Last week the Government published its response to the Rock Review. As a reminder, the Rock Review was the report issued in October 2022 focusing on the tenanted farm sector, making 75 recommendations that could improve the effectiveness of the sector - some of which were pretty controversial. The Government's response sets out what it proposes to do about these recommendations.
Much of the focus is on environmental schemes, and how tenants can be eligible for them. There has been a lot of commentary on those over the past week and the potential leading role for the rural sector in helping to achieve Net Zero and boost biodiversity is underlined by the concentration on making environmental schemes work at scale. But some of the other content may have a greater long-term impact. The review of the taxation of payments under environmental land management schemes (and whether Agricultural Property Relief for Inheritance Tax should be available on land within such schemes) is known about, and is being carried out by the Treasury and HMRC. Changes there could have a significant impact on the shape of the agricultural land market.
And so too might changes that result from the closer focus on the landlord and tenant relationship, especially:
- the potential for a Tenant Farmer Commissioner, who may have a broad remit including some form of involvement with arbitration decisions (from the Rock Review: "the need to provide some form of oversight and scrutiny on the behaviour of parties and the proportionality of decisions"). This is definitely one to watch, as it could change the entire focus of arbitrations in the rural sector.
- a code of practice on "expected standards of socially responsible behaviour for all parties involved in agricultural tenancy agreements", to be developed by a coalition of rural representative bodies. Many rural professionals will be concerned that a subjective overlay may be put on their approaches to what are often tricky negotiations, whether acting for landlords or tenants.
This could ultimately be a cluster of damp squibs, or may result in a much more regulated sector, and the current mood music suggests the latter outcome. Opinions as to what the best outcome would be will differ, but if you have views about this then now is the time to be ensuring that they are heard, and that the various consultations that are taking place over the coming months have the benefit of a wide and practical range of opinions.
While the relationship between a landlord and a tenant is a commercial one, we know there is more we can do to support collaborative landlord-tenant relationships. For example, by: • improving our engagement with the tenanted farming sector through the establishment of the new Farm Tenancy Forum. This will improve the way we communicate with the sector and help us ensure our schemes are as accessible as possible to tenants • launching a call for evidence this summer to explore the benefits and impacts of how a Tenant Farmer Commissioner might work in practice and how such a role might fit within existing procedures and regulations. ..... the development of a code of practice on expected standards of socially responsible behaviour for all parties involved in agricultural tenancy agreements. This includes landlords, tenant occupiers, land agents, and other professionals.