COMMONS AMENDMENTS (Hansard, 2 May 1995)

Earl Howe
My Lords, with the leave of the House, I beg to move that the House do agree with the Commons in their Amendments Nos. 14 to 22 en bloc.
The noble Lord, Lord Gallacher, raised the subject of compensation for tenant-right matters during Committee, Report stage and at Third Reading. Similar concerns were also expressed in another place. The above group of amendments responds to those concerns.
Under the Bill all improvements require landlord's consent in order to be eligible for compensation. In cases where consent is refused, the tenant has the right to go to arbitration (except in the case of planning permission). The concern was that some tenants, being used to the different approach in the 1986 Act, might not realise that 1353 they needed landlord's consent for certain routine operations for which they later intended to claim compensation. That point has now been addressed.
The Government have reflected carefully and come up with an approach which can cover tenant-right matters such as growing crops, applying fertiliser and other individual routine acts of husbandry which add value to the holding, including those which add only a small amount of value compared with the overall value of the holding. The amendments to Clause 19 will ensure that a tenant can carry out "routine improvements" of that kind without losing the right to arbitration if for any reason the landlord withholds consent for them. This approach has the support of the Industry Group.

§ Lord Stodart of Leaston
My Lords, I have absolutely no locus in the debate as I farm in Scotland, to which the Bill does not apply, but, nevertheless, I have been a practical farmer for many years. I have studied the drafting of Amendment No. 21 as regards "fixed equipment". I congratulate the draftsmen on producing it, but wonder whether my noble friend the Minister will be kind enough to tell me exactly what it means.

Earl Howe
My Lords, I believe that there is an explanation in the Marshalled List regarding the meaning of the term. It says that "fixed equipment", includes any building or structure affixed to land and any works constructed on, in, over or under land, and also includes anything grown on land for a purpose other than use after severance from the land, consumption of the thing grown or its produce, or amenity". While the draftsmen are most certainly to be complimented on their phraseology, I would not wish to elaborate on such excellent wording. However, if my noble friend is still in doubt, I shall he glad to elucidate the matter further after today's proceedings.

§ Lord Stodart of Leaston
My Lords, I shall be most obliged if my noble friend will do so.

§ Lord Carter
My Lords, in fact, I was about to ask the same question. When I looked at the definition of "fixed equipment", I could not for the life of me think of anything that would not be caught by the description of, anything grown on land for a purpose other than use after severance from the land, consumption … its produce, or amenity". What is left? I just cannot think of anything else that would be "fixed equipment" under that definition. However, while I am making other points on the group of amendments it is possible that the answer may suddenly appear.
I am extremely grateful to the Minister for referring to the approval of the Industry Group. Indeed, I should have been most disappointed if we had got through the Commons amendments without having the blessing of that group. However, when the Minister says that the amendments respond to the arguments that were made, that is a pretty cool statement bearing in mind all the arguments that we were given in the House during the Bill's passage as to why compensation for tenant right could not be paid. We are pleased that the Government have now accepted the argument.
1354 I also congratulate the draftsmen on the idea of the "routine improvement" which I believe catches the sort of things that we discussed. Obviously the basis of the valuation will be left to the parties to determine. That is clear. Moreover, in the case of what we used to call tenant right, it will now be the incoming tenant who pays, and again it will be up to the parties to determine that between themselves. As I said, it is clear and it meets the points that have been made, as I understand it, for those things which the tenant thought he would be compensated for in the normal course of business. But if such things have been forgotten, the new provision will cover the situation. We are all waiting with baited breath for the explanation of "fixed equipment".