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Lord Carter: I am extremely unsympathetic, but not in the least surprised. I expected that to be the answer that the Minister would give and I said that we realised that, even if it is not in this Bill, we must start somewhere. We must change the definition and I suppose it could be achieved in all the relevant Acts by a miscellaneous provisions Act, that might be a route to use. I believe that we all agree that it is silly that we have a definition of agriculture which includes seed growing and excludes the 9 million acres of cereals and 1 million acres of oil seed rape that we grow. However, so be it.

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It seems to me that the Minister's answer is like the remark of St. Augustine. He said that he was prepared to accept chastity, "but not yet". This comes in that category. We might try again, I know that the draftsmen always say the same thing and we are always given the same answer, it has been tried with other Bills. We have a definition for a modern industry which is out of date; we all accept that, but the Government seem to be content with it. It is a pity, I wish that we could convince them.

We might attempt to return with an amendment at Report stage which is simple in terms of principle. It might serve as guidance in other later Bills. However, obviously we shall get no further today and so I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 83 to 88 not moved.]

Clause 36 agreed to.

Clauses 37 to 39 agreed to.

[Amendments Nos. 89 and 90 not moved.]

Schedule [Consequential amendments]:

Lord Carter moved Amendment No. 91:

Page 19, line 37, leave out paragraph 6

The noble Lord said: The amendment's effect is, in the interests of the industry's flexibility, to put farm business tenancies on the same footing as business tenancies as regards the ability to assign leases. We have already touched on the point, but it is worth returning to it.

In farm lettings against assignment there has traditionally been a bias. The more commercial approach of the farm business tenancy calls for that to be challenged, while the emergence of more fixed term tenancies makes it an essential flexibility to overcome the problems which can arise as a result of being locked into a fixed term lease. It is in line with the modernisation and increased commercialisation which the Government wish to see in the farm business tenancy. The landowner has the option of selling his interest. The amendment is designed to encourage a more open attitude towards assignment as a cultural change in land management. It does not give the tenant an automatic right to assign.

A practical example of a situation where assignment could be useful is where a tenant dies or becomes incapable of farming halfway through a fixed term lease and has no one who can carry on. He can be held to that lease until its expiry. Some ability to assign gives a solution to the problem. Other examples are: attracting specialist skills into a diversification or ensuring its future when successors in the farming business are no longer interested; or enabling a tenant who is making his way up the farming ladder to win a new farm in the knowledge that he can assign his interest in his current farm and so avoid overstretching his resources.

The underlying legal situation is that tenancies are assignable unless stated otherwise. Almost all written agricultural tenancies include that prohibition. Then there is the question that I think I asked on an amendment yesterday and I am not sure that the Minister answered me: does an unwritten agreement

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under this Bill which is caught by the farm business tenancy have the same common law effect if it becomes assignable? I am aware that unwritten tenancies under the existing law are assignable and when the tenancy is reduced to writing that is almost invariably removed. Is the situation the same with an unwritten farm business tenancy? There is the implied right to assign which would be lost, presumably, if the tenancy were reduced to writing. It is an interesting legal point and it would be helpful if the Minister could deal with it.

The relevance of Section 19 of the Landlord and Tenant Act 1927 in this context is that, where an agreement states that a lease may not be assigned without consent, that consent shall not be unreasonably withheld. We had that point earlier today. Accordingly, it is not seen as appropriate to carry forward that exclusion from the Landlord and Tenant Act 1927 and it is not seen as a proper consequential amendment.

What we are really saying with the amendment is that, if we are to have—and some of us have argued against it—all the factors of the farm business tenancy, making it become much more like a commercial tenancy agreement, then we should have the same rights in that agreement as already exist in the normal business tenancy. I beg to move.

The Earl of Kinnoull: If one were to pursue this amendment—I hope that that is not the intention—can the noble Lord, Lord Carter, say what protection the landlord would have against the tenant assigning to someone not qualified to farm?

