§ Mr. Tipping
I beg to move amendment No. 6, in clause 92, page 81, line 19, at end insert—'and(c) the public are allowed reasonable access thereto.'.This is a small amendment, but I consider it important. It could be described as a stile—a little hurdle that I want to put in the way of the Financial Secretary, making him pause for a moment and reflect before continuing on his path. I hope that we can find a signpost directing us to an agreed way forward: I am sure that hon. Members on both sides of the House believe that it is possible to improve the landscape and the environment, while at the same time allowing a greater opportunity for the public to enjoy the countryside.
At the time of the Budget, the Ministry of Agriculture, Fisheries and Food put out a press release which stated:The average full year cost of the proposal is estimated to be negligible.It is clear to me, and to my colleagues on the Front Bench, that the time has come to review rigorously all aspects of public spending, and I think that some real and hard choices must be made about priority. I felt that there was a throwaway ring to those words in the press release: the cost wasestimated to be negligible".It reminds me of the old story about expenditure bids. A bid of 0.1 per cent., or one tenth of 1 per cent., will not break the Treasury—but I know that my colleagues are mindful of the fact that just a thousand pledges like that would eat up the entire Budget.
1011 One very interesting policy development has been the growth in so-called agro-environmental schemes—of which the prime mover is the countryside stewardship scheme. The amount of money committed to the countryside stewardship scheme has grown considerably. I estimate that, as of 1 April 1996, £11 million was committed to it. This Budget provides it with another £5 million, which, in the 1997–98 financial year, will increase spending on it to £21 million.
I am not necessarily concerned about that expenditure, because a strong policy argument can be made that, if we want to make payments to farmers and landowners, we should switch the focus from payments for crop production to payments to improve the landscape and environment and to attract wildlife—to "green" the landscape, to benefit us all and to add value to the world. If one wished to discover where savings could be made, one should examine arable area payments. In 1995, £1 billion in such payments were made to farmers and landowners.
I have no doubt that the type of schemes we are discussing are the schemes of the future and that they represent a switch in emphasis to achieve a "green premium". I support many aspects of the proposals; I merely seek to improve them. The schemes' principles are right, but they have not worked in practice. My amendment would require that, in habitat schemes,the public are allowed reasonable accessbefore tax concessions are made. I draw the Committee's attention to the word "reasonable" in my amendment.
There has always been conflict between public access and the need to protect countryside and habitat, and those conflicts must be resolved. The proposals will lead to increased bird life, for example, which I welcome. There have also been some very useful attempts to use set-aside lands as areas in which birds can breed and be protected. However, people should also have a right to access, so that they can go to look at birds and to see what is happening in the countryside. Countryside protection benefits not only wildlife but people, and finding a reasonable balance is extremely important. The history of agro-environment schemes does not make pleasant reading because, as I said, although enhancing the environment and greening the environment is the right principle, in practice we are not achieving that goal.
I should draw the Minister's attention to schemes that accomplish the twin goals of creating wildlife habitat and of allowing greater public access. One current scheme—public access to environmentally sensitive areas—has all the hallmarks of the proposals that we are considering. I am holding a map that allegedly shows the public how they can locate a public access area in Dartmoor. The applicant is Mr. R. Jephson, who lives in Bedfordshire, and the address on the map is in Bedfordshire. As the map provides no other references to the site's location, it would be impossible for anyone to find the site, which is in Devon. The map was produced by the Ministry of Agriculture, Fisheries and Food and circulated by it in September 1995, and represents land that has been committed as an environmentally sensitive area, to which the public should have access. However, it does not give anyone a clue or a chance to find the land, because people would be looking for it in Bedfordshire rather than in Devon.
1012 The countryside access scheme is similar to the environmentally sensitive area scheme. I am holding two examples of the maps, documentation and information on that scheme published by MAFF. One of the examples concerns the operation of the scheme at Denham Hill farm. The problem is that "Denham Hill farm" is the only information provided on the location of the site. The map provides no other information, such as a nearby village, or any other way in which to find the site. We are paying a subsidy to that farmer so that people can enjoy a right to walk over his fields, but no one can find where his farm is located.
An even better example is provided in a letter, dated 13 February 1996, from MAFF to the Ramblers Association, in which the association is advised that there is a right of access to a site belonging to an applicant—the Guilde Morden Townlands charity. The map does not provide the name of a town, county, road or other reference, but shows only a track, a pit and a coloured open-field site. We are paying significant amounts of money under the countryside access scheme to farmers and landowners, but, as MAFF's documentation shows, the public cannot find the sites. I spent a great deal of time trying to find the land belonging to the Guilde Morden Townlands charity, but I have been unable to do so. The examples demonstrate the current waste and abuse of public money.
I have worked with the Ramblers Association in examining the countryside access scheme and public access to environmentally sensitive areas, and we have surveyed many sites. I think that we can draw two conclusions from those efforts. The first is that few people know of the so-called "new opportunities" because of poor publicity and misleading and unhelpful information. Secondly, once the sites have been located, local people have made it clear that, in half the cases, public access or a public footpath had already existed, and that, in a quarter of the cases, a de facto right to roam had already existed. The public are therefore losing out twice, because they either cannot find the sites, or, in 75 per cent. of the cases, they already had access to them. The situation is not scandalous, but I am deeply disturbed that significant amounts of money are being paid for the public to have rights of access which they cannot exercise or which already existed.
As I said, the largest scheme is the countryside stewardship scheme, which the Agriculture Minister recently described as the premier vehicle for protecting and enhancing countryside access. The countryside stewardship scheme has the hallmarks of failure of the two other schemes that I mentioned.
I draw the Minister's attention to a document entitled "Countryside Stewardship Scheme: Public Access Sites", which I helped the Ramblers Association to publish in March 1995. It was a survey of all the countryside stewardship schemes in the country at that time. It was a major undertaking in that 600 sites were examined.
The survey found that a third of the sites were difficult to find, as I described in relation to other schemes, and, significantly, that 21 per cent. of the grid or ordnance survey references were wrong. That is clearly bad practice. More than 30 per cent. of sites had no sign at the entrance to say that they were countryside stewardship sites although such a sign is a condition of receiving a grant. Perhaps most important, 48 per cent. or almost half of the sites had access problems.
1013 Following the map provided by the Countryside Commission, I accessed a site at Pye Bridge—not far from the Economic Secretary's constituency in Derbyshire—and had to cross the Midland main line. There are eight tracks at that point and, as the Minister knows, trains travel the line in excess of 120 mph. Clearly, that site was wrongly identified and people's lives were being put at risk. I am pleased that the Countryside Commission has now taken the site off its list.
Of the sites surveyed, access was already available to 44 per cent. of them. One criticism of the scheme is that sites are difficult to find, but, when they are found, it appears that de facto access or access across a footpath is already available. Such schemes need to perform better. I estimate that the access element of the countryside stewardship scheme will cost £6 million over 10 years. To put it baldly, we are not getting value for money.
Another example of such a scheme is the conditional exemption from inheritance tax scheme under which the public are also allowed greater access to the countryside. The amendment is clear in seeking reasonable public access to land that is in a habitat scheme, but the conditionality of inheritance tax also has all the hallmarks of failure. I have raised this matter with the Financial Secretary before and I am very grateful for the interest that he has so far taken in it. I hope he will not find it churlish if I say that I have admired his interest but not what has been achieved.
Again, there is a loss of inheritance tax to the public purse in—allegedly—allowing the public greater access to the countryside. The problem with this specific scheme is that because of taxpayer confidentiality, sites cannot be identified. Therefore, the public are in theory being allowed greater access to the countryside, but taxpayer confidentiality means that no one is told where the sites are. That is absolutely crazy, and I do not believe that anyone can justify that situation.
The Countryside Commission administers the scheme on behalf of the Government. I know that the commission itself would like to see a change, and I hope that conditional exemption from IT and the habitat scheme will both be changed to allow greater public access so that people know where the sites are and can access them.
I said that the Financial Secretary had been extremely helpful, although some of the answers to my questions did not inspire me with confidence. On 29 March 1996, the Financial Secretary replied to a written question. I asked how many sites had been givenconditional exemption from IT on the basis of public access having been granted.He replied:The information requested about the number of locations which have been granted conditional exemption is not available.That is not good practice.
In answer to another written question, the Financial Secretary confirmed that the cost of conditional exemption in such cases was between £5 million and £10 million each year. We are talking about significant sums of money—£5 million to £10 million a year in loss of inheritance tax, £10 million over 10 years on countryside stewardship schemes, and lesser amounts for the smaller schemes that I mentioned.
1014 It is imperative that the spirit of the amendment is accepted. If payments are to be made, either in cash or by the avoidance of inheritance tax being allowed, the public should get something back—they should have greater access. The central problem is that Departments, backed by Ministers, are unwilling to advertise the sites.
Also on conditional exemption, I asked the Financial Secretary what consultation had taken place. Again on 29 March 1996, he replied that tourist offices and town halls had been consulted. Since receiving that reply, I have written to every county council in England. With three exceptions, none could find any evidence at all of being consulted. To be fair, three did say that they were consulted but were not prepared to give details of sites in their county because of the prescription of taxpayer confidentiality. Some did not know, and a smaller group would not say. It was the same when tourist information centres were contacted.
I asked the Financial Secretary how he knew that the relevant tourist centres were displaying information telling people about access to the countryside. Also on 29 March 1996, he replied:I am unable to provide the requested information about tourist information centres as it is not held centrally. And, in any event, providing such information may help identify individual cases of tax exemption, thus compromising the normal rules on taxpayer confidentiality."—[Official Report, 29 March 1996; Vol. 274, c. 777.]There we have it—a promise is being made that tourist information centres are consulted and have the necessary information but, at the same time, the Financial Secretary is saying that they are not allowed to display that information for reasons of taxpayer confidentiality. To put it bluntly, it is a real mess—a quagmire. I have anxieties that the clause will lead to similar problems. Substantial amounts of money are being paid to farmers and landowners.
It is important that people who want access to the countryside—there is an ever-growing demand—should have the information to find the locations that they want and that there should be new public access. That is the purpose of the amendment. It is a long, hard road, but people will not give up easily. There is a tremendous desire across the United Kingdom for a better, greener landscape. We want to enjoy that landscape.
There should be a partnership between the Government and those who want to go to the countryside. The Government's policies have set up a series of misdirections, stiles and blocks on footpaths. That is not good enough. People will not tolerate it and there will have to be change. The amendment is a small step in pushing for that.
§ Mr. Geoffrey Clifton-Brown (Cirencester and Tewkesbury)
I should like to comment on the amendments tabled by the hon. Member for Sherwood (Mr. Tipping), whom I am delighted to follow, and his Front Bench colleagues. I oppose both amendments.
§ The First Deputy Chairman of Ways and Means (Sir Geoffrey Lofthouse)
Order. I must point out to the hon. Gentleman that we are debating only amendment No. 6.
§ Mr. Clifton-Brown
Indeed. Amendment No. 6 was moved by the hon. Member for Sherwood and deals with 1015 public access to habitat scheme sites. I apologise for being confused about which amendments we are discussing. I hope to be able to catch your eye on the following amendment as well, Sir Geoffrey, but I shall now confine my remarks to the right of public access to habitat schemes.
A description of what the habitat schemes in question are designed to achieve might be helpful. A pilot scheme was launched in May 1994, aimed at creating or enhancing certain valuable habitats by taking land out of agricultural production. or introducing extensive grazing. and managing it for the benefit of wildlife. The scheme targets three types of habitat: water fringes in six designated areas; farmland previously in the five-year set-aside scheme; and coastal salt marsh.
There is a philosophical divide between the two sides of the Committee. I believe that this country's extensive right of way system is not used to its fullest extent. If the system was already fully used, I could begin to understand the objections of the hon. Member for Sherwood, but it is not. There are a number of reasons for the lack of use, not least of which is the presence of one or two unco-operative landowners and farmers. I condemn those who block up proper rights of way. The Countryside Commission's target is that all rights of way should be open by 2000.
Introducing a public right of way over habitat scheme areas in a Finance Bill is not the right way to proceed. When a Government introduce an agri-environment scheme, they have to ask what that scheme is designed to achieve. I have already set out the nature of the scheme; it is designed to create better habitat. Many of the habitats that we are trying to create need peace and quiet. The Opposition's policy of a right to roam, with people wandering everywhere, would not work with this scheme. Permission to bring the scheme into effect will be granted only if the organisers believe that it will achieve the desired objectives. That will happen only with an out of the ordinary habitat, which would be impossible to achieve with people wandering everywhere. I strongly oppose the introduction in a Finance Bill of the right to roam over habitat scheme areas.
