PARLIAMENTARY DEBATE
Agricultural Tenancies - 24 May 2023 (Commons/Commons Chamber)

I draw the House’s attention to my declaration of interests. With permission, Mr Speaker, in addition to the written ministerial statement that I tabled today, I would like to make a statement regarding today’s publication of the Government’s response to the Rock review of tenant farming in England. It is the next step to support farmers in all corners of the country, who are at the heart of our rural economy, following the UK farm to fork summit last week in Downing Street.

I thank Baroness Rock, who is in the Gallery observing our proceedings. Her tenacity, hard work and dedication alongside the Tenancy Working Group has resulted in this important review. I also thank the former food and farming Secretary, my right hon. Friend the Member for Camborne and Redruth (George Eustice), who is in his place, for initiating the review.

The House will be aware that my background is in dairy farming—four generations deep in Nottinghamshire, in rural Sherwood. We are a family business that is now diversified; it is focused on farm retail, with some beef, lamb, potatoes and a bit of arable. I know at first-hand how important farming is to our economy and to keeping the country fed. That is what farming is for.

One of the first actions taken by this Secretary of State was to announce detailed plans for the nation’s farming sector, with our environmental land management schemes having something to offer every type of farmer. We are making it easier for farmers to apply, and this year we have improved the application process. We have also increased the rates and broadened the scope of countryside stewardship. The process for applying for the sustainable farming incentive is now much more efficient, and we want that to continue. We are going to upgrade the countryside stewardship service so that applications take a similar amount of time. By this time next year, we will be encouraging many more farmers to get involved.

The Government support tenant farmers because there is no better way to bring new people into the sector. From day one of the agricultural transition, we have worked with tenants, utilising their knowledge and experience through our programme of tests, trials and pilot programmes. Their input has helped us develop schemes that are as accessible as possible to all sorts of farmers. I will say to the House what I say to every farmer I meet: “Have a look at our schemes and get involved.”

We commissioned the tenancy working group, chaired by Baroness Rock, to carry out a comprehensive review of tenanted farming in England. We did that because we recognised how crucial the tenanted sector is to a successful agricultural transition. Since then, we have been working with Baroness Rock and colleagues across Government to give full and considered attention to the review’s insights and recommendations. Our response today builds on the considerable progress that we have made since the review was commissioned to implement its ongoing feedback, and sets out the further actions we are taking in response to the review.

For example, we have already made it easier for tenants to participate in the sustainable farming incentive, by offering three-year agreements. We have also made all our productivity grants accessible to tenant farmers, including the £168 million of investment we will launch across 2023. Furthermore, as a result of our continued commitment to tenants, around half of the 22 long-term, high-ambition landscape recovery projects selected in the first round involve tenants working with other farmers and land managers.

As the review recommends, we have launched a consultation on extending inheritance tax relief to include land in environmental land management schemes. We hope this will provide landlords and tenants with more flexibility to diversify their land. The tax consultation also explores an option to limit inheritance tax relief to land let out for a minimum of eight years. That could provide tenant farmers with greater certainty over the length of tenancy agreements.

Today we have set out further actions that we will take. We agree that tenant voices must be heard in the development of Government policies and that we must remove any remaining barriers to accessing our farming schemes. That is why we are today announcing a new farm tenancy forum, which will improve the way we communicate with the sector and help us make our schemes as accessible as possible to tenants. The new forum will put a more formal engagement and feedback structure in place between DEFRA and the tenanted sector. The forum will support the implementation of the Government response to the Rock review, feeding back real-world experiences and insights on progress.

In response to the review, we are pleased to announce that the Royal Institution of Chartered Surveyors has, within its public interest remit, come forward to lead the development of a code of practice, collaborating with industry bodies on expected standards of socially responsible behaviour for all parties involved in agricultural tenancy agreements.

The review also recommended examining the potential need for an independent tenant farming commissioner or ombudsman in England. In response, we will be launching a call for evidence this summer to explore the benefits and impacts of how this might work in practice and how such a role might fit within existing procedures and regulations.

