§ 2.56 p.m.
§ Lord MELCHETT
My Lords, I beg to move that this Bill be now read a second time. In doing so, I think I should probably declare an interest in that I am a farmer, although I am not either a tenant or a landlord, so I do not think the most controversial clauses in the Bill have any relevance to my own farming operation. In passing, perhaps I might say that if anybody ever says to me again, " Farmers are never satisfied ", I am going to refer them to the Post Office's customers. Your Lordships will probably be familiar with the provisions of this Bill, which, as its title implies, range far and wide. To save your Lordships' time, I will go straight on to a brief description of the clauses, spending a little longer on Part II of the Bill, which provides for succession on the death of a tenant.
12 Clause 1 provides for the dissolution of the Sugar Board and the transfer of its assets and liabilities to the Minister of Agriculture. Our adoption of the Common Agricultural Policy and the subsequent ending of the Commonwealth Sugar Agreement have left the Board with no functions to perform. I should like to take this opportunity to express the Government's appreciation of the work of the Board's members and staff over the nineteen years it has been operating. They have done a good job and given excellent service.
The purpose of Clause 2 is simply to ensure that there is for some years ahead sufficient Exchequer support available to the Agricultural Mortgage Corporation Ltd. This will enable the Corporation to continue its function of borrowing from the market funds which can be lent on a long-term basis to farmers. Clause 3 seeks to strengthen the arrangements for the Meat and Livestock Commission to consult with producer and distributor interests. When the Meat and Livestock Levy Order was discussed in another place in April last year it became apparent that the existing arrangements for consultation were not working to the full satisfaction of the industry. Officials reviewed them with the industry and the Commission, and this clause results from that review.
Clause 4 provides for payments towards the costs of maintaining a national system of proficiency tests for agriculture in England and Wales. The National Proficiency Test Council, which devises the tests, has found it impossible to survive without a modest measure of Government support. Proficiency tests are the criteria by which agricultural workers may qualify as craftsmen for a premium (currently some 8–35 per cent.) above the statutory minimum agricultural wage. They are also useful in that they provide a form of qualification which can be awarded following courses arranged by the Agricultural Training Board. In view of the way the Council ties in with the Agricultural Wages Board and the Agricultural Training Board, the Government have decided that the support which has been given for the last three years should be put on a regular statutory basis.
13 Clause 5 provides for measures to restrict the growing of male hops within certain limited areas, with the aim of facilitating the production of seedless hops. Following representations by growers' representatives and after appropriate consultation, the Minister of Agriculture will be able to designate such areas by means of an order. It is important that some English hops should be grown seedless so that hop growers can diversify their market and possibly expand their share of the market both at home and abroad, while continuing to meet the demands of traditional outlets.
Clause 6 relates to the power to obtain agricultural statistics and does not increase the burden of form-filling on farmers. It is merely a tidying up operation and it will remove any doubt that too wide an interpretation may have been placed on the existing powers under the Agriculture Act 1947 to obtain certain statistical information about land. The agricultural industries are about to complete a voluntary change to metric usage. To facilitate this, these industries have asked that imperial should be replaced by metric units in existing legislation, and Clause 7 seeks powers to do this by regulations where necessary. Similar enabling powers are also sought to amend fisheries legislation when required.
Clause 8 provides new powers to regulate the export of animals in the interests of their welfare. The existing arrangements involve the Secretary of State for Trade as well as agriculture Ministers, and the powers available to the latter relate primarily to the protection of animals in transit in Great Britain up to the point of export. Clause 8 will enable agriculture Ministers to make orders specifically requiring those who intend to export animals to provide information about the exact ultimate destination of the animals, that is, the farm or abattoir, and about the arrangements for transporting them abroad so as to ensure their humane treatment.
Clause 9 deals with the elimination of reservoirs of disease in wildlife from which farm animals or poultry are being infected. It will be possible to make orders declaring areas in which named species of wildlife affected with a named disease can be destroyed, but only if Ministers are satisfied that such a disease is being 14 transmitted to farm livestock by wildlife, and after consultation with the Nature Conservancy Council. Clause 10 gives officials powers of entry for investigating the suspected existence of disease in wildlife, including the taking of samples; also for the purpose of carrying out the necessary destruction of wild species, and for the purpose of checking afterwards that destruction has been effective.
Clauses 11 arid 12 introduce important changes in the notice to do work and notice to quit provisions of the agricultural holdings legislation in England and Wales. Despite the measures which were taken in the Agriculture (Miscellaneous Provisions) Act 1963 to prevent the abuse of the notice to do work procedure, it is still possible for an unscrupulous landlord through the unfair use of that procedure to force his or her tenant into quitting the holding prematurely. Even though harassment of this kind happens only occasionally. I believe that a situation which permits even isolated cases cannot be tolerated, and that is why we are seeking to strengthen the tenant's position in this Bill.
Clause 11 extends existing procedures. It will give arbitrators the discretion which they currently lack to modify unreasonable notices to do work, but they can only do so in accordance with strictly defined criteria. This change is based on the advice of expert arbitrators on the Lord Chancellor's panel of arbitrators and has been welcomed by the professional bodies concerned. Clause 12 on the other hand introduces a more fundamental change. It will enable a tenant served with a notice to quit based on his or her failure to do work, to require the landlord to seek the consent of the Agricultural Land Tribunal to the operation of the notice. This provision, in effect. introduces an appeal mechanism into this particular procedure and I believe that it will bring about a better balance between landlord and tenant.
Clauses 13 and 14 make broadly similar provisions for Scotland to those provided in Clauses 11 and 12 for England and Wales. There are some differences of drafting and terminology, and in Clause 13 the opportunity has been taken of applying to Scotland similar provisions to those which have been in the law of England 15 and Wales since the Agriculture (Miscellaneous Provisions) Act 1963.
The amendment to Section 29 of the Agriculture Act 1970 proposed by Clause 15 does not represent any new or novel provision. There are precedents already in both the Horticulture (Special Payments) Act 1974 and the Farm and Horticulture Development Regulations 1973. Under both that Act and those regulations, agriculture Ministers are empowered to recover the full amount of any grant paid in respect of a claim on which one or more items are subsequently found to have been the subject of a false or misleading statement. What we are doing here is fulfilling our undertaking to the Public Accounts Committee to close this gap in the Agriculture Act 1970. The proposed new power is of limited application because the same power already exists in respect of applications which are found to contain false or misleading statements. The clause proposes no change to other provisions in Section 29 under which the claimant can ask for an independent hearing to consider the extent to which any recovery of grant should be made.
My Lords, I hope that I have made clear that Part I of the Bill contains a wide variety of useful and important provisions. But it would nevertheless be true to say that the greatest interest in the proceedings on this Bill in another place has centred on what is now Part 11, the provisions relating to family succession to farm tenancies. This is understandable since any changes to the agricultural holdings legislation can easily raise fears that harm may be done to the landlord-tenant relationship, which plays such an important role in British agriculture. The Government do not believe that these changes will in practice harm this relationship, any more than the somewhat similar but by no means identical 1968 provisions have harmed the landlord and tenant relationship in Scotland. What we are seeking to do, in fact, is to restore to agriculture in England and Wales something which in recent years has been lost to it on an increasing scale; namely, reasonable security for the family of the efficient, hardworking tenant.
There was a time when efficient tenants who got on well with their landlord—and 16 I am glad to say that most of them do—could expect that their children, and then their children's children, would succeed them on their farm, and a large number of tenanted farms have been farmed by the same family for several generations. This is far from being the general case today. All too frequently we read of tenant farmers being told that when they die the landlord intends to exercise his rights under the agricultural holdings legislation to regain possession of the farm. So the tenant farmer knows that his or her family will lose their business, their livelihood and their home when the tenant dies, and without any right of appeal. This cannot be right in human terms; and it must be wrong in farming terms, for few farmers will continue to farm the land to the same standard or with the same care for the future once they know that their family's days there are numbered.
The Government, in the family succession scheme provided in this Bill, are trying to reverse this movement away from tenanted farms, We are providing that a deceased tenant's close relatives, wife or husband, brother and sister, son and daughter (including an adopted child or treated child), should have the opportunity of applying to a competent and well-informed impartial body for the right to continue to farm what they understandably have come to regard as their place of work and their home. But there will be no automatic succession under the scheme: quite the contrary. We have deliberately provided the landlord with fair opportunity to contest an application by a close relative if the landlord believes that the relative would be an unsuitable tenant or if the landlord has reasonable grounds for regaining possession or letting to some other tenant.
The Agricultural Land Tribunal will have to weigh very carefully the various claims that are made for the vacant holding when deciding whether to allow the landlord or a close relative to occupy the land. The detailed procedures will be set out in regulations, and these will be considered with the interested organisations and then laid before Parliament later this year.
The principle of family succession has been considered in great detail in another place. It is all the better for that, and 17 several important changes have been made to the original proposals. These have mainly to do with the definition of eligible close relative. This has now been somewhat widened, so that close relatives who do not fully meet the principal source of livelihood test will be able to apply to be regarded as eligible persons at the discretion of the Agricultural Land Tribunal. But there has been no relaxation of the important criteria of suitability and we intend these to be applied strictly by the Tribunal. Any person who is the subject of a direction entitling him or her to a vacant tenancy will therefore he someone who, in the Tribunal's opinion, will in all respects be suitable to he the tenant of that particular holding. We propose to make it clear that any claim by the landlord's son to the vacant holding as part of the landlord's notice to quit is to be given an equally fair hearing.
Much has been made in another place of the absence of statutory smallholdings from the scheme. An undertaking was given to consider, with the Association of County Councils, whether it would be possible to revise the Smallholdings (Selection of Tenants) Regulations to provide for family succession. We have already been in touch with the Association and 1 welcome its helpful attitude over this matter. I therefore commend the family succession scheme to the House. It has been welcomed by the NFU on behalf of tenant farmers but has inevitably been received with less enthusiasm by landowners. But this is no charter for the bad tenant, and I believe that when the scheme has been working for a time and its provisions are better understood it will be recognised as a well-balanced piece of legislation. It is fair to the interests of the families of both tenants and landlords and will lead to improved farming standards and output from tenanted farms. It will embody in the Statute Book what is to all intents and purposes the procedure adopted by most enlightened estate owners today. Your Lordships may find it helpful before we consider the Bill in Committee to have a summary of the essential features of the scheme and the relevant clauses. I have. therefore made copies of such a summary available in the Printed Paper Office.
As I said earlier, the Bill contains a wide range of items. All arc important 18 for their own reasons. Together they will play their part in the well being of this country's agricultural industry. I beg to move.
§ Moved, That the Bill be now read 2a.— (Lord Melchett.)
§ 3.13 p.m.
My Lords, the noble Lord, Lord Melchett, has been good enough to explain the contents of the Bill. These Agriculture (Miscellaneous Provisions) Bills are presented to Parliament with What might he described as regular infrequency. They deal with a hotch-potch of subjects appertaining to agriculture and they are usually of a tidying-up and non-controversial nature. This Bill, like its predecessors, relates to a variety of topics and we welcome the tidying-up clauses in it. Like the noble Lord, I suppose that I should at the outset declare an interest in the subject in that I am a landowner, a farmer, a landlord and a tenant. I also eat sugar and milk, drink beer from seeded and seedless hops and have a mortgage with the Agricultural Mortgage Corporation; so with that quite broad spectrum of interests I hope that I will be fairly objective in what I say.
This is an important Bill which covers important subjects hut, unlike its predecessors, it is highly controversial. Clause I contains proposals to wind up the Sugar Board, and now that the Commonwealth Sugar Agreement has come to an end, the Board's work has also virtually conic to an end and its demise is entirely logical. I join Lord Melchett in paying tribute to those who have patiently and effectively worked in the Board. The degree of its success can be measured by the fact that it seldom came into the news, and the consumer enjoyed for years the advantage of regular supplies of sugar at virtually constant prices—until, of course, 1974 when the world shortage of sugar threw previously accepted norms right through the window.
Clause 2 permits the Minister to advance more money to the guarantee fund of the Agricultural Mortgage Corporation, but as the money is then used by the AMC to buy Government securities, it is not a very onerous advance on behalf of the Treasury; but of course it 19 enables the AMC to increase its borrowing powers in the market. When one considers that some 9 per cent. of all agricultural land in England and Wales stands as security for AMC loans, few can doubt the importance of this body, and indeed the standing which it rightly enjoys, not only in the industry which it serves but also nationally in the effort of encouraging the production of food from our own resources. I only hope that in the years to come the AMC might be able to find some way of getting equity capital into the industry as well as the more onerous mortgage capital. The provision of adequate supplies of capital for agriculture in the future is of vital importance, not just for expansion but to take care of additional working capital requirements in an inflationary era and to replace the capital which is removed from the industry by capital taxation. I believe that the AMC can look to a considerably enhanced role to play and I welcome the Government's support for it in the Bill.
Equally, we are glad to see the dissolution of two of the three committees which were set up under the Agriculture Act 1967 and which the Meat and Livestock Commission was obliged to consult. Far too much national effort is, in my view, wasted by people sitting on committees which are supposedly useful but which in fact are really unnecessary. I am glad that the Government have recognised this and I welcome the saving of time and effort which will result from their demise. cannot quite understand, however, why the Government did not take the opportunity to wipe the slate clean and remove the third committee, the Consumer Committee, at the same time.
In a sweeping way which must transgress at least the spirit if not the letter of the Sex Discrimination Act, the Government take powers for the removal, treatment or destruction of the poor old male hop plant. His crime is the somewhat natural one of fertilising the female hop plant, but the trouble is that this, not unsurprisingly, gives rise to seeded hop plants which the beer-making process in this country requires but which the Continental techniques of lager-making abhor. If we wish to take some share of the Continental requirement for seedless hops, our hop growers should welcome the 20 facility provided by the Bill to make areas of hops in which the male is extinguished on sight, even if any reluctance to participate in such a heinous conspiracy will incur a penalty of £100.
