Commons Sitting of 6 June 1984

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  TRADE AND INDUSTRY

    Inmos
    Mr. Mark Robin sonasked the Secretary of State for Trade and Industry if he will make a statement on the future of Inmos.
    The Minister for Information Technology (Mr. Kenneth Baker): Inmos began to trade profitability in the last quarter of 1983 and this trend has strengthened in 1984. A group of investors had proposed to make a placement of £30 million in new shares in the company, but in the light of Inmos's current performance and its improved prospects the Government have withheld the signature of the British Technology Group to this proposal. The BTG is actively exploring other options for the transfer of the company to the private sector, bearing in mind the taxpayer's past investment and the future development of Inmos technology.
    Mr. Robinson: I am sure that my right hon. Friend will agree that it is extremely good news that Inmos should have achieved such excellent results and performed so well in such a relatively short time. However, will he give an assurance that if Inmos is transferred from the BTG to the private sector the taxpayer's investment will be protected, together, with the long-term future of the Inmos plant at Newport?
    Mr. Baker: I can give my hon. Friend that assurance, and I appreciate that the plant is in his constituency. Indeed, the plant at Newport is a major factor, as is the design team at Bristol, in considering the future development of Inmos. More than 800 people work at Newport and about 70 at Bristol. There has obviously been a substantial transfer of technology to Newport and we shall want such transfers to continue.
    Mr. Roy Hughes: Does the Minister appreciate that there will be considerable concern about any proposal to privatise the company, particularly as it is involved in new technology that is vital to this country? The Government should keep a grip on it, particularly in view of all the public money that has been poured into the organisation.
    Mr. Baker: I do not agree with the hon. Gentleman. High technology does not have to be developed solely and exclusively in the public sector. Indeed, most high technology is developed in Britain in the private sector.
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    The Government invested in Inmos with the intention of getting it established. It is now established and will require further substantial capital investment. We believe that that should come from the private sector.
    Mr. Hayward: Is my right hon. Friend in a position to say whether any of the options involved in privatization—which many of us would welcome—have been ruled out?
    Mr. Baker: As I said in my original reply, at present we have ruled out only a placement of £30 million of shares, as the terms were not attractive enough. However, the boards of the BTG and Inmos are looking at other proposals. Several companies in the United Kingdom and overseas are interested in investing in Inmos, and at present no option is excluded.
    Mr. Wrigglesworth: Does not the success of Inmos demonstrate that the Government can play a most useful role in ensuring that very important high technology industries have a presence in this country? Will the right hon. Gentleman therefore give an assurance that the company will not be allowed to fall into foreign hands?
    Mr. Baker: I accept that the success of Inmos demonstrates that catalytically Government investment can produce an activity. Indeed, I have often said that from this Dispatch Box. We shall look carefully at all the proposals from both overseas and British companies as well as American Telephone and Telegraph, bearing in mind not only the price that is offered but three important criteria: continuing access to the technology by British industry, the need for a continuing transfer of technology to Britain, and a commitment to the development and expansion of activity in the United Kingdom.
    Mr. Heathcoat-Amory: Does my right hon. Friend agree that although Inmos should not be in the public sector it should remain under British control and ownership? As integrated circuits are now a vital raw material, is it not important that this large indigenous supplier should not, if possible, be dependent on decisions taken elsewhere?
    Mr. Baker: I fully appreciate what my hon. Friend has said. If he will study the criteria that I have announced, I think he will be satisfied that any proposal for the development of Inmos will fully take account of his point.
    I am glad to say that there is considerable interest in Inmos from several countries. Perhaps it is appropriate on this day to say that there is more than one horse in the race.
    Mr. Shore: Does the Minister accept that this remarkably successful and highly innovative enterprise would not have existed if it had not been pioneered as a public enterprise? Therefore, is it not ludicrous to be contemplating the privatisation of one of the most successful public enterprise firms in the country?
    Will the Minister give a categorical assurance that there is no truth in the story published in The Times that the Government are seriously thinking of selling Inmos to AT and T? Would not such a sale be wholly contrary to the British national interest and to the efforts to deal with American extra-territoriality, upon which the Secretary of State sets a great deal of store?
    Mr. Baker: As I made clear earlier, we believe that private sector investment should now take on the continuing and very substantial requirements of capital

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    investment in the company. I am glad to recognise that the company has reached a stage where it has become profitable.
    There is no proposal of which I am aware for the outright purchase of Inmos by an overseas firm. If the right hon. Gentleman will carefully study what I said about the requirements that must be satisfied for the future of Inmos — the continuing access of British industry, the continuing transfer of technology and the commitment to the development and expansion of activity in Britain—he will realise that we have the interests of our country at heart.

    British Shipbuilders
    Mr. Dixonasked the Secretary of State for Trade and Industry what meetings he has had with the chairman of British Shipbuilders to discuss the corporate plan.
    The Secretary of State for Trade and Industry (Mr. Norman Tebbit): The corporate plan has just been received by my Department and I have not yet had the opportunity to discuss it with the chairman.
    Mr. Dixon: Is it not true that British Shipbuilders submitted the corporate plan in May last year, and also submitted an interim strategy policy document in October? Have not the Government told British Shipbuilders that it must dispose of the warship yards within two years and that there must be a further cut in the mercant shipbuilding industry? Has not British Shipbuilders told the Minister that a further reduction in merchant shipbuilding capacity is unacceptable? Is it not time that the Minister came to the aid of the shipbuilding industry—as have the French Government to their industry—to give some future to the thousands of men who work in it?
    Mr. Tebbit: The hon. Gentleman has a rather high threshold for some aid to the industry. That industry has had more than £1 billion of taxpayers' money during the past five years. I am not sure whether the hon. Gentleman thinks that that is petty cash or a substantial amount of taxpayers' money.
    On my discussions with the chairman of British Shipbuilders, I have nothing to add to the clear and full answer that I have already given him.
    Mr. Thurnham: When does my right hon. Friend expect to decide whether the warship division will be sold as a whole or in parts?
    Mr. Tebbit: Not yet, because we have not yet begun seeking purchasers for the warship building industry. We are waiting to see what proposals will come forward.
    Mr. Clay: Is the Secretary of State aware that last year alone the French Government gave £300 million to their industry? Therefore, is not this Government's record pretty pathetic compared with that of the French and many other European nations?
    As this Government advocate staying in Europe for ever and a day, is it not about time that they tried to persuade the European Community to do something more in Europe for shipbuilding? Is the right hon. Gentleman aware that the last launch on the present orders of Austin and Pickersgill, which is in my constituency, will be on 17 November? That massive yard, which two years ago the Prime Minister described as an inspiration to the remainder of Europe, is likely to close unless the Government get off their backsides and do something.
    Mr. Tebbit: The hon. Gentleman has caused considerable concern to workers and management at Austin and Pickersgill as well as to a number of his trade unionist friends by claiming that the company is about to be closed down. That is the surest way of making certain that customers do not come forward with orders. He should try to act in the interests of his constituents instead of taking a class attitude and acting in a narrow, biased, bigoted and partisan way. What is more, had he spent a little more time thinking and a little less talking he would have discovered that last year the taxpayer put £350 million of extra support into British shipbuilding, which is what he praises the French Government for doing.
    Dr. Godman: Does the Department have any plans to publish the Touche Ross report on marine engineering plants and capability in Britain? Does he agree that that report is now out of date, particularly in relation to John G. Kincaid of Greenock?
    Mr. Tebbit: If the report is out of date, it would not be particularly useful to publish it.
    Mr. Ewing: As British Shipbuilders say that it submitted its corporate plan in May 1983 and the Secretary of State says that he has just received it, where on earth has it been for the last 13 months? Before the right hon. Gentleman reaches any decision on the future of British shipbuilders—bearing in mind his record of failing to discuss such important issues with the people who work in the industry — will he now give an unqualified guarantee that he will discuss the corporate plan with the trade unions representing the employees in the industry?
    Mr. Tebbit: What I say is absolutely correct; the corporate plan has just been received by my Department. There have been occasions when there have been discussions about what should be happening to the corporation in the interim, but if the hon. Gentleman writes to Graham Day and asks for confirmation of what I have said today, he will get it. The corporate plan will be discussed in the traditional manner in which such plans have been discussed in the past.

    Microcomputers in Schools
    Mr. Greenwayasked the Secretary of State for Trade and Industry if he will make a further statement on his Department's programme for microcomputers in schools.
    Mr. Kenneth Baker: The existing micros in schools schemes come to an end in December, by which time every school in the country should have received a microcomputer. We have yet to decide whether further schemes of support from my Department are necessary.
    Mr. Greenway: I congratulate my right hon. Friend on the success of the scheme. May I urge him to renew it after December and ensure that schools have updated equipment in this fast-changing sphere?
    Mr. Baker: The scheme has undoubtedly been a success and we can rightly boast that we are, in terms of education, the most advanced in the use of computers. More than 30 countries have sent teams to the United Kingdom to see what we are doing, and the companies that are involved in the scheme are selling their computers in substantial quantities to other countries. That is particularly true of India, where the Acorn computer could

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    become the basic computer for the Indian education system. I am satisfied that our schools have had a good start in this area, though the principal expenditure for equipment in schools must, of course, lie with the Department of Education and Science.

    Pulp, Paper and Board Industry
    Mr. Proctorasked the Secretary of State for Trade and Industry if he will make a statement on the prospects for the pulp, paper and board industry.
    Mr. Kenneth Baker: I do not differ from the industry's opinion that 1984 should be a reasonably good year for papermakers.
    Mr. Proctor: Is my right hon. Friend aware of a recent energy survey in the pulp, paper and board industry, which shows that in 1983 the industry used 8 per cent. less energy per tonne of paper produced? Will my right hon. Friend take this opportunity to congratulate the United Kingdom industry on this achievement in industrial efficiency?
    Mr. Baker: Yes. The industry's energy costs are very high. I congratulate it on taking steps to save about 8 per cent. of its energy costs through a scheme operated by the Department of Energy. I pay tribute to the industry's success and to the work of the Federation of the Paper Trade in promoting the scheme more widely.
    Mr. Litherland: Does the Minister agree that the recent dramatic escalation in the price of wood pulp will lead to further redundancies and closures? Does he agree that the Government's policy towards the industry will mean a very dim future with no chance of recovery?
    Mr. Baker: The hon. Gentleman is far too gloomy. Changes in international prices have effects right across the world. The remarkable factor about the industry in the past two years has been the substantial investment from overseas sources in the Liverpool area and in north Wales. When those pulp mills are operating, the United Kingdom will be the second largest newsprint producer in the EEC.
    Mr. Sumberg: Is my right hon. Friend aware of the great importance of the paper industry to my constituency in Bury? Is he further aware that the industry faces very stiff foreign competition which is often subsidised by Government money and cheap energy? Will my right hon. Friend give me an assurance that if that continues the Government will take positive action to ensure that the industry can compete on fair terms?
    Mr. Baker: The answer to all of my hon. Friend's questions is yes.
    Mr. Williams: We join hon. Gentlemen in congratulating the paper industry on its 8 per cent. gain in energy efficiency, but does the Minister realise that despite that gain in efficiency the industry's competitiveness is being undermined by high energy costs, especially when compared with the costs in France, Italy and Germany?
    Does the Minister agree that competitiveness is further undermined by artificially high rates of sterling in relation to the Euro currencies, and that future investment in such a capital-intensive industry has been severely prejudiced by the Chancellor's Budget decision to phase out capital allowances?
    Mr. Baker: The right hon. Gentleman says that energy costs are high. Why are electricity and other energy costs so high in the United Kingdom?
    Mr. Williams: The right hon. Gentleman put them up.
    Mr. Baker: On the contrary, in the past two years the price of electricity to industry has been maintained. The reason why electricity costs are so high in this country is that the cost of coal is so high.

    Microprocessors
    Mr. Hayesasked the Secretary of State for Trade and Industry how many factories in the United Kingdom are now manufacturing microprocessors; and how this compares with 1982 and 1980, respectively.
    Mr. Kenneth Baker: Companies manufacturing integrated circuits, including microprocessors, in the United Kingdom rose from nine in 1980 and 1982 to 10 in 1984. We are aware of investment proposals in that sector which total about £700 million. There is a prospect of three more companies going into manufacture in the near future.
    Mr. Hayes: Is my right hon. Friend aware that I welcome that encouraging news, and I take this opportunity to congratulate him on an imaginative initiative? This concerns the hon. Member for Bolsover (Mr. Skinner), so if he keeps quiet it might help him. My hon. Friend has taken an imaginative initiative in providing computers to an organisation called DIAL, whose headquarters happen to be in Bolsover. That organisation, particularly in Harlow and Bolsover, will be able to help disabled people claim their benefits, and the officers of the DIAL branch in Harlow have asked me to thank my right hon. Friend.
    Mr. Baker: I doubt whether any initiative that I can take will help the hon. Member for Bolsover (Mr. Skinner). In this case, we supported a group giving advice to handicapped people. I am glad that we were able to make that contribution, because communicating technologies can significantly improve the lot of all handicapped people.
    Dr. David Clark: Is Plessey involved in any microcircuit jobs? Is the right hon. Gentleman aware that Plessey is closing a factory in my constituency, with 600 redundancies, yet only a few hours ago it announced that a new factory would be opened in Plymouth, creating 600 new jobs? Will the right hon. Gentleman ensure that not a penny of regional grant goes to Plessey, in view of its deceitful and underhand manner in my constituency?
    Mr. Baker: The hon. Gentleman knows that I have been dealing with that matter in his constituency. I would not associate myself with the language that he used about Plessey. It is a major developer of microintegrated circuits. Recently it announced an investment of about £50 million. However, even in the advanced industries there are adjustments in the range of microelectronics. I would not knock Plessey in the way that the hon. Gentleman did. It is a progressive company, of which Britain should be proud.
    Mr. Henderson: Does my right hon. Friend agree that microprocessors help most with job creation when they are incorporated in products rather than production processes? Does he feel that British manufacturers should give more attention to the way in which their products could be enhanced by the use of microprocessors?
    Mr. Baker: I agree entirely with my hon. Friend. It is no good just having companies making silicon chips and integrated circuits; they have to be applied. I believe that they must be applied by the traditional, older industries in Britain, because if they do not use the new technologies they will not be in business over the next five years.
    Mr. Skinner: Is the Minister aware that although the Tory Government, over the past few years, have closed nine pits in my constituency——
    Mr. Speaker: Order. Is the hon. Gentleman's question about microprocessors?
    Mr. Skinner: Yes, I am coming to that. During that period, despite all the assurances given about alternative industry, the Tory Government have not managed to get one single microprocessor plant into the whole constituency.
    Mr. Baker: Perhaps the hon. Gentleman should try to sell the advantages of his constituency in a more positive way.
    Mr. Philip Oppenheim: Is my right hon. Friend aware that the Public Accounts Committee report on the Nexos company, which was set up by the Labour Government to develop the British office equipment industry, proves convincingly that the NEB and the BTG ran that company with an abandon that verged on the fraudulent? Is my right hon. Friend further aware that that report proves something which the NEB has denied for over two years—that 800 Japanese facsimile machines costing more than £1 million were sold back to the middle man importers for no more than £1? Does my right hon. Friend agree that that is a just cause for a ministerial investigation?
    Mr. Baker: The PAC has reported on that case, and we are examining it. The lesson which the Government can learn from that investment is that they should not dabble in things in which they are not expert.
    Mr. Shore: Do the Minister's figures in his original reply take into account the reported closure last week of three microcomputer firms — Dragon Data, Tycom, about which I am sure the right hon. Gentleman is aware and concerned as it serves the Conservative party, its headquarters and offices, and, thirdly, Camputers? What is the outlook for the microcomputer industry in Britain this year? Is there any evidence that the big boys, including IBM, are using unfair pricing as a means of securing a market share?
    Mr. Baker: The answer to the latter question is, not as far as we know, but we are making a survey of it. With regard to the question of microcomputer activity—the question was about microprocessors and silicon chips—I accept that they must be put into equipment. During the past few years there has been a tremendous boom in the manufacturing of electronic equipment. In 1983, for example, we in Britain consumed 29 per cent. of all microcircuits in Europe, which was the largest rate of any European country. Therefore, we have the fastest growing electronics industry in Europe.

    Small Firms Service
    Mr. Sackvilleasked the Secretary of State for Trade and Industry what steps he is taking to ensure co-operation between the small firms service and other sources of advice for small firms.
    The Parliamentary Under-Secretary of State for Trade and Industry (Mr. David Trippier): The small firms service works closely with local enterprise agencies and other organisations to provide a full service to small firms.
    Mr. Sackville: Given my hon. Friend's special interest in local enterprise agencies, how does he see their relationship with the small firms service?
    Mr. Trippier: I see the local enterprise agencies as being at the sharp end and actively involved in the local community, and the small firms service as providing backup. To use a medical analogy, the directors of the local enterprise agencies are the general practitioners, and the small firms the counsellors, the specialists or consultants. That is the relationship enjoyed in my hon. Friend's constituency. There is an excellent local enterprise agency called the Bolton Business Venture, which has the support of the small firms centre in Manchester.
    Mr. Grylls: What advice would my hon. Friend give to the small firms advisory service in reply to small businesses which say that the recent changes in the loan guarantee scheme, introduced by the Government two weeks ago, make it the least attractive and most expensive scheme of any developed country?
    Mr. Trippier: The local enterprise agencies' directors should draw the attention of their potential clients to the second Robson Rhodes review, which made it clear that there was a lack of appraisal and monitoring procedures in the loan guarantee scheme. Too many companies were going under because they had not been correctly appraised and monitored. The Government's changes have led to a continuation of the scheme, and increases have not been horrific.
    Mr. Williams: Is the hon. Gentleman aware that that advice is of no help to the 1,200 firms a year which he forecast would be deterred from using the loan guarantee scheme as a result of the changes? Is he aware that there has been not only a 50 per cent. increase in the premium that the Government charge over and above the banks' interest, but, more important, that the reduction in the proportion of the loan now to be covered by guarantee means that the banks will increase the rate of interest they charge? Is he aware that the small firms will face a double increase in interest rates?
    Mr. Trippier: The hon. Gentleman should remember that the Department of Trade and Industry is receiving on average 400 applications a month. I predicted that they would fall to 300 a month—that was my guesstimate. The 100 applications a month that fall away may be from the companies which should not have been covered by the loan guarantee scheme in the first place. The Labour party's policy cannot be to support indiscriminate lending to small businesses. If some of those businesses go down, they may drag other small firms down with them. That would not be our policy. My advice to local enterprise agencies' directors, which I gave in reply to the former

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    question, is sensible. We have increased the exposure for banks, which means that they will increase their appraisal procedures.

    Leyland Vehicles Ltd.
    Mr. Strangasked the Secretary of State for Trade and Industry what consideration he has given to the corporate plan prepared by Leyland Vehicles Ltd; and if he will make a statement on future Government support for the company.
    Mr. Holtasked the Secretary of State for Trade and Industry whether he has received the British Leyland corporate plan: and if he will make a statement.
    Mr. Tebbit: I announced our decisions on BL's corporate plan to the House on 22 May, and they were further debated on 24 May.
    Mr. Strang: Does the right hon. Gentleman accept that unemployment in Bathgate is such that workers who lose their jobs have virtually no hope of finding alternative work? Will he recognise that that is why the social costs of closure are utterly unacceptable? That is also why the finacial costs of closure to the Government are greater than keeping the factory open. If the Secretary of State does nothing else this afternoon, will he tell the House whether the Government have estimated the financial costs of closure of the Leyland plant at Bathgate, and if so will he make the estimates available to the House?
    Mr. Tebbit: Of course we make estimates of such things, but to a large extent they include commercially confidential information. If the hon. Gentleman wishes to examine the costs, I commend to him the evidence taken from Lord Stokes by the Trade and Industry Sub-Committee of the Public Expenditure Committee on 16 June 1971. Lord Stokes said that the cost of having the factory in Scotland was equivalent to a 7·5 per cent. tariff. The hon. Gentleman must consider what that cost means in terms of jobs to other workers in other parts of the economy.
    Mr. Beaumont-Dark: Does my right hon. Friend agree that, just as BL is coming out of the period when it was known as a music-hall joke, it is depressing, now that its business is improving, to find an increase in disputes such as the present one? Would not this be the time to warn BL workers that the patience of the taxpayers who wish to support the company is not inexhaustable and that the time has come to work, not to strike?
    Mr. Tebbit: It would not be right for me to comment on any particular dispute, but it is certain—as has been proved time and time again—that strikes do not save jobs, they destroy them. A long strike purporting to save the job of one individual would no doubt cost the jobs of many others.
    Mr. Dalyell: For heavens sake, why are the social costs of any closure at Bathgate commercially confidential? I wish to ask a question of which I gave notice to the Minister of State's office. Can Charles Nickerson be assured that if. his bid is viable he will receive terms as favourable as are being offered to Nissan? Why should an indigenous motor industry employer receive less favourable terms than those on offer to the Japanese?
    Mr. Tebbit: First, I said that some of the information was commercially confidential. That includes some of the
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    savings or the costs which would otherwise be caused within BL, according to which option one took up as to which of the factories in the Leyland Vehicles group should be closed. The social costs would be almost infinitely variable according to the assumptions which right hon. and hon. Gentlemen like to make about the future of the Scottish economy and many other things. With regard to the hon. Gentleman's question about the help given to Nissan, he will be aware that different regimes of assistance are available for those projects which are internationally mobile and those which are not. The scale of help or assistance for domestic United Kingdom projects——
    Mr. Williams: It is not true.
    Mr. Tebbit: I am sorry, the right hon. Gentleman cannot say that. Well, he can say it, but it does not happen to be true. The scale of help within the United Kingdom is, of course—[Interruption.] I wish that the right hon. Gentleman would shut up for a moment. Mr. Speaker? It is impossible, when one is trying to treat the question of the hon. Member for Linlithgow (Mr. Dalyell) seriously, to be subjected to perpetual barracking from a former Minister who ought to know a damned sight better. I am afraid that I shall have to start again. That will cut out a number of hon. Gentlemens' questions.
    In the event of Mr. Marshall or anyone else coming forward with a proposition to take over all or any part of Bathgate, it would be studied to see to what extent we could financially assist, taking into account its prospects of commercial success, and I should be happy to do that.
    Mr. Kenneth Carlisle: If the taxpayer is to subsidise BL, is it not right that it should purchase a substantial proportion of its components in this country? There are increasing signs that it is not doing that as much as it did in the past. Will the Government ask for a review of the matter?
    Mr. Tebbit: I hope that British Leyland will continue to buy the great majority of components within the United Kingdom. If my hon. Friend's concern is for the taxpayer, he will assuredly want BL to buy in the most competitive market, because if it does not it will not sell its motor cars.
    Mr. Meadowcroft: Will the Secretary of State accept that necessary Government support for British Leyland has to extend beyond his Department, and that the loss of 440 jobs at Charles H. Roe at Leeds is a direct result of the reduction in the transport supplementary grant and the phasing out of bus grants? Will he therefore speak to his right hon. Friend the Secretary of State for the Environment to see that rate levels and rate-capping do not prevent orders being given for at least 100 buses a year, which are all that are required to save that plant?
    Mr. Tebbit: The hon. Gentleman is completely wrong. It is not the level of transport supplementary grant that has caused the decline in orders for buses. The hon. Gentleman must try to examine the matter in a rational light. One thing that has caused the fall-away is that after a burst of ordering in pursuit of introducing one-man buses the demand is now at a lower level. Another cause is that people in some cases prefer to travel by a means of transport other than buses. A third cause is that sometimes bus companies are not run effectively. I am sure the hon. Gentleman takes great heart from the number of bus

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    companies that are now competing successfully with British Rail. No doubt he will give no help at all to those who want subsidies for British Rail as well.
    Mr. Bill Walker: Can one take it from my right hon. Friend's earlier reply about Bathgate, that the Government are pursuing actively the search for alternative owners for that factory? Can he confirm that in the past in Scotland organisations and companies which were in public ownership and were not able to compete effectively were subsequently taken over by the private sector and that the 7·5 per cent. penalty did not seem to deter them from being successful?
    Mr. Tebbit: My hon. Friend is right. In many cases it depends upon where the market for the product is. Perhaps he had most in mind the remarkable case of Scott Lithgow where, despite the jeers and derision of right hon. and hon. Members of the Opposition, the private sector came in and rescued a company which had been bankrupted by nationalisation.
    Mr. Fatchett: I am delighted to have the opportunity of following the hon. Member for Leeds, West (Mr. Meadowcroft) who, like all the Liberals, after taking no interest in this issue, suddenly appears to have an interest in it. In reply to his question the Secretary of State said that there was no relationship between the cut in transport subsidy and the loss of orders for the bus industry. Is the Secretary of State not aware that British Leyland management attributes the loss of jobs in Leeds directly to Government policy and that all those who know the bus and coach industry realise that Government policy in cutting transport subsidies and also in relation to the 3·5 million unemployed put jobs in jeopardy not just in Leeds, but in the coach and bus industry elsewhere? In those circumstances, will the Secretary of State give a commitment to meet his colleague the Secretary of State for Transport—I realise that for both of them this will be a challenging prospect—to discuss the subsidy for the industry and measures to save the jobs in Leeds, which are crucial to our city, and which receive so little interest from the Secretary of State?
    Mr. Tebbit: I hope the hon. Gentleman will forgive me if I do not indulge in the Punch and Judy, ding-dong, two-party game that goes on. I am very glad to hear that he believes everything that the BL management says. I hope he will be able to convince some of his right hon. and hon. Friends that they, too, should believe BL management. The level of subsidy is entirely adequate in the view of my right hon. Friend the Secretary of State for Transport and myself. Therefore, there is no cause for us to discuss the matter.
    Mr. Leigh: Has my right hon. Friend noticed that Track Marshall of Gainsborough is interested in buying the engine plant at Bathgate? Will he look at that application with favour and reject the intemperate remark of the hon. Member for Linlithgow (Mr. Dalyell) last week, when he said that the original tractor line was "bloody well stolen"?
    Mr. Tebbit: The application by Marshall's is not to my Department or to me, but to British Leyland. It is a commercial matter between the two parties. However, requests for regional aid or anything of that kind will be examined by my Department with every sympathy. We should like employment to continue at Bathgate at the highest possible levels.
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    My hon. Friend mentioned the hon. Member for Linlithgow (Mr. Dalyell) and the original tractor line. The best thing that we can do is to cease to throw bricks at each other and see how best we can help the factory to survive under new ownership, if that is possible.
    Mr. Geoffrey Robinson: May I refer to the sale of Jaguar Cars? Bearing in mind the Secretary of State's sincere commitment to the maximum participation by employees in the businesses in which they work—and without disrespect to the chairman of Jaguar Cars—will the Secretary of State consider making financial advice available to the management and employees on the form, extent and terms of the equity participation that they might have in that company?
    Mr. Tebbit: I am sure that the management and work force are capable of taking their own advice.
    Mr. Henderson: Is my right hon. Friend aware that, despite the long list of companies which have moved to Livingston in recent years, and which are likely to deliver more than 4,000 jobs, there is great anxiety about unemployment in central Scotland? Is he aware that that is combined with a nagging anxiety that British Leyland's top management, located as it is south of the border, may not have given fair dos to the Bathgate plant when comparing facilities? Can he reassure the Scottish people that rational decisions have been taken and that parochial prejudice is not involved?
    Mr. Tebbit: I can assure my hon. Friend that the question of the border is utterly and completely irrelevant to the matters discussed. Indeed, I have to remind some Opposition Members that the plant is within the United Kingdom, as are other BL plants.
    Mr. Shore: The Secretary of State did not answer the relevant questions about the future of Bathgate posed by my hon. Friend the Member for Linlithgow (Mr. Dalyell), nor did he answer the interjections by my right hon. Friend the Member for Swansea, West (Mr. Williams) from the Opposition Front Bench. For the record, may we have answers to some specific questions? Is there, or is there not, a differential between companies from overseas investing in British development areas and British companies investing in the same areas? If there is such a difference in incentive, what is it and what is the justification for treating Japanese and other foreign companies more favourably than British firms?
    Mr. Tebbit: I hope that the right hon. Gentleman will not allow his xenophobia to get in the way of the national interest. Of course there is a justification for offering particularly attractive terms to bring to the country internationally mobile projects which otherwise might go to another part of the European Community and have free access to our markets, but would not provide any jobs in this kingdom.
    Later—
    Mr. Dalyell: On a point of order, Mr. Speaker. It arises from question No. 7 asked by my hon. Friend the Member for Edinburgh, East (Mr. Strang). A slip of the tongue was made by the Secretary of State, but I make no complaint about that. For the sake of clarity, it is important to make this point in a delicate situation. The right hon. Gentleman referred to Mr. Charles Marshall. In fact, it is Mr. Charles Nickerson of Track Marshall who has made the serious bid for an interest in the Bathgate factory.

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    The hon. Member for Gainsborough and Horncastle (Mr. Leigh) referred to an infelicitous phrase that I used. Perhaps it was infelicitous, and for that I apologise to the House. My expression referred not to Mr. Nickerson, but to a different man. Over the years, Lothian ratepayers have paid a great deal of money from their resources into the tractor line that had to leave Bathgate. I was simply reacting on behalf of my constituents to the use money which they paid as ratepayers.
    While the Leader of the House is here——
    Mr. Speaker: Order. The hon. Gentleman has corrected the record. He must now raise his point of order with me.
    Mr. Dalyell: The Secretary of State for Trade and Industry put forward a new doctrine in relation to the differential between British companies and "internationally mobile" companies. As it is such a new doctrine, may I ask the Leader of the House, through you, Mr. Speaker, for a statement clarifying the new doctrine for grants to Japanese and other foreign firms?
    Mr. Speaker: I am sure that the Leader of the House heard that.

    British Steel Corporation
    Mr. Hirstasked the Secretary of State for Trade and Industry whether he has received the British Steel Corporation's corporate plan; and if he will make a statement.
    Mr. Tebbit: I expect BSC to complete its corporate plan shortly and to submit it to the Government for approval.
    Mr. Hirst: When my right hon. Friend receives the corporate plan, will he bear in mind that the United Kingdom has reduced its steel-making capacity very much more than have our partners in the European Community? Will he make the most vigorous representations to his counterparts in the Community in order to ensure greater equality of sacrifice? Will he bear in mind that my constituents in the west of Scotland warmly endorse the conclusion of the Select Committee on Trade and Industry, which suggested that in view of the market position there was no valid case for the closure of Ravenscraig steelworks?
    Mr. Tebbit: When we consider BSC's corporate plan we shall, of course, look at the position of the market and the various parts of the BSC, and how all the plants may be fitted into the plan. On the question of the amount by which capacity has been cut, Commissioner Andriessen said recently that he expected about 30 million tonnes of capacity to be taken out between 1980 and 1985. Our contribution will be about 4·5 million tonnes, of which we have already taken out four million. The other countries will catch up on what we had to do in cutting capacity, which should, in many cases, have been closed down many years before—and would have been but for the disgraceful delays caused by the Beswick review.
    Mr. Crowther: Has the Secretary of State read the Select Committee report to which his hon. Friend referred? Is he aware that the Select Committee strongly urged that there should be no further closures in strip mill capacity, strongly criticised the Government's privatisation policy and drew attention to the amazingly high
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    current level of productivity in this publicly owned industry? Will the right hon. Gentleman ask the Leader of the House to ensure that we have a full debate on this matter in Government time before any irrevocable decision is made on further closures?
    Mr. Tebbit: I shall make sure that the Leader of the House is aware of the hon. Gentleman's views about the need for a debate.
    I am sure that the hon. Gentleman will join me in paying tribute to the way in which the work force as a result of the inspired leadership of Mr. MacGregor has now achieved a remarkably high output per man. The United Kingdom figure is 223 tonnes per man year as compared with 212 tonnes in Germany and 190 in France. I have read the Select Committee report with great interest, but the Select Committee is not responsible for the financing of BSC.
    Mr. Hickmet: In as much as BSC's corporate plan is designed to set BSC on course for profitability and thereby secure future job security for our steel workers, may I ask how much has that aim been undermined by the activities of Mr. Scargill—activities which are supported by every Member of the Labour party? Has not the future of the five integrated steel plants been thrown into question far more by the actions of Mr. Scargill than by any other cause? If Mr. Scargill was successful at Orgreave, and if the blast furnaces and coke ovens at Scunthorpe were damaged, what would be the future for the 5,000 or 6,000 steel workers in my constituency? Would it not be nil?
    Mr. Tebbit: Assuredly, the future of jobs in BSC can be secured only by rendering that corporation profitable. My hon. Friend refers to the damage done by the current miners' dispute. I understand that some three quarters of the miners are not currently working, although about a quarter, happily, are still producing coal, which is being transported to the steelworks by many other responsible trade unionists. There is little doubt that the objective at times of some extremists has been to damage the British steel industry. A few years ago some extremists in the steelworks had the same objective, but they learnt their lesson.
    Mr. Ewing: The Secretary of State is considering more corporate plans than Bobby Robson, and is making almost as bad a job of them all. Will he guarantee that he will not accept any proposal that will further reduce the capacity of BSC or lead to the closure of any one of the five integrated steel plants, and that he will not fuel any arguments between the various parts of the industry such as Port Talbot, Ravenscraig and Llanwern?
    Mr. Tebbit: It would be rather unwise of me to make decisions on the corporate plan before I have had the opportunity to see it. I have to stand very firm on the words of the Under-Secretary of State for Industry, when he said:
    "The Government have said that there can be no question of accepting a situation where the taxpayer is required to foot the bill for continual and avoidable loss-making." — [Official Report, 24 March 1975; Vol. 889, c. 226.]
    That was said by the Under-Secretary of State for Industry about British Leyland, but it is equally applicable to BSC, and it is equally applicable although the then Under-Secretary of State for Industry, the hon. Member for Oldham, West (Mr. Meacher), would no doubt wish to recant those views.

    Regional Industrial Development
    Mr. Wardasked the Secretary of State for Trade and Industry if he will make a statement on the submissions he has received in response to the White Paper on regional industrial development.
    Mr. Trippier: I am pleased with the constructive and helpful comments contained in most of the submissions received, which totalled 467 by 31 May.
    All submissions received by that deadline, or dated and post-marked prior to it, will be taken into account when we make our decisions on those issues on which views were invited. A statement will be made in due course. In addition, I shall make available to the House a list of all the submissions received in response to the invitation in the White Paper.
    Mr. Ward: I thank my hon. Friend for that reply. However, he will be aware that some of us are sceptical about the beneficial effects, if any, of regional aid. When he comes to make his final decision on the form of regional aid, will my hon. Friend bear in mind that all that aid comes from the already hard-pressed taxpayers?
    Mr. Trippier: I am aware of my hon. Friend's cynicism, which I have heard from time to time, both on the Floor of the House and in the debates in Committee on the Co-operative Development Agency and Industrial Development Bill, which received its Third Reading on Monday. The Government accept that regional industrial policy costs a lot of public money and that the balance of economic benefits and costs is not clear-cut. We are increasing the cost-effectiveness of the policy, and I am sure that my hon. Friend will welcome that.
    Mr. Wrigglesworth: Will the Minister reject the sentiments expressed by his hon. Friend the Member for Poole (Mr. Ward), which were also expressed by some other Conservative Members in the debate on Monday evening on the Co-operative Development Agency and Industrial Development Bill debate? Will he ensure that the interests of the regions are taken fully into account in the development of new policy? Is he aware that most of the criticisms that we hear come from those areas of the country that have never suffered from the levels of unemployment endured in Scotland, Wales, the north-west and other parts of the country?
    Mr. Trippier: The hon. Gentleman would expect me to reply in the affirmative, and I am anxious to do so. We made it clear in the White Paper that we support an effective regional policy and are determined to ensure that we reduce regional disparities in employment opportuities on a stable, long-term basis.
    Mr. Yeo: Does my hon. Friend agree that there is no net economic gain to the country from any incentive that just asks a firm to locate its business in one part of the country rather than another? Will not the interests of all regions, whether prosperous or depressed, benefit from the promotion of free market forces, in particular Suffolk, which is ready to stand on its own feet in free competition?
    Mr. Trippier: I agree with my hon. Friend's latter point, but the White Paper made it clear that we can no
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    longer try to justify regional policy on economic grounds. We try to justify it on social grounds, because of the inequalities between the regions.
    Mr. Campbell-Savours: Is the Minister aware that the Government's proposals will effectively end any opportunity or chance for west Cumberland to attract any capital-intensive industry until there is a change of Government? Is that a reasonable and fair way to treat my part of the country, particularly when over the past 15 years the only industry that has come to provide jobs in great number is capital-intensive and has come as a result of regional policy?
    Mr. Trippier: The hon. Gentleman is talking absolute nonsense. He cannot pre-judge the outcome of the review which we shall be conducting shortly as a result of the representations that we have received on the White Paper, or what we shall do with the assisted areas map.

    Manufacturing Industry
    Mr. Knoxasked the Secretary of State for Trade and Industry what is the figure for output in manufacturing industry in the most recent quarter for which figures are available.
    The Minister for Trade (Mr. Paul Channon): For the first quarter of 1984 the provisional figure for the index of production for manufacturing industries is 97, based on 1980 being 100.
    Mr. Knox: Will my right hon. Friend confirm that that represents a fall of 10 per cent. compared with the first quarter five years ago? When did manufacturing output last fall by that amount over five years?
    Mr. Channon: It is certainly a fall, as my hon. Friend says, but I am sure he is pleased that manufacturing output is now increasing, that manufacturing exports are increasing, that trends are good and that manufacturing output is 3·5 per cent. higher than in the same quarters of 1983.
    Mr. Gould: Despite the complacency with which the Minister has presided over this record fall in manufacturing output — which has been matched by a corresponding decline in investment, employment and the balance of trade—does he recognise that when North sea oil runs out we shall yet again have to rely on the output of our factories to pay our way in the world? If he recognises that, what does he and his Government propose to do about it?
    Mr. Channon: I would take that lecture from the hon. Gentleman rather more easily if manufacturing output had not fallen from 1974 to 1979 when a Labour Government were in power. All the evidence is that the trend is now upwards. Confidence in industry is good, investment intentions are good, inflation is low and productivity is increasing. The economy is doing better and the Opposition can do nothing but whinge and whine as good news comes along.

Unparliamentary Expressions
Mr. Willie W. Hamilton: On a point of order, Mr. Speaker. You will recall yesterday, Mr. Speaker, the exchanges on the use of the word Fascist by Opposition Members to describe certain Government supporters. It would be improper for me and out of order to challenge your ruling or rulings on that issue, but I think that there was an element of confusion in the rulings which you gave. In column 166 you said:
"we all know that the word Fascist has a connotation here which is not pleasing."
The presumption of that remark is that there might be another connotation where it would be pleasing.
Later, in column 167, Mr. Speaker, you said:
"I hope that we shall not hear this phrase"—
I presume that you meant "this word"—
"used in this House."
There was an air of finality about that. That suggested that in no connotation would we be able to use the word.
In column 168, in response to a representation from my hon. Friend the Member for Birmingham, Ladywood (Ms. Short), you conceded
"that there are Fascist parties that contest elections but they have not been elected to this House."
It is true that they have not been elected under that name.
It seems that in the three exchanges to which I have referred there was an element of confusion. At one stage there was an element of rigidity and at another an element of flexibility. There was the concession that Fascist
"is a serious political term." —[Official Report, 5 June 1984; Vol. 61, c.166–68.]—
that was the expression used by my hon. Friend the Member for Ladywood—and that Fascists stand for Parliament. I have looked up the word "Fascist" in the Oxford English Dictionary. It describes a Fascist as a person of
"right-wing authoritarian views."
That seems to be an accurate description of a large majority of Conservative Members. I looked up further the definition in Webster's Third New International Dictionary. It describes Fascism, which I presume is the philosophy that is supported by Fascists, as
"any program for setting up a centralized autocratic national regime".
That fits this Government's programme like a glove.
I have been in this place for a fairly long time, and in my view the House is in danger of becoming far too sensitive in its use of the English language. Compared with earlier days we are like a namby-pamby church tea party. It is time that we stopped that. There should be, as my right hon. Friend the Leader of the Opposition said yesterday, a degree of flexibility and much greater liberality in the use of our rich language in the House.
Mr. Dennis Skinner rose——
Mr. Dave Nellist rose——
Mr. Speaker: Order. Are hon. Members rising on the same point of order?
Mr. Skinner: No.
Mr. Speaker: I shall deal with this matter first. I would not wish there to be any misunderstanding in the House about my ruling yesterday. The basic guidance on which the House relies in considering unparliamentary expressions is set out in "Erskine May" on page 432, which states:
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"Good temper and moderation are the characteristics of parliamentary language. Parliamentary language is never more desirable than when a Member is canvassing the opinions and conduct of his opponents in debate."
Whether a word should be regarded as unparliamentary depends on the context in which it is used. Context is all-important. "Context" means how the word is said, the circumstances in which it is said and when it is said.
In the context yesterday I am satisfied that the use of the word Fascist was intended to give offence to a Member and amounted to a reflection on his honour.
I am not, of course, ruling that the word Fascist can never be used in debate. On this day, of all days, the anniversary of the day on which many of our fellow countrymen died to ensure that this country remained free from Fascism, we should refrain from using that word to attack each other. I remind the House that we are all honourable Members, and we should debate with each other in that spirit.
Mr. Peter Shore: Further to that point of order, Mr. Speaker. I am sure that the House is grateful to you for that amplification of yesterday's ruling in response to the question put by my hon. Friend the Member for Fife, Central (Mr. Hamilton). A distinction has been drawn about context. Although the whole House accepts that you have the ultimate and proper authority for deciding whether the context rules out the use of a particular word, other hon. Members have the right to disagree with you. Nevertheless, hon. Members accept your authority on that matter.
Yesterday, hon. Members, especially Labour Members, were greatly and genuinely disturbed by the apparent, though now amended, statement from the Chair that the use of the word Fascist was initially unparliamentary. We were concerned because, in the whole of the 40 years since we found ourselves at war with the Fascist states, during which time unparliamentary words were listed in "Erskine May", the word Fascist was never ruled unparliamentary.
There are occasions—this is an important point—when the use of the word Fascist is not an attack on the honour of a Member of Parliament. There may be occasions when it is a reasonable description of an hon. Member's beliefs and values. I am sure that, although we fully understand that the context is all, you have drawn a distinction that will go a long way towards satisfying the doubts that were expressed yesterday.
Later——
Mr. Tony Banks: On a point of order, Mr. Speaker. I wish to refer back to your earlier ruling on the use of the word "Fascist". I am not 100 per cent. sure whether you intend to permit the continued use of the word, or whether it will depend on the context in which it is employed. I should point out that the Prime Minister used the word during Prime Minister's Question Time on 8 December 1983. In column 467 of the Official Report she referred to the nature of "the Fascist Left." One of the problems is that the Official Report uses a capital "F" for Fascist, whereas if it used the lower case for it, and treated it as an adjective, it would fit in with the correct readings given by my hon. Friend the Member for Fife, Central (Mr. Hamilton) of the interpretations used in both Chambers and the Oxford dictionary.
For some reason, the 20th edition of "Erskine May" omits the appendix of unparliamentary expressions.

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Perhaps it might be in order at some stage, Mr. Speaker, for you to look through the list in the 19th edition to see whether some of the words still considered unparliamentary could be loosened for more regular usage. For example, I was referred to as a "hooligan" by a Conservative Member. Frankly, knowing the hon. Gentleman who used the expression, I felt that it was something of a compliment. Nevertheless, it appears in the 19th edition of "Erskine May" as being unparliamentary, as do "humbug" and "Pharisee". I would cheerfully call Conservative Members Pharisees if I thought that they would be in any way insulted. But perhaps, Mr. Speaker, you will look at the 19th edition of "Erskine May".
Dr. Norman A. Godman: Further to that point of order, Mr. Speaker. I readily accept the good sense behind your ruling on the label "Fascist". However, is it in order to refer to Conservative Members as the lumpen bourgeoisie?
Mr. Speaker: If the hon. Members for Newham, North-West (Mr. Banks) and for Greenock and Port Glasgow (Dr. Godman) study carefully what I have said in the Official Report tomorrow morning, they will find the answer to their questions.
However, let me make it doubly clear that I did not intend to rule yesterday that the word Fascist may never be used in debate. My ruling applied to the use of the word when addressed to an hon. Member — as it was yesterday—in a way that is intended to give offence and to be a reflection on that hon. Member's honour.
Mr. Robert N. Wareing: Further to that point of order, Mr. Speaker. I seek your clarification. Would I be in order to use the word "Tory" when it impugned the honour and character of a Member of Parliament, who objected to that word being used against him? For example, I often use the word "Tory" when referring to the right hon. Member for Plymouth, Devonport (Dr. Owen), and I wish to continue using it when I refer to him.
Mr. Speaker: I was dealing seriously with these matters and I do not think that we want to reduce them to a farce.

Coal Industry Dispute
Mr. Dave Nellist: On a point of order, Mr. Speaker. Although you were not in the Chair at the time, you will be aware that, during the Adjournment debate on the coal strike yesterday evening, I made an accusation to the Minister of State, Department of Energy regarding Government pressure and instructions to British Rail to settle the pay dispute with the rail unions so that those unions would not be involved with the miners. That was greeted with extreme derision and laughter by the Minister and his colleagues. Today's events may have changed that, but I leave that matter there.
I wish to raise with you, Sir, the fact that a similar position now arises in relation to British Steel and instructions from the Secretary of State for Trade and Industry. On 23 May, when the non-union coke lorries moved from Orgreave to Scunthorpe it was with the understanding and explicit knowledge of British Steel and right to the top of the Government that on 24 May there would be a meeting of the mining, transport and rail unions to give a dispensation for that coke to be moved by rail. The instruction by the Secretary of State for Trade and Industry in that context is exactly the same as the Prime Minister's instruction to the chairman of British Rail.
Mr. Speaker: That has absolutely nothing to do with me.
Mr. Dennis Skinner: On a point of order, Mr. Speaker. It is well known that even a fairly thin House on Derby day—we all know where the Conservatives are—has the duty to ensure that hon. Members do not treat the House with contempt. As the Daily Mirror today has made it abundantly clear that the Prime Minister has constantly misled the House and treated it with gross contempt by saying that there has been no intervention in the miners' strike, may I ask what steps you, Mr. Speaker, intend to take to ensure that the Prime Minister comes to the Dispatch Box today to explain why she said one thing in the House of Commons and the exact opposite in talks at No. 10 with leaders of the National Coal Board, British Rail and the rest? If she is not prepared to do that, will you refer the matter to the proper parliamentary Committee so that the Prime Minister is brought to book for that gross contempt?
Mr. Speaker: As the hon. Gentleman knows, I am not responsible for leaks in newspapers. Nor can I force the Prime Minister to come and answer questions. On the last part of the question, as the hon. Gentleman knows, there is a formula for dealing with that matter.
Mr. Max Madden: Further to that point of order, Mr. Speaker. Can you help us by ensuring that the inquiry to be instigated by No. 10 into the disclosures in the Daily Mirror is properly carried out? Should not the Leader of the House have told us the terms of reference of the inquiry, whether it is to be conducted by the police, which Government Departments and public sector industries will be required to give evidence, when the findings will be published and whether they will be publicly available? Reservations were expressed earlier about the acceptability of some of the language used in the House, but whatever our disagreements about that, I am sure that there is a general desire that the House should be

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given information about the Government's intentions in these very serious matters, since it is clear that the Prime Minister and other Ministers have deceived the public and the House of Commons. Surely the House is entitled to know from the Prime Minister or the Leader of the House what the Executive are doing to inquire into these very serious allegations.
Mr. Speaker: I say again that it is not for me to advise on parliamentary tactics.

