HL Deb 02 March 1966 vol 273 cc758-72

6.25 p.m.

THE EARL OF KINNOULL rose to ask Her Majesty's Government whether they are aware of the financial hardship caused in some cases where tenant farmers are dispossessed due to their land being taken for development; and whether Her Majesty's Government would consider improving existing legislation on agricultural tenants' compensation. The noble Earl said: My Lords, before I begin, I feel I owe an apology to the House, and in particular to the noble Lord, Lord Champion, and my noble friend Lord Ferrers, for my absence last Monday when this Question was down on the Order Paper. The reason was that there was an early unexpected finish to proceedings on the Abortion Bill, and I was caught out of the House and arrived a few minutes too late.

In view of the certainty of the life of this Parliament, and the uncertainty of a similar Government returning to power, I should like to call upon the Opposition as well as the Government to give sympathy to this case. The subject I wish to raise to-night is a nightmare to any tenant farmer who lives under the threat of his land being taken for development. It is a night mare because he realises full well that both his livelihood and his home are endangered and that the likelihood of his getting another farm to rent is extremely small. He also knows full well that the present compensation for disturbance is so monstrously low that it gives no proper compensation for the sudden loss of his business.

Perhaps I may remind the House of the present legislation governing compensation to dispossessed farmers for disturbance. It is contained in Section 34 of the principal Act, the Agricultural Holdings Act 1948, and in Section 22 of a subsidiary Act, the Agriculture (Miscellaneous Provisions) Act 1963. Under Section 34 of the principal Act the compensation and principles of compensation were laid down and the maximum and minimum limits were set out. The minimum limit is laid down as one year's rental and the maximum limit as two years' rental. "The rental" is the rent which the tenant currently pays to his landlord. No doubt in 1948 this basis of compensation must have seemed extremely fair and reasonable. But times have changed, and farming has become very large business in which a great deal of money is involved. Therefore, I suggest that the rigid limits which were laid down in Section 34 have become as outdated as talk of the horse and cart in present-day farming.

To give an example of the sort of injustice that can occur under Section 34, I should like to quote an experience which I had recently. I was called to make a report on an agricultural estate in North Wales, and on going through the farm rentals I found that they had not been increased for the past twenty years. There was a charitable reason, but in my opinion it was totally misguided. Consequently, no repairs or improvements were carried out to farm buildings. On this agricultural estate some of the best valley land in North Wales was being farmed by a tenant who was paying at that time only 12s. an acre. Under Section 34 the maximum compensation is 24s. an acre should the tenant be dispossessed—a sum equal to one sack of barley. This surely cannot be right. Certain relief could be claimed under Section 22 of the Agriculture (Miscellaneous Provisions) Act 1963, and acquiring bodies of agricultural land were given the power to give discretionary payments above the two-year maximum rental limits in cases where they felt that the tenants honestly deserved them. This power has on many occasions caused difficulty. One of the main criticisms which have been levelled is that no such payments under that Section have ever been made to tenant farmers. Could the noble Lord confirm or deny this, and could he tell us the number of cases, if any, in which they have been paid?

The second, and perhaps more important, reason for criticising this Act, is the fact that the tenant is put into the impossible position of going cap in hand to acquiring bodies, without any legal right to demand payment, without any legal right to take the matter to arbitration or to a Lands Tribunal, and with a strong possibility that if, in his anxiety, he offends the acquiring body he will perhaps receive no payment whatsoever. So the position, as I see it, at the present time is that, on the one hand, there is the major Act, the 1948 Act, which has become out of date, and, on the other, there is this slight relief which is virtually non-operative.

I am glad to say that I am not without support in this action. The National Farmers' Union have fought this case for three years now. The professional bodies—and I am a member of one—have studied this case for a year. Perhaps most interesting of all, is the fact that the right honourable Member for Workington, perhaps better known as the present Minister of Agriculture, felt so strongly about this case in September, 1964, a month before the last Election, that in a written statement to the Farmers' Weekly on this subject, he said: In principle. I accept that adequate compensation should be given to the farmer who suffers because of the take-over of his land for non-agricultural use. In previous legislation it was the practice to make ex gratia payments. This should be obligatory. On this matter further consultation should take place between the Government and the industry.

