Select Committee on Regulatory Reform Eighth Report


Report under Standing Order No. 141



Summary

1. The Regulatory Reform Committee has examined the draft Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006 in accordance with Standing Order No. 141. We recommend unanimously that the draft Order be approved.

Introduction

2. The proposal for the draft Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006 was laid before the House by the Cabinet Office on behalf of the Secretary of State for Environment, Food and Rural Affairs on 30 March 2006. We issued our report on the proposal for this draft Order on 26 June 2006.[1]

3. On 5 July 2006 the Secretary of State for Environment, Food and Rural Affairs laid the draft Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006 before Parliament, together with an explanatory statement from the Department.[2] The draft Order is in substance the same as that which was included in the earlier, proposal stage. It would:

(Proposal 1) - Expand the range of activities from which relatives of a tenant of agricultural land could derive income without jeopardising any rights of statutory succession to a tenancy;

(Proposal 2) - Remove existing restrictions on the eligibility of parties to a tenancy agreement for compensation for improvements (in the case of tenants) or dilapidations[3] (in the case of landlords) at the end of that tenancy;

(Proposal 3) - Bring the provisions of the Agricultural Holdings Act 1986 relating to the management of the arbitration of disputes over tenancies into line with arbitration mechanisms of the Arbitration Act 1996;

(Proposal 4) - Amend statutory provisions which govern the holding of rent reviews for agricultural tenancies;

(Proposal 5) - Make it easier to add new land to an agricultural holding which is subject to a tenancy under the Agricultural Holdings Act 1986, without that necessarily voiding the existing tenancy agreement; and

(Proposal 6) - Abolish the upper limit of 24 months for a notice to quit a tenancy under the Agricultural Tenancies Act 1995, so that indefinitely long notice could be given.

4. We are required under Standing Order No. 141(6) to examine the draft Order against such of the criteria specified therein as are relevant. We are also required to consider the extent to which the responsible Minister has had regard to any resolution or report of the Committee or to any other representations made during the period for parliamentary consideration.[4]

Findings of our previous report

5. Our Report on the proposal for this draft Order described the effect of the proposal in detail and assessed it against the statutory and Standing Order tests. We concluded that the proposal would be an appropriate use of the powers granted to ministers in the Regulatory Reform Act 2001, and that the Department had made a convincing case for the desirability of making the draft Order. We recommended that the Department should lay a draft Order in the same form as the proposal before the House.

Other representations

6. The House of Lords Delegated Powers and Regulatory Reform Committee concluded in its report that the proposal met the requirements of the Regulatory Reform Act and that it would be appropriate for the reforms proposed to be made under the Act.[5]

7. The Department states that it received no other representations during the period of parliamentary consideration which ended on 29 June 2006.

The draft Order

8. The Department notes in its explanatory statement that a number of minor drafting changes have been made to the Order since the proposal stage with the aim of improving its clarity and coherence.[6] None of these changes gives rise to any concern and the effect of the draft Order is not materially changed.

Michaelmas implementation date

9. The Department indicates that, should the draft Order be approved by both Houses, it will be made and come into effect on the following day.[7] While to do this would not be in accordance with Government's recommended guidance that advice on the implementation of new legislation should be made available to those affected at least 12 weeks before they would need to comply with it, the Department points out that the Order, although technically in force, would have little effect in practice until the next Quarter Day, when agricultural tenancies are traditionally signed. This would be either Michaelmas (which is 29 September) or Christmas Day, depending on the timing of the Parliamentary approval process. As the largest number of tenancies are signed at Michaelmas, the Department would prefer to bring the Order into effect in advance of this date, should the prior approval of the Order in Parliament make it possible. The Department states that it will ensure that the agricultural industry is properly informed about the coming into effect of the Order and of its implications before the next Quarter Day. It also considers that the substantial involvement of industry representatives in the process of developing the legislation means that the implications of the Order are already widely understood by many of those affected by it.

10. We consider that no difficulty is likely to arise from the bringing into effect of the Order with a "notice period" to the agricultural community of less than 12 weeks, provided full and effective efforts are made by the Department to communicate its requirements to all those who need to be advised about it.

Recommendation

11. In accordance with Standing Order No. 141 (15) we recommend unanimously that the draft Order be approved.


1   Sixth Report of the Regulatory Reform Committee, Session 2005-06, Proposal for the Regulatory Reform (Agricultural Tenancies) (England and Wales) Order 2006, HC (2005-06) 1309 Back

2   Copies of the draft Order and explanatory statement are available to Members of Parliament from the Vote Office and to members of the public from the Department.  Back

3   "Dilapidations" means damage or disrepair to a rented property for which the tenant of the property will usually be liable.  Back

4   Standing Order No.141(7) Back

5   Twenty First Report of the House of Lords Committee on Delegated Powers and Regulatory Reform, Session 2005-06, HL (2005-06) 193 Back

6   These are identified and discussed in paragraphs 16-21 of the explanatory statement.

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