STATUTORY SUCCESSION BY PERSON NOMINATED BY RETIRING TENANT

HL Deb 07 February 1984 vol 447 cc1087-133

Application of Schedule

1.—(1) Where—

1. (a) an agricultural holding is held under a tenancy from year to year, being a tenancy granted before the date on which this Act is passed or on or after that date in circumstances within section 2(2) of this Act; and
2. (b) a notice is given to the landlord by the tenant, or (in the case of a joint tenancy) by all the tenants, of the holding indicating (in whatever terms) that he or they wish a single eligible person named in the notice to succeed him or them as tenant of the holding as from a date specified in the notice, being a date on which the tenancy of the holding could have been determined by notice to quit given at the date of the notice and which falls not less than sixteen months after the date of the notice;

paragraphs 3 to 9 of this Schedule (except paragraphs 4(8) and 5(6), which are of general application) shall apply unless excluded by paragraph 2 below.

In this sub-paragraph "tenant" does not include an executor, administrator, committee of the estate, trustee in bankruptcy or other person deriving title from a tenant by operation of law.

(2) In this Schedule— agricultural land" has the meaning given by section 1(2) of the 1948 Act; close relative" means—

1. (a) the wife or husband of the retiring tenant;
2. (b) a brother or sister of the retirig tenant;
3. (c) a child of the retiring tenant;
4. (d) any person (not within (b) or (c) above) who, in the case of any marriage to which the retiring tenant has been at any time a party, has been treated by the latter as a child of the family in relation to that marriage;

eligible person" means (subject to sub-paragraph (3) below) a close relative in whose case the following conditions are satisfied—

1. (a) in the last seven years his only or principal source of livelihood throughout a continuous period of not less than five years, or two or more discontinuous periods together amounting to not less than five years, derived from his agricultural work on the holding or on an agricultural unit of which the holding forms part; and
2. (b) he is not the occupier of a commercial unit of agricultural land or, if he is, he occupies it as a licensee only;

But in the case of the wife of the retiring tenant the reference in paragraph (a) above to the relative's agricultural work shall be read as a reference to agricultural work carried out by either the wife or the retiring tenant (or both of them); the holding" means the holding in respect of which the retirement notice is given; the nominated successor" means the eligible person named in the retirement notice; the relevant period" means the period of one month beginning with the day after the date of the giving of the retirement notice; the retirement notice" means the notice mentioned in subparagraph (1) above; the retiring tenant" means the tenant by whom the retirement notice was given or, where it was given by joint tenants (and the context so permits), any one of those tenants, and "the retiring tenants" accordingly means those tenants; the tenancy" means the tenancy of the holding; the Tribunal" means the Agricultural Land Tribunal.

(3) For the purposes of paragraph (a) of the definition of "eligible person" in sub-paragraph (2) above any period during which a close relative was, in the period of seven years mentioned in that paragraph, attending a full-time course at a university, college or other establishment of further education shall be treated as a period throughout which his only or principal source of livelihood derived from his agricultural work on the holding; but not more than three years in all shall be so treated by virtue of this sub-paragraph.

(4) For the purposes of paragraph (b) of that definition—

1. (a) "commercial unit of agricultural land" means a commercial unit of agricultural land as defined by subsection (3A) of section 18 of the 1976 Act (taken with subsection (3B) of that section); and
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2. (b) where the nominated successor is, by virtue of a direction of the Tribunal under paragraph 4(5) below, for the time being entitled to a tenancy of any agricultural holding held by the retiring tenant other than the holding he shall be deemed to be in occupation of that holding.

(5) For the purposes of any proceedings under this Schedule in relation to the holding the Minister shall, at the request of the nominated successor or the landlord and in relation to any agricultural land which is occupied by the nominated successor, determine by reference to the provisions of any order for the time being in force under subsection (3B) of the said section 18 the net annual income which, in his view, the land is capable of producing for the purposes of subsection (3A) of that section (as applied by sub-paragraph (4)(a) above), and shall issue a written statement of his view and the grounds for it to the person making the request. The reference above to any agricultural land which is occupied by the nominated successor includes a reference to any agricultural land which is deemed to be occupied by him by virtue of sub-paragraph (4)(b) above.

(6) Subsection (6A) of the said section 18 (revision of determinations) shall, with any necessary modifications, apply to a statement issued by the Minister in pursuance of sub-paragraph(5) above as it applies to one issued by him under subsection (6) of that section, and subsection (6B) of that section (evidential matters) shall apply also to any statement issued by him in pursuance of that or this sub-paragraph.

(7) Section 92 of the 1948 Act (service of notices) shall apply to a notice under sub-paragraph (1)(b) above as it applies to a notice under that Act.

Excluded cases

2.—(1) The following paragraphs of this Schedule shall not apply—

1. (a) if on the date of the giving of the retirement notice the tenancy is the subject of a valid notice to quit to which subsection (1) of section 2 of the 1977 Act applies, being a notice given before that date in the case of which either—
   1. (i) the month allowed by that subsection for serving a counter-notice thereunder expired before that date without such a counter-notice having been served; or
   2. (ii) the Tribunal consented before that date to its operation;
2. (b) if on the date of the giving of the retirement notice the tenancy is the subject of a valid notice to quit given before that date and falling within Case C or F in subsection (3) of that section;
3. (c) if on the date of the giving of the retirement notice the tenancy is the subject of a valid notice to quit given before that date and falling within Case B, D or E in subsection (3) of that section, and either—
   1. (i) the time within which the tenant could have required any question arising in connection with the notice to quit to be determined by arbitration under the 1948 Act expired before that date without such a requirement having been made by the tenant, and the month allowed for serving any counter-notice in respect of the notice to quit expired before that date without any such counter-notice having been served; or
   2. (ii) questions arising in connection with the notice to quit were referred to arbitration under the 1948 Act before that date and were determined before that date in such a way as to uphold the operation of the notice to quit, and (where applicable) the month allowed for serving any counter-notice in respect of the notice to quit expired before that date without a counter-notice having been served; or
   3. (iii) the Tribunal consented before that date to the operation of the notice to quit;
4. (d) if the retiring tenant has at any time given any other notice under paragraph 1(1)(b) above in respect of the holding and an application to become the tenant of the holding has been duly made by any person under paragraph 4 below in respect of that notice;
5. (e) if on the date specified in the retirement notice as the date as from which the proposed succession is to take place the retiring tenant will be under sixty-five;
6. (f) if the holding consists of land held by a smallholdings authority or the Minister for the purposes of smallholdings within the meaning of Part III of the Agriculture Act 1970 1089 (whether the tenancy was granted before or after the commencement of the said Part III);
7. (g) if the tenancy was granted by trustees in whom the land is vested in charitable trusts the sole or principal object of which is the settlement or employment in agriculture of persons who have served in any of Her Majesty's naval, military or air forces.

(2) The following paragraphs of this Schedule shall not apply if, had a sole tenant of the holding died at the date of the giving of the retirement notice in circumstances falling within subsection (1) of section 18 of the 1976 Act, the application of the provisions of Part II of that Act referred to in that subsection would have been excluded in relation to the holding by paragraph (e) of subsection (4) of that section; and the reference to that paragraph includes a reference to it as extended by subsection (5) of that section or by paragraph 9(1)(b) below in relation to a direction of the Tribunal under this Schedule.

Restriction on operation of certain notices to quit

3.—(1) This paragraph applies to—

1. (a) any notice to quit the holding given to the tenant thereof before the date of the giving of the retirement notice, not being a notice falling within any of paragraphs (a) to (c) of paragraph 2(1) above; and
2. (b) any notice to quit the holding so given on or after that date.

(2) A notice to quit to which this paragraph applies shall not, if it would otherwise be capable of so having effect, have effect—

1. (a) at any time during the relevant period; or
2. (b) where an application to become the tenant of the holding is made by the nominated successor under paragraph 4 below within that period, at any time before the application has been finally disposed of by the Tribunal or withdrawn or abandoned;

and shall in any event not have effect if any such application is disposed of by the Tribunal by the giving of a direction under sub-paragraph (5) of that paragraph.

Application for tenancy of the holding

4.—(1) The nominated successor may (subject to paragraph 7(2) below) apply to the Tribunal within the relevant period for a direction entitling him to a tenancy of the holding.

