HL Deb 15 October 1981 vol 424 cc489-518

76 After Clause 31, insert the following new clause:

"Duties of agriculture Ministers with respect to areas of special scientific interest.

(1) Where an application for a grant under a scheme made under section 29 of the Agriculture Act 1970 (farm capital grants) is made as respects expenditure incurred or to be incurred for the purpose of activities on land notified or to be incurred for the purpose of activities on land notified under section 28(1) or land to which section 29(3) applies, the appropriate Minister—

  1. (a) shall, so far as may be consistent with the purposes of the scheme and section 29 of the said Act of 1970, so exercise his functions thereunder as to further the conservation of the flora, fauna, or geological or physiographical features by reason of which the land is of special interest; and
  2. (b) where the Nature Conservancy Council have objected to the making of the grant on the ground that the activities in question have destroyed or damaged or will destroy or damage that flora or fauna or those features, shall not make the grant except after considering the objection and, in the case of land in England, after consulting with the Secretary of State.

(2) Where, in consequence of an objection by the Council, an application for a grant as respects expenditure to be incurred is refused on the ground that the activities in question will have such an effect as is mentioned in subsection (1)(b), the Council shall, within three months of their receiving notice of the appropriate Minister's decision, offer to enter into, in the terms of a draft submitted to the applicant, an agreement under section 16 of the 1949 Act or section 15 of the 1968 Act—

  1. (a) imposing restrictions as respects those activities; and
  2. (b) providing for the making by them of payments to the applicant.

(3) In this section" the appropriate Minister" has the same meaning as in section 29 of the said Act of 1970."

Earl Ferrers

My Lords, I beg to move that this House doth agree with the Commons in their Amendment No. 76. This amendment forms part of the Government's response to Clause 39 of the Bill as it left this House—the so-called "Sandford clause" which was named, oddly enough, after my noble friend Lord Sandford. I shall have more to say on the general position on this matter when we come to Amendment No. 101, which is the Government's recasting of Clause 39. At this point I will simply explain that the purpose of this new clause is to extend those areas to which the principles of subsections (3) and (4) of Amendment No. 101 apply, to include all sites of special scientific interest and to name the Nature Conservancy Council as the body with the right of objection, on the grounds stated, to farm capital grant applications which are made under the Agriculture Act 1970 and which may affect such areas.

This is a matter on which the Government have gone significantly beyond the terms of the original Sandford amendment and I am sure your Lordships will welcome this new clause. As I have said, I will defer, if I may, my comments on the substance of the Government's response to my noble friend's former amendment until we debate Amendment No. 101 itself. I beg to move.

Moved, That this House doth agree with the Commons in the said amendment.—(Earl Ferrers.)

The Deputy Speaker (Baroness Wootton of Abinger)

My Lords, there is an amendment to this amendment, which is No. 76A.

6.16 p.m.

The Earl of Onslow moved the following amendment (No. 76A) as an amendment to Amendment No. 76:

76A Subsection (2), line 5, leave out ("shall") and insert ("may").

The noble Earl said: My Lords, I rise to move Amendment No. 76A and also to speak, if I may, to Amendments Nos. 101A and 106A and 106D, which are consequential. Amendment No. 101A is to all intents and purposes the same as Amendment No. 76A.

I should like to start by saying what these amendments do not do. I am sure that some noble Lords will say that these amendments stop farmers developing their land in the interests of conservation. They do not. They stop farmers' automatic entitlement to compensation for loss of grant. Farmers can still lime, slag and reseed moorland in national parks, plough up an SSSI or install an "eyesorish" grain silo, but at their own expense.

My Lords, I think that these are the most important amendments that we are going to discuss today. It has been generally agreed that the voluntary code of conservation is much better than the compulsory code. The snags to both are clear. With the voluntary code it is impossible to stop a determined barbarian of a farmer; with the compulsory code it is impossible to stop the determined and trendy bureaucrat, with nothing to lose, dramatically affecting someone else's livelihood. The unpublished National Parks: a Study of Rural Economics, which was printed in August, takes the revolutionary step of urging that farming practices which damage the landscape should be subject to planning controls. I sincerely hope that we never have to get to that state, and perhaps the Department of the Environment is wise not to publish that report until after the passage of this Bill.

We have come now finally to Clauses 31 and 39 of this Bill. These lay duties on the Minister of Agriculture to take into account conservation issues when allowing farm improvement grants. They go much further than the 1968 Act and there is no doubt that they are, except for one small word, an improvement. As they stand they inhibit the Nature Conservancy Council or the national parks authorities from making objections on conservation grounds to farm capital grant schemes.

I say that because these clauses say that if the Nature Conservancy Council or the national parks authorities object to a scheme on conservation grounds and the objection is sustained, they have to offer a management agreement with the landowner having a choice of one of three forms of financial compensation. Where the restriction is permament, a capital sum; where the restriction is for 20 years, a capital sum or else an annual payment throughout that period or a period to be agreed.

If they offer a grant this must inhibit them from objecting—a perfect example of Morton's fork. Either these agencies have enough money to object when they like, which is going to encourage people to put in for a grant which they may not really intend to use and the national parks authorities, together with the Nature Conservancy Council, will become a "rip-off" merchants' paradise. Or, if they do not have the money, the two or three people who will get the management agreements will be the lucky ones and it will cause jealousy and lack of environmental control by those who do not get the compensation.

There is, however, possibly a third option, and that is for the NCC and the NPAs to behave as if they had all the money in the world, object when they felt they had to and, in effect, blackmail the Government into paying. I have spoken to the chairman of the Nature Conservancy Council, Sir Ralph Verney, along these lines and I know they are taking the view that they will have as much money as they need to object.

It is said that the ADAS tea party approach has been working well for the last 15 months. It has been working but, I suggest to your Lordships, this is because there is as yet no compulsion. But even here there are signs of strain. Mr. Theo Burril, the Peak National Park officer, has written to my noble friend Lord Sandford, setting out certain worries and objections that he has. He is also saying the present system is already under strain after 15 months. In the event of compulsion to pay compensation, a farmer is going to press his ADAS officer very strongly for the reason he has been turned down for grant. If the ADAS officer says, "Oh well, it was the Nature Conservancy Council or the national parks authority not really liking it on conservation grounds", that surely is an objection. The fact that it has not been official will make the ill-feeling even worse, or the farmer will become litigious.

My Lords, let us think for a moment of pension funds. The duties of the trustees of pension funds are to maximise the value of the assets they hold. They have bought a farm, and in it there is a large site of special scientific interest, whose destruction will increase their profit. They hear that they could get a grant for doing nothing to that site, provided the Nature Conservancy Council objected and the objection was sustained by the Minister. Of course they would be legally bound to press for the grant as hard as they could, and provided that the site was sufficiently important the Nature Conservancy Council would have to object and the taxpayer would have to pay.

At the national parks conference the Secretary of State said that the Countryside Commission will fund 75 per cent. of all monies paid for Norfolk Broads management agreements. He did not say that the Treasury would automatically top up the Countryside Commission's budget to pay for these agreements. If it does not, the local authorities will have to raise supplementary rates for the national parks authorities for their objections. We know what Mr. Heseltine's views are on supplementary rates. The Bill itself says the financial effects are minimal. Therefore, I ask my noble friend who will reply: Can the Minister give a categorical statement that all monies for all management agreements will be forthcoming automatically?—for if he cannot the effect of "shall" as opposed to "may" will be catastrophic.

My noble friend Lord Peel owns large estates in the Yorkshire Dales national park. Let us assume for the sake of argument that he feels that he would like to lime, slag and re-seed, for perfectly good agricultural reasons—and the Aberystwyth Research Station has shown how it can be done. My noble friend applies for grant for the turning of open moorland to green grass. The Yorkshire Dales park objects—Mr. Harvey, the officer, has told me that he certainly would not like his Lordship to do that. This would be conservationally disastrous. If the Act were to say "shall" my noble friend Lord Peel would collect anything from £5 to £20 per acre per year for not ruining his own grouse moors, something which he probably has no intention of doing in the first place.

When Lord Kilmuir moved the Second Reading of the Town and Country Planning Act 1954 in your Lordships' House, abolishing the Central Land Board, he said (col. 437): Some of these owners had no intention of developing, but were paid out of this fund ".

The principle that applied then was thought bad by a Conservative Government. What has changed? I believe that Brooks's Club put in for planning consent to pull themselves down, knowing they were a listed building; they knew that they were going to get paid compensation; they collected £90,000, and I believe invested it in wine. White's tried, but missed the boat. So having repealed one previous example of abuse, why are we enacting the potential for yet more abuse?

Is it really conceivable that a Conservstive Government is going to enact a piece of legislation which would enable my noble friend Lord Peel to collect between £75,000 and £300,000 a year, which presumably would be taxed as earned income, when there are 3 million unemployed? I believe my noble friend the Duke of Devonshire also has large estates in the Peak District National Park. Of course, here one is taking a slightly extreme view, but there is no reason to suppose that this is not perfectly possible under the Bill. I make no bones in saying that I would love to have a large site of special scientific interest on my property. I would have no hesitation in applying for a grant and hoping that the taxpayer would pay, not only to line my own pocket but also to show the fallacy and the danger there is in this Bill.