The Government have an excellent record on agri-environment schemes, including the habitat scheme. The public want that to continue. We spend approximately £100 million a year on agri-environment schemes. That is a creditable record. I am delighted that the countryside stewardship scheme budget for England alone is £46 million. I hope that Labour Members warmly welcome our agri-environment programme.
I do not want any action to be taken that would damage that progress. I have an interest to declare—I am a farmer. I am also a member of the Environment Select Committee. I believe in the duty of landowners and farmers to enhance the environment of our precious planet. I cannot support the amendment, because it would jeopardise the habitat scheme. There may well be other schemes in which a specific provision for a right of public access might be reasonable, but that should be implemented when the scheme is introduced, and by the 1016 same Ministry. When the Ministry of Agriculture, Fisheries and Food introduced the scheme, it had no intention of making public access part of it.
Imagine a rare bird, such as the stone curlew, nesting in a habitat scheme area. Some well-meaning rambler might come along, not knowing what he was looking for or why the area had been designated as a habitat scheme, and put his foot on that rare nest.
§ Mr. Tipping
If the hon. Gentleman looks closely at the amendment he will see the words, "reasonable access". I would certainly not put my foot on the nest. I know that the hon. Gentleman agrees with the point that I made about the need to balance conflicting interests in the countryside. That is why the word, "reasonable" has been included in the amendment.
§ Mr. Clifton-Brown
I am grateful for that helpful intervention, which shows that we agree on the fundamental point that there should be proper access to the countryside. It is a pity when conflict occurs. However, we then part company. I do not believe that the scheme in question would benefit from increased public access, for the reasons that I have given. Many other schemes, to which the hon. Gentleman referred, have public access provisions built in.
In the spirit of open government that we Conservatives believe in, any public access provision built into a scheme should work properly, otherwise it should not be in the scheme. I deplore the fact that certain people have undertaken to give public access and then obfuscated that undertaking at every stage. They should not draw public money with the promise of access and then try to deny the public that right, but that is not the case with the habitat scheme. On that basis, I find it very hard to support the amendment.
I suspect that I would part company with the hon. Member for Sherwood over a general right to roam, which the amendment encompasses. All my remarks apply to a general right to roam, because exactly the same arguments can be applied both to the right to roam and to the right of public access to a habitat scheme area. Given his rambling interests, I am sure that the hon. Gentleman accepts that, just as there are irresponsible landowners and farmers who are causing difficulties with legitimate rights of way, there are some irresponsible ramblers. If the public are allowed to wander all over the place, some irresponsible ramblers will put their foot in it in the manner that I have described. If the hon. Gentleman accepts that there are some irresponsible ramblers, he must agree that we have to channel them into certain places.
The habitat scheme forms part of an agri-environment scheme that the Environment Committee has considered. There is no doubt that some habitat schemes are near areas to which there is much access, such as the Cotswolds national trail and other national trails. The Select Committee visited one such trail in the Peak district national park, where great boulders had to be lifted in by helicopter to accommodate the huge right of access.
I am not suggesting that habitat schemes and the terms of the amendment relate to such huge numbers of people, but one never knows. If such a scheme happened to be on the edge of a large conurbation, the very purpose for which the scheme was set up—to keep the area peaceful, tranquil and undisturbed—might be undermined.
1017 It is very hard to divine why the hon. Member for Sherwood has chosen to table an amendment on habitat schemes. I could have understood his tabling an amendment on one or two of the other schemes, where public access is catered for; I would have had some sympathy for his argument. When providing access, people who approved the scheme and paid public money for it, with the landowner and the farmer, would have considered the problem of excess public access and concluded that they could easily cope. I am not sure that the hon. Gentleman has thought the matter through and considered all the implications.
I am keen to ensure that our environment is enhanced. We are considering not only some of our rare birds, about which we hear so much. The Environment Committee went to the natural history museum the other day to learn more about some of our endangered species. Habitat schemes were designed and introduced precisely to protect some of them. Although we hear much about some of our high-profile creatures, such as hawks, raptors and some of the small songbirds, habitat schemes are designed to protect many other extremely rare species.
The Environment Committee was given a great lecture on lepidoptera—butterflies—and learnt that at least six species are in serious danger in the British Isles. Habitat schemes were specifically designed to help such very rare species, and rely entirely on the progression down the species in the animal kingdom. The progression starts with the larger mammals, which the schemes might help to protect, and goes down to smaller mammals and birds. Birds depend on food such as smaller insects, molluscs and other items further down the food chain. Many small insects are preyed on by larger animals, and they too need to be protected. That is precisely why the habitat schemes were inaugurated.
On the visit to the natural history museum—
The First Deputy Chairman
Order. This is all very pleasant, but it would be helpful to the House if the hon. Gentleman spoke about the amendment.
§ Mr. Clifton-Brown
I shall try to confine my remarks more closely to the ramblers who put their foot in it, for whom the hon. Member for Sherwood is trying to prevent people receiving tax concessions.
The amendment concerns not only larger mammals, birds and butterflies, but smaller insects. Experts in the Ministry of Agriculture, Fisheries and Food tell me that the habitat schemes are very important for the smaller insects. A computer mapping scheme on a worldwide basis includes the huge amount of information held at the natural history museum. It is the largest database in the world concerning all sorts of species. It is absolutely vital to preserve valuable habitat schemes and vital smaller insects for future generations to study. A vital aspect of the food chain would otherwise be lost.
§ Mr. Nicholas Winterton
Sadly, I heard only part of the most interesting speech of the hon. Member for Sherwood (Mr. Tipping). Does my hon. Friend agree that 1018 the right to roam, which is very much part of the argument advanced by the hon. Gentleman, has costs? Does he accept that those who grant the right to roam and want to move across the countryside contribute a cost, whereas those who are part of the countryside and have to maintain it must meet that cost? I am sure that, as a practising farmer and one who represents an agricultural constituency, my hon. Friend knows a great deal about such matters. Will he comment on the cost of the right to roam, which is so much part of the hon. Gentleman's argument?
§ Mr. Clifton-Brown
I am grateful to my hon. Friend for introducing the subject of a right to roam, on which I have tangentially touched. I must, however, return to the smaller insects and the molluscs. [Laughter.] I do not know why hon. Members are laughing. I do not find the subject at all funny; it is very serious. The hon. Member for Sherwood wants the public to be able to walk all over—
The First Deputy Chairman
Order. The hon. Gentleman must relate his remarks to the amendment and the clause. He is failing to do so. I hope that I do not have to draw that to his attention any more.
§ Mr. Clifton-Brown
I am very grateful for your advice, Sir Geoffrey. I thought that I was trying to relate my remarks to the clause. We are talking about exemption from inheritance tax in relation to habitat schemes. The substantive Opposition amendment will be debated next, but the hon. Member for Sherwood is trying to give members of the public an automatic right to roam on sites exempt from inheritance tax.
§ Mr. Tipping
I wish to draw the attention of the hon. Gentleman, again, to the amendment, which refers to "reasonable access". I have pointed this out to him, but he is getting carried away with his own enthusiasm. "Reasonable access" tries to balance the needs of the habitat and wildlife—about which he talks so eloquently—and the needs of the public. He knows that the countryside is a living countryside and that there must be a balance between those interests. The conflict between them interests all of us who are concerned with the future of the countryside.
§ 8 pm
§ Mr. Clifton-Brown
Bearing in mind your strictures, Sir Geoffrey, and the two interesting interventions that we have heard, I shall move on to the second part of my speech and deal with "reasonable access thereto"—the exact words used in the amendment.
§ Mr. Winterton
Does my hon. Friend accept that my intervention relating to the cost of "reasonable access" had an important impact on the amendment? The amendment states that the public should be allowed reasonable access, and the clause relates to inheritance tax. I repeat that my hon. Friend has considerable knowledge of the countryside because of his practical experience as a farmer. Are there not considerable costs involved with this amendment? Should not the amendment—which the hon. Member for Sherwood has quite reasonably tabled—clearly reflect the costs involved for those who own the land in question?
§ Mr. Clifton-Brown
I am grateful to my hon. Friend for reinforcing his earlier intervention. It is a good point 1019 to debate. What is "reasonable access"? Does it mean one person a year having access to one habitat site? Does it mean that an enormous number of people should have access, such as we saw in the Peak district national park where rocks were flown in by helicopter to maintain paths? They had to fly in rocks because thousands of people were visiting the area. I do not disparage that, but is it "reasonable access" to a habitat scheme? I would suggest that it is not.
If the amendment were accepted, we would need a clearer definition of "reasonable access". My hon. Friend the Member for Macclesfield (Mr. Winterton) is absolutely right to suggest that a general right to roam is not "reasonable access" as it will have a cost. He rightly pointed out that I am a practising farmer, and I obtain some of my income from my farm. I know full well that unreasonable access on a completely ad hoc basis—which the hon. Member for Sherwood is seeking—could do immense damage, particularly to stock-rearing areas where, I understand, many of the habitat schemes envisaged in the amendment would be.
The hon. Member for Sherwood wants the public to have an unfettered right of access to habitat scheme areas, but does he believe that that would damage the livelihoods of farmers? I support a right of access, provided that access is channelled to the right place at the right time, but if the public were able to walk everywhere—as I believe the amendment would allow—it would cause damage. For example, dogs might stray as a result of the type of irresponsible rambler to whom I have referred.
The key to all my remarks is that farmers' livelihoods are being damaged by irresponsible ramblers, and although farmers accept that the vast majority of ramblers are responsible, there is always one who spoils it for everybody else. For example, a rambler might allow his dog loose and the dog might kill several lambs or ewes. Who will pick up the bill for that? The rambler who has let his dog loose will be long gone by the time anyone discovers what has happened.
§ Mr. Tipping
May I remind the hon. Gentleman for the third time that the amendment does not ask for unfettered access but "reasonable access"? My position on this matter is set out clearly in the Access to the Countryside Bill, which I advise him to read. He can then identify my position, rather than make a false prospectus. Many of the points that he has made could not be attached to the Access to the Countryside Bill.
§ Mr. Clifton-Brown
I am grateful to the hon. Gentleman for trying to clarify his position, and I look forward with great interest to reading his Bill.
§ Sir Dudley Smith (Warwick and Leamington)
I wandered in and thought that I had got my days wrong. I heard the discussions about habitats, but I thought that we were discussing the Finance Bill. I have listened with interest to my hon. Friend who, if I may say so, is making heavy weather of this. I hold no brief for the hon. Member for Sherwood (Mr. Tipping), but the word "reasonable" is very important in the legal sense. We all know that some people abuse these schemes, but we must bear it in mind that the public legitimately want access to the countryside and that we want to preserve habitats. There should be 1020 "reasonable access" and some give and take by farmers and ramblers. If people start going the wrong way, we must take action against them. But perhaps we should be more liberal than regressive on this matter.
§ Mr. Clifton-Brown
I am trying hard to keep my remarks brief, Sir Geoffrey, but I keep being distracted. Unfortunately, my hon. Friend was not here for the start of my speech, so I must briefly tell him that I am not against public access at all, but that we must have the right attitude towards it. The existing rights of way network should be upheld, but if the hon. Member for Sherwood wants to table an amendment such as this, he must specify what he means by "reasonable access."
§ Mr. John Home Robertson (East Lothian)
The hon. Gentleman is making a terrible meal of this. He has made clear to the House that he has interests in a farm, and so have I. My farm is in Scotland where there is, in effect, a right to roam. It has never caused anybody any problems, and there is a good partnership between members of the public who walk around the countryside and the farming industry. What is the point in having a habitat scheme to protect habitats for the benefit of the public if we deny the public reasonable access to them? He is overdoing it.
§ Mr. Clifton-Brown
The hon. Gentleman has shown clearly that he has no idea what the habitat scheme is for. The whole idea is to keep an area completely undisturbed to enhance a particular habitat, and we must not get that muddled up with other areas of farming land where the public have a perfect right of access. The whole idea is that we wish to enhance particular flora or fauna which otherwise would not exist. That is why we are prepared to pay taxpayers' hard-earned money—to enhance those things that the public want to see.
I do not know about the farm of the hon. Member for East Lothian, but if the amendment were to be applied to it, I suspect that valuable areas of habitat might be affected. We are talking about small areas, and we do not want to deny the public the right of access to huge areas of countryside. We are making heavy weather of this because I keep being interrupted. The amendment is absolutely nonsensical and totally contrary to the purposes of the scheme. On that basis, I totally oppose it.