British Rail (Wage Negotiations)
3.50 pm
Mr. John Prescott: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the Government's role in the recent British Rail wage negotiations."
The matter is specific because of the publication in today's Daily Mirror of correspondence which we can assume is authentic, in view of the statement today that the Prime Minister has announced an inquiry into the leak of such correspondence. That correspondence clearly involves the Prime Minister, the Secretary of State for Transport and other Ministers in direct Government intervention in British Rail wage negotiations.
The issue is important because the House was informed in a parliamentary reply by the Secretary of State for Transport to my hon. Friends the Members for Tyne Bridge (Mr. Cowans) and for Sunderland, South (Mr. Bagier), inquiring into his involvement in such discussions:
"Wage levels in British Rail are for negotiation between the British Railways Board and the unions. The chairman of British Rail naturally keeps me informed."—[Official Report, 9 April 1984; Vol. 58 c. 27.]
Today's published correspondence, dated from 2 April, makes it clear that the Secretary of State and his Department, together with other Ministers, were, both before and after the parliamentary reply, involved in delaying the settlement of the wage negotiations and increasing the final offer. The Secretary of State misled the House about his involvement and the House should be given an opportunity to debate the issue and pass judgment upon his actions.
The issue is of great urgency in view of the clearly exposed Government strategy to instruct settlements in the rail industry and other public sector industries in order to prevent further industrial disputes while they continue their vendetta against the miners and their families, despite repeated denials by the Prime Minister that she does not want to see any further role for Government intervention.
This House has a right to pass judgment upon the Government's pretence of no intervention in public sector wage negotiations, while directing nationalised industry chairmen to carry out the Government's vindictive and arbitrary public sector wage policy.
Mr. Speaker: The hon. Gentleman asked leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"The Government's role in the recent British Rail wage negotiations."
I listened with great care to what the hon. Gentleman said, but I regret that I do not consider the matter that he has raised to be appropriate for discussion under Standing Order No. 10, and, therefore, I cannot submit his application to the House.
The hon. Gentleman will know that there are other ways to raise these matters.

Rural Development
3.52 pm
Mr. Archy Kirkwood: I beg to move,
That leave be given to bring in a Bill to establish a Rural Development Agency with appropriate powers to sustain rural population by encouraging small scale agriculture in less favoured areas; by co-ordinating an integrated public rural transport system by land, sea and air; by sponsorship and development of small craft and other enterprise including retail outlets and post offices; by providing housing in rural areas for lease or sale by direct build or joint venture providing appropriate housing stock for all age groups; by sponsoring tourism; by promoting village venture schemes; and by providing support measures for rural schools; and for connected purposes.
In introducing the Bill, I start from the position that the Government have a responsibility to maintain basic standards in the fabric of social and economic life throughout the whole country. Of course, resources are finite, and I accept that. Of course, urban decay and economic decline should be given due priority when committing scarce resources to alleviating the grinding poverty and distress that are evident in some of our major and great cities.
There are signs, which are clear for all to see, that rural parts of Britain require co-ordinated and concentrated attention if future problems of rural deprivation are to be avoided. The needs of rural areas may differ in scale and in their nature; they may not always require only hard cash, as often advice and support are as important as grants and loans. However, the needs of the country areas are as great as those identified in the urban and industrial centres.
The need for action now is great, and it has been made greater by a series of fairly recent changes. The European Community is in the process of reforming elements of the common agricultural policy. Whatever our view about the merits of the changes and the method of their introduction, they will bring in their train acute problems for some sectors of the agricultural and related industries. The structural changes in the CAP, if they continue, will make economic life for the smallholder and small-time farmer on marginal land almost impossible.
Also in the European context, we have seen the way in which the British Government's restrictive monetary policies inhibit the full potential of the regional and social funds that are available from the EEC. Much more support for rural areas could have been provided.
In the United Kingdom, the Government are undertaking a review of regional development assistance. Interpreting the signs—they are evident for all to see—there is reason to believe that the areas covered by development status will be curtailed and the amount of money available reduced. In the past, local authorities have been able to allow a measure of direct or indirect support—for example, by maintaining village halls and supporting community and parish councils—but they are being obliged to withdraw that support because the Government have reduced their financial ability to give it.
The same applies to other aspects of country life, including transport. Operators such as Eastern Scottish, in my constituency in the Borders of Scotland, are demanding ever-higher subsidies to maintain fare stage trunk route services. The Post Office is attempting to rationalise its services and is thereby putting its smaller retail outlets under increasing financial pressure. Tourist
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authorities which see the potential of developing the industry in remote areas do not have enough capital to assist appropriate tourist schemes.
For all those reasons, the need for development in rural areas should be faced squarely and urgently. The evidence of decline is there for all to see. The results of the 1981 census show, across the board, a continuing drift from the landward areas into the towns. As the population falls, services are withdrawn. It is an endless spiral which we ignore at our peril.
I noticed with interest the announcement two days ago by the Development Commission for Rural England to set up a number of rural development areas in England. I warmly welcome that development and will watch with close interest the five to 10 year programmes to be implemented in selected areas.
The Government will no doubt say that that announcement, affecting England, fits the bill and that there is no need for a United Kingdom policy on development in rural areas. They will argue, for example, that the Council for Small Industries in Rural Areas, the Development Commission for England, the Scottish Development Agency and the Highland and Islands Development Board already have the necessary powers to achieve the ends set out in the long title of my Bill.
I beg to differ, and so do at least two of my local authorities, the regional authority in the Borders and Berwickshire district council. We take the view that large gaps still exist. Indeed, the work done by the boards, councils and development agencies to which I have referred is commendable, but anyone who pays heed to the powerful and constructive case argued by such influential bodies as Rural Voice in England and Rural Forum in Scotland recognises that major gaps still exist in the provision tnat could, and should, be made in rural areas.
Any meaningful attempt to tackle the problem must be adequately backed by the Department of Trade and Industry via a properly constituted and funded development agency. My Bill seeks to set up such an United Kingdom agency to bridge the gaps that I have identified. It need not require vast sums of money. Indeed, it need not make a significant impact on the volume of public expenditure. It could even be phased in by setting up the agency and charging it with the responsibility of undertaking a series of pilot schemes in different villages and localities to see what could be achieved before the decision to scale up the amount of funds required was eventually taken.
Imaginative and practical steps are necessary now if we are to preserve the best of our rural way of life and stem the slide towards depopulation and deprivation. The Bill offers an opportunity to take a positive step in that direction, and on that basis I commend it to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Archy Kirkwood, Mr. Paddy Ashdown, Mr. A. J. Beith, Mr. Malcolm Bruce, Mr. Geraint Howells, Mr. Simon Hughes, Mr. David Penhaligon and Mr. James Wallace.

Rural Development
  RURAL DEVELOPMENT
  Mr. Archy Kirkwood accordingly presented a Bill to establish a Rural -Development Agency with appropriate powers to sustain rural population by encouraging small scale agriculture in less favoured areas; by co-ordinating an integrated public rural transport system by land, sea and air; by sponsorship and development of small craft and other enterprise including retail outlets and post offices; by providing housing in rural areas for lease or sale by direct build or joint venture providing appropriate housing stock for all age groups; by sponsoring tourism; by promoting village venture schemes; and by providing support measures for rural schools; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 6 July and to be printed. [Bill 188.]
Orders of the Day
  Agricultural Holdings Bill [Lords]
  As amended (in the Standing Committee), considered.
  Agricultural Holdings Bill [Lords]
    New Clause 1

      SALE OF SMALLHOLDINGS (MINISTER'S POWER OF VETO)
      'After section 49(4) of the Agriculture Act 1970 add—
      "(5) A smallholdings authority shall exercise the power under section 165 of the Local Government Act 1933 (section 123 (disposal of land by principal councils) of the Local Government Act 1972) subject to an absolute power of veto by the Minister".'.—[Mr. Geraint Howells.]
      Brought up, and read the First time.
      4.1 pm
      Mr. Geraint Howells: I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient to discuss new clause 3—Sale of smallholdings—
      'No land held by a smallholding authority for the purpose of smallholdings shall be sold by the authority unless the Minister of Agriculture, Fisheries and Food, (or the Secretary of State for Wales in the case of Wales) is satisfied after affording opportunity to all persons interested to make representations and objections in relation thereto that the land is not required for the purpose of smallholdings and lays an order to that effect, such order to be subject to approval by resolution of both Houses of Parliament.'.
      Mr. Howells: The main and avowed aim of the Bill is to ease the strictures on the agriculture industry, which have been caused by the long-term effects of the three-generation succession rules.
      Paying major attention to the nature of the agricultural base will mean more farms to let being on the market. All interested groups believe that young, aspiring farmers should have the opportunity to set up on a farm, even if they cannot afford to buy it.
      County council smallholdings were set up by statute to provide moderate parcels of land for letting to new entrants to the industry. The opportunity to acquire such a letting is still regarded as significant by interested bodies. Smallholdings were only ever intended to be the first rung on the ladder, leading in time to a larger tenancy so that another tenant could take over the holding.
      A Liberal Government originally introduced this form of holding by the Small Holdings and Allotments Act 1907. At that time, the President of the Board of Agriculture and Fisheries was Earl Carrington, who said, in opening the debate, that there was nothing new in the Bill, and nothing radical or revolutionary. The Liberal party was merely trying to restore to the agricultural labourer some of the conditions under which he lived in the earlier part of the last century.
      I hope that I shall not be accused of wanting to see our modern industry stuck in the furrows of the previous century, but the farming community well appreciates how important it is to preserve something of traditional rural life.
      There are approximately 7,000 county council smallholdings in Britain. These have frequently been occupied by a tenant for his entire life, which defeats their purpose. Some statutory smallholdings have formulated a

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      policy of selling off, making no provisions for the purchasers to hold or let the land in the same way as before. Thus, the national stock of smallholdings has been reduced, which is deplored by everyone who has at heart the interests of young farmers.
      It is possible that the Bill will encourage more lettings and, therefore, the young entrants will have somewhere to move on to after a few years on a smallholding. As policy decisions abound, sales have varied from one area to another. There is general concern among the tenants of such holdings about their security. Whenever a holding is sold and is not let in the same way, another viable space for a family goes and the balance of country life is affected.
      Decreasing numbers in the countryside are reflected in local communities, as jobs and local services are lost. The new clause is needed to restore to the Minister the power of veto over such sales. I hope he will accept that encouragement is necessary to county councils so that they will appreciate how important the lettings are.
      Two authorities, to my knowledge, have decided to dispose of all smallholdings—Derbyshire and Somerset. Derbyshire made the decision long ago and Somerset will sell to sitting tenants before disposing of the holding on the open market. However, many county councils which retain land and manage it in a responsible manner get a proper economic return for their investment. For example, Essex county council tries to match sales with purchases, but it also consolidates holdings to make larger and more viable units. The danger of consolidation is that if the holdings decrease, so do the opportunities for new entrants. I urge every county council not to merge holdings. It is better to have two part-time farmers, as such a policy will stem depopulation.
      The purpose of providing the Minister with the power to veto sales is to ensure that councils dispose of smallholdings only if it is essential and the purchasers manage the land in such a way that the same number of tenants are able to rent and farm the land. For that reason, I also support new clause 3.
      To sum up, there are 7,000 smallholders in this country. If all the county councils took the same attitude as Derbyshire and Somerset, it would be a very sad day. By allocating these smallholdings we must also remember that they must make a living. That is the purpose of the exercise. We shall later be debating milk quotas, which affect smallholders. I hope that the Minister, in his wisdom, will make sure that they are compensated for their loss of business.
      I have mentioned that Derbyshire and Somerset are selling their smallholdings. I am sure that other councils are selling. Coming to my own county council of Dyfed, it has perhaps shown a unique example in the lead given in Wales. I received a letter from the council, which said:
      "I understand that you require some information regarding county farms within Dyfed and I list below some facts and figures which may be of use to you."
      For information, the letter continued:
      "Acreage of land held within Dyfed as county farms: 9,200 Number of tenants: 144."
      The following part is important:
      "Number of farms sold within the past 10 years: Nil
      Number of farms acquired within the past 10 years:4
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      Operating surplus for the year 1983–84: £63,900
      Repairs and maintenance 1983–84: £65,000
      Capital maintenance: £50,000.
      Our present policy is that as larger farms within the county become vacant, either by death or retirement, they are offered to our tenants on the smaller start units—these are usually in the region of 10 to 20 acres—and then these starter units are advertised externally.
      Within the past year we have also acquired 300 acres made up of 28 blocks of bare land from the Welsh Church Estate with a long-term aim of putting some of the blocks of land together to form new starter units.
      I am not aware that any other County in Wales has had a definite policy to sell their County Farm Estate but here in Dyfed we have a very definite policy to acquire more farms as and when finance becomes available."
      That, I am pleased to say, is the progressive attitude taken by Dyfed county council towards acquiring more land. We owe a great deal to the county council for its lead in Wales. If only young farmers in other parts of the country had such a future! Dyfed county council is looking after the interests of its tenant farmers much better than are some of its counterparts in England.
      Therefore, it gives me great pleasure to propose new clause 1.
      Mr. Ken Weetch: I should like to speak to new clause 3.
      One of the central purposes of the Bill is to find ways to halt the decline of tenant farming in Britain. That it is in decline is not disputed on any side, although the causes of the deterioration will be in dispute before the debate has run its course. For the tenant farmer in Britain, decline there has been and decline there will continue to be unless steps are taken to alter the serious situation.
      In principle, the Minister and his Department should step right into the middle of the problem and do something to halt the decline. I am arguing the case for new clause 3 in that context. It centres around one of the areas of farming tenancy which, over the years, has been in decline — the numbers of and acreage of land held as smallholdings. In simple terms, the new clause reflects the fact that unless something is done quickly the deterioration in numbers and in the extent of smallholding will continue, and make tenant farming more parlous than it is now.
      It is well that I remind the House of the background to the smallholdings problem. Although the major piece of current legislation governing smallholdings is the Agriculture Act 1970, with particular reference to part III, smallholding legislation has a long history. It dates back to the Small Holdings Act 1892, which empowered county councils to create smallholdings where land existed and could be acquired for that purpose. That legislation was given impetus after the first world war and also during the inter-war period, when county councils were urged to acquire land to combat social depression.
      In the post-war period, the White Paper of 1946 set out the objectives for advance. I come now to an important point. The Agriculture Act 1947, which followed the White Paper, stated that for many people, including agricultural workers, smallholdings could provide the first rung of the ladder into farming. That is an extremely important statement of principle. Many people still see it in that way.
      For smallholdings, the emphasis was altered by the inquiry of the Wise committee in 1966 to the effect that smallholdings were to provide a gateway into farming. Those considerations remain of critical importance. At a

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      time when tenant farming is under pressure from all sorts of directions, smallholding, as a start into farming, is as fundamentaly important as ever.
      4.15 pm
      We now come to the crux of new clause 3. It does not take long to realise that official policy and what is happening in practice diverge considerably. While most people in high places pay tribute to smallholdings as a prop of tenant farming, no one is doing very much to prevent its decline.
      I wish to present enough statistics to make a case. I am always hesitant about using statistical argument because if one uses too much one is accused of deluging people with figures, but if one uses too little one is accused of being partial, so I wish to be critically selective. First, I shall give a definition. I am talking chiefly about local authority smallholdings, but I am aware that other smallholdings come directly under the Minister and are part of the Land Settlement Association estates. I shall take the local authority figures as the most significant for outlining the main problems. I take my statistics from Government sources—the annual return of statistics for smallholdings — and from statistics presented by the Society of County Treasurers.
      I wish to draw these conclusions from that body of statistical knowledge. First, from 1966 until the present day, the total number of smallholdings has declined from 12,882 to 6,959, a reduction of 46 per cent. Those figures are for England alone, but I assure the House that the trend is representative. To be fair, the figures cover the disposal of smallholdings and amalgamation, so one has to discern the strict cause of the reduction. However, the net result is still the same—the number of smallholdings is in decline.
      Secondly, if the Minister examines the statistical evidence over that period, both in terms of actual area of smallholdings and the number of smallholds, he will find a continual decline. That, to say the least, is worrying and needs to be halted. Let me bring the Minister up to date. The latest figures of which I have had sight are those for 1982–83. During that year, 1,300 hectares were disposed of in English counties, and only 126 acquired for smallholding development. That represents a very considerable haemorrhage in smallholding acreage.
      I am sorry to say that East Anglia was the worst culprit in that respect. I make a direct appeal to the Minister of State, who is an East Anglian Member of Parliament. Indeed, he represents Norfolk, South. Norfolk is the worst culprit in the whole country. I wonder what the council is doing up there. I shall stop wondering, and tell the House what it has been doing. In 1982–83, of the 1,300 units disposed of, nearly 800 came from Cambridgeshire, Norfolk and Suffolk. Their disposal amounted to 60 per cent. of the total.
      Norfolk county council, which has not been backward in coming forward with disposals, is in the area where the Minister of State does a lot of his rounds. I wonder whether the Minister has been to Norfolk to ask the council what it is doing, and whether it realises that it is striking a body blow to East Anglia and the smallholding industry. I appeal to the Minister again. Formerly, he was responsible for small businesses. Smallholdings on the land are one of the most valuable areas of small business. Will he respond to that when he winds up?
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      I should like to make two comments about the figures. First, the disposal has occurred despite official warnings and clear expressions of the danger by distinguished witnesses. The Northfield report stated, among other things, that there was no case for dismantling smallholding estates on cost grounds, and that local authorities should pursue energetic management plans for their smallholding estates. Local authorities have been energetic in coming forward, selling and disposing of smallholding estates without any thought of the serious consequences for smallholding development. The activities of some of them, especially those I mentioned in East Anglia, have been deplorable.
      The Northfield report said in unmistakable terms:
      "The national smallholdings estate is a large and valuable asset … it is an important part of the let sector."
      The report made it clear that smallholdings should not be disposed of, especially not in response to immediate financial pressures.
      The leading article in The Times of 28 February pointed out that statutory smallholdings of county councils form less than 1 per cent. of all farmland, but account for 15 per cent. of all new tenancies. It said:
      "The present financial pressures on county councils are now making these estimates for the first time subject to serious erosion … So, while the Government professes to be seriously concerned to reinforce the agricultural tenancy system, it is happy to stand by and watch the breakup of publicly owned estates of smallholdings wherever this generation of councillors prefers to convert those assets into higher-yielding investments."
      That brings me back to the Norfolk county council.
      New clause 3 aims to halt the decline. In principle it provides that the Minister and his Department must become actively involved if the rot is to be stopped. It states that no land held by a smallholding authority shall be sold unless it can clearly be demonstrated that it is not required for smallholdings. As part of that, there must be opportunities for representations and objections to be made. Even when the Minister is satisfied after the procedure has taken place, he must bring the proposals before the House to be debated.
      If the Minister has a better idea about how to stop the precipitous decline in smallholdings, we shall be pleased to listen to it. However, he must take on board the fact that things cannot continue as they are. The House and the entire farming community are anxious to hear his proposals to remedy what everyone agrees is a serious and deteriorating position.
      Sir Peter Mills: I welcome this chance to speak to the new clause. I understand the spirit and sentiment behind it. All hon.. Members wish to see young farmers have the chance to start a farm—to put their feet on the first rung of the ladder. About 40 years ago I started with 29 acres, and I know the thrill and pleasure of beginning to farm a small acreage. It is tough and hard going, but I seized the opportunity, as most people would, even today, despite the troubles and difficulties in agriculture.
      Some aspects, however, worry me. First, I doubt whether in practice smallholdings provide a stepping stone and a way upwards. Although I had such an opportunity 40 years ago, I doubt whether that is possible today. In practice it has not provided a stepping stone, but produced many small farmers who have stayed put. They have had to purchase further land and amalgamate it with their smallholding to make it a viable proposition. The hon.

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      Member for Ceredigion and Pembroke, North (Mr. Howells) moved the new clause well, but he knows how difficult it is to make a small acreage viable.
      I do not have the figures for this, but it would be interesting to know how many small farmers leave these smallholdings. Perhaps the Minister could tell us the turnover rate. I would have thought that it was small. There is a complete blockage of vacancies for smallholdings.
      I do not agree with hon. Members who say that the reduction in smallholdings is due to a deliberate policy. The economic position forces out smallholders and enforces amalgamations.
      Other ways must be found to allow new entrants into the fanning communities. The Government seek to provide them through this legislation. We want fixed terms of tenancies so that a young person can start and after 10 or 15 years become established. That would be one way forward. However, we must look still further. The Government have done much work regarding taxation and the easing of the landlord's position in the interests of the tenant, but further measures must be taken and changes in taxation made so that landlords feel more able and freer to allow more young people to enter the industry.
      The Opposition will do nothing to help the small fanner if they seek to upturn this legislation. If they talk about land nationalisation and wealth taxes, they will nail down the coffin of the small farmer more firmly.
      Mr. Weetch indicated dissent.
      Sir Peter Mills: The hon. Member need not shake his head, because he knows that what I say is true. Land nationalisation, wealth tax and the rating of agricultural land will do nothing to help smallholders and farmers. I hope that the Opposition will make it clear that they do not intend to do that.
      Finally, democratically elected local councils or authorities should decide on these matters. Most of them will take the matter seriously, and they should decide what to do. The Minister should not deal with the matter. He may give guidance, but the local people—they are the ratepayers—should have the final say.[Interruption.] The hon. Member for Ipswich (Mr. Weetch) must contain himself. I thought that he might express that view. In this instance, Whitehall does not know best. The local people should decide whether or not to continue with smallholdings.
      For those reasons I cannot support the hon. Member for Ipswich and new clause 3. I hope that the House and farmers, particularly the smaller ones, will be aware that Socialist policy is to put the whole matter firmly into reverse.
      4.30 pm
      Mr. Gerald Bermingham: I listened—if I may put it gently—with some amusement to the speech of the hon. Member for Torridge and Devon, West (Sir. P. Mills). If one were to take away the party political broadcast, the kernel showed some positive ideas about land and landholding.
      Mr. Deputy Speaker, you are aware that new clause 2 is not to be moved. It dealt with other issues and the way in which agricultural lettings could be made. While not seeking to challenge your ruling, Mr. Deputy Speaker, on
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      the provisional selection of amendments or seeking to trespass on matters outside the debate, it is all part of the same question as to what form future lettings will take if we are to encourage lettings of land to enable people to start in the industry.
      Smallholdings form an essential part of the lettings ladder. One would like to see more encouragement given. It will not be good enough for the Minister to say, "Well, of course, it is up to each local authority to do its own thing." We must be definitive in our policy. We are not talking about land nationalisation. We are talking about how to create tenancies, because the House seeks to encourage tenancies. There has been a continuing decrease in the number of tenancies over the past 10 to 20 years.
      If we are to help agriculture to progress, we must encourage the creation of tenancies, and smallholdings form a part. I said that I would not trespass beyond the scope of the debate on smallholdings into fixed-term tenancies and other such matters, but I believe that my views are well known and I do not depart from them one inch.
      Unless the sale of smallholdings is stopped, and unless active steps are taken to encourage local authorities, and other bodies that hold vast areas of land, to create smallholdings which can be let to young tenant farmers as a stepping stone to a farming career, the tenanted sector must, of course, suffer. There is no dispute that the number of tenanted farms becoming available has decreased, and there is great competition for the tenancy of those which become available.
      If a person has had the education and experience of a smallholding it will give the landlord added security when letting to him. In other words, the chain is there. It starts with a smallholding. Unless the Government take active steps, the chain is about to wither and die. The Government's approach is ostrich-like and in Norfolk the approach is even more ostrich-like. The county councils say, "We will get shot of these things. They are money in hand. We can use the money elsewhere." During the past five years local authorities have been subject to reductions in rate support grant and various other pressures, and there has been a philosophy in favour of knocking down local government spending. Money is therefore sought, from the sale of land, smallholdings or other sources. Consequently, the number of smallholdings has decreased.
      I applaud the positive and forward-looking policy of Dyfed. That is worth saying, although it is not my part of the world.
      I hope that the Minister will admit that the Government, his Department and even he himself have had their heads in the sand and that the time has come to take their heads out of the sand. If we are to maintain the tenanted sector, we must maintain smallholdings. Unless the Government actively encourage and help us in that respect, I fear that by the end of the decade there will be few smallholdings left and the country and farming will be that much poorer.
      Sir Paul Hawkins: I support new clauses 1 and 3, despite the unkind and somewhat rude remarks about Norfolk by the hon. Member for Ipswich (Mr. Weech). I was on the smallholdings committee of Norfolk county council for 20 years, when I believe that we looked after smallholdings extremely

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      well. I do not believe that Norfolk county council cares about smallholdings in the country at present. I am sad about that.
      The Bill is all about having more tenants on the land. I say to my hon. Friend for Torridge and Devon, West (Sir P. Mills) that if we are to have more tenants on the land and create a ladder, for heaven's sake do not cut away the bottom rungs. That sounds idiotic. I say to the Ministers, for heaven's sake look at this. What is the point of them and the Treasury trying to create more smallholdings if they stop people starting and stop fresh blood coming into the industry?
      Many agricultural areas are becoming incestuous. Some 30 or 40 years ago, the situation was such that families could purchase land, but new people cannot now come into agriculture by means of purchasing land. We know that the area of let land is declining and therefore we must try to maintain the smallholders on the land, because in my area they are viable. They make a reasonably good living. Admittedly one must put together two or three smallholdings to make a viable unit, which is why we are losing many tenants. We must keep those who are there if we intend to have more tenants and create a ladder.
      Everyone thinks of Norfolk farms as huge, but they are not. There are hundreds of smallholdings. Norfolk had the most county council smallholdings until Cambridgeshire and the Isle of Ely were amalgamated. I am proud of the smallholders. Many of them live within half a mile of my home. I know them and they are fine men. They bring up good families and they are a credit to the nation and to the district. They are people whom we should encourage. We must keep them on where they are viable, and we want the new blood to be part of the ladder.
      Sir Peter Mills: I am not saying that one should do away with county council smallholdings. The new clause lays down who should decide on their sale, and that is where we disagree. I do not believe that Ministers should decide. County councils should decide. I am not against smallholdings. Hon. Members have it wrong.
      Sir Paul Hawkins: If my hon. Friend lived in my county, where the county council has decided to sell all the smallholdings that can be sold, what would he do? I feel strongly about this. It is a totally wrong decision of the county council. If my hon. Friend the Minister cannot reconsider some of these cases, where will the decline in smallholdings be stopped? That is my main point.
      Mr. Geraint Howells: If, in years past, the Minister of Agriculture, Fisheries and Food had had the right of veto, does the hon. Gentleman agree that there would be many more small holdings in his area today?
      Sir Paul Hawkins: The Minister had that right, and it was given up. He should still have that right, and that is what I want. With due respect to the hon. Gentleman, I like new clause 3 better than new clause 1, because it is stronger.
      It is very short sighted of county councils to sell smallholding estates which can never be replaced at today's prices. Those smallholdings were bought through thrift, enterprise and courage, and estates were built up. Now they are to be sold, but what for? It may be for a bypass or a school. Such things are very important. There are many bypasses in my constituency and we will want new schools. The money for the schools and the bypasses will come, but that land will never be available again.
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      I urge my right hon. and hon. Friends on the Front Bench to reconsider the matter. It is of great importance to hundreds of families, who feel that their livelihood and the livelihood of their sons is endangered by the policy of county councils. In Norfolk, county councillors are no longer rural-minded; they do not care about these tenants. Naturally they have to remember the other services which they provide in the county but they are being shortsighted, because this land, once it is sold, will never be regained.
      Mr. Robert Maclennan: I want to address just one point that was raised by the hon. Member for Torridge and Devon, West (Sir P. Mills) as to where the decision should lie with regard to the policy of abandoning county council smallholdings. His argument that it should be decided by local option might have been appropriate even five years ago when local authorities had an option as to how to spend their resources and when central Government were not putting upon local authorities the kind of pressures that have resulted in county councils looking for ways of easing financial burdens not of their own making.
      In the current climate, for which the Minister's Government are responsible, local authorities will sacrifice the interests of minority groups. They will sacrifice the interests of smallholders who, even when holdings were quite extensive, still constituted in many areas a minority of those engaged in agriculture and a still smaller minority of ratepayers. The voice of these people is not strong enough to resist the pressures that are being put upon them. The hon. Member for Norfolk, South-West (Sir P. Hawkins), who speaks with long experience of agriculture and of local government, is right to recognise the reality that these local authority holdings will disappear.
      Mr. Jim Spicer: Can the hon. Member give specific instances in the west country—in Devon and Dorset, for example—where the county councils have exercised their right and are keeping their smallholdings because they know what is right for the county? Those councils are not getting rid of them. County councils speak for the ratepayers in the county. They have exercised their right in Devon and Dorset. Why should the county council in Norfolk not do so as well?
      Mr. Maclennan: My hon. Friend the Member for Ceredigion and Pembroke, North (Mr. Howells) drew attention to what has happened in Somerset, where councils have succumbed to pressure from central Government and are disposing of county council holdings. No doubt that practice will be followed by others unless it is made clear by central Government that this is regarded as an undesirable development and that the smallholders must be protected from these pressures. Once the pressures have been succumbed to, it will be very difficult to reestablish the holdings.
      I hope Conservative Members will listen to the wise words of the hon. Member for Norfolk, South-West, who has more direct experience of this aspect of agriculture than, I venture to suggest, any of his hon. Friends who are in the Chamber.
      4.45 pm
      Mr. Robert Hughes: The hon. Member for Torridge and Devon, West (Sir P. Mills) is an assiduous and very loyal Back Bencher who takes part

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      in nearly all agriculture debates. I have come to recognise when he has a very weak case because he almost always proceeds at least to attempt to pour scorn on the policies of Her Majesty's loyal Opposition. I shall deal in later debates with some of his remarks. I am not in the least abashed by his strictures on me. Every time he draws the attention of the House to the policies of the Opposition he greatly heartens me and gives me confidence because by his constant reiteration he shows supreme confidence that we will be the next Government. I am more than grateful to him.
      I welcome the support of the hon. Member for Norfolk, South-West (Sir P. Hawkins) for the proposition that smallholdings should not be sold by county councils. We can discuss whether new clause 3 is better than new clause 1 when the Minister replies. The hon. Member got it absolutely right: the ostensible purpose of the Bill is to increase the size of the tenanted sector. There is not very much that the Government can do directly about the privately owned sector. Influences can be brought to bear indirectly on the private sector to do much more to let land. We can act directly in regard to county council smallholdings. We can take measures to protect and possibly to increase the size of the tenanted sector.
      My hon. Friend the Member for Ipswich (Mr. Weetch) pointed out, when speaking to new clause 3, that the number of county council smallholdings is not increasing. In the main, the trend is in the opposite direction. It is no use flying in the face of facts. Certain local authorities, because they are suffering from pressures of finance, but also because they share the Government's ideological passion for privatisation, are disposing of smallholdings. For them to do so is extemely shortsighted and damaging to farming in general and to the tenanted sector in particular.
      I do not want to be diverted down the road of a long discussion about local democracy, but it is the height of impudence for Government Back Benchers to plead that the Minister should have nothing to do with controlling the affairs of county councils and that local ratepayers should decide. They say that local ratepayers know best and that how the smallholdings should be dealt with is a matter for local autonomy, yet recently they were helping to push through legislation under which the Secretary of State for the Environment will determine rates and which will abolish the GLC and the metropolitan counties. Where is the consistency of the argument about local autonomy and democracy? I shall certainly not accept strictures from the Government Benches about the rights of local people to determine policy in the light of their circumstances, although I passionately believe in the argument.
      The hon. Members for Norfolk, South-West and for Torridge and Devon, West talked about the importance of smallholdings as being the bottom rung of the ladder from which people progress. I accept that things probably have changed in the 40 years since the hon. Member for Torridge and Devon, West began his career.
      On Second Reading I expressed my doubts about whether people who began with a smallholding moved to bigger and better things, but there is some validity in the argument. Lord Belstead said that few people moved up the ladder and that probably only about 14 tenants a year moved on. The fault lies not with the county councils, but with those responsible for the upper rungs of the ladder.
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      Land is not being made available for tenants. It is daft to argue about the difficulties of climbing up the rungs of the ladder and then to cut off the bottom rungs and do nothing about the gaps in the middle. County council smallholdings provide a start. The Minister should encourage their provision.
      The amount of land available could be increased. For example, the Durham county council took a decision in 1978 to enlarge the size of its estates. In 1974 it owned 4,678 acres. Today it owns 6,070 acres. They are not large parcels of land but the council's ownership of such land has increased by 50 per cent. Mr. John Cook of the County Land Agent and Valuer said that that had been achieved not by an open cheque policy, but by careful financial management. It can be done.
      The case for county council smallholdings is overwhelming. It is supported in many areas. It is a cross-party issue. I hope that the Minister will take on board our case and the powerful argument by his hon. Friends. I hope that he will accept either new clause 1 or new clause 3. I believe that our new clause 3 is the better. If the Minister is not prepared even to accept that, I hope that he will give a clear undertaking that he will have discussions with the Secretary of State for the Environment and decide to stop the pressure on county councils and other local authorities which are being compelled for reasons of mistaken financial judgment to dispose of smallholdings.
      The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John MacGregor): The issue was discussed at length in another place. It causes emotion and involves genuine differences of view on all sides. I can say to the hon. Member for Ipswich (Mr. Weetch) that I have been much involved in discussions in Norfolk. I am not a member of the county council, but I take a great interest in agriculture and in my local community. My hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins) and I have had many debates on the issue in the years that I have been in the House.
      The new clauses suggest that central Government in general, and the Minister of Agriculture, Fisheries and Food in particular, should intervene in the management of land by local authorities in their capacity as smallholding authorities. The suggestion is that Government should approve of sales before they occur.
      Freedom to retain or dispose of interests in land was granted to local authorities by the Secretary of State for the Environment in May 1979. I believe that it is right that local authorities should have as much freedom as possible in this matter. I shall try to explain why. To limit that freedom in the ways suggested in the new clauses would be retrograde and I shall urge the House to oppose them should they be put to the vote.
      I understand the spirit of the new clause suggested by the hon. Member for Ceredigion and Pembroke, North (Mr. Howells), but it could create many complexities. The hon. Gentleman will not be surprised to learn that the new clause is defective. I shall, therefore, concentrate upon new clause 3 because that is clearer in its intention.
      Leaving aside the questions of principle, on a purely practical note the latter part of the new clause creates a problem. It requires the Minister to bring before both Houses of Parliament every proposed sale of smallholding land. That would encumber proceedings in this and the other place in a way that I doubt has a parallel. We should

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      be burdened with unnecessary administration just when we are attempting to relieve the general public and the House of excessive interference by Government. I cannot believe that any of us wish the House to have to consider, for example, whether a smallholdings authority should be allowed to sell an acre or two of inconveniently situated land in order to rationalise the layout of its estates. The practical aspect is worth bringing to the attention of the House.
      I shall deal now with the more important questions of principle. Decisions about entire holdings or estates should be taken by those best placed to judge the situation—the local authorities. I am sure that in reaching decisions they will take full account of the interests of tenants and of agriculture as well as the public expenditure involved in the retention or disposal of smallholdings estates.
      When the hon. Member for Ceredigion and Pembroke, North described what was happening in Dyfed and elsewhere he demonstrated the variety of needs. The local authority should decide its local needs and take action accordingly. The hon. Gentleman explained his council's views, which I am sure are much the same as his own. The hon. Member for Aberdeen, North (Mr. Hughes) explained what has happened recently in Durham. I share the view expressed by my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) that it is right for the county councils to decide in the light of local circumstances.
      Mr. Geraint Howells: Perhaps the Minister will clarify the position. The hon. Member for Norfolk, South-West (Sir P. Hawkins) said that up to 20 years ago things were going well but that once elected councillors who had no interest in agriculture became involved things started to go the other way. I am worried because perhaps in years to come we may face the same problems in Wales and half our smallholdings will be sold.
      Mr. MacGregor: I disagree with that view about councillors in Norfolk and their attitude to agriculture. I shall explain why I think that it is appropriate for Norfolk county council to do what it is doing. Conditions throughout the country vary. Different councils have different views. They are entitled to those views and there is no reason why Dyfed should not proceed as it is.
      Mr. Thomas Torney: How can the Minister reconcile what he has just said about county councils knowing more than the Government about what should be done when his Government are about to abolish the county councils and put bureaucratic organisations in charge?
      Mr. MacGregor: We have debated that issue at length. The county councils who have responsibility for smallholdings are not to be abolished. I believe that decisions should be taken locally. If county council smallholdings were providing the first step on the farming ladder, we might be considering the matter differently in many counties. As several hon. Members have said, the original object of county council smallholdings was to provide the first rung on the ladder. That is what the hon. Member for Ceredigion and Pembroke, North called them, and the hon. Member for Ipswich described them as a gateway into farming. But I suggest that the tenant of a statutory smallholding is on the first rung of a very short ladder indeed.
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      5 pm
      My hon. Friend the Member for Torridge and Devon, West asked what the statistics were. Information provided by the smallholdings authorities suggests that very few tenants move to farms in the private sector. According to the statistics for the 10 years to 1981—during half of which time the Labour party was in power—only 14 tenants per year on average made such a move, out of approximately 7,000. Such smallholdings are not providing a gateway or a rung on the ladder.
      Mr. Bermingham: Does the Minister agree that the ability to move up the ladder depends upon the availability of tenanted farms for letting?
      Mr. MacGregor: I was going to deal with that point, which was also made by the lion. Member for Aberdeen, North (Mr. Hughes). The Bill that we are considering will help with the availability of tenanted farms for letting. However, the real difficulty is often the cost of capital—working capital in the case of tenanted farming, or general capital in the case of owner-occupied farms—because of the current heavy costs of farming viable farms. We must recognise the existence of that problem, which makes it extremely difficult to enable people to move up the ladder.
      The county council smallholdings are not achieving their original objective.
      Sir Paul Hawkins: My hon. Friend is ignoring what I have been saying. A Bill is now under consideration which is intended to create more tenants. If there are to be more tenants on the middle and upper rungs, one must retain the botton rungs so that there will be people to move up. It is no use giving the statistics for the past 10 years. We must look forward. With the farming community and the National Farmers Union, we must look to the future. The Bill is intended to provide for the future, not for the past 10 years. There will now be rungs for people to step on to. I hope that my hon. Friend will bear that in mind.
      Mr. MacGregor: I had intended to refer to my hon. Friend's speech. My next notes cover his point about fresh blood.
      In terms of people moving into tenancies in the private sector—and by that I do not mean smallholdings which have moved over into the private sector—the problem that we have to identify is different. Among many other factors, there is the problem of the costs of moving in. We discussed that problem at some length in Committee and to some extent on Second Reading. My hon. Friend the Member for Norfolk, South-West made a valuable Second Reading speech on that point. He referred to the problems of bringing fresh blood into farming. That is an important problem and it is not easy to solve. Simply denying to county councils which wish to make changes in their county council smallholdings arrangements the right to do so will not make the broad situation in relation to new tenancies any easier. The two matters are not as closely linked as my hon. Friend believes. My hon. Friend and I have discussed these issues on many occasions. I do not wish to provoke him further. However, as I have moved about the country during the past 10 years I have noted that the new patterns of farming which are being developed are bringing in much fresh blood. I am thinking not least of the institutions. I have met a number of good farm

      329
      managers who do not have a family background in farming and who have come into farming by that route. The problem is much wider than my hon. Friend suggests.
      With regard to the county council smallholdings, the hon. Member for Ceredigion and Pembroke, North asked me about security of tenure. That is another important point, especially in relation to what has recently been happening with the Norfolk county council. The sale of smallholdings has no detrimental effect on the position of the tenants. Until the Bill is passed, we are talking about tenants who are currently in county council smallholdings. They remain protected by the agricultural smallholdings legislation, irrespective of who the landlord is. Indeed, sitting tenants would be significantly better off after sale, because they would stand to gain security of tenure for three generations, which is not generally the case for smallholding tenants. In the case of the big changes that have taken place in respect of the Norfolk county council and the sale to the institution to which the hon. Member for Ipswich referred, the proceeds will of course pass to Norfolk county council but the position of the tenants will not be affected. The tenants will continue to operate their smallholdings, with greater security of tenure. They have, indeed, ceased to oppose the sale.
      The local authorities have various choices.
      Mr. Robert Hughes: Is the Minister of State saying that if a smallholding is sold to someone else and the tenant remains on it that tenant will now have succession, which he did not have before?
      Mr. MacGregor: Yes, because it will be an existing tenancy which will be passed on. Those people will have protection.
      The county councils must consider the alternatives. We have already learnt that many of them will continue to hold on to their smallholdings or even to try to expand the size of their holdings, but there are other possibilities, which are all legitimate. First, it is sometimes necessary to amalgamate smallholdings in order to make them viable. My hon. Friends the Members for Torridge and Devon, West and for Norfolk, South-West made that point. Nowadays, a number of smallholders have other jobs and regard their smallholdings as providing supplementary part-time earnings.
      Secondly, in many cases, a smallholdings authority, exercising its own commercial judgment, may decide to rationalise its management by selling some of its land and using the proceeds from that sale to maintain and improve buildings and equipment on remaining holdings in order to promote greater efficiency. That is a legitimate choice available to some counties.
      Thirdly, a county council's priorities for the use of its resources may change. Norfolk county council provides a good illustration. Currently, it is disposing of about 1,000 acres out of a smallholding estate of 27,000 acres. The problem facing that county council is that the county is now quite different from what it was when smallholdings were first introduced. The population is now growing fast.
      As the hon. Member for Ipswich said, I have an interest in small businesses. There are thousands of viable non-agricultural small businesses in Norfolk. Many of them are very new. They contribute substantially to employment prospects and to the county's resources. I agree with my hon. Friend the Member for Norfolk, South-West that the
      330
      smallholders are fine people, but the people in other small businesses share the same qualities. Employment in the county is now being provided in a variety of ways, and county council activity has many new channels.
      In the earlier years of the century, when the county council smallholding proposals were put forward, Norfolk was very much a rural area. Taxpayers' and ratepayers' money at that time could legitimately be used to improve the economic viability of the county by improving employment prospects in agriculture. The position is different now, and the question that county councils have to ask themselves—they will come to different views about it—is whether the substantial capital assets that have been built up in county council smallholdings for a small proportion of their populations should continue precisely in that way or whether, if they can do such a deal as they have done with the institution, preserving the position of the tenants, it is better to release those assets to be made available on a much wider scale for many more people. That is a legitimate question for the county councils to ask themselves, and I back them in what they have done.
      Mr. Maclennan: For the sake of clarification of what the hon. Gentleman is saying, will he confirm that he, as the Minister of State, Ministry of Agriculture, Fisheries and Food, is saying that it is appropriate for a county council to foster the disposal of agricultural land for other forms of development? That trend away from agricultural land to other forms of activity is becoming increasingly large scale, and it comes ill from the Minister to seem to be encouraging it.
      Mr. MacGregor: I am saying that county councils, quite rightly in terms of their overall responsibility, must look at the current needs and deployment of capital assets and the way that they can best be used for the community. In this case, those smallholdings remain as smallholdings. However, the county council now has other assets that it can deploy for the benefit of the wider community and many more people. The important point is that it comes back to the fact that there is a wide variety of circumstances, and therefore it must be right to leave it to the local authorities to decide. That is why I disagree with the new clauses.
      I agreed with my hon. Friends the Members for Devon, West and for Norfolk, South-West about the importance of finding other ways to help new entrants into the industry. I have been looking sympathetically at all our discussions on the Bill. There are difficulties in a number of proposals before us, as those hon. Members who were on the Committee will know. I hope that it will be possible to overcome some of the difficulties in consultation with all parts of the industry. However, I can give no commitment. I hope that if agreement can be reached and the snags can be overcome, we can return to this subject in Parliament at the appropriate time.
      These smallholdings have not been dealing with the problems of new entrants and the availability of a first rung on the ladder. I recognise that there are legitimate differences of view on this subject, but it is local authorities that can best and most accurately assess, after taking due account of all the implications, what the right decisions are. It is not part of central Government functions to attempt to second-guess the decisions of local

      331
      authorities in this respect. That is why I oppose the new clauses and I urge the House to oppose them as well if they are pressed to a vote.
      Mr. Geraint Howells: The Minister has tried his hardest to convince me that I am wrong in pressing for what these new clauses would provide, but he has failed. I am sure that he will agree that where there is a will there is a way. Therefore, I shall press new clause 1 to a vote, and I hope that hon. Members will support it.
      Question put,That the clause be read a Second time:—
      The House divided: Ayes 127, Noes 204.

      Division No. 348]

      [5.13 pm

      AYES

      Adams, Allen (Paisley N)

      John, Brynmor

      Anderson, Donald

      Jones, Barry (Alyn & Deeside)

      Archer, Rt Hon Peter

      Kaufman, Rt Hon Gerald

      Atkinson, N. (Tottenham)

      Kennedy, Charles

      Barnett, Guy

      Kinnock, Rt Hon Neil

      Beckett, Mrs Margaret

      Kirkwood, Archibald

      Beith, A. J.

