New Clause B

HC Deb 13 June 1968 vol 766 cc560-4

COMPENSATION IN CONNECTION WITH COMPULSORY ACQUISITION ETC. OF AGRICULTURAL HOLDINGS

Lords Amendment: No. 28, after Clause 41, in page 36, line 33, at end insert new Clause B— B.—(1) Subject to the following provisions of this section, where in pursuance of any enactment providing for the acquisition or taking of possession of land compulsorily an acquiring authority acquire the interest in an agricultural holding or any part of it of the tenant of the holding or take possession of such a holding or any part of it, the compensation payable by the authority to the tenant in connection with the acquisition or taking of possession shall be assessed without regard to the tenant's prospects, if any, of remaining in possession of the holding after the relevant date. (2) In subsection (1) of this section "the relevant date" means the earliest date on which, apart from the acquisition or taking of possession, the landlord "could obtain possession of the holding in pursuance of such a notice to quit as is mentioned in paragraph (c) below if—

1. (a) the tenant exercised any tenant's option to extend or renew the tenancy in any case where, apart from this section, he would benefit from doing so; and
2. (b) the landlord disregarded any provision in the contract of tenancy or lease enabling him to resume possession of the holding or to determine the tenancy by notice before the date fixed for the expiration of its term or before the termination of the stipulated endurance of the lease; and
3. (c) the landlord served a valid notice to quit on the tenant in respect of the holding on the date of service of notice to treat in respect of the acquisition or the date of the taking of possession, as the case may be, or as soon thereafter as he became entitled to serve such a notice to quit; and
4. (d) the provisions of section 24 of the principal Act or section 25 of the principal Scottish Act (which restrict the operation 561 of notices to quit) did not apply to the said notice to quit;
• and for the purposes of this subsection any such notice as is mentioned in section 3(1) of the principal Act (which refers to notices of intention to terminate the tenancy of an agricultural holding granted for a term of two years or upwards) shall be deemed to be a notice to quit.

(3) Sutisection (1) of this section shall not apply to such an acquisition or taking of possession as is there mentioned—

1. (a) in the case of such an acquisition, unless the date on which notice to treat in respect of the interest to be acquired is served or treated as served on the tenant by the acquiring authority is after the date of the passing of this Act;
2. (b) where in the case of such a taking of possession prior notice of the taking of possession is by virtue of any enactment required to be served on the tenant by the acquiring authority, unless the date on which the notice is so served is after the date of the passing of this Act.

(4) Section 17 of this Act shall have effect as if any reference to Part II of this Act, other than the reference in subsection (4), included a reference to the foregoing provisions of this section. (5) Nothing in this section shall be construed as prejudicing the provisions of any other enactment under which, apart from this section, compensation in respect of any such compulsory acquisition or taking of possession as is mentioned in subsection (1) of this section falls to be assessed without regard to the prospects there mentioned.

The Minister of Agriculture, Fisheries and Food (Mr. Cledwyn Hughes)

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

Mr. Speaker

I think that it would be convenient to discuss at the same time Lords Amendments No. 33, in Clause 52, page 42, line 7, after "in" insert section (Modification of Restrictive Trade Practices Act 1956 in relation to agricultural marketing boards) of this Act or in and No. 39, in the Title, in line 15, after "buildings;" insert to make further provision with respect to the compensation of tenants of agricultural holdings whose land is acquired or taken possession of compulsorily;

Mr. Hughes

I am obliged, Mr. Speaker. Hon. Members will recall that Part II of the Bill had its origin in the Government's appreciation of the hardship that tenant farmers may suffer when they are dispossessed for non-agricultural purposes of the land which they farm. The Bill provides for such tenants to receive a payment, amounting to four times the annual rent of the land taken, to help them in the reorganisation of their affairs.