Clauses 8 to 10 deal with matters of animal welfare which 1 welcome. Although not everyone agrees with the export of live animals for slaughter, I believe that this trade is both desirable and defensible and I welcome the powers which the Government are taking to prevent abuse and malpractice and to enable the trade to be conducted in an orderly and humane manner. Clauses II to 14 have been designed to avoid harassment of tenants. I do not believe that there is any noble Lord who would consider harassment, and all that that word conjures up, in any way justifiable, whether of tenants or of anyone else. In so far as this occurs, the Government are entirely justified in seeking measures to prevent it. My reservations are two-fold. First, I am by no means convinced that this practice is in any way commonplace and that the existing safeguard which the tenant enjoys by law is inadequate to prevent it. Secondly, I am not convinced that those cases which have occurred are such as to require such a fundamental and universal change in the law which will remove the landlord's legitimate sanction to get repairs done, even though those repairs have been approved as being legal, necessary and justified and sufficient time had been allowed for their completion.
This relatively innocuous and uncontroversial Bill has now been pitched right into the realms of high controversy by the Government writing into it provisions which were not even contemplated or mentioned when the Bill was first published. I refer to that part of the Bill upon which the noble Lord, Lord Melchett, spent some time—namely, Part II— which creates something wholly new and previously unknown in agriculture in England and Wales. I speak of a hereditary tenancy. From time to time, there has been depicted the hardship which a tenant's son may suffer when, having worked for much of his life for his father on a farm, he finds his livelihood removed from him on the death of his father because the tenancy then terminates.
That is a source of irritation and hardship which must be recognised and which 21 some would say should be remedied, although not everyone—and for good reason—would share that view. But this Bill goes infinitely further than remedying that hardship. It does not give the son the right to the tenancy. No hardship has to be proved. Instead, the Bill lists a whole category of eligible persons who may claim the tenancy—the wife, the husband, brother, sister, child or even somebody who is no relation at all but who happens to have been treated as a child of the tenant. All may lay claim to the tenancy. It is left to the Agricultural Land Tribunal to pontificate as to who is the most deserving tenant.
The imagination need not be stretched to visualise the indecorous assault which will he made by the interested parties for the valuable pickings which will be left by the deceased tenant. What are those valuable pickings? Not value in terms of cash. It is more subtle than that. The value lies in what will become a legal right to earn a living from assets which belong to somebody else. That is the value of Part 11, and I venture to suggest that that is the inequity of Part II.
Whatever the arguments on either side of the case may be, let us be clear about one thing: this is highly controversial stuff. Indeed, it may be surprising to some of us to see that the new pivot of Socialist thinking is not the demise of hereditary advantage but the actual initiation of a new hereditary principle—namely, the right to inherit the value of somebody else's property. Startling though that is, I acquit the right honourable gentleman the Minister of Agriculture of holding those views. I know, the noble Lord, Lord Melchett, knows, that despite the apparent plausibility of the arguments, the Minister himself does not wish to see this come about. Had he so wished, the provisions would have been in the Bill in the first place, when it was originally presented to Parliament. However, they were not —they were added later. Where the Minister stands condemned, however, is in not having been man enough to stand up for what he believes to be right and to reject the pressures from those behind him who stand to the Left of his Party and who wish to write into legislation matters affecting the industry for which he is responsible and matters of which he disapproves.
22 What will be the effect of this? The landlord and tenant system, to which the Minister rightly professes allegiance and to which the noble Lord, Lord Melchett, has this afternoon added his support—a system which has played such a vital part in the success of British agriculture— mill gradually wind down. The noble Lord, Lord Melchett, says that the Government believe that the Bill will not do any harm. I disagree. He also says that it will lead to improved tenant farming standards. With respect, I disagree. No one in his senses will let land if it means that, by so doing, he will run the risk of losing control of it for up to 100 years. Young men will be denied entry into the farming system because there will be hardly any farms to hire. Tenants will be tempted to stay on until they die, resulting in an ageing and less virile population of tenant farmers, in order that their successors may benefit from this unique privilege—a privilege which is obtainable on their death.
So the Minister, by permitting this attempt to destroy the existing system—a system which no one claims is perfect but which has stood the test of time and has been to the benefit of all—is creating a new, privileged section of the community and is therefore denying to others less fortunately placed the opportunity of entering agriculture as tenant farmers. Also, unbelievable as it may seem, this privilege is granted even to those who are living on farms which the Government, by their own yardstick, recognise to be unviable units. I find such a proposal quite extraordinary.
This whole fundamental alteration to the landlord and tenant system—and it is not just the question of alleviating a little hardship, but a fundamental alteration—is not, as one might expect, being carried out as a result of a review of the whole law of tenure and of the Agricultural Holdings Act 1948 on which that tenure is based. It is being popped in in a wholly inappropriate Bill—a Miscellaneous Provisions Bill—as an afterthought, against the Minister's own better judgment and without any consultation. Whatever the merits of Part II may be, the mechanics of its conception and birth are unconventional in the extreme and, I would suggest, almost indefensible.
There came from the Party opposite a great man, a Minister of Agriculture 23 who was admired and respected on all sides for what he did for British agriculture. That man was the late Lord Williams of Barnburgh. It was his stewardship which gave agriculture the foundation which has lasted for 30 years and on which the industry has been able to survive, to prosper and to expand and, indeed, to become the envy of other agricultural systems throughout the world. The two pillars on which that was achieved were the Agriculture Act 1947 and the Agricultural Holdings Act 1948. We look to the Minister, in his turn, to stand up and to give the long-term hacking to agriculture which the peculiarity of that industry requires it to receive.
I would merely say to the Government that so long as they continue to produce measures such as the present Bill, and such as the Bill to abolish tied cottages, and so long as they continue to subject the industry to penal levels of taxation and even to threaten it with a wealth tax, so long will they take the stuffing out of the industry, so long will those engaged in it continue to believe that the Government do not really have the interests of agriculture at heart and—what is most important—so long will they believe that the Government do not really understand how agriculture works. So long, too, will the investment which the Government and the industry want and which the nation needs just not he forthcoming. It is for those reasons that I believe that Part II of the Bill will operate against the interests of agriculture. That is why my noble friends and I will do our best, with the help of the noble Lord, Lord Melchett, to improve the Bill at its later stages.
§ 3.28 p.m.
My Lords, both the noble Lords who have spoken have made declarations of interest because of some involvement in agriculture. I do not believe that this is what a declaration of interest in Parliament is meant to be and I do not propose to declare any interest. Some Parliamentarian more experienced than myself will perhaps tell me I am wrong. But I hope that no other noble Lord, because he is either a farmer or a landlord, will declare an interest because I do not believe this is what Parliamentary interest means. I would not 24 have said very much about the Bill which, when it started as Part I, dealt with, in the words of the noble Lord, Lord Melchett, a wide range of useful and important provisions, and broadly I support these useful and important provisions.
But I believe that Part II has no business to be included in a miscellaneous provisions Bill at all, and as the noble Earl, Lord Ferrers, said, it is highly controversial. Miscellaneous provisions bills have not usually contained proposals which are fundamentally controversial, as this Bill does. It is controversial in that it is arguable—and genuinely arguable—whether it is damaging, or the reverse, to agricultural efficiency. It is controversial in so far as it slips in a measure of expropriation without compensation, which I should have thought should be unacceptable in a relatively liberal society like our own. As the noble Earl mentioned, there was no hint of this whatever in the Queen's Speech, and that is not as it should be.
Despite the polite remarks made about the landlord and tenant system by the noble Lord, Lord Melchett, I wonder whether noble Lords opposite really understand what a very good arrangement the landlord and tenant system has been to agriculture in this country. Indeed, I sometimes wonder whether many of them understand how that system works. The English system which, after all, still involves more than 50 per cent. of the agricultural land in England, is a peculiar one in that its arrangements for financing itself are rather different from those of any other industry. On the one hand, there is the fixed capital; that is to say, the land and everything on it: houses, buildings, hedges, ditches, bridges, draining, roads and shelter belts. That amounts to rather more than two-thirds of the total capital in the industry and is supplied by the landlord. On the other hand, there is the working capital; and this is where the situation is different from other industries. By " working capital " I mean the stock, the crop, the implements, the manures and so on, which amount to rather less than a third of the capital in the industry, and this is found by the tenant.
Traditionally the return on the landlord's two-thirds of the capital in the industry has been very small, while 25 traditionally the return on the tenant's capital has been the same kind of return that is required for any viable commercial proposition. What this has meant is that the tenant's capital can all he used in the business of agriculture as working capital. It means that he hires the fixed capital at interest rates lower than any other source of capital, and so he can go into agriculture without having to buy the land. At the same time he has security of tenure for life. So far from extending that security of tenure for life, a great many people on all sides of the industry have suggested that it has been too great and has in fact damaged the industry. Nevertheless, there it is, security for life. Meanwhile, the landlord, at the same time, is subject to very stringent obligations regarding repairs and maintenance, capital improvements, and rent, which as your Lordships will know can he raised only at three-yearly intervals and then, if necessary, only by arbitration.
This system has been endorsed by the National Farmers' Union, and it is endorsed by the Minister of Agriculture. It is the envy of our Continental neighbours and is, I believe, the source of the strength of our agricultural structure. One has only to look at the pickle which the Common Agricultural Policy in the EEC is in to he reminded that this is so. What, then, is the extent of the problem which warrants making succession hereditary? Hereditary it is. If your Lordships look at Clause I 7(5)(g) of the Bill you will see that it involves three generations: father, son and grandson. I cannot help thinking that if eighty years ago noble Lords had decided to abandon the hereditary system in this House, then the House of Lords would have been a powerful and effective Chamber. But that was not so decided. I hope that the analogy will not he wasted on noble Lords opposite.
I turn now to the extent of the problems which warrant this extension. I made my own survey over an area of 60,000 or 70,000 acres about five or six years ago when this question was being talked about. I was surprised how very many of the tenancies which still existed over that 60,0(X) or 70,000 acres were what might be described as hereditary tenancies. As the noble Earl, Lord Ferrers, remarked, that has been the prevailing practice in the old estates; indeed, the noble Lord, Lord Melchett, himself said that. Very often the son of the tenant was a man whom 26 one knew; one also knew his family, and he was in all respects the best man to take on. As the noble Earl, Lord Ferrers, said. there has been some hardship. Nevertheless, it is no good basing legislation entirely on a very small number of cases of hardship. That hardship will not be overcome, nor indeed will social justice be achieved, by wrecking a system—and indeed it will wreck a system merely by doing what is proposed.
It is significant or rather curious, to me that there is no mention of hardship in the Bill. If the Bill means anything at all it should be about hardship, but that is not mentioned. The effect on the system will he very damaging indeed. There will be no new intake. As has been mentioned by the noble Earl, there will be a privileged class of applicants; indeed, there will he conflicting applications, which will be extremely difficult to sort out. There will not be only one applicant (the son), but a whole range of people who have a chance of being applicants. There will be no starting at the bottom, which has been one of the advantages of the division between fixed capital and working capital; and there will be lower standards all round. Of course T should not go so far as to suggest that this is a bad tenant's charter, but inevitably it will mean that in so far as hardship is alleviated by these means there will follow a certain lowering of standards.
There will be abuses; there will he under cover arrangements between ingoer and outgoer. The sort of thing I have in mind is the selling of premiums to an " adoptive " relation. There will be an abuse of buying as sitting tenant and selling with vacant possession, which is the last thing I should have thought that this Bill wished to engender, but engender it, it will. In fact, despite what the noble Lord, Lord Melchett, said, it will break up the system. Everybody has said that they do not want to break up the system. There are safeguards, but looking at these it seems to me that the tests will not he stringent enough nor rigorous enough. For instance, there will be the question of whether a man has enough capital.
Can one ever really achieve a knowledge of that through a tribunal? The tribunal can only ask the man's bank manager, which will reveal absolutely nothing. Will one be able to arrive at the man's 27 technical knowledge? There is the proposal regarding an applicant being required to have spent five years on a farm, three of which can be spent in a college of education, reading not agriculture but anything he wishes. Is that a suitable way of arriving at the technical knowledge required? How is one to arrive at an assessment of a man's character and temperament? I agree that in the old-fashioned estates all those things were done, and could be shown to be done, properly, but 1 do not believe that they can be done by making them a statutory obligation. It is altogether too complex. It is tantamount to automatic succession. The eligible person need not even be a near relation; he need have only a trifling connection with the holding. Lastly, under Clause 20 the tribunal is allowed to admit ineligible candidates. My Lords, what sort of complexity is that?
Finally, it is notable that the Young Farmers' Clubs have come out against Part II successions. Perhaps they have more sense than their fathers, for their fathers, while affirming their belief in the system, nevertheless seize on the immediate financial gain to be made at the landlord's expense, knowing full well that it is closing the shop to anyone not already in it. Lastly, my Lords, a word of sympathy for Mr. Peart, who has been an admirable Minister of Agriculture and who, as it were, served his own apprenticeship under the great Tom Williams before him. As your Lordships have been told, he does not like this at all. Whether he was not strong enough to stand up against it or, as the noble Lord said, was not brave enough, I do not know; but the fact is that he has given way against his own better judgment. What this means is that, instead of being remembered as one of the great Ministers of Agriculture, he will be remembered—and I deeply regret this—as the man who broke the system up.
§ 3.41 p.m.
§ Lord CLIFFORD of CHUDLEIGH
My Lords, first I should like to make an apology, in that I have an appointment later this evening 230 miles away from here, and therefore I shall not be able to attend the rest of this debate. On the basis of honour among thieves, I hope that noble Lords will not warn the motorway police. I promise that when I return 28 tomorrow morning I shall read every word of the debate with the greatest care. That remark applies particularly to the noble Viscount, Lord Monck, who I know is a justice of the peace in an area where once before I was " had for a sucker ". Secondly, like other speakers I have an interest to declare. I am a member of the NFU, I am a member of the CLA, and I am a member of the Agricultural Land Tribunal. I am a farmer and a landowner.
My first reaction to this Bill was that the Government are getting into a very bad habit of using an erstwhile uncontroversial Bill for introducing a new and very controversial element—a measure which could have a very damaging effect on our agricultural production. If they wanted to make such a fundamental change they should, to my way of thinking, have brought forward a special or a separate Bill. Incidentally, they are doing the same thing, so I gather, under a Health Bill; that is, including something which should be in a separate Tobacco Bill. This is yet another step in the slide towards bureaucratic socialism, against which the present Leader of the Liberal Party has recently been warning us.
