Commons Sitting of 17 April 1986

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS

  TEIGNMOUTH QUAY COMPANY BILL (By Order)
  COUNTY OF SOUTH GLAMORGAN (TAFF CROSSING) BILL (By Order)
  SOUTH YORKSHIRE LIGHT RAIL TRANSIT BILL (By Order)
  BEXLEY LONDON BOROUGH COUNCIL BILL (By Order)
  SHOREHAM PORT AUTHORITY BILL (By Order)

  HARWICH PARKESTON QUAY BILL (By Order)
  Orders for Second Reading read.
  To be read a Second time upon Thursday 24 April.

  MILFORD HAVEN PORT AUTHORITY BILL (By Order)
  Order read for resuming adjourned debate on Question [18 February], That the Bill be now read a Second time.
  Debate to be resumed upon Thursday 24 April.

  BRITISH RAILWAYS (STANSTED) BILL (By Order)
  Order read for resuming adjourned debate on Question [24 February], That the Bill be now read a Second time.
  Debate to be resumed upon Thursday 24 April.

Oral Answers to Questions

  Balance of Payments
  Mr. Pikeasked the Chancellor of the Exchequer what effects the recent fall in oil prices will have on the Chancellor's forecasts for the balance of payments in 1986 and 1987.
  The Chief Secretary to the Treasury (Mr. John MacGregor): My right hon. Friend the Chancellor has asked me to apologise for his absence today as he is attending the annual OECD meeting in Paris.
  The forecast in the financial statement and Budget report, which took into account the recent fall in oil prices, showed a current account surplus both this year and in the first half of 1987.
  Mr. Pike: Does the Chief Secretary agree that not only will the fall in revenue from oil prices seriously affect our balance of payments, but so will the fall in oil products? Will that not mean a rapidly growing crisis in our balance of payments? What do the Government intend to do to rectify the present imbalance in our trade in manufactured goods, with which the Budget failed to deal adequately?
  Mr. MacGregor: I do not think that there will be those consequences. In no previous five-year period in recent history has manufacturing output been so successful in holding its market share and keeping pace with world output. The hon. Gentleman will know from the Budget that the buoyancy in the non-oil part of our economy is showing through substantially.
  Mr. Phillip Oppenheim: Is not the fact that the pound has remained reasonably strong during the past couple of months a tribute to the sound management of the economy by this Government?
  Mr. MacGregor: My hon. Friend's remarks are absolutely right.
  Mr. Robert Sheldon: Is it not clear that not only has the drop in oil prices affected the amount that we are likely to obtain in foreign exchange, but that our competitive position vis-a-vis France, Germany and especially Japan has worsened considerably because those countries have been paying substantial sums for their oil? In view of that, will the right hon. Gentleman consider at least starting talks with OPEC to ensure that we obtain a reasonable price for the very important asset that we own?
  Mr. MacGregor: I hope that the right hon. Gentleman is not suggesting that we should have talks with OPEC about keeping up oil prices. He will surely agree that the United Kingdom economy is benefiting considerably from the fall in oil prices, although perhaps not as much as other economies. He must be aware of the beneficial position of the exchange rate in relation to the countries to which he referred.
  Mr. Favell: Is not the United Kingdom doing the whole world a great favour by refusing to talk to OPEC or to put up oil prices to an unnecessary level?
  Mr. MacGregor: I have not the slightest doubt that the fall in oil prices is helping the growth of the world economy, from which we must benefit.

  Unemployment Costs
  Mr. Hardyasked the Chancellor of the Exchequer what is his estimate of the cost of unemployment in 1986–87; and what proportion of the yield of income taxation this represents.
  The Financial Secretary to the Treasury (Mr. John Moore): The overall cost to the Exchequer of unemployment and supplementary benefit paid to the unemployed is estimated to be about £5·6 billion in 1986–87. In addition, about £1·5 billion is paid in housing benefit—a benefit which can continue to be paid if the recipient finds employment. This in total is 17½ per cent. of forecast income tax revenue for 1986–87.
  Mr. Hardy: Does not that answer, which touches on part of the cost of unemployment, illustrate the sheer scale of the failure of the Government's economic policies? For how much longer does the Minister think the country can tolerate that?
  Mr. Moore: The answer certainly illustrates the problems and costs of unemployment. However, as the hon. Gentleman will notice from the employment and unemployment data published yesterday, alongside the tragic levels of unemployment there has been a rise in employment of 1 million new jobs since June 1983.
  Mr. Maples: Does my right hon. Friend agree that if we added to the benefits paid to the unemployed the tax revenue lost as a result of their not being in work the total cost would be considerably greater? For a married man on average earnings, it could be as high as £8,000 a year. Does that not provide an excellent justification for the various job subsidy schemes introduced by the Government? Will my right hon. Friend consider extending the principle of job subsidies more generally?
  Mr. Moore: My hon. Friend knows the difficulty of trying to extrapolate the potential additional tax and other revenues from people whom we obviously want to see in full employment. I am sure that he welcomes the additions to the programmes to help the long-term unemployed, which were added to in the Budget.
  Mr. J. Enoch Powell: Is it not real that the true economic cost of unemployment could well be less, not more, than the total of transfer payments made to unemployed persons?
  Mr. Moore: Clearly, that is correct.
  Mr. John Townend: Does my right hon. Friend agree that the unemployment figures are grossly overstated, especially in the south of England, due to the expanding black economy? How much would the Exchequer save if 500,000 people were forced out of the black economy into the legitimate economy?
  Mr. Moore: Without notice I cannot give my hon. Friend the specific cost, but anything that we can do to lower taxes and further deregulate the economy to reduce the attraction for people to go into what we would all deplore—the black economy—will be of benefit to all.
  Dr. McDonald: In view of the sharp rise of 37,000 in the underlying jobless trend last month, will the Government now consider using the money spent on unemployment benefit and the tax revenue forgone through unemployment on job creation instead of on maintaining the ever-growing army of unemployed?
  Mr. Moore: The hon. Lady would want the House to be reminded of the happy increase in the long-term employed as well as the tragic increase in those who are unemployed. I am sure that she will never begin to grasp the fact that real long-term jobs come not from state expenditure but from the underlying success of enterprise in the economy.

  World Debt
  Mr. Skinnerasked the Chancellor of the Exchequer what recent discussions he has had with the Governor of the Bank of England and others regarding rescheduling of world debt; and if he will make a statement.
  The Economic Secretary to the Treasury (Mr. Ian Stewart): The Governor of the Bank of England and my right hon. Friend the Chancellor of the Exchequer discussed the question of debt at last week's IMF and World Bank interim and development committee meetings in Washington. The meetings welcomed the progress that is being achieved in strengthening the current debt strategy tailored to individual cases and aimed at promoting durable growth in debtor countries.
  Mr. Skinner: Is it not true that the strategy about which the Minister talks has resulted in the debts of Third world countries getting higher and higher as each year passes? Is he aware, for instance, that the debt is about $900 billion? Is it not also true, as the "War on Want" publication issued today asserts, and as hon. Members have done in the House, that Western, Latin American and Nigerian bankers have been living like fat cats while the people in their countries are getting poorer. Is it not time that we changed a system that allows British banks to write off their bad debts against tax while those poor people are getting poorer?
  Mr. Stewart: The hon. Gentleman has overlooked the fact that the fall in the dollar interest rate in particular, and in interest rates generally round the world during the past year, and especially in recent months, has had a beneficial effect on the problems of debtor countries. I do not deny that there is a heavy burden of debt and that it is difficult for many countries to service it, but the fall in oil prices will have benefits other than the reduction in interest rates. Many oil importers, such as Brazil, which is the largest debtor in the world, will benefit substantially from that change.
  Viscount Cranborne: My hon. Friend referred to the effect of the decline in the oil price. Does he accept that that shows that it is universally to be welcomed and that it will help the Third world as well as ourselves?
  Mr. Stewart: Yes, I endorse what my hon. Friend has said. Indeed, the communiqué of the interim and development committee referred to the improved outlook for sustainable growth in the world. Of course, that applies to developing as well as industrial countries.
  Mr. Duffy: What has the Chancellor of the Exchequer done to fulfil the high hopes raised by the Baker-Darman plan, to which, incidentally, his right hon. Friend was party at last September's World Bank and IMF meeting? The House wants to know what are the realistic prospects for that growth-oriented adjustment, about which Mr. Baker had so much to say all winter long.
  Mr. Stewart: The prospects for the Baker plan are good, contrary to much of the public comment about it

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  after the meetings, which, as the hon. Gentleman said, I attended last year, and the recent meeting in Washington. The World Bank has approved higher lending limits. It has decided to increase the amount of structural adjustment lending and policy-oriented lending, and there is already greater co-ordination between the IMF and the World Bank. There has also been agreement in those committees that lending by export credit agencies should follow much more closely upon agreement of a programme with the IMF. That initiative was proposed by my right hon. Friend the Chancellor at the 1984 meeting. I am glad to say that the agreement on the multilateral investment guarantee agency, which was initiated—[Interruption.] I am trying to give a comprehensive answer to the question. The United Kingdom was the first of the G5 countries—the Group of Five—to be signatory to that agreement. That is a welcome development.
  Mr. Beaumont-Dark: Does my hon. Friend accept that although the fall in inflation is good news for Third-world countries, the most important single achievement would be to nudge the Bank of England to get interest rates down more quickly? A little risk at home on interest rates would benefit us a little, but would it not benefit even more those who need to have their world debt rescheduled?
  Mr. Stewart: The decline in interest rates around the world has been extremely helpful for debtor as well as industrial countries, such as the United Kingdom. However, significant reductions in interest rates have already taken place over the past few weeks, not only here, but in the United States, Japan, Germany, and, this week, in France. I welcome that development. So long as the inflationary pressures generated by high oil prices continue to abate, that prospect can continue.
  Mr. Blair: I congratulate the Government on embracing so heartily in Washington last week the principle of Government intervention in the economy to stimulate growth. However, the hon. Gentleman is ludicrously complacent about the Baker plan and the position of Thirdworld debtors. Debtors hit by falling commodity prices and by the need to adjust to the United States budget deficit have no prospect at all of increased living standards for their people unless the European and Japanese Governments adopt policies of greatly increased growth—in other words, practise at home what they preach abroad.
  Mr. Stewart: The prospects in Europe and Japan for increased economic growth are encouraging. Indeed, they are part of the basis on which the countries exporting primary products will need to base their plans.
  It is wrong to suggest that the Government are complacent about the Baker plan. Much progress has been made in implementing those measures. Colombia has recently had a loan, which was completed in accordance with the principles of the Baker plan, and I welcome that.

  Drugs (Importation)
  Mr. Sackvilleasked the Chancellor of the Exchequer what plans he has to improve prevention of importation of dangerous drugs through regional airports.
  Mr. MacGregor: Customs and Excise is well aware of the risk of drug smuggling through regional airports. It is making increasing use of risk assessment, intelligence and information in identifying potential drug smugglers
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  and drug trafficking routes. Technical aids are also being increasingly used. Although the prevention of drug smuggling is not simply a matter of numbers, additional staff have been allocated to certain provincial airports where the risk is greatest to deal specifically with drugs.
  Mr. Sackville: Is my right hon. Friend aware that the north-west has a major drug problem and that Manchester airport is probably one of the major channels for the importation of heroin into this country? Will he guarantee that whatever resources are made available at Heathrow and Gatwick in terms of Customs manning levels, sniffer dogs, thermal imaging and technology are also made available at Manchester?
  Mr. MacGregor: I am well aware of and share my hon. Friend's concern about this matter. In the three years from 1985 to 1987, 560 new posts were allocated, and the great majority of the new officers were engaged on the prevention of drug smuggling. We are also increasing the number of technical aids and the money spent on their development and introduction. Decisions on manpower at Manchester this year depend on the advice of local managers.
  Mr. Ron Brown: Most hard drugs come from Pakistan, especially through Pakistan International Airways. Will the Minister make an effort to control that situation? Will he ban PIA aircraft from entering Britain and thereby make much easier the job of the Customs and Excise staff, who are under great pressure at present because of cuts?
  Mr. MacGregor: The banning of airlines is not a matter for me. We have increased not only the Customs and Excise staff, but the effort to deal with the problem of drug smuggling at the source.
  Mr. Fletcher: In view of the seriousness of the problem, does my right hon. Friend agree that prevention is cheaper than cure? Despite the resources that he has just announced to the House, will he give an undertaking that the resources made available for the prevention of drug smuggling is demand-led, riot cash limited?
  Mr. MacGregor: We look at this matter each year in the public expenditure round. I hope my hon. Friend will agree that my concern is shown by the fact that we have considerably increased the sums and posts this year. As he rightly recognises, prevention is most important, and it is having an effect, as Customs and Excise is increasingly seizing more heroin and cocaine each year.

  Job Creation
  Mr. Winnickasked the Chancellor of the Exchequer if he has yet quantified the expected effect of his Budget on unemployment.
  Mr. Ian Stewart: The purpose of the Government's economic policy is to encourage a vigorous and enterprising economy, generating sustained growth of output and employment. The Budget proposals include a considerable number of measures directed to the problems of unemployment.
  Mr. Winnick: Despite the way in which the unemployment figures have been fiddled yet again, is it not clear that the true level of unemployment is now more than 4 million? Why does the Minister not state clearly that

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  the Budget will do nothing to end the misery of mass unemployment? That is certainly a reason why the Government will be rejected at the general election. Fulham is just the start.
  Mr. Stewart: I disagree with all parts of the hon. Gentleman's question. The dependence of the economy on growth and output for improving employment has been well demonstrated by the figures published yesterday, which show that 1 million new jobs have been created during the past three years. We now have the lowest corporation tax, at 35 per cent., since the war, and the small companies rate is 29 per cent. That is how the private sector can generate the jobs that we need.
  Mr. Forman: The Budget obviously contains some sensible measures designed to alleviate unemployment, but is not the more important factor about which the Treasury must be concerned the rise of 5·7 per cent. in unit labour costs last year and of 4·5 per cent. tbhe preceding year? Therefore, we must see some improvement during the coming period.
  Mr. Stewart: I absolutely support what my hon. Friend has said. Nothing would do so much to improve the prospects for the expansion of British industry, and the creation of further additional jobs than if our unit costs were to rise at a rate not greater than that of our major competitors.
  Mr. Hoyle: Why does the Minister not tell the House that the Budget will do nothing for unemployment? Does he agree that if we are to have a recovery, it must be through industry? Will it not be a great disappointment to industry that interest rates have not decreased today? Is that not a direct result of the free market economy?
  Mr. Stewart: The Budget was well received in the financial market, and I am sure that the sound, responsible economic policies that my right hon. Friend the Chancellor of the Exchequer introduced in his Budget are a direct reason why interest rates have been able to fall by 1·5 points since that day.
  Mr. Holt: In reflecting on the Budget and unemployment, does my hon. Friend accept that at least one hon. Member is bitterly disappointed? The Treasury did not take up my suggestion to introduce measures to assist with the relocation of labour by taking account of the figure of £8,000, referred to by my hon. Friend the Member for Lewisham, West (Mr. Maples), which if given to an unemployed person in the north to help him relocate in the south, where house prices are out of his reach, would have done much to help unemployment.
  Mr. Stewart: The measures in the Budget which apply to the economy as a whole are a better way of devoting limited resources to encourage the expansion of the economy, which is the best way to maintain jobs throughout the country.
  Mr. Tony Lloyd: Is the Minister aware that, among those who did not welcome the Budget, were manufacturers in the north of England and elsewhere, who for six years have faced real problems, created by the Government, in increasing production, investment and ultimately employment? What in the Budget will increase output and employment in the manufacturing industries?
  Mr. Stewart: The most important factor for manufacturing areas, whether in the north of England or
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  anywhere else, is a reduction in inflation. The reduction in interest rates has already taken place and there is a low rate of corporation tax, so industries can reinvest the profits in additional growth in the future.
  Mr. Powley: Does my right hon. Friend agree that many other factors affect the levels of employment and unemployment, besides the welcome measures that were introduced in the Budget? In particular, does he agree that measures such as restrictive practices in commerce and industry, and the introduction of new technology, can affect the level of unemployment? Is it not just as important to pay attention to those measures as to the welcome the measures that were introduced in the Budget?
  Mr. Stewart: I note the point that my hon. Friend has made. Several factors inhibit the working of the labour market, and we have done our best to try to reduce them. We have also tailored the specific employment measures in the Budget particularly to deal with the most difficult areas—the young, the long-term unemployed and those who need training. I am sure that they are the right areas on which to concentrate.
  Mr. Terry Davis: As the original question refers to the effect of the Budget on unemployment, and as the Treasury must have calculated the effects of the Budget on employment, will the Economic Secretary at least admit that he is simply too ashamed to publish that Treasury forecast? As he referred to the Department of Employment figures published yesterday, will he confirm that those same figures show that unemployment has increased by more than 100,000 during the past year, and that the Department of Employment yesterday—only one month after the Budget—announced a resumption in the upward trend of unemployment?
  Mr. Stewart: The hon. Gentleman may have overlooked the fact that the announcement yesterday demonstrated that jobs are rapidly being created in the economy. I should have thought he would welcome that.
  Mr. Meadowcroft: What is the Treasury's estimate of the effect on unemployment of 1p off the standard rate of tax, compared with a 10 per cent. reduction in the employers' national insurance contribution, the cost being identical?
  Mr. Stewart: The reduction in taxation, whether for individuals or for companies, will improve the level of efficiency and incentives in the economy and therefore lead to a continuation of the very satisfactory expansion in the number of jobs in the economy. I remind the hon. Gentleman that the substantial restructuring of national insurance contributions, which was announced in the Budget last year, has come into force only this winter, so the major effect of that restructuring is still to be felt.

  Personal Incomes
  Mr. Chapmanasked the Chancellor of the Exchequer what will be the combined income tax and national insurance contribution liability, when the Budget resolutions take effect, of a single person earning (a) £50, (b) £75 and (c) £100 per week.
  Mr. Moore: The figures are £3·98, £13·98, and £24·98, respectively.
  Mr. Chapman: I welcome and appreciate the significantly reduced income tax and national insurance

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  liability of the low-paid over the past two Budgets, as instanced by the fact that a single person earning £50 a week has had that liability halved, but if it is correct that a person now earning only half average earnings still has to pay about 25 per cent. in income tax and national insurance contributions, must it not remain a top priority for the Chancellor in future Budgets to reduce that tax liability further?
  Mr. Moore: I thank my hon. Friend for his support for what we have been able to do. He is absolutely right. I would not want to be precise on the figures, but for those on half average earnings about 25 per cent. would go in national insurance and income tax. I welcome his support and that of all hon. Members for anything further that the Government can do, within a sound economic performance, to reduce further the actual rates of income tax.
  Mr. Penhaligon: Will the Minister confirm that if the £100 to which he referred had been unearned and a sole income, the Government's take would have been less? Can the Minister say what is logical about that?
  Mr. Moore: What the Minister can say quite clearly, as my hon. Friend the Economic Secretary said a few moments ago, is that the attempt to reduce national insurance contributions at the bottom, and this time the combination on top of that, has given us a much better opportunity to add to employment.

  Income Tax
  Mr. Greenwayasked the Chancellor of the Exchequer what increase would be needed in the standard rate of income tax in order to raise an additional £24 billion of revenue by this means alone; and if he will make a statement.
  Mr. MacGregor: About 20p, bringing the basic rate to 49p in the pound.
  Mr. Greenway: Does my right hon. Friend agree that electors opting for the 41 per cent. VAT rate and the 49p in the pound standard rate of tax, currently on offer by the Labour party, and rising like a cash register all the time, must be practising masochists? The Liberal and Social Democratic parties are not much better. Would it not be much better for the electors to stay with the tax-cutting policies and sound economic growth policies of the Conservative party?
  Mr. MacGregor: I entirely agree with my hon. Friend's last comment, but to be fair to the Opposition I must make it clear that under their policies the electorate has a choice—either 49p in the pound on income tax, or 41 per cent. VAT. To be fair, it is not both, but either.
  Mr. James Lamond: Do not the figures that the right hon. Gentleman has just given show that to finance the £18 billion a year defence budget is costing on income tax alone about 14p in the pound? If that is so, why was it necessary for the Prime Minister to emphasise time and time again that we need hundreds of thousands of American troops in Europe to protect our freedom? How much extra would it cost in income tax if we were able to protect our freedom without American troops?
  Mr. MacGregor: The hon. Gentleman is not making a fair point with regard to income tax, because Labour party spokesmen have made it clear that they would not
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  reduce the overall proportionate cost of defence on GDP. Therefore, there is no implication of a reduction in tax from any change in defence policy by the Labour party.
  Sir William Clarke: Does my right hon. Friend agree that if £24 billion was added to public expenditure, a married man would be able to retain only 44p from every £1 that he earned over £70 a week for himself and his family?
  Mr. MacGregor: I agree with my hon. Friend. The proposals which are still being put forward, and which have not been denied, would have a devastating effect on the overall tax burden and, therefore, on jobs in the economy.
  Mr. Hardy: If unemployment were reduced by half, would not the savings to the Treasury and the contributions of those employed, certainly if they were on anything like half average earnings, equal the amount of money that the hon. Member for Ealing, North (Mr. Greenway) mentioned in his rather extravagant, if obedient, question?
  Mr. MacGregor: It is certainly not extravagant, because the figures that I have put forward have still have not been denied. The hon. Gentleman will know that his right hon. Friends on the Opposition Front Bench, even with their high levels of expenditure, are not predicting anything like a drop to half in the level of unemployment. They are expecting a comparatively small drop over two years, but are completely ignoring the devastating effect on existing jobs of those high expenditure programmes.

  Public Expenditure
  Mr. McCrindleasked the Chancellor of the Exchequer when he expects to commence discussions on public expenditure programmes for 1987–88; and if he will make a statement.
  Mr. MacGregor: Spending plans for 1987–88 will be reviewed during the summer and autumn as part of the 1986 public expenditure survey.
  Mr. McCrindle: I recognise the continuing need to restrain Government expenditure and the important role that my right hon. Friend will play in that procedure, but will he nevertheless take note that there is a good deal of pressure for greater resources to be introduced, particularly into health and education, and will he confirm that, as the new round of expenditure control begins, he will try to keep a balanced view between desirable tax cuts, to which we all look forward, and essential Government expenditure, for which there is considerable public support?
  Mr. MacGregor: My hon. Friend will agree that the desirable tax cuts are beneficial to economic growth Not only do we receive desirable tax cuts from a prudent control of Government spending but we get policies which can produce lower interest rates, which are equally beneficial. But of course my hon. Friend is right. We must keep a balanced approach to these matters. In particular, we must keep a clear view of priorities within the overall public expenditure programme. I have noted his priorities and he will know that we have devoted great priority to health and, after allowing for inflation, there has been real growth of over 20 per cent. in the health programme since 1979.
  Dr. M. S. Miller: When the Chancellor is considering expenditure programmes for 1987–88, will he take into consideration the fact that today's lower oil prices—and no doubt they will continue for some time—are making it extremely difficult for the coal industry? Will he make sure that the coal industry is not totally emasculated because it is unable to compete with oil?
  Mr. MacGregor: Obviously many of these points are matters for the coal industry, and it will have to look. I or example, at its investment programmes and everything else, both in relation to falling oil prices and the negotiation that it has with its customers.
  Mr. Marland: When these discussions begin, will my right hon. Friend continue to explain to those representing local authorities that substantial savings can be made if they seek to privatise many of the services that they currently carry out?
  Mr. MacGregor: Certainly I believe that the Audit Commission has shown that there are still very considerable efficiency savings to be achieved by local authorities. My hon. Friend is right in saying that contracting out and that sort of thing still have some way to go in contributing to those substantial savings.
  Mr. Sheldon: As the final figures for the public sector borrowing requirement for last year have now turned out to be £2 billion less than anticipated, surely it will make some difference to the right hon. Gentleman's expectation of public expenditure over the forthcoming year?
  Mr. MacGregor: I am sure that the right hon. Gentleman, who follows these matters very carefully, will know that we have an expectation of oil prices over the year. Obviously we cannot predict exactly what the future course of oil prices will be, so we must have a prudent approach in that respect. The PSBR, of course, is always within a margin of error, and it is roughly the same margin of error as in recent years, but in a beneficial direction. I think that that illustrates the buoyancy of the non-oil sector of our economy. That has contributed substantially to this favourable outcome on the PSBR, and I would have thought that the right hon. Gentleman would welcome that.
  Sir Peter Hordern: Is it not time, before these decisions are made, for a comprehensive review to be made of one form of public expenditure as against another? Is my right hon. Friend aware of the growing concern at the consistent over-runs in defence expenditure on new, untried equipment, which nobody else appears to want to buy, and the continued underfunding of other programmes, such as the education programme?
  Mr. MacGregor: I agree that the overall look at public expenditure is a very important aspect of each year's public expenditure round. I am making some technical changes in the sequence of putting together the material for collective ministerial discussion and decision this year and I hope that that will contribute further to that process.

  Research and Development
  Mr. Stan Thorneasked the Chancellor of the Exchequer how much direct support for research and development was contained in the Budget measures.
  Mr. Ian Stewart: The scientific research allowance has been kept at 100 per cent. despite the reduction of
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  other investment allowances to 25 per cent. this year. The proposal in the Budget to allow companies to make one-off gifts to charities will benefit institutions which sponsor research and have charitable status.
  Mr. Thorne: As Government support for research and development compares unfavourably with that of some other industrial countries, how can Britain be competitive in world markets?
  Mr. Stewart: This country devotes a bigger proportion of GDP to research and development than the United States, Germany or Japan. There is, indeed, a substantial contribution to defence research and development. With regard to expenditure on civil research and development, companies with higher profits and a lower tax rate will have plenty of room to increase their expenditure on R and D, as they need to in their investments for the future.
  Sir Anthony Grant: Nevertheless, is my hon. Friend aware that there is evidence of a scientific brain drain, particularly in Cambridge? Will he therefore look rather more favourably upon requests for money for research to be allocated in the next review than was the case in the last one?
  Mr. Stewart: I must remind my hon. Friend that increases in both the science and the research budgets, through the University Grants Committee, were made in the autumn statement.
  Mr. Wrigglesworth: Is the Economic Secretary not aware that the fall in the price of oil will increase the balance of payments deficit by about f2·5 billion this year? In the light of that deterioration in the current account of the balance of payments, is not his reply to the question totally inadequate? Do not the Government need to invest a great deal more in civil research and development?
  Mr. Stewart: The evidence certainly does not suggest that the balance of payments surplus this year will be affected on anything like the scale that the hon. Gentleman suggests. We are expecting a further substantial surplus this year. Set against the decline in oil revenues, one must have regard to the fact that the costs of industry and commerce will be very substantially reduced, with the result that they should become very much more competitive.

  Mortgage Income Tax Relief
  Mr. Nichollsasked the Chancellor of the Exchequer what recent representations he has received calling for the abolition of mortgage income tax relief.
  Mr. Moore: My right hon. Friend has received a few such representations.
  Mr. Nicholls: Is my right hon. Friend able to confirm that some of those representations must have come from the leaders of the alliance party? Does he recall that in a recent article in The Times the right hon. Gentleman the leader of the Social Democratic party approved of the New Zealand Government's action in removing income tax relief? Bearing in mind that the Liberal party's environmental spokesman has also called for the abolition of mortgage income tax relief, should not house owners in this country realise what a threat the alliance is to their homes?
  Mr. Moore: I have not received a representation from the leader of the SDP. However, my hon. Friend will be aware that all hon. Members are equally confused. I noticed that article in The Times, in which the leader of the alliance seemed to approve of New Zealand's policy of abolishing mortgage interest relief. I noticed also the comments of the hon. Member for Truro (Mr. Penhaligon), who seemed to be arguing a different set of policies. The alliance policies on this matter seem to depend upon the audiences that it addresses and the spokesman who address those audiences.

  Inflation
  Mr. Kenneth Carlisleasked the Chancellor of the Exchequer what is the latest estimate for the rate of inflation over the next 12 months.
  Mr. MacGregor: The latest forecast for inflation was given in the Budget statement. I expect the rate to fall to 3½ per cent. by the fourth quarter of this year.
  Mr. Carlisle: Does my right hon. Friend agree that we need lower interest rates if investment and the creation of jobs are to be helped, and that we need to control inflation if interest rates are to fall? Does he also agree that confidence is needed that low inflation will be sustained in future years? What are the prospects for this?
  Mr. MacGregor: The best prospects for maintaining low inflation are to keep a Conservative party in power. My hon. Friend knows that the lowest inflation rate during the whole period of the last Labour Government was above the highest inflation rate under this Government since the last general election. As my hon. Friend the Economic Secretary to the Treasury said earlier, interest rates have been reduced by 1·5 percentage points since the Budget because of prudent economic management and a prudent Budget. The continuation of low inflation helps with that trend.
  Mr. Campbell-Savours: Would inflation be higher if unemployment were lower?
  Mr. MacGregor: Inflation has come down because of the prudent economic policies that we have pursued. I believe that there is agreement between both Front Benches that one of the greatest contributions to employment is low inflation. The difference between us is that we are achieving the low inflation.

  Depository Receipts (Taxation)
  Mr. Sumbergasked the Chancellor of the Exchequer how much revenue he anticipates arising from the imposition of a 5 per cent. duty chargeable when United Kingdom shares are converted into depository receipts.
  Mr. Ian Stewart: The measure is intended to compensate for the fact that when shares are bought and sold through the market in the usual way stamp duty is payable on each occasion, but no duty is payable on purchases and sales of depository receipts after shares have been converted into them. The purpose of the charge is therefore to safeguard the £600 million revenue from stamp duty on shares generally.
  Mr. Sumberg: I thank my hon. Friend for his reply. However, is he aware that there is a widespread belief that
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  this will put major British companies at a disadvantage when they want to raise capital on the international market? In the light of the fact that there is no reference to it in the Finance Bill, is there some hope that the Chancellor of the Exchequer has accepted the criticisms and that he will scrap the tax?
  Mr. Stewart: I am aware of the comments of a number of American and British companies, but we have done nothing in the Budget to prevent foreigners buying shares direct in London. We have made it proper to do so by cutting the stamp duty rate with effect from later this year. We will carefully consider representations on the matter of ADR, as we always do on all Budget measures. Those provisions were not included in the print of the Finance Bill, published yesterday, for the technical reasons that I announced on 21 March.
  Mr. Freeman: When my hon. Friend tables amendments to the Finance Bill, will he bear in mind the key principle that we should not be deterring foreign investment in United Kingdom shares?
  Mr. Stewart: There is nothing in the Budget, nor will there be in the Finance Bill, to deter foreign investment in United Kingdom shares through London, and we are reducing the rate for doing so.

  PRIME MINISTER

    Engagements
    Ql. Mr. Penhaligonasked the Prime Minister if she will list her official engagements for Thursday 17 April.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House I shall be having further meetings later today, including one with His Royal Highness King Hussein of Jordan.
    Mr. Penhaligon: Is the Prime Minister aware that her own Secretary of State for Defence, while recording an item for Radio Clyde on Monday of this week, said:
    "My colleagues and I are very dubious"—[interruption.]—"as to whether a military strike"—
    Mr. Speaker: Order. Paraphrase, please.
    Mr. Penhaligon: The Secretary of State clearly indicated that he and his colleagues were dubious as to whether a military strike was the best way of dealing with Gaddafi because it would create tensions in other areas and would hit the wrong people. What changed the Prime Minister's mind, from Monday to Tuesday, regarding that very sensible statement?
    The Prime Minister: My right hon. Friend was indicating that we considered many aspects of the very difficult decision before us—and we did go over them very thoroughly and consulted about them—but we came together to the decision which the House knows.
    Mr. Fry: Will my right hon. Friend find time today to consider what seems to have been the disappointing result of the meeting of EEC Foreign Ministers this morning? Will she consider pointing out to our European allies that the American action against Libya was very much due to frustration and the effective lack of the Western civilised world's opposition to terrorism? Does she agree that if we

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    wish to avoid further strikes, the rest of the countries of the Western world must get together to take effective action to stop terrorism?
    The Prime Minister: I agree with my hon. Friend. I understand that the result of that meeting this morning is that Europe is prepared to take further measures. We now have to work at turning that general willingness into specific measures. The need to do that has increased because of recent events, and we shall be pursuing the matter vigorously.
    Mr. Kinnock: I am sure that the Prime Minister and I, every other Member of the House, and people throughout the country, will be united in their condemnation of the vile murder of helpless and harmless British citizens in the Lebanon. The Prime Minister said yesterday that if there were any question of using United States aircraft based in this country in a further action that would be the subject of a new approach to the United Kingdom. Does that mean that refusal of the use of bases has now become, to coin a phrase, conceivable?
    The Prime Minister: The right hon. Gentleman is making selective use of something that I said. I indicated that in all the circumstances, when we had considered every aspect, that was the conclusion which I had come to, and the conclusion which we agreed—that we should give our consent for the use of those bases. That was after a long period of terrorist action, and after a long period of the United States trying to secure peaceful measures for the prevention of terrorism. That referred to a decision taken after a long period of consideration of both of those factors. In future if the United States required the operational use of those bases again, it would have to ask specially, and we could agree or withhold our agreement.
    Mr. Kinnock: That appears to be the second shift in position by the Prime Minister in the course of a week. As it is clear that the right hon. Lady has the right to say no, as was testified by two former Prime Ministers yesterday, and also has the power to say no, as we heard in the same testimony, will she show the will to resist? Will she accept that that is the very strong desire of the British people, who understand that there are much more effective ways of combating and defeating terrorism?
    The Prime Minister: There has been no shift in position. Perhaps the right hon. Gentleman did not fully comprehend it, but there has been no shift in position whatsoever. Yesterday I set out the position on the use of the bases. I am delighted that the right hon. Gentleman renews his statement that he wishes to fight terrorism in every possible way. I hope that in future the Labour party will vote for the prevention of terrorism legislation.
    Mr. Kinnock: I will not take that from the right hon. Lady. The sour and salutary fact about the prevention of terrorism legislation is that it has not prevented terrorism and it will not prevent terrorism. The right hon. Lady provokes terrorism.
    The Prime Minister: The prevention of terrorism legislation has helped the police to prevent acts of terrorism. That is well known. I should be delighted if the Labour party, instead of voting against it, would in future vote for it.
    Sir Fergus Montogomeryasked the Prime Minister if she will list her official engagements for Thursday 17 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Sir Fergus Montgomery: Is my right hon. Friend aware that expenditure on the National Health Service in the north-west in 1978, the last year of the Labour Government, was £380 million, and that today it is £903 million? Does my right hon. Friend not think that it is time we began to proclaim the true facts rather then let the Opposition parties continue to perpetuate myths?
    The Prime Minister: My hon. Friend is correct to say that the National Health Service is now treating more patients, is better staffed and better financed and makes more effective use of resources than ever before. We shall do our level best to apply the resources to it. I am delighted that nurses, also, are better paid.
    Mr. Norman Atkinson: Will the Prime Minister reconsider the statement that she has just made in reply to the Leader of the Opposition? As she now stands virtually alone among the political leadership of Europe in believing that military retaliation is an effective answer to terrorism of any kind, whether in the middle east or in Northern Ireland, and as I heard members of her own party saying privately last night that if she were to reconsider the views that she had put during yesterday's debate it would not mean either a loss of face for her or a loss of credibility in her own party, and recognising that no member of her own party could say that to her, will she recognise the sensitivity of her views and bring herself into line with the opinions expressed throughout Europe?
    The Prime Minister: The decision was taken after prolonged and wide consideration. We came to that decision. I believe that it was the right decision. Should the United States wish to have the use of those bases again, it would have to make a totally fresh application. Our agreement would be required for their use for such an operation and we could either agree or withhold agreement.
    Sir John Biggs-Davisonasked the Prime Minister if she will list her official engagements for Thursday 17 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Sir John Biggs-Davison: As the Leader of the Opposition and others more expert have questioned the present force of the long-standing agreement on the American use of Royal Air Force bases, will my right hon. Friend consider removing any doubts that may remain in the public mind after her clear speech yesterday by inviting President Reagan to make a joint statement with her to clarify the position?
    The Prime Minister: I said yesterday that the arrangements are the same as they have been since they were agreed by Mr. Attlee and Mr. Truman. They have been renewed by every Prime Minister and every President since, and of course were renewed when the cruise missile question arose. They require that if the United States wishes to use bases in Britain for operational purposes it has to seek permission, seek agreement, and that permission can either be given or, as two former Prime

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    Ministers said yesterday, it can be withheld. In my speech yesterday I made a statement about President Reagan's and my understanding of the present position.
    Mr. Steel: Does the Prime Minister now accept her share of personal responsibility for the boosting of Colonel Gaddafi's political support, as we saw on the streets of Tripoli last night? Does she also accept her share of responsibility for exposing British citizens to increased fanaticism and terrorism? Does she now recognise that that is what happens when one turns the British bulldog into a Reagan poodle?
    The Prime Minister: The reputation of Colonel Gaddafi has not been enhanced. I hope that people will look at the terrorism that he has been using for a long period as a political weapon and bear in mind the many lives that have been lost as a result of that terrorist activity. In the Berlin bombing over 230 people were injured. If one lets the threat of further terrorism prevent one from fighting against it, the terrorist has won and he will hold to ransom every free society.
    Mr. Patrick Thompsonasked the Prime Minister if she will list her official engagements for Thursday 17 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Thompson: Does my right hon. Friend agree that industrial action by prison officers would be regrettable, bearing in mind the valuable service they perform in our prisons? In Norwich prison the strains are showing to the extent that there have been recent escapes. Will my right hon. Friend do all that she can to support those who are working for them, negotiating better working practices and better arrangements for the benefit of all concerned?
    The Prime Minister: I gladly pay tribute to the prison service for the way in which the staff have carried out their duties. As my hon. Friend is aware, we have put a great deal more resources into building and for the employment of more prison officers. The management of the service has repeatedly made it clear that it is prepared to talk to the staff to try to resolve the problem. The management must do everything that it can to use resources most effectively.
    Mr. Home Robertsonasked the Prime Minister if she will list her official engagements for Thursday 17 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Home Robertson: Will the Prime Minister reflect on the prophetic words of the Secretary of State for Defence, who said on Monday that a military strike hit the wrong targets and would give rise to what he referred to as "other tensions"? Such tensions will, presumably, lead to reprisals against innocent British citizens. That has now happened. We in Scotland know that the Prime Minister has taken the right hon. Gentleman's advice often enough when he has been wrong. Why did she not take his advice on this one occasion when he was right? How on earth can he now remain in this bloodstained Government?
    The Prime Minister: As I have said, my right hon. Friend the Secretary of State for Defence was telling the world that we considered all aspects of the situation that was put before us. Decisions of this kind are not easy. As I said yesterday, terrorism thrives on appeasement.
    Mr. Peter Bruinvelsasked the Prime Minister if she will list her official engagements for Thursday 17 April.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Bruinvels: Does my right hon. Friend share my concern at the very high acquittal rate in trials by jury? Does she agree that today too many jurors have no respect for law and order, do not believe in crime meriting punishment and will do everything in their power to acquit rather than to convict? Will she introduce plans so that the selection of jurors is more representative of those who believe that the punishment should fit the crime?
    The Prime Minister: Some days ago I saw the report that my hon. Friend has in mind and thought that it was very disquieting. The whole position regarding the challenging of jurors has been approached in the White Paper on criminal justice, and the matter to which my hon. Friend has referred will be considered by my right hon. Friend the Home Secretary.

Prison Service
3.30 pm
Mr. David Alton(by private notice) asked the Secretary of State for the Home Department if he will make a statement following the result of the ballot by members of the Prison Officers Association in support of industrial action, and say what contingency plans he has for administering Her Majesty's prisons.
The Secretary of State for the Home Department (Mr. Douglas Hurd): The House will know that this morning the national executive committee of the Prison Officers Association announced that its members had voted for industrial action in the prison service, and that it would take such action unless the issues about which it is in dispute with the Prison Department have been resolved by 7 May.
I believe that the House will share my sense of sadness and concern at these developments: sadness because I do not believe industrial action is in any sense necessary; concern for what this means, not just for prison officers and those in their charge, but for the prison service itself.
Industrial action is unnecessary for two reasons. First, as my right hon. Friend the Prime Minister has just said, this Government have made clear their commitment to prison officers not just in words but by devoting record levels of resources to the prison service. Secondly, industrial action is unnecessary because prison service management has repeatedly stated its willingness to continue to discuss with the Prison Officers Association the issues in dispute. I hope that even at this late hour the leaders of the association will respond positively to that offer.
The Government have a range of contingency measures available to them to cope with any industrial action and its effects. I think that it would be wrong for me to describe these in any detail today: much will depend on whether action is taken and what form that action takes. The Government are prepared and will respond vigorously as necessary. In doing so, we shall have the safety of the public and the security of prisons as our first concerns.
Let me make it clear that we do not seek confrontation. Our chief efforts over the coming days, as in the last few weeks, will continue to be directed to resolving the dispute in discussion with the Prison Officers Association, so that resort to industrial action is not necessary.
Mr. Alton: Speculative reports have appeared in the press during the past week or so to the effect that the Home Secretary is considering sending troops into the prisons. Does he agree that, instead of turning our prisons into industrial battlegrounds, it would be better to begin negotiations with the POA? The Home Secretary's noble Friend Lord Glenarthur said on the radio that he was prepared to talk to the POA, so why did he refuse its request on 8 and 9 April for negotiations? Does not that lead to the sort of confrontation that the Home Secretary has just said he wanted to avoid?
Mr. Hurd: The position is clear. As we have repeatedly said, and as my right hon. Friend the Prime Minister said in her letter yesterday to prison governors, we are ready to consult the POA about manning levels but are not prepared to concede management's right to manage
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the prison service. Consequently, we cannot concede to anyone else the right to determine, in negotiations, what manning levels should be. But we are willing and, indeed anxious to consult, and that is the normal procedure.
Mr. John Wheeler: Does my right hon. Friend agree that the basis of the dispute lies in the inflexible working practices and systems of working within the prison service? Does he further agree that the dispute takes place against a background of record levels of expenditure on the prison building programme, the provision of new prisons and resources, and on the number of prison officers employed?
Mr. Hurd: Yes, indeed. That is true both as regards prison building and as regards the number of staff being employed. The number of prison officers has increased by 18 per cent. over a period when the prison population has increased by 12 per cent. So we are improving the situation, despite the large rise in the number of people whom the courts sentence to prison.
Mr. Chris Smith: Does the Home Secretary agree that the root cause of the problem is that prisons, such as Pentonville prison in my constituency, are grossly overcrowded and that prison officers are grossly stretched in the work that they have to do? What plans do the Government have to reduce the overall number of people in our prisons?
Mr. Hurd: I agree that we are trying to remedy decades of neglect. I personally think that it is one of the scandals of administration that previous Governments allowed the prisons steadily to fill and did nothing about a prison building programme. We are now putting that right. But I agree with the hon. Gentleman that we need to make further efforts to persuade the courts that there are tough and practical alternatives to custody when it comes to sentencing first or minor offenders.
Sir John Farr: The whole House is sorry that there has been this breakdown in talks with the Prison Officers Association, but will my right hon. Friend bear in mind that these officers have a splendid record of service to the country and have maintained the security of our prisons very well indeed, holding people of the most violent character without objection? Will my right hon. Friend bear in mind in the discussions that he may be having with the prison officers that they will not be taking action without bearing in mind their responsibilities to the nation and the security of their jobs?
Mr. Hurd: I agree with my hon. Friend's tribute. In the prisons that I have visited since taking office as Home Secretary I have been deeply impressed by the professionalism of the prison service, so I entirely agree. For that reason, I am very anxious that we should bring this dispute to an early close through discussion.
Mr. John Evans: Will the Home Secretary accept that prison officers who are at the sharp end of trying to deal with the vastly overcrowded prisons in the country have a perfect right to be consulted about staffing levels, and will he take this opportunity to deny the statement made by the chairman of the Prison Officers Association that resources are so limited and stretched that prisoners cannot receive even a change of underclothing?
Mr. Hurd: Resources are stretched, but they are less stretched than they were as we gradually make up the results of the decades of neglect of which I spoke.
Mr. Spencer Batiste: Will my right hon. Friend take this opportunity to reassure all those who live around prisons that he will monitor the security of prisons and will take all steps necessary to maintain that security?
Mr. Hurd: Yes, indeed. That is why I mentioned that the security of prisons would be our first priority if it came to industrial action, which I hope it will not.
Mr. Frank Cook: I am sure that the Home Secretary will agree that a major contributing factor to the situation is a combination of excessive numbers within prisons and the length of time for which prisoners are incarcerated. He knows from his report to clerks, registrars and judges that he has called for fewer and shorter sentences. However, his right hon. Friend the Member for Chingford (Mr. Tebbit) has called quite publicly for longer and harsher sentences. Will the Home Secretary please tell us who will win the day—he who has the authority, or he who has not?
Mr. Hurd: The hon. Member is inventing a contradiction. My predecessor and I and my right hon. Friend the Chancellor of the Duchy of Lancaster made it perfectly clear that for severe offences we favour severe sentences. What I was saying in my earlier reply was that, for lesser or minor offences, it is very important that the courts should have available to them tough and practical alternatives to custody so that people can do something useful for the community while serving their punishment instead of sitting in prison at great expense to the community.
Mr. Douglas Hogg: Will my right hon. Friend the Home Secretary confirm, first, that prison officers are very anxious to maintain the present high level of overtime, and, secondly, that prison officers are extremely well paid? Taking into account overtime, the average officer earns only about £2,000 less than a Member of Parliament.
Mr. Hurd: I had better not get involved in that last point. However, I am worried about the level of overtime which, on average, makes up about 30 per cent. of prison officers' earnings and, on average, amounts to 16.5 hours per officer per week. I do not think that that is a sign of the proper use of resources.
Mr. Gerald Kaufman: Is it not a fact that, under the Government's 1984 Act, the Prison Officers Association has used the Government's most favoured method of a ballot to secure an overwhelming 81 per cent. majority for industrial action? Is not this verdict to be expected when the prisons are bursting at the seams, with almost as many inmates now as the Home Office predicted for 1993? What is the Home Office doing to alleviate that? What will the effects of industrial action be on visitors, the courts, solicitors, prison governors, probation officers and inmates? Why is the Home Office exacerbating this tense situation by being so adamant in ruling out the one key word to which the Prison Officers Association attaches importance—negotiation? What kind of Government is it under whom we have a record crime wave, a unanimous vote of no confidence in it by the Police Federation, and now an overwhelming vote for industrial action by the prison officers?
Mr. Hurd: The right hon. Gentleman is being captious. We inherited a situation in which the prisons had been neglected for decades. We are steadily putting that right by recruiting more prison staff than ever before and by building prisons. As I have now said twice, we must also try to make sure that for minor offences the courts have effective alternatives to custody.
If the right hon. Gentleman is telling us that it is Labour party policy that politicians should tell the courts, regardless of the evidence or the case, how many people should be sent to prison, that is incompatible with having an independent judiciary.