One of the factors which the Government had very much in mind in introducing this provision was the fact that in cases of compulsory dispossession the tenant is compensated on the basis of the unexpired term of his tenancy, and that for an agricultural tenant on a year-to-year tenancy this can be very short. Within the last year, however, there has been a Lands Tribunal decision which, if it is correct, would upset this basis of compensation as it was understood at the time when the new payment was conceded to agricultural tenants. In this case—Pettitt v. Ministry of Transport— the Tribunal's decision related compensation, in effect, not to the period between dispossession and the earliest date of expiration of the tenancy, but to the length of time for which the Tribunal considered the tenant would be likely to remain in occupation, taking into account all the relevant circumstances, including security of tenure, which the Agricultural Holdings Acts confer upon tenant farmers.

Now, obviously, if an agricultural tenant were to receive compensation on the Pettitt basis and also the special payment under this Bill, he would be benefiting twice over. The decision in Pettitt's case is at present under appeal. It is becoming evident that there is every prospect that this Bill will become law before the result is known. The introduction of a provision to restore the status quo is, therefore, unavoidable, and this is all that the new Clause does. It restores the basis of compensation for agricultural tenants to that on which we always thought it stood. It takes away nothing from the tenant's compensation which he had before. It introduces no new elements into the principles on which compensation has been customarily assessed in the past, and it does not in any way cut across the Government's desire to relieve hardship. I should perhaps add that it will not affect the decision on any compensation paid to Mr. Pettitt.

Consequentially, it has been necessary to amend Clause 52 to exclude application of the new Clause to Northern Ireland, which has its own legislation, and to amend the long title to bring the new Clause within the scope of the Bill.

Mr. Godber

We are grateful to the Minister for the explanation that he has given to us. The case of Pettitt v. Ministry of Transport cropped up a good deal in another place, and from my reading of it, I rather expected that we might have heard the result of the appeal by the time the Bill came back, but we have not done so. I understand the difficulty in which the Government are placed. None of us wants to see a condition in which there is confusion or in which there could be double compensation, but I am somewhat unhappy.

The noble Lord, Lord Beswick in another place on Third Reading said that he thought the matter was all right, but that if it was not they would be able to put it right in another Session, since discussions were going on with regard to further legislation. He also said that the N.F.U. and the C.L.A., as well as professional bodies, would be consulted to see if they could find a way to overcome the difficulties. It would seem to be extremely untidy if we cannot have clarification. We are told now that the position will be safeguarded in the way that it will be looked at in the future.

I must register regret that the matter has to be left in this rather uncertain state. None of us wants to make provision for double compensation. This would be unfair to the taxpayer and unnecessary. I would have thought that it would have been possible for the Ministry, in their discussions with the N.F.U., to have clarified whether any of the cases which were worrying the N.F.U. would be upset by the wording that is proposed. However, this is the last stage at which the matter can be considered, and certainly I do not want to hold up the passing of this legislation. I only record the view that it is unfortunate that we have not been able to get the position clarified, quite apart from the appeal, in which I recognise that the Government has no part. In the circumstances, I think that we must allow the legislation to proceed but, in the preparation of the future legislation to which the noble Lord, Lord Beswick, referred, I hope that we shall be sure that any Amendment required will be brought forward then and that the matter will be tidied up in that way.

The Minister of State, Ministry of Housing and Local Government (Mr. Niall MacDermot)

Perhaps I might reply to the right hon. Gentleman's remarks, as my Department has a general oversight over the compensation code.

I do not think that there is any confusion about the way in which these provision will work. I think that the matters to which my noble Friend, Lord Beswick, was referring were some rather peripheral ones which came up in the debate in the other place and raised more general issues under the compensation code as it affects agricultural tenants.

These matters can be considered in the proper place, but this Bill would not be the proper place in which to deal with them. As was made clear in the debates in the other place, we are not satisfied that the matters raised have anything more than a theoretical significance and we have invited the bodies concerned to let us have instances of the sort of problem that they suggest might arise.

Question put and agreed to.

Mr. Speaker

As the House is willing to waive its privileges, I will see that an entry to that effect is made in the Journal.