VARIATION OF RENT (Hansard, 21 April 1983)

§ Mr. O'Neill
I beg to move amendment No. 1, in page 1, line 13, leave out 'and'.

§ Mr. Deputy Speaker (Mr. Bernard Weatherill)
With this amendment it will be convenient to take amendment No. 2, in page 1, line 16, at end insert `and (iii) at the end there shall be added the words "and any factor arising from a scarcity of subjects available to let".'.

§ Mr. O'Neill
One of the recurring themes in Committee was the nature of the deal that was struck between the National Farmers Union, the Scottish Landowners Federation and the Department of Agriculture and Fisheries for Scotland. It was assumed that the deal was to be a compromise. There was to be a delicate balance of interests. The landowners were to get so much and the National Farmers Union, in its dual role as a representative of tenants and landowners, would get so much. One of the points in favour of young people wishing to enter farming or anyone seeking a new tenancy was to 460 be the abolition of key money. Our understanding is that there is still doubt as to whether new tenants will be adequately protected.
We tabled amendments Nos. 1 and 2 in an attempt to make clear that any factor arising from a scarcity of subjects available to let would not lead to an increase in the arbitrated rent which would take account of the willingness of individuals to pay over and above the going rate. Initially we were led to believe that key money would be outlawed. We have subsequently been informed, having had an opportunity to speak to the National Farmers Union, that protection would not be afforded by the Bill, as drafted, and that there was still a need for action.
I accept that the amendment may be imperfect and that we may not have time today to develop the arguments. If the Minister tells me that he is prepared to consider the matter and that it can be dealt with in another place to the satisfaction of all concerned, we shall be happy to withdraw the amendment. We are anxious to get an assurance from the Minister that he will be able to meet the anxieties expressed by the National Farmers Union of Scotland in respect of key money. If he agrees that amendment is necessary—we accept that it may not be possible for him to indicate precisely the nature of the amendment—we would be prepared to take it on trust. I await the outcome of the Government's thinking.

§ Mr. Home Robertson
We are paying the price for the haste with which the Bill has passed through Parliament so far. We were informed by breathless representatives of the National Farmers Union of Scotland, after clause 2 had been passed in Committee, that the inclusion of the little word "normally" in clause 2(a)(i) would mean that a coach and horses could be driven through the intention to take the consideration of a premium as a result of a scarcity of farms to let out of the calculation of rents assessed for other farmers in the neighbourhood. We tabled the amendments to ensure that the point would be debated again.
I was advised yesterday afternoon by Mr. Jock Hunter of the National Farmers Union that he had had further discussions with the Minister, following consultations that the union had had with its legal advisers and others, that seemed to bear out the union's interpretation that the Bill, as drafted, could mean that the premium created by the scarcity of farms to let could remain in the calculation. The provision on key money was the one good thing that led the Opposition not to oppose the Bill in principle. Obviously we would be worried if this intention is defeated because of the curious drafting of the Bill. We understand that the Minister has given an assurance to the National Farmers Union. I invite him to give a similar assurance to the House that, if necessary, appropriate amendments will be brought forward in another place.

§ Mr. John MacKay
The intention of the Bill is certainly to provide that the arbiter must look to factors other than evidence of open market rents for comparable subjects in the surrounding area where he is of the view that such evidence as there is is insufficient or unreliable. It was envisaged that the phrase insufficient, or not sufficiently reliable would encompass situations in which there was a scarcity of subjects to let.
While that is the intention, the Government acknowledge that it is important to ensure that the detailed 461 wording of the new statutory formula for determining rent on rent reviews by arbitration is the correct one, since this issue will affect the whole let sector in Scotland for a long time to come. We do not consider that the wording of the amendments is appropriate but, in the light of the discussion in the House today, and the representations we have had from the National Farmers Union of Scotland and the Scottish Landowners Federation, we propose to re-examine the wording in detail. If, in the light of that reexamination, we consider that clarification of our intention in the Bill is required, we shall arrange for the necessary amendment to be made in another place. Having given that assurance, I hope that we can pass on to the next group of amendments.

§ Mr. Russell Johnston (Inverness)
Before the Minister sits down, could he give us a tiny glimpse of what it is about the innocent word "normally" that is not normal in this context?