      Lambie, David

      Bermingham, Gerald

      Lamond, James

      Blair, Anthony

      Leighton, Ronald

      Brown, Hugh D. (Provan)

      Lewis, Ron (Carlisle)

      Callaghan, Rt Hon J.

      Lewis, Terence (Worsley)

      Callaghan, Jim (Heyw'd & M)

      Litherland, Robert

      Campbell-Savours, Dale

      Loyden, Edward

      Clark, Dr David (S Shields)

      McKay, Allen (Penistone)

      Clay, Robert

      McKelvey, William

      Cocks, Rt Hon M. (Bristol S.)

      McTaggart, Robert

      Coleman, Donald

      McWilliam, John

      Concannon, Rt Hon J. D.

      Madden, Max

      Conlan, Bernard

      Maxton, John

      Cook, Robin F. (Livingston)

      Maynard, Miss Joan

      Corbett, Robin

      Meadowcroft, Michael

      Corbyn, Jeremy

      Michie, William

      Cowans, Harry

      Millan, Rt Hon Bruce

      Craigen, J. M.

      Miller, DrM. S. (E Kilbride)

      Crowther, Stan

      Mitchell, Austin (G't Grimsby)

      Cunliffe, Lawrence

      Morris, Rt Hon J. (Aberavon)

      Dalyell, Tarn

      Nellist, David

      Davis, Terry (B'ham, H'ge H'l)

      Orme, Rt Hon Stanley

      Deakins, Eric

      Parry, Robert

      Dixon, Donald

      Powell, Raymond (Ogmore)

      Dormand, Jack

      Prescott, John

      Douglas, Dick

      Radice, Giles

      Dubs, Alfred

      Randall, Stuart

      Dunwoody, Hon Mrs G.

      Richardson, Ms Jo

      Eadie, Alex

      Roberts, Ernest (Hackney N)

      Eastham, Ken

      Robertson, George

      Edwards, Bob (W'h'mpt'n SE)

      Robinson, G. (Coventry NW)

      Evans, John (St. Helens N)

      Ross, Ernest (Dundee W)

      Ewing, Harry

      Ross, Stephen (Isle of Wight)

      Field, Frank (Birkenhead)

      Rowlands, Ted

      Fields, T. (L'pool Broad Gn)

      Sheerman, Barry

      Fisher, Mark

      Sheldon, Rt Hon R.

      Flannery, Martin

      Shore, Rt Hon Peter

      Forrester, John

      Short, Ms Clare (Ladywood)

      Foulkes, George

      Short, Mrs R.(w'hampt'n NE)

      Freeson, Rt Hon Reginald

      Silkin, Rt Hon J.

      Freud, Clement

      Skinner, Dennis

      Godman, Dr Norman

      Smith, Cyril (Rochdale)

      Gould, Bryan

      Smith, Rt Hon J. (M'kl'ds E)

      Hamilton, W. W. (Central Fife)

      Spearing, Nigel

      Harman, Ms Harriet

      Strang, Gavin

      Harrison, Rt Hon Walter

      Thomas, Dafydd (Merioneth)

      Hattersley, Rt Hon Roy

      Thomas, Dr R. (Carmarthen)

      Hawkins, Sir Paul (SW N'folk)

      Thompson, J. (Wansbeck)

      Haynes, Frank

      Thorne, Stan (Preston)

      Hogg, N. (C'nauld & Kilsyth)

      Tinn, James

      Home Robertson, John

      Torney, Tom

      Howells, Geraint

      Wainwright, R.

      Hoyle, Douglas

      Wallace, James

      Hughes, Dr. Mark (Durham)

      Wareing, Robert

      Hughes, Robert (Aberdeen N)

      Weetch, Ken

      Hughes, Roy (Newport East)

      Welsh, Michael

      Hughes, Sean (Knowsley S)

      Williams, Rt Hon A.

      332

      Winnick, David

      Mr. Robert Maclennan and Mr. Dafydd Wigley.

      Tellers for the Ayes:

      NOES

      Alison, Rt Hon Michael

      Hind, Kenneth

      Ancram, Michael

      Hirst, Michael

      Ashby, David

      Hogg, Hon Douglas (Gr'th'm)

      Aspinwall, Jack

      Hooson, Tom

      Atkinson, David (B'm'th E)

      Howarth, Alan (Stratf'd-on-A)

      Baker, Rt Hon K. (Mole Vall'y)

      Howarth, Gerald (Cannock)

      Baldry, Anthony

      Hunt, David (Wirral)

      Batiste, Spencer

      Hunt, John (Ravensbourne)

      Beaumont-Dark, Anthony

      Hunter, Andrew

      Bellingham, Henry

      Jackson, Robert

      Benyon, William

      Jessel, Toby

      Berry, Sir Anthony

      Johnson-Smith, Sir Geoffrey

      Bevan, David Gilroy

      Jones, Gwilym (Cardiff N)

      Biffen, Rt Hon John

      Jopling, Rt Hon Michael

      Biggs-Davison, Sir John

      Knight, Gregory (Derby N)

      Blaker, Rt Hon Sir Peter

      Knox, David

      Bottomley, Peter

      Latham, Michael

      Bottomley, Mrs Virginia

      Lawrence, Ivan

      Bowden, A. (Brighton K'to'n)

      Lee, John (Pendle)

      Bright, Graham

      Leigh, Edward (Gainsbor'gh)

      Brinton, Tim

      Lester, Jim

      Brown, M. (Brigg & Cl'thpes)

      Lightbown, David

      Bruinvels, Peter

      Lilley, Peter

      Budgen, Nick

      Lloyd, Peter, (Fareham)

      Burt, Alistair

      Luce, Richard

      Carlisle, John (N Luton)

      Lyell, Nicholas

      Carlisle, Kenneth (Lincoln)

      McCrindle, Robert

      Carttiss, Michael

      McCurley, Mrs Anna

      Cash, William

      McCusker, Harold

      Channon, Rt Hon Paul

      Macfarlane, Neil

      Chope, Christopher

      MacGregor, John

      Clark, Dr Michael (Rochford)

      Maclean, David John

      Clark, Sir W. (Croydon S)

      McQuarrie, Albert

      Clarke, Rt Hon K. (Rushcliffe)

      Major, John

      Coombs, Simon

      Malins, Humfrey

      Cope, John

      Malone, Gerald

      Couchman, James

      Marlow, Antony

      Currie, Mrs Edwina

      Maude, Hon Francis

      Dickens, Geoffrey

      Mawhinney, Dr Brian

      Dicks, Terry

      Maxwell-Hyslop, Robin

      Douglas-Hamilton, Lord J.

      Mayhew, Sir Patrick

      Durant, Tony

      Mellor, David

      Emery, Sir Peter

      Meyer, Sir Anthony

      Evennett, David

      Mills, lain (Meriden)

      Eyre, Sir Reginald

      Mills, Sir Peter (West Devon)

      Fairbairn, Nicholas

      Moate, Roger

      Fallon, Michael

      Moore, John

      Farr, John

      Moynihan, Hon C.

      Favell, Anthony

      Mudd, David

      Fenner, Mrs Peggy

      Neale, Gerrard

      Forman, Nigel

      Needham, Richard

      Forth, Eric

      Nelson, Anthony

      Fowler, Rt Hon Norman

      Nicholls, Patrick

      Fox, Marcus

      Norris, Steven

      Franks, Cecil

      Onslow, Cranley

      Freeman, Roger

      Oppenheim, Philip

      Fry, Peter

      Osborn, Sir John

      Gale, Roger

      Parris, Matthew

      Galley, Roy

      Peacock, Mrs Elizabeth

      Gardner, Sir Edward (Fylde)

      Porter, Barry

      Garel-Jones, Tristan

      Powell, William (Corby)

      Goodlad, Alastair

      Powley, John

      Gorst, John

      Prentice, Rt Hon Reg

      Gower, Sir Raymond

      Price, Sir David

      Greenway, Harry

      Proctor, K. Harvey

      Hanley, Jeremy

      Pym, Rt Hon Francis

      Hargreaves, Kenneth

      Renton, Tim

      Harris, David

      Rhodes James, Robert

      Hawkins, C. (High Peak)

      Rhys Williams, Sir Brandon

      Hayes, J.

      Ridley, Rt Hon Nicholas

      Hayward, Robert

      Ridsdale, Sir Julian

      Heathcoat-Amory, David

      Robinson, Mark (N'port W)

      Heddle, John

      Roe, Mrs Marion

      Henderson, Barry

      Rowe, Andrew

      Higgins, Rt Hon Terence L.

      Ryder, Richard

      333

      Sainsbury, Hon Timothy

      Thornton, Malcolm

      St. John-Stevas, Rt Hon N.

      Thurnham, Peter

      Sayeed, Jonathan

      Townend, John (Bridlington)

      Shaw, Sir Michael (Scarb')

      Tracey, Richard

      Shelton, William (Streatham)

      Twinn, Dr Ian

      Shepherd, Colin (Hereford)

      van Straubenzee, Sir W.

      Shepherd, Richard (Aldridge)

      Viggers, Peter

      Sims, Roger

      Waddington, David

      Skeet, T. H. H.

      Wakeham, Rt Hon John

      Smith, Sir Dudley (Warwick)

      Waldegrave, Hon William

      Smyth, Rev W. M. (Belfast S)

      Walden, George

      Soames, Hon Nicholas

      Walker, Bill (T'side N)

      Spencer, Derek

      Waller, Gary

      Spicer, Jim (W Dorset)

      Ward, John

      Spicer, Michael (S Worcs)

      Wardle, C. (Bexhill)

      Stanbrook, Ivor

      Warren, Kenneth

      Steen, Anthony

      Watson, John

      Stern, Michael

      Watts, John

      Stevens, Lewis (Nuneaton)

      Wells, Bowen (Hertford)

      Stevens, Martin (Fulham)

      Wheeler, John

      Stewart, Allan (Eastwood)

      Winterton, Mrs Ann

      Stewart, Andrew (Sherwood)

      Wolfson, Mark

      Sumberg, David

      Wood, Timothy

      Taylor, Teddy (S'end E)

      Woodcock, Michael

      Temple-Morris, Peter

      Young, Sir George (Acton)

      Terlezki, Stefan

      Thomas, Rt Hon Peter

      Tellers for the Noes:

      Thompson, Donald (Calder V)

      Mr. Michael Neubert and Mr. Ian Lang.

      Thompson, Patrick (N'ich N)

      Question accordingly negatived.

      New Clause 4
      New lettings
      'Incorporated or unincorporated institutional landowners whose principal business is other than agriculture shall make all agricultural land in their ownership available for letting to a tenant.'. —[Mr. Robert Hughes.]
      Brought up, and read the First time.
      Mr. Robert Hughes: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Harold Walker): With this is it will be convenient to discuss new clause 5—
      Annual report to Parliament on tenancies and land ownership—
      `The Minister of Agriculture, Fisheries and Food and, in the case of Wales, the Secretary of State for Wales, shall make annual reports to Parliament on the amount and type of agricultural land available for tenure and changes in the ownership of agricultural land, with particular reference to financial institutions; and shall make such recommendations as he deems necessary to increase the amount of land available for tenure and the number of tenancies.'.
      Mr. Hughes: All of us who are concerned with tenanted land are seriously worried about the continuing drift of that land to institutional ownership. The Bill does not begin to deal with the central problem of tenanted land. The objective of the new clause is to ensure that land which is in institutional ownership is made available for rent. The clause is drawn widely and it includes all institutional landowners but we wish to centre our attention on the new institutional owners, which are the financial institutions.
      Since the 1960s the financial institutions have acquired a growing interest in agricultural land. During the second half of the 1970s, they were buying between 8 per cent. and 12 per cent. of all the farm land sold in Great Britain, which was equivalent to more than 50,000 acres annually. In December 1981, the current value of the funds' investment in agricultural land was
      334
      estimated in a report produced by Savills-RTP to he about £900 million, of which let land represented about £700 million.
      The analysis produced by Savills-RTP suggests:
      "Purchasing on a regular basis only commenced in 1968 and the first half of the 1970s was a period of irregular buying and volatile market conditions. Since 1975, purchasing has been at a consistent and substantial level with a tendency for the annual rate of acquisition to increase. Over half the land owned at the end of 1981 has been bought since 1976."
      The largest part of that land was acquired in the east midlands, East Anglia and the south-east. Acquisition in the north was only 1·1 per cent. and in the north-west it was only 2·2 per cent.
      It is clear that the concentration of acquisition has been in cereal and cropping areas. A more recent report by Reading university's department of land management estimates that in 1982 a further 59,000 acres were acquired. The proportion of all agricultural land owned by the institutions is small. In a debate in another place, Lord Northfield estimated that the percentage of land owned by the institutions is about 1·2 per cent. of all agricultural land. However, the financial institutions are a new factor and a fast-growing one, and its importance in certain areas is far greater than the national figures suggest. The financial institutions own 2·5 per cent. of grassland and cropping areas.
      It is reasonable that we should be concerned with the behaviour of this newest and fastest-growing type of landowner. The House will recall that the Northfield committee produced a substantial report. The committee was appointed by my right hon. Friend the Member for Lewisham, Dept ford (Mr. Silkin). Its report was published once the right hon. Member for Worcester (Mr. Walker) became the Minister of Agriculture, Fisheries and Food.
      It is true that the Northfield committee did not propose that restraints should be put upon the financial institutions involved in land owning but it thought — this was mentioned in paragraph 350 — that the acquisitions should be closely monitored. In paragraph 347, it stated:
      "It is our opinion that the primary role of the financial institutions in agriculture ought to be as long term investors in let land and not as farmers."
      The purpose of the clause is to put that sentiment into practice.
      In a debate in another place Lord Belstead claimed that 70 per cent. of the land owned by financial institutions is let. What about the other 30 per cent., which must be fairly substantial? The issue goes deeper than that, because the 70 per cent. of let land is a figure that hides more than it reveals.
      According to the Savills-RTP survey, 39·8 per cent. of the land owned by the financial institutions is let as traditional tenancies, 45 per cent. on a sale-and-lease-back arrangement and 15·2 per cent. on other full repairing and insuring tenancies. We are all concerned about full repairing and insuring tenancies. Frankly, they are totally bad. We cannot assume, as might be assumed from the bare facts, that the institutions are only taking over the role of the traditional landlords.
      5.30 pm
      Mr. Robert Jackson: I am glad that I was able to catch the hon. Gentleman's eye. Does the hon. Gentleman recognise that the effect of new clause 4 is to discourage the institutions that invest in land, reduce the

      335
      availability of capital for agricultural development and reduce the type of innovations to which my hon. Friend the Minister referred?
      Mr. Hughes: I certainly do not believe that the sale-and-lease-back arrangements and full repairing and insuring tenancies are innovations that we wish to support. I am opposed to them. If we decide to tell the financial institutions that they must let their land, they may decide not to buy the land. I am not aware of evidence that, because the institutions are buying the land, they are necessarily putting in capital for development. In discussing new clause 5 I shall say something about how we might make more land available for tenancy. The hon. Gentleman will find that new clauses 4 and 5 dovetail neatly.
      The fact that a large proportion of the land owned by the institutions is being let does not necessarily mean that the number of tenancies remains the same. Land may be tenanted, but the number of tenancies may differ because of amalgamations and the working of larger units.
      The remarks on this subject made by Lord John-Mackie can be seen at columns 206 and 207 of the House of Lords Hansard for 13 December 1983. I cannot quote all his remarks. He cited a number of cases in which the number of tenants was severely cut by the acquisition of land by financial institutions. It is important, in considering agricultural tenancies, to look closely at the role of the institutions. New clause 4 will assist the central objective, which appears to be shared by both sides of the House. The tenanted sector is important, and the decline in the number of tenancies should be arrested, if not reversed.
      New clause 5 calls for an annual report to Parliament on rented land and on the changes needed to increase the amount of land available for tenancies and the number of tenancies. The Northfield committee thought that the subject was of such importance that it devoted a section of its report to the subject. The committee took eight pages to discuss the need for more and better information about what is happening.
      Paragraph 259 of the report states:
      "Throughout our work we were hampered by the lack of detailed information on many of the topics we studied. It is disturbing that so little is known about the pattern of acquisition, ownership and occupancy of agricultural land and that Governments should have to take decisions, which may have far-reaching effects on agricultural structure, on the basis of incomplete or non-existent data."
      That is precisely what we are doing in the Bill. Paragraph 280 states:
      "in the long term, a full system of land registration with land use identified and beneficial interests visible would be desirable for the agricultural reasons outlined."
      The reasons given by the committee for having better information on proper land registration were threefold: first, to monitor the industry's performance and judge, for example, the relative efficiency of different types of owners and occupiers and farm sizes; secondly, to know how those who saw themselves as stewards of one of the nation's most important resources were carrying out their function; and, thirdly, to monitor important trends, such as land purchase by financial institutions or overseas buyers.
      In the meantime, the Northfield committee recommended that the agriculture Departments should put in train action to fill in the most important omissions from the currently available statistics. The committee recommended that the Ministry of Agriculture, Fisheries
      336
      and Food should identify and monitor trends in acquisition. The committee identified an urgent need for data to be collected on acquisition by financial institutions and overseas buyers.
      The committee argued that we need to provide a better background to the pattern of ownership. With better data, estimates about the future structure of land because of policy changes could be more rationally based. We need to improve the understanding of the complexities of tenurial structure in agriculture.
      It is now five years since the Northfield report was published, and we are still handicapped by a paucity of information about what is happening. It is astonishing that Ministers come forward—I admire their honesty—to say, "In many cases, we do not know what is happening.'' Ministers refer to an aim, which we all share—to encourage greater tenancies to be made available and encourage tenant farming—yet do little to achieve it.
      The best gloss one could put on the Bill—some of the Minister's colleagues in the other place tried to put the best gloss on the legislation—is that it would have the most marginal effect on increasing the amount of tenanted land.
      Sir Paul Hawkins: Does the hon. Gentleman agree that any information should be broken down into regions? I am sure that I am correct in saying that in East Anglia the largest number of purchases are made from pension and other funds. It would be helpful if the regions were mentioned in any information. Will the hon. Gentleman explain his objections to full repairing leases or sale and lease-back? I cannot understand his point.
      Mr. Hughes: My basic objection to the full repairing and insuring leases is that the landowners who are supplying the tenancies are not putting money into the industry. There are tax advantages to them for doing that. I have some figures, although I do not know whether they will help the hon. Gentleman. I understand that in East Anglia 17·2 per cent. of land acquisitions were made by the financial institutions. I entirely agree with the hon. Gentleman that we ought to observe the pattern in different parts of the country. Although figures for, say, England or Wales would advance the discussion to some extent, they would not take us much further forward.
      The Bill will not meet its stated objectives. The Labour party has solutions to the problem. It believes that the best methods of ensuring, first, stability of tenant farming and, secondly, the expansion of the amount of tenanted land and the number of tenanted farms would be to establish a rural land authority to administer land already publicly owned, to extend public ownership in the tenanted sector and to go further and acquire more land for tenancy. If radical action is not taken, those who, in their evidence to the Northfield committee, predicted the end of tenant farming by the end of the century will be proved right.
      There can be no doubt that tenant farming has been a success. Farming practices have changed for a variety of reasons, but they have not been the fault of the tenants, many of whom have invested their lives as well as their money in farming. The way in which landlords have moved into in-hand farming has nothing to do with tenant farming. It has to do with tax changes, the common agricultural policy, modern technology, and so on.
      The figures show clearly that the landlords have failed the tenanted sector. We owe it to tenants who have

      337
      invested their lives in farming to do all that we can to sustain the system. New clauses 4 and 5 will do a great deal towards that. If the Minister has to give a detailed report each year on the situation and how he believes it should be changed, the work of Parliament and agriculture will be greatly asisted. I commend the new clauses to the House.
      Mr. Weetch: It is a sad state of affairs that on the state of institutional investment in the land in this country there is no Government source comparable with the Savills' agricultural performance analysis, produced by commercial valuers. That is where I had to look to discover the trends in institutional investment in land in this country. It is sad indeed that there is no comprehensive register showing the ownership of agricultural land and the trends in such ownership. I should have thought that on a prima facie analysis an accurate idea of land ownership would be an extremely useful basis for any kind of policy. Whatever political line one wishes to pursue, it should be based on an accurate set of statistics and related information about the current situation. I am open to correction from the Minister on this, but to the best of my knowledge one looks in vain for any comprehensive body of information about land holding and the trend in institutional investment in this country.
      5.45 pm
      My purpose is to ask the Minister, as a repository of information, to assist our lack of information by answering a few brief questions. First, does the Ministry regard institutional investment in the countryside as a good thing? Is investment by financial institutions in agriculture to be welcomed? I do not ask for a precise answer today, but perhaps he will give us the broad lines of the Ministry view.
      I have read the section of the Northfield report dealing with institutional investment and I have taken opinions on the matter in East Anglia, which is naturally the area that I know best. I am no specialist or expert on this, but I gather that investment in the land by financial institutions is a complicated affair with complex arguments on both sides. I discern, however, the following consensus. First, financial institutions buy agricultural land not through any intrinsic interest in farming but as part of a long-term investment portfolio. In other words, they consider the land not from the point of view of farming but as part of a financial investment bottom line, if I may so put it. Does the Minister regard that as a good thing? I confess that I do not know. Can he give the Ministry view?
      Savills' agricultural performance analysis openly states that when such investment takes place,
      "Almost all the farms bought meet the narrowest investment criteria".
      In other words, a very particular — not to say idiosyncratic—influence is being brought to bear on the land market and agricultural investment. I suspect that we are considering part of the institutional property market and not anything specifically to do with farming.
      I am advised that the extent of institutional ownership of farmland is about 3 per cent. Can the Minister tell us whether that is anywhere near correct? Can he give the Ministry's figure and enlighten us as to the exact extent of the problem? I am further advised that, although only about 3 per cent. of the total acreage of crops and grass
      338
      is under such ownership, the purchase by institutional investors of land coming on to the market each year is higher in the let land market than in any other part of the market and thus has a more marked impact than anything else on tenancy.
      As a layman making innocent inquiries, I am told on one side of the case that institutional investors have been responsible in part for the rise in rents and land prices in the countryside, that they have brought instability to the land market and that they are partly responsible for the deterioration of the tenants' situation. As a layman, one is further confused when one hears the other side of the case. I have also been told that institutional investors are responsible for more money coming into farming, bringing a new business approach and a breath of fresh air to agricultural investment and that by and large they are good landlords. Which side of that equation is true? What is the Minister's assessment of the effect of institutional investment?
      I gather from the Northfield report that in 1977–78, or thereabouts, 81 per cent. of the land owned by institutional investors was in the form of tenanted in-hand farming or partnerships. The performance analysis from the commercial surveyors Savills estimates that in-hand farming or farming related to partnership now stands at about 86 per cent. Does that mean that prospects for tenant farmers are improving under financial institutions? Before we can assess institutional investors or anyone else, we need some sort of land register so that we can understand who owns what, and what the trends are.
      I return to my initial point. If we are to have any policy that makes coherent sense for landholdings and tenancies and for all things related to that, there must be some form of monitoring. We need a register and a repository of information, because without that we shall be just as much in the dark in future as we are now.
      Sir Paul Hawkins: I wish to concentrate initially on what the hon. Member for Aberdeen, North (Mr. Hughes) said about full repairing leases or sale and lease-back. I do not see anything wrong with transferring responsibility for maintaining the buildings and houses to the tenant. An adjustment in the rent is then made, because obviously a bigger burden has been placed on the tenant. The only disadvantage, perhaps, is that the landlord may not take so much interest in the matter, although that is not necessarily so, because he will need to see whether his tenants are maintaining the buildings, and so on. I see nothing wrong with the change that has taken place in many tenancies during the past 10 years.
      Sale and lease-back means selling to an investor who wants an income while still retaining the tenancy for the agricultural holding. One can make what conditions one likes. However, the more onerous the conditions in a sale and lease-back, the lower the price for the land. Thus, I cannot see what is wrong with sale and lease-back. It is very advantageous to certain families to sell their land, while retaining the tenancy, so that they can go on farming it. They then know that they have some cash in the bank to give, perhaps, to a daughter who marries or with which to readjust the family's finances. Thus, on those two points I disagree with the hon. Member for Aberdeen, North.
      I do not believe that pension funds should farm. I am very much against that. Pension funds do a first-class job and since the middle ages City money has always gone into agriculture. Indeed, we want that constant stream.

      339
      However, I do not like what is happening in East Anglia at present. I shall not mention all the pension funds because my hon. Friend the Minister no doubt knows some of them better than I do——
      Mr. Robert Hughes: Has the Minister got shares in them?
      Sir Paul Hawkins: I do not think so.
      For example, the coal board farms 10,000 acres in Norfolk. It does not only own it but farms it. I could cite companies such as Vauxhall and Guardian Royal Exchange. I reckon that another 300 or 400 farmers could be earning a living, with 500 acres apiece, from the amount of land that pension funds not only own but farm. I hope that my hon. Friend the Minister will make a public appeal before too long, asking those pension funds—with all the advantages that we have given them through fiscal changes in Budgets, and through the Bill—to let their land.
      Pension funds as both landlords and tenants are operated from London, Manchester or one of the big cities, and so do not take as much interest in village life and in the social aspect as farmers have traditionally done. I know of an exceptionally good firm that farms extremely well. There is a first-class manager, but he has to operate across three of four counties. Unlike the farmer who has traditionally been a part of village life, he has no opportunity, for example, to support the church. Farmers' wives have traditionally helped in leadership of the village, yet in many villages in Norfolk that has gone, because of the pension funds' influence. The Minister should make an appeal. At this stage, he could not and should not take any legal measures to control that influence, but he should point out that it can lead to great dissatisfaction among those who want to farm.
      Information is badly needed. I have discussed that point with Lord Northfield in the Agriculture Committee of the Council of Europe. I am very sorry that various Governments have not yet been able to bring themselves to get that information together. As a quid pro quo for letting the Royal Institution of Chartered Surveyors instead of the Minister appoint arbitrators, perhaps he will suggest that it does a free basic survey and produces a new Domesday Book to be presented to the Ministry.
      Mr. Eric Deakins: I thoroughly endorse what the hon. Member for Norfolk, South-West (Sir P. Hawkins) has said about the role of institutional pension funds in agriculture. He made some important points, which were not always put as clearly as that in Committee. It is nice to hear from a Conservative Member who has great experience of the subject and who represents one of the best farming areas in the country. He can see at first hand what is happening. I sincerely hope that the Minister will consider the hon. Gentleman's very good points and, in particular, the fact that pension funds do not behave like traditional farmers when they engage directly in agricultural production.
      Farmers have had, and I hope will always continue to have, an important social role that is not always connected—as the hon. Gentleman rightly pointed out—with their farming activities. Many traditional farmers, although sadly not all, are very good at looking after the countryside. However, I regret to say that, from what I have seen of East Anglia and the south and east midlands in the past 20 or 30 years, it would seem that the
      340
      institutions which have been at least in part responsible for the deterioration in farming practices have much to learn from the traditional farmers whom they have replaced. It has been a retrograde step that so much institutional money has come into agriculture directly through buying farms and then engaging in farming activities. The Minister must address his mind to what is the appropriate role of financial institutions in agriculture.
      6 pm
      Pension funds invest not only in agriculture but in industry and services, both in the United Kingdom and overseas. I cannot think of a single example of where the pension funds invest in industry—for example, in the manufacturing industry — and then seek to run that industry themselves. The behaviour of pension funds in agriculture is almost at odds with their behaviour in all the other areas in which they invest. Surely the appropriate role for institutional investors in agriculture, as in other areas of economic and commercial life, is to supply funds with appropriate guarantees—for example, mortgages—but not directly to engage in agriculture themselves. I wonder why they are doing so. Perhaps there is something in the tax concessions available or in other aspects of agricultural activity that leads the institutions to take a greater interest in agriculture than other areas, to the detriment of the traditional tenant farmers.
      It is the policy of both the Labour party and the Government to encourage an increase in the amount of land available for tenants and an increase in the number of tenant farmers. The activities of the institutions in East Anglia and elsewhere are leading us in the opposite direction. The Bill gives us an opportunity to express the concern felt by hon. Members on both sides of the House about what is happening and what is likely to happen if present trends continue.
      I hope that the Government will accept new clause 5. There can be no objection in principle to the idea of an annual report to Parliament, and therefore to the nation, about what is happening in agriculture. As my hon. Friend the Member for Ipswich (Mr. Weetch) said, figures are difficult to obtain. As the Government's stated objective is to increase the supply of tenanted land, they should have the means at their disposal to show the trends from year to year. Parliament should be the judge, year by year, of whether the Government are achieving their stated objective. If they are not, it should be a matter of concern to both sides of the House.
      Mr. MacGregor: This has been a short but interesting debate. As we have a great deal ahead of us today, I shall be brief in my reply.
      I shall deal first with new clause 4. A number of hon. Members have referred to the recent Savills survey, and I shall do the same. What is important about that survey, apart from the fact that its information is up to date, is that it has concentrated on the financial institutions' total holding and not on all institutions as they are traditionally defined.
      The survey shows that the total holding of the financial institutions is only about 3 per cent. of the area of crops and grass in Great Britain, although I readily concede the point made by my hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins) and by the hon. Member for Aberdeen, North (Mr. Hughes) that there are regional variations.

      341
      In terms of the most up-to-date information, it is interesting to note that 86 per cent. of land owned by financial institutions is let. When compared with the estimates made by the Northfield committee at the end of 1978, the figures show a movement towards a higher proportion of land being let as against being farmed in hand either directly or through partnerships. The Northfield estimate was 81 per cent., whereas the survey gave a figure of 86 per cent.
      There is evidence that the purchases by the financial institutions are falling off. It is worth quoting one paragraph in the conclusion of the survey:
      "The year to the end of December 1983 has been one in which the Institutions have been particularly inactive."
      That point could have been made more clearly, but it means that the institutions have not greatly been involved in investing in agricultural land. The survey continues:
      "Net purchasing by the Funds in the Analysis was 4,100 acres—the lowest since the mid-sixties. Contrary to the impression that it is the Institutions which have made the market in land in recent years, in 1983 the price of good vacant possession land has hardened in spite of the inactivity of the Institutions."
      We could for ever analyse the position. I agree that we should have better information, and I shall deal with that point later.
      One of the interesting points about what happened in 1983—I have my views about why the institutions have not been active in the market—is that the price of land has been held up largely by the activities of existing farmers, who have been adding to their holdings. That showed that the position is nothing like as simple as some people previously thought it would be in terms of the impact of the institutions, and the belief that it was the institutions that were pushing up the prices of agricultural land. It is important to have that piece of information.
      I shall now deal with the general principle of the Bill, having established that the farming in hand by the institutions is nothing like as serious as some people would have us believe. It is important to give landowners flexibility. If we remove the flexibility, we shall run the risk of frightening the institutions away from investing in agricultural land as a whole. Some people may think that that would be a good thing, but I do not share that view. If we impose the restriction suggested, we should run considerable danger of discouraging investment in agriculture and of diminishing a useful source of capital for farming, and institutions undoubtedly bring in capital. It could also cause the further problem of more farms for sale on vacant possession being split into parcels. There is evidence of that in some sales. It is done to enable the existing units of agriculture that are large viable farms to be sold to existing owner-occupiers. Hence, that farm goes out of the prospect of being in the tenanted sector.
      The position is not as simple as some would have us believe. There are threats to the tenanted sector other than from the institutions. There is danger in discouraging institutions from investing in agricultural land and then letting it.
      Sir Paul Hawkins: There is a great deal in what my hon. Friend says. I dislike the recent trend with land agents and others in splitting a large acreage—perhaps 1,000 acres—into three, four or five blocks and then selling the house. That good farm can never be put together again. I do not know whether my hon. Friend has a solution to the problem, but I would like him to find one if possible.
      342
      My hon. Friend should think about the position in East Anglia. Although there was a downward trend in institutional farming in 1983—I am no more certain than he is of why that happened—previously there was an upward trend, and I believe that currently there is an upward trend. I think that 1983 was a one-off. There is a growth of institutional farming in East Anglia. Has my hon. Friend any solutions to that problem?
      Mr. MacGregor: I can think of some solutions, but they would be unacceptable in a free country, and unacceptable to the House and to me.
      I was trying to make it clear that there is not a simple black and white case that the institutions are making it more difficult to have tenanted land. Indeed, there is a case for saying that by continuing to invest in land, keeping farms together and continuing with the high proportion of let land, the institutions are actually maintaining the process of having a large number of tenanted farms.
      It would be invidious to differentiate between different classes of landowner, even if it were practicable to do so, which I strongly doubt. The Northfield committee has been quoted a great deal in the debate. That committee recommended no restraints on the involvement of the institutions in landowning. It was interesting to note that Lord Northfield himself said in debates in another place that the financial institutions should not be subject to special rules which did not apply to all landowners, which is precisely what the new clause would do.
      The country has always benefited from a diversity of people being prepared to invest their time and money in land ownership. There is no reason to suppose, on the whole, that the new institutions are less good landowners than the traditional ones. Indeed, as has been pointed out, in some ways—for example, by their sale and lease-back arrangements—the financial institutions can create new tenancies.
      The hon. Member for Walthamstow (Mr. Deakins) made an interesting speech in Standing Committee—he spoke about the opportunities for new entrants into farming which the financial institutions could offer—which was somewhat at variance with his comments today. He made some good points in his Committee speech, which I will not repeat now, to demonstrate the contribution that the institutions make.
      I remind the hon. Member for Ipswich (Mr. Weetch) that we must consider who are the beneficiaries of the institutions' investments in these cases. By and large, they are trade unionists, the members of pension funds, and I have heard some interesting cases in that respect from an institution in which I should declare an interest in that it is one in which I used to be employed, though not on the agricultural side of the company. I refer to the Hill Samuel agricultural property unit trust, which is showing trade union members where their investments lie in agricultural land — this is a feature of its annual reports — and demonstrating how they are doing a great deal by way of encouraging conservation, planting trees, making financial contributions to village life and the communities in which the farms lie. The institutions are explaining the wider benefits of investment in agricultural land.
      At best, therefore, the new clause is largely unnecessary, as the overwhelming proportion of land owned by the financial institutions is already let, and, from the current signs, that proportion is increasing. At worst, by arbitrarily and unnecessarily restricting the institutions'

      343
      freedom of management, it would act as a disincentive to investment in agriculture, and that could only be to the detriment of the industry as a whole. My answer to the hon. Member for Ipswich, therefore, is that the contribution of the institutions has been beneficial to agriculture and agricultural efficiency as a whole.
      My hon. Friend the Member for Norfolk, South-West, who knows the feeling in the countryside better than anyone in the House, made some fair points. Not least because of the efforts that he has been making, more of the institutions are responding along the lines that he desires, and I commend that. I share his view, however, that taking clear-cut legislative steps of the sort proposed and trying to make these changes by legislation is not the way to deal with the problem. The case has not been made for the change proposed, either in terms of the harm to farming that the institutions are said to be doing or for the benefits to be achieved by such a change.
      6.15 pm
      I accept the point that the hon. Member for Aberdeen, North made about information, in that part of new clause 5 flows from the recommendations of the Northfield committee. As he knows, as a result of section 2 of the Agriculture (Amendment) Act 1984, a private Member's Bill which has just completed all its stages through the House — it was introduced by my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), who is present today—agriculture Ministers now have additional power to obtain information on types of land occupancy. That explains to a large extent why that information has not existed until now. Until my hon. Friend's measure became an Act, the powers were limited to asking for the names and addresses of owners and occupiers, whether the land was let and, if so, at what rent.
      The new powers cover the collection of information about the terms on which, or the arrangements under which, any land or any part of it was owned, occupied, managed or farmed by any person. This will allow Ministers to ask questions about the family relationship between occupiers and to ask whether the land is held under a partnership or occupied by a private company, trust, charity and so on. As I say, this legislation has been enacted in the light of the Northfield recommendations and will ensure that the necessary statutory powers are available to identify important trends in the pattern of land ownership and occupancy. I am sure that the hon. Member for Aberdeen, North will welcome that, although it means that to a large extent the new clause is not necessary.
      I could not follow the hon. Member for Aberdeen, North in asking for a separate report to Parliament each year. To do so would be unnecessary, and therefore we need not burden the Bill with such a provision. The results will, in due course, be published in the normal way. We have not taken precise decisions on how the information will be published—because the necessary powers for its collection have only just been obtained — but it is reasonable to assume that it will be widely available in much the same way as the results of the Department's annual rent surveys are published, in booklets, or it could be made available in the annual review. Either way, that information will be available to Parliament and a separate report, as suggested in the new clause, is not necessary.
      The second part of the new clause—the requirement that Ministers should make recommendations on ways of increasing the amount of land available for letting—is
      344
      equally unnecessary. I do not believe that by asking for an annual report we shall change matters. We need to take action, and that is precisely what we are doing by the Bill and by the changes that we have made, in successive Finance Bills, to capital taxation which has been a great disincentive to landlords. I have pressed the hon. Member for Aberdeen, North on many occasions to give his support to the changes that we have made in taxation, but so far without success.
      The hon. Gentleman could do something that would help a great deal more than asking for annual reports. He could go further than he went in Committee by saying that, if there is general agreement in the industry that clause 2 is a desirable part of the legislation, he will make it clear that the Labour party, should it ever return to power, would not repeal that clause.
      Mr. Robert Hughes: I begin by answering the Minister's final question, although I thought that in Committee I gave a more than adequate answer. The Labour party's position is clear, We believe strongly in the principle of succession of tenancy, as laid down in the 1976 Act. We have made it clear that, on being returned to government, we shall restore the succession of tenancy to new tenants.
      What I said in Committee was not exactly what the Minister said I said. I said that if, after the next election, the circumstances presented to the then Labour Government showed that the enactment of this measure has meant a great difference to the amount of land being made available for tenancy—in other words, if the drift away from farming tenancies has been arrested—that Labour Government will have to take account of that at the time. That is as clear as I can put it, and I hope that my remarks stand the test of time.
      I am very grateful for all the support from my hon. Friend the Member for Ipswich (Mr. Weetch), my hon. Friend the Member for Walthamstow (Mr. Deakins) and the hon. Member for Norfolk, South-West (Sir P. Hawkins), especially in relation to financial institutions. They should not fund directly. We should, as Parliament and Government, be taking decisions on the basis of the best knowledge that is available.
      May I tell the hon. Member for Norfolk, South-West what the Savills-RTP performance analysts said about the pattern of financial institution ownership?
      As might be expected, ownership is concentrated mostly in the east midlands, with 21·8 per cent. of institutionally held land. East Anglia has 17·2 per cent. and the south-east of England has 16·4 per cent. Scotland contributes 16·5 per cent. to the total. That shows the position at the end of 1981. The analysis goes on to say that there has been a move away from the eastern counties towards parts of Yorkshire. However, I do not want to spend all my time reading this excellent analysis into the record.
      I strongly support my hon. Friend the Member for Ipswich. I hope that all hon. Members will do so. He paid tribute—if he did not, I shall do so now—to Savills-RTP for its analysis. We should not be dependent upon private sources for information in our debates.
      The Minister of State made the case, perhaps more strongly than anyone, for the need, especially, for new clause 5 and the annual report to Parliament, when he referred to land prices and the amount of land purchased

      345
      by financial institutions based on anecdotal evidence. It is not good enough for a Minister to speak on the basis of anecdotal evidence. That is no way to run a country.
      I am very grateful to the hon. Member for Gainsborough and Horncastle (Mr. Leigh). I was going to say, tongue in cheek, that I was aware of the detailed provisions of the hon. Member's Act, but I had not really appreciated its importance, and I am glad to know of the provisions. I pay tribute to the hon. Member for putting them through.
      I draw a different conclusion from the Minister. I do not think that that Act invalidates new claue 5. If anything, it reinforces it, boosts it and shows all the more reason why an annual report to Parliament is feasible. The Minister has no excuse to say that it is difficult to get the information because he does not have the power to do so. He has the powers and he should produce the information. He let the cat out of the bag when he said that the Government had not decided exactly how to make the information available, whether it would be in annual report, or as information in booklets.
      By far the best way of making information available is in an annual report to Parliament. After all, new clause 5 simply says that the Secretary of State shall
      "make such recommendations as he deems necessary."
      Once he has that information, perhaps he will say that there is no need to change things or make representations to change matters because they all follow as night follows day, after the passing of the sun.
      I hope that new clause 5 will be written into the Bill. With the leave of the House, I should like to withdraw new clause 4 and formally move new clause 5.
      Motion and clause, by leave, withdrawn.

    New clause 5

      ANNUAL REPORT TO PARLIAMENT ON TENANCIES AND LAND OWNERSHIP
      `The Minister of Agriculture, Fisheries and Food and, in the case of Wales, the Secretary of State for Wales, shall make annual reports to Parliament on the amount and type of agricultual land available for tenure and changes in the ownership of agricultural land, with particular reference to financial institutions; and shall make such recommendations as he deems necessary to increase the amount of land available for tenure and the number of tenancies.—[Mr.Robert Hughes.]
      Brought up, and read the First time.
      Motion made, and Question put, That the clause be read a Second time:—
      The Committee divided: Ayes 120, Noes 208.

      Division No. 349]

      [6.24 pm

      AYES

      Anderson, Donald

      Coleman, Donald

      Archer, Rt Hon Peter

      Concannon, Rt Hon J. D.

      Ashton, Joe

      Conlan, Bernard

      Banks, Tony (Newham NW)

      Cook, Robin F. (Livingston)

      Beckett, Mrs Margaret

      Corbett, Robin

      Beith, A. J.

      Corbyn, Jeremy

      Blair, Anthony

      Cowans, Harry

      Brown, Hugh D. (Provan)

      Craigen, J. M.

      Callaghan, Rt Hon J.

      Crowther, Stan

      Callaghan, Jim (Heyw'd & M)

      Cunliffe, Lawrence

      Campbell-Savours, Dale

      Dalyell, Tarn

      Clark, Dr David (S Shields)

      Davis, Terry (B'ham, H'ge H'l)

      Clay, Robert

      Deakins, Eric

      Cocks, Rt Hon M. (Bristol S.)

      Dixon, Donald

      346

      Dormand, Jack

      Mitchell, Austin (G't Grimsby)

      Dubs, Alfred

      Morris, Rt Hon J. (Aberavon)

      Dunwoody, Hon Mrs G.

      Nellist, David

      Eadie, Alex

      O'Brien, William

      Eastham, Ken

      O'Neill, Martin

      Edwards, Bob (W'h'mpt'n SE)

      Orme, Rt Hon Stanley

      Ewing, Harry

      Parry, Robert

      Fields, T. (L'pool Broad Gn)

      Powell, Raymond (Ogmore)

      Fisher, Mark

      Prescott, John

      Flannery, Martin

      Radice, Giles

      Forrester, John

      Randall, Stuart

      Foulkes, George

      Redmond, M.

      Freeson, Rt Hon Reginald

      Richardson, Ms Jo

      Freud, Clement

      Roberts, Ernest (Hackney N)

      Hamilton, W. W. (Central Fife)

      Robertson, George

      Harman, Ms Harriet

      Robinson, G. (Coventry NW)

      Harrison, Rt Hon Walter

      Rooker, J. W.

      Hattersley, Rt Hon Roy

      Ross, Ernest (Dundee W)

      Haynes, Frank

      Ross, Stephen (Isle of Wight)

      Hogg, N. (C'nauld & Kilsyth)

      Rowlands, Ted

      Holland, Stuart (Vauxhall)

      Sheerman, Barry

      Home Robertson, John

      Sheldon, Rt Hon R.

      Howells, Geraint

      Shore, Rt Hon Peter

      Hoyle, Douglas

      Short, Ms Clare (Ladywood)

      Hughes, Dr. Mark (Durham)

      Short, Mrs H.(W'hampt'n NE)

      Hughes, Robert (Aberdeen N)

      Silkin, Rt Hon J.

      Hughes, Roy (Newport East)

      Skinner, Dennis

      Hughes, Sean (Knowsley S)

      Smith, Cyril (Rochdale)

      Hughes, Simon (Southwark)

      Smith, Rt Hon J. (M'kl'ds E)

      Jones, Barry (Alyn & Deeside)

      Spearing, Nigel

      Kaufman, Rt Hon Gerald

      Strang, Gavin

      Kirkwood, Archibald

      Thomas, Dafydd (Merioneth)

      Lambie, David

      Thomas, Dr R. (Carmarthen)

      Lamond, James

      Thompson, J. (Wansbeck)

      Lewis, Ron (Carlisle)

      Thorne, Stan (Preston)

      Lewis, Terence (Worsley)

      Tinn, James

      Litherland, Robert

      Torney, Tom

      Loyden, Edward

      Wainwright, R.

      McKelvey, William

      Wallace, James

      McTaggart, Robert

      Wareing, Robert

      McWilliam, John

      Weetch, Ken

      Madden, Max

      Welsh, Michael

      Maxton, John

      Wigley, Dafydd

      Maynard, Miss Joan

      Winnick, David

      Meadowcroft, Michael

      Michie, William

      Tellers for the Ayes;

      Millan, Rt Hon Bruce

      Mr. Allen McKay and Mr. Gerald Bermingham.

