Amendment 158

Agriculture Bill - Committee (5th Day) – in the House of Lords at 5:30 pm on 21st July 2020.

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Lord Whitty:

Moved by Lord Whitty

158: After Clause 16, insert the following new Clause—“Smallholdings estates(1) Every smallholdings authority which, before the commencement of Part 1 of this Act, holds any land for the purposes of smallholdings must—(a) review its smallholdings estate, and(b) before the period of 18 months beginning with the day Part 1 of this Act comes into force, submit to the Secretary of State proposals with respect to the future management of its land for the purposes of providing—(i) opportunities for persons to be farmers on their own account;(ii) education or experience in environmental land management practices for farmers, potential farmers and farm workers;(iii) opportunities for increasing public access to the natural environment and understanding of sustainable farming; and (iv) opportunities for innovation in sustainable land management practices.(2) No land held by a smallholdings authority immediately before the commencement of Part 1 of this Act is to be conveyed, transferred, leased or otherwise disposed of other than—(a) in connection with the purposes listed in subsection (1), or(b) in accordance with the proposals submitted under subsection (1). (3) For the purposes of this section “smallholdings authority” has the same meaning as in section 38 of the Agriculture Act 1970.”Member’s explanatory statementThis new Clause would limit the disposal of "county farms" by local authorities and would require local authorities to review their holdings and submit proposals for future management to provide opportunities to extend farming to new farmers, provide agricultural education and stimulate innovation.

Photo of Lord Whitty Lord Whitty Labour

My Lords, apropos of the discussion on the previous group of amendments, this is the first time I have contacted your Lordships from rural Dorset. The bandwidth and the stability of the internet connection appear to be somewhat suspect, so if I get cut off, your Lordships will understand.

This amendment is about introducing a new generation of farmers to our agricultural system. Much of the debate on the Bill has been about the outputs of farming: food, and the impact on the environment and the countryside. The key inputs into farming are of course the skill and enterprise of those who work the land, but we have heard very little about that in the debate. A subsequent amendment from my noble friend Lady Jones of Whitchurch deals with the general improvement of the supply, quality and skill of labour in agriculture, which I will strongly support. However, this amendment is about getting people in who will run their own farms and who need to be given that opportunity.

I well remember when I was first made an Agriculture Minister—over 20 years ago now—and I was told that the average age of English farmers was about 59; I was slightly younger at that point, but not a lot. I was slightly shocked at that, but then I was told that this was always the case, because you either inherited your land from your father or your uncle or you had to save up enough money to buy the land. Another way in was provided from the beginning of the last century by many rural counties, which established tenancies directly for young farmers who could not afford to enter in the normal way through inheritance or purchase. It was a successful scheme, and it continued and was reinforced after the Second World War. However, from the 1980s, there was a drastic fall in the number of tenancies and the acreage covered by such tenancies almost halved. We sped it up a bit around 2000 but in the last 10 years, as a recent report by the CPRE shows, there has been a further 10% decline in the areas covered by county tenancies.

This is a crucial way in, yet some of our proud rural counties have drastically reduced the acreage covered by county tenancies. These include counties such as Herefordshire, Somerset, North Yorkshire and Lincolnshire, and some counties, such as Northumberland, Northamptonshire and Lancashire, appear from the figures not to have any county tenancies nowadays. Even my own adopted county of Dorset—whose internet connection is not great—has also capped its tenancy by 10% over the last 10 years. This is pretty disastrous in terms of getting new blood into managing farms and running their own farms.

My amendment is quite modest, but it would require those counties with such smallholdings to review the situation and not to dispose of any such holdings except for the purposes similar to the objectives of the county farm tenancies. That would require each county to work out a new strategy, discuss it with Defra, continue to provide support for those tenancies that existed and, hopefully, resume providing further tenancies.

I was heartened at the end of the previous day of the Committee stage when the noble Baroness, Lady Bloomfield, indicated that there will be some support for county farms as a result of the new agricultural system. I have yet to see any details of that, but it would be important to improve availability for rural young farmers, or indeed urban people who wish to get into farming, if the county scheme could be revived or, at the very least, stopped from declining further. An objective assessment by the counties and Defra would reinstate tenancies and start increasing the amounts of such tenancies that are available, which should help to herald a new future in farming for those who desperately want to run their own farm and improve the environment at the same time. I beg to move.

Photo of The Earl of Dundee The Earl of Dundee Conservative

My Lords, within this grouping I support Amendment 158, in the names of the noble Lord, Lord Whitty, and others, which sets out to enable new entrants to county farms, to provide education in farming these holdings and to stimulate innovation within them.

I am also in favour of Amendment 246, in the names of my noble friend Lady McIntosh of Pickering and others, which suggests that landlords should contract longer farm business tenancies.

I also support my noble friend’s Amendment 237, which would enable tenants to object to a landlord’s possible refusal of consent to enter financial assistance schemes.

I come to Amendment 159 in my name. This proposed new clause would encourage agricultural smallholdings in areas close to towns and cities. In terms of the Bill, there are a number of advantages.

The first is consistency with the Government’s commitment to building houses where people want to live. Many would like to live in the countryside; however, very often this is not possible due to planning constraints and the high costs to applicants of gaining permission. The proposed new clause would allow for the development of affordable green homes arising from government incentives to local authorities for that purpose. Local authorities might then incentivise the private sector to invest in this type of endeavour. Along with other locations, green-belt sites could be used. Since we are considering agricultural smallholdings, these would not be subject to current urban restrictions applying to green belts.

Secondly, the developments would be combined smallholding, home and work spaces. Residents would have two occupations: farming some land; and working from home. An example might have 30 houses and 180 acres of farmland, thus 6 acres per unit. A typical occupant might farm vegetables in polytunnels while also working part-time as an IT consultant via high-speed internet. Post coronavirus, two interconnected trends have emerged: a greater demand for property in the countryside and a growing potential of being able to work from home. The proposals outlined thus fit in with those new demands in facilities.

Thirdly, the projects, as envisaged, would provide fresh, high-quality produce to local urban markets, thus strengthening the United Kingdom’s food security, while assisting government aims for the countryside by increasing opportunities for rural employment.

Fourthly, in connection with this Bill, the farming methods adopted by these smallholdings would qualify to benefit from this financial assistance for the purposes detailed in Clause 1. I hope that my noble friend the Minister can support this proposal.

Photo of The Earl of Devon The Earl of Devon Crossbench 5:45 pm, 21st July 2020

My Lords, I am generally supportive of the amendments in the names of the noble Lord, Lord Whitty, and the noble Earl, Lord Dundee, and their desire to get younger farmers on to the land. This is crucial to improving diversity and productivity and is generally crucial to the health of the farming industry.

However, I oppose Clause 34 and the entirety of Schedule 3 standing part of the Bill. This is not because I think that agricultural tenancy reform is not much needed; rather, it is far too important an issue to be addressed in a simple schedule to this complex Bill. It must not be treated as an afterthought. In these constipated proceedings, we simply do not have time to do justice to agricultural tenancy reform. I have barely had the capacity to consider the provisions in Schedule 3; perhaps this proposal is aimed at sparing me and your Lordships the time of doing so.