Business of the House
3.42 pm
Mr. Neil Kinnock: May I ask the Leader of the House to state the business for next week?
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for next week will be as follows:
MONDAY 21 APRIL—Opposition day (11th Allotted Day), first part. Until seven o'clock there will be a debate on education on a motion in the names of the leaders of the Liberal and Social Democratic parties.
Remaining stages of the Animals (Scientific Procedures) Bill [Lords].
Proceedings on the Statute Law Repeals Bill [Lords].
Ways and Means resolution relating to the Social Security Bill.
TUESDAY 22 APRIL—Opposition day (12th Allotted Day). Until about seven o'clock there will be a debate entitled "Housing—Putting People First"; afterwards there will be a debate entitled "Transport—Putting People First". Both debates will arise on Opposition motions.
WEDNESDAY 23 APRIL—Second Reading of the European Communities (Amendment) Bill. The six monthly report on developments in the European Community July-December 1985 (Cmnd. 9761) will be relevant to the debate.
THURSDAY 24 APRIL—Remaining stages of the Housing and Planning Bill.
FRIDAY 25 APRIL—Private Members' Bills.
MONDAY 28 APRIL—Second Reading of the Finance Bill.
Mr. Kinnock: I am grateful to the right hon. Gentleman. Does he recall that on Tuesday the Prime Minister told me that during the period between the initial message from the President of the United States and the air strike against Libya on 15 April she and the Secretaries of State for Foreign and Commonwealth Affairs and for Defence
"acted together in knowledge of one another's views throughout?"—[Official Report, 15 April 1986; Vol. 95. c. 731.]
Does he further recall the Defence Secretary's broadcast, which was quoted in the House yesterday, and the Foreign Secretary's statement last night, in which he said:
"I had no confirmation of any decision by the President, still less of any decision to authorise raids that night, until I came back to London and met the Prime Minister."—[Official Report, 16 April 1986; Vol. 95, c. 950.]
The discrepancy between those versions of events must be obvious to the right hon. Gentleman and even to the more vociferous of his Back Benchers. Will he please ensure that a statement is made on Monday so that the House can form a judgment on which version is accurate?
Could the Leader of the House give an undertaking that on Monday there will also be a full statement from the Foreign Secretary about his further conference with European Foreign Ministers today?
Now that the Government have so much extra time because of the defeat of the Shops Bill, will the Leader of the House ensure that more time is given to debate other matters that are of pressing concern? I instance the worsening unemployment figures published today, which
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show the biggest monthly increase for five years. Can he arrange a day of Government time to debate unemployment so that the appropriate Ministers can come to the House and answer the charge that they are failing to reduce unemployment?
The right hon. Gentleman will have seen the announcement this morning about the bids which have been made for Land Rover and Freight Rover. He has promised a debate on the future of British Leyland. Can he not tell us when that debate will take place?
The need for a debate on foreign affairs is now even more necessary than when I have asked for it during the two previous business questions sessions. When will that debate take place?
Mr. Biffen: I will take the points mentioned by the right hon. Gentleman the Leader of the Opposition in the order in which he made them.
I note what the right hon. Gentleman said about the matters which formed part of the run-up to the American action in Libya. I should have thought that they were matters which had been covered by the recent debate and by exchanges this afternoon, but I will convey to the Prime Minister the point that he has mentioned.
On the desirability of a statement by my right hon. and learned Friend the Foreign and Commonwealth Secretary as a result of the meeting with the Foreign Ministers of the European Community, I take the point that the right hon. Gentleman makes and I realise that it will be echoed throughout the Chamber. I will see that the appropriate representations are made.
As to the Shops Bill, before history is set in concrete I should perhaps observe that at no stage did the Government suppose that the Floor of the House would be much detained by the passage of this eminently sensible and self-commending legislation, otherwise they would not have been prepared to suggest that the whole thing could have been propelled by the self-disciplining means of a free vote. We delude ourselves, therefore, if we suppose that there is now a great store of time that can be used for other debates. Nevertheless, I understand the genuine concern about the level of unemployment as exemplified by the recent figures, and I suggest, at least initially, that it is a matter that will very properly feature in the Second Reading of the Finance Bill.
I have already indicated to the right hon. Gentleman the circumstances in which I believe it would be helpful and appropriate for the House to debate the future of British Leyland. I will consider his recent remarks in that context.
I quite understand the interest in the House that there should be a debate on foreign affairs, notwithstanding our recent concern in the middle east, because there are many issues elsewhere, not least in Latin America. Perhaps this matter could be considered through the usual channels.
Sir Peter Hordern: As both the Chancellor and the Foreign Secretary have recently announced that they are in favour of our joining the European monetary system, would my right hon. Friend make time for an early debate on this important matter so that the Prime Minister and the Cabinet may have full knowledge of the House's views?
Mr. Biffen: Most statements about this matter couched in terms of principle have also been matched by conditions

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of time, but I take note of what my hon. Friend says. I suggest that the speech that he wishes to make he might essay on the Second Reading of the Finance Bill.
Mr. David Alton: Can the Leader tell the House if the Secretary of State for Education and Science will reply personally to the debate on Monday? Secondly, can he give the House any news about whether there will be a debate on the NIREX sites, the orders for which have still not been laid, and a debate on the report of the Select Committee on the Environment on the disposal of nuclear waste?
Mr. Biffen: I cannot confirm the first point, but the hon. Gentleman might also at some time inform the House whether any Privy Councillor from the Liberal party will take part in that debate.
As to the second point, I take account of the concern that there should be early consideration of these matters, but I cannot go further than that.
Mr. Andrew Rowe: Given the unequivocal statement of Labour party policy presented by the right hon. Member for Manchester, Gorton (Mr. Kaufman) that the law against shops opening on Sundays should now be enforced, will my right hon. Friend consider providing time to discuss the consequences of that?
Mr. Biffen: I think that at moments of synthetic triumph all sorts of rather dangerous comments are made. I would not like to go beyond that—not in the mood of charity that I entertain this afternoon. I do not think that the Government could provide very much more time for an inquest into the unhappy circumstances of last Monday.
Mr. Martin J. O'Neill: Will the Leader of the House find time to take account of the end of the long take-over saga of the Distillers company, which should reach its conclusion tomorrow? Will he also find time for a discussion on the operation of monopolies and mergers legislation, because many of my constituents who are employees of Distillers feel that they have been rendered mere pawns in a stockbrokers' game?
Mr. Biffen: Without wishing to elevate the temperature in the Chamber, I can tell the hon. Gentleman that I very much understand his point. I shall refer his general remark to my right hon. Friend the Secretary of State for Trade and Industry.
Mr. Jonathan Aitken: Does my right hon. Friend recall the breakneck speed with which the Channel tunnel project was announced, evaluated, and voted on just after Christmas? Can he now solve the mystery of what has actually happened to the proposed Channel Tunnel Bill—
Mr. Robert Adley: It is on the Order Paper today.
Mr. Aitken: I had hoped that the Bill would sink without trace. As it was promised before Easter, can my right hon. Friend now advise the House about its progress?
Mr. Biffen: The Government entertain the aspiration, which I hope is well founded, that that legislation might have better prospects than some other.
Mr. Jack Ashley: Is the Leader of the House aware that there is now a great deal of publicity about the number of children dying from
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whooping cough? Are not the Government now urging further vaccination of children? Is the right hon. Gentleman aware that, although I support the immunisation programme, I also support the need for adequate compensation for vaccine damaged children, some of whom are severely brain damaged?
I am not terrified by the innuendo from Ministers and civil servants that those who support the claim for adequate compensation are damaging the immunisation programme. We are not. We support the immunisation programme, but we also demand proper compensation. Have not the Government admitted that one in 100,000 children are severely brain damaged by vaccination, with some of them being turned into cabbages?
Is the right hon. Gentleman aware that early-day motion 74 has been supported by 200 hon. Members from both sides of the House asking for adequate compensation?
[That this House believes that the proposed £20000 payment to vaccine damaged children is grossly inadequate for a lifetime of severe disability; expresses its strong support for the immunisation scheme; but calls upon the Government to provide the few tragic and unwitting casualties of this state-sponsored scheme with compensation comparable to that given to industrially injured people, or that awarded by the courts to those similarly disabled.]
The Government have refused adequate compensation for devastated families. They do not want to pay them £20,000. Will the right hon. Gentleman find time for a statement on this matter next week?
Mr. Biffen: I quite understand the right lion. Getleman's point. He properly observes that the early-day motion has the general endorsement of hon. Members in all parts of the House. I cannot hold out any tangible and specific hope, but I shall certainly draw the attention of my right hon. Friend the Secretary of State for Social Services to the right hon. Gentleman's request for a statement.
Mr. Tony Marlow: Would it be possible to introduce legislation to take from individuals the right to take out an act of mandamus against local authorities in order to restrain the army of bigots who would otherwise be released by the parliamentary wimps who sacrificed their judgment on the altar of what they thought to be short-term expediency on Monday night?
Mr. Biffen: I do not think that I am in any mood today to be lectured about expediency in relation to last Monday—[HON. MEMBERS: "Why not?"] I think that I was flexible beyond belief.
My hon. Friend's point is valid, but there is no prospect of an early passage in Government time of the legislation that he seeks. No doubt he knows well that there are opportunities available for private Members using their time.
Mr. Robert Parry: Has the Leader of the House seen early-day motion 685 concerning the Transport and General Workers Union's campaign on the use of the weedkiller 2–4–5,T?
[That this House congratulates the Transport and General Workers Union on its national and international campaign against the manufacture and use of the weedkiller 2–4–5,T, in view of the link between the use and the incidence of cancer and other serious medical side

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effects, particularly amongst pregnant women through birth deformities, which has been reported worldwide; notes the recent meeting betweeen the high powered delegation of the Transport and General Workers Union and Mr. Lange, Prime Minister of New Zealand, which is the only country in the world still manufacturing the weedkiller; warmly welcomes the promise from Mr. Lange that he will re-examine his country's policy on the manufacture of 2–4–5,T; and calls upon the Government of New Zealand to act urgently to stop the manufacture of this deadly substance.]
Will the right hon. Gentleman ask the Foreign Secretary to make representations to the New Zealand Government concerning the manufacture of this deadly substance, especially in view of the effect that it has on pregnant women?
Mr. Biffen: Yes, I will certainly make those representations.
Mr. Andrew MacKay: In the light of the decision of the House to reject the Shops Bill, would it be wise next week for us to have a debate on the two possible immediate scenarios which will ensue: a widespread and increasing flouting of the law, which would be intolerable, or widespread and increasing prosecutions, which would be immensely unpopular?
Mr. Biffen: A short period of abstinence from consideration of those problems would do us no harm. However, I can understand that the problems will come to meet us some months hence.
Mr. Eddie Loyden: Will the transport debate include the effect of EEC regulations on lorry drivers in Britain whose conditions and hours are being affected by EEC regulations? If it cannot be embraced in the debate, will the right hon. Gentleman ask the Secretary of State for Transport to bring the matter before the House?
Mr. Biffen: The hon. Gentleman will appreciate that the subject for debate was chosen by the Opposition. I am sure that the Opposition Front Bench will have listened with constructive sympathy to the hon. Gentleman's request.
Mr. Eric Forth: Will my right hon. Friend confirm that the European Communities Bill which will be debated next Wednesday concerns the Single European Act? Will he explain what role the House or a Standing Committee can have in judging that Act and seeking to amend it when it comes to us apparently already agreed by the Heads of Government?
Mr. Biffen: The answer to my hon. Friend's first question is yes. The answer to his second point is that that will be determined by the course of the debate.
Mr. Alex Carlile: Will the right hon. Gentleman find time for a debate on the manning levels in the prison service, and especially why the Government have such a patronising attitude to the Prison Officers Association that they are prepared to consult it but not negotiate with it?
Mr. Biffen: The hon. and learned Gentleman may have been out of the Chamber when the matter was raised by—[HON. MEMBERS: "He was here:] In that case, he has no excuse for asking such a question.
Mr. Michael Forsyth: Although the House has declined to bring the advantages of shopping on Sundays to the English as we enjoy them in Scotland, will my right hon. Friend find time for a debate on the merits of extending to England the benefits which we enjoy in Scotland of more liberal licensing hours?
Mr. Biffen: It would be unrealistic for the House to suppose that the future of flexi-hours will not have been conditioned to some extent by Monday's vote.
Mr. Harry Ewing: Does the Leader of the House realise that I have a good reason for asking a question about prisons? Does he remember that last Thursday I asked him to arrange for the Secretary of State for Scotland to make a statement on the crisis in Scottish prisons? Did he do anything about that? If he did not, will he do something this week before Scotland is faced with the same position as prevails in England and Wales?
While we are discussing prisons, would the Leader of the House discuss with Mr. Speaker introducing a prison system whereby those who behave themselves get preferential treatment while those who misbehave—in the House—are punished?
Mr. Biffen: Of course, I recognise that the hon. Gentleman has a valid reason for asking that question. May I say at once that so did the hon. and learned Member for Montgomery (Mr. Carlile). As his immediate neighbour, I would not wish to be thought dismissive of his contribution. He was not asking a question but making a point. Although that is frequently done, I like to have the chance to pay back in kind from time to time.
Of course, I shall again take up the hon. Gentleman's point in respect of my right hon. Friend the Secretary of State for Scotland. I understand the penal programme that he wishes to apply to the House and although I also understand why he should wish to invoke Mr. Speaker in this matter, I think it is something better left to the usual channels.
Mr. Richard Holt: My right hon. Friend is always concerned about employment and unemployment, and I understand that he has already this afternoon provided an opportunity for us to debate British Leyland. However, British Leyland is only one company, whereas there is an entire industry in this country—the furniture industry—in which we are importing twice as much as we export. The situation has changed over five years. If we are to maintain our manufacturing base in furniture, may we have a debate in the House and reverse current trends?
Mr. Biffen: I wish that current trends could be reversed merely by debate in the House. If my hon. Friend wishes to bring those wider considerations to the attention of the House, I think that in the first instance he should seek to have the matter debated on the Adjournment.
Several Hon. Members rose—
Mr. Speaker: Order. There is to be a statement, and then we have a fairly heavy day. I will allow business questions to continue for a further 10 minutes, and I hope that in that time, or less, everyone will have been called.
Mr. Frank Cook: The Leader of the House has already told the hon. Member for Liverpool, Mossley Hill (Mr. Alton) this afternoon that representations will be made for early consideration of the report about the NIREX proposals. The right hon. Gentleman should be aware of the widespread anxiety felt throughout the country that the Government's response to the report on radioactive waste by the Select Committee on the Environment may well take a written form and that opportunity to debate that report will not be accorded prior to discussion of the special development orders when they are placed before the Chamber. Will the right hon. Gentleman now assure us both that there will be a debate on the report and that it will take place before the SDOs are discussed?
Mr. Biffen: I will bear in mind all the points that the hon. Gentleman has made, and his concern that we should move with some expedition in resolving those matters.
Mr. Sydney Chapman: Next Thursday we shall debate the Report stage of the Housing and Planning Bill. The Committee stage was completed only seven clays ago. During Committee stage Ministers promised amendments, not only arising out of assurances and commitments made during debate, but because amendments were successfully carried by Back Benchers. Will my right hon. Friend assure us that those Government amendments will be brought forward next Thursday and not left for later discussion in another place?
Mr. Biffen: My hon. Friend makes a fair point, and a House of Commons point. We will certainly see that as many of the amendments as possible are dealt with in the House, but it may be unavoidable for some of them to be dealt with in another place.
Mr. Tam Dalyell: Table Office rules do not allow questions to be put on DefCon—that is the defence conditions agreement between Britain and the United States. Is there not therefore an obligation on Ministers to make a statement next week on the changes from categories 5 to 4, 3, 2, 1, or whatever they were, in the level of nuclear alert earlier this month as a result of the Libyan crisis? Is there not also an obligation to make a statement on the situation in which launchers of cruise missiles left their bases on the night of 10–11 April, both from Greenham and from Comiso, in very extraordinary circumstances that were not related to the exercise on 15 April? Should not there be an explanation by statement as the Table Office does not allow—I do not blame the Clerks—an explanation by parliamentary questions?
Mr. Biffen: The hon. Gentleman makes two quite separate but profoundly important points. I will certainly refer them to my right hon. Friend the Secretary of State for Defence.
Mr. Douglas Hogg: The Leader of the House will remember that before the Easter recess I asked him to confirm that the special development order would not be laid until there had been a full debate on the Select Committee report relevant to NIREX. The Leader of the House will recall that he said that he treated that proposition with very considerable sympathy. Will he confirm to the House that his sympathy is in no way diminished but that, on the contrary, it has been enhanced?
Mr. Biffen: My sympathy is a static consideration.
Mr. Jeff Rooker: The Leader of the House is first and foremost a parliamentarian. Is he happy to have announced business for next Thursday on a Bill that has no yet been reprinted? The Minister's office informs me that work has not yet been started on the amendments necessitated by a string of concessions made by Ministers—irrespecthe of the defeats that they suffered. Hon. Members and others will be in no position to prepare for an important debate on a number of matters, including the removing of security of tenure from 6 million families.
Mr. Biffen: I was aware of some of those factors when I answered the question of my hon. Friend the Member for Chipping Barnet (Mr. Chapman). I am advised that the Bill as reported by the Standing Committee will be available today. We therefore have to take account of the time that will be available for amendments to be tabled before next Thursday. I trust that the general wishes of the House can be met.
Mr. Michael Fallon: May we have an early debate on the success of the prh atisation programme, which has directly benefited over 1·5 million people? The Labour party could then clear up the confusion over its policy of compensation and renationalisation, in case it should ever come to power.
Mr. Biffen: I have great sympathy for that request, not least because it comes from one of my hon. Friends who is most dedicated to maintaining the intellectual initiative that sustains the programme. However, I have a much more prosaic task—that of handling Government business—and I do not think that there will be any better opportunity than the Second Reading of the Finance Bill.
Mrs. Ann Clwyd: On 12 February, at the end of a debate on the Felixstowe Dock and Railway Bill, the Chairman of Ways and Means promised to look at ways of reviewing the private Bill procedure. On 10 April, the Leader of the House said that the matter was still under consideration. What progress has been made?
Mr. Biffen: Consideration remains the state that I have to report, but I appreciate the hon. Lady's concerr that the matter should be expedited.
Mr. Patrick Nicholls: Will my right hon. Friend agree that the point raised by my hon. Friend the Member for Darlington (Mr. Fallon) goes even wider? There is some confusion about the fate of privatised industries. Is my right hon. Friend aware that the leader of the SDP has approved the privatisation of British Telecom, but that in an article in The Guardian the leader of the Liberal party raised the prospect of renationalisation? Should we not have a debate to try to clear up the threat that those contradictory policies pose to assets that people have bought with their own hard-earned money?
Mr. Biffen: My hon. Friend mades a compelling and pertinent case. However, I am bound by limitations of time. I also have sufficient faith in my hon. Friend's advocacy to feel confident that the good folk of Devon will know about the matter whether or not there is a parliamentary debate.
Mr. John Evans: Is the right hon. Gentleman aware that since the Government took office the House of Commons has not discussed in Government

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time the affairs of the Health and Safety Commission, which affects the life and safety at work of more than 20 million people. Will the Leader of the House consider the matter and announce, in the immediate future, at least one day's debate on that subject?
Mr. Biffen: I take note of what the hon. Gentleman says. It is a most important topic. However, in all fairness, I suggest that the hon. Gentleman might like to put a question to my right hon. and learned Friend the Paymaster General at Question Time next Tuesday.
Mr. Michael Brown: I revert to the question about NIREX. I have in my hand a reply from the Minister of State at the Department of the Environment to a parliamentary question. That reply shows that it is the Secretary of State's intention to lay the SDO at the end of April. Can the right hon. Gentleman reconcile what he has said today with that answer to my parliamentary question?
Mr. Biffen: I should like to look at the parliamentary answer before making a considered comment, but I assure my hon. Friend that the answer that I gave to my hon. Friend the Member for Grantham (Mr. Hogg) stands.
Mr. Andrew Faulds: As the body count has tragically started of Britons killed in revenge for the Prime Minister's involvement with President Reagan's murder of Libyan civilians, will the right hon. Gentleman arrange for the Foreign Secretary to make a statement on Monday—he is absent at present—about what additional security measures are being introduced to defend the staff of British embassies, who, as I was told by an Arab diplomat at lunch today, are not sufficiently defended in present circumstances, and individual Britons working abroad in Britain's interests in sensitive areas?
Mr. Biffen: Obviously, I take note of the hon. Gentleman's points, and I shall ensure that my right hon. and learned Friend the Foreign Secretary is aware of the hon. Gentleman's request. However, the hon. Gentleman may like to consider the statement that will be made just after business questions.
Mr. Peter Bruinvels: Now that, thankfully, the Shops bill is no longer with us, will the House have an opportunity to debate the Shops Act 1950 to remind all large local authorities that it contains a power to prosecute any large companies for staying open on Sundays? Will my right hon. Friend also remind both my right hon. Friend the Home Secretary and my right hon. and learned Friend the Foreign Secretary of my continuing concern about the 157 technicians at Heathrow airport and the 27 trainee pilots, all from Libya who are still working here and who may represent a potential security threat to all who live in the United Kingdom?
Mr. Biffen: I hope that we shall not have to live too long with the residue of the Shops Bill. One of the first laws in politics is, "In a moment of triumph, do not crow." On my hon. Friend's second point, he raised anxieties of real substance, and I shall ensure that they are conveyed to both my right hon. Friend the Home Secretary and my right hon. and learned Friend the Foreign Secretary.
Mr. Dennis Skinner: Will the Leader of the House confirm that at last week's Cabinet meeting there was a discussion paper on the question of coal in relation to the fall in oil prices? Is he aware of the conflicting reports in the newspapers arising from that discussion paper? One suggests that the Government will allow market forces to operate, with the result that many more thousands of miners will lose their jobs. Is he further aware that in the 1950s and 1960s successive Governments of different political persuasions followed that course when they had cheap oil, and that the net result was that after the price of oil quadrupled we were short of energy and needed coal in abundance? Will he ensure that we have a debate or statement on that matter so that we can make it absolutely clear that we shall assure the livelihood of those miners who are presently engaged in the coal mining industry, and not follow the short-sighted policy of the 1950s and 1960s?
Mr. Biffen: Regarding what took place in Cabinet last Thursday, alas, one of the inhibitions made on me is not to report to the House or the press what goes on in Cabinet. It is a most irksome restraint, but I must live with it.
On the hon. Gentleman's second point, there is real concern throughout the energy consuming public, both industrial and domestic, that there should be a proper balance of alternative supplies of energy, within which coal will undoubtedly play a major part. I shall certainly consider the necessity of having a debate on that proposition.
Mr. Michael Meadowcroft: Is the Leader of the House aware that the United States Administration have announced that on 23 April they intend to impose draconian regulations impeding exports to the United Kingdom which will impinge illegally on United Kingdom companies? Does he consider it important that we should have an urgent debate on the question of extra-territoriality?
Mr. Biffen: The whole question of extra-territoriality undoubtedly raises profound economic and trade issues which are of major national concern. I shall certainly convey the anxiety which has been expressed to my right hon. Friend the Secretary of State for Trade and Industry. He will certainly be encouraged to know that he has the support of the traditional free trade element of the House.
Mr. David Young rose—
Mr. Speaker: Order. Obviously the hon. Member was not present when I announced that I could not allow questions to continue beyond 10 past 4 o'clock, and it is now 13 minutes past.
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. Is it not a gross discourtesy to the families of the hostages who were so tragically lost in Lebanon today that the Prime Minister has sought to leave the Chamber and to quit before this highly important statement—
Mr. Speaker: Order. The hon. Gentleman knows perfectly well that that is not a matter for me.

Lebanon (Terrorism)
4.14 pm
The Minister of State, Foreign and Commonwealth Office (Mr. Tim Renton): With permission, Mr. Speaker. I should like to make a statement on British interests in the Lebanon and terrorism.
The British ambassador to Lebanon, Mr. John Gray, has reported that three bodies were found near Beirut earlier this morning. Pinned to one of the bodies was a notice claiming that they had been excuted as "CIA spies" by an organisation calling itself the Arab Fedayeen. Mr. Gray is urgently trying to arrange positive identification of the bodies. As the House will know, Mr. Alec Collett, a British employee of UNRWA, was kidnapped in Lebanon on 25 March 1985. Two British citizens, Mr. Leigh Douglas and Mr. Philip Padfield were kidnapped on 28 March this year, and Mr. Brian Keenan, of dual British and Irish nationality, was kidnapped in Beirut on 11 April. The House will wish to express to the relatives of the kidnap victims their sympathy in the terrible anxiety that they are now undergoing after all the acute stress to which they have already been subjected. Further information will certainly be given to the next of kin as soon as it is received.
Mr. Gray has also reported that another British citizen was kidnapped earlier this morning in west Beirut on his way to the airport. So far we have not received any claim of responsibility for his abduction. The ambassador is making inquiries with the authorities in Beirut and with community leaders.
Last week Mr. Gray repeated and reinforced his standing advice to British citizens against remaining in west Beirut and other areas in Lebanon where British citizens are at particular risk. All reasonable security precautions have been taken to protect Mr. Gray and his small staff. We have asked him urgently for his further advice on staffing of the British embassy and the safety of the remaining British community.
My right hon. and learned Friend the Foreign Secretary held an urgent meeting with his European colleagues in Paris this morning to discuss terrorism. A further meeting will be held early next week to discuss implementation of the recommendations of experts.
I understand that a suspected explosive device was found this morning at terminal 1 of Heathrow airport. The terminal was evacuated while the device was made safe. A women was arrested by the police.
This morning four rockets hit the ambassador's unoccupied residence in west Beirut. Mr. Gray was not present at the time, and he reports that there were no casualties, although some damage was caused to the building.
The whole House will wish to pay tribute to Mr. Gray and his staff, who are doing their work in the Lebanon with skill and courage in dangerous conditions.
Mr. Donald Anderson: We on this side of the House express our condolences to the bereaved and our admiration for the ambassador and his staff in extremely difficult conditions in Lebanon. We take no satisfaction from the realisation of our prediction that we in Britain will now be in the front line of terrorist outrages.
The Arab Fedayeen, or Arab commando unit, which has claimed responsibility for the three deaths in Lebanon,
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has apparently claimed that those three murders were in direct retaliation for the United States' aggression against Libya. Does the Minister have any further information on this subject? Is it correct that those three are the first tragic victims of the Prime Minister's completely isolated support for President Reagan? What progress had the Foreign Secretary made in his negotiations last week with the Syrian Government about the release of those three Britons—progress which appears, tragically, to have been cut short?
What information is there about the terrorist group responsible for the outrage of shelling our residence in west Beirut? If sufficient evidence is available to show that a neighbouring Arab country was responsible, whl the Government be tempted to invoke article 51—the self-defence article of the United Nations—and seek a retaliatory strike against that country? Where do we draw the line as we add up the mounting cycle of violence?
It is said that armed groups are now roaming the streets of west Beirut in search of foreigners as their victims. In those circumstances, what advice is the Foreign Office giving to residual staff at our embassies and to other British nationals? Is evacuation a practicable option in these circumstances? What special measures are being taken to protect our embassies and missions, both in the middle east and elsewhere, particularly in places where the Libyans have maintained their missions?
Finally, during the debate last night the Foreign Secretary told the House that he would today again urge our European partners to meet the challenge of terrorism. In the light of the results of this morning's meeting, is the Minister convinced that our European Economic Community partners have risen to the challenge?
Mr. Renton: I thank the hon. Gentleman for the sympathy that he has expressed to the relatives of the kidnap victims. His sympathy is obviously shared by the whole House. At present we do not have any information about who was responsible for these murders. Indeed, the bodies have not been identified. As soon as we have the information, we will contact the next of kin if the victims are British.
As the hon. Gentleman knows, "fedayeen" is a word commonly used in Arabic. Thus, the Arab fedayeen sounds like a wide group, not one of the specific terrorist groups on which we have previously received information. We cannot therefore be certain at this stage of the type and identity of the group claiming responsibility.
The shelling of our west Beirut residence obviously sounds alarming, but I point out to the hon. Gentleman that rocket attacks in west Beirut have been all too frequent in recent months. Our chancery building was subject to a rocket attack in August 1984. For that reason, for months we have arranged for all the United Kingdom staff to sleep in east Beirut rather than west Beirut.
As I said in my statement, we have given instructions to posts throughout the world, and particularly those in the middle and near east, to look carefully at their security measures. We shall be reinforcing this advice specifically in regard to Beirut after receiving further advice front the ambassador. The remaining British citizens in the Lebanon have for a long time been advised not to travel, for example, in west Beirut, in the Beka'a valley, or south Lebanon, unless they absolutely have to do so. Our ambassador has frequently pointed out to them that he is

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not able to give them the protection that British citizens abroad would normally receive. He is considering this advice to see whether it should be strengthened.
The EEC meeting this morning was only an interim meeting for Foreign Ministers to discuss progress, particularly on the subject of international terrorism. They repeated their determination to take quick action in this respect. Next week, at the Foreign Affairs Coumcil meeting on Monday, it is expected that expert groups will submit reports, with their recommendations for action on international terrorism.
Finally, I refer to the hon. Gentleman's comments about the British Government's support for United States' action against terrorist targets in Europe. Is he really suggesting that Governments should not take such action; that their hands should be tied because of threats made to them by terrorists and kidnappers? The Government carefully considered the position of our hostages in the middle east and elsewhere, but if we had allowed our hands to be tied and not taken action of the sort that we deemed it right to take, because of possible reprisals by kidnappers, that would have been seen as giving in to terrorist criminals, and that is not the sort of action that the House would expect from this Government.
Sir Peter Blaker: My hon. Friend has the support of Conservative Members in the tribute that he paid to our ambassador in Beirut and his staff, and in his expression of sympathy to the relatives of the British kidnap victims. Is he aware that this side of the House rejects most of the conclusions drawn by the hon. Member for Swansea, East (Mr. Anderson)? My hon. Friend and his right hon. Friends have our support for the courage that they are displaying in doing what they believe to be right in the face of international terrorism.
Mr. Renton: I thank my right hon. Friend both for his expression of sympathy for the relatives of the victims and for his warm support for the work being done by Her Majesty's ambassador in Lebanon and his staff, and I will ensure that his expression of support is passed on to those concerned.
Mr. James Wallace: I associate myself and my right hon. and hon. Friends with the Minister's expression of sympathy to the relatives of the kidnap victims, and also in paying tribute to the work being done in very trying circumstances by Mr. Gray and his embassy staff in Beirut.
Alliance Members profoundly disagree with the Government's decision to support the American intervention in Libya, but we unreservedly condemn acts of terrorism. Does the hon. Gentleman not think that there are more effective ways of dealing with and combating terrorism than the method chosen, such as the ways which we believe are being discussed by the European Council of Ministers and which we hope will be implemented? Does he not believe that by standing alone in Europe and aiding and abetting American military action we have made British subjects and citizens more vulnerable to retaliatory attacks, the first victims of which he referred to in his statement today?
Mr. Renton: I thank the hon. Member for his expression of sympathy and his support for the ambassador
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and his staff. I agree with what he said about action of the past few hours in relation to British hostages. One thing that this shows is the clear need for international action against international terrorism, whether ordinary terrorism or state-sponsored terrorism. This is the message that my right hon. and learned Friend the Foreign Secretary has been hammering home for many months, at meetings in the EEC and at the United Nations, and we hope that more positive action will be taken in the months ahead.
I am sure that the House does not want me to go over the debate that occupied seven hours last night, but surely it is right that in certain circumstances military action in self-defence is necessary in order to discourage and prevent further acts of terrorism.
Sir Peter Mills: Will my hon. Friend bear in mind that, sadly, it looks as though it is one of my constituents who has been killed, and will he join me and the House in sending our deepest sympathy to the father and relatives at Bideford? My hon. Friend said that it is important for all British subjects to get out of Beirut, but how can they do that without some assistance? I understand that one or two people who have gone to the airport have been captured. Will my hon. Friend make arrangements somehow for such people to be protected?
Mr. Renton: I thank my hon. Friend for his opening remarks. I am sorry to hear that one of the victims may be a constituent of his. I know that the House would want to associate itself with the expression of sympathy to his constituent's family. To avoid misunderstanding, I emphasise that my advice was not, to use my hon. Friend's words, that it is important for all to get out. I drew a careful distinction between west Beirut and east Beirut. Anyone who has been to Beirut recently, as I did in December, will know well the reasons for that distinction.
Our advice through the embassy to British residents has for many months been that they should not travel through west Beirut unless they have good reason to do so. At the moment the same advice does not apply to east Beirut. There is, of course, always the possibility that people living in the Lebanon can leave by ferry, which is the usual method for coming to and from Beirut. That is a possibility which I am sure many people will be thinking about at present. I bear in mind my hon. Friend's remarks about the safety of those travelling to the airport in west Beirut, and I shall pass those on.
Mr. David Young: All hon. Members will be saddened by the news of any victims of terrorism, no matter from where it comes. I was glad to hear my hon. Friend the Member for Swansea, East (Mr. Anderson) say that the answer to terrorism is international action. Our criticism is that there has been unilateral action. Having met the ambassador from the Lebanon and his delegation only a few days ago, what support are the Government giving for United Nations resolution 425 for the removal of American-backed Israeli troops from the south of Lebanon, which would be a major means of stabilising that region? Will the Secretary of State make a statement as soon as possible?
Mr. Renton: I thank the hon. Gentleman for his opening remarks. I do not agree that the United States' action was unilateral. Rather, it was action by the United States, supported in one respect by the United Kingdom,

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on behalf of the international community, which is threatened by international terrorism. Someone earlier referred to the front line of terrorism. We have been in the front line for at least the past 10 years, since the agents of the Libyan Government started to commit their crimes in Britain.
The hon. Gentleman will know that we strongly support the continuation of the mandate of UNIFIL in south Lebanon. That is coming up for discussion at the United Nations. We have always strongly urged Israel to complete its evacuation from south Lebanon. That has been the Government's consistent policy, and I hope that it will be seen to be put into effect.
Mr. Ralph Howell: I join my hon. Friend in offering my deepest sympathy to the families and friends of the victims in Beirut, including my constituents, Mr. and Mrs. Douglas, who have suffered deeply since the abduction of their son. May I have an assurance that everything possible will be done to ascertain the facts of what has happened in Beirut as soon as possible?
Mr. Renton: Yes, I can give that unqualified assurance to my hon. Friend. We expect to hear within hours about the identification of the bodies, and that information will be communicated immediately not only to the next of kin but to any Members of this honourable House who, for constituency reasons, are associated with the victims.
Let me take this opportunity of thanking all those many Governments, organisations and individuals who have tried in recent weeks to assist us, either in locating or in securing the release of the various hostages. Their work has been magnificent, and if for three of them it has ended today, that is a great tragedy.
Dr. John Gilbert: In view of the deteriorating security situation in Beirut, do Her Majesty's Government have not only contingency plans for the evacuation of British residents there, but military units to assist in such an evacuation, as was the case recently in Aden?
Mr. Renton: I note what the right hon. Gentleman says. The evacuation in Aden was substantially assisted by the chance presence of Britannia, and we cannot always call on the royal yacht for this purpose. Its presence outside Aden was extremely helpful, but that was by chance, as it was on a voyage to Australasia. The right hon. Gentleman would not expect me to go into detail about possible contingency plans, but I take his point about the dangerous situation in the Lebanon. That is a matter of which we have been aware for a good many weeks.
Mr. Robert Adley: Everybody will deplore these dastardly deeds, but will my hon. Friend please understand that it is necessary sometimes to try to comprehend what is going on before one rushes into making decisions such as the Government made the day before yesterday? Does he agree that when my right hon. Friend the Prime Minister refers to state terrorism she aptly describes the acts of Israel in southern Lebanon? That is seen by almost all Arabs as a direct result of the policy of the United States in the middle east, with which we now, sadly, seem to be associated. Will my hon. Friend at least confirm that it remains the British Government's policy utterly to condemn this illegal invasion and occupation of Lebanese territory? Will he now recognise that the Government should be seeking, with our European
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partners, to restrain the United States from its one-sided policy in the middle east which has caused so many problems?
Mr. Renton: I would only make the point to my hon. Friend that in the course of yesterday's debate, virtually all of which I listened to, many hon. Members on both sides of the House said that the real solution to the problem of terrorism in the middle east lay in the solution of the Palestinian problem. I would not deny that that is the root cause, but it is the easiest thing in the world to say that. The difficulty is to find a solution. Successive Governments, United Nations organisations, the United States and many others have sought such a solution over recent years. King Hussein is in Britain at the moment, and doubtless that is one of the matters that he will be discussing with my right hon. Friend the Prime Minister, since it was her initiative, after discussions with King Hussein, which appeared to have a chance of taking us a step forward in meeting a joint Jordanian-Palestinian delegation last autumn. It is easy to say that that is the problem, but the difficulty, as all Governments have found, is to find the solution to the Palestinian question.
Mr. Frank Cook: I associate myself with the words of my hon. Friend the Member for Swansea, East (Mr. Anderson), especially with his expressions of sympathy and condolence, in the same way as I associate myself with the Prime Minister's statement on Tuesday:
"Terrorism is a scourge of the modern age."—[Official Report, 15 April 1986; Vol. 95, c. 730.]
In fact, most people would agree that terrorism is an almost exquisite form of premeditated treachery. With that in mind, will the Minister give the House an assurance this afternoon that he will prevail upon the Prime Minister, who has not been present throughout these proceedings, to consult her friend the President of the United States to see whether she may be allowed to agree with me in stating that a terrorist is a terrorist, regardless of the insignia worn when committing the insane and bloody act?
Mr. Renton: I note what the hon. Gentleman says, and I fully agree with him in his wholehearted condemnation of terrorism, be it state-inspired or directed, wherever it occurs.
Mr. John Stokes: Is my hon. Friend aware that this afternoon in Westminster Abbey King Hussein of Jordan paid a moving tribute to the late Glubb Pasha? Cannot we somehow get back to those happier days when Englishmen knew and understood the Arab people so well? Surely there will be no peace in that part of the world unless a peace plan can somehow be started again, perhaps by the EEC Ministers.
Mr. Renton: I note what my hon. Friend said. I would have been at that memorial service had it not been necessary to prepare for this statement in the House on these tragic events. Thinking of Glubb Pasha does, of course, remind us of an era in the middle east when Britain was an extremely important protecting power. That day has gone for ever, but our interests in the middle east remain very strong. We never forget them.
Mr. Jack Ashley: Will the Minister accept that we have gone beyond the days of the late Glubb Pasha and are living in the 1980s? While all Members of the House of Commons will understand why he should make such an anodyne, apparently innocent and

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bland statement about the present situation, will he convey to the Prime Minister and the Secretary of State that they have made a disastrous error of judgment and should learn the lessons accordingly?
Mr. Renton: I do not think that the Prime Minister or the Foreign Secretary has made a disastrous error of judgement. Therefore, no, I will not convey that message.
Mr. Jonathan Aitken: Does my hon. Friend agree that, arising out of the current situation in Libya, we now may be at the beginning of a chain of consequences and events, some of which, sadly, may have tragic results for individuals, but some of which may yet result in the elimination of state-sponsored terrorism and therefore make the world safer for individuals?
Mr. Renton: Yes, I very much hope that the result which my hon. Friend sees as a possibility will come about.
Mr. Tam Dalyell: Unfashionable though it may be these days, may I express a high regard for the quality of the senior officials of the Foreign Office? Did not those self-same officials warn Ministers specifically that if there was a military attack on Libya we might expect retribution in Beirut? Will he confirm that that specific warning was given by officials? Was that warning passed on by Ministers to Downing street, and did Downing street overrule the Foreign Office? Was that specific warning about Beirut taken into account? Is it not a case of Downing street thinking that it knows better than everybody else?
Mr. Renton: The hon. Gentleman has an infinite capacity for seeing plots that do not exist. It is not necessary for officials to warn Ministers about the position of hostages.
Mr. Dalyell rose—
Mr. Renton: I suggest to the hon. Gentleman that he listens and waits for a minute. I was in Damascus and in Beirut before Christmas. I spoke to Mr. Shara', Mr. Khaddam, Mr. Karami and other senior Ministers about Alec Collett and what could be done to secure his release. I did not need the advice of officials for that. So, quite clearly, when the decision was taken to support the United States in its measured attack on terrorist targets in Libya, one of the matters that was carefully taken into account was the implications to those who were being held hostage.
Mr. Ivor Stanbrook: Apart from Beirut, has it not been easily predictable since Monday that the lives of other British citizens would now be at risk elsewhere in the middle east? What are the Government doing about stepping up protection for them?
Mr. Renton: I have already said in answer to earlier questions that we have given instructions to our posts throughout the middle east to take particular security precautions. Notably, in regard to Libya and Lebanon, in the first category, Mr. Dunnachie, who is in charge of our British interests section, has been giving advice to the British community constantly for the last few days, and Mr. Gray, our ambassador in Beirut, has been doing that along the lines that I have already mentioned for a good many weeks now.
Mr. Greville Janner: Can the Minister tell the House rather more than he has about the bomb at terminal 1 at Heathrow airport this morning? In view of the continuing and awful series of airport and airline outrages, one more of which was, appparently, only averted today through the customary effort and courage of airline staff, is he consulting the British Air Line Pilots Association to see whether we can bring into force, by agreement, an arrangement that aircraft do not land in those countries which provide safe havens for terrorists and murderers?
Mr. Renton: I cannot say any more at the moment about the bomb at Heathrow terminal 1. Police inquiries are at an early stage, and it would not be appropriate for me to comment further. Of course, it is my right hon. Friend the Home Secretary who will in due course answer further questions about the bomb.
We have not received any representations from, for example, the International Federation of Airline Pilots Associations, but if it makes such representations as the hon. and learned Gentleman has suggested, the appropriate Department will consider them very carefully indeed.
Mr. Bill Walker: Does my hon. Friend agree that the kidnapping and murder of people in the middle east is not a recent phenomenon? Many of us remember the situation that existed in the late 1940s when this was going on, and it has been going on ever since. Will my hon. Friend confirm that the military action taken earlier this week is not the first instance of military action being taken in the middle east? Any student of middle east history knows that air forces, including the Royal Air Force, have been engaged extensively in the middle east in operations of this kind?
Mr. Renton: I take my hon. Friend's point, and he is of course right in saying that terrorist activities are nothing new. Specifically in regard to Libyan terrorist activities, this country has been suffering from them ever since 1979; for instance, in March 1980, when a Libyan journalist was shot in Regent's park. The whole House should agree that, despite the tragic circumstances that I have had to announce today, if the Government refrained from taking what they believe to be the correct action, because they were frightened of reprisals by terrorists or kidnappers, they would be giving in to blackmail by criminals. I cannot believe that that is a course of action that the House would want the Government to follow.
Mr. Michael Foot: Is it not evident from the hon. Gentleman's replies to the questions that have been put to him that these are not departmental answers? It is impossible for his Department to be responsible for these replies. If, tragically, this intensification of terrorist action continues over the coming days, will the Government make sure that the person who comes to the House to answer for these matters is the Prime Minister, who is primarily responsible?
Mr. Renton: I cannot say that I fully understand the right hon. Gentleman's question. Responsibility for the middle east is specifically mine within the Foreign Office, and it is therefore totally appropriate that I should have come here this afternoon to make a statement about developments in the Lebanon today.
Mr. Andrew MacKay: On this occasion, when, quite rightly, the whole House is condemning savage murders, would it not be right for us to make it absolutely clear also that the more that terrorist activities take place, the stronger will be our resolve throughout this House? Should we not also point out that we have been at the sharp end as victims of terrorism in this country and abroad for a long time before Monday night's bombing of Tripoli?
Mr. Renton: I fully agree with my hon. Friend, and I have no doubt that, despite these tragic events, hon. Members, certainly on the Government Benches, are determined that there shall be no compromise and no trading with terrorists.
Mr. Robert Maclennan: Does the Minister accept that his earlier explanation of the discussions in Paris today reveals a disturbing lack of urgency, and that his reference to more effective measures against terrorism in the months ahead being planned by European Foreign Ministers will not reassure people in this country that the Government are committed to effective measures other than the use of force? Will the Minister report the decisions of principle, if any, which were taken today in Paris which carry the discussion beyond the communiqué issued on Monday?
Mr. Renton: Although I understand the reasons for it, the hon. Member will have to restrain his impatience for a few more days. Today's meeting of the Foreign Ministers was only an interim meeting, at which once again the need was accepted for further urgent measures both to suppress terrorism in Europe and to recruit wider international support from friendly and moderate countries to stop state terrorism. A full meeting of the Foreign Affairs Council will take place on 21 April. It is from that meeting that the hon. Gentleman should expect to hear an announcement, in the communiqué, of what decisions have been taken.
Several Hon. Members rose—
Mr. Speaker: Order. I must have regard to the business before the House today. I shall allow questions to go on for a further 10 minutes, but then we must move on. I hope the House will agree that I should give preference to those right hon. and hon. Members who did not take part in yesterday's debate and who were not called on previous statements.
Sir Paul Hawkins: Does my hon. Friend know that when I went through Heathrow airport last Saturday there was no passport control on any El A1 aeroplanes? I was travelling on a British aeroplane, and I was told that because an El A1 flight was taking place that day the passport controllers had refused to work.
Mr. Renton: I note what my hon. Friend says, and it is certainly a matter of concern. I shall see that it is passed on to my right hon. Friend the Home Secretary, who has responsibility for passport matters.
Mr. Tony Banks: On what basis does the Minister justify his statement that in supporting the United States attack on Libya Britain was acting in support of the international community? Will he please name the countries which have indicated to Her Majesty's Government their support for the United States' attack on Libya and Britain's support for that attack?
Mr. Renton: The hon. Gentleman would do better if he listened more closely. I said that the United States, with our support in one specific area, was acting on behalf of all those in the international community who have suffered from international terrorism. That is of course right. Libyan terrorism threatens not just the United States and the United Kingdom, but a number of the surrounding Arab countries, and this action should be considered to have been taken on behalf of all of those countries.
Mr. Douglas Hogg: Will my hon. Friend confirm that urgent steps will be taken to find out whether the Libyan Government are in any way responsible either for the three murders in the Lebanon or for the bomb at terminal 1 at Heathrow? If there is a connection, will my hon. Friend ensure that that fact is clearly announced to the world and, to the extent possible, ensure that the evidence is revealed?
Mr. Renton: I note with great care what my hon. Friend said. There is always a problem about revealing specific sources when one finds out the details of who is responsible for terrorist attacks and for kidnappings. However, I listened to what my hon. Friend said, and I shall bear his comments in mind.
Mr. Ron Leighton: Do the Government understand what every schoolchild could have told them—that by acting as a puppet of the Americans they have placed in danger the lives of countless innocent British citizens? Do they understand that the responsibility for their blood is now on their hands?
Mr. Renton: I find the hon. Gentleman's comments cheap, unpleasant and time-serving. I should like to make the point to him that the price for resisting terrorism is never cheap. We never thought that it would be cheap, and no intelligent person should think that it will be cheap. But we cannot combat terrorism by side-stepping it. If we try to side-step it, the eventual price is likely to be greater than if we had resisted the terrorism from the beginning.
Mr. Ernie Ross: The Minister knows that at least two of the people who may have been victims of this terrorist action worked and lived not in west Beirut but in east Beirut. The university is in west Beirut. The Minister also knows that the majority of British subjects who are now living in Beirut wish to remain there, as do the British subjects in every other Arab country. They are looking to this Government, not for their support for action against Arab Governments, but for an initiative that will resolve the problem in the middle east. That is the Palestinian problem. Will the Minister confirm that his right hon. Friend the Prime Minister intends to go ahead with her visit to Israel, and is he able to say what initiative she will take to Israel in an effort to settle the Palestinian problem?
Mr. Renton: I listened very carefully to the hon. Gentleman's question, and I realise that he appreciates the difficulties. However, I would make the point to him that it is not just a question of the Palestinian problem, to which I have already referred. The inter-communal problems in the Lebanon between different types of Moslems and between the Moslems and the Christians go back many centuries. These problems are at the heart of so many of the difficulties around Beirut. It was for this reason that Syria brought forward the joint tripartite draft agreement,

1033
to try to find agreement between the communities around Beirut for a peaceful settlement. My right hon. Friend the Prime Minister is certainly proposing to go ahead with her visit to Israel. I have no doubt that she will take some thoughts with her for discussion with Mr. Peres about how the Arab-Israel peace process can be moved forward.
Mr. Max Madden: Does the Minister accept that there can be no prospect of peace in the middle east, and certainly no real reduction in terrorism, unless the Palestinians secure a homeland? Does he also accept that the influence which Britain and America could have exerted to that end has been considerably reduced by the insane attack upon Libya by the Americans, with the support of this Government?
Does he also accept that, because of this insane adventure, we have made British citizens in many countries in the middle east targets for terrorism? Will he give a clear undertaking that British bases will never again be used by the Americans or by anybody else to undertake mad adventures of this sort?
Mr. Renton: The hon. Gentleman's determination to introduce extravagant words like "insane adventure" causes him to lose sight of the point that he made at the beginning of his question, which was about the Palestinian problem and the Palestinians' right to a homeland. We have always supported the Palestinians' right to self-determination. We take a foreign policy view about this question which is quite different from that of the United States. It was against that background that my right hon. Friend the Prime Minister suggested during her visit last autumn to Jordan that a joint Palestinian delegation should come here. It is a pity that that initiative did not work out, but we always remain willing to look at other ideas for bringing reputable Palestinians, as representatives of the Palestinian people, into the peace process.
Mr. Harry Ewing: The Minister of State keeps saying that the Government's policy must not be dictated by the fear of reprisals. What will he say if, tragically, it is shown that some of the people who have now been found dead had been held hostage for a very long period? Does he accept that it was the Government's support of the American action that brought about the killings? No doubt their lives were always in danger while they were held hostage, but was it not the Government's support for the American action that brought about the tragic killing of those who had been held hostage for so long?
Mr. Renton: I listened carefully to the hon. Gentleman. I know him to be a thinking and careful person. I should only like to send back the thought to him that we had the position of our hostages very much in mind. However, if any Government refrain from taking what they believe to be correct action through fear for their hostages, they are allowing their hands to be tied by terrorists and criminal kidnappers and are giving in to blackmail by terrorists and kidnappers. That is something that we have always said we would not do.
Mr. D. N. Campbell-Savours: Does the Minister accept no responsibility for the loss of the hostages' lives?
Mr. Renton: I think that that is a foolish question.
Mr. Tony Marlow: Will my hon. Friend accept that, whatever was said yesterday by two ex-Prime Ministers and an ex-Foreign Secretary, given the circumstances in which the Government found themselves, and whatever misgivings they had, given the fact that the European Community turned its back on the Americans, there was no alternative for a British Prime Minister but to agree to the use of our bases and, had they been Prime Minister or Foreign Secretary, no doubt they would have made the same decision?
Mr. Renton: If my hon. Friend is referring to the Opposition, I am not at all certain that they would have made the same decision, because I am not certain that it is in their character to take determined decisions to stand up against terrorism. That apart, I agree with my hon. Friend's remark.
Mr. Andrew Faulds: In acquiescing in the American President's demands for the use of British bases, which was in clear contravention of the spirit and understanding of the original agreement on these bases, did the Prime Minister contemplate the inevitability of these British deaths, and others which will follow, and the inevitability of the Libyan civilian casualties as well?
Mr. Renton: The hon. Gentleman is wrong. He is trying to repeat some of yesterday's debate. It is clear that the agreement of the Prime Minister and of the Government was not in contravention of the original Attlee-Truman agreement. I do not agree with his comments, and I repeat that it would be wrong if the Government allowed their decisions to be dictated by fear of what terrorists or criminal kidnappers might do.
Sir Eldon Griffiths: In the weeks and months before these bodies were discovered, and well before the American air strike, is it not the case that evidence was building up in Beirut—circumstantial perhaps—to link the abductions of these British citizens to the policies and agencies of the Government of Libya?
Mr. Renton: I hope my hon. Friend will not mind if I do not go into further detail this afternoon. I do not wish to say anything that might affect the safety of those who are held hostage—[AN HON. MEMBER: "Tell the Truth."] I assure the House that it is not a question of telling the truth. It is a question of the safety of those who are being held hostage in the Lebanon. For that reason, I shall not go into further detail.
Mr. Anderson: Has not the Minister, in his bland statement today, failed to recognise that the situation has changed fundamentally because of the attack and that British citizens everywhere are now vulnerable to terrorism? In the light of that, what is his advice to British subjects in west Beirut? Is it to stay, or to leave? If it is to leave, how do they do so? Has the hon. Gentleman not today confirmed that negotiations which were under way with the Syrian Government about the release of our citizens have been totally undermined by this invasion and that our Government have abandoned those citizens to their fate? If we are not to be dictated to by fear of reprisals, what possible ground can there be for thinking that Colonel Gaddafi and his apparently less rational Government will be dictated to by the fear of reprisals?
Mr. Renton: Our advice for many years now has been not to go into Beirut, or to other parts of the Lebanon, which are every bit as dangerous as west Beirut. We have

1035
today instructed our ambassador in Beirut to give us his further opinion on what additional instructions, if any, should be given. The situation in the Lebanon has been in turmoil for many months, as anyone who has been there recently will know. We have been in discussion with many Governments in the middle east the Syrian Government included, for weeks about our citizens who are held hostage. We in this country have been in the front line of terrorism for many years, not least since the killing of Policewoman Fletcher two years ago. There is nothing new about this situation.