The landlord-tenant system in British agriculture, as has been said and as will be said again, is the envy of other nations, and Part II of this Bill is the third step on the road to destroying it. Already the supply of land to let is beginning to dry up. Would that our leaders in this field had been brought up on Henderson's book, The Farming Ladder! This particular provision is knocking out the main rung of that ladder. No wonder, as the noble Lord, Lord Henley, has mentioned, the National Association of Young Farmers' Clubs are very much against it. On my small estate, I have third generation farmers, and before the last war there were even longer associations. One of my neighbouring landowners has a family which has been farming on his estate for 200 years. I only wish the Minister could have been present three weeks ago, when 1 gave a lunch to my tenants to celebrate 50 years of tenancy by one of my tenants, and had been able to listen to the speeches of the tenant farmers on that occasion. Of course there have been hard cases, but they make bad law. In the South-West we have an agricultural equivalent of Mr. Heath's 29 unacceptable face of capitalism—what we refer to as the unacceptable face of land ownership. But that is not a valid reason for the abolition of a well-proven system. I have another colleague who for years did not farm himself on the grounds that he would have not enough time to manage and run his estate efficiently. Now, by the change in the pattern of taxation, he has been forced to take a farm in hand himself. That means one less to let; one less vital step on the farming ladder.
When my resident agent retired 10 years ago I did not replace him, and for a long time I found myself working 16 hours a day. Yet an agricultural landowner's income, coming from rents and royalties, is classified as unearned income. This last weekend alone my unforgiving minute was filled, as everyone who is a landowner knows, with repairs, re-thatching, water supplies (private), a chimney fire and forestry problems (including this awful and continuous elm disease); and paper work increases year by year. With capital transfer tax, the threatened wealth tax, the Community Land Bill and now the Layfield proposals for the rating of agricultural land, an agricultural landowner has precious few hopes of ever having a moment to spare in the foreseeable future. When a smallholder died recently I intended to split his fields among the neighbouring tenants. That is what they wanted and that is what they expected. But I am forced to let them on six-monthly terms of agistment. Landowners are now forced to do this by the taxation requirements and by the necessity to get in hand the 1,000 acres needed to qualify for the working farmer tax allowance under the new proposals. This all means the same thing, that there will be less land to let.
I am opposed to big institutional farmers. I am opposed to the larger bodies buying up farms—insurance companies, corporate bodies and the like. This legislation is another means to force the pace in that direction. Landowners and owner-occupiers are being slowly and steadily forced into making themselves companies, and things like that. In the not so long run this can result, as 1 foresee it, only in the creation of absentee landowners. Fragmentation due to penal taxation can only affect the efficiency of British agriculture, and this proposal can only 30 hasten that decline. For which landowner is going to keep in good repair property he can never expect to have back in his or his heir's lifetime, or even longer? As the noble Lord, Lord Henley, has mentioned, landlords' fixtures will deteriorate, and the good relations between the agricultural landlord and tenant which are currently enjoyed will quickly deteriorate. I am in favour of the traditional lettings. I am against the modern trends, which arc forcing owners to make themselves into companies, partnerships and so on, but it is the penal taxation of agricultural landowners that is the culprit. Income treated as unearned income is a major cause; the threatened wealth tax, the threatened rating of agricultural land, and capital transfer tax, will force the private landowner to cut down his woodlands and not maintain his agricultural fixtures. In the highest capitalised industry in the country, this whole trend is bound to result in less efficient agricultural production.
My Lords, where is all this leading? The unfair taxation and all these cases that we have been mentioning can only, I presume, go toward land nationalisation as so recently recommended by the National Union of Agricultural Workers coupled with the name of Miss Maynard. One would have thought that by now the lesson would have been learnt from what has happened to agricultural production in Russia. But, no; it seems not. The chip is there for all to see. They are determined to get rid of us kulaks even if it means starving the country. The right to own land is a bulwark of freedom and liberty. I maintain that Part H of this Bill puts another nail in that coffin.
Having said that, I hope that the Government will accept in Committee some of the reasoned Amendments to which reference has been made already today—and doubtless there will be many more. I should particularly like exception to be made in the case of the home farm. If we are going to be forced out of the business of estate management into that of farming, 1,000 acres as dictated by the taxation rules, then at least that should be granted to the owner. If the Government are going to tax us on that basis, then Part II of the Bill should not be put into effect until we have got that 1,000 acres in a ring fence. Also, I maintain that the capital transfer tax on inherited tenancies should 31 not be borne by the landowner. Instead of having Part II of this Bill, the Government should have reformed the penal taxation of the agricultural landowners, which would make the destruction of the landlord-tenant system in agriculture wholly unnecessary. You could then have penalised those few landowners and their advisers who have been forced to commit acts of what I consider to he the unacceptable face of landowning and preserve a system of agricultural efficiency which is the envy of the free nations; for no other better method has been yet devised for sharing the necessarily large capital costs for efficient agricultural production.
§ 3.53 p.m.
§ Lord MIDDLETON
My Lords, I too, must declare an interest in agricultural land, some of it owner-occupied, some of it tenanted. As we have heard, these new clauses which make up Part II of the Bill would make significant alterations to the law which has governed the relationship of the agricultural owner and tenant for 28 years. We have heard the noble Lord, Lord Melchett, earlier refer to the balance between the landlord and tenant. I believe that the 1948 Agricultural Holdings Act created an acceptable balance. It set out the duties of the owner when letting his land and building; it regulated his duty to repair, his duty to provide fixed equipment, to compensate and, in certain circumstances, to receive compensation. It gave to the tenant security of tenure for his lifetime, provided that he farmed reasonably well and paid his rent. This protection was accepted throughout the industry as fair and desirable in the interests of food production. Now we have Part II of the Bill—Clauses 16 to 23—which provide that on the death of a farm tenant—who may have farmed for a lifetime under the protection of the 1948 Act—a suitably qualified relative must, if the Agricultural Land Tribunal say so, succeed to the tenancy and a suitably qualified relation of the applicant might be required in law to succeed in his turn.
I very much fear—and here I agree with the noble Lord, Lord Henley—that this may tip the balance so far away from the owner as to jeopardise the whole landlord and tenant system to the point of collapse. The argument in favour of compelling 32 an owner to give a tenancy to a qualified applicant is this: the risk to farming efficiency, provided the Land Tribunal does its job, is of less consequence than the hardship that can arise when a son or near relative who has worked on the family farm is given a valid notice under the 1948 Act. This puts us in a difficult situation. It puts us in the situation of balancing unquantified human hardship against the possible loss of efficiency in a vital industry.
One would have expected the Government, first, to examine how much hardship, in fact, arises at present; and then to take a careful look at the landlord and tenant system in England and Wales. I am told that in Scotland, where legislation for succession was introduced not so long ago, lettings are now very rare. One would have expected the Government to have considered, free from the pressures that have prompted this hurried legislation and strictly in terms of the economics of food production, whether the system should be fostered or discouraged. If, after further consideration, the Government thought that food production was best encouraged, as it was in the 1948 Act, by altering the landlord and tenant law, surely common sense would have demanded proper consultation followed by a carefully considered new holdings Bill.
These provisions have been thought up in a hurry. The matter has not been properly weighed up. No adequate consultation has taken place. It is, in my view, entirely wrong that there should be tacked on to a Bill of this kind ad hoc provisions whose effect on the supply of capital to more than half the farms in England and Wales is uncertain. First, what is the extent of the hardship suffered under the law as it stands? In my own experience, when an owner wishes to re-let he does freely just what the Bill would have him do by compulsion. If a tenant dies or wishes to retire and there is a competent son or near relation who knows the farm and fulfils the criteria which, in the Bill, will fall to be considered by the Land Tribunal, the son gets the tenancy.
Where this does not happen then in nine cases out of ten it is because the owner has good reasons for not wishing to re-let. He may wish to sell with vacant possession.
33 Under our present fiscal system, as the noble Lord, Lord Clifford of Chudleigh, reminded us, a sale may be forced upon him. He may wish to farm the land himself; he may wish to amalgamate two or more holdings to achieve greater efficiency. Why should he not be free to do any of these things as he so wishes?—because, we are told, there are some undoubted cases of hardship; therefore, the owners' freedom to do what he wants with his own must be curtailed by legislation.
It does not require much imagination to understand the anxiety of a tenant lest his son should not be able to continue in the farming business. Cases of hardship, where they do arise, we are told are chiefly in the livestock farming areas of England and Wales where the units are often small, farming is precarious, the farmer is independent, self-reliant and enterprising; but as tenants they have few capital assets. If notice is given on the father's death, his family loses that independence which they treasure so highly. There is in these cases little hope that a son can buy a farm of his own once notice has been given. Of course we must do what we can to allay these fears, but first, we ought to be told how many cases of real harship occur. I hope we may hear this today. I believe there are very few.
Next, what harm will be done if the system collapses? The noble Lord, Lord Melchett, would tell us, I believe, that in the urban housing field the drying up of the supply of privately-rented accommodation is but a prelude to what he and his friends call " municipalisation ". Is something like that planned for agricultural land? I very much doubt it. I doubt whether at this moment that is what the Government have in mind. I am reassured by the tribute to the value of the landlord / tenant system which earlier today was paid by the noble Lord, Lord Melchett. I believe they have just drifted into including these clauses in the Bill with the best intentions in the world, but without proper thought.
I am delighted that the noble Lord, Lord Henley, reminded us what are the economic benefits of the landlord-tenant system in agriculture. At present, 53 per cent. of agricultural holdings in England and Wales are farmed subject to a tenancy.
34 This means that nearly half our farmland has in effect been loaned by an owner to a tenant together with the farmhouses, buildings, cottages and all the necessary fixed equipment and infrastructure. It has been loaned on extremely favourable terms for the tenant's lifetime. Tenanted agricultural land is worth £291 per acre and for this the tenant pays £9 an acre. I have taken the average figures from the Ministry of Agriculture's latest six-monthly reports. So the tenant is borrowing in effect the owner's capital at the exceedingly low rate of 3 per cent. I do not know of any other business where you can borrow on such terms.
The only capital required by the tenant is that required to equip his farm with implements, machinery and livestock, as the noble Lord, Lord Henley, told us. An efficient farmer should get a return of at least 15 per cent. on his working capital. This should give him sufficient to plough enough back into his enterprise without borrowing to keep equipment up to date. If he does borrow, then it will normally only be related to his working capital. His landlord has a statutory duty to provide him with modern buildings and fixed equipment; capital for any expansion of the business may be, and usually is, provided in large part by the owner.
As the noble Earl, Lord Ferrers, told us, a fundamental problem for British agriculture is the availability and cost of capital. Under our landlord tenant-system, the part played by the owners of agricultural land in the provision of the industry's capital requirements is a very significant one. Someone has said that if our system did not exist, it would have to be invented. The Government seem determined to invent ways of destroying it. As the noble Lord, Lord Clifford of Chudleigh, reminded us, their present fiscal policy provides plenty of examples of this: first, there is the position of the agricultural landlord under income tax: his rents are subject to the investment income surcharge of 15 per cent., while the owner-occupiers' farming profits are not. Secondly, the owner of tenanted land would fail to qualify for the new business property relief at the rate of 30 per cent. included in the Finance Bill 1976. Thirdly, tenanted land is excluded from the full-time working farmer relief 35 which would have halved the value of his land for capital transfer tax purposes.
The effect of these fiscal disabilities must be to encourage him to take land in hand with a view to securing all or some of them. But under this Bill if he lets a farm, he may not regain possession for three generations. Why should he create new tenancies ever again? If this disincentive to let knocks out the possibility for a young farmer of ever getting his feet on to the farming ladder, then surely the farming community must come in time to regret this hurried and ill-thoughtout measure that looks so harmless at first sight. I believe, with the noble Lord, Lord Henley, that this view is shared by the Federation of Young Farmers' Clubs. That is very significant. The consequences to aspiring farmers will be very serious. But what should concern us most is the country's food production, and here loss of efficiency must follow the loss of the economic advantages of our present system. So, my Lords, what should we do about this Bill? I find myself reluctant to oppose totally any measure— however mistaken—that is designed to strengthen the independence of our farming community. In any case, it would come rather oddly from an hereditary Peer to object to the principle of succession.
Yet I have a deep conviction that this is not the way to go about it and that this Bill, as it stands, is bound to hurt the farming community in the long run and damage food production. Here I am in complete agreement with my noble friend Lord Ferrers. I believe that, where a farm is to be relet anyway, the son should get priority and, if he is suitable, he should be offered the tenancy. I would not object to legislation to achieve that end. I am wholly opposed to, and I am sure we must amend in Committee, legislation that provides that a farm has got to be relet in certain circumstances, whether or not the owner wants to do so. That must result in reluctance on the part of owners to let land at all. By alleviating the hardship of a few now, there will result greater hardship to many in the long term.
There may not be any tenancies available in the future because the system under the combined effect of this and other pressures —chiefly fiscal—will have collapsed. The ill effects of such a collapse would take 36 some time to appear. The difficulty is that the potential economic damage is extremely hard to quantify. But, my Lords, if there was even a remote possiblity that food production would suffer, that surely ought to have made the Government pause before presenting such a " botched-up " and ill-considered piece of legislation.
§ 4.7 p.m.
§ Lord COLLISON
My Lords, it was a pleasure to listen to the noble Lord, Lord Middleton. I do not agree with him, but he put his case in moderate and persuasive terms. As for the rest, I feel rather like the boy in Holland who saw a hole appearing in a dyke and put his finger in to stop the sea from coming in. The sea outside seems to be raging, and we have heard so much this afternoon which is contrary to the Bill. However, it. is a miscellaneous Bill and in such a Bill we are asked to deal with a number of what may be unrelated matters. All these matters affect agriculture, and it is clear that on some of them we are all in complete agreement.