      Miller, Dr M. S. (E Kilbride)

      NOES

      Aitken, Jonathan

      Carttiss, Michael

      Alison, Rt Hon Michael

      Cash, William

      Ancram, Michael

      Channon, Rt Hon Paul

      Ashby, David

      Chope, Christopher

      Aspinwall, Jack

      Clark, Dr Michael (Rochford)

      Atkinson, David (B'm'th E)

      Clark, Sir W. (Croydon S)

      Baldry, Anthony

      Clarke, Rt Hon K. (Rushcliffe)

      Batiste, Spencer

      Conway, Derek

      Beaumont-Dark, Anthony

      Coombs, Simon

      Bellingham, Henry

      Cope, John

      Benyon, William

      Couchman, James

      Berry, Sir Anthony

      Currie, Mrs Edwina

      Bevan, David Gilroy

      Dicks, Terry

      Biffen, Rt Hon John

      Douglas-Hamilton, Lord J,

      Biggs-Davison, Sir John

      Dunn, Robert

      Blaker, Rt Hon Sir Peter

      Durant, Tony

      Bottomley, Peter

      Emery, Sir Peter

      Bottomley, Mrs Virginia

      Evennett, David

      Bowden, A. (Brighton K'to'n)

      Eyre, Sir Reginald

      Braine, Sir Bernard

      Fairbairn, Nicholas

      Bright, Graham

      Fallon, Michael

      Brinton, Tim

      Farr, John

      Brooke, Hon Peter

      Favell, Anthony

      Brown, M. (Brigg & Cl'thpes)

      Fenner, Mrs Peggy

      Bruinvels, Peter

      Forman, Nigel

      Budgen, Nick

      Forth, Eric

      Bulmer, Esmond

      Fowler, Rt Hon Norman

      Burt, Alistair

      Franks, Cecil

      Carlisle, John (N Luton)

      Fry, Peter

      Carlisle, Kenneth (Lincoln)

      Gale, Roger

      347

      Galley, Roy

      Porter, Barry

      Gardner, Sir Edward (Fylde)

      Powell, William (Corby)

      Garel-Jones, Tristan

      Powley, John

      Goodhart, Sir Philip

      Prentice, Rt Hon Reg

      Goodlad, Alastair

      Price, Sir David

      Gorst, John

      Proctor, K. Harvey

      Gower, Sir Raymond

      Pym, Rt Hon Francis

      Greenway, Harry

      Rathbone, Tim

      Hanley, Jeremy

      Renton, Tim

      Hargreaves, Kenneth

      Rhodes James, Robert

      Harris, David

      Rhys Williams, Sir Brandon

      Harvey, Robert

      Ridley, Rt Hon Nicholas

      Hawkins, C. (High Peak)

      Ridsdale, Sir Julian

      Hawkins, Sir Paul (SW N'folk)

      Robinson, Mark (N'port W)

      Hayward, Robert

      Roe, Mrs Marion

      Heathcoat-Amory, David

      Rowe, Andrew

      Heddle, John

      Ryder, Richard

      Henderson, Barry

      St. John-Stevas, Rt Hon N.

      Hind, Kenneth

      Sayeed, Jonathan

      Hirst, Michael

      Shaw, Sir Michael (Scarb')

      Hogg, Hon Douglas (Gr'th'm)

      Shelton, William (Streatham)

      Howard, Michael

      Shepherd, Colin (Hereford)

      Howarth, Alan (Stratf'd-on-A)

      Shepherd, Richard (Aldridge)

      Howarth, Gerald (Cannock)

      Sims, Roger

      Howe, Rt Hon Sir Geoffrey

      Skeet, T. H. H.

      Hunt, David (Wirral)

      Smith, Sir Dudley (Warwick)

      Hunt, John (Ravensbourne)

      Smyth, Rev W. M. (Belfast S)

      Hunter, Andrew

      Soames, Hon Nicholas

      Jackson, Robert

      Spencer, Derek

      Jessel, Toby

      Spicer, Jim (W Dorset)

      Johnson-Smith, Sir Geoffrey

      Spicer, Michael (S Worcs)

      Jones, Gwilym (Cardiff N)

      Stanbrook, Ivor

      Jopling, Rt Hon Michael

      Stern, Michael

      Knight, Gregory (Derby N)

      Stevens, Lewis (Nuneaton)

      Knox, David

      Stevens, Martin (Fulham)

      Latham, Michael

      Stewart, Allan (Eastwood)

      Lawrence, Ivan

      Stewart, Andrew (Sherwood)

      Leigh, Edward (Gainsbor'gh)

      Sumberg, David

      Lester, Jim

      Taylor, Teddy (S'end E)

      Lightbown, David

      Terlezki, Stefan

      Lilley, Peter

      Thomas, Rt Hon Peter

      Lloyd, Peter, (Fareham)

      Thompson, Donald (Calder V)

      Luce, Richard

      Thompson, Patrick (N'ich N)

      Lyell, Nicholas

      Thornton, Malcolm

      McCrindle, Robert

      Thurnham, Peter

      McCurley, Mrs Anna

      Townend, John (Bridlington)

      Macfarlane, Neil

      Tracey, Richard

      MacGregor, John

      Twinn, Dr Ian

      Maclean, David John

      van Straubenzee, Sir W.

      McQuarrie, Albert

      Viggers, Peter

      Major, John

      Waddington, David

      Malins, Humfrey

      Wakeham, Rt Hon John

      Malone, Gerald

      Waldegrave, Hon William

      Marlow, Antony

      Walden, George

      Maude, Hon Francis

      Walker, Bill (T'side N)

      Mawhinney, Dr Brian

      Waller, Gary

      Maxwell-Hyslop, Robin

      Ward, John

      Mayhew, Sir Patrick

      Wardle, C. (Bexhill)

      Mellor, David

      Warren, Kenneth

      Meyer, Sir Anthony

      Watson, John

      Mills, lain (Meriden)

      Watts, John

      Mills, Sir Peter (West Devon)

      Wells, Bowen (Hertford)

      Moate, Roger

      Wells, John (Maidstone)

      Moore, John

      Wheeler, John

      Moynihan, Hon C.

      Whitfield, John

      Mudd, David

      Winterton, Mrs Ann

      Murphy, Christopher

      Winterton, Nicholas

      Neale, Gerrard

      Wolfson, Mark

      Needham, Richard

      Wood, Timothy

      Nelson, Anthony

      Woodcock, Michael

      Nicholls, Patrick

      Yeo, Tim

      Onslow, Cranley

      Young, Sir George (Acton)

      Oppenheim, Philip

      Osborn, Sir John

      Tellers for the Noes:

      Parris, Matthew

      Mr. Tim Sainsbury and Mr. Ian Lang.

      Peacock, Mrs Elizabeth

      Question accordingly negatived.

    New Clause 6

      WAIVER OF CONTRACT
      'Notwithstanding the provisions of any contract, agreement, covenant, lease or tenancy, a registered milk producer may apply to cease milk production and give up his milk quota, and if approved by the Minister cease milk production and give up his milk quota, pursuant to the compensation scheme announced by the Minister of Agriculture, Fisheries and Food on Friday 25th May 1984, without incurring any liability for damages in consequence of so doing, or being subject to any court action by way of injunction to restrain him from so doing.'. — [Mr. Maxwell-Hyslop.]
      Brought up, and read the First time.
      Mr. Robin Maxwell-Hyslop: I beg to move, That the clause be read a Second time.
      The purpose of the clause is both simple and clear. II is to enable tenant farmers to benefit directly from the compensation scheme announced by my right hon. Friend the Minister of Agriculture, Fisheries and Food on Friday 25 May for those who wish to give up milk production and surrender their quota for reallocation.
      It goes without saying that a farm that gives up its quota is likely to be less valuable on the market after it has given up its quota than it was before. Therefore, it is not to be expected that landlords will welcome tenants exercising their right to apply to participate in the Minister's compensation scheme. The compensation will go to the person who gives up the quota—the milk-producing tenant—and the landlord will be left with an asset of reduced value. That is why so many tenancy agreements have in them a condition that the tenant will not take any action that will harm the value of the farm. That can be enforced by injuncion in the courts.
      I do not doubt that the courts would hold that giving up a quota under the scheme so that the farm would not in the predictable future be used for milk production would be an action in breach of the tenancy, and would grant an injunction. If the owner of the farm did not go for an injuction, I would expect him to be able to recover damages—the damages being related to the reduction in the value of the farm as a result of the tenant surrendering his quota and his registration as a milk producer.
      How, therefore, do we get out of the conundrum so that milk farmers who are tenants and wish to avail themselves of the compensation scheme can do so? It can be done only by a clause of this nature, which relieves them of
      "any contract, agreement, convenant, lease or tenancy".
      I thought that those words probably covered the contingencies that were likely to be relevant. The new clause relieves the farmers statutorily of the legal consequences of that action in terms of injuction or damages.
      If it be objected that that leaves the owner of the farm exposed to a diminution in the value of the farm without compensation, I must agree. However, it is wholly open to the Minister to bring in a compensation scheme which recognises that reality, and compensates the owner of the farm for the reduced value as well as compensating the milk producer who goes out of production and surrenders his quota, as the Minister is anxious that a certain proportion should do.
      I am not suggesting for a moment that the majority of tenant milk producers will want to cease production. Clearly they will not, because it is not only their livelihood, but the roof over their heads. A large proportion of tenanted farms in my part of the world—

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      and possibly in others that produce milk—are not suited to any other livelihood. They are used either for the production of milk, or for no viable agricultural purpose. This will not apply to the majority of milk-producing tenants, but only to those who wish to benefit fron the compensation scheme.
      By the same token, the cost of a scheme to compensate the tenants' landlords for the corresponding loss in value of the farms would be a comparatively small financial burden on the Treasury. The two figures must of necessity correspond. I hope thereby to establish that the objective of the new clause is limited.
      The House must ask whether it should be done, and, if the answer is yes, whether it should be done by a Bill or by statutory instrument. The compensation scheme is likely to be brought in by statutory instrument. There are reasons why the use of secondary legislation for a waiver of contract would be oppressive and an abuse of delegated legislation. Statutory instruments cannot be amended by either House. They may only be passed or rejected in the form in which they are presented or, under the negative resolution procedure, if a prayer negating them is passed in either House. That makes a statutory instrument an unsuitable way of legislating.
      If there are shortcomings in my drafting of new clause 6—I accept responsibility for its drafting because I did it myself—it can be rectified when the Bill goes to another place.
      Mr. Mark Hughes: It does not go there.
      Mr. Maxwell-Hyslop: Amendments and new clauses go to the other place. If no such clause is inserted, the Bill cannot be altered in another place. The Bill passes into law as it leaves the House except for any amendment that we make or new clauses that we add. Therefore, imperfections in drafting are not a reason to vote against the new clause. They can be rectified in another place. We are dealing with the principle.
      Mr. Ivan Lawrence: There are unlikely to be any imperfections in my hon. Friend's drafting.
      Mr. Maxwell-Hyslop: I am grateful to my hon. and learned Friend for saying that. With his eagle eye he would spot imperfections, and with his generosity of spirit he would tell me of them, having spotted them. That gives me even greater confidence in recommending the new clause to the House.
      There is no need to labour the argument. The manner in which my right hon. Friend announced the scheme on Friday 25 May did not suggest that he intended it to be taken by fanners as a scheme irapplicable to tenants, nor did milk producers receive it in that way, but without this provision the Bill will have that effect. I hope that I have satisfied the House that it would be inappropriate to include this provision in a statutory instrument.
      6.45 pm
      It is no argument against the new clause to say that most tenants who are milk producers will fall into the category that will benefit from the reallocation of quota. Many of them will be in the under-200,000 litres-a-year band and will have first priority in receiving the reallocation of quota to bring them up to calendar 1983 production.
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      Calendar 1983 in Devon was a miserable year, and in many cases it was well below calendar 1981, which is why many milk producers wish that calendar 1981 had been our base year for quota, not calendar 1983. However, I understand the reasons why calendar 1983 was taken. That is an indirect benefit from the reallocation of quota, and other tenants, especially of institutions with larger holdings, such as the National Trust or the Church Commissioners, will not fall within the 200,000 litres-a-year cut-off point for priority in the reallocation of quota.
      We must remember that many tenant milk producers have their bank loans secured on their herd because there is nothing else on which to secure them. In so far as some bank managers say — as they are doing — that the collateral has lost one third of its value, although the loan has lost none of its quantum, and that with that loan capital facilities have been purchased which now cannot be fully and economically used, there will be some tenants who will wish to leave milk production but will be able to do so only if they benefit from the compensation scheme. They cannot do that however, if their landlords refuse, in the representative case for tenancies and leases today. That is the case for giving new clause 6 a Second Reading and adding it to the Bill.
      Mr. Mark Hughes: I have much sympathy with new clause 6. The House is faced with a technical difficulty. I accept what the hon. Member for Tiverton (Mr. Maxwell-Hyslop) said, that to introduce such a procedure under the regulations when they introduce the quota may have severe restrictions and may not do the job properly. It is clear that many farmers who entered into a tenancy agreement on the expectation of an expanding dairy industry and expanding dairy production now find themselves under pressure to quit dairy farming and may be at risk of breaking their contracts for their tenancies if they take up the scheme announced on 25 May.
      I hope that the Government will give us an absolute assurance that the regulations, when they are laid, will go beyond the normal terms of such regulations in order to obviate the difficulty which the hon. Gentleman has shown the regulations will not do. If, however, the Government cannot give that absolute assurance, we must ask the House to divide on the new clause. It is unacceptable that dairy farmers who have undertaken contracts, tenancies and other agreements should be called upon to go to court because they have had to renege on those agreements for reasons outside their possible control.
      Many of these problems were unexpected when the Bill was drafted and came before the House on Second Reading and in Committee. I hope that the Minister will now accept that what has happened since 31 March has completely changed certain parts of the Bill. It may well be necessary to change, not just the regulations for the implementation of the milk quota but the Bill itself.
      The Opposition support the hon. Member for Tiverton in saying that the waiver of contracts forced upon farmers because of changes beyond their control and beyond anything for which they could have planned must be catered for in the Bill if it is not completely covered within the regulations. I am happy to support the hon. Gentleman's new clause.
      Sir Peter Mills: I have listened to my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) with sympathy and studied his new clause. It stems from

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      anxiety for those farmers who have a desperate problem. Surely tenant farmers should have the right to leave milk production and take advantage of the scheme. If they are denied that right——
      Mr. Mark Hughes: It will be appalling.
      Sir Peter Mills: It is appalling, yet the landlord's position is completely impossible. If one proceeds along the lines of the new clause it could set a precedent, and where would it end? The position is dreadful. There could be further quotas, but heaven forbid. The effect on the landlord would be serious if there were any further schemes to help tenants get out of certain types of production. What about cereals? I am worried for the tenant farmer and the landlord. It is not often that the hon. Member for Torridge and Devon, West is in a dilemma. I usually know my own mind, but in this case I do not.
      There is another point. One must think of the landlord who has spent a great deal of money setting up a dairy outfit—perhaps £100,000 or more—to assist in having a viable dairy unit. He is suddenly told that his tenant is accepting the scheme and is getting out. The landlord is left with the baby on his hands and a sterilised farm for milk production. It shows the utter nonsense of the quota system.
      Mr. Torney: At last the hon. Gentleman has been converted.
      Sir Peter Mills: How stupid some people can get. It confirms my right hon. Friend's view when he fought so hard for an end-price reduction rather than a quota system. That is why, with respect, the hon. Member for Bradford, South (Mr. Torney) is talking a great deal of nonsense. This is a terrible dilemma. It highlights the need to ensure that we never return to a quota system if we have to reduce production of any other commodity. I do not know the way forward here. I hope that my hon. Friend the Minister will help and give some comfort and assistance to the tenant dairy farmer who wishes to take advantage of the scheme.
      There are two sides to the problem, and one cannot leave out the landlord and the expense that could occur to him, or what might happen in the future if we deal with other products. The landlord may in the end be left with a farm which is not allowed to produce anything.
      Mr. Edward Leigh: Does my hon. Friend agree that the dilemma shows the ludicrous position we would be in if quotas were to be introduced for cereals?
      Sir Peter Mills: Absolutely. That is what I was trying to say and not saying very well. My hon. Friend is right. We look to the Minister to help us out of this dilemma and to see what can be done. There must be some way of getting together with the Country Landowners Association and the National Farmers Union to find some way to sort out the problem and to assist the tenant dairy farmer to get out, while not penalising the landlord.
      Mr. Jackson: We all know how serious are the problems being faced by some dairy producers as a result of the introduction of quotas. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) has done the House a service by drawing attention to the problem, but our appreciation of the difficulties should not precipitate us into passing bad legislation. I consider my hon. Friend's new clause to be thoroughly bad legislation.
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      The new clause is bad for two reasons. The first lies in the technical inadequacy of the proposal. The new clause can relate only to England and Wales, because the Bill relates only to England and Wales. I stand to be corrected, but I have the gravest doubt about whether that is a deficiency that can be corrected in another place. If my hon. Friend's new clause were to be accepted it would introduce serious discrimination between dairy farmers in England and Wales and those in Scotland and Northern Ireland. It would be a serious distortion, and I cannot believe that my hon. Friend intends that. It could have come about only by way of a technical oversight.
      Mr. Maxwell-Hyslop: Is my hon. Friend aware that the Minister has introduced the kind of distortion about which my hon. Friend is talking? There is a different percentage aimed at to be purchased in Northern Ireland from that in England and Wales. The whole system of law on tenure is different in Scotland from that in England, which is why the Bill is confined to England and Wales. The only decision that we can make today is on the Bill that is before the House, which is confined to England and Wales for that reason. It does not stop anyone from legislating separately for Scotland, as the Government would have to do anyway because the system of tenure is different in Scotland.
      Mr. Jackson: I well understand that there are differences between different parts of the United Kingdom, but I do not believe that they justify the different legislative treatment that my hon. Friend is proposing in the new clause.
      My objection goes deeper than technical deficiency. I believe that my hon. Friend's proposal is bad legislation for a more fundamental reason. It introduces the dangerous principle of expropriation without compensation. A quota for the production of milk is a form of property right which is attached to a piece of land. My hon. Friend's proposal amounts to an uncompensated transfer of the landlord's interest in the property to the tenant. It is ironic that that should be proposed in the context of a Bill whose prime purpose is to put right precisely an earlier such interference in established contractual arrangements in the matter of succession.
      Mr. Mark Hughes: Will the hon. Gentleman accept that milk quotas are not a transferable asset at the moment? They revert without compensation to the Ministry of Agriculture, Fisheries and Food or the dairy, in this case the Milk Marketing Board, within the terms of the legislation. Therefore, the hon. Gentleman's argument is wrong.
      7 pm
      Mr. Jackson: The hon. Gentleman must accept that it has been admitted by my hon. Friend the hon. Member for Tiverton that a right which would be in the possession of the landlord is to be taken away. That is the difficulty that I am emphasising. I cannot see that there can be any justification for this dangerous and unprincipled step. I cannot see any argument for expropriation without compensation in this case, any more than I could see an argument for expropriation with inadequate compensation with regard to the shipbuilding industry on an earlier occasion, when my hon. Friend scored a great parliamentary triumph. At that time he followed a clear and well-justified line. He would do well to return to that line today by withdrawing the new clause.
      Mr. W. Benyon: I, too, appreciate very much the motives that have caused my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) to move the new clause. At this stage it introduces a new set of factors, some of which have been touched on in the debate. I do not want to deal with the other partner in the partnership, the landlord, as opposed to the tenant. Fixing the quota on the tenant would create an injustice, particularly where there had been substantial capital expenditure.
      We have to consider the new clause as it stands. It is no good saying that compensation should be produced in some other way by the Government. Much more important is the fact that it would be an enormous disincentive to letting in the future. I can think of nothing more calculated to dissuade a landlord from letting than arbitrary legislation of this kind. People will say that what has been done in one case could be done elsewhere. Already there have been hints about cereals. We have spent much time on Second Reading, in Committee and now on Report discussing the legislation, the motive of which is to increase the number of farms for letting. If we accept the new clause, we will reverse the process.
      I accept that there is a problem, but as the new clause stands it is arbitrarily taking away a right. Therefore, it should be resisted. Obviously the matter has to be considered, as my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) said, in conjunction with the various parties in the industry to see whether a solution can be reached.
      Mr. Nicholas Budgen: Like the bulk of the Conservative party, I represent an urban constituency. My constituents are concerned most of all to have cheaper food and to keep monetary support to the farming industry within proper bounds. [Interruption.] I am a very small farmer. As a result of agricultural support, the land that I wish to buy is much more expensive than it would otherwise have been. As has been pointed out already, the principal beneficiaries of a high level of agricultural support have been the agricultural land owners, although they have had to obtain a good deal of tax relief, which they have been very fortunate to get, so as to be able to pass on assets of a high nominal value but a low yield.
      The debate illustrates that my right hon. Friend was right in wanting a reduction in price. If we are not careful, I suspect that there will be a ready answer to my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills): extra compensation for landlords. There will be a grave injustice to landlords if tenants give up what is equivalent to a grant of planning permission. Then the land could not be used for Cairying. One can see that land without the benefit of that equivalent of planning permission might drop in value from £2,000 per acre to perhaps £1,000 per acre. One can see the injustice that would be done.
      What are the Government likely to do? Will we have something similar to what happened in regard to the draining of marshy land of great amenity value? Will there be first an over-high price for corn, then subsidies for peope to take out hedges and then, if they do not respond to those price mechanisms, will the Government say, "We have a splendid Act under which we will compensate you
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      for not doing that which the market encourages you to do."? I suppose that we may do the same thing for agricultural landlords.
      Let us not go down that path. Let us recognise that the price mechanism signalling to people how they should act in their enlightened self-interest is the proper way to deal with farm surpluses. The surpluses must be dealt with quickly. We know already that the Commission expects that the budget of the EC will be overspent this year by £1·4 billion. That is after what are described as harsh reductions in the agricultural surpluses. We know the row that will occur if any serious attempt is made to reduce further agricultural production next year.
      My constituents do not wish to see more money spent in the EC. They are not yet convinced that the agriculture industry is in dire penury. I hope that there will not be further demands from my hon. Friends for compensation for landlords, who, I agree, would be treated badly if my hon. Friend's new clause were accepted. It is far better for the problem to be dealt with by the price mechanism.
      I leave my right hon. Friend with this thought. In this country it is always possible to give national aid to increase the receipts of farmers for their produce. Why can we not have a national policy which lowers the price of agricultural products? Why can we not say to the EC, "Thank you very much indeed. We will give our farmers 20 per cent. less for their milk. We would prefer to do that rather than introduce quotas."? The Government could say to people like myself who have suckler cows, "We think you are terribly hard up. We want to give you more and we will give you national aid." Why can there not be national reductions in price?
      Mr. David Maclean: I can add nothing of greater wisdom to the debate than we have heard from my hon. Friends the Members for Tiverton (Mr. Maxwell-Hyslop) and for Torridge and Devon, West (Sir P. Mills). I completely agree with the principle of the new clause and I have great sympathy with the "Catch-22" situation in which tenant dairy farmers and landlords are being placed. It is an awful dilemma to which the Government will have to address themselves in the coming weeks and months.
      However, I do not believe that the Bill is the right vehicle for a clause such as has been proposed. It is five years since the National Farmers Union approached us to do something about the landlord and tenant system. The Bill has been five years in the gestation process. My right hon. Friend the Minister has been criticised for apparently rushing in the quota system. We should not add to the problem that might be encountered in dairy farming by accepting the new clause that many of us have had a chance to study only during the last few days. The solution is to have exhaustive but rapid discussions with the NFU and the CLA on how the problem should be approached. Let us all also consult the Tenant Farmers Association and come up with some solution to the problem. Perhaps we need a new Bill or perhaps the regulations will solve the problem. I am not a constitutional lawyer so I cannot comment on that. Having spent so long putting together a Bill that has been agreed by the NFU and the CLA, we should not hurriedly accept a new clause which, as my hon. Friend the Member for Torridge and Devon, West said, could have repercussions for the cereal, beef and sheep sectors. I urge the Government rapidly to have discussions with the NFU and the CLA.
      Mr Torney: Something must be done about the Bill. Whether we agree with it or not, the Bill is aimed at helping the tenant farmer. Since the Bill was introduced circumstances have changed. The new EEC quotas, approved by the Minister, create a new factor.
      One could argue that the new system creates dangers for many tenant farmers. The new clause deals with liability for damages if a tenant farmer gives up milk production. The tenant farmer does not get out of milk production because he is fed up with it or does not like doing it any more, but because the EEC, with the agreement of the Minister, has decided that he cannot produce as much milk as he used to produce. To say that the Bill does much for tenant farmers is nonsense.
      The Opposition support the new clause. Even if its wording is not perfect, its sentiments are right. If it is pressed to a vote we shall vote for it unless the Minister gives cast iron assurances that legislation will be introduced to give the tenant farmer protection.
      Mr. Gerrard Neale: I agree with my hon. Friends the Members for Tiverton (Mr. Maxwell-Hyslop) and for Torridge and Devon, West (Sir P. Mills). I see the dilemma particularly in relation to the landlords. Considerable discontent will be caused in my area if the large number of farmers who could be affected think that there is one law for owner-occupiers and another for tenant farmers. That could give rise to great anger.
      In addition, since the announcement of the scheme fundamental doubts have arisen about how the scheme will affect a particular farm and what the hardship grounds will be. I am grateful to my hon. Friend the Member for Tiverton for bringing the problem to the attention of the House. Unless my right hon. Friend is able to give some assurance that discrimination between tenant farmers and owner-occupiers can be dealt with suitably, a barrage of major criticism will be levelled at him.
      Mr. Budgen: Is my hon. Friend in favour of a system of compensation for landlords on the capital that they will lose?
      Mr. Neale: I remind my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) of what my hon. Friend the Member for Torridge and Devon, West said. Many of us would not have gone down this road, any more than the Minister would, but we are set on a course that we cannot change. I worry about where we shall stop, but some people will want to avail themselves of the scheme. They will be justified in doing that, but they will be pre-empted. I do not know how we can justify that.
      I urge my right hon. Friend to consider the arguments carefully and to give a sign that he is willing to look at the problems seriously. Many of us will be in the gravest difficulty if we have to justify the fairness of the proposal to those who are adversely affected.
      7.15 pm
      Mr. Ivan Lawrence: I came into the Chamber shortly before the start of the debate having just written many letters—goodness knows how many—to the milk producers in my constituency saying that for some of them salvation was at hand because of my right hon. Friend's scheme to encourage those who wish to leave milk production by providing adequate compensation. Thanks to my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) highlighting the scheme, it now appears
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      that that is not so for a large proportion of small milk producers in my constituency. I refer to tenant farmers who are bound by contract to their landlords and will not be able to avail themselves of the relief without breaking their contract.
      Something, of course, must be done about it. I could be wrong, but I do not believe that it is financially possible to provide compensation for landlords for what amounts to a breach of contract along the lines suggested by my hon. Friend the Member for Tiverton. The sums involved would be substantial and beyond likely implementation.
      Before the Council of Ministers agreed to the form of compensation, it must have considered the consequences to the different legal systems in Europe of breaking the contracts which bind landlords and tenants. Landlord and tenant law doubtless applies in different forms, but in substance is the same across the civilised countries of Europe.
      I concede that the Minister is caught on the horns of a remarkable dilemma which is not of his making. Nobody could have tried harder to stop this happening. The Minister must have had some assurance during discussions with colleagues in the Community about how they proposed to deal with the same problem.
      But it is no use pretending that we shall help the small milk producer in the way that my right hon. Friend promulgated on 25 May if the reality is different. My right hon. Friend must either devise some other way of helping the small milk producer, or find some way round this particular contractual dilemma, no doubt with the assistance of his colleagues in the Community.
      As there is an element of doubt, I shall find it difficult to support my hon. Friend's well-timed and important new clause. However, the plight of the small milk producers in my constituency is very serious, and I am most anxious, as their representative, to see that they are treated with justice and fairness. I look to my right hon. Friend to achieve that justice and fairness in one way or another.
      Sir Paul Hawkins: I entirely sympathise with the cases that my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) has brought to our notice. It is good that he has done so. Personally, however, I do not think that we should adopt the new clause. The Bill has been long in coming, and I have been longing for it to appear. Together with the Budget changes to capital transfer tax and other matters, the Bill will go some way towards creating more tenant farmers, and that is the only way in which a young man can enter farming today. No young man today can buy 200 acres at £2,000 or £2,500 an acre. The new clause would do serious damage to relations between landlord and tenant. The matter can best be dealt with by regulations, when the regulations are made.
      As my hon. Friend the Member for Tiverton rightly said, only a small number of farmers would be affected. We are somewhat inclined to exaggerate the importance of this issue. I am sure that my hon. and learned Friend the Member for Burton (Mr. Lawrence) did not wish to exaggerate, but if he had been present for the whole of the debate he might have realised that the number of people who have such a clause in their agreements is not enormous, and nor is the number who will stop farming.
      Finally, I do not agree with my hon. Friend the Member for Penrith and the Border (Mr. Maclean) that we should go back to the NFU and the CLA, and negotiate with them again. The NFU cannot make up its mind about anything

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      at present. I have good friends in the NFU, and I am a member of that union, but I believe that the Minister must make up his own mind. I know the Minister, and I am convinced that he will do what is fair.
      Mr. Nicholas Winterton: I apologise for being absent for part of the debate. I was detained by other duties in the House.
      I remind my hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins) that the aim of the House is to see that justice is done and seen to be done. The fact that the new clause may apply only to a few cases is not important. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) and other hon. Members have done a great service to the farmers, who in recent times have been dealt a devastating blow.
      I believe that my view is shared by the NFU. I do not share the opinion of the NFU and held by my hon. Friend the Member for Norfolk, South-West. The NFU is, to use the words of my hon. and learned Friend the Member for Burton (Mr. Lawrence), faced with a dilemma. There have been different views within the NFU as to how the milk package should be handled. However, to say that the NFU is at sixes and sevens and does not know where it stands on any issue is to do a grave disservice to one of the finest organisations representing one of the most efficient industries in the country — [Interruption.] If my hon. Friends wish to laugh, they should keep an eye on their farmers at the next election. To the farmers, this is no laughing matter.
      The new clause merits our support. It deals with a small number of farmers who will be adversely affected——
      Mr. Budgen: Will my hon. Friend give way?
      Mr. Winterton: No. I know precisely what my hon. Friend wants to say. I grew up with him.
      Sir Peter Mills: Will my hon. Friend give way?
      Mr. Winterton: I am happy to give way to my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills).
      Sir Peter Mills: My hon. Friend rightly says that he wishes justice to be done in the House. However, there must be justice for the landlord as well as the tenant.
      Mr. Winterton: I believe that if my hon. Friends analyse the problems facing farming at the moment they will probably be more concerned about the tenant farmer and the decrease in the number of tenant farmers which has occurred than about anything else. If my hon. Friend wishes to know about which group I am most concerned at present, I must say that, in the main, it is the tenant farmer and—allied with him—the small and medium-sized dairy farmer.
      My hon. Friend the Member for Tiverton has taken a deep interest in this matter and has done much research. He has been consistent in his views, which is more than I can say for many of my hon. Friends. I say that with great sadness——
      Mr. Budgen: No, he does not. My hon. Friend says it with great enjoyment.
      Mr. Winterton: If my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) wishes to
      358
      intervene now, I shall be happy to give way, but perhaps he wishes only to make glib remarks from a sedentary position.
      Mr. Budgen: Is my hon. Friend in favour of a compensation scheme for landlords? How much would it cost, and how would he justify it to the taxpayers?
      Mr. Winterton: I would justify a compensation scheme by reference to all that has happened to agriculture recently. Successive Governments have urged farmers to produce more. The farmers have reacted more efficiently and effectively than any other industry in the country. The Government then, almost retrospectively, expect them to change direction. Adequate compensation should be given to the appropriate farmer, whether he is a landlord or a tenant.
      No doubt the drafting of the new clause can be criticised. That is what the Front Bench always says when such a new clause is introduced. Ministers make reassuring sounds in the hope that opposition on the Government side will evaporate because of lack of time. The Front Bench has the knowledge and the wherewithal to provide the answers, but its answers will not produce the result that my hon. Friend the Member for Tiverton wishes to achieve.
      Not just in relation to this matter but on the wider question of milk quotas, the Government have bitten off more than they bargained for when they made the agreement in Brussels some weeks ago. We saw the result at the by-elections in Surrey, South-West and Stafford, and in the local government elections, and we shall see it in the European elections next week. People who traditionally, because of their jobs, have instinctively and inevitably voted Conservative will abstain on a massive scale.
      Sir Paul Hawkins: Rubbish.
      Mr. Winterton: My hon. Friend says "Rubbish". We shall await the result of the poll. What I have said will be proved to be right.
      Sir Peter Mills: My hon. Friend is not helping our candidates.
      Mr. Winterton: Should we be trying to help our candidates in an election, or should we be seeking to serve the best interests of this country?
      I am supporting my hon. Friend the Member for Tiverton because he and a number of my hon. Friends have had the courage to put down a new clause that is directed towards helping a number of people who would be adversely affected as a result of the milk package. I have said much in the House and outside on this subject and shall continue to do so. I want to see injustices righted, and even if I am criticised almost unanimously by my hon. Friends I shall still say what I believe to be right.
      7.30 pm
      The Minister of Agriculture, Fisheries and Food (Mr. Michael Jopling): We are all grateful to my hon. Friend the Member for Tiverton (Mr. Maxwell-Hislop) for tabling this new clause. A number of my hon. Friends have expressed a similar view. My hon. Friend the Member for Wantage (Mr. Jackson) said that my hon. Friend the Member for Tiverton had done the House a service, and he has.
      I am grateful for the expressions of support from many hon. Friends, who have said how much better it would

      359
      have been if we could have dealt with the massive over-production of milk throughout the EEC by the discipline of price. That would have been a good deal neater and simpler, and it is something, as the House knows, that I have always wanted. However, we found ourselves in a minority of one in Brussels, and I regret that we were not able to have our way on that. I hope that a lesson will be learnt and that if discussions take place on other commodities we shall find ourselves in a majority.
      I understand and share the concern expressed by my hon. Friend the Member for Tiverton that the outgoers scheme for milk producers should be as fair as possible to all concerned and should achieve its essential objective of providing a reserve quota for allocation to other producers, particularly the small ones, to whom, as the House will know, I think it is right to give a first priority in the reallocation of quotas.
      Mr. Robert Hughes: Will the right hon. Gentleman tell the House why he made the announcement about the £50 million outgoers scheme to a Conservative press conference for the European elections, and did not come to the House and explain what he has now explained?
      Mr. Jopling: I am sorry, but the hon. Gentleman is uncharacteristically wrong in that. We answered a written question on the scheme before we ever embarked on a press conference outside.
      The House will perhaps recall that some voices have urged me, with regard to the redistribution of quotas, to create a market for them and to say, "Let the people purchase them, if they can, at the highest price; let them be bought and sold." Apart from the fact that regulations for the milk scheme do not make provision for that, that would have been the wrong way. It was right to take a positive decision to handle these quotas ourselves, so that we could give first priority on redistribution to the smaller producer.
      The scheme is for a minority of producers who want to give up to be encouraged to do so. The principal aim of the scheme is to restore to a far greater number of small producrs their 1983 production patterns. That is what we are about. The purpose of the scheme is not necessarily to encourage people to get out of milk production.
      The outgoers scheme will encompass owner-occupiers and tenants. My hon. Friend the Member for Tiverton was right when he said that those who want to get out will be in a minority. The majority of milk producers will wish to stay in milk production, and it is that that we want to encourage, particularly at the smaller end. We hope that by making available something rather less than 1·5 per cent. of all the milk produced in the country we can bring 40 per cent. of producers who have fewer than 40 cows back to their 1983 position of production.
      Owner-occupiers account for the majority of all milk producers. I have been looking at some figures—which may interest the House—of how many milk producers are owner-occupiers and how many rent the farms. Some farms are on a mixed tenure, and sometimes it is not possible to assess how many of these there are. However, in England and Wales, according to the latest figures that I have been able to get, there are 20,500 milk producers who own their farms, compared with 12,200 who rent their farms. There is a minority of milk producers who are tenants.
      Mr. Budgen: When the owner-occupier comes to sell his farm, will he not find that its capital value is much diminished if it does not have any quota attached to it?
      Mr. Jopling: That is so, but we have seen that before with quotas for other crops, which have had an effect on the value of farms. Owner-occupiers account for the majority of milk producers, and the decision whether or not to give up milk production and apply for compensation under the outgoers scheme will be a matter for the producer. With the tenant there is a need—which the House understands if one is to judge from the tenor of the speeches — to take into account the interest of the landlord as well. Who can argue but that both the landlord and the tenant have a clear and legitimate interest in the farming activities that are carried on on the holding?
      My hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) drew attention to the unfair impact which the clause could have on landlords. As he said, in the case of a dairy holding the landlord may have invested substantial capital in the provision of specialist dairy buildings which would be of a much reduced value if, because of quota restrictions, continued milk production on the holding were no longer possible.
      Another aspect to which no hon. Member has yet referred is where the tenant has provided the buildings himself, with the landlord's consent. I can see that my hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins), who has dealt with many arrangements of compensation, knows exactly what I am going to say. Where such a tenant has decided, as a result of the outgoers scheme, that he wishes to give up milk production and quit the holding, the landlord could find himself facing a substantial bill for compensation to the tenant for the tenant's investment in those buildings. That would be even worse than the situation to which my hon. Friend the Member for Torridge and Devon, West referred.
      It is because of the shared interest in the holding that we intend to provide in the outgoers scheme that the agreement of the landlord will be necessary before compensation is paid to a tenant who wishes to cease milk production. That is an entirely fair approach, which will ensure that an important decision affecting the future of farming activities on the holding can be arrived at with the agreement of the parties who have a legitimate interest in the holding.
      Mr. Geraint Howells: Let us say that a small dairy farmer is keen to leave the dairy industry. If his landlord says, "No, you are not allowed to leave the dairy sector," what plans has the right hon. Gentleman to help the producer?
      Mr. Jopling: That is one of the matters which the House will want to consider carefully. However, it is not relevant to the new clause.
      The outgoers scheme will be non-statutory as a result of the way in which it will be brought in under Community regulations. The clause would cut right across current procedures and override any quota provisions which might already be incorporated in a tenancy agreement. The House will have taken careful note of the remarks of my hon. Friend the Member for Wantage (Mr. Jackson) on expropriation without compensation. The House should

      361
      consider carefully and seriously the implications of adopting the approach that my hon. Friend the Member for Tiverton has placed before it.
      My hon. Friend the Member for Milton Keynes (Mr. Benyon) brought a crucial issue to our attention when he said that one of the main purposes of the Bill was to encourage landlords to let more land. The Bill will do that in a number of ways. One factor which has undoubtedly contributed to the problems of the tenanted sector over the years is the fear among landlords that any provision which they have included in a tenancy agreement will subsequently be overridden by statute. That happened in 1976 when the then Labour Government introduced their succession provisions. It would be most unfortunate if something similar happened with the milk quota arrangements. The result would be a further damaging blow to the confidence of landlords and to their willingness to create more tenancies. That is a matter which was taken up by my hon. Friend the Member for Norfolk, South-West.
      For those reasons I ask my hon. Friend the Member for Tiverton not to press the new clause to a Division. I understand fully the motives that lie behind it, and I am concerned about the dilemma in which we find ourselves. I am sure that we all want to ensure that the objectives of the outgoers scheme are achieved. As I have stressed, one of them is to bring the smaller producers back to their 1983 production patterns. However, the clause has far-reaching implications which, if it were to be adopted, could prove to be a further major disincentive to the letting of land.
      I have been asked by a number of my hon. Friends to think carefully about the dilemma that faces us. I shall do that, of course. My hon. Friend the Member for Norfolk, South-West asked me not to consult the Country Landowners Association, the National Farmers Union and other organisations. Notwithstanding his request, I shall ask those bodies whether they can help the Government and the House in finding ways whereby, with consent, we can overcome the problem. I do not believe that the House should accept the new clause and I hope that my hon. Friend the Member for Tiverton will withdraw it. If he feels that he is not able to do so, I must ask my right hon. and hon. Friends to oppose it, but I hope that that will not be necessary.
      7.45 pm
      Mr. Neale: How soon does my right hon. Friend think he will be able to give this matter serious consideration and produce a solution? Any farmer who entered my right hon. Friend's Department would soon become aware of the grave complexities which he has to resolve. However, individual farmers are being swamped with the most hideous uncertainty. My right hon. Friend and the House have a grave responsibility to resolve the issue quickly on behalf of farmers.
      Mr. Jopling: We are moving as fast as we can to clear our minds over special cases, direct sales and wholesale sellers who are still uncertain about their quota. We hope to provide the necessary information very soon. We shall move as fast as we can and I hope that my hon. Friend will not press me to announce a time. As I have said, I hope that my hon. Friend the Member for Tiverton will not press the clause to a Division. However, if he feels that he must do so, I must ask the House to oppose it.
      Mr. Robert Hughes: I have no wish to prolong the debate. The hon. Member for Tiverton (Mr. Maxwell-Hyslop) has given the House an opportunity to discuss some serious issues which have arisen as a result of the implementation of quotas.
      I said earlier that the Minister had failed to make a statement in the House and that as a result proper questioning has not been possible. A proper debate should take place and it is unsatisfactory that we should discuss such an important issue under the terms of a new clause to a Bill which has wide implications.
      The Minister accused me of being uncharacteristically wrong about the making of a statement to the House and the timing of a press conference. I seek to be a fair man and I understand that I may have been wrong in that an announcement was made to the House by means of a written answer about five minutes before a press conference took places. The Conservative press conference began at 9.35 am and 9.30 am is the earliest that a written answer can be given to the House. It seems that I was not so very wrong.
      The outgoers scheme will provide £50 million over five years. That pales into insignificance when set against the provision that is being made by the Federal Republic of Germany. The problem of small farmers would have been dealt with in a much better way if the Minister had adopted a scheme akin to the one that I put to him when I met him about a fortnight ago. The smaller producer should have been allowed to produce his 1983 quota and only that, and where necessary the quota should have been adjusted upwards on a sliding scale towards the level of the larger producers. Such a scheme is to be implemented by the West Germans, so there is nothing impracticable about it. Indeed, it is a much better way of tackling the problem.
      There are clear signs that the Minister has not followed through in detail all the ramifications of what is happening to milk producers as a result of the quota applications. The Minister tells us that the outgoers scheme is non-statutory because it is to be introduced under the EC agreements. None the less, I am concerned that we shall not have a proper opportunity fully to debate the scheme in Government time to ensure that we arrive at the best possible solution. I hope that the Minister will take this opportunity to give an assurance that he will consult his right hon. Friend the Leader of the House and that arrangements will be made for a proper debate. Some guarantees have been given, and I should like them to be reinforced. We must discuss this matter properly. I hope that no Minister will duck the issue.
      7.50 pm
      Mr. Maxwell-Hyslop: I seek leave of the House to respond briefly.
      Mr. Deputy Speaker (Mr. Paul Dean): The hon. Member does not need to seek leave, because he moved the motion.
      Mr. Maxwell-Hyslop: The issue will not go away, because it is real rather than theoretical. Ministers and every other hon. Member agree that the quantum of the problem is small, for two reasons: first, my right hon. Friend the Minister is prepared to buy up only 2·25 per cent. of the quota; secondly, a large proportion of the milk producers involved will be owner-occupiers rather than tenants. The quantum is small; the principle is not.

      363
      The only possible resolution of the principle lies in the Minister's hands. He rightly said that two interests are involved — the interests of the tenant and of the landlord. It follows that in equity there is a compensation liability to both parties. A huge sum is not involved, and I hope that I have accurately and convincingly given the reasons for that.
      We all know that the time span to legislate on this matter is relevant. Without the new clause, the tenant farmer will not be able to avail himself of the scheme's benefits. It is entirely in the hands of my right hon. Friend and the rest of Cabinet to remove any injustice which the new clause might involved by recognizing that there should, in equity, be compensation for the diminution in value which this measure brings to the landlord. The only way to give equity, if tenants compared with owner-occupiers are not to be penalised, is to include the new clause in the Bill. No further opportunity is available to include this measure later in the Bill.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 111, Noes 207.

      Division No. 350]

      [7.53 pm

      AYES

      Anderson, Donald

      Hughes, Roy (Newport East)

      Archer, Rt Hon Peter

      Hughes, Sean (Knowsley S)

      Ashton, Joe

      Janner, Hon Greville

      Banks, Tony (Newham NW)

      Kaufman, Rt Hon Gerald

      Barnett, Guy

      Kirkwood, Archibald

      Beckett, Mrs Margaret

      Lambie, David

      Beith, A. J.

      Lamond, James

      Bermingham, Gerald

      Leighton, Ronald

      Blair, Anthony

      Lewis, Ron (Carlisle)

      Brown, Hugh D. (Provan)

      Lewis, Terence (Worsley)

      Callaghan, Jim (Heyw'd & M)

      Litherland, Robert

      Campbell-Savours, Dale

      Loyden, Edward

      Clark, Dr David (S Shields)

      McDonald, Dr Oonagh

      Clay, Robert

      McKay, Allen (Penistone)

      Cocks, Rt Hon M. (Bristol S.)

      McKelvey, William

      Coleman, Donald

      Maclennan, Robert

      Concannon, Rt Hon J. D.

      McWilliam, John

      Cook, Robin F. (Livingston)

      Madden, Max

      Craigen, J. M.

      Maxton, John

      Crowther, Stan

      Maynard, Miss Joan

      Cunliffe, Lawrence

      Meadowcroft, Michael

      Dalyell, Tarn

      Michie, William

      Davis, Terry (B'ham, H'ge H'l)

      Millan, Rt Hon Bruce

      Deakins, Eric

      Miller, Dr M. S. (E Kilbride)

      Dixon, Donald

      Morris, Rt Hon J. (Aberavon)

      Dormand, Jack

      Mudd, David

      Douglas, Dick

      O'Neill, Martin

      Dubs, Alfred

      Oppenheim, Philip

      Dunwoody, Hon Mrs G.

      Parry, Robert

      Eadie, Alex

      Pike, Peter

      Eastham, Ken

      Powell, Raymond (Ogmore)

      Ewing, Harry

      Prescott, John

      Field, Frank (Birkenhead)

      Radice, Giles

      Fisher, Mark

      Randall, Stuart

      Flannery, Martin

      Redmond, M.

      Forrester, John

      Richardson, Ms Jo

      Foster, Derek

      Robertson, George

      Foulkes, George

      Robinson, G. (Coventry NW)

      Freud, Clement

      Ross, Ernest (Dundee W)

      Godman, Dr Norman

      Ross, Stephen (Isle of Wight)

      Gourlay, Harry

      Rowlands, Ted

      Hamilton, W. W. (Central Fife)

      Sheerman, Barry

      Harrison, Rt Hon Walter

      Short, Ms Clare (Ladywood)

      Haynes, Frank

      Short, Mrs H.(W'hampt'n NE)

      Hogg, N. (C'nauld & Kilsyth)

      Skinner, Dennis

      Holland, Stuart (Vauxhall)

      Smith, Cyril (Rochdale)

      Home Robertson, John

      Spearing, Nigel

      Howells, Geraint

      Strang, Gavin

      Hoyle, Douglas

      Thomas, Dafydd (Merioneth)

      Hughes, Dr. Mark (Durham)

      Thompson, J. (Wansbeck)

      Hughes, Robert (Aberdeen N)

      Thome, Stan (Preston)

      364

      Tinn, James

      Winterton, Mrs Ann

      Wallace, James

      Winterton, Nicholas

      Wareing, Robert

      Weetch, Ken

      Tellers for the Ayes:

      Welsh, Michael

      Mr. Robin Maxwell-Hyslop and Mr. Thomas Tomey.

