Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006

rose to move, That the draft regulatory reform order laid before the House on 5 July be approved[24th Report from the Regulatory Reform Committee]. The noble Lord said: My Lords, the order amends the Agricultural Holdings Act 1986 and the Agricultural Tenancies Act 1995. The amendments will foster tenant farmer diversification; give tenants and landlords greater flexibility to come to their own agreements; ensure decisions on restructuring are business-led; improve the viability of the tenanted sector; maintain the balance between landlord and tenant interests; and enable landlords and tenants to adapt to the agricultural climate of the 21st century. The amendments were developed in collaboration with the Tenancy Reform Industry Group—TRIG—and the proposals have cross-industry support. Article 5 removes the barrier to tenant farmer participation in diversified activities by amending the criteria for the ““livelihood test”” for succession to a tenancy. Articles 6 and 8 ensure no loss of compensation or disruption to the rent review cycle when adding to or removing land from a holding, provided that the new holding forms a substantial part of the old holding. Articles 7, 9 and 10 replace the arbitration procedures in the Agricultural Holdings Act 1986 with the procedures in the Arbitration Act 1996 in line with the Agricultural Tenancies Act 1995. Article 12 also relates to the 1995 Act. It clarifies provisions that have confused industry and professionals since the introduction of the 1995 Act on circumstances in which the 1986 Act continues to apply. It encourages restructuring by introducing new provision to allow parties to agree in writing that, when a tenant holds a 1986 Act tenancy, the 1986 Act will apply, provided that the old holding is a whole or substantial part of the new holding. Article 13 gives landlords and tenants freedom to set their own maximum notice period for a farm business tenancy and retains the protection of the 12-month minimum notice period. Articles 14 and 15 give landlords and tenants greater freedom to reach agreement on rent reviews. Articles 16 and 17 make it easier for landlords and tenants with farm business tenancies to reach agreement on improvements to a holding by providing an option to agree a maximum limit for the end-of-tenancy compensation. The order will promote a healthy and competitive tenanted sector without removing tenant protection or disrupting the landlord/tenant balance. The Government have given commitments to monitor the effectiveness of the regulatory reform order, particularly in relation to the impact on tenant farmer diversification, and to keep under review whether future legislative measures might be necessary. I am happy to repeat that commitment here, but I cannot be precise about how it will be done, as changes are always being made to the scope and level of surveys that we undertake. We will carry out this commitment through our close links with industry and the Tenancy Reform Industry Group and through analysis of available statistics and research. On behalf of the Government, I thank the members of the Delegated Powers and Regulatory Reform Committee for confirming that the present proposals are appropriate to be made under the Regulatory Reform Act 2001, and for recommending them to the House. The committee in another place has also considered these proposals. It concluded that they remove burdens within the meaning of the Regulatory Reform Act 2001 without removing any necessary protections or preventing the exercise of any existing rights or freedoms. Both committees have unanimously recommended that the order be approved. I beg to move. Moved, That the draft regulatory reform order laid before the House on 5 July be approved [24th Report from the Regulatory Reform Committee].