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

My Lords, a lot of the ground that I was going to cover has been covered already, and I do not wish to delay the House too much. However, I wish to make one or two points. As has been said, it was hoped that this regulatory reform order would come to us before Michaelmas, this September. We all know why it did not. I know that the Minister tried very hard to get it in place in time, but the general clogging up of the legislative process seems to have made that impossible. The work done by the Tenancy Reform Industry Group made an invaluable contribution to this order. It straightened out much tenancy law and policy that was not entirely satisfactory in the previous legislation. I shall consider the livelihood test towards the end of my remarks. The regulatory reform order introduces amendments to ensure that agricultural work done away from the holding as well as other work can be approved in writing by the landlord. I shall make further points on that. One needs to be an expert in land law to deal with this order. It is complex but it is a very good attempt to overcome some of the anomalies to which the noble Baroness referred, particularly the problem that the original holding must remain a substantial part of a new holding. That appears to have been sorted out in the order, as does compensation, which is a difficult area on which to legislate. The arbitration procedures in the Agricultural Holdings Act 1986 were very inflexible. The order seems to introduce much more flexibility in settling disputes. That can only be a good thing. The amendment to provisions of rent reviews in the regulatory reform order, which amends Section 9 of the Agricultural Tenancies Act 1995, as the Minister said, and allows parties to opt out of rent review provisions by express agreement, is a good solution to that problem. As regards notice to quit, the removal by the regulatory reform order of the upper limit of 24 months is a desirable outcome. I hope that I have interpreted that correctly and that the process could go on for much longer than 24 months. If that is the case, it is a good thing. I refer to one of the concerns of the Tenant Farmers Association and, indeed, of the Tenancy Reform Industry Group. TRIG proposed that non-agricultural income earned on or from the holding should be able to be considered where the landlord had consented to the non-agricultural use at any time, whether before or after the introduction of the regulatory reform order. At a late stage, it was discovered that the provision in the RRO would be able to apply only if the consent from the landlord came after the introduction of the RRO. That means that, even where a tenant is involved in an established non-agricultural use of the holding previously consented by the landlord, he will have to seek the landlord’s consent again if any of the income from that activity is to be eligible to be counted in the livelihood test of the potential successor. There is a risk that landlords may decide not to give that consent and perhaps not to be helpful either. The noble Baroness made the point that the noble Lord, Lord Whitty, had promised to monitor the responses of landlords when faced with requests from tenants for renewed consent. That is an important point on which both the noble Baroness and I agree. The noble Baroness mentioned the fiscal changes, with which I agree. However, TRIG has raised structural issues. The Government were asked by TRIG to consider various structural issues, including barriers to tenants’ retirement, lack of support for new entrants and the risk of the loss of county council smallholding farms. I know that far too many of those farms have been lost. They provide the first rung on the farming ladder. I have been, and continue to be, very closely associated with the young farmers movement. These are very important issues. As we know from many surveys that have been carried out, in most areas of the country the average age of farmers is between 55 and 60. There are many very good young farmers with plenty of good ideas who are just champing at the bit to get a holding. The Government would find a very good response in the agricultural industry if they paid attention to the structural issues that TRIG highlighted in its evidence to the Government. On the whole, there is a welcome for the order. It is certainly quite an improvement on what went before, and we only regret that it did not come forward sooner.