      Wigley, Dafydd

      Winnick, David

      NOES

      Aitken, Jonathan

      Greenway, Harry

      Amess, David

      Ground, Patrick

      Ancram, Michael

      Hampson, Dr Keith

      Arnold, Tom

      Hanley, Jeremy

      Ashby, David

      Hargreaves, Kenneth

      Aspinwall, Jack

      Harvey, Robert

      Atkins, Robert (South Ribble)

      Hawkins, C. (High Peak)

      Atkinson, David (B'm'th E)

      Hawkins, Sir Paul (SW N'folk)

      Baker, Nicholas (N Dorset)

      Hayhoe, Barney

      Baldry, Anthony

      Hayward, Robert

      Batiste, Spencer

      Heddle, John

      Beaumont-Dark, Anthony

      Henderson, Barry

      Bellingham, Henry

      Hind, Kenneth

      Benyon, William

      Hirst, Michael

      Berry, Sir Anthony

      Hogg, Hon Douglas (Gr'th'm)

      Bevan, David Gilroy

      Howard, Michael

      Biffen, Rt Hon John

      Howarth, Gerald (Cannock)

      Biggs-Davison, Sir John

      Hunt, John (Ravensbourne)

      Bottomley, Peter

      Hunter, Andrew

      Bottomley, Mrs Virginia

      Jackson, Robert

      Bowden, A. (Brighton K'to'n)

      Johnson-Smith, Sir Geoffrey

      Bowden, Gerald (Dulwich)

      Jones, Gwilym (Cardiff N)

      Braine, Sir Bernard

      Jopling, Rt Hon Michael

      Brinton, Tim

      Knight, Gregory (Derby N)

      Brooke, Hon Peter

      Knox, David

      Brown, M. (Brigg & Cl'thpes)

      Latham, Michael

      Bruinvels, Peter

      Lawrence, Ivan

      Buchanan-Smith, Rt Hon A.

      Lawson, Rt Hon Nigel

      Budgen, Nick

      Lee, John (Pendle)

      Bulmer, Esmond

      Leigh, Edward (Gainsbor'gh)

      Burt, Alistair

      Lester, Jim

      Carlisle, John (N Luton)

      Lightbown, David

      Carlisle, Kenneth (Lincoln)

      Lilley, Peter

      Carttiss, Michael

      Lloyd, Peter, (Fareham)

      Cash, William

      Luce, Richard

      Channon, Rt Hon Paul

      Lyell, Nicholas

      Chope, Christopher

      McCrindle, Robert

      Clark, Dr Michael (Rochford)

      McCurley, Mrs Anna

      Clark, Sir W. (Croydon S)

      Macfarlane, Neil

      Clarke, Rt Hon K. (Rushcliffe)

      MacGregor, John

      Conway, Derek

      Maclean, David John

      Coombs, Simon

      McQuarrie, Albert

      Cope, John

      Major, John

      Couchman, James

      Malins, Humfrey

      Currie, Mrs Edwina

      Maione, Gerald

      Dicks, Terry

      Marlow, Antony

      Douglas-Hamilton, Lord J.

      Mates, Michael

      Dunn, Robert

      Maude, Hon Francis

      Durant, Tony

      Mawhinney, Dr Brian

      Eggar, Tim

      Mayhew, Sir Patrick

      Emery, Sir Peter

      Mellor, David

      Evennett, David

      Meyer, Sir Anthony

      Eyre, Sir Reginald

      Mills, Iain (Meriden)

      Fallon, Michael

      Mills, Sir Peter (West Devon)

      Farr, John

      Moate, Roger

      Favell, Anthony

      Moore, John

      Fenner, Mrs Peggy

      Moynihan, Hon C.

      Forman, Nigel

      Murphy, Christopher

      Forth, Eric

      Needham, Richard

      Fowler, Rt Hon Norman

      Nelson, Anthony

      Franks, Cecil

      Nicholls, Patrick

      Freeman, Roger

      Onslow, Cranley

      Gale, Roger

      Page, Richard (Herts SW)

      Galley, Roy

      Parris, Matthew

      Garel-Jones, Tristan

      Peacock, Mrs Elizabeth

      Glyn, Dr Alan

      Porter, Barry

      Goodhart, Sir Philip

      Powell, William (Corby)

      Goodlad, Alastair

      Powley, John

      Gorst, John

      Prentice, Rt Hon Reg

      Gow, Ian

      Price, Sir David

      Gower, Sir Raymond

      Proctor, K. Harvey

      365

      Pym, Rt Hon Francis

      Temple-Morris, Peter

      Raison, Rt Hon Timothy

      Terlezki, Stefan

      Rathbone, Tim

      Thomas, Rt Hon Peter

      Renton, Tim

      Thompson, Donald (Calder V)

      Rhodes James, Robert

      Thompson, Patrick (N'ich N)

      Rhys Williams, Sir Brandon

      Thornton, Malcolm

      Ridley, Rt Hon Nicholas

      Thurnham, Peter

      Ridsdale, Sir Julian

      Townend, John (Bridlington)

      Robinson, Mark (N'port W)

      Tracey, Richard

      Roe, Mrs Marion

      Twinn, Dr Ian

      Rowe, Andrew

      van Straubenzee, Sir W.

      Ryder, Richard

      Viggers, Peter

      Sainsbury, Hon Timothy

      Waddington, David

      Sayeed, Jonathan

      Wakeham, Rt Hon John

      Shaw, Sir Michael (Scarb')

      Waldegrave, Hon William

      Shelton, William (Streatham)

      Walden, George

      Shepherd, Colin (Hereford)

      Walker, Bill (T'side N)

      Shepherd, Richard (Aldridge)

      Waller, Gary

      Sims, Roger

      Ward, John

      Skeet, T. H. H.

      Wardle, C. (Bexhill)

      Smith, Sir Dudley (Warwick)

      Watson, John

      Soames, Hon Nicholas

      Watts, John

      Spencer, Derek

      Wells, Bowen (Hertford)

      Spicer, Jim (W Dorset)

      Wells, John (Maidstone)

      Spicer, Michael (S Worcs)

      Wheeler, John

      Stanbrook, Ivor

      Whitfield, John

      Stern, Michael

      Wolfson, Mark

      Stevens, Lewis (Nuneaton)

      Wood, Timothy

      Stevens, Martin (Fulham)

      Woodcock, Michael

      Stewart, Allan (Eastwood)

      Young, Sir George (Acton)

      Stewart, Andrew (Sherwood)

      Stradling Thomas, J.

      Tellers for the Noes:

      Sumberg, David

      Mr. Michael Neubert and Mr. Ian Lang.

      Taylor, Teddy (S'end E)

      Tebbit, Rt Hon Norman

      Question accordingly negatived.

    New Clause 7

      RETIREMENT OF TENANT FARMERS FROM AGE 65
      `The following shall be added at the end of subsection (3) of section 2 of the Agricultural Holdings (Notices to Quit) Act 1977—
      "Case J

      `(a) at the date of the operation of the Notice to Quit, the tenant uner a tenancy agreement which had been entered into after enactment of this Act, had passed the age of 65;

      (b) the tenenacy agreement had provided that this 'Case' shall apply to the tenancy;

      (c) for the purposes of this 'Case', a Notice of Retirement shall not take effect for two years from the next term date following the service of the Notice;

      (d) the tenant, who is a party to a tenancy agreement to which this 'Case' applies, shall on retirement be paid compensation based on two years' rent, irrespective of whether the tenant serves a Notice to Quit after receiving a Notice to quit under this 'Case'.".'.—[Mr. Hunter.]

      Brought up, and read the First time.
      Mr. Andrew Hunter: I beg to move, That the clause be read a Second time.
      After the drama generated by the debate on new clause 6, I feel that matters can now only go into something of a decline.
      The few hon. Members who laboured through the heat of the day in Standing Committee may recall that I moved an amendment in Committee which differed greatly in wording from the new clause now before the House, although the basic motives and objectives were the same. My hon. Friend the Minister listened sympathetically and replied at great length to the amendment which I moved in Committee, stating that there were circumstances in
      366
      which he "would be happy to table a suitable amendment on Report." It was, therefore, with great regret that I noted his failure to do so. Even at this late stage I hope and plead that he will take on board the sentiments, motives and principles underlying this new clause.
      During the consideration of the Bill in another place, and on Second Reading and in Committee here, it was stated ad nauseam that the purpose of the Bill was to restore health to the tenanted sector of the farming industry. That can be achieved only by inducing landlords to release farms which hitherto they would have taken, or might take, in hand, or farm in partnership themselves. I contend that by introducing the concept of retirement the new clause will speed up the turnover of tenanted farms and bring fresh tenancies on to the market to as great an extent as the abolition of future three-generation successions.
      The purpose of the new clause can be summarised very simply. It is to provide the landowner and the prospective tenant with an option—I stress that word—to include a retirement clause in a new tenancy agreement. It will enable the landlord, at his discretion, to serve a notice of retirement on a tenant, after that tenant has passed the age of 63, by means of an incontestable notice to quit under section 2 of the Agricultural Holdings (Notices to Quit) Act 1977. The relevant age is 63 because the new clause provides that two years' notice must be given.
      I stress again that there is no question of one-sided compulsion. There must be prior agreement between the parties that the tenancy will include such a retirement provision, so that both parties would enter into the agreement with a clear understanding of that provision and the tenant would thus not be subject to any element of compulsion. The tenant would have two years' notice of retirement in recognition of the need for adequate planning and timely liquidation of assets, having regard to national and fanning economic circumstances. In other words, it will safeguard the retiring tenant farmer from being compelled to retire in circumstances such as those currently—one hopes temporarily—prevailing in which the liquidation of certain fanning assets would bring depreciated returns. Furthermore, under the new clause the tenant would receive outgoing compensation based on two years' rent.
      I shall briefly outline the arguments in favour of introducing the option—again I stress the word "option"—of a system of retirement. First and foremost, it would be an added inducement to landowners to let, rather than taking vacant farms in hand, and would thus represent a real move towards making more farms available for letting in accordance with the Bill's aim, which both sides of the House willingly accept. On the other hand, if we did not introduce any system of retirement, landlords might continue to let vacant land to neighbouring established farmers or to amalgamate it with other land, simply to avoid the creation of other long-term tenancies.
      Obviously the effect of the system of retirement would be to limit the lengths of tenancies. That, in itself, would give more people the chance of farming, and tenancies would become available years earlier than occurs under present legislation, which of course provides for succession only on the death of the tenant.
      There are also other advantages to a retirement system. It has most of the benefits of a term tenancy for the landlord, yet it is acceptable to tenants—witness the championing of the new clause by the Tenant Farmers

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      Association. Incidentally, I hope that my hon. Friend the Minister will pay heed to my suggestion that every effort should be made to enable the Tenant Farmers Association to contribute to our national debates on farming matters. I have very much valued the assistance and briefing that I and other Committee Members received from that association.
      A system of retirement would also take much of the uncertainty out of tenancy arrangements, both for the landlord and for the tenant. The landlord would know for how long, at the most, his land would be tenanted. If he wished, he could hold out the option of taking the land back and could offer the tenancy to an older man. On the other hand, the tenant would know exactly where he stood and he could plan for retirement, which sadly many tenant farmers cannot do at present.
      A retirement system would remove the problem of an elderly tenant finding it increasingly difficult to cope, running up heavy dilapidations, and getting bitter about a rent which he cannot afford even though, in all probability, it is artificially low. For the landlord, it would overcome the problem of seeing a tenanted farm deteriorate. Clearly the well-wishing and well-meaning landlord would not want to appear to be too hard on an aging tenant.
      It is relevant to recall that new clause 6 has already been added to the Bill. It enables county councils, in respect of new tenancies, to retire their smallholding tenants at the age of 65. For the life of me I cannot understand why what should be acceptable for county council smallholding tenants is not likewise acceptable for the broader spectrum of tenants. The new clause is, therefore, entirely consistent with the retirement policy for county council tenants. Its application to tenants generally would be more flexible, as landlords would have discretion to operate retirement from the age of 65, and tenants would not be subjected to compulsion. The tenants would enter into an agreement with the prior knowledge that the tenancy could, at two years' notice, be terminated after he had passed the minimum age of 65.
      In the wider discussion and debate generated by the Bill, some concern has been expressed about the effects of a retirement system on small tenanted farmers, particularly in the west country and Wales. I stress once again that this system of retirement would not apply to existing tenants and tenancy agreements. The liquidation of assets and compensation based on two years' rent would amount to a very appreciable topping up of any individual pension arrangements into which a tenant farmer had been able to enter. In particular, the next generation of tenant farmers to whom a retirement policy would apply are likely to be young, well-qualified, trained and highly-educated agriculturists, and there is every reason to believe that they would expect to carry the responsibility of meeting their own pension requirements.
      I rest my case on these observations. I argue that a retirement system is just and equitable. If we are serious in our desire to give fresh life to the tenanted sector of the farming industry, a retirement system is essential.
      8.15 pm
      Mr. Deakins: The hon. Member for Basingstoke (Mr. Hunter) is to be congratulated on bringing this issue before the House during the Report stage of such an important Bill. I have some sympathy with what he seeks to achieve, but, despite his meticulous explanation, I still have some
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      doubts about the advantage to the tenant of his proposal. He spelled out very clearly the advantages to the landowner, but the advantages to the tenant are not so clear. The hon. Gentleman made great play of the fact that the landlord and tenant, meeting as free and equal people in the sphere of commercial activity, would have the option whether to include such a provision in a tenancy agreement. However, if a would-be tenant did not like such a provision, the landlord would not necessarily say, "I give up my right to have this provision in the tenancy agreement." In this rather harsh commercial world, he is much more likely to say, "Fair enough; I'm afraid that, if you don't accept the tenancy term, I will not have you as my tenant. I'll wait until someone else comes along who will accept the tenancy term." That is most likely to happen.
      The hon. Gentleman may have been a little unfair on the older generation of farmers. I thought that farming was one of those occupations where experience counted for a great deal, even though, with modern technical knowledge, younger people are likely to be more up to date in their approach. Nevertheless, one should not entirely discount the value of experience. If the new clause was accepted, we might be on our way towards setting up a new system of tied housing. I am worried about the housing implications of the hon. Gentleman's proposal. At the age of 63 or 65, the tenant farmer would obviously have to quit the tenancy, which would mean leaving the farm so that someone else could take over. But would he not be in the same position as the farmworker was in under the tied cottage system? I hope that the hon. Gentleman will elucidate that point, as I am worried that we might be getting into the very situation that we managed to get out of after 20 or 30 years of hard work, particularly on this side of the House.
      Mr. Maclean rose——
      Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Member for Walthamstow (Mr. Deakins) has concluded his speech.
      Mr. Leigh: I support the new clause proposed by my hon. Friend the Member for Basingstoke (Mr. Hunter). It is a useful new clause, and I can well understand the sentiments that prompted him to move it. The 1977 Bill was a disaster for new tenancies, and what is called for is a lion of a Bill to create new opportunities, especially for young farmers. In fact, it is a mouse of a Bill that will do little to create the opportunities needed.
      However, I understand the Government's difficult dilemma, hoist as they are between the Country Landowners Association and the National Farmers Union. It is not wise to have government by pressure groups, even those as distinguished as the CLA and the NFU. However, I can understand the difficulties in which the Government would find themselves if the new clause was accepted.
      The spirit behind the clause is worthy, and I hope that my hon. Friend the Minister will take the opportunity to make positive noises about retirement provision. Of course term tenancies have disadvantages — a man in his twenties taking on a term tenancy would have to give it up 20 years later, in his mid-40s. and would be left without livelihood, security or a home. But that argument does not apply to retirement tenancies. I take the point made by the hon. Member for Walthamstow (Mr. Deakins) that it might be a weapon for the landlord who might turn to

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      another tenant. Surely it is as likely that he will take the land in hand. We are trying to create new opportunities and tenancies. The new clause would help to achieve that aim.
      If the new clause is accepted, farmers would probably be the only self-employed people who would be required to retire at 65. Farmers occupy a unique position in any event. It is logical and sensible that people should plan for their retirement. Their sons or the people who might follow them as holders of the tenancies should be able to plan for that day also. For the life of me, I cannot understand why farmers, like other people, should not plan for the future and for their 65th birthday.
      Sir Peter Mills: I congratulate my hon. Friend the Member for Basingstoke (Mr. Hunter) on proposing the new clause. It is right and proper that he should do so. In principle, I am in favour of retirement at 65. I also congratulate the Tenant Farmers Association on its brief and on the way in which it has handled the case. I agree with my hon. Friend that we must listen carefully to what it says. It has shown clearly how responsible it is in these matters.
      It is not unusual for people to have to retire at a certain age. Looking at some hon. Members, it might be better if Members of Parliament had to do so. I do not know why such a rule should not apply to agriculture. I do not understand the NFU's objection and, quite frankly, I do not understand the attitude of some of my farmers in the south-west. I believe that the new clause would be helpful.
      The brief from the Tenant Farmers Association puts forward an option—there is nothing compulsory about it. It mentions added inducements to landowners to let vacant farms rather than take them in hand. That is what the Bill is about—it is an inducement to allow more tenant farming. The new clause could help that aim.
      The Tenant Farmers Association brief suggests a limit to the length of tenancies, which would give more people the chance to farm and would create more mobility. I agree with that. One of the parts of the brief that I liked best was where the suggestion that the son or the person expected to take over the tenancy could plan his future in the knowledge of the term of the tenancy, rather than having to gamble on whether the existing tenant would continue to a very old age. In the south-west of England I have often come across an elderly looking gentleman who, when I have asked whether he is the farmer, has replied, "Oh no, I am the farmer's son"—yet he is 50 or 55. The aged tenant goes on and on. I confess that a relative of mine did exactly that. When it came to the time of his retirement, his son was almost of retirement age himself. There is a real case for the new clause.
      My hon. Friend is absolutely right to say that it is important that farmers should think in a businesslike manner about their retirement. The new clause highlights the importance of taking steps towards that. I declare an interest because I am connected with insurance. It is important that, at the end of their days, tenant farmers have a lump sum through endowment or whatever means to provide for their future so that they do not have to hang on to their tenancies. Both landlord and tenant should contribute to some pension scheme so that the tenant is not turned out of the farm with no house because he cannot afford to buy one. Under a proper scheme, he would have provision for his future.
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      I hope that the Minister will consider the new clause carefully. He should not take too much notice of the NFU. It is not often that I speak against the NFU, but in this case it would be wise for my hon. Friend the Minister to think seriously about the new clause. It may not be correctly drafted, but I hope that my hon. Friend will consider it carefully because it is a reasonable proposition.
      Mr. Jackson: I support the new clause moved by my hon. Friend the Member for Basingstoke (Mr. Hunter). It is a pity that we all feel constrained to be brief about this important subject. If the new clause were to be included in the Bill, it would do more than almost anything else to achieve the Government's objectives.
      I do not want to repeat the arguments that have been so well put about the way in which the new clause would promote mobility and make more land available for tenancy. I want to address the question of its effects on small tenant farmers. The simple answer to the objection raised on this score by the NFU and others is that the new clause would affect only new tenancies. All existing tenants would be unaffected. They could pass on their tenancies to their successors, and if they did not have successors they could retain the tenancy until they died. All tenants and landlords would be able to enter into contracts providing for retirement, if they so chose, with their eyes open. If the holding was too small to support the setting aside of a proportion of the income towards provision for retirement, the landlord could not in practice then insist on a retirement clause, for he would not be able to find a tenant to take on the land on that basis.
      The new clause may look like the imposition of a measure of compulsion — admittedly it sounds like compulsion to say "retirement at 65"—but in reality it is a blow for liberty, a blow for the principle of freedom of contract. I do not understand why we should continue to deny the freedom of tenants to enter an arrangement, with their eyes open, through which they could retire at 65. The new clause accords that freedom of contract to tenants and to landlords, and I hope that the House will support it. If it does not, I hope that the Government will take the opportunity to think again in the future, because the new clause, more than any other measure, would advance the purposes which the Government claim for the Bill.
      8.30 pm
      Sir Paul Hawkins: Virtually everything that needs to be said on the subject has been said, and said well, and there is little for me to do in addition to congratulating my hon. Friend the Member for Basingstoke (Mr. Hunter) on moving the new clause. I agree with others that its inclusion in the Bill would have a profound effect.
      I have corresponded with the Tenant Farmers Association since its birth, I have met its members on several occasions and I have concluded that it is a forward-looking organisation which has organised first-class meetings and prepared excellent briefs for hon. Members.
      The whole of agriculture must begin to look forward and stop considering only the troubles of the past and how they affect the immediate future. There is more to farming than next year's price review. We must look 10 to 15 years ahead and lay foundations for the young farmers who will be the tenants and owner-occupiers of the future. The Tenant Farmers Association and my hon. Friend the Member for Basingstoke have performed a service in putting the spotlight on this issue. I feel sure that the

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      Minister would like something to be done on the lines of the new clause. I hope that he will find ways of introducing the principle of it.
      The question of housing worries the hon. Member for Walthamstow (Mr. Deakins). People in many trades and professions make arrangements to buy homes, especially as they look forward to their retirement. Policemen, teachers, bank managers and many others, well before retirement, arrange to buy their own homes. I see no reason why the farming community should not do the same. Bearing in mind the pension and other arrangements that the self-employed can make, the lump sums that can be received and the way in which mortgages, at least at present, are readily available, any problems that exist could be overcome. I hope that the Minister's reply will be encouraging.
      Mr. Maclean: I, too, support my hon. Friend the Member for Basingstoke (Mr. Hunter) and congratulate him on the splendid way in which he moved the new clause.
      I regret that the Government have rejected term tenancies, although I appreciate their reason for doing so. As my hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins) said when we debated an earlier amendment, having found unanimity between the NFU and the CLA, the Government were right to seize that unique opportunity and bring an NFU-CLA package before the House. However, I hope that once the Bill becomes law we shall not wait another eight years before looking at some other aspects of landlord and tenant law.
      I also hope that the Government will soon come up with some answers to the problems of term tenancies and will give further thought to the whole question of retirement, the subject having been raised by my hon. Friend the Member for Basingstoke. After all, the new clause would offer the next best thing to a term tenancy. It is acceptable to landlords, and it is clear that tenants want such a provision. It would provide a degree of certainty; landlord and tenant would know when the tenancy would come to an end and could plan accordingly.
      The hon. Member for Walthamstow (Mr. Deakins) wondered what advantages there would be for the tenant. Perhaps it is not up to us to elucidate all the advantages. If a freely consenting landlord and tenant want to enter into a scheme of this type, let us allow them that freedom of contract. It is clear that this system would not be imposed over the whole of landlord and tenant law. Perhaps only a limited number would wish to apply it. Is it our duty in Parliament to prevent people from doing what they freely want to do?
      My hon. Friend the Member for Basingstoke has proposed a completely optional scheme. It does not refer to tenancies created under the 1976 Act or to tenancies that will have been created under this Bill. It would be for landlord and tenant to enter into. Perhaps it has not been sufficiently stressed in this debate that agreement between both parties would be essential.
      Hon. Members have pointed out that prior to the Bill there were years of discussion and consultation with the CLA and NFU. When we next come to look at the reforms that are necessary in landlord and tenant legislation, I hope with other hon. Members that we shall spread the net more widely and take into account the views of the young farmers' associations. Whenever we debate these issues, much is said about the first rung on the ladder—the
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      need to get young people into farming—so we have a duty to consult those young people, for they have a wise view to put forward. I echo the comment of my hon. Friend the Member for Norfolk, South-West that we must consult the Tenant Farmers Association. It and the young farmers have a valid view and we should not disregard it.
      Mr. Mark Hughes: I do not wish to introduce a note of sadness—because I welcome the new clause—but I fear that I could not ask my hon. Friends to support the hon. Member for Basingstoke (Mr. Hunter) should he press the matter to a Division. At this stage in the Bill, after the discussion that we had in Committee, major problems arise concerning quitting farming to retire. They need more careful consideration in the context of new tenancies which, as the hon. Member for Basingstoke said, are entered into freely by landlords and tenants.
      My hon. Friend the Member for Walthamstow (Mr. Deakins) spoke of problems over housing. There are others. There is the whole question of how free such agreements would be for new tenants. Would it not be difficult for a prospective tenant to turn down such an arrangement and still expect to obtain the tenancy? We all accept that one way of making tenant farms available is to ensure that there is an exit at retirement, rather than only at death. However admirable the principle, I am not satisfied that what the new clause proposes is the proper exit mechanism.
      The hon. Member for Torridge and Devon, West (Sir P. Mills) said that it might be necessary to concentrate in the future on a landlord contribution to a retirement scheme. There is a whole range of possibilities as to how one gets rid of antique tenant farmers. I echo what he said about the age of some farmers. It is possible to meet a septuagenarian and imagine that he is the tenant, only to have him say, "You want my old dad, who is 97."
      I echo the plaudits that have been given to the Tenant Farmers Association for the aid that it gave to members of the Standing Committee. It has been a great relief to have had advice from that association as well as from the NFU when dealing with a Bill such as this. I must very reluctantly advise my hon. Friends to abstain from voting in favour of the new clause, if the hon. Gentleman forces it to a Division. We accept deeply the need for completely adequate retirement provisions at 65, whether for housing, pension arrangements or pension funding. We accept that if more tenancies are created there must be a proper exit arrangement prior to death.
      With the greatest deference to the hon. Member for Basingstoke, I do not believe that the new clause effects adequately the desire that we have in common: to provide adequate retirement provision for tenants, whether of new or existing tenancies. I do not want to see two classes of tenants, one with adequate retirement provision and the other without it. Therefore, I must advise my hon. Friends not to vote on the new clause.
      Mr. MacGregor: Having disagreed about small-holdings with my hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins) earlier in the debate—we have disagreed on the issue for some years—I must say that I very much agree with the need to look ahead in agriculture in the next 10 to 15 years and provide for the new entrants with vision, based on realism. That is right. It is something to which my right hon. Friend and I are

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      devoting much of our time. I hope that we are doing something about it. I entirely agree with my hon. Friend the Member for Norfolk, South-West on that point.
      I recall, as my hon. Friend the Member for Basingstoke (Mr. Hunter) said, that we had a lengthy debate in Committee on his new clause, which was similar in intent, but not in detail, to new clause 7. We have had a good and useful, although inevitably short, debate. It does not matter too much that it has been short, because we had such a long debate in Committee. To some extent, this debate has moved the arguments along.
      As my hon. Friend knows, I was attracted by the proposal because I am keen to do anything to increase the flow of tenancies. I was impressed by the arguments put forward. I entirely agree with my hon. Friends and with the hon. Member for the City of Durham (Mr. Hughes) about the way in which the Tenant Farmers Association has put forward the idea. It has done so constructively and sensibly, and argued the case coherently. I know that it has support in principle among many farmers and clearly among some of my colleagues in the House.
      At the end of the debate in Committee I gave an undertaking to discuss further the important issue with the industry to find out whether it would be possible to reach agreement on a form of retirement provision which had broad industry support. I stressed then that I saw drawbacks, although I entered into the discussions in a constructive spirit. I have as a result had further discussions with the NFU and the Tenant Fanners Association, which are the main organisations representing tenants' interests. As has been made clear by some of my hon. Friends, the NFU has given much consideration to the problem, but in the end has come out firmly against the proposal.
      I share the view of my hon. Friends that it is up to the Government and to the House to put forward proposals for legislation. Although the NFU does not seem to me to be representing the views of all farmers, we must take account of the fact that many farmers—some of whom have expressed the view to me personally as I have travelled around the country—are very strongly against the proposal and deeply worried by it.

      8.45 pm
      One reason why we must reconsider the proposal is that it has emerged and developed fairly late in the discussions; indeed, even as late as in the parliamentary debate on the Bill. Secondly, we all recognise that the agriculture industry is going through a period of considerable uncertainty, especially with the need to check the costs of disposing of the surpluses produced by the CAP. If the proposal has not been fully thought through and is therefore likely to create further uncertainty and worry in the farming industry in general, and if there are still real divisions in the farming industry, we must think carefully before deciding to impose further problems and uncertainties on the industry.
      Mr. Jackson: If my hon. Friend thinks that this is a good idea but that the problem lies in the relatively late stage at which the matter has come to the surface in the debate, will he tell the House what steps he could take to bring the issue back to the House for consideration so that we could make a positive decision on the matter?
      Mr. MacGregor: I shall deal with that point at the end of my remarks.
      I have been undertaking discussions, and I recognise the efforts of my hon. Friend the Member for Basingstoke to meet some of the drawbacks that were spoken of in Committee, but problems remain, although I congratulate my hon. Friend on what he has done. There is much force in many of the arguments that have been put forward. It is very helpful to have such a debate tonight.
      Some formidable problems remain. Let me address my mind to some of them. First, I refer to the point made by my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), although he did not regard the problem as insuperable. Tenant farmers would be the group of self-employed people required to retire at a specified age. I cannot think of any others off hand but, as the Minister who formerly dealt with the self-employed, I can think of a great many self-employed people who do not have to retire at a specified age.
      My hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) is quite right to say that these days it is not unusual for people to retire at the age of 60 or 65. That is happening increasingly throughout the community, particularly for company employees, including those in the public sector. However, it is not yet generally the case among the self-employed. We would be introducing a largely new principle for the self-employed if we introduced the principle now.
      Some problems are involved. We all know that one feature that is important to the self-employed is their independence and ability to decide their own destiny. It is also worrying that there is a difficulty about pension provisions. I recognise that the new clause refers only to new tenancies, so all people entering into such contracts will have plenty of time in which to plan. The worry about such provision comes through most strongly from farmers in areas where they are more likely to have low incomes, and where, although they have not fully taken on board the fact that it will apply only to new tenancies, they feel nevertheless that the same problem of providing for pensions would apply to their sons or daughters, as they embark upon new tenancies.
      One way of protecting themselves from that and of ensuring that they have an adequate income in old age is to be able to go on in their job after the age of 65. The final difference is that, on the whole, provisions are made in companies for retirement at 60 and 65, where the employer and the employee contribute to the company pension scheme. That would not be so in this case.
      I know that one of my hon. Friends has suggested that we should think about full tenancies, with contributions from landlords to pension schemes. That radical proposal will perhaps need to be considered in the light of proposals such as those before us. However, the argument is not sufficiently well developed to enable us to take that on board now.
      The second general problem is that my hon. Friend the Member for Basingstoke, who proposed the new clause, laid considerable emphasis on the fact that this retirement would be an option. He used that word several times. I know exactly why he did so. He was afraid that because of the supply and demand in tenancies it would turn out not to be an option, but would be an almost automatic clause in future tenancy contracts. It would amount to compulsory retirement.

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      There are arguments on both sides, but I believe that there are good arguments for saying that it would not be as easy an option as he has made out. We need to explore that point further.
      It has been suggested that it would be wrong to require a tenant farmer who has a major business investment in his farm effectively compulsorily to liquidate his assets on reaching the age of 65. My hon. Friend has tried to meet that problem with the two-year notice provision.
      Nevertheless, farming would probably still be the only industry involving such major investment where the investor would not be able to make his own decision about when to cease trading, even if he had two years to plan for it. There is the worry that he may have to liquidate his assets at a time that is not of his choosing. It might not be possible for him to realise them at an advantageous price, for reasons outside his control. For example, the immediate reaction after the imposition of quotas could not have been foreseen two years previously, when he was given notice. Therefore, there is a lack of freedom for him to be able to realise his own lifetime investment at the most advantageous time.
      Several other points were made by the NFU and others. I did not share all the fears that were expressed; for example, the fear that landlords would let to older tenants in their 50s so that they could ensure a tenancy for a relatively short fixed term. I do not think that that is how it would work out in practice, in most cases. Another difficulty is that there would be no obligation on the landlord to give an undertaking to a tenant whether, and if so when, he would serve a notice to quit based on retirement. The tenant would thus be in considerable uncertainty over when he would have to move to his retirement position. That is not dealt with in the new clause.
      Some of my hon. Friends and the hon. Member for Walthamstow (Mr. Deakins) referred to provision for alternative accommodation. Many farmers wish such provision to be made. It is in the clause on smallholdings. It is easier, in the case of smallholdings, to defend and justify that provision, because smallholdings belong to a local authority, even if housing is provided by a different local authority. There is no provision in the new clause for that alternative accommodation. It might be extremely difficult to achieve in practice. Nevertheless, many people are concerned about that.
      I could list a few more problems, but I think that I have touched on some of the major difficulties about the proposal. It is therefore with reluctance and regret that I cannot recommend my hon. Friends to allow the new clause to be included in the Bill. As I have said, there is much force in many of the arguments. Anything that will increase the flow of new tenancies is attractive, but even on that point there is the problem whether the flow of new tenancies would be increased by the measure. I have discussed the point with the Tenant Farmers Association. Neither it nor I have yet been able to find a satisfactory way around the difficulties of ensuring that there are new tenancies if there is a compulsory retirement on the farm. The new clause does not solve the problem.
      Obviously the subject will be debated much more. The way in which the debate and thinking are shifting is interesting, as we have seen today. However, it is a pity, in a way, that the debate has only just started to move in that direction, and it is difficult to try to deal with some of the objections at such a late stage in the passage of the
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      Bill. Therefore, I must reluctantly conclude that I cannot recommend the inclusion of the new clause, because it is our duty to put on the statute book clauses which are thought through and as free as possible of practical snags.
      I shall answer the point made by my hon. Friend the Member for Wantage (Mr. Jackson). I cannot give arty parliamentary commitments, but the fact that so many of my hon. Friends are thinking along these lines shows that the debate will not go away. I hope that the subject will continue to be discussed, and. if it is possible to overcome all the problems to which I have referred, it is likely that there will be greater uninimity and, who knows—I do not know when action could be taken, but I would not rule it out—we might reconsider the matter.
      Mr. Hunter: This has been an extremely profitable debate. I thank my hon. Friends for supporting the new clause. I shall withdraw it on the assurance and understanding that the debate has only just started, and will continue on another occasion.
      I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    Clause 1

      DETERMINATION OF RENT OF AGRICULTURAL HOLDING
      Mr. Mark Hughes: I beg to move amendment No. 1, in page 2, line 10, at end insert 'and the earning capacity'.
      Mr. Deputy Speaker: With this it will be convenient to take the following amendments: Government amendments Nos. 2 and 3.
      Amendment No. 4, in page 2, line 18, after 'holding', insert
      'and "earning capacity" in relation to the holding, means the net annual income which the holding is capable of generating (taking account of current economic factors and marketing and production constraints outside the control of the tenant)'.
      Government amendment No. 5.
      Mr. Hughes: I thank the Minister of State for the. amendments that he has tabled, which are grouped with my amendment. We had a long debate in Committee on the need to insert the words "and the earning capacity" into the rent formula. Everything that has happened in the dairy industry since the Bill went into Committee shows why it was essential to do so. The Opposition pressed the Government — with assistance, to be fair, from Conservative Members—to reintroduce earning capacity as part of the rent formula, when it had been removed for no good reason in another place. Therefore, we are grateful that in amendments Nos. 2, 3 and 5 the Government are reintroducing those words.
      Even at this 11th hour and 59th minute, the Minister should recognise that the wording of amendment No. 4 regarding the meaning of "earning capacity" is better and more applicable than the wording of Government amendment No. 5. Amendment No. 5 states:
      "'related earning capacity' means the extent to which, in the light of that productive capacity, a competent tenant practising such a system of farming could reasonably be expected to profit from farming the holding."
      I am sorry, but I am not satisfied that the sudden imposition of dairy quotas is covered by that definition in as satisfactory a way as under amendment No. 4.
      Therefore, while we must welcome the Government's sudden flush of reasonableness in accepting "earning capacity" in clause 1, I ask the Minister just to make

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      certain that his definition is the right one. We are satisfied beyond doubt that amendment No. 4 makes better sense than amendment No. 5. We do not wish to press amendment No. 1 to a vote, but I seek your advice, Mr. Deputy Speaker, about whether, were the Minister to reject amendment No. 4, we would be able to press it. I am satisfied that it would make better law if we chose amendment No. 4 rather than amendment No. 5.
      Mr. Henry Bellingham: The removal from the first draft of the Bill of the words
      "profit from farming the holding"
      provoked much criticism on Second Reading and in Committee. Therefore, I am grateful that the Government have kept their word and participated in this group of amendments. The uproar in the industry on all sides led to a lengthy debate, and at the time I did not see the reason for removing those words. I support the amendments. I agree with the hon. Member for City of Durham (Mr. Hughes) that the wording in amendment No. 4 is clearer than that in amendment No. 5. I would not go to the stake about it, but it is clearer in a number of important aspects, and I urge my hon. Friend the Minister to consider that.
      I applaud my hon. Friend for getting this part of the rent formula right. It is a package which depends on the rent formula and the succession clause. He has the rent clause formula right, but it is sad that he has not got the succession clause completely right. He could have done so by accepting new clause 2, but I shall not talk about that as it would be out of order.
      The debate on new clause 7 will not go away, nor will the debate on fixed-term tenancies. It will increase the flow of let land on to the market. I urge my hon. Friend to listen to the National Federation of Young Farmers Clubs, the Country Landowners Association and the many people in the industry who are talking more and more about the advantages of fixed-term tenancies. That debate will not disappear, and I urge him to consider it at a later stage.
      9 pm
      Mr. Maclean: I am delighted to support the Government on this group of amendments. It is essential that the term "related earning capacity" or something similar is put back into the Bill. Like my hon. Friend the Member for Norfolk, North-West (Mr. Bellingham), when I first saw the amendments I instinctively thought that the wording of amendment No. 4 was much clearer in meaning and concept than the Government's amendment No. 5—it worries me when I am in complete agreement with the Opposition. Will the Minister assure the House that, in the final analysis, after legal verbiage is cut away, amendment No. 5 means exactly the same as amendment No. 4? If that is the case, I heartily congratulate the Government. I hope that my hon. Friend will address himself to that point.
      Mr. MacGregor: We had long debates in Committee about these words and I gave a clear commitment in response to the debate, which I did willingly.
      The three Government amendments introduce a specific reference to earning capacity in relation to the productive capacity of the holding, without preventing an arbitrator from taking into account earnings from non-farming activities as a relevant factor. I shall explain the
      378
      amendments in more detail to make clear beyond doubt the Government's interpretation of the change and how the problems have been overcome.
      In determining the rent properly payable in respect of a holding, one especially relevant factor which the arbitrator must take into account under clause 1(3) will be the productive capacity of the holding and its related earning capacity. Amendments Nos. 3 and 5 define these terms. The earning capacity specifically relates to the holder's productive capacity. Under its terms it will include potential farm earnings within the limit of these definitions. That is fair.
      The related earning capacity does not include earnings from non-farming activities such as tourism. Where such earnings exist they would be one of the unspecified relevant factors which the arbitrator would be bound to take into account. We cannot start listing in the clause possible relevant factors because that would immediately raise doubts about which other factors might or might not be regarded as relevant for determining rent. The rent clause, therefore, spells out only specific relevant factors which apply in every case. The effect of the amended formula enables actual earnings from non-farming activities to be taken into account as relevant factors.
      I can give my hon. Friend the Member for Penrith and the Border (Mr. Maclean) the assurance he seeks. I sought guidance and advice from experts on these matters. I am advised that amendment No. 4 does not add anything to the amendments I propose. Both the National Farmers Union and the Country Landowners Association declared themselves content with the wording we have adopted. The points referred to in brackets in the Opposition's amendments are integrated in our amendments. For example, quotas affect earning capacity, and therefore where quotes exist, as they do in the dairy sector, they would be taken into account as a factor of earning capacity.
      I am advised that there is no need to be specific. If one starts to specify particular factors, others are left out. The hon. Gentleman probably thinks that he has thought of everything relevant, and perhaps he has. However, five years from now, there could be a problem when another factor becomes relevant. There is always a risk when one specifies particular factors and leaves others out. There is an inclination to think that the others are less important and less material, and that they should perhaps be disregarded.
      On that basis, I hope that the hon. Member for City of Durham (Mr. Hughes) will be content that my amendments match the commitments I gave in Committee and meet his points.
      Mr. Mark Hughes: I beg to ask leave to withdraw my amendment, and I support the Government's amendments.
      Amendment, by leave, withdrawn
      Amendments made: No. 2, in page 2, line 11, after 'holding', insert
      'and its related earning capacity'.
      No. 3, in page 2, line 14, leave out
      '"productive capacity", in relation to the holding'
      and insert
      ', in relation to the holding—
      (a)"productive capacity"'.
      No. 5, in page 2, line 20, at end insert
      ';and
      (b) "related earning capacity" means the extent to which, in the light of that productive capacity, a competent tenant practising such a system of farming could reasonably be expected to. profit from farming the holding.'.—[Mr. MacGregor.]
      Mr. MacGregor: I beg to move amendment No. 9, in page 4, line 23, at end insert—
      '(10A) Where under an agreement between the landlord and the tenant of the holding (not being an agreement expressed to take effect as a new contract of tenancy between the parties) provision is made for adjustment of the boundaries of the holding or for any other variation of the terms of the tenancy, exclusive of those relating to rent, then, unless the agreement otherwise provides—

      (a) that provision shall for the purposes of subsection (8) of this section be treated as not operating to terminate the tenancy, and accordingly as not resulting in the commencement of a new contract of tenancy between the parties; and

      (b) any increase or reduction of rent solely attributable to any such adjustment or variation as aforesaid shall be disregarded for the purposes of paragraph (b) of that subsection.'.

      Mr. Deputy Speaker: With this it will be convenient also to consider Government amendment No. 10.
      Mr. MacGregor: I am pleased to be able to bring these amendments before the House in fulfilment of my undertaking in Committee to my hon. Friend the Member for Milton Keynes (Mr. Benyon). These amendments go beyond the specific point raised by him, which was about the effect of the boundary changes on the triennial rent review, and cover other variations in the terms of the tenancy which could pose a similar trap. It could be, for example, the introduction of a conservation covenant with a consequential reduction in rent. I am sure that we would wish to encourage the introduction of conservation convenants and, therefore, it is right to remove a possible obstacle such as the one I have just described.
      Amendment No. 9 provides that adjustment of boundaries or any other variation in the terms of the tenancy, except those relating to rent, will not for the purpose of section 8(8) of the Agricultural Holdings Act 1948 constitute a new contract of tenancy, and a variation of rent on those grounds will not trigger the start of a new three-year rent cycle.
      Amendment No. 10 removes new section 8(11)(d) which becomes superfluous. I am grateful to my hon. Friend for raising the point.
      Mr. W. Benyon: I should like to say how grateful I am to my hon. Friend the Minister for fulfilling his pledge. I firmly believe that the amendment covers the point that I made in Committee.
      Amendment agreed to.
      Amendment made: No. 10, in page 4, line 37, leave out from '1977' to end of line 43.—[Mr. MacGregor.]

    Clause 3

      AMENDMENT OF PROVISIONS RELATING TO STATUTORY SUCCESSION IN CASES NOT EXCLUDED BY SECTION 2
      Mr. MacGregor: I beg to move amendment No. 12, in page 7, line 28, leave out
      'within the meaning of Part II of the Agriculture Act 1967'
      and insert
      'from "within" to the end of the paragraph'.
      Mr. Deputy Speaker: With this it will be convenient to consider Government amendments Nos. 13 to 16, 29, 35, 40, 44, 69 and 77.
      Mr. MacGregor: It looks a formidable list of amendments but in fact they are in response to debates in both Houses on amendments from the Agricultural Law
      380
      Association, and fulfil the undertaking that I gave in Committee on 10 April. I am grateful for the association's help in tackling this complex problem.
      We are dealing with the operation of the commercial unit occupancy test. The purpose of the test is to ensure that a would-be successor, who already farmed a commercial unit, should not be eligible to succeed to a tenancy under part II of the Agriculture Act 1967.
      The existing provisions in relation to the test are imprecise and have given rise to various anomalies as well as providing scope for evasion. Having looked into the matter, I feel that it is now right to clarify the law. To do so will be in step with other provisions which were added to the Bill much earlier, which are now incorporated in the group of amendments being considered. It will ensure that in the case of a multiple holding a would-be successor may succeed to no more than one holding of commercial unit size. It is designed to make more tenancies available, but it must be done with equity. The new group of amendments is designed to achieve that.
      The matter is rather complex, and I could, if required, go over the various paragraphs, but as the amendments probably have the support of the House I shall not do so unless anyone wishes to raise them with me.
      Mr. Bellingham: I proposed a number of these amendments in Committee on behalf of the Agricultural Law Association, and it is extremely pleased with what the Government have come up with. One point has been made to the Minister which I should like to repeat. It is the association's fear about paragraph (2) of the proposed new schedule 3A because it does not deal with the case where a survivor is granted an unprotected interest in a commercial unit by a member of his family, other than a spouse, such as the parent, brother or sister, nor does it deal with the case of a family farming company controlled by brothers or sisters. The legal advisers of a farming family could arrange affairs so that the succession could be assured. I know that the point has been made to the Minister, but it is the only point about which the ALA remains worried.
      Mr. MacGregor: I recognise that this is a very complex area of the law. I think we have made it better than it was. It may not be possible to make it perfect. I think that this is the first time that this point has been put to me, and I have not had an opportunity to study it. If it is legitimate and if we can incorporate it in the Bill there will be a last opportunity to do so. I hope that my hon. Friend will support the amendments as they stand.
      Amendment agreed to.
      Amendments made: No. 13, in page 8, leave out lines 24 to 33 and insert—
      '(3C) Schedule 3A to this Act, which specifies—

      (a) kinds of occupation that are to be disregarded for the purposes of paragraph (c) of the definition of "eligible person" in subsection (2) above; and

      (b) circumstances in which a person is deemed to be in occupation of land for those purposes;

      shall have effect.'.
      No. 14, in page 8, line 44 leave out from 'any' to end of line 2 on page 9 and insert 'relevant land'.
      No. 15, in page 9, line 8 at end insert—
      'In this subsection "relevant land" means agricultural land which is—

      (a) occupied by any person falling within the said paragraphs (a) to (d) (whether he is, where the request is made by a person so falling, the person making the

      381
      request or not); or

      (b) the subject of an application made under section 20 of this Act by any such person.'.