I must say right at the outset that I welcome the Bill as a whole and believe it to be greatly improved by the addition of the clauses dealing with succession. As your Lordships know, these clauses were added following the debate in another place and, as a result, we now have proposals before us which are aimed at giving greater security to the families of tenants when the actual operating tenant dies. Quite apart from the succession issue, to which I will return in a moment, the new proposals give much greater security to tenant farmers since they give additional powers to an arbitrator under the Agricultural Holdings Act 1948 to allow him to delete from a notice issued by a landlord, and enable the tenant to use alternative means of doing the job required, and perhaps in doing it another way he could use alternative materials. The arbitrator can also delete from any requirement any instruction which has been given which he feels to be unreasonable and not in the best interests of the holding itself.
Previous to that, as we all know, the tenant who got a notice to quit because of failure to comply was completely unable to contest the notice before an arbitration tribunal. Now he can do so, and the 37 arbitrator must give his consent to the notice before it can be proceeded with. I would contend this is clearly a matter of greatly improved security for the tenant; and in my innocence I wrote down the words, " which we must endorse ". I had better amend that and say, " which I in particular strongly endorse."
To return now to the proposal for the right of succession following the death of a tenant, it seems to me that the proposal is fair to both the landlord and the tenant and, together with other people, none of whom appear to be here this afternoon, I think this agricultural reform is long overdue. I do not want to be misunderstood. That is not to say that I think the majority of landowners behave with a callous disregard and lack of concern for the interests of the families of deceased tenants. I fully accept that harassment occurs in a minority of cases, but undoubtedly it does occur, and hardship and distress arc caused to a tenant's widow and children. I think it is time that fair and equitable provision were made to control such cases. I say again that I believe the proposals should take into account the hardship to tenant farmers' families which can arise under the present law.
To quote just one example, a tenant farmer's son can put a good part of his time and money into the holding. He can then find that when his father dies he loses the tenancy. That cannot he fair. On the other hand, although that kind of issue has to be taken into account by the arbitrator, the arbitrator also has to take into account the landowner's interest, even if it means that he needs to sell the land in order to repay a capital loan or needs the land to amalgamate it into a bigger and more viable unit. These issues have to be considered by the arbitrator, who can then make a balanced judgment as between the two cases.
I have listened to some interesting things this afternoon, I must say. I am a little shocked. People have said they know what goes on in the mind of my right honourable friend, Fred Peart. How can they know? My right honourable friend is not here to say, " Nay " or " Yay ". The accusation has been made that here he has put something into the Bill which he does not believe in himself. I do not think these things should be said when a man is not here 38 to reply. We are told that if we support this Bill we are of the Left, whatever that may mean. if wanting to give greater security to the family of a tenant farmer is being Left, I am Left. So far as I am concerned, the word in this context is absolutely meaningless. Furthermore, we have been told that the National Farmers' Union are opposed to the measure. I have here a Press issue issued by the National Farmers' Union, and I should like to read part of it. It says:
It should be emphasised at the outset that the NFU always has been, and remains, totally opposed to automatic succession, or to anything anything that would jeopardise the landlord/tenant system. The Union believes that this system is fair, has served British agriculture well for many years, and therefore justifies the fullest support from the industry.I read that carefully in order to point out that the National Farmers' Union is taking a balanced view. Their Press issue continues:
Nevertheless there have been disturbing trends in the nature of land tenure in agriculture in recent years, which are causing increasing anxiety and which cannot be ignored. There has for some time been a growing resistance among landowners and their professional advisers to the granting of traditional lettings. Such new entrants as there now are frequently find themselves required to operate under partnership agreements or other arrangements devised to deprive the person actually farming the land of any security of tenure or other statutory protection. This is a complete negation of the objects of the Agricultural Holdings Act 1948, on which the landlord/ tenant system is based.The document then goes on to talk about the taxation problem, so I will not deal with that part of it. Several paragraphs later, we have this:
The NFU considers that the scheme embodied in Part II of the Bill does in fact strike that fair balance. It will provide a fair opportunity for adjudication by an impartial and experienced body—the Agricultural Land Tribunal—between the arguments of the would-be tenant and the landlord's reasons for wishing to resume possession.I shall not read more of that, but I say the proposal is a fair one because the Tribunal has to make a balanced judgment between the claims of the conflicting parties. I hope that we shall hear, after I have sat down, rather less emotive speeches on the subject. People are entitled to a point of view without being accused of being " Left Wing ", whatever that means, and without being told that our own Minister is acting contrary to his own views.
§ Lord DAVIES of LEEK
I beg your Lordships' pardon. Is my noble friend aware that a television programme was made in Abergavenny and in South Wales on farmers and landowners who are making farmers and tenants of many, many years quit because they were given impossible tasks to do? All we want is fair arbitration, and this Bill gives the opportunity for that.
§ Lord COLLISON
My Lords, I did not see that actual television broadcast, but of course that is the object of the Bill. Having said all that, I should like to refer to the fact that the statutory smallholdings are excluded from the provisions of the Bill. This also applies to the Land Settlement Association. I am a vice-chairman of that Association and a long time executive member. I just want to say this. The Government have indicated, have they not, that in their view a scheme for possible succession should apply to other bodies besides the statutory smallholding, and they have said that they hope local authorities will bear these principles in mind in settling succession problems.
So far as the LSA is concerned—and I have been there for a long time now: too long—I am satisfied completely that it has always behaved in accordance with the principles outlined here. When there is a son who wants the holding and he is capable of doing the job, obviously, as is the case with other provisions relating to the letting of smallholdings, and particularly in connection with the LSA, which is a big business, we have to be assured that the entrants to the holding are people of integrity and sense and are good horticulturists. That we do, but I have never known the LSA behave harshly to a tenant's family when the head of that family has died. We have always seen to it that there is accommodation for wives and families somewhere before we try to get the holding. We have men on the holdings who are well over the age of 70 and who are still farming.
40 However, I said there are matters in the Bill with which we agree. It is a good thing that the Government have made provision for the elimination of male hops. I am interested in trying to improve our export trade and, as we have already heard, on the Continent they want the seedless hop, so if we can produce it ourselves—and, to a large extent, this will be voluntary—we shall improve our export trade. I also agree with the provisions to allow the Government to control the export of live animals. One sometimes questions whether live animals ought to be exported at all, but the fact that there is provision for their protection is clearly a good thing.
Finally, I am quite pleased about something which most may consider a small matter; that is, the provision of funds to help the proficiency testing organisations. The National Proficiency Test Council does a magnificent job of work. Only two or three weeks ago, I spoke about the efficiency with which that work is done and about the need for qualified skilled workpeople in agriculture, which apprenticeships and training provide. These things are all tied up with the work of the proficiency test committees, and with the wages that an agricultural worker can earn. My old union is disappointed at the number of older men who have learned the job over the years—perhaps learning the hard way without training—and have failed to apply to their employers for a craftsman's certificate which would entitle them to a higher wage. We think that the reason may be the £2 charge which is made for the test, but that is another matter. However, the help which will be given by the Government, which it is estimated will cost about £25,000, is very necessary and is greatly appreciated by the industry.
§ Lord FORBES
My Lords, before the noble Lord sits down will he agree that agriculture is about food production, and can he tell me whether there is anything in Part II of the Bill which is likely to increase that
§ Lord COLLISON
My Lords, I am glad the noble Lord asked me that question, because in my view the fact that there is greater security will mean that more young people are attracted to take these holdings. Over the past four or 41 five years the number of new tenancies is useful. Clause 8, which deals with has gone down and down. We therefore the export of animals, is also valuable need new blood in the industry and this and on all such matters I support the Bill Bill will make people more willing to as it stands. risk taking a holding.
§ 4.23 p.m.
§ Baroness ELLIOT of HARWOOD
My Lords, I intend to speak for only a very short time, because much of what I intended to say has already been said. This Bill contains some useful clauses and I agree with the noble Lord, Lord Collison, whose long service to agriculture I should like to commend. Years ago, when my husband was Minister of Agriculture and was putting through all the marketing schemes, the noble Lord, Lord Collison, was working for the Agricultural Workers' Union. He told me only the other day how he remembers those days, and remarked how, in the context of the EEC, we are now all supporting strongly and clinging to the tradition of the Milk Marketing Board and the other boards. He and I are two people on the Committee who remember our struggles to get through Parliament the legislation setting up the different marketing boards. That shows that there is a very long tradition of co-operation in agriculture j by the main political Parties, and I hope very much that this will continue, in spite of the fact that we have some fundamental disagreements on this Bill.
But I should like to say that I welcome several of the clauses. First, I welcome Clause 2 which refers to the Agricultural Mortgage Corporation, and I think it will be useful in relation to its work. I also welcome Clause 4 on the proficiency tests, to which the noble Lord, Lord Collison, referred, and which encourage the efficiency and value of those who work in agriculture. That is a very good clause indeed. As regards Clause 7 and the need for us all to adopt the metric system, I think that this will be jolly difficult. Only the other day, I listened to the noble Baroness, Lady White, answering questions on the radio about metrication. I thought to myself: " My goodness me! I must learn far more about it, particularly its relationship to the industry in which I am interested, because I know so little." But Clause 7 42 is useful. Clause 8, which deals with the export of animals, is also valuable and on all such matters I support the Bill as it stands.
On Clauses 13 and 14, I share the views of the noble Earl, Lord Ferrers, and others who have spoken from this side. This is a fundamental change from the 1949 Act and cannot, even in the most imaginative manner, be called a miscellaneous matter. The relationship between the landlord and the tenant has worked so very successfully for so many years that it would be a great pity if we did anything which fundamentally altered that. I, too, have the same blue paper that has been issued by the National Farmers' Union to its members, of which I am one, and while I entirely agree with what the noble Lord, Lord Collison, read out we must not forget that they included this paragraph, which, as he rightly said, he did not read out but perhaps he will not mind if I do so, which states:
The main underlying reason for the drying up of the market in new lettings is the penal level of taxation of private landlords, particularly under the capital transfer tax and the threatened wealth tax.It is only fair to recognise that that is something which mitigates against the system to which we have been used for so many years.
In Scotland, we already have a far more stringent law between the landlord and the tenant and, while it makes matters more difficult, it has worked fairly well on the whole, simply because we have the right relationship between the landlord and the tenant. I live in a part of the world where there are many big estates, and a great many tenants who have been in their farms for 100 or 200 years. I remember asking the late Duke of Buccleuch " How long has so-and-so been a tenant of the Buccleuch estate?" and the answer was, " Three hundred years." That must mean that there is a very good relationship between tenants and landlords, provided that the landlords are good, the estates are well run and people know that they are dealing with fair and square landlords who will help them in their work. I believe that the basis of a successful industry is co-operation, and I do not believe that one can separate the farmer, the landlord or the worker. It is absolutely vital that all three should participate in this industry. The object of the industry is not to make money—and, goodness knows! it is 43 extremely difficult to make both ends meet; it is to produce food for the rest of the population. After all, only 3 per cent. of us work in or on the land. It is a very efficient industry and the number of people involved in it is very small indeed, but the food we produce is eaten by the remaining 97 per cent. of the population.
Therefore, we are anxious to serve them in the best way that we possibly can. I do not think that making a radical change of this kind, without some very good reason for it, will help to increase food production or w ill help to increase the better relationship between the three vital parts of the agricultural industry. Therefore, I am afraid that I shall be on the look out for Amendments that will not entirely favour one side or another but will make it fair; and to make it fair I think that the model we have in Scotland is one which the Government could well look at. It gives greater security of tenure, if I may use that phrase, to the tenant than does the English model. Having worked it for a good number of years, although 1 have not many tenants but I live in an area where enormous numbers of farms are tenanted, I can see that it can be made to work successfully. I hope very much that during the passage of the Bill we may find a way out which will serve both sides and will not raise a very controversial spirit.
§ 4.31 p.m.
§ Lord NUGENT of GUILDFORD
My Lords, first may I thank the noble Lord, Lord Melchett, for his speech in which he described the Bill to us. May I also congratulate the noble Lord on the lucidity and brevity with which he achieved the description of a very large number of topics, including the controversial one. I am afraid that I shall be among the many noble Lords who will belabour him for this controversial measure which should never have been included in a Miscellaneous Provisions Bill. Such a measure, if at all necessary, should only follow a comprehensive survey of the topic. My speech will be concerned with the values of the traditional system of farm tenancy as between the private landlord and tenant with which I am very familiar.
I should declare a non-interest. I have been a farmer and in farming all my life. I started in the role of a farm worker, although I was never a member of Lord 44 Collison's union. However, when I left the Army in the 1920s I worked for several years in that capacity. Then I branched out and took a farm of my own. In passing, may I say that I started without any resources. Therefore, the reference by the noble Lord, Lord Clifford of Chudleigh, to the Henderson farm ladder was, in a very modest way, my own experience. I borrowed the money, got started and made a success of farming, but in those days it was easier to do so because taxation was much lower and I was able to pay off my borrowings quite quickly. Thus, I was successful. I mention this because it gives substance to my claim to understand the industry.
In the post-war years I played an active part in the National Farmers' Union and was on their council for many years. Also I was active in the Young Farmers movement and was the national vice-chairman of it. In all those contacts with my many friends, I found that most farmers, and the sons of farmers, were tenant farmers, and that there was a very happy relationship between tenant farmers and landlords. The noble Lord, Lord Henley, described very adequately and effectively the way that the traditional, practical farmer has always seen this matter. He has always used what money he could raise or save for the working capital of the farm and for the livestock and machinery, and he has looked to the landlord to provide the money for the freehold. As the noble Lord, Lord Henley, and the noble Lord, Lord Middleton, have rightly said, that working partnership has always been the way that the farmer has looked at it and he was very happy to work that system. Therefore I put it on the record that the general background has been a happy relationship, one of mutual advantage and respect.
In passing, I should say that while I am delighted to hear that the Young Farmers' movement has had the good sense to oppose the Bill, I regret very much that my old friends in the National Farmers' Union have taken the short-term view and commended it. For the reasons which have been mentioned and which to some extent I shall reiterate, I am quite certain that in the long run this is a disastrous measure. As we have heard today, there are still over 50 per cent. of farm tenancies although inevitably, as other noble Lords have said, the effect of the penal taxation 45 of the day has reduced them. Generally speaking, though, the relationship is still friendly.
The noble Lord has relied upon one or two cases of harassment, but they are the exception. Of course there are some bad landlords, but there are some bad tenants, too. This is inevitable in any human system. But, my word, if ever there were a case where hard cases make bad law, this is certainly one of them! My assertion is that the traditional system has served us well. It has served the landlord well; it has served the tenant farmer well; it has served the country well.
