HL Deb 28 November 1983 vol 445 cc442-9

3.10 p.m.

Lord Belstead

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Lord Belstead.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 2 [Abolition of statutory succession to agricultural holdings in the case of new tenancies]:

[Amendment No. 30 not moved.]

The Chairman of Committees (Lord Aberdare)

I have to point out before I call Amendment No. 31 that if this amendment is agreed to I cannot call Amendment No. 32.

Lord Prys-Davies moved Amendment No. 31: Page 6, line 4, leave out from ("shall") to end of line and insert ("only apply on the occasion when there died the first").

The noble Lord said: Your Lordships know very well that the principal part of this Bill—indeed, the controversial part—is to be found in Clauses 1 and 2. These clauses are at the heart of the NFU and CLA package. They do not stand apart in a splendid isolation, the one from the other. Clause 1 is the benefit required by the NFU in exchange for the loss of succession sought by the CLA and conceded in Clause 2. This balance of benefit and detriment, this give and take, is the basis of the bargain between the NFU and the CLA, and is the heart of the Bill.

But is this bargain still intact? If the open market valuation is to find its way into the rent formula embodied in Clause 1, or if the scarcity factor is to be dropped from Clause 1, the bargain will have been undermined and the balance will tilt or swing heavily in favour of the CLA. It has occurred to us on these Benches that in these changed circumstances the NFU will want another careful look at Clause 2. It may conclude that succession may have been sold at too cheap a price.

These comments are relevant because of the uncertainty about the extent of the Government's commitment to Clause 1 as drawn in the Bill. On the first day in Committee the noble Lord the Minister, under heavy pressure not to depart from the open market formula, invited your Lordships not to press the very many amendments to Clause 1 so that the Government could have time to consider whether it was possible to incorporate the sense of the amendments without destroying the NFU/CLA package. I am not sure that the Government can accept the sense of the open market formula which was being pressed on the Government a week ago without doing harm to the principle of Clause 1. I wonder whether the Minister, when he replies, can give us the benefit of his thinking over the past few days.

The object of this amendment is to ensure that, come what may, there shall be one statutory successor on the death of a tenant whose tenancy was granted after the passing of this Bill when it becomes an Act. This would secure a two-generation tenancy; a family tenancy which would, on average, extend over 40 or 50 years from father to son. I believe that this amendment recognises that some landlords have genuine fears that the effect of statutory succession in the 1976 Act is too heavy a burden, although we on these Benches do not accept that the evidence supports this contention. The amendment recognises the fears of landlords, but, at the same time, it also recognises the need of the tenant's family to a protection of tenancy—possibly a protection which the NFU may have been too ready to bargain away.

As I understand it, the Bill as drawn denies to tenancies created after its passing the benefit of any statutory succession on the death of the contractual tenant. The proposed new clause is not content to modify or to restrict the right of succession granted by the 1976 Act in the case of a contractual tenancy granted after the passing of the Bill: it takes it away. The new tenant may have been a good tenant; the farm may have been farmed well; but on the death of the tenant and on the authority of this clause, his family could be thrown out. Should the shield provided by the 1976 Act be dropped altogether in 1983 for new tenancies? Is this a wise provision? Is it not in the interests of good husbandry that this provision should be maintained?

It is rather interesting that we have not been given any firm data about how Section 18 has worked. We have been asked to reverse Section 18, but there is no firm data on how the section has worked. We have not been referred to any comprehensive assessment of the operational section. I have a hunch that we have not been referred to any such assessment because no such assessment exists.

I shall put three simple questions to the Minister. First, how many tenants have died since November 1976 leaving eligible successors who succeeded to the tenancies? That is a simple question. Secondly, how many eligible successors were found by the ALTs to be unsuitable for succession? Thirdly, what percentages of holdings which became available with vacant possession were re-let, although there was no eligible successor or suitable eligible successor? It would appear to me that we cannot form a proper picture unless we know the answers to these questions and possibly to other questions.

But, if Clause 2 is enacted, then henceforth tenants will be put into two categories: one will be a three-generation tenancy, the other will be a severely limited one-generation tenancy. If I may adopt the words of the noble Marquess, Lord Salisbury, this will be a very peculiar thing. We shall have a substantial number of tenants for some years to come who will be able to claim a three-generation succession and other tenants who, although possessing good records as tenants, will be denied the right of even a single succession.

Of course, not only shall we have the two categories of succession but all this will lead to at least two—and, I concede, possibly more than two—different rent valuations. This, in turn, will breed a sense of unfairness among tenants which will be quite understandable. This sense of unfairness could intensify and it would lead to a demand in due course for a repeal of the section. I would acknowledge that our amendment, regrettably, will still retain two classes of tenancy—the three-generation and the two generation—but the differential will be much reduced. So, in a sense, although the best solution would have been the deletion of Clause 2and my noble friends will speak about that later on—a second-best solution (and I acknowledge that it is very much a second-best solution) is to allow one transmission on the death of the contractual tenants. I beg to move.