That was eighteen months ago, and I believe that there has been sufficient time for consultation between the Government and the industry, as do 75 tenant farmers in Buckinghamshire who at the present time are fighting a threat to their livelihoods and homes. In this case, 27,000 acres of land are being threatened for a New Town. It is probably not unknown to your Lordships that over 50,000 acres of land are swallowed up every year by development projects, so one can fairly say that this is not a simple, isolated case. This is something which is occurring year after year, and hardship is definitely being suffered.

On the question of an amendment to Section 34 of the Agricultural Holdings Act, I believe that two fundamental principles should be followed. First, profits should be geared to the rent in the matter of compensation. Secondly, some account should be taken of the age of the tenant and his expectancy of working life. Is it equitable that a brilliant young farmer who is making a great contribution to this industry should be penalised with exactly the same basis of compensation as a semi-retired farmer with one year to go?

I would make one final plea to the noble Lord, Lord Champion. At this time, just before the Election, I ask him to give an undertaking, not only for the Government but for his Party, to say definitely that they will amend the present legislation. The situation at the present time is monstrous. Farmers who have no wish to give up their land are asking not for a golden handshake, but only for fair compensation for the loss of both their homes and their livelihoods.

6.35 p.m.

EARL FERRERS

My Lords, I think that my noble friend has done a great service in bringing this matter forward to-night. I would at the outset congratulate him, not only on bringing it forward, but also on his perseverance in so doing, because I believe that this is the fourth occasion on which his Unstarred Question has appeared on the Order Paper. On the first two occasions he was prevailed upon to remove it, because it looked as though it might come on at 10 o'clock at night. On the third occasion when it looked as though it was going to come on not at 10 o'clock but at 11 o'clock, by some quirk of procedure his Question came on at about 9.30 and the noble Earl unfortunately missed it by a minute.

However, I am very glad that he has persevered, because I think the point which he has brought forward is important. Nobody may claim that this is of national importance; but where this trouble cuts, it cuts hard. It cuts hard on people who are farming as tenants and who suddenly find that their land, which, after all, is the tool of their trade, is removed from them. I hope very much that the noble Lord, Lord Champion, will give very careful consideration to this question. After all, what is it that we are after on all sides? It is, presumably, only to be fair: what one wants to see is justice done to people who, for one reason or another, find themselves in a situation which is not of their making. Of course it is always difficult to be fair, and it is always difficult to assess fairness. Over any problem it is always so easy to make an exception and say, "Ah, but this is a different category." But I believe that farming is an exception, because by its very nature it is different from anything else. The farmer uses as the tools of his trade the very commodity which is now so very much in demand by everyone—that is, land. So it is important that we see that he is dealt with fairly.

I have a horrible feeling that the noble Lord, Lord Champion, may sweep this problem off the table and under the carpet; but because it is important, I hope that he will not do so. After all, the noble Lord can gain an advantage from the fact that there is to be an Election. He could perhaps give some encouragement to the tenant farmers by saying that if they were to be so misguided as to vote for the Labour Party, they might at least be able to have some form of compensation if their land is removed from them. I hope that he will be a little bold this evening and chance his arm a little, and try to give some encouragement to these people who find themselves in this unfortunate situation.

If a man owns a sweet-shop and finds that the premises are going to he removed for redevelopment, it is fairly easy to assess what he is going to lose. It is fairly easy to assess the inconvenience which he will suffer, and the money which he has tied up in the business. It is also fairly easy to assess what the new premises will cost, what it will cost to move, and what the new situation will be like. But that is not so with farmers, because the farmer's whole life is his work. Frequently, money is put by tenants, of their own volition, into highly costly schemes, such as drainage schemes which will give them only a long-term return. But they do it for the sake of prudence, because they believe that it will give a reasonable return. They frequently remove their hedges and ditches and replace them with tiled drains, at tremendous capital cost, in order to make their fields economic. Of course this is important for farming, but it is not important once the land is being used for development.

