My Lords, I beg to move that the draft Agricultural Holdings (Fee) Regulations 2022, which were laid before the House on 20 October, be approved. I declare my farming interests as set out in the register and point out that I am a member of the Royal Institution of Chartered Surveyors. I speak for England only. However, I highlight that we have worked closely with the Welsh Government on this instrument, and the same composite instrument was debated and approved by the Senedd on 22 November.
This Government believe in a vibrant and flourishing tenant farming sector. We believe that it is vital for the future of agriculture. A third of farmland in England is tenanted, with 14% of farms wholly tenanted and 31% of farms with a mixed tenure—that is, both owning and renting land. This variety in land tenure and the ability to rent land on a flexible basis is important as it enable tenants and owners to grow and adapt their farm businesses. It also provides a route into farming for new entrants, bringing new skills and ideas into the sector.
Many tenants and landlords work collaboratively and progressively to resolve issues that may arise during their tenancy agreement. However, sometimes, that is not possible. In those cases, our agricultural tenancy legislation enables either party to the tenancy agreement to apply to a professional authority to appoint an independent arbitrator to help resolve a dispute. It also enables the professional authorities to charge a small statutory fee to cover the administration costs of delivering an arbitration appointment service.
The current fee that can be charged for the appointment service was set in 1996 at £115. Inflation since then means that this level of fee no longer covers the costs incurred by the professional authorities in delivering the arbitration appointment service. The purpose of this instrument is to update the statutory fee on a cost recovery basis to £195 in line with His Majesty’s Treasury’s guidance, Managing Public Money. The increase was supported by 73% of the respondents to the Government’s consultation on this issue.
Although I recognise that this increases costs for tenants and landlords, it remains a relatively small statutory fee that is necessary to sustain the continued delivery of an important independent appointment service. The costs of running the service include staff time to assess each application for the arbitration skills and knowledge required to make a relevant match with a suitably qualified arbitrator, as well as conducting the necessary checks for any conflicts of interest to ensure independence.
This instrument also updates the regulations in line with changes we made in the Agriculture Act 2020 to include a wider list of professional authorities that can now offer an arbitration appointment service. This now includes the president of the Central Association for Agricultural Valuers and the chair of the Agricultural Law Association, alongside the president of the Royal Institution of Chartered Surveyors. This means that tenants and landlords now have more choice between different service providers, which will help to drive continuous improvement in the provision of an efficient and quality service.
In addition, this instrument includes a new duty to review the regulations every five years. Reviews will be carried out in consultation with industry to check that the level of the statutory fee is appropriate and in line with cost-recovery principles.
I am aware of the recently published report on tenant farming led by my noble friend Lady Rock. It includes recommendations on the operation and oversight of dispute resolution. I thank my noble friend and members of the working group for producing this report. I welcome it and its focus on supporting a vibrant tenanted sector. The Government are considering its recommendations and will publish a formal response in due course.
I also highlight that the professional authorities delivering arbitration appointments have responded positively and proactively to requests for improvements. For example, the Royal Institution of Chartered Surveyors is in the process of implementing the recommendations made in the recent review by the noble Lord, Lord Bichard, to improve governance structures, deliver greater independence of its regulatory functions and focus on its public interest remit. In addition, the professional authorities delivering arbitration appointment services have transparent and high standards of professional conduct that they expect their arbitrators to comply with.
I hope I have assured noble Lords of the need for this instrument, which will ensure that tenant farmers and landlords continue to have access to the appointment of an independent arbitrator when they need it, funded by an appropriate statutory fee on a cost-recovery basis. I beg to move.