I beg to move, in page 27, line 14, at the end, to insert:Provided that compensation shall not be payable under this Section where the landlord has made to the tenant an offer in writing to withdraw the notice to quit and the tenant has unreasonably refused or failed to accept the offer.Now that the Minister is taking some of the advice which was given to him upstairs to incorporate some of the 1923 Act, which was an excellent Measure, into the drafting of this Bill, I hope he will accept this Amendment. It is drawn from the 1923 Act, and it gives a landlord an opportunity of withdrawing a notice to quit if a tenant is given an offer within a reasonable time. "A reasonable time" has to be interpreted by the parties concerned. I think that the provision I am proposing might be quite useful to the tenant as well as to the landlord. If circumstances change after the notice has been given, and the landlord feels he can withdraw the notice, it might be to the tenant's interest to remain as tenant, and it might be of mutual advantage if this provision was inserted. It has worked very well in the 1923 Act, and I see no reason why it should not work here.
§ The Solicitor-General
We really cannot accept this Amendment, because we take the view that it goes a good deal too far. What is the situation which one is considering? Clause 29 provides that the tenant, in the event of a notice to quit being given, is entitled to certain compensation for disturbance. The Amendment seeks to provide that where a landlord has served a notice on the tenant, but offers to withdraw the notice 429 even at almost the last minute—[HON. MEMBERS: "No."] Hon. Members say "No," but I think that must be the effect of the Amendment. The question is what is reasonable and if it is at any time which is sufficiently far away from the expiry of the notice to be entitled to be described as a reasonable time, the tenant must be bound by it or lose his compensation. That is not fair. If a landlord has given notice to quit, surely the tenant should be allowed to treat that as a serious, notice, which is intended to operate as such. If it is given, the tenant, as an ordinary prudent person, will begin to take steps to reorganise his existence, to find accommodation, and to think about how he is to move his equipment, etc. Surely, it would be most unfair on the tenant to expect him to be kept on tenterhooks in the expectation that the landlord might possibly at some time, before the expiration of the notice, change his mind and withdraw it.
It is not expecting too much of the landlord to ask that if he gives notice, he must make up his mind definitely one way or the other, before he does so, as, to whether he wishes that notice to operate If he gives notice I should have thought that he could be expected to make that decision. Any grown-up person should be able to take a decision of that sort, and if he gives notice, he should be held to it. If a tenant, perfectly willingly, agrees to the notice being withdrawn, that is another matter, but if, having received notice, he has begun to make his arrangements accordingly, then fairness and justice between the two parties requires that the landlord should be bound by his own act. That is the normal course of events in every other business relationship. If the tenant is prepared to release the landlord from the effect of his notice to quit, that, as I say, is another matter. I would ask the House not to accept this Amendment, because it is really most unfair to the tenant, and would give a loophole to the landlord, which fairness and justice do not require that he should have. Either the landlord wishes to give notice or he does not, and before he gives notice he should make up his mind one way or the other.
§ Mr. York
The Solicitor-General has got hold of the wrong end of the stick. The reasons for which notices are withdrawn are not the sort of reasons which he ap- 430 pears to have in mind. For example, in the case of a notice to quit which has been given in order that the owner's son may take over the farm, the son might die. In that event there is then, in many cases, no point in the owner of the farm taking it over. In that case he would make the tenant an offer to withdraw the notice. Where the unfairness might come in would be if there was any unreasonable delay. The definition of "unreasonable" in this connection is very simple. It has been working for 25 years or so with perfect satisfaction, and never to my knowledge has there been one quarrel about this point—[Interruption.] I qualified my statement by saying that in my experience, and I have a fairly wide experience in these matters, I have not come across one.