BILLS PRESENTED
  BRITISH SHIPBUILDERS (BORROWING POWERS)
  Mr. Secretary Channon, supported by Mr. Secretary Ridley, Mr. Kenneth Clarke, Mr. Secretary Rifkind, Mr. John Moore and Mr. Peter Morrison, presented (under Standing Order No. 111 (Procedure upon Bills whose main object is to create a charge upon the public revenue)) a Bill to raise the limits imposed by section 11 of the Aircraft and Shipbuilding Industries Act 1977 in relation to the finances of British Shipbuilders and its wholly owned subsidiaries: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 136.]
  CHANNEL TUNNEL
  Mr. Secretary Ridley, supported by the Prime Minister, Secretary Sir Geoffrey Howe, Mr. Norman Tebbit, Mr. Secretary Baker, Mr. Secretary Channon, Mr. John Moore and Mr. David Mitchell, presented a Bill to provide for the construction and operation of a railway tunnel system under the English Channel, together with associated works; to provide for connected improvements in the road network near Ashford, in Kent, and in the rail network in South Eastern England; to incorporate part of the railway tunnel system into the United Kingdom and to provide for the application and enforcement of law in relation to, and otherwise for the regulation of, that system and matters connected with it; to provide for the construction of certain highways and associated works in the vicinity of Folkestone; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 137.]
Orders of the Day
  Agriculture Bill
  As amended (in the Standing Committee), considered.
  Agriculture Bill
    New Clause 4

      COMPENSATION TO OUTGOING TENANTS FOR MILK QUOTA
      `(1) Schedule [Tenants' compensation for milk quota] to this Act shall have effect in connection with the payment to certain agricultural tenants on the termination of their tenancies of compensation in respect of milk quota (within the meaning of that Schedule).
      (2) On a reference under section 12 of the Agricultural Holdings Act 1986 (arbitration of rent) the arbitrator shall disregard any rights the tenant may have under that Schedule.'.—[Mr. Jopling.]
      Brought up, and read the First time.
      5.5 pm
      The Minister of Agriculture, Fisheries and Food (Mr. Michael Jopling): I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this it will be convenient also to discuss the following: New clause 6—Apportionment of value of milk quotas between landlords and tenants—
      `(1) Subject to the provisions of this section the landlord or tenant of an agricultural holding may by notice in writing served on his tenant or landlord at any time during the continuance of the tenancy or before the expiration of two months from the termination of the tenancy demand a reference to arbitration under the Agricultural Holdings Act 1986 of the question of what proportion of the value of the quota on the holding is attributable to the landlord and tenant respectively.
      (2) No such reference as is referred to in subsection (1) above shall be possible unless the landlord or the tenant of the holding has requested his tenant or landlord to enter into an agreement as to their respective proportions of the value of the quota on the holding but no such agreement has been concluded.
      (3) On a reference under sub section (1) above the arbitrator shall determine what proportion of the value of the quota available on the holding at the date of arbitration is attributable to each party according to his respective contribution to the establishment of quota allocated by the Minister.
      (4) In making his determination under subsection (3) above the arbitrator shall have regard only to the period prior to the allocation of quota by the Minister.
      (5) For the purposes of subsection (3) above the value of any quota brought on to the holding by whatever means other than quota allocated by the Minister shall be attributed to the party who acquired it and shall not be apportioned by the arbitrator.
      (6)(a) For the purposes of subsection (3) above and subject to paragraphs (b) and (c) below, in determining the respective contributions of the landlord and tenant to the establishment of quota on the holding the arbitrator shall take into account the quality of land used for dairying, if relevant, and the contributions of each party to any land improvements specific to dairying, the dairy buildings, their appurtenances and plant, the dairying equipment and machinery, and the provision of the dairy herd, feed, labour and management.
      (b) In making his determination under sub section (3) above the arbitrator shall not attach undue weight to any one of the factors contributed by the landlord or tenant but shall endeavour to achieve a reasonable balance between all factors taken into account.
      (c) In any case where the landlord has provided all the dairy buildings, and their appurtenances and plant, land and land improvements specific to dairying, and the tenant has provided all the dairying equipment and machinery, the dairy herd and management of it, the

      1037
      quota value shall be apportioned equally between the landlord and the tenant and the arbitrator shall have regard to this principle in making his determination under subsection (3) above.
      (7) The tenant shall be entitled on the termination of the tenancy, on quitting the holding, to obtain from his landlord compensation for that portion of the value of the quota on the holding which:—

      (a) the parties agree is attributable to the tenant; or

      (b) in the absence of agreement between the parties is determined by an arbitrator under sub-section (3) above to be attributable to the tenant.

      (8) The value of quota to be taken into account for the purposes of sub-section (7) above is the value of the quota at the time of the termination of the tenancy in question and in determining that value there shall be taken into account such evidence as is available, including evidence as to sums being paid for freehold and leasehold interests in land and in respect of grazing licences for periods of less than one year:—

      (a) in cases where quota is registered in relation to the land; and

      (b) in cases where no quota is so registered.

      (9) Where the parties fail to agree the value of the quota to be taken into account under sub-section (8) above such value shall be determined by arbitration under the Agricultural Holdings Act 1986.
      (10) In this section "dairy buildings, their appurtenances and plant" shall include any buildings used for cow housing and other dairying purposes and includes parlours, dairies, silage pits, feed stores, slurry stores, collecting yards and any associated yards, and other relevant constructions of whatsoever nature; "dairying equipment and machinery" shall include the milking equipment and parlour fittings, bulk milk tanks and associated equipment, cubicle divisions, equipment used in connection with the dairy herd for forage harvesting, feeding and the disposal of slurry, and other relevant equipment of whatsoever nature; "Minister" means—

      (a) in the case of land in England, the Minister of Agriculture, Fisheries and Food, and

      (b) in the case of land in Wales, the Secretary of State; "quota" means direct sales quota or wholesale quota as defined in the Dairy Produce Quotas Regulations 1986; and "quota allocated by the Minister" means any quota allocated by the Minister under the Dairy Produce Quotas Regulations 1984, the Dairy Produce Quotas (Amendment) Regulations 1985 and the Dairy Produce Quotas Regulations 1986.'.

      Amendment (a) thereto, in paragraph 1(10)(b) after second 'in', insert 'Scotland and'
      Government amendments Nos 25 to 27 and 29.
      Government amendment No 30—Schedule—

    TENANTS' COMPENSATION FOR MILK QUOTA PART I

      RIGHT TO COMPENSATION
      Tenants' right to compensation
      1.—(1) Subject to the following provisions of this Schedule, where on the termination of the tenancy of any land the tenant has milk quota registered as his in relation to a holding consisting of or including the land, the tenant shall be entitled, on quitting the land, to obtain from his landlord a payment—

      (a) if the tenant had milk quota allocated to him in relation to land comprised in the holding ("allocated quota") in respect of so much of the relevant quota as consists of allocated quota; and

      (b) if the tenant had milk quota allocated to him as aforesaid or was in occupation of the land as a tenant on 2nd April 1984 (whether or not under the tenancy which is terminating), in respect of so much of the relevant quota as consists of transferred quota transferred to him by virtue of a transaction the cost of which was borne wholly or partly by him.

      (2) In sub-paragraph (1) above—
      "the relevant quota" means—

      (a) in a case where the holding mentioned in subsection (1) above consists only of the land subject to the tenancy, the milk quota registered in relation to the holding; and

      1038

      (b) otherwise, such part of that milk quota as falls to be apportioned to that land on the termination of the tenancy;

      "transferred quota" means milk quota transferred to the tenant by virtue of the transfer to him of the whole or part of a holding.
      (3) A tenant shall not be entitled to more than one payment under this paragraph in respect of the same land.
      Succession on death or retirement of tenant
      2.—(1) This paragraph applies where on the termination of the tenancy of any land after 2nd April 1984 a new tenancy of the land or part of the land has been granted to a different tenant ("the new tenant") and that tenancy—

      (a) was obtained by virtue of a direction under section 39 or 53 of the Agricultural Holdings Act 1986 (direction for grant of tenancy to successor on death or retirement of previous tenant);

      (b) was granted (following a direction under section 39 of that Act) in circumstances within section 45(6) of that Act (new tenancy granted by agreement to persons entitled to tenancy under direction); or

      (c) is such a tenancy as is mentioned in section 37(1) (b) or (2) of that Act (tenancy granted by agreement to close relative).

      (2) Where this paragraph applies—

      (a) any milk quota allocated or transferred to the former tenant (or treated as having been allocated or transferred to him) in respect of the land which is subject to the new tenancy shall be treated as if it had been allocated or transferred to the new tenant; and

      (b) in a case where milk quota is treated under paragraph (a) above as having been transferred to the new tenant, he shall be treated as if he had paid so much of the cost of the transaction by virtue of which the milk quota was transferred as the former tenant bore (or is treated as having borne).

      (3) Sub-paragraph (1) above applies in relation to the grant of a new tenancy before the date on which the Agricultural Holdings Act 1986 comes into force as if the references in that sub-paragraph to section 39, 53 and 45(6) of that Act were references to section 20 of the Agriculture (Miscellaneous Provisions) Act 1976, paragraph 5 of Shedule 2 to the Agricultural Holdings Act 1984 and section 23(6) of the said Act of 1976 respectively.
      Assignments
      3. Where the tenancy of any land has been assigned after 2nd April 1984 (whether by deed or by operation of law)—

      (a) any milk quota allocated or transferred to the assignor (or treated as having been allocated or transferred to him) in respect of the land shall be treated as if it had been allocatd or transferred to the assignee; and

      (b) in a case where milk quota is treated under paragraph (a) above as having been transferred to the assignee, he shall be treated as if he had paid so much of the cost of the transaction by virtue of which the milk quota was transferred as the assignor bore (or is treated as having borne);

      and accordingly the assignor shall not be entitled to a payment under paragraph 1 above in respect of that land.
      Sub-tenancies
      4. Where the sub-tenancy of any land terminates after 2nd April 1984 then, for the purposes of determining the sub-landlord's entitlement under paragraph 1 above—

      (a) any milk quota allocated or transferred to the subtenant (or treated as having been allocated or transferred to him) in respect of the land shall be treated as if it had been allocated or transferred to the sub-landlard;

      (b) in a case where milk quota is treated under paragraph (a) above as having been transferred to the sub-landlord, he shall be treated as if he had paid so much of the cost of the transaction by virtue of which the milk quota was transferred as the sub-tenant bore (or is treated as having borne): and

      1039

      (c) if the sub-landlord does not occupy the land after the sub-tenancy has ended and the sub-tenant has quitted the land, the sub-landlord shall be taken to have quitted the land when the sub-tenant quitted it.

    PART II

      AMOUNT OF COMPENSATION PAYABLE
      Calculation of payment
      5.—(1) The amount of the payment to which the tenant of any land is entitled under paragraph 1 above on the termination of his tenancy shall be determined in accordance with the following provisions of this paragraph.
      (2) The amount of the payment to which the tenant is entitled under paragraph 1 above in respect of allocated quota shall be an amount equal—

      (a) in a case where the allocated quota exceeds the standard quota for the land, to the value of the sum of—

      (i) the tenant's fraction of the standard quota, and

      (ii) the amount of the excess;

      (b) in a case where the allocated quota is equal to the standard quota, to the value of the tenant's fraction of the allocated quota; and

      (c) in a case where the allocated quota is less than the standard quota, to the value of such proportion of the tenant's fraction of the allocated quota as the allocated quota bears to the standard quota.

      (3) The amount of the payment the tenant is entitled to under paragraph 1 above in respect of the transferred quota shall he an amount equal—

      (a) in a case where the tenant bore the whole of the cost of the transaction by virtue of which the transferred quota was transferred to him, to the value of the transferred quota; and

      (b) in a case where the tenant bore only part of that cost, to the value of the corresponding part of the transferred quota.

      "Standard quota"
      6.—(1) Subject to the following provisions of this paragraph, the standard quota for any land for the purposes of this Schedule shall be taken to be the number of litres of cow's milk which could reasonably be expected to have been produced from the land in a period of 12 months.
      (2) the number mentioned in sub-paragraph (1) above shall be calculated—

      (a) by reference to the average number of hectares of the land used during the relevant period for the feeding of dairy cows kept on the land; and

      (b) on the assumption that the amount of milk produced from one hectare of land in a period of 12 months is such amount as the Minister may by order prescribe.

      (3) An order under sub-paragraph (2) above may make different provision for different cases.
      (4) Where—

      (a) the average number of hectares of the land in question which could reasonably be expected to have been used during the relevant period for the feeding of dairy cows kept on the land (having regard to the number of grazing animals other than dairy cows fed from the land during that period) is substantially greater or less than the average number referred to in sub-paragraph (2)(a) above; or

      (b) the amount of milk which could reasonably be expected to have been produced from one hectare of the land in question during the relevant period is substantially greater or less than the amount prescribed under sub-paragraph (2)(b) above,

      then that number or, as the case may be, amount shall be adjusted accordingly.
      (5) For the purposes of sub-paragraph (4) above a number or amount shall be taken to be substantially greater or less than another only if it exceeds, or, as the case may be, falls short of that other by an amount equal to or greater than 20 per cent. of that other.
      (6) The power to make an order under this paragraph shall be exercisable by statutory instrument and any statutory instrument containing such an order shall be subject to annulment in pursuance of a resolution of either House of Parliament.
      (7) In this paragraph references to the feeding of animals are to grazing and feeding from harvested crops (other than loose grain) and references to dairy cows are to cows kept for milk production.
      "Tenant' s fraction"
      7.—(1) For the purposes of this Schedule "the tenant's fraction" means the fraction of which—

      (a) the numerator is the annual rental value at the end of the relevant period of the tenant's dairy improvements and fixed equipment; and

      (b) the denominator is the sum of that value and such part of the rent payable by the tenant in respect of the relevant period as is attributable to the land used in that period in connection with the production of cow's milk.

      (2) For the purposes of sub-paragraph (1)(a) above the rental value of the tenant's dairy improvements and fixed equipment shall be taken to be the amount which would fall to be disregarded under paragraph 2(1) of Schedule 2 to the Agricultural Holdings Act 1986 on a reference made in respect of the land in question under section 12 of that Act (arbitration of rent), so far as that amount is attributable to tenant's improvements or tenant's fixed equipment which are relevant to the production of cow's milk.
      (3) Where—

      (a) the relevant period is less than or greater than 12 months or

      (b) rent was only payable by the tenant in respect of part of the relevant period.,

      the average rent payable in respect of one month in the relevant period or, as the case may be, in that part shall be determined and the rent referred to in sub-paragraph (1)(b) above shall be taken to be the corresponding annual amount.
      (4) For the purposes of sub-paragraph (2) above "tenant's improvements" and "tenant's fixed equipment" have the same meanings as in paragraph 2 of Schedule 2 to the 1986 Act, except that—

      (a) any allowance made or benefit given by the landlord after the end of the relevant period in consideration of the execution of improvements wholly or partly at the expense of the tenant shall be disregarded for the purposes of sub-paragraph (2)(a) of that paragraph;

      (b) any compensation received by the tenant after the end of the relevant period in respect of any improvement or fixed equipment shall be disregarded for the purposes of sub-paragraph (3) of that paragraph; and

      (c) where paragraph 2 above applies in respect of any land, improvements or equipment which would be regarded as tenant's improvements or equipment on the termination of the former tenant's tenancy (if he were entitled to a payment under this Schedule in respect of that land) shall be regarded as the new tenant's improvements or equipment.

      "Relevant period"
      8. In this Schedule "the relevant period" means—

      (a) the period in relation to which the allocated quota was determined; or

      (b) where it was determined in relation to more than one period, the period in relation to which the majority was determined or, if equal amounts were determined in relation to different periods, the later of those periods.

      Valuation of milk quota
      9. The value of milk quota to be taken into account for the purposes of paragraph 5 above is the value of the milk quota at the time of the termination of the tenancy in question and in determining that value at that lime there shall be taken into account such evidence as is avaialble, including evidence as to the sums being paid for freehold and leasehold interests in land—

      (a) in cases where milk quota is registered in relation to the land; and

      (b) in cases where no milk quota is so registered.

    PART III

      SUPPLEMENTAL PROVISIONS
      Determination of standard quota and tenant's fraction before end of tenancy
      10.—(1) Where, on the termination of a tenancy of any

      1041
      land, the tenant may be entitled to a payment under paragraph 1 above, the landlord or tenant may at any time before the termination of the tenancy by notice in writing served on the other demand that the determination of the standard quota for the land or the tenant's fraction shall be referred to arbitration.
      (2) On a reference under this paragraph the arbitrator shall determine the standard quota for the land or, as the case may be, the tenant's fraction (so far as determinable at the date of the reference).
      (3) Section 84 of the Agricultural Holdings Act 1986 (arbitrations) shall apply as if the matters mentioned in this paragraph were required by that Act to be determined by arbitration under that Act.
      Settlement of tenant's claim on termination of tenancy
      11.—(1) Subject to the provisions of this paragraph, any claim arising under paragraph 1 above shall be determined by arbitration under the Agricultural Holdings Act 1986 and no such claim shall be enforceable unless before the expiry of the period of two months from the termination of the tenancy the tenant serves notice in writing on his landlord of his intention to make the claim.
      (2) The landlord and tenant may within the period of eight months from the termination of the tenancy by agreement in writing settle the claim but where the claim has not been settled during that period it shall be determined by arbitration under the Agricultural Holdings Act 1986.
      (3) Where a tenant lawfully remains in occupation of part of the land subject to the tenancy after the termination of the tenancy, the references in sub-paragraphs (1) and (2) above to the termination of the tenancy shall be construed as references to the termination of the occupation.
      (4) Section 84 of the Agricultural Holdings Act 1986 (arbitrations) shall apply as if the requirements of this paragaphah were requirements of that Act, but paragraph 18 of Schedule 11 to that Act (arbitration awards to fix days for payment not later than one month after award) shall have effect for the purposes of this paragraph as if for the words "one month" there were substituted the words "three months".
      (5) Where—

      (a) before the termination of the tenancy of any land the landlord and tenant have agreed in writing the amount of the standard quota for the land or the tenant's fraction or the value of milk quota which is to be used for the purpose of calculating the payment to which the tenant will be entitled under this Schedule on the termination of the tenancy; or

      (b) the standard quota or the tenant's fraction has been determined by arbitration in pursuance of paragraph 10 above,

      the arbitrator determining the claim under this paragraph shall, subject to sub-paragraph (6) below, award payment in accordance with that agreement or determination.
      (6) Where it appears to the arbitrator that any circumstances relevant to the agreement or determination mentioned in sub-paragraph (5) above were materially different at the time of the termination of the tenancy from those at the time the agreement or determination was made, he shall disregard so much of the agreement or determination as appears to him to be affected by the change in circumstances.
      Enforcement
      12.—Section 85 of the Agricultural Holdings Act 1986 (enforcement) and section 86(1), (3) and (4) of that Act (power of landlord to obtain charge on holding) shall apply to any sum which becomes due to a tenant by virtue of this Schedule as they apply to the sums mentioned in those sections.
      Termination of tenancy of part of tenanted land
      13.—References in this Schedule to the termination of a tenacy of land include references to the resumption of possession of part of the land subject to the tenancy—

      (a) by the landlord by virtue of section 31 or 43(2) of the Agricultural Holdings Act 1986 (notice to quit part);

      (b) by the landlord in pursuance of a provision in the contract of tenancy; or

      (c) by a person entitled to a severed part of the reversionary estate in the land by virtue of a notice to
      1042
      quit that part given to the tenant by virtue of section 140 of the Law of Property Act 1925;

      and in the case mentioned in paragraph (c) above this Schedule shall apply as if the person resuming possession were the landlord of the land of which he resumes possession.
      Severing of reversionary estate
      14.—(1) Where the reversionary estate in the land is for the time being vested in more than one person in several parts, the tenant shall be entitled, on quitting all the land, to require that any amount payable to him under this Schedule shall be determined as if the reversionary estate were not so severed.
      (2) Where sub-paragraph (1) above applies, the arbitrator shall, where necessary, apportion the amount awarded between the persons who for the purposes of this Schedule together constitute the landlord of the land, and any additional costs of the award, caused by the apportionment shall be paid by those persons in such proportions as the arbitrator may determine.
      Powers of limited owners
      15. Notwithstanding that a landlord of any land is not the owner in fee simple of the land or, in a case where his interest is an interest in a leasehold, that he is not absolutely entitled to the leasehold, he may for the purposes of this Schedule do anything which he might do if he were such an owner or, as the case may be, were so entitled.
      Notices
      16.—(1) Any notice under this Schedule shall be duly served on the person on whom it is to be served if it is delivered to him, or left at his proper address, or sent to him by post in a registered letter or by the recorded delivery service.
      (2) Any such notice shall be duly served on an incorporated company or body if it is served on the secretary or clerk of the company or body.
      (3) Any such notice to be served on a landlord or tenant of any land shall, where an agent or servant is responsible for the control of the management or farming, as the case may be, of the land, be duly served if served on that agent or servant.
      (4) For the purposes of this paragraph and of section 7 of the Interpretation Act 1978 (service by post), the proper address of any person on whom any such notice is to be served shall, in the case of the secretary or clerk of an incorporated company or body, be that of the registered or principal office of the company or body, and in any other case be the last known address of the person in question.
      (5) Unless or until the tenant of any land has received—

      (a) notice that the person who before that time was entitled to receive the rents and profits of the land ("the original landlord") has ceased to be so entitled, and

      (b) notice of the name and address of the person who has become entitled to receive the rents and profits,

      any notice served on the original landlord by the tenant shall be deemed for the purposes of this Schedule to have been served on the landlord of the land.

      Crown land
      17.—(1) The provisions of this Schedule shall apply to land which belongs to Her Majesty in right of the Crown or to the Duchy of Lancaster, the Duchy of Cornwall or a Government department or which is held in trust for Her Majesty for the purposes of a Government department, subject in each case to such modifications as the Minister may by regulations prescribe.
      (2) For the purposes of this Schedule—

      (a) as respects land belonging to Her Majesty in right of the Crown, the Crown Estate Commissioners or the proper officer of body having charge of the land for the time being, or, if there is no such officer or body, such person as Her Majesty may appoint in writing under the Royal Sign Manual, shall represent Her Majesty and shall be deemed to be the landlord;

      (b) as respects land belonging to Her Majesty in right of the Duchy of Lancaster, the Chancellor of the Duchy shall represent Her Majesty and shall be deemed to be the landlord;

      (c) as respects land belonging to the Duchy of Cornwall such persons as the Duke of Cornwall or the possessor for the time being of the Duchy of Cornwall appoints

      1043
      shall represent the Duchy and shall be deemed to be the landlord and may do any act or thing which a landlord is authorised or required to do under this Act;

      (d) as respects land held in trust for Her Majesty for the purposes of a Government department, that department shall represent Her Majesty and shall be deemed to be the landlord.

      (3) Any sum payable under this schedule by the Duke of Cornwall (or any other possessor for the time being of the Duchy of Cornwall) may be raised and paid as if it were an expense incurred in permanently improving the possessions of the Duchy as mentioned in section 8 of the Duchy of Cornwall Management Act 1863.
      (4) Any sum payable under this Schedule by the Chancellor of the Duchy of Lancaster may—

      (a) be raised and paid as if it were an expense incurred in the improvement of land belonging to Her Majesty in right of the Duchy within section 25 of the Duchy of Lancaster Act 1817, or

      (b) be paid out of the annual revenue of the Duchy.

      (5) The power to make regulations under this paragraph shall be exercisable by statutory instrument and any statutory instrument containing such regulations shall be subject to annulment in pursuance of a resolution of either House of Parliament.
      Interpretation
      18.—(1) In this Schedule—

      "allocated quota" has the meaning given in paragraph 1(1) above;

      "holding" has the same meaning as in the 1986 Regulations;

      "landlord" means any person for the time being entitled to receive the rents and profits of any land and "sub-landlord" shall be construed accordingly;

      "milk quota" means—

      (a) in the case of a tenant registered in the direct sales register maintained under the 1986 Regulations, a direct sales quota within the meaning of the 1986 Regulations, and

      (b) in the case of a tenant registered in the wholesale register maintained under those Regulations, a wholesale quota within the meaning of those Regulations;

      "the Minister" means—

      (a) in the case of land in England, the Minister of Agriculture, Fisheries and Food; and

      (b) in the case of land in Wales, the Secretary of State;

      "registered", in relation to milk quota, means—

      (a) in the case of direct sales quota, within the meaning of the 1986 Regulations, registered in the direct sales register maintained under those Regulations, and

      (b) in the case of a wholesale quota, within the meaning of those Regulations, registered in a wholesale register maintained under those Regulations;

      "relevant quota" has the meaning given in paragraph 1(2) above;

      "standard quota" has the meaning given in paragraph 6 above;

      "the 1986 Regulations" means the Dairy Produce Quotas Regulations 1986;

      "tenancy" means a tenancy from year to year or a tenancy to which section 3 of the Agricultural Holdings Act 1986 applies, and "tenant" and "sub-tenant" shall be construed accordingly;

      "tenant's fraction" has the meaning given in paragraph 7 above;

      "termination", in relation to a tenancy, means the cesser of the letting of the land in question or the agreement for letting the land, by reason of effluxion of time from any other cause;

      "transferred quota" has the meaning given in paragraph 1(2) above.

      (2) The designations of landlord and tenant shall continue to apply to the parties until the conclusion of any proceedings taken under or in pursuance of this Schedule.'.
      The following amendments thereto:

      (a), in paragraph 1(3) leave out 'A tenant shall not be entitled to' and insert 'Not'.

      1044

      (b), in paragraph 1(3) after 'paragraph', insert 'shall be made'.

      (c), in paragraph 7(2) leave out 'relevant' and insert 'specific'.

      It may be convenient if I say that I have been asked about the first group of amendments headed by the Minister's new clause 4. If that new clause is agreed to by the House, new clause 6 standing in the name of the hon. Member for Cornwall, South-East (Mr. Hicks) will fall, and it will not be possible for a vote to be taken upon it.
      We have followed the normal practice of not printing more than the first six names of hon. Members who have signed a new clause or an amendment. That practice was followed in the case of the hon. Member's new clause 6, but I confirm to him and the House that his new clause has been signed by a total of 26 hon. Members.
      Mr. Robin Maxwell-Hyslop: I am most grateful for that statement, Mr. Speaker, because there is a wide body of opinion in all parts of the House which wishes to have the opportunity of voting for the official National Farmers Union new clause, which is new clause 6. Your statement means that if they wish to do so, they will have to negative new clause 4. Can you further tell the House whether, if new clause 4 is carried, there will be the opportunity to have a separate vote on the Government's new schedule? Although the implication of new clause 4 is apparently to accept the schedule, which is why new clause 6 would fall, nevertheless, many hon. Members would wish for the opportunity of a separate vote on the Government's new schedule.
      Mr. Speaker: The question will have to be put on the Government's new schedule, and there will be an opportunity, if Members object to it, to vote upon it.
      Mr. Tony Baldry: When last a major agriculture debate was held in the House it was the view of the Government at that stage that it was a matter for the National Farmers Union and the Country Landowners Association to see whether they could come to some agreement on tenancies. The first that any hon. Member knew that that view had been changed was in an answer to a written question in Hansard on Friday.
      This new schedule is extremely complex and lengthy. Has there been adequate time for hon. Members to consider it as it has not been considered in Committee? After all, it should be properly and fairly debated this afternoon. Having regard to the weight of work on the House this week, hon. Members have not had adequate time to apply their minds to it and the provision affects the livelihood of many people.
      Mr. Speaker: The hon. Gentleman could make that point during the debate on the new schedule.
      Mrs. Elaine Kellett-Bowman: The debate on these amendments has been made more complicated by the fact that unfortunately they were incorrectly printed on the Order Paper for Monday, Tuesday and Wednesday. They bore no resemblance to the amendments on the Amendment Paper today. I wonder why the amendments were not starred, because they were certainly not on the Order Paper yesterday in the form in which they appear today. I refer principally to amendment No. 30. If you would like me to bring both versions to you, Mr. Speaker, I can do so.
      Mr. Speaker: When I made my selection, the amendments were not starred and I was able to make my selection from all the amendments which were listed on the Order Paper at the time.
      Mr. Jopling: In commenting on my hon. Friend's question, I think it is correct that when amendment 30 was tabled a week ago—I referred to it in the House at question time last Thursday—it was correctly printed.
      Mr. Speaker: I think that we should proceed.
      Mrs. Kellett-Bowman: It was incorrectly printed in the third succeeding edition.
      Mr. Speaker: It was correct when I made my selection.
      Mr. Jopling: Before I deal specifically with the clause, I should like to apologise to the House for the absence of my right hon. Friend the Minister of State who hopes to be here by 5.30 pm. His wife presented him with a small daughter within the hour. He hopes to be here as soon as possible so that he may reply to the debate.
      The new clause and schedule which are tabled in my name are directed at an urgent and pressing problem. Many tenants of dairy farms are at a stage where they wish to retire or move to a new farm. If they do so, as the law stands at present the quota which they have helped to build up will remain on the land, and they will get no share of its value. Yet it is now generally accepted that in almost all cases both landlord and tenant have contributed to the quota and are entitled to some recognition of that.
      In the last few months I have been engaged in the most intensive and through discussions with the National Farmers Union, the Tenant Farmers Association and the Country Landowners Association to try to find an agreed solution to the problem. Most regrettably it has not proved possible to reach agreement despite very genuine endeavours on all sides. In this situation I am clear that it is up to me to act. Indeed, 69 of my colleagues have urged me to do precisely this in early-day motion 650. It would be quite wrong to walk away from the problems, as the effect of doing so would be to leave tenants with no early prospect of any recognition of the contribution they have made to the quota which is attached to the land.
      Mr. David Harris: As one who signed the early-day motion, I ask my right hon. Friend whether he accepts that when we called on him to act, some of us at least did not expect him to use this Bill as the vehicle for bringing in a decision? It was expected that the whole question would be dealt with fully in legislation which would have full and proper consideration rather than being dealt with in an hour or two this evening, without hon. Members have any chance to consider it again.
      Mr. Jopling: The Bill came out of Committee at the end of January. I have seen reports in the press over the past few months that its progress through the House was delayed because the Government were trying very hard to find a way of getting agreement, so that the matter could be dealt with in the Bill. I think that has been generally known and I am surprised at my hon. Friend's reaction.
      I had to reach a view as to what is reasonable in a situation where the landlords' and tenants' representatives take sharply opposed views as to what should be done. Hon. Members on both sides of the House will have seen the briefing which has been put out by various parties pointing in opposite directions. They may have noted that
      1046
      on the one hand the National Farmers Union has described this proposal as "completely unfair", while on the other the Scottish Landowners Federation has suggested that it brings in
      "a principle hardly consistent with natural justice".
      Hon. Members may draw their own conclusions from the fact that the Government's proposal lies between the points of view of those two organisations. For my part I totally reject such extravagant assertions as have been made. On the contrary, I believe that the solution which is set out in the Government's new clause and schedule is fair and reasonable both to landlords and tenants.
      5.15 pm
      Mr. Eric Forth: Will my right hon. Friend help hon. Members at this stage by saying whether, when he approached the problem, he sought a solution which would provide the full range of possibilities on any one judgment from, as it were, zero to 100, or whether he had it in mind to put an arbitrary limit on the apportionment of value which could be given to either side? It would help some of us greatly if he could let us know what he had in mind.
      Mr. Jopling: I shall come to exactly that point a little later in my speech. If I may be allowed to do it in my own way, I hope my hon. Friend will be satisfied.
      Mr. Peter Hardy rose—
      Mr. Jopling: These are complicated matters. I shall give way, but I hope that when I come to the section of my speech which is highly complicated I shall be allowed to explain the matter to the House without interruption.
      Mr. Hardy: I recognise the very serious difficulty which faces the Minister in trying to secure a just arrangement, but does he not accept that, where a tenant has himself incurred considerable capital cost, perhaps as much as or more than the landlord may have done, the arrangement to which the Minister seems to have been pointing may not be quite as just as he imagined in the first place?
      Mr. Jopling: I shall come to exactly that point. I think it is just and that the solution pays full regard to the investment that a tenant may have made.
      Mr. Tam Dalyell: Some of us have had representations from the Scottish National Farmers Union, Mr. John Biggar, and others. In the rather special circumstances of Scotland, could not the Scottish NFU and the other parties get together in a round table conference under the chairmanship of the Scottish Office Minister to try to sort out these complex matters?
      Mr. Jopling: My hon. Friend at the Scottish Office has already done that but, as I shall say later in my speech, my mind is not closed to further discussion.
      I am sure that most hon. Members understand the effect of the provisions, but I have found recently in talking to hon. Members and to specialist journalists that there is a good deal of misapprehension, so it might be helpful if I give the House at the outset a brief description of how the system will work.
      The starting point is that for each holding a standard quota will be calculated. That will be done by taking the number of hectares used for dairying on a holding and multiplying it by a standard yield per hectare which will be prescribed later in a statutory instrument. It is my

      1047
      intention to prescribe a standard yield per hectare somewhat below the national average yield of milk for this purpose. This is to take general account of the cuts which were applied in calculating quotas, which still affect a significant proportion of milk producers, especially the larger ones who did not have their quota brought back to pre-quota levels in the redistribution.
      Mrs. Kellett-Bowman rose—
      Mr. Jopling: I shall not give way. I hope my hon. Friend will allow me to continue.
      The yield which I have in mind to prescribe as the standard yield per hectare is based on 4,500 litres per cow. Hon. Members will be aware that the national average yield per cow is nearer 5,000 litres, which is considerably more.
      If one side feels that this calculation for arriving at a standard quota for a farm does not give the right result, he can argue for a different figure to be used. For example, the landlord might argue that the tenant had used too small a part of the holding for dairying, and that a higher number of hectares should be used in the calculation.
      A tenant might argue that the land was of poor quality and only marginally suitable for milk production, or that he had used a low-input system, and a lower yield per hectare should therefore he used. Those are perfectly legitimate arguments and many people have urged me to leave these difficult assessments to arbitrators, the experts. I have provided that where agreement cannot be reached on matters of that sort an arbitrator is at liberty to choose a more appropriate figure where that differs significantly from the standard.
      Having fixed this standard quota—the first part of the arrangement that I have been explaining—the next stage is to compare it with the actual quota on the holding. The tenant will get the whole of the value of the quota which lies above the standard. He thus gets full acknowledgement without reduction in cash terms for the fact that he has a quota for his farm that is bigger than might have been expected. It is impossible for us to be more generous to the tenant for that part of his production because he receives 100 per cent. compensation.
      We now come to the apportionment of the standard quota between tenant and landlord. In deciding how to do that, I decided that the best way was to build on the well established process of assessing tenant's improvements, a process that is already familiar in the agricultural holdings legislation. The proportion is decided by reference first to the tenant's improvements and then to the rent which the landlord has charged. These two elements determine respectively the tenant's and the landlord's share. The total amount a typical tenant receives is thus 100 per cent. of the value of his excess quota, the amount over the standard quota, plus a percentage of the standard quota, which is related to the value of his improvements.
      Let me make it clear that apart from this calculation the tenant will also continue to receive at the end of the tenancy the compensation to which he is entitled under the Agricultural Holdings Act. Nothing in this affects that. That is a quite separate calculation which is unaffected by the new provisions, and compensation for quota is an additional sum which a tenant will receive.
      Mr. Ralph Howell: Will my right hon. Friend explain what he has just said? If a tenant pays for 100 per cent. of the improvement, will he get 100 per cent. of that part of the quota?
      Mr. Jopling: I am afraid my hon. Friend did not catch what I said. The proportion is decided by reference to the tenant's improvement and then by reference to the rent that the landlord has charged. The value of the improvement is put in terms of rent and then that is put as a percentage of the rent and the tenant's improvement put together. That is a familiar formula for valuers and should not cause too much trouble.
      Mr. Brynmor John: At the end of the day, the important figure is the percentage that a tenant might receive on the total milk quota. In an earlier discussion a figure of 33 per cent. was used. Could the Minister give an illustrative figure of the percentage a tenant might receive of the total milk quota on the present formula?
      Mr. Jopling: I shall come to that point and, as I said to his hon. Friend the Member for Wentworth (Mr. Hardy) perhaps I might be allowed to come to it in my own way.
      Mr. Patrick Nicholls: My right hon. Friend said that low intensive farming would be taken into account and, impliedly, no injustice would be wrought. We have heard that the variation has to be more than 20 per cent.
      If that is relevant, it does not seem to answer the point about low intensive farming. If the 20 per cent. is not relevant, then clearly it does answer the point.
      Mr. Jopling: The 20 per cent. trigger point is relevant to that. That is why I said that it made a substantial change in the position. I should like to talk about the tenant who, for whatever reason, has less than the standard quota, the tenant who finds himself with a quota that is lower than the standard quantity. There is a problem here, because the tenant is generally leaving behind him a quota inadequate for the holding. We have to bear in mind the interest of the incoming tenant who is likely in practice to have to find the money. The outgoing tenant's share of the actual quota, calculated for the standard quota, is therefore reduced in proportion to the shortfall. He will, however, still receive, as before, whatever compensation is due to him under the Agricultural Holdings Act, 1986.
      That is the second time I have made that point, but it is important to make the position clear.
      The effect of all this is, first, that we have a system which is flexible because it allows the professional judgment of arbitrators to be applied to the circumstances of the individual case, and second, the tenant who has performed well and put a great deal of skill, effort and expense into his enterprise will do well. Under certain hypotheses we estimate that the tenant who has performed well could receive more than about two thirds of the total value of the quota. At the other end of the scale the tenant who has invested nothing and has a low level of milk production could get nothing.
      But just as there is virtually no case where a landlord should get nothing, there are no circumstances in which even the worst tenant would have to compensate his landlord for what I will loosely call his dilapidations on milk quota. Bearing in mind that the money will normally be found from the incoming tenant, whose ability to pay

      1049
      will depend upon the economic potential of the holding, these proposals provide a system which is fair to all parties.
      Mr. Maxwell-Hyslop: How did my right hon. Friend arrive at the figure of 20 per cent. as a substantial difference? In the milk quota regulations 15 per cent. triggers off special hardship on grounds of weather or animal disease or other hardship. Does my right hon. Friend realise how crucial this is? The House has no control over the standard quota figure that he adopts. It is unamendable under the negative resolution procedure and may not even be debated.
      5.30 pm
      Mr. Jopling: I should be surprised if such a matter were not debated. However, that is a matter of opinion. As regards the figure of 20 per cent., it is important that we should try to achieve uniformity throughout the country—I shall come to that point a little later—and I believe that my hon. Friend holds that view most firmly. But variations should be made only when they are substantial. That is why I used the word "substantial".
      Sir Adam Butler: Will my right hon. Friend give way?
      Mr. Jopling: I shall not give way, as I do not want the House to lose the drift of my remarks.
      Sir Adam Butler: It is on a very important point.
      Mr. Jopling: In that case, I give way to my right hon. Friend.
      Sir Adam Butler: I apologise for intervening, but I wish to raise an important point. My right hon. Friend said that in the optimum situation, the maximum that an outgoing tenant would receive was two thirds. Many of us think that in that situation, where the tenant has done virtually everything to create that business and where the landlord has only drawn the rent and made no contributions to buildings or anything else, the maximum obtainable should be nearer the 90 per cent. mark.
      Mr. Jopling: The important point is that in all such calculations it must be borne in mind that by providing the land, the landlord has clearly provided one of the ingredients in the quota.[Interruption.] I would not expect Opposition Members to accept that point, but perhaps they will bear with me for a moment.
      The land has helped to create the quota so due accounts must be taken of it. By the very introduction of quotas, the landlord has had a penalty imposed upon his land whereby it is no longer able to produce unlimited quantities of milk as it could before the introduction of quotas.
      Much of the discussion about this subject, as can be seen in the briefing that the NFU has circulated to hon. Members, has concentrated on the average award that a tenant will receive. Several hon. Members have raised that point with me, not least my hon. Friend the Member for Gloucestershire, West (Mr. Marland), who I know feels strongly about it. However, that concentration is unfortunate for two reasons. First, it is impossible to forecast with any accuracy where the average might come about. The variations in circumstances are so wide, particularly the variations in the value of tenants' improvements, that any such estimates are fraught with
      1050
      enormous difficulty. Secondly, and more importantly, it is not the average that matters anyway. What matters is the result for each individual farmer and whether the individual is being treated fairly. If tenants and landlords are being treated fairly in individual cases, we can say that the totality of the system is fair.
      It has been suggested—it is implicit in new clause 6, or what I shall call, for shorthand purposes, the NFU clause—that a 50–50 split should be the norm. But surely the starting point should be the facts of the case rather than some arbitrary figure. The more I have thought about the matter and the more I have considered the role of the arbitrator, the more firmly convinced I have become that we should not pluck a figure from the air in that way. Superficially a 50–50 split looks fair; it always does. However, there is no logic to it.
      I just do not think it right to impose an arbitrary figure in that way. But I should make it clear that if, in the further progress of the Bill through Parliament, either side in the dispute or either side in the House wishes to make representations seeking to make this method of calculation even fairer than it is, I shall be happy to listen during the next few weeks. That is the primary reason why I cannot go along with new clause 6 which stands in the name of my hon. Friend the Member for Cornwall, South-East (Mr. Hicks). That clause suggests that a 50–50 split should be the norm, based on a situation in which the landlord has provided
      "all the dairy buildings, and their appurtenances and plant".
      That does not look to me like the average case, and I have grave doubts about it on that score. But in any case it implies that the tenant who has made no improvements is to get half the value of the quota.
      A tenant who has allowed his farm seriously to run down would presumably get less than 50 per cent., but might still get a significant share. I do not see how that can be defended, given that the landlord's interest in the holding would have been severely damaged by that tenant's behaviour. We cannot say to the landlord, "You must not only bear the cost of the fall in the value of your land caused by your tenant's neglect, but you must compensate the tenant for the privilege." Yet that would be the inevitable result of that proposal.
      There are two other reasons why I cannot accept new clause 6. First, we have to provide a framework within which professional valuers can operate. If we do not do so, we shall find very different treatment being given to essentially similar cases. Indeed, that was the point that I made to my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). I believe that new clause 6 would give unpredictable results. The guidance that it gives is short and very general. As a result, we would have much longer arbitrations, more contentious arbitrations and, quite simply, many more of them.
      Our proposal provides a framework within which, in most cases, landlord and tenant should be able to reach agreement on the amount of compensation to be paid. Where agreement cannot be reached, we have guidelines within which professional valuers can readily operate. Surely that is a better way of going about things.
      Secondly, although it may look simpler, new clause 6 is seriously defective. It does not address a whole series of issues which we have covered in the proposed new schedule, such as the definition of eligible tenants and the application to Crown lands. Such matters cannot be

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      ignored. I make no apology for the complexity of the proposals that I have put before the House. They have to cover a wide range of circumstances.
      My hon. Friend the Member for Milton Keynes (Mr. Benyon) has tabled three amendments to the Government's new schedule. The third seeks to restrict the types of tenants' improvements to be taken into account. I just cannot accept that. The first two amendments are directed at a technical point that is concerned with statutory successions. If my hon. Friend would be good enough to withdraw those two amendments, I will arrange for the matter to be considered further, and for any necessary action to he taken in the other place, provided that the House agrees with these proposals.
      The discussion on this subject has tended to focus on the interests of the National Farmers Union and the Tenant Farmers Association on the one hand, and of the Country Landowners Association on the other. This is natural; it is these organisations which have participated in the discussions we have had in the last few months, and I would like to thank them for their constructive approach and their willingness to consider all possibilities exhaustively. But one party is not represented in these discussions and that, quite simply, is the person who is not yet a dairy farmer.
      We must not make the barriers to entry too high and we must remember that the interests of incoming and of existing tenants differ. Some people have suggested to me that in most cases we are dealing not with a landlord-tenant problem but with a tenant-tenant problem. This may be too simple a way of putting it, but there is a serious underlying point here.
      I believe our proposals are fair to sitting tenants, prospective tenants and landlords. In preparing the proposals, I have been greatly assisted by the contribution of ideas from the Royal Institution of Chartered Surveyors and the Central Association of Agricultural Valuers, both of whom have long experience of being fair to both sides. The Government's new clause and schedule draw very heavily on their ideas, and I make no apology for having taken from them the idea of a standard quota.
      Finally, I should mention that my right hon. Friend the Secretary of State has also been consulting interests in Scotland, and proposals which take account of particular Scottish circumstances will be brought forward in due course.
      Several Hon. Members rose—
      Mr. Jopling: I have not had time to mention a number of aspects or I have touched upon them only briefly, but I hope that I have given the House an understanding of how the system will operate. I have given very careful thought to other approaches, but I have concluded that this system is the fairest, most flexible and most practical that can be devised. I believe it is necessary to take this action now to let tenants and landlords know where they stand, and I ask the House to agree.
      Mr. Robert Hicks: I welcome the Minister's acknowledgement that tenant farmers involved in milk production should be compensated, on termination of their tenancy, for their contribution to the establishment of the milk quota from their farm units. That is a major step forward, and I pay tribute to my right hon. Friend for his recognition of that fact. I believe it is only right that that should be done, bearing in mind that, under
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      the rules, the milk quota, which represents a valuable capital asset which will have accrued in part from a tenant's lifetime of work and investment, will be left by the outgoing tenant with the landowner.
      The key issue, of course, is, how the value of the milk quota should he apportioned between the landlord and the outgoing tenant. It is not an easy problem. I am sure that all of us, irrespective of the side of the House on which we sit, recognise that fact. Devising an acceptable and fair formula will not be easy.
      I have to say to my right hon. Friend, however, that, seven days since new clause 4 was tabled, many colleagues have told me that, while they may not in every respect go along with the provisions in my new clause, they are equally uneasy in their minds about my right hon. Friend's proposals, not least because they are so complex.
      5.45 pm
      Furthermore, it is important that Parliament should get it right today, because this may be the forerunner of other parallel situations in the event of quotas being introduced in this country and in Europe in respect of other crops that may be produced.—[HON. MEMBERS: "God forbid."] Some of my hon. Friends say, "God forbid." But it is certainly a possibility. Therefore, if this is to be used as the blueprint, added responsibility is placed on all of us today to make sure that we achieve the most acceptable and fair compromise.
      There are 37,000 milk producers in England and Wales, of whom at least 40 per cent. are involved in tenancy agreements. The Minister has today submitted his proposals and outlined the details. The basic reason why I, together with more than 20 of my hon. Friends and, indeed, a number of Opposition Members, have tabled an alternative for determining the basis of the landlord-tenant share is that the Minister's scheme does not sufficiently recognise the tenants' contribution to the milk quota value. It is on this basis of fairness and justice to the tenant's position that I wish to argue my case.
      In essence, as the Minister has outlined, his proposal seeks to establish a standard quota. The proportion of that standard quota that should be attributed to the tenant is the crucial point under discussion. If, as the Minister has said, the allowed quota for that farm unit is higher than the standard quota, the excess or difference is automatically credited to the tenant. We all understand that, but, given the make-up of the formula of my right hon. Friend's proposal, I suggest that very few tenant farmers will get into the tenant quota stakes at all. They will be limited because of the physical constraints brought about by the introduction of milk quotas and by the figure that the Minister is introducing as part of his formula.
      Even if one accepts the somewhat artificial division of the milk quota between the standard quota on the one hand and the tenant's fraction on the other—which I certainly do not—there are certain critical aspects of the proposal that I believe we must consider carefully. This involves the measurement of the standard quota and the criteria for assessing what part of that standard quota should be attributed to the tenant. I believe that the Minister's proposals are too narrow and restrictive. That is why I believe that structurally they act against the interest of the tenant. There is the relationship between the notional rent value, reflecting the improvements that the tenant has made, and the overall rent charged for that farm holding. My right hon. Friend will know—although naturally he

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      did not admit it to the House when explaining his proposals—that in practice that is bound to be a relatively small percentage.
      Although I do not accept some of the things that have been described to Members of Parliament as the realities of the situation, it is worth pointing out to my right hon. Friend that the Milk Marketing Board—which has no direct interest in this, unlike the CLA and NFU—has stated that it believes that the proposed formula to be used to determine the compensation to outgoing tenants for milk quota is incapable of providing many tenants with a fair deal.
      That is a fair and objective assessment by a professional organisation that has direct knowledge of, but no direct involvement in, the distribution of the milk quota value. Its advice should be heeded.
      Mr. W. Benyon: How many NFU representatives are there on the Milk Marketing Board?
      Mr. Hicks: To the best of my knowledge, the Milk Marketing Board is directly elected and represents geographical constituencies. Three members of that board are elected by national constituencies.
      My right hon. Friend responded to the three major criticisms that have been made about the problems that will arise from his proposals. I am not convinced by his argument in respect of the low-cost, low-input farmer. Devon and Cornwall are full of such producers. Although my right hon. Friend said that the arbitrator can alter the basic reference point, I am not certain from what he said—I shall read his words carefully tomorrow—that it meets the criticisms that have been expressed. The same argument applies to those who farm in marginal areas.
      Having established the standard quota, the Minister has confirmed that the fraction to be apportioned to the tenant is to be calculated on what I would describe as the narrow basis of the rental value of the improvements made by the tenant and the tenant's fixed equipment compared with the rental value of the dairy unit as a whole.
      Mr. Douglas Hogg: My hon. Friend is critical of the method of calculation. Does he accept that it is generally used in claims for improvement under the 1948 Act and that it is also the relevant calculation in claims by business tenants under part II of the Landlord and Tenant Act 1954?
      Mr. Hicks: To the best of my knowledge, that is correct. In response I would say that we are now dealing with an entirely new situation brought about by the introduction of milk quotas two years ago. Therefore, while taking account of precedent and parallel procedure, this House has a responsibility to make certain that what we formulate tonight is correct in respect of the landlord and tenant.
      We can talk only in averages, because, although there is a host of individual situations, we must reflect them as averages. That means that the tenant's proportion will in most cases inevitably be well below 50 per cent. I believe that my right hon. Friend's proposals are basically unfair, because they do not do justice to the tenant's position.
      Mr. William Cash: My hon. Friend has referred on a number of occasions to the different circumstances that could arise, and he has related them to
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      the class of person who may be affected under the provisions in the schedule. It occurs to me that there are provisions for different cases within any given class, but has my hon. Friend considered whether these provisions might be hybrid?
      Mr. Hicks: I thought that I explained in my introductory remarks that I was attempting to put forward an alternative system that I believed to be fairer and which acknowledged the tenant situation in a more practical and accurate manner than the proposals of my right hon. Friend. I accept that there may be technical deficiencies, but I am more concerned about getting it right in practice.
      I shall explain why I suggest that the proposals in new clause 6 are to be preferred. In general, they recognise the contribution of the tenant's expertise and financial investment, about which I have been talking. There is no arbitrary classification of the quota into the standard quota and the tenant's fraction. The new clause takes account of the contributions made by both the landlord and the tenant. I subsections (6)(a) and (10) we set out the criteria that should be used in determining respective proportions. These include not only the fixed costs—which are also included in my right hon. Friend's proposals—but also the variable assests as well.
      This list for assessing what the proportion should be reflects the situation in practice. It is more comprehensive than the Minister's somewhat narrow and restrictive formula, which, in my judgment, works to the disadvantage of the tenant. To establish the principle of justice to which I have referred—I emphasise this, because I am sure that my right hon. Friend did not deliberately wish to mislead the House about my counter proposals—the starting point of any arbitration process should be the equal division of the quota value allocation in the case outlined in subsection (6)(c).
      I emphasise that that is meant to be a starting point in the interests of fairness and justice. It is right to enshrine this position into statute. Of course, the actual breakdown will vary. I understand that it could end up as 70–30 either way, but the starting point is essential, and we must be seen to be manifesting justice in formulating our proposals.
      I make no apology for repeating the fact that I believe that my right hon. Friend's proposals are far too complex. In spite of what he said, I suggest that they do not in reality do justice to the expertise and financial investment that a tenant farmer may well have made over 40 years of his working life. Of course, this has political implications, too, as regards the party in government.
      I ask my right hon. Friend to take account of these important additional aspects, bearing in mind the need for justice to the tenant not only to be seen but also to be effective in reality, before he throws out all the suggestions that my right hon. and hon. Friends are making this evening.
      6 pm
      Mr. John: May I add my congratulations in his presence to the Minister of State? I suppose that he is more accurately described as the "Minister in a state" at the moment.
      The buzz phrase of this debate is "I make no apology". I have lost count of the number of times that it was used by the Minister of Agriculture, Fisheries and Food, and even the hon. Member for Cornwall, South-East (Mr.