§ Mr. Alan Milburn (Darlington)
We have had an interesting diversion for the last 28 minutes. It has been a veritable tour de force—a tour of fauna and flora, molluscs, insects and the animal kingdom.
I want to bring the debate back to the amendment. My hon. Friend the Member for Sherwood (Mr. Tipping) has raised an important issue, which is something of a hardy annual in Finance Bills: it comes back year after year. My hon. Friend should be congratulated on being such a doughty champion of the right of access to land that has benefited from the public purse. He raised the issue in Committee last year and he has done so again today, this time in relation to clause 92, which extends inheritance tax relief to land within habitat schemes.
The amendment would make the relief conditional on a modicum—a reasonable amount—of public access. That is exactly the sort of phraseology that was encompassed in the original Act to deal with the issue: the Finance Act 1976. The continual concern of the hon. Member for 1021 Cirencester and Tewkesbury (Mr. Clifton-Brown) about the words "reasonable access" can therefore perhaps be laid to rest if he cares to examine previous laws dealing with the matter.
The argument is not about the principle of relieving inheritance tax in exchange for gaining public access to important parts of the countryside. The simple principle is that if the taxpayer is forking out a small fortune—because that is what is represented by the millions of pounds of revenue forgone in the past—the Government should ensure that the recipients either fulfil their obligations to public access or forgo the tax advantage.
It is a question of rights and responsibilities: the right to receive public subsidy and the responsibility to guarantee public access. That is the principle that my hon. Friend the Member for Sherwood wants to enshrine in the law through the amendment. The problem, as he said both this year and last year, is that public access cannot be guaranteed when information about the land concerned is not readily available.
We do not even know the number of sites that are subject to conditional exemption. The Government's shuffling off of responsibility to the Countryside Commission and individual local authorities simply will not do, because the local authorities do not know, and the commission will not say, where the sites are. The public, who are the ultimate financiers of the relief, cannot find out where the land is.
Last year, I paid particular attention to the Minister's comments when he replied to a similar debate in the Standing Committee. He sought to reassure my hon. Friend the Member for Sherwood about information being available to the public. He said that such information was availableif we care to ferret out the facts."—[Official Report, Standing Committee E, 27 February 1996; c. 555.]It is not. In any case, the public should not have to ferret out information that should by right be theirs.
I appreciate that it would be wrong for the Inland Revenue to disclose information about the affairs of individual taxpayers. We do not ask how much relief is worth in individual cases, but we want to know where access has been promised in return for relief and we want that access to be guaranteed. As the Ramblers once memorably put it, the law is supposed to give the taxpayer some quo for its quids.
§ Mr. Milburn
I have not had the opportunity to study that publication, but I am sure that in his response the Minister will acquaint the whole Committee with its contents. I am concerned to ensure that, if public subsidies are given to landowners to take land out of farming use and to attain the laudable environmental objectives of preserving the countryside, the people that that is supposed to benefit—the public—have a right to reasonable access.
§ Mr. Nicholas Winterton
The hon. Gentleman is advancing a reasonable case, but he should consider the cost of granting that reasonable access to the countryside. I make this intervention because part of my constituency lies within the Peak park, which was referred to by my 1022 hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) in his 28-minute contribution. Will the hon. Gentleman make reference to the substantial cost that is often involved in granting what the hon. Member for Sherwood has rightly described as reasonable access to the countryside? I make particular reference to the cost of maintaining footpaths, as I have considerable knowledge of the Peak park and of the problems that growing access to the public cause to that rural environment.
§ Mr. Milburn
The hon. Gentleman makes an important and telling point. If rights and responsibilities apply on one side of the argument they must apply on the other. We should certainly not condone behaviour in the countryside that causes damage to areas of outstanding natural beauty or creates additional costs for those who are responsible for looking after them. I hope that the Minister will take note of the hon. Gentleman's point about my hon. Friend the Member for Sherwood having a reasonable case.
It is especially important that the right of public access should be guaranteed where it has been promised, because many of the lands covered by existing inheritance tax agreements lie in areas of outstanding natural beauty—the jewels in the crown of our countryside—but we do not even know where they are, so members of the public cannot properly enjoy them.
Conservative Members have been as concerned as Opposition Members about some of the issues that we have discussed this evening. The National Audit Office also expressed concern about the operation of the current inheritance tax regime, which the clause extends to lands under the habitat schemes.
An NAO report in 1992 said:The Department should give further attention to the nature and frequency of the procedures to monitor owners' compliance with undertakings given in return for conditional exemption from inheritance tax on land, buildings and particularly chattels. They should also review the extent to which assurances on retention, maintenance and rights of access remain heavily dependent on owners themselves.It is five years since the office produced that report. I understand that a Public Accounts Committee report produced the following year made similar recommendations.
Perhaps the Minister can allude to the Government's response to the NAO report and to the subsequent PAC report. A consistent thread runs through the arguments of the NAO, the PAC and my hon. Friend the Member for Sherwood. It is that simple maxim that if the public are to foot the bill through tax reliefs and tax subsidies to landowners, it must be conditional on the owners guaranteeing the public the simple right of access. That is an important principle, and I hope that the Minister will respond favourably to the amendment.
§ Mr. David Lidington (Aylesbury)
I am grateful for the opportunity to speak briefly on the important amendment moved by the hon. Member for Sherwood (Mr. Tipping). The hon. Member for Darlington (Mr. Milburn) gave the game away in terms of his philosophical approach when he talked about the public 1023 footing the bill for tax reliefs or tax allowances. It is worth reminding him that we are not talking about handouts from taxpayers, but about a change in the law that would allow certain individual taxpayers to keep more of their own money and not have their assets taxed by the state as much as they would otherwise have been.
§ Mr. Clifton-Brown
My hon. Friend may be confusing two issues. One is the payment for the habitat scheme, to which I think that the hon. Member for Darlington (Mr. Milburn) was referring. The other is set out in the clause on exemptions from inheritance tax.
§ Mr. Lidington
I am grateful to my hon. Friend for putting me right. I am, indeed, referring to the inheritance tax reliefs in clause 92.
My concern about the amendment of the hon. Member for Sherwood derives partly from the conservation efforts being made in my constituency and in other parts of the Chiltern hills and partly from the list of enactments in clause 92(3). Clause 92(4) empowers the Treasury toby order made by statutory instrument amend the list of enactments in subsection (3) above.I shall return later to the principle of enabling powers, and of giving a further such power to the Government.
First, I will deal with clause 92(3)(a) and (c). Paragraph (3)(a) refers to regulation 3(1) of the Habitat (Water Fringe) Regulations 1994.
§ Mr. Clifton-Brown
Is my hon. Friend aware that there are six such designated areas under clause 92? The Committee may be interested to know that they are as follows: the York, Derwent and Rye system; the Ribble tributaries; the Shropshire meres, which are especially important for people who live in the Welsh Marches; the River Beult, which I gather is in Kent; the Flapton Ley, which I believe is in Devon; and the upper Avon, Wylye and Nadder valleys in Hampshire and Wiltshire.
§ Mr. Lidington
I am grateful to my hon. Friend. Inland river systems sustain a great variety of wildlife, but they have come under increasing pressure in recent decades as a result of changes in farming techniques, improved drainage and the greater use of pesticides. It is important that we should do our utmost to conserve the flora and fauna that remain in those rich habitats.
By their nature, water fringes, especially when they are near large population centres, attract many people as sites for picnicking, camping and other recreational pursuits. I am sure that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) has, like me, enjoyed a family walk along a country river or around a lake. His mention of the Shropshire meres reminded me of such an afternoon in the company of my wife—and a very pleasant outing it was.
§ Mr. Nicholas Winterton
My hon. Friend mentioned meres, but what about canals? I refer in particular to the Cheshire ring and the Macclesfield canal. What about the flora and fauna there? Will he comment on that in adding to his excellent contribution?
§ Mr. Lidington
I am grateful to my hon. Friend for the benefit of his customary detailed knowledge of the area that he represents.
1024 My hon. Friend the Member for Cirencester and Tewkesbury informed the Committee that regulation 3(1) of the Habitat (Water Fringe) Regulations 1994 does not apply to the canal systems in Cheshire mentioned by my hon. Friend the Member for Macclesfield (Mr. Winterton). However, statutory instruments, by their nature, can easily be extended and this one could be extended to cover more sites than were included in the original Department of the Environment list. It is certainly conceivable that the canals mentioned could come within the scope of subsection (3)(a) if the Government of the day decided to amend the provisions. My hon. Friend made an important point about canals, which sustain a variety of wild plants and animals. To his knowledge of the waterways of Cheshire, I add mine of the Aylesbury and Wendover arms of the Grand Union canal which both support wildlife and attract people who live and work in towns and want to get out and enjoy the countryside.
This debate forces us to examine carefully the inevitable tension between the interests of conservation and of the rights of public access to recreation in the countryside. Water fringes are vulnerable habitats, but that is even more true of the saltmarshes mentioned in clause 92(3)(c). I do not know whether my hon. Friend the Member for Cirencester and Tewkesbury has been able to ascertain a list of those sites covered by the Habitat (Salt-Marsh) Regulations 1994.
§ Mr. Patrick Thompson (Norwich, North)
Mention of salt marshes makes me think of the coast of north Norfolk. I am not expert on this part of the Bill. Can my hon. Friend explain whether coastal saltmarshes would be affected by the regulations?
§ Mr. Lidington
The salt marshes of north Norfolk and the Wash would appear, at least in principle, to be eligible for inclusion in the Habitat (Salt-Marsh) Regulations 1994. If they are not among those sites which would be affected directly if the amendment were passed, they could be affected in the foreseeable future.
§ Mr. Tipping
Does the hon. Gentleman accept that access to saltmarshes is already provided under one of the agri-environment schemes—the scheme on public access to environmentally sensitive areas? Does he agree that the balance between protecting the landscape and the environment and allowing public access is what is exercising the mind of the Committee?
§ Mr. Lidington
I wholly agree with the hon. Gentleman that the test for the Committee is to get the balance right. It is my contention that that is best achieved by examining the terms of schemes and making arrangements for access to sites rather than by incorporating the rather broad language of the amendment in the Finance Bill.
§ Mr. Clifton-Brown
My hon. Friend asked me whether I had been able to obtain any information about the saltmarsh option. Unlike the water fringe option, which is for inland waterways—fresh water—at six designated sites, the aim of the saltmarsh option is to create and extend areas of saltmarsh on suitable land, consistent with the provision of effective and sustainable coastal defence. That might be helpful to my hon. Friend.
§ Mr. Lidington
Indeed. We have only to consider the pressure on saltmarshes, as on inland waterway systems, 1025 not only from agriculture but from development of various types, to see why we need to take great care to ensure that such sites are adequately protected. North Kent and the now aborted proposals to develop the Maplin area of the coast of Essex for an airport in the 1970s are just two examples of the pressure on saltmarshes around the coast of Britain. That is why the Committee should be careful before allowing public access in the way that the hon. Member for Sherwood wishes. I know that it is not his intention, but the amendment might unwittingly have the effect of allowing access to such an extent as to damage the habitat that attracted people there in the first instance.
§ Mr. Patrick Thompson
I am becoming genuinely interested in the point about public access. There is a distinction between public access and total exclusion of the public. Is there any halfway measure under which restricted access could be allowed, either now or in the future? I know that certain categories of people are allowed into certain special conservation areas. Is that relevant to the clause?
§ Mr. Lidington
My hon. Friend makes an important point. One of my quarrels with the term "reasonable access" in the amendment is that it does not seem to allow sufficiently for the dilemma that my hon. Friend has illustrated.
I return to the point that I made to the Committee earlier. If a public access agreement is drafted which is specific to a particular site, it will allow for access to be given to biologists and genuine researchers. It would allow the public to be barred from sites at particular times of the year, in the same way as public access to the Fleet lagoon in Dorset is strictly limited when the wading birds are likely to be nesting. Detailed site-specific arrangements could then be made. My fear is that the language adopted by the hon. Member for Sherwood would allow public access to continue and to grow, perhaps to the detriment of particular sites.
§ Mr. Clifton-Brown
My hon. Friends have raised an important point. Of course, the scheme is time-limited to 20 years, so any public access would be prescriptive rather than statutory. If it were prescriptive, would it be possible to limit public access to certain times of the year? To take my stone curlew nesting example, it is important to keep the public away during the nesting months of April and May. Does my hon. Friend think that that would be a good idea?