Here I would put on record my own respect for the Country Landowners' Association who have always pursued the most enlightened policies for the general management of their members' farms. The result has been that the technological progress of the industry has been progressively helped by the admirable relationship that has existed between the Country Landowners' Association and the farmers. I think that most of the cases of harassment have arisen where a new landowner has arrived on the scene who is not imbued with these traditions and who is ignorant of the best way to manage his land.
The effect of the Bill will be to strengthen the tenant's position versus the landlord's. It is going to tilt further the balance in his favour so that he and his successors can hold on to the tenancy for succeeding generations against the landlord's wish. Of course, the definition of who can succeed to a tenancy has been touched on already and it goes very wide. I agree entirely with the noble Lord, Lord Henley —and I am sorry to see that he is not in his place—that the safeguards are quite inadequate, but perhaps we can improve them during the Committee stage. We can discuss this.
Two results flow from the Bill. I support what has already been said, but I will say it again. Let us remember—the National Federation of Young Farmers has rightly picked up this point—that the Bill will make it almost impossible for a youngster who is not a farmer's son to get into the industry. I should also like to touch upon the philosophical point (although, like other noble Lords, I welcome it) that so surprisingly noble 46 Lords on the opposite side of the House are supporting the hereditary principle. In this case, however, I am afraid their application of the principle is wrong. Despite everything, tenancies will fall in over the years. Some tenants will sell their tenant right, or whatever you like to call it, for it is worth a lot of money today—£200 or £300 an acre. In some cases there will not be a successor, so over the course of the next two or three generations tenancies will gradually fall in. Inevitably, as other noble Lords have said, landlords are then bound to take possession of those farms and farm the land themselves. The risk of letting again is so great that there is no prospect of their doing so. Therefore, over the next two or three generations this admirable system. which has served us well, will gradually shrink and die away. This will happen in just the same way with corporate bodies, pension funds, insurance companies and so on who are buying up land. They will do exactly the same: they will take over the land and farm it themselves.
May I make this point to the noble Lord, who has said he does not think that this will happen and that the safeguards are adequate. If one looks at the unhappy record of urban housing, which was referred to by. the noble Lord, Lord Middleton, one sees exactly the same thing happening. In their anxiety to try to ensure justice for the underdog, noble Lords opposite and their right honourable friends in the other place have so tilted the balance against the private landlord that gradually over the years the private citizen has decided that it is not worth his while to put his money into building houses to let. The result is that today, hard pressed although we are for houses, no private money is going into building houses to let. The only houses we can have for letting are those which can be provided with a limited amount of public money, and that is nothing like enough. The noble Lord is now proposing a measure which will take us in exactly the same direction. He will dry up the supply. I hope that precedent may make some impression on the noble Lord.
I will say just this in support of what. other noble Lords have said. The noble Lord, Lord Collison—and I am sorry he is not in his place—thought it was improper 47 to impute motives or non-motives to the Minister of Agriculture, Fisheries and Food, Mr. Peart, that he evidently did not want this provision in the Bill. As he did not put it in the Bill for the Second Reading in the other House it is surely not unreasonable to assume that he did not want it. It was put in by other people and he could not get it out again. One needs to understand the industry—and I have not only had personal experience of it and made my life in it, and my living out of it, but I have rubbed shoulders with everybody, and have also had five years as junior Minister in the Ministry of Agriculture: and I am certain that this will damage the industry. I am also certain that a man of Mr. Peart's understanding will feel just the same as I do, but unfortunately the short-term view catches people's imaginations and they think they are doing a good turn by tilting the balance in favour of the farmer's son. They are not, my Lords, and I just hope that when we come to the Committee stage we shall be able to modify the worst part of this Bill, because it really is bad in this respect. I hope the noble Lord will take this message and will allow us to amend the Bill to make it a little less bad.
§ 4.42 p.m.
The Earl of CAITHNESS
My Lords, before commencing my remarks I must declare my interest in agriculture. I work for possibly one of the largest firms of land agents in the country and as a firm we advise both landlords and tenants. Accordingly, my comments must be confined to Part II of the Bill. The great sadness of this piece of legislation is that it interferes in the ordinary arrangements which are generally settled sensibly, fairly and peaceably in the countryside. These are now to be threatened by more intervention by the Land Tribunal and arbitration. Is there a need for this Bill We have just heard a very good defence of the present system. The very few cases of hardship arising on the death of a tenant have given rise to a complex and heavy piece of legislation. The Government are using a sledgehammer to crack a very small nut. However, if the Socialist- philosophy on this subject must come before your Lordships' House, then at least it should have come forward as a 48 separate Bill and been mentioned in the Queen's Speech.
The results of Part El of this Bill are numerous and will he far-reaching from both the tenants' and the landlords' point of view. The landlord/tenant system which has evolved works extremely well and provides over 50 per cent. of the farmers in England and Wales. Recent legislation by the Government has not helped to maintain or improve this figure and already there is a change of atmosphere in the country due to such legislation as the Finance Act 1975. The tax system is the cause of land being taken in hand by so many landlords. This Bill serves only to weaken the existing system and the voluntary supply of land to let will dry up. Furthermore, if only a select few, free from outside competition, can inherit the tenancy one is depriving others of the chance to farm. This could well lead to less efficient holdings and reduced food production—something none of us wants.
The tax angle on the landlord is obvious; less obvious is the effect on the tenant when he inherits, and I feel that the full effect of this aspect has not been appreciated. Situations may well arise when tenants, capable and willing to farm, may find it impossible to do so due to the tax situation, thus increasing hardship exactly where it is proposed to reduce it. The selection of the tenant is in the power of a Land Tribunal. Surely a landlord and/or his agent are better qualified to choose a good tenant in the interests of good husbandry and estate management than an Agricultural Land Tribunal. They will have to decide, after what may be a costly and embarrassing hearing before them, on the merits or otherwise of a deceased tenant's qualifying descendants. This cannot lead to harmony between the parties.
I am concerned with the wording of the selection clauses. I believe that a son should have every chance to succeed to a tenancy, but I feel that the present clause covers too wide an area. Furthermore, although a detailed definition would be required to cover all possible subjects, the full-time course at a university should be linked to, or concerned with, agriculture. It is distinctly possible that many tenants, particularly on estates where the landlord/ tenant relationship is good—and this applies to the majority of cases—will feel 49 embarrassed over the statutory power which their descendants will have over the landlord.
The landlord and tenant system as we know it has received a death blow. The relationship that has taken so long to build up has slowly been eroded by penal taxes. Confidence and trust between the landlord and tenant, slightly frayed at the edges, has now received a severe setback. The tenant will be reluctant to ask the landlord for aid in case he reveals too much of his financial situation which could be used against him by the landlord when it comes to choosing a possible successor. Landlords will be reluctant to inject capital into holdings over which they have little control as to who succeeds the present tenant. Variations in present tenancy agreements may be forthcoming which must only polarise the parties as they seek to protect their legal situation. The flexibility and easy liaison between the landlord and/or his agent and the tenant which now exists, will disappear. I shall be sad if this happens.
§ 4.46 p.m.
§ Lord BALERNO
My Lords, so far in this debate little reference has been made to Clause 3, which deals with the Meat and Livestock Commission set up under the Agriculture Act of 1967. It is a statutory body, but while it owes certain duties to the Government it is otherwise wholly independent—a fact recognised and appreciated by most of those concerned with the meat industry. That has not prevented a certain amount of criticism of, and indeed sniping at, the Commission, largely from those at its somewhat lunatic fringe. Such criticism should be considered in the light of its undoubted successes in recent years. Let me mention just one which redounds to the credit of the whole meat industry. It is a fact that in real terms meat prices have fallen relative to other consumer purchases in recent years.
When the Bill which afterwards became the Act of 1967 was going through this House, some concern was expressed about the large number of committees involved of various shapes and sizes. It is therefore no surprise that two of these are being extinguished. The form of direct consultation is much more likely to procure good advice: the lowest common factor 50 of a committee of men of divergent, not to say conflicting views.
Another recent and notable achievement of the Commission is the establishment of a meat promotion executive. It was not until the spring of last year that agreement was reached throughout the industry on the terms of reference and the constitution of the organisation. The consequent levy order was approved by Parliament last April. In that time, when fresh meat was the single most important item in the weekly shopping basket, everything but fresh meat was advertised and promoted. Fresh meat accounts for 15 per cent. of the total food bill, but meat accounted for less than 0.5 per cent. of all the food advertising on television and in the Press, and nearly all of that was spent by overseas suppliers. The first advertising campaign started last September and ran for six weeks. It seems to have had a steadying effect on prices and has encouraged the housewife to make better use of leftovers. I am informed that one of these, shepherd's pie, is now much more popular.
I come now to the agricultural holdings part of the Bill. I would say on Clauses 13 and 14, which relate to Scotland, that these clarify an area of potential dispute and are welcomed there. Particularly welcome is the use to be made of the Scottish Land Court under the guidance of its present chairman, Lord Birsay, for it has won the confidence of the agricultural community. It is rather better organised than the English Land Tribunal.
My Lords, the main subject of debate here is the tenancy of agricultural holdings, and I would almost congratulate England upon coming level with Scotland in this matter. I agree with my noble friend Lady Elliot of Harwood that in Scotland these seem to be working acceptably to both owners and tenants. Certainly, as my noble friend Lord Middleton said, there is a steadily decreasing number of tenancies falling vacant each year, but question to what extent that has been caused by the security of tenure. I think financial and taxation reasons are responsible for fewer tenancies, as it were, coming on to the market.
I am afraid I approach this subject from a somewhat different angle from that of 51 Lord Ferrers. We have to recognise that some fundamental changes have taken place in recent years. The noble Lord, Lord Henley, spoke of the relative proportion of capital employed as between landlord and tenant. My point is that the proportion of capital that the tenant is now putting into a farming enterprise in proportion to the landowner has greatly increased, and therefore he has more rights than perhaps he had in the past. Secondly, while the old type of landlord still survives, with his sense of responsibility for the land and the welfare of his tenants, there is a new type of landlord, and many of them, who treats the ownership of land merely as another investment. So it is that today, in many cases, it is only the tenant farmer who understands and fulfils the trust he owes to the land. It is only right that he and his son after him should be enabled to harvest the fruits of their labours, but not his sisters, his cousins, and his aunts.
I am somewhat surprised that the Government have not taken this opportunity of including in this miscellaneous provisions Bill provisions for the encouragement of fish farming. In recent years this subject has been discussed in your Lordships' House, by both debate and Question. On every occasion, the Government have not merely listened carefully to what has been said; they have told us they were listening carefully to what has been said. They have also shown understanding of the great potential of fish farming, both marine and freshwater. Indeed, in the recent past provision was quietly slipped in the Freshwater and Salmon Fisheries (Scotland) Bill, whereby the sale of farmed fish could be made in the close season when it was illegal to offer certain kinds of fish for sale. This action, coupled with the sympathy expressed by the noble friends of the noble Lord, Lord Melchett, impels me to beseech the noble Lord to seize this opportunity to add a clause to this Bill which will give effect to certain proposals by the fish farming industry for the better ordering of this enterprise, which already is saving the country quite a considerable sum of foreign exchange. Here is an industry which demands no great subsidy from the Government to get it going. It requires only a continuation and extension of the excellent scientific advice 52 which the Government already provide, and the removal of certain disabilities. particularly in regard to security of tenure, rate of concession and other legal points which presently discriminate against it.
As I feel certain that the expressed goodwill of the Government must be a continuing goodwill towards fish farming. it is my intention to put forward a brief Amendment on the Committee stage. I know that this Amendment will be imperfectly drafted. I do not think that in my 15 years in this House I have ever heard that an Amendment by a Back-Bencher was perfectly drafted, at any rate in the eyes of the Government Front Bench; but while I know that it will be imperfectly drafted, I hope it will give the Government a chance to implement their goodwill.
§ 4.55 p.m.
§ Viscount MASSEREENE and FERRARD
My Lords, I will take the advice of the noble Lord, Lord Henley, and not declare my interest. Suffice it to say that I farm in Scotland and in England; apart from that, I will keep quiet. I welcome Part 1 of the Bill. I think every noble Lord on every side has welcomed it. However, may I just say a word about Clause 2 which refers to the Agricultural Mortgage Corporation. Like my noble friend Lord Ferrers, I have a loan from the Corporation and therefore 1 welcome the increase of the guarantee fund by £13 million.
I have spoken before on the question of I farmers' overdrafts. I should like to see some method by which farmers in this country, like farmers on the Continent and in other countries, can get short-term, low-interest loans. A farmer, unlike many other people, has a very good excuse for an overdraft: for example, that he has to wait until the harvest comes in, or until he sells his lambs. Therefore, although I quite agree that a viable farmer can go to one of the Big Five banks and get plenty of money because he has the security, he has to pay exorbitant rates of interest today. Would it not be possible to have what I call a land bank in which farmers, when they were prosperous, could invest and get a decent rate of interest, but when they needed to be tided over. they could get short-term loans and at a far lower rate of interest than that charged by the Big 53 Five? That is just a point. I have not given the noble Lord, Lord Melchett, prior notice of it, so I would not expect him to answer it today.
My Lords, I also welcome Clause 8, which deals with the power to regulate the exportation of animals in the interests of their welfare. I sincerely hope that we strictly impose these regulations, for the important point is to see they are carried out in practice, which is not always easy. I have no criticism of Clauses 9 and 10 dealing with the power to provide for the destruction of wild life, powers of entry, and so on, but, of course, the appropriate authority must be 100 per cent. satisfied. The Bill says:
The appropriate authority, if satisfied…".I hope that means 100 per cent. satisfied before the " appropriate authority " can send in people to private land to exterminate wild animals, or to take samples of whatever they want to take samples of.
It seems that the more diseases in animals the veterinary profession cures, the more diseases appear. We heard nothing about brucellosis 20 or 30 years ago, and now it is very much to the fore. Before we know it, it might happen that some wild animals, for instance deer, will develop brucellosis and that would be a very serious matter. It would be almost impossible to eradicate, because you cannot exterminate all the wild deer in the country. My question here is that although I have complete faith in the powers-that-be in the Civil Service, they do sometimes employ local people, who when they are working for the Civil Service can be very arrogant. A watch has to be kept on this.