(2) Any such application—

1. (a) must be accompanied by a copy of the retirement notice; and
2. (b) must be signed by both the nominated successor and the retiring tenant or, where the notice was given by joint tenants, by each of the retiring tenants.

(3) If the Tribunal are satisfied—

1. (a) that the nominated successor was an eligible person at the date of the giving of the retirement notice; and
2. (b) that he has not subsequently ceased to be such a person; the Tribunal shall determine whether he is in their opinion a suitable person to become the tenant of the holding.

(4) Before making a determination under sub-paragraph (3) above the Tribunal shall afford the landlord an opportunity of stating his views on the suitability of the nominated successor; and in making any such determination the Tribunal shall have regard to all relevant matters, including—

1. (a) the extent to which the nominated successor has been trained in, or has had practical experience of, agriculture;
2. (b) his age, physical health and financial standing;
3. (c) the views (if any) stated by the landlord on his suitability.

(5) If the nominated successor is determined under that subparagraph to be in their opinion a suitable person to become the tenant of the holding, the Tribunal shall give a direction entitling him to a tenancy of the holding.

(6) If the Tribunal dispose of the nominated successor's application otherwise than by the giving of a direction under sub-paragraph (5) above the retirement notice shall be of no effect (but without prejudice to paragraph 2(1)(d) above).

(7) For the purposes of this Schedule an application under this paragraph which is withdrawn or abandoned shall be treated as if it had never been made.

(8) Provision shall be made by order under section 73(3) of the Agriculture Act 1947 (procedure of Agricultural Land Tribunals) for requiring any person making an application to such a tribunal under this paragraph to give notice of the application to the landlord of the agricultural holding to which the application relates.

Effect of a direction under paragraph 4

5.—(1) Subject to the provisions of this and the following paragraph, a direction by the Tribunal under paragraph 4(5) above entitling the nominated successor to a tenancy of the holding shall entitle him to a tenancy of the holding as from the relevant time on the same terms as those on which the holding was let immediately before it ceased to be let under the contract of tenancy under which it was let at the date of the giving of the retirement notice; and accordingly, subject as aforesaid, such a tenancy shall be deemed to be at that time granted by the landlord to, and accepted by, the nominated successor.

(2) Where the tenancy of the retiring tenant or (as the case may be) of the retiring tenants was not derived from the interest held by the landlord at the relevant time, the tenancy deemed by virtue of sub-paragraph (1) above to be granted to, and accepted by, the nominated successor shall be deemed to be granted by the person for the time being entitled to the interest from which the tenancy of the retiring tenant or tenants was derived, instead of by the landlord, with like effect as if the landlord's interest and any other supervening interest were not subsisting at the relevant time: but this provision shall not be read as affecting the rights and liabilities of the landlord under this Schedule. The reference above to a supervening interest is a reference to any interest in the land comprised in the tenancy of the retiring tenant or tenants, being an interest created subsequently to that tenancy out of the reversionary estate immediately expectant on the term granted by that tenancy and still subsisting at the relevant time.

(3) If the terms of the tenancy to which the nominated successor is entitled by virtue of a direction such as is mentioned in sub-paragraph (1) above would not, apart from this subparagraph, include a covenant by the tenant not to assign, sub-let or part with possession of the holding or any part thereof without the landlord's consent in writing, sub-paragraph (1) above shall have effect as if those terms included that covenant.

(4) Any tenancy of the holding inconsistent with the tenancy to which the nominated successor is entitled by virtue of such a direction shall, if it would not cease at the relevant time apart from this sub-paragraph, cease at that time as if terminated at that time by a valid notice to quit given by the tenant.

(5) The rights conferred on any person by such a direction (as distinct from his rights under his tenancy of the holding after he has become the tenant thereof) shall not be capable of assignment.

(6) The Lord Chancellor may by regulations made by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament provide for all or any of the provisions of this Schedule (except this sub-paragraph) to apply, with such exceptions, additions or other modifications as may be specified in the regulations, in cases where the nominated successor, being entitled to a tenancy of the holding by virtue of such a direction, dies before the relevant time.

(7) In this paragraph "the relevant time" means the date specified in the retirement notice as the date as from which the proposed succession is to take place or such later date as the Tribunal may, on the application of the tenant, specify in such a direction.

Arbitration on terms of new tenancy

6.—(1) Where the Tribunal give a direction such as is mentioned in paragraph 5(1) above, subsections (3) to (8) of section 24 of the 1976 Act (provisions as to arbitration on terms of new tenancy) shall have effect in relation to the tenancy which the nominated successor is entitled to or has obtained by virtue of the direction, but with the substitution—

1. (a) in subsection (4) of a reference to paragraph 5(1) for the reference to section 23(1) of that Act;
2. (b) in subsection (5)(a) of a reference to the tenancy of the retiring tenant or (as the case may be) tenants for the reference to the deceased's tenancy.

(2) In those provisions, as extended by sub-paragraph (1) above— the landlord" means the landlord of the holding; the tenant" means the nominated successor; the relevant time" has the meaning given by paragraph 5(7) above; the prescribed period" means the period between the giving of the direction and the end of three months immediately following the relevant time.

(3) Section 77 of the 1948 Act (arbitration under that Act) shall have effect as if in subsection (1) the first reference to that Act included a reference to this Schedule.

Effect of death of retiring tenant on succession to the holding

7.—(1) Sub-paragraphs (2) to (4) below apply where the retiring tenant, being the sole (or sole surviving) tenant of the holding, dies after the date of the giving of the retirement notice but before the relevant time (within the meaning of paragraph 5 above).

(2) If the tenant's death occurs at a time when no application by the nominated successor has been made under paragraph 4 above or such an application has not been finally disposed of by the Tribunal, the retirement notice shall be of no effect and no further proceedings shall be taken under this Schedule in respect of it; and accordingly, subject to section 2 of this Act, section 18(1) of the 1976 Act shall apply on the tenant's death in relation to the holding.

(3) If the tenant's death occurs at a time when any such application has been so disposed of by the giving of a direction such as is mentioned in sub-paragraph (1) of paragraph 5 above, that paragraph, paragraph 6 above and paragraphs 8 and 9 below shall continue to have effect in relation to the holding; and accordingly section 18(1) of the 1976 Act shall not apply on the tenant's death in relation to the holding.

(4) If the tenant's death occurs at a time when any such application has been so disposed of otherwise than by the giving of any such direction, section 18(1) of the 1976 Act shall, subject to section 2 of this Act, apply on the tenant's death in relation to the holding, but no application may be made on that occasion by the nominated successor under section 20 (or 21) of that Act in relation to the holding.

(5) Where the retirement notice was given by joint tenants and one of those tenants, not being the sole surviving tenant of the holding, dies, his death shall not affect any rights of the nominated successor under this Schedule.

Effect of direction on succession to other holdings under the 1976 Act

8. Where—

1. (a) the retiring tenant, being the sole (or sole surviving) tenant of the holding, dies; and
2. (b) the nominated successor is for the time being entitled to a tenancy of the holding by virtue of a direction under paragraph 4(5) above,

then for the purpose of determining whether, in relation to any other agricultural holding held by the retiring tenant at the date of his death, the nominated successor is a person in whose case the condition specified in paragraph (c) of the definition of "eligible person" in subsection (2) of section 18 of the 1976 Act is satisfied, the nominated successor shall be deemed to be in occupation of the holding, and subsection (6) of that section shall have effect as if the reference to subsection (3C) of that section included a reference to this paragraph.

Effect of succession of nominated successor on succession under the 1976 Act

9.—(1) Where the nominated successor obtains a tenancy of the holding by virtue of a direction under paragraph 4(5) above—

1. (a) subsection (2) of section 2 of this act shall apply to the tenancy as it applies to a tenancy obtained as mentioned in paragraph (a) of that subsection, and the reference in paragraph 1(1) above to that subsection accordingly includes a reference to it as applied by this paragraph; and
2. (b) that occasion shall for the purposes of subsection (4)(e) of section 18 of the 1976 Act (exclusion of Part II of that Act where two successions have already occurred), in its application on the death of a tenant of the holding or a related holding, be deemed to be an occasion on which there died a sole tenant (within the meaning of subsection (1) of that section) of the holding and a tenancy of the holding was obtained by virtue of a direction of the Tribunal under section 20 of that Act.

(2) In sub-paragraph (1)(b) above "related holding" means, in relation to the holding, any agricultural holding comprising land the whole or a substantial part of which is comprised in the holding.")

