Environment Bill

Earl of Caithness Excerpts

Report stage
Wednesday 15th September 2021 Lords Chamber

[The Earl of Devon (CB)]

My Lords, this is a groundbreaking Bill in many ways but, from the perspective of English property law, no provisions are more revolutionary than Part 7 and the introduction of conservation covenants. This is a seismic shift, meaning that, for the first time since the Normans introduced common law, owners of land will be able to bind successors in perpetuity to positive obligations to manage land in a particular way. More radical still, and in a departure from the recommendations of the Law Commission, the counterparties to these obligations will now include for-profit companies—private enterprise. As a farmer and a former property barrister now practising at an agricultural law firm with clients in this space, I support this scheme and want it to succeed, but there are glaring imperfections in Part 7, causing major concern to, among others, the NFU, the Bar Council and the RICS. Because of that I have tabled Amendments 109, 110, 112, 113, 114 and 115.

Amendments 109 and 110 focus on the formalities by which conservation covenants are created, ensuring that they say what they are and what they do on their face and are created by deed rather than, as currently drafted, by a simple exchange of emails. Amendment 112 ensures that for-profit responsible bodies are conservation- focused, not distracted by other, competing duties, such as making profits for their shareholders at the expense of the environment. Amendments 113 through 115 resolve the untenable position when a responsible body defaults, such that the Secretary of State steps in and, in perpetuity, binds a landowner to a positive obligation without any reciprocal duty to pay the fees covenanted. Since Committee, I am grateful for the support of the noble Baroness, Lady Jones of Whitchurch, the noble Lord, Lord Oates, and the noble Viscount, Lord Ridley, and many others, including the noble Baroness, Lady Jones of Moulsecoomb, indicating a very broad consensus across your Lordships’ House for these modest but vital amendments.

I am also grateful to the Ministers in Defra and the Bill team for their engagement, although I remain concerned that there is a failure to grasp the significance of the issues raised. Given the time, I do not propose to restate the hypothetical parade of horribles that I set out in Committee, but I note that no one has argued that those hypotheticals are wrong. The Government erroneously asserted that conservation covenants needed to be executed by deed in order to be registered as local land charges, but they have since accepted that that was inaccurate. That is appreciated; however, this only reinforces the sense that this radical change to property law is being rushed through without due consideration or understanding. It is our duty to build in necessary safeguards to protect farmers, the environment and future generations from the threat of zombie covenants blighting our green and pleasant land in perpetuity.

Key to resolving these concerns is Amendment 110, requiring that conservation covenants be executed by a deed which contains its key terms as to duration and payments on its face. This is the traditional and best way to ensure that advice is taken such that the potentially punitive and perpetual implications of entering a conservation covenant are properly understood at the outset. The Government say that their draft guidance recommends legal advice, and this should be sufficient, but anyone willing to enter a perpetual covenant by a mere exchange of emails is hardly going to sit down and read the guidance first. Defra wants no brake on the uptake of these covenants and, rather unusually, it is farmers seeking greater formality and not the Government. Defra has directed me to other statutory covenants created without necessarily using a deed, but none of these contains positive covenants, perpetual in nature, with a for-profit private counterparty. These are largely restrictive covenants with trusted statutory authorities.

Amendment 111 in the name of the noble Earl, Lord Caithness, sets out at considerable length the full formalities to be considered in executing a conservation covenant, formalities the RICS would no doubt recommend. Such extensive formalities may not be warranted within the legislation, but they are exactly what will be considered by properly advised parties executing such a covenant by deed.

The Government suggest that Amendment 112 is unnecessary because Defra will ensure that responsible bodies are truly responsible, but I have read the draft guidance and nowhere does it state the objective parameters against which responsibility will be judged. Indeed, it appears that foreign entities can be responsible bodies, so long as they have a PO box in the UK, and entities directly connected with the landowner could be responsible bodies too—there is no prohibition.

I was also surprised in Committee that the Minister cited the example of for-profit water companies as the type of body the Government consider to be responsible. Would that include Southern Water, recently fined £90 million for environmental degradation on an industrial scale in the pursuit of shareholder profits?