I shall not say anything about Clauses 11 to 14; that is, the change in the law on agricultural holdings. I have always thought that the existing law deals adequately with harassment. I have never come across harassment. The CLA, understand, has had no complaints of harassment. I understand even the NFU say it is a very rare occurrence. I think the existing law ought to be able to cope with that, as my noble friend Lord Ferrers said. If you have an arbitrator to decide about agreements made between landlord and tenant, it is, surely, interfering with the freedom of the individual. We have a lot of that today, of course. I am very " anti " any increase from that point of view.
54 When we come to Part II, I am not at all happy about that. It was never mentioned in the Queen's Speech that a Bill was to be introduced to alter the system of agricultural landlord and tenant in this country. It ought to be in a separate Bill. There are, after all, eight clauses here. It has been rather sneaked in to this Agriculture (Miscellaneous Provisions) Bill. It is not the way to introduce legislation. We have heard that 54 per cent. of farmers in England and Wales are tenants, and we have also heard that our landlord-tenant system is the envy of other nations. It has certainly worked very well in the production of food, because the agriculture industry in this country is the most efficient industry as regards productivity. I think the Government should be very careful before they do anything to destroy that system.
I was very interested to hear my noble friend Lady Elliot and my noble friend Lord Balerno say that the system had worked very well in Scotland. It has worked perfectly in many cases, but, of course, you get bad tenants. The Labour Government reintroduced this law in Scotland, making tenancies hereditary; I think it was in 1968, but of course, Scotland had had it before. It was reintroduced by the Labour Government of the day. I do not think it has always worked very satisfactorily. Without doubt. it has dried up the number of farms to let. It has made it very difficult for a young man coming from agricultural college to get a farm. It has rather made farming a closed shop. It is very unfair for the landlord in these days of high inflation. In Scotland, you can go to arbitration on the rent only every five years, not three years, as in England. When you have had inflation of 25 or 30 per cent. a year, it means, of course, that the landlord is on the wrong side financially. I know cases where the tenant, as regards income, cash-flow, is far richer than the landlord.
I find it rather amusing that I said, in 1968 at the time the Labour Government brought this in, that I was quite sure they were bringing it in to make a precedent. Of course I was laughed at and it was said that was nonsense. But this is just what the Government are doing; that is, quoting Scotland as a precedent. It is not a precedent that has been entirely successful. We have heard from one or two noble Lords, in regard to these clauses in Part II. 55 bringing in something akin to the Scottish system; that the young farmers' clubs are objecting to it. if this Bill goes through, it will be very difficult for a young man to get a tenanted farm in this country.
Some noble Lords have said that hard cases make bad laws, but the hard cases are indeed very few and far between. I agree that where big companies buy land, they do not have the human contact that the private landlord has, and there may be hard cases in that event. I have certainly never come across any hard cases, or heard of them. But it is rather hard to ask a landlord to tie up his land for generations, that is, the existing tenant and two successions.. As my noble friend Lord Ferrers said, it is really tying up his land for 100 years. It is really confiscation of his land, because the moment you have this security of tenure for 100 years you are really depreciating the value of the land by two-thirds. With the appalling taxation that we have now, if the private landlord is subjected to wealth tax or has to pay capital transfer tax, how is he to raise the money if all his land is tenanted and the value depreciated by two-thirds? The answer is he will not be able to unless he has some land that has vacant possession.
I shall be very short. Another point I am worried about, which has been mentioned, is the definition of " eligible person ". It is, surely, too wide in the Bill. Why should the Agricultural Land Tribunal be allowed to admit some person to apply for the succession who is not a near relative of the deceased tenant? I really cannot see why this has been included. This might make a black market in tenancies. A tenant, for instance, might sell to someone for a large sum of money; if he agreed to put him in his will to succeed him in the tenancy. Perhaps some woman might marry the tenant in his dotage and give him £10,000 or £20,000 in order to get the tenancy. It opens up all sorts of possibilities.
§ Lord MELCHETT
My Lords, that is an interesting possibility, but I wonder whether the noble Viscount would agree that even if this woman did marry the tenant in his dotage she still has to be approved by the Agricultural Lands Tribunal as a suitable person to farm the land, so she has a lot of work to do before they get married.
§ Viscount MASSEREENE and FERRARD
My Lords, I quite agree, but she could then promptly marry somebody who was very experienced in farming and get the tenancy. But I will not pursue that. I can only say that I am worried by Part II. I think that it will dry up capital for the land. We have heard that landlords provide two-thirds of the capital, and if they are going to lose their control over their land I would find it difficult to invest in the land on that basis if I had a lot of tenants. I do not have many. I suppose it is the same old story; everything is going to Whitehall. But in the future the tenant will rue the day when he is the tenant of the State. When he is the tenant of Whitehall, or rather computers in Whitehall, he will long for the old days. I cannot support Part II of this Bill.
There is one amendment I should like to make. If we must have succession of tenancies in England and Wales it ought to be limited to one succession, and it also ought to be limited to the tenant's family, that is to his children or his wife. I repeat: I do not like Part II at all, as I am quite sure that it will harm food production, and food production for this country is vital.
§ 5.12 p.m.
The Earl of LYTTON
My Lords, earlier in this hot afternoon I wondered whether I was awake or asleep. I thought I was dreaming that the Party of Socialism was warmly defending the hereditary principle and it was being opposed by Peer after Peer on the Conservative Benches, but then 1 realised I was not asleep after all. I myself have been a landlord, a tenant, an occupier. I am at present a tenant; my landlord is 21. I acknowledge the great value of the landlord/tenant partnership in history up to the present time. I have the strongest suspicions that it is being opposed by public opinion and Governments of every complexion throughout the Western world. I agree so much with what the noble Lord, Lord Nugent of Guildford, said; that is, that it does not matter what kind of landlord you are, all legislation discriminates in favour of the tenant and one had perhaps better face the problem.
I am afraid that I do not agree that this little measure, however unsuitable—I do 57 not particularly care for it; and I am referring to Part II, family succession—has tipped the balance towards the downfall of this historic landlord/tenant system. That surely has occurred already. If not, why did I have to pay 80 per cent. death duties? Why did I have to dispose of all my property in that way? Why was it that it should happen under a Conservative Government if they are the defenders of landowners?—because it was under a Conservative Government. Not one of the people who have been attacking the Socialists for acting according to their principles has explained why they do not act according to theirs. That is a factor which puzzles me. Not a single word has been said about the fact that large estates were subject to penal death duties long before the capital transfer tax, and that the system of landlord/tenant was under threat long before we heard of this extra security for tenants.
While we are on security, I should like to say that I was endeavouring to operate, or take a share in operating, the 1948 Agricultural Holdings Act, by which the Labour Party conferred security upon tenants. During the course of the cases that we heard, it was not only the had landlord who sometimes came out in a bad light; it was sometimes the historic, big landowner who was unfair to a tenant. I do not think that we have heard a very fair balance of arguments, because from the Socialist Benches there was only the noble Lord, Lord Collison, who spoke well but so moderately. He could have said something so much more damaging about the failure of that side to live up to their principles. I think that the time has come when we should face the progressive and peaceful change of the landlord/ tenant system into a system of owner-occupiers. That will not satisfy true Socialists since, as Bernard Shaw said in his contribution to the Encyclopaedia Britannica 30 years or so ago, " Socialists desire the abolition of all private property". But private property is not sufficiently defended by those who believe in it, and that is my complaint.
The partners now are two sets of very substantial capitalists—the tenant is a man worth £30,000 or more. If you arc going to establish, as I did, owner-occupiers who were formerly tenants, you have to protect them. The ones established were very happy for 20 years.
58 At first I think they were sorry that I went, because I spent a lot more money than I could afford —and consequentially more than they could. But having got over this period of joy with my presence as landlord, there is not one of them who, until lately, would have gone back. Now they realise what has happened with the increase in the value of their lands. There was a widow of a man I had established on his farm, and there was a moment when the value of this land of 200 acres went up to about £1,000 an acre, and she was worth £200,000. She was filled with horror. She consulted her solicitor and wrote to me and said, " What has happened?". Nothing is being done to secure the generation of owner-occupiers.
I do not defend the continuation of the landlord/tenant system, if it has seen its time. There are a great many merits in owner-occupation. There is DIY when anything goes wrong, instead of summoning the landlord. There are a great many advantages, but they must be protected. We are, as many Peers have said, producing food, and we want to produce it in the best way. Look at the study of production of food, especially animal products, among the State farms in Eastern Europe, and then look at the smallholdings which many people hold and the enormous proportion of the food that they produce from those holdings. Do not abandon private owner-occupation, but it must not be subjected to the same penal taxation to which the landlords have been subjected.
In other words, I am urging that ownership, on a smaller scale than before, should be the intention of both Parties. I never try to play off one Party against another and if I have said something amiss to the Conservative Party, because nobody else has said it, then it would have been more appropriate if somebody else had. Consolidate the owner-occupier hut, when he or she dies or passes it on, do not ruin the successor by penal taxation, as I have been ruined. I do not mind my ruin—I am not complaining about that—but do not do it to owner-occupiers in future. Protect them.
§ Lord BOOTHBY
May I remind my noble friend, my Lords, that throughout his life Bernard Shaw continued to denounce what he described, and described 59 to me more than once, as the confiscatory taxation to which he was subject? He was very angry about it.
§ 5.21 p.m.
§ Lord STANLEY of ALDERLEY
My Lords, I am sure that it is appropriate that your Lordships should be discussing this Bill in Rogation Week. I hope and trust that, although we may disagree about odd bits and pieces of it, we shall in the end add to farming's welfare not only materially but socially. What is certain is that if we ignore the social side we do so at our peril and in the end we shall not only drop productivity but also destroy one of the last remaining strongholds of individual freedom and family life. It is with this in mind that I approach the part of the Bill which deals with the landlord-tenant relationship, and despite the admonition from my noble kinsman, Lord Henley, I will declare my interest—indeed, it is why I am speaking to your Lordships—in that I have been a tenant of an Oxford college for 22 years and, rather bogusly, of my wife for four. It is not for me to say which of my landlords finds me the most awkward. Suffice it to say that I have not been given notice to quit, despite the fact that I got there by the old-fashioned method of patrimony, matrimony and parsimony, which I suggest is as good a way as any, provided of course one gets the balance right.
I got the impression, maybe wrongly, when reading the discussions that took place in another place, that when there was a disagreement between landlord and tenant, as mentioned in Clauses II and 12, it was always the tenant's fault. I hope, indeed, I know, that your Lordships will throughout the debates on the Bill accept that the fault nearly always lies 50 per cent. with the landlord and 50 per cent. with the tenant. I am more than prepared to accept that on the occasions when I have diagreed with my landlord the fault usually has been 50 per cent. mine.
I come to the vexed question of tenant's relatives being able to apply to the Agricultural Land Tribunal under certain conditions for the right to succeed to a tenancy, usually, but wrongly, called the hereditary tenancy clause. I feel as though I am on port tack and that all of my noble friends are on starboard, so I 60 will deal with the matter quickly before I find myself in trouble. I have to admit to being saddened, indeed irritated, when I heard of the inclusion of this clause in a Bill whose only naughtiness appeared to be the sex life of the male hop. However, it has brought to the fore the greatest problem facing farming today; namely, who is to own the land, and I do not accept for a moment that it does not matter who owns it provided it is well farmed. I may be naive, but I am not as naive as that. Taking that line of thought to its logical conclusion, it will be Big Brother State, and I would prefer the most wicked imaginable Victorian landlord to that.
I was also saddened that the cause of this wrongly called hereditary tenancy clause was caused by one or two isolated cases of mistaken zeal, if I can call it such, by a few landlords. It is particularly sad for me that at least one originated in Wales; so often the English behave with too little compassion and thought in Wales, and I would certainly not exonerate myself or my ancestors from such a charge. As noble Lords have said, isolated cases make bad law, but in this case I believe it is the tip of an iceberg, for more and more landlords, unless something is done, will want to get rid of their tenants in order to take land in hand because of the penal and, if I may say so, idiotic taxation levied against the landlord. In passing, may I ask the noble Lord, Lord Melchett, when the report of the Inter-departmental Committee on the effects of taxation on farm land is to be published? Maybe it has been published and I was too excited by the potato crisis and missed it, but I do not think it has. To revert to my theme, I find it unattractive, though understandable, on the part of the landlord who finds himself attacked by taxation, to inflict hardship on his tenant or his tenant's heirs, and this is what 1 believe the clause is trying to prevent.
I am particularly worried in this context by the recent move by institutions and City companies who are now taking land in hand rather than letting it. Perhaps Lord Melchett will be able to tell me when he replies whether, under Section 25(1) of the 1948 Act, these organisations will be able to argue with 61 success before the Agricultural Land Tribunal that they should refuse to grant a further tenancy to a suitable applicant under the Bill in order further to enlarge their farming empire, even if that particular farm is in itself viable. Am I right in assuming that if the incoming tenant is considered suitable by the Agricultural Land Tribunal and the farm is viable, there will be no case for the large farming company to argue that it would aid their estate management to get possession? Presumably such a company could never argue a hardship case?
My Lords, it is for these reasons that, reluctantly, I support the clause granting the right of certain relatives to apply to the Agricultural Land Tribunal for a tenancy. I fully accept and agree with my noble friend Lady Elliot of Harwood that the correct way is to alter the taxation laws to make the landlord's tax position viable, but that is like asking the Government for a satisfactory guaranteed price for beef. I am sure that 99 per cent. of your Lordships and the country would agree that what we are aiming for is a balanced mix of land ownership between owner-occupier—and I agree entirely with the noble Earl, Lord Lytton—landlord and tenant, and maybe a very little bit of institutional and company farming. It is on the question of how we get it that we may differ, but in the end and with some good 'Hill I am convinced that we will achieve it, despite the odd difference that may come between us.
§ 5.30 p.m.