We agree with the review that the tenanted sector has an essential role as a route into farming for new entrants. We will commit to assess how our new entrant support scheme pilot supports farmers to gain new tenancies, and we will present emerging findings to the new farm tenancy forum to embed the views of the tenanted sector in our schemes. The Government support tenant farmers because this is one of the best routes to bring new people into the sector.

As I have set out, we have already made progress on actioning this important review. Today, we are announcing a new forum to embed tenants further in policymaking. We will also publish a new industry-led code of practice and launch a call for evidence on the proposed tenant farming commissioner. We will deliver for tenant farmers and for all farmers. I commend this statement to the House.

I thank the Minister for advance sight of his statement. I also thank Baroness Rock and all those involved in the tenancy working group, because theirs is an excellent report. The Government have clearly spent a long time—eight months—considering it. Although we are pleased to see the response at last, we are slightly disappointed that it takes a rather piecemeal approach. Perhaps the Minister could start by telling us how many of the 74 recommendations the Government have chosen to adopt.

This is a complex subject, and we probably need more time to debate it properly. However, let me start by restating why it matters: with half of England’s farmland tenanted, we are not going to achieve the transition to a more sustainable form of food production and restore nature without getting this right. There is a problem—long acknowledged—that farm business tenancies now average just 3.2 years. Although constant renewals and negotiations might be good for land agents, that is too short-term, and it is often too difficult for tenants to get involved in the schemes the Government are bringing forward.

Although we welcome the fact that entry to the sustainable farming incentive has been made possible through three-year agreements, I note that the Minister said in his statement that we must “remove any remaining barriers to accessing our farming schemes.” Of course, those schemes are much more than just the SFI. Will he therefore tell us why he has not accepted the proposals from the Rock review to make it easier for tenants to enter the tier 2 and tier 3 versions, since that is where the majority of these schemes, such as those for countryside stewardship and landscape recovery, are likely to lie? That really matters. With so much now being pushed out through the countryside stewardship scheme—a debate for another day, perhaps—it could be a problem.

The Minister may be able in passing to update us on the current uptake of the SFI, which I fear—I suspect he shares this view—is still disappointingly low. What assessment has he made of the number of tenants who are likely to enrol, particularly in the countryside stewardship scheme and in landscape recovery level 2? I am told that 70% of tenants routinely do not get consent from their landlords, and I wonder what his estimate is. The danger is that, for all the fine words, too many tenants will still not be able to access environmental land management schemes.

I welcome the comments from the Minister and in the Rock review about the potential benefits for new entrants. We are, of course, still waiting for more details on the new entrants scheme—interestingly, the Government produced the exit scheme a while ago. Will the Minister tell us where he has got to on the new entrants scheme?

The Minister may recall that, during the passage of the Agriculture Act 2020, a previous Secretary of State assured us that moving away from basic payments under the common agricultural policy would see rents fall. Will the Minister tell us what has happened so far, as we approach the halfway point in the agricultural transition?

In general, does the Minister agree that we need a structural change to move to long-term agreements? That was one of the key conclusions from the Rock review. I heard nothing in his statement to that effect, even though this was a fundamental point.

The review found that the constant renegotiation of tenancies is problematic in itself. As Baroness Rock told the Oxford farming conference—the Minister and I were both there:

“Too often we found an overly short term, commercial and acerbic approach to the management of tenanted estates.”

I wonder whether the Minister agrees with that comment. I also wonder whether anything in his statement this morning will remedy the increasingly common situation where tenanted land is lost as landlords seek to put land into woodland or other uses, thus reducing the scope for food production.

We welcome the establishment of the farm tenancy forum, but will the Minister clarify what its role will be? The danger is it will just be a rolled-over version of the long-running tenancy reform industry group. What will its task be? Who will serve on it? What will its terms of reference be?

We welcome further consideration of a tenant farming commissioner, but does the Minister not understand that the problems facing tenants are real and present now? What further information does he expect from yet another consultation? Is that in fact just an attempt to long-grass this recommendation? Is the Minister taking forward the recommendation that the Law Commission investigate this complicated area?