This Amendment is an inducement to the landlord to withdraw his notice where circumstances change. It is not really a serious argument to contend that once a man has made up his mind he should be made to stick to that decision. Under normal circumstances that is perfectly true, but the sort of instances in which this Amendment would be a valuable provision will arise because the circumstances have changed, and when circumstances change, surely it is an arguable proposition that there should be an inducement to the owner to say "Circumstances have changed. Would you like the farm back again?" The Government should justify why they are not continuing the provision of the 1923 Act in this case. The Solicitor-General did not attempt to justify that, except to say that it was high time that the owners knew their own minds when they gave their notice. That is not a very strong point. This provision has worked satisfactorily for a long time. It is an inducement which will not exist if this Amendment is not accepted. The Government would be well advised to think again about the matter and to re-enact that part of the provisions of Section 12 of the old Act.
§ Mr. Gallacher (Fife, West)
This Amendment shows that hon. Members opposite, for all their protests, are not concerned about the tenant. Their one concern is the decaying landlord class of this country. What happens if a tenant gets notice to quit? Does he wait for the termination of the notice or does he im- 431 mediately attempt to get another means of livelihood. He does the latter thing right away. Even if the landlord did withdraw the notice, the tenant should still be entitled to compensation, because he is bound to bear a considerable amount of expense even though there may be only a few days between the notice being served and withdrawn. There is no thought in the minds of hon. Members opposite for the workers on the land. Every opportunity is taken by them to protect the land and to get the money. They take every chance of providing compensation at the expense of the Government for the landlord, but they are against compensation when it is the landlord who might have to pay. What a sorry miserable gang they are.
§ Major Legge-Bourke (Isle of Ely)
The hon. Member for West Fife (Mr. Gallacher) seems to be seeing red as characteristically as usual. His misrepresentation of the view of hon. Members on this side of the House was particularly marked. I should have said that one of the objects of this Bill is to try to keep things working smoothly between the landlord and the tenant.
§ Major Legge-Bourke
This Amendment should help the good relations between landlord and tenant. In certain cases the tenant may be very reluctant to go and only too glad to be allowed to stay on.
§ Major Legge-Bourke
The Solicitor-General made great play with the meaning of the word "reasonable." The meaning is shown fairly clearly in Clauses 12 and 14. One can see how the word is being used in this Bill where it says:Any person authorised by the Minister in that behalf may at all reasonable times enter upon the land …Yet, according to the Solicitor-General, we do not know what the word "reasonable" means. The Solicitor-General said that nobody knew what the word meant when it was pointed out that this notice would be given or withdrawn only within a reasonable time. We have the word mentioned again in Clause 14 (8) which says: 432Where … the Minister is satisfied that it is reasonable that the said time should be extended.The Bill seems to have "reasonable" running through it the whole time. I should have thought that what was sauce for the Government was also sauce for the Opposition.
§ 5.45 p.m.
§ Captain Crookshank
I hope the Minister will consider this discussion between now and the final passage of the Bill. The Solicitor-General has not really shown any cause why this Amendment should not be made. It has been the law for a quarter of a century. Experience shows that it has met certain cases which have arisen. Obviously, it is not a matter which comes up every day. What the Solicitor-General says is that the grown up person should be able to make up his mind. When he has given notice, he should stick to it; he should have known exactly what was wanted. For a Member of this Government, a Government which in 48 hours changed its mind on one of the most vital issues, to come before the House in this Session, to say that any reasonable grown up person should make up his mind—well, that settles that.
§ Amendment negatived.
§ Major Wise (King's Lynn)
I beg to move, in page 27, line 30, to leave out from "to," to "without," in line 32, and to insert:one year's average profit arising from the occupation of the holding as assessed for Income Tax purposes based on the assessments of the three Income Tax years immediately preceding the date of quitting the holding and in the event of such assessments covering the occupation of two or more holdings they shall be divided and apportioned for the purposes of this Subsection according to the acreage of each such holding and in that case one year's average profit as aforesaid shall be taken to be the apportioned amount applicable to the holding for which the notice to quit has become operative and to which this Subsection thus applies.