Lord Mackie of Benshie

As I understand the amendment, if I understand it, it would appear from the noble Lord's speech that what they want to do is to give the NFU time to think again in case the wicked Government do them down on Clause 1. This may be an admirable sentiment but I do not think it is very sensible, because the NFU and the CLA were thinking for two years or more. I agree that, if land is going to be let and more land is going to be available for incomers to farming, it will matter just as much to the sons or daughters of tenants. and then I think that this is a sensible compromise. I must say that to move it from one generation to two generations (which the noble Lord, I think, acknowledged was second best) would be very foolish. Therefore, I think that we would oppose this amendment.

Lord Belstead

Listening to the noble Lord moving this amendment, I felt a little like the Irishman who, on being asked the way, would have replied that he would not be starting from there, anyway, if he had the choice. Really, on any objective judgment, the position which we have reached in 1983 under the terms of the 1976 legislation is not desirable and, some would say, is disastrous. In his remarks the noble Lord said perfectly fairly that no evidence had been given by the Government of this assertion—which, of course, my noble friends and I have made before now from this side of the Committee.

I am not sure that I can answer the detailed questions which the noble Lord put to me. I think that some of them are not capable of a reply because we do not have the information. But let me give the Committee two very simple pieces of information. Between 1970 and 1975 the percentage of agricultural land (as expressed as a percentage of the total amount of agricultural land in England and Wales) which was rented went down by 0.6 per cent. Then, from 1976to 1982, the percentage of tenanted land as a proportion of the total area of agricultural land went down by very nearly 5 per cent. In statistical terms, that, arguably, has been the effect of the 1976 legislation, although I would not deny that there may have been other reasons as well.

I think that it is fair to ascribe weight to that accelerated decline in the area of agricultural land which has been tenanted since the 1976 Act became law. One has only to use one's common sense. To sign away a great deal of real property for a period of three generations really is asking a very great deal of the private landlord—and my noble friend Lord Swinton in his Second Reading speech showed from his personal experience how the 1976 Act had prevented the letting of land in his family. If I may say so, the report of the committee of the noble Lord, Lord Northfield, in paragraph 626, was in no doubt that the 1976 Act was having an effect on tenanted land. There is, therefore, so far as the Government are concerned, no feeling that we need second thoughts on this matter.

What we have tried to do is to draw Clause 2 of the Bill—in which we would repeal if the Committee agrees, the 1976 Act—in as fair a way as we possibly can by making sure that there is no retrospection. This is the effect of subsection (2) of Clause 2. I want to place that on the record because I was not entirely sure from the words of the noble Lord that he entirely agreed with that. The effect of subsection (2) taken with subsection (1) is that Clause 2 allows for no retrospection in the repeal of the 1976 Act. I am afraid that I cannot go further than that in replying to noble Lords opposite. I acknowledge that noble Lords are trying to take a step in the direction of the Bill in bringing forward this amendment but I am afraid that it is not acceptable to the Government.

Lord John-Mackie

I think that this requires a little more ventilating than it has had. The noble Lord, Lord Belstead, has made a reply which I do not think will satisfy us at all. I should like to emphasise what my noble friend Lord Prys-Davies said on this subject, but more from the practical side of a tenant than in relation to the legal points that he made. There has been a lot of argument about just what effect the 1976 Act has had. I have made some calculations and I also have here a graph done by a firm of land agents which shows the position all the way from 1920 onwards. In the period from 1975 to 1982 that graph remains absolutely steady, although it shows a steady decline.

I do not know where they got the figures from after 1982, but I presume it was from the Northfield report, which shows that graph continuing at a steady decline. Nor am I sure where the noble Lord got his figures, but I should imagine that he has taken acreage. Of course, if a 20,000-acre hill farm were let in that time, that would probably distort the figures considerably. My noble friend Lord Prys-Davies has said that we cannot get proper figures. For the noble Lord to quote acreage instead of the number of farms is, I think, very misleading. As I say, you have only to have a couple of 20,000-acre hill farms in that figure and it distorts the argument altogether.

I made some calculations on the actual figures that I could get, and I admit readily that there was a slight difference between 1977 and 1982. The noble Earl, Lord Caithness, doubted my figures. He may be right. As I say, there was a difference but it was not significant. He produced some more figures which just add to the confusion that we have. We do not have proper information to continue this argument to any degree of sense at all, and I want to make that point very clear indeed.

