New Clause

HC Deb 13 June 1968 vol 766 cc546-56

LANDLORD'S POWER IN CERTAIN CASES TO REQUIRE TENANT TO PURCHASE HOLDING

Lords Amendment: No. 21, after Clause 19, in page 19, line 3, at end insert new Clause "A": — A. In any case in which, in pursuance of the foregoing provisions of this Part of this Act, a landlord is precluded from giving an incontestable notice to quit to a tenant who has acquired right to the lease of an agricultural holding, the landlord may give notice to the tenant requiring him to purchase the holding and in any such case the tenant shall purchase the holding at such price as may be agreed between the parties or, in the case of dispute, as may be fixed by the Scottish Land Court who shall fix the said price on the basis of what price the holding would realise if offered for sale in the open market with vacant possession.

The Secretary of State for Scotland (Mr. William Ross)

I beg to move, That this House doth disagree with the Lords in the said Amendment.

I hope hon. Members will bear with me for a few minutes to allow me to explain why we do not agree with this Amendment. This House has not had any previous discussion on the proposal embodied in the new Clause. The proposed new Clause would be at variance with the principles of Part III of the Bill. Part III is designed to give security of tenure as a tenant to a successor to an agricultural holding who is a near relative of the deceased tenant. The effect of the new Clause would be that in cases where under Clause 18 a landlord loses his present right to give a successor an incontestable notice to quit, he would have a right to require the tenant to purchase the holding at an agreed price, or failing agreement, at a price fixed by the Scottish Land Court on the basis of the open market value with vacant possession.

Whatever the merits of the proposal, the new Clause as it stands would not do. It does not say what is to happen if the tenant does not purchase. Presumably the intention is that the landlord would then be able to serve an incontestable notice to quit, but it does not say so. To that extent the Clause is not satisfactorily drafted.

There are much more serious objections. If the landlord is given the right to insist on the tenant purchasing the holding at open market value, it seems likely that this power would be exercised at least as often as the old power to dispossess under Section 6(3), of the 1958 Act. I suspect that it may be argued that the tenant should be able to raise the money to purchase it on the security of the holding. We all know that it is not always possible at all times to raise money when it is wanted. Acceptance of this new Clause would perpetuate that sense of insecurity which it is our purpose under Clause 18 to remove. A tenant would be just as uncertain as he is today about the fate of his farm when he dies. If this new Clause were accepted we are sure that it would be likely to create as much hardship as that which we have been trying to remove.

It may be argued that the inclusion of the new Clause would afford a fairer deal for the landlord by allowing him to realise his farm. We have looked at Clause 18 a great deal from the landlord's point of view and have introduced Amendments to add to the circumstances in which the landlord may disposses even a near relative. There are likely to be many occasions in which a landlord will be able to realise the value of his farm if he so wishes, but we could not possibly accept this new Clause. It is at variance with the principle of this part of the Bill.

A letter which we received at the Scottish Office from the National Farmers' Union of Scotland may be of inerest to the House. It says: I am writing to affirm that the Union strongly object to the provisions contained in Clause 20 of the Bill as amended on Report in the House of Lords, and would urge the Government to take the necessary steps to have this Clause removed…. One of the main objections is that, while the tenant's successor may be perfectly capable of financing the running of a tenanted farm he may not be in a position to raise the necessary capital to actually purchase the holding. This could lead to the type of hardship which is the very thing the Government are trying to minimise by the new proposals on succession to farm tenancies. In view of all this, I hope that the House will conclude that the Government are right in advising that the proposed new Clause should be rejected.

Mr. Stodart

I hope that I can say that my attitude, and the views that I have expressed, during the several hours of debate that we have had on this part of the Bill has been based solely upon what I believe will be the effects of the Government's proposals on the efficiency of the agricultural industry. It is perfectly apparent that my views are not shared by others. Despite that, we can still no doubt speak to one another amicably.

Since the main debates took place in Committee and the tumult and the shouting died down, it is interesting to observe the reaction which is now taking place in Scottish agricultural circles. It is not surprising that the representatives of those who own land, namely, the Scottish Landowners' Federation, continue not to be pleased. Despite the views the Secretary of State just read, sent to him by the Scottish National Farmers' Union, it must surely be mortifying to him to have his hand, if not bitten, at least snapped at by those whom he has sought to feed, because many branches of the N.F.U.—if he reads the agricultural Press, as I am sure he does, he must have noticed these reports—have been making a point of saying that they did not ask for this legislation as it has been presented to the House but only for the rights of what they describe as a competent son; not the near relative as it is defined in the Bill.