Even the Royal Society for the Protection of Birds may feel obliged to put in for drainage grant in the Ouse Marshes in order to realise the economic potential of their property there. This would, of course, be anti-conservationist, but when the NCC object, as they would, the society would get a large subscription increase. The financial implications here are horrendous and worry many people; these include the Countryside Commission. The objection was hidden in a long letter to The Times by their chairman Derek Barber. I have spoken to every single senior officer of every single national park and they all think exactly as I do. The Royal Society for the Protection of Birds, the Royal Society for Nature Conservation, the Council for National Parks, the Association of County Councils, who incidentally have not even been consulted on this, are all of the same opinion. It is as if Manchester United and Arsenal and their fan clubs were all of one voice.

My Lords, let us put ourselves in the position of someone who, at the request of the Nature Conservancy Council or of the national parks authority has already carried out his public duty, as admittedly large numbers of farmers have done, by conserving his site of special scientific interest. I believe the noble Lord, Lord Melchett, has 90 acres of sites of special scientific interest. They have all done this without compensation. What are their feelings going to be if they, having not applied for a farm improvement grant, see their next door neighbour get a whacking great sum for not doing exactly the same as what they are not doing for free? Of course it is going to encourage the civilised to apply for grants, and if ADAS say there are perfectly good sound farming reasons to plough up this land, or to build a grain silo on it or to drain it or any equally valid reason, they will then go ahead and do it, or receive compensation for not getting a grant to do it.

If the objection is sustained on conservation grounds by the Minister of Agriculture because of an environmental objection by someone other than the NCC or the national parks authority—for instance, the Council for the Preservation of Rural England or the Royal Society for the Protection of Birds or any of the other environment groups—then there will be even more ground for discontent. Surely the right approach is that compensation should be paid where it can be paid in cases of hardship or necessity. The standard will probably have to vary according to the cash limits imposed by the Treasury, and we all know how generous they are being at the moment!

But compensation should not be as of right for loss of taxpayers' grant. After all, there is already some element of planning of agricultural land. If there is a tree preservation order put on an old oak forest there is no compensation, no management agreement, and the order is an absolute bar to cutting that down. Here we are saying that you should not get the grant automatically. One cannot clear an old and good tithe barn on one's property. I have at home a very beautiful beamed 18th century tithe barn; that has got a preservation order on it, and I cannot pull it down and put up a modern asbestos-clad building. So there is some element of planning and there is already some element of not allowing farmers to do absolutely everything they want to do with their land in the law as it stands. My Lords, Halvergate is going to cost £65,000 a year to safeguard 20 per cent. of that area for 20 years. To apply the same safeguards to the rest of the Broads would cost £1 million. The mind boggles at the global sums that would be required to safeguard, through management agreements, the whole of the countryside.

If the Minister is prepared to say that the objections will be so rare, and the times that they have to be sustained by the Minister of Agriculture so rare, then it does not matter if the clause is changed from "shall" to "may", because they will always be able to offer compensation within their budget. In that case again, the change from "shall" to "may" will do no harm. If the objections are going to be so great that they have to pick and choose the numbers which they press, then I suggest that unfairness, jealousy and skulduggery will arise and, my Lords, my noble friend Lord Peel does not need, even though he may like, £300,000 a year of the taxpayers' money. I beg to move.

Moved, That, as an amendment to Amendment No. 76, Amendment No. 76A be agreed to.—(The Earl of Onslow.)

6.31 p.m.

Lord Hunt

My Lords, in rising to second Amendment No. 76A, I, too, propose to speak mainly to Amendment No. 101A. As your Lordships will have gathered these two amendments are in effect identical, differing only in that they refer respectively to SSSIs in this case and the national parks in the other.

Like the noble Earl, Lord Onslow, I have received personal expressions of concern from a number of national park officers. They have expressed concern both about the principle and about the practical implications of Commons Amendments Nos. 76 and 101. I would guess that other noble Lords, too, have received strongly worded objections from such bodies as the Association of County Councils, the Royal Town Planning Institute and others. The noble Earl mentioned this, but your Lordships may well have seen a press statement following a press conference held last Monday, 12th October, in the name of the CPRE, the RSPB, the Royal Society for Nature Conservation and the Council for National Parks, of which I have the great privilege to be president. The Countryside Commission in a written statement supports both of these amendments. I do not think I am exaggerating when I say that feelings of concern among all who care about the environment are running pretty high on this matter.

As regards the principle, there is a strong feeling that it is wrong that mandatory compensatory payments should be made from public funds to prevent agricultural schemes being undertaken which are deemed at governmental level not to be in the wider public interest. It is wrong to depart from the present principle underpinning the present practice which is endorsed and improved—and I freely admit that—by Clauses 31 and 39 of the Bill, by which there is eligibility to be considered for compensation, but no entitlement. There is no obligation to make such payments in management agreements, but there is local discretion to do so or not to do so in circumstances which can only be assessed and agreed locally.

Local discretion is the very essence of this matter and yet under the terms of the Commons amendments the Nature Conservancy Council and the national park authorities or the planning authorities will have no discretion: they will have to implement ministerial guidelines—about which, incidentally, they have not yet been consulted—and they will have to pay up.

The noble Earl, Lord Onslow, said that the system is working well. However, he referred to certain strains in the system and I hope that he will not mind if I suggest that those strains will sooner or later become intolerable if, as we now understand from research undertaken by the University of Birmingham, the annual losses of moorland to agricultural development in national parks may be running at something over 12,000 acres a year. Sooner or later reserve powers—to be used, of course, only as a last resort—will have to be added to this legislation to check losses of this order. But the system is working well—and I freely admit this from all that I have heard—in the sense to which the Government rightly attach so much importance as indeed do all sensible environmentalists, in maintaining good relations between the negotiating parties—that is, of course, between, for example, on the one hand the National Farmers' Union and the Country Landowners' Association and on the other hand the national park authorities, the Nature Conservancy Council and the amenity bodies.

So much for the principle. When it comes to the practical application of mandatory compensation, no one from whom I have heard or to whom I have spoken considers it realistic that enviromental interests —that is, landscape, public amenity and nature conservancy—can be defended at the price which will be necessary; that is, the cost of compulsory compensation for all farmers making schemes which are adjudged to be damaging to the enviroinent in all the national parks and, of course, all those on whose land SSSIs are located, on a virtually indefinite timescale following the precedent of the Exmoor guidelines. I shall await with great interest the Minister's answers to the questions which have been put to him by the noble Earl.

The noble Earl, Lord Onslow, said—and I hope that I have understood him aright—that the financial effects of the Bill are minimal according to the Government. I refer your Lordships to the Explanatory and Financial Memorandum at page v, where it reads: The provisions relating to the Countryside Commission national parks and management agreements require no additional expenditure". I must ask the Minister whether that statement is still valid. It can only mean that the Government undertake to foot the whole bill. I need hardly ask whether the Government presume to commit successor governments to do so in respect of agreements containing annual payments over a period of 30 years: it is quite clear that they have no such authority.

The noble Earl has pointed to the evident fact that the national park authorities could not foot the bill without massive Government subvention. All 10 of the NPAs together have an aggregate budget of little more than half that of the Nature Conservancy Council. The result, put in words different from those of the noble Earl, will be fewer objections from the national park authorities to proposals for development despite the environmental damage they will cause; accelerated losses to the landscape; bitterness and frustration among all those who are responsible for the protection of our countryside and all those countless others who value our landscape and its leisure amenities; and worsening relationships between all concerned.

There is the additional factor of forestry, which is now to be subject to the notification and negotiation procedures in Clause 40(2)(b). This widens the compensation potential quite enormously. I should like to quote from a letter which I have received from the national park officer of the Northumberland National Park, who gives as an example his experience of negotiations during the past 18 months. He writes as follows: Over the past 18 months we have objected formally, or indicated that we would do so, to sonic 3,000 acres of proposed new planning. If pushed to management agreements, and if compensation was in the order of the Exmoor figures"— and he says that he suspects that they could be— we should be committed to annual payments of getting on for 10 per cent. of our revenue on these schemes alone". Everybody knows all the other tasks that are laid upon the national park committees and the planning authorities.

The Secretary of State, who addressed the national park authorities at their annual conference in Norfolk last month—and I was glad to be there—said that he was very proud of the Bill striking, as he claimed it did, a fair balance between all interests concerned. For lack of reserve powers I believe that the balance had not been redressed before the insertion of these Commons amendments. The imbalance is now far more serious. I am the first to agree that this Bill contains some helpful and welcome features, but on the score of these two Commons amendments I would say that there are no grounds for satisfaction or self-satisfaction whatever.

