Agricultural Holdings (Amendment) Bill (Hansard, 27 April 1990)

§ The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. David Maclean)

The Bill introduced by the hon. and learned Member for Montgomery (Mr. Carlile) addresses a small but important aspect of the agricultural holdings legislation about which everyone thought there was no problem prior to the Bell v. McCubbin ruling in the Court of Appeal last July.

As I explained on Second Reading, the extent of the loophole revealed by the ruling has not been tested in the courts, but it has caused considerable concern to tenants as they fear that it could have widespread implications and reduce their security of tenure.

Agricultural holdings legislation is an extremely complex area and it is important to consider the availability of land in the landlord and tenanted sector and to encourage future development.

Since 1984 the amount of tenanted land has continued to decline, but at a slower rate than between 1976 and 1984. The June census data is supported by the Central Association of Agricultural Valuers annual tenanted farm survey that shows that, since 1984, there have been more re-lettings than in preceding years, but with a continuing overall decline. The Agricultural Holdings Act 1984 made letting more attractive than it had been since 1976, but it is still not sufficiently attractive to halt, let alone reverse, the downward decline.

It is important to consider the main factors that may have contributed to the decline of the tenanted sector this century. First, there are the socio-economic factors such as the redistribution of wealth, economic depression and changes in class structure. Secondly, it is important to consider the effects of capital taxation, as well as the value of vacant land. Thirdly, it is important to consider the legislation that has given increased security of tenure to the tenant. Different factors have, of course, assumed importance at different times.

A recent landlord and tenant survey conducted by the Country Landowners Association suggested that the main reasons for not letting land at the present time are, in decreasing order of importance, the agricultural holdings legislation, financial and estate management reasons, the political risk, and taxation. At present therefore, the lifetime security of tenure provisions in the Agricultural Holdings Act 1986 appear to be the main disincentive. A radical change is needed if the main aim is to increase the amount of land available for letting to stem, or often to reverse, the downward trend in the tenanted sector. Much greater flexibility in the options open to landlords and tenants would seem to be essential.

I recognise that it may be extremely difficult for landowners, aspiring young farmers and existing tenants to reach a consensus on any new proposals—I appreciate that that may not be possible. My colleagues and I will be looking for some signs of agreement on the measures to be taken as the debate unfolds in the coming months. Even 666 more important is any proposal that genuinely addresses the problem and is likely to be effective in increasing the amount of tenanted land. That will call for flexibility and goodwill on all sides. I feel it should be possible to find such a solution on the basis that existing tenancy agreements are not affected. Only an effective proposal will be worth further consideration.

The Bill is important. Part I, schedule 3 of the Agricultural Holdings Act 1986 applies only to England and Wales and it sets out the circumstances in which a landlord can serve a case B incontestable notice to quit. Until now the vast majority of notices have fallen under case B(a)—that is, on the grounds that planning permission had been obtained to use the land for a non-agricultural purpose. Under case B(b) in the 1986 Act the notice to quit can be given on the ground that the land is required for use other than agriculture for which, otherwise than by virtue of any provision of the town and country planning enactments, permission is not required. It was widely held that case B(b) related only to the Crown. Therefore, it was thought to have limited use, but it was available, for example, to the Forestry Commission if it needed to obtain the possession of land for the purposes of afforestation.

On 13 July 1989 the Court of Appeal, in Bell ν.McCubbin, ruled that under case B(b) a private landlord could recover possession of a farmhouse which had been sublet by the tenant for residential purposes to persons employed outside agriculture and was required by the landlord for his own non-agricultural use. Although the repercussions of the ruling are likely to be much more limited than has been suggested, we understand the tenants' concerns and we recognise the spirit behind the Bill introduced by the hon. and learned Gentleman. I was therefore pleased that officials within my Department and parliamentary counsel were able to assist the hon. and learned Gentleman to refine his original text.

The amended Bill before the House will, it is hoped, make absolutely clear the circumstances when an incontestable notice to quit can be served where land is to go for use other than agriculture. In effect, the Bill provides three circumstances where an incontestable notice to quit can be served under case B. The first is where planning permission has been obtained. That is the same as under existing legislation. The second deals with cases where Parliament has given an effective permission for a particular development. It seems clear that the current Agricultural Holdings Act 1986 also covers the use of land for which an Act of Parliament not dealing generally with town and country planning grants planning permission. That is where the developer does not have to obtain planning permission from the local authority. Those circumstances, together with Crown immunity, are covered by the 1986 Act.

The Bill therefore covers circumstances in which an Act gives planning permission. It provides for private and local Acts as well as the various ways in which Parliament may, in Acts or parliamentary orders not forming part of the general town and country planning legislation, remove the need for a planning application.

As I have already said, we wish the Bill a fair wind. I am glad that my officials have been able to co-operate with the hon. and learned Gentleman in the measure. I hope that the Bill will reassure tenants, and I commend it to the House.

§ Mr. Alex Carlile (Montgomery)

I start by thanking the Minister and his ministerial colleague the hon. Member for Skipton and Ripon (Mr. Curry) for all the assistance that they and officials in their Ministry of Agriculture, Fisheries and Food have given with the Bill. Although a good attempt was made to draft a Bill which would stand scrutiny in the courts, I am sure that because of the amendments which were made in Committee as a result of the intervention by Ministers it is now a much better Bill.

Agricultural holdings legislation is always subjected to lawyers' microscopes. I feel reasonably sure that they will see a clear image when they apply their microscopes to the Bill. I am also grateful to the National Farmers Union which has given me a great deal of support in the preparation of the Bill and in ensuring that it met the need that the Minister explained a few moments ago. I am also particularly grateful to tenant farmers in my constituency. There are many small tenant farmers in Montgomeryshire in various sectors of farming. They have supported me and expressed their concern about the issues that gave rise to the Bill.

I was grateful to the Minister for his more general remarks about the tenant farming sector. I agree wholeheartedly with him, as I said on Second Reading, that a thorough-going review of agricultural tenancy law is needed. I shall do what I can to encourage a reasonable and constructive view of that issue far and wide in the farming industry, with which I have a close connection, partly because of the nature of my constituency, which I believe is pro rata the most agricultural in the entire United Kingdom, and even more agricultural in employment terms than that of the Minister's constituency of Penrith and The Border.

Agricultural tenancies need to be available on a more flexible basis if we are to have more agricultural tenancies, as we must if the industry is to retain a career structure which entices the ablest young farmers permanently into the industry rather than into what may be better paid employment. With those points in mind, it gives me great pleasure to express my thanks to all involved with the Bill.