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      Hicks) fell into the trap. Why should I resist the temptation when it is widespread? So I make no apology for beginning my contribution by observing that we are now paying the penalty for the haste with which the milk quota scheme was introduced. It has made a capital asset of what had hitherto not been traded.
      To make the case, I have only to refer to Farmers Weekly of 7 March 1986, in which the Milk Marketing Board talks about people who have milk quotas and are trying to trade them, yet who have never themselves produced milk. We are talking about a scheme which was introduced far too quickly and which has had unfortunate consequences.
      This is the most peculiar Report stage of a Bill in my experience. The Bill came out of Committee on time, in accordance with an agreement, which we never hear about, on 28 January, 11 weeks ago today. This must be something of a record. I should like to know of a wider gap than that between the Report and Committee stages. We know—even the right hon. Gentleman admitted that he knew, from reading the papers—that negotiations have taken place during that time between the Country Landowners Association, the National Farmers Union and the Ministry of Agriculture, Fisheries and Food on the question of the outgoing tenant's right to milk quota.
      Not suddenly, but rather surprisingly—at any rate to those of us who had given up expectation of ever seeing the Bill again—last Friday there was tabled a new clause over seven pages long. Even allowing for the postponement of the debate by one day, it means that people who have been interested and who have been waiting for this, even if it has not come as a total surprise, have had less than a week in which to study it, and it has not had the advantage of the scrutiny, sometimes tedious but necessary, which a Committee of the House of Commons, considerng a Bill, can give it.
      I remind the right hon. Gentleman that when the development land tax was introduced in a schedule by my right hon. Friend the Member for Llanelli (Mr. Davies), a large number of constitutional protests came from Conservative Members, who were then in opposition, about the impropriety of introducing what was a mere three-page new clause. Yet now this has been introduced and the right hon. Gentleman says that he makes no apology for introducing it. I think that an apology is clue.
      The clause will be discussed, and I shall deal with its merits, but I want to make it clear that most of the discussion of this matter and its merits will be transferred to another place and that the House will effectively be neutered in its discussion of the clause, apart from tonight's debate, because of the way in which Government have chosen to introduce it. They could have chosen another way. I understand why the right hon. Gentleman wanted to take advantage of the bus that is actually at the stop. Nevertheless, the new clause is a substantial addition to the original Bill, not a mere addition arising out of Committee, and, if the House cannot comprehend some of the explanations given by the right hon. Gentleman, it is his own fault for having introduced at so late a stage and in such complexity this sort of scheme.
      Mr. Robert Maclennan: The Minister, in explanation of the hurry, sought to exculpate himself from giving the House inadequate time. He spoke of the urgency of the measure and the need for
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      a settlement. Has the hon. Gentleman noticed that the same argument has not been applied to those w ho hold dairy quotas in Scotland?
      Mr. John: I always look with trepidation on the Scottish position, for obvious reasons. Nevertheless, I agree that there is selective haste here.
      In aiding the House to discuss the matter, the right hon. Gentleman really has something of a duty to give illustrative figures. He has given some, but they are not, with respect, the illustrative figures, which I understand were the subject of the discussions which all of us, including the Minister, read about in the newspapers. I understand that the figure for the average value which a tenant would get out of the milk quota, which was used as an illustration during the negotiations, was 33 per cent. I do not know how accurate are the estimates of the NFU, but it has done its best in a very short time. It estimates that the average value to the tenant of the milk quota will be 25 per cent. While conscious of the special plea of the right hon. Gentleman, I do not believe that that in any way reflects a fair value for the outgoing tenant.
      As the right hon. Gentleman properly said, we must have regard to the new tenant who is coming in, but we must also have regard to the man who has built up the quota by his life's work. This seems to reproduce the conflict that often occurs—in a phoney way in my view—between what is due to the pensioner who created the wealth on which the modern generation relies and the person who is actually producing the wealth today. Unless there is a feeling of justice for a tenant farmer at the end of his tenancy in dealing with the milk quota, neither the person who is presently affected nor the one who is taking over the tenancy can feel any confidence at all.
      We really must press the right hon. Gentleman for an average figure. What will be the norm? Is it, as the NFU says, 25 per cent.? Is it the Milk Marketing Board figure, quoted by the hon. Member for Cornwall, South-East, somewhere between 10 and 35 per cent.? I know that individual cases can vary, but the true measure of the overall fairness of the scheme must be the average figure. Heavens knows, we use averages in the House often enough for the right hon. Gentleman not to be squeamish about revealing the average formula on this occasion.
      Mr. Nicholas Baker: It is incorrect to say that farmers have been working for years to build up the quota. What has happened is that the Government have suddenly introduced a quota, much to everyone's annoyance. What one must try to achieve is a fair way of recognising or rewarding the investment that has been made. Surely the figures that we ought to be interested in are the maximum and the minimum that a tenant can achieve, rather than the average?
      Mr. John: I do not agree. I believe that a good indication of the overall fairness of a scheme is the average production of that scheme. I agree that, in shorthand, it was the building up of the dairy business that I referred to, but that does not do away with the problem that I have raised.
      The right hon. Gentleman said that he did not want to look at the new clause of the hon. Member for Cornwall, South-East, to which I have added my name, because it imported an arbitrary figure, but he said in his speech that the maximum figure to which a tenant could be entitled,

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      taking all into account, if he had built up the business and if there had been no substantial capital input from the landlord, and so on, would be 66·6 per cent.
      The arbitrary figure imposed is for the provision of the land. Even accepting the right hon. Gentleman's philosophy on that, if the landlord provides the land it is to be arbitrarily recompensed at one third. Therefore, under this formula the landlord could never obtain less than one third, but the tenant could get nothing, and certainly never more than two thirds. The parameters for the landlord are between one third and 100 per cent., but for the tenant they are between nothing and two thirds. That is not equitable. I suspect that the right hon. Gentleman will wish to consider that during the course of the debate.
      Dr. John Marek rose—
      Mr. John: I prefer not to give way. There have been many interventions in the debate and I know that many hon. Members want to speak. It is only fair to give them the opportunity to do so.
      The scheme will be a paradise for agricultural valuers. Would that we were all agricultural valuers at this time. It will not be cheap for either the tenant or the landlord—it is paid equally by them—and we know that fees even for simple things are not cheap. The matter will be complex.
      I worry whether the scheme will be workable at all. I hesitate to go into the Bill in great detail, because we are really debating a Committee point. However, this debate is effectively the only Committee stage that we will ever have on the new clause. I agree with the hon. Member for Cornwall, South-East about the standard yield. By definition, the tenant cannot have more than a small fraction of the value of the standard yield. The extra yield over the standard yield may not amount to very much in many cases.
      The right hon. Gentleman has tried to approach the matter in a slightly different way. I take it that the level of production that could reasonably have been expected under paragraph 6(1) of the schedule does not take account of the 10 per cent. quota cut imposed upon that land. I should be grateful if the right hon. Gentleman could confirm that, because it is one of the assumptions made by the NFU in calculating its average. It is important in assessing whether it is reasonable.
      Paragraph 6(2) will make matters even more difficult, because sub-sub-paragraph (a) refers to
      "the average number of hectares of the land used during the relevant period for the feeding of dairy cows kept on the land."
      There are at least two problems here. There is the division of the land, first, for different purposes and, secondly, for different species at the same time. How will the arbitrator approach that matter? How can he separate it in practice?
      The new clause makes no provision for a statutory instrument. There is a provision in the Bill that a statutory instrument be introduced on average litreage, but there is nothing for the average number of hectares. What is to be the average number of hectares? How on earth is the House to know the answer to that?
      The right hon. Gentleman said that he was satisfied that the schedule was right. He had better be satisfied, because the absence of provision for a statutory instrument means that if the scheme goes badly wrong the right hon.
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      Gentleman will have to return to the House for primary legislation to enact any amendment. He will not be able to do it through the statutory instrument procedure.
      6.15 pm
      Under paragraph 6(3), two categories of person will be disadvantaged—the low-intensive system farmer and the producer on marginal land. The notes on clauses say that the Minister can prescribe different standard yields to suit different cases, and give the example that a different yield might be prescribed for different breeds of cattle. But what about different grades of land? Is that to be a factor? If it is not, it will mean penalisation.
      The hon. Member for Tiverton (Mr. Maxwell-Hyslop) made a fair point. If there is to be at least a 20 per cent. difference to enable a departure from the standard formula, that will penalise many people who fall just short or even halfway short of that business. That will not be fair.
      The right hon. Gentleman has certainly produced unanimity—I cannot find any organisation that actually approves. Even the CLA, which if not unduly grateful might at least have been reasonably grateful, does not think that the system can work. The right hon. Gentleman says, as do all Ministers, that the fact that everybody is against him means that he must be right. Whether the Government are or are not right depends on where they pitch the final result.
      I believe, and I ask the House to accept, that if the final result is an average value for the tenant of 25 per cent. of the value of the milk quota—or somewhere between the 10 and 35 per cent. mentioned by the NFU and the Milk Marketing Board—it will be manifestly unfair. Even on the figures, sketchy as they are, produced by the right hon. Gentleman, the scheme is complicated and unworkable. It is a poor, scant reward for tenant farmers for their hard work and dedication.
      Sir Peter Mills: I congratulate my right hon. Friend the Minister of State on producing, as I have already said, a heifer calf. Nothing could be better at this time of talking about dairy quotas than to have that. What a success. I hope that all goes well.
      I am rather distressed by the need for this new clause. I do not like to say this, but I am annoyed with the CLA and the NFU because they have not got their act together and decided among themselves. That has put my right hon. Friend in an exraordinarily difficult position as he tries to be Solomon. Surely they could have reached some agreement.
      I should have thought that the CLA would want to assist the Government in this dilemma. After all, it has been well looked after by the Government. It has had no fear of land taxation or nationalisation. Indeed, the Government have helped it with taxation on capital transfer and so on. Therefore, I expected it to bend over backwards to reach agreement.
      Again, it gives me no pleasure to say that the NFU should have done more, although I realise that it has moved a great deal further than the CLA. Under the quota system, the dairy sector has done extremely well—margins over costs are very good and interest rates are coming down. Recently, my right hon. Friend said that for every 1 per cent. drop in interest rates, £50 million came off the burden for British agriculture. I would have hoped that the NFU could reach agreement with the CLA.
      I want to blow my own trumpet a little. The Devon NFU and CLA actually got together and decided on a

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      certain course. I congratulate the chairmen and secretaries of the NFU and CLA in Devon. As the Minister can see from that agreement, his representations were well received by them. No doubt with adjustments that agreement might have been accepted and we could have brought it with us today.
      On receiving my letter detailing the agreement, the Minister replied:
      "I find it very encouraging that these county branches should have been prepared to work together so constructively in an attempt to find a satisfactory solution."
      Why could that not have been done nationally? It is in the interests of the CLA and the NFU to have done so. Both sides should have given in slightly on these matters so that we could have had agreement, for much is at stake here. If we are to have further quotas, it would be better for them to reach agreement than for the Minister to bring this upon us. The Minister will not satisfy the CLA or the NFU.
      The brief that we received from the NFU raises three important points. The first is:
      "The definition of standard quota takes no account of the 10 per cent. cuts in production level already imposed."
      The Minister has answered that by lowering the standard level. The second point is:
      "The proposals would penalise highly competent tenants who use low intensive systems of milk production."
      That is an important matter. I listened carefully to what the Minister said. I agree that this could be taken into account by the assessor or arbitrator, but I would like that firmed up. When this goes to the House of Lords, I hope that we can have something a little stronger, so that we can be clear that there is fair play towards those with low input production. The third point is:
      "Producers on marginal land would have great difficulty in establishing any excess quota, through no fault of their own."
      I agree with those three points and hope that they can be considered further.
      The fairness shown to the incomng tenant is the nub of the legislation. We must get the balance right between the outgoer and the incomer. The sums involved are pretty high. They might be as much as £20,000 to £25,000. Just think what that would mean to an incoming tenant. He would not be able to find that sum and buy machinery and the other things that he needs to get the farm going.
      At meeting after meeting I have heard constantly from the NFU and, rightly, from young farmers, "What will you do about young people getting tenancies? If we go too far with the outgoers scheme, the incomers will not get a look in." That must be sorted out. That is why I disagree with my hon. Friend the Member for Cornwall, South-East (Mr. Hicks), with whom I have shared a room for many years. I believe that it would be unfair to the incoming tenant, so it is a crucial point.
      The hon. Member for Pontypridd (Mr. John) asked why there was such a hurry to introduce the measure after such a long delay. Many tenants who are retiring now will get nothing if we do not pass the legislation. That is why the Minister has bent over backwards to get this agreement. It was necessary to save those tenants who are retiring. It is important that we pass the Bill, but I hope that adjustments can be made in the House of Lords to take into account the points that I have raised.
      Mr. John: Although I concede the urgency, I do not believe that parliamentary scrutiny of the documents should be a mere formality. I do not believe that the other place should be the only place that can deal with these matters, merely because we have boxed ourselves into a
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      corner, and cannot find the time to consider the Bill properly. Does the hon. Gentleman share my regret that the House is unable to debate the matter properly?
      Sir Peter Mills: I understand the hon. Gentleman's point. The other side of the coin is that if we do not get started, those tenants will get no compensation for going out. One might criticise the Minister for not speeding this up, but he tried time after time to get the two sides together. He displayed more patience than I have, but finally he had to act as Solomon in this matter. I hope that the House of Lords will correct the small errors.
      Will the capital sum that the tenants receive be taxed? Will the landlord be able to set the payment that he must make to the outgoing tenant against his income? Those are important points. The outgoer may think that he has £20,000, only to find that it is heavily taxed.
      Much of the assessment work will be done by the Royal Institution of Chartered Surveyors. But what about the Association of Land Valuers? It is important that it has an equal share in these matters. I may be wrong, but I believe that tenant farmers would value its assessments more than they would assessments by the RICS. The Minister said that there would be some flexibility in the matter. Will he give firm guidelines to the assessors so that they can carry out the wishes of the House? Is there a right of appeal finally to the Minister?
      Amendment No. 31 is interesting because it proposes to facilitate the use of land for other purposes. My hon. Friend the Member for Stafford (Mr. Cash) put his finger on an important point. We should study carefully alternative uses of our land instead of food production.
      This is an important measure. The Minister has made some reassuring remarks about flexibility and how the assessors or arbitrators can adjust to meet the points that have been raised. Above all, I ask my right hon. and hon. Friends to think carefully about the incoming tenant, who could be penalised if the outgoer gets too much.
      Mr. Maclennan: The Minister deserves some sympathy from the House for his predicament, but in the last analysis one must admit that he has not satisfied any of those who are affected by the quota arrangements that were introduced hurriedly some time ago.
      Mr. Nicholas Fairbairn: Rubbish.
      Mr. Maclennan: The hon. and learned Gentleman says "Rubbish". If he would care to say which interest is satisfied by the Minister's proposal, I should be glad to hear it.
      Mr. Fairbairn: The NFU and the Scottish NFU complained of the rigidity of a 70–30 split and proposed an equally rigid split of 50–50. The Minister is to be congratulated on introducing an equitable scheme.
      Mr. Maclennan: The hon. and learned Gentleman has made my point. He was not able to cite anyone other than himself who has been satisfied by the Minister.
      I recognise the urgency of coming to a conclusion on the matter. I regret the fact that the Minister has taken so long to bring forward proposals. This problem is not a new or unforeseeable one. It was inherent in the introduction of quotas, and attention was drawn to it in discussions on quotas when they were first introduced, in which context proposals were made by members of the alliance parties that they should be tradeable. We published a document

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      the December before last suggesting that arbitration was the proper way to proceed. For many months, the Minister has been pressed to formulate an equitable solution.
      6.30 pm
      We cannot accept, as an excuse for the extraordinary way in which the Minister has proceeded, the need to move speedily now. The vehicle of the Agriculture Bill is convenient for the Government but not for the House of Commons. It is not convenient to be presented with more than seven pages of schedule containing detailed proposals that we have less than a week to study and consider amendments to and that we cannot properly debate on Report. The Government are making a farce of parliamentary procedure.
      It appears, too, that Scottish hon. Members are to be given no opportunity to consider the proposals for Scotland. Apparently, consultations in Scotland are not yet complete. Doubtless provisions will appear in the other House at some time, but the Government's attitude remains unclear. What is clear is that the Scottish interests are no more satisfied than interests south of the border are satisfied by what the Minister has proposed for England.
      Mr. John Corrie: If provisions about Scotland are added in another place, they will return here in the form of Lords amendments and will have to be debated.
      Mr. Maclennan: I have already acknowledged that Lords amendments would be considered on the Floor of the House, but the same objection applies to that procedure as to what we are doing today. It is extremely difficult to give proper consideration to detailed legislation on the Floor of the House. Matters such as these should be considered in Committee and debated extensively, and we should be able to take advice about them. We should be able to hear, on each paragraph or sub-paragraph of such a lengthy schedule, the views of those affected.
      I am sure that the Minister would not defend today's procedure as being ideal. It is far from satisfactory. We are dealing with the prospects not only of those leaving dairying but also of those who are entering it. We are dealing with a valuable asset that in many cases has been built up over a number of years. The legislation will affect not only the disposition of wealth between landlord and tenant but the disposition of the potential for an income of those who wish to farm in the future. The Country Landowners Association has drawn attention to its view that incoming tenants will be adversely affected by what is proposed, and the NFU has pointed to the adverse effects on outgoing tenants. It is clear that tenants in general will suffer under the Government's proposals.
      I agree with the Minister on one point—the general principle that he stated as his starting point. He said that we should start from the facts of the case and not from an arbitrary figure. That is an attractive view. The value of the landlord's assets and the landlord's capital input into an enterprise will vary from case to case, as will the value of the tenant's.
      However, when the Minister suggests that his own approach amounts to starting from the facts of the case, that argument is not sustainable. The Minister has invented a formula—complex and opaque, but a formula none the less—and that is the starting point. The concept of
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      the standard quota is a starting point that is not neutral; it is predetermined. It is also defined with such a degree of complexity that it will be almost impossible for farmers to use it to make the ready evaluation of their entitlements that the Minister suggested that they would be able to arrive at by simple consultation with each other. The Minister must be wrong if he believes that the use of his formula will make arbitration unnecessary. It is so opaque that there is bound to be a sense of grievance on both sides. The possibilities for dispute seem to me to be legion.
      I note that the suggestion was put forward by the Royal Institution of Chartered Surveyors, which is certainly not unfamiliar with dealing with such disputes. No doubt its members will be involved in sorting out disputes arising from this legislation. However, I do not think that we can feel any confidence that the Minister has avoided the problem that he rightly sought to avoid.
      The Minister said that he would be prepared to listen to arguments over the next few weeks. Arguments on what? One of the arguments that has been put forward is that of the NFU, and the Minister has clearly rejected it already. The argument was that there should be a starting point of equilibrium between the two parties to a potential dispute. It is unfortunate that the Minister has so speedily rejected that starting point. It was no more than a starting point, and, as the hon. Member for Cornwall, South-East (Mr. Hicks) pointed out, the formula that the NFU has put forward could result in considerable variations in division of quota between landowner and tenant.
      If the Minister will show willingness to reconsider his approach to the NFU new clause—new clause 6, which is in the name of the hon. Member for Cornwall, South-East and a number of other hon. Members from both sides of the House—the debate will have served a most valuable purpose.
      The industry wants to get the matter right. The industry wants to get it right more than it wants it to be settled this week or tonight. The industry wants it to be right not only for reasons of equity, and not only because it is necessary to do justice between landowner and tenant, but also because the formula could provide for similar arrangements if in due course other quota systems are introduced in this country. I know that the Minister recoils from that thought and may regard it as utterly unattractive. He was similarly hostile to the idea of introducing milk quotas. We cannot take much comfort from that. Perhaps in reply the Minister will tell us precisely what arguments he will listen to in the next few weeks.
      Mr. Cash: On behalf of the alliance, will the hon. Gentleman tell us the extent to which his arguments bear on its proposals for the rating of agricultural land?
      Mr. Maclennan: the hon. Gentleman is perpetuating the myth, which has appeared in various Conservative handbooks, that the alliance is committed to rating agricultural enterprises differently from the way in which they are rated at present. He is not throwing light on the debate, but is seeking to throw dust in the jurymen's eyes.
      I must address some remarks to amendment (a) to new clause 6 which seeks to extend the provisions to Scotland. I admit that that has been prepared without proper consultation with all the interests in Scotland. We have more milk marketing boards than England, and know that the National Farmers Union of Scotland is unhappy about the Government's proposals.
      The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): The hon. Gentleman would know, if he had discussed these matters with either the Scottish NFU or the Scottish Landowners Federation, that my right hon. and noble Friend the Minister of State has had discussions with them to try to reach an agreed solution. Unfortunately, to date that has proved to be absolutely impossible.
      Mr. Maclennan: We are interested to know whether the Minister proposes to apply the same solution to Scotland as has been applied to England. I assume that that is the most likely probability. It seemed reasonable to adopt the detailed and workable proposals advanced by the NFU in England. It would have been quite easy for us to try to devise another amendment embodying similar principles, but when work of this kind has been done it seems sensible to adopt it.
      Many Conservative Members are anxious to participate in the debate. Therefore, I shall make my remarks brief. The Government would do well to listen to the views of those who support new clause 6, and not to remain committed against it. This is not a matter which will divide the House on party lines. It is important to say that because many regular supporters of the Government may feel that it is appropriate to support new clause 6. I hope that they will not feel inhibited from doing so because a number of hon. Members in other parts of the House support that sensible proposal.
      The Minister has had a difficult job to do. I do not in the least underestimate the problem. One must recognise that he has at least tried to be equitable, but I do not think that he has succeeded. That is why I hope that the House will support new clause 6.
      Mr. W. Benyon: I declare my interest as an owner of agricultural land, some of which is subject to milk quota.
      First, I shall deal with my amendment to the Government's schedule, amendment No. 30. I accept what my right hon. Friend the Minister said in his opening remarks, and I shall not seek to move amendments (a) and (b). All I seek is that only one successor should have an entitlement under section 46 of the Agricultural Holdings Act 1986.
      I accept what my right hon. Friend said in respect of amendment (c) which seeks to replace "relevant" with "specific", but I hope that that matter will be considered further. With "relevant", we include matters which are not just dairying matters, for example, field drainage, which could also be used in respect of the production of beef and cereals. Every farm is different. That is why I am glad that the Government, at least on this aspect, have accepted that point, and that we shall not seek to divide the compensation on a fixed ratio.
      6.45 pm
      Let us consider the position before quotas were introduced. What happened at the end of a tenancy? The tenant sold his stock and machinery, was repaid the residue of his improvements or, in some cases, of dilapidation, and that was that. Then along came quotas and, lo and behold, a heavy capital tax was imposed on the landlord. If we accept new clause 6, it will mean that on a 100-cow unit the landlord will have to find about £30,000. It is said that the incoming tenant will find this, but it is a substantial sum and it will rise as the holding becomes larger.
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      What will all this do to the landlord-tenant system, which is recovering slowly from the Agriculture (Miscellaneous Provisions) Act 1976? At best, landlords will be reluctant to relet land, and at worst, they will say, "We will never ever put ourselves in this position again. We were kicked on the shins in 1976 and now we are being kicked again." I speak from personal experience because over the past 18 months I have let three farms, two of which are dairy farms, following the change in the tenancy laws. What will I do in the future? The most important question, which was dealt with eloquently by my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills), is what this will do to incoming tenants.
      It was incredibly short-sighted of the National Farmers Union in its brief to hon. Members not once to have mentioned that point. It is all very well to concentrate on the position of existing tenants—I accept that their position must be considered—but not to mention the position of future tenants is to neglect the future of British agriculture.
      I realise that my right hon. Friend the Minister has had a difficult task and that the matter is extremely complicated. There are only three cases where a tenant is entitled to share a quota. The first is where, by his own competence, he has achieved a higher quota than would otherwise be established on the land. The second is where the tenant has invested in fixed equipment, and the third is where he has purchased additional quota.
      The Government's schedule is not clear. I was interested to hear the Minister mention the figure of 4,500 litres per cow. I think that that figure is too low, but that is beside the point. However, the figure is absolutely crucial in assessing the effect which the proposal will have. When the outgoing tenant leaves the industry, the money that is due to him leaves the industry, which is already in severe financial difficulties, and that is an additional loss.
      Mr. Hicks: Surely my hon. Friend will accept that in many instances the outgoing tenant may well be moving to another tenancy or, indeed, to the ownership of his own cows. These people are not all retiring necessarily, and therefore it does not follow that all the money is going out of the industry.
      Mr. Benyon: My hon. Friend is right, but let us agree that the vast majority will be retiring and getting out of farming, because I think that that is how we all understand the position. I appreciate how difficult the situation has been and will be in the future. It is a sad day for British agriculture when we have to consider the present proposal, and an even sadder day for young people who wish to take part in the industry.
      Mr. Kevin Barron: I am concerned about the situation of a tenant farmer who came to my surgery about four weeks ago and told me about the plight he would be in should he retire from his farm, which is in the village of Brampton in my constituency. He brought with him a copy of Farmers Weekly. Last month I wrote to the Minister, and I understand why on this occasion he has not yet replied to that letter. In a long conversation in my surgery, this tenant farmer told me how concerned he was about the proposed legislation that is now before us. He said that for the past two years, although there had been a milk quota scheme, there was no way at present in which, if he gave up the tenancy, he would be

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      compensated for what had been a lot of hard work, not just in getting quotas but in ensuring that he produced a good yield from the farm to enable him to accrue a benefit when his tenancy of the farm terminated. He also told me that the landlords' and tenants' associations had not been able to agree on the matter of quotas.
      Since then we have seen the Government's new clause 4—and new clause 6, which I understand is sponsored by the National Farmers Union—in relation to what should happen between a landlord and tenant in the ending of tenancies. In his opening speech, the Minister made great play of the fact that some tenants may be able to get up to 66 per cent. of the standard quota to which he referred. He said that they would get all that they produced above the standard quota.
      Although the number of tenant farmers has been mentioned, we have not been told the likely percentage of farmers who would reach the 66 per cent. and how many would be lower than that. Many percentages quoted in the debate have been much lower than two thirds of the share of the standard yield. I believe the Minister should have given us appropriate figures. He should have been able to say that the figures from the National Farmers Union are wrong, as are the percentages from the Milk Marketing Board, and that it is unlikely that people will get to that level.
      I would not want to see farming in this country changed dramatically. I am a layman—my association with the countryside is walking rather than working—but I have seen dramatic changes in farming over the years which have not achieved the best results for the environment.
      I am surprised that people constantly talk about the incoming tenant. The question is whether the outgoing tenant, who has worked on the farm and pushed up the quota and yield, is getting a fair deal on retirement. A similar question has been argued many times in the industry with which I was associated. In this debate we have heard arguments relating to the incoming tenant, when the important question is whether a tenant is fairly compensated when a tenancy comes to an end. The Minister has not convinced me that the arbitration provision in new clause 4 will suit the tenant farmer to whom I spoke a few weeks ago.
      I also refer to the tenant landlord, who is a tenant on one holding and a landlord on the rest. Such people, together with the NFU delegation, lobbied me yesterday. A man from the village of Woodall in my constituency said that he was totally dissatisfied with what the Minister was proposing. He urged me to support new clause 6. He did not think that everything about that clause was right, but he believed that at least it provided a better arbitration provision than is provided in new clause 4. I have decided to support new clause 6, because the Minister has not convinced me that the arbitration provision in new clause 4 will satisfy tenants on farms in my constituency. Therefore, it is up to the Minister to offer proper arbitration, not involving inbuilt percentages with a maximum or minimum that people can receive. Tenants who have worked hard to build up quotas and are about to retire should be compensated for their time and work.
      Sir Geoffrey Johnson Smith: I wish to raise with the Minister a point which has not so far come into the debate and which concerns the important area—
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      some people may regard it as a grey area—of quota ownership. I refer to a sector of farmers who have various forms of partnership, or share farming or contractual agreements. For many reasons, when they have been drawn up, these agreements have suited landlord and farmer alike, and have helped many young people on to the farming ladder. Few such farmers are registered as landowners or milk producers. In such cases, the name of the landowner is generally used.
      Under the Government clause, how is this category of farmer affected? For example, a farmer can have a contractual agreement, own the cows and machinery, provide the labour, operate and manage separate accounts, make all the decisions, and take all the risks. In one such case, a man I know doubled the milk output from his farm, mostly at his own expense, before quotas were imposed. Since then, the value of his cows has been reduced because of the quotas. What will such people do, and what will happen to them? Surely it cannot be fair or just that such a person, through no fault of his own, should see his assets—in this case, cows—fall considerably in value while, at the same time, the milk produced by those cows has increased as an asset, because the milk quota undoubtedly is an asset. In the case to which I have referred, this asset has increased by about £75,000.
      Unless the Minister can assure me otherwise, under the Government's proposal, as I understand it, such a person may have no share in that asset. He has no share in the value of the farm. How will he find the capital to purchase the quota for his cows in future? Will there be a future for such people? Most hon. Members who have spoken have had in mind a person who will quit farming altogether, but there are those who, as in the case that I have described, will not quit.
      It is difficult for someone in my position, when various suggestions are made on different clauses, to vote against new clause 4. I listened carefully to what my right hon. Friend had to say and I understood in large part what he was driving at. It is important to consider the incomers as well as the outgoers. I regret, as others have, that it was not possible for the CLA and the NFU to do a deal.
      7 pm
      Am I supposed to vote against a clause which has been introduced by my right hon. Friend and which I understand is backed by independent arbitrators which is important to me? I would have been most mistrustful of any arrangement which had not been so backed. Independent arbitration has been the basis so far which has been much prized and valued. Am I to help to kick out new clause 4 and then vote for new clause 6 which I understand has support from hon. Members on both sides of the House?
      Before I decide which clause to vote for I should like to have one assurance at least from my right hon. Friend the Minister of State when he replies. When my right hon. Friend the Secretary of State talks about being flexible, I recognise that that can mean many things. He claims that he has already been flexible enough. When right hon. Members on the Front Bench claim that they have been flexible but are willing to consider representations which will make things more flexible, I wonder to what extent that is just a form of words. When my right hon. Friend replies, will he give me some idea of the areas which he thinks are suitable for further representations which will perhaps meet some of the fears that have been expressed today?

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      I want to express just one of the fears. Paragraph 6(5) of the new schedule says:
      "For the purposes of sub-paragraph (4) above a number or amount shall be taken to be substantially greater or less than another only if it exceeds, or, as the case may be, falls short of that other by an amount equal to or greater than 20 per cent. of that other."
      That can be explained in clearer language, although I do not propose to take up time on that tonight. But why do we need to have that qualifying difference to the standard quota? It might be that some of my farmer friends would see that as working to their disadvantage. Would it not be best to throw that out altogether? Might not that be helpful? If not, will my right hon. Friend tell us of some area in future where the Government might be prepared to give so that it will be more amenable to those farmers who at present, from my conversations with them, find it difficult to accept new clause 4 because they find so much of it incomprehensible, and, where it is not incomprehensible, complex?
      I believe that the Government want to be fair. Tomorrow night I shall be meeting members of the farming community in my constituency. I shall certainly explain to them as best I can what the Government say today. But I have in mind also that if that is unsatisfactory I shall have the opportunity at a future date to join my right hon. and hon. Friends who may wish to table an amendment in future. Let us hope that that will not be necessary.
      Mr. Alexander Eadie: Many right hon. and hon. Members here today are probably more knowledgeable than I am about agriculture. But, like my hon. Friend the Member for Rother Valley (Mr. Barron), I intervene largely as a result of two constituents who have visited me at my surgery. They are tenant farmers, and they are worried about milk quotas.
      This is a debating Chamber. Having listened to the debate so far, I can to some extent understand the dilemma in which the Government find themselves. But the Government must recognise the changed circumstances. Although the Minister said that he could not obtain agreement and therefore had to take the middle road in his formula, the strength of the debate—at least as I have judged it so far—is that the right hon. Gentleman seems blatantly to be giving more preference to the landlords than to the tenant farmers.
      If there is any doubt about the feeling that exists and the political time bomb that the Government are trying to tackle here, it is probably best illustrated in an NFU document, which says that the strength of feeling amongst tenant farmers on this issue is enormous.
      On Radio 2 this morning I heard somebody say that the Government are beginning to lose touch with the people. I have a shrewd hunch that in coming forward with this new clause and schedule the Government have to some extent lost touch. The Minister has admitted his difficulty in not obtaining agreement between the NFU and the landowners and that the formula is complicated. However, I judge that in that complicated formula he is giving blatant preference to the landowners rather than dealing with the problem of the tenants.
      My hon. Friend the Member for Pontypridd (Mr. John) got it right when he said that percentage is everything. Of course percentage is everything. Based on that are some of the judgments that we can make about future
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      opportunities for farming. If the landowners are favoured too much the opportunities for young people to enter farming in future will to some extent be jeopardised.
      I believe that the Government are treating this important aspect shabbily. We are told that we are doing something on Report which should have been done in Committee and that, if we do not like it, perhaps when it comes back from another place we may have another bite at it. Then the Minister says that he is prepared to consider certain propositions. He is prepared to do that after, as I understand it, the Bill has been driven through the Lobbies tonight. That is a shabby way to deal with the Bill and a most unsatisfactory way for the House of Commons to deal with this important issue.
      I have received a letter from the Scottish NFU on the milk quota landlord-tenant sharing arrangement. It says that the alternative new clause prepared and supported by the Scottish and English NFUs will be available on a certain date—which it gets wrong, but that is not its fault—and urges all Scottish Members to support that alternative new clause. The letter goes on to say:
      "we believe this is essential because of the current intention to put forward legislation for Scotland only in the House of Lords at a later stage in the Bill's progress."
      Again, I think it is rather shabby that the House of Commons is not to have the opportunity to consider that aspect of the legislation. We have to leave it to the other place to decide what is going to happen, and then it will come back here. If the argument is to be about the landlord and tenant arrangements—I do not wish to cast any aspersions on anybody—I have little confidence in the other place being able to come up with legislation that will be beneficial to all concerned.
      Mr. Alexander Pollock: The hon. Gentleman will be aware that a number of people have advocated a greater amount of time to allow wiser counsel to prevail in consultations with the various bodies in an attempt to find a solution. This was very much the point made by the hon. Member for Caithness and Sutherland (Mr. Maclennan). Is the hon. Gentleman aware of the terms of the letter written by the Minister of State, Scottish Office, yesterday? He said:
      "The position in Scotland is that, while we accept the principle of waygoing tenants' right to compensation, we have not as yet reached a final view on the arrangements to be introduced for Scottish tenants."
      Surely, against that background, it is useful for us to wait and see what may emerge from the other place.
      Mr. Eadie: The hon. Gentleman makes a fair point. He has an advantage over me. I have not seen the letter to which he refers. I make no complaint about that, but I think he will have to take on board the point that I have tried to make. Have we more confidence in the House of Commons than in the other place when it comes to being able to deal with the issue of landlords versus tenants? Therefore, although he makes the point that there is difficulty in making arrangements, I will quote the relevant paragraph from the Scottish NFU. which the hon. Gentleman will have had the advantage of seeing. It says:
      "We are extremely pessimistic of the possibility of Scottish legislation providing any significant improvement in the terms of allocation of quota between landlord and tenant, unless the weaknesses of the Government's intentions are adequately exposed in this week's debate."
      First, the weakness in the Government's handling of this legislation is exposed. Secondly, the shabby way in which it is intended to try to drive this new clause through

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      the House of Commons also exposes the Government's weakness. I shall have no inhibitions about opposing new clause 4. If it is said that this is a non-political point and if there is a spirit of neutrality on both sides of the House, I hope that the Government will see fit to withdraw their proposal and allow further consultation to take place. I shall then be able to go back to my constituents and meet my constituency branch of the National Farmers Union and tell them that the Government are serious about wanting to be fair as between landlord and tenant in relation to milk quotas.
      7.15 pm
      Mr. Nicholas Winterton: I shall be quite brief, because many of the arguments have been rehearsed already in this debate. I believe that the method that the Government have chosen to introduce this very important new clause on Report highlights the dangers, injustice and stupidity of adopting this course of action. We are discussing a highly complicated and very sensitive matter—the future livelihood of people who have invested a whole life's work in the dairy industry in this country.
      I would reply to those who criticise me for what I am about to say by stating that this situation has been forced upon the dairy industry, both landowners and tenants, by the Government. The dairy industry as a whole did not seek the imposition of milk quotas, nor did the landowners or the tenant farmers engaged in dairy farming. Surely, on an important matter such as this, we in this House should bring justice to a situation which has been causing increasing anxiety, worry and problems to the dairy industry ever since the imposition of the dairy quota.
      I would say to my right hon. and hon. Friends on the Front Bench that the Government can criticise the Opposition, and vice versa, but I give the Opposition credit on this score: when, in the 1970s, I served on the Committee on the Agriculture (Miscellaneous Provisions) Bill they introduced an important new clause on the succession of tenancies. We strongly opposed it in Committee, but we did have the opportunity of opposing it, of putting down amendments, in the sure knowledge that we would then have a full debate on Report before the Bill went to the other place, so that all the problems of that new clause and all that went with it could be adequately discussed in the House.
      What is more—this has been highlighted by some of my hon. Friends and by Opposition Members who have spoken in the debate—that gives the outside organisations, the tenant farmers, the NFU, the Tenant Farmers Association, the Country Landowners Association, the valuers and the professional bodies involved, every opportunity of presenting their case, their concerns and their criticism to hon. Members, who then, when we come to the debate, can reach a decision in knowledge and not in ignorance.
      One of the reasons why I shall support my hon. Friend the Member for Cornwall, South-East (Mr. Hicks) in the Division Lobby tonight is that I believe that he has put forward a more just way of solving this problem than have the Government. There may be criticisms which my right hon. and hon. Friends on the Front Bench can level at the new clause but I believe that, on balance, in the words of the NFU brief, he is seeking to deal with "a typical
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      situation" and a 50–50 situation to start with is an equitable one. To start with any less than that is to show bias towards one party as against the other, and I do not believe that the House seeks to do that.
      I make this point very clearly to my right hon. and hon. Friends on the Front Bench. I have many tenant dairy farmers in my constituency. I have two or three substantial landowners. The difference between the landowners is very marked. Some are excellent in their dealings with their tenants and provide massive investment in the land. Here we have a situation which could adequately be dealt with under new clause 6. The quota allocation starts on a 50–50 basis, and if there is any dispute between the tenant and the landowner it goes to arbitration and the quota allocation can be reduced from, say, 50 to 20 for the tenant, while the landlord has 80, or vice versa. But it starts on an equitable basis, and if the House is not prepared to provide that it is nonsense to debate this situation tonight.
      I have grown up with the agriculture industry. I have no vested interest. My father's family were auctioneers, valuers and estate agents of 150 years' standing. When one has grown up with the dairy industry in particular, one understands the commitment, not only to the land, but to the job that is being done. It is not just a five-day-a-week job; it is not a job from 9 to 5. When one is dealing with livestock, it is 24 hours a day, seven days a week, 52 weeks a year.
      From the representations that have been made to me by the chairman of the Cheshire NFU, who is a tenant dairy farmer from Lower Withington in my constituency, and the arguments that he and many other tenant farmers have put to me, I believe that there is a case that deserves to be heard. I do not like to have to decide on such an important matter in this House when the first I knew of what the Government were doing was when a new clause was put down last Friday which, sadly, I did not see until Monday of this week.
      Mrs. Kellett-Bowman: I only want to observe that when my hon. Friend saw it on Monday it was incorrect and it was therefore more misleading than ever.
      Mr. Winterton: My hon. Friend makes a valid point. There have been only 72 hours, therefore, in which to hold consultations and reach a decision.
      My hon. Friend the Member for Cornwall, South-East presented a very fair case. It convinced me far more than did the case presented by my right hon. Friend the Minister of Agriculture. My right hon. Friend is not in his place at the moment. He has had a difficult job to do, and many hon. Members are disappointed that the National Farmers Union and the Country Landowners Association have been unable to reach a decision on such an important matter. Would it matter if there were a further delay for two or three months? I do not believe that it would.
      We shall have to vote on Government new clause 4. There will be no opportunity to vote on the merits of new clause 6. I shall vote against my party, not because I think that it is seeking to do wrong, but because it has not taken on board all the views that should have been considered when dealing with such a complex matter. The NFU feels very strongly about this matter. It believes that tenant farmers are very anxious and angry.
      My hon. Friend the Member for Milton Keynes (Mr. Benyon) said that we must not discourage young people

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      from entering the farming industry. Although it is not mentioned in its brief, I am sure that the NFU is more than aware of this. In the late 1970s, during the proceedings on the Agriculture (Miscellaneous Provisions) Bill 1976, many Conservative Members stressed the need to bring new life and young people into farming. This priority was highlighted time and again. The House should give more than just fair weight and a fair wind to the views of my hon. Friend the Member for Cornwall, South-East. I shall vote for the spirit of his amendment when I vote against the Government in the Division Lobby.
      Mr. Richard Livsey: Before I deal with new clause 4, I, too, should like to congratulate the Minister of State and his wife, who have done so well in producing their child so soon. I sympathise with the Minister of Agriculture, who has been suffering from influenza this week. Although he is not in the House, I am glad that his voice held out long enough to explain the complexities of new clause 4. It was extraordinary that he had to plead for silence in order to explain its complexities. If he found it difficult to explain the new clause, how are right hon. and hon. Members expected to understand it, and how can those outside Parliament be expected to accept it? The unacceptability of new clause 4 is to be found in the first line of paragraph 6(1) of the new schedule and in the calculation of quota in paragraph 6(4).
      The definitions of standard quota depend on a formula that is to be put forward in a statutory instrument. A formula that is based upon 4,500 litres per cow and upon a stocking rate of 1·9 cows per hectare and which also takes account of rental value of the land, does not stand up to examination. The Minister says that the formula allows for flexibility, but I believe that it is set in concrete. The attraction of new clause 6 is that it is much more open-ended. It provides a much fairer basis for arbitration.
      If the Minister's fonnula were used for a standard quota, in certain circumstances a tenant could be left with almost nothing. The legislation must be seen to be fair. This proposal is not the same as that of February. The formula is inequitable in its approach to the farmer on marginal land when compared with, say, grade 2 land. There are 37,000 dairy farmers in England and Wales. Many of them are farming on marginal land, not on high quality land. The Minister's formula will militate against those farmers who, because they are farming on marginal land, already operate at a disadvantage.
      The Minister referred to the position before the introduction of milk quotas in 1984. Production was then 10 per cent. higher than it is now. This formula means that the tenant's quota will now be even lower. The Minister's arbitration proposals are very restrictive and will probably tie the hands of the arbitrator. The Royal Institution of Chartered Surveyors is critical of this proposal. A tenant could end up with only 25 per cent. of the quota, which would be inequitable. The hon. Member for Milton Keynes (Mr. Benyon) said that if new clause 6 were agreed to, it would result in a tax on landlords. However, he neglected to say that, because the quota is attached to the value of the landlord's land, its value is greater. Therefore he does not lose to such a great extent.
      Mr. David Heathcoat-Amory: The hon. Gentleman may know that in Somerset his party has made great play of the need to retain county council farms in public ownership in order to give opportunities to new
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      entrants, yet he is supporting an amendment that would have the affect of increasing the compensation paid by landlords to existing tenants at the expense of incoming tenants. Therefore he is supporting the erection of a new barrier against new entrants. Is he able to explain this paradox in Liberal thought, or is he happy about a policy that pulls in both directions at the same time?
      Mr. Livsey: No. I am looking for an equitable solution to the problem, for a solution that is fair to everybody. New clause 6 introduces equity and proper arbitration. Every point is taken into account, particularly arbitration in the case of county council smallholdings. We believe that that is a fairer starting point.
      New clause 6 has the support of many members of different parties, and I feel that it is important to have cross-party support on this issue because we shall have to live for a very long time with the solution that is chosen. Governments of different colours will have to live with it and administrate it.
      7.30 pm
      It would be better for the Government to accept a clause acceptable to the broad view of hon. Members with farming interests. If we fail to secure consensus, I do not think that we shall be able to carry the proposal forward. If the Minister is to impose a scheme that leaves the tenants with, on average, 25 per cent. of the quota, he will be presenting a formula that hon. Members will not accept for very long.
      We wish to include Scotland in new clause 6. There have been strong representations from Scotland on the clause, supported by many of my hon. Friends such as my hon. Friend the Member for Gordon (Mr. Bruce) and my right hon. and hon. Friends who represent the Borders. New clause 6 is supported as well by my hon. Friends the Members for Yeovil (Mr. Ashdown) and for Truro (Mr. Penhaligon).
      The worry about incomers has been stated. I have a great deal of sympathy with the arguments about young farmers coming into the industry, the value of the quota and the barrier that that could present to them getting into farming. We need to address ourselves to that problem.
      Mr. Colin Shepherd: Will the hon. Member therefore not just buck the issue but address himself to it now? It is fundamental to the industry's future structure and we cannot leave it to be dealt with on another occasion. Will he deal with it now?
      Mr. Livsey: I shall deal with it. I believe that arrangements should be put in train for the milk marketing boards to have available a reserve of quota to cater for these circumstances. We cannot in this brief discussion go into the details of such a scheme, but I would suggest that in the future we look to such ideas as a means of resolving these problems.
      On the Continent younger farmers can borrow at far lower interest rates than is possible in this country. We need to examine that facility so that quota is available at more preferential rates. This vast subject needs to be opened up on another occasion.
      The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. John Selwyn Gummer): The hon. Gentleman has mentioned a matter of great importance to the House, which is the problem of possible barriers against new people coming into the dairy industry.