Everyone knows that the economic size of a farm gets bigger and bigger as the years go by, and the functioning of the unit depends upon its size. The removal of a large section of a farm can make an enormous economic difference to it—one far greater than the acreage might appear to be worth. I would instance the case of a 350-acre farmer. That farmer is farming a unit which is economically viable, useful and sensible in modern up-to-date conditions. But if 150 acres are suddenly removed from that farm, either to put a motorway through it or to build houses there, then it changes from a 350-acre farm into a 200-acre farm. The farmer may have lost only 150 acres, but his unit has dropped from a viable one to one that is highly marginal. And it does not end there: he has to alter his whole system of farming in order to make this new and different unit as viable as it can be. Therefore, his whole system of management will have to alter immensely. This is a fact which makes the removal of land of far greater importance financially than the actual acreage might indicate.

If the compensation to a tenant is to be fair, the aim should be that the tenant, while no better off than he was before compensation, should, equally, be no worse off. But often he is, because he cannot resist the notice to quit if it is given to him for development purposes, and all he will get, of course, is his tenant right; payment for his growing crops and for the manurial residues that are left in the land; virtually nothing for the loss of his home or business; a little bit for disturbance—which means the cost of selling up and getting himself into another farm; and one year's rent, or, at the outside, two. As my noble friend pointed out, if he has been paying a very low rent this militates against him vigorously.

The noble Lord who is to reply may say that the tenant has been having the land cheap for the last twelve or, in this case, twenty years, and that that is one of the snags of having a low rent. But I do not think that that argument holds any water at all. To have one year's rent, or, at the most, two, is fairly scant treatment for a person who has to move out of his business and then, apparently, find another farm. Can anyone say how that is going to be done? If a man has been farming at a rent of 12s. an acre, he certainly will not find another farm at that rent. The number of farms that come on to the market as tenanted units is getting smaller and smaller, and one of the reasons why they are getting fewer and fewer in number is because units are getting larger and larger. It is therefore an impractical proposition to say that the farmer should remove from his farm and find another one; because the chances are that he will find it extremely difficult to do that.

There is the possibility of substantial injustice being done here, and I hope that the noble Lord will give this matter some very serious consideration. I hope that he will realise that, as the years go by, more and more farmers are bound to suffer from this because more and more land will be required for development purposes. I hope that the noble Lord will let himself go a little and will give some encouragement to the farmers. After all, the noble Lord's Party is the one which has always championed the part of the tenant, and I hope that he will do so this evening. Even if he were a little more forthcoming than perhaps he should be he can take heart from the fact that he will be following his political masters in giving a bit of encouragement to the people who are about to enter an Election; and he can take further encouragement from the fact that, even if he does go a little too far, he need not worry too much, because I do not expect he will have to put his promises into action after March 31. Nevertheless, I hope that the noble Lord will give this some serious consideration, and will this evening be encouraging to tenant farmers, who are worried by this situation.

6.45 p.m.

THE MINISTER WITHOUT PORTFOLIO (LORD CHAMPION)

My Lords, it is because I think I shall be standing here after the Election that I have not got to be too forthcoming about this Question that has been put to me to-night. After all, what I must do to-night is to give your Lordships the facts and to tell your Lordships what the Ministry and the Minister are doing about this problem, which I recognise as a problem. I am bound to say that, of course, I sympathise to a large extent with the noble Earl in the fact that he was not able to get here on Monday night for us to deal with his Question then. I understand; and, of course, his apology is quite unnecessary, except that he gives it to the House and not to me personally.

