Agriculture Bill

Baroness Rock Excerpts

Committee stage & Committee: 5th sitting (Hansard) & Committee: 5th sitting (Hansard): House of Lords
Tuesday 21st July 2020 Lords Chamber

[The Duke of Wellington (Non-Afl) [V]]

My Lords, as before, I declare my agricultural interests as detailed in the register. During the many days of this Committee a considerable number of thoughtful and constructive amendments have been tabled, but in most cases the Government have suggested that they are unnecessary since the matter is already covered in Clause 1 or can be provided for in the new environmental land management scheme. However, the ELMS will not begin until 2024. During the years between now and then, many farms that are currently barely profitable will suffer or disappear.

I will speak to my Amendment 149. I am grateful to the noble Lord, Lord Greaves, for signing it as well. As I said at Second Reading, my real concern is for the very survival of smaller hill farms during the intervening years from now until the new ELM payments begin in 2024. The Government announced in February that farmers in the lowest band of basic direct payments—up to £30,000 per annum—would have their payment cut by 5% in 2021, with further cuts in the following years. However, the Government’s own figures for 2018-19—the latest available—show that the average cattle and sheep farmer in a less-favoured area received a direct basic payment of £24,000 and still made a profit of only £15,500. Figures for 2019-20, when available, will probably show a slightly better position. Nevertheless, these smaller hill farms are only marginally profitable even with the basic payment and would be commercially totally unviable without taxpayer support.

We all accept that we are moving away from the basic payment system to the new environmental land management scheme payments. The purpose of my amendment is to ask the Government to think again about whether it is sensible or fair to reduce those in the lowest band even by 5% before ELMS payments kick in in 2024.

On Tuesday two weeks ago we debated Amendment 78 in the names of the noble Lords, Lord Bruce and Lord Greaves. Their amendment urged the Government to maintain support for hill farms and other marginal land. I support this general principle. My amendment is more specific and asks the Government simply to protect just the lowest band of recipients from the cuts until the new payment systems come into play.

Last Thursday, the noble Baroness, Lady Bloomfield, stated that since small abattoirs operate on a commercial basis they would not fit into the principle of the public good. My contention is that, unfortunately, small hill farms are not in any way commercial on their own, so I believe the public will consider it more than just for taxpayers’ money to be given for the public good of maintaining our small hill farms, which play such an important part in so many rural communities in this country. When the Minister responds to this group of amendments, I hope he will give the Committee an assurance that the Government will look again at the timing and percentage of the reductions in the basic payments for small farmers in the uplands.

[Baroness Rock (Con) [V]]

My Lords, I declare my interest as a director of a tenant farming enterprise as set out in the register. I shall speak to my Amendments 150 to 153. Although there is an understandable desire to demonstrate that we are moving away from the old regime of the CAP, we must do so in a way that is effective rather than just quick. The delay in our exit from the EU and the implications of Covid-19 point to a possible delay in the implementation of this new policy framework. These amendments would allow greater flexibility in pausing or even reversing the phasing out of direct payments should, and only should, circumstances require it. This would be particularly important in a scenario where payments to farmers had been reduced but where the funds freed up had not been spent on alternative programmes and remained unused.

Amendment 150 would allow Ministers to reverse reductions in direct payments if they were found to be having a detrimental impact on the nation’s ability to produce food. The Covid-19 crisis will have long-term implications for our country, so this amendment would allow for welcome flexibility. UK consumers, who have valued the domestic supply of food over recent times like never before, will not welcome any dip in that supply. In the event of a pause or a reversal for these reasons, the Government should be allowed to maintain independent financing for the development of alternative schemes, such as ELMS, so that they are not delayed or interrupted.

My Amendment 152 would enable those who have opted to take delinked payments to return to receiving direct payments if the direct payment scheme is extended. If a delinked payment is introduced, the powers to extend the transition period in accordance with Section 8(3) will be used. The status of the farmer would be uncertain. He may be locked out of the system for longer than envisaged. The status of such a person in this situation should be defined in the regulations to provide legal certainty. Given the current uncertainty about what future schemes will look like, this amendment would provide a safeguard against unintended consequences for farmers if the agricultural transition period is extended.

--- Later in debate ---

[The Earl of Caithness [V]]

My Lords, last week the noble Lord, Lord Judd, was pleased to support what I said about the sequestration of greenhouse gases. This week, I am very pleased to support him on what he said about upland farmers and the concern that a number of them are going bankrupt and their land is becoming part of larger holdings, which is altering the nature of the countryside. It is not just the small upland farms that are under pressure. Small lowland and small family farms are under pressure throughout the UK, and there is now an inevitable drift towards bigger farms, more contracting and fewer tenancies—that is a sad thing.

Amendment 159 in the name of my noble friend Lord Dundee is an interesting proposal. It would be a very good way to start development on green-belt land adjacent to towns, but what happens when the idealistic thoughts of smallholdings do not become viable or the owners cannot cope, and the whole area turns into “horsey culture”? This is not good for biodiversity or the land. One sees an enormous amount of potentially good land being ruined by horses because the land is not properly maintained. It takes a great amount of extra work to keep land where horses are kept, on a small acreage, in good health.

I have put my name to Amendments 237, 238 and 246. I support Amendment 246 because I would like to see longer farm tenancies. This an important part of the structure of farming in the United Kingdom, and in England in particular. That is what the Bill is about, and I would like to see this amendment in the Bill.

I support Amendment 238 because it has the interesting additional wording of “full and efficient farming”. This comes back to our discussions on Clause 1, because there is a push from the Government to turn much of our agricultural land into recreational theme parks, whereas this amendment is geared to making certain that the land is farmed in a proper and efficient manner.