I was horrified to learn that the average length of modern agricultural tenancy is just three years. This is the worst possible thing for the environment. For all our days of effort to define and incorporate a variety of public goods and worthy causes under Clause 1, probably the best thing we can do for the environment is simply adjust the term of agricultural tenancies from three years upwards towards 10. There is simply no way a farmer can commit the resources to maintain his or her natural capital, such as soils, hedges and trees, when he or she has only a three-year term and the bank that is financing the business needs to see a commercial return within that short timeframe.

I also keep in mind the excellent work of the Tenancy Reform Industry Group—TRIG—whose final report to Defra made wide-ranging and sweeping recommendations for agricultural tenancy reform. Schedule 3 is a wholly inadequate response to that. Many will say that we should take what we can by way of primary legislation in this area, as the chance does not come along too often. However, I would resist that and reiterate that this far too important an issue to be resolved by Schedule 3 alone.

Photo of Baroness Young of Old Scone Baroness Young of Old Scone Labour

My Lords, I will speak on Amendment 222 in my name; I thank the noble Lord, Lord Randall, for putting his name to it.

The community infrastructure levy, known as the CIL, was introduced in 2010—[Inaudible.]

Photo of Lord Russell of Liverpool Lord Russell of Liverpool Deputy Chairman of Committees

The noble Baroness’s connection is very bad. If she does not mind, we will leave her for a moment to try to get the connection back up and I will call her later. I call the noble Baroness, Lady McIntosh of Pickering.

Photo of Baroness McIntosh of Pickering Baroness McIntosh of Pickering Conservative

I have some sympathy with the noble Earl, Lord Devon, but I have tried to use my best judgment to amend the Bill as it stands. Amendment 223 builds on the work, as the noble Earl pointed out, of the Tenancy Reform Industry Group, just to ensure that the amendments put forward by TRIG can be implemented in a timely manner.

I turn to other amendments in my name and thank the noble Baronesses, Lady Jones of Moulsecoomb, Lady Bakewell of Hartington Mandeville and Lady Northover, the noble Earl, Lord Caithness, and my noble friend Lady Rock for lending their support to these. Amendment 237 also has a complementary one for Wales. It makes a straightforward change to require the Government to bring forward necessary regulations to allow an agricultural tenant to refer to arbitration any unreasonable refusal from the landlord following a request by the tenant to join a scheme developed under the financial assistance provisions. Let me say at the outset that there are plenty of examples of good relations between landlords and tenants; the amendment deals only with circumstances where they are perhaps less good. I think it fair to say that tenant farmers are rightly concerned about their ability to access new public payments for public goods in light of their tenancy agreements and some of the restrictive clauses they contain. I hope the Government will give an assurance in that regard.

Amendment 238 closes a potential loophole in the Bill regarding the consent of the landlord, which the tenant is required to obtain before entering a financial assistance scheme. As drafted, the Bill contains a relatively narrow set of criteria which has to be in place, but envisages providing the tenant with the option to object only where the tenancy agreement or legislation governing the tenancy relationship between the landlord and the tenant restricts the tenant’s ability to participate without the landlord’s consent. Currently, the situation would not be covered by the provisions in this part of the Bill. This amendment seeks to address that by ensuring that all refusals by a landlord are referable by the tenant to arbitration on the grounds of reasonableness. I hope my noble friend will see that that is very modest ask.

Amendment 239 again concerns the landlord’s consent. This and Amendment 238 would together address issues around unreasonable restrictions within tenancy agreements that prevent farm tenants investing in their holdings to carry out activities or improvements which assist with the productivity or sustainability of the holding. As the noble Earl, Lord Devon, said, three years being the standard tenancy is simply not conducive to the investment that I personally would like to see. I hope my noble friend will look favourably on this amendment. Again, it is a suggestion put forward by TRIG and I hope my noble friend will make sure that tenancy agreements contain reasonable clauses that would make an appeal against an unreasonable refusal from landlords easier.

Amendment 240 addresses the definition of “diversification activity” and would extend it to activities that, although by nature not deemed to be agricultural, horticultural or arboricultural, enhance and complement the use of the holding for those purposes. Again, the intention is not to create a complete free-for-all but simply to give the tenant certainty of provision. I would hope that it is reasonable to allow farm tenants to have access to the means to carry out reasonable farm diversification activities without the landlord’s unreasonable refusal disallowing them from doing so.

Amendment 244 also has a similar one for Wales and, taken together, they seek to enhance the franchise of individuals who are able to apply for succession of a tenancy for the limited number of tenancies under the Agricultural Holdings Act 1986 that continue to have rights of succession. This is simply looking to extend the current franchise that includes husbands, wives, civil partners, sons, daughters, individuals brought up in farm families and treated as children of the marriage or civil partnership, and brothers and sisters of the deceased or retiring tenant. Crucially, the list of potential successors does not include the grandchild, nephew or niece of the deceased or retiring tenant; nor does it include children from a cohabiting partner of the deceased or retiring tenant. This amendment seeks to plug that gap. Again, this was considered by TRIG, so I hope my noble friend will look favourably upon it.

Amendment 245 looks to ensure that tenant farmers in England are not locked out of new government public payments for public goods schemes, or schemes that provide support for productivity. The Bill already recognises the difficulty tenant farmers occupying under the Agricultural Holdings Act 1986 might have in gaining consent from their landlords, due to the nature of their tenancy agreements, but leaves tenants occupying under farm business tenancies regulated by the Agricultural Tenancies Act 1995 fully exposed to the whims of their landlords, without a legislative backstop. I hope that my noble friend will look favourably on this amendment. Tenant farmers want to play their full part in these schemes, which enhance the environment, landscapes and animal welfare, and I am sure that, through the good offices of my noble friend, that can be achieved. It is important to say that when this was considered in Committee in another place, it was voted down on the basis that farm business tenancies are shorter term; however, this misunderstands the nature of the marketplace for letting land and I am sure my noble friend will take a much more considerate view.

Finally, I come to Amendment 246. As with the amendment to the franchise for tenancy succession, this amendment was also considered by the Defra-sponsored Tenancy Reform Industry Group. It is part of the Government’s policy to encourage longer-term farm business tenancies. It is important to note that the average length of a farm business tenancy in England and Wales is less than four years, and 90% of all agricultural tenancies are let for a period of only five years or less. Such short-term agreements are inadequate to allow farm tenants to invest in and profit from these holdings and to have the freedom to take part in agri-environment schemes. This amendment would make the changes necessary in this regard.

I hope my noble friend will consider these amendments vital, putting all tenants on an equal footing and enabling them to benefit in the same way that landlords would hope to benefit from these schemes.

Photo of Lord Curry of Kirkharle Lord Curry of Kirkharle Crossbench

My Lords, I am very pleased to attach my name to Amendment 158, in the name of the noble Lord, Lord Whitty. The tenant farming sector is hugely important in the United Kingdom. Some 30% of all agricultural land is tenanted. I have long been concerned about the future of the county farms estate. As the noble Lord, Lord Whitty, said, many have been disposed of, including in my own county of Northumberland. Indeed, in conjunction with the Tenant Farmers Association, I wrote a report in, I think, 2007 on this topic.

Many of the farms that remain under the ownership of local authorities are no longer smallholdings. Of course, it is important that farms of different sizes are available to let to tenants. I speak as someone who started farming in 1971 as a tenant on a relatively small mixed farm in Northumberland. We had then what we called a farming ladder: it was possible to start small and, through hard work and sound business skills, gradually move on to larger farms. The model worked really well and provided an entry into farming for those from outside established farming businesses. New blood is crucial for any industry sector, and certainly for farming. Many of today’s successful farming families started small and have built impressive rural businesses as a consequence.