§ Mr. Lidington
That would be a good idea. Even within a public access agreement for an individual site, it would be desirable to allow a degree of discretion to the managers or those responsible for supervising conservation on a particular site. For example, if a particular habitat is used by migratory birds during their flight north or south in spring or autumn, it would surely be sensible to allow a measure of discretion to those responsible for conservation so that if migration was early or late in a particular year, they could bring forward or put back the period of public access in the interests of conservation. My hon. Friend's point strengthens my view that the language of the amendment is inappropriate.
I move from new section 124C(3)(a) and (c) to the subsection which, I confess, troubles me most. New section 124C(3)(b) refers to the Habitat (Former 1026 Set-Aside Land) Regulations 1994. As every member of the Committee will appreciate, set-aside land is found in every part of the country. No one knows for certain how the scheme is likely to develop. There have been significant changes during the past 12 months, as a consequence of the impact on the European beef market of the BSE crisis since March 1996. That brings me away from the coasts and back towards my constituency and neighbouring constituencies and to the Chiltern hills.
The Chilterns are a valuable habitat. They include much land which is classed as an area of outstanding natural beauty, and much which is green belt, but the Chilterns also often mark the dividing line between land which is given that class of protection and land which is available for normal development, subject to the usual planning process.
Counties such as Bedfordshire, Buckinghamshire and Berkshire, which are just beyond the rim of the London green belt, are peculiarly subject to development pressures. Anyone who has studied the Department of the Environment's recent Green Paper on household projections will know how the demand for housing and new premises for employment in those south-eastern counties is forecast to grow steadily—some might say dramatically—in the next 10 to 20 years. That growth will put still further pressure on agricultural land and woodland in my constituency and in other parts of the Chiltern hills.
§ Mr. Lidington
The Cotswolds and the Chilterns probably have a great deal in common so far as development pressures are concerned.
§ Mr. Nicholas Winterton
My hon. Friend makes a good point, but does he accept that it is not merely areas to the north and west of Greater London, such as the Chilterns, his constituency and the Cotswolds, that suffer such pressures? Areas on the periphery of great cities such as Manchester also suffer. I refer to my constituency of Macclesfield in Cheshire, where the same pressures are being exerted and the same arguments are relevant to my hon. Friend's proposals, which he is making in an excellent contribution to the debate.
§ Mr. Lidington
I thank my hon. Friend. Having some good friends who live not in his constituency, I fear, but nearby, and having visited Wilmslow, Knutsford and Mobberley, I am certainly aware that development pressures in Cheshire as a consequence of people coming out from the Manchester conurbation are probably as acute as those affecting counties such as mine, which are adjacent to the London conurbation, although on a slightly smaller scale in view of the relative size of the two cities.
There is not only development pressure on the Chiltern hills and Buckinghamshire. Understandably, there is also a huge demand for public access and I have immense sympathy for that. I was brought up in north-west London and used to go for Sunday walks with the family along the Chess valley or the scarp of the Chiltern hills. None of us wishes to deny such walks to present or future generations, but we have to ensure that public access does not develop in such a way that it damages a precious environment. Public access has to be managed.
1027 In my part of the country, there are many opportunities for legitimate public access through long-distance paths such as the Ridgeway along the scarp of the Chiltern hills and the north Buckinghamshire and south Buckinghamshire footways, which Buckinghamshire county council has developed with great prescience and vision to balance public access, conservation and efficient farming in a way that I am sure that the hon. Member for Sherwood seeks to achieve as much as anyone else.
There have also been clashes, however. A number of farmers and landowners in Buckinghamshire and Oxfordshire have been alarmed at some of the initiatives taken by the Ramblers Association and people such as the hon. Member for Sherwood who want a more general right to roam enshrined in law.
§ Mr. Tipping
I think that the hon. Member for Aylesbury missed the beginning of my speech. I have never advocated an unrestricted right to roam. As I said earlier in this short—but extending—debate, my position is set out in the Access to the Countryside Bill, which tries to deal with the tensions that the hon. Member so rightly recognises.
§ Mr. Patrick Thompson
This is becoming a very interesting debate. Before I became a Member of Parliament, I spent much time in the national park areas involved with the Duke of Edinburgh award scheme and so forth. To what extent do these issues differ in national park lands and in the areas that he is describing in Bedfordshire and Buckinghamshire? Does national park status make a difference and, if so, how?
§ Mr. Lidington
I am no expert on national park land. Some people have argued that the Chilterns or the Cotswolds might be given national park status. I would prefer to avoid that degree of what some people might describe as overmanagement and rely on finding a sensible and pragmatic balance between the differing interests of agriculture, forestry, public recreation and conservation in the way that I have sought to describe.
Two local issues have given me cause for great concern about clause 92(3)(b). The first is my knowledge of the efforts being made by the Berkshire, Buckinghamshire and Oxfordshire Naturalists Trust to establish a network of nature reserves throughout the Chilterns to try to bring back some of the flora and fauna that have been lost as a result of poor stewardship during previous decades of this century. The people most closely concerned with those projects have told me that it is no good relying on a tiny network or series of oases of nature reserves, from which we exclude the public altogether and expecting that plants and animals will thrive in those isolated colonies. Instead, they argue, we need to link those oases through hedgerows and set-aside land which is responsibly managed in the interests of conservation. The creation of those links between nature reserves, in the traditional sense, could be put at risk by the amendment.
1028 My second cause for concern locally derives from the ambitious project under way in the Chilterns—due in part to the great generosity of my constituent Mr. John Paul Getty—to reintroduce the red kite back into England. You will know, Sir Geoffrey, that the red kite is a bird of prey which, through persecution, had been confined to a small area of mid-Wales around Plynlimon, but which can now be seen by drivers along the M40, thanks to a sensible programme of conservation and management.
The hon. Member for Darlington (Mr. Milburn), contributing from the Opposition Front Bench, referred to the fact that it was difficult to obtain details of every site listed under the various regulations described in clause 92(3).
§ Mr. Tipping
I hesitate to correct the hon. Gentleman. However, the sites that we said the public had difficulty in finding were not those to which he refers, but those which have conditional exemption from inheritance tax to allow greater public access. I do not think that the hon. Gentleman has been following the debate closely enough.
§ Mr. Lidington
My point is that in the interests of good conservation—this was certainly true in the case of the red kite—it is often important to keep the location of specific sites secret so as to ensure that rare species are allowed to breed and thrive without the attentions of bird egg collectors or poachers intervening in that process. I would not want circumstances to arise in which, in order to achieve the desirable objective of greater public access to and enjoyment of our countryside, we allowed intrusions that could severely damage efforts to introduce or restore species to habitats in this country and to ensure that they thrive there.
I said earlier that I wanted to return to the enabling powers that the clause would give to the Government. I simply note that in clause 92 the proposed section 124C(4) to the Inheritance Tax Act 1984 would enable the Treasury, by order, toamend the list of enactments in subsection (3)".It follows that if the Committee were to accept the amendment proposed by the hon. Member for Sherwood we would be putting into law a right of public access—or "reasonable access" in the terms of the amendment—not only in respect of those enactments already listed in proposed section 124C(3), but in respect of any future enactments added to the list by any future statutory instrument introduced at the behest of any future Government. It is a good principle that, whenever possible, we should try to avoid giving too many enabling powers and it is that principle which causes me to have further doubts about the amendment.
§ Mr. Nicholas Winterton
The amendment moved very reasonably by the hon. Member for Sherwood (Mr. Tipping) seeks to make inheritance tax agricultural relief for land dedicated under long-term habitat schemes conditional on the public being allowed reasonable access to the land. Does my hon. Friend accept that protecting or improving the environment and creating public access to land are totally different objectives, albeit equally desirable ones? Is that not why there are different arrangements dealing with habitats and with public access to land? I have considerable sympathy with the argument advanced by the hon. Member for Sherwood, but are not 1029 the matters relating to habitats and public access that we are debating two very different issues? Will my hon. Friend deal with those two issues?
The First Deputy Chairman
Order. Before the hon. Member for Aylesbury (Mr. Lidington) deals with those points, I must say that that was a very long intervention.
The First Deputy Chairman
Order. Relevant or not, interventions are supposed to be brief and to the point—and that one was neither.
§ Mr. Lidington
I am sure that my hon. Friend will try to catch your eye later in the Committee's proceedings, Sir Geoffrey, so that he can develop his important arguments.
I want to conclude by saying to the hon. Member for Sherwood that, although I understand and have some sympathy with the motives behind his amendment, he has chosen a blunt instrument with which to secure his objective: there are better ways of securing improved public access to our countryside.
§ Mr. Jack
This has been an interesting debate, which has shown that Conservative Members have a clear understanding of and a great deal of sensitivity towards the issues relating to the countryside and habitats.
I want to deal directly with the lines of argument advanced by the hon. Member for Sherwood (Mr. Tipping) when moving his amendment.
§ Mr. Jack
Indeed, it was some time ago. I might be wrong, but I believe that the hon. Member for Sherwood has stirred up the proverbial hornets' nest among Conservative Members.
First, I want to direct the hon. Gentleman's attention to an important piece of logic relating to his amendment. I would not normally accuse him of being an opportunist, but there is an element of opportunism in the phrasing of his amendment. He has, in his own way, asked for land covered by clause 92 to be subject to an extra requirement in respect of access. As I know from a former ministerial incarnation, the hon. Gentleman takes an interest in countryside and farming matters, so he will understand that we could not have had this debate had it not been for the fact that the Government responded to representations from concerned landowners, who wanted to advance land into various environmental schemes for the general benefit of the people and of the countryside environment, but who would hold back from so doing if we were to leave the law unchanged. Taking into account the inheritance tax factors affecting ordinary farmed land, it is an entirely praiseworthy and meritorious development that we are now moving towards encouraging more land not to be farmed but to be dealt with in an environmentally sensitive way. I therefore hope that the hon. Gentleman will give us some brownie points for our actions in that respect.
Although clause 92 is fairly narrowly drawn in the areas that have to be exempted from inheritance tax provisions, the debate has alerted us to a wider issue, with 1030 which the hon. Gentleman entertained the Committee. The narrow issue is the question whether there should be "reasonable" public access to the types of habitat scheme enunciated in proposed section 124C(3) to the Inheritance Tax Act 1984. What is distressing coming from someone who takes a genuine interest in countryside matters is the fact that the hon. Gentleman has not defined what he means by "reasonable".
In my former incarnation at the Ministry of Agriculture, Fisheries and Food, I opened one of the first six habitat water fringe schemes. I recall tramping through a meadow adjacent to the Ribble and understanding precisely what was happening in that ecologically finely balanced area as a result of the scheme, which imposed a highly restrictive regime on the farmer concerned. If we had not had a clear definition of the word "reasonable", we might have had large numbers of people, having been alerted to that habitat scheme, tramping across the meadow land and taking away all the advantages of its entering the scheme in the first place. The Committee could not reasonably be asked to support the amendment without the word "reasonable" being more closely defined.
§ Sir James Molyneaux
In view of the consensus that has been achieved in the course of this good natured debate, could not the two Front Benches come to an agreement—enter into collusion, if necessary—reinforced by all the rest of us, to ensure that any future Treasury Bench, under whatever management, would underwrite landowners' interests? I am only a window box farmer, but such a measure would cover landowners against public liability claims, which have arisen in my constituency to the extent that one farmer was forced to sell his land because of an alleged injury sustained by a rambler walking across his land. As no insurance company will provide such cover, a future Chancellor of whatever party should undertake to do so, even if it means increasing income tax.
§ 9 pm
§ Mr. Jack
The right hon. Gentleman makes an interesting point, which may be relevant to the general issue of encouraging farmers to offer to put land into habitat schemes that require public access. Those points will no doubt have been noted by my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food, who is responsible for schemes such as the countryside stewardship scheme. I shall draw the right hon. Gentleman's remarks to his attention.
I have criticised the narrow point of the amendment and shall now trespass a little into other areas. First, however, I refer to the incisive speech by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton—Brown), who made cogent, coherent and knowledgeable representations about this matter before the Finance Bill was published and before the announcement on the issue on Budget day. He spoke on behalf of many concerned landowners in advocating that we follow that measure. I publicly record my appreciation for his lines of argument alerting us to the matter in the first place. In my hon. Friend's knowledgeable speech, he attested to many of the real issues that surround the whole question of reasonable—however one defines that—access to land in the type of habitat scheme that is the subject of the amendment.