I have spoken before of my concern that tenants sometimes do not get a fair deal: because of their tenancy agreement, woodland, streams and things like that are often excluded, particularly from old Agricultural Holding Act tenancies. This hampers the ability of the tenant to carry out full farm biodiversity and restricts the amount that a tenant can diversify.

Looking to the future, what will happen under ELMS tiers 2 and 3? What happens if a tenant is attracted by a scheme under tier 2, or perhaps is included in the ambit of a tier 3 scheme, which involves inappropriate public access? What is the situation for the landlord in these circumstances? The land might be the landlord’s asset, and he might in due course wish to take that land in hand when the tenancy agreement comes to an end. If the tenant takes part in an ELM scheme which includes public access that depreciates the value of that land in the longer term—undoubtedly the public access will become a common established right over time, if not immediately—is the landlord consulted in a tier 3 scheme? Does the landlord have a right of refusal under the proposals that the Minister has in mind that we do not know about?

There are a lot of questions here that need digging into and explaining. I supported these amendments because the tenant should be not only encouraged but treated fairly when they have a holding.

[Baroness Rock [V]]

My Lords, again I declare my interests as a director of a tenant farming enterprise. I support Amendment 237 in the name of the noble Baroness, Lady McIntosh. I was pleased to add my name to Amendments 238 and 243 to 246. I welcome the clear intention to ensure that tenants are not excluded from financial assistance schemes.

Amendment 238 seeks only to ensure that all potential circumstances that could arise for a tenant to need their landlord’s consent are covered. Some schemes, by their nature, require tenants to seek the consent of their landlords, regardless of legislation or their contracts of tenancy. Those individuals would not be able to use the provisions of this legislation to object to a landlord’s refusal, in those circumstances. This amendment merely extends the opportunity for reasonable objection to apply to any and all situations where the landlord’s consent is required. The amendment is not seeking to expand the remit of the legislation beyond what the Government intend, just to ensure that no one is left out of being able to use this provision.

I welcome the provisions of Schedule 3, in particular those allowing tenants to object to a landlord’s refusal to grant consent to enter a financial assistance scheme, but the exclusion of farm business tenants is a mistake. By their short-term nature, restrictive terms and high levels of rent, FBTs deserve the protection of this legislation. Over time, FBTs will become the major way in which non-landowners become farmers, and it is important that the legislative basis for their occupation is secure. As the Government rightly move towards a new mechanism to support farm productivity gains and public goods, it would be tragic if FBTs had no recourse against unreasonable landlords who refuse consent for them to be part of that new direction of travel.

I recognise that there is a balance between ensuring that we do not disincentivise landlords and ensuring that tenants have sufficient opportunities to take part in new schemes. However, given the restrictive terms of many FBTs and the lack of impetus to improve them in the marketplace, the balance should rightly ensure fair scheme access for all tenants.

While it is government policy to ensure long-term FBTs, it is disappointing that the Bill does not contain the provisions to assist with this that were proposed by the Tenancy Reform Industry Group—TRIG— which formed part of the Government’s consultation. Amendment 246 rectifies this. The marketplace does not currently deliver a sufficient number of long-term FBTs and the Government could do more to promote their use. These provisions should provide comfort to landlords who have to deal with tenants who breach the terms of the agreements or when land is required back for non-agricultural use, planning consent for change of use having been obtained. While these new provisions will have direct benefit for landlords, who are prepared to let for longer periods, they will provide indirect benefit to the tenanted sector as a whole, by providing scope for a greater degree of longer-term tenancies.

Finally, on Amendments 243 and 244, many successful businesses are family enterprises, no more so than in agriculture. Tenancy succession provisions ensure the longevity of farming businesses, and it is right that there should be eligibility criteria for who can succeed to a tenancy. Other bits of the Bill speak to that issue. One area that is limiting for many farm businesses with succession rights is the close relative test. Often it is nephews, nieces and grandchildren who are involved in the farm, rather than the children of the retiring or deceased tenant. It is important to recognise that these wider members of a family farm may be the most appropriate individuals to succeed. This issue was considered by TRIG and formed part of the Government’s consultation on agricultural tenancies.

The tenanted sector is responsible for farming at least one-third of the agricultural area of England and Wales. We must ensure that tenant farmers are able to participate fully in schemes to contribute to the future of farming.

[Baroness Bennett of Manor Castle [V]]

My Lords, it is a pleasure to follow the noble Baroness, Lady Rock, and to echo many of the sentiments she expressed on Amendment 246, to which my noble friend Lady Jones of Moulsecoomb has attached her name. I will speak briefly to Amendments 158 and 159. Amendment 158 is on county farms, which is something that we have heard discussed broadly, its importance stressed by many sides, so I will not detain the Committee on that.

I want particularly to address Amendment 159, in the name of the noble Earl, Lord Dundee. This in many ways addresses the question I put to the Minister after the previous group of amendments. Do we perceive our countryside as a place where we can see a growth of a different kind of business and economy—strong local economies, rich communities of small independent businesses producing food and providing services for those businesses? The vision set out by the noble Earl in this amendment reflects some very exciting work that is being done in Wales. We are seeing exciting experiments and developments in the devolved Administrations that could be transferred to England. That is the idea of One Planet Living: that it is possible to create developments that meet our environmental, social and economic goals and are different from what has gone before, which may not increase the concentration of land ownership, but may create opportunities for small independent landowners, businesses, tenants and people to operate different kinds of businesses, in different ways.

I do not need to tell your Lordships that land ownership in England is incredibly concentrated. We have a situation in which half of England is owned by less than 1% of its population. If we were to share the land of England around the whole population, everyone would get half an acre each. In the light of Covid-19, we may see that people wish to explore different ways of living, different kinds of businesses, different ways to work and support themselves, and different ways to work in communities. This amendment is an exciting possibility and way of doing that. I commend it to the Committee.