Agricultural tenancies

Agriculture Bill – in a Public Bill Committee at 2:45 pm on 3 March 2020.

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Photo of Ruth Jones Ruth Jones Labour, Newport West 2:45, 3 March 2020

I beg to move amendment 87, in schedule 3, page 50, line 15, leave out “may” and insert “must”.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

With this it will be convenient to discuss amendment 88, in schedule 3, page 50, leave out lines 27 to 29 and insert—

“the landlord’s consent to a matter on which the landlord’s consent is required,”.

Photo of Ruth Jones Ruth Jones Labour, Newport West

Amendment 87 is designed to make it a requirement for the Government to bring forward regulations to provide a framework for tenants to object to their landlord’s refusal to allow them to enter a relevant financial assistance scheme. As drafted, the Bill provides the power for the Government to introduce regulations, but it is not a requirement. There is a trend in the Bill for the Government to use the weakest language possible or to take the most timid of approaches. In our view, it is essential that tenant farmers are given full certainty in this situation.

Tenant farmers have welcomed the recognition that they require and deserve additional measures to protect them, and this is one of the areas that we highlighted during discussions on a previous version of the Agriculture Bill. We are pleased that our probing has produced a framework of protection for tenants, but it is essential that the provisions are used. If they are not used, what is the point of having them in the Bill? If it is the Government’s intention to use the provisions, it will not be a problem to change them from a “may” to a “must”. That is one of our big points on the Bill—we would strengthen the weak wording. We want to strengthen up, not level down.

The Minister’s predecessor, now the Secretary of State, has shown a willingness to listen, engage and reflect on Opposition amendments. I hope that the Government will go further, listen harder and deliver for tenant farmers.

Amendment 88 is about action. It would close a potential loophole in the Bill about the consent of the landlord. Currently, it sets out the circumstances where any regulations will apply in respect of a landlord’s consent. They are defined as circumstances where either the agricultural tenancy legislation or the contract of the tenancy requires the tenant to have the landlord’s consent. What that appears to have missed out—I am sure it is inadvertent, but it has done so—is where the provisions of the financial assistance scheme itself require the tenant to obtain the landlord’s consent.

As an example, the current countryside stewardship scheme requires all tenants occupying land under the Agricultural Holdings Act 1986 to have their landlord’s consent, even though those tenants will have security of tenure. The amendment would ensure that tenants have recourse to the regulations in every case where the landlord’s consent is required. I am sure the Minister would not want any of the provisions or effects of the Bill to create difficulties for tenants in accessing public money for public good, which is obviously the Government’s favoured system for replacing the basic payment scheme.

I place on record my thanks to all those organisations that have made representations on the issue. I think of the Tenant Farmers Association and their chief executive George Dunn as an example of strong and effective campaigning.

These are simple, arguably technical, but important and empowering amendments. The Government have demonstrated a willingness to listen and engage to a degree, but I call on them to go further—to take the plunge and deliver on what is a cross-party and all-UK commitment to empowering and supporting our farmers. The Bill needs to be joined up, it needs to be smart and it needs to be fit for purpose. The amendments help in that purpose. I hope the Government, and indeed the hon. Member for Edinburgh North and Leith, will support them.

Photo of Victoria Prentis Victoria Prentis The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

Agricultural tenancies are a vital part of our farming industry, accounting for nearly a third of all farmland in England and Wales. I want to see a thriving tenant farming sector in the future. That is why we have included provisions in the Bill to modernise agricultural tenancy legislation.

Turning first to amendment 87, the Committee has already considered at length the use of the words “may” and “must” in legislation. I do not intend to go over those arguments again. As I said last week, the use of the word “may” is entirely consistent with other legislation in this sphere. I assure the hon. Member for Newport West that there is absolutely no doubt that the Government intend to use the powers to make these important regulations and that we will move quickly to do so. Plans are already under way to meet industry representatives for discussions on their scope and content.

I understand the drive behind amendment 88, which seeks to broaden the scope of the dispute provisions to cover any situation where the tenant may need the landlord’s consent to undertake an activity. However, the intention of these provisions is to provide tenants of the older Agricultural Holdings Act 1986 agreements with a mechanism to challenge outdated restrictions in those agreements. In some cases, they were written 30 or 40 years ago, when there was a very different policy and commercial environment. That is why it is important that the procedure for referring requests to dispute remains clearly linked to the terms of the tenancy agreement. To broaden the scope further to include any issue or activity where landlord consent is required risks unintended consequences and opens up the potential for misuse of the provisions, which could damage landlord-tenant relations.