If the House agrees them, these amendments would implement part of proposals put forward by the National Farmers' Union and the Country Landowners' Association seeking to facilitate succession when a tenant who is over 65 years of age wishes to retire. At present a tenant can pass on his tenancy during his lifetime only if the landlord agrees. These amendments provide that when an existing tenant over the age of 65 who enjoys rights of succession under the 1976 Act wishes to retire and nominates a successor, the Agricultural Land Tribunal will have discretion to allow succession, provided that the applicant satisfies the requirements as to eligibility and suitability. The procedure to be followed is set out in detail in the new schedule, Amendment No. 82. Under paragraph 1 of the new schedule a tenant wishing to retire is required to give notice to the landlord at least 16 months before the proposed retiring date, which must be a term date, naming the person he wishes to succeed him. Provisions as to eligibility, including the commercial unit test, which the would-be successor must satisfy, are set out. These follow those in the 1976 Act, as amended by this Bill, including the new provisions in Amendment No. 65, which we have not yet reached, restricting the number of holdings to which a successor may succeed.

Paragraph 2 of the schedule excludes for the provision a tenancy which is subject to an effective notice to quit and cases where a previous application has been made under these arrangements; it prescribes a minimum age of 65 years for the retiring tenant; it excludes statutory smallholdings and applies only where tenants enjoy rights of succession under the 1976 Act.

Under paragraph 3 a notice to quit which has not been determined at the date of the retirement notice or which is served after the retirement notice will lapse if an application for succession is approved by the tribunal. Under paragraph 4 the nominated persons must, within one month of the retirement notice, apply to the tribunal for succession, attaching a copy of the retirement notice. The tribunal must satisfy itself as to the applicant's eligibility and suitability. The landlord is afforded the same opportunity to contest suitability as in the 1976 Act.

Rules of procedure for tribunals will be made under Section 73(3) of the Agriculture Act 1947 which will enable landlords to contest the eligibility of applicants. Paragraphs 5 and 6 incorporate procedural provisions relating to the tribunal's direction and to arbitration on the terms of the new tenancy, comparable to Sections 23 and 24 of the 1976 Act as amended by this Bill.

Paragraphs 7 and 8 set out the effect of death of the retiring tenant on succession to the holding. Paragraph 7(4) would prevent an unsuccessful applicant for succession on retirement being able to reapply for succession on the death of the tenant. Paragraph 9 provides that a succession on retirement under these provisions will count as one of the two successions allowed under the terms of the 1976 Act.

That is the effect of the different paragraphs of this very long schedule, but it attempts to put a very simple principle into effect—the principle that somehow we must make it easier for tenants to be able to retire and nominate successors if we are to try to encourage the turn around of successions more frequently than has happened in the past. I beg to move.

Viscount Dilhorne

My Lords, there is one thing that I should like to ask my noble friend Lord Belstead to consider in this particular amendment. This amend- ment allows a tenant to serve a notice. The tenant is given an option to set in motion a succession procedure. This is a one-way option. If there is an elderly tenant who ought to retire, the landlord still has to wait until his death.

It would seem to be a fairer provision if this provision allowed the options to be mutual, exercised by both parties, so that the son, who is anyway going to succeed, could succeed prior to the death of the tenant, and enable the farm to continue probably to be looked after better. It is only a provision that I am suggesting that my noble friend should consider in order to accelerate something where the landlord has no power to accelerate it and the actual tenant has passed the age where he should still be, so to speak, in the saddle.

Lord John-Mackie

My Lords, I think we would all welcome this clause and the schedule. I read it through. It seemed to take an awful lot on paper to carry out what one would think would be a simple amendment. However, we must accept that the draftsman has gone into it carefully and that it requires this long schedule. The point that the noble Viscount mentioned, that the landlord should have the right to insist on the retirement of a tenant who he thinks is not farming well, or is just aged, is a difficult point. We had the argument about whether we should fix an age when we discussed this at Committee stage.

If the tenant has a successor working on the farm it is slightly different. With all the new eligible people who are being controlled now, the man should be working on the farm, so I think that the noble Viscount's point is met if the person who is going to succeed is managing the farm. I should like to hear what the noble Lord, Lord Belstead, says on this point.

Lord Walston

My Lords, I think that this is a good amendment, and I support it. I cannot go along with the proposal of the noble Viscount, Lord Dilhorne. It perhaps sounds logical, but let us look at the situation as it might well arise. If the father, let us call him, or the tenant, does not wish voluntarily to surrender the tenancy to his son or next relative, for the landlord to impose it upon him against his will would lead to an unhappy family situation which cannot be in the interests of the farm itself. I do not think it is in any way practical for that reason.

My only query about this amendment which, as I say, I support, is why it is not going to be open to a tenant to apply before he is 65 for this to be done. There can be cases—and there are cases I personally have come across—where an extremely good tenant meets with a serious accident, or becomes incapacitated through disease, and is anxious to hand his tenancy on to his son, who may be 30 by then—he himself being perhaps 50 or 55—and whom he would like to succeed him. Most good landlords would agree to take the son into partnership, but if there are going to be proposals as set out in this amendment whereby the tenancy can be surrendered at the age of 65 in favour of a son, or a suitable successor, I think it should be possible for it to be done at an earlier date where the tenant himself is incapacitated through accident or disease., I hope that the Government will be prepared to consider that, or give us cogent reasons why it is not a starter.

Lord Northfield

My Lords, this series of amendments meets all the points we raised at Committee stage, and covers the recommendation that my committee made in paragraph 634. Those of us who tried amateur drafting at Committee stage to cover this point were devastated to find that when it is done properly it needs nine pages. It shows how far astray we can be when as amateurs we try to do the job of the parliamentary draftsmen.

On the point that the noble Viscount, Lord Dilhorne, raised, may I say that some members of my committee saw the point about the reluctant tenant. There is some force to the argument. The noble Lord, Lord Walston, said that it could lead to bad family situations. In fact, it might heal a bad family situation when the landlord is able to say to some recalcitrant old man who will not retire, "Your son should take over", and that would bring to an end what might have been a continuous running fight in that family about the need for the elderly tenant to make room for the next one. That can cut both ways. There is something to be said for a landlord power to trigger this mechanism.

I will say no more than that, but I should be interested to know whether the noble Lord, Lord Belstead, will confirm that the Government have considered this and rejected it. It is important for us to know whether the door is still open on this issue or whether they have considered it and rejected it.

On the point about retiring earlier than 65, I guess that the amendment provides for that, but again I am a little lost and should be interested to know whether I am right.

Lord Belstead

My Lords, the suggestion which came from my noble friend Lord Dilhorne worried the noble Lord, Lord John-Mackie. I think it would also worry the Government, because it would come very near to compulsory retirement. That is also what the noble Lord Lord Walston, was saying.

But, if the tenant is unsatisfactory, in the sense that he is not keeping up to the requirements of good husbandry, the landlord can apply for a certificate. I know we have been over this ground before, but the suggestion from my noble friend which we feel would come very close to compulsory retirement is not something we would want to consider, because, ever since the Bill was introduced we have always said that we would consider what in effect would be voluntary retirement which is what the NFU and the CLA considered.

That leads me to the question asked by the noble Lord, Lord Walston: what about the age of 65 being a lower retirement age? The noble Lord, Lord Northfield, answered part of that for me by directing my attention to paragraph 634 of his report, where the noble Lord's committee recommended that transfer should be at the age of 65. In addition the negotiations within the industry have been on this basis.

I am not entirely sure that all the factors have been in the minds of those who have been considering this. I should like to look again at the noble Lord's report. But, speaking off the cuff, there would be a danger if we lowered the 65 year-old age because, imperceptibly, pressure would begin to be brought on tenant farmers to retire. This would not be desirable.

I have been asked a direct question by the noble Lord, Lord Northfield. That is, would the Government consider this point or are our minds closed to it? Obviously our minds cannot possibly be closed on an enormously long schedule which we were only able to get down last Thursday. It would be wholly unreasonable for me to suggest that to your Lordships. I have staked out the ground as best I can about what the considerations are in our minds if we are to return to this point.

On Question, amendment agreed to.

Clause 4—[Amendments with respect to length of notices to quit]:

9.18 p.m.