As regards the case for succession, agriculture is a long-term business and on many things it takes years before a farmer sees the benefit from his work. Starting with the longest term of the lot—the planting of trees—just how many tenant farmers are going to plant trees if their families are not going to get the benefit of them? I am planting trees at the present moment, as it happens, in the hope that if I live long enough my youngest son will get the tenancy of the farm but with the proverbial bus going up and down the streets of London continually, that may not be the case. So my family may not get the benefit of the trees that I am planting at the present time.

I want to make a point about drainage. I have just drained the whole of the farm that I have tenanted over the past seven years. I am talking about drainage in all its aspects. It takes years and years (a) to write off the cost and (b) to get the benefit. How on earth are farmers going to get the benefit of that sort of work if they do not have some confidence that their families are going to get the benefit?

Then there is the question of buildings, fencing—often road making—and all the business of fixed equipment which tenants help landlords to deal with. Many tenants do it. I know many tenants who provide nearly all the fixed equipment themselves. How do you get the full benefit of that for your family unless you have some succession?

May I mention liming and fertilising, which is one of the most important means of keeping land in good heart? There again, liming particularly is a very long term business indeed. I know that some noble Lords may bring forward the argument that if a farmer has a proper tenancy agreement he will get full recompense and a tenant rights agreement at the end of his lease—or rather, if he is a life tenant, after he is dead. That is not a lot of compensation, if I may say so. I do not want to get emotional on the subject of farming but I have farmed myself for a very long time. It is a way of life. It is slightly different from other businesses and I think in many ways it has to be treated differently. My noble kinsman may disagree with me: he has three daughters and I have three sons.

Most noble Lords hold their land in perpetuity. Why grudge the man who works that land and looks after it? Why grudge him at least a succession for his son for which we are asking? We are not asking for two successions but only for one. I should have thought that noble Lords would have agreed with that.

We are not talking solely about private landlords, many of whom, I agree, are first-class landlords. The noble Earl, Lord Swinton, instanced what he did. I was intrigued by the way he put it: that they had looked not only for giving one son succession but that if there were two sons he looked for farms on the estate for that as well. He was proud of doing that and he had 89 per cent. of his land in hand and he said that was just right, he thought, for the size of the estate. Then when it became mandatory, he turned against it. I do not quite understand that; but that is what he said. I suspect it was the advice he got which he admitted he agreed with. But it seems strange to have done that.

Not all landlords are private landlords. We have the Church, Crown land, colleges and other charities. Now more and more are managed by, if I may say so, hard-faced investment managers, who do not know the land and have no feeling for it. I should like to give my own experience of that particular point. On my farm we had a disaster with Dutch elm disease and all the elms died. There were very many of them. I have now the hedgerows with all the dead elms cleared, and this is the re-planting that I am doing at the present moment in my hedgerows. I thought that as the county council were giving me a grant the landlord should maybe go half and half in my share; but I received the reply, "We cannot invest any money that does not show an immediate return." That is the sort of thing that you get, and that is why I am scared stiff at the growing institutional landlord system that we have. They will be managed by even harder-faced investment managers, and that makes me very doubtful whether they will manage the land as the old landlords have done. Unless we get mandatory succession, farmers may not get much consideration at all from that type of landlord.

I do not think that whatever is put into this Bill as it stands—and we do not yet know what the Government are going to do in Clause 1—will make any difference to the number of farms coming on to the market. Much more radical things will have to be done to the Bill before that happens. The NFU have given away their right to succession, with nothing in return. I should like to quote from a document which illustrates the point more than anything else. This is a document which was written by my great grandfather 160years ago and he wrote it after he had been given the tenancy of a farm of 105 acres—50 so-called arable and 55 unclaimed land, or bog. He set about claiming the 55 acres, and when I read what he did it makes me very humble indeed.

This is what he said at the beginning of a report which he gave to the Highlands Society and was commended for it in 1831 when it started to show business. I want to read two short passages. He says: the former tenant not having been under any restriction as to cropping and it having been intimated to him several years before the expiry of his lease that it was not to be continued as a farm, the soil was completely exhausted and unfit to bear a crop of any sort. That is what happens when he has no succession. At the end of the report my great grandfather wrote: Before concluding this report I cannot omit mentioning with feelings of much satisfaction that the Earl of Aberdeen, on account of the exertions I made in improving my farm, has agreed to renew my lease at the present rent for a period sufficient, I trust, to enable me to recover the capital I have laid out and a remuneration for my own time and trouble. That was 160 years ago and the situation is the same today.

3.40 p.m.