§ Mr. Deputy-Speaker
At the same time hon. Members can discuss the following two Amendments which stand in the name of the hon. and gallant Member for King's Lynn (Major Wise):
In page 27, line 35, leave out "one year's rent," and insert:one year's average profit as aforesaid.433 In page 27, line 45, at end, insert:at the rate at which rent was payable immediately before the termination of the tenancy or one year's average profit as aforesaid whichever is the greater.
§ Major Wise
The Minister has been open to a good deal of frontal attack and I hope that, as this Amendment is proposed from this side of the House, he will not think that he is being attacked in the rear. The object of this Amendment is to amend the 1923 Act. That Act is embodied in this Bill so far as it affects claims for compensation for disturbance. The Amendment seeks to alter the amounts from one year's rent to one year's average profit. Under the 1923 Act, if a tenant's claim for compensation for disturbance is upheld, it is possible for him to claim from his landlord the amount of one year's rent if he can prove loss or expense directly attributable to his quitting. On the other hand, if he considers that amount is not sufficient, he is enabled to claim a higher amount up to two years' rent with the proviso that he must afford the landlord an opportunity of making a valuation of the stocks and other things which he wishes to sell or to remove.
Many things have happened in farming since the 1923 Act was passed. Farming is now a business. It is recognised by the Chancellor of the Exchequer as being a business in addition to being a way of life. When the 1923 Act was passed, tax was payable by the farmer under Schedule B on one year's annual value. Previous to that the farmer was assessed on Schedule B on one-third of the rent. In 1923 a farmer was assessed on one year's annual value. Later it reached two years' annual value, and now it is on a different basis altogether. The position has arisen that farming has become such a business—possibly a profitable business—that it is laid down in the Finance Acts that if the rent of the farm is under £100 a year the farmer pays on the basis of three years' rent. If it is more than £100 a year, then he produces accounts and pays according to his profits.
The position which I take up is that, if the State or the owner of land is in a position to disturb a tenant and substantiate a notice to quit, he should be able to claim compensation on the basis of the profit which he either makes or the State 434 presumes he makes. Therefore, for the purpose of this Amendment, I am suggesting that the average of the previous three years' Income Tax assessments should be taken. The position may arise, and it is one of some importance, that the landlord may be able to substantiate a notice to quit, and the occupier is in a position to claim for disturbance. The occupier goes out, the landowner pays the one year's rent under the existing law and the disturbance claim. The owner occupies it for a short time, then sells it with vacant possession. The farmer has lost his livelihood and is faced with the difficulty of obtaining another farm, which is apparent today to many hon. Members of this House, or will be in the near future. The farmer has been compensated to the extent of one year's annual value, and the landowner has cashed in on possibly five or possibly more years' annual value by reason of vacant possession. That position may easily arise.
Let us take the position with regard to the State. Under this Bill, and under other Bills, the State is in a position to acquire land for various purposes—research, development, experiment, smallholdings and for other reasons. The State goes to the landowner and purchases a farm, subject to the tenancy. The purchase is completed, and then the State steps in and gives the tenant notice to quit, also agreeing, under this Bill, to pay a disturbance claim. Again, the tenant loses his livelihood. The State has purchased the land at a fair price, subject to the tenancy, but compensates the tenant only on a rental basis. In other operations, where the State disturbs businesses, compensation is paid on a profits basis, and, if compensation can be paid to other businesses on a profit basis, then the view I hold is that the State should compensate the farming community, which is a business community, also on a profits basis.
I hope this Amendment will find favour with the Minister. He may say, as I think perhaps he will, that neither the National Farmers' Union nor the professional organisations have desired any particular alteration to the 1923 Act in regard to compensation, but the future is before us, and very many State purchases of land will come into operation. The desire which I have in moving this Amendment is that there should be no 435 possible hardship on a tenant or an occupier of land who is disturbed for the purposes of the State or for the purposes which may arise in regard to ownership.
§ Mr. Gerald Williams (Tonbridge)
Will the hon. Gentleman tell us what happens if the farmer has been making a loss, as he may well do in the future? Will he pay compensation to the State—or the landlord?