There are many detailed questions that should and will be asked—more than can be accommodated today—but let me conclude on a positive note by welcoming the involvement of the Royal Institution of Chartered Surveyors in developing a code of practice. This is a complicated and important area, and it is vital to everyone’s interests that collaborative ways forward are established.

I am grateful to the hon. Gentleman for that one little nugget of positivity. We have already adopted most of the recommendations in the Rock review. He characterised that action as piecemeal, perhaps because throughout this process we have been liaising with Baroness Rock and the tenancy working group, listening to their recommendations and ensuring that we take them into consideration as we design the new ELM schemes. We will naturally consider further items as we proceed, and the farm tenancy forum is being established so that we can continue to receive that good advice.

Of course we want tenants to be involved in the SFI. The hon. Gentleman knows that we ran pilot schemes which have been quite successful. He knows that we have listened to farmers who have engaged with those pilot schemes, and, in response, have adapted, changed and tweaked them. We will launch six more standards under the SFI this summer, and we will be saying to farmers, “Now is your moment to get involved, to take a look at these new schemes”. We want them to think about how they embark on the journey of our transition away from bureaucratic EU systems such as the single farm payment and towards a new system that will enable us to support farmers’ food production and to benefit the environment and increase biodiversity at the same time.

There are, of course, good landlords and good tenants, and some poor landlords and some poor tenants. We want to allow flexibility for good landlords and good tenants, and to hold to account those who are not adopting the right course of action. I noted that the hon. Gentleman’s question contained no recommendations or policy from Labour. There is a gaping void in Labour’s rural policy: it is an urban-based party that does not understand rural communities and does not understand the farming sector. The Conservative party is the party of rural communities, and we will always stand up for those communities and for farmers.

I, too, pay tribute to Baroness Rock and her working group. She has engaged with me and with my Committee, the Select Committee on Environment, Food and Rural Affairs, which launched its report on the tenanted sector this morning.

Does the Minister agree that as we move from direct payments to more environmentally linked payments, there will always be a limitation on which schemes tenants can participate in because of their long-term nature? Does he also share my concern about the possibility of perverse incentives for landlords to take land back from tenants for purposes such as the creation of solar farms, rewilding and forestry?

I pay tribute to my right hon. Friend and his Committee for their work. We want to avoid any such perverse incentives. We do not want to motivate landlords to take land from tenants for the purpose of, for instance, rewilding, or to remove them from the sector for any reason. We want to encourage a positive working relationship.

There are, of course, some challenges. If, for example, a tenant applies for a grant under our new slurry scheme to introduce physical structures that will last well beyond the length of the tenancy, the landlord will need to have some engagement in the process and to support that tenant. We want to open up these grants to tenants as well as owner-occupiers, so that tenant farmers can invest in their productivity as well as their sustainability and their ability to make a profit.

I welcome and broadly agree with the review, and pay tribute to Baroness Rock and her team for their hard work. I am grateful for advance sight of the Minister’s statement, which also included much encouraging information. However, the Government have dragged their feet in responding to the review, and many of the policies that will affect tenant farmers have already been set in train, which is one reason why a mere 27 of the more than 1,000 farms in my constituency, roughly half of which will be tenanted, have taken part in the SFI so far.

I think the Government should stand rebuked by two particular elements in the review, and I should like them to look at those again. First, does the review not remind them to ensure that landscape recovery includes tenant farmers, and that the landscape cannot be gobbled up by water companies and large estates, which is what is beginning to happen? Secondly, given that many tenant farmers in Cumbria and elsewhere are upland farmers, does the Minister recognise that the intention of funding environmental schemes via the system of income forgone discriminates against the uplands and will force many hard-working tenant farmers out of the industry altogether, to the detriment of our environment and of food production?

I thank the hon. Gentleman for his warm welcome for the report and our response, but I think that some of his characterisations are a little misplaced. Let me say first that in designing the ELM schemes we took account of the feedback we were receiving from those conducting the review. We were in possession of it when it was published some time ago, and we worked with the group to ensure that we were taking it on board. Secondly, of course we want to support upland farmers. We want to support all tenants, to ensure that they have the best possible opportunity to make a living, and to protect the beautiful landscapes that we see not only in Cumbria but in the south-west and other places with landscapes that matter to the British people.