The noble Earl, Lord Ferrers, seems to me to have entered upon this simple question in a Party manner which was quite unjustified. After all, what he is doing is virtually accusing us of doing nothing about this great problem, which has existed, so far as I am aware, ever since I have known the slightest thing about farming—and this dates back well over fifty years. I must remind the noble Earl that there have been two things of some consequence done about this since the end of the war. The first was the Act of 1948, put on to the Statute Book by this Party, of which I am proud to be a member, and by the Minister of Agriculture who was the finest Minister of Agriculture this country has ever seen—namely, Tom Williams, now Lord Williams of Barnburgh. The second thing done was clone by the noble Lords opposite by means of the section in the 1963 Act referred to by the noble Earl. The noble Earl quite rightly referred to this section in scathing terms. He said this was not worth having; that it just was not worth bothering about. So the Party which is accused of being the Party of the urban section of the population, and not of the countryside, has done more for the farming community than the present Opposition did in the whole of their thirteen years.

This is not a problem which has suddenly come upon us; it is something which has been with us since the beginning of the Industrial Revolution—that land is taken for development and tenant farmers do not get all the compensation to which they think they are entitled. This is an old one: it dates back for well over a hundred years. What I cannot understand is that, during all the years the noble Earl and his friends were in power, they really did not tackle this matter. But, my Lords, I did not want to start this. It was only the stimulation of the noble Earl that caused me to enter into this in a Party fashion.

EARL. FERRERS

My Lords, may I interrupt the noble Lord? I do apologise for needling him in that fashion—I did not realise he was so susceptible—but he did say that I accused the Government of doing nothing. That is not true; I did not accuse them of doing nothing. I just said that here was a problem, and I hoped they would be able to face it for the future.

LORD CHAMPION

It sounded remarkably like that when I was listening to the noble Earl. After all, he should not come here and beat the Party drum and expect the people who are opposite him to just sit down and say, "Ah, well, the poor chap has got to say this; he has been pressed by his Central Office to say this sort of thing ", just in case it is repeated during the Election days which lie immediately ahead. But I will go no further in this matter. I think I have gone far enough to illustrate that this Party, despite the fact that it springs mainly from the urban section of our population, has given tremendous thought to the problems of the countryside and of those who make their living in the countryside.

I agree with the noble Earl, Lord Kinnoull, that this is a matter which is worrying tenant farmers at the present time; and, while I have no remedy to announce to-day, I am glad to be able to say something about the problem and the complexities that confront my right honourable friend the Minister of Agriculture and the other Ministers who are involved in a solution of this problem, or in attempting a solution of this problem. As I said just now, the question of compensation where tenant farmers lose land to development is not new, but it is topical because all over the country at this moment a large number of developments are taking place. They are taking place for town projects and they are taking place for group projects. There are many aspects of development which are bound to affect tenants who up to now, or at any rate until recently, have had no fear of, or little cause to fear, dispossession, or to concern themselves very much about the compensation they might be entitled to as a result of their being dispossessed of the land upon which they have been gaining their living. I realise that what we are discussing here is not compensation as such, but whether compensation ought to be reasonably generous. This is really the problem. As the noble Earl has said, compensation is payable already. I will just summarise the arrangements provided under existing legislation.

THE EARL OF KINNOULL

My Lords, may I be permitted to interrupt? The noble Lord says that compensation should be generous. This is not my point. My point is that compensation should be fair.

LORD CHAMPION

My Lords, this is a nice use of words. I should have thought that, if I were a tenant, I should prefer "generous" to "fair". But I have no objection to this, and it is fairness that we shall look for in this connection.

A private landlord always terminates the tenancy under the Agricultural Holdings Act, 1948, and public authorities, even those possessing compulsory powers, sometimes do the same. In these cases the tenant is entitled to compensation, as is provided under that Act: for improvements and tenant-right (with which we are not concerned to-day) and, under section 34, for disturbance. Incidentally I should have thought that the noble Earl's point about drainage and so on would have been to some extent covered by the fact that compensation is payable for improvements, and as he knows, for residual manurial values. If he does not know that, I am sure he should. This section fixes the amount of compensation within, so to speak, a bracket—it cannot be less than one year's rent, nor more than two years' rent. Between these limits it is for the tenant to show that he should receive more than the minimum.