Under the present position in Scotland —or, perhaps I should say, the position up to this present legislation—certain members of a family could inherit the remainder of a lease. At the end of that lease the landlord could, if he wished to do so get possession. Under the proposed legislation, which is now in its final stages, a farm can be passed to a near relative, admittedly under certain restrictions, for perpetuity.

The proposed Clause would permit a landlord, faced with such a succession, to insist upon the new tenant purchasing at vacant possession value on the open market. The right hon. Gentleman asked a very pertinent question which had struck me: what happens if he does not? In Committee we moved several Amendments. Two of our suggested improvements feature in the Bill—those about the successors having to be qualified, although here again it did not go quite as far as we should have liked, and the one which has just been dealt with about the successor not working another farm.

There are other Amendments that I should like to see, and I do not doubt that in due course we shall see them. But it would be less than honest of me if I said that I approve of the proposed new Clause. I do not think that it in any way meets the situation. I hope that I am continuing the approach which I have adopted throughout when I say that I do not think that this is the right way TO tackle a problem which has for long proved intractable, but which I believe— and being a farmer I am a perpetual optimist—is capable of solution if the two sides involved are prepared to talk together, and when doing so to indulge in a certain amount of normal give and take.

Therefore, I do not propose to resist the Government's intentions on the Amendment, though I can, of course, only advise my hon. Friends.

9 p.m.

Sir Frank Pearson (Clitheroe)

As a mere English Member I hesitate to intervene on what is essentially a matter concerning the Scottish landlord. But although the intricacies of the tenancy law in Scotland may not be altogether a subject for an English Member to speak on, there is an underlying principle of equal importance to England, and it is on that principle that I should like to say a few words.

Those of us present who went through the Committee stage will remember the circumstances in which Clause 19 was introduced. The reasons for its introduction were never really justified to the Committee. The Minister had a bright idea that it should be introduced at a late stage, but those of us who knew anything about the background knew that political pressures had been exerted over one or two cases of genuine hardship, pressures to which the Minister gave way, probably against his better judgment. In giving way and legislating for a hard case the Minister has made bad law.

The principle underlying the Clause is thoroughly bad. Although the other place may not have drafted its new Clause in the best possible way—and I accept that certain criticisms can be made of it—the other place was trying to achieve something with which I have the greatest sympathy.

Under Clause 19, near-relatives are to be given nearly permanent security of tenure. A daughter, who may marry anyone—may not marry a farmer but a dentist or a writer to the signet—as long as she has reasonable knowledge of agriculture is to be given security of tenure. It will be similarly the case with widows. But the practical result will be that the landlord will not be able to get vacant possession of his land.

In these cases, we are not dealing only with large landlords. Very often we shall be dealing with people who own a couple of hundred acres or so and to whom the value of their holdings will be of intense interest and meaning. In depriving owners of vacant possession when tenants die we shall be robbing them, on a 200-acre farm, for example, of £20,000 at £100 an acre—the difference between the value of vacant possession and the value of possession under tenure. That is the extent to which the owners are likely to be robbed by this provision.

I believe that the introduction of the Clause is totally retrograde and a further step towards undermining the efficacy of the landlord-tenant system. I do not know what the Government attitude towards that system is. I do not know whether they regard it as good or not. I do not really care very much. But I do say that, if the tenant farmers are to be asked to carry the capital value of the land which has been carried by the landlords up to date—because that is what will happen if the landlord-tenant system breaks down—agriculture will find it very difficult to raise the capital to carry on. By this provision, we shall be forcing very often the small landlord to hold his farm under tenancy or to sell it at a very substantial loss, and when the Minister talks about hardship it would be as well to weigh up just where the hardship lies.

Mr. Buchan

But that is precisely what we propose. We have written into the rest of the Bill, to which the hon. Gentleman is not referring, the question of relative hardship between landlord and tenant. The situation he envisages is taken care of in the rest of the Bill.

Sir Frank Pearson

Does the hon. Gentleman say that the question of hardship from the landlord's point of view will be taken care of when these cases arise? Will he confirm that?

Mr. Buchan

Yes. It is already confirmed in the Bill and in the Agricultural Holdings (Scotland) Act.

Sir Frank Pearson

I am glad to hear the hon. Gentleman say that. Where we get a small landlord owning a relatively small acreage, and where the operation of this Clause would lead to the loss of at least £100 an acre, I hope the tribunals which will deal with these matters will take account of the hon. Gentleman's words. If he gives me that assurance I shall be very much more satisfied than I have been on this matter. I do not want to detain the House much longer.

Mr. Buchan

Hear hear.