Let me say this, gently, to the hon. Gentleman. He will be aware that the Liberal Democrats entered into the political game of trying to keep our farmers tied to the bureaucratic EU land-based subsidies by tabling a motion in the other place. Under that system, far too much time was spent on burdening farmers with complex sets of rules, and on debating whether a cabbage was the same as a cauliflower for the purposes of the three-crop rule. We have to move on to a different place, and that is what we are doing. The hon. Gentleman can play his political games, but we will look after those farmers and ensure that the system works for them.

I commend the comprehensive piece of work done by Baroness Rock and I welcome the statement, but I want to make two points. First, probably the most powerful thing that the Government could do to improve the accessibility of the schemes to tenant farmers is to make agreements assignable from one tenant to the next. I wonder whether any progress has been made on that option. Secondly, if we want to help tenant farmers, we must make it as easy as possible for landowners to bring land to market for rent. Historically, under the Law of Property Act 1925 and the Agricultural Holdings Act 1948, landowners had a right to rent out their land, but following pernicious lobbying by the banking industry that was taken away through section 31 of the Agricultural Tenancies Act 1995, and they now need permission from a bank. Will the Minister consider repealing section 31 as part of the ongoing review?

I pay tribute to my right hon. Friend, who triggered the Rock review and set it up in the first place. His knowledge is evident to the whole House. I will look into his specific questions and get back to him, but many of these issues can now be reviewed by the farm tenancy forum, and I think that that will be an opportunity to get under the bonnet and inform ourselves much more directly than we have in the past.

I thank all the farmers in Stroud Valleys and Severn Vale for everything they do for food production. I also welcome the farming focus from Baroness Rock and, indeed, the Prime Minister—and Kaleb from “Clarkson’s Farm”, who is a firm favourite in our household. Does my right hon. Friend agree that we must keep tenant farmers farming for generations, and look at how we are encouraging young farmers into the businesses that are so vital for our country?

My hon. Friend will be aware of my background. I think that if ever there was a moment in history when we needed the brightest and most inspired people to come into the sector and embrace food production, as well as solving the challenges of climate change, that moment is now. As for encouraging young people into the sector, we can all play our part in providing a positive image of food production and farmers to ensure that that next generation becomes involved.

I call Simon Hoare.

Thank you, Madam Deputy Speaker. I am the first of two Simons to be called.

I thank my right hon. Friend for his statement. Dorset Council runs a very successful network of county farms, which are becoming rarer but are still, in my view, important. Can my right hon. Friend say whether his statement will be of benefit to the tenants of those county farms?

I hope that it will be of benefit to all tenant farmers, whether they are on a county farm, have a private landlord or a non-governmental organisation as their landlord. We want to support all tenants, but I recognise the huge contribution that county council-owned units have made and Dorset has certainly been exemplary in showing how they can benefit tenants by establishing the stepping stone to getting into an agricultural business and getting on to the producing food ladder.

The creation of a new farming tenancy forum is a welcome move. Those voices are crucial and the next generation in East Devon will be vital. Does the Minister agree that the tenanted sector is vital for the future of agriculture and absolutely crucial for the food security of the United Kingdom?

I wholly agree with my hon. Friend. He will be aware that only last week I was in Devon talking to farmers in his constituency about the contribution they are making to keeping the country well fed and also protecting the beautiful landscapes that Devon has to offer. We want tenants in Devon and across the country to embrace and benefit from our new schemes and to continue to keep us well fed and look after the environment.

I pay tribute to my hon. Friend. The farmers of Lincolnshire produce a huge amount of food for the nation. We need to invest in new technology and in productivity, to ensure that our farmers continue to become more productive. The good news is that we get about 1% more efficient every year as a sector—that is, we produce 1% more food from the same amount of land. We need to build on that productivity, which is why we are investing huge amounts in science, technology and innovation to make sure that farmers have the best access to new technology.