It can be argued that this Bill, as now amended by the Commons, should be allowed to work, should be tried out and allowed to prove itself, and that further amendments can be made later, if need be, in the light of experience. I predict that the experience of that course of action could be irreversible damage to the countryside and to relationships alike. We cannot afford such a policy. Our Amendments Nos. 76A and 101A are essential in both these respects, and I hope that your Lordships will support them.

Lord Digby

My Lords, the noble Earl, Lord Onslow, has I think in effect said that one noble Lord is profligate and all arbitrators are incompetent, because if indeed the noble Earl, Lord Peel, could have got £300,000 a year extra income by developing his moors he is pretty incompetent not to have done so in the past. I am, of course, talking about extra income. I believe that the noble Earl has misunderstood the basis of compensation for this. The first point is that an owner of land will have his potential income diminished by not being allowed to carry out a normal agricultural operation on his land.

Lord Melchett

No, my Lords.

The Earl of Onslow

My Lords, perhaps I could interrupt my noble friend for a moment. This is exactly what he is not going to be able to do. He is not going to be allowed a grant. The amendment does not allow someone to be stopped from farming. We must keep that absolutely in the forefront of our minds. We are not stopping anyone from doing anything.

Several noble Lords

Order, order!

Lord Digby

My Lords, the fact remains that if this goes through, surely the noble Earl, Lord Peel, will not be able to improve his moorland. The basis of compensation here must be—and, as I understand it, is—the difference between the income that that land is producing at the moment, the income that it would produce if developed, less all the costs that that development would involve. First, there are reclamation costs. I have been through this, although I admit not in this country but in Ireland. The process of reclamation there turned out to be five times as expensive as the value of the land would be when reclaimed. Therefore, there was no financial advantage. So from the extra income that he would receive reclamation costs, say, over 10 years have first to be deducted by the arbitrator.

Lord Melchett

My Lords, I am sorry to intervene again in the noble Lord's speech. I am sure that he does not wish to mislead the House, but I am not sure that he is talking about the same amendment on the Marshalled List. The amendment that we are discussing has nothing to do with the level of compensation; the amendment that we are discussing affects whether compensation is paid when a grant is denied, and, as I understand it, that is all.

Lord Digby

My Lords, yes, but the argument has been produced that huge amounts of compensation will be paid by the national parks. I do not believe that that is true at all. The actual compensation will be quite small. Not only are there all the initial costs, but the costs of keeping it and the costs—

Lord Melchett

My Lords, no, that is not true.

Lord Digby

My Lords, the noble Lord says that that is not true. Doubtless the noble Earl the Minister will correct me if I am wrong. After all, all the arguments used by the noble Earl, Lord Onslow, were on the point of compensation, and there is also the existing use value that must be taken off this. An arbitrator will purely assess the amount that the owner is losing. If he is not allowed something in the public interest, I think that it has been accepted so far in this Bill that he should be compensated. I shall leave the matter there at the moment and doubtless I shall be corrected if I am wrong. If I am correct, I am sure that my other noble friends will take up my argument.

Earl Peel

My Lords, having heard this very exciting news about my windfall profits of between £75,000 and £300,000 a year about which the noble Earl, Lord Onslow, has spoken, and despite my excitement at this, I must assure your Lordships that in fact I shall preserve my grouse moors, which goes to show that conservation and shooting go hand in glove.

As the noble Lord, Lord Hunt, has said, one of the main objectives of this Bill is to strike a sensible balance between agricultural activities and all aspects of nature conservation. I believe that until this point, this objective has largely been achieved. The voluntary codes have been maintained in relation to SSSIs and moorland conservation orders, and thus the Government have declared their faith in the agricultural industry to bear the responsibility placed on it. How we all hope that this will be justified!

But I believe that the introduction of Clauses 31 and 39 could be the equivalent of dropping a large brick on the very delicate scales of balance between the two camps, the agricultural camp and the conservation camp. The incentive for farmers to improve output through grants is obviously right and proper. I welcome compensation for the genuine loss of capital value or established revenue caused by the imposition of an order under Clause 29. But the very idea, as an objection to good conservation reasons, of compensation for a notional return on capital financed to a substantial degree by public funds is quite another matter. In my opinion, it is totally unacceptable. As the noble Earl, Lord Onslow, has said, it is a grant for doing nothing.

Of course, it can be argued that ADAS would allow what they regard as genuine cases to get through the net. But I believe that the pressures on them could be enormous and could result in undue tension developing between them, the NCC and the national park authorities at a time when their total co-operation is of such fundamental importance. Indeed, I should mention, with regard to the 1980 agricultural Act and the question of notification of agricultural buildings within special areas—that is, those which are outside normal planning regulations—that there is evidence to show that schemes are going ahead without the proper consultation procedure and, in the result, they are out of keeping with the sensitive areas in which they are being built.

In addition, grants which are forthcoming from the national park authorities to meet special environmental requirements are being taken by MAFF as part of the growth payment of grant, enabling MAFF to pay a reduced amount. I know that these two points are relatively small, but I think that they illustrate that problems exist which I am sure will be exacerbated should the amendment tabled by my noble friend Lord Onslow be defeated.

Finally, as the noble Lord, Lord Hunt, mentioned, the financial implications of the Government amendment are contrary to what is stated in the Financial Memorandum. He mentioned that: the provisions relating to the Countryside Commission, national parks and management agreements require no additional public expenditure". If the Government amendment goes through, this would be unlikely, to say the least. Secondly, surely those words: …provisions relating to the Countryside Commission, national parks and management agreements require no additional expenditure go totally against the present Government's policy.

6.50 p.m.

Baroness White

My Lords, I should like to say how greatly I welcome the speech which we have just heard from the noble Earl, Lord Peel, because I think he has put his finger on so many of the points worrying a great number of us. I would remind your Lordships that the only matter which is strictly before us at the moment is an amendment which asks that the word "shall" should be replaced by the word "may". In other words, that there should be some element of discretion left to the Nature Conservancy Council on the one hand and the national park authorities in the appropriate circumstances on the other, so that they would not be under an absolute obligation, which is the situation in the Bill as at present drafted, to offer grants even though they feel that the case for not proceeding with a particular agricultural or forestry development is sustainable in light of conservation considerations, if they are absolutely obliged in the circumstances where agreement has not been reached in the earlier stages with the assistance of ADAS. I should like to say how delighted many of us are that in Amendment No. 101 ADAS has been at long last formally brought into the proceedings. But it has not, of course, been brought in in the comprehensive way which many of us would greatly have preferred.

The Strutt Committee, to whom some of us gave evidence some years back, had the root of the matter, in which they were arguing for a comprehensive consideration of the situation where you had diverse interests of agricultural or forestry development on the one hand and enviromental, conservation or wildlife interests on the other. They urged that both landscape and wildlife criteria be built into the relevant MAFF grant aided scheme. That to my mind would have been the ideal solution. But the Government have taken one rather timid step in this direction in Amendment No. 101, in which they have brought in ADAS to give advice to the farming community on the conservation and enhancement of natural beauty, as well as also diversifying into other enterprises who might be of commercial benefit to the rural community.

That is good as far as it goes, but it still leaves this confrontation between the farming interests and the environmental interests. I am surprised that we have not had any representation so far from the Association of County Councils' members. I am sure there must he some present. We greatly miss the noble Viscount, Lord Ridley, who I know is not able to be here today. Those of you who have received some notes from the Association of County Councils who are, after all, major authorities in the national park areas in all but two of the national parks, will see that they point out this mandatory obligation that if you object to a grant you must then as a park authority offer compensation. As they say, the amendments which we are discussing at this moment appear to remove the spirit of agreement altogether, because they place on one party the obligation to offer an agreement—and they put the word into quotation marks—and to pay money in compensation according to a formula agreed elsewhere.

No one so far has mentioned the other amendment which I think we are discussing here, which I think is No. 106, which is concerned with the financial provisions and guidance. We really are being presented with a pig in a poke, because we are informed that consultations have been proceeding about these financial guidelines, and one of the reasons which may be advanced by Ministers as to why this amendment which is under discussion should not be accepted would be, "Don't worry. Everything will be all right because the guidelines will be so wise and so practical that you really need have no concern at all." But we do not know what these guidelines are going to be.

Discussions have been going on between the departments, naturally enough, between the organisations of those who have direct financial interests—in other words, the NFU, the CLA, and the timber growers—and the two statutory bodies, the Nature Conservancy Council and the Countryside Commission have been consulted. As we have seen from the long apologia from the chairman of the Countryside Commission in The Times this week, he shows a certain reluctance to bite the hand that feeds him. There has been no discussion that we know of with the national parks authorities. There has certainly been none that I have heard of with the major voluntary organisations as to what these financial guidelines might be.

It is only right that we should have a little more information, and in particular as to why the national park authorities, who would be very much concerned with any compensation that they might obligatorily have to pay, have not, as I understand it, been brought into these consultations as yet. But surely, the nub of all this is that if this amendment is not accepted we are faced with a situation, which again has been touched upon in one or two letters to The Times in recent days, that those who, in other circumstances, are denied making a profit from the land that they own if they wish to develop it by putting buildings on it—in other words, if they do not obtain planning consent—do not expect compensation.