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      Is he suggesting that we should reduce the quota available to those who are already in the industry, in order that the Milk Marketing Board might hand it out to newcomers because that is the only way in which spare quota can be found? Or, is he suggesting that there should be some sort of buying-in arrangement? If so, who would finance that? Does he not accept that the incoming tenant will always have to pay what the outgoing tenant gets?
      Mr. Livsey: Additional quota could be found for entrants into the industry. The situation is not as the right hon. Gentleman has described. I think that it will be possible to provide quota in future.
      We are discussing a reduction of 3 per cent. in the quota under the outgoers scheme. Clearly, people are going out of production. Quota will be available in the future, and some of that could be put in reserve.
      Mr. Maclennan: Does my hon. Friend not also recognise that, if the outgoing tenant is not to receive a fair share of the quota, it is a positive disincentive to him to move out, and consequently make the enterprise available to an incomer?
      Mr. Livsey: I agree with my hon. Friend. I ask the Government, in the interests of the industry, to withdraw new clause 4 to allow us to vote on new clause 6. Hon. Members from both sides have demonstrated a degree of unity on new clause 6, which does not exist on new clause 4.
      Mr. Charles Morrison: Even though I am chairman of the all-party group on population, I congratulate my right hon. Friend the Minister of State on his happy event.
      Today, we are concerned with surplus milk production. Like my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) I think it is regrettable that the National Farmers Union and the Country Landowners Association were unable to reach a reasonable agreement after many weeks of discussion. I appreciate their difficulties, but it seemed that they might have been able to give and take enough to ensure that a reasonable compromise between their varying interests was achieved. Not only would it have been far better if they had done that themselves, but it would have removed the difficult situation now facing my right hon. Friend, whereby he thinks that he has to impose a solution on them.
      At the moment I am not sure that we shall get the right answer to the problem. I wonder why we have not been presented with an enabling clause, rather than precise proposals, which would have allowed further discussion to go ahead on the basis of the proposal of my hon. Friend the Member for Cornwall, South-East (Mr. Hicks).
      Both proposals have their advantages, but it seems to me that, given the short time available for consideration of these proposals, it is likely that we shall not get the right answer tonight.
      I share the concern expressed by my hon. Friend the Member for Milton Keynes (Mr. Benyon) about the problems of new tenants. That is one of the reasons why I think it is wrong tonight to come to a final decision. The problems to which he referred are very genuine indeed.
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      I was pleased to hear the comments of my right hon. Friend the Minister about the calculation of the standard quota. He intends to do his best to meet the points made in that regard by the National Farmers Union.
      I am concerned most about compensation. As we know, it is possible for a landlord to obtain 100 per cent. of the compensation. The same should be true for the tenant in certain, albeit rather exceptional, circumstances. Let us take, for example, a tenant farmer on the Wiltshire downs who many years ago took an arable farm and decided to have a Hosier milking system, using a mobile Hosier bay. Let us assume that he wishes to give up. So far as I can see, there is no reason why he should not return to his landlord an arable farm, which is what he took. Every aspect of the dairy investment would have been paid for by the tenant farmer. What conceivable argument could there be to prevent that tenant getting 100 per cent. compensation?
      Mr. Douglas Hogg: In those circumstances the tenant would already have a claim for improvement under the Agricultural Holdings Act 1948.
      Mr. Morrison: That has nothing to do with the quota. If I am wrong, my right hon. Friend the Minister of State will correct me.
      My hon. Friend the Member for Horsham (Sir P. Hordern) has whispered in my ear another example of a third generation tenant farmer of a third generation landlord. If the landlord has done nothing to assist the tenant farmer, what conceivable argument is there for that tenant farmer not getting 100 per cent. compensation? Because my right hon. Friend's proposals do not seem able to meet that case, and because on the other hand the proposals of my hon. Friend the Member for Cornwall, South-East seem to have the flexibility and, indeed, the relative simplicity that are required, as of now I propose to support my hon. Friend's new clause, if I have the opportunity to do so.
      I have not thought this through, but in regard to appeals, might it not be possible to have a system whereby the most exceptional cases of the type that I have described are referred under a special provision to the Agricultural Lands Tribunal? I do not know whether that would cope, but it might be a way round the difficulty that I have described. I should like to think that my right hon. Friend will be able to answer adequately my points, but as of now I doubt it. For that reason I intend to support my hon. Friend the Member for Cornwall, South-East.
      Mr. Allen McKay: Like my hon. Friend the Member for Rother Valley (Mr. Barron), I do not have a brief from the NFU or from the Country Landowners Association. All I have is a letter written on behalf of tenant farmers in my constituency. They think that they are getting a raw deal. They may be third and fourth generation tenant farmers who have put a lifetime of work on farms which have been built up over the generations. Those tenant farmers have worked many hours and have put buildings on the land. At some time they will get compensation for those buildings, but if there is to be compensation for milk quotas, they think that they should get the reward for the work that they have done.
      I accept the argument about the incoming tenant farmer. I recognise the problems about encouraging people to come into the industry. The Government propose to pay

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      compensation to a person who has not even started to put in any effort. They say that they will pay compensation to someone who has done virtually nothing.
      What about the landlords? Who is the landlord? There are many absentee landlords. In my area the landlords used to be the Fitzwilliams, the Straffords, the Wortleys and the Wentworths. They looked after their tenant farmers. The landlords do not live in the area any more. In many cases they are companies owned by shareholders, and they never appear on the land. The landlord's responsibilities are carried out by an agent. My tenant farmers wonder why those absentee landlords should be compensated for the work that the farmer and his family have put in for many years.
      7.45 pm
      Why are we giving compensation for quotas? As I understand it, quotas came into being under an EEC ruling. Because there is over-production of milk, the Government had to decide how much should be produced on each farm, and on which farms it should be produced. The quota is a licence to produce a certain quantity of milk. It is we who are putting a valuation on the quota. A goodwill arrangement is being created. It is not an outgoing quota. I could understand it if compensation was to be paid to a farmer who was being forced out of business, rather than retiring or going out of business voluntarily, because the Government did not want his milk any longer. What we are talking about is goodwill. We should consider the analogy of the goodwill of a shop. Compensation for goodwill goes not to the person who owns the shop but to the person who has built up the business in the shop. I recognise the difficulties which we are running into.
      I am concerned that this will not be the last time this will happen. We are talking about milk production, but what will happen if there is a surplus of potatoes or cereals? Will the EEC say that there must be cuts in production and that we have to introduce quotas for them. If so, the Government will come to the House with legislation and we will have the same argument again.
      This is a classic example of a matter that should have been discussed not on the Floor of the House but in a Special Standing Committee which could have gone into detail on all the pros and cons. When the Minister replies, he may be able to tell us why we have got into difficulty. In the past, when a tenant farmer left his farm, there was an auction and he got his compensation from the materials which he sold and for the buildings which he left on the land. For the first time we are introducing the goodwill aspect into farming. The farmer will be selling not something tangible but a licence which has been issued by the Government to produce a certain quantity of milk. That is the danger in the Government's proposal.
      Mr. Douglas Hogg: It is unfortunate that we are discussing such a complicated matter at this stage of the Bill. In effect, we have before the House a very detailed draft which should be debated as it would be in Committee, but we cannot do that. In essence, we are talking about the principle of the new clauses. Therefore, I share the disquiet expressed by many hon. Members about the way in which we are being asked to consider the matter for the first time.
      The House is considering two principles which are enshrined in the two new clauses put forward separately by my right hon. Friend the Minister and by my hon.
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      Friend the Member for Cornwall, South-East (Mr. Hicks). They are designed to achieve different things. Surely we should now be trying to determine the underlying principle which we should apply to the proposal for compensation. If we can identify the principle that we should apply, we can decide which of the new clauses is more consistent with that principle.
      There are comparable situations from which we can gain guidance and I should like to suggest two. There is the procedure under the Agricultural Holdings Act 1948 whereby the outgoing tenant has a claim for improvement on the termination of the tenancy. Secondly, there is the situation that arises in the context of business tenancies under the Landlord and Tenant Act 1954, part II, where again a tenant has a claim for compensation on the termination of the tenancy. It is important to determine what the tenant in those two cases is seeking to recover. He is not just seeking to recover a lump sum because he is leaving the premises. He is not entitled to that. He is entitled to claim compensation only for improvement. The principle upon which that is assessed is the betterment of the landlord's premises, the improvement to the landlord's premises which is attributable to the work or the investment of the tenant.
      Mr. Maclennan: I realised from his earlier interventions the line that the hon. Gentleman would follow. He is missing the point that this is not a proper analogy. Effectively, the tenant has freely entered into a contract, a lease, the terms of which and the law surrounding which are clear to him. The situation is now different. The creation of quota is the creation of an asset, and if the owner of the asset is not properly compensated as a result of what the Government are doing, the Government are effectively expropriating the tenant or, for that matter, the proprietor.
      Mr. Hogg: I do not agree, for two reasons, one general and one specific. My general reason is that this is not a capital asset in the conventional sense. It is much more analogous to the possession of a shop which has a specific planning use prescribed for it which is more advantageous than another kind of planning use. In any event, if the hon. Gentleman looks at the Agricultural Holdings Act which was introduced by the Labour Government in which he was a Minister, he will see that the same system of betterment was applied to improvements carried out prior to 1968. That of course is analogous to the present situation.
      We should try to determine the relevant principle, and it seems to me that the relevant principle, deduced from comparable situations, is that the tenant has a right to claim compensation to the extent that his work and his investment has improved the assets of the landlord. I do not accept that the tenant has a right to claim compensation or financial recognition or a lump sum beyond the level of that recognition. If one applies that principle lo the two new clauses, I suggest that one will see that the Government's new clause is preferable.
      New clause 6 is advanced by my hon. Friend the Member for Cornwall, South-East and is not directed towards providing financial recognition for betterment. It is doing something else. It is saying that an outgoing tenant has some form of proprietorial interest in milk quota irrespective of the contribution that he has made to improve the landlord's asset. I do not accept that analysis.

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      New clause 6 also had the pragmatic disadvantage mentioned by my hon. Friend the Member for Milton Keynes (Mr. Benyon) and by the Minister that, if we adopt new clause 6, we are taking capital out of agriculture and are likely to impose a burden on incoming tenants. That is a pragmatic disadvantage, although it is not as serious as the disadvantage of principle to which I have referred.
      Mr. Maxwell-Hyslop: My hon. Friend has overlooked the point that was also overlooked by the Country Landowners Association. There is quota on a farm that has quota only because the tenant was producing milk on the crucial date. If he had not been producing milk on that crucial date, there would be no quota and the owner of the land could not let it to anybody or take it in hand and produce milk on it. Secondly, the quantum of that quota is related to what the tenant was producing in the base year. It is the tenant who creates the quota, not the landlord. It is true that it could be said that it could not be done without the landlord, but it is also true that the tenant could not have done it if his parents had not given birth to him. It is the tenant who creates this valuable, negotiable, rentable and saleable asset.
      Mr. Hogg: My hon. Friend is not wholly right. Both parties created the asset.
      Mr. Nicholas Winterton: No—the Government created the asset.
      Mr. Hogg: Many parties created the asset.
      Mr. Winterton: No, the Government.
      Mr. Hogg: The Government created the asset in one sense and the tenant created it in the sense put forward by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) and the landlord created it in yet a third sense. It is a fact of history which came about through a combination of circumstances. We still have to analyse the principle on which the compensation is recoverable. I believe that the principle is betterment and enhancement. That is a difference of principle between us and reasonable men can differ about that. We need to identify why we differ about that and I submit it is because our purpose and objective are different. If that is right, one turns to the Government's proposal.
      I agree with my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) that there are problems about the Government's new clause 4. I agree with him that the new clause does not accord sufficient recognition when dealing with standard quota to the problems of marginal land, and to the problems that would flow from low input farming—a policy often advocated by Ministers.
      I put those criticisms to the Minister, but he is right in introducing a clause that is designed to confine compensation primarily to betterment and enhancement over and above what would otherwise be the case. That is the correct approach. I recognise that a number of my hon. Friends do not agree with me, but that is perfectly understandable because in a sense we are debating a principle. Once the principle of betterment is accepted, the Government's new clause 4 is to be preferred to that of my hon. Friend.
      Dr. Roger Thomas: When the milk quotas were introduced two years ago, three of the areas
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      hardest hit were south-west Wales, Cornwall and Devon. But that is not the reason why the farmers of south-west Wales are disenchanted with clause 4 and happy with clause 6. The hon. Member for St. Ives (Mr. Harris), in an intervention, said that this matter should be before the House in the form of an entirely new Bill and go through all stages, especially Committee, when the nuts and bolts and intricacies of the matter could be examined in far greater detail.
      It is a great disservice to the farming community, especially to tenant farmers, that this matter has been brought in at the tail end of an important Bill. Many hon. Members wish to participate in the debate. We are also trying to get the Bill through in a hurry. Many of those who spoke from the Government Benches tried to extricate the Minister from the hole that he has been digging for himself. After the Minister of State has replied, there should be some means to enable us to wipe out what has happened tonight.
      This is an important debate. It may have been repetitious, but that has been because the same valid points have been raised. Time and again hon. Members have pointed to the advantages of new clause 6 and the disadvantages of new clause 4.
      8 pm
      I represent a dairy farming area, where there are many marginal farms. Marginal farms will do particularly badly out of the complex regulations involved in new clause 4. We should stick to the principles of new clause 6. At least that starts from a 50–50 base line for the tenant and landlord. From there, the figure could move up or down according to arbitration. New clause 6 has been criticised on the ground that arbitration will take a long time and that many cases would have to go for adjudication. But surely that would be excellent. After all, there would then, at the end of the day, be fairness.
      I hope that the Minister will recognise that hon. Members on both sides of the House are unhappy. The feelings of the farming fraternity have filtered through to the House in an almost unprecedented manner. However, I do not want to detain the House, as the Opposition feel that there are many other important provisions that should be debated at length. I refer, in particular, to new clause 1 which mentions a consumers' committee to look after the interests of the consumer. That is an important new clause, and we would like to reach it.
      I come from an area that has suffered greatly from milk quotas, and we do not wish to suffer any more. I make one party political point. When the hon. Member for Ynys Mon (Mr. Best) speaks, he will be able to confirm that the Conservative party's popularity plummeted in April 1984. If new clause 4 is virtually steamrollered through the House tonight, so late in the passage of the Bill, the Conservative party will see its support virtually destroyed in rural areas.
      Mr. Corrie: I am well aware that the new clauses and the schedule do not cover Scotland, but I am sure that they will be used as the basis for any legislation that comes up in the other place. I am equally sure that, because of EEC legislation, Scottish provisions could not be very different, or there would soon be complaints from English farmers that might end up in the European Court. I know that my colleagues in the Scottish Office have been desperately trying to obtain some agreement between the SLF and the

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      NFU in Scotland, but have not yet succeeded. I hope that they will continue to discuss such matters with them in the hope of reaching some agreement.
      My right hon. Friend the Minister cleared up several points that had been worrying me, and I thank him for that. The sad thing about the debate is that if we had had time to thrash out the schedule in Committee we could probably have reached a consensus. However, if my right hon. Friend the Minister really meant it when he said that his mind was still open, it may yet be possible to improve the schedule slightly in the other place.
      Mr. John Home Robertson: How?
      Mr. Corrie: I assume that it is possible to do something in the other place, and I look forward to seeing what happens there.
      Mr. Home Robertson: Does the hon. Gentleman want a peerage?
      Mr. Corrie: No, I want to talk about the Bill. Is the hon. Gentleman offering a peerage?
      We all want a fair and reasonable divide between landlord and tenant, depending on the input from each party. I agree that that should not be based on any percentage figure. In any discussions, no two cases will be the same. The mess that we find ourselves in shows what happens when one tampers with production. As has been said, we may have to face the same problems over cereals. Quotas have undoubtedly created a new asset. Hard-pressed farmers will see a little relief as they go out of farming if they can make use of this compensation. I assume that if there were a new EEC outgoers scheme legislation would be needed to cover that in the case of any tenant farmers going out of milk production, but not out of the farm. However, I shall not go into that, as I would be out of order if I were to do so.
      At present a tenant has no rights whatever, and the landlord has a 100 per cent. right to the quota compensation. I cannot agree with all my hon. Friends, as I believe that it would be unfair for either side to obtain 100 per cent. compensation. It does not matter how much the tenant has put into the land. Indeed, many tenants have put in an enormous amount of capital. But the landlord has still provided the land on which he farms. The problem raised by the new clauses and the schedule is that we are trying to find a basis of negotiation for possibly hundreds of completely different cases. It is extremely difficult to sort out hectarage and litreage production on a wide variety of land types and to come out with a fair result, especially when the standard quota is as high as 4,500 litres.
      Very few of the farmers in marginal land areas—this is true of my area—will get anywhere near excess quotas. Thus, I feel that the basis of the standard quota and excess is perhaps not the right starting point. I shall cite three cases from my constituency, where each of the farmers has 700,000 litres of quota. Farmer A has 100 pedigree cows. He feeds them hard, because he wants good pedigrees, and he averages about 7,000 litres. Farmer B farms well, but traditionally. He never forces his cows, and averages about 5,000 litres with 140 cows. Farmer C has a hard marginal farm, where he raises beef calves from his dairy side. He runs 155 cows, but he manages an output of only about 4,500 litres. Farmers B and C are not bad farmers. They are good, traditional
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      farmers on the sort of land that they are farming, yet the possible compensation differences between the three farmers could be enormous.
      Mr. Maxwell-Hyslop: Has my hon. Friend noticed that the difference between farmers B and C is less than the 20 per cent., which under the Minister's formula, would trigger a differential standard yield?
      Mr. Corrie: If a fanner was down to 20 per cent. below those levels, he probably should not be farming anyway. His output per hectare would not make the unit viable.
      Mr. Pollock: My hon. Friend will recall that our right hon. and noble Friend the Minister of State, Scottish Office, has implied that the Scottish arrangements have yet to be finalised. In the light of the examples that my hon. Friend is giving the House, does he believe that there is any possibility that tenant farmers in Scotland will benefit beyond the two thirds currently being made available in England and Wales?
      Mr. Corrie: I cannot say what will happen in the other place, but if any legislation passed by this House benefited farmers in Scotland more than those in England, I believe that we might be taken to court under EEC legislation for enacting unfair legislation. I may be wrong about that, and if so perhaps my right hon. Friend the Minister will correct me at the end of the debate.
      In 1983–84 a young farmer took over a tenancy partnership with a landlord in the constituency. The landlord had no interest whatever in putting a dairy unit on that farm. He said that the young man could go ahead if he wanted to. The young man spent between £70,000 and £80,000 on putting up buildings, installing equipment, and erecting a dairy. He was lucky enough to get a good quota. He is bound to go out of that farm in 1994. Last Thursday a solicitor's letter arrived saying that, although the landlord had not previously been interested in that farm's milk output, under legislation that might come forward now he would, of course, claim his compensation. That young man who invested £80,000 on the assumption that he would ultimately get some return on it will be much worse off when the time comes. Does my right hon. Friend think that the present legislation will give that young man a fair return on the money that he invested? My right hon. Friend said earlier that the maximum that could be obtained was probably about 66 per cent.
      I accept that at the end of a tenancy the landlord may find that he gets a bill for a considerable sum of money, and £30,000 has been mentioned. In my area, where there are big dairy farms, it would be much more than that. At that point he has three choices. He can go out of dairy farming, pass on that cost to the incoming tenant, which would be a heavy burden, or charge the tenant a higher rent to cover the interest on the quota that he had bought out. There is no doubt that the land value is increased as long as the quota stays with the land, so that most landlords would want to keep the quota with the land.
      I am not happy with what has come out of tonight's debate. I think that we have it so nearly right that, with proper discussion, we could have got something that pleased every hon. Member.
      I wish to raise two small points. First, I understand that if a tenant buys out quota, 100 per cent. of that will be his when he goes out and the landlord will not have access to

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      any of it. Secondly, I understand that if there is no statutory successor there is no compensation for the estate. I feel that that is wrong. If a man borrows a lot of money, puts it into a tenant farm, builds up the dairy herd and his unit and then dies, his dependants find that there is no compensation for what he has done, and this makes an enormous difference to his estate in the final reckoning.
      The real sadness, as has been said, is that the organisations in agriculture outside the House could not agree among themselves and that it has been necessary to introduce legislation at all. Once again the legislators have to take the difficult decisions and be got at from both sides because they cannot agree among themselves.
      Dr. Marek: If anything can be learnt from today's debate, it is that the subject has been introduced too late on Report. It should have been introduced in Committee, where we would have been able to intervene in each other's speeches more often, to speak more than once and to challenge or test the hypotheses that have been put forward. The hypotheses have been interesting and some of the thoughts, speeches and points in the debate have taxed my mind, and I shall have to think about them very carefully.
      I am not sure whether I am completely right in what I am about to say. Indeed, I am not sure whether hon. Members who have spoken have been completely right in their points all the time. The tenor of the debate has been that new clause 4 is not correct, that the Government have not got it right and that something ought to be done about it. I hope that the Government will take this on board as many hon. Members have made the point.
      If the Government are sincere in trying to do their best for industry and to get general agreement between the CLA and the NFU, they will take this seriously. If, on the other hand, the Government are seeking to serve their own people—those who belong to the CLA and those landowners who sometimes do not have to do anything for a living—they will do nothing; they will leave it alone and try to use their majority to force through the new clause.
      The hon. Member for Grantham (Mr. Hogg) made a series of interesting points. I thought that, by and large, he was wrong, especially when he talked about the quota not being a capital asset. I think that it is a capital asset, although not in the way that one would normally imagine. The hon. Gentleman gave an example about planning. If planning permission is granted by a council, it is not always given to the landlord of the building; sometimes it is made personal or there is a section 52 agreement. One can give other examples. When intoxicating liquor is sold in a public house, one person is licensed to sell it and the licence is granted to him, not to the public house or the company or brewery that owns the public house. One can then argue whether that capital asset falls into one category or another.
      I believe that in 1984 the Government created a capital asset to be divided between the landlord and the tenant. There is no a priori reason why this should be given to the landlord as opposed to the tenant or to the tenant as opposed to the landlord. Hon. Members may imagine that I am going to argue for a 50–50 distribution and then
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      consider the individual cases and determine them in the light of the circumstances of each case. Indeed, that is what I am going to do.
      The Secretary of State said that some tenants would get up to 66 per cent. of the benefit of the quota. I find that difficult to believe. When the fraction of the tenant's standard quota is being worked out, somewhere in the denominator of that fraction will be the rental value of the land that is being used for dairy cows. That rental value will be very high, thus making the fraction very small. I do not believe that tenants will get up to 66 per cent., and, judging by what other hon. Members have said, I do not think there is much confidence in the Minister's argument.
      8.15 pm
      The argument is very complicated, and the Minister has tidied up all sorts of arithmetic, figures and divisions. I believe that he places a value in the land itself. It is at this point that I believe a political difference arises between Conservative and Opposition Members. In my view, there ought not to be a value in the land. There ought to be a value in the land if it is being used properly, and I hope that some Conservative Members can agree on that. If a landlord is misusing land or not using it at all, no benefit should accrue to the landlord.
      Some Conservative Members attributed charitable motives to the Government and said that they were trying to do a good job, but the Government must prove this. I am a little more cynical. I think that the Government are trying to protect their vested interests and the landowners—in particular, those who do not use their land at all.
      The hon. Member for Devizes (Mr. Morrison) gave one excellent example, and I am going to give another. If a landowner—he need not be a member of the CLA; it could be some finance house in the City—happened to own an old quarry which had been filled up with rubbish with a layer of top soil, so that it was completely useless, and rented the land to a tenant farmer to see what he could do with it, and if that tenant farmer built up his dairy herd and put the land into good repair, then having paid for all the buildings and equipment, I submit he ought on retirement to have 100 per cent. of the quota. I cannot see any reason why he should not have 100 per cent.
      Equally, if a landowner had a farm that was a going concern, composed of grade 1, grade 2 land, with no problems, and he provided the cows—I know that this is a little hypothetical and not quite how things are usually done, but I am talking in extremes, and most cases fall between the extremes—and everything else for the tenant, who did nothing but take income from rent, the tenant should have no part of the quota at the end of the day because the quota would have been supplied by the landlord. The average situation is somewhere between the two, and equity is that the division should be 50–50. If the landlord and the tenant each puts in 50 per cent., however one defines it—and here the CLA and the NFU should be considered together—then each should get 50 per cent., but that is not the effect of the new clause.
      A specious argument was put forward by the hon. Member for Milton Keynes (Mr. Benyon). He said that something extra should be given to the landlord, because a tenant farmer on retirement takes money out of the industry. On the other hand, one can have a landlord who says, "I have had my income from all these tenant farmers and now I am going to retire to the south of France," and

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      he, too, moves out of the industry. If there is to be equity in these matters, what is good for one is good for the other. There can be arguments both ways.
      Next there is the problem of new entrants with which the Government must deal. I can see nothing in the Bill that will help that situation. That will require the provision of money.
      We need more time, although not too much, because tenant farmers are retiring all the time. The Government should withdraw the new clause. There should be urgent discussions between the CLA and the NFU in order to reach agreement and to make sure that, when the new clause is reinserted in another place, it will generally be seen to be fair to the tenant farmer and to the landlord. The new clause does not achieve that. Unless I get an assurance from the Government, I intend to vote against the new clause.
      Mr. Christopher Hawkins: My right hon. Friend has been told that his formula is too complex, but in my view it is far too simple. Several hon. Members have mentioned a number of other factors that should be introduced when deciding on compensation, but introducing them would inevitably make the formula more complex.
      At present, it is nothing more or less than a valuation formula which compares the proportion of the total value of the farm that is due to the tenant's efforts with the proportion due to the assets of the owner. I agree with my hon. Friend the Member for Grantham (Mr. Hogg) that that is a sound basis for the new clause. The formula may be standard and simple, and it may give a rough and ready breakdown of the contributions of the landlord and tenant to the value of the farm, but under the proposed formula that can only be done well on average, as the performance of tenants is compared with an average yield, with no regard to the difficulty of achieving that yield in different areas.
      The standard quota of 4,500 litres per cow may be achieved in the lush pastures near this building, with very little effort indeed, but in High Peak, which my right hon. Friend has visited recently, a tenant might have to be almost superhuman to achieve such a yield, given the quality of the land, the height above sea level and the climate.
      It is unfair that the standard quota does not vary from area to area. It should at least be lower in the upland areas. That should be considered. If the new clause is supported, could not a separate figure be included in the statutory instrument for upland areas, marginal land and other areas? If not, I hope that the other place will make changes along these lines.
      Mr. D. E. Thomas: This debate has clearly shown the disastrous consequences of the quota system in general. It has also demonstrated the problems that arise within the agriculture industry when this House intervenes because the parties—in this case the landlords and the tenants—have been unable to reach agreement.
      It is unfortunate that there has been a failure of agreement. I am not blaming the Department, because I am sure that it wished that such agreement had taken place in England and Wales. However, we must look at the ways in which the Government have tried to intervene in a system that has been created by the European Community
      1084
      and by the Government's implementation of the quota system. We must look at that, not only for its immediate effects on the dairy sector, but because of its potential effect if quotas are to be introduced into other sectors of the industry.
      In the area that I represent, I am particularly concerned about the sheepmeat sector. Similarly, other sectors of the industry could be subject to quotas. If we set out the relationship between landlord and tenant on the basis that the Minister is proposing, we shall create a precedent for the quota system in other sectors of the industry Fcr those reasons, we must firmly reject, as nearly all hon. Members who have spoken have done, the scheme proposed by the Minister.
      I endorse what other hen. Members have said about the timing of the presentation of the new clause. After all, the Standing Committee discussed this subject for a long time, and there was plenty of opportunity then for the Government to introduce a new clause, which we could have debated in full. I do not want to create any acrimony, because we had an extremely harmonious Standing Committee—perhaps too harmonious, but the fact that such a new clause was not introduced in Committee casts aspersions on that Committee.
      The fact that a tenant milk producer has no right over the quota once he ceases milk production is illogical. At present, the entire capita] value rests with the landlord. That illogicality has arisen because of the way in which the quota has become a transferable commodity.
      There has been some discussion about what the quota can be compared with. Should it be compared with a mineral right, or with a form of planning permission? I prefer to see it as a unique creation of the nature of the quota system itself. When a quota has become an exchangeable commodity and a value in itself, that must obviously create serious problems for those whose only value is derived from production.
      We are all agreed, as are the parties outside the House, that it is unsatisfactory that a tenant milk producer should have no control over quota at the end of a period of agricultural operation. But the Minister's proposal is equally unsatisfactory. Rather than giving the tenant no control at all, the formula is totally weighted against the tenant. Indeed, it is weighted to a new concept in landlord-tenant relationships. The normal concept, as I understand it, is that the tenancy is based on the usual forms of good husbandry and on the existing legislation covering landlord-tenant relationships, under which the tenant is expected to reach a certain standard of agricultural production. Nowhere is this related to a standard of production that is reasonably to be expected over an annual period. This is a new concept—the concept of a standard quota and a level of production that a tenant producer ought to have achieved.
      Although the Minister has explained the history of it, it is unsatisfactory that a concept devised by valuers should become an obligation on tenants. It is a totally artificial concept.
      I am particularly concerned about this concept as it will apply to the marginal dairy areas. The Minister has not addressed himself sufficiently to this issue. In such areas he allows a variation of the standard quota level if production can be expected to differ by more than 20 per cent. from the norm. That again is an arbitrary figure. What are we to do—I know that Conservative Members

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      agree with this—with the huge numbers of producers who fall between the norm and 20 per cent.? The Minister must address himself to that issue.
      Increasingly, there is serious debate within the agriculture industry and this House about a lower intensity system of production. As we move towards the increasing costs of concentrates and inputs, any system in agriculture should not discriminate against those who are working for a low intensity system, yet a competent tenant farmer with a low intensity system of milk production will be discriminated against under the present arrangements. If we are looking to move towards more organic and low input farming, this is the last thing that we should institutionalise in any system of milk quota. I ask the Minister to reconsider this, because it seems to me a major anomaly in his proposals.
      In the new clause tabled by the hon. Member for Cornwall, South-East (Mr. Hicks) we at least have a basis which is more equitable, but even this does not go far enough. I am sure that the Minister will be able to produce technical reasons why what is proposed is not entirely acceptable to him. If so, that is a much clearer argument for him, even at this late hour of 8.29 pm, to withdraw his amendments and reconsider them. After all, if he was able to bring forward his revised proposals at such a late stage, surely it is possible for him to withdraw his clause and give us the opportunity to consult further, so as to achieve a more equitable scheme on the lines of the simpler one proposed in new clause 6. Under this new clause there is no arbitrary classification, so it is a much fairer system for both landlord and tenant.
      8.30 pm
      This debate is typical of the history of the implementation of the milk quota system. From its inception we have had anomalies, and we still have them. We still have individual farmers who do not have milk quotas because they were not in production on day one, although they have invested a massive amount. We have anomalies between areas, and between marginal producers and those who farm better quality land. The whole business of quotas is an example of how not to pursue our agricultural policy. We must work to limit production, but not by methods such as this.
      Mr. Maxwell-Hyslop: I am grateful to my right hon. Friend for grasping the nettle and deciding to legislate. It had become apparent that without that impetus agreement at national level between the National Farmers' Union and the Country Landowners Association was unreachable. If anyone doubts that, he has only to read the national brief sent to Members by the CLA, in which it referred to the proposal as a capital levy and said that nothing should be paid to tenants except under a few very limited conditions. Without the impetus of the knowledge that the Minister had decided to legislate, agreement was out of reach because there was no incentive for the CLA to reach it. Hence my congratulations.
      I believe, however, that the time has now come, when this debate reaches its end, when my right hon. Friend should seek your leave, Mr. Deputy Speaker, and that of the House to adjourn this debate for two weeks. I shall explain why. As recently as 11 o'clock last Thursday, his own private office was unable to tell hon. Members when the Minister's amendments and new clauses would appear
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      on the Order Paper. Those who had to go down to their constituencies early on Friday morning, as many of us with large constituencies have to, had to leave the House that week not knowing the Minister's proposals. I make no complaint of that. My complaint is that, since the amendments and new clauses were, in effect, being seen by those hon. Members for the first time this Monday, it was wholly unreasonable to expect us to legislate on that basis only two days later. That then became three days later.
      The programme pressures which were impelling the Minister into doing that and which were not of his making have now eased dramatically. There must have been a very large slot in both Houses allocated to the Shops Bill, and with the defeat of that on Monday the pressure ought to be off my right hon. Friend. It must be crystal clear to him that, despite his best endeavours, he has not yet got it right in a number of respects.
      It is not enough to look at the elegance of the formula. One has to anticipate its consequences. They are that the representative tenant in milk production will get only about 25 per cent. of the value of the quota. If that is so, then in the judgment of many Members my right hon. Friend has got his formula wrong.
      It is not enough just to fiddle the standard yield, in which determination the House can play only a trivial part, because it is to be done by negative resolution statutory instruments. That means that it is unamendable. We know that there are many statutory instruments against which the House wishes to pray for which there is no time or which, when the evening comes, overrun. So if it is to be done by statutory instrument at all, it should be done by the affirmative resolution procedure so that there has to be a debate. Under the formula which my right hon. Friend has written into his new schedule, however, whatever one does to the standard yield one still cannot get a high enough percentage for the tenant where that is the just and proper thing to do.
      I am glad that my hon. Friend the Member for Milton Keynes (Mr. Benyon) momentarily appeared in the House, satisfied himself with his own argument and disappeared, because it revealed the gaping hole in the CLA case, which is this: without the tenant's milk production on the critical date there would have been no quota. It was the tenant in milk production who created that quota. That is what the CLA at national level—as opposed to local level in Devon and doubtless in many other counties—has failed or refused to recognise.
      I hope that he did not mean it, but my right hon. Friend certainly gave the impression that he thought that the National Farmers Union was careless of the interests of new entrants. That is not my experience of the National Farmers Union at Devon county level—and it is the largest branch in the country. In discussion with members about milk quotas, it recommended that, when we brought in a system of transferring quotas, 10 per cent. of the quota transferred should be taken into a pool specifically designed for hardship cases and new entrants. That is the answer to the false dilemma put by my hon. Friend the Minister of State when he challenged the hon. Member for Brecon and Radnor (Mr. Livsey) to say where he would get the spare quota from. Devon county has already suggested where it should come from. So have many other NFU branches. They say that it should come from the 10 per cent. tax on transfer of quota.

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      This shows that the Devon county branch and, I am sure, many other branches of the NFU have given thought to the interests of new entrants. I am glad to say that it demonstrates that the Minister's assumption that the National Farmers Union is careless of the interests of new entrants is poorly substantiated by the facts.
      Another fallacy put out by my hon. Friend the Member for Milton Keynes is that substantial compensation for milk-producing tenants will force landlords to take the land in hand. I would have thought that the logic was the exact opposite, that if they had to pay the compensation if they took it in hand, and could pass the duty of paying the compensation on to a new tenant if they get it again, then the larger the compensation to be paid the greater the incentive to the landlord to relet rather than to take it in hand. I wish that my hon. Friend were here because it is only fair that he should have the opportunity to answer the accusation that there is a gaping hole in his logic. However, it is not my fault that he is not with us.
      I intervened in the speech of my right hon. Friend the Minister to ask—and he gave no satisfactory reply—why a 20 per cent. threshold should be considered right now when a 15 per cent. threshold was considered right under the milk quota regulations for triggering the special hardship quota because of, for example, the sickness of animals, exceptionally bad weather, the illness of the farmer or other specific grounds. Presumably my right hon. Friend must have considered 15 per cent. to be right because he wrote it into the regulations.
      Many of us are extremely apprehensive about the yawning gap whereby the arbitrators will be debarred from arbitrating, even on the basis of my right hon. Friend's formula. He was right to say that I have pressed on him the designing of a formula that would achieve, as far as possible, consistency in arbitration, throughout the United Kingdom. Unless there is consistency, by definition there will be injustices. New clause 6, which is the considered opinion of the NFU—which has seen, albeit at very short notice, the Minister's new schedule—provides the fairest approach.
      None of those who have signed their name to new clause 6 claims that it is perfect. There is a great deal in my right hon. Friend's new clause that could sensibly be attached in another place to the end of new clause 6. Alternatively, my right hon. Friend could accept my advice and ask permission of the Chair and the House to adjourn the debate for a fortnight when it is concluded—not now—and then bring forward a new amendment. It would be sensible to attach to new clause 6 many of the provisions relating to sub-tenancies, Crown land and many other matters that are so excellently drafted in the Government's new clause.
      The trouble is that, for procedural reasons, if we deal with the matter tonight—which I do not advise—either new clause 4 must be withdrawn or it must be defeated in the Lobby because otherwise we shall not have the opportunity to put the question on new clause 6.
      I hope that I have demonstrated to my right hon. Friend that hon. Members are trying to be reasonable. They are trying to understand his difficulties as well as the difficulties of the industry. They give him due credit for grasping the nettle and deciding to legislate in the Bill—something for which many of my constituents have asked—and avoid delay so that people do not go out of
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      the industry deprived of all compensation. However, it is even more important to get this right than it is to deal with it three weeks earlier or three weeks later.
      My substantive plea to my right hon. Friend is that now that the events of Monday have given the Government the opportunity to take that course—I made this point on the business statement earlier this week, so it should come as no surprise—the Bill should be postponed so that he can think about what will have been said by the close of the debate, discuss it with the bodies with which he tells us he has been in deep discussion, and come up with the best answer and with a procedure that will he as near analagous as circumstances permit to our having had a Committee stage and then a Report stage. I believe that that is in everybody's interests, including those of the Government.
      8.45 pm
      Mr. Anthony Nelson: I, like other hon. Members, have tried to follow the debate closely. I have sought to divine the preferable course of action and decide whether to support new clause 4 or new clause 6. I have found it exceedingly difficult to decide exactly what my course should be. I see arguments both ways. I do not doubt the intention of the signatories to either new clause to seek an equitable and durable solution that will gain the greatest credence and support on both sides of the House.
      As many hon. Members have said, my right hon. Friend was placed in an extremely difficult dilemma which, to some extent, has presaged the difficult time problem with which the House is faced. My right hon. Friend was fair in writing to a number of hon. Members with a particular interest in these matters, especially those with dairy farmers in their constituencies, setting out his intentions before the detail of the new clause was tabled. My right hon. Friend has sought to recognise a legitimate interest of landlords as the providers of the constituent part of the asset.
      As the debate progressed, I have found myself considering those arguments in relation to particular cases in my constituency, where many dairy farmers, tenant farmers and landlords have been to see me on this matter. I have reached the conclusion that there is a case for the land to be considered part of the asset, even though largely I accept that the asset is wholly derived from the windfall of the imposition of quotas. Indeed, we are talking about an artificiality built upon an artificiality. The inevitable implication will be both capricious and inequitable. The drafting of any new clause must be oriented towards reducing to the minimum the capricious nature of that impact and the inequities that will result.
      Although I recognise that the asset derives largely from the imposition of the quota system, I am bound also to consider the many cases in my constituency where the landlord provides the land. That land is suitable for dairy farming, has always been farmed in that way and is let on the basis that it will be farmed as dairy land. I find it difficult to accept that such a landlord might not he entitled to any proportion of the quota under the terms of new clause 6. Unless he had provided assets such as machinery, buildings and so on, he might be deprived of any interest. Therefore, I see strong arguments in favour of the Government's new clause.
      I am also influenced by the problems of newcomers, about whom much has been said. I have conflicting views because I recognise that new clause 6 may have a more

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      prejudicial impact on newcomers than new clause 4. On the other hand, I must question the extent to which I should be worried about that. The problems that newcomers will face, which undoubtedly will be considerable, are a product of all the anomalies, artificialities, quota and apportionment. At the end of the day, what is wrong is not the impact on the newcomer because it will cost him a great deal. The problems are not the result of the new clause; they are the result of the imposition of the quota system. It is an inevitable consequence, and we must face the fact that there will be difficulties.
      One difficulty will be that of the incomers. My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) mentioned ways of solving the problem. Perhaps in time, when quotas prove not to be immortal, those problems will go away. I would prefer not to be faced with the decision this evening as to what course to follow.
      If possible, we should have a new clause 5 which would find some common ground, for I fear that there will be difficulties with the Government's new clause as well as with new clause 6. I am especially worried about the way in which the tenant's fraction has been defined. The fact that it will be assessed principally on the basis of the marginal improvement in rent will not necessarily reflect equity, for the basic rent which a tenant pays may not be a precise definition of the extent to which, at any moment, the landlord has put assets in or has an interest in the quota and the tenant has at the same time. Therefore, any appreciation of the rent and any formula based on that appreciation may be wholly capricious in determining what I assess will be the most important element of the compensation which the tenant will receive—that is, the tenant's fraction of the standard quota—apart from consideration of excess, which may have a capricious and similarly inequitable impact.
      My right hon. Friend will be the first to accept that there will be problems with the imposition of the proposal. Therefore, I am driven to the conclusion that there are faults with new clause 4. Although it has much to commend it, there are problems with new clause 6, and that is why I would prefer to adopt the course of action described by my hon. Friend the Member for Tiverton. A little more time should be given to hon. Members like me to obtain more representation instead of having to rely on the hurried phone calls and telegrams which I have received from my dairy tenant and landowning constituents. There should be more sober and careful assessment of the way forward.
      Knowing the way in which Governments work, I suspect that that is not on the cards. Ministers want to get their business through, and if they have to give way tonight they will see it as a defeat or a concession to the House, or bringing into doubt a central element of the Bill. They should not see it in that way. The Bill might enjoy the good will of many hon. Members later if we had more time and if some of our fears could be satisfied, which they have not been this afternoon.
      For that reason, I hope that my right hon. Friends will' accept the course of action urged upon them. If they fail to do so—this may be an incentive for them to do so—I shall be driven to the conclusion that I should resist new clause 4 and should give preference to new clause 6. But that would be my fallback position against my preference that the Government should defer this matter.
      Sir John Farr: I hope that my hon. Friend the Member for Chichester (Mr. Nelson) will forgive me if I do not follow him too exactly. I wish to speak more broadly on new clause 6.
      I was disappointed with the arguments of my right hon. Friend the Minister of Agriculture, Fisheries and Food in pointing out why he did not think this was an especially good new clause. He said that the supply of tenants might dry up if the incoming tenant's share of the quota became larger, as would be the case if our new clause were accepted. I assure my right hon. Friend that the supply of incoming tenants will never dry up.
      My hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) said that, in addition, there would be a 10 per cent. pool, or levy, for special hardship cases for incoming tenants. That will be available to help to ease the financial problems of an incoming tenant. I am far more concerned with our new clause, which broadly lays down that the quota should be divided 50–50 and that the outgoing tenant has proper recognition of the money, effort and the lifetime of work that he has put into the enterprise that he will be leaving. That is one reason for new clause 6.
      I am suspicious of the new clause, because it talks about a standard quota. It takes up seven and a half pages of the Amendment Paper and is extremely complex. The new clause tabled by my hon. Friend the Member for Cornwall, South-East (Mr. Hicks) and others is much simpler. It covers just more than one page, and it works on the basis of a 50–50 split, which we believe is an equitable basis. I am told that when one has mastered the standard quota system laid down by the Government the value to be attributed to the tenant in many cases could be only 25 per cent. That will often produce cases of deliberate and unacceptable hardship and unfairness.
      I join my hon. Friend the Member for Tiverton in calling for a chance to talk about the proposal. My hon. Friend has been lucky enough to receive representations from his constituents. My constituents are not fully aware of the consequences of what the Government are trying to do. By telephoning the NFU and the CLA today, I have obtained their views on the Government's proposals and new clause 6. I see no hurry for this measure. We have all the time in the world now that the Shops Bill has fallen by the wayside, and the right and proper way for a good, cautious, sensible Conservative Minister to proceed is to get a response from the people engaged in the industry and to allow Members of Parliament to receive representations from their constituents. He could then proceed in a more cautious and sensible way.
      My right hon. Friend is proposing to impose upon the industry this frightful new additional complexity of a standard quota. I understand that it is the production level that an efficient producer should have reached, yet the figures on which standard production levels are based are not included in the schedule. The schedule calls for the restriction of a tenant's share of standard quota to the ratio of the rental value of his improvements to the rental value of the farm. This may often give the tenant only 15 to 20 per cent. of the average standard quota. Even if the tenant was solely responsible for building up the quota, it could often be little higher than 30 or 40 per cent.
      I have heard of several cases of considerable unfairness. One is a small to medium specialist dairy holding with buildings, most of which are provided by the landlord, where the tenant practises an efficient, low-cost forage

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      system with output below the standard quota. This would qualify for little or no compensation under paragraph 5(c) of the schedule. In addition, a viable dairy farm created wholly by the tenant's investment and expertise from bare land, with no investment by the landlord, would not qualify, even with the standard quota, plus the value of output in excess of standard quota for more than about one third of the total value of the quota.
      9 pm
      It appears to me that the proposals in the Minister's new clause and new schedule are not only hasty, but ill-conceived and unfair. I join my hon. Friend the Member for Cornwall, South-East in criticising the CLA and NFU for not coming to an agreement, helping the Government and removing the burden of making the decision from the Minister's shoulders. I regret, in particular, the fact that help was not provided in a far more forthright and ready manner by the CLA. The Milk Marketing Board opposes the Government's schedule as being unfair, and, as has been pointed out, that view is of great significance, because the MMB has no axe to grind. We know that the NFU is opposed to the Government new clause, and that the CLA is, too. We have heard about the agreement reached by the CLA and the NFU in Devon.
      The three counties branch covering Leicester, Rutland and Northampton, has also reached agreement on the matter. I am informed by the secretaries of the NFU branches in Leicester, Rutland and Northampton and the three counties CLA that the agreement was sent to Swallow street, headquarters of the CLA, 10 days or a week ago as soon as the terms of the agreement were known. More remarkably, not only was there agreement between the CLA and the NFU in the three counties, but after a two-day conference representatives of the Tenant Farmers Association, the valuers organisation, the estate agents and even the National Union of Agricultural and Alllied Workers, as represented by the Transport and General Workers Union, also gave their agreement.
      They all gathered together to discuss the Minister's proposals on sharing out the quota and to try to provide an alternative proposal that could attract their united agreement and be put to the Minister. They reached complete unanimity. The basis of the agreement sent to Swallow street a few days ago was that the quota should be distributed on a shared basis and that valuers should help to decide any difference. The formula should be such as to make possible a ratio of one to 99 in favour of either landlord or tenant. After a full day of conference, that is the basis that was agreed on. It is far more sensible than some of the ideas contained in the seven or eight pages of the schedule with which we are struggling tonight.
      I shall support my hon. Friend on new clause 6. I hope that my right hon. Friend, who is a sensible man, will heed the message, that there has not been enough time. If the three counties branch can get together with representatives of the unions and everyone concerned and reach agreement, the CLA at national level should be told to pull its finger out.
      Mr. Jim Spicer: First, I commiserate with my right hon. Friend the Minister who has come straight from his sick-bed tonight. It was brave of him to do so. Secondly, I congratulate my right hon. Friend the Minister of State on a happier event—the birth of a daughter. We all congratulate him on that.
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      There are three things that most farmers and, I think, landlords say that they want on this issue. First, they want agreement. Secondly, if they cannot get agreement immediately, they would like to see most of the issues dealt with by arbitration. Thirdly, they want as much flexibility as possible. With that starting point, surely it is not beyond the wit of man to arrive at some conclusion. As has been said tonight, it is quite disgraceful that, given those three points, the CLA and the NFU could not sit down and thrash this out, as they have been able to do in some areas. I will not say which.
      My right hon. Friend must intervene, but he cannot be all things to all men. It is unbelievable that this storm has built up purely and simply because he was told by everyone that he must intervene, and now that he has done so, nobody likes it. We should all be ashamed of that disgraceful position.
      I agree with hon. Members who have said that the schedule is complex. I left the House last Thursday night and went to my constituency. I recovered from the Shops Bill on Friday night at a local church, and on Saturday morning this storm broke on me. I was shooting in the dark and that is wrong. I did not see the schedule until I arrived at the House on Monday. That is bad, particularly as the schedule is so complex. At first sight, the schedule seems too restrictive. I must say how grateful I am to my right hon. Friend the Minister for the way in which in his opening speech he seemed to make it clear that there was much more flexibility involved than I had thought.
      Did my right hon. Friend say that if there is no initial agreement, either on the standard quota or on other related matters, decisions could be left to arbitration? That is an important point because if that is the case, it is a big step forward. For the reasons that have been mentioned by other hon. Members I do not like the fixed figure of 4,500 litres. If one imposes such a restriction on the low input farmer and the farmer with low-quality ground, one imposes a restriction on the poorer parts and gives more to the richer parts. That must be wrong in essence.
      All hon. Members have cited examples, and it is much better to do that than to read through the seven and a half pages of the schedule. I shall cite a simple example. In 1971 a good farmer moved to a grazing farm and decided to go into dairy farming. The landlord was not interested in the farm being anything other than a grazing farm. The farmer put every single ounce of work and equipment into that farm. If anyone suggests that the farmer- should do anything other than hand it back as a grazing farm, he is wrong. I cannot accept the figure of two thirds being the absolute maximum because such a person should receive more than that. Equally, if he has not done the job properly, he should receive far less. I hate the idea of any restrictions being involved.
      We all understand the need to encourage new tenants to come in. We understand, too, the restrictions that may be placed upon them when they come in, in terms of the massive burden of cost resulting from the high pay-out on the quota by the landlord, which the tenant must then recoup. We must not make too much of that because, try as we will, the number of tenanted farms that come on the market each year is relatively small. However this matter is dealt with in future, my guess is that the chances of getting more tenant farmers coming forward will decrease rather than increase. Most farmers know that, looming

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      over them, is a general election, with the awful, incredible thought that the Labour party could win, and we know what would happen then.
      Mrs. Kellett-Bowman: Like nearly all other hon. Members who have spoken in this debate today, I am sadly torn between the amendments before us. Ever since quotas were introduced, I have been urging the Minister—and since he is my next door neighbour I can get to him readily enough—to find a fair solution to the question of the allocation of the capital value of a quota between a landlord and a tenant. We have all acknowledged in the House tonight his considerable efforts to persuade the CLA and the NFU to come to an amicable arrangement. I can well understand his extreme exasperation that they have failed to do so and his determination, in the absence of such an agreement, to put forward his own solution.
      My right hon. Friend has said, with his usual modesty, that such a solution will not suit everyone. He is absolutely right. The only problem is that I have yet to find anyone that it does suit. There is always a slight disadvantage when one has to try to explain these matters to one's constituents. There are so many imponderables facing us in the seven and a half pages of the schedule. Discussion on the matter yesterday was very much hampered by the fact that one of the main amendments was so badly garbled on the paper before us at the time as to be literally incomprehensible. My right hon. Friend's private office was kind enough to send across to me a photostat of the correct version, but by then it was too late for proper discussion. The last train to my part of the world leaves at 7.15 pm, so that my people had gone before I obtained it.
      It is desperately important, as speaker after speaker has said, that we get this matter right from the beginning, because we are unlikely to get another bite at the cherry. Many farmers in my constituency would prefer discussion on the matter to be postponed. Several hon. Members have suggested that and have requested a separate Bill to be introduced to deal with the share-out of the value and nothing else. We could then really get down to the nitty-gritty and properly consider the details in Committee, rather than try to deal with the matter in half a day on the Floor of the House.
      As my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills) said, we may be putting at risk any tenant who may be retiring shortly or the widow of any farmer who may not continue to run the farm. In his eagerness to get something onto the statute book I am sure that my right hon. Friend had in mind protecting this group of people. I should therefore be reluctant to have nothing in this Bill, but I am bound to say that, if we have to have something, I should prefer new clause 6.
      I shall listen carefully to the winding-up by our rather jubilant Minister of State, and I hope he will say whether the standard quota is taken before the 10 per cent. cut, as put to him by the Leader of the Opposition, and give us some concrete examples of the likely share-outs. If he has time, he may like to expand a little further on the effect of the measure on marginal land farmers and low input farmers, and on how it will relate to the various breeds of cattle. Unless these answers are good, I cannot imagine
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      that many of the hon. Members who have spoken in the debate will vote for new clause 4; rather, they will opt for new clause 6.
      Mr. Keith Best: I realise that any expression of contentment that I may have detected as I rose to speak is more in realisation of the fact that I am the penultimate Back Bench speaker in the debate than in anticipation of what I may say. I congratulate my right hon. Friend on having tried to find a solution to this imponderable and difficult dilemma with which he and the House are faced because there is no agreement between the organisations that are largely responsible for maintaining and promulgating the ideas of agriculture. That is a sad reflection, but it is not so much a reflection upon them as an acknowledgement of the difficulty of the matter with which we grapple.
      I am much persuaded by the arguments of those hon. Members who have sought to persuade my right hon. Friend that a further look at the matter would be advantageous. It is desperately important that we get this right. The matter has raised tremendous controversy. I can only hope that, after the Shops Bill, the bombing of Libya and now compensation for tenants, we never have another week like this in the House of Commons, although I suspect that we may well do so.
      9.15 pm
      My right hon. Friend will know that Wales is the land of the small farmer. He knows that well because he has had close family connections with my constituency. Wales is also the land of the tenant farmer. Wales may be the land of the small farmer but it is also the land of the loud farmers' voice, and my young English colleagues will know that that voice is amplified twofold because we have not one farmers union but two.
      There is profound disquiet at these proposals in Wales because of how they may affect poor tenants. Wales, as I said, is a land of tenant farmers and they tend to be poor. Herein lies our great problem of trying to achieve an equitable compromise between the rights of the outgoing tenant and not inhibiting the incoming tenant.
      I recognise that some tenants have put far more than others into the milk quota over a long time. A formula which has a fixed element, whether it is 50–50 or 25 per cent. coming to the tenant, is not an equitable way of dealing with the wide variation that must exist in everyone's contemplation. Indeed, many examples have been brought before the House today.
      One must also have regard to the poor tenant who wants to come into agriculture and who will be inhibited or prevented from doing so if he has to find an enormous sum in order to buy in effectively because of the amount of compensation that has been paid to the outgoing tenant. That is important in Wales.
      I want to hear my right hon. Friend's views on marginal land. That has been mentioned by many hon. Members tonight. It is particularly significant that several hon. Members from Wales have spoken in the debate tonight and all have mentioned marginal land. A large part of my constituency of Anglesey is marginal land but there is a significant argument, which I have advanced, that the whole of Ynys Môn should be regarded as a marginal area. Indeed, I am sure that the hon. Member for Caernarfon (Mr. Wigley) would support me in that view. It is poor