Lord Renton moved Amendment No. 32: Page 8, line 33, after ("months") insert ("which may terminate on a date other than the end of a year of the tenancy")

The noble Lord said: My Lords, I should explain that Clause 4 deals with the giving of short notice for the termination of an agricultural tenancy and details the circumstances in which such notices should be given. It is especially subsection (3) which this amendment would amend.

Presumably it is the intention of the Government that subsection (3) affecting short notices should enable a notice to terminate on a date which is not necessarily the end of the year of the tenancy. Indeed, as the holding may be deteriorating seriously and rapidly, it is sensible that that should be so. But I suggest that the wording is not quite clear on this point.

The Agricultural Law Association has pointed out that there is a good precedent for wording which puts the matter at rest, removes any doubt and it is to be found in the Agricultural Holdings (Notices to Quit) Act 1977 in Section 5(1)(h). These words to be found in Amendment No. 32; the words to be inserted after "months" in line 33, are: which may terminate on a date other than the end of the year of the tenancy". This is very technical but it seems to me that that would set the matter at rest and remove doubt. I beg to move.

Lord Belstead

My Lords, I understand the point made by my noble friend Lord Renton and, once again, I welcome the search for clarity in this legislation. But, with respect to my noble friend and those who advised him on this, I think that this is unnnecessary for these reasons. Where bad husbandry is established, the new subsection (6) specifically provides for a period of notice of not less than two months to terminate the tenancy. This means any period of two months; and, if I may say so, it entirely displaces the provisions previously applicable in Section 1(1) of the 1970 Act, which talks about 12 months from the end of the then current year of tenancy. It is not just the case of substituting "two months" for "12 months" in the words just quoted.

The wording which we have chosen here and which is troubling my noble friend has been put in quite specifically to provide for a period of notice of not less than two months to terminate the tenancy. I hope that that explanation may satisfy my noble friend that there is nothing between us so far as my noble friend's intention is concerned, only as to whether the drafting of the Bill achieves that intention.

Lord Renton

My Lords, may I say that, speaking for myself, I am convinced by my noble friend's explanation. It is a very narrow, rather subtle point. I say, with respect, that I think he has got it right. I must apologise that I referred to a new subsection (3). It should have been subsection (6) as my noble friend has said. With that explanation, and in the hope that those who inspired me to move the amendment are satisfied also, I beg leave to withdraw the amendment.

Amendment, by leave withdrawn.

Clause 5 [Amendments with respect to cases excepted from restriction or operation of notices to quit]:

Lord Northfield moved Amendment No. 33: Page 9, line 4, leave out ("omitted") and insert ("replaced by the following words— Case A—the landlord is a smallholdings authority for the purposes of smallholdings within the meaning of Part III of the Agriculture Act 1970,[...] and—

1. (a) the holding was let to the tenant in pursuance of the said Part III as a tenancy terminable between the seventh and tenth year of the tenancy;
2. (b) the notice to quit takes effect not earlier than the beginning nor later than the end of that period;
3. (c) the instrument under which the tenancy was granted contains an acknowledgement signed by the tenant that the tenancy is subject to the provisions of this Case; and
4. (d) before the notice to quit takes effect the tenant has been offered the tenancy of another smallholding suitable to his needs and resources in terms of size and type of enterprise to be carried on or which otherwise satisfies criteria agreed between the landlord and the tenant.".").

The noble Lord said: This amendment is in the name of the noble Viscount, Lord Ridley. He is not here and he has asked me to move this amendment, and I gladly do so. In the Committee stage the noble Viscount moved an amendment about starter holdings among smallholdings. It was essentially to allow, on the lines of the recommendations of the Northfield Committee, for fixed-term tenancies in the smallholdings system terminable between the 7th and 10th years—and I quote: for young people starting out to prove themselves and giving them that period to do so and build up capital". That was essentially the form in which the noble Viscount moved the amendment in Committee. I intervened to point out that his amendment did not contain some safeguards which my committee had recommended; namely, that the tenancy should not terminate unless the county authority had a holding further up the ladder, a larger holding, suitable for him to move on to, and, secondly, that if they did not have such a holding to offer to him then the notice to terminate at the 10th year would lapse and the county would fail to get possession.

This was to prevent hardship among smallholding tenants if the county authority could not offer them something to move on to when they had proved themselves in a starter holding for which they had a tenancy for from seven to 10 years. When I made my objection at Committee stage the noble Viscount took it away and consulted with the Association of County Councils who are behind this amendment and fully support the principle. They have now come up with the revised wording which is on the Marshalled List. This provides the sort of safeguards which my recommended. In subparagraph (c) the tenant has to sign at the beginning that he fully understands what he is taking on—that it is a seven-year tenancy. In subparagraph (d) the tenant must have been offered a smallholding suitable to move on to before the county can claim possession at the end of the short lease.

There may be some doubt as to whether subparagraph (d) is sufficient, because it says that we have to be assured that he has been offered the tenancy of another smallholding "suitable to his needs". An immediate query might be: what if they do not agree about whether the holding is suitable? That is covered in fact, because this amendment is to a part of the original Act where these matters of dispute are referred to the agricultural lands tribunal. There is no doubt at all that there is sufficient arbitration on the issue of suitability if a conflict arises.

I am glad to say that this amendment is fully in line with what my committee recommended, and I am happy to recommend it to the House. I understand that in some discussions with the Ministry of the noble Lord, Lord Belstead, there has been some hint that it might be preferable, instead of having this specific provision for starter holdings, for the matter to be left to the use of what are called Section 2 licences by the Government. The noble Lord, Lord Belstead, said on Second Reading, and has since repeated, that the Government propose to use Section 2, under which the Government can give short tenancies and provide for certain kinds of starter tenancies. I understand that the point has been put to the Association of County Councils that that might be the way to operate starter holdings in the smallholding system as well.

I am afraid that just will not do at all, and I want to be quite clear in saying that. I say it for three very important reasons. First, if we relied on the Minister's use of discretionary powers under Section 2 to give short-term tenancies, this poor tenant of a starter smallholding would be denied the benefits of a proper agricultural tenancy for a period of as long as 10 years; and the benefits of a proper tenancy are very important indeed. For example, they include provision for compensation on termination and all sorts of things like that, which represent very important protection indeed for the tenant. None of these would be available if we relied simply on Section 2 powers.

The second reason why use of these powers would not lead to a satisfactory conclusion is that it would take away the vital recommendation of my committee about the right of the tenant to remain on the starter holding or to move on to a larger one. That is a very important part of the amendment. So Section 2 powers would not give him the right to remain if there was not a suitable tenancy to move on to, and we would find that a very great drawback to the use of Section 2 powers.

The third reason is an equally cogent one, as to why Section 2 would not be good enough, because this has nothing to do with the Ministry; it is a matter for the county council. They manage smallholdings. They have to decide the length of tenancies and similar matters in line with their general management policy. It would be quite wrong to leave decisions on this matter to the Ministry of Agriculture, who really have no role at all in managing smallholdings in the national system.

For all those reasons, I hope that we shall not be asked by the Government to make do with the proposed extension of the use of Section 2 powers. It is much better to legislate separately for the smallholdings system, as is proposed in this amendment, and to put in the very important safeguards which are in paragraphs (c) and (d), and which were an essential—and, indeed, a crucial—part of my own committee's recommendations. So I beg to move this amendment and hope that it will be accepted.

Lord Pry's-Davies

My Lords, we on these Benches are pleased to support the amendment of the noble Viscount, Lord Ridley. In Committee, we were concerned that there would be this difficulty if the tenancy had been terminated between the seventh and tenth years and there was no alternative accommodation. Paragraph (d) meets the edge of our criticism, because it provides for suitable accommodation to be made available and, in the event of a dispute as to whether or not the alternative tenancy is suitable, the matter can be referred to the agricultural land tribunal. So we support the amendment.

The Earl of Onslow

My Lords, I should like to support this amendment, probably for reasons which the noble Lord, Lord Prys-Davies, will not accept. I happen to think that if we are to increase the tenanted sector of the agricultural community there must be a small element—not a large element—of fixed-term tenancies and this is a small step in that direction. I would have a small guess that the noble Lord, Lord Prys-Davies, will not support fixed-term tenancies in the case of private landlords, but he will happily support them for county council landlords. That seems to me to be slightly illogical thinking. If we are to have fixed-term tenancies because they will increase the supply of tenanted land—which large numbers of your Lordships think is right—then it does not matter from where that supply of tenanted land comes. It does not matter who the landlord is or what size the holding is. Having said that, I support the principle of short-term tenancies and will pray it in aid when we come to my Amendment No. 51, when I expect that the noble Lord will be speaking against it and when I shall have no hesitation in reminding him of his inconsistency on that point. But as a start this is very worthwhile and I support the amendment of my noble friend Lord Ridley.

