HC Deb 06 June 1984 vol 61 cc316-33

'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 (Ceredigion and Pembroke, North)

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 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 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 (Ipswich)

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 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?

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 (Torridge and Devon, West)

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. 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 (St. Helens, South)

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 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 (Norfolk, South-West)

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 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.

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 (Caithness and Sutherland)

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 (Dorset, West)

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 (Aberdeen, North)

The hon. Member for Torridge and Devon, West (Sir P. Mills) is an assiduous and very loyal Back Bencher who takes part 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. 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 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 (Bradford, South)

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.

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 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 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 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
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.
Winnick, David Mr. Robert Maclennan and Mr. Dafydd Wigley.
Tellers for the Ayes:
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
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.

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