§ Lord MONK BRETTON
My Lords, I shall not speak for long because f am sure that everyone is anxious to hear what the Government have to say about what has been said and, indeed, there have been many speakers from this side of the House. However, I am afraid that I must say that I shall have to bore your Lordships to the extent that I wish to talk about Part II of the Bill. I must also mention that I have an interest, in that I am primarily an owner-occupier, but my family—though not I, directly—has an interest in that land. I believe that what has been said about the landlord and tenant system and its usefulness will probably suffice and I would heartily endorse everything that has been said on that head. I should like to go on to 62 the tangle which the present proposals leave us to consider.
It has been made fairly clear—and I, too, agree—that it will be impossible to expect the private owner to do much, if anything at all, in the way of letting to an outsider. The next thing that worries me is that this will have an increasing effect in widening the gap between the value of let land and vacant possession land. There is significance in this and I know it only too well as an owner-occupier. We heard what the noble Earl, Lord Lytton, said, but I consider that the owner-occupier is already in very considerable trouble. He looks to his future with great anxiety, not only from the point of view of taxation but also from the point of view of inflation. He is looking back at the landlord and tenant system and saying, " I wonder how I can make use of this again, because I think I may probably have to."
The difficulty, the moment there is this wide variation between the two prices of land, is that if one wishes to carry out a sale and lease back transaction, the two prices mean that it is done at a very bad price and a large capital loss. The owner gives a large capital profit away to somebody else. That does not seem to me to leave us with that option very readily open. It may mean instead that the owner-occupier is forced into making his farm smaller, so we shall have fragmentation.
Another matter which is of concern is whether the institutional owner—the insurance company, for instance—will necessarily again let land to an outsider. feel that such owners will have to think hard in the interests of their policyholders. They will have to consider the present cash value and the consequences of reletting. With the calculation discounted at 15 per cent., the answer must surely be that the " quick buck " is the best thing for the policyholders. I believe that we shall see an increasing trend towards devices such as share farming and partnership, which I consider to be greatly inferior to the landlord and tenant system. I am also interested to hear about the possibility of premiums flying around for the disposal of leases. I wonder whether or not that is possible. I have always had the feeling that it would take money out of agriculture altogether, and should therefore be avoided.
63 Of course we are also confronted with the plea from the young farmers' clubs which has been well emphasised.
I should like briefly to consider why we got into this position and why these proposals have been introduced into the Bill. I do not believe that it is only taxation, mainly capital taxation, that has brought this about. I believe that it is a combination of that and the effects of the Agriculture Act 1948 on taxation. Much has been said about taxation already and there is hardly any need to comment further upon it. My feelings are as strong as those of many on this side of the House. The problem that the 1948 Act leaves with us is that, instead of deciding upon providing security of tenure for a tenant's working life, it was decided to make it for his life. That immediately meant that it was very much better for everybody if a decision as to what was to happen next as regards a tenancy of a farm was made just before the time when the tenant was getting too old to go on managing himself. It is at that time that the matter of succession—is there a son, how old is he, and so on?—must be decided so that everybody knows where he is. There have been unfortunate cases in which nothing has been done, or where there has been disagreement. Then we get the nonagenarian tenant with the son aged 40 running the farm in practice, and these are the cases where there is hardship. I feel that, whether it be by the long road of one hereditary generation or in other ways, we should get back to the situation where a tenancy ends at the time when a man retires. The present system has certainly caused some trouble in this respect. It is a pity it did so, but I believe that that was an inevitable part of the original decision.
I feel it worth mentioning that I believe no other nation made that particular decision. Some European countries—Holland and France in particular—give very considerable security to tenants. I have no doubt at all that they have always cast envious eyes on our system. The French rules are that if one lets a farm to a tenant one lets it for nine years. The tenant has a right to a further six years but otherwise the tenancy goes on in successive periods of nine years. If the landlord does not renew the lease, there is, if the owner sells, a right of first refusal for the tenant to buy the farm. If the 64 owner does not offer it for sale, it must be seen that he is genuinely taking the farm in order to farm it himself. There is also a provision that if a tenant is within five years of retiring he should be allowed to continue in the farm until he reaches retirement.
In France, 45 per cent. of land is rented and 52 per cent. is owner-occupied. It will therefore be seen that this is a rather significant affair for the French. They adopted a more moderate approach. My one question is, did we go to a degree of overkill in 1948? I feel that it is possible to think so and I believe that a considerable body of professional opinion in this country holds that view and has done so for a long time. I particularly mention the French because I believe that they have a habit of getting their social engineering right—to use a modern term. I believe that the old-fashioned landlord/ tenant system here was an excellent piece of social engineering. The French have managed to ally their social and economic objectives in a way that has got their country and their industry forward. Perhaps we are not very good at that these days. But in agriculture it is very necessary to keep an eye on what the French are doing. They may have had many problems about the structure of their agriculture, but they are making very considerable progress, while I fear that we may be too complacent and may allow ourselves to slip back. That is why today this particular issue is of very great importance.
We must be careful to ensure that our approach to this whole matter is constructive. There are many possibilities which I am sure will occur to the owners of land to try to keep the landlord-tenant system in existence in some way and to retain, so far as possible, the personal element which has always been an important factor in it—but these proposals will not give them the chance. I shall be interested to hear whether there is any more to report about the Agricultural Mortgage Corporation equity stake plan.
Finally, I feel that if this legislation goes through it will be difficult to unscramble. I do not believe that it should go too far. It should be limited so far as possible, and I think that for the provisions to cover one generation is enough. I think, too, that there are very good 65 reasons for adopting extreme caution in this matter. We should keep a careful watch to try to ensure that we shall not end up as a race of owner-occupier farmers who are condemned to conduct smaller and smaller enterprises. I believe that something better than this is needed.
§ 5.42 p.m.
§ The Earl of ONSLOW
My Lords, obviously I must declare an interest as a farmer, but I am no tenant and I am no landlord. First, I wish to make one plea to the noble Lord, Lord Melchett, and his colleagues in another place, that just because the advice comes from this House (and I hope that it will be wise advice) they will not automatically think that this has come from hereditary landlords who have come down from the countryside in their masses, speaking only in their own interest. If so, those hereditary landlords would be the descendants of the Howards and the Mowbrays who are, I fear, what the noble Lord, Lord Melchett, is becoming: in other words, he is turning the tenants of the Crown into occupiers of freehold land, which is, after all, what happened under the weaker Plantagenet Kings.
It has already been said, but must be re-emphasised, that it is the fiscal measures which have upset the balance between the landlord and tenant system. It must be remembered that before the war any owner of land was desperate to let any land under any circumstances at all, because he could not make a profit out of it, farming it himself. That was one of the by-products of the slump in agriculture between the wars. Now we have the reverse. Fiscal disadvantages of owning land have made it almost imperative for any land owner to want to take that land back into his own hands when it becomes vacant. Had the dry up of the tenanted land not occurred, this measure, to rectify what, possibly, are certain injustices, would not be necessary, because there would be the supply of tenanted land. Even though the landlord and tenant system has worked it must not be sacrosanct. As several noble Lords have said, food production is most important, and the best and easiest way to achieve this is by having a vigorous farming community.
66 My criticism is not so much of the hereditary system of tenancies—after all, I am an hereditary Peer, and so am an hereditary tenant in your Lordships' House, if I might put it that way. My main criticism is that there is no element of a man retiring at, say, 65, and his son then taking over from him. That, in my humble opinion, would be a much more sensible measure than a man—
§ Lord MELCHETT
My Lords, I am sorry to interrupt the noble Earl, but I am not clear whether he is talking about the scheme under the Bill whereby a person can retire and arrangements can be made for the succession of the tenancy to take place at that stage, or about the present situation under which, as the noble Lord seated behind the noble Earl pointed out, that is not possible.
§ The Earl of ONSLOW
My Lords, I know that it is not possible at present, and this is one of the faults of the present system. But does the Bill make it a right in the same way as when a tenant dies? That would be quite a good thing. What would possibly be even better than that would be to have an element whereby land could be let for a fixed term. Let us suppose that a young man enters farming at aged 35, having done managerial work, and takes a fixed-term tenancy of 30 years, which would mean that he would be 65 when he retires. In the rent payable that man might pay what was, in effect, a life insurance premium to ensure that upon retirement he receives a lump sum or pension: alternatively, if he died during the 30 years' term his widow would have something on which to live. That would seem to me to reintroduce an element of protection, and it would increase the number of young people coming into farming. I have seen a farm not a million miles from me which was farmed by a man who was 76 or 80 when he died. That man had been an extremely good farmer when he was young, but the farm had gone downhill and declined considerably. Nobody benefits from that type of situation, and I believe that the retirement element must be introduced into tenancy arrangements.
A point not yet raised in the debate is that the insurance and pensions schemes which have bought land will now find that the value of industrial workers' pensions 67 will drop due to the decrease in the capital value of tenanted land. What I hope will happen, although I suppose it is a forlorn hope, is that there will be a complete, unbiased inquiry into the landlord and tenant system throughout this country, and that it is not done merely in this haphazard way, bowing to the whims of a reasonably obscure Back-Bencher in another place.
§ 5.49 p.m.
§ Lord SANDYS
My Lords, I have listened to all the previous 15 speeches in this afternoon's debate and what is quite evident from your Lordships' examination of the Bill is the considerable amount of thought on the polemics of a particular part, and broadly the support for Part I of the Bill. My first duty is to thank the noble Lord, Lord Melchett, for taking much trouble to ensure the circulation of notes on clauses prior to our consideration of the Bill, and for informing us, as he did in the course of his speech, that we are going to have further notes at a later stage.
It is very important indeed to note that speeches made from this side of the House have preponderated—only 2 out of 15 have come from Benches opposite; the vast majority of the speeches have come from this side of the House—and that almost without exception they have taken a high degree of objectivity, notably, I think, the speech of my noble friend Lady Elliot, who made a very healing speech, speaking from very great experience in this matter. She hoped that our discussions, although necessarily concerned with Part II of the Bill, would not be over-vituperative, and I hope that it is in that spirit that the noble Lord, Lord Melchett, will accept some of the remarks I shall make to wind up from this side of the House.
I believe that we should welcome the clauses in Part I of the Bill which concern immediate practical matters. We are indeed glad that the measures for supporting proficiency tests have been included. We are also glad that the arrangements for metrication have been included in this measure. In passing, I should like to say that the agricultural industry have very strongly emphasised the need for double figures: in other words, 68 for ensuring that both the metric and imperial measure are included for as long as possible. It is a matter of great importance that it should not lapse after a few years, because many people find it extremely difficult. Having been used to a lifetime of dealing with imperial measure, they become muddled and confused, as I am sure each one of us does, in converting to metric measure, to the detriment of both their business and the business of the country as a whole. So I hope we shall have " double dishing.
When we come to the special matters relating to meat marketing, I think my noble friend Lord Balerno referred to this in particular detail, and I hope the Government will take note of what he said. i should like to address myself especially to the way in which we have received this Bill. It is only too apparent from all the speeches made that this Bill, in Part II, has been in response to one single Member of Parliament. In this respect I think we ought to examine a very important document which I constantly refer to because I believe it is in the interests of both the preparation of legislation and the whole question of legislating in your Lordships' House that we should have regard to it with ever increasing interest. It is the Renton Report (Cmnd. 6053), and I would refer to what they say in Chapter 6 about the Agriculture (Miscellaneous Provisions) Bill, and the very special criticism they apply to it.
It occurs in paragraph 6.14 on page 31; and their criticism, if 1 may say so, is even-handed to both Parties who shared Government over the last 15 years. Both the Fair Trading Act 1973 and the Agriculture (Miscellaneous Provisions) Act 1968 are criticised in the same way, simply because they illustrate the defects of arranging in Statute Law a number of different matters of highly varied subject and context. My Lords, it makes the task of regulating the Statute Book almost impossible, and it is small wonder that, if we turn over another page, we read on page 33 that the Lord Chief Justice, Lord Widgery, told the Committee that he wholeheartedly supports textural amendment, and that when complex legislation was amended texturally it was of enormous help to judges. I hope the Government. and indeed my own Party.
69 will take the Renton Report to heart—I believe it is of real importance—because we ought to consider the views of those who deal with questions concerning the various sections in the courts.
I should like to turn now to the question of Part II. I should particularly like to emphasise what my noble friend Lord Ferrers has said, because I think he struck the very centre of the problem when he said that a new pivot had been reached, a pivot in the affairs of Socialist thinking—the right to inherit the value of somebody else's property. This is the crucial point. It is the nub and it is the nexus of the whole of Part II, and I think we ought to concern ourselves with it because the loss of control, as nearly everybody has said, will extend over possibly 100 years or more. I think it would further be of considerable value if we perhaps considered the position of the Agricultural Land Tribunal, an admirable body of which the noble Lord, Lord Clifford of Chudleigh, as I understand it, is a member in the local context; because the weight of this legislation in Part II will fall upon the Agricultural Land Tribunal, and they are being asked to do something extremely difficult. They are being asked to adjudicate in quite different circumstances from those to which they are used. They come along, with their minds framed towards the classic section, Section 24(2)(d), and by this Bill they are asked to do something entirely new—and I hope our sympathies lie with them in this particular case.
I have been trying to place myself in the position of a member of one of those Land Tribunals when a case comes before them. Perhaps I may take an entirely hypothetical situation which may arise within, perhaps, the next 12 months or so. A landowner ho owns two farms, each of 500 acres, dies. The vultures gather. The death is announced, the solicitor fills in the classic pro forma. and he replies to the question, " Was the deceased in possession of the unencumbered freehold of lands or hereditaments?" Having informed the powers that be about that, two months later a second event takes place, and that is that the tenant of the farm dies. I admit that this is a hypothetical situation, but how often this can occur. The young landlord, the inheritor of the estate, wishes to take the farm in hand, and naturally he wishes to he considered on an entirely equal footing to that of the son of the tenant, who 70 no doubt wishes to place himself in a parallel position.
