Agricultural Tenancies

Lord Cromwell Excerpts

Monday 12th June 2023 Lords Chamber

[Lord Benyon (Con)]

I am grateful to my noble friend. One of the greatest criticisms of the Tenancy Reform Industry Group—I pay tribute to the many hours many people sat on that organisation—was that it was a talking shop. People did not feel they were being listened to, and it was a way of getting off their chest concerns they knew existed. We want to make sure that the new forum is not that; that it is executive and has a snap to it. As I have said, it will meet every quarter and the Farming Minister will be one of the co-chairs. Its remit and the determination to keep it close to Ministers shows that it will be more than that.

My noble friend makes valid points about trees and hedgerows. We have published guidance on how tenants can approach tree planting and woodland schemes such as the England woodland creation offer, and we have made sure that both the tenant and landlord will need to agree to any EWCO proposal on tenanted land. I do not think that is wrong—it is absolutely right that if a major change in land use is being promoted, the landlord’s interests matter. If they do not, it will be another incentive for landlords not to let land, or indeed to bring to an end a letting arrangement when a farm becomes available and take it in hand. We want to make sure we are still providing the incentives.

My noble friend is entirely right about hedgerows. That is why we have published our new hedgerow standard as part of the new six standards for the sustainable farming initiative. But he is absolutely right that a hedge no higher than this table does not really achieve very much in terms of carbon and biodiversity. If it is much wider, much higher and preferably has an unploughed, unfarmed cultivated headland, it will be immensely more important.

My noble friend is absolutely right, of course, that a lot of agents are excellent people—I think I was when I was one—but we should not create legislation around trying to put everybody in the same boat as the bad ones. Agents are undoubtedly advising their clients as to what is best for them to secure their interests for the future and the future generations of their family. That is why we want to see the kind of changes we are making to inheritance tax, which give the incentive to landowners, on the advice of their agents, to do the right thing and encourage that. I have received inspiration from my colleague, the Minister. I might have misled the House. He is not the co-chair but, importantly, he will attend every meeting of the tenants’ forum.

[Lord Cromwell (CB)]

My Lords, I did not intend to speak this evening, but apart from sharing the noble Lord’s scars of IACS from the past—he has my profound sympathy—I declare my interest as a shareholder in the family farming company. I will make two points. One is that well-intentioned changes can produce unintended consequences. I am not going to get into the details of hedgerow widths or heights tonight, but simply say that history shows us you cannot force landlords and tenants to have a happy, long-term relationship. It is based on trust, performance and mortality—people die, people get ill and things move on. You cannot oblige people, any more than you could in any other relationship, to stay together if it is not working.

Secondly, on introducing taxation in this form, if you make it obligatory to have an eight-year tenancy or you do not get tax relief, the answer will not be eight-year tenancies; it will be no tenancies, because no landlord in their right mind will be tied down in that way. They will simply take the land in hand and contract-farm it. We have had tenants farming with us for whom we have run back-to-back short-term tenancies for years and years, because we have a relationship of co-operation and trust. However, if the law obliges us to enter a multiyear relationship in which they can change the land use entirely, those tenancies will simply come to an end. The tax system should not interfere in what are fundamentally human relationships between people trying to work together in their mutual interest.

[Lord Benyon (Con)]

The noble Lord speaks an awful lot of sense. To an extent, it is impossible for government to be perfect here because, as he says, we are dealing with human relationships. Government should create the right incentives. We are talking about a business relationship. There are so many different types of tenure in this country—owner-occupier, tenancies under the Agricultural Holdings Act 1986, farm business tenancies under the 1995 Act, graziers, contract farmers, share farmers and multiple graziers on commons. The complications of trying to create a farming support system that can be accessed by them, particularly in areas such as Countryside Stewardship, are really difficult, but it is vital that they are there.

The noble Lord is absolutely right that, if we get this wrong and government tries to impose things that the market does not want, we will end up getting the worst of all possible worlds—people we want to see on the land not on the land. We want to make sure that we keep this vibrant, diverse form of occupation and use of land, which requires landlords and tenants to work together for their mutual benefit and for the societal benefit of us all, through the use of our vital natural capital, which will deliver many more wider societal benefits.