§ Major Wise
It is quite possible that, for one year, a farmer may make a loss, but the Amendment suggests that the average of the three years' Income Tax assessments should be taken. We hope that this Bill will prevent farmers making losses, and we do not envisage that losses should be made in agriculture. We look forward to steady agricultural prosperity.
§ Mr. Alpass
I beg to second the Amendment.
In doing so, I claim that I am living up to my desire to do justice to the farmers of this country, and I am quite sure that, if hon. Members on the other side are sincere in the many professions which they have made regarding the interests of farming, they will also give it their unstinted support. This Amendment will only affect the good farmers. The bad farmers cannot claim compensation for disturbance. If this Bill, with its security of tenure Clauses, is accepted by the House, the only occasion on which a good farmer can be dispossessed, and therefore claim compensation, will be if the land is required for a national or other public purpose. I suggest that, if for this purpose a good farmer is to be dispossessed, he should not be made to suffer a financial loss.
It is said that perhaps the farmers do not want this Amendment, but my experience proves exactly the contrary. I have addressed meetings of the National Farmers' Union in my own constituency—very large meetings, the largest ever held in the history of the Union. That was only natural, because I was explaining this Bill. At every meeting, questions have been put to me by people who have been affected and will be affected by disturbance. In my constituency we have had the construction of the great runway for the "Brabazon," and we have had farmers dispossessed on that account. We also contemplate new roads through 436 the middle of my division to the new Severn Bridge, and the good farmers there are very anxious about what is going to happen to them.
We cannot argue that if land is required, for a national purpose it shall not be taken, but we do say that a man whose living is taken from him on that account shall be fully, fairly and amply compensated. Other people are compensated when their businesses are taken from them on the basis of their profits. I am surprised that hon. Members on the other side should talk about farmers making losses. I believe that time has long since gone by. If this Measure is properly operated, it will be their own fault if they do make losses. I was talking the other day to a prominent farmer in my division, who is a member of the county executive committee, and who holds very strong views, and he said "A man must be, well, not a wise man, but the very opposite, if he cannot make a profit, and he has no business to be a farmer if he cannot." This Bill will assure to the farmer a reasonable living and a profit. We maintain that it is only elementary justice that if for State or public purposes he is dispossessed, he should not suffer a financial loss. I feel sure that the Minister, with his usual desire to be fair and just to farmers and tenants, and his desire to see them inspired with confidence and putting their best into the work, will accept the Amendment. I am equally sure that if hon. Members opposite are true to what they profess when they go to their constituencies, they also will give this Amendment their support.
§ 6.0 p.m.
§ Mr. T. Williams
I regret that I cannot accept the Amendment. I am sure that neither of my hon. Friends is terribly disappointed, or, at least, terribly surprised at my attitude, in view of what I said on this sort of Amendment in Standing Committee. It is true that the matter was discussed in Committee, and that I made a statement there, and, in fairness to my hon. Friends, I have seriously thought about the matter since then, but I am bound to confess that I see no justification for making the change indicated in the Amendment. It is clear that the object of the Amendment is to obtain for the person who is dispossessed or disturbed greater compensation than has been his lot in the past. The present pro- 437 cedure started in 1923, but it does not follow that everything that started in 1923 is the right thing. Indeed, we have just refused to accept a proposal by hon. Members opposite to insert in this Bill something that was in the 1923 Act. The suggestion of my hon. Friends that we should make a change here is not, however so far as I have been able to ascertain, in the interests of agriculture. After all, rentals are reasonably convenient yardsticks, and to try to substitute an average of the annual profit over a period of three years would introduce many great complications.