      1095
      land and the farmers work it extremely well. It is a constant source of amazement to me that they extract what they do from such poor quality land.
      If my constituents find that they will be discriminated against by the formula in new clause 4, that will be a matter of grave concern and dissatisfaction which agriculture cannot afford at this time, after all the tribulation through which it has been.
      I shall listen carefully to my right hon. Friend and I hope that he will say a lot about the flexibility that will be possible within the existing formula, and particularly how those on marginal land wilt be safeguarded. I hope that we may look at this again but at the moment I am more persuaded by new clause 6 than by new clause 4 unless he can persuade me to the contrary.
      Mr. Nicholas Baker: I certainly cannot complain that my right hon. Friend the Minister has brought forward the proposals very speedily and without leaving us much time, because I am one of those who said that, in view of the lack of ability of the Country Landowners Association and the National Farmers Union to agree—which I deplore as much as anybody who has spoken in the debate—it was necessary that he should do so. Perhaps one of the reasons for the length of the debate—five hours is quite a long time to discuss the subject—is that many tenant farmers in our constituencies have got or been given the wrong end of the stick about some of my right hon. Friend's proposals.
      I start from the position that the quota is a right in land, rather like a mineral right, and is therefore something in which a landlord has an essential and basic interest, albeit at a relatively low level. Above the landlord's basic level, the rest should be capable of apportionment between the landlord and the tenant.
      The reason why I put my name to new clause 6 was partly to ensure that it was debated and partly because, looking at the different kinds of valuation, I favoured the input basis of valuation, which is looking at what both sides have put in by way of investment in buildings, equipment and so on, rather than what I call the output basis, which is the one adopted in new clause 4, which is based really on the rent that those buildings and parts can attract.
      However, I see some severe problems with new clause 6. It is not clear to me how the landlord's interest is to be recognised and it does not seem to me to address the problem of valuation, which is bound to be complicated. Arguments that it is complicated are really a statement of something that cannot be avoided.
      On my right hon. Friend's clause, I too would like to hear more about the lowering of the 20 per cent. variation level. I would regard that as rather high and would hope that it would be possible to have greater flexibility. I should like to see a greater differential between the maximum and the minimum which a tenant can obtain as a share of the quota. I have some qualms about the fact that it is for the Minister to decide what the standard quota is.
      I look forward to hearing what my hon. Friend the Minister of State, the new father of the House, has to say.
      Mr. Home Robertson: I think that a lot of us had hoped that this debate would have been completed some time ago, but I join other hon. Members in congratulating the Minister of State on the birth of his baby daughter. We wish his wife and daughter well and we wish the Minister
      1096
      of State himself many long, sleepless nights when he will be able to reflect not only on the consumption of milk but also on milk quotas and other such matters.
      As the hon. Member for Ynys Môn (Mr. Best) said, this has not been a very happy week for the Government. They started getting themselves into trouble over the Shops Bill, they got a lot of people into considerably more serious trouble midweek over the bombing of Libya, and, to go from a very serious matter to what many people might think is a rather peripheral matter, I fear that they may have got the question of tenants' rights with respect to the milk quota wrong too.
      I awaited with bated breath to hear what the hon. Member for Dorset, West (Mr. Spicer) would say when he rose to be the last speaker on the Government side. I wondered whether he would perhaps give some support, or even wholehearted support, to the Government, because we have gone through the five hours of this debate without any hon. Member giving unequivocal support to the Minister. [Interruption.] The hon. Member for St. Ives (Mr. Harris) is saying that the hon. Member for Milton Keynes (Mr. Benyon) was supporting the Government, but he was going in the opposite direction by saying amazingly, that it was too generous to the tenants. So absolutely nobody is happy with new clause 4. The Government have got themselves into a spot of bother.
      There is considerable merit in the constructive suggestion of the hon. Member for Tiverton (Mr. Maxwell-Hyslop) that the Government should go away and think about this and return with a better-thought-out proposal upon which there might be consensus. Manifestly, there is no consensus for the present package.
      It has been made very clear during the debate that this issue is important to the dairy industry. It is extraordinary that so many right hon. and hon. Members have referred to it. They have obviously been lobbied very strongly by their constituents. That is not surprising. According to my information, 40 per cent. of the dairy farms in this country are tenanted farms. It is therefore a matter of considerable importance to a high proportion of those who make their living from the dairy fanning industry. There is evidence that two weeks ago the National Farmers Union may have been surprised by the strength of feeling among dairy farmers. The original formula suggested a 70–30 split in favour of the landlord. The NFU found that it was under pressure at that stage. The Government find that they are under pressure this evening over a different kind of formula.
      Whether we like it or not, the milk quota is a unique capital asset. I do not want to dwell upon the Minister's past unhappinesses, but he will be aware that the Government blundered into this in 1984. It would be inappropriate to go into the circumstances, but it is worth recalling that this is a temporary five-year quota scheme that is supposed to disappear in 1989. I very much doubt whether it will disappear then, because we are writing on to the statute book another eight pages that are based upon the perpetuation of this scheme. The quota could attract a value of as much as £50,000, which somebody might buy or sell, on even a comparatively small farm. Therefore, it is difficult to imagine that the quota will disappear. We do not necessarily suggest that it should disappear, hut it is time to dispel some of the fictions about the scheme.
      It is unfortunate that what began as a short-term black market is about to be enshrined in statute. A black market in the quota has been operating in one way or another. We

      1097
      want the system to be flexible. It is right that the quota should be able to be moved from one unit to another, but when quota began to be purchased and leased we found that people were getting into trouble. In the Farmers Weekly of 7 March there is an article which reads:
      "Hundreds of speculators now have milk quotas, even though they have no intention of becoming dairy producers. Many of them have never been producers and their speculative holding is upsetting many producers who are short of quota and cannot afford to buy more. Some landowners are keeping quota just to protect the value of their land."
      Not surprisingly, the Milk Marketing Board is worried about this. It means that a quota that ought to result in the production of milk is not being used.
      It might have been better—I say this, admittedly, with the benefit of hindsight—if the quota had never become a tradeable commodity and if any quota that was relinquished, for whatever reason, could have reverted to a quota bank for redistribution on a fair basis. That would have overcome the problem facing incomers to dairy farming, to which a number of hon. Members have referred. However, that has not come to pass and it is no good complaining about the background to the problem. We must confront the problem and do something about what I acknowledge is an urgent matter. Given that this commodity has a value, it is urgent that there should be a fair distribution of its value and that something must be done about the problem.
      No right hon. or hon. Member who has taken part in the debate has expressed confidence in the new clause. The House is being bounced into taking a decision on a very substantial package. It will be possible to amend it only in the House of Lords. I wonder how many tenant dairy farmers will be content that their prospects under this system will be settled for them by the House of Lords? It will not be easy for the tenant dairy farmers lobby to get a fair hearing in that forum. The question of the Scottish dairy farmers will be dealt with in the House of Lords. The Minister may suggest that it would be possible for this House to deal with whatever comes back from the House of Lords as Lords amendments, but that is unamendable, and something which we will have to take or leave. It is clear that the package is not fair, but we are thankful for small mercies in that the Minister has recognised that the tenant is entitled to a share of the valuation.
      9.30 pm
      Under new clause 4, the bulk of the standard quota will belong to the landlord, and the tenant will have to rely mainly on the excess for his share of the valuation. No account has been taken of the 10 per cent. cut in production which was taken when quotas were introduced. Nothing is being done to avoid a penalty being imposed on non-intensive producers, nor on marginal land farmers. About 25 per cent. of the valuation will go to the tenant, in spite of the fact that in many cases the tenant may to a large extent have built up the value on which that figure is based by his own investment and by his own efforts.
      New clause 6 provides a basis of a 50–50 share-out. That is a basic calculation which may vary according to the inputs of the two parties. It seems to be a fair way of approaching this point. That is why I strongly advise my hon. and right hon. Friends to reject new clause 4 so that the House can vote on and accept new clause 6 in due course. I put it to the hon. Member for Wealden (Sir G.
      1098
      Johnson Smith), who seemed to suggest that there was some way of fudging this issue and hoped that there would be an easy way out of it, that that will not do. If the House does not reject new clause 4, we will be saddled with this proposal, which has been seen to be loaded too heavily in favour of the landlord. We should not take that option. We should vote against new clause 4 and accept new clause 6.
      Mr. Gummer: May I thank the Members of the House for their generous congratulations which were addressed to me but which I know are to go to my wife. Whether or not I should pass on to her the kind remarks of the Member for Torridge and Devon, West (Sir P. Mills), which referred to her in what I must say were rather bovine words, I do not know. Perhaps she will not read that particular part of Hansard. I must say to the hon. Member for Brecon and Radnor (Mr. Livsey) that the way in which he suggested that this was a somewhat early arrival was, it seemed to me, part of a deep party political purpose to undermine the confidence of the strict Baptists in my constituency about a matter on which they place a considerable amount of weight. I know it was a slip of the tongue, and that was the only slip involved.
      My hon. Friend the Member for Cornwall, South-East (Mr. Hicks) introduced his new clause in a way which I think commended itself to the House. I hope that he will be helped by the answers which I give, not only to him, but to other hon. Friends and hon. Members as I go through this. There have been some very direct questions asked, and I shall have to answer them.
      I do say that it is natural that the clause which has been put down by my right hon. Friend is one which does look more complex than his own, but that is partly because it covers a whole range of areas which need to be covered and which, his, I think, does not. My hon. Friend has accepted that to some extent: I do not think that there is division between us on it.
      This is a complex matter, not just because it is an argument about who owns the quota or an argument between landlord and tenant. It is an argument, first, about the ownership of quota, dependent upon the circumstances which, as every hon. Member has agreed, differ widely; indeed, they might be said to differ from farm to farm and from relationship to relationship. Further, it is an argument between outgoing tenants and incoming tenants. I do not think that any hon. Member can forget that in seeking an equitable solution we cannot ignore the fact that in almost all cases—certainly in almost all cases which involve one tenant going out and being replaced by another tenant—the actual cost of the compensation to the tenant who goes out will come from the pocket of the tenant who comes in. That must be taken into account in the discussions.
      In reply to the hon. Member for Brecon and Radnor, I would say that it is possible to postulate a scheme which would enable help to be given in the limited number of hardship cases. However, we are not talking about a limited number of hardship cases but about every case in which one tenant succeeds another tenant and in which there is a pay-out on the value of the quota. In every case that we are talking about, we are discussing a quota on which people who were in dairying before never expected to get any pay out. What tenants expect at the end of the

      1099
      tenancy is to be paid for improvements. A description of that was given graphically by my hon. Friend the Member for Grantham (Mr. Hogg).
      I remind those of my hon. Friends and Opposition Members who talked about hardship to the tenant that no tenant will suffer hardship because in every case in which there is a payment the tenant will be paid something which he could not have expected to get up to now. I hope that hon. Members realise that if we do not make a change, there will be no payment to tenants in these circumstances. Therefore, it is unfair to suggest that the Government have not had the tenant's interests considerably in mind in the drafting of the new clause.
      The argument has been fiercely fought. I hope that hon. Members who were present listened carefully to the assertions of my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) and of my hon. Friend the Member for Milton Keynes (Mr. Benyon). In their speeches they made a statement which showed that they had taken a particular view about where the overwhelming weight of the value of the quota should be placed.
      In this short debate I do not wish to stand on one side or the other. To argue that we have got it wrong because those two views are still unreconciled is to ignore the fact that the two views are unreconcilable because they take a wholly different view of the nature of the quota. Because the people representing those two views have not been able themselves to reconcile them, the Government are put into the position of producing an answer. I do not think it stands up for the hon. Member for East Lothian (Mr. Home Robertson) to say that that in some way casts doubt upon the strength of the position put forward because people still wished that their view had triumphed and that the other view had not been taken into account. That is the situation in which we find ourselves.
      My right hon. Friend has been right, first, to seek to answer the question; secondly, to put down the new clause; and thirdly to say to the House that any delay means that tenants will leave without compensation, which must be damaging if hon. Members think that they have any rights in the matter. Given the short time that hon. Members have had to debate the matter, I accept that we must try to pay close attention to the points that have been made.
      I can answer directly the question asked by the hon. Member for Pontypridd (Mr. John). He asked whether the 10 per cent. was taken into account. It was, and that is the reason why the standard quota is lower than the average quota. It was said from the beginning that the problem with the average quota is that it depends upon the quotas that were granted. Those quotas were diminished, in some cases by 10 per cent., and that was because of the arrangements made at the time by the Government. One could say that all this should be left to a valuer and that there is no reason to have this difference put into the Bill. However, there is a good reason for it.
      Once we get into the business of trying to value quota that might have been given, we are in great difficulty. That is because we would be asking the incoming tenant not only to pay for the quota which has been granted and which he might be able to use to gain the money to pay compensation through the landlord, but also to pay compensation for quota that had not been granted. Therefore, he would not have the benefit of that quota to enable him to gain the return to pay his ingoing premium or his extra rate.
      1100
      I have made a note of the points made by my hon. Friend the Member for Torridge and Devon, West (Sir P. Mills). He asked about the definition of the standard quota and then spoke about the 20 per cent. I shall come back to that in answering the points made by my hon. Friend the Member for Tiverton, his neighbour. On the matter of marginal land and low-input and low-output farmers, the present clause covers the problems my hon. Friend placed before us. We are determined that the clause should solve these problems and I give the undertaking that we shall watch carefully to see that it does what we want it to do, which is to provide a fair share of the quota to people who are in either of those positions. I hope that meets the needs which have been rightly mentioned by hon. Members who represent such constituents.
      I think the House recognised that the points raised by my hon. Friend the Member for Milton Keynes (Mr. Benyon) represented a totally different point of view from that which was presented by other hon. Members. The hon. Member for Caithness and Sutherland (Mr. Maclennan) made the point that there are two totally different views about this and said we could not take any credit for our view. I should like to remind him of what The Scotsman said in an article on 12 April. It said:
      "This failure to satisfy either the landlord or the farmers' organisations is an indication that it may not be a bad formula after all."
      I am sorry that that has to be said but I fear it may be true. There is a real lack of understanding on both sides of the other side's position. The two sides are far apart and it would be wrong of us to believe that merely by putting this off for another two weeks we would be able to give an answer which would satisfy people more than this, although I hope that we will use that time to look carefully at the points raised by hon. Members on both sides of the House.
      An hon. Member asked about taxation. Some hon. Members defined this quota as a practical gain and payments for that will be subject to capital gains tax in the normal way. The hon. Member for Rother Valley (Mr. Barron) said that he was looking for a fair deal on retirement for the tenant. I hope that the House will accept that that is not what we are seeking, because the tenant receives part of his deal on retirement in the form of the payment that he receives for the improvements that he has made and, of course, through the arrangements that he has made for his retirement. Until very recently there was no question of a capital payment being made. That has come about because of the so-called creation of an asset.
      9.45 pm
      Mr. Nelson: Does my right hon. Friend accept that the extent to which such dairy farmers have been able to provide for their retirement during their working lives has been limited by the imposition of quotas? That is why the apportionment of such quotas on retirement is relevant.
      Mr. Gummer: I am sure that my hon. Friend is right about apportionment being relevant. But it was suggested that that was all that we were talking about. I am sure that my hon. Friend will agree that in some cases the operation of quotas has not resulted in a lowering of the income in the way suggested, but that in many other cases, it has done so. There are some people who, by reducing their inputs and by accepting the lower outputs, have found that they have a higher margin than beforehand.

      1101
      This matter is not easily approached. Indeed, the hon. Member for Rother Valley seemed merely to restate that tenants were good and landlords were bad. But we will not get anywhere if hon. Members adopt that sort of approach.
      Mr. Barron: Does the right hon. Gentleman accept that if a tenant has worked hard to build up his yield and his quota, he should be able to get something for it? Sometimes tenants build up their yields not with the aid of landlords but despite them.
      Mr. Gummer: I quite agree, and that is why we are here today and why the Government have tabled the new clause. It saddens me that he and the hon. Member for Barnsley, West and Penistone (Mr. McKay) suggested that we were not trying to find an answer. We are all trying to find an answer, and we are trying to make sure that it is right. But we will not get much further unless hon. Members accept that.
      My hon. Friend the Member for Wealden (Sir G. Johnson Smith) asked about share farmers. That is different, because most share farmers have specifically entered into their particular arrangements in order not to be subject to the landlord-tenant arrangements that are part of our statute law. Consequently, they have made arrangements as to what the apportionment of their inputs and outputs should be. This is not the relevant legislation for dealing with that—if there is a relevant statutory place for it, which I doubt. I hope that my hon. Friend will listen carefully when I answer the point about 20 per cent. that was raised by my hon. Friend the Member for Tiverton, as I believe that that will cover his point.
      Mr. Christopher Hawkins: Perhaps my right hon. Friend will clarify the capital gains position. I accept that a capital gain should be taxed as such. But would it be taxed as a capital gain falling all in one year when it is paid, or could the capital gain be spread from the day that the tenant started his tenancy? Alternatively, would the capital gain be treated as starting the day that the quotas began? If my right hon. Friend cannot answer that point now, will he make a statement later?
      Mr. Gummer: I should be happy to write to my hon. Friend on that point. It is, after all, a technical and complicated matter.
      We listened carefully to the remarks of the hon. Member for Midlothian (Mr. Eadie). However, he underestimated the real problem of dealing with the balance between the outgoing and incoming tenant. We were opposed to quotas initially, but we cannot ignore them. We must get the balance right.
      My hon. Friend the Member for Macclesfield (Mr. Winterton) spoke as enthusiastically as I would about the work that farmers do. But I very much disagreed with him when he questioned whether it mattered if we delayed. It does matter, because even a short delay would mean that some people who were entitled to perhaps a considerable part of a quota would in fact get none. We think that would be a mistake.
      The hon. Member for Brecon and Radnor explained the complexities of the clause. I think that he underestimated the fact that the clause is based largely on what we understood was the view that the NFU felt was acceptable or would be acceptable to it, so it cannot be quite as unjust
      1102
      as some hon. Members have suggested, but we understand the problems. He got the stocking rate wrong because it is nearer 1·31 cows. I assure him that the views about which we are talking were well canvassed not only with the Royal Institution of Chartered Surveyors, but with the Central Association of Agricultural Valuers, both of which have given us advice. We have acknowledged this all along.
      There is a very real problem in trying to shrug off the difficulty for the incomer merely by suggesting that one can deal with the hard cases. By increasing the amount of quota value to be paid out to the outgoers, one is setting a higher price for everybody who wants to come into dairying. Those of us who believe that one problem with farming is that it is increasingly difficult to enter because that is the nature of the control over surpluses would be very concerned not to push the problem aside. While I in no way wish to be party political, I think that on that occasion the hon. Gentleman showed a paucity of knowledge about the matter because tenants who are going to come in know perfectly well that they will not be covered by any scheme involving 10 per cent. tax on those who are able to find a way of transferring their quota, because at present there is no system of flexibility of quotas to enable that to be done. Therefore, I think that the hon. Gentleman is avoiding the difficulty, because as usual he wants to be all things to all men. One cannot deal with the outgoers in the way that he wants without affecting the incomers, and that must be faced.
      I hope that I can give my hon. Friend the Member for Devizes (Mr. Morrison) some help. We did not have an enabling clause because we felt that it was important, if it was to last for as long as it looks as if it may have to, that over time there was seen to be an equity of compensation. If one were to leave it so vague, it would, first, be contrary to the advice that we received from the valuers because it would make for more expensive, protracted and general valuations; and, secondly, one would not achieve equity over time. Although there is, of course, the opportunity to appeal to the county court against what has been decided; I will look at his proposals about appeal to the agricultural land tribunal. I do not think that is the right place, but I will look at it.
      I do not believe that one can have 100 per cent. compensation for the tenant. I believe that even if in the smallest way land has been used for dairy production, some small compensation must be available to the landlord. However, I must tell my hon. Friend the Member for Milton Keynes that I am not in favour of the proposition that the tenant who has reduced the value of his landlord's land, having taken over a dairy farm, should pay some sort of direct compensation on outgoing. That seems to be to be the exact corollary of 100 per cent. for the tenant in some cases, and therefore we have set our sights against both of those conditions.
      I turn next to the points made by the hon. Member for Cunninghame, North (Mr. Corrie). [Interruption.] Hon. Members who have not been present in the debate may think that the points raised by those hon. Members who have been present are unimportant, but specific questions have been asked, the House is concerned that we should get this right and those questions must be answered.
      My hon. Friend the Member for Cunninghame, North presented three different cases and asked about the difference in compensation. I believe that the compensation would be radically different in each of those cases. I

      1103
      hope that we shall be able to increase the flexibility and make sure that the valuer is able to take even more into account. We shall see whether the new clause covers this point to the extent that my hon. Friend would wish.
      The hon. Member for Wrexham (Dr. Marek) is not here—
      Mr. Tony Banks: He is lucky.
      Mr. Gummer: The hon. Member for Newham, North-West (Mr. Banks) has not been here at all for the debate, and we have all been very lucky. He ought to be here, because he now has no work to do on the GLC.
      The hon. Member for Wrexham suggested that the Government tabled the new clause to protect the landlords' interests. That is manifestly untrue. Had we wanted to do so, we would have tabled no new clause, and consequently tenants would have got nothing.
      My hon. Friend the Member for High Peak (Mr. Hawkins) referred to the less favoured areas. I shall take that point seriously. He was right to make it, and I shall see whether it can be put right if it is not right already. I believe that it is, but I shall see whether we can help.
      The hon. Member for Meirionydd Nant Conwy (Mr. Thomas) asked us to withdraw the new clause. We cannot do so because we believe that would damage his tenants, and I am sure that his tenants would not want to get no support at all.
      My hon. Friend the Member for Tiverton asked me to look at several matters. I cannot put off this decision—
      Mr. Maxwell-Hyslop: Why not?
      Mr. Gummer: I hope that my hon. Friend has listened to what I have said. We differ on this matter. I am on one side and he is on the other, and I am afraid that I cannot help him.
      However, I can help in relation to the 20 per cent. I am perfectly prepared to look at it again. My hon. Friend said that this would be less helpful than it ought to be, and I shall see that we do something about it.
      If I have not covered other points that have been raised it is because they are detailed and I shall have to deal with them at a later date—[Interruption.] If hon. Members wish to hear more, they will no doubt sit throughout the rest of the proceedings. This is the best way of dealing with a problem in respect of which we cannot satisfy two wholly divergent interests—those of the incoming tenant and those of the outgoing tenant. That is what this is really about, and I believe that the Government have produced the best answer.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 210, Noes 142.

      Division No. 145]

      align="right">[10 pm

      AYES

      Alison, Rt Hon Michael

      Biggs-Davison, Sir John

      Amess, David

      Blackburn, John

      Ancram, Michael

      Bonsor, Sir Nicholas

      Atkins, Rt Hon Sir H.

      Boscawen, Hon Robert

      Atkinson, David (B'm'th E)

      Bottomley, Mrs Virginia

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

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

      Baldry, Tony

      Bowden, Gerald (Dulwich)

      Batiste, Spencer

      Boyson, Dr Rhodes

      Bellingham, Henry

      Braine, Rt Hon Sir Bernard

      Bendall, Vivian

      Brandon-Bravo, Martin

      Bennett, Rt Hon Sir Frederic

      Bright, Graham

      Benyon, William

      Brinton, Tim

      Best, Keith

      Brittan, Rt Hon Leon

      Biffen, Rt Hon John

      Brooke, Hon Peter

      1104

      Brown, M. (Brigg & Cl'thpes)

      Jones, Robert (Herts W)

      Browne, John

      Jopling, Rt Hon Michael

      Bryan, Sir Paul

      Joseph, Rt Hon Sir Keith

      Carlisle, John (Luton N)

      Key, Robert

      Carlisle, Kenneth (Lincoln)

      King, Rt Hon Tom

      Carlisle, Rt Hon M. (W'ton S)

      Knight, Greg (Derby N)

      Carttiss, Michael

      Knight, Dame Jill (Edgbaston)

      Chalker, Mrs Lynda

      Knowles, Michael

      Chapman, Sydney

      Lang, Ian

      Chope, Christopher

      Lawler, Geoffrey

      Churchill, W. S.

      Lawson, Rt Hon Nigel

      Clark, Dr Michael (Rochford)

      Leigh, Edward (Gainsbor'gh)

      Colvin, Michael

      Lilley, Peter

      Conway, Derek

      Lord, Michael

      Cope, John

      Lyell, Nicholas

      Cranborne, Viscount

      McCrindle, Robert

      Critchley, Julian

      McCurley, Mrs Anna

      Currie, Mrs Edwina

      MacGregor, Rt Hon John

      Dicks, Terry

      MacKay, Andrew (Berkshire)

      Dorrell, Stephen

      MacKay, John (Argyll & Bute)

      Dover, Den

      McNair-Wilson, M. (N'bury)

      du Cann, Rt Hon Sir Edward

      McNair-Wilson, P. (New F'st)

      Dunn, Robert

      Major, John

      Dykes, Hugh

      Malins, Humfrey

      Eggar, Tim

      Malone, Gerald

      Emery, Sir Peter

      Marlow, Antony

      Evennett, David

      Mather, Carol

      Eyre, Sir Reginald

      Maude, Hon Francis

      Fallon, Michael

      Mawhinney, Dr Brian

      Favell, Anthony

      Mayhew, Sir Patrick

      Fenner, Mrs Peggy

      Mellor, David

      Forman, Nigel

      Merchant, Piers

      Forsyth, Michael (Stirling)

      Meyer, Sir Anthony

      Forth, Eric

      Miller, Hal (B'grove)

      Fowler, Rt Hon Norman

      Mills, Iain (Meriden)

      Fraser, Peter (Angus East)

      Mills, Sir Peter (West Devon)

      Freeman, Roger

      Mitchell, David (Hants NW)

      Fry, Peter

      Moate, Roger

      Gardner, Sir Edward (Fylde)

      Montgomery, Sir Fergus

      Garel-Jones, Tristan

      Moore, Rt Hon John

      Goodhart, Sir Philip

      Morris, M. (N'hampton S)

      Goodlad, Alastair

      Morrison, Hon P. (Chester)

      Gow, Ian

      Moynihan, Hon C.

      Grant, Sir Anthony

      Murphy, Christopher

      Greenway, Harry

      Neale, Gerrard

      Griffiths, Peter (Portsm'th N)

      Needham, Richard

      Ground, Patrick

      Neubert, Michael

      Grylls, Michael

      Newton, Tony

      Gummer, Rt Hon John S

      Nicholls, Patrick

      Hamilton, Hon A. (Epsom)

      Norris, Steven

      Hamilton, Neil (Tatton)

      Onslow, Cranley

      Hanley, Jeremy

      Oppenheim, Phillip

      Hargreaves, Kenneth

      Osborn, Sir John

      Harris, David

      Ottaway, Richard

      Haselhurst, Alan

      Page, Richard (Herts SW)

      Hawkins, C. (High Peak)

      Parkinson, Rt Hon Cecil

      Hawkins, Sir Paul (N'folk SW)

      Patten, J. (Oxf W & Abgdn)

      Hayes, J.

      Pawsey, James

      Hayhoe, Rt Hon Barney

      Peacock, Mrs Elizabeth

      Hayward, Robert

      Pollock, Alexander

      Heathcoat-Amory, David

      Portillo, Michael

      Heseltine, Rt Hon Michael

      Powell, William (Corby)

      Hickmet, Richard

      Powley, John

      Higgins, Rt Hon Terence L.

      Price, Sir David

      Hind, Kenneth

      Proctor, K. Harvey

      Hogg, Hon Douglas (Gr'th'm)

      Rathbone, Tim

      Holland, Sir Philip (Gedling)

      Rees, Rt Hon Peter (Dover)

      Holt, Richard

      Rhodes James, Robert

      Howard, Michael

      Rhys Williams, Sir Brandon

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

      Ridley, Rt Hon Nicholas

      Howarth, Gerald (Cannock)

      Ridsdale, Sir Julian

      Howell, Rt Hon D. (G'ldford)

      Roe, Mrs Marion

      Hubbard-Miles, Peter

      Sainsbury, Hon Timothy

      Hunt, David (Wirral W)

      Shaw, Sir Michael (Scarb')

      Hunter, Andrew

      Shepherd, Colin (Hereford)

      Hurd, Rt Hon Douglas

      Shersby, Michael

      Jackson, Robert

      Silvester, Fred

      Jenkin, Rt Hon Patrick

      Sims, Roger

      Jessel, Toby

      Skeet, Sir Trevor

      Johnson Smith, Sir Geoffrey

      Smith, Sir Dudley (Warwick)

      1105

      Soames, Hon Nicholas

      Viggers, Peter

      Spicer, Michael (S Worcs)

      Wakeham, Rt Hon John

      Stevens, Lewis (Nuneaton)

      Walden, George

      Stewart, Allan (Eastwood)

      Walker, Bill (T'side N)

      Stradling Thomas, Sir John

      Wardle, C. (Bexhill)

      Sumberg, David

      Watts, John

      Tebbit, Rt Hon Norman

      Whitfield, John

      Thompson, Donald (Calder V)

      Whitney, Raymond

      Thompson, Patrick (N'ich N)

      Wood, Timothy

      Thorne, Neil (Ilford S)

      Thurnham, Peter

      Tellers for the Ayes:

      Townend, John (Bridlington)

      Mr. Tony Durant and

      Tracey, Richard

      Mr. Mark Lennox-Boyd.

      NOES

      Adams, Allen (Paisley N)

      Heffer, Eric S.

      Anderson, Donald

      Hicks, Robert

      Archer, Rt Hon Peter

      Home Robertson, John

      Ashby, David

      Howells, Geraint

      Aspinwall, Jack

      Hoyle, Douglas

      Atkinson, N. (Tottenham)

      Hughes, Robert (Aberdeen N)

      Banks, Tony (Newham NW)

      Hughes, Roy (Newport East)

      Barnett, Guy

      Hughes, Sean (Knowsley S)

      Barron, Kevin

      John, Brynmor

      Beckett, Mrs Margaret

      Kaufman, Rt Hon Gerald

      Bennett, A. (Dent'n & Red'sh)

      Kirkwood, Archy

      Bermingham, Gerald

      Knox, David

      Bidwell, Sydney

      Lamond, James

      Blair, Anthony

      Leadbitter, Ted

      Bray, Dr Jeremy

      Leighton, Ronald

      Brown, Gordon (D'f'mline E)

      Lewis, Terence (Worsley)

      Brown, N. (N'c'tle-u-Tyne E)

      Litherland, Robert

      Brown, R. (N'c'tle-u-Tyne N)

      Livsey, Richard

      Brown, Ron (E'burgh, Leith)

      Lloyd, Tony (Stretford)

      Bruce, Malcolm

      McCartney, Hugh

      Buchan, Norman

      McDonald, Dr Oonagh

      Campbell-Savours, Dale

      MacKenzie, Rt Hon Gregor

      Carlile, Alexander (Montg'y)

      Maclennan, Robert

      Clark, Dr David (S Shields)

      McNamara, Kevin

      Clarke, Thomas

      McTaggart, Robert

      Clay, Robert

      McWilliam, John

      Clelland, David Gordon

      Madden, Max

      Clwyd, Mrs Ann

      Marshall, David (Shettleston)

      Coleman, Donald

      Maxwell-Hyslop, Robin

      Cook, Frank (Stockton North)

      Maynard, Miss Joan

      Cook, Robin F. (Livingston)

      Michie, William

      Corbett, Robin

      Mikardo, Ian

      Corbyn, Jeremy

      Millan, Rt Hon Bruce

      Cunliffe, Lawrence

      Miller, Dr M. S. (E Kilbride)

      Dalyell, Tam

      Morris, Rt Hon J. (Aberavon)

      Davies, Rt Hon Denzil (L'lli)

      Morrison, Hon C. (Devizes)

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

      Nellist, David

      Dewar, Donald

      Nelson, Anthony

      Dixon, Donald

      Oakes, Rt Hon Gordon

      Dobson, Frank

      O'Brien, William

      Dormand, Jack

      O'Neill, Martin

      Dubs, Alfred

      Orme, Rt Hon Stanley

      Dunwoody, Hon Mrs G.

      Parry, Robert

      Eadie, Alex

      Pendry, Tom

      Evans, John (St. Helens N)

      Pike, Peter

      Ewing, Harry

      Powell, Raymond (Ogmore)

      Farr, Sir John

      Radice, Giles

      Field, Frank (Birkenhead)

      Randall, Stuart

      Fields, T. (L'pool Broad Gn)

      Raynsford, Nick

      Fisher, Mark

      Richardson, Ms Jo

      Flannery, Martin

      Rogers, Allan

      Forrester, John

      Rooker, J. W.

      Foster, Derek

      Ross, Ernest (Dundee W)

      Foulkes, George

      Ross, Stephen (Isle of Wight)

      Freud, Clement

      Rowlands, Ted

      Gardiner, George (Reigate)

      Sheerman, Barry

      Garrett, W. E.

      Sheldon, Rt Hon R.

      Gilbert, Rt Hon Dr John

      Shore, Rt Hon Peter

      Hamilton, James (M'well N)

      Silkin, Rt Hon J.

      Hardy, Peter

      Skinner, Dennis

      Harman, Ms Harriet

      Smith, C.(Isl'ton S & F'bury)

      Harrison, Rt Hon Walter

      Soley, Clive

      Hart, Rt Hon Dame Judith

      Strang, Gavin

      Haynes, Frank

      Thomas, Dafydd (Merioneth)

      Heddle, John

      Thomas, Dr R. (Carmarthen)

      1106

      Thompson, J. (Wansbeck)

      Winnick, David

      Tinn, James

      Winterton, Mrs Ann

      Torney, Tom

      Winterton, Nicholas

      Wallace, James

      Young, David (Bolton SE)

      Wardell, Gareth (Gower)

      Wareing, Robert

      Tellers for the Noes:

      Wigley, Dafydd

      Mr. Ron Davies and

      Williams, Rt Hon A.

      Mr. Allen McKay.

      Question accordingly agreed to.
      It being after Ten o'clock, further consideration of the Bill stood adjourned.
      Ordered,
      That, at this day's sitting, the Agriculture Bill may be proceeded with, though opposed, until any hour.—[Mr. Mather.]
      Bill, as amended (in the Standing Committee) again considered.
      New clause 4 added to the Bill.

    New Clause

      CONSUMERS' COMMITTEE
      'In section 19 of the Agricultural Marketing Act 1958, for subsection (2) there shall be substituted—
      "(2) A consumers' committee shall—

      (a) consist of a chairman and not less than ten other members, who shall be such persons as appear to the Minister, after consultation as to one member with the Co-operative Union, to represent the interests of consumers; and

      (b) be charged with the duty of considering and reporting to the Minister on issues of food policy affecting consumers.".'.—[Mr. John.]

      Brought up, and read the First time.
      Mr. John: I beg to move, That the clause be read a Second time.
      The report that I heard last week that the cuckoo had not been sighted in Britain because of the cold weather is completely wrong. It has been sighted in the Agriculture Bill. The cuckoo in this case is new clause 4, which has so far displaced all the other business in the Bill. It has taken, properly, five and a half hours to debate it. My complaint is that whoever arranged for the Report stage and Third Reading in one day, took no account of that. It has produced a total distortion of the time allowed for debate and a total nonsense of the work of the Committee. I am not impressed with the way in which the Government have added to the Bill on Report.
      That said, it is a pleasure to have moved new clause 1, the purpose of which is to extend the remit of consumer committees in the Ministry of Agriculture, Fisheries and Food. The problem with consumer affairs and the growing interest in consumer affairs in agriculture is becoming patent, and many Labour Members—their view is shared throughout the House—are anxious that the committees' influence should be increased. That is the purpose of the new clause. The time when shortage dictated an automatic market has passed, and what we and our fathers faced was competition from abroad. If British agriculture is to survive and prosper, it must pay much more attention to changing consumer tastes, not only because the consumer wants good quality food at reasonable prices, with a wide choice, but because it is good for farmers to ensure that there is discipline to provide food at the right price and the right quality.
      Consumers want to buy such food, and there have been many complaints about the dearth of British resources.

      1107
      There is a great debate about diet and health, and there is great concern about additives and labelling, all of which are here to stay, and all of which must be recognised in our dealings with consumer affairs. Section 19 of the Agriculture Marketing Act 1958, which set up the consumers' committee within the Ministry of Agriculture, Fisheries and Food, provides that there should be a chairman and no fewer than six members of the committee; secondly, that it should deal with any scheme, which must be approved by Ministers. Since it was set up in 1958, all but three schemes have been repealed, and the only schemes that are in operation are those for wool, milk and potatoes. Therefore, the consumer committee in the Ministry is limited in the type of commodity with which it may deal. It should be able to range across the wide spectrum of food.
      Secondly, the committee is limited in the investigations that it may initiate. For example, it cannot directly intervene on behalf of consumers on topics such as import controls and food processing techniques. The latter are of paramount importance to the consumer. The body is limited not only in the range of topics with which it may deal, but in the initiatives that it can take. I think that that is wrong. New clause 1 would therefore substitute for subsection (2) a consumers' committee consisting of a chairman and at least 10 members, the addition in number being designed to take account of the wider sphere of work given to the committee, which would
      "be charged with the duty of considering and reporting to the Minister on issues of food policy."
      That wider remit is widely overdue.
      I do not believe that by transforming the ministerial committee one could achieve the consumer input into food matters that is required. We need an outside body to consider the matter. Some body analagous to the National Consumer Council will have to be set up in future, with Government funding.
      10.15 pm
      The consumers' committee within the Ministry of Agriculture will be more relevant if we adopt new clause 1. It will be wider in scope than it is now and more relevant in the type of work that it can initiate. If we keep the consumers' committee in its present form it will speak with an increasingly irrelevant voice on a declining number of subjects, and we will have the worst of all possible worlds.
      The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): I am glad to have this opportunity to place on record the Government's views on the representation of consumer interests. We attach great importance to the matter. Consumers have a real, proper and growing concern about the formulation of policies which have a direct bearing on the availability, quality and price of food. I can therefore register sympathy with a number of points which have been made in this respect by the hon. Member for Pontypridd (Mr. John).
      I would not want the House to form the impression that the present consumer consultation arrangements are either nonexistent or at best inadequate, or confined only to the area to which the hon. Gentleman referred. That is not the case. We regularly consult consumer interests on the Government's position in relation to the annual price-fixing proposals when determining the Government's negotiating stance. However, as in the case of all consultations on that matter, the
      1108
      realities of discussions in the Agriculture Council require a certain amount of flexibility to be retained in order to make progress. That does not mean that we lack sympathy for the consumer view. There are also regular and extensive discussions with consumer interests in one of my Department's other main areas of responsibility, namely, that of food standards and safety. There is a statutory obligation on Ministers to consult all interested parties, including consumer representatives, before making regulations under the Food Act. The Food Advisory Committee provides independent advice to Ministers on food matters, and its members are drawn from a wide range of interests, including consumers. Of course, one is always prepared to listen seriously to suggestions for improvement. The consumers' committees established under section 19 of the 1958 Act perform a useful task in monitoring the effect on consumers of agricultural marketing schemes. They were set up in connection with the regulated product contained in each scheme. Those schemes have been overtaken by time. Only those for potatoes, milk and wool remain. They are not slow to come forward with recommendations to Ministers, although alternative points of view are often put forward too.
      Mr. Allan Rogers: The hon. Lady suggests that if anyone puts forward improvements she will consider them. Will she accept that on the question of agriculture and prices, she should contain prices and exhort the Minister of Agriculture, when he goes to Europe, to resist continual demands by the French and Germans for food price rises? That would be the best deal that the Government could give the consumers.
      Mrs. Fenner: No hon. Member present has the opportunity to say more clearly than I do, having spoken at the Dispatch Box on and off since 1972, that the past few years are the only ones during which the food price index has remained below the retail prices index generally.
      Mr. Rogers: That is not the Minister's fault. It should have fallen even further.
      Mrs. Fenner: It could hardly have fallen further. Food prices have been stable.
      It would be misleading to think that the new clause introduces some radically new concept into the area of consumer consultation, because it does not. Much of the machinery is already in place. In such circumstances, it does not seem sensible to introduce the changes proposed because they would overlap and duplicate many of the existing functions of consumer organisations which advise us and are always consulted over the years. They have built up an expertise in the areas for which they are responsible.
      Mr. John: Outside consumer bodies must advise on food, such as milk and potatoes. One does not complain about an overlap with the ministerial committee in that respect. As it is the only ministerial committee, why can it not be given a decent remit?
      Mrs. Fenner: I submit that it has the remit written into the Acts. I am sure the hon. Gentleman will agree that since writing those Acts and setting up marketing schemes, consumer expertise and sophistication throughout the Western world has grown. Those bodies are much more powerful and have a great input into every Western country's economy, including ours. They have a great deal of say. Nevertheless, I would welcome any progress which the consumer organisations can make in

      1109
      increasing the consumers' impact in Brussels and other member states, possibly through increased co-operation among the consumer organisations in western Europe.
      In a newspaper article, the hon. Member for Pontypridd has said that my Ministry has appeared to see its main task as representing farmers. That is just not so. I have already mentioned the liaison arrangements with consumers, and we also consult food manufacturers and distributors. In determining policy we cannot give absolute priority to any one point of view. We must take account of the public interests and public expenditure constraints. We must take account of what is practicable and negotiable in Brussels. There is a balance to strike. It is in the long-term interest of farmers that they should take account of the consumer interest, and that policies should be formulated with that in mind, together with other considerations. That is what my Department does, and since I joined it in 1972, and became the first woman to be appointed a Minister there, that has been one of my major preoccupations.
      Finally, I doubt whether it would be appropriate to amend the 1958 Act in the way pfoposed, as its provisions deal with the regulated product of agricultural marketing schemes, rather than with wider agricultural and food policy issues.
      The new clause, apart from being legally unsound, would serve only to confuse rather than to clarify. For those reasons, we are unable to adopt the changes which it would introduce in place of arrangements which I regard as being generally satisfactory, although I never have a closed mind about consumer representation.
      Mr. Maclennan: The purpose of this new clause seems to be to give the consumer a new statutory body to speak more generally on marketing schemes than do consumer committees. However, I cannot see how this proposal would greatly benefit the consumer. In these matters of determining food policy, as the Minister said, the consumer's voice is represented by several existing statutory and other bodies and, in particular, by the National Consumer Council, which has a general remit and the members of which are in my experience, annually voicing their views about matters of food policy.
      Mr. John: If the hon. Member had talked to the NCC he would have heard its complaint that little has neither the personnel nor the resources to deal adequately with so important and widespread an area as food. It would welcome the setting up of a properly funded analagous body. In the meantime, within the Ministry—and that is the point of the amendment—we would have a voice speaking for consumers in the councils of the Ministry of Agriculture, Fisheries and Food.
      Mr. Maclennan: I thought that the earlier point the hon. Member was making was that he wanted an independent voice and not a voice within the Ministry. It seems that he wants to have the argument both ways. I believe that consumers are well represented by the NCC and other statutory bodies that regularly make representations. I would not want to see their independent position undermined by a body appointed in the way the hon. Member has suggested.
      Mr. John: I am not sure whether to marvel at the hon. Member's naivety or at his stupidity; perhaps it is an unlikely
      1110
      combination of both. The hon. Member has clearly never troubled to consult the NCC. He has exuded complacency. This bears ill with the pretentions of the alliance to be the champion of the consumer. He is opposing the extension of the remit of a body that exists already within the Ministry. He appeared not to understand that situation very clearly. I suggest that, in his busy schedule, he find time to see the NCC representatives and ask them whether they think they have sufficient remit, resources and personnel in order to deal with the matter of food. If he does so, the complacency he has shown in his short and misguided contribution this evening will rapidly disappear.
      Mr. MacLennan: The hon. Member is really remarkably arrogant about these matters. I must remind him that for five years I served as Under-Secretary of State for Prices and Consumer Protection and dealt, on an almost weekly basis, with the NCC. I am bound to say that his experience in other fields may be considerable, but I do not believe that he can speak with equal authority on this matter. The NCC would be horrified if it thought that its independent role as a representative of the consumer was to be usurped by a creature of a Department of State. I believe that the hon. Member's suggestion is positively damaging to consumer interest. However, had he not felt obliged to make his extraordinarily immoderate response to my speech, I should not have had to reiterate that point.
      Mr. John: No one knows as much about anything as the hon. Gentleman pretends to know about everything, so I bow to his seal of guarantee on arrogance because it seems that no one is as well qualified in this House as he to give such a seal. He simply does not understand the new clause or the point I am making. I have said that two things are necessary. As he will know from his vast ministerial experience, at present there is a committee within the Ministry of Agriculture, Fisheries and Food to advise the Minister on consumer affairs. That committee deals with only three areas, namely, wool, potatoes and milk. In order to extend its influence and make its remit proper and understandable it should be given a much wider remit, not because I believe it would replace outside independent bodies. I deliberately said that I believe an outside independent body is also necessary. If we are to have a ministerial committee, it should be given a proper job to do. I hope that the hon. Gentleman will ponder that and come up with more constructive ideas about the protection of the consumer when he next speaks on this subject.
      10.30 pm
      I regret that from the Minister I did not get even tea and sympathy; perhaps I got water and sympathy. She, too, in a sense believes in Dr. Pangloss's claim that all is best in the best of all possible worlds. The drafting of the new clause may not be perfect, but she did not answer the principle of it, which is that if a consumer committee in the Department is to be relied on, it should be given a proper job to do. There is no point in asking the committee to examine a scheme if its members feel frustrated and that their initiative is severely limited.
      For those reasons, it has been worth airing the role of the ministerial committee. It is not designed to replace the outside independent body. This committee already exists within the counsels of the Ministry of Agriculture, Fisheries and Food and it would be appropriate to extend its remit.
      Question put and negatived.