County farms are clearly owned by local authorities, but, as I said in the aforementioned report, they are a national asset and should be retained. Too often, local authorities have taken short-term decisions to dispose of their landholdings to plug an annual funding gap without, in my view, considering seriously the strategic importance of these assets. There are innovative ways in which these estates, in partnership and in conjunction with their tenants, could provide a wide range of key services such as local food markets, educational access and other public services—including, potentially, energy generation—to try to ensure they are financially viable, as indicated in this amendment.

There are many challenges in trying to achieve financially viable businesses on local authority estates, including small farms becoming the equivalent of bed-blockers in hospitals. If tenants granted the tenancy on a starter farm do not move on to a larger unit, the starter farm fails at its purpose. I realise this may be considered too controversial, but I think the starter farm tenancy should be limited to a maximum of 10 years. If the business has not been established and become financially viable to the extent that it can move to a larger holding in 10 years, it is unlikely to succeed.

To move on within a reasonable period requires larger farms to be available to rent. I regard this as a serious concern. Is the farming ladder permanently broken? So many rungs of the ladder have been removed through the merging of farms, particularly by institutional landowners, that opportunities are much more limited than they were when I started my farming business. However, I am unwilling to accept that it is impossible to establish a successful and sustainable long-term farming business on tenanted land. We need new blood today as much as in the past. In fact, one could argue we need an infusion of new blood more than ever in this fast-moving, rapidly changing world.

This amendment may seem like a fringe issue within the Bill, but I regard it as an important opportunity to assist in restructuring the farming sector and ensuring that it is fit for purpose. Retaining the county farm structure is very important in this respect. I also support the other amendments in this grouping that protect the interests of tenants, as recommended by TRIG and as spoken to by the noble Baroness, Lady McIntosh.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Deputy Chairman of Committees, Deputy Speaker (Lords) 6:00 pm, 21st July 2020

I was about to call the noble Lord, Lord Lucas, but do we have the noble Baroness, Lady Young, back with us?

Photo of Baroness Young of Old Scone Baroness Young of Old Scone Labour

We do indeed. I shall speak to Amendment 222 in my name. I feel, at this precise moment, like having a rant about the inadequacies of rural broadband, but I shall restrain myself. I thank the noble Lord, Lord Randall, for supporting Amendment 222.

The community infrastructure levy was introduced in 2010. Some local planning authorities apply it to new agricultural buildings, but some do not. Agricultural buildings are often required for things such as housing livestock or storing grain, and new buildings are often driven by changes in regulations on animal welfare or food safety standards; or, they may enable business growth or productivity. These things will be important in the new agricultural world we are envisaging in the Bill. New agricultural buildings, however, are not like commercial buildings or housing developments, which are built by investors for immediate profit by selling or letting. Farmers have to stump up for the CIL payment, which can be tens of thousands of pounds, for loans they have taken out to construct a building, and they add to the servicing costs of loans—a direct cost on the farm business.

We are, in the Bill, seeing an environment where farming businesses will need to invest in an innovative way to improve their competitiveness and productivity. The CIL charge for new farm buildings risks inhibiting such investment. It is even more complicated in the current position, because some planning authorities, as I said, choose to levy the CIL on new farm buildings, and some do not, so there is an uneven playing field across the country, for a farming industry that supplies national and global firms. I can imagine the conversations with the supermarkets if you tried to tell them about your CIL charge when they are pressing down on costs across industry as a whole.

We need to bear in mind what the CIL was intended to do; it was a charge to fund local facilities, infrastructure and services to meet increased pressures that new developments often cause. Agricultural buildings are often large in size, so they attract a higher CIL, but low in impact on community infrastructure and services. Cows do not really need social services or want enhanced transport routes. Agricultural buildings are clearly defined in planning laws, so there is no danger of this becoming a creeping extension to any exemption, and there is clear evidence that imposing the CIL discourages investment in these farm businesses. So, this amendment would enable the Government to help farm businesses when they are facing what will, by all accounts, be very uncertain times as a result of the major changes in the agricultural support system. I hope the Minister might see his way to supporting this amendment.

Photo of Lord Lucas Lord Lucas Conservative

My Lords, I support what the noble Earl, Lord Devon, said about less than five years being far too short for average farm tenancies if we are to succeed with a comprehensive agri-environment scheme. I also agree with him that accepting half a loaf now may not lead to the other half appearing; I think we all ought to understand, in this House, how that works. I am very grateful for Tony Blair’s willingness to accept half a loaf all those years ago.

My interest in this group is in Amendment 242. I am not an agricultural tenancy specialist; I come at this from an education point of view. Subsection 11(3) is an odd bit of legislation. It abolishes a large chunk of Part 1 of Schedule 6 to the Agricultural Holdings Act, which is full of definitions—I cannot, for the life of me, understand how we can do without them, but presumably it all fits in with the rest of the Bill. The bit that we are left with is a restatement, effectively, of one bit of Part 1 of Schedule 6, which governs the interface between the successor to a tenancy and that successor going off and learning their trade at an agricultural college. But it says that you are allowed only three years, and a lot of modern level 6 courses in agricultural colleges now last four years, because they—quite rightly—incorporate a year’s experience.

Today, I listened to the Universities Minister, Michelle Donelan, urging universities to be much more flexible and offer structures that are part-time, modular and akin to continuous professional development over many years. Looking to the future, therefore, the answer is not my amendment, but to remove the time restriction from this clause entirely. A successor to a tenancy ought to be allowed to have been studying their craft, and it ought not to matter where and in what pattern they have been doing that, particularly when we are currently urging such institutes of education to offer a much wider variety of ways in which agricultural education can be obtained. We ought not to be stuck in the past in this clause.

Photo of Lord Randall of Uxbridge Lord Randall of Uxbridge Conservative

My Lords, I echo the words of the noble Lord, Lord Whitty, and the noble Baroness, Lady Young of Old Scone, about connectivity. The problem is not just in rural areas; it is here too, in suburban Middlesex. However, I am even more relieved that the noble Baroness spoke to Amendment 222 before I did, because she is much more eloquent than I am, and it is something I support.

With regard to the community infrastructure levy, it is of interest that, since 2009, only one local authority has carried out a viability assessment on whether agricultural buildings can afford to pay the CIL. This assessment concluded that the local authority should pay the farmer to build a new farm building.

At a time when the Government are looking at all sorts of innovative ways to cut out red tape and so forth in the planning area—I may have concerns about them if they impinge on environmental interests—we should make sure that we give those in the agricultural industry a fair deal on these properties. After all, they will not be used for profit in the same way that an extension would be, or in any other ways. I support what the noble Baroness said, and I hope the Minister will take note.

Photo of Lord Judd Lord Judd Labour

My Lords, I have great joy in very warmly supporting this amendment moved by my noble friend Lord Whitty. The future economic prospects for Britain and the great changes to our way of living and our society that may become necessary only emphasise the urgency of what he is talking about.

I live in rural Cumberland, right up in a valley, where an unwelcome social development is becoming very obvious. Farming, and hill farming in this instance, is increasingly done by elderly people who find it more and more difficult to cope. Consequently, the land gets bought up and concentrated in the ownership of a few people, very often living far away.

