we will support her. I look forward to the Minister’s comments.

[Lord Grantchester (Lab)]

I thank the Tenant Farmers Association for its communications on these clauses. I also thank the noble Lords who have tabled these amendments for further consideration. They tackle many aspects of the two major Acts, the Agricultural Holdings Act 1986 and the Agricultural Tenancies Act 1995, following the Government’s consultations on their workings, on which there has been so much debate. I recognise the passion with which many speakers have spoken tonight. These relationships can certainly become fraught and I appreciate the experiences that the noble Baroness, Lady Rock, shared with the House. It is a difficult and complicated subject that has been deliberated on by the Tenancy Reform Industry Group over many years. The Bill delivers on many of its recommendations, and the Minister will see that they are drafted to balance the interests of tenants and owners.

I understand that many of the amendments were consulted on last year but did not receive enough support and that therefore further, more detailed work may be required. I understand that there remains an appetite in England and Wales to consider the situation further before coming to a conclusion by the enactment of these amendments. The amendments are certainly important and have our broad support, including Amendment 88 in the names of the noble Baroness, Lady McIntosh, and the right reverend Prelate the Bishop of St Albans. We agree that there should be parity between tenants under the 1995 Act and those under the 1986 legislation in objecting to a landlord’s refusal to enter into a specific financial assistance scheme. We wish generally that all farming operations, whatever the terms of their occupancy, should be encouraged to take up the various ELM schemes and make their contributions towards an environmentally sustainable agriculture.

We would also be receptive to the modern interpretation of relationships that could lead to wider inclusion in tenancies, in line with our general encouragement for new entrants to come into the industry, provided they can meet the various eligibility provisions. The noble Earl, Lord Devon, argues that these clauses should be excluded from the Bill, but we would not go along with such an approach. If improvements to the legislation have been agreed as part of the TRIG process, we would not wish to hold them up. However, regarding further amendments, we can see that these may not have received the more considered support as widely as may be necessary for enactment in the Bill. We await the outcome of a more comprehensive assessment throughout the industry.

[Lord Gardiner of Kimble (Con)]

My Lords, I thank all noble Lords. The noble Lord, Lord Grantchester, used the word “passionate”. It has been a passionate debate and I think that, whatever the tenure of ownership, tenancy or commonhold, the challenges of farming are very profound. Obviously, the Government need to work towards creating an environment in which all types of tenure are able to run a strong business.

Turning to Amendments 69 and 89, the noble Earl, Lord Devon, proposed that we should in effect decide not to take forward what we have banked in our work. The package of tenancy reforms included in Clause 34 and Schedule 3 were shown by public consultations in England and Wales to have broad support. They deliver on many of the recommendations from the Tenancy Reform Industry Group—TRIG. The noble Lord, Lord Grantchester, made that point rightly, because the Government have brought forward those recommendations which commanded broad support. These provisions will help to modernise agricultural tenancy legislation, providing tenants with more flexibility to adapt to change. That is why it is very important that they remain in the Bill, so that they can be delivered now.

I understand that the noble Earl, Lord Devon, would like to see tenancy reform delivered through a separate dedicated Bill, and I can assure him and noble Lords that both the UK and Welsh Governments are keen to engage in further discussions with members of TRIG to explore whether any further actions may be needed to ensure what we all want, which is a thriving tenanted sector.

On Amendment 84, the tenant farming sector remains, as the noble Lord, Lord Wigley, said, and as we all know, a crucial element of agriculture in Wales. Within last year’s consultation, the Welsh Government outlined their proposals for a new sustainable land management scheme in Sustainable Farming and Our Land. It also consulted on a series of measures to modernise the tenant farming sector in the agricultural tenancy reform consultation. Policy development on tenancy reform remains ongoing in light of the consultation responses received and is being carried out in conjunction with development of sector-wide proposals for future agricultural support.

The Welsh Government acknowledge the importance of ensuring that tenant farmers are able to access any new scheme, and their view is that a Senedd Bill would provide a more appropriate legislative vehicle for that purpose. Further consideration will be given to what provision is needed in due course. The Welsh Government intend to publish a White Paper later this year to pave the way for an agriculture (Wales) Bill to be introduced in the next Senedd term.

On Amendment 87, there can of course be benefits from tenants and landlords entering into a longer-term tenancy agreement. There has been a lot of talk of three years. As far as I am aware, the parties can, if they so choose, have any length of term they desire; in the same way as with arrangements with any other property, that is a matter for the parties. I was therefore a little concerned that there appeared to be among certain of your Lordships this idea that everything was for three years and there was no leeway. As far as I know, and from my experience, that is not the case.

However, when the Government consulted on this matter of longer-term tenancy agreements, the feedback gathered indicated that introducing shorter notices to quit would be unlikely to affect significantly landowners’ decisions about the length of tenancy to offer. Other factors such as the size, quality and location of the land, and personal motivations for owning land have a much greater influence on decisions about the length of the tenancy term offered.

It is also important to recognise that, while there are benefits to longer-term tenancy agreements, shorter-term tenancies can be more suitable for different business models. For example, short-term lets have been shown to be very often more appropriate for new entrants looking to rent land on a flexible basis to gain experience. They can also be more suitable for some seasonal horticultural businesses. However, I can assure your Lordships that the Government will continue to work with TRIG on this important issue. That includes exploring how the sector can encourage more landowners to offer innovative long-term agreements to tenants who would welcome them rather than defaulting to standard short-term agreements.