The provisions in schedule 3 had broad support in our public consultation. They have been shaped to ensure that the interests of both tenants and landlords are considered. We will continue to consult the industry generally, including members of the tenancy reform industry group, as we develop the supporting regulations. I therefore ask the hon. Member for Newport West to withdraw the amendment.

Photo of Ruth Jones Ruth Jones Labour, Newport West

Again, the Minister and I share the same broad aims and principles, which is great. However, we have not changed our minds about “may” and “must”, and the need to strengthen this legislation and beef it up to give people the protection they require. I am glad that the Minister has agreed that stakeholders will have the opportunity to lobby and that she will be consulting widely as the Bill is developed. I accept the history of the tenancy agreement Acts, but we will press the amendment to a vote.

Question put, That the amendment be made.

Division number 23 Agriculture Bill — Agricultural tenancies

Aye: 5 MPs

No: 10 MPs

Aye: A-Z by last name

No: A-Z by last name

The Committee divided: Ayes 5, Noes 10.

Question accordingly negatived.

Amendments made: 57, schedule 3, page 51, line 37, leave out “the National Assembly for Wales” and insert “Senedd Cymru”.

See the explanatory statement for Amendment 51.

Amendment 58, schedule 3, page 54, line 9, leave out “the National Assembly for Wales” and insert “Senedd Cymru”.

See the explanatory statement for Amendment 51.

Amendment 59, schedule 3, page 54, line 14, leave out “the National Assembly for Wales” and insert “Senedd Cymru”.

See the explanatory statement for Amendment 51.

Amendment 60, schedule 3, page 54, line 19, leave out “the National Assembly for Wales” and insert “Senedd Cymru”.—(Victoria Prentis.)

See the explanatory statement for Amendment 51.

Photo of Ruth Jones Ruth Jones Labour, Newport West 3:00, 3 March 2020

I beg to move amendment 85, in schedule 3, page 55, line 20, at end insert—

‘(1A) In subsection (1) leave out “section” and insert “sections 28A and”.”

Photo of Sir David Amess Sir David Amess Conservative, Southend West

With this it will be convenient to discuss amendment 86, in schedule 3, page 55, line 31, at end insert—

26A After section 28 insert—

“28A Disputes relating to requests for landlord’s consent or variation of terms

(1) Subsection (2) applies where a tenant under a farm business tenancy has made a request to a landlord for the purposes of—

(a) enabling the tenant to request or apply for relevant financial assistance or relevant financial assistance of a description specified in regulations under subsection (2), or

(b) complying with a statutory duty, or a statutory duty of a description specified in regulations under subsection (2), applicable to the tenant, and the request meets such other conditions (if any) as may be specified in regulations under subsection (2).

(2) The appropriate authority may by regulations make provision for a tenant under a farm business tenancy to refer for arbitration under the Agricultural Holdings Act 1986 a request under subsection (1) if no agreement has been reached with the landlord on the request.

(3) Subsections (2) and (4) to (6) of section 19A of the Agricultural Holdings Act 1986 (as inserted by paragraph 7 of Schedule 3 to the Agriculture Act 2020) shall apply to any regulations made under subsection (2) of this section.

(4) In this section—

“appropriate authority” means—

(a) in relation to England, the Secretary of State, and

(b) in relation to Wales, the Welsh Ministers;

“relevant financial assistance” means financial assistance under—

(a) section 1 of the Agriculture Act 2020 (powers of Secretary of State to give financial assistance),

(b) section 19 of, or paragraph 7 of Schedule 5 to, that Act (powers of Secretary of State and Welsh Ministers to give financial assistance in exceptional market conditions), or

(c) a scheme of the sort mentioned in section 2(4) of that Act (third party schemes);

“statutory duty” means a duty imposed by or under—

(a) an Act of Parliament;

(b) an Act or Measure of Senedd Cymru;

(c) retained direct EU legislation.””

Photo of Ruth Jones Ruth Jones Labour, Newport West

I will speak briefly to both amendments. Like all the amendments tabled by my hon. Friends and me, they are important, and I hope they will receive a fair hearing. They cover the elements of the Bill that look at powers available to tenants, succession rules and guidance around rent reviews. Anybody who has been to a farm or has a farm in their constituency will know that, although those areas are niche, they are incredibly important.