    New Clause 5

      CONSOLIDATION OF AGRICULTURAL MARKETING SCHEMES
      'The following paragraph shall be inserted after paragraph 5 of Schedule 1 to the Agricultural Marketing Act 1958—
      "5A.—(1) Without prejudice to any other powers conferred on him by this Act, the Minister, if he is of opinion that it is expedient that any scheme should be consolidated, may by order make a substitutional scheme.
      (2) The power conferred by this paragraph to make an order shall be exercisable by a statutory instrument which states that the order contains only provisions made for the purpose of consolidating a scheme revoked by it; and any such order shall be subject to annulment in pursuance of a resolution of either House of Parliament.".'.—[Mr. Andrew F. Bennett.]
      Brought up, and read the First time.
      Mr. Andrew F. Bennett: I beg to move, That the clause be read a Second time.
      The clause deals with a small but technical point with which the Joint Committee is much concerned. It is an important and accepted principle of legislation that we try to consolidate the law and that, when the law is implemented through regulations, those regulations are consolidated in such a way as the public can inspect the law without having to thumb through a great deal of other legislation.
      We also try to ensure when we pass legislation that the Government have power to consolidate regulations. Under the milk marketing scheme the Government are not able to initiate regulations. They simply have a semi-judicial role in that they arbitrate on the regulations. That has made consolidation difficult. The new clause would enable consolidation to take place.
      I suspect that the Minister will say that the drafting of the new clause is faulty, although we were assisted in its drafting by Mr. Speaker's counsel. I shall be content, and not press the matter, if the Minister accepts the principle of the new clause and undertakes to introduce in another place a satisfactory form of words to cover the point that I have in mind.
      Mr. Jopling: I am grateful to the hon. Member for Denton and Reddish (Mr. Bennett) for explaining his amendment. I find it difficult to accept the amendment as it stands, but I am prepared to discuss with the hon. Gentleman the introduction of an amendment in another place which would meet the Joint Committee's wishes as well as a nutnber of other points. If he would be satisfied with that and be good enough to withdraw his new clause perhaps we can proceed on those lines.
      Mr. Andrew F. Bennett: On the basis of the undertaking that has just been given by the Minister, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    Clause 1

      PROVISION OF SERVICES AND GOODS CONNECTED WITH AGRICULTURE AND COUNTRYSIDE
      Mr. John: I beg to move amendment No. 1, in page 1, line 6, leave out clause 1.
      Mr. Speaker: With this it will be convenient to take the following amendments: No. 2, in page 2, line 6, after 'or', insert,
      1112
      'subject to approval by affirmative resolution of the House of Commons'.
      No. 4, in page 2, line 7, at end insert—
      '(3A) Within three months of the passing of this Act the Minister shall set out in a report to Parliament the criteria which he proposes to apply in determining whether to introduce charges for services provided under this section, the method of charging which he proposes to adopt, the amounts which he proposes to charge, and any exemptions from charging which he proposes to make. '.
      No. 5, in page 2, line 7, at end insert—
      '(3A) The Minister shall appoint such officers and staff as may be necessary for the supply of services or goods under this section and shall provide training appropriate to their duties.'.
      Mr. John: Some of the amendments in this group amend in part the basis of charging and the number of staff in the Agricultural Development and Advisory Service, but amendment No. 1 simply seeks to delete clause 1.
      We had a short stand part debate in Committee, but nevertheless there was a remarkable lack of clarity at that stage as to how the scheme would work, what the basis of the charging was, how the ADAS staff would be able to cope, how they would be trained to do so and how many of them would be engaged in invoicing an billing as opposed to delivering the advice.
      I hoped that with the passage of the 11 weeks to which I have earlier referred that more clarity and detail will be available to us tonight than was the case in Committee, because we are that much nearer the implementation of the scheme. If ADAS is to be launched upon an unsuspecting agricultural public, we had better know and debate the scheme and its ramifications at this stage.
      Clause 1 is broad in scope, not only covering the provision of any services or goods in relation to production and marketing of agricultural produce but also dealing with research and development. So it is not confined merely to advisory services; it also deals with research. It seeks to replace provisions in the Agriculture (Miscellaneous Provisions) Act 1944 and the Wildlife and Countryside Act 1981 as well as the Agriculture Act 1947.
      Clause 1 should be removed from the Bill, first because so far there has been a statutory duty upon the Ministry to provide advisory services and all the other subjects which are listed in clause 1. Clause 1 would substitute a discretionary power and whether it is to be provided or not will cause widespread concern because of the uncertainty that is bound to arise whenever a discretionary power is put in the place of a duty. There will be widespread concern among the farming population, conservation organisations, and so on. I refer, because it is a matter of common circulation to hon. Members, to the memorandum of the Council for the Protection of Rural England on that subject. Therefore, clause 1 should be deleted because it removes a statutory duty and replaces it with a discretionary power.
      Secondly, clause 1 exists against the background of cuts both in the advisory and research services. The House should consider the extent of each of those. In advisory services in 1987–88 the cut at the ADAS level will be £20 million which will be accompanied at MAFF level by a cut in the same year of £16·5 million. In agricultural research we have a cut in 1986–87 at ADAS level of £10 million doubling to £20 million in 1987–88. At the same time, in ministerial research we have a cut in 1986–87 of £18·25 million rising to £16·5 million in 1987–88. At a time when agriculture is expected to adapt to deal with the new situation, cuts are bound to weaken the fabric of both

      1113
      ADAS and ministerial advice and research into the subject. Unless the Minister can provide one tonight, there is no guarantee that after 1987 that will be the end of the matter. There may be a continuing spiral of cuts.
      Although the proposed cuts may appear to be significant at the bilateral talks that are held each autumn, compared with the £1,893 million that is spent upon CAP market support in the United Kingdom they are very small indeed. They are being made at the expense of the dispersal of and, in many cases, at the expense of the redundancy of highly expert advisers and research specialists. Their dispersal means that never again will there be collected together such an expert body to advise agriculture in a position of travail.[Interruption.] I appreciate that the Minister and his Parliamentary Private Secretary have difficulty in understanding this biblical phrase, despite the Minister's earlier allusion to Baptists.
      Mr. Gummer: Given where I have spent the whole of this afternoon, the word "travail" is very close to my heart.
      Mr. John: I should have thought that, were he prepared to use it, the word "labour" would be much nearer to it.
      The dispersal of this body of expert knowledge would have tragic consequences for the quality of advice and research that is available to agriculture at precisely the time when it needs it most.
      Furthermore, parliamentary approval is not required for the detailed system of charging. We have not been given the basis for the charges. No details have been made public so that discussions can be held about them. We are told that no charge will be made for conservation advice, but if a future Minister were to decide that a charge should be made for conservation advice, the House would have no power to influence his decision, or even to debate the matter.
      A great deal of the statutory work that is shared by the NFU and the milk marketing board is carried out for the benefit of the public. Inspections are carried out under the milk and dairy regulations to protect the public against the consequences of contaminated milk. A charge is to be made for this service. The Minister says that the provision of good milk will benefit the consumer. The producer also benefits. The consumer is at one remove from the producer who is being charged. The fact that statutory work has not been charged for has served us well over the years. It has ensured a reasonably high standard of food hygiene and the standard of care to which the Parliamentary Secretary referred in the last debate. The charging system needs to be clarified.
      On 13 February Big Farm Weekly carried an interview with Professor Todd who was reported as having said that the full economic cost of the service is to be passed on to the user. Is that so? Or will the Minister say, using the immortal words that so enlivened our Committee stage debates, that consultations are still taking place? If he cannot assure us that those consultations are now coming to an end and that they know what they intend to do, I fear that the inclusion of this clause is a blank cheque.
      The Government have said that advice relating to conservation, rural diversification and animal welfare will be exempt from charges.
      1114
      In Committee the Minister seemed unable to suggest how one would draw a line between those and the other advice.
      If we go to the Bell report, at paragraph 47, we find that Professor Bell says that this type of advice—meaning conservation—is inexorably linked with the measures which improve the efficiency of the operation. That is what I would like to ask the Minister. How can he separate the two, and what counts as pure conservation?
      For example, advice on pesticides may benefit the environment, and also benefit the farmer to cut his costs by being able to apply only the correct amount of pesticide. Will this service be charged for, because it has to do with the business, or will it be exempt because it has to do with the environment? That is the sort of detail upon which we had no advice in Committee, and I believe that it is high time that we had some advice.
      10.45 pm
      The next point is the mushrooming of private consultants. We shall see a sudden increase in the firms of private consultants, who will give the advice which ADAS is now being disabled from giving for financial and personnel considerations. They will not be obliged to take conservation into account as did the ADAS personnel. Should there not then be a code of practice for them?
      I do not know whether Ministers will consider that matter, whether they have already made up their minds, or whether they are still open minded about it. Time is getting short. We have had a Committee stage plus eleven weeks, and we still do not know publicly what the ministerial stance is.
      I believe that the major flaw in this case is that charging will mean that the very people who need the advice most will be unable to pay for it. Small farmers on hill and upland areas who most need advice may well find themselves precluded from taking as much advice as they would wish, even if they can afford some.
      If subscription schemes are introduced, will there be a guarantee that farmers will get advice from ADAS as and when they want it? We know that often emergencies divert attention, energy and manpower, but will that advice be available?
      I should like to deal with the training of ADAS staff in their new marketing orientation. I give way.
      Mr. John Carlisle: Before the hon. Member goes on to training, he is giving the impression that farmers receive advice at the moment only from ADAS. Will he agree that many commercial organisations give an enormous amount of advice free of charge, in some cases in commercial consideration of their products which they are trying to sell. However, the personal advisers that he has talked about have been in existence for many years and have not just sprung up because of this Bill. They have the advantage of giving farmers and growers advice without having some commercial consideration by a large firm behind them.
      Mr. John: I should like slightly to adapt the advice given to some hon. Members and say that there is no such thing as a free consignment. A lot of advice is given by commercial advisers on the side to enable the farmer to apply their products.
      ADAS is perceived to be totally independent, at the service of the farmer, and able to range across a much wider spectrum than would agricultural supplier who would deal mainly with his own product, and its effects.

      1115
      Although I agree that other advice is possible, I would say that no advice could supplant ADAS, and I do not believe that any advice is as good as ADAS advice. The hon. Gentleman may disagree, but I say that if this measure goes through agriculture will learn to its cost just how good ADAS has been and just how damaging are the Government's proposals for it.
      I am sure the hon. Member for Luton, North (Mr. Carlisle) was not trying to divert me from the new training for ADAS staff for their marketing orientation. Whatever else we may disagree about, we will agree that that is a new departure for the staff. They have not been used to charging for their services and they will have to become market-oriented. From the news I have received about training, it seems like a bad book in the series, "How to Succeed". I understand that it is proposed to have a two-day course to train ADAS staff for their market orientation—how to be a salesman in two days. It sounds like a course in how to learn Esparanto in 12 hours. If the Minister has contrary information, he should tell the House tonight that their training will be much more thorough. If they are to have only a two-day course, ADAS will be launched into its new role completely unprepared for the rigours of the market. That brings me back to the private consultants who will operate without a code of conduct.
      Another matter of concern is that a statutory duty is being accepted by the Ministry of Agriculture, Fisheries and Food. We were delighted to hear that in Committee, but it will have an effect upon ADAS. How can it carry out that role when it has to charge? I would not be the first to be thought of as a Francophile, but the French are raising their research budget by 10 per cent. at this difficult time when we are cutting ours. The ADAS staff has already been cut by 12 per cent. and the cut will go up to over 20 per cent. when the further 450 redundancies are declared.
      We have had no details to date about redundancies in the ADAS research organisations. I hesitate to remind the House how long it has been since Second Reading, yet no further details have been made available. We know about the implications for the manpower of the Agricultural and Food Research Council because it has published a corporate plan for 1986–91 which refers to a 26 per cent. drop in the volume of research over the period between 1983 and 1991; job losses are put at 600 in 1984–85, 580 in 1985–86 and 600 in 1986–87. That is roughly one third of all staff employed by the council; about 1,800 people will be declared redundant between 1984 and 1987.
      Coupled with the privatisation of the plant breeding organisation and other bodies, that points not only to the basis of ADAS being changed but to the quality of its advice, and of all advice and research in agriculture being badly affected at the very time when farmers are desperately seeking such advice and research to help them adapt to the changed circumstances which will affect farming in future. That is why I believe that the House should throw the clause out, although other amendments seek to modify its rigours slightly.
      Mr. Roger Moate: I agree very much with the words of the hon. Member for Pontypridd (Mr. John) in commendation of the work done by ADAS and the high regard in which it is held, certainly by the people with whom I am particularly concerned, namely, the smaller growers and farmers. I also agree with the
      1116
      emphasis that he placed on the importance of research and development at a time of high and increasing competition with our continental competitors. As the hon. Gentleman might expect, I also agree w1th what he said about the £2 billion that we spend on market support under the common agricultural policy at a time when we are making fairly major cuts in these important services.
      I do not agree with the rather pessimistic approach that the hon. Gentleman adopted. I warmly welcome the increased opportunities for private consultancy, as [do the point made by my hon. Friend the Member for Luton, North (Mr. Carlisle) that commercial interests can and will provide a wide range of highly valuable services to a large number of growers. There is some validity in the point that the advice tendered by commercial organisations concentrates on the areas of their own interests and does not generally cover the wide spectrum of interests which have frequently and consistently been supported by ADAS and the Ministry.
      The specific worry that I should like to put to my right hon. Friend is about the effect on smaller growers. We are entitled to some reassurance from my right hon. Friend that this matter will receive careful consideration. Smaller growers are least able to afford higher charges and might suffer most. Although we talk easily about the problems of agriculture and about the high levels of income to the larger growers, it should be borne in mind that many smaller growers—I say growers because I am talking about the horticulture industry in my constituency—struggle year after year to survive. The imposition of charges will be a heavy burden on them.
      Small growers have benefited most from the first-class services offered by ADAS and the Ministry, especially in the development of new types of fruit. This is not an area in which private commercial interests are likely always to be available to advise; and small growers may well suffer. I do not disagree with the principle of charging. Agriculture is a highly important matter about which commercial interests should have the chance to make commercial decisions. I receive representations from highly efficient but small growers who are struggling to stay in business and are genuinely worried about the charges that might be imposed by organisations upon which in the past they have depended and greatly respect. I hope that nothing we do will make it harder for those growers who are fundamental to the life of our countryside to stay in business and to flourish at a time when they are desparately worried about new competition, especially from an enlarged European Community.
      Mr. Livsey: I should like to make a few important points. I cannot agree that charging for ADAS services is a good thing. There is room for commercial advice and this has been available for some years. I have worked in the commercial advisory field. We are being asked to introduce charges for ADAS services. That advice has always been independent and not linked to commercial interests, and it is important for us to stick to that principle. I am not saying there is no room for commercial advice, because there certainly is, but ADAS should not be asked to impose charges in competition with commercial advisors.
      I am worried about research. The plant breeding institute in Cambridge has been involved in all kinds of research into cereals and has carried out that research in an objective and fine way. What will happen if

      1117
      commercial interests become involved in the plant breeding institute and we lose some objective research? Pure research, possibly on low input systems of growing cereals may conflict with the commercial interests of any grouping that may take over the plant breeding institute. We cannot afford to lose objective research. We have seen cuts in the Weed Research Organisation. That has happened in the past, but now the research station has disappeared. We have also seen cuts at various other research stations such as Compton which has stopped research in several areas. We have seen also cut backs in the Welsh plant breeding station, and the losses of jobs in all those places.
      11 pm
      There are many fears about clause 1. I believe that it will undermine objective research and objective advice. I am not saying that there should not be a commercial sector. There is a commercial sector, but I think that it will not adequately compensate for the necessary independent research and advice.
      I am particularly worried about charging for advisory services in the less wealthy farming areas, in particular in the less favoured areas where the ability to pay for services does not exist. The targets set for ADAS in regard to charging and income I believe will not be achieved in those areas. Are we, therefore, to discriminate against those areas in the matter of advice? I am sure that is not the Government's intention, but that is what may happen as a result of what they are doing.
      If the Government reject our arguments for clause 1 to be taken out of the Bill, we would like to see each charge for every service put before the House for consideration.
      Mr. John Carlisle: Like the hon. Member for Brecon and Radnor (Mr. Livsey), I have been involved in commercial advice to farmers and growers. I wish to allay some of the fears that will have been aroused by the alarmist talk of the hon. Member for Pontyprid (Mr. John). The question has been raised, particularly by Opposition Members, whether advice given freely is necessarily better advice than that which might be given on a commercial basis. I suggest that the hon. Gentleman may have underestimated somewhat the advice that is given in the private and commercial sector by those who are well trained. The cost of this training is borne by companies at considerable expense, and those involved are not sent out into the world until they have had that training. Farmers are, I think, getting better advice from commercial companies now than they were in the old days. I say that from a certain amount of experience.
      If I may say so, I think that the hon. Gentleman also overestimated the value of advice given by ADAS. Although because it is so-called free it is meant to come in an unbiased way, the advice given is not necessarily the best advice. It could be argued that, had more money been available for better training in the ADAS scheme, with farmers and growers able to make contributions to it, ADAS might have been better advised.
      As the hon. Member for Pontypridd has said, there is no such thing as a free service, yet Opposition Members are now complaining that the service has to be paid for.
      Mr. Stephen Ross: Does the hon. Gentleman not agree that agriculture is probably the most
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      efficient industry in the country? Why has it been so efficient and done as well as it has done? The answer is, through the services of ADAS and its predecessors. It has been of the highest quality. It is disgraceful that the hon. Gentleman should decry it now.
      Mr. John Carlisle: I do not need lessons from the hon. Member for Isle of Wight (Mr. Ross) in the viablity of agriculture. I have spent all my life in agriculture, I am a farmer's son and I have spent 20 years of my commercial life advising farmers and commercially marketing their products. I do not need the hon. Gentleman to tell me about the viablity of an excellent agricultural trade.
      I say to the hon. Gentleman and to the Opposition that the great idea that because the advice is freely given it is the best advice is nonsense. I would not want the House to be left with the impression that those in the commercial sector are giving advice purley for their own commercial interests. As I said in an earlier intervention, there was a growth of personal consultants over many years before the Bill was considered, even in the dark days before this Government were elected. These consultants stand or fall on the advice that they give and on the commercial viability of the farmers on which they consult. If their advice is not good enough, the farmers will not accept it. It is a hard commercial world in relation to advice. Most of us in the trade welcome the fact that ADAS will now have to be paid for.
      The hon. Member for Brecon and Radnor talked about the PBI. When it is privatised—and I hope that it will not be too long before it is—the money that will be available for potential buyers could be such that the research and development that goes into the PBI will be considerably more than at present. That must be to the benefit of growers. A large amount of cash will be involved, and that will be to the benefit of the growers and the institute.
      Farmers and growers are ready to pay for advice if they think that such advice will help make them more commercially viable. The Bill's provisions will assist them in that way.
      Mr. Dafydd Wigley: I intervene briefly towards the end of the Bill's passage—my hon. Friend the Member for Meirionnydd;ant Conwy (Mr. Thomas) having been involved in earlier stages.
      I cannot accept the comments that have just been made, particularly the slur on people working in ADAS—[HON. MEMBERS: "Shame."] It was a slur. If the hon. Member for Luton, North (Mr. Carlisle) carefully reads what he said, he will see that there is a reflection on the ability of ADAS—that people are not as well trained as they might be and that the resources have been such that people may not be up to the same standard as the private sector.
      The experience of farmers in my part of the world has been very different indeed. I do not know whether standards vary from area to area, but the representations that I have received arise directly from the large volume of pressure in my own constituency from farmers who are extremely upset at the possibility of a decline in the ADAS service.
      In my area, farms are small. It is subsistence farming. It is not farming with large resources that can be used for highly professional independent advice. I wish that that were the case. It would be excellent if farmers had the

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      resources to take advantage of every possibility, but in my area it is very much breadline farming, and those farmers depend on the advice that they receive from bodies such as ADAS.
      Over the last few years, there has been a tremor of fear in the Welsh agriculture industry because of the run down in research. The hon. Member for Brecon and Radnor (Mr. Livsey) referred to the effect on the plant breeding station. Farmers in Wales were extremely concerned about the cuts at Aberwstwyth, because the direct help that they have received for many years has made land—often marginal land—much more productive because of know-how and development.
      The agriculture industry faces a difficult time. Farmers may lose the services of ADAS, which has been one of their main supporters, and because of the resource squeeze on them they may not be able to take advantage of other opportunities.
      I am not for a moment decrying the ability of those who are working in the private sector, although I would question whether they are all totally impartial as they obviously have an eye on their own commercial interests. That is perfectly natural and understandable, but there must be an alternative that is readily available and not priced out.
      People in Wales feel strongly about the possibility of charges for some of these services. That could put farmers off from using them. We must devote all the resources we can to research in the agricultural sector, and we should not restrict artificially the availability of those services. For that reason, I shall support amendment No. 1.
      Mr. Gummer: The purpose of this clause which we are invited to remove from the Bill is, first and foremost, to make clear the wider remit of agriculture as distinct from the one which has so far been depended upon in earlier Agriculture Acts. I believe it to be absolutely right that we should make clear that the Minister is responsible for supplying to any person any services or goods relating to a much wider range of items than was previously the case. We used to see agriculture in far too narrow a context.
      However, there is an inevitable result. One cannot—not just ought not—lay the same statutory duty for that wider range of matters as for the much narrower range. It would mean that anyone concerned with
      "the conservation and enhancement of the natural beauty and amenity of the countryside"
      could say that any service which he thought concerned that ought, by statutory power, to be carried out by ADAS. That cannot be so.
      We have had this argument in Committee. It was one of the arguments which seemed to me to be so obviously accepted that the other side of it rather trailed away. Those who opposed it realised, when they looked at the problem in a straightforward way, that the reality was different from the fear. I can see that one could be afraid that to move from a statutory duty, in the narrow sense, to a wider statement might mean that less concern would be shown in the future than hitherto. Yet nothing that my right hon. Friend and I have said or done could possibly lead to the substantiation of that fear.
      The opposite has happened. We are now saying that agriculture is not just about husbandry and growing crops; it stretches to conservation and
      "the enhancement of the natural beauty and amenity of the countryside".
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      Agriculture is also concerned with other activities and enterprises which benefit the rural economy. That is why cause 1 is crucial. If Opposition Members persist in pressing for the abolition of this clause, they will once again be taking a reactionary view about what we are trying to do in the Bill, for at long last we have broken out of the attitude towards agriculture which is now being trumpeted abroad by the Labour party. It evidently does not want to have this extension or scope. If it wants it, why does it wish to get rid of the clause in which that extension is enshrined?
      That is why the introduction of the hon. Member for Pontypridd (Mr. John) to what he put forward was neither acceptable nor in accordance with the facts. More important, it appears that in the 11 weeks of which he has spoken he has learnt nothing, for we have had this debate backwards and forwards—and nobody took his view. He did not win a single impartial person to his side. The reason is that it does not stand up. Many of those people who felt that perhaps he might be right realised, when they came to consider what a statutory duty would mean, that this was an impossible situation, for anyone involved in any activity in the countryside could demand that the Minister should provide any service he regarded as being related to that activity.
      The hon. Gentleman cannot have it both ways. Either he wants this wider definition of agriculture, or he must accept that only the narrower definition can carry a statutory duty. If he wants the wider, he must accept that it is no longer a statutory duty but a discretionary power. Otherwise no Ministry could take this wider remit upon its shoulders, and this Ministry certainly would not be prepared to take on that which it could not carry out.
      The hon. Gentleman went on to talk about a number of things, but I would take up particularly the milk and dairy regulations. It is true that their cost will be borne by those who receive the benefit. Who are the first beneficiaries? They are those who wish to sell the product with the assurance that it is a pure product. It is perfectly right for those who produce and sell to carry that kind of cost. That is, after all, what his Government visited constantly on the rest of industry. Is he suggesting that in some way or other industry should turn to the Government for payment of so many of the things which, rightly, he demands that it achieves?
      Most of industry has laid upon it a requirement to sell goods of a proper standard for the purpose for which they are intended. It is not the Government who pay for that research, or for the checking and testing; it is industry itself. It is not unreasonable that the agriculture industry should also meet the cost of being able to sell its goods at the standard required by the customer.
      11.15 pm
      The hon. Gentleman spoke in a sneering tone about the mushrooming of private consultancies. There is great advantage in the private consultancy because we know where its bias lies. Therefore, unless one thinks that farmers are extremely stupid—and I am sure that the hon. Gentleman does not think that—one realises that the farmer knows perfectly well that, when consulting someone with a commercial interest, he must take the advice with a very large pinch of commercial salt.

      1121
      There are other sorts of bias. When I talk to conservation interests, they say that ADAS is very much biased against them. I do not happen to believe that, but they think so. There are many differing biases.
      I would not go along with what my hon. Friend the Member for Luton, North (Mr. Carlisle) said in his assessment of ADAS. I also find peculiar the view that it is blasphemous to cast any doubt upon the service provided by ADAS at any time, as suggested by Liberal Members. It was a most preposterous riposte. It appears that every time we discuss any section of the population that might vote Liberal they come into their own. It is a most remarkable achievement—
      Mr. Stephen Ross: That is disgraceful coming from a member of the Church of England synod.
      Mr. Gummer: Oh dear, oh my goodness—
      Mr. Ross: It is totally dishonest and a disgrace.
      Mr. Gummer: It is a little late in the evening for the hon. Gentleman to enter our debate and then to lose his temper so rapidly. He should look after his health a little better. It is synthetic anger.
      The House should honestly be able to say that ADAS has done—[Interruption.]
      Mr. Deputy Speaker (Mr. Harold Walker): Order. Hon. Members must not bellow across the Chamber.
      Mr. Gummer: The House must honestly accept that ADAS has contributed a great deal to the advancement of agriculture. However, to say that the advancement of agriculture is entirely the responsibility of ADAS is a load of rubbish, and we all know it. It is to do with the work of farmers, it is to do with the investment of farmers and landowners, it is to do with the way that the agriculture industry has been led to produce 80 per cent. of the temperate needs of this country. It is ridiculous to say that because ADAS has been largely responsible for that, we cannot discuss alternative means of providing advice, and it is not sensible to suggest that ADAS cannot charge for some of its services. Many of us would say that by charging for some of its services it would get closer to the market and, perhaps, tailor some of its services more to what people need rather than what they think they should need. There is always a temptation—[Interruption.] It is odd that some people believe that, unless one is 100 per cent. sure that the way an organisation is, is how it should always be, one is betraying that organisation. I am simply saying that we can improve ADAS by ensuring that there is a closer association between it and the market—
      Mr. Malcolm Bruce: Rubbish.
      Mr. Gummer: The hon. Gentleman's contribution to this part of the debate, as in the rest of our debate this evening, consists of shouting "Rubbish" from a sedentary position. We know the contribution of the alliance parties to agriculture. We have had nothing useful or productive from its members this evening, which is the fifth successive time that we have had no help from the alliance when debating agriculture.
      Mr. Bruce: Give way.
      Mr. Gummer: No, I shall not give way, because so far I have been unable to speak without the hon.
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      Gentleman shouting at me. He does not even have the courtesy to ask me to give way. The hon. Gentleman must accept that if ADAS is to do its job properly it must be viewed in the context of general advice not only from commercial businesses but from elsewhere.
      The hon. Member for Pontypridd used a technique which I have noticed before which is called the using-thepercentage-without-giving-any-of-the-figures technique. The hon. Member said that France would increase by 10 per cent. the state contribution to the advisory service, but he did not say on what or in comparison with what. I checked on the situation in France and it should be said that French farmers contribute nearly half of the cost of the advisory service. The Government are considering small charges, but are still spending £120 million on ADAS. The figure of 10 per cent. seemed to be a figure plucked out of the air. In Denmark the contribution of the state was 37 per cent. in 1972 and fell to 22 per cent. in 1982. In Germany the state contribution is 40 per cent. and in the Netherlands it is about 50 per cent.
      We would not be out of line with our neighbours if we suggested that some part of the cost of the advisory service should be contributed by those who receive its advice. I agree with the worries expressed by my hon. Friend the Member for Faversham (Mr. Moate). I have carefully considered what we are doing and I shall monitor what we are doing. I appreciate his concern about the small grower. I have many such growers in my constituency and they are concerned that services should be tailored to their special needs. I hope that the element of commercialism will promote that.
      Mr. John: The right hon. Gentleman has said that comparatively small charges would be imposed on British farmers. How do we know that when he has not given us any details on charging?
      Mr. Gummer: I mentioned such charges in making the point that, even with these charges, we will be spending £120 million on the services provided. That is a large proportion of the expenditure.
      The hon. Member for Pontypridd wondered why in such circumstances we do not place before the House a series of charges. The answer is that in these areas we want ADAS to be commercially oriented and able to react to the needs of the market. We want to ensure that it can provide the services which are required by the small growers mentioned by my hon. Friend the Member for Faversham. ADAS can do this only if we have some flexibility. If it is tied to a tariff, one is expecting it to work in a commercial environment with both hands tied behind its back. If that were the case, it could not compete with commercial enterprises. The hon. Member for Pontypridd wants us to do the one thing which would destroy the ability of ADAS to compete and and win in the market place.
      I have no fear for ADAS because it is a successful body and will be able to meet the needs of the market. To ensure that the marketing is effective there will be a two-day induction course for all employees of ADAS. That is just the starting point, because there will be continual training. To laugh at the initial two-day course is to suggest that educational training can start nowhere.
      That is a typical example of the reaction of those who do not wish ADAS to work because they believe that the only advice worth having is free advice. That is nonsense.
      Mr. Bruce: That is not what was said.
      Mr. Gummer: The hon. Member may shout that, but the spokesman for the Liberal party said that he did not think that the services of ADAS should he charged for—or did he?
      Mr. Bruce: He did not say that.
      Mr. Gummer: The hon. Member for Brecon and Radnor (Mr. Livesy)—it was the one occasion when the hon. Member for Gordon was in the Chamber—said that ADAS gave the best advice and that that advice should be free. He went on to say that commercial advice was biased and, therefore, worse than the unbiased advice of ADAS. That must mean that he believes the best advice to be free advice.
      I am sorry to have taken so long in replying to the debate—
      Mr. Livsey: The Minister is getting carried away with himself. I did not say what he suggested. I said that we have a perfectly good advisory service which has a free, honourable record. Why cannot we continue with that and have commercial advice alongside it? It is disgraceful to charge for the advice of a service that was not set up for that purpose.
      Mr. Gummer: If the hon. Gentleman believes that I have mis-stated what he said. I withdraw any part of my remarks which mis-stated his case. But what he said is precisely what I thought—that ADAS provides the sort of advice which he and his hon. Friends see as better, more important and more central than any other advice.
      Mr. Bruce: Rubbish.
      Mr. Gummer: Is ADAS advice better than other people's advice? That is the question that I ask the Liberal party.
      Mr. Bruce: It is necessary to have it.
      Mr. Gummer: That changes the position altogether. Of course, it is necessary to have it, and we shall continue to have it. The Government will continue to pay for a large proportion of it, and we are asking people to pay a proportion for themselves. That is what happens in all the countries of the European Community that I have mentioned.
      More importantly, the hon. Member for Brecon and Radnor is asking for apartheid between commercial advice and the advice given by ADAS. That is unacceptable. It would be much better if ADAS provided a more direct connection with the market, and that is what the amendment proposes to do. I am sorry if the Opposition do no want the clause, but I hope that the House has noticed that the arguments against the clause, although wrong, have been made properly by the official Opposition, in contrast with the mere shouting match from the alliance.
      Mr. John: After such felicitations from the Minister, I regret having to remind him that, although some women undergo post-natal depression, he is obviously undergoing post-natal euphoria. If the alliance did not exist, it would be necessary for him to invent it, because, robbed of that prop, the House might have adjourned at a reasonable hour tonight.
      The Minister talked of the lost 11 weeks. Neither in Committee nor tonight has he deigned to give us facts. He
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      says, "I cannot tell you about charging because it may contravene commerciality, and anyway I am rot so timorous about the future of ADAS as to believe that it could go wrong." In that, he differs from Professor Bell, who says that, depending on where the charges are pitched, there could be a substantial fall in demand, which could jeopardise dual objectives. Professor Bell could conceive of difficulties, but our euphoric Minister of State could conceive of nothing. The House is not worthy to hear even the basis of the charges being put before it. I challenge the Minister once more to say whether the full economic cost of ADAS advice will be charged.
      The Minister is always longer on rhetoric than on fact. I challenge him to say how we could separate conservation advice which happened to be intertwined with advice on pesticides, in view of his declaration that environmental advice would not be charged for but that commercial advice would. Shall we have a stopwatch ADAS, in which every 30 seconds a watch clicks off and on and they say, "We are off pesticides as a conservation measure; we are on to pesticides as a commercial venture?" Is that what he is asking us to accept? Of course not. He is asking us to accept that his amusing tirade at the expense of the alliance is a substitute for answering the detailed and perplexing points that we raised in Committee, but which were not answered then or tonight. The House does not know the facts and neither does AD AS.
      11.30 pm
      The Minister talked about my sneering at the two-day course. The responsibility for ADAS having nothing better than a two-day course to prepare it for the realities of the commercial market is the Government's. They have not been able to devise a scheme, or to take ADAS into their confidence, early enough for it to be prepared properly. They will cast it into competition with what the hon. Member for Luton, North (Mr. Carlisle) has described as expert commercial undertakings, and I have no doubt that many of them are, with only a two-day course to prepare it. To use the modern jargon, it will have two days of in-house training. Even with the Minister of State's silver tongue, that is not a recipe to ensure that ADAS will be able to take its place in the commercial market and compete with the commercial undertakings. It is a recipe for decline.
      The attractive feature about ADAS has been its duty to give advice rather than discretion, and by removing that duty and replacing it with discretion we shall have an adverse effect on the quality of advice which has guided agriculture under both Labour and Conservative Governments.
      The Minister has sneered and said that the Labour party argues that industry has to pay for ensuring the merchantable quality of its goods. That is so, but we are talking of different traditions. Agriculture has so far been in a position where it has not been charged for advice that has benefited the public as well as manufacturers. At the end of the day it will be the consumers who carry the cost and not producers. The Minister should be frank and admit that to the House.
      Mr. John Carlisle: That happens now.
      Mr. John: But in a diluted form. The taxpayer carries the cost now. The hon. Gentleman may squirm, but the consumer and the taxpayer do not always coincide. The

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      largest consumers are often those who are unable to bear additional costs, but that is a wider economic argument which I do not want to enter into tonight.
      ADAS is being asked to effect economies through the redundancy of 450 members of its staff. The Minister has talked about the percentages to which I referred, but he did not challenge the assertion that ADAS's advisory staff will be reduced by 20 per cent. He is aware that the Minister of Agriculture, Fisheries and Food has stated that the ADAS research staff will be cut by 450 in two years. Those people will be cast adrift in a commercial world and will be inadequately prepared, and ADAS will have a diminishing staff that will be unable to compete on equal terms. There will be less advice available to agriculture at a time when it will want it most.
      I do not want to take up all the Byzantine rhetoric that the influence of certain shouting induced the Minister to produce, but I must respond to the right hon. Gentleman's comment that the Opposition trailed away in Committee. We trailed away to the extent that we forced a vote against the clause at the end of the debate to decide whether the clause should stand part of the Bill. We intend to force a vote against the clause this evening because we believe that a statutory duty could be combined with a wider definition of agriculture, and not because we believe that a narrower definition of agriculture should prevail. We do not accept that the one goes with the other. I hope that the House will reject the clause out of hand.
      Question put, That the amendment be made:—
      The House divided: Ayes 28, Noes 125.

      Division No. 146]

      align="right">[11.35 pm

      AYES

      Bennett, A. (Dent'n & Red'sh)

      Livsey, Richard

      Bruce, Malcolm

      McKay, Allen (Penistone)

      Campbell-Savours, Dale

      Maclennan, Robert

      Carlile, Alexander (Montg'y)

      Nellist, David

      Clelland, David Gordon

      Parry, Robert

      Cunliffe, Lawrence

      Pike, Peter

      Dalyell, Tam

      Randall, Stuart

      Eadie, Alex

      Rogers, Allan

      Evans, John (St. Helens N)

      Ross, Stephen (Isle of Wight)

      Ewing, Harry

      Rowlands, Ted

      Harrison, Rt Hon Walter

      Skinner, Dennis

      Haynes, Frank

      Wigley, Dafydd

      Home Robertson, John

      Howells, Geraint

      Tellers for the Ayes:

      John, Brynmor

      Mr. Ron Davies and

      Kirkwood, Archy

      Mr. John McWilliam.

      NOES

      Amess, David

      Bulmer, Esmond

      Ashby, David

      Carlisle, Kenneth (Lincoln)

      Atkins, Rt Hon Sir H.

      Carlisle, Rt Hon M. (W'ton S)

      Atkinson, David (B'm'th E)

      Carttiss, Michael

      Baker, Nicholas (Dorset N)

      Cash, William

      Baldry, Tony

      Chalker, Mrs Lynda

      Batiste, Spencer

      Chope, Christopher

      Bellingham, Henry

      Clark, Dr Michael (Rochford)

      Benyon, William

      Conway, Derek

      Biffen, Rt Hon John

      Cope, John

      Biggs-Davison, Sir John

      Cranborne, Viscount

      Blackburn, John

      Currie, Mrs Edwina

      Bonsor, Sir Nicholas

      Dorrell, Stephen

      Boscawen, Hon Robert

      Dover, Den

      Bottomley, Mrs Virginia

      Dunn, Robert

      Bowden, Gerald (Dulwich)

      Durant, Tony

      Bright, Graham

      Eyre, Sir Reginald

      Brinton, Tim

      Fallon, Michael

      Brooke, Hon Peter

      Farr, Sir John

      Bryan, Sir Paul

      Favell, Anthony

      1126

      Fenner, Mrs Peggy

      Mather, Carol

      Fletcher, Alexander

      Mayhew, Sir Patrick

      Forman, Nigel

      Merchant, Piers

      Forsyth, Michael (Stirling)

      Miller, Hal (B'grove)

      Forth, Eric

      Mills, Iain (Meriden)

      Fowler, Rt Hon Norman

      Mitchell, David (Hants NW)

      Freeman, Roger

      Moate, Roger

      Garel-Jones, Tristan

      Moynihan, Hon C.

      Goodhart, Sir Philip

      Murphy, Christopher

      Griffiths, Peter (Portsm'th N)

      Nelson, Anthony

      Ground, Patrick

      Neubert, Michael

      Gummer, Rt Hon John S

      Newton, Tony

      Hamilton, Hon A. (Epsom)

      Nicholls, Patrick

      Hamilton, Neil (Tatton)

      Osborn, Sir John

      Hanley, Jeremy

      Page, Richard (Herts SW)

      Hargreaves, Kenneth

      Patten, J. (Oxf W & Abgdn)

      Hawksley, Warren

      Pollock, Alexander

      Heathcoat-Amory, David

      Portillo, Michael

      Hickmet, Richard

      Powell, William (Corby)

      Hind, Kenneth

      Powley, John

      Holt, Richard

      Proctor, K. Harvey

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

      Raffan, Keith

      Howarth, Gerald (Cannock)

      Rees, Rt Hon Peter (Dover)

      Hunt, David (Wirral W)

      Rhodes James, Robert

      Hurd, Rt Hon Douglas

      Rhys Williams, Sir Brandon

      Jenkin, Rt Hon Patrick

      Ridsdale, Sir Julian

      Johnson Smith, Sir Geoffrey

      Sainsbury, Hon Timothy

      Jopling, Rt Hon Michael

      Shaw, Sir Michael (Scarb')

      Kellett-Bowman, Mrs Elaine

      Shepherd, Colin (Hereford)

      Key, Robert

      Soames, Hon Nicholas

      Knight, Greg (Derby N)

      Stradling Thomas, Sir John

      Knight, Dame Jill (Edgbaston)

      Thompson, Donald (Calder V)

      Knowles, Michael

      Thompson, Patrick (N'ich N)

      Leigh, Edward (Gainsbor'gh)

      Thorne, Neil (Ilford S)

      Lennox-Boyd, Hon Mark

      Thurnham, Peter

      Lilley, Peter

      Viggers, Peter

      Lord, Michael

      Wakeham, Rt Hon John

      Lyell, Nicholas

      Wardle, C. (Bexhill)

      McCurley, Mrs Anna

      Whitfield, John

      MacGregor, Rt Hon John

      Wood, Timothy

      MacKay, John (Argyll & Bute)

      Major, John

      Tellers for the Noes:

      Malins, Humfrey

      Mr. Gerald Malone and

      Marland, Paul

      Mr. Francis Maude.

      Question accordingly negatived.
      11.45 pm
      Mr. Home Robertson: I beg to move amendment No. 7, in page 2, line 22, at end insert—
      '(6) In exercising his powers and duties under section 4 of the Small Landholders (Scotland) Act 1911, the Secretary of State for Scotland shall take account of the objectives of subsections (1), (2) and (4) of this section.'.
      Mr. Deputy Speaker: With this it will be convenient to take amendment No. 28, in page 14, line 34 [Clause 15], leave out subsection (6).
      Mr. Home Robertson: One of the purposes of amendment No. 7 is to enable us to hear something from the Under-Secretary of State for Scotland, who sat through the entire Committee stage of the Bill in silence. That, I think, was a case of dumb insolence on his part, but we hope during this brief debate to entice him to say something about the situation in the agricultural, advisory and research service in Scotland.
      The obscure reference in the amendment to the Small Landholders (Scotland) Act 1911 will, I trust, enable us to debate the Government's attack on the agricultural advisory service, the research service and agricultural education in Scotland. The amendment would incorporate the useful aspects of clause 1 into the Scottish system, and it would specifically build in the reference to conservation in subsection (1)(b) into the Scottish scene, but it would

      1127
      obviously omit the unjustifiable reference to charges in subsection (3), about which my hon. Friend the Member for Pontypridd (Mr. John) was speaking in relation to the rest of the United Kingdom a minute or two ago.
      Charges for advisory services for agriculture in Scotland are not ruled out by the present legislation as it affects Scotland. However, it has not been the practice of the Scottish agricultural colleges to charge for their advisory services, and the plans to impose such charges are part of a squalid package of cuts which are being imposed by the Treasury on the Ministry of Agriculture, Fisheries and Food and on the Department of Agriculture and Fisheries for Scotland. What a package that is for Scotland.
      We are being confronted with a 41 per cent. cut in the funding for the agricultural advisory services of the three Scottish agricultural colleges. We are being confronted with an 18 per cent. cut in the funding for research and development in Scotland, and there are parallel cuts in the state veterinary service and in the other aspects of state involvement in agriculture in Scotland.
      All that is being dressed up as some kind of a review of agricultural education, advisory services and research in Scotland, but in reality this is an extremely damaging raid by the Treasury on the Scottish agricultural college system.
      The integrated system that we have in Scotland is universally recognised to work well. Indeed, it was recently commended by the Select Committee on Agriculture as a system which worked well because it is a partnership between the agricultural research services, the agricultural advisory services and agricultural education.
      There is no waste in the system, and there is proper cooperation between the three sectors. There are no watertight compartments. People involved in agricultural research in Scotland are in close contact with farmers, and the students in our colleges get the maximum practical experience. There is a proper flow of information between the three sectors.
      The cuts in the budgets of our three agricultural colleges, and the cuts which have been imposed on the Scottish agricultural research institutes are undermining the whole system. There is genuine evidence that Scotland is taking a heavier share of that cut, although the Government are predictably going to great lengths to try to obscure the issue. Indeed, it is difficult to establish direct comparisons because of the different structures in England and Scotland.
      I find the arguments and the detailed figures which have been provided by the Scottish agricultural colleges on this issue convincing and disturbing. There appears to be a genuine risk that if the income from charges cannot be raised in the coming year, the advisory staff throughout Scotland could be cut from a total establishment of 208 advisers to only 55.
      The problem seems to be that the Scottish agricultural colleges are facing even tougher constraints than ADAS in accommodating that regime of cuts. The first year could be absolutely disastrous. If they cannot get the income from the charges in 1987–88, the entire system could collapse. That is no exaggeration, because if there is a fall in the numbers of staff available to do the job in Scotland it will be impossible for those in remote areas to get access to the service. The costs of providing the service are higher in Scotland. Many farms are in remote areas. The needs
      1128
      of the marginal areas, such as the area that the Parliamentary Under-Secretary of State for Scotland is supposed to represent, are considerably greater.
      I refer to the annual report for 1985 of the Edinburgh School of Agriculture that serves the east of Scotland. It refers to a market research project into the reaction of farmers at the prospect of having to pay commercial rates for advice. It says:
      "This report indicates that the standing of the College's advisory service ranks high with Scottish farmers hut their ability to pay is, as we suspected, severely curtailed by their current financial position. In the last normal year for which data are available (1984), the net farm incomes of Scottish farmers were less than £5,000 a year, and thus it is obvious that many farmers with less than average incomes will have great difficulty in paying an economic charge for advice which they have previously received free."
      The report continues:
      "the revamped services will not merely have to be sold to farmers able and willing to pay, they will have to be tailor-made to farmers' needs and marketed accordingly."
      The report makes two fundamental points. First, there is likely to be a slump in the uptake of advice by farmers. That slump in uptake may be only temporary, because the farmers cannot afford the advice, in present circumstances. Many of the farmers who most need the advice will be those who cannot afford it, under present circumstances. They may believe that they can do without this kind of technical support in the next year or two, but if they do without it in the next few years they will find that it is no longer there if they decide later that they want to take it up again. The shortfall in funding could wreck the system.
      Secondly, the advisory and research services may in future have to be targeted at the most prosperous farms. The smaller, marginal farms—the farms that most need advice—will find that those services are no longer available. It is a serious matter, and I hope that the Minister will deal with it.
      As if the disruption of the Scottish colleges, with their excellent system of integrated education and advice, were not enough, the Government have extended their attack to the Scottish agricultural research institutes. The principal focus of the Government's attack is upon soil science, land use and marginal farming, refer to the Macaulay Institute of Soil Research in Aberdeen and to the Hill Farming Research Organisation that is based at the Bush in Midlothian.
      These two institutes provide a classic example of the principle of divide and rule The Government say that they want to get rid of about 100 members of staff and of one of the two locations at either Craigiebuckler or the Bush. Not surprisingly, both of the institutes and their staff have rallied to save their own institutes. The Government have cynically stood back and watched the conflict that they deliberately sought to start.. That is a despicable way to treat two excellent Scottish agricultural research institutes. Even at this late stage, I urge the Minister to think again.
      The remote rural areas in Scotland that are involved in marginal farming need all the expertise that is available in Scotland to restructure and to diversify land use and the economy of those areas.
      This is not the moment in our history to sacrifice excellent institutes like the MacAuley and the HFRO, which can help restructure those important and fragile factors of our economy and ecology.
      I am not opposed to a review of the system, but I am opposed to these wholesale cuts at a time like this. Can I

      1129
      urge the Government to give genuine consideration to the positive suggestions being made by the Institution of Professional Civil servants which call for the forming of a new united institute which could work from the two locations in Mid-Lothian and Aberdeen? It would be sensible because it would provide a focus of activity both in the north and south of Scotland which could meet the needs of both parts of the country.
      I would like to mention the cuts in the state veterinary service, because I think that that is relevant to what we are talking about tonight, and the centre at Casswade in Mid-Lothian, which is being closed.
      I fear that the cuts will undermine the genuinely vital service and could increase the hazards not only to animal health, but also to human health in Scotland. We all know that some animal health problems can give rise to a risk to human health too.
      I put it to the Minister that the Government must stand condemned in its contempt for rural Scotland, the farming industry, and the staff of the Scottish agricultural colleges and institutes. We demand a proper constructive review of the system, which must include adequate funding to help to guide the Scottish agricultural industry through these times of fundamental change.
      12 midnight
      The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): The purpose of these amendments would have been to ensure that the provision of advisory and related services in Scotland would be the same as in England and Wales. That was not obvious from the hon. Member's speech, because the last thing that he did was to speak to the two amendments in his name.
      We are proud in Scotland of our distinctive system, a key element of which is the Scottish agricultural colleges, generally independent of Government, though deriving a substantial proportion of their income from Government, and able to integrate advisory, research and development and education services.
      Section 4 of the Small Landholders (Scotland) Act 1911 has been seen as the main vehicle by which the Secretary of State for Scotland can provide advice and services through the colleges. The terms of this section are broadly drawn and they have proved sufficiently flexible over the best part of the century to allow changing levels and patterns of service to be provided.
      Existing legislation already provides sufficient cover for the Secretary of State for Scotland to fund, and thus guide, the provision made by the colleges for the advisory and related services. Further legislation as suggested in amendments by the hon. Member is strictly unnecessary, and can only put in question the adequacy of that existing legislation. Far from clarifying the position, as is not unusual with the hon. Member, he could only create uncertainty.
      The advisory services north and south of the border have always marched broadly in step. The idea that the cuts in Scotland will be as drastic as an hon. Member was suggesting is totally misleading. The idea that a 41 per cent. reduction in expenditure will lead to a 75 per cent. reduction in staff is also misleading, and causes alarm amongst the people whom I presume the Opposition want it to cause alarm to.
      1130
      He himself said that there was some agreement on the merit of the new united institution. I think he also mentioned one of the trade unions involved. He knows that both institutions favour that concept, and the governing body of the MacAuley recently issued a statement to that effect.
      The idea is an exciting one, and one which a lot of people agree with. The contentious question is where the institution should be cited.
      A group is currently studying the options available to us for the citing of the institution, whether Aberdeen or Edinburgh, or a combination of the two. It will not do any good to prejudge what that group is going to advise us on the question of citing.
      Mr. Michael Forsyth: Could I urge my hon. Friend to give as much weight to the arguments which have been put by the hon. Gentleman as is reflected by the attendance of Opposition Members? The fact that there is only one of them present surely indicates that there is not as much feeling about this as an issue as he has given us to understand.
      Mr. MacKay: My hon. Friend has made a valid point, but any of my hon. Friends who have listened to the hon. Member for East Lothian (Mr. Home Robertson) will know that he is a great man for generating heat, if a little light. Obviously his colleagues know that and have pushed off to their beds.
      As independent companies, the Scottish agricultural colleges do not require statutory authority to raise charges. It would be undesirable for Ministers to exercise the degree of control over such companies suggested in the hon. Member's amendments. None the less, as the major funding body for the colleges, my Department can exercise close oversight over their activities and we shall expect the spread and level of charges to be determined only after close consultation with the Department.
      I ask my hon. Friends to resist the amendments on the grounds that they are unnecessary, confusing and therefore undesirable, but most particularly because they are wholly inappropriate to the present distinctive arrangements for providing advisory and related services in Scotland. If the hon. Member does not seek to withdraw I hope my hon. Friends will join me in the Lobby.
      Amendment negatived.

    Clause 4

      CONSTITUTION AND FUNCTIONS OF HOME-GROWN CEREALS AUTHORITY
      Mr. Deputy Speaker: We now come to Government amendment No. 8, with which it will be convenient to consider amendment No. 9 and Government amendment No. 10.
      Amendments made: No. 8, in page 3, line 16, leave out `eleven' and insert `twelve'.
      No. 10, in page 4, line 1, leave out from beginning to end of line 8 and insert—
      '(4A) The Ministers shall appoint one of the members appointed under paragraph (a) of subsection (3) of this section to be chairman and another to be deputy chairman of the Authority.'.—[Mr. Gummer.]
      Mr. Home Robertson: I had better move amendment No. 9.
      Mr. Deputy Speaker: The hon. Gentleman has missed his chance. I have put the Question on amendment No. 10.
      Amendment made: No. 11, in page 4, line 18, after 'cereals"', insert 'and for the words "the marketing of cereals" there shall be substituted the words "the production or marketing of cereals.".'.—[Mr. Gummer.]

    Clause 6

      EXTENSION OF CEREALS MARKETING ACT 1965 TO NEW CEREALS AND OTHER CROPS
      Amendments made: No. 12, in page 6, line 35, after `(a)', insert 'herbage seed, flax and'.
      No. 13, in page 6, line 39, at end insert—
      '(d) any other arable crop (except sugar, hops, potatoes or any horticultural produce within the meaning of section 8(1) of the Horticulture Act 1960).'.—[Mr. Gummer.]

    Clause 7
      CONSTITUTION AND LEVY SCHEMES OF MEAT AND LIVESTOCK COMMISSION
      Amendment made: No. 14, in page 7, line 23, leave out 'eleven' and insert 'fifteen'.—[Mr. Gummer.]
    Clause 12

      DESIGNATION AND MANAGEMENT OF ENVIRONMENTALLY SENSITIVE AREAS
      Mr. Maclennan: I beg to move amendment No. 18, in page 11, line 4, leave out 'person' and insert 'landlord and tenant'.
      Mr. Deputy Speaker: With this it will be convenient to discuss the following amendments:
      No. 19, in page 11, line 4, leave out 'having an interest in' and insert 'farming'.
      No. 20, in line 5, leave out 'that person agrees' and insert 'those persons agree'.
      No. 22, in line 27, at end insert—
      `( ) Prior to the making of an agreement with a tenant of agricultural land, the Minister shall notify the owner of that land of the terms offered to the tenant and shall provide the owner with a copy of the agreement. '.
      No. 23, in line 28, leave out subsection (7).
      Mr. Maclennan: I move the amendment, admittedly at a late stage in the proceedings on the Bill, to get clarification from the Government about the arrangements which they may make under the provisions in the clause for the designation and management of environmentally sensitive areas, and to seek elucidation as to with whom the Government intend that the arrangements should be made.
      It seems that both landlord and tenant would have an interest in the arrangement, although normally it would be the tenant, if there is a tenant, who would be most immediately involved in the sense of his income being affected by the recompense for the implementation of the management agreement. None the less, the use of different techniques by the tenant could affect the capital value of the land and might even affect the rent. Therefore, it would be interesting to know how the Government see it. The use of the word "person" which I seek to have substituted
      1132
      might cover both landlord and tenant, but, as I read the clause, it is not necessarily so. I should be grateful for the Minister's elucidation.
      Mr. Stuart Randall: The purpose of amendment No. 19 is to make clear with whom the agreement about environmentally sensitive areas will be made. Clause 12 (4) says that the agreement may be made between the Minister and somebody
      "having an interest in agricultural land".
      I carefully read the Minister of State's notes. As he knows, I was not on the Committee, and I found that his explanation of the matter was quite clear. I noted that he was anxious to ensure that the terms used were sufficiently broad to make sure that one did not write any person or group out of the legislation.
      The term,
      "any person having an interest in agricultural land"
      is so broad that it makes that part of the clause misleading. Our amendment seeks to remove that term and substitute "a person farming agricultural land." The amendment will ensure that the agreement cannot be unfairly exploited by landowners, especially landowners who do not work the land.
      The second aim of the amendment is to ensure that any ESA grants or moneys go direct to tenants, because they are the people who farm the land and who could lose the use of productive land or find that their agricultural output is reduced as a result of the experiment. In its submission the National Farmers Union said:
      "Agreements should whenever possible be entered into with the person who has the right to determine the practices followed."
      Clearly, that says that it is the tenant to whom we should be referring.
      There is a need to make the wording of the clause more specific for the purposes of clarification. In Committee the Minister made a fair point when he said that there is a need to ensure flexibility to cater for all the cases and for the range of cases to which the ESAs and the various agreements will refer. For example, one could have an agreement between the Minister and a tenant, and one could also have sub-tenancies and grazing rights and all these things need to be catered for. The phrase "farming agricultural land" makes it clear that the clause is still broadly based and caters for the range of cases for which it needs to cater without the need for subsequent amendments to the legislation.
      The words, "having an interest in" are too general and could lead to abuse. Some landlords have an interest in their land but do not actually farm it, and the clause as presented could be taken to embrace landlords who do not work the land. That is not what the clause should be about. For too long we have been damaging our environment, and the hon. Member for Mid-Worcestershire (Mr. Forth), who will lose his seat at the next general election, ought to concern himself about these matters. When I lived in his constituency, I was aware and, indeed, was continually told by people in the constituency, how he neglected it. Rather than barracking, he ought to think about his own constituents and about some of the ESAs because they would be useful in his constituency.
      If an ESA is to be a success, the prerequisite is that it must be seen to be fair. Fairness is crucial. This means that we must compensate tenants for the loss of productive capacity and output, which obviously affects their incomes.