1031 The hon. Member for Sherwood went wider than the narrow terms of the clause and took us into two important realms, one of which was land that is already the subject of the inheritance tax exemption, but which may be in various forms of habitat scheme. The debate ranged over schemes such as the countryside stewardship scheme, the countryside access scheme, environmentally sensitive areas and the woodland grant scheme, to name but four of the major schemes. If I understood the hon. Gentleman correctly, in moving his amendment in that way, he sought to make the wider demand that, if that land was to continue to enjoy the inheritance tax exemption, as does all other farm land, because of its habitat nature that land, too, should have greater access. He cited the Ramblers Association audit of knowledge about the schemes.
I do not want to go into areas where I should not go, but it is worth reminding the hon. Gentleman to look carefully at publications on the countryside access scheme, which tell farmers who put their land into that area the ways in which they should make information more widely available. The hon. Gentleman and I have debated before the signposting of information in tourist centres and so on. The best service that I can render the hon. Gentleman and the Committee is to draw to the attention of my ministerial colleagues responsible for policing those schemes some of the deficiencies that have been attested to.
It was interesting to note the figures that the hon. Member for Sherwood gave. He said that a third of the land was difficult to find. He did not, however, say whether the people trying to find it were experts in map reading and using other aids to locate it. Nor did he entertain us with information on whether the other two thirds was found easily.
§ Mr. Tipping
I am conscious that the Financial Secretary had to miss part of the debate. Had he been present, he would have heard me say that at that time the countryside stewardship scheme was administered by the Countryside Commission, and that 20 per cent. of the grid references provided by the Countryside Commission were wrong.
§ Mr. Jack
Clearly, that is historic information, but it is important. The point that I am making is that, to join all those other schemes, landowners must fulfil various access requirements, yet under clause 92(3) some other forms of land are particularly sensitive and one would have to be certain about what "reasonable" meant in those contexts.
§ Mr. Winterton
Does my hon. Friend agree with the point made by the hon. Member for Sherwood (Mr. Tipping), that all landowners must—I emphasise the word "must"—publicise public access arrangements that are agreed by the appropriate heritage agency working in conjunction with local authorities and other interested 1032 parties? Is that not vital to the Government's aims, and does it not work towards what the hon. Member for Sherwood is trying to achieve?
§ Mr. Jack
Yes, but I fear that three different issues concerning access have become muddled. My hon. Friend's remark is relevant and correct. In a moment, I shall deal briefly with the third issue, about which the hon. Member for Sherwood had something to say, relating to land that may be farmed.
In general, if farm land is admitted to environmental schemes, closely defined access requirements are already built into the schemes, so there is no need to embroider them.
I pay tribute to the perceptive and sympathetic remarks of my hon. Friend the Member for Aylesbury (Mr. Lidington), who drew our attention to the terms of the salient part of clause 92, which is of direct relevance to our discussion.
The third issue to which the hon. Member for Sherwood drew our attention was those forms of asset—in this case, land—that were the subject of exemption from inheritance tax, in exchange for access, so to speak. I remember that last year the hon. Gentleman debated the subject at length, but I shall not attempt to paraphrase our comments. I undertook to make that information more widely available.
The hon. Member for Darlington (Mr. Milburn) said in his pugnacious way that members of the public should not have to go ferreting around for that information. I can tell him that the ferrets can go back in the pocket and down the trouser leg: the public have no need to ferret about, because we have taken further action to make the information exceedingly widely available. That is why I asked the hon. Gentleman whether he had read Inland Revenue publication No. 156. I shall furnish him with a copy of that excellent new leaflet, which sets out the broad-brush approach for obtaining information about the land that is on the exempt register.
I have asked the Inland Revenue to write to all the local authorities that run a library service, giving information about the availability of the Inland Revenue leaflet and providing a poster to publicise our efforts to make more knowledge available about where the land is and how it can be accessed, while maintaining taxpayer confidentiality. We have put the entire register on the Internet, so there is now public as well as private provision for obtaining the information.
We have addressed all three of the areas of concern identified by the hon. Member for Sherwood. In the light of the information and assurances that I have given him, I hope that he will not press the amendment to a Division.
§ Mr. Tipping
The debate has been stimulating and enthusiastic. We have been taken down paths that perhaps we should not have trodden, we have been to faraway fields, and at times the debate almost became a picnic. We have tested your tolerance, Sir Geoffrey.
Across the Committee, there has been a recognition of the need for a balance between protecting the habitat and allowing public access. That is a great challenge. I have set out my position in the Access to the Countryside Bill, which is before the House. It deals with many of the points made in the Chamber—for example, the notion that access should be allowed only at certain times of the year, 1033 the notion of restriction orders, and the notion that access not only is a right, but entails responsibilities. I am particularly interested in the point raised by the right hon. Member for Lagan Valley (Sir J. Molyneaux) about owner liability. I am currently addressing that issue, with a view to including it in a subsequent version of the legislation.
The Minister called me an opportunist—he was very nice about it—and I confess to that charge. The amendment was intended to provoke debate and discussion. One or two hon. Members said that their interventions would be short, but if their walks are as long as their short interventions, I shall never accompany them.
I have taken the opportunity to raise issues such as public access to environmentally sensitive areas, countryside access schemes, the countryside stewardship scheme and conditional exemption from inheritance tax. I praised the Financial Secretary earlier in the debate for always listening and taking an interest in such matters. I believe that we shall continue to tread this path. I am conscious that changes have been made, but much more remains to be done.
The hon. Member for Macclesfield (Mr. Winterton) referred to issues of cost, and he will recall that I identified sources of funding. For example, I mentioned the arable area payments scheme, in which the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) is also interested. Landowners and farmers receive substantial sums from that source and the hon. Gentleman has advocated capping that expenditure.
There is general agreement within the Committee that we must balance the people's right to access the countryside against the need to enhance and protect the countryside and lift the landscape. It is a complicated area, and I am delighted that we have had such a stimulating debate. I am glad that the Minister has re-examined the matter, and I shall continue to press him on those issues. Progress has been made, so I beg to ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
§ Mr. Milburn
I beg to move amendment No. 7, in page 81, line 46, at end add—'(7) This section shall only apply to land which has been acquired for bona fide reasons and shall not apply to land which has been acquired as part of a scheme or arrangement of which the main purpose, or one of the main purposes, is the obtaining of a tax advantage.'.The amendment has one simple, but significant, purpose: to protect the taxpayer and the Inland Revenue from any possibility of abuse as a result of the proposal in clause 92 to extend inheritance tax relief to land in habitat schemes. The Opposition support the principle behind the habitat scheme: promoting nature conservation is clearly a laudable objective, particularly as it applies to sites of special environmental significance. We would like to see the common agricultural policy reformed in such a way that it focuses resources still further on those positive environmental objectives.
We are equally concerned about protecting family farms. Those family businesses provide a key focus for stability and continuity in rural communities—they are often the backbone of our countryside. It is clearly an important Government objective to try to avoid the break-up of working farms of that sort. The extension of agricultural property relief under the IHT rules in the 1992 1034 Budget from 50 per cent. to 100 per cent. was presented as a means of doing just that. Nowadays, exemption from inheritance tax can be gained after only two years of owner occupation of a working farm. Two years ago, provision for 100 per cent. relief was also extended to tenanted farms. According to the Budget press release of 26 November 1996, the Government's—
§ Mr. Clifton-Brown
There is a slight inaccuracy in what the hon. Gentleman has just said. The exemption for tenanted farms was only that granted in the recent tenancy legislation for farm business tenancies, not for all tenanted farms.
§ Mr. Milburn
That is right. It is 100 per cent. relief after seven years rather than two for owner-occupied farms.
According to the press release of 26 November, the Government's new intention, which is enshrined in clause 92, is to extend relief from inheritance tax to land managed under the terms of the habitat scheme. The release tells us that the Revenue has received legal advice that as the law stands such land would not qualify for such relief. Perhaps the Minister will explain how that situation arose. He alluded to representations that have been made by landowners. I hope that he will tell us how many representations were made. He might allude as well to the legal advice that he has received that has necessitated the clause that is before us.
I hope also that the Minister will indicate the costs of extending relief in the way that is set out in the clause. That is important for two reasons. First, those with land covered by the habitat scheme are already receiving a public benefit. Expenditure on the scheme is projected to rise to almost £2 million by the end of the decade. Extending the IHT relief to land in habitat schemes represents a double benefit at public expense so it is doubly important that the taxpayers' interests are properly protected from abuse.
Secondly, as there is now a substantial body of evidence to suggest that agriculture property relief is being systematically abused for tax avoidance purposes, our amendment aims to prevent such abuse so that the extension of APR is available only to those who have a genuine desire to farm and to protect the countryside. It would prevent the unscrupulous from hiding behind a laudable environmental objective purely for the purpose of erecting a convenient tax shelter.
Such abuse has become all too common. The Financial Times of 14 May 1994 contained an article entitledTax farming: an old crop is revived".It outlined how tax avoidance under IHT rules could not be simpler for those who could afford it. It is an interesting article. It referred to the current market for land and the fact that there were only a few farms available for sale at that time, partly because of the influx of British and foreign buyers. It reads:British buyers now include the rich, eager to take advantage of the new inheritance tax rules. 'Sell a house in the English home counties', says Christopher Wilson of buying agent Wilson and Wilson, 'and put the proceeds into a farm with vacant possession. Work it for two years, perhaps by contracting out, and IHT will vanish.' His firm and accountants Grant Thornton have formed a `city landowners service' to handle that sort of work.1035 In other words, those who are wealthy enough can enjoy a 40 per cent. tax windfall simply by parking some cash in farmland for two years.
The article went on to suggest that the changes in IHT rules are distorting the market for farming land. There is some evidence to suggest that the very people who the IHT rules were designed to protect—small working family farmers—are losing out as wealthy buyers from home and abroad buy up land for tax avoidance purposes.
I do not regularly surf the Internet, but thankfully we on the Opposition Benches have one or two advisers who do, and they came across an interesting article—if that is the right word for it—just two days ago, from Strutt and Parker. It says:Since the beginning of 1996, Strutt and Parker have sold and purchased in excess of £100 million worth of farms and estates throughout the United Kingdom.The article talks about the upturn in the market for land and farms. It goes on to say:However, 1996 saw the re-emergence of a substantial amount of non-farming money which purchasers were looking to invest in farmland. Many of these investors were tax driven, taking advantage of rollover relief and reinvestment relief. Others were looking to acquire agricultural property for Inheritance Tax purposes.Indeed, the article says that, such are the distortions in the market, towards the end of 1992 there was a lack of farms available for sale.
The Sunday Times of 3 September 1995, commenting on the 1995 inheritance tax relief rules, quotes Mr. Adrian Baird, the Country Landowners Association chief tax adviser, as saying:we are worried that exploitation of the legislation for tax avoidance, particularly by outside people buying into land, will bring it into disrepute.The article, which is entitled "Rich landowners to reap millions in tax changes" goes on to say that the paper has surveyed many of the country's biggest landowners and has looked at the way in which they plan to benefit from the new rules.
Some,"—it saysare interested,"—purelybecause it allows the perfectly legitimate avoidance of inheritance tax, others because it offers ways of giving tenant farmers shorter leases.Indeed, the article quotes several examples. The Marquess of Normanby's 60,000-acre estate in Yorkshire is one such example. James Jackson, the Duke of Northumberland's agent, is quoted as saying that he was considering "one or two wheezes" relating to the new legislation on the Duke's 90,000-acre estate.
The reality is that it is possible to drive a coach and horses through the existing inheritance tax rules. Of course there should be proper protection for people who are genuinely in the business of farming, but the current loopholes in the inheritance tax rules make it all too often little more than a tax shelter for the very wealthiest, at the public's expense.
Inheritance tax, particularly agricultural property relief, is like manna from Heaven for the tax planning industry. I took the opportunity today to look at Tally's Taxfinder, 1036 the Bible on these matters, and I came across the following passage on page 23 of the 1993–94 tax planning guide, volume I, which says that the remarkable new regime introduced by the Finance Act 1992is potentially there also for the benefit of others, since it provides the opportunity almost to 'buy' freedom from inheritance tax by purchasing an appropriate category of property and owning it for two years. It is even possible,"—it saysto do so through the purchase of a USM portfolio. which would require no participation in the business or the need to farm.It is precisely such loopholes that make tax avoidance so easy, and which are now being extended in clause 92. Indeed, extending them without proper safeguards, as the Bill as drafted does, removes the inconvenience of even having to farm the land to make the gain. Instead, the land can just be sat on for two years before 100 per cent. inheritance tax relief comes into effect.
§ Mr. Home Robertson
It is worse than that, because not only can the land just be sat on to qualify for the tax breaks to which my hon. Friend referred but even more money can be paid in from the taxpayer by setting the land aside, and getting paid by the Ministry of Agriculture, Fisheries and Food for doing nothing.