Amendments 85 and 86 would ensure that tenants renting land under the Agricultural Tenancies Act 1995 can object to a landlord’s refusal to allow access to financial assistance. The Bill currently omits cover for those tenants and we need to address that. That lack of protection is odd, given that, as the Minister has said, nearly half the land in the tenanted sector in England is now let under 1995 provisions. In Wales, the figure is more than a quarter of the land.

Over time, that area of land will grow and it will be important to ensure that those tenants are protected as much as those under the 1986 Act. Given that these are more modern agreements, which will have had the full attention of the legal profession in their drafting, they are more likely to include more restrictive clauses than those under the older legislation. That will cause problems for tenants if they do not have adequate recourse to object to the use of those restrictive clauses within the new policy framework.

It will be a significant failure if we cannot provide the same level of protection to tenants under the 1995 Act as we are seeking to provide to tenants under the 1986 Act. That is a simple but important point. I hope that the Minister will receive it warmly, in the spirit that it is intended.

Photo of Victoria Prentis Victoria Prentis The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

I receive all the hon. Lady’s amendments warmly. She has again raised an important issue. Farm business tenancies are a vital part of our farming industry. They provide a flexible way for established farmers to expand their business, by renting additional parcels of land. Crucially, they also open the way for new entrants, with no family connection to the land, to get a foothold in the sector.

As I have already stated, I want a thriving tenant farming sector. That is why we have included provisions in the Bill to modernise agricultural tenancy legislation. Although I recognise concerns that the new dispute conditions do not include farm business tenancy agreements, there are very important reasons for that.

Photo of Victoria Prentis Victoria Prentis The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

Shall I set out some of my reasons first? Then, if necessary, I will give way to the hon. Gentleman. First, evidence from the public consultation on this issue in England does not support extending the provision to include farm business tenancies. That is because, as the hon. Member for Newport West said, they are more modern, commercial agreements, negotiated more recently than agreements under the 1986 Act. They are shorter term and reviewed more regularly, so that tenants have the opportunity to renegotiate and vary the terms to fit changing commercial conditions, and ensure that they can access future financial assistance schemes.

Secondly, the legal framework governing farm business tenancies already provides for enabling the parties to agree terms, so that the tenant can continue to deliver diversified activities, such as environmental schemes, alongside farming. Thirdly, extending the provisions to include farm business tenancies risks undermining landlord confidence in tenancy agreements that had been freely and relatively recently entered into by both parties. That could lead to landlords withdrawing from the let sector in favour of contracting or farming in hand, which would reduce opportunity for tenant farmers.

The aim of the provisions is to provide a dispute mechanism specifically for tenants of 1986 Act agreements, because those are lifetime agreements that were negotiated 30 to 40 years ago in a very different world. They often contain outdated restrictions that could act as a barrier to tenants meeting modern statutory requirements and, in England, accessing future farming schemes that we are setting out.

Photo of Daniel Zeichner Daniel Zeichner Labour, Cambridge

This is a complicated set of issues, and I seek clarification. Some lack of clarity about post-1995 holdings has been raised with me. The question is, going back to the financial assistance schemes, who would make the decision to de-link? Who would get the lump sum? Is it the tenant in post-1995 cases?

Photo of Victoria Prentis Victoria Prentis The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs

The hon. Gentleman and I have undertaken to have a specific conversation later about de-linking and lump sum payments. I tried to set out the position this morning. Once a decision has been made to de-link payments, they may continue to be paid to the tenant. Indeed, the person farming the land—so the tenant—would apply for any lump sum. However, the two are separate, as I set out this morning. I hope that answers his question.

The provisions in schedule 3 had broad support in the public consultations in England and Wales. They have been shaped to ensure that the interests of tenants and landlords are considered. We will continue to consult industry widely, including members of the Tenancy Reform Industry Group, as we develop future regulations. I therefore ask the hon. Member for Newport West to withdraw her amendment.

Photo of Ruth Jones Ruth Jones Labour, Newport West

I welcome the Minister’s commitment to a thriving tenancy sector—that is great news. I thank her for the explanation and for her commitment to have an ongoing dialogue with my hon. Friend the Member for Cambridge. I look forward to the outcome of those discussions. We still have reservations about this important area, but we will not press the amendment to a vote. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 3, as amended, agreed to.