§ Mr. MacKay
I do not want to have a long discussion. There is more involved than the innocent word "normally". There has to be a definition of when things are normal and what scarcity means. That is the complicated issue to which the draftsman will have to turn his mind to ensure that the Bill does what we, the Labour Opposition, other parties in the House and the two parties to the agreement outside the House intended—that the arbiter should be able to consider other factors than simply open market rents.
I know that the hon. Gentleman has a constituent who is more than a little interested in the matter. He has been lobbying us fairly hard on the subject. I assure him that we have it very much in hand. We hope, if necessary, to put forward amending words in Committee in another place.

§ Mr. O'Neill
In view of the Minister's assurance, I beg to ask leave to withdraw the amendment.

§ Mr. John MacKay
I beg to move amendment No. 4, in page 2, leave out lines 24 and 25 and insert— '(iv) the current economic conditions in the relevant sector of agriculture.";'.

§ Mr. Deputy Speaker (Mr. Ernest Armstrong)
With this it will be convenient to take amendment No. 5, in clause 1, page 2, line 25, at end add 'in the surrounding area'.

§ Mr. MacKay
Clause 2 provides: Where the arbiter is of the view that such evidence as there is of rents in the open market for comparable subjects in the surrounding areas is insufficient, or not sufficiently reliable, to enable him to determine … the rent he can take other factors into account. It was suggested in Committee that that definition was too wide, as agriculture in Scotland encompasses a wide range of sectors. I undertook to consider the matter again and I now propose amendment No. 4, which provides that the criteria shall apply to the sector of agriculture in which the review holding is engaged.
The Opposition's amendment No. 5 would alter the criteria to consideration of economic conditions in agriculture as a whole as they applied to the area surrounding the holding. The economic conditions factor is intended to enable an arbiter, having examined all the 462 available comparisons, to adjust the rent upwards or downwards to take into account my proposed new criterion of the general economic conditions applying in the particular sector of agriculture in which the holding is engaged. The economic conditions factor will be available as an instrument of fine tuning. Although reliable information about the general economic conditions in Scottish agriculture as a whole will be readily available, information limited to a small geographical area is unlikely to be available.
In the circumstances, and in the light of the debate in Committee, I commend amendment No. 4 to the House. I think that it will meet with approval and I hope that the Opposition will not press amendment No. 5.

§ Mr. O'Neill
We tried in Committee to sharpen up the criteria. We suggested this change and the Minister, with characteristic caution, decided to consult his boss in another place before agreeing to it. Nevertheless, we are thankful for small mercies.
I was interested to hear the language that the Minister used in proposing the amendment. The last thing that I expected from a monetarist Government was any sign of appreciation for things like fine tuning which used always to be associated with Keynesian economics. I am grateful to the Minister, as the amendment goes some way to meeting our criticisms.
On the point about surrounding areas, I realise that in the context of the new criterion this would be restrictive. When we tabled our amendment, we were not sure what the future position would be. Subject to the discussion, I shall probably be happy not to press amendment No. 5.

§ Mr. Robert Maclennan (Caithness and Sutherland)
I am delighted that the Government have agreed to introduce amendment No. 4.
In rejecting amendment No. 5, the Minister said that the Government did not have information about the agricultural conditions in different areas of Scotland. That is an extraordinary statement. The information must be available not only through the offices of his Department but through the returns to the college of agriculture and the figures made available for the purpose of the census. I do not think that he needs to rest his case on such grounds. Perhaps he will correct any misapprehension that his remarks may have caused.

§ Mr. Home Robertson
I thank the Minister for introducing this constructive Government amendment. I may even claim some credit for it as I moved an amendment on this in Committee. I pointed out that the requirement to consider current general economic conditions in agriculture in assessing rents could be harsh on tenants in sectors of the industry that are currently having a bad time. At that time, a large group of pig farmers had come down from Scotland to see us and to tell us of the desperate state of the pig industry in Scotland. It would certainly have been outrageous if the rent of a tenant pig farmer had been shoved up in accordance with the profitability of the cereal sector. We pointed out to the Minister that that could happen under the Bill as drafted. The replacement of the original words by the phrase the current economic conditions in the relevant sector of agriculture is clearly infinitely better. It is also better than the drafting suggested in amendment No. 5, so just for once I simply offer my thanks to the Minister.

§ Mr. John MacKay
I wish to respond briefly to one point. It is not the Government but the arbiter who requires the information. If the limitation of geography were added to the limitation of sector in the Government amendment the arbiter would be hard put to define the general conditions in the sector.