Only about 50 per cent. of the farmers in this country pay Income Tax on profits under Schedule D. The profits basis for taxation is automatically applicable only to farms with a rental of over £100 a year, or to market garden holdings. Where it is less than £100, the tenant has the choice of an assessment based on profits, or three times the rental value. Moreover, Income Tax is based upon profits in the previous financial year, and not in the year in which the tenant would quit. Therefore, the profits for the last year of farming by the tenant would not be known, and the three years principle suggested in the Amendment could not be operated. Apart from these very practical difficulties, the annual profit procedure might well turn out to be injurious to the tenant. For instance, if one assumed that there were two very bad years, compensation might be very tiny indeed.
§ Mr. Williams
I did not anticipate the snow and ice this year and the loss of 4,500,000 sheep and 60,000 or 70,000 cattle; I did not anticipate the floods in the Fens, but, unfortunately, they came. It might well be that in one year a person with three lucky years behind him might come out on top, but it could happen the other way round. It is true that the Amendment also suggests that the maximum compensation should be either two years' rent or one year's average profit, whichever is the greater, but, in order to obtain compensation above the minimum, a man is required to prove additional loss over and above the minimum, and under provisos (b) and (c) of Subsection (2), he must give the landlord a reasonable opportunity of making a valuation of his goods and implements, and must give 438 notice to the landlord that he intends to make such a claim at least a month before the termination of the tenancy. In this type of case, therefore, the tenant would be put to a considerable amount of trouble. There would certainly be many disputes and infinitely more arbitrations than there are at present.
I submit to my hon. Friends that one year's rent may not be a strictly arithmetical, reasonable figure for compensation, but I submit also that an average year's profit covering the past three years may likewise not be an arithmetical, fair and reasonable amount of compensation. On the whole, therefore, I think that the rent, which is supposed to be a fair reflection of profitability, is the right thing. If there had been any extensive demand on the part of the farming community for this change, I am sure that representations would have been made to me during the past 12 months when we have been preparing this Measure. No such representations have been made, and I can only conclude that the fact that we are providing in the next Clause security of tenure satisfies the farming industry that we are going as far as is necessary in all the circumstances. In view of the complications that would arise from an endeavour to take a three years' average of profits and the difficulties that would ensue, I hope my hon. Friends will see fit to leave the matter where it is, because I think that will give the maximum contentment to those who are involved.
I rise mainly to irritate the hon. Member for Thornbury (Mr. Alpass) and the hon. Member for West Fife (Mr. Gallacher) by defending the tenant farmer. I always find the landowners and farmers in the Bristol area very different from those in the rest of England. This is a matter that has been discussed among tenant farmers for some years. The majority of them realise that there would be many anomalies and hardships if profits were made the basis for computing compensation for disturbance.
Suppose, for instance, that last year was the first year that a man went on to a farm, and that he had a disastrous harvest. This year he would have had the floods and the snows, and would have lost many sheep and cattle. By the end of this year he would probably not be farming as well as he ought to do. The landlord could then ask for a certificate 439 from a war agricultural committee and would not have much difficulty in proving that he could improve the output of that farm. The result would be that the tenant would be given notice to quit, and would probably get no compensation.
The question of profits is something about which the Minister knows more than does the hon. Member for Thornbury. The Minister knows quite well that profits do not exist to the extent that the hon. Gentleman thinks they do. I think that more hardship would be caused if this Amendment were adopted.
§ Mr. Alpass
The hon. Member said that the landlord would be able to get the tenant out. We are not advocating a claim for compensation by the bad tenant; it is only good tenants who, under the Bill, would be entitled to claim compensation.
§ Mr. Wilfrid Roberts (Cumberland, Northern)
I hope the Minister, and particularly the agricultural community, will think a little more about this point. I believe there is justification for basing compensation on profits, and that it is a more reasonable basis than that of rent. With the increased intensity of farming the rent has become a much less important factor than it was at one time, and especially is that true of the type of farming with which I am familiar, where the values of livestock, buildings, equipment and wages have risen. Moreover, the differences between types of farming are increasing. One farmer may farm much more intensively than another, although they may pay similar rents. Therefore, one farmer's profits may be much larger than those of another, and the disturbance caused to his life may be much greater. For instance, a poultry farmer with a very small piece of land may carry on a business with a big turnover and large profits. There are other types of farms where the rent is no longer a fair basis on which to judge the scale of a man's farming. Therefore, I hope the farming community will think about this question and consider whether the introduction of the element of profit would be a fairer basis for compensation.
