Previous Section Back to Table of Contents Lords Hansard Home Page


Lord Carter: I am grateful to the Minister. I agree that it would have been easier if we had grouped the amendments. The amendment has been tabled in a genuine attempt to seek the reason for that provision. The Minister has given a satisfactory answer. It was extremely helpful, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 18:


Page 2, line 43, leave out from ("are") to ("the") and insert ("less than 10 per cent of").

The noble Lord said: The purpose of the amendment is to make the Government explain what they mean by "small". The Minister will remember the exchange we had in 1993 on the Agriculture Bill when I tabled an amendment which referred to the "small farmer" and the noble Earl rebuked me and said that I should be politically correct and refer to the "vertically disadvantaged farmer".

In this amendment we refer to small changes in area. Solicitors and barristers outside the House foresee a great deal of litigation over that question. To be helpful, we have suggested instead:


I am sure that the Minister will not like that and will have an alternative. However, the amendment has been tabled in a genuine attempt to discover what the Government mean by "small" in connection with changes in area. I beg to move.

Earl Howe: I listened with interest to what the noble Lord had to say on this somewhat technical point. Our intention in this clause is to enable a landlord to give a tenant the use of an extra piece of land, perhaps a field, without losing the protection which had been gained by

12 Dec 1994 : Column 1143

complying with the notice conditions. That is necessary because the addition of land to a holding results, in law, in the surrender of the existing tenancy and the regrant of a new one. Parties who had exchanged notices and whose initial tenancy fully met the notice conditions might not realise that it was necessary to exchange notices again. Furthermore, they might not be able to comply with the notice conditions if the tenant had diversified to a significant extent. Therefore, Clause 3(4) makes it unnecessary for that to be done as it states that the new tenancy shall be taken to meet the notice conditions.

As the noble Lord pointed out, the Bill refers to a "small" area of land. The noble Lord would prefer that to be more precise and to specify less than 10 per cent. of the size of the holding. I see that that approach has the merit of certainty, but it also has the disadvantage that if parties inadvertently added marginally more land to a holding, a court would have to conclude that Clause 3(2) did not apply. I see merit in the flexible approach that we deliberately adopted in the present draft of the Bill. It may be a matter on which we can reflect and debate further at a later stage. However, for the moment I hope that what I have said will be of assistance to the noble Lord in deciding whether to take the matter forward.

Lord Carter: I am grateful to the Minister. His reply was helpful. However, if there is to be uncertainty, that will lead to litigation. I believe that there is a chance that there could be considerable debates in court about what is meant by "small". It would be helpful if between now and Report and Third Reading the Government can think of a better way of addressing the problem which gives more certainty. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Gallacher moved Amendment No. 19:


Page 2, line 44, leave out ("and") and insert ("or").

The noble Lord said: Clause 3, to which the amendment refers, lays down the circumstances in which the exchange of notices provided in Clause 1 will carry forward to cover the surrender of an old tenancy in favour of the granting of a new one. Subsection (2) of the clause imposes a condition that the land must be the same land,


    "apart from any changes in area which are small in relation to the size of holding and do not affect the character of the holding".

Clearly it is desirable to allow some limited flexibility in that situation. However, it is suggested that the present wording is too limiting, as any changes would have to be both small in terms of the holding size and not affect the character of the holding. It is in the interests of all parties that there should be rather more scope within the law to interpret "small" and "character" by making them alternative. That would be achieved if the amendment were to commend itself to the Committee. I beg to move.

Lord Middleton: The amendment allows a little more flexibility where the exchange of notices prior to an old farm business tenancy is to be carried forward so as to cover the grant of a similar new tenancy for

12 Dec 1994 : Column 1144

virtually the same parcel of land. The noble Lords, Lord Carter and Lord Gallacher, may be surprised to hear that I support them.