Listening to the speech of the noble Lord, Lord Melchett, this afternoon, I was encouraged when he said that he believed that, so far as the Government were concerned—I cannot quote his exact words—the son of the landlord and the son of the tenant would be considered on an exactly parallel basis, because this is entirely at variance with what was said in another place. I have been preparing for this Second Reading debate for weeks, and 1 have been plodding through Standing Committee to reach this particular issue. At last I have found it. It was in Standing Committee C on 18th March 1976, and it occurs on page 889. Dr. Gavin Strang, the Minister, said this:
What we cannot accept is that the landlord's son will be treated on an equal basis with the son of the tenant ".I am delighted if, as I understood it from what the noble Lord, Lord Melchett, said this afternoon, there has been a change of heart, and in the course of his remarks perhaps the noble Lord would be kind enough to confirm it if he wishes to do so.
§ Lord MELCHETT
My Lords, I think it would he very helpful to me, at any rate, if not to the rest of your Lordships' House, if the noble Lord was able to say at which point in the proceedings before the Agricultural Land Tribunal the remark of my honourable friend Mr. Strang was addressed, because I have a feeling that it may have been addressed at a different stage in the proceedings than my remark earlier this afternoon.
§ Lord SANDYS
My Lords, I think that perhaps we ought to consider this rather more carefully when we come to a later stage. It is a point of detail. I entirely accept what the noble Lord has said, that it may occur; but it all goes to show that there is very intricate machinery in operation here—and this is really what this Bill in Part II is all about.
I very much agree with the noble Earl, Lord Caithness, when he said that the Government are using a sledgehammer to crack a very small nut. It is a question, as is the whole of that quotation from pages 889 and 890 of the proceedings in Standing Committee, of the matter of hardship referred to by my noble friend 71 Lord Ferrers. It is a question of whether hardship can be proved by the landlord or the tenant's successors and the balance to be drawn between them. I believe that it is a question of considering our role and responsibilities in this House to deal with some of the consultation which has not taken place already.
I was very worried when I received today a copy of the Young Farmers' Group document in which they said:
There have been inadequate consultations in the industry. We, as young farmers who have a major interest in such proposals, have never been consulted.Of all the groups affected by the particular problems of Part II, I believe that we should listen closely to what the young farmers are saying: because it is a rising generation in the industry with which this country will be most concerned in the coming years. I agree with what was said by my noble friend Lady Elliot, in regard to the 3 per cent. of the population of this country who are concerned with agriculture and the 97 per cent. who are outside the industry. These are highly significant figures: and when one comes to consider the agricultural role of the very small portion of the population in food production, it is so highly significant when it comes to the economy of the country.
I listened with great interest to what my noble friend Lord Monk Bretton said about France because, as we are only too well aware, more than 15 per cent. of the population in France are concerned with agriculture. However hard we try to increase the numbers concerned with agriculture by adjusting them in this country, by including those concerned with the production of agricultural machinery, the allied and distributive trades of wholesale and retail produce, they cannot reach more than about 7 per cent. or 8 per cent., as I understand it. But as every one of us is concerned with eating, I believe it is of enormous consequences to us all.
Finally, my Lords, I should like to return to the question of evidence of hardship. The only evidence, as I understand it—and I have listened carefully to what every noble Lord has said—of hardship has been concerned with the television programme in Abergavenny. This may be an important case. I did not see the 72 particular programme, but I hope the Government will be able to give us further details about it. Nevertheless, if we are legislating about only one or two isolated occurrences, I believe it is a case where your Lordships should draw back from agreeing with another place over many of the proposals made in Part II of the Bill.
§ Lord HYLTON
My Lords, I apologise for speaking without putting my name on the list. I do so to make only one historical point. It used to be the custom in many parts of England to let farmland for a period of two or three or possibly more lives. This was back in the 18th century or longer ago and it was found to be inefficient. We then had annual tenancies at rack rents. That was found to be unsatisfactory. Since 1948, we have had what is, in effect, tenancies for a single life. It is now proposed to go back to two or three lives again. I suggest that this will be found to be putting the clock far too far back that it will give rise to very considerable uncertainties and that it will be generally unhelpful.
§ 6.5 p.m.
§ Lord MELCHETT
My Lords, first may I thank all noble Lords who have taken part in this debate for what has been a unanimous welcome for at least some of the Bill—in fact, I think, for the entire number of clauses in Part I. Indeed, I think I have only been asked one or two questions at most about all those clauses. I take what the noble Lord, Lord Sandys said about dual units. I think that that is the agreed view of all parties. Those who heard my noble friend Lady White on the radio will know that there are different views about the speed at which it is desirable to go with decimalisation; but the Government are convinced with the National Farmers' Union that the use of dual units will remain important for some time in particular areas, for example, in the use of pesticides.
The noble Earl, Lord Ferrers, asked about retaining the Consumer Committee on the Meat and Livestock Commission which Clause 4 deals with. My understanding is that the review undertaken by the various committees following the disquiet expressed, indicated that this particular committee was working very well indeed. It therefore seems, as 73 it was working well, quite unnecessary to change it. Everyone on the committee and on the Commission itself were satisfied with the way it was working. The noble Lord, Lord Stanley of Alderley, asked about the agricultural mortgage corporations and of the possibility of their taking an equity stake in some farmland. I presume that he is referring to the co-ownership scheme which was discussed in another place following the discussions on Clause 2 which does not actually bring up this issue; but the discussions were held when Clause 2 was being discussed. My right honourable friend explained that he was discussing the proposal with the agricultural mortgage corporation and those discussions are continuing.
The noble Lord, Lord Stanley of Alderley, also asked about the inter-Departmental review on capital taxation and agricultural land. My understanding is that this is the type of review not normally published; but there have been proposals made in the Finance Bill currently before another place relating to changes in capital transfer tax in both small businesses and farm lands. ft might be wise to see what happens to those proposals before considering anything else in relation to capital transfer tax.
Inevitably, I have to deal mainly with Part II of the Bill; but before I do so may I answer the point of the noble Lord, Lord Balerno, about fish farming. I am tempted to say that in view of his kind words about Part II and the way that family succession has worked in Scotland, I am happy to give him a clause or more. However, my understanding is that at the moment there are no serious legal constraints on fish farming. The Government recognise that there are certain matters to put right in fisheries legislation. I think that the noble Lord will know that the Ministry of Agriculture and Fisheries discussed this with fish farming representatives some time ago. I understand that the Ministry at the moment are awaiting and willing as soon as possible to receive the considered comments on the report circulated then. In the meantime, the agricultural Departments are discussing in depth, and continuing to discuss, with the fish farmers the best means of fish farming and of promoting it by means of research and development.
74 The Government regard that as a most fruitful approach.
Before turning to Part II, could I make the point to the noble Lord, Lord Sandys, which I should have interrupted him to make. That was the Welsh television programme which, I think, was mentioned in an intervention by my noble friend Lord Davies of Leek. It referred to misuse of notices to do work procedures which are dealt with by Clauses I 1 and 12. It did not refer to harassment which is dealt with under Part II. The noble Lord, Lord Stanley of Alderley, asked another question about Part II which I might take before making any general comments. That was about the position of the institutional landlord. Institutional landlords will not be in any different position from any other landlords. Their tenants and applicants for tenancy will be in no different position from other tenants or applicants for the tenancy. In either case, the tenant or the applicant for the tenancy, will have to make a case before the Agricultural Land Tribunal in the usual way.
Of course the Agricultural Land Tribunal —as has been pointed out, but possibly with not as much emphasis as might have been the case—is an impartial body, with a legally qualified and experienced chairman with representatives of the landowning and farming interests on it. I hope that in all our discussions on Part II of the Bill that first we will be able to avoid casting any doubts on the competence of the tribunal to undertake the task which Part II will place on them and, secondly, not to suggest that the tribunal is not a suitable body in any way to undertake these tasks.
I accept that there are some real difficulties surrounding this scheme. Noble Lords opposite are criticising a hereditary scheme; I, on the other hand, am defending it, but not quite in those terms. I defend the behaviour and practices of existing good landlords. That, and the experience in Scotland, is what the Bill is based upon, not, as some noble Lords have suggested, on a few hard cases. There are some other difficulties. Noble Lords opposite say that good landlords already do what the Bill lays down. I certainly accept that. Yet, as I understand it, those who oppose Part II of the Bill do so because they say 75 landlords should not he forced to let land if they want to sell it or take it in hand. Yet they say that the Bill itself, rather than lack of provisions in the Bill, will dry up tenancies. I find that a difficult argument to follow with any logical approach.
The noble Earl, Lord Ferrers, said the measure was introduced in a hurry; but as the noble Lord, Lord Henley, pointed out, the matter has been talked about for five or six years, if not a great deal longer. It is perfectly true that my right honourable friend did not intend to introduce family succession in this Bill. It started out as a short and relatively non-controversial piece of legislation. On Second Reading in another place, however, there was considerable adverse comment at the absence of any family succession provisions in the Bill. This comment came not only from Government Back-Benchers but from Members of the Party of the noble Lord. Lord Henley, in particular. I confess that I was extremely surprised therefore to hear the noble Lord's remarks this afternoon. I assume that his speech represents a sudden and dramatic change of policy on behalf of the Liberal Party. I suppose that if the Liberal Party is entitled to change its policy within a few days of the Bill leaving another place, then my right honourable friend was entitled to decide to introduce Part II between Second Reading and Committee stage in another place when he was under considerable pressure to do so.
My Lords, I suggest to the noble Lord that my policy—and I emphasised what happened in England—may in some measure differ from what my Welsh friends believe. It is possible that it is pressure from Wales which has caused Part II of the Bill to come about at all.
§ Lord MELCHETT
My Lords, I look forward with warm anticipation to the noble Lord supporting at least all the application of Part II of the Bill to Wales, even if he does not feel able to support its application in England, although I cannot see why English tenants should be treated in a worse way than Welsh tenants in these respects.
A further factor which weighed heavily with my right honourable friend was the 76 publicly expressed views and subsequent pressure from representatives of tenant farmers. The National Farmers' Union, in a circular issued just before the Second Reading debate in another place said that they regretted that the Government had not taken the opportunity of including in the Bill comparable rights to those that already exist in Scotland. The fact that in subsequent discussion both in Parliament and outside there has been a widespread welcome for the family succession scheme shows that there has been up to now a widespread fear among tenant farmers that on the death of the farmers the families would be evicted. This is the justification for the inclusion of the family succession clauses in this Bill. Noble Lords said that this was not in the Queen's Speech; nobody went so far as to say that it was not in the Manifesto. My understanding of some of the criticisms which have been directed at this Government during our period of office is of our insistence on enacting everything in the Manifesto. We have been criticised on occasion for not listening to pressures put on us from other sources. I suggest to noble Lords in all parts of the House that we look at this provision on its merits and do not use arguments about it either not being in the Queen's Speech or the Manifesto. We have had some pressure exerted on us from all parts of the political spectrum, and we have reacted in accordance with that pressure.
My Lords, what the noble Lord has said is very interesting. Will the Government therefore still keep their minds open to be able to accept pressure from other sources of different natures?
§ Lord MELCHETT
My Lords, this Government remains, as always, open to pressure from all sources so long as it is well-directed and well-placed pressure. I confess that I find the criticism that Part II should not have been included in a miscellaneous provisions Bill, with the allegations that my right honourable friend was bowing to Left-Wing pressure, as amounting to no more than people hitting out a little wildly. By all means let us discuss the scheme on its merits. I look forward to looking at the detail of the scheme in Committee; but I hope we shall be able to do so without making wild, unjustified allegations about each other's motives.
77 Incidentally, I confess to some surprise at the view of the noble Earl, Lord Ferrers, that some of his noble friends, as it appeared from subsequent debate—certainly Lord Henley's Party in another place and the National Farmers' Union—are all to he found sitting behind and on the left of my right honourable friend the Minister for Agriculture because, as the noble Earl said, it was pressure from that quarter which led to the introduction of this scheme.
I do not believe that there is evidence to support the view that there will he a drying up of new tenancies as a result of the family succession provisions. There has certainly been virtually no drying up in Scotland since the introduction of their legislation in 1968. A recent CLA survey of 844 cases where the tenancy had ended showed that in only 28 per cent. of the cases did the tenancy end because of the death of the tenant. In 72 per cent. of the cases the question of family succession in the terms of this Bill would not have arisen anyway. I was glad to hear what the noble Baroness, Lady Elliot of Harwood, and what the noble Lord, Lord Balerno said about the family succession scheme in Scotland. The noble Baroness will no doubt be glad to hear therefore that this new scheme has been based to a considerable extent on the Scottish scheme. The main provisions of the two schemes are very similar. Her remarks reinforce my view that it is a fair and well-balanced scheme that we are introducing in this Bill.
However, there are obviously some fundamental misunderstandings of the scheme among those who appear not to support it in your Lordships' House. The noble Viscount, Lord Massereene and Ferrard, spoke of a woman marrying a man in his dotage. As I pointed out, this woman will have to convince the Agricultural Land Tribunal that she will make a good farmer. But before that, she will have to have worked on the farm for five years. All in all, I suggest that it is going to have to be a well timed as well as hardworking marriage.
Let me say this about the scheme as my final words this evening. Given the objectives of the scheme, we have tried to produce a piece of legislation which is straightforward in its application and which is both fair and balanced in its effect. We have tried, in effect, to en- 78 capsulate in our scheme the policy which fair and reasonable landlords adopt on their estates; and the scheme contains important safeguards for the landlord's interest.
What is this policy? It is surely to look after the well-being of their tenants and to look after the well-being of the land. Where a fair and reasonable landlord has a good tenant, knows the family and knows that one of the children or the brother or sister will prove a worthy successor to the tenant, the landlord is content to let that successor have the tenancy when it falls vacant. This is precisely what our scheme provides for, and the fair and reasonable landlord therefore has nothing to fear from it. It is the unfair or the unreasonable landlord who acts without giving thought to the effects which his actions may have on others who will feel the effects of this scheme. But as I said at the beginning of our debate, this scheme is no charter for a bad tenant.
I agree that, on the whole, the landlord-tenant system has worked well. The Bill will merely make statutory the actions that all good landlords take already, as various noble Lords, including the noble Lord, Lord Middleton, and the noble Lord, Lord Nugent of Guildford, said during the debate. Therefore, all the scheme will do is to protect those few tenants who have been harassed or, in the words of the noble Lord, Lord Nugent of Guildford, it will imbue by law into new landlords the values of the old. With that in mind, I commend the Bill to the House.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.