We are not in fact from this side of the House objecting to there being some reasonable measure of compensation to the farming and forestry interests, as the case may be, if they are prevented from developing in certain directions which are deleterious to the environment. But to say that this must be mandatory, that there should be no discretion in the matter, that you will be obliged to give the money even though you may be absolutely convinced, the body concerned may be absolutely convinced that the person concerned never had any real intention of going ahead with the development for which he has been compensated for not undertaking, seems to me to be unstatesmanlike.

It is putting a certain group of people into a separate class as citizens, which is going to arouse a great deal of resentment. If you are obliging this to be done, instead of allowing it to be done with a decent discretion and relying on the knowledge and good sense of either the NCC or of the national park authorities, this can only exacerbate what I think can be a growing sense of exasperation concerning the fact that farmers as of right—as of right—will be able to claim sometimes very large sums indeed, because the levels of payments that have been agreed on two cases which have so far been determined under this kind of arrangement, the Exmoor case and the Norfolk Broads, are very substantial payments indeed. I think there will be very considerable resentment if it is felt that the bodies who are in the best position to judge will not be allowed to use any discretion. They will be under an absolute obligation. If the matter goes to arbitration, if the agricultural grant was refused on the representation of either of the two bodies concerned, the national parks or the NCC, they will not be allowed to withdraw. They will have to meet the sum, as I understand the Bill, named by the arbitrator.

I can only plead with noble Lords in all parts of the House, and with Her Majesty's Government, to make this amendment to the Bill, and to say that it should be not an absolute right conferred on a particular group of citizens that they should he compensated for not doing something. It is not a right enjoyed by landowners in other circumstances, who, as I say, could vastly increase the value of their land if they were allowed planning permission for certain types of development. This will be a special group of citizens who will have a right against the taxpayers and ratepayers which no other body of citizens in the country will enjoy.

I therefore plead for the amendment, which we thought about very carefully. We are not going into any of the details of levels of compensation and so on. We are simply saying, "Pause for a moment, leave it as discretionary and trust the authorities, including the local authorities and the national parks, to reach sensible judgments, but do not force them". They will be put in an impossible situation, partly because nobody believes that the Government will supply all the money in all the cases; it is absolutely unrealistic to suggest that tht could be so. Therefore, there is great apprehension that objections will not be made when they should be made because the bodies concerned will say, "It is quite hopeless. We shall not have the resources to pay this mandatory grant". If it were left to their discretion, it would be healthier all round.

If the person concerned who is refused a grant from the Ministry of Agriculture, because there is an environmental objection, knows that he has an absolute right to compensation in those circumstances, surely his professional advisers will tell him to hold out and not to come to an agreement, not to listen to ADAS and not to try to reach a sensible middle course. I am sure that if I were professionally advising a person in that situation I would say, "You are all right, chum. You have mandatory compensation coming to you if you do nothing". Imagine what the situation will be like between neighbours. This worries the national parks people especially, who say that while many of the farming community are very willing to go along, for a small sum of compensation, keeping their land in the way we feel it should be kept, why should those conscientious citizens be side by side with others who will take advantage to the last penny because of this mandatory right? For those considerations, I implore your Lordships to think very carefully on this issue. As I say, we are not stopping anything. We are simply saying: do not make it absolute, do not make it mandatory; leave an element of discretion.

Lord Monk Bretton

My Lords, I wish to speak in opposition to the amendment and briefly to show the other side of the picture. If we pass the amendment, we shall disturb the balance achieved so far, which I believe to be a valuable degree of consensus which has been reached, and I thought it had been very broadly reached, and I still think that.

Baroness White

My Lords, I apologise for interrupting the noble Lord so soon in his speech. Would he not agree that the consensus is very far from complete and that those of us who have received representations from the ACC and other bodies recognise that they are very apprehensive indeed? There is no consensus there.

Lord Monk Bretton

For example, my Lords, I have heard no objection from the Nature Conservancy Council, among others, and I should have thought there was at least some degree of consensus, and I trust the noble Baroness will grant me that. The amendment endangers the principle of paying compensation in return for conservation measures undertaken by owners and occupiers of agricultural land, and briefly I would mention the case of the Pevensey Levels in Sussex because I was present at a number of the meetings which took place after the designation of that particular SSSI, so I heard a good many of the difficulties.

The first thing to remember in that case, of about 19,000 acres, is that it is highly fragmented in ownership, and they are nearly all small owners in any case. There was no question of a lack of goodwill towards conservation among those owners and occupiers, but there is no doubt that the fundamental stumbling block always came over the loss of the grants, and immediately they heard that one began to get the difficulty of people saying, "This is an attempt to maintain butterflies at our expense". Until then they had talked sensibly about the migrating birds and their wish, and everybody else's wish, to help them, which is what that SSSI is about. The danger therefore regarding loss of grant as something for which no form of compensation should be due is that one will lose the goodwill of those people, and without their goodwill it will be difficult to achieve the conservation measures one wants. It is important to make that point; it may not be entirely as other forms of compensation have been, but there are needs for it.

There is also the need for proper economic assessment. Of course, some of these schemes will prove to be expensive, and it is a good thing if that comes out because it may lead to the scrutiny of alternative methods to achieve the same conservation aim more economically. That is important not only to conservationists and agriculturalists but to everyone in the country; it is a question of the application of our national resources. I am sorry to take issue with my noble friend Lord Onslow on this because I would far rather hope that we could club together in an effort to make sure that the Government see to it that the national parks and the Nature Conservancy Council have enough money to deal with the problem.

I come to the question of what might be described as unmeritorious applications and the question of large payments and whether there will be large payments. Personally, I am not so hopeful that my family's interest in the Pevensey Levels will prove as remunerative as all that on this score. I hope and very much expect that arbitration procedures will be only a long-stop and that in most instances there will be settlement on the Minister's guidelines, and I do not suppose the Minister's guidelines will be a giveaway.

If some very strange, fancy or surprising applications are put in for grant, there appears to be a good chance that they may be turned down by the Ministry of Agriculture on grounds other than conservation; they may not be viable, and I wonder very much about the business of turning a grouse moor into fertile pastures carrying a great head of stock. If the Ministry of Agriculture turn a grant down on grounds other than conservation, no compensation will be available, anyway. As I understand it, this compensation will be net of grant, which is by no means as favourable as might be imagined; it will be based on the profits a farmer would have made if he had undertaken works without grant aid.

Lord Melchett

My Lords, the noble Lord said, as if it was a surprising fact, that the compensation would be net of grant. Is he really suggesting that it might be possible that a farmer, when he is refused grant aid, should receive compensation which included the grant aid?

Lord Monk Bretton

My Lords, if the noble Lord studies this carefully, I think he will see that it reduces the amount of compensation that is available.

The Government can also do something to ward off the bluffers by including in the financial provisions measures which will ensure that the system caters only for the genuine. That is what I think is likely to happen. In general I would comment that arbitration awards and compensation have never in this country on the whole been a pushover, and I am not at all sure that they are going to be so in this case. I think it vital now, if we possibly can, to maintain the status quo established in the Bill, and I hope that I have presented some of the other side of the picture.

7.11 p.m.

Lord Winstanley

My Lords, in rising to express my support for the amendment I might venture to hope that in do soing I shall also have the support of my noble friends on these Benches, even the support of the noble Lord, Lord Mackie of Benshie. I mention faint doubt merely to illustrate that it is not only at Blackpool and at Brighton that differences within the parties occasionally manifest themselves.

I think that arguments in favour of the amendment, changing the word from "shall" to "may", have been made with the utmost clarity by the noble Earl, Lord Onslow, the noble Lord, Lord Hunt, the noble Baroness, Lady White, and indeed by the noble Earl, Lord Peel. I think that the noble Earl, Lord Peel, put his finger on the crux of the matter when he said that preservation of the word "shall", as against "may", would inevitably mean that some people would get grants for doing nothing. Let me make it clear to the noble Earl, Lord Peel, that I am not against people occasionally getting grants for not doing things. Sometimes it is necessary to pay landowners grants for not doing certain things which might have been economically valuable to them.

But I would go further than the point of the noble Earl, Lord Peel, because I think that the clear evidence here is that without the amendment not only would people get grants for not doing things, but furthermore they would get grants for not doing things which they never had the slightest intention of doing. They would get grants for putting in an application to do something which they did not want to do, anyway. That is the real difficulty here. Of course we are dealing here not only with SSSIs and the Nature Conservancy Council, we are dealing also with moorland within designated areas of countryside, the national park authorities and the local authorities. With all those bodies funds are extremely limited. The inevitable consequence of leaving things as they are is that these bodies—the Nature Conservancy Council, the Countryside Commission and the national park authorities—at present operating under very serious financial constraint would be tempted not to make objections at all to certain proposals that come forward because by so doing they could virtually bankrupt themselves. I know that in his speech to the national park conference at Norwich the Secretary of State has given certain undertakings with regard to forthcoming finance, but I do not think that the national park authorities will act until they actually have the money. They certainly have not got it now, nor to the best of my knowledge has the Nature Conservancy Council.

