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

My Lords, at the outset, I apologise to the industry about that delay. To be honest, in the summer I would like to have pushed it. With all the other things that the House was doing in that period in July, there was no way that the business managers could slot this in, and one had to weigh up the balance. This was just one of the things that got squeezed. I realise the effect—maybe I did not so much to start with, but I soon had it brought home to me—of the Michaelmas changes. I will have to write about some of the issues that the noble Baroness asked me about, such as inheritance and capital gains tax. There are Treasury matters there. The other thing is—I do not use this in any way as an excuse—that the order is made under the regulatory reform legislation, so there are certain constraints. It is not a free-for-all where you can do anything that you want; there are constraints about regulatory reform. It has taken an inordinate length of time. My officials apologised to me and said that it had taken a lot longer than was planned when the committee was set up following the foot and mouth outbreak. Nevertheless, we have got the order, and that is crucial. I am not going to try to second-guess things, because in some ways the order allows for arrangements between tenants and farmers. I have been asked questions about the notice arrangements; I cannot possibly answer those. The order allows, by agreement, changes between the tenants and the landlord to a more flexible degree than in the past. Let us suck it and see. I cannot say what is good or bad in terms of length, because it depends on the individual circumstances. The fact is that they are not now constrained by the previous legislation, so it is up to individual business people, as it were, to make their decisions. I also accept without any qualification that if you are a young person wanting to get on the land and get into farming and you do not have £3 million or thereabouts, you need to get a tenancy. That is the route in; I fully accept that. I understand that there has been a bit of a comeback in rented holdings. The figure for England is approximately 25,000 to 26,000 wholly rented holdings. There are about 40,000 mixed-tenure holdings and 120,000 wholly owned holdings. There is no doubt that the way in is through getting a tenancy, and I fully accept that. I have not asked why the order did not cover this, but I am not surprised to find out that it did not. Facilitating the retirement of farmers is almost a contradiction in terms for some people. It is probably outside the scope of regulatory reform. There are other ways in which Defra is trying to assist with that. The order will be an aid to diversification. I always create a rod for my own back in saying this, but sometimes it pushes the policy along: the biggest barrier to diversification at the moment is planning law at the local district council level. I am not saying that I want to get rid of planning law; far from it. But planning law at that level must take into account changes in farm practices. It is something that I am trying to address. It is a cross-government issue; we are not working in a silo. I have been on enough farms and seen enough examples in the past few months of really barmy barriers to diversification. We are trying to address that, because it is probably the next issue. It will be fully accepted by Members that although we are bringing the order in late, it cannot be retrospective. That is one of the issues that we cannot deal with. On the key issue of compensation that the noble Baroness asked me about, the change in the order will ensure more certainty in compensation payments and will ensure that the compensation payable is known in advance where the parties have agreed. I reaffirm the commitments given by my noble friend Lord Whitty. I do not think that his name was mentioned in my speaking notes and, as my officials would have found out as they listened to me, I added a paragraph in at the end of the speech in which I was happy to repeat my noble friend’s commitment. What I cannot say though—and I admit this with some difficulty—is exactly how we will do the monitoring. I am trying to cut down the number of surveys on farmers. I have balked at some of them since I have been here. Nevertheless, we have to have some mechanism in place to carry out our commitment to monitor the arrangements. We will do that through our close links with industry, which are important. I completely take the point raised by the noble Baroness. Yes, we will monitor any CAP reform measures that impact not only on single farm payments, but on other areas, and we will bring forward the necessary changes if required. I am sure that the CAP needs simplifying and we do not need to leave that until the last minute in 2013, but there are constant, ongoing discussions about this and ideas are floating around on reform and simplification. When, as a result of the 2003 changes coming into force, factors emerge that were not able to be taken into account in this order, I give a commitment that we will keep them under review and bring forward the necessary changes.