      No. 16 in page 9 leave out lines 9 to 12. —[Mr. MacGregor.]

    Clause 6

      AMENDMENTS WITH RESPECT TO CASES EXCEPTED FROM RESTRICTION ON OPERATION OF NOTICES TO QUIT
      Mr. MacGregor: I beg to move amendment No. 18, in page 11, line 28 leave out 'was' and insert 'is'.
      This is a small amendment but it covers a significant point. The new case I inserted by clause 6(6) provides, subject to certain conditions, for compulsory retirement at age 65 for tenants of statutory smallholdings in relation to new tenancies granted after commencement.
      The amendment makes clear that the right to serve an incontestible notice to quit under case I belongs only to a smallholdings authority. If the authority sells the land the new landlord, if he is not a smallholdings authority, does not acquire with the holding the right to impose retirement on the tenant. That right ceases when the ownership changes hands.
      I repeat that this is in relation to new tenancies granted after commencement. It will ensure equity amongst tenants of non-statutory smallholdings in relation to retirement.
      Amendment agreed to.
      Mr. Weetch: I beg to move amendment No. 19 in page 11, line 38 at end insert—
      '(bb) the smallholdings authority or the Minister intends to re-let the holding as a smallholding in pursuance of Part III of the Agriculture Act 1970 and has entered into a contract of tenancy with a prospective tenant contingent only upon the notice to quit taking effect; and'.
      Mr. Deputy Speaker: With this it will be convenient to discuss amendment No. 20, in page 11, line 38 at end insert—
      `(bb) the smallholdings authority or the Minister intends to re-let the holding as a smallholding in pursuance of Part III of the Agriculture Act 1970 within six months of the notice taking effect; and'.
      Mr. Weetch: I intend to be brief, so as to keep up the speed which we seem to have acquired of late. Both amendments are concerned with restrictions on the operation of notices to quit. In effect, the amendments would add conditions to the illustrations in subsection (6). A council should be restrained from requiring a tenant to quit if it is not prepared to re-let the land to another tenant. The amendments are alternative ways of preventing councils from operating the retirement provision unless they intend to re-let the smallholding. I do not think that it is incumbent upon me to explain this further, because it is abundantly clear what the amendments are about.
      The only point that I would make is that the amendments have been thoroughly considered by the NFU, which has given both approaches a great deal of scrutiny and study. I put it to the Minister that he could accept either of these conditions, or else suggest an alternative.
      Mr. MacGregor: I can understand the hon. Gentleman's objectives in moving these amendments,
      382
      which, as he indicated briefly, stem from a desire to ensure that where a smallholdings authority takes advantage of the retirement provisions for its tenants it does so to enable a new tenant to take over the holding, rather than to obtain vacant possession for subsequent sale or whatever. It brings us back, however, to a point of principle which we have sought to defend many times during debate on the provisions of the Bill, as well as during our discussion on new clauses 1 and 3, that management decisions on the efficient organisation of a smallholdings estate should be taken by the smallholdings authority concerned without undue interference from central Government. In reaching their decisions I am sure that local authorities will take full account of the interests of their tenants, current and prospective, and the need to provide some degree of movement within their estates.
      It is, however, perfectly possible that, on the retirement of certain tenants, the good of the estate as a whole is best served by the sale of the land comprising that holding, and the use of the proceeds to maintain and improve buildings and equipment on remaining holdings. The smallholdings authority should be able to pursue that option.
      In line with the general belief that discretion about smallholdings should be left to the local authority, if the amendment is pressed to a Division I shall urge my hon. Friends to vote against it.
      9.15 pm
      Mr. Robert Hughes: I listened to the Minister with disappointment. I agree that local authorities should be allowed the greatest possible autonomy, but the possibility of retirement at 65 is a new provision for new tenancies. The Government are making that change.
      The Bill's intention is to make more tenancies available and the purpose of retirement at 65 is to accelerate the turnover of tenancies, if only by a couple of years. The Government should provide protection to ensure that a tenancy which becomes vacant as a result of retirement at 65 should be available for relet. I hope that the Minister will think afresh.
      It is for my hon. Friend the Member for Ipswich (Mr. Weetch) to decide whether to force the amendment to a Division, but if he does he can count upon my support. I think that we should force the matter to a Division. The Minister should accept the amendment. It was urged upon us by the NFU, which feels strongly about it.
      Mr. Weetch: I was disappointed at the Minister's reply. He could have been more flexible on the issue of principle. I have no alternative but to press the amendment to a Division.
      Question put, That the amendment be made:—
      The House divided: Ayes 97, Noes 180.

      Division No. 351]

      [9.17 pm

      AYES

      Anderson, Donald

      Cocks, Rt Hon M. (Bristol S.)

      Archer, Rt Hon Peter

      Concannon, Rt Hon J. D.

      Ashton, Joe

      Cook, Robin F. (Livingston)

      Banks, Tony (Newham NW)

      Craigen, J. M.

      Beckett, Mrs Margaret

      Crowther, Stan

      Beith, A. J.

      Cunliffe, Lawrence

      Bermingham, Gerald

      Dalyell, Tarn

      Blair, Anthony

      Davies, Ronald (Caerphilly)

      Brown, Hugh D. (Provan)

      Davis, Terry (B'ham, H'ge H'l)

      Callaghan, Jim (Heyw'd & M)

      Deakins, Eric

      Campbell-Savours, Dale

      Dixon, Donald

      Clark, Dr David (S Shields)

      Dormand, Jack

      Clay, Robert

      Douglas, Dick

      383

      Dubs, Alfred

      Maxton, John

      Dunwoody, Hon Mrs G.

      Maynard, Miss Joan

      Eadie, Alex

      Meadowcroft, Michael

      Eastham, Ken

      Michie, William

      Ewing, Harry

      Millan, Rt Hon Bruce

      Field, Frank (Birkenhead)

      Miller, Dr M. S. (E Kilbride)

      Fields, T. (L'pool Broad Gn)

      Morris, Rt Hon J. (Aberavon)

      Fisher, Mark

      Parry, Robert

      Flannery, Martin

      Penhaligon, David

      Forrester, John

      Pike, Peter

      Foster, Derek

      Powell, Raymond (Ogmore)

      Freud, Clement

      Prescott, John

      Godman, Dr Norman

      Radice, Giles

      Harman, Ms Harriet

      Randall, Stuart

      Haynes, Frank

      Redmond, M.

      Hogg, N. (C'nauld & Kilsyth)

      Richardson, Ms Jo

      Holland, Stuart (Vauxhall)

      Robinson, G. (Coventry NW)

      Home Robertson, John

      Ross, Ernest (Dundee W)

      Howells, Geraint

      Ross, Stephen (Isle of Wight)

      Hoyle, Douglas

      Rowlands, Ted

      Hughes, Dr. Mark (Durham)

      Sheerman, Barry

      Hughes, Robert (Aberdeen N)

      Smith, Cyril (Rochdale)

      Hughes, Sean (Knowsley S)

      Spearing, Nigel

      Kirkwood, Archibald

      Strang, Gavin

      Lamond, James

      Thomas, Dafydd (Merioneth)

      Leighton, Ronald

      Thompson, J. (Wansbeck)

      Lewis, Ron (Carlisle)

      Thorne, Stan (Preston)

      Lewis, Terence (Worsley)

      Tinn, James

      Litherland, Robert

      Torney, Tom

      Loyden, Edward

      Wallace, James

      McDonald, Dr Oonagh

      Wareing, Robert

      McKay, Allen (Penistone)

      Welsh, Michael

      McKelvey, William

      Winnick, David

      Maclennan, Robert

      McTaggart, Robert

      Tellers for the Ayes:

      Madden, Max

      Mr. John McWilliam and Mr. Ken Weetch

      Marek, Dr John

      Mason, Rt Hon Roy

      NOES

      Aitken, Jonathan

      Douglas-Hamilton, Lord J.

      Alison, Rt Hon Michael

      Dover, Den

      Ancram, Michael

      Dunn, Robert

      Arnold, Tom

      Durant, Tony

      Ashby, David

      Emery, Sir Peter

      Aspinwall, Jack

      Evennett, David

      Atkinson, David (B'm'th E)

      Eyre, Sir Reginald

      Baker, Nicholas (N Dorset)

      Fallon, Michael

      Baldry, Anthony

      Farr, John

      Batiste, Spencer

      Favell, Anthony

      Beaumont-Dark, Anthony

      Fenner, Mrs Peggy

      Bellingham, Henry

      Forman, Nigel

      Benyon, William

      Forth, Eric

      Berry, Sir Anthony

      Franks, Cecil

      Biffen, Rt Hon John

      Gale, Roger

      Biggs-Davison, Sir John

      Galley, Roy

      Bottomley, Peter

      Garel-Jones, Tristan

      Bottomley, Mrs Virginia

      Glyn, Dr Alan

      Bowden, A. (Brighton K'to'n)

      Goodhart, Sir Philip

      Bowden, Gerald (Dulwich)

      Gorst, John

      Braine, Sir Bernard

      Gower, Sir Raymond

      Brinton, Tim

      Greenway, Harry

      Brooke, Hon Peter

      Hampson, Dr Keith

      Brown, M. (Brigg & Cl'thpes)

      Hanley, Jeremy

      Bruinvels, Peter

      Hargreaves, Kenneth

      Buchanan-Smith, Rt Hon A.

      Harris, David

      Budgen, Nick

      Hayward, Robert

      Bulmer, Esmond

      Heddle, John

      Carlisle, Kenneth (Lincoln)

      Henderson, Barry

      Carttiss, Michael

      Howard, Michael

      Cash, William

      Howarth, Gerald (Cannock)

      Chope, Christopher

      Hunt, John (Ravensbourne)

      Clark, Dr Michael (Rochford)

      Hunter, Andrew

      Clarke, Rt Hon K. (Rushcliffe)

      Jackson, Robert

      Conway, Derek

      Johnson-Smith, Sir Geoffrey

      Coombs, Simon

      Jopling, Rt Hon Michael

      Cope, John

      Key, Robert

      Couchman, James

      Knight, Gregory (Derby N)

      Currie, Mrs Edwina

      Knox, David

      Dicks, Terry

      Latham, Michael

      384

      Lawrence, Ivan

      Shelton, William (Streatham)

      Lee, John (Pendle)

      Shepherd, Colin (Hereford)

      Lester, Jim

      Shepherd, Richard (Aldridge)

      Lightbown, David

      Sims, Roger

      Lilley, Peter

      Skeet, T. H. H.

      Lloyd, Peter, (Fareham)

      Smith, Sir Dudley (Warwick)

      Lyell, Nicholas

      Soames, Hon Nicholas

      MacGregor, John

      Spencer, Derek

      Maclean, David John

      Spicer, Jim (W Dorset)

      McQuarrie, Albert

      Spicer, Michael (S Worcs)

      Major, John

      Stanbrook, Ivor

      Malins, Humfrey

      Stern, Michael

      Malone, Gerald

      Stevens, Lewis (Nuneaton)

      Maude, Hon Francis

      Stevens, Martin (Fulham)

      Mawhinney, Dr Brian

      Stewart, Allan (Eastwood)

      Mayhew, Sir Patrick

      Stewart, Andrew (Sherwood)

      Mellor, David

      Stradling Thomas, J.

      Meyer, Sir Anthony

      Sumberg, David

      Mills, Iain (Meriden)

      Taylor, Teddy (S'end E)

      Mills, Sir Peter (West Devon)

      Temple-Morris, Peter

      Mitchell, David (NW Hants)

      Terlezki, Stefan

      Moynihan, Hon C.

      Thomas, Rt Hon Peter

      Murphy, Christopher

      Thompson, Donald (Calder V)

      Neale, Gerrard

      Thompson, Patrick (N'ich N)

      Needham, Richard

      Thornton, Malcolm

      Nelson, Anthony

      Thurnham, Peter

      Neubert, Michael

      Townend, John (Bridlington)

      Nicholls, Patrick

      Tracey, Richard

      Oppenheim, Philip

      Twinn, Dr Ian

      Page, Richard (Herts SW)

      van Straubenzee, Sir W.

      Peacock, Mrs Elizabeth

      Waddington, David

      Percival, Rt Hon Sir Ian

      Wakeham, Rt Hon John

      Porter, Barry

      Waldegrave, Hon William

      Powell, William (Corby)

      Walden, George

      Powley, John

      Walker, Bill (T'side N)

      Prentice, Rt Hon Reg

      Waller, Gary

      Price, Sir David

      Ward, John

      Proctor, K. Harvey

      Wardle, C. (Bexhill)

      Pym, Rt Hon Francis

      Watson, John

      Raison, Rt Hon Timothy

      Watts, John

      Rathbone, Tim

      Wells, Bowen (Hertford)

      Renton, Tim

      Wells, John (Maidstone)

      Rhodes James, Robert

      Whitfield, John

      Rhys Williams, Sir Brandon

      Winterton, Mrs Ann

      Ridley, Rt Hon Nicholas

      Winterton, Nicholas

      Ridsdale, Sir Julian

      Wolfson, Mark

      Rippon, Rt Hon Geoffrey

      Wood, Timothy

      Robinson, Mark (N'port W)

      Woodcock, Michael

      Roe, Mrs Marion

      Rowe, Andrew

      Tellers for the Noes:

      Ryder, Richard

      Mr. Ian Lang and Mr. David Hunt.

      Sayeed, Jonathan

      Shaw, Sir Michael (Scarb')

      Question accordingly negatived.
      9.30 pm
      Mr. MacGregor: I beg to move amendment No. 21, in page 12, line 9, at end insert—
      '(aa) was granted on an application made by the National Coal Board; and'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 22.
      Mr. MacGregor: It might be appropriate to say now, to save time and avoid me having to say the same thing in respect of the majority of the rest of the Government amendments, that most of them are a response to firm commitments or offers which I made in Committee to consider matters. Some Government amendments are technical and have been tabled as a result of further legal or other expert consideration. These amendments have often been tabled following discussions which have taken place in pursuit of the changes that it has been necessary to make to the Bill as a result of the commitments that I gave in Committee.

      385
      Amendments Nos. 21 and 22 are exceptions to the majority of Government amendments and I must apologise to the House for having to introduce them. They are designed to correct a technical flaw in a Government amendment which was accepted in Committee to deal with security of tenure provisons for tenants of land to be worked by the National Coal Board for opencast coal.
      Unfortunately, the earlier amendment related to provisions for the granting of planning permission specifically to the NCB. We now understand that as a general rule planning permission applies for the benefit of the land and any person interested in it. The amendments rectify the flaw by relating the provisions to the granting of planning permission following an application by the NCB for the working of coal by opencast operations. The amendments will achieve our original intention and I commend them to the House.
      Amendment agreed to.
      Amendment made: No. 22, in page 12, line 10, leave out `by the National Coal Board'.—[Mr. MacGregor.]

    Clause 8

      TRANSFER OF CERTAIN FUNCTIONS OF MINISTER TO PRESIDENT OF R.I.C.S.
      Sir Paul Hawkins: I beg to move amendment No. 23 in page 13, line 14, leave out clause 8.
      Mr. Deputy Speaker: With this it will be convenient also to take amendment No. 24 in page 13, line 23, leave out 'Royal Institution of Chartered Surveyors' and insert `Chartered Institute of Arbitrators'.
      Sir Paul Hawkins: It is my belief that the Minister should retain the power to appoint arbitrators from the Lord Chancellor's panel. I must declare an interest—it is not exactly an interest because on this occasion I am rather against the chartered surveyor—for I have been a chartered surveyor for longer than I care to say. My father and grandfather were chartered surveyors and my son is one. I hold the Royal Institution of Chartered Surveyors in great esteem. It is a professional body and I would trust it to appoint an arbitrator anywhere. However, many members of the farming community have the feeling that chartered surveyors act only for landlords. That may be true of some of the larger firms that feature in the headlines, but most firms of chartered surveyors are prepared to act for landlords or tenants.
      The agriculture section of the institution forms a small percentage of the institution's members. I should say that not more than 10 per cent. of the institution's members deal with agriculture matters. If one wanted a body to deal with agriculture matters only, probably the Central Association of Agricultural Valuers would be a better choice.
      It is normally the large firms and not the small country firms that can afford to provide the institution with a president. It is very nearly impossible to take the senior partner of a three or five-man firm from his work for a year to become president.
      What happens when the president is asked to appoint an arbitrator in an issue in which his own firm is involved? I do not think that it would remove the feeling that
      386
      something was slightly wrong if the vice-president were to make the appointment. I believe that the president would make the appointment fairly and without prejudice but the Bill should take its place on the statute book with the confidence of everyone who is to be involved in its implementation.
      Against that background, it would be far better if the Minister retained the power to appoint arbitrators. I cannot believe that the appointment process costs the Ministry a great deal of money. I hope that my hon. Friend will change his mind and retain the power. I understand that the National Farmers Union and the Country Landowners Association have agreed to pay a fee instead of being provided with a free appointment service as in the past. This matter has created much ill feeling in the country and in the farming community. I want the Bill to start off on the right foot and have a fair wind.
      Mr. Weetch: I shall refer to amendment No. 24 which stands in my name. Clause 8, which entails the transfer of certain functions from the Minister and his Department to the president of the Royal Institution of Chartered Surveyors, is one of the most controversial and doubtful parts of the Bill.
      Under the present arrangements, a dispute between a landlord and a tenant may be referred to arbitration by either party. If the parties cannot agree on an appointment, an arbitrator is appointed by the Minister from a panel of arbitrators drawn up by the Lord Chancellor.
      Under clause 8 the panel will still exist, and the Lord Chancellor will continue to draw it up. Instead of the Ministry appointing an arbitrator in a disputed case, the arbitrator will be appointed by the president of the Royal Institution of Chartered Surveyors. That is wrong in principle. There is such a level of disquiet about the proposal and such feeling that it is wrong-headed that there is a serious danger that confidence in the arbitration framework will be undermined.
      The arguments, as the Minister well knows, are against the whole proposal. The new arrangements will not be seen as impartial in the farming community as a whole — quite the contrary. They will have a debilitating effect on the level of confidence in arbitration on disputed matters. I can do no better than to quote from the comments on clause 8 by the Tenant Farmers Association. A brief which was sent to members of the Committee and no doubt to others states:
      "The Royal Institution of Chartered Surveyors is seen by tenants as a predominantly landowner orientated organisation and the necessary degree of confidence does not therefore exist."
      I do not know whether that point is correct or whether the inference is correct. I say only that that is the case as one important organisation sees it.
      The National Farmers Union has expressed considerable suspicion. The brief states:
      "On a point of principle it is not appropriate for the President of a professional body whose members act for the parties to a dispute, to be responsible for the appointment of the Arbitrator."
      That appears to be a sound argument in principle.
      The transfer of responsibility under clause 8 is a clear abdication of responsibility by the Minister and his Department. The present system has worked well for almost 40 years. It depends upon the confidence of all sections of the farming community, especially the tenants. The Ministry, in the cases about which we are talking, has

      387
      long been seen as neutral, fair, impartial and above the disputes. I put it to the Minister that those functions have now been jettisoned. That is a serious matter.
      The saving in money is minimal. On 28 November 1983, Lord Belstead said in another place that there would be a saving of £50,000 from dispensing with the four members of staff involved in appointing arbitrators. Compared with the wrecking of established confidence, that is chickenfeed and could easily be recouped through a fee. After all, a fee is to be paid to the president of the RICS. It is clear that an edict has gone out from the Prime Minister and the Treasury, "Thou shalt privatise." The Minister, looking around his small domain for something to privatise, has hit on this because he could find nothing else. That is dogma gone mad. The practical consequences will be extremely serious and there are no tangible gains.
      I have much sympathy with the case made by the hon. Member for Norfolk, South-West (Sir P. Hawkins) for his amendment No. 23. I am only sorry that the Standing Committee did not have the benefit of his wise advice and counsel. He probably has more practical experience in this matter than all the rest of us put together and his has been the most damning criticism. The House should take careful note of such criticism from a practitioner.
      If it were up to me, I should like clause 8 to disappear altogether, never to be seen again, but if there has to be a transfer it should be to a body other than the Royal Institution of Chartered Surveyors. Under the Government's proposal, justice may in fact be done but the fact that it will not be seen to be done will undermine confidence. I hope that the Minister will accept amendment No. 24 and even at this late stage avoid one of the principal and far-reaching mistakes in the Bill.
      Mr. David Harris: I wish briefly to support all that has been said by my hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins). He spoke of the feelings in his part of the world and I can confirm that, rightly or wrongly, similar feelings are held in the opposite corner of the country—the south-west.
      The parliamentary committee of the Cornwall branch of the National Farmers Union has debated the matter and feels very strongly that the responsibility should be retained by the Minister. We are all conscious that Ministers and Government Departments are overloaded, but I agree with my hon. Friend that the Minister should meet the feelings on this point rather than have the entire Bill get off to a bad start through lack of confidence.
      The hon. Member for Ipswich (Mr. Weetch) referred to the cost of administering the existing legislation and the Minister's responsibilities under it. As my hon. Friend the Member for Norfolk, South-West said, the parties to disputes in arbitration are prepared to pay a fee. I respectfully suggest that that is the right way to proceed, and I urge my hon. Friend the Minister to think again on this. For my part, I should like to see clause 8 disappear altogether.
      9.45 pm
      Mr. Hunter: I rise briefly to speak in support of the two amendments, and, in particular, amendment No. 23. I am profoundly concerned about the clause, which bestows the power of appointing arbitrators on the Royal Institution of Chartered Surveyors. I do not mean any disrespect to the hon. Member for Ipswich (Mr. Weetch),
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      but, although his argument that the arbitrator should be appointed by the Chartered Institute of Arbitrators has much merit, I see it as second best.
      I think that I have done my homework on the Bill. I have read and re-read the Official Report of the proceedings in the other place, and of those on Second Reading in this House and in Committee. Perhaps I display my naivety, but I still cannot understand why the Government are taking such a course. The savings in cost and manpower are minimal. I do not know the precise figures, but I suspect that well over 90 per cent. of disputes over rent revision are settled without going to arbitration. In the few cases where the dispute continues, I suspect that for 90 per cent. of the time both parties will agree on the arbitrator. We are talking about a minimal number of cases. Therefore, one should ask whether the provision is worth all the fuss.
      The industry is clearly unhappy about the changes that the Government intend to make. My gut feeling, particularly given the climate that prevails in farming matters at the moment, is that if the industry feels so strongly, we should go along with it and accept that the savings are minimal and let the powers remain with the Minister. On that point I rest my case. I thoroughly support the amendment.
      Mr. Bermingham: May I apologise to the hon. Member for Norfolk, South-West (Sir P. Hawkins) as was not in the Chamber when he moved the amendment. However, I was well aware of the line that he intended to take.
      I wish to reinforce what I said in Committee, which is that justice must always be seen to be done. Someone who is appointed independently and who is completely independent makes a far better arbitrator than someone with whom a person could identify. I do not seek, as I said in Committee, to criticise in any way the Royal Institution of Chartered Surveyors. It is a very honourable body and it has served our society well for a number of years, but the Bill puts it in a very invidious position. If the amendment was accepted and we returned to square one with the Minister retaining his powers, everybody would accept the position, just as they have done for several years.
      Since Second Reading and the Committee stage, I have taken the trouble of speaking to farmers in my region. Believe it or not, although I represent an industrial seat, most of the land is agricultural. I have walked round the farms and have spoken to the Tenant Farmers Association, the NFU and others, not only in my constituency but in Lancashire and Yorkshire, which is my home base. I gained the overwhelming impression that no one is happy with the provision in the Bill. Everybody opposes it. People think that it is unfair and unreasonable. As the hon. Member for Basingstoke (Mr. Hunter) rightly said, the savings are minimal. To lose those savings would be as nothing compared with the respect that would be gained by the arbitration service if there was once again a totally independent system of appointment. Accordingly, I hope that the Government will concede that small point, which is nevertheless important if we are to have harmony in our arbitration system.
      Mr. Geraint Howells: I endorse the sentiments that have been expressed by hon. Members on both sides of the House. We are in full agreement on this issue. I do not

      389
      want to repeat what I said in Committee. I have received many letters, and, like many hon. Members, I believe that the Government should concede this point. The sooner they realise that the farmers and the public at large are against the proposal the better.
      Mr. Robert Hughes: To judge from the speeches so far, it is clear that there is great discontent and unhappiness in the farming community about the change that the Bill will make to the arbitration nomination. The change from the Ministry to the president of the Royal Institution of Chartered Surveyors has caused real offence. Indeed, there has been more controversy about this part of the Bill than about any other part that we have discussed.
      The genesis of the Bill, and I make no complaint about it, was the debate and discussion initiated partly by a previous Minister, partly by the Country Landowners Association and partly by the NFU. The Bill was in gestation for three and a half years. There have been changes to the agreement, but essentially it has been kept.
      Never during the discussions between the CLA and the NFU did the question of arbitration arise. There were complaints in another place, as there were in Committee, about lack of consultation, but even the Minister said in Committee that the present system has been efficient, has worked well and has had the confidence and trust of both sides of the industry — both landowners and tenants. Therefore, we would have expected compelling and powerful reasons from the Minister for the proposed change. I shall never accuse the Minister of lack of vigour in defending his policy, but I must say that the reasons he adumbrated for the change were feeble in the extreme.
      The Minister's defence was fairly simple. He said that it was not a great issue of privatisation or of Government policy—it was merely sensible to transfer to the private sector those tasks which could equally well be provided by non-Government bodies. He said in Committee:
      "We believe that the appointment of arbitrators falls firmly into that category."
      The hon. Gentleman argued that it was a matter of practicality and not principle and that agriculture was unique in having the arbitrator in a landlord and tenant position being appointed by the Government. The truth is that sheer dogma is behind the change. The Minister's noble Friend in another place said clearly that he smelt dogma. This is no way to go about it.
      The RICS appoints arbitrators in many non-agricultural cases and where the Crown is a party to the arbitration. The whole point about the RICS appointing arbitrators where the Crown is a party to the dispute is to achieve impartiality. If a Government Department nominated an arbitrator when the Crown was involved, that would appear not to be impartial. That is why the RICS is satisfactory in other cases.
      The Minister argued in Committee:
      "It is the Government's priority to save manpower in the Civil Service, although we are not arguing the case on cost grounds."—[Official Report, Standing Committee F, 12 April 1984; c. 180.]
      No one disputes that Government manpower should be saved if it is sensible to do so. It is a reasonable proposition, which any reasonable man would be willing to accept. However, there is a contradiction here. The Minister said that, although there would be no saving in manpower, it would be sensible to redeploy the four
      390
      people who were concerned to other tasks. We are talking about only four people. Under the heading "Effects of the Bill on Public Service Manpower", the Bill states
      "There will be a small saving in Departmental manpower arising from the transfer to the President of the Royal Institute of Chartered Surveyors of the responsibility for the appointment of arbitrators."
      The Government are trying to have it both ways.
      The Minister admitted that the functions had been carried out effectively and impartially. There have been no complaints about the system and there is no widespread support—indeed no support at all—for any change. The Minister argues that the new system will be equally impartial, but that is not how the tenants see it.
      I should not attempt to cross swords with the hon. Member for Norfolk, South-West (Sir P. Hawkins) over the question of arbitration and chartered surveyors, for he has great experience of that, but everyone knows—the point has been made to me in extremely strong terms—that the RICS is seen to be comprised of the Government's men. That view appears to be deeply ingrained in the minds of tenant farmers.
      The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): Really!
      Mr. Hughes: The Parliamentary Secretary need not get excited. She knows perfectly well what is being said, and I must go on the advice of those in the industry. A fee must be paid, and there is no reason why we should not leave matters as they are, having the fee charged and paid to the Ministry. That would save money and would, therefore, help the Minister of State should he have any difficulty with the Prime Minister over this. I have received a strong letter of support from the north Wales branch of the Central Association of Agricultural Valuers urging that matters be left as they are.
      This is the only case of the Government being involved in arbitration where the Minister is taking action. On Monday of this week we had an Adjournment debate on the Potato Marketing Board. It was answered by the Minister who is dealing with the Bill. He said, defending the potato marketing scheme:
      "The scheme provides for arbitration if a producer is aggrieved by any act or omission on the part of the board or, failing agreement, to be appointed by Ministers".—[Official Report, 4 June 1984; Vol. 61, c. 135.]
      Under that scheme, therefore, the Minister is retaining the Government's right to appoint an arbitrator, and he accepts that that is a good formula when there are disputes between growers and the Potato Marketing Board. I believe that the milk marketing scheme also provides for the Minister to appoint an arbitrator in the event of a dispute between a producer and the Milk Marketing Board.
      Thus, an arbitration on rent appears to be the only case where a Government arbitration nomination is being taken out of the Ministry's hands and handed over—perhaps one can put it this way—to private enterprise. Does the Minister intend to do away with the Government-nominated arbitrator under the Milk Marketing Board's scheme, or the scheme operated by the Potato Marketing Board? If so, a great deal of damage would result.
      I have always given the Minister credit for being an extremely intelligent man. He must know that the important changes which have been made in the rent formula may produce in the early stages more disputes than are likely to occur later. The more that arbitration is

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      seen to be impartial, the more the judgments handed down clarify the rent formula, the easier it will be in future years to operate the new formula. He must be aware of the resentment that is being caused by clause 8.
      I am sure that the Minister recognises that the best way to make sure that, despite its failings and any criticisms that we may have of it, the Bill gets a fair wind is to accept amendment No. 23, to take out clause 8, leaving the existing system undisturbed. I hope that he will go that far. If he cannot and does not accept amendment No. 23, we shall force the House to a Division, even if the hon. Gentleman does not wish to do that. If amendment No. 23 is defeated, I urge my right hon. and hon. Friends to support us in the Lobby on amendment No. 24.
      The hon. Member for St. Ives (Mr. Harris) said that he regarded amendment No. 24 as second best. I should not put it quite as second best——
      It being Ten o'clock, the debate stood adjourned.
      Ordered,
      That, at this day's sitting, the Agricultural Holdings Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Garel-Jones.]
      Question again proposed, That the amendment be made.
      Mr. Hughes: I should not quite describe amendment No. 24 as second best, but it is a good fallback. If we cannot have amendment No. 23, let us have amendment No. 24. I hope that the Minister will make a name for himself on this occasion and concede the amendment.
      Mr. MacGregor: The hon. Member for Aberdeen, North (Mr. Hughes) is doing his best to be extremely enticing. This matter has been much debated and it is difficult to say anything new about it. I apologise for reiterating points that I made in Committee. My defence is that I am responding to points already made in Committee.
      There has been much misunderstanding about what the amendment entails. Members of the Committee will understand that well, as will my hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins). I have found much misunderstanding and exaggeration as I have travelled around the country. I am grateful for yet another opportunity to stress that this is a simple and staightforward proposal.
      We are discussing simply the appointment of arbitrators from a panel appointed by the Lord Chancellor. I know that Opposition Members know, but it must be stressed again in view of their attacks, that we are not altering the arrangements for appointment to the Lord Chancellor's panel. The same people will be conducting arbitrations. Virtually all the members of the panel—202 out of 206 — are already members of the Royal Institution of Chartered Surveyors.
      It is a fundamental part of Government policy to transfer to the private sector those tasks that can be provided equally well by non-Government bodies. I repeat what I said in Committee, referred to a moment ago by the hon. Member for Aberdeen, North—that the appointment of arbitrators falls firmly into that category. The RICS already appoints arbitrators in many non-agricultural cases. I am advised that the number exceeds 2,000 a year. I am told that those arbitrations are running at roughly
      392
      1,000 a year. We are asking the RICS to take on a task that it already does frequently, and of which it has great experience.
      As the hon. Member for Aberdeen, North said, the RICS is designated by statute to appoint arbitrators in agricultural cases where the Crown is a party to the arbitration. Therefore, it is appointing its own members in cases involving tenants. I have no doubt that the RIC'S can carry out that extended function objectively and impartially, as it already does in the appointments for which it is currently responsible.
      I shall deal with the hon. Gentleman's point about the Potato and Milk Marketing Boards. I was trying to think which part of the Adjournment debate, which came very early in the morning, the hon. Gentleman had decided to quote to me. There is a legitimate distinction between the boards and the RICS. I referred to the RICS appointing arbitrators to more than 2,000 agricultural cases a year. In the Potato and Milk Marketing Boards, arbitrators are appointed where there is a dispute between a statutory body and an objector, which does not happen often. Here, we are referring, as in all other cases for which the RICS appoints arbitrators, to disputes between two private individuals, a landlord and a tenant. It is perfectly capable of carrying out that function as impartially as it has done in all the other cases.
      As to the practical arrangements after handing over, the president of the RICS has given assurance that the procedure currently followed for the appointment of arbitrators will be substantially the same and that he undertakes to make the most suitable appointments in all cases, whether or not the arbitrator is a member of the RICS.
      My hon. Friend the Member for Norfolk, South-West asked what would happen if the president's firm had an interest in a case in which he was asked to appoint an arbitrator. I have been corresponding with my hon. Friend about that. As he knows, if the president were asked to appoint an arbitrator in such a case, the application would be directed to a vice-president, who would make the appointment. My hon. Friend said that that was not satisfactory, but that is standard RICS practice in non-agricultural cases, and does not appear to create any difficulties.
      Officials of the agriculture Department will co-operate closely with RICS officers during the handover period to ensure that the new arrangements operate smoothly and effectively from the start. The hon. Member for Aberdeen, North referred to the difficulties resulting from the introduction of the Bill and, therefore, certain changes in the tenancy arrangements, but, as he knows, we are not proposing to implement this part of the Bill until a year has passed, so as to enable the transition to take place and to deal with the point that he made.
      As the House knows, it is the Government's priority to use manpower effectively in the Civil Service. It is therefore essential to make sure that those who are employed in the Civil Service undertake work of value to the farming industry that cannot be done elsewhere. With some of the changes that are taking place in Brussels, I assure the House that we need any manpower that we can relieve from other purposes to deal with some of the new functions that must be undertaken as a result of decisions in Brussels. Therefore, it is straightforward and sensible

      393
      to say that four people should not be employed on a task that could equally well be performed by a non-Government organisation.
      I refer to amendment No. 24. I am sure that the House will agree, as the Committee did when we debated this part of clause 8, that it would be wrong for us today to enter into a debate on the respective merits of the RICS and the Chartered Institute of Arbitrators, both of which are highly respected and capable professional bodies. I am grateful for the comments made in Committee about the professional integrity and standing of both bodies.
      I looked into the matter with great care, both before and after the Committee stage. I concluded that the RICS is the body with the greatest experience in this area. The president of the RICS will be advised in this task by staff of his land agency and agricultural division, all of whom have wide experience of agricultural matters. As I think I made clear in Committee, the activities and experience of those in the Chartered Institute of Arbitrators have tended to be concentrated in the City, trade, industry and other matters, but not agriculture.
      Therefore, I can assure the House that I share the desire that nothing should be done to diminish the efficiency or impartiality of what is widely recognised as a well respected system of arbitration. I remain convinced that the transfer of my right hon. Friend's responsibility for the executive function of the appointment of arbitrators to the president of the RICS will not impair that system in any way, and before too long it will be seen that the fears that have been expressed are not realised. For that reason, I ask the House to resist both amendments.
      Sir Paul Hawkins: I am sorry that my hon. Friend the Minister of State and my right hon. Friend the Minister have not seen fit to act on the considerable disquiet in the farming community over this matter. Not only the farming community but the Central Association of Agricultural Valuers are, in 99 per cent. of the cases, the people who will have to act on behalf of the landlord or the tenant. I did not stress this before. I hope that the House will understand my embarrassment, but I thought that it was right to move the amendment because, as my family has been connected with the RICS for many years, I wanted to explain that it was wrong that people felt that disquiet, and I wanted the Bill to start off with a fair wind.
      Only a small number of cases are involved. Generally, the landlord and tenant agree. If they do not, the valuers agree. Surely in 99 per cent. of the cases the valuers will agree at least on the name of an arbitrator. It is only when something goes wrong that they come to the Minister. I should have thought that one person and half an hour of the Minister's time was all that was necessary for the appointment of an arbitrator.
      I have begged the Minister to give way on this point, but as he has not I must press the amendment to a Division.
      Question put, That the amendment be made: —
      The House divided: Ayes 101, Noes 174.

      Division No. 352]

      [10.10 pm

      AYES

      Anderson, Donald

      Beckett, Mrs Margaret

      Archer, Rt Hon Peter

      Beith, A. J.

      Ashton, Joe

      Blair, Anthony

      Atkinson, N. (Tottenham)

      Brown, Hugh D. (Provan)

      394

      Caborn, Richard

      Maclennan, Robert

      Callaghan, Jim (Heyw'd & M)

      McTaggart, Robert

      Campbell-Savours, Dale

      McWilliam, John

      Clark, Dr David (S Shields)

      Madden, Max

      Clay, Robert

      Marek, Dr John

      Cocks, Rt Hon M. (Bristol S.)

      Mason, Rt Hon Roy

      Cook, Robin F. (Livingston)

      Maxton, John

      Corbett, Robin

      Maynard, Miss Joan

      Craigen, J. M.

      Meadowcroft, Michael

      Crowther, Stan

      Michie, William

      Cunliffe, Lawrence

      Millan, Rt Hon Bruce

      Dalyell, Tarn

      Morris, Rt Hon J. (Aberavon)

      Davies, Ronald (Caerphilly)

      Parry, Robert

      Davis, Terry (B'ham, H'ge Hl)

      Penhaligon, David

      Dixon, Donald

      Pike, Peter

      Dormand, Jack

      Powell, Raymond (Ogmore)

      Dunwoody, Hon Mrs G.

      Prescott, John

      Eadie, Alex

      Radice, Giles

      Eastham, Ken

      Randall, Stuart

      Ewing, Harry

      Richardson, Ms Jo

      Fields, T. (L'pool Broad Gn)

      Robinson, G. (Coventry NW)

      Fisher, Mark

      Ross, Ernest (Dundee W)

      Forrester, John

      Ross, Stephen (Isle of Wight)

      Foster, Derek

      Rowlands, Ted

      Freud, Clement

      Sheerman, Barry

      Godman, Dr Norman

      Shore, Rt Hon Peter

      Gourlay, Harry

      Skinner, Dennis

      Harman, Ms Harriet

      Smith, Cyril (Rochdale)

      Harris, David

      Smith, Rt Hon J. (M'kl'ds E)

      Hawkins, Sir Paul (SW N'folk)

      Snape, Peter

      Haynes, Frank

      Spearing, Nigel

      Hogg, N. (C'nauld & Kilsyth)

      Stott, Roger

      Holland, Stuart (Vauxhall)

      Strang, Gavin

      Howells, Geraint

      Thomas, Dafydd (Merioneth)

      Hoyle, Douglas

      Thompson, J. (Wansbeck)

      Hughes, Dr. Mark (Durham)

      Tinn, James

      Hughes, Robert (Aberdeen N)

      Torney, Tom

      Hughes, Sean (Knowsley S)

      Wallace, James

      Hunter, Andrew

      Wareing, Robert

      Kirkwood, Archibald

      Weetch, Ken

      Lambie, David

      Welsh, Michael

      Leighton, Ronald

      Winnick, David

      Lewis, Ron (Carlisle)

      Winterton, Mrs Ann

      Lewis, Terence (Worsley)

      Winterton, Nicholas

      Litherland, Robert

      Loyden, Edward

      Tellers for the Ayes:

      McDonald, Dr Oonagh

      Mr. John Home Robertson and Mr. Gerald Bermingham.

      McKay, Allen (Penistone)

      McKelvey, William

      NOES

      Aitken, Jonathan

      Carttiss, Michael

      Alison, Rt Hon Michael

      Cash, William

      Ancram, Michael

      Chope, Christopher

      Arnold, Tom

      Clark, Dr Michael (Rochford)

      Ashby, David

      Clarke, Rt Hon K. (Rushcliffe)

      Aspinwall, Jack

      Conway, Derek

      Atkinson, David (B'm'th E)

      Coombs, Simon

      Baker, Nicholas (N Dorset)

      Cope, John

      Baldry, Anthony

      Couchman, James

      Batiste, Spencer

      Currie, Mrs Edwina

      Beaumont-Dark, Anthony

      Dicks, Terry

      Bellingham, Henry

      Douglas-Hamilton, Lord J.

      Benyon, William

      Dover, Den

      Berry, Sir Anthony

      Dunn, Robert

      Bevan, David Gilroy

      Durant, Tony

      Biggs-Davison, Sir John

      Emery, Sir Peter

      Bottom ley, Peter

      Evennett, David

      Bottomley, Mrs Virginia

      Eyre, Sir Reginald

      Bowden, A. (Brighton K'to'n)

      Fallon, Michael

      Bowden, Gerald (Dulwich)

      Farr, John

      Braine, Sir Bernard

      Favell, Anthony

      Brinton, Tim

      Fenner, Mrs Peggy

      Brooke, Hon Peter

      Forman, Nigel

      Brown, M. (Brigg & Cl'thpes)

      Gale, Roger

      Bruinvels, Peter

      Galley, Roy

      Buchanan-Smith, Rt Hon A.

      Garel-Jones, Tristan

      Budgen, Nick

      Glyn, Dr Alan

      Bulmer, Esmond

      Goodhart, Sir Philip

      Carlisle, Kenneth (Lincoln)

      Gorst, John

      395

      Gower, Sir Raymond

      Rhys Williams, Sir Brandon

      Greenway, Harry

      Ridley, Rt Hon Nicholas

      Hampson, Dr Keith

      Ridsdale, Sir Julian

      Hanley, Jeremy

      Rifkind, Malcolm

      Hargreaves, Kenneth

      Rippon, Rt Hon Geoffrey

      Hayward, Robert

      Robinson, Mark (N'port W)

      Heddle, John

      Roe, Mrs Marion

      Henderson, Barry

      Rowe, Andrew

      Howard, Michael

      Ryder, Richard

      Howarth, Gerald (Cannock)

      St. John-Stevas, Rt Hon N.

      Hunt, John (Ravensbourne)

      Sayeed, Jonathan

      Jackson, Robert

      Shaw, Sir Michael (Scarb')

      Johnson-Smith, Sir Geoffrey

      Shelton, William (Streatham)

      Jopling, Rt Hon Michael

      Shepherd, Colin (Hereford)

      Key, Robert

      Sims, Roger

      Knox, David

      Skeet, T. H. H.

      Lang, Ian

      Smith, Sir Dudley (Warwick)

      Latham, Michael

      Soames, Hon Nicholas

      Lawrence, Ivan

      Spencer, Derek

      Lester, Jim

      Spicer, Jim (W Dorset)

      Lightbown, David

      Spicer, Michael (S Worcs)

      Lilley, Peter

      Stanbrook, Ivor

      Lloyd, Peter, (Fareham)

      Stern, Michael

      Lyell, Nicholas

      Stevens, Lewis (Nuneaton)

      McCurley, Mrs Anna

      Stevens, Martin (Fulham)

      MacGregor, John

      Stewart, Allan (Eastwood)

      Maclean, David John

      Stewart, Andrew (Sherwood)

      McQuarrie, Albert

      Stradling Thomas, J.

      Major, John

      Sumberg, David

      Malins, Humfrey

      Taylor, Teddy (S'end E)

      Malone, Gerald

      Temple-Morris, Peter

      Maude, Hon Francis

      Terlezki, Stefan

      Mawhinney, Dr Brian

      Thomas, Rt Hon Peter

      Mayhew, Sir Patrick

      Thompson, Donald (Calder V)

      Mellor, David

      Thompson, Patrick (N'ich N)

      Meyer, Sir Anthony

      Thornton, Malcolm

      Mills, Iain (Meriden)

      Thurnham, Peter

      Mills, Sir Peter (West Devon)

      Townend, John (Bridlington)

      Mitchell, David (NW Hants)

      Tracey, Richard

      Moynihan, Hon C.

      Twinn, Dr Ian

      Murphy, Christopher

      van Straubenzee, Sir W.

      Neale, Gerrard

      Viggers, Peter

      Needham, Richard

      Waddington, David

      Nelson, Anthony

      Wakeham, Rt Hon John

      Nicholls, Patrick

      Walden, George

      Oppenheim, Philip

      Walker, Bill (T'side N)

      Page, Richard (Herts SW)

      Waller, Gary

      Parris, Matthew

      Wardle, C. (Bexhill)

      Peacock, Mrs Elizabeth

      Watson, John

      Percival, Rt Hon Sir Ian

      Watts, John

      Porter, Barry

      Wells, Bowen (Hertford)

      Powell, William (Corby)

      Wells, John (Maidstone)

      Powley, John

      Whitfield, John

      Prentice, Rt Hon Reg

      Wolfson, Mark

      Price, Sir David

      Wood, Timothy

      Proctor, K. Harvey

      Woodcock, Michael

      Pym, Rt Hon Francis

      Raison, Rt Hon Timothy

      Tellers for the Noes:

      Rathbone, Tim

      Mr. David Hunt and Mr. Michael Neubert.

      Renton, Tim

      Question accordingly negatived.
      Amendment proposed: No. 24, in page 13, line 23, leave out
      'Royal Institute of Chartered Surveyors'
      and insert 'Chartered Institute of arbitrators'. — [Mr. Weetch.]
      Question put, That the amendment be made:—
      The House divided: Ayes 95, Noes 177.

      Division No. 353]

      [10.21 pm

      AYES

      Anderson, Donald

      Bermingham, Gerald

      Archer, Rt Hon Peter

      Blair, Anthony

      Ashton, Joe

      Brown, Hugh D. (Provan)

      Atkinson, N. (Tottenham)

      Caborn, Richard

      Beckett, Mrs Margaret

      Callaghan, Jim (Heyw'd & M)

      Beith, A. J.

      Campbell-Savours, Dale

      396

      Clark, Dr David (S Shields)

      Marek, Dr John

      Clay, Robert

      Mason, Rt Hon Roy

      Cocks, Rt Hon M. (Bristol S.)

      Maxton, John

      Cook, Robin F. (Livingston)

      Maynard, Miss Joan

      Corbett, Robin

      Meadowcroft, Michael

      Craigen, J. M.