That is one procedure. There is an alternative, which was not, I think, mentioned by the noble Earl, for authorities possessing compulsory powers. They can, and often do, proceed by notice of entry. The tenant's claim for compensation is then made under Section 121 of the Lands Clauses Consolidation Act 1845. It amounts to the value of his unexpired legal interest, plus the loss or injury he may sustain, whether by severance or total loss of the holding—and this includes loss of profit. Under this procedure, if the term of unexpired legal interest is short, the tenant will get correspondingly less for loss of profit—and this is a point we have very much in mind.

In addition, there is the discretionary power to which I have already referred, as did the noble Earl, and which is given by Section 22 of the Agriculture (Miscellaneous Provisions) Act 1963—but only to authorities possessing compulsory acquisition powers—to compensate a displaced tenant for the loss which in their opinion he will sustain to his agricultural business. The noble Earl asked me whether anyone has ever benefited under this section of the 1963 Act. I have made some inquiries, and the answer given to me is that up to the present no great use has been made of the power, and the number of people benefiting is not known. But I must add that there has not been much time for the exercise of this power. It does not help—and this I must stress—the tenant who gets notice to quit from a private landlord. It can be invoked only in the case of displacement as a result of action by authorities which have powers of compulsory acquisition.

THE EARL OF KINNOULL

My Lords, may I interrupt again? The noble Lord mentioned the third alternative where acquiring bodies would enter into the land first under the Lands Clauses Act 1845. I think the latest Act is the 1965 one. The point I would make is that there is a tremendous amount of vagueness under that legislation, even though it is the 1965 Act. I note that the Valuers' Association and other bodies hope that this particular legislation will be cleared up, so that valuers may know what the real price is.

LORD CHAMPION

My Lords, I am not sure about there being an Act of 1965. The Act to which I referred was very much earlier: it was the Lands Clauses Consolidation Act of 1845. Any doubts that exist here are very much in the mind of my right honourable friend—and I shall come to this later when I am taking about what my right honourable friend is hoping to do about this whole problem of compensation to the tenant farmer.

The first part of this Question asks whether the Government are aware that in some cases tenant farmers who have to give up land because of development suffer financial hardship. I appreciate the moderate wording of the Question here, which is, of course, whether we are—or whether society is—paying enough to the tenant farmer who is displaced for development purposes. The noble Earl's wording of the Question was very moderate—much more moderate than the words of the noble Earl, Lord Ferrers. The answer is that in some cases there is a large degree of hardship suffered, but not in all cases. For example, if a tenant so affected happens anyhow to be on the point of retiring from the exacting occupation of present-day farming—that is, that he would himself have given notice to quit a year or so later—if he then gets his compensation for disturbance "according to the book" nobody would maintain that he suffers financial hardship.

However, the Government are not going to shelter behind a minority of cases and say that because improved arrangements are not needed for everyone they are not needed at all. If the tenant is in his prime and is farming satisfactorily, then we all know that he is very unlikely, because of the security of tenure provisions, to have to quit unless the land is taken for nonagricultural purposes. It has been argued that such farmers, unless it was known that early development was likely, have an expectation of continuing on their holdings which is cut short by the notice to quit for development—a notice which of course is not contestable—and that this loss of expectation is not adequately compensated by the provisions which I have explained.

Moreover, where the proportion of his holdings lost is high, such a tenant will have to find other land or even another home. It is further argued that this is becoming more and more difficult to do. We recognise the point made by the noble Earl, Lord Ferrers, that if one is thrown out of his farm it is extremely difficult to get another and that this is a great hardship, as it is even to have to cut off one hundred or so acres of a three hundred and fifty acre farm. But I am bound to say—and I am absolutely positive of this—there is a great deal of sympathy on both Front Benches in this matter. Both the noble Earl and I feel the same about this—as I am sure do both my right honourable friend in another place and Sir Martin Redmayne who is opposite him on the Front Benches there.

EARL FERRERS

My Lords, that was about six months ago. It is now Mr. Godber.

LORD CHAMPION

I do not follow these moves. They happen so often it is impossible to follow them all. All I can say is that they will be to no purpose.