Lord Belstead

My Lords, while I recognise from the speech of the noble Lord, Lord Northfield, that my noble friend Lord Ridley, in whose name this amendment is down, has moved nearer to the recommendations in the Northfield Report, I remain to be convinced that the amendment will achieve my noble friend's aim of improving mobility in smallholdings estates.

The difficulty is that the fact which faces us is that in the 10 years leading up to 1982–83 only 14 tenants, on average, every year out of 7,000 smallholdings estates moved to another rung on the farming ladder. I think that we would all share the disappointment at this lack of mobility. But it drives one to the conclusion that one must look very carefully at what we think we are gaining from enabling smallholdings authorities to grant fixed-term tenancies. I accept that my noble friend Lord Onslow will be gaining a very useful paving amendment for his Amendment No. 51, to which we shall come a little later. Having said that, I realise that all the way round the House there has been support for this amendment, so may I add one or two quick words as well? Yes, I was going to say that I thought Section 2 would be another way of going about it. The new arrangements to be introduced with the coming into force of this legislation will give scope for trial tenancies. However, I take on board the three criticisms which the noble Lord, Lord Northfield, has levelled against them, and I need to think about it.

May I, though, ask your Lordships to consider this point? The amendment would achieve a large number of smallholdings tenants on fixed term tenancies which might have to be renewed every seven to 10 years, because the tenants have nowhere else to go. While the noble Lord, Lord Northfield, was good enough to say that my noble friend Lord Ridley's amendment was more or less in line with the recommendations in his report, it is fair for me to make the point that the amendment is not in line with the Northfield Report on one crucial point: that the report said that such tenants ought to move on to a larger holding.

When one looks at paragraph (d) at the top of page 7 of the Marshalled List, it is a little difficult to see what would be achieved. Almost all that would happen would be that tenants on short-term tenancies would be shuffled around from one similarly sized holding to another. I realise that there is a little more to it than that, because it might mean that a holding could be vacated which an incoming tenant could occupy, whereas the vacating tenant might find it perfectly easy to move to a different geographical location or to another holding on the same location. Therefore I wonder whether we could take this away and think about it again.

I do not want your Lordships to think that the Government's mind is closed. We shall come to two amendments on the Marshalled List which I very much hope to be able to accept. They are amendments relating to smallholdings which have been tabled by my noble friend Lord Ridley. I am rather worried about writing into legislation a provision which could be of almost no effect, yet we could be writing into legislation the very important principle of shorthold tenancies about which we always need to think carefully before embarking upon that course.

Lord Northfield

My Lords, I am very grateful to the noble Lord for what he has said. If I may make one brief comment, my impression—it is no more than that because I have not followed the matter so closely as I ought to have done in the years since the report was published—is that county councils have been spending some years upon reorganising their system of smallholdings and, with amalgamations, have been trying to produce larger, more viable holdings. I feel that, if the county councils were in a position to give people a start on a small smallholding of, perhaps, 20 or 30 acres, they would be encouraged by the amendment to say that they must continue the reorganisation of their holdings in order to provide holdings of particular sizes so that there is a ladder up which people can move. Although the noble Lord is quite right in saying that very few people do move at the moment, I believe that that movement could be encouraged by allowing the county councils to pursue further reorganisations and provide a ladder whereby they could make use of the provision if it becomes law. Therefore I beg the noble Lord to think about this point, which would be in line with what the County Councils Association have in mind. Nevertheless, after the kind undertaking which the noble Lord has given to consider the matter, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.40 p.m.

The Earl of Caithness moved Amendment No.34: Page 9, line 5, leave out subsection (3) and insert— ("(3) For Case C there shall be substituted— Case C—on an application under subsection (4) the Tribunal—

1. (a) were satisfied in relation to the holding that the tenant was not—
   1. (i) managing it to the standard which would be required by a responsible landlord; or
   2. (ii) farming it in accordance with the rules of good husbandry; or
   3. (iii) managing or farming it to the standard which would be practised by a responsible tenant on a comparable holding; and
2. (b) certified that they were so satisfied not more than six months before the giving of the notice to quit, and that fact is stated in the notice".").

The noble Earl said: My Lords, I moved an amendment very similar to this at Committee stage. The reason I put down this amendment again is that at Committee stage the amendment was rather badly drafted. Therefore, I should like to draw the attention of the House to this amendment and to the consequential amendment on the next page of the Marshalled List, Amendment No 36. Amendment No. 36: Page 9, line 38, at end insert— ("( ) In subsection (4) of section 2 of that Act for the words "his responsibilities to farm in accordance with the rules of good husbandry" there shall be substituted "the responsibilities set out in paragraph (a) of Case C above".").

These amendments clarify the difficulties that we encountered at Committee stage. During that stage, I received the support of the noble Lords, Lord Northfield and Lord Mackie of Benshie. My noble friend the Minister kindly said that he would look at this matter again if we could provide further evidence. I wrote to my noble friend on this matter but I must admit that I have not been as diligent as I ought to have been in following up this matter due to the fact that other aspects of the Bill have taken more time than I anticipated.

The point that brought it all home was that, in respect of Amendment No. 31, my noble friend said that if a tenant was not farming up to standard there could be the service of a notice to quit on the ground of bad husbandry. At that the noble Lord, Lord Northfield, raised his eyebrows and said we had been through all that before. The fact is that I do not wish to go through all the arguments again, but it is very difficult to secure a notice to quit on the ground of bad husbandry. I am therefore asking my noble friend Lord Belstead whether he could keep the door open, as he kindly offered to do at Committee stage, so that we may return to this aspect to see whether we can improve matters. As my noble friend acknowledged at Committee stage, some of the onus is on him as well. I beg to move.

Lord Middleton

My Lords, I feel that I am being obtuse, and if I am, I know that my noble friend Lord Caithness will tell me so. My memory of what he said at Committee stage is not what it should be, but how does he distinguish between bad management and bad husbandry? The two would seem to be very close and the distinction between them must be very narrow. If under Clause 5(3)(a)(i) the tenant is not managing well although he may be a good farmer, surely his financial situation will eventually lead him to giving up the tenancy, in which case Case C may not be necessary.

The Earl of Caithness

My Lords, if I may reply, with the leave of the House, the person who can differentiate best between farming and management will be my noble friend sitting in front of me, Lord Sandford. The point I made at Committee stage was that I wanted to look at this matter from a broader aspect than just farming. Bearing in mind the tremendous pressures of conservation, recreation and the other uses to which farm buildings can he put, I wanted the whole matter to be brought under an agricultural tenancy and thus broaden the scope. That requires management as opposed to just farming.

Lord Northfield

My Lords, I am glad that the noble Earl is persevering with this matter. It is a very difficult point. Getting certificates of bad husbandry is like getting a camel through the eye of a needle, as I understand it. Landlords now have almost given up trying. Such case law surrounds this aspect, and there is such difficulty in proving deterioration of the land—which is essentially the important point in obtaining a certificate of bad husbandry—that the likelihood of getting a refusal has deterred landlords from even trying, even when they know that tenants are well below standard.

When the noble Earl moved his amendment at Committee stage, the Government replied that all the tests he put in his amendment are already in the law as it stands. I believe they were probably right about that. They challenged the noble Earl to add to the law in some way that would strengthen the powers of landlords. I think he has probably done so in this draft. It does meet two particular points which were spelt out in exactly these words in my own committee's report. We suggested, in heavy black type, that people should be meeting the standards of a responsible landlord. We suggested also in heavy black type that the procedure ought to be reviewed to strengthen the powers of the landlord to obtain possession. I only hope that, after reflecting on the matter between Committee stage and Report, the Government are going to be helpful and say, "All right. It may not be quite right as drafted, but there is a very strong point here".

Everybody in the industry knows about this. If there is a very unhappy situation in this matter, somebody—namely, the Government—ought to take the initiative in finding out whether the law can be improved. I do not think it is right for them to keep on saying to the noble Earl, "You must provide the redraft of the law". The Government know the law is being disregarded or is defective; I do not know which it is. I think there is an onus on the Government, if they do not agree to the drafting, to take this away and say, "We know there is a great deal of disquiet and it is part of our responsibility to see whether we can legislate to improve the matter". I therefore support the noble Earl, and I am glad he is still pressing this matter.