      1133
      In addition to ensuring that they get all this money, there must be an incentive to participate in the scheme and make sure that it works effectively. We all know that landlords have a lot of practical and financial influence and many powers. This means that they have enormous inherent advantages. They can, for example, determine tenancy agreements when there is a change of tenancies, and whether an ESA continues. The amendment attempts to counter this inherent advantage and to provide a more balanced arrangement.
      We also believe that the agreement should be directly with the tenant, namely, the person who farms the land. We believe that it would not be unreasonable for the landlord to be informed of the agreement. It is not difficult to think of instances where certain interests of landlords could be affected in a detrimental way.
      There are two reasons why landlords should not worry about an amendment of this kind. First, the agreements are voluntary in nature, and last for about five years only. The full support of the tenants is vital to the success of any agreement. It is important that tenants get the full financial compensation. If not, the ESA scheme will fail. We believe that this will be bad for Britain.
      We say that the amendment is accurate, broadly based and indicates clearly that the agreement is to be with those who farm the land. We hope that the Minister will take this into account.
      If I may deal briefly with amendment No. 22, on the face of it it looks not unreasonable, but I would like to have the Minister's interpretation of the words
      "notify the owner of that land of the terms offered to the tenant".
      The amendment states that the landlords should be notified beforehand of the changes and agreements. Does notify mean notify, or does it provide the landlord with an opportunity to take part—
      Mr. Deputy Speaker: Order. The hon. Member for Hereford (Mr. Shepherd) is waiting to explain his amendment to the House. It might be more convenient for the House to listen to the hon. Gentleman before it starts to make up its mind on the amendment.
      Mr. Randall: That is a good idea. I take your advice on that, Mr. Deputy Speaker. I shall wait to hear what the hon. Gentleman has to say, and I shall respond to it afterwards.
      12.15 am
      Mr. Colin Shepherd: I am grateful for the opportunity to intervene, and I shall speak very briefly to amendments Nos. 22 and 23. During the Committee proceedings, the CLA was worried lest there be misunderstanding that amendment No. 22 sought provision for prior consent by a landlord before a tenant could enter into an agreement with an ESA. That was not the case. The CLA was seeking to ensure that the owner was made aware of the fact that an agreement was being entered into and the terms of that agreement. Apart from wishing to know about management decisions affecting his land, the owner should be informed of any financial arrangements entered into by the tenant that may well be material in rent reviews.
      The Minister replied that the MAFF would
      "normally want the landlord to take his full part in the agreement".
      He also said:
      1134
      "First, we shall be discussing the matter with all those concerned. Secondly, in agreeing with a tenant we shall require him to notify the owners".—[Official Report, Standing Committee B, 28 January 1986; c. 259–61.]
      If that is to be the case, the CLA feels that the Act should say clearly that the owner is to be notified. For the benefit of the hon. Member for Kingston upon Hull, West (Mr. Randall), it is the pure dictionary definition of the word "notify". The Act should also state whether the tenant or the Minister should notify.
      In Committee, the Minister gave repeated assurances that no agreement would be binding on anyone who did not voluntarily enter into it, nor on one who was not party to it. In view of that, it would be preferable to delete a clause that seeks to bind successors in title—hence the reason for amendment No. 23. I very much hope that my right hon. Friend will give sympathetic consideration to accepting these two amendments because they put straight matters that were subject to confusion or misunderstanding in Committee.
      Mr. Gummer: I shall deal first with the amendments that were introduced by the hon. Member for Caithness and Sutherland (Mr. Maclennan). It is difficult to accept them. If they were inserted in the Bill, it would mean that the Minister would be able to make an agreement only with the landlord and the tenant. I hope that the hon. Gentleman agrees that that is not what he would wish us to do, because there will be occasions on which one might wish to make an agreement with an owner-occupier. That would not be possible if this change were made, and one might wish to make other agreements with the tenant without reference to the landlord, although it will be insisted that the tenant must notify the landlord.
      It may be that we shall wish to reach agreement with a tenant on a matter that is purely in the direct interest of the tenant. We want to be as flexible as possible in our arrangements. That is the purpose of the ESAs. They are experimental areas, and all sides of the House will agree that we want to keep them as such so that we can learn from them and perhaps build upon them.
      If that is so, it is important that we do not tie anyone down to a precise formula of the kind that would involve making an agreement only with the landlord and tenant. I am keen that it should not be as narrow as that, and I am sure that the hon. Member for Caithness and Sutherland will not wish to press the amendment, given that it has an unfortunate side effect which I do not think he intended.
      Mr. Maclennan: I am not sure whether it has that unfortunate side effect, but perhaps that is a matter of interpretation. The Minister's intentions are important. What does he mean by a person having an interest in land? In a case involving landlord and tenant, does he mean merely the tenant? If that is so, he has at least cleared up part of my uncertainty, but I am not satisfied that the landlord should not have a say in such cases.
      Mr. Gummer: What we mean is precisely what we have said about persons having an interest in the land. We want to have an agreement with the person who can deliver on the subject on which the agreement is made. These agreements will be very wide. We shall be making various kinds of agreement, different circumstances, and different arrangements. Some will be minor, some major, in the impact they have upon farming patterns. In all cases, in dealing with a tenant we shall require that the tenant

      1135
      informs the landlord. That is a requirement that we shall lay down, and I have given an absolute commitment to that which I repeat this evening.
      What we do need, however, is to be able to have that agreement with the person who has the interest in the land and who can deliver the goods, so to speak, the person who is carrying out the activity or is involved in the activity on which we wish to get agreement. I am sorry that it is as broad as this, but, if we are experimenting in the way that we wish, we do not want to get into the position the hon. Gentleman would put us in, that of having to agree with the landlord and tenant in circumstances where we need an agreement only with the tenant, only with the landlord or where we want to have an agreement with the owner-occupier. The amendment would mean that we could have none of those separately but only one in combination. It is more than unnecessary; it would be onerous and wrong to write into the legislation what is contained in the amendment.
      Mr. Randall: Just a very quick point of clarification. I take the Minister's point about flexibility. It is just that when one looks at this particular clause one immediately has the impression that, if the courts had to interpret it, they would see the main motive not as looking after the interests of the tenant and ensuring that all the money goes to the tenant, but providing loopholes for the landlord, who might not necessarily farm the land, to get his hands on some of the money. This is really what I should like an assurance on from the Minister.
      Mr. Gummer: The purpose of the money is to achieve the end that we have in mind; therefore, the money is provided to the person who can deliver the goods. I am putting it as broadly as that because I hope that the hon. Gentleman, in following very carefully, as I know he has been doing, the Hansard report of the Committee, will see that we are concerned with a whole range of different agreements. So I am putting it as broadly as that to cover the whole range of deals that we may do in order to protect the environmentally sensitive areas. I can assure the hon. Gentleman that the purpose is to use that money to recompense people who would otherwise have farmed in a different way, so, in a very large proportion of cases, they will he the farmers.
      I do not want to be tied to "the farmer", for the reason that, if we put in "farmer", as the hon. Gentleman would wish, it would mean that we were tied then to doing the deal only with the tenant, if it was a tenancy that was involved. I can envisage circumstances in which that would be inhibiting. Let us take, for example, a situation in which there might soon be a change of tenancy. One might want to have a tripartite agreement between the existing tenant, the landlord and the Ministry, in order to ensure that a number of aspects of the matter were taken into account. Sometimes we might want to link together a group of people; under the amendment, we could not actually do that. That is why we think that it would be a mistake. We want to be in a position where we can make an agreement with the landlord if that is the person with whom it can most properly be made, and where, if we need to make an agreement with landlord and tenant, we can do that.
      We have been perfectly straight about it: if the experiment is to work we must have the opportunity of
      1136
      trying to find the best agreement in the circumstances, so that we can look at all these five or six places and see how they work, in order to learn one from another.
      I hope that Opposition Members will accept that and will not feel it necessary to press these amendments. It is right for them to have raised the amendments, but I feel that to be more precise here than we have been will be to put ourselves into a more difficult position.
      Turning to the amendments of my hon. Friend the Member for Hereford (Mr. Shepherd), I had hoped that we had dealt with these earlier, in Committee. I repeat that I am absolutely committed to requiring the tenant to notify the landlord when there has been an agreement with the tenant. I do not want to include a specific provision on this point in the clause because we have not gone into detail about this in all the other areas of which we have been speaking. It would be a very peculiar general enabling position if the only thing that we put into it was that in the case of a tenancy we would require the tenant to notify the landlord. I give an absolute assurance that that is what we shall do. That is the way in which we shall conduct these experiments. In the light of that absolute assurance, I ask my hon. Friend whether he would feel able to withdraw his amendment.
      The clause could so easily have become a pantechnicon of bits and pieces—each perfectly reasonable—and would have become unwieldy. We would gradually have moved to a position where the experiments would have been far too regimented. For the sake of others, I ask my hon. Friend to withdraw—
      Mr. Deputy SpeakerOrder. The amendment was selected for debate, not for a possible Division. It has not been moved.
      Mr. Gummer: It would be right to leave the position as it is because to do otherwise would complicate the matter and lead others to feel that other things should be added. I hope that my hon. Friend will accept my assurances.
      My hon. Friend referred to a succession of tenancies. We are thinking in terms of five-year agreements, so any agreement passed on to the next tenant would not be very onerous. It is necessary to have some continuity. As we are talking about the defence and protection of sensitive areas, we are keen that the agreement should be given a reasonable run. If there is a change of tenancy, it would not be onerous for the agreement to be passed on for its duration. We do not want to be tied entirely to the norm of a five-year agreement because, for experimental purposes, we might try slightly shorter or even slightly longer periods. It would be a small price to pay for some degree of continuity.
      I am sure that my hon. Friend will appreciate that to have all but one tied to a five-year agreement, with the one split because of a transfer from one tenant to another, would be damaging to the experiment. I hope that he accepts my assurance that it is less onerous than the provision in section 39(3) of the Wildlife and Countryside Act, under which agreements can extend for an unspecified and much longer period. I hope that my hon. Friend will accept this shorter period.
      Mr. Maclennan: I remain a little uneasy about the wording for fear that an agreement reasonably entered into

      1137
      between the Minister and one party with an interest in the land may adversely affect the interests of another party such as the tenant or the landlord.
      I admit that my concern has not been voiced strongly by outside interests, so it would be inappropriate to press the amendment.
      I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 15

      SHORT TITLE, COMMENCEMENT, CONSEQUENTIAL AMENDMENTS, REPEALS AND EXTENT
      Amendments made: No. 25, in page 14, line 18, leave out from '8' to 'shall' in line 19 and insert
      '10 and section [Compensation to outgoing tenants for milk quota] and the repeals consequential on sections 8 to 10'.
      No. 26, in page 14, line 20, leave out
      'responsible for agriculture in the different parts of the United Kingdom'.
      No. 27, in page 14, line 25, at end insert
      'and in this subsection "the Ministers" means the Ministers responsible for agriculture in the parts of the United Kingdom to which the provision in question extends'.
      No. 29, in page 14, line 34, leave out
      'Section 1 of this Act does'
      and insert
      'Sections 1 and [Compensation to outgoing tenants for milk quota] above and Schedule [Tenants' compensation for milk quota] to this Act do'.—[Mr. Jopling.]

  NEW SCHEDULE
    TENANTS' COMPENSATION FOR MILK QUOTA Part I

      Right to Compensation
      Tenants' right to compensation
      1.—(1) Subject to the following provisions of this Schedule, where on the termination of the tenancy of any land the tenant has milk quota registered as his in relation to a holding consisting of or including the land, the tenant shall be entitled, on quitting the land, to obtain from his landlord a payment—

      (a) if the tenant had milk quota allocated to him in relation to land comprised in the holding ("allocated quota") in respect of so much of the relevant quota as consists of allocated quota; and

      (b) if the tenant had milk quota allocated to him as aforesaid or was in occupation of the land as a tenant on 2nd April 1984 (whether or not under the tenancy which is terminating), in respect of so much of the relevant quota as consists of transferred quota transferred to him by virtue of a transaction the cost of which was borne wholly or partly by him.

      (2) In sub-paragraph (1) above—
      "the relevant quota" means—

      (a) in a case where the holding mentioned in subsection (1) above consists only of the land subject to the tenancy, the milk quota registered in relation to the holding; and

      (b) otherwise, such part of that milk quota as falls to be apportioned to that land on the termination of the tenancy;

      "transferred quota" means milk quota transferred to the tenant by virtue of the transfer to him of the whole or part of a holding.
      (3) A tenant shall not be entitled to more than one payment under this paragraph in respect of the same land.
      Succession on death or retirement of tenant
      2.—(1) This paragraph applies where on the termination of the tenancy of any land after 2nd April 1984 a new tenancy of the land or part of the land has been granted to a different tenant ("the new tenant") and that tenancy—
      1138

      (a) was obtained by virtue of a direction under section 39 or 53 of the Agricultural Holdings Act 1986 (direction for grant of tenancy to successor on death or retirement of previous tenant);

      (b) was granted (following a direction under section 39 of that Act) in circumstances within section 45(6) of that Act (new tenancy granted by agreement to persons entitled to tenancy under direction); or

      (c) is such a tenancy as is mentioned in section 37(1) (b) or (2) of that Act (tenancy granted by agreement to close relative).

      (2) Where this paragraph applies—

      (a) any milk quota allocated or transferred to the former tenant (or treated as having been allocated or transferred to him) in respect of the land which is subject to the new tenancy shall be treated as if it had been allocated or transferred to the new tenant; and

      (b) in a case where milk quota is treated under paragraph (a) above as having been transferred to the new tenant, he shall be treated as if he had paid so much of the cost of the transaction by virtue of which the milk quota was transferred as the former tenant bore (or is treated as having borne).

      (3) Sub-paragraph (1) above applies in relation to the grant of a new tenancy before the date on which the Agricultural Holdings Act 1986 comes into force as if the references in that sub-paragraph to section 39, 53 and 45(6) of that Act were references to section 20 of the Agriculture (Miscellaneous Provisions) Act 1976, paragraph 5 of Shedule 2 to the Agricultural Holdings Act 1984 and section 23(6) of the said Act of 1976 respectively.
      Assignments
      3. Where the tenancy of any land has been assigned after 2nd April 1984 (whether by deed or by operation of law)—

      (a) any milk quota allocated or transferred to the assignor (or treated as having been allocated or transferred to him) in respect of the land shall be treated as if it had been allocatd or transferred to the assignee; and

      (b) in a case where milk quota is treated under paragraph (a) above as having been transferred to the assignee, he shall be treated as if he had paid so much of the cost of the transaction by virtue of which the milk quota was transferred as the assignor bore (or is treated as having borne);

      and accordingly the assignor shall not be entitled to a payment under paragraph 1 above in respect of that land.
      Sub-tenancies
      4. Where the sub-tenancy of any land terminates after 2nd April 1984 then, for the purposes of determining the sub-landlord's entitlement under paragraph 1 above—

      (a) any milk quota allocated or transferred to the sub-tenant (or treated as having been allocated or transferred to him) in respect of the land shall be treated as if it had been allocated or transferred to the sub-landlard;

      (b) in a case where milk quota is treated under paragraph (a) above as having been transferred to the sub-landlord, he shall be treated as if he had paid so much of the cost of the transaction by virtue of which the milk quota was transferred as the sub-tenant bore (or is treated as having borne); and

      (c) if the sub-landlord does not occupy the land after the sub-tenancy has ended and the sub-tenant has quitted the land, the sub-landlord shall be taken to have quitted the land when the sub-tenant quitted it.

      PART II

        AMOUNT OF COMPENSATION PAYABLE
        Calculation of payment
        5.—(1) The amount of the payment to which the tenant of any land is entitled under paragraph 1 above on the termination of his tenancy shall be determined in accordance with the following provisions of this paragraph.
        (2) The amount of the payment to which the tenant is entitled under paragraph 1 above in respect of allocated quota shall be an amount equal—

        (i) in a case where the allocated quota exceeds the standard quota for the land, to the value of the sum of—

        (ii) the amount of the excess:

        1139

        (b) in a case where the allocated quota is equal to the standard quota, to the value of the tenant"s fraction of the allocated quota; and

        (c) in a case where the allocated quota is less than the standard quota, to the value of such proportion of the tenant's fraction of the allocated quota as the allocated quota bears to the standard quota.

        (3) The amount of the payment the tenant is entitled to under paragraph 1 above in respect of the transferred quota shall be an amount equal—

        (a) in a case where the tenant bore the whole of the cost of the transaction by virtue of which the transferred quota was transferred to him, to the value of the transferred quota; and

        (b) in a case where the tenant bore only part of that cost, to the value of the corresponding part of the transferred quota.

        "Standard quota"
        6.—(1) Subject to the following provisions of this paragraph, the standard quota for any land for the purposes of this Schedule shall be taken to the number of litres of cow's milk which could reasonably be expected to have been produced from the land in a period of 12 months.
        (2) The number mentioned in sub-paragraph (1) above shall be calculated—

        (a) by reference to the average number of hectares of the land used during the relevant period for the feeding of dairy cows kept on the land; and

        (b) on the assumption that the amount of milk produced from one hectare of land in a period of 12 months is such amount as the Minister may by order prescribe.

        (3) An order under sub-paragraph (2) above may make different provision for different cases.
        (4) Where—

        (a) the average number of hectares of the land in question which could reasonably be expected to have been used during the relevant period for the feeding of dairy cows kept on the land (having regard to the number of grazing animals other than dairy cows fed from the land during that period) is substantially greater or less than the average number referred to in sub-paragraph (2)(a) above; or

        (b) the amount of milk which could reasonably be expected to have been produced from one hectare of the land in question during the relevant period is substantially greater or less than the amount prescribed under sub-paragraph (2) (b) above, then that number or, as the case may he, amount shall be adjusted accordingly.

        (5) For the purposes of sub-paragraph (4) above a number or amount shall be taken to be substantially greater or less than another only if it exceeds, or, as the case may be, falls short of that other by an amount equal to or greater than 20 per cent. of that other.
        (6) The power to make an order under this paragraph shall be exercisable by statutory instrument and any statutory instrument containing such an order shall be subject to annulment in pursuance of a resolution of either House of Parliament.
        (7) In this paragraph references to the feeding of animals are to grazing and feeding from harvested crops (other than loose grain) and references to dairy cows are to cows kept for milk production.
        "Tenant' s fraction"
        7.—(1) For the purposes of this Schedule "the tenant's fraction" means the fraction of which—

        (a) the numerator is the annual rental value at the end of the relevant period of the tenant's dairy improvements and fixed equipment; and

        (b) the denominator is the sum of that value and such part of the rent payable by the tenant in respect of the relevant period as is attributable to the land used in that period in connection with the production of cow's milk.

        (2) For the purposes of sub-paragraph (1)(a) above the rental value of the tenant's dairy improvements and fixed equipment shall be taken to be the amount which would fall to be disregarded under paragraph 2(1) of Schedule 2 to the Agricultural Holdings Act 1986 on a reference made in respect of the land in question under section 12 of that Act (arbitration
        1140
        of rent), so far as that amount is attributable to tenant's improvements or tenant's fixed equipment which are relevant to the production of cow's milk.
        (3) Where—

        (a) the relevant period is less than or greater than 12 months or

        (b) rent was only payable by the tenant in respect cif part of the relevant period,

        the average rent payable in respect of one month in the relevant period or, as the case may be, in that part shall be deterinined and the rent referred to in sub-paragraph (1)(b) above shall be taken to be the corresponding annual amount.
        (4) For the purposes of sub-paragraph (2) above "tenant's improvements" and "tenant's fixed equipment" have the same meanings as in paragraph 2 of Schedule 2 to the 1986 Act, except that—

        (a) any allowance made or benefit given by the landlord after the end of the relevant period in consideration of the execution of improvements wholly or partly at the expense of the tenant shall be disregarded for the purposes of sub-paragraph (2)(a) of that paragraph;

        (b) any compensation received by the tenant after the end of the relevant period in respect of any improvement or fixed equipment shall be disregarded for the purposes of sub-paragraph (3) of that paragraph; and

        (c) where paragraph 2 above applies in respect of any land, improvements or equipment which would be regarded as tenant's improvements or equipment on the termination of the former tenant's tenancy (if he were entitled to a payment under this Schedule in respect of that land) shall be regarded as the new tenant's improvements or equipment.

        "Relevant period"
        8. In this Schedule "the relevant period" means—

        (a) the period in relation to which the allocated quota was determined; or

        (b) where it was determined in relation to more than one period, the period in relation to which the majority was determined or, if equal amounts were determined in relation to different periods, the later of those periods.

        Valuation of milk quota
        9. The value of milk quota to be taken into account for the purposes of paragraph 5 above is the value of the milk quota at the time of the termination of the tenancy in question and in determining that value at that time there shall be taken into account such evidence as is avaialble, including evidence as to the sums being paid for freehold and leasehold interests in land—

        (a) in cases where milk quota is registered in relation to the land; and

        (b) in cases where no milk quota is so registered.

      PART III

        SUPPLEMENTAL PROVISIONS
        Determination of standard quota and tenant's fraction before end of tenancy
        10.—(1) Where, on the termination of a tenancy of any land, the tenant may be entitled to a payment under paragraph 1 above, the landlord or tenant may at any time before the termination of the tenancy by notice in writing served on the other demand that the determination of the standard quota for the land or the tenant's fraction shall be referred to arbitration.
        (2) On a reference under this paragraph the arbitrator shall determine the standard quota for the land or, as the case may be, the tenant's fraction (so far as determinable at the date of the reference).
        (3) Section 84 of the Agricultural Holdings Act 1986 (arbitrations) shall apply as if the matters mentioned in this paragraph were required by that Act to be determined by arbitration under that Act.
        Settlement of tenant's claim on termination of tenancy
        11.—(1) Subject to the provisions of this paragraph, any claim arising under paragraph I above shall be determined by arbitration under the Agricultural Holdings Act 1986 and no such claim shall be enforceable unless before the expiry of the period of two months from the termination of the tenancy the tenant serves notice in writing on his landlord of his intention to make the claim.
        (2) The landlord and tenant may within the period of eight months from the termination of the tenancy by agreement in

        1141
        writing settle the claim but where the claim has not been settled during that period it shall be determined by arbitration under the Agricultural Holdings Act 1986.
        (3) Where a tenant lawfully remains in occupation of part of the land subject to the tenancy after the termination of the tenancy, the references in sub-paragraphs (1) and (2) above to the termination of the tenancy shall be construed as references to the termination of the occupation.
        (4) Section 84 of the Agricultural Holdings Act 1986 (arbitrations) shall apply as if the requirements of this paragaphah were requirements of that Act, but paragraph 18 of Schedule 11 to that Act (arbitration awards to fix days for payment not later than one month after award) shall have effect for the purposes of this paragraph as if for the words "one month" there were substituted the words "three months".
        (5) Where—

        (a) before the termination of the tenancy of any land the landlord and tenant have agreed in writing the amount of the standard quota for the land or the tenant's fraction or the value of milk quota which is to be used for the purpose of calculating the payment to which the tenant will be entitled under this Schedule on the termination of the tenancy; or

        (b) the standard quota or the tenant's fraction has been determined by arbitration in pursuance of paragraph 10 above,

        the arbitrator determining the claim under this paragraph shall, subject to sub-paragraph (6) below, award payment in accordance with that agreement or determination.
        (6) Where it appears to the arbitrator that any circumstances relevant to the agreement or determination mentioned in subparagraph (5) above were materially different at the time of the termination of the tenancy from those at the time the agreement or determination was made, he shall disregard so much of the agreement or determination as appears to him to be affected by the change in circumstances.
        Enforcement
        12.—Section 85 of the Agricultural Holdings Act 1986 (enforcement) and section 86(1), (3) and (4) of that Act (power of landlord to obtain charge on holding) shall apply to any sum which becomes due to a tenant by virtue of this Schedule as they apply to the sums mentioned in those sections.
        Termination of tenancy of part of tenanted land
        13.—References in this Schedule to the termination of a tenacy of land include references to the resumption of possession of part of the land subject to the tenancy—

        (a) by the landlord by virtue of section 31 or 43(2) of the Agricultural Holdings Act 1986 (notice to quit part);

        (b) by the landlord in pursuance of a provision in the contract of tenancy; or

        (c) by a person entitled to a severed part of the reversionary estate in the land by virtue of a notice to quit that part given to the tenant by virtue of section 140 of the Law of Property Act 1925;

        and in the case mentioned in paragraph (c) above this Schedule shall apply as if the person resuming possession were the landlord of the land of which he resumes possession.
        Severing of reversionary estate
        14.—(1) Where the reversionary estate in the land is for the time being vested in more than one person in several parts, the tenant shall be entitled, on quitting all the land, to require that any amount payable to him under this Schedule shall be determined as if the reversionary estate were not so severed.
        (2) Where sub-paragraph (1) above applies, the arbitrator shall, where necessary, apportion the amount awarded between the persons who for the purposes of this Schedule together constitute the landlord of the land, and any additional costs of the award, caused by the apportionment shall be paid by those persons in such proportions as the arbitrator may determine.
        Powers of limited owners
        15. Notwithstanding that a landlord of any land is not the owner in fee simple of the land or, in a case where his interest is an interest in a leasehold, that he is not absolutely entitled to
        1142
        the leasehold, he may for the purposes of this Schedule do anything which he might do if he were such an owner or, as the case may be, were so entitled.
        Notices
        16.—(1) Any notice under this Schedule shall be duly served on the person on whom it is to be served if it is delivered to him, or left at his proper address, or sent to him by post in a registered letter or by the recorded delivery service.
        (2) Any such notice shall be duly served on an incorporated company or body if it is served on the secretary or clerk of the company or body.
        (3) Any such notice to be served on a landlord or tenant of any land shall, where an agent or servant is responsible for the control of the management or farming, as the case may be, of the land, be duly served if served on that agent or servant.
        (4) For the purposes of this paragraph and of section 7 of the Interpretation Act 1978 (service by post), the proper address of any person on whom any such notice is to be served shall, in the case of the secretary or clerk of an incorporated company or body, be that of the registered or principal office of the company or body, and in any other case be the last known address of the person in question.
        (5) Unless or until the tenant of any land has received—

        (a) notice that the person who before that time was entitled to receive the rents and profits of the land ("the original landlord") has ceased to be so entitled, and

        (b) notice of the name and address of the person who has become entitled to receive the rents and profits,

        any notice served on the original landlord by the tenant shall be deemed for the purposes of this Schedule to have been served on the landlord of the land.
        Crown land
        17.—(1) The provisions of this Schedule shall apply to land which belongs to Her Majesty in right of the Crown or to the Duchy of Lancaster, the Duchy of Cornwall or a Government department or which is held in trust for Her Majesty for the purposes of a Government department, subject in each case to such modifications as the Minister may by regulations prescribe.
        (2) For the purposes of this Schedule—

        (a) as respects land belonging to Her Majesty in right of the Crown, the Crown Estate Commissioners or the proper officer of body having charge of the land for the time being, or, if there is no such officer or body, such person as Her Majesty may appoint in writing under the Royal Sign Manual, shall represent Her Majesty and shall be deemed to be the landlord;

        (b) as respects land belonging to Her Majesty in right of the Duchy of Lancaster, the Chancellor of the Duchy shall represent Her Majesty and shall be deemed to be the landlord;

        (c) as respects land belonging to the Duchy of Cornwall such persons as the Duke of Cornwall or the possessor for the time being of the Duchy of Cornwall appoints shall represent the Duchy and shall be deemed to be the landlord and may do any act or thing which a landlord is authorised or required to do under this Act;

        (d) as respects land held in trust for Her Majesty for the purposes of a Government department, that department shall represent Her Majesty and shall be deemed to be the landlord.

        (3) Any sum payable under this schedule by the Duke of Cornwall (or any other possessor for the time being of the Duchy of Cornwall) may be raised and paid as if it were an expense incurred in permanently improving the possessions of the Duchy as mentioned in section 8 of the Duchy of Cornwall Management Act 1863.
        (4) Any sum payable under this Schedule by the Chancellor of the Duchy of Lancaster may—

        (a) be raised and paid as if it were an expense incurred in the improvement of land belonging to Her Majesty in right of the Duchy within section 25 of the Duchy of Lancaster Act 1817, or

        (b) be paid out of the annual revenue of the Duchy.

        (5) The power to make regulations under this paragraph shall be exercisable by statutory instrument and any statutory instrument containing such regulations shall be subject to annulment in pursuance of a resolution of either House of Parliament.
        Interpretation
        18.—(1) In this Schedule—

        "allocated quota" has the meaning given in paragraph 1(1) above;

        "holding" has the same meaning as in the 1986 Regulations;

        "landlord" means any person for the time being entitled to receive the rents and profits of any land and "sub-landlord" shall be construed accordingly;

        "milk quota" means—

        (a) in the case of a tenant registered in the direct sales register maintained under the 1986 Regulations, a direct sales quota within the meaning of the 1986 Regulations, and

        (b) in the case of a tenant registered In the wholesale register maintained under those Regulations, a wholesale quota within the meaning of those Regulations;

        "the Minister" means—

        (a) in the case of land in England, the Minister of Agriculture, Fisheries and Food; and

        (b) in the case of land in Wales, the Secretary of State;

        "registered", in relation to milk quota, means—

        (a) in the case of direct sales quota, within the meaning of the 1986 Regulations, registered in the direct sales register maintained under those Regulations, and

        (b) in the case of a wholesale quota, within the meaning of those Regulations, registered in a wholesale register maintained under those Regulations;

        "relevant quota" has the meaning given in paragraph 1(2) above;

        "standard quota" has the meaning given in paragraph 6 above;

        "the 1986 Regulations" means the Dairy Produce Quotas Regulations 1986;

        "tenancy" means a tenancy from year to year or a tenancy to which section 3 of the Agricultural Holdings Act 1986 applies, and "tenant" and "sub-tenant" shall be construed accordingly

        "tenant's fraction" has the meaning given in paragraph 7 above;

        "termination", in relation to a tenancy, means the cesser of the letting of the land in question or the agreement for letting the land, by reason of effluxion of time or from any other cause;

        "transferred quota" has the meaning given in paragraph 1(2) above.

        (2) The designations of landlord and tenant shall continue to apply to the parties until the conclusion of any proceedings taken under or in pursuance of this Schedule.'.—[Mr. Jopling.]
        Brought up, read the First and Second time, and added to the Bill.
        Motion made, That the Bill be now read the Third time.
        Mr. Michael Jopling, by Her Majesty's Command, acquainted the House, That Her Majesty, having been informed of the purport of the Bill, gives her Consent, as far as Her Majesty's interest is concerned, That the House may do therein as it shall think fit.
        Mr. Michael Jopling, by Command of the Prince of Wales, acquainted the House, That His Royal Highness, having been informed of the purport of the Bill, gives his Consent, as far as the Prince of Wales's interest is concerned. That the House may do therein as it shall think fit.
        Question put and agreed to.
        Bill accordingly read the Third time, and passed.

      CONSUMER PROTECTION
      Ordered,
      That the draft Child Resistant Packaging (Safety) Regulations 1986, which were laid before this House on 5th March, be approved.—[Mr. Malone.]

      Criminal Injuries Compensation Scheme
      Motion made, and Question proposed, That this House do now adjourn.—[Mr. Malone.]
      12.30 am
      Sir Humphrey Atkins: It was almost exactly 22 years ago that the Government of the day, with the full approval of both Houses of Parliament, established the criminal injuries compensation scheme. The scheme was intended, and still is intended, to provide some measure of compensation to people who have suffered injury through criminal action and who are unable to get any kind of recompense, either because the criminal could not be identified or, if he was identified, was in no position to make any recompense himself. The scheme is administered by a board whose chairman and members are appointed by my right hon. Friend the Home Secretary and who make annual reports to Parliament. It is a measure of the general satisfaction with which Parliament regards the way the board has conducted its activities that, so far as I can trace, not one of these reports has ever been debated in this House.
      However, a situation has now come to light of which I believe the House would wish to he aware and I am grateful to my right hon. Friend for making himself available to answer this debate tonight. The situation arises from the events of October 1984 when a terrorist gang exploded a bomb in the Grand hotel at Brighton during the Conservative party conference. This fearful event led not only to much destruction of property but, far more seriously, to the death and serious injury of many people. We all, of course remember that one of our own number was killed and many of us here also remember the others who were killed.
      As a result of this crime, no fewer than 21 applications were made to the criminal injuries compensation board for compensation, 19 from civilians and two from the police. Naturally, applications such as these take a little time to process because, for example, it is not always possible to determine very quickly the precise extent of personal injury and, therefore, the loss of earning power or whatever it may be that may be permanently with the injured person. I do not know what has happened in the majority of these 21 cases, but I do have personal knowledge of three of them and it is these three that I would like to bring to the attention of the House.
      Let me say straightaway that I do not propose to identify the applicants. They have suffered enough and if I were to mention their names they would, I fear, be the subject of further publicity and inquiry and I am sure that none of us would wish to inflict that upon them. I will simply refer to them as applicants A, B and C, but my right hon. Friend, of course, knows precisely to whom I am referring in each case.
      Applicant A's claim was comparatively easy to process, although the injuries were serious in all conscience, and the boars: assessed the claim, made an offer, had the offer agreed and made the payment all within a comparatively short time and the whole matter was settled in the first half of last year. Applicant B's claim was more complicated and so the board, clearly accepting that the claim had validity, but without being able to determine the precise level of payment which

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      should be made, gave applicant B an interim award which again was paid in the first half of last year. No further payment has been made, for a reason to which I will come back in a moment.
      Applicant C's claim was the most complicated of the three and the details could not be settled until the second half of last year. Here again the board has refused to make any further progress with this claim and applicant C has not yet received a penny piece. Since it became known that I was to raise this matter tonight, several other people have told me that they, too, have not yet received anything in respect of their claims following this same incident. Applicant C's case, therefore, is by no means unique.
      The board has given one reason and one only why it has brought to a halt all further work on these outstanding claims and why it is leaving these claimants without any payment over a period which now amounts to many months. It is that in June last year a man was arrested and a little later was charged with complicity in this bomb outrage, and the board takes the view that it cannot make any payments because, if it did, it might prejudice the fair trial of the accused. I must tell the House that I find that excuse completely unacceptable, and, what is perhaps even more important, completely untenable, for three reasons.
      The first is that I cannot for the life of me see why the making of a payment under the criminal injuries compensation scheme in respect of a crime has any bearing whatever upon the identity of the person who committed it. Mr. X, who has been charged, may or may not be guilty; I do not know, and the board does not know. Only the courts can decide, but, unless it is to be argued that the setting off of a bomb in the Grand hotel in Brighton is a perfectly lawful act and, therefore, no crime was committed, which everybody will agree is ludicrous, I cannot see why the fact that somebody had been charged prevents payments from being made.
      My second reason is that, even if that argument is accepted as valid, the pass has already been sold. As I mentioned earlier in the case of applicants A and B, payments have already been made, and for all I know other payments have been made, too. The chairman of the board, Mr. Ogden, speaking on "The World This Weekend" on the radio on Sunday, said that the first payment was made "a long time ago". That has no bearing on the matter. Either the making of payments is prejudicial to a fair trial, in which case he was wrong to make any payments, or, as I contend, it is not, in which case he is wrong to stop making payments now.
      My third reason is that Mr. Ogden and his board stand condemned by their words. Paragraph 43 of its 20th report to Parliament for the year ended 31 March 1984—Cmnd. 9399—discusses at some length the problems of making awards when criminal proceedings are pending and refers to such matters as the possibility that an accused might plead that injuries were inflicted by him in self-defence and matters of that sort.
      However, I draw my right hon. Friend's attention to one part of paragraph 43 where the board says:
      "However in cases as clear cut as bomb outrages, we do not consider ourselves so limited".
      It goes on to say:
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      "Provided we are satisfied on the balance of probabilities after a detailed investigation that the application satisfies the requirements of…the scheme …then we feel able to make awards in such cases."
      I simply cannot understand why, in view of all that I have said, and of the board's words, the board is behaving in this extraordinary way today.
      The scheme was set up to provide some relief to people who had suffered injury and financial hardship. The scheme received the approval of Parliament when it was established, when it was revised in 1979 and, of course, again every single year when the money for the scheme, including the salary of the chairman, is voted by Parliament. Furthermore, our Select Committee on Home Affairs, which in 1984 investigated compensation and support for victims of crime, produced a report—its first report in Session 1984–85—and referred at some length to the need to avoid delay in payments.
      In paragraph 49 it said:
      "untoward delays in settlement can only detract from any satisfaction and consolation the victim might derive from the outcome of his claim: he gives twice who gives quickly".
      And yet here is this board quite deliberately delaying payment heedless, it seems, of the needs of the claimants.
      There is no reason to suppose that any or all of them are financially able to manage quite happily without any kind of compensation. Physical injury, loss of earning capacity, damage of all kinds make, as we all know, a devasting impact upon a family's finances. There can be little doubt—indeed, I know this for a fact—that a number of outstanding claimants are suffering considerable financial hardship. That is why Parliament willed that everything possible should be done as quickly as may be to try to help people in these unhappy circumstances.
      I know that Mr. Ogden, in the broadcast to which I referred earlier, said that it was open to anyone who felt that he had been badly treated by the board to go to the courts and ask for a ruling that he or she ought to be paid. If I may say so, this is a most unreasonable proposition. We all know the cost of legal proceedings and the suggestion that someone ought to put at risk possibly the whole amount of any award seems to me, although possibly legalistic, completely heartless.
      Having set out my view of the matter, I should like to ask my right hon. Friend two questions. First, does he agree with Mr. Ogden's statement that the correct course to follow is to withhold all further payments by way of compensation until the trial of anyone accused of complicity in the offence is completed, however long that may take? If he does, I know that he will wish to explain to the House in greater detail than is at present available why he thinks it is correct, and furthermore why it is that the scheme under which the board operates contains no reference to this provision and also why it is that the board never tells any claimant that the charging of anybody in connection with the offence will bring an immediate stop to any further action on his claim.
      If, however, he does not agree with Mr. Ogden, I come to my second question. What is my right hon. Friend going to do about it? There seems to be a rather grey area here. The scheme is non-statutory; therefore, there is no Act which lays down the powers and responsibilities of my right hon. Friend. Paragraph 3 of the scheme makes it clear that the board will be entirely responsible for what compensation should be paid in individual cases and its decisions should not be subject to appeal or ministerial review. I think that we would all agree that this is a

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      sensible provision because otherwise my right hon. Friend would no doubt be inundated with requests for the review of awards.
      However, I draw attention to the fact that this provision specifically addresses the question of what compensation should be paid, not when it should be paid. Could my right hon. Friend tell the House please whether he has any power to give directions to the Board about how it should conduct its operations? If he does not have any such power, are we not in an intolerable situation?
      Here is a hoard, appointed by my right hon. Friend, responsible for the distribution to innocent victims of crime of £40 million a year of taxpayers' money, which we vote, seemingly able to withhold payment for months or even years on grounds which no one here believes to have any validity, and to behave in a way which is clearly contrary to the will of Parliament, whose Chairman claimed on the radio that he could not be removed from office, and my right hon. Friend can do nothing about it. If this is really the case, it is my view that the situation is wholly unacceptable. In this first debate on the matter—we can always return to it—I look forward to hearing my right hon. Friend's observations.
      12.44 am
      The Secretary of State for the Home Department (Mr. Douglas Hurd): I am grateful to my right hon. Friend the Member for Spelthorne (Sir H. Atkins) for raising this issue. It must be right that an important and sensitive issue, which affects people in circumstances with which every Member of this House has the utmost sympathy, should be raised in this House. My right hon. Friend, as one would expect, has deployed his case in a clear and impressive way.
      I should begin by explaining the role of Ministers in the criminal injuries compensation scheme. Criminal injuries compensation in England and Wales and Scotland is at present on a non-statutory basis, and awards are ex gratia. Governments have concluded that the system of criminal injuries compensation would be more orderly and satisfactory if set out in a formal scheme. This tells Parliament, applicants and the general public what they can expect, and provides a basis for judicial review of the board's decisions in individual cases. The scheme itself is the responsibility of my right hon. and learned Friend the Secretary of State for Scotland and myself. Under the terms of the scheme, compensation is administered by the Criminal Injuries Compensation Board, which is entirely responsible for deciding what compensation should be paid in individual cases. The board's decisions on such matters are not subject to appeal to Ministers or to ministerial review. The general working of the scheme is, however, a matter for review by the Government, and my colleagues and I take a keen interest in its operations, as I hope to show before I conclude. It is right on that basis that my right hon. Friend should bring his concerns before the House this evening.
      As one would expect, the scheme itself does not deal in detail with particular matters of administration, nor has it been the general practice of Ministers to intervene in such matters. The expectation is that, having set out in the scheme the main principles of eligibility for compensation and similar matters, and having appointed an independent board to administer the scheme, we can rely on the board to deal sensibly with the cases.
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      As my right hon. Friend said, the Brighton explosion took place on 12 October 1984. In all, 32 people were injured, including five who were killed by the explosion or as a direct result of it. Police inquiries were, from their earliest stages, based on the premise that the explosion had been caused by a bomb. Press reports at the time were to the same effect. The board heard in September 1985 that the extensive police investigation had resulted in charges being brought.
      The Criminal Injuries Compensation Board received a total of 28 applications as a result of the incident. This figure updates that mentioned by my right hon. Friend. The latest position is that 10 of these applications have been resolved and awards made. Of the further 18 cases still awaiting resolution, in 11 cases the board does not yet have enough information to enable it to decide what award, if any, should be made: it needs further medical or other reports, and the delay in these cases has nothing to do with the criminal proceedings.
      Tonight, my right hon. Friend has focussed attention on the seven other cases which are otherwise considered ready to be put before a board member for a decision but which have been held up, as my right hon. Friend said, because of the impending criminal proceedings.
      The question how to mesh its own procedures with criminal proceedings is a question that the board may have to consider in every case which comes before it. It has to have a general rule, and the general rule which it has adopted is that where criminal proceedings are in train, the board will not reach a decision on the application to it until the trial result is known.
      Despite the apparent contradiction—to which my right hon. Friend understandably drew attention—with part of its 20th annual report, the board has explained that it has basically two reasons for this approach. First, if it takes a decision in the absence of information which may come out at the trial, its decision may be wrong. The extra information which may come out is not precisely foreseeable in advance, but the obvious category of information which is likely to be added at the trial is the defendant's own side of the story. The board has no power of its own to summon and question the alleged assailant, although it can take into account any information which is volunteered to it. I could elaborate at this point, as part of the board's general explanation, but I will not do so, because my right hon. Friend could say with justice that this is far from the present case.
      However, there is a second reason why the board is reluctant to make awards when criminal proceedings are pending, and this second reason is more relevant to this set of seven cases. In the view of the chairman of the board, there is a risk that a decision to award compensation could itself become an issue in the later proceedings and be a matter of embarrassment in those proceedings. For example—and this is the key point—the defence could argue that the trial had been prejudiced if a public body had previously reached a conclusion about the origin of an explosion.
      Where no alleged offender has been traced, the board obviously cannot wait for ever but must get on and do the best it can. If, later, someone is prosecuted, the fact that the board has made an award is not something anyone can do anything about.
      But the chairman of the board feels, as I understand it, that there is a notable difference between that situation and the one in which the board makes an award in the

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      knowledge that a criminal case is pending. That is the board's answer to the point that my right hon. Friend made about the difference of treatment accorded by the board to the various cases.
      Sir John Stradling Thomas: I am sympathetic to the point that my right hon. Friend is making and that Mr. Michael Ogden made. But I cannot see any connection between the prejudicing of the case and the right to compensation for those who have suffered as victims. Under our system of law, that could be taken care of by the learned judges without prejudicing the trial of any culpable defendant in a trial and without having any relationship to the question of the right of the victim to compensation. Will my right hon. Friend address himself to that?
      Mr. Hurd: I am doing so. The board is entitled to make compensation only where there is a case of criminal assault, and I wish to develop carefully what I understand to be the board's interpretation of this and explain what support it has had, and in doing that I will cover the point that my hon. Friend makes.
      I was dealing with the difference between the situation to which I referred and the one in which the board makes an award in the knowledge that a criminal case is pending. As I said, that is the board's answer to my right hon. Friend's point about the difference of treatment accorded by the board to the various cases.
      Those which reached the settlement stage before criminal proceedings were instituted were settled. Those which did not have been held up. The thought here must be that, while the degree of actual prejudice may be the same, the disregard of the risk is more wilful and, therefore, more reprehensible on the board's part.
      It is difficult for a non-lawyer such as I to reach a definite view on the prejudice issue. It may seem far-fetched, as it does to my right hon. Friend. But—and this is now the crucial point in this case—I have not the slightest inkling, and nor has the board, of what defence any of those accused in connection with the Brighton explosion will raise.
      I have personal views, as does my right hon. Friend, on how likely it is that the jury will be persuaded that the explosion resulted from, say, a fractured gas main rather than an explosive device. Less easy to judge—my right hon. Friend raised the question whether a criminal attack was involved—is whether the jury is likely to be influenced at all by a decision reached before the trial by the Criminal Injuries Compensation Board and whether it could with any force be claimed by defence counsel that they may have been influenced.
      I am sure that my right hon. Friend would wish to join me in hoping for a fair trial and a trial that proceeds without diversion from the issues that will properly be before the jury. The chairman of the board, applying himself to the matter diligently, has reached the conclusion that the awards should not proceed while the trial is pending.
      The chairman of the board is not alone in this view. He has, in this case, sought the views of the Lord Chief Justice on whether there would be a risk of prejudice if the board were to proceed to make awards. The Lord Chief Justice has confirmed the view to Mr. Ogden, and separately to me, that a risk of prejudice does exist, both as a question
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      of general principle as well as in the case that we are now considering. Of course, the view taken in the trial would be a matter for the judge concerned, and the arguments put forward, but it is clear that authoritative legal opinion is that the risk of prejudice cannot be dismissed.
      Indeed, in these circumstances, in view of the publicity which this matter has, naturally, received and the crucial importance of getting a proper trial in which any guilty person can actually be found guilty, I have been forced to conclude that it would be foolish to intervene, even if I had the right to do so.
      The trial will open in the next few weeks. I understand—and it is certainly my wish—that the board should be free to resolve the outstanding cases as soon as it is clear from the process of the trial that the fact that a criminal act took place is not in doubt. This means that it should not be necessary to wait for the result of the trial to be known before the board can proceed. So the remaining delay should not be great, although I accept that any delay on the scale that has occurred in these kind of cases can cause hardship.
      But we cannot leave the matter there.
      Mr. Jeremy Hanley: For a jury to be prejudiced it has to have heard of the amount of compensation given as a result of a particular act. Of the 30,000 compensation cases dealt with last year, I wonder how many were published in the newspapers and how many juries ever heard of compensatory amounts being paid.
      Mr. Hurd: That matter has rightly and honourably been raised by my right hon. Friend. It is not a matter which can be dealt with in a corner and nor has anyone sought that it should be. I have mentioned not only the views of Mr. Ogden but the views which support him in that respect of the Lord Chief Justice. I have also mentioned, which I think that the House would agree with, the crucial importance of getting a proper trial in which diversionary issues are not raised in any way which might prevent anyone who may be guilty from being found guilty. That thought has rather dominated my non-legal mind in tackling this matter.
      As I said, we cannot leave the mattter there. The general issue which emerges from these cases may recur and further thought must be given to it. It would be too easy to reach a conclusion based simply on the notion of playing safe without regard to the considerations of humanity, touching the lives of individuals which my right hon. Friend has clearly and properly expressed.
      My right hon. Friend mentioned that this is the first debate on the subject, and that is correct so far as the Government's intentions are concerned, as well as, perhaps, his own. I have announced in the White Paper on criminal justice, recently published, that we intend to put the criminal injuries compensation scheme on to a statutory basis for the first time. So there will be, when we come after the next Gracious Speech to a Bill which will implement this and other proposals, an opportunity for Parliament and Government to consider the matter further. Parliament will, as part of its consideration of our proposals for putting the scheme on a statutory basis, need to tackle the relationship between the scheme, the Government and the courts. There will be occasion, and, I think, obligation, to think about the matter, among others.

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      I have given the reasons why, quite apart from the convention that Governments do not intervene in the administration of the board, for obvious reasons which my right hon. Friend accepted, in this case, with a trial of this importance pending, it is difficult for me to go against the considered view of the Lord Chief Justice. But this is not a matter which will go to sleep and there will soon be opportunities as part of the general consideration of the
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      scheme for the House to return to it. The cases to which my right hon. Friend has referred will be a test of the view formed in particular of the relationship between the board and the courts. This debate may thus turn out to be an important prelude to future decisions and I am glad that it has taken place.
      Question put and agreed to.
      Adjourned accordingly at two minutes to One o'clock.