Of course it is perfectly possible that some of these bogus applications (if I may so call them) might be weeded out by the Ministry of Agriculture—I say, might be. But what if we had remained with the old concept of the Strutt Committee and its recommendations? The noble Baroness, Lady White, referred to this. A recommendation of the Strutt Committee was that landscape and wildlife criteria should be built into the relevant MAFF grant-aided schemes as conditions of eligibility, and that provision be sought for paying grants to farmers and landowners for certain conservation works. Had we stayed with Strutt, then the amendment would not have been necessary. But we have not really stayed with Strutt. We have left MAFF merely to give advice and say. "Yes, this agricultural project would qualify for grant", then leaving it to the Nature Conservancy Council or the national park authority to step in at the end of the day and say, "No, you can't go ahead with that", and to lodge an objection. Then those bodies, not of course the Ministry of Agriculture, would have to pay the compensation.

All week I have been asked why am I so anxious about this matter; the noble Lord, Lord Sandford, is happy with the present situation. I have studied the Bill very carefully and I have read its Long Title. Nowhere is it stated that this is a Bill designed to achieve the happiness of the noble and reverend Lord, Lord Sandford. But I am bound to say that I believe that Lord Sandford's happiness rests on his personal belief that the battle which has been waged within the Ministry of Agriculture over the Strutt Report has been won by those who have conservation very close to their hearts. If I believed that, as I think the noble Lord believes it. then perhaps I should not be as worried as I am about the present situation. But frankly I do not really believe that, and since I do not believe it, I honestly feel that we must have the amendment to leave out "shall" and insert "may". Then we could leave the Nature Conservancy Council, the national park authorities and the local authorities concerned with a discretion, thereby discouraging purely bogus applications made solely for the purpose of obtaining grant.

Lord Stanley of Alderley

My Lords, I should like to say a few words about grants, because the question of grants has been bandied around the floor. For better or worse every civilised country supports its agriculture, and the way, for better or for worse, that we in this country do it is through grants. I think I am right in saying that in France it is done by way of a cheap interest rate. If your Lordships are saying, which you are saying, that certain farmers should not be entitled to grants because they are in a certain area, you are discriminating against those particular farmers. I put it to your Lordships that if we had cheap interest rates, as in France, would you say that my neighbour on Snowdon should not have cheap interest rates? That would be grossly unfair because, with the best will in the world, I think that on the lowland I am better off than he is, and I would still get the grants. So let us be careful about this grant business. If you take away the grant, you must give the farmer something else instead, and this is what your Lordships are going to give him in the Bill. I pray that your Lordships do not muddle yourselves over the question of grant. I am not going further into grant, because it concerns the entire system of agricultural support, and there are many people here better qualified than I to have a 10-hour debate on that.

As the noble Baroness, Lady White, reminded us, whether to have the word "shall" or "may" is the point of the amendment. Those two words strike at the two basic ingredients of the Bill. They strike, first, at the principle of voluntary co-operation for me, the farmer, and help for my farmers. They strike at that, and if we insert the word "may", it knocks that one. Secondly, the point strikes at the principle that when a farmer is forced to conserve, (as most of us do, and do freely, because we want to do it, and it is rather fun) against his financial ability—and the people we are talking about are basically up against it; they are not well off, believe it or not—there should be some measure of compensation to help him so conserve. The word "shall" ensures that.

Both those principles have been discussed here and in another place for the past year, and although various extremist organisations have wished for compulsion, regulation and state intervention, the vast majority of your Lordships and the Members of another place have decided on the voluntary approach, with compensation where necessary. Then suddenly, overnight, at the last minute, your Lordships decide to change all this, including breaking faith, if I may say so, with compromises made in another place. In my opinion that is not in keeping with the usual degree of responsibility that I have experienced in your Lordships' House.

I suspect that the noble Lord, Lord Melchett, says that I am being unreasonable, but he can have his say in a minute. However, in common I suspect with many of your Lordships, I read this morning, on this very subject, The Times, a paper that has consistently reported the proceedings on the Bill in a biased, if not inaccurate, way, and today was no exception. However, it was my great privilege to read that article on the train on my way up here from Anglesey. Anyone who can do that journey, looking out at the countryside that the farmers are producing today, and who can then say that such countryside has been ruined and that they would prefer to see a compulsory bureaucratic system instead, must be truly blinkered.

I beg your Lordships to reject this disruptive amendment. Let the clause stand as it is. Do not be misled that it would heal farming/conservationist differences. It would not. My noble friend Lord Peel said that it was a brick. Yes, it is a brick, my Lords; and that brick, if it is enacted, will come back in full measure to those conservationists from the farmers who are going to suffer. Please let us stop fighting. We have done it for a year, thanks to the media. Let us go in peace for a change to look after the land, without this obstructive amendment, in the same manner as we have in the past, which has produced the scenery and, indeed, the character and the society which I believe is a stabilising influence in our way of life and which I hope some of your Lordships admire.

7.21 p.m.

Lord Molloy

My Lords, I believe that we must take on board the parlous state of our nation as regards industrial disputes in this year of grace 1981, in order to understand what we are discussing here tonight in your Lordships' House. Can your Lordships imagine for one moment any of the heads of the families among the 3 million unemployed not wondering what sort of idiots we are discussing an issue like this when they are wondering whether or not they can pay their rates and their rent, and buy the food and the clothes for their children, out of their unemployment benefit?

As has been said by the noble Lord opposite, we are talking about the possibility of somebody making a cash-in for an idea he never intended to make into a reality by getting compensation from, possibly, the future millions who might be unemployed. This, I believe, is what your Lordships' House has to take into consideration. There will be hundreds of thousands of our fellow citizens who have made applications to build, for example, a garage alongside the house they own, or a lean-to, and who have been refused by the local planning authority. They will say, "If only I were a well-off farmer, I could get compensation for putting in this application for a garage I do not really want and so have a nice cream-off". That is going to be the attitude, not of thousands, nay!, but millions of people.

Your Lordships have only to go to some of the counties of this land of ours in South Wales and in Scotland, and meet those who work in dangerous and hazardous jobs making steel or digging coal, to realise what they have to do to appear before a tribunal because they may have contracted pneumoconiosis, or have had some industrial disease. They have got to have the full backing of the legal department of their trade union; and they will make their voices heard at their branch meetings. I want the Government Front Bench to understand that this is not a matter to smile about. The only people who laugh about things of this sort are those who have never been on a Sunday morning to a meeting of British miners discussing things like industrial diseases. These workers will say: "What is happening? Where is the justice? Where is the fair play that a measure of this particular sort can make it easy for some of those who are not too badly off? "

As the Government have said—and the Chancellor of the Exchequer has said it more than anybody else—the Government have no money at all, the Government have not got a ha'penny. What the workers will say about this measure, then, is that the Government will pay this compensation out of the contributions from the working men and women who pay their taxes via PAYE. This is going to be the discussion throughout British industry, and I do not want to see it. We are in a difficult situation. I do not want this House to have a debate and an argument which will not only cause grave bitterness within the strict confines of what we are discussing apropos this particular amendment, which we must pass, but will inevitably drift into much wider environs.

Therefore, in this particular instance, for the reasons I have time only to adumbrate but with all the sincerity that I can command, I must ask that your Lordships should support the amendment. We should not examine the detail but should go beyond the narrow boundaries and look at what ordinary people are going to say if this Bill becomes an Act of this realm. They will see it as an injustice; they will see it as an unfairness. What is more (this is a term I hate using, but it will be said) they will see it as nothing but a piece of class legislation—and I do not want that word used. I do not want it used by the trade union movement, by the CBI or by anyone else. Therefore, we in this House have a responsibility to see to it that we do not provide extremists with that opportunity. That is why I hope the amendment will be supported.

Lord Buxton of Alsa

My Lords, my reasons for pressing this amendment moved by the noble Earl, Lord Onslow, are not really based on conservation grounds at all; they are because of this one word. I firmly believe, after more than 30 years in this field of activity, that it will turn out to be bad legislation. It will not work; everybody will be confused; and it will lead to needless and serious ill-feeling and strife. Either the Government must confirm that the money will be available—and it could be millions a year—or, if they say that the money will not be available, then, frankly, this part of the Bill is a fraud.

I cannot overstress the significance of the precedent which is being set, which is the right of farmers and landowners to have compensation. The moment that right is written into the Bill or the statute, there is no way of knowing where it will lead us or where it will end. The noble Earl, Lord Onslow, mentioned the question of tree preservation orders. I had an 80-acre wood subject to a tree preservation order until a motorway went through it. That has to be accepted; that is progress. But why should one not be compensated for not knocking down all the trees, for felling and ploughing, if you can get it for other purposes in the case of SSSIs? There is no difference between the two in principle.