Sir Frank Pearson

I have made a valid point. I hope that, when the Minister of Agriculture considers the situation in England, he will bear in mind the fact that the landlord-tenant system has served agriculture well. If the Minister undermines it unduly, the agricultural industry will suffer. It is all very well to talk about hardship. One may get hardship in certain cases, but consider the hardship on both sides and consider the contribution to agriculture that landowners have made in the past and are making today.

We accept that the Clause has certain flaws in it, but we would not wish to divide upon it. However, I hope that I have made clear to the House that the feeling and philosophy behind Clause 19 is totally irregular. I reject it and have every sympathy with the new Clause passed by their Lordships which, for various technical reasons, we are unable to accept.

Mr. Robert Maclennan (Caithness and Sutherland)

The hon. Member for Clitheroe (Sir Frank Pearson) has gone far to eliminate the impression given by his hon. Friend the Member for Edinburgh, West (Mr. Stodart) that the opposition to this important addition to the Bill was somewhat more muted and that now the light of reason has been cast upon our councils here.

It comes as no surprise that the hon. Member for Clitheroe should find underlying the new Clause proposed in another place certain thoughts with which he is in sympathy, because he has never made any secret of the fact that he considers the landlord a more efficient farmer than the tenant. This has been the drift of all his contributions to the discussion on this important matter.

It has been hard for hon. Members on this side to understand the logic behind the hostility of the Opposition to this new Clause which was attached to the Bill at an earlier stage. I speak with considerable satisfaction having, prior to the Government's intervention in the matter, brought forward a Bill to secure the very purposes which this Clause has now secured. Whatever may be the views of the scattered branches of the National Farmers' Union, to which the hon. Member for Edinburgh, West referred, at least the Caithness branch of the N.F.U. has been categoric in its support for the Government. At my last meeting with that branch two weeks ago it echoed the words of the letter of which the Secretary of State has spoken tonight. Some concern was expressed at the possibility that the Government might countenance the quite unworkable proposals put forward in another place which would strike at the principle underlying the new Clause guaranteeing to the near relatives of deceased tenant farmers security of tenure.

I welcome the assurances which we have had tonight from my right hon. Friend and from the Opposition that they will accept the view of the Government on this matter. I congratulate my right hon. Friend on the Measure which he has introduced. It will give much satisfaction to the fanning community throughout Scotland. This new Clause is one of the frequent examples of the benefits which are derived for Scotland from being able to attach to a United Kingdom Bill a provision of purely Scottish content.

9.15 p.m.

Mr. Alasdair Mackenzie (Ross and Cromarty)

The question of security of tenure was debated at considerable length both in Committee and on Third Reading, and I had hoped that we had heard the last of it, because it is a piece of legislation which is welcomed throughout Scotland, and Scotland only is concerned with it. I am disappointed that the matter is causing so much heart burning on the southern side of the border, because it does not affect that area at all.

It seems to me that the Opposition are unduly concerned about the effects of this Measure, because anyone with any experiencs of agriculture must realise that security of tenure is essential in the long-term interests of farming because it is a long-term business. For that reason I am disappointed to learn that many landowners are so concerned about this legislation.

It is important to note that the N.F.U. has supported this measure from the outset and that it has expressed its opposition to this new Clause. It must be clear to anyone that if we accept the Clause now it will make nonsense of all that we passed at earlier stages. I therefore think that we on this bench should be consistent and support the Government in refusing to accept the Clause.

I do not follow the argument about hardship to the landlord, because the opportunity will be there to apply at regular intervals for an increase in rent, and if there is any dispute about who will fix it, the Land Court will step in. I do not think that any Government body, certainly not in Scotland, enjoys the confidence of the people whom it serves in the same: way as the Scottish Land Court does. It has always been regarded as a most impartial body from the day it was set up, and in my opinion its status under the present chairman and members has never been higher, and that is saying a great deal. I am sure that if a case is referred to the Court, if it approves of the successor to the tenancy, it will fix a fair rent and ensure that the proprietor receives justice in every respect.

I support the Government in rejecting the Clause.

Mr. J. B. Godber (Grantham)

I have taken careful note of what was said by the hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie), that this matter affects only those North of the Border, and therefore I do not wish to intervene for more than a few moments. I do so only to make clear our position on this matter. In Committee upstairs we opposed the introduction of this part of the Bill. We felt that it was wrong, and that its repercussions could be bad. We believe that it could harm the landlord— tenant system, but if the Government pro- pose to go through with it in relation to Scotland, that is a matter for them, and they have taken their decision.

