Agriculture Bill

Baroness Rock Excerpts

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

[Baroness Rock (Con) [V]]

My Lords, I declare my interest as a director of Wrackleford Farms Ltd, a tenant farming enterprise. I shall speak to Amendments 81, 82, 83, 85 and 86, which stand in my name. I am grateful for the support of the noble Baroness, Lady Bakewell of Hardington Mandeville, for these amendments. I shall also speak to Amendments 69 and 89 in the name of the noble Earl, Lord Devon, Amendment 84 in the name of the noble Lord, Lord Wigley, and Amendments 87 and 88 in the name of my noble friend Lady McIntosh of Pickering.

In speaking to my Amendment 81, I speak also to Amendment 84 in the name of the noble Lord, Lord Wigley, which will achieve the same outcome for Wales prior to it coming forward with its own legislation, as this amendment envisages for England. This amendment is a straightforward change to require the Government to come forward with the necessary regulations to allow an agricultural tenant to refer to dispute resolution an unreasonable refusal from a landlord following a request made by the tenant to join a scheme developed under the provisions for financial assistance.

While the Government may give an assurance that they will use the power available in this part of the Bill to bring forward the necessary regulations, there is no reason why the Government should not commit to doing so in the Bill. Tenant farmers are rightly concerned about their ability to access new public payments for public good schemes in light of their tenancy agreements and some of the restrictive clauses which they contain. Tenants must be given the assurance that they will be able to enter new schemes without the landlord being able to unreasonably withhold consent. The change which this amendment will make is entirely in line with the Government’s policy and should not cause any issue for them but at the same time it would give a tremendous boost of assurance to tenant farmers who are looking at the possibility of taking part in new schemes as they develop.

Sadly, there are circumstances where landlords refuse consent on an unreasonable basis for their tenants to enter schemes. Although it may be considered prudent for landlords to allow their tenants to remain profitable, it can sometimes be the case that landlords seek to use the leverage involved in having to give their consent to make unreasonable demands of their tenants, including surrendering secure tenancies in favour of insecure farm business tenancies, seeking the surrender of land, buildings or dwellings or merely to make the life of the tenant difficult. Having said that, there are, of course, plenty of examples where relationships between landlords and tenants are very good and where the changes being envisaged by this amendment would not be a risk to those good relationships or undermine what the parties are trying to achieve in those circumstances.

Amendment 82 closes a potential loophole in the provisions of the Bill around gaining the consent of the landlord, which is required to be obtained by the tenant in entering a financial assistance scheme. The Bill contains a relatively narrow set of criteria which need to be in place before the tenant has recourse to potential dispute resolution for an unreasonable refusal of consent to join a financial assistance scheme. The Bill envisages providing the tenant only with the option to object where the tenancy agreement or legislation governing the relationship between the landlord and the tenant restricts the tenant’s ability to participate without the landlord’s consent. However, there may be individual requirements set out within the financial assistance schemes which require tenants to seek the landlord’s consent. It may be because of the nature of specific land use changes envisaged by schemes being considered by tenants. Currently, that situation would not be covered by the provision in the Bill, and the amendment seeks to address that by ensuring that all refusals by a landlord can be referred by the tenant to dispute resolution on the grounds of reasonableness.

The Government may say that they will ensure to address this point in the way in which they design schemes, and I have some sympathy with that, but it would be better to have the provisions in the Bill rather than have to rely on individual schemes having their own appeal mechanism.

Amendment 83 would address specific issues around unreasonable restrictions within tenancy agreements which prevent farm tenants investing in their holdings to carry out activities or improvements which assist with the productivity or sustainability of the holding. This could include using the holding for non-agricultural activities which are in keeping with and complementary to its agricultural uses, which many farms want to do and which adds much-needed financial stability to those holdings.

Many tenants will have agreements which require them to seek their landlord’s consent for the installation of new fixed equipment or to carry out new activities where the requirement for the landlord’s consent is absolute. In these circumstances, there is no recourse for the tenant, who feels aggrieved by a refusal from the landlord. In that it is a point of public policy that farming should become both more productive and more sustainable, it would be an error not to allow tenants the same ability to fulfil those objectives as others. Of course, reasonable landlords will give reasonable consent for activities which improve the productive capacity of the holding and/or its sustainability, but, sadly, there are situations where such consent is not forthcoming. This is mostly because landlords are seeking to extract other concessions from their tenants, as I have set out previously. This amendment does not seek to provide a carte blanche ability for tenants to avoid reasonable clauses within their tenancy agreements, but it would provide the opportunity for them to appeal against an unreasonable refusal from their landlord. Indeed, this suggestion formed part of the recommendations of the Tenancy Reform Industry Group in its report to Defra in October 2017.