Lastly, I must deal with this question of whether or not there will be many applications. I believe it to be utterly naive to suggest that if funds are really available the number of applications for compensation will not become overwhelming. This is really not so much to do with conservation—and I want to make this point because it has not yet been mentioned properly—it is a question of business practice. Most farms are companies, with shareholders. If all farmers and landowners were like your Lordships, I concede there would be no problems. But large numbers of farms across the country are owned by pension schemes and financial institutions, with boards and shareholders who probably have never been to their farms. They have managers; and a manager's duty—and I speak as a businessman all my life—is to maximise revenue. I suggest, therefore, that a farm manager would be negligent if he failed to get compensation by going through this rigmarole of applying for grants, being refused and then getting compensation, because this Bill says he is entitled to it.

Even where the person in charge is a naturalist he will be failing in his duty as a manager if he passes up the opportunity of increasing revenue by X-thousand pounds a year for not being able to do something he had no real intention of doing. There is nothing immoral in it, either. It is just as proper as avoiding taxation—and I do not talk about evading taxation.

Lord Stanley of Alderley

My Lords, will the noble Lord give way? Has he any evidence to show that those institutions that have owned and are owning behave irresponsibly?—because my record is that they do not. Can he give me any?

Lord Buxton of Alsa

No, my Lords, I do not think it is necessary to do so. I did not say anything about that. I said that it was the duty of the managements of the agricultural farming companies to maximise revenue and that if there is money sitting there the manager should be sacked if he does not go for it. This clause, as it now stands, not only invites farmers and landowners who have no intention to plough or drain scientific sites, it obliges them according to business practice. It is not, as my noble friend Lord Onslow said, his legal responsibility to do so but it is his business responsibility to do so according to normal practice, to go through this process to finish up with compensation and, therefore, additional revenue. Even where the financial institutions are not involved and it is a family farm, it will still be a company and it seems obvious that a conservation-minded farmer owning wetland and or moorland with scientific interest will feel obliged to go for the additional revenue. Either his son or the partner will say, "You must be out of your mind if you do not realise what you can do." It is naive to say that there will be just a few isolated cases and that most will get settled out of court or, as they are today, at a tea party.

If the Commons amendment is a genuine one, that is to say, if it is "shall" and the money is available, all the SSSIs may be either ploughed or drained or the public will be paying millions in compensation for the remainder which are not ploughed or drained. Logically, there could be no SSSIs left in the country volun tarily maintained as they are now. This amendment with "shall' could ultimately virtually extinguish the voluntary system.

My Lords, I shall not continue because so much has been said by noble Lords, but I feel that I should like to spend a few minutes in congratulating the Government on getting this Bill so far and in complimenting my noble friend on the Front Bench for a marvellous job. We are in sight of the end and it would be a tragedy if through an error, to my mind, in another place of one word we allowed it to go through as it stands. I should like to reassure my noble friend Lord Stanley that this amendment is not saying that there will not be compensation; it is handing the discretion to the responsible bodies and authorities and it is not putting them in a straitjacket. What is the point of having illustrious bodies with distinguished people appointed by Government if they have no discretion?

Lord Sandford

My Lords, like the rest of your Lordships I should rather be having my supper but we have to deal with this amendment. As the father of what is now a family of amendments that bore my name, I think I ought to say a word of two here to help guide the House about the two key words "shall" and "may". Incidentally, when I moved the original amendment it had the word "shall" in it and it was supported by almost all noble Lords who have spoken so far. I shall seek to help them realise why there is no occasion to change their mind just because the amendment came back from the Commons in a slightly different form.

I must first say a word of thanks to the Government who at one stage were resistant to the general philosophy behind my amendment but have now accepted it. They have stuck firmly to the philosophy in it, strengthened it, refined it, extended it from the national parks to the SSSIs and from England and Wales to Scotland, with the promise to extend it to the Broads. That is, I hope, a good example of the flexibility and willingness to learn which is a characteristic of Her Majesty's Government.

Your Lordships must face facts. We need now, I suggest, to distinguish the essence of this clause from the subsidiary parts of it. The essence of my original clause and of the two clauses which stem from it is contained, as regards Amendment No. 76, in Clause 1(a) and, as regards Amendment No. 101, in Clause 1 and Clause 3(a). Those are the parts of the amendments which lay a firm duty on the Ministry of Agriculture, and, in practice, the staff of ADAS, to include conservation criteria in their consideration of grants. That is the key point. What we have been discussing up to now are factors subsidiary to that—important but subsidiary.

I should prefer not to go into this at any length, but it is necessary to do so because all the indications, from what is being said and the representations being made to us, are that people's minds are still back in 1974. That is understandable, because this whole problem of farmers being paid a grant with one hand from the Ministry of Agriculture and then paid compensation from another source to counteract it goes back to the bad old days from which the Exmoor conflict arose. It is necessary to recapitulate the story from there to realise how far we have moved. At that time, the less favoured areas directive was regarded by the farming world and the Ministry of Agriculture as the English hill cow and sheep subsidies written into a European context; but there was more than that to it.

This less favoured areas directive is to provide for farming in certain areas where there was a need to maintain minimum population levels or in order to conserve the countryside—and I am quoting from Article 1. Article 3 says that the less favoured farm areas shall include mountain areas in which farming is necessary to protect the countryside and in which farming must be continued to conserve the countryside and to preserve the tourist potential of the area. That is a point which, in 1974 and 1975, was not accepted in agricultural circles. ADAS officers felt that it was their duty to give a grant if they were presented with a viable scheme for increasing agricultural production. Not only could they not take other criteria into account but they were not in a position to withhold a grant whatever objections were made.

That led to the inquiry from Sir John Cripps when he was chairman of the Countryside Commission on 20th December 1977 to the President of the European Commission, Mr Roy Jenkins. The latter replied in answer to an inquiry about this, that member states may lay down additional conditions as regards the implementation of the measures of aid provided by this directive. But, in our view, therefore although a farmer in the less favoured area or, for that matter elsewhere, is free to choose a system of farming and the improvements which are necessary to carry out development plans, in so doing he is obliged to respect all the regulations and conditions with regard to conservation of the countryside. Member states are not obliged by the directive to grant-aid projects which would be in conflict.

That took us forward quite a bit. It was not immediately accepted, but it was reinforced by the recommendations in the Strutt Report which the noble Lord, Lord Winstanley, has quoted, in which they said: It is plain that MAFF must in future take a wider view of countryside affairs. Greater provision of more expert advice is perhaps the most important single need. A wider responsibility for MAFF in our view would confer a consequent obligation to include conservation criteria in grant aid schemes that it administers". That advice was proffered in May 1978. It took time for that to be assimilated, but we eventually got the agreement of the Ministry of Agriculture to accept that advice.

It first took concrete shape when Parliament was presented last autumn with the new scheme for administering farm capital grants. We debated it on 6th August last year. The relevant part of that for today's debate is the following paragraph in the explanatory notes issued on that occasion which read: In the light of extensive consultations with the interested bodies, Ministers have decided to arrange for ADAS officers to visit conservation authorities concerned every week to help them consider farmers' proposals". That was very welcome and acceptable so far as it went. We failed then to get the Minister's responsibility and his officers' responsibility for conservation on to the face of the statutory instrument, and it has not until now appeared on the face of any statute. Now it is there and that completely alters the situation.

It really will not do to go on talking and debating as though we were still back in 1974. There has been a radical shift. The clause I have just read establishes what has come to be known as the weekly ADAS tea party. This is the meeting week by week between ADAS officers in areas where there are sites of scientific interest and in national parks where they consider together with the regional staff of the Nature Conservancy Council and the national park officers the applications that have come to them from farmers.

The record over the past year in a selection is as follows: In the Peak Park they have processed 340 applications from farmers. Of those, 239 have been agreed as they stood. A number amounting to 101 have been modified and there are two outstanding from which objections may arise. In the Yorkshire Moors they have processed 111 applications. In fact 100 have been agreed as they stood and 11 have been modified. There have been no objections since 1978 when the matter was dealt with by MAFF refusing the grant. Therefore, of course the clause which we are debating would not be invoked.

In the SSSIs the Nature Conservancy Council tell me that they have processed 64 applications from farmers—this is the ADAS officer and the NCC regional officer jointly. They have agreed 50, they have modified 11 and there are three outstanding which might conceivably lead to objections. That is the situation which the first part of this clause will not weaken but reinforce. The House can see from what I have been saying that there do arise objections: two out of 340 in the case of Peak Park; none in the case of the Moors; and three out of 64 in the case of the SSSIs. But they have not reached the formal state of objection by' the relevant authority which triggers off this clause. That is the experience of the past year.

I put it to the House that the anxieties which are being expressed are expressed from an understanding of the situation which is still rooted in the 1974 situation and has not taken into account the changes and the shifts in the Ministry's attitude, still less the effect of the essential part of the clause which the House was glad to agree to when I introduced it back in March and which has come back to us in very similar form.