      Michie, William

      Crowther, Stan

      Iviillan, Rt Hon Bruce

      Dalyell, Tarn

      Morris, Rt Hon J. (Aberavon)

      Davies, Ronald (Caerphilly)

      Parry, Robert

      Davis, Terry (B'ham, H'ge H'l)

      Penhaligon, David

      Dixon, Donald

      Pike, Peter

      Dormand, Jack

      Powell, Raymond (Ogmore)

      Dunwoody, Hon Mrs G.

      Prescott, John

      Eadie, Alex

      Radice, Giles

      Eastham, Ken

      Randall, Stuart

      Ewing, Harry

      Redmond, M.

      Fields, T. (L'pool Broad Gn)

      Richardson, Ms Jo

      Fisher, Mark

      Robertson, George

      Forrester, John

      Robinson, G. (Coventry NW)

      Godman, Dr Norman

      Ross, Ernest (Dundee W)

      Gourlay, Harry

      Rowlands, Ted

      Harman, Ms Harriet

      Sheerman, Barry

      Haynes, Frank

      Shore, Rt Hon Peter

      Hogg, N. (C'nauld & Kilsyth)

      Skinner, Dennis

      Holland, Stuart (Vauxhall)

      Smith, Cyril (Rochdale)

      Home Robertson, John

      Smith, Rt Hon J. (M'kl'ds E)

      Howells, Geraint

      Snape, Peter

      Hoyle, Douglas

      Spearing, Nigel

      Hughes, Dr. Mark (Durham)

      Stott, Roger

      Hughes, Robert (Aberdeen N)

      Strang, Gavin

      Hughes, Sean (Knowsley S)

      Thomas, Dafydd (Merioneth)

      Kirkwood, Archibald

      Thompson, J. (Wansbeck)

      Lambie, David

      Tinn, James

      Leighton, Ronald

      Tcrney, Tom

      Lewis, Ron (Carlisle)

      Wallace, James

      Lewis, Terence (Worsley)

      Wareing, Robert

      Litherland, Robert

      Weetch, Ken

      Loyden, Edward

      Welsh, Michael

      McDonald, Dr Oonagh

      Winnick, David

      McKelvey, William

      Maclennan, Robert

      Tellers for the Ayes:

      McTaggart, Robert

      Mr. Allen McKay and Mr. Lawrence Cunliffe.

      McWilliam, John

      Madden, Max

      NOES

      Aitken, Jonathan

      Conway, Derek

      Alison, Rt Hon Michael

      Coombs, Simon

      Ancram, Michael

      Cope, John

      Arnold, Tom

      Couchman, James

      Ashby, David

      Currie, Mrs Edwina

      Aspinwall, Jack

      Dicks, Terry

      Atkinson, David (B'm'th E)

      Douglas-Hamilton, Lord J.

      Baker, Nicholas (N Dorset)

      Dover, Den

      Baldry, Anthony

      Dunn, Robert

      Batiste, Spencer

      Durant, Tony

      Beaumont-Dark, Anthony

      Emery, Sir Peter

      Bellingham, Henry

      Evennett, David

      Benyon, William

      Eyre, Sir Reginald

      Berry, Sir Anthony

      Fallon, Michael

      Bevan, David Gilroy

      Farr, John

      Biggs-Davison, Sir John

      Favell, Anthony

      Bottomley, Peter

      Fenner, Mrs Peggy

      Bottomley, Mrs Virginia

      Forman, Nigel

      Bowden, A. (Brighton K'to'n)

      Freud, Clement

      Bowden, Gerald (Dulwich)

      Gale, Roger

      Braine, Sir Bernard

      Galley, Roy

      Brinton, Tim

      Garel-Jones, Tristan

      Brooke, Hon Peter

      Glyn, Dr Alan

      Brown, M. (Brigg & Cl'thpes)

      Goodhart, Sir Philip

      Bruinvels, Peter

      Gorst, John

      Buchanan-Smith, Rt Hon A.

      Greenway, Harry

      Budgen, Nick

      Hanley, Jeremy

      Bulmer, Esmond

      Hargreaves, Kenneth

      Carlisle, Kenneth (Lincoln)

      Harris, David

      Carttiss, Michael

      Hayward, Robert

      Cash, William

      Heddle, John

      Chope, Christopher

      Henderson, Barry

      Clark, Dr Michael (Rochford)

      Howard, Michael

      Clarke, Rt Hon K. (Rushcliffe)

      Howarth, Gerald (Cannock)

      397

      Hunt, David (Wirral)

      Robinson, Mark (N'port W)

      Hunt, John (Ravensbourne)

      Roe, Mrs Marion

      Hunter, Andrew

      Ross, Stephen (Isle of Wight)

      Jackson, Robert

      Rowe, Andrew

      Johnson-Smith, Sir Geoffrey

      Ryder, Richard

      Jopling, Rt Hon Michael

      St. John-Stevas, Rt Hon N.

      Key, Robert

      Sayeed, Jonathan

      Knox, David

      Shaw, Sir Michael (Scarb')

      Lang, Ian

      Shelton, William (Streatham)

      Latham, Michael

      Shepherd, Colin (Hereford)

      Lawrence, Ivan

      Sims, Roger

      Lester, Jim

      Skeet, T. H. H.

      Lightbown, David

      Smith, Sir Dudley (Warwick)

      Lilley, Peter

      Soames, Hon Nicholas

      Lloyd, Peter, (Fareham)

      Spencer, Derek

      Lyell, Nicholas

      Spicer, Jim (W Dorset)

      McCurley, Mrs Anna

      Spicer, Michael (S Worcs)

      Macfarlane, Neil

      Stanbrook, Ivor

      MacGregor, John

      Stern, Michael

      Maclean, David John

      Stevens, Lewis (Nuneaton)

      McQuarrie, Albert

      Stevens, Martin (Fulham)

      Malins, Humfrey

      Stewart, Allan (Eastwood)

      Malone, Gerald

      Stewart, Andrew (Sherwood)

      Maude, Hon Francis

      Stradling Thomas, J.

      Mawhinney, Dr Brian

      Sumberg, David

      Mayhew, Sir Patrick

      Taylor, Teddy (S'end E)

      Mellor, David

      Temple-Morris, Peter

      Meyer, Sir Anthony

      Thomas, Rt Hon Peter

      Mills, Iain (Meriden)

      Thompson, Patrick (N'ich N)

      Mills, Sir Peter (West Devon)

      Thornton, Malcolm

      Mitchell, David (NW Hants)

      Thumham, Peter

      Moynihan, Hon C.

      Townend, John (Bridlington)

      Murphy, Christopher

      Tracey, Richard

      Neale, Gerrard

      Twinn, Dr Ian

      Needham, Richard

      van Straubenzee, Sir W.

      Nelson, Anthony

      Viggers, Peter

      Neubert, Michael

      Waddington, David

      Nicholls, Patrick

      Wakeham, Rt Hon John

      Oppenheim, Philip

      Walden, George

      Page, Richard (Herts SW)

      Walker, Bill (T'side N)

      Parris, Matthew

      Waller, Gary

      Peacock, Mrs Elizabeth

      Wardle, C. (Bexhill)

      Percival, Rt Hon Sir Ian

      Watson, John

      Porter, Barry

      Watts, John

      Powell, William (Corby)

      Wells, Bowen (Hertford)

      Powley, John

      Wells, John (Maidstone)

      Prentice, Rt Hon Reg

      Whitfield, John

      Price, Sir David

      Winterton, Mrs Ann

      Proctor, K. Harvey

      Winterton, Nicholas

      Raison, Rt Hon Timothy

      Wolfson, Mark

      Rathbone, Tim

      Wood, Timothy

      Renton, Tim

      Woodcock, Michael

      Rhys Williams, Sir Brandon

      Ridley, Rt Hon Nicholas

      Tellers for the Noes

      Ridsdale, Sir Julian

      Mr. Donald Thompson and Mr. John Major.

      Rifkind, Malcolm

      Rippon, Rt Hon Geoffrey

      Question accordingly negatived.
      10.30 pm

    Schedule 1

      MINOR AMENDMENTS WITH RESPECT TO STATUTORY SUCCESSION
      Mr. MacGregor: I beg to move amendment No. 25, in page 19, line 20, at end insert—
      'Continuing eligibility of applicant
      3A. In section 20(2) of that Act, for the words "that the applicant is an eligible person" there shall be substituted—

      "(a) that the applicant was an eligible person at the date of death, and

      (b) that he has not subsequently ceased to be such a person;".'.

      Earlier today the House passed some amendments concerned with eligibility. While we were dealing with
      398
      those amendments attention was drawn to an example of pure tidying up, in connection with eligibility, which seemed to be worth adding to the Bill. That is what the amendment does. Its purpose is to codify a Court of Appeal ruling in the case of Jackson v. Hall. Under that ruling, to satisfy the tests of eligibility for succession, the applicant must be an eligible person at the time of the death of the tenant and must continue to be so at the time when his application is heard by the Agricultural Land Tribunal. The amendment puts that Court of Appeal ruling into legislative form.
      Mr. Bermingham: The hour is late and I do not want to detain the House. I congratulate the Government on at least trying to make amendments in a very difficult field. There have been enough court cases on this subject over the years to make us all wary of any wording. I had intended to award the Government five out of 10 for their solution to the problem, but that might have been mean. Eight out of 10 might be nearer the mark. However, those who advise me on these matters have given me examples of possible loopholes to which further thought should be given.
      One particular case comes rapidly to mind. I shall not apologise for harking back. I do so because of the way in which the amendments have been grouped. I suppose that I could have raised this matter on a point of order earlier on, but I did not wish to delay the House in that way. I am seeking, not to force a vote on this matter, but to warn the Government. I hope that the Minister will take on board my remarks.
      Amendment No. 25 contains the seeds of future litigation op joint occupancy, particularly with a widow who might have an interest elsewhere which might be considered a commercial interest. There are a number of examples, and I shall not go into them in detail. The amendment relates back to others, which is why I thought it appropriate to raise my fears and those of those who instruct me.
      The classic example of the problems that might arise is that of the tenant for life. Particularly where the land is settled and held under settlement terms, the tenant for life has the right to enter into it for occupation and to farm land. It remains arguable that his occupancy, if not accompanied by a formal contract of tenancy, will not count against him. In the case of settled land, it could mean that succession could be used for tenanted land in this respect. That is the first of the examples to which I draw the attention of the House.
      My second example is one that merits even more consideration from the Government and the Parliamentary draftsmen, as it may open up a number of actions in the near future. It concerns occupiers who divest themselves of occupation. That may seem to be a contradiction in terms, but it is not. It is possible sometimes for a potential applicant, in anticipation of the death of a tenant, particularly when death is imminent—as the Minister is aware, there are a number of diseases where life expectancy is limited—to rid himself of the unwelcome occupancy, which could give rise to a bar on succession, of a commercial unit by granting a short-term unprotected interest for the period designed to outlast the imminent death of the tenant and the proceedings before the tribunal. Such matters should be looked at soon.
      I appreciate the difficulties, as do those from the Agricultural Law Association who have been assisting me.

      399
      We are anxious to cut down on litigation on this subject, and to forewarn the Government to the problems that might arise. Perhaps these matters can be looked at in the next six months before the law gets going. I am sure that everybody will agree to a slight amendment to cope with such problems. This advice is calculated, because tomorrow morning lawyers will look at the Bill, perhaps to see whether there are ways to circumvent Parliament's intentions.
      I ask the Minister to look carefully at those two cases. I seek, not to be unhelpful, but to forewarn rather than to criticise.
      Mr. MacGregor: I am grateful to the hon. Member for St. Helens, South (Mr. Bermingham) for the way in which he made his remarks. As I have said, I recognise that this is an extremely complicated area of law. It is the complexity of it that explains why the amendments have come forward on Report and not earlier. I do not pretend that we shall have everything right. The hon. Gentleman has drawn attention to a number of problems and possible loopholes. I intended to say, if pressed, that I accept that there will inevitably be some loopholes and that it is not possible to put an end to all the difficulties. I believe, however, that we have made a considerable improvement on what existed earlier, and I am grateful to the Agricultural Law Association for its help. The hon. Gentleman said that he hopes I shall carry out a review with a view to making further changes in six months' time, but I am sure he will recognise the difficulties in doing that. I have certainly taken note of the issues that he raised.
      Amendment agreed to.
      Mr. MacGregor: I beg to move amendment No. 26, in page 20, line 24, leave out from `to' to 'and' in line 36 and insert
      'the holding at any time after the beginning of the period of three months ending with the relevant time apart from this subsection ("the original relevant time"), then—

      (a) if the direction is given within that period, the Tribunal may, on the application of the tenant, specify in the direction, as the relevant time for the purposes of this and the next following section, such a time falling within the period of three months immediately following the original relevant time as they think fit;

      (b) if the direction is given at any time after the original relevant time the Tribunal shall specify in the direction, as the relevant time for those purposes, such a time falling within the period of three months immediately following the date of the giving of the direction as they think fit;'.

      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 27, 28, 38 and 62 to 64.
      Mr. MacGregor: These are last-stage tidying-up amendments. They stem from the secretaries of the Agricultural Land Tribunal when we consulted them on the subordinate legislation which will follow from the Bill. It seemed appropriate to make the change in the primary legislation. The amendments overcome problems which occur when the Agricultural Land Tribunal cannot give a direction until shortly before or, as sometimes happens, after the relevant time when a new tenancy would begin. This usually arises if legal matters have to be settled in court before a tribunal can hold a hearing or if one of the parties is taken ill and the hearing is delayed.
      400
      Schedule 1, paragraph 6, and schedule 2, paragraph 5, as drafted enable the tribunal to specify a new relevant time at the request of the tenant. That will still be the position after the proposed amendments have been incorporated into the Bill if the direction is given three months or less before the relevant time. If the direction is given at any time after the original relevant time, the tribunal will as a result of the amendments automatically specify a new relevant time. The definition of "the prescribed period" in section 24(2) of the 1976 Act and in schedule 2, paragraph 6(2) of the Bill is being amended to ensure that the landlord or tenant will have at least three months from the time of the direction to serve a notice demanding arbitration on the terms of the tenancy or rent.
      Amendment agreed to.
      Amendments made: No 27, in page 20, line 38, after `24(2)' insert—
      '(a)'.
      No. 28, in page 20, line 40., at end insert '; and
      (b) in the definition of "the prescribed period" for the words "and the" onwards there shall be substituted the words "and—
      (a) the end of the three months immediately following the relevant time; or
      (b) the end of the three months immediately following the date of the giving of the direction;
      whichever last occurs.".'.
      No. 29, in page 20, line 40, at end insert—
      '7. The following Schedule shall be inserted after Schedule 3 to that Act—

    SCHEDULE 3A

      OCCUPATION OF LAND FOR PURPOSES OF STATUTORY SUCCESSION
      Preliminary
      1.—(1) In this Schedule "the occupancy condition" means paragraph (c) of the definition of "eligible person" in section 18(2) of this Act.
      (2) For the purposes of this Schedule a body corporate is controlled by a survivor of the deceased if he or his spouse, or he and his spouse together, have the power to secure—

      (a) by means of the holding of shares or the possession of voting power in or in relation to that or any other body corporate; or

      (b) by virtue of any powers conferred by the articles of association or other documents regulating that or any other body corporate;

      that the affairs of that body corporate are conducted in accordance with his, her or their wishes, respectively.
      (3) Any reference in this Schedule to the spouse of a survivor of the deceased does not apply in relation to any time when the survivor's marriage is the subject of a decree of judicial separation or a decree nisi of divorce or of nullity of marriage.
      Excluded occupation
      2. —(1) Occupation by a survivor of the deceased of any agricultural land shall be disregarded for the purposes of the occupancy condition if he occupies only—

      (a) under a tenancy approved by the Minister under section 2(1) of the 1948 Act or under such a tenancy relating to the use of land for grazing or mowing as is referred to in the proviso to that provision;

      (b) under a tenancy for more than one year but less that two years;

      (c) under a tenancy not falling within paragraph (a) or (b) above and not having effect as a contract of tenancy;

      (d) under a tenancy to which section 3 of the 1948 Act does not apply by virtue of section 3B of that Act;

      (e) as a licensee; or

      (f) as an executor, administrator, trustee in bankruptcy or person otherwise deriving title from another person by operation of law.

      (2) Paragraphs (a) to (e) of sub-paragraph (1) above do not apply in the case of a tenancy or licence granted to a survivor of the deceased by his spouse or by a body corporate controlled by him.
      (3) References in the following provisions of this Schedule to the occupation of land by any person do not include occupation under a tenancy, or in a capacity, falling within paragraphs (a) to (f) of that sub-paragraph.
      Deemed occupation in case of Tribunal direction
      3. Where a survivor of the deceased is, by virtue of a direction of the Tribunal under section 20 of this Act, for the time being entitled (whether or not with any other person) to a tenancy of the whole or part of any agricultural holding held by the deceased at the date of death other than the holding, he shall, for the purposes of the occupancy condition, be deemed to be in occupation of the land comprised in that holding or (as the case may be) in that part of that holding.
      Joint occupation
      4. —(1) Where any agricultural land is jointly occupied by a survivor of the deceased and one or more other persons as

      (a) beneficial joint tenants;

      (b)tenants in common;

      (c)joint tenants under a tenancy; or

      (d)joint licensees;

      the survivor shall be treated for the purposes of the occupancy condition as occupying the whole of that land.
      (2) If, however, the Tribunal in proceedings under section 20 of this Act determine on the survivor's application that his appropriate share of the net income which the land is, or was at any time, capable of producing for the purposes of section 18(3A) of this Act is or was then less than the aggregate of the earnings referred to in that provision, then, for the purpose of determining whether the occupancy condition is or was then
      402
      satisfied in his case, the net annual income which the land is, or (as the case may be) was, capable of so producing shall be treated as limited to his appropriate share.
      (3) For the purposes of sub-paragraph (2) above the appropriate share of the survivor shall be ascertained—

      (a) where he is a beneficial or other joint tenant or a joint licensee, by dividing the net annual income which the land is or was at the time in question capable of producing for the purposes of section 18(3A) by the total number of joint tenants or joint licensees for the time being;

      (b) where he is a tenant in common, by dividing the said net annual income in such a way as to attribute to him and to the other tenant or tenants in common shares of the income proportionate to the extent for the time being of their respective undivided shares in the land.

      Occupation by spouse or controlled company
      5.—(1) For the purposes of the occupancy conditions and of paragraph 4 above, occupation—

      (a) by the spouse of a survivor of the deceased; or

      (b) by a body corporate controlled by a survivor of the deceased;

      shall be treated as occupation by the survivor.
      (2) Where, in accordance with sub-paragraph (1) above, paragraph 4 above applies to a survivor of the deceased in relation to any time by virtue of the joint occupation of land by his spouse or a body corporate and any other person or persons, sub-paragraphs (2) and (3) of that paragraph shall apply to the survivor as if he were the holder of the interest in the land for the time being held by his spouse or the body corporate, as the case may be.
      Ministerial statements as to net annual income from land
      6. The reference in the definition of "relevant land" in section 18(6) of this Act to agricultural land which is occupied by any such person as is mentioned in paragraph (a) of that definition includes a reference to any agricultural land which is deemed to be occupied by him by virtue of this Schedule.".'. — [Mr. MacGregor.]

    Schedule 2

      STATUTORY SUCCESSION BY PERSON NOMINATED BY RETIRING TENANT
      Mr. Geraint Howells: I beg to move amendment No. 30, in page 21, line 5, leave out 'a single eligible person' and insert
      'one or more eligible persons.'.
      Mr. Deputy Speaker: With this it will be convenient to take the following amendments: No. 32, in page 21, line 11, at end insert
      '; or
      (c) a notice is given to the landlord by one or more eligible persons named in the notice indicating (in whatever terms) that one of the conditions contained in (i) or (ii) below applies and that he or they wish to succeed the tenant or tenants of the holding to the tenancy of that holding as from a date specified in the notice, being a date on which the tenancy of the holding could have been determined by notice to quit given at the date of the notice and which falls not less than sixteen months after the date of the notice.

      (i) the tenant (or in the case of a joint tenancy) all of the tenants have become unfit to farm the holding by reason of ill-health or infirmity; or

      (ii) the tenant or all of the tenants consent to the application by the eligible applicant.'.

      No. 39, in page 22, line 12, at end insert
      "'successor's notice" means the notice mentioned in subparagraph (1)(c) above, "eligible appplicant" means the eligible person mentioned in subparagraph (1)(c) above and named in the successor's notice.'.
      No. 41, in page 22, line 33, after 'successor', insert 'or eligible applicant'.
      No. 42, in page 22, line 35, after 'successor', insert 'or eligible applicant'.
      No. 43, in page 22, line 43, after 'successor', insert 'or eligible applicant'.
      No. 46, in page 23, line 8, after 'notice', insert 'or successor's notice '.
      No. 47, in page 23, line 18, after 'notice', insert 'or successor's notice'.
      No. 48, in page 23, line 22, after 'notice', insert 'or successor's notice'.
      No. 58, in page 24, line 41, after 'successor', insert 'or eligible applicant'.
      No. 59, in page 24, line 45, after 'notice', insert 'or successor's notice'.
      Mr. Howells: Schedule 2 introduces the possibility of a nomination by a tenant or a successor to take over the holding when the tenant retires. It applies only to tenancies already in existence. The tenant or tenants may give notice to the landlord nominating their successor. The alliance supports that amendment to the present situation. It feels that if that opportunity is available to the tenant, he need not hold on to the tenancy to death so as to pass it on to the eligible person, who is defined in paragraph 2 as
      "a close relative in whose case the following conditions are satisfied".
      In Committee I tried to secure some assistance for the daughters of tenants who might be at a disadvantage in remaining on the farm to help in the home and who failed to qualify as an eligible person. The concession has been given to the wife of the retiring tenant by paragraph 2, but my amendment was rejected. We feel, however, that a further amendment to allow the tenant to nominate one or
      404
      more eligible persons is the way forward. The alliance is anxious to encourage joint tenancies and partnerships for family farms so that wives or husbands have an interest in the business also. The amendment recognises that more advanced approach.
      10.45 pm
      I shall now discuss amendment No. 32. Given that we accept the possibility that a tenant may wish to retire and pass on the tenancy to a successor before he dies, we feel that a means should be provided also for when he becomes unfit to farm and possibly too ill to notify that fact to the landlord and make the proper nominations to the landlord. In that case, we feel that the close relatives who are eligible should be able to make the application for the tenancy, rather than see the farm deteriorate and go downhill before they take over.
      The "eligible applicant", which is the term we have given to the peron to distinguish him from an ordinary successor, must prove that one of two conditions exist: first, that the tenant is unfit to farm because of mental or physical infirmity or, secondly, that the tenant consents. The close relative cannot just take over at will and without any real basis for doing so. We believe that this measure provides for a realistic approach to succession tenancies and might help to remove some of the anomalies. This is a more humane approach than compulsory retirement, which provision we tried to remove in Committee.
      Mr. MacGregor: I understand the problems that the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) is trying to solve with these amendments. I know of his concern about this matter, because we have discussed it before, but there are certain difficulties about the amendments.
      I shall deal first with amendment No. 30. I certainly understand that, on a large holding, there could be two potential successors who have, over a long period of years, derived their principal source of livelihood from the holding. The basic arrangements. however, for succession contained in the Agriculture (Miscellaneous Provisions) Act 1976 provide for only one eligible person to claim succession. There is a good reason for that. For example, two eligible persons could be the son and the grandson of an elderly tenant. To allow them to succeed jointly to the tenancy would add an extra generation to the statutory succession chain. In view of that, and the fact that we take a view about the number of generations that can succeed, I am sure that the hon. Gentleman will not be surprised to learn that I find his amendment unacceptable.
      Not only is the amendment, for understandable reasons, out of step with the existing arrangements for statutory succession on death; it is also wrong in principle. I draw the hon. Gentleman's attention to paragraph 2(7) of schedule 1 which facilitates inter vivos succession to joint tenants by agreement with the landlord. I believe that that is as far as we can go in that matter.
      I listened carefully to the hon. Gentleman's further explanation of amendment No. 32 and the other amendments. Although I realise that there could be difficulties connected with failing health, I conclude on the whole that those difficulties should not be settled by legislation. The provisions proposed by the hon. Gentleman could give rise to conflicts in farming families that are probably worse than the difficulties that he wishes to solve—for example, difficulties about ousting a sick

      405
      or infirm father against the father's wishes. Those difficulties must be left to be settled within the family, without recourse to legislative pressure.
      The hon. Gentleman will know, following the debate in Committee, during which I undertook to look at certain aspects of the failing health problem, that we propose to provide in a forthcoming amendment to the Bill for inter vivos succession on grounds of ill-health before the age of 65, subject to the tenant's consent. That measure goes some way towards meeting the hon. Gentleman's concern and is as far as I am prepared to go in this sensitive area.
      Mr. Geraint Howells: Once again, the Minister has failed to convince me, although he has tried very hard during the day. We were told earlier that he was a very intelligent person, but he has not acceded to even one of our requests so far today. We shall thus have no alternative but to press amendment No. 32 to a Division at the appropriate time.
      I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn
      Mr. MacGregor: I beg to move amendment No. 31, in page 21, line 10 leave out 'sixteen months' and insert
      `one year, but not more than two years,'.
      The purpose of the amendment is to extend the period for giving notice of retirement from
      "not less than sixteen months",
      as the Bill now provides, to
      "one year, but not more than two years"
      before the date specified in the retirement notice. I am grateful to note that the hon. Member for City of Durham (Mr. Hughes) approves of the change. It follows representations from the NFU when the Bill was in Committee that 16 months was insufficient, but discussions were not quite complete at that stage. It is in line with the time scale for notices to quit, I believe that it makes sense and I commend it to the House.
      Amendment agreed to.
      Amendment proposed: No. 32, in page 21, line 11 at end insert
      ; or
      (c) a notice is give to the landlord by one or more eligible persons named in the notice indicating (in whatever terms) that one of the conditions contained in (i) or (ii) below applies and that he or they wish to succeed the tenant or tenants of the holding to the tenancy of that holding as from a date specified in the notice, being a date on which the tenancy of the holding could have been determined by notice to quit given at the date of the notice and which falls not less than sixteen months after the date of the notice.

      (i) the tenant (or in the case of a joint tenancy) all of the tenants have become unfit to farm the holding by reason of ill-health or infirmity; or

      (ii) the tenant or all of the tenants consent to the application by the eligible applicant.'.—[Mr. Geraint Howells.]

      Question put, That the amendment be made:—
      The House divided: Ayes 89, Noes 168.

      Division No. 354]

      [10.52 pm

      AYES

      Anderson, Donald

      Callaghan, Jim (Heyw'd & M)

      Archer, Rt Hon Peter

      Campbell-Savours, Dale

      Beckett, Mrs Margaret

      Clark, Dr David (S Shields)

      Bermingham, Gerald

      Clay, Robert

      Blair, Anthony

      Cocks, Rt Hon M. (Bristol S.)

      Brown, Hugh D. (Provan)

      Conlan, Bernard

      Caborn, Richard

      Cook, Robin F. (Livingston)

      406

      Corbett, Robin

      McWilliam, John

      Cowans, Harry

      Madden, Max

      Craigen, J. M.

      Marek, Dr John

      Crowther, Stan

      Maxton, John

      Cunliffe, Lawrence

      Maynard, Miss Joan

      Dalyell, Tarn

      Michie, William

      Davies, Ronald (Caerphilly)

      Millan, Rt Hon Bruce

      Davis, Terry (B'ham, H'ge H'l)

      Morris, Rt Hon J. (Aberavon)

      Dixon, Donald

      Parry, Robert

      Dormand, Jack

      Penhaligon, David

      Eadie, Alex

      Pike, Peter

      Eastham, Ken

      Powell, Raymond (Ogmore)

      Ewing, Harry

      Prescott, John

      Fields, T. (L'pool Broad Gn)

      Richardson, Ms Jo

      Fisher, Mark

      Robertson, George

      Forrester, John

      Robinson, G. (Coventry NW)

      Foster, Derek

      Ross, Ernest (Dundee W)

      Freud, Clement

      Ross, Stephen (Isle of Wight)

      Harman, Ms Harriet

      Sheerman, Barry

      Haynes, Frank

      Skinner, Dennis

      Hogg, N. (C'nauld & Kilsyth)

      Smith, Cyril (Rochdale)

      Holland, Stuart (Vauxhall)

      Smith, Rt Hon J. (M'kl'ds E)

      Home Robertson, John

      Snape, Peter

      Howells, Geraint

      Spearing, Nigel

      Hughes, Dr. Mark (Durham)

      Stott, Roger

      Hughes, Robert (Aberdeen N)

      Strang, Gavin

      Hughes, Sean (Knowsley S)

      Thomas, Dafydd (Merioneth)

      Hughes, Simon (Southwark)

      Thompson, J. (Wansbeck)

      Kirkwood, Archibald

      Tinn, James

      Lambie, David

      Torney, Tom

      Leighton, Ronald

      Wallace, James

      Lewis, Ron (Carlisle)

      Wareing, Robert

      Lewis, Terence (Worsley)

      Weetch, Ken

      Litherland, Robert

      Welsh, Michael

      Loyden, Edward

      Winnick, David

      McDonald, Dr Oonagh

      McKay, Allen (Penistone)

      Tellers for the Ayes:

      McKelvey, William

      Mr. A. J. Beith and Mr. Michael Meadowcroft.

      Maclennan, Robert

      McTaggart, Robert

      NOES

      Aitken, Jonathan

      Dicks, Terry

      Alison, Rt Hon Michael

      Douglas-Hamilton, Lord J.

      Ancram, Michael

      Dover, Den

      Arnold, Tom

      Dunn, Robert

      Ashby, David

      Durant, Tony

      Aspinwall, Jack

      Emery, Sir Peter

      Atkinson, David (B'm'th E)

      Evennett, David

      Baker, Nicholas (N Dorset)

      Eyre, Sir Reginald

      Baldry, Anthony

      Fallon, Michael

      Batiste, Spencer

      Farr, John

      Beaumont-Dark, Anthony

      Favell, Anthony

      Bellingham, Henry

      Fenner, Mrs Peggy

      Benyon, William

      Forman, Nigel

      Berry, Sir Anthony

      Gale, Roger

      Bevan, David Gilroy

      Galley, Roy

      Biggs-Davison, Sir John

      Glyn, Dr Alan

      Bottomley, Peter

      Goodhart, Sir Philip

      Bottomley, Mrs Virginia

      Gorst, John

      Bowden, A. (Brighton K'to'n)

      Greenway, Harry

      Bowden, Gerald (Dulwich)

      Hargreaves, Kenneth

      Braine, Sir Bernard

      Harris, David

      Brinton, Tim

      Hawkins, Sir Paul (SW N'folk)

      Brooke, Hon Peter

      Heddle, John

      Brown, M. (Brigg & Cl'thpes)

      Henderson, Barry

      Bruinvels, Peter

      Howard, Michael

      Budgen, Nick

      Howarth, Gerald (Cannock)

      Bulmer, Esmond

      Hunt, David (Wirral)

      Carlisle, Kenneth (Lincoln)

      Hunter, Andrew

      Carttiss, Michael

      Jackson, Robert

      Cash, William

      Jopling, Rt Hon Michael

      Chope, Christopher

      Key, Robert

      Clark, Dr Michael (Rochford)

      Knox, David

      Clarke, Rt Hon K. (Rushcliffe)

      Latham, Michael

      Conway, Derek

      Lawrence, Ivan

      Coombs, Simon

      Lester, Jim

      Cope, John

      Lightbown, David

      Couchman, James

      Lilley, Peter

      Currie, Mrs Edwina

      Lloyd, Peter, (Fareham)

      407

      Lyell, Nicholas

      Shelton, William (Streatham)

      McCurley, Mrs Anna

      Shepherd, Colin (Hereford)

      Macfarlane, Neil

      Sims, Roger

      MacGregor, John

      Skeet, T. H. H.

      Maclean, David John

      Smith, Sir Dudley (Warwick)

      McQuarrie, Albert

      Soames, Hon Nicholas

      Major, John

      Spencer, Derek

      Malins, Humfrey

      Spicer, Michael (S Worcs)

      Malone, Gerald

      Stanbrook, Ivor

      Maude, Hon Francis

      Stern, Michael

      Mawhinney, Dr Brian

      Stevens, Lewis (Nuneaton)

      Mayhew, Sir Patrick

      Stevens, Martin (Fulham)

      Mellor, David

      Stewart, Allan (Eastwood)

      Meyer, Sir Anthony

      Stewart, Andrew (Sherwood)

      Mills, lain (Meriden)

      Stradling Thomas, J.

      Mills, Sir Peter (West Devon)

      Sumberg, David

      Mitchell, David (NW Hants)

      Taylor, Teddy (S'end E)

      Moynihan, Hon C.

      Temple-Morris, Peter

      Murphy, Christopher

      Terlezki, Stefan

      Neale, Gerrard

      Thomas, Rt Hon Peter

      Needham, Richard

      Thompson, Donald (Calder V)

      Nelson, Anthony

      Thompson, Patrick (N'ich N)

      Neubert, Michael

      Thornton, Malcolm

      Nicholls, Patrick

      Thurnham, Peter

      Norris, Steven

      Tracey, Richard

      Oppenheim, Philip

      Twinn, Dr Ian

      Page, Richard (Herts SW)

      van Straubenzee, Sir W.

      Parris, Matthew

      Viggers, Peter

      Peacock, Mrs Elizabeth

      Waddington, David

      Percival, Rt Hon Sir Ian

      Wakeham, Rt Hon John

      Porter, Barry

      Walden, George

      Powell, William (Corby)

      Walker, Bill (T'side N)

      Powley, John

      Waller, Gary

      Prentice, Rt Hon Reg

      Wardle, C. (Bexhill)

      Proctor, K. Harvey

      Watson, John

      Raison, Rt Hon Timothy

      Watts, John

      Rathbone, Tim

      Wells, Bowen (Hertford)

      Renton, Tim

      Wells, John (Maidstone)

      Rhys Williams, Sir Brandon

      Whitfield, John

      Ridsdale, Sir Julian

      Winterton, Mrs Ann

      Rifkind, Malcolm

      Winterton, Nicholas

      Robinson, Mark (N'port W)

      Wolfson, Mark

      Roe, Mrs Marion

      Wood, Timothy

      Rowe, Andrew

      Woodcock, Michael

      Ryder, Richard

      St. John-Stevas, Rt Hon N.

      Tellers for the Noes:

      Sayeed, Jonathan

      Mr. Tristan Garel-Jones and Mr. Ian Lang.

      Shaw, Sir Michael (Scarb')

      Question accordingly negatived.
      11 pm
      Mr. MacGregor: I beg to move amendment No. 33, in page 21, line 12, leave out from beginning to `shall' in line 13 and insert
      'the principal paragraphs of this Schedule'.
      Mr. Deputy Speaker (Mr. Paul Dean): With this we shall discuss Government amendments Nos. 34, 36, 37, 45, 49, 50, 53, 55 to 57 and 66.
      Mr. MacGregor: I am pleased to bring before the House this rather large batch of amendments that improve the procedures in schedule 2 for facilitating statutory succession on the voluntary retirement of the sitting tenant. Most of these amendments are in fulfilment of the undertaking I gave in Standing Committee on 10 April in relation to the suspension of notices to quit when notice of retirement is served. There are also some drafting amendments to clarify the text and to remedy some minor defects. I shall try to explain their purpose as quickly as possible, but there are many of them.
      The first amendment concerns the case where there has been service of a valid notice to quit under case B, D or E—that is, when land is needed for development or
      408
      there has been a breach of the tenancy agreement—before the giving of the retirement notice. If the notice is not one in respect of which the retirement provisions of schedule 2 are entirely excluded under paragraph 2(1)(c) of the schedule because arbitrations and tribunal procedures relating to the notice have already been exhausted, the retirement notice is held in suspense until action on the notice to quit has been settled one way or the other. If the notice to quit is upheld, the retirement notice is of no effect. That is set out in the new paragraph 2(3) and (4) of schedule 2.
      If a valid notice to quit is served on or after a retirement notice is given but before the tribunal has started the hearing of the application by the nominated successor, the amendments provide that if the notice to quit is given under case F—that is, the tenant's backruptcy—or case C when a bad husbandry certificate has already been given, the retirement notice is of no effect. They also provide that if the notice to quit is given under case B or D, the retirement notice is held in suspense until action on the notice to quit has been settled one way or the other. If the notice to quit is upheld, the retirement notice is of no effect. This is set out in the new paragraph 2A.
      In all other situations not already covered by the text of schedule 2, a notice to quit may not impede an application for a tenancy under paragraph 4 of the schedule.
      Amendment agreed to.
      Amendments made: No. 34, in page 21, line 14, at end insert
      `and subject also to paragraph 2A below.'.
      No. 35, in page 21, line 39, leave out from `land' to end of line 40.
      No. 36, in page 21, line 49, at end insert—
      '"the principal paragraphs of this Schedule" means paragraphs 3 to 9 below (except paragraphs 4(9) and 5(6), which are of general application);'.
      No. 37, in page 22, line 1, after `means', insert
      '(subject to paragraphs 2(4) and 2A(3) below)'.
      No. 38, in page 22, line 3, at end insert—
      '"the retirement date" means the date specified in the retirement notice as the date as from which the proposed succession is to take place;'.
      No. 40, in page 22, line 25, leave out `and' and insert—
      '(aa) Schedule 3A to that Act (which provides for the disregarding of certain kinds of occupation as well as specifying circumstances in which a person is deemed to be in occupation of land) shall apply in relation the nominated successor as it applies in relation to a survivor of a deceased tenant, but subject to the following modifications, namely—

      (i) references to the occupancy condition shall be read as references to the said paragraph (b),

      (ii) the reference in paragraph 4(2) to section 20 of that Act shall be read as a reference to paragraph 4 below, and

      (iii) paragraphs 3 and 6 shall be omitted; and'.

      No. 44, in page 22, line 45, after '(4)', insert `(aa) or'.
      No. 45, in page 23, line 7, leave out `following' and insert `principal'.
      No. 49, in page 23, line 45, after `holding', insert 'or a related holding'.
      No. 50, in page 23, line 46, after `holding', insert `or a related holding'. —[Mr. MacGregor.]
      Mr. Jackson: I beg to move amendment No. 41, in page 23, leave out lines 49 to 51.
      Mr. Deputy Speaker: It will be convenient to discuss at the same time the following Government amendments: Nos. 52, 54 and 60.
      Mr. Jackson: In Committee we had a useful discussion of the point raised by the amendment, so I can be brief. I seek to remove the age restriction on the right of a tenant to pass on his tenancy. When I tabled an amendment in these terms in Committee, the Minister was kind enough to say that he would table a Government amendment on Report to lift the restriction in cases of ill health or other incapacity.
      But, perhaps ungratefully, I wish to press my hon. Friend further. I do so for two reasons. The first is concerned with what we have been told is the main objective of the Bill — increasing the number of tenancies and promoting mobility, so making way for new blood to come into the industry. My amendment would help in those respects. The second reason is more fundamental. The restriction that we are discussing is a major restriction on the freedom of the tenant and his would-be successor, and we should put an end to it.
      What considerations have been put forward to justify this restriction on their freedom? In Committee, my hon. Friend advanced two reasons, the first being that this is a package and that because the CLA has struck an agreement with the NFU, this serious restriction on the freedom of some individuals should be maintained. That cannot be regarded as a substantial argument.
      The second reason is even more paternalistic. In Committee, my hon. Friend argued that there was a fear that if the restrictions were removed in the case of some tenants, there would be increasing inter-family pressures on the tenant to retire early in favour of an eligible successor. However, my hon. Friend gave his case away when he went on to say that while he could not gauge the strength of that feeling, it was not the business of Parliament to solve disputes within the family. I thoroughly agree with that sentiment, which is why I ask the Minister to accept the amendment and, with it, to make a small but useful expansion in the area of elementary human freedom.
      Mr. Hunter: I shall speak to amendment No. 51, in support of my hon. Friend the Member for Wantage (Mr. Jackson). My hon. Friend explained clause 4 and schedule 2, which would enable an existing tenant to apply to the Agricultural Land Tribunal for a direction for a tenancy to be passed on to a nominated successor. That can happen in the event of a refusal by the landlord of an application to transfer the tenancy.
      I entirely accept and applaud the intention and objective of clause 4. It will create many tenancy changes and that will be generally welcomed. It is reasonable to argue that a significant number of tenancy changes would not otherwise occur until the tenant's death. However, I must tell the Minister — in a friendly way — that I cannot understand or accept the limiting of its application to tenants of 65 years of age or over. I support my hon. Friend in urging that the age limitation should be removed. I believe that tenancy transfers should meet with Agricultural Land Tribunal approval, regardless of the age of the tenant. There are many personal and health reasons other than age alone that can prevent the continuation of effective farming.
      Mr. Mark Hughes: It is clear, in relation to amendment No. 54 — we pressed this matter in Committee—that transfer because of mental or bodily ill-health should be made easier. Serious practical difficulties arise from the amendment. The Agricultural Land Tribunal would need to be satisfied that, first, the tenant is infirm in body or mind and that such infirmity is likely to be permanent; and, secondly that as a result the tenant is incapable of conducting the farming business in perpetuity.
      Nobody on the Agricultural Land Tribunal is in a position to make such medical judgments. We support and welcome the Minister's intention to make available the ill-health ground, but we are not satisfied that amendment No. 54 achieves that objective. I should be most grateful if the Minister could satisfy us on that matter.
      Mr. MacGregor: Hon. Members are now endeavouring to be brief, so I shall try to do the same. As those Members who were on the Committee know, I undertook to consult outside interests to see whether it was possible to make a provision in the Bill for succession on grounds of ill-health before the age of 65. I was struck by the case before the Committee sat, but I wanted to hear the Committee debates before taking action. I was impressed by the arguments that I heard there and I entered into consultations. As a result, I am pleased to bring forward amendments Nos. 52, 54 and 60.
      The amendments will enable a tenant to retire before the age of 65, in favour of a nominated successor, if he is suffering from ill-health to an extent which permanently prevents him in his personal capacity from fulfilling his responsibilities to farm in accordance with the rules of good husbandry. In the case of joint tenancies, all tenants must meet that condition of ill-health.
      The tribunal must satisfy itself that the grounds of ill-health are established. That is a question of medical judgment in many cases. The problem of medical judgment is always implicit, and probably explicit, in any endeavour to introduce this sort of change in the law. It will be up to the tribunal to decide how it wishes to proceed. I can cite other cases of semi-traditional or traditional processes in which decision-takers do not have medical skills but call upon those who have them for their advice. Perhaps that is the way in which the tribunal would decide to proceed.
      We felt that it was unnecessary to write that approach into the Bill, but that we should leave it to a tribunal to satisfy itself that the grounds of ill-health are established and to decide how it would satisfy itself. I freely confess that that may not be perfect, but the hon. Member for City of Durham (Mr. Hughes) will agree that it is not possible to find a perfect solution to the problem. If, for any reason, the tribunal dismisses an application by the nominated successor under the arrangements, there may be no second bite by the nominated successor. An application by any other would-be successor may be made only on the death of the tenant.
      11.15 pm
      I refer next to the amendment proposed by my hon. Friend the Member for Wantage (Mr. Jackson). I hope he will agree that I have at least gone some way towards meeting the problems which he and others raised, and of which I was aware, by enabling the tenant to have the opportunity to retire on ill-health grounds before the age of 65. My hon. Friend was seductive in the way he moved

      411
      his amendment and in his appeal to the principles of freedom, but at this late stage of the Bill I am reluctant to make this final change. As I emphasised in Committee, the transfer that he seeks can take place at any age where the landlord agrees. Therefore, we are talking only about cases where the landlord does not agree.
      The age of 65 has been agreed by the industry, is in line with the Northfield report recommendations and is a well-recognised retirement age for many groups of people. In the absence of general agreement about going anywhere below the age of 65 within the industry as a whole, and in view of the desirability of ensuring that the Bill, in its final stages, gets through the House with the general agreement of the industry, I feel reluctant to go as far as my hon. Friend wishes, but I hope he will support my amendments and feel that they help quite a bit.
      Amendment negatived.
      Amendments made: No. 52, in page 23, line 49 leave out from '(e)' to end of line 50 and insert
      'subject to sub-paragraph (1B) below, if at the retirement date'.]
      No. 53, in page 24, line 10 at end insert—
      '(1A) In sub-paragraph (1)(d) above "related holding" means, in relation to the holding, any agricultural holding comprising the whole or a substantial part of the land comprised in the holding.'.
      No. 54, in page 24, line 10 at end insert—
      '(1B) The principal paragraphs of this Schedule are not excluded by sub-paragraph (1)(e) above if the retirement notice is given on the grounds that—

      (a) the retiring tenant or (where the notice is given by joint tenants) each of the retiring tenants is or will at the retirement date be incapable, by reason of bodily or mental infirmity, of conducting the farming of the holding in such a way as to secure the fulfilment of the responsibilities of the tenant to farm in accordance with the rules of good husbandry; and

      (b) any such incapacity is likely to be permanent; and that fact is stated in the notice.'.