Lord Walston

The noble Lord, Lord John-Mackie, has spoken with a wealth of personal experience. He even makes those of us who are doubtful about it think that there may be something in the hereditary principle after all, when he quotes the experience of his great grandfather. But what he is in fact saying is that everything lying behind this Bill is wrong. He is saying that what there was before the three-life tenancy was good. He might even have gone on to say that tenancies in perpetuity are better because that is the logic of his argument, and where it must inevitably lead. I think most of us here have accepted that, although the results of the three-life tenancy have not shown a marked and absolutely certain decline in the lettings, that has been a contributory factor. Your Lordships will remember that most of the speeches on Second Reading said that this Bill will do little, but it removes the absence of tenanted land and it is a move in the right direction.

Having accepted that—and I think that even the noble Lord, Lord John-Mackie, and his friends rather grudgingly and unwillingly accepted that—I cannot for the life of me see the logic behind his proposals and those of his noble friends. All he is saying is, "We would like to have had a three-life tenancy. We do not think that a one-life tenancy is sufficient, so let us compromise and have a two-life tenancy". But if the arguments that he has adduced showing what happens towards the end of a one-life tenancy are true, if the fertility of the land is not maintained, if the drainage is not maintained, if the soil is not limed, if the dead elms are not cut down and if yew trees are not planted at the end of a one-life tenancy, precisely the same thing will happen at the end of a two-life tenancy. We shall be no better off, accepting that the majority of us sitting here in this Chamber will not be here to see it. But from the point of view of agriculture, there will be absolutely no change whatsoever.

Therefore, reluctantly and sadly—because I do not like disagreeing with the noble Lord, Lord John-Mackie, who has so much wisdom and experience—I feel that all he is doing is attempting, not very wholeheartedly, to postpone the evil day, if indeed it is an evil day, and thereby doing a great deal to vitiate any success that this Bill might have. So I am afraid that I must join with my noble friend Lord Mackie of Benshie in opposing this amendment.

Lord Nugent of Guildford

I enjoyed listening to the noble Lord, John-Mackie, with his great experience of agricultural matters, putting some technical flesh onto the political bones of his noble colleague, but I am not sure that all the flesh really fitted. It would be a very short-term farmer who did not get the fertiliser value back out of his land in his lifetime; and there might be one or two other technical points on which the noble Lord, as fluent as ever and, as always, delightful to listen to, was a little on shaky ground.

But, of course, he is right when he says that it is not possible to prove it. He is probably right that, if you drew a graph from the 1920s till now, the downward trend of tenanted agricultural land would continue in a fairly straight line. But, of course, my noble friend was contending that there was a significant jerk after the 1976 Act, and I should have thought that it was significant. But nobody could prove that, and we all know it. I can well remember, however, when we were debating the 1976 Act here, which I strongly opposed with my noble colleagues because I felt sure that it would further diminish what was left of the tenanted agricultural land, which was already far too little.

The significant point about which I would remind noble Lords on the other side is that the Government did not put that provision in their Bill when they introduced it into the Commons. It was put in by an amendment from the Back-Benches, as the noble Lord, Lord John-Mackie, will remember, and Ministers accepted it because clearly, for political reasons, they could do nothing else. So that by the time the Bill came here, there it was in the Bill. We did the best we could with it, but clearly the weight of political numbers was going to defeat us. But the fact is that any act of judgment at that time, certainly by someone—

Lord John-Mackie

Will the noble Lord allow me to intervene? Is he suggesting that the weight of political numbers at the present moment does not have any effect?

Lord Nugent of Guildford

Of course it has, and I hope that it will have a very good effect this time in trying to put right some of things that have been put wrong. But the point I was making was that the political judgment of the experts—that is, the Ministers and the officials behind them in the Ministry of Agriculture of that day—was that, on the whole, this would probably further diminish something which most of us very much wish to see not diminished. That is really why we opposed it then, and I and my noble friend, and indeed all my noble colleagues, are trying to rectify to some extent the mistake that was made in 1976.

I am the last to say that I think that this Bill will transform the whole situation; I am sure that it will not. The fiscal factors are so weighty against the letting of agricultural land that there is all too little of it left now. But, at least, it will do something if we put this Bill on the statute book to retard (I do not say that it will even stop) the downward trend. That is the reason why all of us who are interested in the prosperity of the countryside and. indeed, the social structure of the countryside, and especially in the prospect of youngsters coming in and becoming tenants of agricultural land, wish to proceed with this Bill, to put it on the statute book and, at least, make this marginal improvement in what we consider a very unhappy situation now. So I warmly support my noble friend and I hope that he will stick to his guns.

The Earl of Swinton

As the controversy in this debate seems to be growing, I think it might be a convenient time to take the Statement. I beg to move that the House do now resume.

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

House resumed.