Earl Howe: I have listened with interest to the points made in Committee. It may help if I explain briefly the intentions underlying Clause 3. It is to enable the parties to agree on small changes in the area of land comprised in the tenancy—for example, where a landlord wished to give the tenant the use of an additional field which is small in relation to the size of the holding and does not affect the character of the tenancy. The addition of land to a holding results, in law, in the surrender of the existing tenancy and the regrant of a new one. Parties who had exchanged notices and whose initial tenancy fully met the notice conditions might not realise that it was necessary to exchange notices again, since they might not even know that they had a new tenancy. Furthermore, even if they did realise this, they might not be able to comply with the notice conditions if the tenant had diversified to a significant extent by the time of the regrant. Clause 3(4) makes it unnecessary for them to do this as it states that the new tenancy shall be taken to meet the notice conditions. In other words, it rescues those parties from a trap into which they might accidentally fall simply as a result of a very minor change in the area of the tenancy.

The noble Lord's amendment would enable parties to add a significant amount of land to a holding, provided that it did not alter the character of the holding. That is one effect of the amendment. Alternatively, they could add a small area of land which might have on it a substantial non-agricultural enterprise which would totally alter the balance of the tenant's entire business. My view is that in either of those circumstances there would be a substantial and fundamental change to the agreement into which the parties had originally entered and they would not be falling accidentally into a trap from which they needed to be rescued by this clause. They would be making a deliberate and substantial change to the tenancy and the correct course, if they wished to be covered by the notice conditions, would be to sign a new tenancy agreement. I must emphasise that this clause is intended to deal only with minor changes which the parties may make to the tenancy, resulting either deliberately or accidentally in a new tenancy.

I believe that the principle underlying the clause should be allowed to stand unchanged. I hope that the noble Lord will feel that that explanation is helpful and will be able to withdraw the amendment.

Lord Gallacher: I am grateful to the noble Earl for the explanation he has given. I was under the impression that the amendment was of minor consequence. However, the noble Earl said that the Bill as drafted provides for only minor changes whereas the proposed amendment might allow major changes to take place in a variety of ways which he outlined. In those circumstances, it would be sensible for me to withdraw the amendment and to take counsel of my advisers in the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 20:


Page 3, line 3, leave out ("earlier") and insert ("not later than").

12 Dec 1994 : Column 1145

The noble Lord said: With this amendment, we move into deep semantic waters. I am advised that "not later than" is more accurate than "earlier". There seems to be considerable concern throughout the agricultural industry. I shall be grateful if the Minister will explain why the Government have chosen "earlier" rather than "not later than". I beg to move.

The Earl of Courtown: The amendment goes part of the way to clarify the position relating to notices. However, there appears still to be some confusion in the clause.

Clause 3(3) states that the term date of the new tenancy will be earlier than the term date under the old tenancy. Clause 3(5) defines "the term date" as,


    "the date fixed for the expiry of the term".

That seems to mean that the new tenancy must end before the old tenancy. I shall be most grateful if the Minister will clarify that point.

Earl Howe: I hope that I can clarify for the Committee what underlies this part of Clause 3. I believe that the amendment may be based on a misunderstanding. The point is that under Clause 3(1) (b) it is provided that either the condition in subsection (2) or the condition in subsection (3) must be met. As we have already discussed, subsection (2) allows for minor changes in the area of land comprised in a new tenancy but no change to the term date. Subsection (3) allows for the tenancy to be ended earlier—that is to say, when the new agreed term date is earlier than it was for the old tenancy. There may be circumstances in which the parties may wish to bring forward the termination date for the tenancy. The case where there is no change in the term date—that is the point of saying "not later than"—is already dealt with by subsection (2). That is the situation where the parties simply wish to make a minor change to the area. There is no need to make an amendment to subsection (3) in order to allow for that.

I realise that it is a complex area. However, I hope that I have explained the intention underlying the clause. It is purely and simply to enable the parties to bring forward the termination date for the farm business tenancy and to substitute an earlier date than the one upon which they had agreed earlier. That is why we believe it is better to say "earlier" rather than "not later than".


Next Section Back to Table of Contents Lords Hansard Home Page