This is not the best way of dealing with the matter. We would have liked to have seen the total rejection of this part of the Bill. We think that that is the only effective way to represent our views. I hope that the Minister of Agriculture, Fisheries and Food will not become infected with the unfortunate attitude of the Secretary of State for Scotland which I believe is doing harm north of the Border. So long as it is kept north of the Border, it is not for me to intervene. If, however, it were suggested we should do anything on these lines south of the Border I would be very greatly concerned indeed. I believe that it would do grave harm to the health of British agriculture, and I wish to say that publicy and clearly.

Mr. Russell Johnston (Inverness)

I was wondering whether the right hon. Gentleman would agree that, oddly enough, the English and Scottish N.F.U.s are at variance in much the same way as he is with the Government on this, and that we do have a real division among experts?

Mr. Godber

If I may, by leave, respond to that question, I would accept that that is so. We do not, on either side of the House, always agree with the N.F.U. in either country. We have our own views. Sometimes we agree. Sometimes hon. Gentlemen opposite agree. I just wanted to make clear that we do not want penetrating south of the Border any Scottish ideas on this matter.

Mr. Ross

By leave of the House, I would say that I think this attitude to the N.F.U.s is very interesting indeed, and the views of the N.F.U.s and how they change. I would say to the hon. Member for Clitheroe (Sir Frank Pearson) that this was not a sudden thought of the Government or of the Scottish N.F.U. In fact, we have had discussions with the landowners and with the N.F.U. over quite a long time to see whether or not there could be some amicable arrangement about this, and it was obvious there was not, and that the Governmen would have to take action.

It has been supported by the National Farmers' Union of Scotland, and it has been applauded by the tenant farmers of Scotland. We from Scotland in this House are sometimes accused of not being able to take the right action at the right time in respect of something which is purely Scottish. I would have thought that every Member in the House would have been proclaiming that here is an opportunity when the House of Commons can respond, and respond quickly, by means of a United Kingdom Bill, to something which Scotland wants. This shows just exactly how this House can do it.

Is it right? I started to wonder whether the hon. Member for Edinburgh, West (Mr. Stoddart) was opposed to the principle or not, because at one time he seemed to imply that his views on Clause 18 were well known—that he was ag'in it—and then later on he talked about an intractable problem, appearing to say there was no way of solving it, of improving the position of the tenant farmers without undermining altogether the position of the landlords. He knows quite well that this is the point. We tried to get them to solve it, and they did not, and we must come down on one side or the other. Hon. Gentlemen opposite from Scotland came down on the side of the landowners. We on this side, with the help of the Liberal Party, came down on the side of the tenant farmers. Let that be clear.

I, too, read the agricultural Press in Scotland, and I also read the letters which come to me, and not a single letter has come to us from any branch of the N.F.U. complaining of what we have done.

Mr. James Davidson (Aberdeenshire, West)

The right hon. Gentleman says that in particular the Liberals came to the aid of the Government in favour of the Government's view. May I make it quite clear, as a member of fairly long standing of the Scottish N.F.U. in the Aberdeen and Kincardine area, that owner-occupiers in Scotland, certainly in the north-east, would be every bit as much in favour of the Government's view as would the tenant farmers?

Mr. Ross

I am very glad to hear that, because there have been some cases where landowners who are also fanners actually resigned from the N.F.U. because of the support it has given the Government on this.

One other point which was mentioned, I think by the hon. Member for the Member for Clitheroe, was the question of the small owner. In this respect, the rights where there is hardship are also written into the parent Act, the 1949 Act, as amended by the 1958 Act. There might be some differences as to what is a small owner, a small landlord, and when an hon. Gentleman starts talking, for example, of 200 acres which, at £100 an acre is, according to my arithmetic, £20,000, I can ony say there are parts of Scotland where that owner would not be regarded as a small landowner. I want to assure him that my concern is for Scotland. My concern is to be able to meet the needs of Scottish agriculture and I am very glad that we have the majority support in the House in respect of this and that the right hon. Gentleman has not a single Scottish Tory Member behind him on this occasion. There is not one here, though he has one on the sidelines.

I am perfectly sure that we have in this the fairly full support of everyone and I want to think my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan). There should not have been any fear about the attitude of the Government towards this Clause put in in another place. As the hon. Member for Ross and Cromarty (Mr. Alasdair Mackenzie) nas rightly said, if there are certain points to be decided by the Scottish Land Court, that court has a status which I believe is quite unique in the annals of Scottish law, in the confidence that is placed in it by those who deal there.

Mr, Hector Monro (Dumfries)

I am here.

Mr. Ross

Just in time. There may be heartburning south of the Border about what we are doing but it is heart warming and cheering north of the Border and in this matter that is what is wanted.

Question put, and agreed to.