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Lord Carter: I am grateful to the Minister for the explanation. It is a tricky point. There was some interest—I will not say concern—as to why the phraseology in the Bill was as it is. However, I am sure that all those concerned will read the noble Earl's remarks in Hansard with interest. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Gallacher moved Amendment No. 21:

Page 3, line 4, at end insert ("and that at the beginning of the new tenancy the character of the tenancy remains primarily or wholly agricultural.").

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The noble Lord said: The amendment will ensure that either there is a very long let, or that the use of the land must be reconverted to agriculture, or that the parties enter into a business tenancy. It may be that in such circumstances a business tenancy would be more appropriate. In order to ascertain the views of the noble Earl on the matter, I beg to move.

Earl Howe: I am a little surprised by the amendment. Its effect would largely be to defeat the purpose of the clause. We are dealing here with the situation in which the parties agree to substitute an earlier term date in their tenancy agreement for the one on which they originally decided. They might agree to do that, for example, if the tenant knew that he wished to move on in two years' time to another holding. Rather than wait and agree a surrender at that time, the parties may decide to vary the tenancy agreement so that they both know where they stand.

In such cases, it would be pointless to require them to satisfy new conditions when the new tenancy is, in effect, a continuation of the old one but simply terminating sooner. If the tenant had, in fact, significantly diversified his enterprise in the meantime the holding might not satisfy the condition envisaged by the amendment. That would mean that by simply altering the term date the parties had forfeited the protection that was provided by the notice conditions in the first place.

I do not believe that that can be what the noble Lord wishes to achieve by the amendment, although he may have worthy motives in putting the amendment down. I hope that in the light of that explanation he will reconsider and withdraw the amendment.

Lord Gallacher: I am grateful to the noble Earl for pointing out an aspect of the effect of the clause which I must confess had escaped me when I first read it. In the circumstances, I think that I can best serve the wishes of the Committee by seeking leave to withdraw the amendment. I shall study carefully what the noble Earl said and, if necessary, bring it back in a revised and perhaps more limited form at the Report stage of the Bill; that is if we still deem it necessary to proceed along this line at all. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 3 agreed to.

6.30 p.m.

Clause 4 [Agricultural Holdings Act 1986 not to apply in relation to new tenancies except in special cases]:

Lord Stanley of Alderley moved Amendment No. 22:

Page 3, line 20, after ("granted") insert ("on an agreed succession").

The noble Lord said: I also wish to speak to my Amendment No. 27, which is grouped with Amendment No. 22. The amendment is technical in that all the parties, including the Government, agree that succession rights under the 1986 Act should remain. The amendment ensures just that.

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However, it would be cumbersome and bureaucratic in future to have tenancies granted under the 1986 Act as well as those granted under this Bill. Amendment No. 22 ensures that after 1st September 1995 all new tenancies should be farm business tenancies under this Bill though, of course, tenancies existing under the 1986 Act would remain—as has already been brought out—until they become extinct. We hope that thereafter there will be only one system.

A landlord and tenant might wish to agree to a long tenancy allowing for succession. In that case, they may do so under this amendment by having a farm business tenancy. As we discussed, that has many advantages over the 1986 type of tenancy. It has diversification, environmental covenants and, most important of all, better compensation arrangements for the tenant. To keep the noble Lord, Lord Carter, happy, the amendment is supported by what I might call the "Gang of Six". I beg to move.

Lord Carter: I hope that the Gang of Six is a little more successful politically than the Gang of Four! My name and that of my noble friend Lord Gallacher are attached to Amendments Nos. 23 and 28. As the noble Lord, Lord Stanley, said, we are dealing here with the same technical point.

Amendment No. 23 proposes to marry with the "rollover" provisions in the 1986 Act. If there is a voluntary grant of a tenancy to a close relative of the retiring or deceased tenant, then even though express references to Part IV of the 1986 Act are not inserted in the new tenancy it would preserve the succession rights of the new tenant. There is a similar "rollover" position regarding the established succession rights under the 1986 Act and it would be illogical for them not to be the same under the new Bill.

Amendment No. 28 proposes to add the words "close relative" after "agricultural holding" and it refers to the same point. The preservation of security for an existing tenant on an express surrender and regrant is as important as where there is a surrender and regrant by operation of law inadvertently. If the Government's intention is that all tenants with existing protected tenancies should not inadvertently lose that security after the passing of the 1995 Act, then I am advised that the wording in the amendment is necessary.

On the general point, I was advised by Mr. Andrew Densham —who is well known for dealing with this area—that the intention is that all existing tenancies should be unaffected by the new Bill and that certainly no existing tenant with full security should inadvertently lose that security. Similarly, all accumulated succession rights are to be preserved, but the Bill as drafted does not achieve that end. It only addresses the situation where, inadvertently by operation of law, an existing tenant surrenders his tenancy on a regrant. There are numerous examples where existing tenants, on agreeing in co-operation with the landlord to a new tenancy on modern, up-to-date terms (often for the benefit of the landlord) may inadvertently find themselves thereafter without security. We all know that that is not the Government's intention. It is a technical point which, I am sure, is a matter for the lawyers. However, that is

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the advice which we have received and it is important that the Government make it clear. If these amendments are not perfect then perhaps the Government will agree to consider the matter before the Report stage.

Lord Middleton: It is essential that a tenant's succession rights under the 1986 Act should be protected, as proposed by my noble friend Lord Stanley. I support my noble friend that there is much to be said for drawing a line under the 1986 Act so that, except where the existing succession rights persist, we do not have a situation where, running side by side, two tenancy systems would remain: one under the 1986 Act rules and the other under the farm business tenancy rules.

My noble friend's amendment would effectively draw a line and prevent the perpetuation of all unsatisfactory elements of the 1986 Act. It would not, however, prevent the parties to a farm business tenancy agreeing to whatever terms they wished; for example, in regard to succession rights.

The Opposition amendments to Clause 4 have the same laudable object of preserving the rights of succession tenancies, but they go too far towards perpetuating the 1986 tenancies. The noble Lord, Lord Carter, will not like me saying this, but they go well outside the joint industry agreement. I greatly prefer my noble friend's amendment.

Lord Carter: I am surprised by that intervention from the noble Lord, Lord Middleton. I can understand the CLA thinking like that, but I would be amazed if the NFU, the TFA and the National Federation of Young Farmers' Clubs did not agree fully to protect all the succession rights that are in the 1986 Act. Indeed, the Government had the chance to remove those rights by acting retrospectively, but they chose not to do so. I should like it now to be confirmed that that is so.

I thought that this was a technical discussion, but as we proceed through Committee we learn more and more. I am sure that it would be for the reassurance of the industry if the Government would confirm that they have no intention of weakening the succession rights under the 1986 Act for those who have them.

I quoted the legal advice which I received from a leading practitioner in the field that the Bill does not do that, and we hope that that was inadvertent. I hope the Minister will now confirm that all those with succession rights under the 1986 Act will have them preserved and that their rights will not be weakened, as the noble Lord, Lord Middleton, suggested. If there is an inadvertent weakness in the drafting, I hope that the Government will undertake to put it right.

Lord Middleton: I did not mean to infer that the succession rights would be weakened. As I understand it, the amendments would strengthen them.

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