Therefore, my noble friend’s amendment has wider implications and challenges beyond what he is specifically talking about. I think it would be nothing but good for British society if more young people who wanted to become involved in farming had that opportunity. Too often, you hear of people who would like to be in farming but cannot afford to get into the system as it has emerged, and who are looking for small, manageable farms.

It is also true that, as we are taking a balanced diet and all the rest so seriously, we may need to concentrate far more on a variety of farming which lends itself to producing varied diets and to the self-sustaining approach to agriculture. For these reasons, I am very glad to support my noble friend.

Photo of Baroness Jones of Moulsecoomb Baroness Jones of Moulsecoomb Green

My Lords, this is a near-perfect group of amendments, and the Government would do well to pick all of them up. It is certainly good luck that your Lordships’ House has so many very talented people who can help the Government to improve the Bill.

Reforming agricultural tenancies and giving greater protection for tenants and their families would help give the security needed to take a long-term view as a guardian of the land, make beneficial investments and work the land to its fullest potential. The county farm amendments are also brilliant and should be encouraged in order to bring more enthusiastic entrants into the agricultural sector. I echo the dismay of the noble Lord, Lord Whitty, that county farms are being sold off; I am sure he knows that his adopted county of Dorset has recently sold six county farms.

Alongside smallholdings, I ask the Minister how he sees the provision of allotments in improving our food security, resilience and health. There is a huge underprovision of allotments in this country, with multi-year waiting lists. I confess that I am a very keen allotment holder—I do not think my nails will ever be the same again after this lockdown—so I know how wonderful they are and encourage the Minister to include allotments in Government plans for our food systems. A housing estate should not be built these days without some sort of allotment close by so that people can get out, grow food and get their hands dirty.

Photo of The Earl of Caithness The Earl of Caithness Conservative 6:15 pm, 21st July 2020

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.

Photo of Baroness Rock Baroness Rock Conservative

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.

Photo of Baroness Bennett of Manor Castle Baroness Bennett of Manor Castle Green

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.

Photo of Lord Marlesford Lord Marlesford Conservative

My Lords, I draw the attention of the Committee to my farming interests in Suffolk, as in the register. I will speak to Amendment 222 in the name of the noble Baroness, Lady Young of Old Scone. I support what she has said, but will take it wider. The community infrastructure levy was originally introduced in around 2010, when, as she explained, it was intended to be a reasonably small contribution towards any infrastructure implications, primarily of developing housing.

Unfortunately, the levy has recently been seen—inevitably perhaps—as a means for strapped local authorities to raise funds directly. There seems to be little control or constraint on what local authorities can do with CILs. I think the Government should look at this closely, because recently, and certainly in the part of Suffolk I am from, they have increased them as much as 10 times. At the same time, the big housing developers often bargain their way out of making any contribution at all.

What I really want to suggest is that our thinking should move on and be not just about the construction of new agricultural buildings. More relevantly from the point of view of diversification of farming, which is what this Bill is very much about, it should also be about the conversion of redundant farm buildings into dwellings, for example. This is thoroughly desirable. Buildings can be converted economically and attractively, adding to the landscape and providing additional housing at a time when we should want to encourage this very much.

One of the anomalies is that new houses are not subject to VAT whereas the conversion of a redundant farm building to a dwelling is subject to 5% VAT. We should consider exempting the conversion of a redundant farm building for whatever purpose, provided that it remains part of the farming enterprise—even, for example, conversion to a house, regardless of whether it is for someone who is going to work on the land. It is part of diversification. Provided that the building is part of the holding, it should be seen in the context of the raw business unit, a point I made at an earlier stage of this Bill. We should think wider and recognise that anything we can do to encourage farmers to diversify and use their assets for other purposes should be encouraged.

Photo of Lord Taylor of Holbeach Lord Taylor of Holbeach Conservative 6:30 pm, 21st July 2020

My Lords, as I have not spoken since a week last Thursday, perhaps I should my declare interest as a member of a family farming business in which I worked for over 45 years before coming to the House. The business celebrated its centenary last year but perhaps noble Lords do not know that my interest in this group of amendments stems from the fact that the business was founded by my grandfather, a Londoner returning from World War I, on a Crown colony—a 10-acre smallholding in Holbeach Marsh. We now own and farm 200 times this acreage and, I hope, provide evidence of the important steps on the ladder and the key provision of smallholdings.

This Bill does not pretend to be a wholesale review of the law relating to land ownership and tenancy but, as my noble friend the Minister has said, it makes some pragmatic and uncontroversial changes with which I believe the House will agree. In the meantime, the principle purpose of the Bill and the reason why we need it in good time, is the payment of financial assistance following Brexit through the environmental land management scheme. The thrust of the Bill is the building of a progressive and productive agriculture and horticulture system fit for the post-Covid 19 age. It also seeks to provide the nation with a countryside that is naturally and environmentally sensitive—objectives that are not incompatible or contradictory.

However, there will be changes, and we need to encourage the occupation of land by farmers and growers who can implement them. Making a success of ELM depends very much on the details of the scheme and the uptake by the industry—making sure that the scheme’s incentives work is wrapped up in the ownership and occupation of the land. Can my noble friend say what discussions there have been with interested parties on this matter and what the timetable is for any conclusion?

Perhaps I can be forgiven for also asking about cropping licences, which are very important in areas such as mine. Crop specialisation is part of a local scene and provides much of the impulse of industry locally. Not only do the licences make sense, they provide steps on the ladder for the farmers of tomorrow and enable established companies to work with neighbours for effective rotation. It is not a tenancy but a short-term licence. At the moment, by agreement, the financial assistance is paid to the long-term occupier of the land. This is as it should be. Can my noble friend assure me that the intention under the Bill is that this will continue?

Photo of Lord Cameron of Dillington Lord Cameron of Dillington Crossbench

My Lords, when I first saw the amendment from the noble Lord, Lord Whitty, I was very supportive of the concept of providing a bottom rung for aspiring farmers. After all, who would not want to help young men and women into one of the most noble of professions? Then, I started thinking about it and gradually became more sceptical about its premise and, worried about my scepticism—which is not a normal frame of mind for me—I spoke to various members of the farming community from around the country, including the noble Lord, Lord Curry. I am afraid to say that even after these conversations—or mostly because of them—and in spite of the enthusiasm of the noble Lord, Lord Curry, my scepticism was not entirely removed.

In my experience, and that of others, the smallholder estates have lost their way from their original successful purposes. Their heyday, as the noble Lord, Lord Taylor, just mentioned, was after the First World War when they grew enormously and provided rural sanctuary and livelihoods for soldiers returning from the front. In Somerset, where I used to live, a whole estate near us was given to the nation for this purpose. Since then the farms have continued to provide sanctuary and livelihoods for many aspiring farmers.

More recently, over the past 30 years or so, I have been conscious that the occupants of these farms have been getting older and older. They can almost be described as being trapped on their smallholdings. The old form of tenancy that lasts for ever has resulted in these once-young families turning into grandparents on holdings that are now too small to provide a decent living. Some have survived because the children have been enterprising and converted buildings into workshops, farm shops and even playschools; but most survive by family members going out and getting wages in the wider rural economy, so that the family and the old man who is the tenant can survive on the land. Rarely these days is the tenant a young, aspiring farmer on the first rung of the farming ladder. One of the problems, as other noble Lords have mentioned, is that the next rung on the ladder is almost impossible to find or afford, so the old tenants have simply remained on that bottom rung.

