§ 9.15 p.m.
§ Colonel Clarke
I beg to move, in page 11, line 40 after "Part I," to insert:or Part II in so far as such an improvement would if carried out alter the character of the holding.Subsection (1, b) lays down that where a supervision order is in force for the farming of an agricultural unit, the Minister may give such directions as he thinks necessary to secure that the unit is farmed in accordance with the rules of good husbandry. The Clause provides that such directions as are made do not entail making improvements falling within Part I of the Third Schedule, unless, whether on application of tenant or Minister the landlord has consented to the improvement, or in accordance with certain provisions of the 1923 Act, which relate to market gardens, compensation for the carrying out of improvements does not depend on the landlord's consent. Part I of the Third Schedule deals with the making of water meadows, or works of irrigation, the planting of orchards or fruit bushes, and so on. We want to add these words so as to include certain changes which the tenant might have performed under Part II of the Schedule, which includes the erection, alteration and enlargement of buildings, and the making or improvement of permanent yards. We believe that under that head might be comprised such things as the erection of a Danish piggery or the removal of permanent fences. These might make a complete change in the way in which the farm is being run. There might be an alteration from dairy farming to arable. 312 Our Amendment is designed to make the Clause consistent, both as regards Part I and Part II of the Schedule.
§ Question put, "That those words be there inserted in the Bill."
§ Mr. Lennox-Boyd
On a point of Order. Points of Order and matters of courtesy are sometimes interwoven. Is it not possible to have an answer to this important point which has been raised.
It is true that I have collected the voices, but I have not declared them. If the Minister desires to speak, he can do so.
§ The Solicitor-General
Perhaps I may briefly state the reply I was going to give. One has to try to draw a distinction between the improvements referred to in Part I and those referred to in Part II of the Schedule. It is not within the purview of this Debate to discuss their nature and why they have each been put in the Parts in which they appear, and why it has been necessary in regard to Part I, that the landlord's consent must be obtained before compensation is paid if an improvement is carried out, and why, in respect of those in Part II, they can be carried out, and compensation can be obtained, despite the landlord. There has been that radical distinction before. For the purpose of Clause 14 we have selected those that appear in Part I, those which require the landlord's consent as an indispensable necessity before compensation can be claimed for carrying out an improvement. The differences in character in the improvements set out in Part I and Part II are comparatively 313 clear and we do not feel that we can accept the Amendment. It is reasonable, in our view, to say that where an improvement cannot be carried out by the tenant without getting the landlord's consent—if he is to get compensation—a direction should not be given to the tenant to carry out those same improvements unless the landlord has consented. When we come to the other category of improvements under Part II of the Schedule which can be carried out by the tenant, despite the landlord, compensation being payable notwithstanding the fact that the landlord has refused his consent—provided the Minister gives his consent—we are on entirely different ground. It is reasonable, in that case, that the Minister under Clause 14, should be entitled to direct the tenant when a supervision order has been made, to carry out those improvements. He could give his consent if he were asked, and it is reasonable that he should have power to give necessary directions. The two categories of improvements are in no sense analogous. A reasonable dividing line is being drawn between the two, and I ask the House to follow us in adhering to that dividing line.
There is a further point. The wording of the Amendment would lead to a great deal of difficulty. The Amendment qualifies improvements which may not be subject to direction by tying it to those which alter the nature of the holding. Even an improvement of a minor character might be said to alter the character of the holding. Alteration of a building in a very small degree might alter the character of the holding. Therefore, we feel that the introduction of these words would give rise to a great deal of uncertainty and obscurity. What would be meant by an improvement which was an improvement which did not alter the holding? We feel that almost every improvement does alter the holding. If we admitted the Amendment it would mean that a direction could not be given under Clause 14 in respect of even a trifling improvement since it could be said that, to a certain extent, the improvement would alter the character of the holding.
The hon. and gallant Gentleman the Member for East Grinstead (Colonel Clarke) said that a tenant may be given directions to carry out an extensive alteration to the building. If he does, he is entitled to compensation, but he is only 314 entitled to compensation equivalent to the increase in value to the landlord of his holding by reason of the carrying out of the improvement. Even ii the landlord has to pay that compensation the landlord does get an equivalent increase of value in his holding. When he re-lets to another tenant he can charge an increased rent in proportion to the increased value of the holding. We have drawn the line carefully between those improvements which should and should not be subject to direction, in limiting the ones which cannot be subject to direction to those for which it is indispensable to get the landlord's consent for compensation to become payable.