I thought then—as did those who supported me then —that the word "shall" struck the appropriate balance. I submit with this kind of record of experience to draw on so far, the word "shall" is still appropriate. My belief is not just a hunch, as the noble Lord, Lord Stanley of Alderley, was saying. It is based on some fairly firm experience which will be reinforced by this clause. Whether it has "may" or "shall" in it, it will certainly reinforce that clause. With the influence of this new statutory responsibility laid upon ADAS to have regard for conservation, it will work well. If the ADAS officer is exercising his new responsibility for conservation and decides to turn a grant down, this subsidiary part of the clause is not invoked at all and the anxieties that have been expressed will not be realised.

Lord Melchett

My Lords, I shall be very brief as I sense the House would like to come to a decision on this matter and the noble Earl has still to respond on behalf of the Government. May I say to the noble Lord, Lord Sandford, that we are talking about a totally different clause from the one which he introduced in this House some time ago. Under that clause the compensation was to come from the Agriculture Act and MAFF moneys. It raised quite different principles from the ones that we are discussing under this clause, where the money comes from the national park authorities and the Nature Conservancy Council.

We are talking about an amendment of only one word, the change from "shall" to "may". But it is a very important word. The noble Lord, Lord Sandford, mentioned the Peak District national park and statistics from them. He did not mention that their view was that now, given this one word ("shall" rather than "may") the national park officers think that we would be better off if Clause 39 were deleted completely. The Association of National Park Officers have said that this re-wording is going to make a charade of the whole thing.

On the nature conservation side, the RSPB have said that this change, this one word, could lead to more SSSIs being destroyed rather than less. Those are very sweeping statements to apply to a single word. But the one word raises a vital issue. The Association of County Councils has said that it converts eligibility into entitlement to receive money for the first time since the 1947 Agriculture Act was passed. That is what the noble Lord, Lord Monk Bretton, said.

What the farmers wanted was an automatic right in national parks and SSSIs for compensation if agricultural grant aid is not paid. That is what this amendment is about: the automatic right for compensation if agricultural grant aid is not paid. If I may take up the point that the noble Lord, Lord Stanley of Alderley, made, what the NFU appear to be asking for is special treatment for farmers in national parks and SSSIs. They will have an automatic right to grant aid. For farmers outside national parks and outside SSSIs, agricultural grant aid will continue to be discretionary.

It seems to me that the Government have constructed an edifice in this Bill which is doomed to collapse. All those involved in making it work, including many who wish to see it work, believe that it will collapse. It may be that it will be better for this wording to be retained in the Bill, the sooner to bring the whole thing crumbling down under the weight of the enormous compensation payments which will be needed, and then we can introduce some sensible legislation in its place.

I find it quite astonishing that a Government with the views that they have on public expenditure should introduce a principle which, if applied to another example—regional industrial development grant paid by the Department of Industry—would have the implication, if one drew an exact parallel, that any firm refused a grant from public money to develop a new company or a new product in one of the assisted regions would immediately go to the Department of Employment and get a grant because they had been refused a grant by the Department of Industry.

I said that the noble Earl has yet to respond to the debate. I wonder whether I can help him and try and shorten his contribution by quoting something which he said in the debate on the "Sandford amendments" as they are now known, when they were first introduced on 12th March 1981. Referring to the practice, which the amendment then had, for the relevant authority to seek a management agreement with the applicant in accordance with financial guidelines which were determined by Ministers, the noble Earl said (at col. 488 of Hansard): But I think that it would be undesirable to make such a requirement mandatory, for two reasons. First, it would oblige the local authorities concerned to increase their expenditure, irrespective of the circumstances of the case". My Lords, that is exactly the argument in favour of the amendment that the noble Earl, Lord Onslow, has moved.

The noble Earl went on: It is far preferable to leave them"— that is the national parks authorities and now the Nature Conservancy Council— as at present, to make up their minds as to whether a management agreement should be offered. Secondly"— and this is something which a number of speakers have said in this debate— it might encourage farmers to put forward controversial schemes which would never be sound enough to secure a grant on the grounds of their agricultural value, in the knowledge that the relevant authority would be bound to object because of conservation implications. If the objection were not withdrawn, the offer of a management agreement would be obligatory". That is the argument in favour of the amendment.

7.51 p.m.

Earl Ferrers

My Lords, it has been an interesting debate until we came down to the last speech of the noble Lord, Lord Melchett, who said he was in favour of this particular Bill as at present drafted in order that the whole thing will collapse and crumble. If I may say so, I thought that was particularly unhelpful and particularly unconstructive, when the whole purpose of this Bill has been to try to find a consensus of agreement, which is very difficult indeed to do.

I think it was my noble friend Lord Buxton who said that this has been a very good Bill while it has been going through Parliament and he suggested that we might just change the modest word from "shall" to "may". It was The Times, I think, on Tuesday of this week which said that after months of debate and the debating of hundreds of minutiae the crucial showdown between farmers and conservationists has narrowed down above all to this one issue: that is the issue between "shall" and "may".

I personally think it is erroneous to try to polarise people into two opposing camps, either conservationists or farmers. It is not insignificant that the two leading proposers of this amendment, and therefore presumably conservationists, are in fact landowners and farmers in their own right as well. It is a mistake to brand people as either conservationists or farmers, as if the two were mutually incompatible or exclusive. It may be that the interests of agriculture, if pursued exclusively, will be incompatible with the interests of conservation, if pursued exclusively; but I believe there is in people usually a mixture of the two in differing degrees and the whole of this Bill seeks to find a compromise not between people but between interests which may well be divergent. I think it is astonishing how, as this Bill has carved its tortuous passage through Parliament, there has been a remarkable example of where the irreconcilables have in fact been reconciled.

My noble friend Lord Onslow introduced his amendment in his characteristically pungent style. He used some words which I thought were slightly intemperate and he referred to "unfairness", "skulduggeries" and "rip-offs". I personally regret his personal references to the Members of your Lordships' House, which hardly enhanced the quality of his argument and I believe somewhat devalued what is a serious and very important matter of wide national importance. My noble friend Lord Onslow and others, including my noble friend Lord Buxton, I think, said that tree preservation orders were put on people's land and they had no compensation; but I am advised that in certain circumstances compensation may in fact be payable where there are tree preservation orders and where listed buildings, and even ancient monuments are involved. The principle is not new. Trees protected by various orders cannot be felled, topped or lopped without the consent of the local planning authority; and if consent is refused compensation may be payable under Section 174 of the Town and Country Planning Act 1971.

So far as historic buildings are concerned, I am advised again that there is a precedent for compensation here and that where a building is listed as being a building of historic interest, listed building consent, in addition to planning permission, is required before the building can be altered, extended or demolished. If such consent is refused for alteration or extension compensation may be payable under Section 171 of the Town and Country Planning Act. Yes, my Lords. My noble friend, and indeed several noble Lords, said that this was a new precedent and a new principle. What I am saying is that it is not a new principle.

My noble friend referred to the possibility of liming and slagging certain moors in Yorkshire, and said that certain people might be able to get some astonishing sums of money in compensation. I do not know where my noble friend got his figures from, but there is no set scale for compensation. Each management agreement is different and it depends on the circumstances of the case.

It was, I think, the noble Baroness, Lady White, who asked: "What are the financial guidelines going to be?" I can tell her that there is no question of adopting the Exmoor guidelines as they stand. We have entered into preliminary discussions with a range of interested organisations, building on the Exmoor model, to determine how it might be adapted to the national situation. We hope soon to have a draft available for discussion informally with the local authority associations and the Nature Conservancy Council. This draft will certainly embrace the options for either annual or lump sum payments, as promised by my right honourable friend, but, like the Exmoor guidelines, it will not stipulate any specific sums to be paid in respect of the restrictions imposed. That would be completely inappropriate as the payments offered, whether by way of annual payments or by way of capital sum, must depend on individual circumstances and be subject to negotiation.

After the informal discussions have been concluded, it is the intention to prepare draft guidelines which will be put out for public consultation, and all comments received will be taken carefully into account before the guidelines are finalised and published. I think, therefore, that it is erroneous when figures such as those which have been bandied around are bandied around, because, if I may say so, they are based without fact because each individual circumstance is different.

Over the particular matter of management agreements, there are really two routes we can take. Both have their disadvantages, and I make no apology for that. The first is what the Bill says at present: namely, that at the end of the day, if the considerations of conservation are so overwhelming that because of what he has on his land a farmer ought to be deprived of a grant for that which all other farmers are entitled to, then the Nature Conservancy Council shall enter into a management agreement with him and pay him to preserve that which needs to be preserved.

Lord Melchett

My Lords, the noble Earl said: that which all other farmers are entitled to". Do I take it that the Government's policy on capital grant schemes and grant aid to farmers has changed and it is the fact now that farmers are entitled automatically to a grant?—because that is a new policy.