Lord John-Mackie

My Lords, I am very interested in this point. I do know that the question of giving someone notice to quit on the ground of bad husbandry is a very difficult one indeed. I am intrigued at the noble Earl's point about the difference between management and farming; I think he has a very real point there which he explained to the noble Lord, Lord Middleton. You could quite easily say that a farm was not being managed well if the system was wrong. You could say it was bad husbandry if the land was dirty and so on. I think there is a major difference, which I am glad the noble Earl has brought out, between management and actual farming.

I remember an occurrence on these lines where the farmer had a field of strawberries which were filthy with weeds and he was told that this really was bad husbandry. He said, "Really it is not because I do not have to straw them in the summer; the weeds take the place of the straw, and this is a good crop". It was definitely bad husbandry, but he could make a case that it was not. I know the difficulties there. I think you might have a very much stronger case on the question of bad management. So I think we could support the noble Earl.

Lord Walston

My Lords, I am afraid I cannot support the noble Earl. I have sympathy with what he is trying to do but I think one uses common sense, which should be used perhaps rather more than is the case in matters of bad husbandry. Husbandry and management so far as the tenant farmer is concerned go hand in hand and cannot be distinguished. If you manage badly, in my submission, you are practising bad husbandry, and if you farm badly, even though you may technically appear to be managing well, you are still practising bad husbandry. The law is there; it is not being implemented properly; I do not know why. It may be because landlords do not like to bring cases against tenants; it may be because tribunals before whom such cases come have been unduly lenient.

I do suggest to your Lordships that there are sufficient laws of the land at the moment to enable anybody who farms badly, however it is defined, to be, first warned, and, secondly, turned out by his landlord. I do not think there is need for any further legislation or any amendment of this kind.

The Earl of Swinton

My Lords, I should like to be more helpful to my noble kinsman, but I really do feel that the ball is still very much in his court. When considering his Amendment No. 48A during Committee stage it was suggested that if my noble kinsman could indicate what additional factors the tribunal should be expected to take into account the point would be considered further. I understand that he wrote a letter to my noble friend Lord Belstead but he did not produce any more evidence or suggest what additional factors could be taken into account.

I think the noble Lord, Lord Walston, has a very good point. I do not know where farming stops and management begins. I am looking at the section of the 1947 Agriculture Act which is the law on bad husbandry, and, although it is turned the other way round and says what good husbandry is, I quote from it: (a) permanent pasture is being properly mown or grazed and maintained in a good state of cultivation and fertility and in good condition; (b) the manner in which arable land is being cropped is such as to maintain that land clean and in a good state of cultivation and fertility and in good condition;"— I should have thought that that would cover the point raised by the noble Lord, Lord John-Mackie, about the weeds— (c) the unit is properly stocked where the system of farming practised requires the keeping of livestock, and an efficient standard of management of livestock is maintained where livestock are kept and of breeding where the breeding of livestock is carried out; (d) the necessary steps are being taken to secure and maintain crops and livestock free from disease and from infestation by insects and other pests; (e) the necessary steps are being taken for the protection and preservation of crops harvested or lifted, or in course of being harvested or lifted; (f) the necessary' work of maintenance and repair is being carried out. I should have thought that that covered management as much as anything else. It seems to me that day-to-day management on every farm is covered by what is there. I am afraid I cannot accept this amendment.

The Earl of Caithness

My Lords, I appreciate that the Government cannot accept my amendment, but I asked whether the door was open to further negotiation. When I wrote to my noble friend Lord Belstead on 5th December, I had no idea until receiving my noble kinsman's reply that the evidence I had produced was not what he wanted. If I had been told, I should have followed it up much faster than I have done. Can my noble kinsman say that the door is open and that we can discuss this, because obviously there is much feeling about the matter.

The Earl of Swinton

Yes, my Lords, the door is always open so far as my noble kinsman is concerned, and I am sure we can discuss this further. However, we should like to have some evidence and hard facts on where it is going wrong.

The Earl of Caithness

My Lords, I am most grateful. If the House will bear with me, I will quote from column 529 of Hansard of 28th November. My noble friend Lord Belstead commented that the noble Lord, Lord Northfield, had made a good point in saying that the present law was a dead letter and that, we shall need to consult the industry with some care"—[Official Report, 28/11/83; col. 529.] Therefore, I hope that my noble kinsman will also consult at his end. Meanwhile, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

9.53 p.m.

Lord Sandford moved Amendment No. 35: Page 9, line 38, at end insert— ("(5A) The following subsections shall be inserted after section 2(4) of that Act (4A) In determining whether to grant a certificate under subsection (4) above the Tribunal shall disregard any practice adopted by the tenant in pursuance of any provision of the contract of tenancy, or of any other agreement with the landlord, which indicates (in whatever terms) that its object is the furtherance of one or more of the following purposes, namely—

1. (a) the conservation of flora or fauna or of geological or physiographical features of special interest;
2. (b) the protection of buildings or other objects of archaeological, architectural or historic interest:
3. (c) The conservation or enhancement of the natural beauty or amenity of the countryside or the promotion of its enjoyment by the public.

(4B) For the purposes of Case D and Case E any provision such as is mentioned in subsection (4A) above shall (if it would not otherwise be so regarded) be regarded as a term or condition of the tenancy which is not inconsistent with the tenant's responsibilities to farm in accordance with the rules of good husbandry.".")

The noble Lord said: My Lords, I am moving this amendment on behalf of my noble friend Lord Ridley and the noble Lord, Lord Gibson. In doing so, I wish to speak at the same time to Amendments Nos. 84, 85 and 86, which are amendments to Schedule 3 and are consequential. Amendment No. 84: Schedule 3, page 31, line 11, leave out ("Subsection (3) of section 5 of this Act does") and insert ("In section 5 of this Act— (a) subsection (3) and subsection (5A), so far as relating to section 2(4A) of the 1977 Act, do") Amendment No. 85: Page 31, line 12, leave out ("and subsection (5) of that section") and insert— ("(b) subsection (5)") Amendment No. 86: Page 31, line 15, at end insert— ("(c) subsection (5A), so far as relating to section 2(4B) of that Act, does not apply in relation to any act or omission by the tenant occurring before the commencement of this Act.") My noble friends have asked me to apologise on their behalf for their absence as they are both, alas, abroad.

With Amendment No. 35 we return to the topic of conservation, which was raised more than once in Committee, notably on Amendment Nos. 47, 48 and my own Amendment No. 61C. Although those amendments all started from different points and covered slightly different aspects, and were not acceptable to my noble friend on the Front Bench, I think the House will agree that there was at the end of the day, agreement that there is a need for legislation of this kind—namely, agricultural holdings legislation—to be seen to encourage and to support management agreements whose purpose it is to conserve the beauty and the amenity of the countryside and the public's enjoyment of it. It is necessary to support those management agreements rather than hamper them or discourage either the landlord or the tenant from entering into them. There was also the feeling—and this perhaps is the point which was not fully covered, at least by my own amendment—that such amendments needed to be designed in order to give even-handed protection to the landlord over against the tenant or to the tenant over against the landlord.

I am most grateful to my noble friend Lord Belstead, as are many others who are concerned about this matter, for having taken the matter away, for having considered it, for having convened several meetings with the Association of County Councils, the Countryside Commission, the National Trust, the Nature Conservancy Council, the CLA and the NFU, and for having produced the amendments which it is now my honour to speak to. I am sure that it was not an easy agreement to achieve. All the organisations that I have just mentioned are most grateful to my noble friend for what he has managed to bring forth.

I am not exactly sure why, having succeeded in producing the amendments, my noble friend has asked the noble Viscount, Lord Ridley, the noble Lord, Lord Gibson, and myself to move them. Being of a suspicious mind—and as I know that this has happened before—I hope that it is not to leave the Government the freedom to knock them out when the Bill gets to the Commons. We should be grateful for an assurance on that point. Subject to that, we are all extremely grateful to my noble friend the Minister for having been able to produce these amendments.