You have to ask yourself, if you were a county council with farming assets of some £40 million, £50 million or more, would you use them just to keep 20 or 30 farmers on the land, often for the rest of their lives, or would you sell that land and invest the money to help a far greater number of your wider constituents? That would be a very unimaginative approach.

I turn to Amendment 159, from the noble Earl, Lord Dundee. Why not use these estates as a model example of what can be done with land and landed assets to make them really work for the people of your county? As his amendment hints, why not create small businesses on them? Create affordable housing or sheltered accommodation. Create allotments. Create environmental havens and biodiversity in a way that the locals can see and appreciate. Create innovative products using food, timber or textiles. Hold competitions for suggestions for new ways to use the land. Yes, also have some farm tenancies—strictly time-limited to, say, 10 to 12 years—that provide that essential bottom rung of the farming ladder for young families.

Having, as noble Lords will see, overcome my scepticism—thank goodness—I am now certain that these county council estates should be kept and survive, but they need a new purpose in life, new blood and new ideas, with more imagination as to how they can truly serve their electorate. I am very supportive of Amendment 159 in the name of the noble Earl.

Photo of Baroness Neville-Rolfe Baroness Neville-Rolfe Conservative

My Lords, I take great pleasure in following the noble Lord, Lord Cameron, and his words of wisdom. I apologise for the discourtesy of pulling out of the last group because of a meeting of the EU Committee, but I agree with my noble friend the Minister about the invaluable contribution of rural communities and the vital importance of the various strands of work to accelerate digital connectivity on farms and in rural areas.

I wish briefly to express my concern with Amendments 223 and 237 to 246 on landlord-tenant issues. Some are more worrying than others. We need to be clear about how the landlords’ and tenants’ interests will be handled under ELMS and other schemes, but we need to be very careful. Those of us old enough to remember the introduction of hereditary tenancies by the Labour Government in the 1970s—without consultation, I may add—remember the devastating effect on the supply of tenanted land. The apparent attempt in Amendments 243 and 244 to widen this principle to less-close relatives is misguided. It is like trying to keep rents low by fixing them, then being surprised when the supply of housing dries up. I find it amazing that these amendments try to extend the hereditary principle in new areas. I thought the trend was to reduce it in modern Britain. In any case, the associated interference in the laws of property would be unjustified.

Moreover, I am highly dubious about trying to cover the detail in this already gargantuan Bill. Tenancy reform beyond the proposals already in the Bill should be the subject of separate legislation and preferably of parliamentary scrutiny in draft.

Photo of Lord Mann Lord Mann Non-affiliated

My Lords, I am listening in to a fascinating discussion and points in relation to tenant farms and smallholdings. I certainly found the arguments and proposals by the noble Lord, Lord Whitty, very convincing.

Amendment 222 tabled by the noble Baroness, Lady Young of Old Scone, and supported by the noble Lord, Lord Randall of Uxbridge, falls exactly within the scope of the intent and purpose of this legislation. It fits in with government changes in relation to the planning regime that attempt to kick-start building and the economy across the country.

Ever since the unwise proposals and legislation of the community infrastructure levy pushed through by George Osborne, it has been bedevilled conceptually by being flawed in its very attempts to put money into local authority infrastructure and has repeatedly led to people withdrawing from potential small-scale developments. In essence, the CIL has shifted the market even more towards the large housebuilder and the large developer. It has had a particularly devastating effect on small businesses and the householder who wishes to do something with either a small business or a small piece of land.

When it comes to agriculture, I echo concerns previously raised that conversion of farm buildings is absurdly hit by CIL money-raking by local authorities. When I first exposed it, in challenging George Osborne in the House of Commons—I got some changes over a period of two years—we had local authorities seeking extraordinary amounts from single properties. The maximum I could evidence was £178,000 in taxation to be paid in advance for a single property development. Even with that lowered to more manageable amounts and a requirement for an affordability test, the CIL prevents the microentrepreneur—the person who wishes to move with small amounts of finance—progressing. The demands by local authorities for the CIL to be paid up front is particularly pernicious. The level of the CIL is particularly anti-entrepreneurial.

When it comes to farmland and farm buildings—both with new agricultural buildings, as in this amendment, and with change of use required for the conversion of derelict former agricultural buildings into more effective use—the CIL is a blight on the rural community. I strongly recommend to the Government that they should grab the detail of this amendment and perhaps even extend it further. That will have a bigger impact on kick-starting building and entrepreneurship in the rural economy than all these changes of simplifying the planning system. Money is what counts when it comes to development, and the CIL takes money away at the beginning of the development. Cash flow-wise, that therefore makes many developments impossible for people. This is an excellent amendment; I hope the Government adopt it.

Photo of Baroness Garden of Frognal Baroness Garden of Frognal Deputy Chairman of Committees, Deputy Speaker (Lords) 6:45 pm, 21st July 2020

The noble Lord, Lord Inglewood, has withdrawn, so I call the noble Lord, Lord Carrington.

Photo of Lord Carrington Lord Carrington Crossbench

My Lords, I declare my interests as a farmer and landowner as set out in the register. I support the proposal in the name of the noble Earl, Lord Devon, to remove Clause 34 and Schedule 3 covering agricultural tenancy provisions. I agree wholeheartedly with everything said by the noble Baroness, Lady Neville-Rolfe.

As drafted, the clause is neither fish nor fowl nor good red herring, in that—despite the important work of the Tenancy Reform Industry Group—the prospective legislative reform is not balanced and reflective of both parties’ interests, and runs the risk of damaging relationships and increasing anxiety and uncertainty. Although I welcome some of the proposals of Schedule 3—such as the removal of the minimum retirement age of 65 from AHA tenants, the widening of the pool of arbitrators and the paragraph to protect both tenant and landlord in new investment—others are more contentious.

In particular, I welcome the introduction of a strengthened condition of suitability for those succeeding to a tenancy, but the detail has not been agreed by the industry and should not be left unclear. Until the regulations are drafted, landowners cannot be certain whether the “improvement” suggested will diminish the effect of the loss of the commercial unit test. Neither is it clear how landowners’ interests are protected in the assessment of reasonableness.

The NFU has welcomed the reforms but also urges that other reforms under discussion at TRIG, such as landlords’ consent on variation of terms under the tenancy Act, are taken forward. Please could the Minister consider separate legislation on tenancy reform, rather than rushing it through as part of the Agriculture Bill? The issues are different, and it is clear from this Bill that what is proposed is only a first step and lacks detail. TRIG has been united on supporting landlord-tenant relationships, and this should be built on.

Photo of Baroness Bakewell of Hardington Mandeville Baroness Bakewell of Hardington Mandeville Liberal Democrat Lords Spokesperson (Environment, Food and Rural Affairs)

My Lords, this large group of amendments—and, indeed, large group of speakers—concentrates on new entrants into farming. I have added my name to Amendments 237 and 245. My noble friend Lady Northover has added her name to Amendments 241 and 244 but, due to unforeseen circumstances, is not able to be present this evening.

At Second Reading, many of your Lordships spoke in favour of ensuring that the passage of new entrants is facilitated. The move from direct payments under the CAP to ELMS is likely to see some of our more seasoned farmers deciding to leave the land to retire or to move on to other, less strenuous occupations. The noble Baroness, Lady Young of Old Scone, and others have spoken against the community infrastructure levy being applied to new farm buildings, and I support her amendment.