§ Mr. Milburn
I thank my hon. Friend for his intervention. He brings a certain knowledge to our debate—not knowledge of tax avoidance, of course, but knowledge of rural communities and the agriculture industry. Perhaps I have been too generous in regard to those matters.
Without our amendment, the possibility of abuse and tax avoidance will be extended. The amendment would empower the Inland Revenue to deny inheritance tax relief to those owning land in habitat schemes when it was clear that the purpose was tax avoidance. We want relief to focus on those with genuine environmental objectives, not on those who shelter behind them merely to gain a tax advantage. The public should not foot the bill for the wealthiest, who are using lax laws to reduce their liability.
At a time when ordinary families are paying more tax than they were at the last general election, the Government should stand up for the decent, hard-working majority of taxpayers. Those who are experiencing the biggest tax hike in peacetime history, following 22 separate tax rises, are entitled to demand a fair and efficient tax system; but the current inheritance tax rules ensure that the system is not fair and efficient. In many respects, inheritance tax has become a purely voluntary tax, and clause 92 would extend that spirit of voluntarism to land covered by habitat schemes.
The loopholes in the inheritance tax system mean that many of the wealthiest members of society get off scot free, or at least mostly tax free. The latest figures for 1993–94 from the Inland Revenue's 1996 statistics—a riveting read, as the Government Whip will no doubt appreciate—show that there were only 1,478 cases of inheritance tax being paid on agricultural property, out of a total of 17,363 paying any form of inheritance tax. That represents just 6 per cent. of the total number of estates notified for probate.
The Government's argument seems to be that, as the inheritance tax system that they created is so riddled with anomalies and loopholes, the answer is not to reform it 1037 but to extend it on the way to abolishing it. It is less a case of "If it's broke, fix it" than a case of "If it's broke, axe it"—and, as I have said, the beneficiaries of such an approach would be the wealthiest members of society. If the Prime Minister's objective—abolition of inheritance tax—were fulfilled, the wealthiest people would reap the biggest rewards. At the very top, each of the 201 families inheriting estates valued at more than £2 million would gain nearly £1 million. Such a tax cut would hand out millions to people who are already multi-millionaires.
I do not believe that abolishing inheritance tax, or extending it in the way suggested in clause 92, will do anything to create an enterprise economy in which merit is the crucial determinant of success. If the Conservatives got away with their objective, it would merely make the wealthy even wealthier. If there is room for tax cuts in the future, they should be used to help the hard-working majority. Opposition Members want to reform the inheritance tax system rather than abolish it, and the amendment is a step in that direction.
It is of course right that the inheritance tax system does not penalise people on middle incomes, whose property values may rise over time, which is why raising inheritance tax thresholds—
§ The Chairman of Ways and Means (Mr. Michael Morris)
The hon. Gentleman appears to be drifting into a general discussion on inheritance tax. The amendment—as he knows, because he moved it—deals specifically with inheritance tax and habitat schemes.
§ Mr. Milburn
I was about to mention two matters. First, raising inheritance tax thresholds may be a desirable reform. Secondly, however, the system must be safeguarded against abuse if it is to have integrity and command public confidence. Amendment No. 7 intends to achieve precisely that objective, which is why it is so important.
We want family businesses and farms to be protected. Opposition Members want to prevent the breaking up of bona fide businesses and farms and the tax system to work fairly and efficiently. The extension of inheritance tax proposed under clause 92 should not be made unless taxpayers' interests are properly safeguarded. Our amendment would accomplish that goal. It would prevent tax avoidance but offer help to genuine farmers and to those interested in preserving the very best of the British countryside.
I find it hard to believe that an argument can be made against such a motive or that a convincing argument can be made against our amendment. In his speech, no doubt the Minister will prove me wrong. In the meantime, however, I commend our amendment to the Committee.
§ Mr. Clifton-Brown
My hon. Friend the Financial Secretary to the Treasury kindly mentioned that I made representations to him on clause 92's exemption for habitat schemes. That tribute should have gone to my constituent, Mr. Michael Fitzgerald, because he brought the matter to my attention. Thereafter I brought the matter to the attention of my right hon. Friend.
I think that it would be helpful if I explained to the House the origin of clause 92 and the need for amendment No. 7. I am indebted to the Country Landowners 1038 Association, of which I am a member, for providing the technical note which I shall use. It is important to understand how the issue arose, and the note at least partially answers the questions asked by the hon. Member for Darlington (Mr. Milburn) about why it was necessary to include clause 92 in the Bill.
Under section 117 of the Inheritance Tax Act 1984, as amended, agricultural property can qualify for inheritance tax agricultural property relief only if the property isoccupied for the purposes of agricultureduring the required period. As the hon. Member for Darlington made clear, in the case of owner occupation the required period is two years immediately prior to any transfer of the property, and in the case of occupation by someone other than the owner, the required period is seven years immediately prior to any transfer.
When set-aside schemes were first introduced, owners who elected the fallow option were considered to remain in occupation of their land for purposes of agriculture because the scheme required the landowner to maintain the property in a fit state for agricultural production. The Revenue's view was that, although minimum maintenance was required under the scheme, the requirement provided sufficient indication of intent, as suggested by the word "purposes".
The 20-year habitat scheme, the inheritance tax exemption and amendment No. 7—all of which the Committee has spent so much time discussing today—push so far forward any prospect of future agricultural use that the requirement to maintain the land in a fit state for future agricultural use would not make sense. Thus, there is no hook on which the Revenue can justifiably hang a proper belief that such land remains in agricultural application.
When I brought the matter to the attention of my hon. Friend the Financial Secretary to the Treasury, he took legal advice from the Revenue—perhaps also from elsewhere—and its view was precisely the one which I have paraphrased. However, he considered—I am grateful to him for this—that a charge to inheritance tax under the habitat schemes would deter people wishing to enter those schemes. Indeed, my constituent, Mr. Fitzgerald, who entered 212 hectares in the scheme, would not have done so had it not been for clause 92. I am therefore grateful that my hon. Friend has seen fit to remedy the situation in that way.
The amendment exemplifies some of the worst fears of farmers and landowners. The hon. Member for Darlington made it clear that should the Opposition get anywhere near power, they will not only introduce changes such as that which they have proposed this evening but will seek to extend the scope of inheritance tax. One of the easiest ways to extend its scope would be to abolish what are known as potentially exempt transfers.
Anyone who keeps an asset for more than seven years is exempt from inheritance tax, but I believe that one of the first things that the Opposition would do is abolish that relief. We should then have a potential wealth tax in the making—who knows, perhaps the Opposition are proposing a wealth tax. The Opposition have ruled out some personal taxation options but that means that others will have to be considered. This particular exemption relating to habitat schemes—
§ Mr. Clifton-Brown
To return to the amendment, I must say that it strikes one as a little spiteful. We are trying to improve the environment. If someone has the foresight to buy a piece of land, and probably pays a great deal of money for it, he is by nature altruistic and wants to improve the general habitat. Does it really matter if, at some stage in the future, he might get away without paying a little bit of tax? The amendment is simply jealousy of the highest order and shows that the Opposition are still unreconstructed when it comes to tax. Jealousy is still their motive.
The proposed new provision contained in clause 92, which would give exemption from inheritance tax, is a preliminary to our abolishing inheritance tax. The Opposition spokesman made it clear that his philosophy is to extend it. Tonight's debate could not reveal more sharply the philosophical difference between us when it comes to raising taxation: the Opposition want to increase taxes in rural areas and destroy rural employment. Anyone thinking about voting for the Opposition at the next election should consider that point very carefully.
§ Mr. Jon Trickett (Hemsworth)
Having listened carefully to my hon. Friend the Member for Darlington (Mr. Milburn), I have to say that I detected none of the implications referred to by the hon. Member for Cirencester and Tewkesbury (Mr. Clifton-Brown). I did, however, note that the point of the hon. Gentleman's speech was precisely what the amendment is intended to prevent—the possibility that a further loophole may be opened in the inheritance tax legislation and rules.
In considering the matter, we are entitled to examine the broader context in which clause 92 is being proposed. Part of that context is formed by clause 91, which raises the threshold for the payment of inheritance tax from £200,000 to £215,000. That is £10,000 more than is necessary for the usual indexation, and it will cost £16 million a year in lost revenue to the Exchequer. Adding that to the previous year's huge increase, the threshold for inheritance tax has risen by 40 per cent. in two years, from £154,000 to the proposed figure of £215,000. Inflation is running at about 2.5 per cent. That threshold increase vastly outstrips the retail prices index and house price inflation.
Conservative Members have declared an ideological opposition to inheritance tax. This further loophole may be designed to ensure that the tax is eventually abolished. The implications of abolition are substantial. The likely cost would be £1.6 billion—the equivalent of 1p on the standard rate of income tax.
Given the Government's record and their ideological commitment to the removal of inheritance tax, we are entitled to be suspicious that they may be opening a further loophole in the tax through which millionaires and others could crawl, as happened with the 1992 decision to relieve agricultural properties from inheritance tax. A small industry has developed, advising estates on how to take advantage of that provision. The industry could also feed on clause 92. According to the 1996 Inland Revenue statistics, a large number of the country's wealthiest estates have already found loopholes to avoid inheritance tax.
§ Mr. Trickett
Thank you for that advice, Mr. Morris. I shall endeavour to take it.
1040 It is clear that a large industry of tax advisers, lawyers and others has developed around the specific function of advising estates on how best to exploit any loopholes that emerge. Our amendment was drafted to offer the Government assistance—they are obviously in need of it—in avoiding the possibility of the clause becoming an additional loophole.
Even without clause 91, there has been a decline in the inheritance tax base, as the Inland Revenue figures show. There has been a 2.5 per cent. reduction in the past two years in the number of estates paying inheritance tax. We need to ensure that a potential new loophole is not opened. The amendment would help to do that.
§ Mr. Clifton-Brown
Do the hon. Gentleman or any of his hon. Friends have any idea why reliefs were given to agricultural properties? It was because agriculture is a long-term business with relatively low long-term returns.
§ Mr. Trickett
I understand the hon. Gentleman's point. That may have been the intention, but, as civil servants in ministerial offices who draft legislation often do not realise, there is a wise world out there, full of people who do nothing but try to find ways of exploiting loopholes. The Sunday Times said that the Marquis of Bath, whose wealth is estimated at £40 million, was investigating the loophole. Our amendment is drafted to secure the objectives that the Government claim to want to achieve. We feel that there is a danger in the drafting of the clause that a further loophole might emerge.
I thank you for your tolerance, Mr. Morris. I suppose that I have stretched the point slightly, but I have attempted to address the issues behind the amendment and the logic of our proposals.
§ Mr. Jack
This has been an interesting debate. Before I deal with the substance of hon. Members' remarks, I hope that, with your indulgence, Mr. Morris, I can deal with the detail of the points relating to clause 92 and something that I said in previous exchanges.
I did not in any way want knowingly to mislead the hon. Member for Sherwood when I said to him that we have made the register more widely available. I should be absolutely clear: the path that is more widely available in the ways that I described—through libraries and the Internet—relates to works of art. Particular provisions relate to the requirements that those who qualify for exemption for land should, with the help of heritage advisory agencies working with local authorities, draw up a list of such information. In following up the points, I satisfied myself—indeed, the hon. Member for Edinburgh, Central (Mr. Darling) probed me by means of parliamentary questions on how we audit the fact that such matters are properly adhered to—about that information, but in the light of the further comments of the hon. Member for Sherwood, I shall obviously look again at the matter.
§ Mr. Tipping
I am very grateful for the Minister's comments. If works of art can go on the Internet and not breach taxpayer confidentiality, I find it difficult to understand why the issue of land cannot be considered again.
§ Mr. Jack
I am sure that local authorities, for example, that keep lists of land that is available for public access 1041 will have taken careful note of what the hon. Gentleman has said. He will understand that those items of land are included in more general lists of land where access is available precisely for the reasons of taxpayer confidentiality. I am grateful for his comments.
I turn specifically to the content of the amendment. With his considerable knowledge—not only from his direct farming interests—of land law and surveying, my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Clifton-Brown) made the farming background to the measure very clear. He went to the heart of why we are debating the item. Indeed, the hon. Member for Darlington (Mr. Milburn) asked me specifically where the representations came from, from whom we had heard, and so on, and made a number of points about legal advice.