Amendments 113 to 115 solve the intolerable impact of the responsible body becoming bankrupt or deregistered and passing its role as counterparty to the Secretary of State, who then has no obligation to pay anything to the landowner, whatever the cost of the landowner’s conservation commitments. These amendments strictly limit the duration for which the Secretary of State is holder of last resort to 12 months, after which, if no responsible body is willing to take the covenant on, it is simply discharged. This has the effect of killing a zombie covenant and protecting the landowner and the land from the risk of a perpetual obligation with no payments in return. Without this change, the scheme is fatally flawed, as anyone advising on such covenants would have to identify this very real risk and advise against it. Of course, if landowners do not take advice, they will not know of this risk, as I note that no mention is made of it in Defra’s draft guidance.

I could go on, but time is short and the arguments are clear. For these reasons and the myriad others I set forth in Committee, I beg to move.

[The Earl of Caithness (Con)]

My Lords, I support the noble Earl, Lord Devon, in his amendments. They are hugely important. I am a great supporter of conservation covenants and I want them to work effectively. As he just said, I have a number of amendments in this group.

I am looking at conservation covenants in something akin to a divorce situation. One can enter into marriage with the very best of intentions and it is all going very well, but then it starts going sour. Divorce can be extremely costly and brutal. A conservation covenant could be entered into with the very best of intentions, but here the situation is complicated because the parties entering it could be different parties when it comes to a conclusion. There could be very different interpretations and a great deal of costs.

The noble Earl, Lord Devon, did not actually mention costs so much today as he did in Committee, but in Clause 126 the final remedy is the Upper Tribunal and that can cost £50,000 to get started. Can farmers really afford that, particularly tenant farmers? The average size of a farm in England is 87 hectares and the cash flows are bare at the most. They might be a little better with the wheat price at the moment but, sure as anything, we have seen wheat prices go up and come down. You cannot expect farmers to have that amount of ready cash to fight in the courts.

I therefore seek to spell out in some detail the sort of things that need to be taken into account. I do not expect many conservation covenants to be undertaken by tenants but, if one is, all the freeholders of the land should be signatories to that agreement. I hope my noble friend will confirm that. It is a very un-Conservative thing to deprive the beneficiary of a reversionary interest of the full value of that interest, which could easily be done if a tenant enters into an agreement which prejudices the farm at the end of the tenancy. Not only does a conservation agreement affect one property, but it could very easily affect the neighbouring properties and surrounding farms if that conservation covenant involves the re-wetting of the land, which can take many years to undo.

I hope we can get a simpler way to modify and change the tenancies. When negotiation has failed, we need a simple system. I suggest in my amendments that there is an alternative dispute resolution which is simple, cheap, and which farmers, tenants and landowners are used to. I am hugely concerned by the impact that outside bodies might have. As the noble Earl, Lord Devon, has just reminded us, all you need is a PO box. You could get foreign investment companies coming in, taking over these conservation covenants and making life extremely difficult for the occupier.

I very much hope that the Government will be sympathetic to the amendments tabled by the noble Earl, Lord Devon. His Amendments 109 and 110 cover all the points I have raised, but I have spelt them out in a different way because they are of extreme concern to farmers.

[Baroness Jones of Moulsecoomb (GP)]

My Lords, I will speak briefly. When I first looked at these amendments, I decided to leave them well alone because I did not know what covenants were. Looking at them a little more closely, my working-class bigotry kicked in and I thought that if three hereditary Peers were dealing with this then I ought to be careful. But, in fact, I am convinced, soothed and reassured, and I will be voting for the amendment.

--- Later in debate ---

[Baroness Young of Old Scone (Lab)]

My Lords, my Amendment 117 requires the Secretary of State to create a land-use framework for England. I am conscious of the hour and the fact that this was also raised during debates on the Agriculture Bill and in earlier stages of this Bill. I am also conscious that it is extremely cold in the Chamber and dinner looms, so I will be brief.

I have had considerable support from noble Lords from all parts of your Lordships’ House on this issue. I thank the noble Earl, Lord Caithness, and the noble Baronesses, Lady Bennett of Manor Castle and Lady Boycott, who have also put their names to the amendment. It has become even more important since we last discussed it. Pressures on land from all sides continue to grow, and that is reflected in land prices, which are rocketing up. In particular, the pressures that are really growing and coming into focus include the need for more land for carbon sequestration, for food production and increasing our food security, for tree planting and for forestry, to reduce our reliance on imported timber. There is also pressure for land to halt and reverse the decline in biodiversity, provide green open spaces post Covid and help communities and people protect their health and their mental health.