It will be vital to encourage younger, more energetic men and women to enter the profession. Some will be the sons and daughters of existing farmers and able to take on the family farms. Others will be graduates from agricultural colleges who have always had an interest in the land and farming. All will need help, support and encouragement. The supply of those not inheriting farms will be an essential element of success. Without land, you cannot farm.

Given the very short timeframes of the average farm tenancy, as relayed to us by the noble Earl, Lord Devon, do the Government see larger landowners making some of their land available for new entrants?

Many county councils have been forced to sell some of their farms to raise money for other capital projects, and local authority funding is, as ever, problematic. I know from my own county experience that these farms come in a variety of sizes, from very small starter farms to large move-on holdings, but they are rarely very large holdings. For some, the starter units give a flavour of what is involved, but they are not always large enough for them to make a living. The role of the county farm estate is to give a helping hand to those starting out. Some tenants will stay until they need to retire; others will wish to move on to larger farms in other areas. Whatever their wish, the Bill needs to facilitate this.

On Thursday, we heard of the valuable contribution that prosperous landowners with huge holdings are making to the debates in this House. However, I believe that it is the smaller farmers—especially those on the edge, such as hill farmers and those on less productive soil—who need our special consideration. I agree with the noble Earl, Lord Devon, that a three-year tenancy is completely inadequate. Farming is a long-term business, and the noble Lord, Lord Curry of Kirkharle, made a powerful case for tenancies to be set at 10 years to allow a continuity of supply of starter farms.

Tenant farmers are potentially at the mercy of landlords. It is therefore important for them to be able to access funds and not to be dependent on what the landlord says. For example, there are cases where a landlord hopes to get planning permission and does not want the commitment of a grant attached to the land, especially if it lasts for a particular length of time. Sadly, on some occasions, although not all, they would rather their tenant went under than have a constraint preventing them obtaining planning permission. I support the comments of the noble Baroness, Lady McIntosh, on this amendment. I note that the noble Lord, Lord Marlesford, believes that the conversion of redundant farm buildings to homes is good, but we must be sure that the buildings are indeed redundant and that the farmer is not looking to make more money by converting them into dwellings.

It is important that tenants are protected from a landlord’s refusal to consent to enter into financial assistance schemes. It is for the tenant farmer to decide what he or she wishes for their farm. Can the Minister confirm that landlords will be prevented from blocking their tenants’ aspirations? The noble Lord, Lord Taylor of Holbeach, gave an example of the farming ladder. The ELM schemes need to work. Cropping licences are an important part of the local economy. This is a short-term licence, and I look forward to the Minister’s response.

The terms of inheriting farms are very different from those of other enterprises. Children grow up on farms and it is in their blood. They have developed skills throughout the years. They might not be the sons or daughters of the farmer; they might be the nephews, nieces or grandchildren. Should the farmer die suddenly, as has been the case with three of the farms in the village where I live, members will want to take over the farmer’s tenancy. I note the opposition of the noble Baroness, Lady Neville-Rolfe, to this amendment. Often landlords will be keen for this to happen, with continuity being provided. Immediate family might not be in a position to take on the tenancy, and nor might they wish to do so, but other family members of tenant farmers might absolutely want to carry on the farming tradition, having already invested a large part of their lives in the tenant farm. The noble Lord, Lord Judd, and the noble Earl, Lord Caithness, spoke of the selling off of hill farms to those living away from the land, with it not being farmed in the way intended but often being used as pony paddocks.

As has been said, the average age of a farmer is now over 60, and this is very concerning. We have to make sure that young farmers are able to get started. Given that it is almost impossible for someone without independent means to buy land or to borrow enough from a bank, as predicted profits are so limited, unpredictable and long-term, a tenancy is the only way to provide for young farmers. The noble Lord, Lord Cameron, gave a very powerful example of how elderly farmers are trapped on county farms that are no longer capable of providing a living. Diversification and new ideas are important so that these farms can be taken forward. Therefore, the amendment on widening the inheritance of tenancies seems very important. Can the Minister give an assurance that members of a farmer’s extended family will be able to inherit the farm? This is an important aspect of the Bill and I look forward to the Minister’s reassurance on these issues.

Photo of Baroness Jones of Whitchurch Baroness Jones of Whitchurch Shadow Spokesperson (Environment, Food and Rural Affairs)

My Lords, I have added my name to Amendment 158 and am very pleased to support it. My noble friend Lord Whitty and others have made an important case for restricting the disposal of county farms and, instead, for making good use of the smallholdings to bring new entrants into the sector, using the assets as exemplars of good environmental practice and providing greater public access. I agree with the noble Lord, Lord Cameron, that this is not about preserving the status quo; it is about providing a renaissance for the sector and the land that it covers. We would like to see these smaller farms have a direct link with their local communities, providing local fresh fruit and vegetables, as well as meat and dairy produce. This should be what “public money for public goods” is all about.

In the past, smaller farms of less than five hectares have been excluded from receiving direct payments, but I hope that the Minister will confirm that these thresholds will now be scrapped and that what will matter is what the farmer does with the land, rather than the size of it. We also hope that local authorities will be persuaded, through the process of a review, to see the potential of their county farms in the longer term and the potential that they can bring to their communities, rather than being a source of short-term cash on disposal.

I also have a great deal of sympathy with the concerns expressed by my noble friend Lady Young of Old Scone about the applications of the community infrastructure levy. I agree that it is in danger of inhibiting innovation and the encouragement of a range of activities in the sector.

I listened to the noble Earl, Lord Dundee, talk about creating smallholdings and work spaces. I agree with a number of noble Lords who have been excited about that prospect. I can see the potential, but I also think that it would depend very much on where the land and activities were sited. I have a feeling that the noble Earl mentioned that it might happen on the green belt, and I would certainly have concerns if he did say that. However, with good planning and good organisation, I can see that that could be a real asset among the range of options in the farming community.

The noble Baroness, Lady McIntosh, has a series of amendments about tenancy reform. We agree that such reform is long overdue. A number of noble Lords have, rightly, made the point that short-term tenancies inhibit long-term investment in farm quality and development, and this is one of the many reforms that needs to be addressed.

We welcome the first steps made in Schedule 3, but clearly they do not go far enough. Having listened to the noble Earl, Lord Devon, it may well be that the scale of the reform that is needed is not well served by being set out in a schedule to the Bill. This is a matter to which we need to pay full attention. For example, we believe that there needs to be a greater rebalancing of the power between the landlord and the tenant.

As the noble Baroness, Lady McIntosh, rightly says, it is not right that the tenant should require the landlord’s consent when accessing public money for public goods, and that the dispute mechanisms in the Bill do not seem to apply appropriately as they are written. She also seeks to broaden the criteria for close relatives of a deceased tenant, which much better describes modern family arrangements, which are not based simply on the nuclear family, with tenancies passed down as they traditionally have been from father to son, but which should be available to a much wider range of family members.

The noble Earl, Lord Devon, the noble Baroness, Lady McIntosh, and other noble Lords are right to push for further reforms way beyond those covered in Schedule 3. I hope that the Minister takes this away and returns with proposals for a more radical set of reforms which take on board the TRIG proposals and can be scheduled at an appropriate point.