This is one of the rare occasions on which all Members of Parliament say to people, "Why don't you write in and we will have a look at the matter." This is one of the genuine occasions when a concerned citizen did just that through the good services of his Member of Parliament. As my hon. Friend the Member for Cirencester and Tewkesbury said, the matter was taken up by the Country Landowners Association, and we also received representations from the National Farmers Union. To a certain extent, the matter snowballed, but one could not say that there was a mass lobby of the Treasury on the point.
Once we had taken legal advice on whether the concerns of those who made representations were real or imaginary, I understood very clearly the importance of ensuring, especially with regard to the narrow range of schemes so affected, that there were not unnecessary barriers to land entering an environmental scheme. Our previous exchanges identified fairly adequately the narrow range of habitat schemes that potentially would have caused somebody an inheritance tax liability—as clause 92 does—as opposed to other environmental schemes which would not. It was right to make the move.
The reason why the Government said that the proposal's costs were negligible is that under the scheme the land has to come from within the curtilage of an existing farm. The short answer is that if the land had not gone into one of the tightly defined environmental schemes, it would have continued to have been farmed land. If the land had been on an owned farm or on one farmed under the Agricultural Tenancies Act 1995, to which my hon. Friend the Member for Cirencester and Tewkesbury referred, by definition it would have automatically qualified for inheritance tax relief, subject to the conditions to which my hon. Friend accurately attested. By definition, costs cannot therefore be anything other than negligible.
In terms of this tightly defined scheme, we are talking about relatively small parcels of land. I stated earlier that I had been to see one habitat scheme alongside the River Ribble, and it involved a margin of land alongside a tributary of the river. We are not talking about broad acres, but narrow areas. Other forms of environmental scheme are more extensive in terms of acreage—for example, the environmentally sensitive areas scheme covers something like 10 per cent. of farm land in this country. The narrow scheme that we are discussing does not fall into the same category.
As we have been invited to consider seriously the amendment, we must look at exactly what it says. At its heart there is a motive test. The hon. Member for 1042 Darlington (Mr. Milburn) had clearly done a certain amount of homework, but he did not tell us what kind of motive test he envisaged. If the amendment were passed, it would create considerable uncertainty among those who may have to act upon it. The amendment is flawed in that respect.
The scheme cannot be deemed to be a vast handout to rich people. I doubt very much that anyone would follow the circuitous route referred to by Opposition Members during their remarks on the amendment. If one followed the logic of the hon. Member for Darlington, one would go out to buy a farm to put a piece of land into a narrow group of environmental schemes to get the inheritance tax relief that one could otherwise have received even if one had not put the land into such a scheme. He went down an extremely tortuous route to try to make his wider point—that inheritance tax relief on agricultural land is, in some way, a vast tax dodge.
The constituency of the hon. Member for Darlington is surrounded by some of the best farming land in north Yorkshire, and he will know that the countryside can remain almost unchanged for decades and centuries, as families with a long-term interest in the area farm the land. If he ventures out from the urban citadel that is Darlington, he will meet some of the farmers whose families have farmed the land for up to three generations. These are precisely the people to whom the hon. Gentleman referred in his opening remarks, when he said that we must maintain the fabric of the community, and particularly family farms. These are the people who, by and large, form the farming communities in this country.
The hon. Member for Darlington also asked what would happen if someone bought a farm to get the advantages of clause 92, but then simply "sat on the land" and allowed it to rot. He asked whether such a person would still qualify, and that is a serious point. This is where the two-year rule to which he referred is used. In judging whether the farm is a working farm, the Inland Revenue will look at the farm's accounts to see if proper business has been carried out. If it turns out that the farmer has simply sat on his backside and done nothing, the accounts would quickly start to show that it was not a properly farmed piece of land, and it would not—by definition—qualify for the types of relief about which we have been talking.
I must remind the hon. Member for Darlington that the two-year test in terms of owner-occupation—introduced to establish whether the land acquisition was merely a passing fancy or a genuine attempt at farming—was a definition borrowed from the capital transfer tax regime that a previous Labour Administration introduced. We merely carried forward the test into our legislation, and I hope that he will agree that there is some sense in that. I hope also that he will accept our assurances about the way in which the Inland Revenue checks to make certain that the land is being properly farmed. If it is being properly farmed, the hon. Gentleman—from his earlier comments—can have no objection to the inheritance tax provision being applied. That is another reason why the amendment is entirely unnecessary.
The hon. Gentleman gave the Committee the impression, perhaps inadvertently, that all farm land was owned by some vast group of rich people using it simply as a means of tax avoidance—no, I do him a disservice, because he mentioned family farms, and I must not mislead the Committee about that, although he did give 1043 that impression in his later remarks. He may be interested to know that the majority—more than 70 per cent.—of estates in receipt of relief are worth less than £500,000, and 90 per cent. less than £1 million. Considering that agricultural land prices might be £2,000 to £3,000 per acre, we are hardly talking about especially large farms.
We are talking about precisely the group of farmers that the hon. Gentleman said should receive assistance, to avoid having the family farm broken up through the inheritance tax mechanism. I could not stand here and say that some people may not in the past have bought a farm with tax in the back of their mind, but the evidence that I put before the Committee this evening showed that proper working farmers gain the advantage of the provision.
On habitat land, we are not talking about fly-by-night merchants. The habitat schemes require management undertakings for up to 20 years and if people did not do what they were supposed to—if they were to withdraw from a scheme before its end, for example—they would face penalties. The schemes are properly organised, managed and run.
There has been a consensus across the Committee this evening that we want such environmental provision for land; if there was a barrier through inheritance tax, we have removed it in the clause. The amendment is therefore not necessary and I invite the Committee to reject it if it is pressed to a vote.
§ Mr. Milburn
This has been an illuminating debate. I am especially grateful to my hon. Friend the Member for Hemsworth (Mr. Trickett) for his perspicacious probing of the Government's intentions on inheritance tax.
I remind the Committee of the intention behind the amendment: to stop abuse of the tax system. It is designed specifically to prevent the buying up of farm land—in this case, land set aside for conservation purposes—as a cover for tax avoidance. It would empower the courts to test whether the buying up of farm land designated under a habitat scheme was for genuine purposes or for tax avoidance.
The amendment has three aims: to protect genuine farms, and especially small family-run farms, from being broken up; to encourage more farmers actively to engage in efforts to preserve the best of the countryside; and to root out deliberate tax avoidance. We have heard how the current inheritance tax rules, which are being extended in the clause, are wide open to such abuse. The system effectively allows the very wealthiest to make a tax killing simply by parking cash for two years in farm land. That does nothing to encourage family farms and everything to encourage tax avoidance.
I would have thought that a responsible Government would want to take a tough stance on tax avoidance. After all, in the Budget the Government declared war on tax loopholes. I am afraid that once more dogma is standing in the way of reason. The Minister has refused to give the Committee an assurance that tax avoidance will be clamped down on; instead, he has stood up once again for the vested interests of those who can make huge tax gains at the public's expense, simply because of their huge wealth. He has stood up for the few against the many; for unfairness against fairness; and for irresponsibility in tax 1044 matters against responsibility. For that reason, the Minister's approach leaves us with no alternative but to test the opinion of the Committee.
§ Question put, That the amendment be made:—
§ The Committee divided: Ayes 263, Noes 300.1048
|Division No. 49]||[9.59 pm|
|Abbott, Ms Diane||Davis, Terry (B'ham Hodge H)|
|Adams, Mrs Irene||Denham, John|
|Ainger, Nick||Dewar, Donald|
|Ainsworth, Robert (Cov'try NE)||Dixon, Don|
|Allen, Graham||Dobson, Frank|
|Anderson, Donald (Swansea E)||Donohoe, Brian H|
|Anderson, Ms Janet (Ros'dale)||Dowd, Jim|
|Armstrong, Ms Hilary||Eastham, Ken|
|Ashdown, Paddy||Ennis, Jeff|
|Ashton, Joseph||Etherington, Bill|
|Austin-Walker, John||Evans, John (St Helens N)|
|Banks, Tony (Newham NW)||Ewing, Mrs Margaret|
|Barnes, Harry||Fatchett, Derek|
|Barron, Kevin||Faulds, Andrew|
|Battle, John||Fied, Frank (Birkenhead)|
|Bayley, Hugh||Fisher, Mark|
|Beckett, Mrs Margaret||Flynn, Paul|
|Beggs, Roy||Forsythe, Clifford (S Antrim)|
|Beith, A J||Foster, Derek|
|Bell, Stuart||Foster, Don (Bath)|
|Bennett, Andrew F||Foulkes, George|
|Benton, Joe||Fraser, John|
|Bermingham, Gerald||Fyfe, Mrs Maria|
|Berry, Roger||Gapes, Mike|
|Betts, Clive||Garrett, John|
|Blunkett, David||George, Bruce|
|Boateng, Paul||Gerrard, Neil|
|Bradley, Keith||Gilbert, Dr John|
