Estimates of costs, savings and
other benefits
105. The Department has addressed the costs, savings
and other benefits it believes would arise from its proposal under
the description of each element of the proposed Order in the explanatory
statement; it has also produced a Regulatory Impact Assessment
for the proposal attached to the statement as Annex E.
106. In general terms, the Department considers that
the proposal would have the benefits of providing landlords and
tenants of agricultural land with a more flexible legislative
regime to govern the letting of land, with greater freedom to
reach agreement with respect to specific matters rather than having
their freedom constrained. Specific changes which the proposal
would enact would remove legal barriers to tenant farmers diversifying
their business activities, and make it easier to reach agreements
leading to the enlargement and improvement of holdings. No overall
figures are offered for costs and savings likely to arise for
the tenanted farming sector in England and Wales, although the
Department notes that roughly one third of agricultural land in
England and Wales is tenanted. In 2004, the Government produced
figures indicating that there are 25,833 wholly rented holdings
and 40,353 mixed tenure holdings. The proposals would therefore
affect a substantial number of businesses, their owners and their
employees. The Department considers that the proposals would have
the effect of promoting equity and fairness, because they would
remove some of the restriction which affect tenant farmers, and
to which farmers who occupy land which they themselves own are
not subject.
107. In relation to particular elements of the proposal,
we note the following points:
108. Proposal 2 - This element of the proposed
Order would increase the potential liabilities of both landlords
and tenants, but the concomitant of that is that that would both
equally benefit from enhanced rights to compensation. Where parties
might in future be unable to agree a limit to compensation to
be paid to a tenant for improvements made at his expense during
his tenancy, the proposal provides that an arbitrator may be asked
to fix a limit. The Department estimates that the work required
to do this would amount to £300 - £600, and that such
an expense would be worthwhile if it made it possible to carry
out improvements to a holding that would benefit both landlord
and tenant.
109. Proposal 5 - This element of the proposed
Order would remove the present need in some instances to go to
a Tribunal to determine whether a tenancy can be subject to an
agreed succession. The Department states that 120 such cases are
currently considered by the Tribunals each year; they have not
been able to forecast how many of these cases could be avoided
because of the proposed Order. The Department believes that costs
for proceeding under the legislation revised as proposed, where
the parties involved agree to make use of the new provisions,
would probably be similar to those paid under current legal machinery.
110. In respect of Proposals 1, 3, 4 and 6, the Department
considers there are unlikely to be any compliance costs.
111. We consider that the proposals have been
the subject of, and taken appropriate account of, estimates or
increases or reductions in costs or other benefits which may result
from their implementation.
3 