Amendments 85 and 86 would enhance the franchise of individuals who are able to apply for succession of tenancy for the limited number of Agricultural Holdings Act 1986 tenancies which continue to have rights of succession. Where those rights of succession apply, a narrow list of close relatives are able to apply to be considered to be eligible to take on succession tenancy. Up to three generations of members of the family can be tenants of the same holding. The current franchise includes husbands, wives, civil partners, sons, daughters, individuals brought up in farm families and treated as children of a marriage or civil partnership, and brothers and sisters of the deceased or retiring tenant. However, crucially, the list of potential successors does not include the grandchild, the nephew or the niece of the deceased or retiring tenant, nor does it include children from a cohabiting partner of the deceased or retiring tenant. The amendment seeks merely to correct for those omissions. This is also an issue that was considered by the Tenancy Reform Industry Group. It is often the case that the most appropriate successor in a family business is not to be found in the immediate generation but in the next, and there is no reason to deny the ability for the tenancy to be passed to those individuals should they also be able to meet the other eligibility criteria.

I strongly support Amendment 87 in the name of my noble friend Lady McIntosh of Pickering, as it seeks to provide a framework for encouraging longer-term farm business tenancies. As the noble Earl, Lord Devon, raised, the average length of FBTs is under four years. With 90% of all tenancies let for five years or less, this is a crucial issue. I look forward to hearing what the Government plan to do about it and ask that consideration be given also to the taxation environment within which landlords make decisions about farm tenancy letting, as has been proposed by the Tenant Farmers Association.

Amendment 88 in the name of my noble friend Lady McIntosh of Pickering is crucial to this legislation. FBT tenants should not be left out of the possibility of objecting to their landlord’s refusal to allow them to enter into a financial assistance scheme. Should my noble friend push this matter to a vote, I would certainly vote in favour of the amendment, as it closes a dangerous loophole for nearly half the tenanted sector of agriculture.

Finally, I turn to Amendments 69 and 89 in the name of the noble Earl, Lord Devon. I cannot support the removal of the tenancy provisions in the Bill that those amendments would achieve. However, I understand and fully agree with his view that we urgently need a specific Bill covering agricultural tenancies. It could pick up on many of the issues already recommended by the Tenancy Reform Industry Group. I urge my noble friend the Minister to give an assurance that an agricultural tenancies Bill will be brought before this House in the not too distant future.

I know that my noble friend the Minister is very supportive of the tenanted sector and highlights its importance to the whole agricultural industry. I thank him particularly for his empathetic engagement on this. It is therefore right that new legislation, providing security and stability to the tenanted sector, should be brought before the House. Although I am minded to test the will of the House on my amendments, I will listen carefully to what the Minister says before making my final decision.

[Baroness McIntosh of Pickering (Con)]

My Lords, I am delighted to follow my noble friend Lady Rock and thank her for her staunch and eloquent support for Amendments 87 and 88. Perhaps I may briefly address Amendments 69 and 89, in the name of the noble Earl, Lord Devon. I have great difficulty with them because they would remove from the Bill all provisions relating to agricultural tenancies. That would be a very regrettable move. However, I support Amendment 84 in the name of the noble Lord, Lord Wigley, which is a mirror image of the amendments standing in my name.

I will address my remarks primarily to Amendments 87 and 88. Clearly, as I say in my explanatory statement, Amendment 87 would seek to

“bring into effect a legislative change proposed in the tenancy reform consultation carried out by DEFRA and the Welsh Government, which has not been covered by the Bill, to encourage landlords to let longer Farm Business Tenancies.”

I would like to draw out some of the comments made by my noble friend Lady Rock in speaking to her amendments as passionately and eloquently as she did. I am minded to press Amendment 88 to a vote, not on my behalf but on behalf of all the agricultural tenants for whom, I know, this is close to their hearts.

I have had cause to raise this issue at previous stages of the Bill and I feel passionately about it. I grew up in a part of the world—Teesdale, in the Pennines in the north of England—where the farm incomes are among the lowest in the land. The farmers there probably survive only because their wives go out not just to help on the farm in all weathers, particularly at lambing time. In normal circumstances, outside Covid, they also go out and try to earn a living to keep the family afloat.

The basis of Amendment 88 is very simple. It is to put the tenants’ agreements under the Agricultural Tenancies Act 1995 on exactly the same basis as under the Agricultural Holdings Act 1986. My noble friend Lady Rock referred clearly to the devastating effects of moving from a secure tenancy agreement to an insecure tenancy, which do not bear thinking about in the present climate. Tenant farming is the bedrock of this country; it is almost unique to the English countryside. I remember so clearly from my years as a Member of the European Parliament how we stand out as one of the few areas of Europe with such a well-developed system of tenancies.

What I find so heartbreaking about the current situation is that the two Acts have not yet been brought together. To me, the provisions covering tenants under them should be absolutely as one. This is a highly regrettable situation. To be fair, my noble friend the Minister tried to go to some pains to put my mind at rest in Committee. Yet I find myself tabling the same amendment on Report, and potentially putting it to a vote, because I have not had satisfaction on this point.

I believe I am here as a voice for those people who cannot be represented otherwise than through our good selves in this House. I urge my noble friend to consider any reason why the tenancies under the two Acts cannot be treated in exactly the same way. It would be grossly unfair if any tenants’ possible access to financial assistance could be refused at the whim of a landlord. I accept there are good tenants and bad tenants; there are good landlords and bad landlords. But we have to look at the worst-case scenario.