I should like to go on to take up the point which my noble friend makes to me in his letter commending these amendments. He said that he would like to pursue further a point which a number of us have made before. My noble friend Lord Caithness and the noble Lord, Lord Northfield, have just stressed it again. Nowadays, even if there was not always, there is more to managing an agricultural holding than just farming it. And there is more to management agreements than the pursuit of conservation. This was a point that a number of us made at Committee stage. But I do not think that our minds were quite meeting on that point. It is not something that has been fully covered in these amendments, although they go a good deal further than many of us had expected when we were discussing the matter at the earlier stage.

Since the Committee stage I have had the benefit of visiting Devon; I visited Dartmoor and the estates of the Duchy of Cornwall for which a comprehensive and integrated management plan has just been devised. I shall not mention the particular holdings concerned. I was shown them by the Ministry's own surveyor for the region and by the national park officer himself. On the first of them there were considerable restraints on what the tenant was going to be able to do—things which he would have been able to do had his holding not been in a national park but which he was constrained from doing because it was important to conserve the landscape.

In order, as it were, to compensate him and bring the tenant's income up to a viable figure, he was advised and encouraged to go into—and has in fact started—farm tourism. In the process of going into farm tourism, some of the buildings of that agricultural holding are used differently. They are not being used for agriculture, whereas they might have been in other circumstances. There is a modification to the management of the holding in order to go into farm tourism which this kind of legislation does not seem to support in a way similar to that in which the Minister and everyone else agrees it should do in the case of conservation.

The next-door holding was one which was similarly constrained. (Both these holdings are in less favoured areas and are very difficult to farm.) The possibility of improving the agricultural productivity of the holding was again barred by the need to conserve the landscape. In that particular case some of the farm buildings had been converted with advice from CoSIRA into small industrial workshops—not agricultural workshops. There again is a modification of the management of the holding. I remain to be convinced that this legislation has yet been adequately amended to deal with circumstances such as those two that I have just described.

However, I shall not weary the House any longer now. My noble friend has made very considerable progress in meeting the desires expressed in Committee in respect of amenity and conservation, and we are all extremely grateful for that. We should like to pursue with him the further matter of other modifications to the management of an agricultural holding for reasons other than conservation. The bodies concerned about this matter are the Countryside Commission, the Association of County Councils, the Association of District Councils, the National Trust, the Development Commission, and the RICS, and we all very much look forward to meeting my noble friend to discuss it. I beg to move.

Lord Walston

My Lords, I hope that the noble Lord has not yet sat down because I should like to ask him whether he can explain to me—I am sure that I am far more ignorant than other Members of your Lordships' House—the precise meaning of the word "physiographical" in his amendment.

Lord Sandford

My Lords, I think that in the circumstances that is a question which my noble friend on the Front Bench might be able to answer a little better than I can.

Lord Bishopston

My Lords, in view of the business still outstanding, I shall be brief, but I want to endorse some of the words of the noble Lord, Lord Sandford, though of course I speak for the Opposition. The amendments are apparently the result of the consultations which have taken place with a number of bodies, including the National Trust, and I again declare an interest as a member of the council. In the absence of the noble Lord, Lord Gibson, I should like to say that the Government have gone some way towards meeting the pressures which were obvious during the Committee stage. Indeed, some of us were rather concerned that the Minister showed less than what should have been enthusiasm for some of the points which had been made. I feel that again we need to stress that conservation is not one-sided, that it should be a partnership between the landlord and the tenant and all those concerned, and that in many ways it is really good husbandry in itself.

As the noble Lord, Lord Sandford, has said, we need to look at management agreements. Bearing in mind that the law requires that conservation should be observed and that there are natural restraints which may affect the viability of the holding, I feel that even greater consideration should be given to some of these necessary restraints and to the acceptance of the fact that conservation is good husbandry, is in the interests of all of us, and is not necessarily detrimental to the working of the holding. With those few comments, I commend the amendments.

Lord Belstead

My Lords, this matter was raised in Committee by my noble friends Lord Sandford and Lord Ridley, and the noble Lord, Lord Gibson, and it is because it was proposed and spoken to by those noble Lords, that I very much welcomed the opportunity to be able to make arrangements so that my noble friend Lord Sandford could move this amendment this evening. If I may say so, the credit goes to him and to his noble friends for moving the amendment. That is the reason why the amendment has not been moved as a Government amendment. Having said that, woe betide me if I try to forecast what will happen in another place, and I fear that even to my noble friend I shall not do so. But I make it unreservedly clear that the Government welcome these amendments and are exceedingly glad that my noble friend is moving them this evening. That is the first point.

The second point is that my noble friend suggested that the amendments could be improved, and he gave examples in particular arising from the time when he saw developments outside the normal farming operations undertaken in the Duchy. All I would say to that is, yes, I should welcome a talk about it and I think that it should be an official talk, properly conducted. Perhaps we can get on with it, and I shall undertake to convene a meeting if that is acceptable to my noble friend.

Thirdly, the National Trust wrote to my noble friend and sent a copy of the letter to me. Although my noble friend did not I think, move on to the point, it would perhaps be for everyone's benefit if I dealt with the National Trust's point. The National Trust was concerned whether this amendment covered manmade structures designed to improve the landscape. My advice is that it is the Government's belief that the word "enhancement" must apply to the work of man and that it is capable of covering man-made features that enhance the natural beauty of the countryside. This would include buildings that have been designed or adapted to blend into the countryside as well as hedges and trees. So far as the word "physiographical" is concerned, it is, in very simple terms, a description of nature.

Lord Sandford

My Lords, I am most grateful to my noble friend. I had received the same letter from the National Trust, but I did not raise the point just now because I was entirely satisfied that the amendment that my noble friend on the Front Bench had so helpfully drafted for us fully met the point. I was going to tell them so tomorrow, but now they will be able to read it themselves. My own view, in responding to what my noble friend has just said, is that it would be well, following any discussions that we have, even if we find an amendment that we could put down, to leave these amendments dealing with conservation alone. They have been agreed and settled after long and difficult discussions and I would be loth to be instrumental in messing them about. If we can find another amendment that deals with management agreements to do with issues other than conservation, I would greatly prefer to try and get them into the Bill as a separate exercise on another occasion. But that is only a matter of tactics.

As to what may happen in another place, I hardly liked to mention my suspicions just now. When I did mention them a week or so back to one of my noble friend's officials, he said, "Oh, that would be very uncharacteristic of my Minister". Indeed, we know that it would be. With the assurance that he has given us in addition to that, I think that we can rest content that this constructive piece of work will remain in the Bill. I beg to move.

On Question, amendment agreed to.

[Amendment No. 36 not moved.]

10.8 p.m.

Lord Monk Bretton moved Amendment No. 37: Page 9, line 38, at end insert— ("( ) A new Case shall be added as follows— Case I—at the date of the giving of the Notice to Quit the tenant, under a tenancy agreement which had been entered into after enactment of this Act, had passed the age of 65." ")

The noble Lord said: The purpose of this new amendment, which concerns new tenancies only, is to enable landlords, at their discretion, to serve notice of retirement on tenants from the age of 65. In other words, it means that new tenancies would run to retirement age. Obviously, this would produce more farms to let. Some say that it would double the number of farms to let. I do not want to labour that point. I want to use it as a starting point. The Tenant Farmers' Association, whose amendment this is, considers that it would keep farms in younger hands, give more people the chance to farm and create more mobility. The association says that lifetime tenancy often discourages the making of proper retirement plans but that under these proposals a son should be able to find out earlier what his future is.

There have been certain changes in this amendment since Committee stage which I should mention. The amendment no longer stipulates use of the statutory repair rules, which meets a criticism made by my noble friend the Minister. Nevertheless, may I still register disapproval of agricultural leases being fully repairing and insuring, and of the value added tax rules which prompt this kind of tenancy. There are now no other qualifications restricting the operation of the notice to quit, such as insistence upon reletting the holding or a bar on amalgamating the holding. I want to see that enough owners are encouraged to let. What is wanted is a reasonable legal and tax climate so that that comes about—a legal and tax climate in which owners are no longer forced into wishing to take more and more land in hand. I know that the Tenant Farmers' Association believes that that is the way in which to solve our difficulties. It believes that if tenants thought it through sufficiently, they would react to these ideas in the same way as it does.

My amendment makes no reference to pension provisions, which are the subject of an amendment to my amendment. I should like to take this opportunity to say that lack of a retirement provision is believed to be a principal objection to tenure to retirement age from the West Country and Wales. I do not know the extent to which this has been researched, and I wish I did. If it is true, if one was trying to do something about it, one would know that one was working on the right lines.