As regards the first part of the Question, the Government agree that in some cases there may be financial hardship. I now turn to the second part of the Question, whether the Government will consider improving legislation on this point. The noble Earl, Lord Kinnoull, referred to a statement by my right honourable friend Mr. Peart about this very thing. In the quotation which was used he said he thought that Section 22 of the 1963 Act should be made obligatory. Immediately upon assuming office my right honourable friend started an inquiry about this aspect and came to the conclusion that utilising this method might not be the best procedure. He instituted a Departmental inquiry into something which would enable tenant farmers to benefit not only in cases where the compulsory purchase process had been evoked or a private landlord might have to pay something additional; but this inquiry has not yet finished.

I should tell your Lordships, frankly, that any arrangements for improved compensation would have to be designed with an impossible degree of elaboration if they were to meet with absolute fairness all the gradations of circumstances which can occur between the very different kinds of case which I have mentioned. Even to approach fairness between individuals, some way of differentiating between cases must be found, and this will not be easy. However, I repeat that the problem arises whether the landlord is a private owner or a public authority. It therefore affects the balance of interest between landlord and tenant. The Minister will not act in such a matter without considering the views of the Country Landowners' Association, and the National Farmers' Union. I think that the views expressed in this debate also must be taken into consideration. The points which the noble Earl has brought to the attention of the House must be considered by whoever may happen to be in charge when a final decision is taken. That applies also to what was said by the noble Earl, Lord Ferrers. Although I did not agree with some of the comments which he made, they form part of this debate and must be considered. Some of his remarks made good sense. I am hoping that my right honourable friend will consider all these things when eventually a decision has to be taken.

As I am sure that the noble Earl will know, these bodies are giving thought to this knotty problem—and it is a knotty problem. They appreciate that the Government ought not to be overgenerous to the tenant at the expense of the landlord, otherwise there would be a real risk that the developments genuinely needed by the community would he hindered. I am not in a position to-day to say what is the solution most acceptable to these bodies. Your Lordships will appreciate that even if we knew it, such a solution would not necessarily be free from difficulties such as incompatibility with the provisions for compensation for tenants outside agriculture. Despite what was said by the noble Earl, Lord Ferrers, shopkeepers have to be considered in this connection. They may be losing their livelihood. But I agree that the degree of hardship which they may suffer may be much less than that suffered by a tenant farmer who has no hope of securing another farm and continuing to make a living.

My Lords, it follows from what I have said that some time may elapse before the Government can decide on a remedy for the problem to which the noble Earl has drawn attention. It will also be clear from what I have said that no effective remedy could be administered without some change in legislation. I think, however, that I have said enough to demonstrate that the Government will not only consider the problem but are giving it serious and urgent study. Those last words are not meaningless, as they may sometimes be. Words like "urgent" and "serious" sometimes flow glibly from the lips of politicians, particularly from those on the other side of the House, but the Government are certainly giving this matter the urgent study which we think it deserves, because we recognise the degree of hardship often experienced by tenant farmers dispossessed of their land.

THE EARL OF KINNOULL

My Lords, in view of the fact that the noble Lord, Lord Champion, has said that, so far as he is aware, no payments so far have been made under Section 22 of the Agriculture (Miscellaneous Provisions) Act, and he has also been good enough to advise us that discussions will continue for some time, may I ask whether he could advise the Minister to direct the inquiring bodies to make use of Section 22, because I think that is what is worrying a lot of tenant farmers?

LORD CHAMPION

My Lords, I did not say that no use had been made of these powers.

THE EARL OF KINNOULL

I thought the noble Lord said that.

LORD CHAMPION

No; all I said was that up to the present no great use has been made, and the number of people benefiting is not known. As regards telling the authorities that they have these powers, the noble Earl, who supported the legislation when it went through the House, will know that the Act does not make it obligatory on local authorities, but gives them a discretionary power. I think they ought to use it, but it is not for me or the Government to instruct them to do this. Were I a tenant, or were I advising a tenant, I should immediately say, "Appeal to the appropriate authority to ensure that it uses Section 22 of the Act of 1963". Beyond that I think we ought not to go.

House adjourned at seven minutes past seven o'clock.