Environment Bill — House of Lords, 2021-09-15
Topic: Public Lands
Charles Courtenay (Crossbench, Unknown): My Lords, this is a groundbreaking Bill in many ways but, from the perspective of English property law, no provisions are more revolutionary than Part 7 and the introduction of conservation covenants. This is a seismic shift, meaning that, for the first time since the Normans introduced common law, owners of land will be able to bind successors in perpetuity to positive obligations to manage land in a particular way. More radical still, and in a departure from the recommendations of the Law Commission, the counterparties to these obligations will now include for-profit companies—private enterprise. As a farmer and a former property barrister now practising at an agricultural law firm with clients in this space, I support this scheme and want it to succeed, but there are glaring imperfections in Part 7, causing major concern to, among others, the NFU, the Bar Council and the RICS. Because of that I have tabled Amendments 109, 110, 112, 113, 114 and 115 Amendments 109 and 110 focus on the formalities by which conservation covenants are created, ensuring that they say what they are and what they do on their face and are created by deed rather than, as currently drafted, by a simple exchange of emails. Amendment 112 ensures that for-profit responsible bodies are conservation- focused, not distracted by other, competing duties, such as making profits for their shareholders at the expense of the environment. Amendments 113 through 115 resolve the untenable position when a responsible body defaults, such that the Secretary of State steps in and, in perpetuity, binds a landowner to a positive obligation without any reciprocal duty to pay the fees covenanted. Since Committee, I am grateful for the support of the noble Baroness, Lady Jones of Whitchurch, the noble Lord, Lord Oates, and the noble Viscount, Lord Ridley, and many others, including the noble Baroness, Lady Jones of Moulsecoomb, indicating a very broad consensus across your Lordships’ House for these modest but vital amendments I am also grateful to the Ministers in Defra and the Bill team for their engagement, although I remain concerned that there is a failure to grasp the significance of the issues raised. Given the time, I do not propose to restate the hypothetical parade of horribles that I set out in Committee, but I note that no one has argued that those hypotheticals are wrong. The Government erroneously asserted that conservation covenants needed to be executed by deed in order to be registered as local land charges, but they have since accepted that that was inaccurate. That is appreciated; however, this only reinforces the sense that this radical change to property law is being rushed through without due consideration or understanding. It is our duty to build in necessary safeguards to protect farmers, the environment and future generations from the threat of zombie covenants blighting our green and pleasant land in perpetuity Key to resolving these concerns is Amendment 110, requiring that conservation covenants be executed by a deed which contains its key terms as to duration and payments on its face. This is the traditional and best way to ensure that advice is taken such that the potentially punitive and perpetual implications of entering a conservation covenant are properly understood at the outset. The Government say that their draft guidance recommends legal advice, and this should be sufficient, but anyone willing to enter a perpetual covenant by a mere exchange of emails is hardly going to sit down and read the guidance first. Defra wants no brake on the uptake of these covenants and, rather unusually, it is farmers seeking greater formality and not the Government. Defra has directed me to other statutory covenants created without necessarily using a deed, but none of these contains positive covenants, perpetual in nature, with a for-profit private counterparty. These are largely restrictive covenants with trusted statutory authorities. Amendment 111 in the name of the noble Earl, Lord Caithness, sets out at considerable length the full formalities to be considered in executing a conservation covenant, formalities the RICS would no doubt recommend. Such extensive formalities may not be warranted within the legislation, but they are exactly what will be considered by properly advised parties executing such a covenant by deed The Government suggest that Amendment 112 is unnecessary because Defra will ensure that responsible bodies are truly responsible, but I have read the draft guidance and nowhere does it state the objective parameters against which responsibility will be judged. Indeed, it appears that foreign entities can be responsible bodies, so long as they have a PO box in the UK, and entities directly connected with the landowner could be responsible bodies too—there is no prohibition I was also surprised in Committee that the Minister cited the example of for-profit water companies as the type of body the Government consider to be responsible. Would that include Southern Water, recently fined £90 million for environmental degradation on an industrial scale in the pursuit of shareholder profits Amendments 113 to 115 solve the intolerable impact of the responsible body becoming bankrupt or deregistered and passing its role as counterparty to the Secretary of State, who then has no obligation to pay anything to the landowner, whatever the cost of the landowner’s conservation commitments. These amendments strictly limit the duration for which the Secretary of State is holder of last resort to 12 months, after which, if no responsible body is willing to take the covenant on, it is simply discharged. This has the effect of killing a zombie covenant and protecting the landowner and the land from the risk of a perpetual obligation with no payments in return. Without this change, the scheme is fatally flawed, as anyone advising on such covenants would have to identify this very real risk and advise against it. Of course, if landowners do not take advice, they will not know of this risk, as I note that no mention is made of it in Defra’s draft guidance I could go on, but time is short and the arguments are clear. For these reasons and the myriad others I set forth in Committee, I beg to move.