There are other pressures as well: by 2050, we will need land to house 7 million more people in this country, if the population estimates are correct. That will also mean land for development and infrastructure to support the jobs for this population increase. If we add together all of those things, plus other land uses, the calculation shows that, to meet all of society’s needs for land over the next two decades, we will need a third more land than we have. We desperately need a framework to allow land to be used in the most effective way, for multiple functions—both public and private—to be met by the same piece of land and for decisions on competing land-use pressures to be made on a rational basis, at national, regional and local levels. The three other nations of the UK have all seen sense and have land-use frameworks—England does not.

In addition to all that, the list of land-use schemes that the Government are introducing is growing. Noble Lords have heard about many of them during the course of the Bill: local nature recovery strategies, Nature4Climate and other carbon schemes, biodiversity net gain, the new range of agricultural support schemes in ELMS, major tree-planting initiatives and whatever designations of development land that will come out of the Government’s planning changes, when we see them. There are lots of government schemes. A land-use framework would set all of these in an integrated and logical framework that would act like the glue between them to allow them to operate successfully together, rather than in their current silos. In Committee, the Minister said that local nature recovery strategies would do that job, but they do not include planning and development land uses.

More and more organisations are advocating the need for a land-use framework. I have previously mentioned the Climate Change Committee, the House of Lords Select Committee on the Rural Economy and the Food, Farming and Countryside Commission, on which I should declare an interest as a commissioner. Since we last discussed this topic, another bunch of folk have decided that a land-use framework would be a good idea: the food strategy report that Henry Dimbleby produced for the Government called for such a framework, and the forthcoming Royal Society report will do the same. So I believe that the case for developing and implementing such a framework is undeniable and pressing. For example, it is crucial that the Government’s forthcoming planning reforms are informed by such a framework.

What we are faced with is like trying to do one of these awful jigsaws that well-meaning people give you for Christmas. It is a complex land-use jigsaw where there is no picture on the box and you have a third more pieces than will actually fit into the jigsaw. I do not know about noble Lords’, but I hate those offerings —they are impossible to do—and that is what we are trying to do with land use at the moment. I hope that the Minister will hear the rising tide of support for a land-use framework and accept my amendment.

[The Earl of Caithness (Con)]

My Lords, I have put my name to this amendment. I have supported the noble Baroness in her cause of a land-use framework for England for many years. Indeed, if I remember rightly, one of the recommendations of the House of Lords Committee on the Rural Economy was that we needed a land-use framework. That was some years ago and, as the noble Baroness has said, the case is even more pertinent now. The Bill increases the need for one with the conservation covenants. There is no limit to what land these covenants could be on. If they are going to be in perpetuity and they take all the best agricultural land, then we might well be doing ourselves a disservice in the long term when we need that land to grow food for a starving population.

The noble Baroness, Lady Young of Old Scone, has set out all the points. It is desperately important for the Government to integrate all their policies; at the moment, the pieces of the jigsaw are all over the place. Their strategies, including the new soil strategy, would work so much better if there were a structured plan for them to work under. I just cannot understand why the Minister and Defra are so reluctant to do this when the devolved Administrations have seen the logic of it.

[Lord Carrington (CB)]

My Lords, I declare my interests as set out in the register.

I also want to speak about this interesting clause, which I have been scratching my head about for some time. The need for some top-down planning was clearly identified by Henry Dimbleby in the recent national food strategy report. However, top-down planning on its own and on the scale envisaged is not practical, as there is always a need for local factors to be considered at the same time. While there is some merit in the concept of focusing public funding on the right thing in the right place, it is neither realistic nor desirable to micromanage what happens right down to parish level. As food producers and environmental guardians, farmers and land managers should be at the core of any approach to developing a framework. A framework for land use should be about joining up policy on the ground, not dictating what is done on the land in a very prescriptive way. Any land-use framework should be positive and enabling—allowing land managers to deliver more from their land, whether for the environment, food or other economic activity—rather than negative and restrictive.

The most interesting objective of the clause recognises the need to consider agriculture and food production. Farmers and landowners have often asked for a more strategic approach to land use, particularly now that land may be taken out of production for carbon-offsetting purposes, housing or whatever, so a clause along these lines helps to deal with the issue. However, this clause has much wider ambitions that could greatly restrict the progression of farming and the diversification of farm businesses, let alone other rural businesses. Zoning would almost certainly make it harder or more expensive to get planning permission for a new or different enterprise.

A land-use framework can never succeed in circumstances where there are going to be changes in technology, climate conditions, consumer demand and business viability, to name just a few considerations, all of which could happen in very short order. Furthermore, there are also likely to be major, currently unforeseen implications for land values and tax considerations that need much more research. I therefore cannot support the amendment.