Finally, we also agree with the amendment in the name of the noble Lord, Lord Lucas, which picks up the issue of many training courses, particularly those relating to agriculture and horticulture, being sandwich courses or part-time courses, and therefore a longer period of time needs to be allowed when assessing the right to tenancy. It is a small but important point, which I hope that the Minister takes on board.

We welcome the initial steps being taken in this Bill but would like to see a much more central role for reform of smallholding and tenant farmers in the future of UK farming. I hope that in his response, the Minister can persuade us that he has heard this message and that the Government have a much broader reform agenda in mind, and I hope that he can bring back those proposals in the near future. I look forward to his response.

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs 7:00 pm, 21st July 2020

My Lords, I thank all noble Lords who have participated in this debate. At its heart is our consideration about how we ensure that there is a vibrant farming sector in the future, with young people coming into a very important industry and way of life. I agree with what was said by the noble Lord, Lord Curry, about new skills.

I thank the noble Lord, Lord Whitty, for Amendment 158, which I will address alongside Amendment 159. For a successful long-term future, agriculture relies on attracting new talent and bringing new skills and innovation into the sector. For many years, local authority smallholding estates and council farms have provided opportunities for entrant farmers. While Amendment 158 is aimed at preventing further disposal of smallholdings and council farms by local authorities, such intervention may conflict with the Local Government Act, which gives local authorities the power to manage and dispose of their land according to local priorities and the principle of delivering best value.

Rather than adding regulatory burdens, the Government want to work collaboratively with local authorities, supporting them to retain and invest in the rejuvenation—the noble Baroness, Lady Jones, may have used the word regeneration—and development of their smallholdings and council farms. As stated in Defra’s Farming for the Future: Policy and Progress Update, published in February, this Government intend to use the powers under Clause 1 to offer funding to councils, landowners and other organisations to invest in creating more opportunities for new entrants to access land, delivering the kinds of outcomes that my noble friend is seeking through Amendment 159.

Local authorities can take advantage of rural exception sites to help the delivery of affordable housing, and the revised National Planning Policy Framework includes new policies to support the building of homes in isolated locations where this supports farm businesses with succession. We will work with local authorities, community land organisations and other landowners as we develop this funding scheme, and further details will be set out in the Government’s multiannual financial assistance plan. Working collaboratively with local authorities in this way and supporting them to manage their estates to provide important fresh opportunities for new farmers will be more effective than adding regulatory burdens.

My noble friend Lord Marlesford may know—I am sure he does—that in April 2018 the Government amended a national permitted development right to support rural housing and agricultural productivity, meaning that up to five new homes can be created from existing agricultural buildings on a farm, rather than the previous maximum of three. I say to the noble Baroness, Lady Jones of Moulsecoomb, regarding allotments, that these are matters for local authorities. The decision to increase local provision is taken at a local level.

On Amendment 222, the community infrastructure levy is a matter for local authorities and the MHCLG. It is an important tool to help them deliver the infrastructure needed to support development in their areas. In setting rates, local authorities must strike an appropriate balance between using CIL to fund the infrastructure required to support the development and the potential effects of imposing CIL on the economic viability of development across the area, including agricultural developments. Although it is a matter of education and therefore within another department’s remit, out of considerable interest I will take what was said by the noble Baroness, Lady Young, and see what further I can make of it.

On tenancies, in relation to the stand part debate and Amendment 223, measures in Clause 34 and Schedule 3 are designed to make pragmatic modifications to tenancy legislation. This package of reforms received broad support from respondents to our public consultations in England and Wales last year, and they deliver on many of the recommendations from the Tenancy Reform Industry Group. The provisions have been carefully drafted to balance the interests of tenants and owners. I agree that agricultural tenancy legislation is complex. Any further changes impacting on landlord and tenant property rights must be very carefully considered in a timely way and not rushed.

Some of the proposals that we consulted on last year are not included in Schedule 3 because they did not have broad support, or because responses showed that they needed more detailed development work before the proposed changes could work effectively, and alternative ways of achieving the policy aim should be explored. The UK and Welsh Governments are very willing to engage in further discussions about those proposals and to review the need for further tenancy reform with members of the Tenancy Reform Industry Group, which includes representative of owners and tenants.

In Amendment 237 my noble friend Lady McIntosh is seeking assurance that the Government will make these regulations; I can give that assurance. The Government intend to start discussions with members of the Tenancy Reform Industry Group to develop the details of these regulations over the next few months, to ensure that the interests of tenants and owners are taken into account.

On Amendments 238 to 240, 245 and 246, many owners and tenants come to practical agreements on such issues without the need for dispute resolution. To encourage this approach further, the Tenancy Reform Industry Group is working on updated guidance to support tenants and owners in discussions about diversification and environmental schemes highlighting the benefits for both parties. This dispute provision has been carefully constructed, after consultation, to be used in limited circumstances, balancing the interests of both tenants and owners, so that market confidence in the benefits of agricultural tenancy agreements is not undermined. Broadening the provision to cover a much wider range of circumstances, such as for diversified activities, may result in lasting changes to land use and the value of the owner’s assets. As such, it is more appropriate that such requests are negotiated between the parties.

Regarding tiers 2 and 3, and landlord issues relating to public access, I say to my noble friend Lord Caithness that we are currently finalising eligibility requirements for ELMS, including whether landlord consent or consultation would be required for tenants to join ELMS, including for tier 2 and tier 3 projects. As I said, our tests and trials are designed to include tenant farmers in the schemes. We are actively considering this as part of the codesign with all stakeholders, and I do not want to pre-empt the process but, as I have said, we are very clear that the tests and trials will include tenant farmers.

Responses to our public consultation show that there is not the same need for dispute provisions for farm business tenancies as there is for Agricultural Holdings Act tenancies. Agricultural Holdings Act agreements were negotiated sometimes 30 or 40 years ago in a very different policy and commercial environment, and often contain outdated restrictions that have not been reviewed for many years. Farm business tenancies are more modern commercial agreements negotiated more recently in the context of environmental schemes being available. They are reviewed more regularly, giving tenants the opportunity to renegotiate the contract’s terms if they deem it necessary, for example, to enable diversifications or to enter future financial assistance schemes.

Respondents to the consultation also noted that there is a risk that providing tenants with opportunities to challenge the terms of recently negotiated agreements could undermine owner confidence in letting land through farm business tenancies, reducing opportunities for tenants in future. Because I have no interest to declare in this matter, I will respond to the point that my noble friend Lady Neville-Rolfe made. In all our desire to ensure that there is a vibrant farming sector with both owners and tenants—as well as other sectors—all of which make a great contribution, we need to be mindful of getting the right system in place, one that does not have the consequences of many owners of properties with a small amount of land deciding that this tenancy route may not be for them.

We have sometimes conceptualised this discussion as being about large landowners and small tenants. Very often, the modern arrangements are for owners with a small acreage deciding they might have a farm business tenancy. It is unfortunate that we sometimes characterise these matters in this way. It is often about someone with a smallish acreage wanting a farm business tenancy with an incoming tenant.

I agree that there can be benefits from tenants and owners entering into longer-term tenancy agreements. The Government consulted widely on this last year. The feedback gathered indicates that introducing shorter notices to quit in certain circumstances is unlikely significantly to affect owners’ 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 to offer.