|Bray, Dr Jeremy||Godman, Dr Norman A|
|Brown, Gordon (Dunfermline E)||Godsiff, Roger|
|Brown, Nicholas (Newcastle E)||Golding, Mrs Llin|
|Bruce, Malcolm (Gordon)||Gordon, Ms Mildred|
|Burden, Richard||Graham, Thomas|
|Byers, Stephen||Grant, Bernie (Tottenham)|
|Callaghan, Jim||Griffiths, Nigel (Edinburgh S)|
|Campbell, Mrs Anne (C'bridge)||Griffiths, Win (Bridgend)|
|Campbell, Menzies (Fife NE)||Grocott, Bruce|
|Campbell, Ronnie (Blyth V)||Gunnell, John|
|Campbell-Savours, D N||Hain, Peter|
|Canavan, Dennis||Hall, Mike|
|Cann, Jamie||Hardy, Peter|
|Carlile, Alex (Montgomery)||Harman, Ms Harriet|
|Chisholm, Malcolm||Harvey, Nick|
|Clapham, Michael||Hattersley, Roy|
|Clark, Dr David (S Shields)||Hill, Keith (Streatham)|
|Clarke, Eric (Midlothian)||Hinchliffe, David|
|Clarke, Tom (Monklands W)||Hodge, Ms Margaret|
|Clelland, David||Hoey, Kate|
|Clwyd, Mrs Ann||Hogg, Norman (Cumbernauld)|
|Coffey, Ms Ann||Home Robertson, John|
|Cohen, Harry||Hood, Jimmy|
|Cook, Frank (Stockton N)||Hoon, Geoffrey|
|Corbyn, Jeremy||Howarth, Alan (Stratf'd-on-A)|
|Corston, Ms Jean||Howarth, George (Knowsley N)|
|Cousins, Jim||Howells, Dr Kim|
|Cox, Tom||Hoyle, Doug|
|Cummings, John||Hughes, Robert (Ab'd'n N)|
|Cunliffe, Lawrence||Hughes, Roy (Newport E)|
|Cunningham, Jim (Cov'try SE)||Hume, John|
|Cunningham, Ms R (Perth Kinross)||Hutton, John|
|Dalyell, Tam||Illsley, Eric|
|Darling, Alistair||Jackson, Ms Glenda (Hampst'd)|
|Davies, Bryan (Oldham C)||Jackson, Mrs Helen (Hillsborough)|
|Davies, Denzil (Llanelli)||Jamieson, David|
|Davies, Ron (Caerphilly)||Janner, Greville|
|Jenkins, Brian D (SE Staffs)||Prescott, John|
|Jones, Barry (Alyn & D'side)||Primarolo, Ms Dawn|
|Jones, leuan Wyn (Ynys Môn)||Purchase, Ken|
|Jones, Dr L (B'ham Selly Oak)||Quin, Ms Joyce|
|Jones, Nigel (Cheltenham)||Radice, Giles|
|Jowell, Ms Tessa||Randall, Stuart|
|Keen, Alan||Raynsford, Nick|
|Kennedy, Charles (Ross C & S)||Reid, Dr John|
|Kennedy, Mrs Jane (Broadgreen)||Rendel, David|
|Khabra, Piara S||Robinson, Geoffrey (Cov'try NW)|
|Kilfoyle, Peter||Rogers, Allan|
|Kirkwood, Archy||Rooker, Jeff|
|Lestor, Miss Joan (Eccles)||Rooney, Terry|
|Lewis, Terry||Ross, Ernie (Dundee W)|
|Litherland, Robert||Rowlands, Ted|
|Livingstone, Ken||Ruddock, Ms Joan|
|Lloyd, Tony (Stretf'd)||Salmond, Alex|
|Llwyd, Elfyn||Sedgemore, Brian|
|Loyden, Eddie||Sheerman, Barry|
|McAllion, John||Sheldon, Robert|
|McAvoy, Thomas||Shore, Peter|
|McCartney,Ian (Makerf'ld)||Short, Clare|
|Macdonald, Calum||Simpson, Alan|
|McFall, John||Skinner, Dennis|
|McKelvey, William||Smith, Andrew (Oxford E)|
|Mackinlay, Andrew||Smith, Chris (Islington S)|
|McLeish, Henry||Smith, Llew (Blaenau Gwent)|
|Maclennan, Robert||Smyth, Rev Martin (Belfast S)|
|McMaster, Gordon||Soley, Clive|
|McNamara, Kevin||Spellar, John|
|MacShane, Denis||Squire, Ms R (Dunfermline W)|
|McWilliam, John||Steel, Sir David|
|Maddock, Mrs Diana||Steinberg, Gerry|
|Maginnis, Ken||Stevenson, George|
|Marshall, David (Shettleston)||Stott, Roger|
|Marshall, Jim (Leicester S)||Strang, Dr Gavin|
|Martin, Michael J (Springburn)||Sutcliffe, Gerry|
|Martlew, Eric||Taylor, Mrs Ann (Dewsbury)|
|Maxton, John||Taylor, Matthew (Truro)|
|Meacher, Michael||Thompson, Jack (Wansbeck)|
|Meale, Alan||Thurnham, Peter|
|Michael, Alun||Timms, Stephen|
|Michie, Bill (Shef'ld Heeley)||Tipping, Paddy|
|Milburn, Alan||Touhig, Don|
|Miller, Andrew||Trickett Jon|
|Mitchell, Austin (Gt Grimsby)||Turner, Dennis|
|Molyneaux, Sir James||Tyler, Paul|
|Moonie, Dr Lewis||Vaz, Keith|
|Morgan, Rhodri||Walker, Sir Harold|
|Morley, Elliot||Wallace, James|
|Morris, Ms Estelle (B'ham Yardley)||Walley, Ms Joan|
|Morris, John (Aberavon)||Wardell, Gareth (Gower)|
|Mowlam, Ms Marjorie||Wareing, Robert N|
|Mudie, George||Watson, Mike|
|Mullin, Chris||Welsh, Andrew|
|Murphy, Paul||Wigley, Dafydd|
|Oakes, Gordon||Williams, Alan (Swansea W)|
|O'Brien, Mike (N Warks)||Williams, Alan W (Carmarthen)|
|O'Brien, William (Normanton)||Wilson, Brian|
|O'Hara, Edward||Winnick, David|
|Orme, Stanley||Wise, Mrs Audrey|
|Pearson, Ian||Worthington, Tony|
|Pickthall, Colin||Wray, Jimmy|
|Pike, Peter L||Wright, Dr Tony|
|Powell, Sir Raymond (Ogmore)||Tellers for the Ayes:|
|Prentice, Mrs B (Lewisham E)||Mr. Kevin Hughes and|
|Prentice, Gordon (Pendle)||Ms Angela Eagle.|
|Ainsworth, Peter (E Surrey)||Ancram, Michael|
|Aitken, Jonathan||Arbuthnot, James|
|Alexander, Richard||Arnold, Jacques (Gravesham)|
|Alison, Michael (Selby)||Ashby, David|
|Allason, Rupert (Torbay)||Atkins, Robert|
|Amess, David||Atkinson, Peter (Hexham)|
|Baker, Kenneth (Mole V)||Forman, Nigel|
|Baldry, Tony||Forsyth, Michael (Stirling)|
|Banks, Matthew (Southport)||Forth, Eric|
|Banks, Robert (Harrogate)||Fowler, Sir Norman|
|Bates, Michael||Fox, Dr Liam (Woodspring)|
|Batiste, Spencer||Freeman, Roger|
|Bellingham, Henry||French, Douglas|
|Bendall, Vivian||Fry, Sir Peter|
|Beresford, Sir Paul||Gale, Roger|
|Biffen, John||Gallie, Phil|
|Body, Sir Richard||Gardiner, Sir George|
|Bonsor, Sir Nicholas||Garel-Jones, Tristan|
|Booth, Hartley||Garnier, Edward|
|Boswell, Tim||Gill, Christopher|
|Bottomley, Peter (Eltham)||Gillan, Mrs Cheryl|
|Bottomley, Mrs Virginia||Goodlad, Alastair|
|Bowden, Sir Andrew||Gorman, Mrs Teresa|
|Bowis, John||Gorst, Sir John|
|Boyson, Sir Rhodes||Grant, Sir Anthony (SW Cambs)|
|Brandreth, Gyles||Greenway, Harry (Ealing N)|
|Brazier, Julian||Greenway, John (Ryedale)|
|Bright, Sir Graham||Gummer, John|
|Brooke, Peter||Hague, William|
|Brown, Michael (Brigg Cl'thorpes)||Hamilton, Sir Archibald|
|Browning, Mrs Angela||Hamilton, Neil (Tatton)|
|Bruce, Ian (S Dorset)||Hampson, Dr Keith|
|Budgen, Nicholas||Hanley, Jeremy|
|Burns, Simon||Hannam, Sir John|
|Burt, Alistair||Hargreaves, Andrew|
|Butler, Peter||Harris, David|
|Butterfill, John||Haselhurst, Sir Alan|
|Carlisle, John (Luton N)||Hawkins, Nick|
|Carlisle, Sir Kenneth (Llnc'n)||Hawksley, Warren|
|Carrington, Matthew||Hayes, Jerry|
|Carttiss, Michael||Heald, Oliver|
|Cash, William||Heathcoat-Amory, David|
|Channon, Paul||Hendry, Charles|
|Chapman, Sir Sydney||Heseltine, Michael|
|Churchill, Mr||Hicks, Sir Robert|
|Clappison, James||Higgins, Sir Terence|
|Clarke, Kenneth (Rushciffe)||Hogg, Douglas (Grantham)|
|Clifton-Brown, Geoffrey||Horam, John|
|Coe, Sebastian||Hordem, Sir Peter|
|Colvin, Michael||Howard, Michael|
|Congdon, David||Howell, David (Guildf'd)|
|Conway, Derek||Howell, Sir Ralph (N Norfolk)|
|Coombs, Anthony (Wyre F)||Hughes, Robert G (Harrow W)|
|Cope, Sir John||Hunt, David (Wirral W)|
|Cormack, Sir Patrick||Hunt, Sir John (Ravensb'ne)|
|Couchman, James||Hunter, Andrew|
|Currie, Mrs Edwina||Hurd, Douglas|
|Curry, David||Jack, Michael|
|Davis, David (Boothferry)||Jackson, Robert (Wantage)|
|Day, Stephen||Jenkin, Bernard (Colchester N)|
|Deva, Nirj Joseph||Jessel, Toby|
|Devlin, Tim||Johnson Smith, Sir Geoffrey|
|Dorrell, Stephen||Jones, Gwilym (Cardiff N)|
|Douglas-Hamilton, Lord James||Jones, Robert B (W Herts)|
|Dover, Den||Jopling, Michael|
|Duncan, Alan||Kellett-Bowman, Dame Elaine|
|Duncan Smith, Iain||Key, Robert|
|Dunn, Bob||King, Tom|
|Durant, Sir Anthony||Kirkhope, Timothy|
|Dykes, Hugh||Knight, Mrs Angela (Erewash)|
|Elletson, Harold||Knight, Greg (Derby N)|
|Emery, Sir Peter||Knight, Dame Jill (Edgbaston)|
|Evans, David (Welwyn Hatf'ld)||Knox, Sir David|
|Evans, Jonathan (Brecon)||Kynoch, George|
|Evans, Nigel (Ribble V)||Lait, Mrs Jacqui|
|Evans, Roger (Monmouth)||Lamont, Norman|
|Evennett, David||Lang, Ian|
|Faber, David||Lawrence, Sir Ivan|
|Fabricant, Michael||Legg, Barry|
|Fenner, Dame Peggy||Leigh, Edward|
|Field, Barry (Isle of Wight)||Lennox-Boyd, Sir Mark|
|Fishburn, Dudley||Lester, Sir Jim (Broxtowe)|
|Lidington, David||Oppenheim, Phillip|
|Lilley, Peter||Ottaway, Richard|
|Lloyd, Sir Peter (Fareham)||Page, Richard|
|Lord, Michael||Paice, James|
|Luff, Peter||Patnick, Sir Irvine|
|Lyell, Sir Nicholas||Patten, John|
|MacGregor, John||Pattie, Sir Geoffrey|
|MacKay, Andrew||Pawsey, James|
|Maclean, David||Peacock, Mrs Elizabeth|
|McLoughlin, Patrick||Pickles, Eric|
|McNair-Wilson, Sir Patrick||Porter, David|
|Madel, Sir David||Portillo, Michael|
|Maitland, Lady Olga||Powell, William (Corby)|
|Major, John||Rathbone, Tim|
|Malone, Gerald||Redwood, John|
|Mans, Keith||Renton, Tim|
|Marland, Paul||Richards, Rod|
|Marlow, Tony||Riddick, Graham|
|Marshall, John (Hendon S)||Rifkind, Malcolm|
|Marshall, Sir Michael (Arundel)||Robathan, Andrew|
|Martin, David (Portsmouth S)||Roberts, Sir Wyn|
|Mawhinney, Dr Brian||Robertson, Raymond S (Ab'd'n S)|
|Mayhew, Sir Patrick||Robinson, Mark (Somerton)|
|Mellor, David||Roe, Mrs Marion|
|Merchant, Piers||Rowe, Andrew|
|Mitchell, Andrew (Gedling)||Rumbold, Dame Angela|
|Mitchell, Sir David (NW Hants)||Ryder, Richard|
|Moate, Sir Roger||Sackville, Tom|
|Monro, Sir Hector||Sainsbury, Sir Timothy|
|Montgomery, Sir Fergus||Scott, Sir Nicholas|
|Moss, Malcolm||Shaw, David (Dover)|
|Needham, Richard||Shaw, Sir Giles (Pudsey)|
|Nelson, Anthony||Shephard, Mrs Gillian|
|Neubert, Sir Michael||Shepherd, Sir Colin (Heref'd)|
|Newton, Tony||Shepherd, Richard (Aldridge)|
|Nicholls, Patrick||Shersby, Sir Michael|
|Nicholson, David (Taunton)||Sims, Sir Roger|
|Norris, Steve||Skeet, Sir Trevor|
|Onslow, Sir Cranley||Smith, Sir Dudley (Warwick)|
|Smith, Tim (Beaconsf'ld)||Tredinnick, David|
|Soames, Nicholas||Trend, Michael|
|Speed, Sir Keith||Trotter, Neville|
|Spencer, Sir Derek||Twinn, Dr Ian|
|Spicer, Sir Jim (W Dorset)||Vaughan, Sir Gerard|
|Spicer, Sir Michael (S Worcs)||Viggers, Peter|
|Spink, Dr Robert||Waldegrave, William|
|Spring, Richard||Walden, George|
|Sproat, Iain||Walker, Bill (N Tayside)|
|Squire, Robin (Hornchurch)||Ward, John|
|Stanley, Sir John||Wardle, Charles (Bexhill)|
|Steen, Anthony||Waterson, Nigel|
|Stephen, Michael||Watts, John|
|Stern, Michael||Wheeler, Sir John|
|Stewart, Allan||Whitney, Sir Raymond|
|Streeter, Gary||Whittingdale, John|
|Sumberg, David||Widdecombe, Miss Ann|
|Sweeney, Walter||Wiggin, Sir Jerry|
|Sykes, John||Wilkinson, John|
|Tapsell, Sir Peter||Willetts, David|
|Taylor, Ian (Esher)||Wilshire, David|
|Taylor, John M (Solihull)||Winterton, Mrs Ann (Congleton)|
|Taylor, Sir Teddy||Winterton, Nicholas (Macclesf'ld)|
|Temple-Morris, Peter||Wolfson, Mark|
|Thomason, Roy||Wood, Timothy|
|Thompson, Sir Donald (Calder V)||Yeo, Tim|
|Thompson, Patrick (Norwich N)||Young, Sir George|
|Thornton, Sir Malcolm|
|Townend, John (Bridlington)||Tellers for the Noes:|
|Townsend, Sir Cyril (Bexl'yh'th)||Mr. Roger Knapman and|
|Tracey, Richard||Mr. Bowen Wells.|
§ Question accordingly negatived.
Clause 92 ordered to stand part of the Bill.
To report progress and ask leave to sit again.— [Mr. Brandreth.]
Committee report progress; to sit again tomorrow.