I appreciate the Minister's difficulties. I think there would be a way out of those 440 difficulties, which would be to the advantage of the good farmer and of the farmer who is making the very best use of his land. It would be to give an option of being compensated on either rent or profits. That would safeguard the case referred to by the hon. Member for Leominster (Mr. Baldwin) of the bad year, or a series of bad years. It would prevent a landlord from taking advantage of such a situation and getting rid of a tenant without paying him much compensation. It would safeguard the man who was not farming so profitably as others. If a tenant had the option of claiming on a profit basis such as is set out in this Amendment, it would be a great safeguard to the progressive and energetic man with numerous sidelines on his farm, and who, if he lost the farm, would have infinite difficulty in finding another opportunity of carrying out the same undertaking.
§ Amendment negatived.
§ 6.15 p.m.
§ Colonel Clarke
I beg to move, in page 28, line 20, at the end, to insert:(5) Compensation shall not be payable under this Section in the case of a permanent pasture which the landlord has been in the habit of letting annually for seasonal grazing and which has, since the third day of September, nineteen hundred and thirty-nine, and before the date when this part of this Act comes into operation, been let to a tenant for a definite and limited period for cultivation as arable land, on the condition that the tenant shall, along with the last or waygoing crops, sow permanent seeds.I am afraid I must again call the attention of the Committee to the 1923 Act. This Amendment is designed to deal with certain cases that may arise as a result of the war, and I have no doubt the Minister will recognise in the Amendment words similar to those which appear in Section 12 (7, f) of the Agricultural Holdings Act, 1923, which contains similar provisions to meet the same cases that arose out of the 1914–18 war. Exceptional treatment was accorded to certain land. Permanent pasture, in order to meet war requirements for growing corn, was broken up as a temporary measure, but where that was done arrangements were made with the tenant whereby it was only to be for a limited period—for the period of the war or for a certain number of years. At the end of that time, it was to be handed back for its ordinary use as permanent 441 pasture or seasonal grazing, and, before it was handed back, with the last or way-going crop should be sown permanent seeds. If this Amendment is accepted, we shall only be doing the same thing as was done at the end of the first world war, and which then worked satisfactorily and was a help to all concerned.
§ Mr. T. Williams
As the hon and gallant Member for East Grinstead (Colonel Clarke) has said, it would be unfair to penalise a landlord in the case to which he referred; but there is no need for the insertion of the proposed words, since the matter was dealt with under Section 26 of the Agriculture (Miscellaneous War Provisions) Act, 1940, as amended by Section 14 of the Agriculture (Miscellaneous Provisions) Act, 1943 Those Sections provide that if after the commencement of the 1940 Act, and before the end of the war period, which is 31st December, 1947, a contract of tenancy has been made for a term not exceeding eight years, and the contract provides that the land shall be cultivated as arable land, then if immediately before the 1940 Act the land was not being used for agriculture, or was being used for agriculture but was let on less than an annual tenancy—for example, seasonal grazing—or consisted of permanent pasture and was occupied by the landlord, the Agricultural Holdings Act, 1923, shall not apply to such a contract of tenancy. Since under Clause 44 (1) of the Bill, Part III is to he construed as one with the Agricultural Holdings Act, 1923, this means that Part III of this Bill and the 1923 Act will not apply to such contracts of tenancy. Therefore, in these circumstances the landlord cannot be penalised because his seasonal grazing has been ploughed up.
§ Colonel Clarke
I am obliged to the right hon. Gentleman for that explanation, which satisfies the point I have raised, and I beg to ask leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn
§ Amendment made: In page 28, line 38, leave out "that Section," and insert "the said Section fourteen"—[Mr. T. Williams.]