Lord Carter: The consent of the landlord is required on the understanding that the consent should not be unreasonably withheld. It would be entirely reasonable to withhold it if it were clear that the person to whom the tenancy was being assigned was an unsatisfactory tenant.

6.30 p.m.

Earl Howe: I am grateful to the noble Lord for introducing what is a rather technical amendment in his customary clear fashion. We considered earlier today the question of landlord's consent for tenant's improvements. The arguments which I used then apply equally to landlord's consent to assignment and change of user where no structural alteration to the premises is involved. In the latter case, because a farm business tenancy will usually comprise more land than it does buildings, significant changes of user can take place without structural alterations. Such changes might have a significant effect on the landlord's interest.

As the noble Lord mentioned, the question was raised yesterday of what the position is on the tenant's right to assign a tenancy held under an oral agreement, and I undertook to write to the noble Lord. However, it may be convenient if I answer the point now. The tenant has the right to assign the tenancy if the tenancy agreement does not contain a provision which prevents him from doing so. Since oral agreements by their nature are unlikely to include—or at least to be shown to include—such a provision, the tenant will normally have the right to assign them. The important point, however, is that where a tenancy agreement does contain such a

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provision, it should be allowed to have effect and not be overridden. That is why the Agricultural Holdings Act 1986 and the Bill which we are considering today both disapply Section 19 of the Landlord and Tenant Act 1927 in relation to agricultural tenancies.

We must give landlords the confidence to let land and the best way of doing that is by ensuring that their interests are not overlooked. That is not the same as creating a bias in favour of landlords, as the noble Lord sought to suggest. To remove their control over whether or not the lease is assigned, which is what this amendment would do, would give rise to understandable concerns and would deter letting. That is the central point. I therefore hope that the noble Lord will not press his amendment.

Lord Carter: I am not surprised by the answer. We have had a useful discussion. It is very interesting to have it confirmed that oral agreements under the Bill relating to farm business tenancies will have in them the implied right to assign. That will increase interest in the possibility of unwritten agreements, which might not be what the Government want or indeed what any of us wants. As a tenant, I would be only too keen to enter an oral agreement if I had the right to assign it. I am not a lawyer but I believe that the Government cannot override this as it is part of common law. It is an interesting admission. It will be looked on with interest and may well increase the attraction of unwritten agreements under the Bill which I suspect will make for neither good order nor good practice. Obviously, this is a question on which I shall have to take advice. I shall read what the Minister said with great interest. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 92:

Page 27, line 15, leave out paragraph 26.

The noble Lord said: In moving this amendment I shall also speak to Amendments Nos. 93 and 94. These amendments are very simple in that they employ the usual device in seeking to leave out a paragraph to enable the Minister to put clearly on the record what particular paragraphs mean. I believe it will help us to understand the degree of protection or otherwise which the Government are prepared to give to the occupants of farm houses—the tenants—as a result of the operation of the Bill. We merely ask for the paragraphs to be left out as a probe to give the Minister the chance to tell us how much or how little protection the Government are giving to farm tenants under the Bill in the occupation of their residence. I beg to move.

Earl Howe: I hope that I can be of assistance to the Committee. The Rent Act 1977 deals with protected tenancies of dwelling houses. The position is that houses comprised in an agricultural holding are not included in the definition of a protected tenancy and are outside the scope of the Act. As the Act has now been replaced by the Housing Act 1988, in the case of most tenancies entered into on or after 15th January 1989 the chances of a farm business tenancy coming within its scope are pretty slim though I accept that it is possible. However, as I made clear when we discussed Amendment No. 13

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yesterday, dealing with residential farm business tenancies, we do not want to discourage landowners from letting houses.

Where Part III of the Protection from Eviction Act 1977 applies, if a tenancy of a dwelling-house comes to an end but the occupier continues to reside in the house, the owner must use court proceedings to recover possession. As a farm business tenancy may comprise a very large business as well as the house, it is reasonable that landowners should, as a last resort, be able to make use of common law rights of entry where appropriate.

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