Earl Ferrers

My Lords, I do wish the noble Lord, Lord Melchett, would not pick one up on minutiae, to use that word again. He knows perfectly well what I refer to—that there is a system of capital grants to which farmers may apply. And what I am saying to the noble Lord, Lord Melchett, is that in normal circumstances they may apply and indeed they can apply. The opponents of this particular course which we have set on the Bill say that the Nature Conservancy Council will not have enough money to pay for all the sites and therefore that will inhibit the council from objecting, possibly even at the start, to a scheme because they will know that if they lodge a formal objection to a proposed operation which may attract an agricultural grant, they will be bound in the end to enter into a management agreement. So goes the argument: there will not be enough funds to pay for all the compensation.

The amendment is put down by my noble friends Lord Onslow and Lord Buxton to say, "Let us remove the word 'shall' and replace it with the word 'may'", so as to remove the mandatory obligation on the Nature Conservancy Council to enter into a management agreement in all cases where they wish to make a formal objection to a proposed alteration to a site and, as the NCC is bound to be limited, as all organisations are, for funds, it may—so the argument goes—then choose which sites it wishes to enter into a management agreement on.

The NCC can put funds towards those sites on which it feels strongly and have management agreements on them. In the case of the preservation of those sites on which it feels less strongly, it can still register objections to proposed schemes, but without the obligation or even the consideration of having to enter into a management agreement for which it may not have funds. The registering of the objection itself will mean that the Minister of Agriculture has to consult with the Environment Minister, as he does at present, as to whether he refuses grant on conservation grounds.

The down-side of the argument is that, if it were merely permissive for the Nature Conservancy Council to enter into an agreement, there would be no obligation whatever on it to do so. The NCC would be able to sustain an objection, at least in theory, on each and every site, and seek to deny to the farmer that which might be applicable to other farmers; in other words, a grant. It could do that without any assurance of financial recompense, however far down the pecking order of importance that site might be, even in the eyes of the NCC, because, by an accident of geography, a farmer might have an SSSI on his land.

If my noble friend's amendment were accepted, we should find that we were in a position where a body, eminent and highly responsible though it were, and as it is, had a right to question the propriety of a grant as a result of a designation which was made by that body—a designation which was made without the right of redress, without appeal, without fear of contradiction and without any financial recompense. I do not think that that is right, and the Government do not think that that is right.

My noble friend Lord Onslow has quoted many expressions of support which he has received, but I noticed that he did not quote a letter from the Nature Conservancy Council which I may, perhaps, be permitted to quote. The letter states: You asked me whether the Nature Conservancy Council will be able to support your amendment on the Sandford principle, replacing the requirement for an objecting agency to offer an agreement with the owner or occupier whose grant has been withheld for nature conservation on landscape grounds, with a facility to offer grant only if it so wishes. The Nature Conservancy Council has given the Government its support for the present wording of the clause, because it removes the uncertainty which has bedevilled negotiations between the conservation agencies and farmers and landowners in the past. It also places a firm commitment on Government to make adequate resources available to deal with those agreements resulting from the new measures over the years, and we are working on the assumption that they will do so. If the system does not work, because the resources are not made available, the blame will fall squarely on the Government and an alternative to the voluntary co-operation will then have to be considered. May I draw your attention to the letter in today's Times by Derek Barber, the chairman of the Countryside Commission, which admirably puts the case for giving the Bill a fair trial. I am sure that my council would wholeheartedly endorse this pragmatic approach". That is the letter which the Nature Conservancy Council sent, and I think that it is indeed an important one.

I recognise that the two examples which I have given of "may" or "shall", and what might happen in those two cases, are extremes and the worst that could happen. In fact, I have no doubt that the majority of these cases will be settled amicably and satisfactorily, without recourse to the safety net which the Bill provides.

Twelve months ago, when the new capital grant provisions came into operation, many people were apprehensive about the effect on conservation when prior approval was abolished; many apprehensions were expressed, not only in this House but in another place as well. My noble friend Lord Sandford has given the figures this evening, which I think are astonishing, in that they show exactly how much the ADAS service does, and how much the conservation bodies do, in order to arrive at amicable agreements. I believe that that is a pattern which is likely to evolve.

If this amendment is accepted, then I fear that we shall be back to the position that we were in before the Bill was introduced, a position where we had failed to reconcile the growing requirements of conservation with the legitimate rights of the individual and of agriculture. Trying to reconcile that difference is what the whole of this Part of the Bill is about. As a result of that, we have put into the Bill the involvement of ADAS, the recognition of the needs of conservation, the recognition of the rights of landowners and the promotion of management agreements, but under this amendment, if taken to its extreme, there could be no management agreements.

Immense effort has been made, and successfully made, to achieve this compromise between differing interests. Positions have moved in a way which, I venture to suggest, would have seemed entirely impossible 12 months ago. We may not have got it quite right. We cannot have satisfied all the interests. By the nature of the game, that is impossible. But I hope your Lordships will agree that the Bill as it is drafted, which in this respect is the same as it was when it was last in your Lordships' House, which had the approval of your Lordships' House then and has subsequently had the approval of another place, is the way in which it ought to remain. While I recognise the force of the arguments which have been put forward this evening by my noble friends and those who feel that way, I really cannot advise your Lordships to accept this amendment.

The Earl of Onslow

My Lords, we have had very nearly two hours of debate. There is only one thing that I should like to say before I ask your Lordships to support me and my noble friends in the Division Lobby, and it is this: my noble friend Lord Ferrers said that tree preservation orders may be given compensation and historic buildings may be given compensation. I sincerely hope that my noble friend Lord Cockfield, who I see standing by the Bar, will be happy to pay all the money which the Treasury will have to give if we by any chance lose this amendment.

8.8 p.m.

On Question, Whether the said amendment (Amendment No. 76A as an amendment to the Commons Amendment No. 76) shall be agreed to?

Their Lordships divided: Contents, 57; Not-Contents, 59.

Abinger, L. Elphinstone, L.
Aldenham, L. Elwyn-Jones, L.
Amherst, E. Ewart-Biggs, B.
Beswick, L. Foot, L.
Birk, B. Grafton, D.
Bishopston, L. Hampton, L.
Brockway, L. Hanworth, V.
Bruce of Donington, L. Houghton of Sowerby, L.
Buxton of Alsa, L. [Teller.] Hunt, L.
Chorley, L. Jacques, L.
Collison, L. Jeger, B.
Cranbrook, E. Jenkins of Putney, L.
Davies of Leek, L. John-Mackie, L.
de Clifford, L. Kaldor, L.
Kirkhill, L. Rochester, L.
Knutsford, V. Rugby, L.
Lawrence, L. Scanlon, L.
Llewelyn-Davies of Hastoe, B. Seear, B.
Spens, L.
Lovell-Davis, L. Stamp, L.
Melchett, L. Stewart of Alvechurch, B.
Molloy, L. Stewart of Fulham, L.
Napier and Ettrick, L. Stone, L.
Onslow, E. [Teller.] Strabolgi, L.
Oram, L. Swinfen, L.
Peart, L. Underhill, L.
Peel, E. Vernon, L.
Pitt of Hampstead, L. White, B.
Ponsonby of Shulbrede, L. Winstanley, L.
Arbuthnott, V. Liverpool, E.
Auckland, L. Long, V.
Avon, E. Lonsdale, E.
Beloff, L. Lyell, L.
Belstead, L. Mackay of Clashfern, L.
Broadbridge, L. Mackie of Benshie, L.
Brougham and Vaux, L. Mancroft, L.
Burton, L. Margadale, L.
Campbell of Alloway, L. Marley, L.
Cockfield, L. Monk Bretton, L.
Coleraine, L. Mottistone, L.
Craigmyle, L. Mountevans, L.
Cullen of Ashbourne, L. Mowbray and Stourton, L.
De La Warr, E. Orkney, E.
Denham, L. [Teller.] Pender, L.
Digby, L. Platt of Writtle, B.
Eccles, V. Rochdale, V.
Ferrers, E. Sandford, L.
Ferrier, L. Sandys, L. [Teller.]
Fortescue, E. Skelmersdale, L.
Gibson-Watt, L. Stanley of Alderley, L.
Gormanston, V. Strathcarron, L.
Gridley, L. Strathclyde, L.
Hailsham of Saint Marylebone, L. Sudeley, L.
Swinton, E.
Hives, L. Trumpington, B.
Holderness, L. Tryon, L,
Hylton-Foster, B. Vaux of Harrowden, L.
Kemsley, V. Vivian, L.
Lane-Fox, B. Westbury, L.

Resolved in the negative, amendment disagreed to accordingly.

On Question, Motion agreed to.

Lord Denham

My Lords, I should apologise to your Lordships for the late time of the adjournment for dinner, but I think it will have been the general wish of the House not to interrupt this very important debate in the middle. I beg to move that further consideration of Commons Amendments be now adjourned until nine o'clock.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.19 p.m. to 9 o'clock.]