      No. 55, in page 24, line 11, leave out 'following' and insert 'principal'.
      No. 56, in page 24, line 20, at end insert—
      '(3) If on the date of the giving of the retirement notice the tenancy is the subject of a valid notice to quit given before that date and including a statement that it is given for any such reason as is referred to in Case B, D or E in section 2(3) of the 1977 Act (not being a notice to quit falling within sub-paragraph (1)(c) above), the principal paragraphs of this Schedule shall not apply unless one of the events referred to in sub-paragraph (4) below occurs.
      (4) Those events are as follows—
      (a) it is determined by arbitration under the 1948 Act that the notice to quit is ineffective for the purposes of section 2(3) on account of the invalidity of any such reason as aforesaid; or
      (b) where a counter-notice is duly served under section 4(2) or (3) of the 1977 Act—

      (i) the Tribunal withhold consent to the operation of the notice to quit, or

      (ii) the period for making an application to the Tribunal for such consent expires without such an application having been made;

      and where one of those events occurs the relevant period shall for the purposes of this Schedule be the period of one month beginning with the date on which the arbitrator's award is delivered to the tenant, with the date of the Tribunal's decision to withhold consent, or with the expiry of the said period for making an application (as the case may be).
      Notices to quit restricting operation of Schedule
      2A. —(1) If the tenancy becomes the subject of a valid notice to quit given on or after the date of the giving of the retirement notice (but before the Tribunal have begun to hear any application by the nominated successor under paragraph 4 below in respect of the retirement notice) and the notice to quit—
      412

      (a) falls within Case C in section 2(3) of the 1977 Act and is founded on a certificate granted under section 2(4) of that Act in accordance with an application made before that date; or

      (b) falls within Case F in section 2(3);

      the retirement notice shall be of no effect and no proceedings, or (as the case may be) no further proceedings, shall be taken under this Schedule in respect of it.
      (2) If the tenancy becomes the subject of a valid notice to quit given on or after the date of the giving of the retirement notice (but before the Tribunal have begun to hear any application by the nominated successor under paragraph 4 below in respect of the retirement notice) and the notice to quit—

      (a) includes a statement that is given for any such reason as is referred to in Case B in section 2(3) of the 1977 Act; or

      (b) includes a statement that it is given for any such reason as is referred to in Case D in section 2(3) and is founded on a notice given for the purposes of that Case before that date;

      the retirement notice shall be of no effect and no proceedings, or (as the case may be) no further proceedings, shall be taken under this Schedule in respect of it unless one of the events referred to in sub-paragraph (3) below occurs.
      (3) Those events are as follows—

      (a) it is determined by arbitration under the 1948 Act that the notice to quit is ineffective for the purposes of section 2(3) on account of the invalidity of any such reason as aforesaid; or

      (b) where a counter-notice is duly served under section 4(2) or (3) of the 1977 Act—

      (i) the Tribunal withhold consent to the operation of the notice to quit; or

      (ii) the period for making an application to the Tribunal for such consent expires without such an application having been made;

      and where one of those events occurs, and the notice to quit was given before the time when the relevant period would expire apart from this sub-paragraph, that period shall for the purposes of this Schedule expire at the end of the period of one month beginning with the date on which the arbitrator's award is delivered to the tenant, with the date of the Tribunal's decision to withhold consent, or with the expiry of the said period for making an application (as the case may be).
      (4) For the purposes of this Schedule an application by the nominated successor under paragraph 4 below which is invalidated by sub-paragraph (1) or (2) above shall be treated as if it had never been made'.
      No. 57, in page 24, leave out lines 23 to 28 and insert
      'any notice to quit the holding or part of the holding given to the tenant thereof (whether before or on or after the date of the giving of the retirement notice), not being a notice to quit falling within any provision of paragraph 2 or 2A above.'.
      No. 60, in page 25, line 3, at end insert—
      '(2A) If the retirement notice includes a statement in accordance with paragraph 2(1B) above that is given on the grounds mentioned in that provision, then, before the nominated successor's application is further proceeded with under this paragraph, the Tribunal must be satisfied—

      (a) that the retiring tenant or (as the case may be) each of the retiring tenants either is or will at the the retirement date be incapable, by reason of bodily or mental infirmity, of conducting the farming of the holding in such a way as to secure the fulfilment of the responsibilities of the tenant to farm in accordance with the rules of good husbandry; and

      (b) that any such incapacity is likely to be permanent.'.—[Mr. MacGregor.]

      Mr. Jackson: I beg to move amendment No. 61, in page 25, line 30, at end insert—
      'If the Tribunal dispose of the nominated successor's application otherwise than by the giving of a direction under sub-paragraph (5) above, the nominated successor may not on the death of the tenant, make an application for a direction entitling him to the tenancy unless a period of five years has elapsed from the date on which an application under paragraph 4(1) and (2) above was made.'
      Mr. Deputy Speaker: With this it will be convenient to take amendment No. 68, in page 27, line 41, leave out sub-paragraph (4).
      Mr. Jackson: It has been my good fortune—at least I think it is so—to have these late amendments selected, and I shall be brief, as I know how late it is.
      The purpose of the two amendments is to put right what I consider to be a serious potential injustice to a few individuals. Under the arrangements proposed in the Bill, a tenant can apply only once to the Agricultural Land Tribunal to transfer his tenancy to a successor, and if he fails, he can never do it again.
      We must ask ourselves what that could mean to the individuals concerned. We are considering a moment that is a turning point in their lives, perhaps one of the most important moments in the career of a would-be successor. He has to show that he is both eligible and suitable to succeed to the tenancy, for which he might have been preparing himself all his adult working life. However, under the Government's proposals in the Bill, he has only one chance to demonstrate that eligibility and suitability, and if he fails, he does not have another chance. It is a throw of the dice; all or nothing—in a phrase, "sudden death". It is as if, in the House, we were allowed only one chance to be elected to Parliament, and having failed, we could never stand again. [HON. MEMBERS: "A good idea. "] It may a good idea for some, but we all agree that it could be less satisfactory for ourselves.
      I do not believe that the Government proposal can be justified in the light of natural justice. The criteria of suitability are set out in the 1976 Act — training, practical experience, age, physical health, and adequate financial standing. On all those criteria a man may fail, but he can draw lessons from his failure, and if he is given the chance, he can demonstrate that he has learnt the lessons. But it is precisely that chance that the Government, in their legislation, fail to provide, and which I am seeking to make possible by my amendment. I know that it is a bore and a cost for the landlords, but I hope that the House will look with favour on an amendment moved in the interests of simple natural justice.
      Mr. MacGregor: I gave much thought to the amendment, because I saw the point of the argument advanced by my hon. Friend the Member for Wantage (Mr. Jackson). He will not find my answer satisfactory, but I hope that he will understand the spirit in which it is given.
      I must resist the amendments, for the following reasons. The inter vivos succession provisions in schedule 2 were introduced as part of the mini-package agreement reached between the National Farmers Union and the Country Landowners Association. It was not part of that agreement that an unsuccessful applicant could apply again on the death of the tenant. The CLA contends—it has a point—that the landlord should not be put to the trouble and expense of having to oppose again an applicant whom he has already proven to be ineligible. Under the provisions in schedule 2 the tenant and nominated successor are free to choose the best time to serve a retirement notice in order to optimise the nominated successor's eligibility. If, having done so, the applicant is found to be ineligible, the passage of further time is unlikely to make him so. In those circumstances, there is a problem about putting the landlord to further trouble and expense.
      414
      As there is a compromise agreement on this, and for the reasons that I gave on the previous group of amendments, it is better to leave the Bill as it stands. I hope that my hon. Friend will accept those reasons.
      Question put, That the amendment be made:—
      The House divided: Ayes 19, Noes 170.

      Division No. 355]

      [11.21 pm

      AYES

      Ashdown, Paddy

      Parry, Robert

      Beith, A. J.

      Penhaligon, David

      Campbell-Savours, Dale

      Skinner, Dennis

      Cook, Robin F. (Livingston)

      Smith, Cyril (Rochdale)

      Cunliffe, Lawrence

      Thomas, Dafydd (Merioneth)

      Ewing, Harry

      Wallace, James

      Freud, Clement

      Wareing, Robert

      Howells, Geraint

      Hughes, Simon (Southwark)

      Tellers for the Ayes:

      Jackson, Robert

      Mr. Archy Kirkwood and Mr. Robert Maclennan.

      Loyden, Edward

      Meadowcroft, Michael

      NOES

      Aitken, Jonathan

      Garel-Jones, Tristan

      Alison, Rt Hon Michael

      Glyn, Dr Alan

      Ancram, Michael

      Goodlad, Alastair

      Arnold, Tom

      Gorst, John

      Ashby, David

      Hargreaves, Kenneth

      Aspinwall, Jack

      Harris, David

      Atkinson, David (B'm'th E)

      Hawkins, Sir Paul (SW N'folk)

      Baker, Nicholas (N Dorset)

      Hayes, J.

      Baldry, Anthony

      Heddle, John

      Batiste, Spencer

      Henderson, Barry

      Beaumont-Dark, Anthony

      Howard, Michael

      Bellingham, Henry

      Howarth, Gerald (Cannock)

      Benyon, William

      Hunter, Andrew

      Berry, Sir Anthony

      Jopling, Rt Hon Michael

      Bevan, David Gilroy

      Knox, David

      Biggs-Davison, Sir John

      Lang, Ian

      Bottomley, Peter

      Latham, Michael

      Bottomley, Mrs Virginia

      Lawrence, Ivan

      Bowden, A. (Brighton K'to'n)

      Lester, Jim

      Bowden, Gerald (Dulwich)

      Lightbown, David

      Braine, Sir Bernard

      Lilley, Peter

      Brinton, Tim

      Lloyd, Peter, (Fareham)

      Brooke, Hon Peter

      Lyell, Nicholas

      Brown, M. (Brigg & Cl'thpes)

      McCurley, Mrs Anna

      Bruinvels, Peter

      Macfarlane, Neil

      Buck, Sir Antony

      MacGregor, John

      Budgen, Nick

      Maclean, David John

      Bulmer, Esmond

      McQuarrie, Albert

      Carlisle, John (N Luton)

      Major, John

      Carlisle, Kenneth (Lincoln)

      Malins, Humfrey

      Carttiss, Michael

      Malone, Gerald

      Cash, William

      Maude, Hon Francis

      Chope, Christopher

      Mawhinney, Dr Brian

      Clark, Dr Michael (Rochford)

      Mayhew, Sir Patrick

      Clarke, Rt Hon K. (Rushcliffe)

      Mellor, David

      Conway, Derek

      Meyer, Sir Anthony

      Coombs, Simon

      Mills, Iain (Meriden)

      Cope, John

      Mills, Sir Peter (West Devon)

      Couchman, James

      Mitchell, David (NW Hants)

      Currie, Mrs Edwina

      Moynihan, Hon C.

      Dicks, Terry

      Murphy, Christopher

      Douglas-Hamilton, Lord J.

      Neale, Gerrard

      Dover, Den

      Needham, Richard

      Dunn, Robert

      Nelson, Anthony

      Durant, Tony

      Neubert, Michael

      Emery, Sir Peter

      Nicholls, Patrick

      Evennett, David

      Oppenheim, Philip

      Eyre, Sir Reginald

      Page, Richard (Herts SW)

      Fallon, Michael

      Parris, Matthew

      Farr, John

      Patten, John (Oxford)

      Favell, Anthony

      Peacock, Mrs Elizabeth

      Fenner, Mrs Peggy

      Percival, Rt Hon Sir Ian

      Forman, Nigel

      Porter, Barry

      Gale, Roger

      Powell, William (Corby)

      Galley, Roy

      Powley, John

      415

      Prentice, Rt Hon Reg

      Temple-Morris, Peter

      Proctor, K. Harvey

      Terlezki, Stefan

      Rathbone, Tim

      Thomas, Rt Hon Peter

      Renton, Tim

      Thompson, Donald (Calder V)

      Rhys Williams, Sir Brandon

      Thompson, Patrick (N'ich N)

      Ridsdale, Sir Julian

      Thornton, Malcolm

      Rifkind, Malcolm

      Thurnham, Peter

      Robinson, Mark (N'port W)

      Tracey, Richard

      Roe, Mrs Marion

      Twinn, Dr Ian

      Rowe, Andrew

      van Straubenzee, Sir W.

      Ryder, Richard

      Viggers, Peter

      Sayeed, Jonathan

      Waddington, David

      Shaw, Sir Michael (Scarb')

      Wakeham, Rt Hon John

      Shelton, William (Streatham)

      Walden, George

      Shepherd, Colin (Hereford)

      Walker, Bill (T'side N)

      Sims, Roger

      Waller, Gary

      Skeet, T. H. H.

      Wardle, C. (Bexhill)

      Smith, Sir Dudley (Warwick)

      Warren, Kenneth

      Soames, Hon Nicholas

      Watson, John

      Spencer, Derek

      Watts, John

      Spicer, Jim (W Dorset)

      Wells, Bowen (Hertford)

      Spicer, Michael (S Worcs)

      Wells, John (Maidstone)

      Stanbrook, Ivor

      Whitfield, John

      Steen, Anthony

      Winterton, Mrs Ann

      Stern, Michael

      Winterton, Nicholas

      Stevens, Lewis (Nuneaton)

      Wolfson, Mark

      Stevens, Martin (Fulham)

      Wood, Timothy

      Stewart, Allan (Eastwood)

      Woodcock, Michael

      Stewart, Andrew (Sherwood)

      Stradling Thomas, J.

      Tellers for the Noes:

      Sumberg, David

      Mr. David Hunt and Mr. Tim Sainsbury.

      Taylor, Teddy (S'end E)

      Question accordingly negatived.
      Amendments made: No. 62, in page 26, line 44, leave out from second `the' to end of line 47 and insert `retirement date, except that—

      (a) where such a direction is given within the period of three months ending with the retirement date, the Tribunal may, on the application of the tenant, specify in the direction, as the relevant time for the purposes of this paragraph, such a time falling within the period of three months immediately following the retirement date as they think fit;

      (b) where such a direction is given at any time after the retirement date, the Tribunal shall specify in the direction, as the relevant time for those purposes, such a time falling within the period of three months immediately following the date of the giving of the direction as they think fit;

      and any time so specified shall be the relevant time for those purposes accordingly.'.
      No. 63, in page 27, line 16, leave out 'the end of' and insert—
      (a) the end of the'.
      No. 64, in page 27, line 17, at end insert
      ; or
      (b) the end of three months immediately following the date of the giving of the direction;
      whichever last occurs.'.
      No. 65, in page 27, line 24, leave out from 'after' to end of line 25 and insert 'giving the retirement notice.'.
      No. 66, in page 27, line 29 after 'and', insert
      `no proceedings, or (as the case may be)'.
      No. 67, in page 27, line 36, after `above,', insert
      'but before the relevant time (within the meaning of that paragraph),'.
      No. 69, in page 28, line 20, leave out from beginning to end of line 21 and insert
      the reference in the definition of "relevant land" to agricultural land which is occupied as mentioned in paragraph (a) of that definition included a reference to agricultural land which is deemed to be occupied by the nominated successor by virtue of this paragraph.'.—[Mr. MacGregor.]

    Schedule 3

      MINOR AND CONSEQUENTIAL AMENDMENTS
      Amendments made: No. 71, in page 31, leave out line 40.
      No. 72, in page 31, line 42, leave out 'and' and insert—
      (aa) for the words from "for the supply" to "the Minister" there shall be substituted the words "executed on the holding for the purpose of complying with the requirements of a notice under section 3 of the Agriculture (Safety, Health and Welfare Provisions) Act 1956 (provision of sanitary conveniences and washing facilities)"; and'.
      No. 73, in page 40, line 7, at end insert—
      'The Opencast Coal Act 1958 (c.69)
      28A. In section 24(6) of the Opencast Coal Act 1958 (tenant's right to compensation for improvements etc.), in proviso (b), for each of the words "four" and "five" there shall be substituted the word "eight".'.—[Mr. MacGregor.]

    Schedule 4

      ENACTMENTS REPEALED
      Amendments made: No. 75, in page 44, line 21, column 3, leave out from `it,' to 'and' in line 23.
      No. 76, in page 45, line 4, at end insert—

      '4 & 5 Eliz. 2 c.49.

      The Agriculture (Safety, Section 3(10).'. Health and Welfare Provisions) Act 1956.

      No. 77, in page 45, line 19, column 3 leave out `to "1967"' and insert 'onwards'.—[Mr. MacGregor.]
      Order for Third Reading read.— [Queen's Consent, on behalf of the Crown, and Prince of Wales's Consent, on behalf of the Duchy of Cornwall, signified]
      Question proposed, That the Bill be now read the Third time.—[Mr. Jopling.]
      11.32 pm
      Mr. Robert Hughes: May I take this opportunity to put the record straight on a slip of the tongue I made earlier when I said that the industry described the RICS as the Government's men; it was clear in the context of my speech that I meant the landlord's men. Hansard, however, will not correct this slip. Therefore, I put that correction on the record.
      The Bill makes little or no contribution to the future of the tenanted sector. It is a bad Bill and we shall vote against it tonight.
      11.33 pm
      Mr. Geraint Howells: I do not believe that the necessary amendments have been made to ensure that the Bill fulfils its purpose of promoting healthy tenant-landlord relationships. This issue has been debated by all interested parties for a number of years. Everyone accepted that the present arrangements were no longer satisfactory and that fundamental changes were needed. This should have been our opportunity to put things right, but in the event it has not proved to be so. Unfortunately, the Government did not take our representations into account. As a result the Bill is totally inadequate and does not advance the interests of the agricultural industry.
      The provisions have been discussed at length on the Floor of the House and in Committee, but after all the talking we have not made any significant progress. We in the alliance believe that one essential element in

      417
      agriculture is continuity. This element has been destroyed in the Bill, exposing many a tenant farmer and his family to great insecurity.
      We suggested a two-generation succession as a fair and equitable compromise. We are disappointed that our arguments were not accepted and we shall vote against Third Reading.
      11.35 pm
      Mr. Jopling: I note that the hon. Member for Aberdeen, North (Mr. Hughes) and the Liberal party spokesman, the hon. Member for Ceridigion and Pembroke, North (Mr. Howells), intend to vote against Third Reading. Even they would not dispute the need for legislation to make more farm tenancies available. The problem is how to achieve that. One needs only a brief acquaintance with this complex subject to realise that it is exceedingly difficult to maintain the right balance in the landlord-tenant relationship.
      Radical measures are unlikely to achieve the degree of performance that is essential if the confidence of those landlords and tenants is to be maintained. That is why the Government took the view that any measures must, so far as possible, be on the basis of agreement with the industry. The Bill is workable and acceptable to landlords and tenants. At technical level we have remedied many of the weaknesses in the present legislation which have been uncovered over the years of practical application.
      What is more important, the new rent formula will help to ensure greater confidence in the arbitration process. The changes in the succession arrangement, in conjunction with the fiscal changes introduced by the Chancellor of the Exchequer will help to create the right climate for landlords to let more land and so create more opportunities for new tenants and new farm entrants on their own account.
      We now have a useful Bill which will be widely welcomed by the industry as a whole. I commend it to the House.
      Question put, That the Bill be now read the Third time:—
      The House divided: Ayes 170, Noes 85.

      Division No. 356]

      [11.37 pm

      AYES

      Aitken, Jonathan

      Brown, M. (Brigg & Cl'thpes)

      Alison, Rt Hon Michael

      Bruinvels, Peter

      Ancram, Michael

      Buck, Sir Antony

      Arnold, Tom

      Budgen, Nick

      Ashby, David

      Bulmer, Esmond

      Aspinwall, Jack

      Carlisle, John (N Luton)

      Atkinson, David (B'm'th E)

      Carlisle, Kenneth (Lincoln)

      Baker, Nicholas (N Dorset)

      Carttiss, Michael

      Baldry, Anthony

      Cash, William

      Batiste, Spencer

      Chope, Christopher

      Beaumont-Dark, Anthony

      Clark, Dr Michael (Rochford)

      Bellingham, Henry

      Clarke, Rt Hon K. (Rushcliffe)

      Benyon, William

      Conway, Derek

      Berry, Sir Anthony

      Coombs, Simon

      Bevan, David Gilroy

      Cope, John

      Biggs-Davison, Sir John

      Couchman, James

      Bottomley, Peter

      Currie, Mrs Edwina

      Bottomley, Mrs Virginia

      Dicks, Terry

      Bowden, A. (Brighton K'to'n)

      Douglas-Hamilton, Lord J.

      Bowden, Gerald (Dulwich)

      Dover, Den

      Braine, Sir Bernard

      Dunn, Robert

      Brinton, Tim

      Durant, Tony

      Brooke, Hon Peter

      Emery, Sir Peter

      418

      Evennett, David

      Prentice, Rt Hon Reg

      Eyre, Sir Reginald

      Proctor, K. Harvey

      Fallon, Michael

      Rathbone, Tim

      Favell, Anthony

      Renton, Tim

      Fenner, Mrs Peggy

      Rhys Williams, Sir Brandon

      Forman, Nigel

      Ridsdale, Sir Julian

      Gale, Roger

      Rifkind, Malcolm

      Galley, Roy

      Robinson, Mark (N'port W)

      Garel-Jones, Tristan

      Roe, Mrs Marion

      Glyn, Dr Alan

      Rowe, Andrew

      Goodlad, Alastair

      Ryder, Richard

      Gorst, John

      Sayeed, Jonathan

      Hargreaves, Kenneth

      Shaw, Sir Michael (Scarb')

      Harris, David

      Shelton, William (Streatham)

      Hawkins, Sir Paul (SW N'folk)

      Shepherd, Colin (Hereford)

      Hayes, J.

      Sims, Roger

      Heddle, John

      Skeet, T. H. H.

      Henderson, Barry

      Smith, Sir Dudley (Warwick)

      Howard, Michael

      Soames, Hon Nicholas

      Howarth, Gerald (Cannock)

      Spencer, Derek

      Hunt, David (Wirral)

      Spicer, Jim (W Dorset)

      Hunter, Andrew

      Spicer, Michael (S Worcs)

      Jackson, Robert

      Stanbrook, Ivor

      Jopling, Rt Hon Michael

      Steen, Anthony

      Knox, David

      Stern, Michael

      Lang, Ian

      Stevens, Lewis (Nuneaton)

      Latham, Michael

      Stevens, Martin (Fulham)

      Lawrence, Ivan

      Stewart, Allan (Eastwood)

      Lester, Jim

      Stewart, Andrew (Sherwood)

      Lightbown, David

      Stradling Thomas, J.

      Lilley, Peter

      Sumberg, David

      Lloyd, Peter, (Fareham)

      Taylor, Teddy (S'end E)

      Lyell, Nicholas

      Temple-Morris, Peter

      McCurley, Mrs Anna

      Terlezki, Stefan

      Macfarlane, Neil

      Thomas, Rt Hon Peter

      MacGregor, John

      Thompson, Donald (Calder V)

      Maclean, David John

      Thompson, Patrick (N'ich N)

      McQuarrie, Albert

      Thornton, Malcolm

      Malins, Humfrey

      Thurnham, Peter

      Malone, Gerald

      Tracey, Richard

      Maude, Hon Francis

      Twinn, Dr Ian

      Mawhinney, Dr Brian

      van Straubenzee, Sir W.

      Mayhew, Sir Patrick

      Viggers, Peter

      Mellor, David

      Waddington, David

      Meyer, Sir Anthony

      Wakeham, Rt Hon John

      Mills, lain (Meriden)

      Walden, George

      Mills, Sir Peter (West Devon)

      Walker, Bill (T'side N)

      Mitchell, David (NW Hants)

      Waller, Gary

      Moynihan, Hon C.

      Wardle, C. (Bexhill)

      Murphy, Christopher

      Warren, Kenneth

      Neale, Gerrard

      Watson, John

      Needham, Richard

      Watts, John

      Nelson, Anthony

      Wells, Bowen (Hertford)

      Neubert, Michael

      Wells, John (Maidstone)

      Nicholls, Patrick

      Whitfield, John

      Oppenheim, Philip

      Winterton, Mrs Ann

      Page, Richard (Herts SW)

      Winterton, Nicholas

      Parris, Matthew

      Wolfson, Mark

      Patten, John (Oxford)

      Wood, Timothy

      Peacock, Mrs Elizabeth

      Woodcock, Michael

      Percival, Rt Hon Sir Ian

      Porter, Barry

      Tellers for the Ayes:

      Powell, William (Corby)

      Mr. John Major and Mr. Tim Sainsbury.

      Powley, John

      NOES

      Anderson, Donald

      Conlan, Bernard

      Archer, Rt Hon Peter

      Cook, Robin F. (Livingston)

      Ashdown, Paddy

      Corbett, Robin

      Beckett, Mrs Margaret

      Cowans, Harry

      Beith, A. J.

      Craigen, J. M.

      Bermingham, Gerald

      Crowther, Stan

      Blair, Anthony

      Cunliffe, Lawrence

      Brown, Hugh D. (Provan)

      Dalyell, Tam

      Caborn, Richard

      Davies, Ronald (Caerphilly)

      Callaghan, Jim (Heyw'd & M)

      Davis, Terry (B'ham, H'ge H'l)

      Campbell-Savours, Dale

      Dormand, Jack

      Clark, Dr David (S Shields)

      Eadie, Alex

      Clay, Robert

      Eastham, Ken

      Cocks, Rt Hon M. (Bristol S.)

      Ewing, Harry

      419

      Fields, T. (L'pool Broad Gn)

      Millan, Rt Hon Bruce

      Fisher, Mark

      Morris, Rt Hon J. (Aberavon)

      Forrester, John

      Parry, Robert

      Foster, Derek

      Penhaligon, David

      Freud, Clement

      Pike, Peter

      Haynes, Frank

      Powell, Raymond (Ogmore)

      Hogg, N. (C'nauld & Kilsyth)

      Prescott, John

      Holland, Stuart (Vauxhall)

      Redmond, M.

      Howells, Geraint

      Robertson, George

      Hughes, Dr. Mark (Durham)

      Ross, Ernest (Dundee W)

      Hughes, Robert (Aberdeen N)

      Sheerman, Barry

      Hughes, Sean (Knowsley S)

      Skinner, Dennis

      Hughes, Simon (Southwark)

      Smith, Cyril (Rochdale)

      Kirkwood, Archibald

      Smith, Rt Hon J. (M'kl'ds E)

      Leighton, Ronald

      Spearing, Nigel

      Lewis, Ron (Carlisle)

      Stott, Roger

      Lewis, Terence (Worsley)

      Strang, Gavin

      Litherland, Robert

      Thomas, Dafydd (Merioneth)

      Loyden, Edward

      Thompson, J. (Wansbeck)

      McDonald, Dr Oonagh

      Tinn, James

      McKay, Allen (Penistone)

      Torney, Tom

      McKelvey, William

      Wallace, James

      Maclennan, Robert

      Wareing, Robert

      McTaggart, Robert

      Weetch, Ken

      McWilliam, John

      Welsh, Michael

      Madden, Max

      Winnick, David

      Marek, Dr John

      Maxton, John

      Tellers for the Noes:

      Maynard, Miss Joan

      Mr. John Home Robertson and Mr. Don Dixon.

      Meadowcroft, Michael

      Michie, William

      Question accordingly agreed to.
      Bill read the Third time, and passed.

  Bretby Hall Hospital
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodlad.]
  11.47 pm
  Mrs. Edwina Currie: I wish to raise the subject of the closure of Bretby Hall hospital in my constituency, a subject that raises issues not just for my area but for the rest of the country. I am grateful to my hon. and learned Friend the Member for Burton (Mr. Lawrence) for his advice on this matter.
  Bretby Hall is a small, 86-bed orthopaedic unit, housed in a magnificent old property in south Derbyshire. The house once belonged to Lord Chesterfield, and has been an orthopaedic hospital since 1926, before the creation of the National Health Service. It is managed by the Southern Derbyshire health authority, which covers several constituencies, including those of Derby, and in turn by the Trent regional health authority. It is one of two main orthopaedic units in south Derbyshire, the other being at the Derbyshire royal infirmary at Derby, which does the main trauma and accident cases. Bretby is used only for cold surgery — that is, planned operations. The beds cannot be used for anything else, and in my eyes that is one of the hospital's virtues.
  The closure arises not because of lack of money but because of increases. Under the resource allocation working party formula, both Trent and the Southern Derbyshire health authority are the gainers. Trent has 500 more posts as a result of the recent manpower review, and the Southern Derbyshire health authority has embarked on a large capital building programme at its two main district general hospital sites—Derbyshire royal infirmary and Derby City hospital.
  Before the contracts were let, the DHSS sensibly asked how the additional facilities were to be used, and the consideration of the transfer of various small units, such as the Derwent hospital and the Derby children's hospital, has led to the problem that we now have. The main victim of this consideration has been Bretby. The closure is out for consultation, and the transfer. if it is agreed, will take place in 1986–87, following the provision there of a twin theatre and of an extra lift at Derby city hospital. The additional cost will be about £2 million, and there will be increased revenue costs as well.
  I emphasise that the intention is that there should be no loss of service, and I am not criticising the district health authority. As a former chairman of the authority, I understand the pressures that it is under. It envisages some gains. It tells us that there will be more modern facilities — I have to add, somewhat more modern facilities, because a new theatre and physiotherapy department have only recently been provided at Bretby, the latter with private funds. There will be fewer beds in the new unit, for there will be a decrease from 86 to 76.
  We are told that access may improve for some patients, but the letters that I have received from throughout Derbyshire, Staffordshire and Leicestershire suggest that access is not a problem for the patients who have been treated at Bretby. We are told that on the district general hospital site there will be less risk to patients, and perhaps better status for staff and more training facilities for staff of all kinds. That is not what the consultants say, and I

  421
  stress that it is the consultants who work at Bretby and at other district hospital sites who are leading the fight to keep Bretby Hall open.
  Something extremely special would be lost if Bretby Hall were to close; that is why I am so pleased to have the opportunity of raising the issue in an Adjournment debate. In the year that I have represented the neighbourhood of Bretby I have visited Bretby Hall hospital on a number of occasions. It is always a delight to visit it, for it has a very special atmosphere. It is special for reasons other than the fact that it is in a beautiful house, that there are wards in what was formerly a ballroom, that there is a former music room with a beautiful parquet floor and that every ward looks out over magnificent gardens with fields and the Derbyshire hills beyond. Whatever else we can do in Derby, we cannot provide those attractions.
  I have no doubt that Bretby Hall is special because of the atmosphere of a small, friendly local unit. That atmosphere is real and it is understood by the patients and the staff. There are about 170 staff at Bretby and they are nearly all local people. They are deeply committed to working at the hospital. Bretby Hall has no difficulties in recruiting staff, even scarce and rare staff, such as theatre sisters. They will work at Bretby Hall but not in Derby, and they are most reluctant to move. The effect on staff morale of the proposed closure is disastrous. I suspect that if the decision is taken to close Bretby Hall we may well see over the next couple of years the progressive collapse of the unit. It may not be possible to maintain the service to patients in the way that we would like.
  Bretby Hall is special in a number of ways. For example, it has never cancelled an operation. If an elderly constituent is booked in for a hip operation, he or she knows that it will take place. The patients know that they can count on the hospital. The through-put is astonishing. It is typical there to carry out a hip operation in an hour and a half and to get a patient home in 12 days flat. The average length of stay for an orthopaedic patient is nine days and that is being reduced. When I was there last week, the hospital was dealing with 10 patients in one theatre in one day. That is quite a record, but sometimes it is exceeded.
  Mr. Ivan Lawrence: In paying this profound compliment to the staff of Bretby Hall hospital, is my hon. Friend not paying a substantial compliment to my constituents in Burton-on-Trent?
  Mrs. Currie: I am glad to have the opportunity to confirm that that is so. I am paying a compliment also to my own constituents, and I am delighted that some of them are listening to the debate.
  I have talked to the surgeons and I have asked them why Bretby Hall seems to be so successful. One reason is that it is a small hospital. I am told that it is quick and easy to transfer patients as it is not necessary to wait for a long time for porters or administrative staff. Over and over again the consultant surgeons have said: "It is simply easier to work in Bretby Hall and to get on with these things."
  On these grounds alone, Bretby Hall is special. If one makes the effort to study the statistics and to compare Bretby Hall with other major orthopaedic units it is interesting to find that its through-put is much higher than that elsewhere. Compared with Oswestry and the royal
  422
  orthopaedic hospital in Birmingham, the Woodlands, near which I used to live, the number of cases per theatre is revealing. Bretby Hall can deal with 200 hip operations while Oswestry can deal with only 154 and the Woodlands 190. As for operations on knees, Bretby Hall can deal with 102 per theatre while Oswestry deals with only 18 and the Woodlands only 28. Bretby Hall has four consultants while the Woodlands has 12 and Oswestry has 25. Bretby Hall operates on only four days a week instead of five elsewhere and it does not have the large number of permanent junior staff to assist that are to be found in other units. On these grounds alone, the future of Bretby Hall needs to be reconsidered.
  These levels of achievement are to be found at Bretby Hall for reasons that are set out in a report from a working party to my right hon. Friend the Secretary of State for Social Services, which is known as the Duthie report on orthopaedic services. My hon. Friend the Parliamentary Under-Secretary of State will be well acquainted with the report, especially as Professor Duthie is one of his constituents. Paragraph 3.4.1 reads:
  "Because of its inevitably demanding nature, "trauma"
  that is, accidents—
  "will always take priority over elective surgery. Beds booked for elective patients in wards which receive both trauma and elective surgery become filled with accident and emergency cases and theatre time for elective surgery has to be used for traumatic cases …
  Since few orthopaedic units have sufficient beds to cope with the influx of traumatic cases and at the same time to meet the demands of elective surgery, it is only in those places where trauma and elective beds are geographically separated that elective beds are protected. Where, within a single hospital, endeavours are made to reserve beds for elective cases trauma cases still overflow into them. It is without doubt for this reason that many see as the only solution of the waiting time problem the strict separation of facilities for traumatic and elective treatment."
  There could not be a better description of the organisation of orthopaedic services in and around my constituency with elective work at Bretby Hall and trauma work at Derbyshire Royal infirmary.
  Bretby Hall hospital raises one or two wider points. It is an orthopaedic hospital. Of all our long waiting lists, the waiting lists for orthopaedics is the worst, nationally and locally. At the time that Professor Duthie was making his report, the Trent region was the worst in the country for orthopaedics, and it is not all that much better now.
  The most recent figures that I could obtain were in the Derby Evening Telegraph of 9 February 1984. In southern Derbyshire, almost 750 non-urgent orthopaedic cases out of a total waiting list of 1,755 have been waiting for longer than one year, and 31 of the 50 most urgent orthopaedic cases have been waiting for longer for one month. That is way beyond Government guidelines.
  I suggest that, as we are messing around with orthopaedics, we need more assistance, not a transfer. Yesterday's research is today's routine activity. Improvements in anaesthesia especially mean that most elderly people can be treated safely and frequently under local anaesthetic. I am not sure that it would suit me to have my knee treated under a local anaesthetic, but it seems to suit many elderly people and they recover more quickly. One surgeon has estimated that we need about 10 per cent. more beds in orthopaedic surgery to cope with increases in the number of fractured femurs, let alone increased demand in other respects.

  423
  The Southern Derbyshire health authority has set up a working party on orthopaedics. I have two recommendations to make to that working party: first, provide more beds at Derby city hospital for all the difficult cases and reduce waiting lists; secondly, leave Bretby Hall alone. I feel strongly about that point.
  One of the last recommendations of the Duthie report was:
  "No specialist orthopaedic hospital, however small or isolated, should be closed unless it can first be guarateed that the facility planned to replace it will provide the same or a better standard of service for an equal or increased number of patients within a similar period of time."
  Bretby Hall is special for two other reasons. First, it is in an old house. That is typical of the NHS, especially in the provinces. Reinstatement of that house could be expensive, but I challenge the notion that an old property is always dearer to run. The NHS does not charge depreciation or interest on its capital, so it is a little difficult to compare an old and a new hospital, but my experience of local government suggests that new buildings are invariably more expensive and frequently a great deal more expensive than the existing facilities.
  The Southern Derbyshire health authority figures show that there will be an increase in running costs after the transfer of £127,000 a year, and that is for 10 fewer beds. I challenge the notion that it has to be NHS money. Bretby Hall is a grade II listed building. Is it so impossible to get the Department of the Environment and the Department of Health and Social Services together so that we can restore Bretby Hall, the house, to its former glory and enable NHS money to be spent as it should be — on equipment, drugs, services, and so on? I should be grateful for the Minister's comments.
  Finally, there is the classic dilemma of the countryside versus the city. I used to be responsible for a big city hospital. I am now responsible for a country area of 50,000 electors and a city area of 26,000 electors and I am conscious of the need to serve all my constituents and of the health authority's responsibility to cover an enormous area of Derbyshire.
  I question the wisdom of always putting services in the towns and cities and expecting country people to travel to them. That may be fine for people in Derby, but it is not fine for the large number of people who live nowhere near the city. I question the wisdom of closing all our little hospitals. In the past five years, 112 small units have been closed. Admittedly, more beds have been provided, but they have been in bigger units, with an average of more than 300 beds each.
  In questioning the wisdom of closing all the little units and putting all the services on one site, I realise that I am questioning the whole pattern of NHS hospital planning, but I suspect that much of it is 20 years out of date. The concept of the big city hospital on a single site was perfect for the 1950s and the 1960s when our cities were growing, but it took 20 years to obtain the money, which I appreciate has been provided by the Government. Nevertheless, the plans do not reflect the changing pattern of population. All our major cities are losing population, so the services are moving into the cities as the population moves out.
  The pattern of treatment is also changing. Orthopaedics did not exist 20 years ago. Now that it is a basic, standard
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  service, it might be better to provide small, perhaps multipurpose local hospitals and units with ready availability of basic services such as orthopaedics instead of constantly building monoliths in towns.
  Despite the good will of a decent, caring health authority and all the arguments for the transfer of orthopaedic services to Derby, there is a deep-seated, unhappy feeling in my constituency that closing Bretby Hall hospital and others like it all over the country is a mistake. I hope that the authorities will take heed of what has been said and reconsider their plans.
  12.1 am
  The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Patten): I am very pleased that my hon. Friend the Member for Derbyshire, South (Mrs. Currie) has raised the important issue of Bretby orthopaedic hospital. I am also glad to note that my hon. and learned Friend the Member for Burton (Mr. Lawrence), with his characteristic care and concern for these matters, has been present to take part in the debate.
  Mrs. Currie: My hon. Friend the Member for Leicestershire, North-West (Mr. Ashby) is here, too.
  Mr. Patten: Yes, and I await his intervention. I was paying complements only to those who had spoken.
  Mr. David Ashby: Will my hon. Friend give way?
  Mr. Patten: It is a little early in my speech to give way. I must first devote my attention to the remarks of my hon. Friend the Member for Derbyshire, South.
  The orphopaedic services provided by Bretby hospital are well known and the buildings housing them are known as a fine example of Victorian architecture. I was glad that my hon. Friend linked those two points as she did.
  I wish to deal with four matters. First, there is the consultation process which surrounds any closure proposal. Secondly, there is the relationship between the important points raised by my hon. Friend about the capital programme and the recommendations of the Duthie report and the constant dilemma in the Health Service of large versus small and urban versus rural. Thirdly, I wish to deal with an important issue concerning the staff and the morale of the excellent staff who work at the hospital. Finally, I wish to say a little about the building, although some of the issues are matters for my right hon. Friend the Secretary of State for the Environment and not for me or my colleagues at the Department of Health and Social Security.
  I appreciate that any decision about the hospital would affect people in a wide area.
  Mr. Ashby: Does my hon. Friend appreciate that this excellent hospital draws patients from a very wide area, including north-west Leicestershire, so that there is great concern about this over a much wider area than Derbyshire?
  Mr. Patten: I am grateful to my hon. Friend for drawing attention to that important matter and I shall certainly bear in mind what he says about the number of patients drawn from his constituency and their opinion of the hospital.
  I must say at the outset that I am in a difficult position today in terms of saying anything definite to my hon.

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  Friend the Member for Derbyshire, South as no decision has been made to close the hospital. I understand that the southern Derbyshire health authority will shortly be issuing, or has already issued, a consultation document about the hospital. The consultation which is to follow will be carried out according to procedures clearly laid down by the Department. Obviously tonight I must not and cannot in any way prejudge the outcome of the consultations which the southern Derbyshire health authority is currently undertaking, but I am sure that it will consider all proposals carefully.
  I can assure my hon. Friend the Member for Derbyshire, South that, if the proposals come to my right hon. and learned Friend the Minister and myself, any decision will be taken only after the most painstaking and thorough consideration of the case. Should such a recommendation come to us, I should be delighted to see my hon. Friend and any of her constituents to discuss the case in person further before any decision is taken.
  I was pleased that my hon. Friend referred to the important work done on orthopaedics by my distinguished constituent, Professor Duthie. The working party chaired by Professor Duthie was set up to consider the problem of waiting times for outpatient appointments and admission to hospital for orthopaedic patients. I was very interested to hear about the regime of patient management in the hospital. We certainly recognise the need to reduce orthopaedic waiting lists and times. Indeed, perhaps waiting times are as significant as waiting lists in this context.
  We are urging health authorities to make the fullest use of the report in considering how to improve the services offered to orthopaedic patients in their districts. I am glad that that is being put into effect by the Trent regional health authority, under its excellent chairman, Mr. Michael Carlisle, who has asked all districts in its region to review orthopaedic services in the light of the recommendations of Professor Duthie's own report. I am convinced that in formulating its proposals for Bretby hall orthopaedic hospital the southern Derbyshire health authority will take account of the report's conclusions, particularly as they relate to the use of small hospitals such as Bretby hall.
  My hon. Friend rightly pointed to one of the report's recommendations, to the effect that no such hospital should be closed—I had a small bet with myself that she would pick on this recommendation, and happily she did—unless alternative services
  "of the same or a better standard for an equal or increased number of patients"
  can be provided. That is a significant sentence. I am sure that it is a view shared by the admirable League of Friends of Bretby hospital. I understand that it does invaluable work. Indeed, I pay tribute to that great unsung army who work within the NHS — the leagues of friends of hospitals—who do so much good, and who do not get the public recognition which they so often deserve. However, what they do is deeply appreciated by my right hon. Friend the Secretary of State and myself.
  I come to the next important issue, which involves the relationship of the capital programme, the debate about large and small hospitals, and the implications of the Duthie report. As someone who may have to consider proposals about this hospital at a future date, I can only speak tonight in general terms about this important issue.
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  The pattern of a district's health services will inevitably change over time, particularly where there are plans for major redevelopment, as is the case in southern Derbyshire. I suspect that those plans for major redevelopment may, indeed, have implications for the constituents of my hon. Friend the Member for Leicestershire, North-West (Mr. Ashby), who is in the Chamber tonight.
  During the next 10 years the health authority has a very ambitious capital programme, which is likely to total more than £40 million at current prices. The programme includes the redevelopment of services at Derby city hospital, to where the health authority proposes, I understand, to transfer the services now at Bretby hall. There are also major capital developments under way at the Derbyshire royal infirmary and at Ilkeston general hospital. When one invests £40 million in a development scheme, it must involve the appraisal and continuing reappraisal of the services already given. It must mean that we look at the pattern of service delivery.
  Health authorities up and down the country are rightly having to go through that re-examination. As my hon. Friend the Member for Derbyshire, South knows all too well, the NHS is now seeing the biggest programme of integrated building development and redevelopment that has been seen at any time since 1948. The programme involves the spending, on current plans, of more than £1 billion on some 140 separate schemes throughout the country. A Minister in my Department could be forgiven for asking, from time to time, "What cuts?" It is the biggest building explosion and capital reconstruction of the NHS that Britain has ever seen.
  Sometimes such redevelopment may—and I pick my words carefully — involve the closure of certain hospitals, some of which may be small, others of which may be out of date. Out-of-date plant is hard to maintain, and needs to be replaced. That is not a negative approach. It is not about closures or cuts; it is about providing an improved quality of health care for all those in the district. If we can focus our attention on the need of the patients rather than on the needs of buildings, that is the correct way to see whether we are delivering services to our clients in the right way.
  In a modern Health Service, that can mean increasing centralisation of some, although not necessarily all, of the services that the NHS must provide. However, I appreciate that we need to strike a balance between the effective use of expensive medical technology, highly trained nursing and ancillary staffs, and ensuring that the services are accessible to the community which which serve and they are wanted by it. That is not an easy task. It would be wholly wrong for the NHS to attempt to concentrate all its medicine in city centre hospitals. Equally, it would be a delusion for us to think that we can supply to every small hospital the complete range of modern medical techniques. I know that my hon. Friend agrees with that.
  I am sure that the health authority will be considering the health care needs of all the people in southern Derbyshire, whether they live in Derby, in the smaller rural communities or across the county boundaries in Leicestershire. Whatever the outcome of the proposals for Bretby hall, it must be proper and desirable that health authorities should examine and reappraise how all their services might be delivered to the public more effectively and economically. It is especially galling for health authorities, when they take the trouble to think about the

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  services that they deliver, that every time they publish a document looking at their services the press talks about cuts. A modern Health Service cannot stand still; it must change—we hope for the better.
  Thirdly, and far from lastly, I must say a word about the excellent nursing staff who, I understand from what my hon. Friend told me before the debate, work at Bretby Hall along with ancillary and technical staff. Orthopaedic nursing is skilled and important. The staff must be concerned. The consultation procedure requires health authorities to include in any consultation document propoals for the alternative employment of staff, but that may not always be easy when facilities are being transferred from one hospital to another. I am sure that this is recognised by health authorities throughout the country. Of course, all staff interests have ample opportunity to comment on the proposals during the next three months. I hope that they will take that opportunity. Indeed, I should be surprised if they were not planning to do so.
  I find myself in some difficulty on the question of the building. As my hon. Friend recognised, the importance of the listed building—I understand that it is Victorian turreted—is not an issue for my Department but for the Department of the Environment. However, I want to say a few words about the building's future. The NHS prides itself on the care with which it treats historic buildings. The future use of Bretby Hall cannot be considered until a decision has been reached about the future location of orthopaedic services in the area. I cannot do anything that would pre-empt the consultations that are now under way. However, the health authority is aware of the listed status of the building, and this will be an important factor in considering its future use.
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  Our guidance to health authorities on the correct handling of listed buildings is clear and unequivocal and we make our displeasure known rapidly to any health authority which plays ducks and drakes with the historic fabric of houses that are in our care. The relevant guidance, in the NHS "Handbook on Land Transactions", says that an authority
  "should not arrange for the demolition of, alteration to, or extension of a listed building in a way to affect its character, without the prior written agreement of the local planning authority."
  That leaves no doubt about where a health authority's duty lies, and I am happy to remind authorities of that tonight. If a planning authority objects to a health authority's proposal for the use of a listed building, the case would be referred to Ministers for decision. I hope that that reassures my hon. Friend that, whatever the outcome of the consultations on the future of Bretby Hall as a hospital, its place as part of our architectural heritage is not threatened.
  I realise that tonight I have not been able to give any firm commitments in response to many of the questions which my hon. Friend asked and which, I know, concern my other hon. Friends. I hope she recognises that this is not because of any lack of concern, but because of a wish not to undermine or prejudge the local considerations taking place on how the needs of southern Derbyshire can best be served. I hope that if I have done nothing else tonight I have reassured my hon. Friend that none of the important issues which she has raised will go by default.
  Question put and agreed to.
  Adjourned accordingly at sixteen minutes past Twelve o' clock.