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 can be more appropriate for new entrants looking to rent land on a flexible basis to gain experience. Short-term lets can also be more suitable for some seasonal horticulture businesses.

I turn to Amendments 243 and 244. The Government consulted on proposals to expand the list of relatives eligible to succeed a tenancy agreement. Concerns were raised that doing so could disproportionately affect owners’ rights to their property because the changes could extend a tenant’s occupation of the holding for many years beyond the timescale an owner has been expecting, particularly in the case of succession by the grandchildren of current tenants.

There are examples of owners being willing to negotiate solutions to family succession, such as offering long-term tenancy agreements to grandchildren of the tenant where they are the most suitable future tenant with the best knowledge and skills to continue the farm successfully. We believe that this is the sensible way forward. The Government will continue to engage in discussions with the Tenancy Reform Industry Group —which represents both tenants and owners—to encourage this process.

My noble friend Lord Taylor of Holbeach referred to cropping licences—they are not tenancies and they are part of the farming scene now. ELMS will provide funding to those who are carrying out the management of the land or water to deliver the environmental public goods being funded.

On Amendment 241, the Welsh Government acknowledge the importance of ensuring that tenant farmers are able to access any new scheme. Their view is that a Senedd Bill would provide a more appropriate legislative vehicle for this purpose. Further consideration will be given to what provision is needed in due course.

On Amendment 242, I reassure my noble friend Lord Lucas that where the practical year of a sandwich course is spent working on the family holding—which is often the case—that year will already count under the current livelihood test provisions.

The Government will continue to work with industry on these important issues. This includes ongoing engagement with the Tenancy Reform Industry Group, which we think is the right way forward. We have brought this schedule and the clause forward because these were parts of the consideration that came from the Tenancy Reform Industry Group that we thought were pragmatic and widely accepted. Of course, it would have been possible not to have had them at all, but they address some important elements of modernising a very important feature of the agricultural landscape: a vibrant and successful tenant farming sector, operating alongside an owner sector. Both have important roles to fulfil and will be an enormously important part of the agricultural food production of this country as well as environmental enhancement.

Going back to the amendment of the noble Lord, Lord Whitty, we believe that there is an important future, particularly for new entrants, and we must consider how to ensure that new entrants come along. I am mindful of what the noble Lord, Lord Cameron of Dillington, said, but that new entry route is very important and is continuing work. On that basis, I hope the noble Lord, Lord Whitty, will feel able to withdraw his amendment.

Photo of Baroness Boycott Baroness Boycott Crossbench 7:15 pm, 21st July 2020

My Lords, this has been a fantastically interesting debate and I very much support the amendments of the noble Lord, Lord Whitty, and many others to do with county farms and the length of tenancies, especially what the Minister was just saying about the variety of agriculture.

However, there is a gap here: urban agriculture. When I ran the London Food Board, which I began in 2008, we started a scheme called Capital Growth to create community gardens in London. The plan was to create 2,012 by 2012, which we did and, in fact, today —I have just checked on the website, where you can type in your postcode to find your nearest garden—we have 2,553 community gardens covering about 250 acres of London and producing £288,000 worth of produce every year.

The thing about urban agriculture is that, for a kid growing up in an urban school on an estate in a poor area, the idea of ever being a farmer is as remote as me thinking I could go to the moon. It is not just that they would not be a farmer; there would be nobody who had a father who was a farmer. Therefore, the introduction of community gardening is vital, not only in educating people but in helping them take the first step on the way to becoming growers and custodians of the land and setting up small businesses. Because I visited so many, I know that many supply restaurants and supermarkets. There are wonderful places where they grow hops and make their own beer, which becomes an industry. Even in these tiny spaces, you can do this.

The social benefits are dramatic—the police, doctors and community leaders all favour this—but it is also extremely cheap, and it means that people get an education about growing. I have listened to almost all of this debate and, all the way through, we have talked about agriculture as though it can happen only in the country. That is not so; it is a fact that it can happen in cities. You see it towns such as Incredible Edible Todmorden, and in schools. I have a proposal in with the noble Lord, Lord Goldsmith, who is very enthusiastic. I would very much like the Minister’s support for us to take this project countrywide. It is good for your health, it teaches you to grow food and it is fantastic for the environment.

I will share one small detail. There are hives all over London. At one point, we had more hives than we could supply with flowers, but then we balanced that up. A study was done in Paris about the honey that is produced there—96 different flowers went into the taste of that honey. We held annual honey competitions, and we had honey that went from almost clear, or almost white, through to something that looked like treacle. You could tell the honey that had come from the lime trees in particular parks. It gave people an enormous sense of belonging, and put people on the first step to agriculture. My noble friend Lady Jones of Moulsecoomb said that councils should have allotments. We realised a year and a half in that an allotment was an impossibility because, when you get an allotment, you are saying that the land must be there in perpetuity. We had “meanwhile leases”, which means they can be taken back; that would be a great way forward.

Photo of Lord Gardiner of Kimble Lord Gardiner of Kimble The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I believe that the noble Baroness made a speech rather than asking a question but I have noted it all. I approve of gardening, community gardening and the production of food.

Photo of Lord Whitty Lord Whitty Labour

My Lords, I thank the noble Lords, Lord Curry and Lord Judd, and my noble friend Lady Jones, and others, who supported the general approach of Amendment 158. I thought that I would fall out with the noble Lord, Lord Cameron, but I essentially agree with him that, if we are to have a revival of county farms, we will have to redefine the mission. What is clear from all speakers is that, in this brave new world of post-CAP agricultural policy, we will need people to come into farming who have not traditionally been there and who are unlikely to be able to buy their way into it. We need their talents, their skills, their entrepreneurship, their enthusiasm and their recognition that the provision of public goods, which this Bill is all about, is an important part of farming. Regrettably, when it comes to county farms, neither the structure of ownership of agricultural land in this country, nor, in some respects, the provisions of tenancy law, nor the withdrawal of the local state from this area—none of these things—are particularly conducive to bringing new talent, new blood and new ideas into farming; we need to make a new start.

My amendment is quite limited. It asks the counties involved to review their estates, not to sell any for the moment, and then to define a new strategy along with Defra and the farming organisations. That is an important part of the rejuvenation of agriculture. It must be recognised that this Bill should be paralleled with a means of more people coming in with new skills and new backgrounds. I understand the issue of urban agriculture and community gardens and so on as one potential way in, but the traditional way in through county farms is rapidly disappearing. We need to continue to make positive use of what is there, and to ask the counties, effectively, to look at the situation again and do so in this new strategic sense.

The schemes coming through ELMs and through the other provisions of this Bill will need the next generation to seize the opportunities that they present. That means that we need new ways in. I hope that county farms will be a significant provider of those ways in. I will not press my amendment for the moment, but I hope that the Minister will recognise that even the present level of county farms may well deserve some special recognition within this Bill in respect of government support for the public good. Meanwhile, I beg leave to withdraw the amendment.

Amendment 158 withdrawn.

Amendment 159 not moved.

Sitting suspended.

Photo of Baroness Henig Baroness Henig Deputy Chairman of Committees, Deputy Speaker (Lords) 7:56 pm, 21st July 2020

We now come to the group consisting of Amendment 159A. I remind noble Lords that anyone wishing to speak after the Minister should email the clerk during the debate. Anyone wishing to press this amendment to a Division should make that clear in debate.