I put that to the House as a fundamental answer to what has been said. Secondly, I say that the wording of the alteration is bound to occasion difficulty and obscurity and probably rule out any improvement, even the smallest. If the tenant carries out extensive improvements of the type contemplated in Part II of the Schedule, he gets compensation equivalent to the increased value of the landlord's holding, but the landlord when he relets can charge an extra rent equivalent to the increase in that value. The landlord gets a holding which is more valuable than it was before, exclusively by reference to the increase in the value due to the carrying out of the improvement. For those reasons I must oppose the Amendment.
It is very much within the purview of this Amendment to know what is the principle underlying the division in the Third Schedule of Parts I and II, and why one part is included in this Clause and the other half is not. It was explained to us in Committee upstairs that the improvements in Part I of the Third Schedule were improvements which were expected to change the character of the holding as distinct from those in Part II which are improvements not expected to change the character of the holding. I do not think that distinction has been entirely successful. In Part II will be found a number of items which I think no practical man would dispute are likely to change the character of the holding. If this Amendment is accepted, I do not anticipate the difficulties which the learned Solicitor-General seemed to think would arise in a great many cases. In fact, if one looks at several of the improvements listed in Part II of the 315 Schedule, such as the erection of buildings, the making of roads, and the provision of embankments or sluices apart from their repair and maintenance, I think one must agree that it would be very hard to carry out work under those headings without altering the character of the holding. I wish that the Government would think again before they exclude our suggestion that works under Part II of the Third Schedule which change the character of the holding should be treated as in the same class as those in Part I. We are not bringing forward this Amendment because we anticipate hardship, but because we consider that the Clause as at present drafted is likely to achieve bad administration which could be easily improved by its acceptance.
§ General Sir George Jeffreys (Petersfield)
I wish to support the Amendment. The reference of the learned Solicitor-General to the use of the word "alteration" seemed to me to be a little short of a complete description because it is not alteration that we are protesting against, but the alteration of the character of the holding. I would give a simple example of what might alter the character of a holding very considerably: Supposing that a tenant of an arable farm—very likely a good arable farm—wished to change the character of the holding and make it a dairy farm. It surely would not be reasonable to ask for compensation for the very considerable extra buildings which would be necessary for the purpose of a dairy farm. That would alter the character of the holding, and I do not think that would be a reasonable excuse to make. The Solicitor-General also referred to the possible loss or gain to the landlord in consequence of any such alteration. I suggest that the average landlord is perfectly well aware of the factors that may affect the value of the holding which belongs to him, and he would be very unlikely to object to anything which would enhance its value and make it a better holding. I do not think any objection would be raised on those grounds, and I suggest therefore that the Government might think again. This is a very simple Amendment which makes a very small alteration; it would not alter the strength of the Bill in any way, and would certainly make the Clause fairer in 316 its operation, and I hope the Government will think again and accept it
§ 9.30 p.m.
§ Major Mott-Radclyffe
The learned Solicitor-General has over-simplified the object of this Amendment. It is not quite as simple a proposition as he tried to convey to the House. What we think is undesirable is that a tenant should be directed to carry out an improvement on a holding which in fact would completely alter the character of that holding. My hon. and gallant Friend the Member for Petersfield (Sir G. Jeffreys) gave the obvious example of a farm being changed from an arable farm into a dairy farm. That is the most obvious example one could give, because the actual cost of such a conversion would be very high indeed. The learned Solicitor-General said that in such an event it was all right, because the landlord could perfectly well charge extra rent in relation to the improved value of the holding. It is not, however, only a question of whether or not the landlord can charge extra rent; the really important question is whether, in view of the new use to which the farm is to be put because of the alteration of its character, the economic level of the new type of farming will enable that particular farm to carry the extra rent to pay the interest on the capital expenditure. That involves the whole issue of whether or not, by altering the type of a farm, one is running into the very great danger that in a few years' time the new type of farming which will be carried on on that farm may well be entirely uneconomic, and therefore quite unable to carry the interest on the capital expenditure.
§ Amendment negatived.