The amendment of the noble Lord, Lord John-Mackie, certainly has my moral support and I should like to take this opportunity to say that, although I appreciate there may have been less helpful amendments that he could have tabled (whatever happened to Clause 2?), I am grateful for what he has done over this one. I should have liked to say that I agreed with it straight away before it was tabled, but I foresee certain difficulties which should he mentioned.

First, I think that larger tenants can perfectly well manage to provide for retirement on their own. That is a point that should be made. Secondly, bearing in mind that these are new lettings of holdings, we should try very hard to avoid letting farms that are so unviable that they will not enable the tenant to provide for his retirement. Thirdly—and this is well worth pondering on further—when the landlord gives notice to quit I think that my amendment results in him becoming liable for compensation of a year's rent. This compensation would be a capital sum. Section 34(1) of the 1948 Act comes into play here. It is a pity that this money, if it has to be paid, should not be more effectively deployed into a self-employed pension annuity for a tenant, because I believe that that type of policy is by far the best and most cost-effective way of making a retirement provision.

There could be tax difficulties here for the landlord, and that is why I am hesitant about this amendment. If help over these pension arrangements could achieve agricultural leases to retirement age, in my view there could be a great deal to be gained. I know that my noble friend the Minister will say that this is no good without broad support from the industry. I want to say a few words about that because there are a few straws in the wind. I have known for a long time that there is some sympathy for these proposals in NFU circles. It has come to my ears that several county branches of the NFU have in fact sent resolutions to their headquarters broadly supporting an amendment of this kind. I believe that these were grass roots movements promoted by local branches, and this is significant.

One wonders how clearly the degree of support for lifetime tenancies, or for tenancies at retirement age, is really known and particularly what are the main objections to tenancy to retirement age. We are unlikely to legislate again over this for a long time, and I wonder whether the subject of my amendment has been adequately canvassed. I believe that 70 per cent. of the membership of the National Farmers' Union are owner-occupiers. It may be because of this that they have suffered the emergence of the Tenant Farmers' Association, which is a small organisation but comprises 100 per cent. tenants.

It was obviously started by larger, substantial tenant farmers, but I believe now has a much more representative membership, of which 5 per cent. are county council smallholders. Their meetings are singularly well attended when open to the farming public, and I think it is true to say that their influence is evidently greater than their membership size. It is a safe bet to say that the Young Farmers' Clubs would prefer this amendment to not having it.

I think that the Country Landowners' Association would have no objections, beyond loyalty to the package with the National Farmers' Union. But I wonder whether they pressed the NFU adequately about this particular proposition. I hope that the Minister will not be too sanguine that these matters have been adequately researched. I hope he will consider taking them away for further thought and consultation.

I am worried about landlords who sometimes say, à propos return to lifetime tenancy, "We have been here before." The experience was that lifetime tenancy led to the demand for succession, which then dried up the market. Will there be a repetition of this, virtually a vicious circle? I believe that there is a strong case for achieving, if we can, a different approach to this, and this amendment provides it. I beg to move.

10.19 p.m.

Lord John-Mackie moved, as an amendment to Amendment No. 37. Amendment No. 38: At end insert— ("provided a suitable pension scheme funded by both landlord and tenant had been agreed.".")

The noble Lord said: My Lords, in speaking to this amendment I should like to say something about Lord Monk Bretton's amendment which I discussed with him earlier in the week. We certainly would be against this amendment without our amendment attached to it. It is easy when you are 30 to take a farm and agree to retire at 65. But time passes more quickly than one thinks, and times could be bad.

You reach 65, and often the type of farm we are thinking about, the 100-acre or 150-acre farm, is in an area which is not so good—a less favoured area is the expression nowadays. The capital on a farm like that is not large, and one knows what it takes today to buy a house and have something on which to retire over and above one's pension. I feel that compulsory retirement like that would not work, but we would give it our blessing, provided a suitable pension scheme funded by both landlord and tenant had been agreed.

The point the noble Lord made to me was that we should take a cut-off point. Since I spoke to him, I have tried to think of a cut-off point, whether by size or anything else, but I cannot think of one. I take his idea that he would like to have the funding of a pension scheme somewhere in the 100 or 200 acre area. I do not think we could possibly do that. I see no reason why larger farmers should not take part in a pension scheme. They are just as happy with a pension as anyone else, funded by the landlord from the rent and by the tenant himself. I am sure that this would be good, although I do not think it will necessarily bring any more farms on to the market.

However, it might bring them on to the market earlier. But then we have no guarantee that the landlord will let the farms. That is another point that we have to look to. In moving the amendment, I must say that we will not support the noble Lord's amendment, but, if he agrees to our amendment being attached to it, we should be prepared to support it.

Lord Middleton

My Lords, for the first time this evening I find myself entirely in agreement with the noble Lord, Lord John-Mackie, about Amendment No. 37. I never did believe that one should push someone out just because he was 65, but the nearer I get to that age the more strongly I feel about it. I do not think one should. It is logical to suggest that if people are to be pushed out because they are 65 there should be some pension arrangement. This is an entirely new concept that the landlord should contribute to the pension arranged for the tenant. The danger is that, while the Bill is trying to encourage new tenancies, we are immediately introducing an element which may be a disincentive to landlords. So I do not like either of these amendments.

Lord Northbourne

My Lords, I may be able to be helpful with a few figures which I found on this subject. I am pleased to be able to agree with the noble Lord, Lord John-Mackie. My figures are based on a tenant aged 35 going into a new tenancy and planning to retire at 65. I took a slightly larger farm of 300 acres with a net rent of £12,000 after repairs and insurance. I considered reviews every three years, a 15 per cent. increase in rent. If the landlord and the tenant each contributed 5 per cent. of the rent during the period of the tenancy, 30 years, at age 65 the tenant would have a cash sum of £178,000, equivalent to £42,000 at today's value. In addition, he would have a life pension of £55,000 per annum, equivalent at today's values to £12,750.

The Earl of Onslow

My Lords, I should like to support the amendment of my noble friend Lord Monk-Bretton because it goes a little further towards my pet hobby-horse of fixed-term tenancies. I also agree with the noble Lord, Lord John-Mackie, that a man has to have a pension at the end of his days, though I wonder whether the wording of the amendment is correct. A suitable pension scheme funded by both landlord and tenant", is open to too much value judgment. It seems to be reasonable to go a little way along the path presented by the noble Lord, Lord Northbourne, towards a fixed percentage of the rent being paid into a pension fund. I do not think it matters how it is done, except that the amendment put by the noble Lord, Lord John-Mackie, has to be tightened up.

I moved an amendment on this point during the proceedings on the 1976 Act regarding pensions at retiring age, or pensions on short-term fixed tenancies. That would be a major advance. Anything that increases the numbers of tenancies increases the life and variety of the countryside, and that is what I think is so important. One must get away from the concept of these enormous grain prairies in East Anglia, most of which are owned by the noble Lord, Lord Walston, so far as I can gather. When one goes to parts of the country and sees them deserted, then one realises that anything that can increase the value and variety of that land is a good thing. That is best done by increasing the tenanted agricultural sector. Anything that does that would be a good thing, and I therefore support my noble friend's amendment, together with the amendment to that amendment.

Lord Walston

My Lords, unlike the noble Earl, Lord Onslow, I am not whole-heartedly in favour of fixed-term tenancies but I do agree with the general principle that, after a farmer has reached the age of 65, (although there are some exceptions to this) in general it is good that he should consider retiring. It is good for agriculture, it is probably good for him and good for those who come after him. I looked with considerable favour on the proposals of the noble Lord, Lord Monk-Bretton. But if they were accepted as they stand, with no amendment, I think that they would open the door wide to fixed-term tenancies. There would be very few landlords who would be prepared to grant a tenancy of longer than terminating at 65.

That is one of the reasons, and only one of the reasons, why I support the amendment of the noble Lord, Lord John-Mackie, and his friends, and the principle that lies behind it that, in exchange for giving up a lifetime security and agreeing to retire at the age of 65—which is of very great advantage to the landlord—the landlord himself should give some quid pro quo in the shape of a proportion of the rent which would be devoted to a retirement pension for the tenant. That is the principle that I support. I do not think that it need be compulsory upon the tenant to contribute a like sum; although I think it would be prudent of him to do so. But I would prefer not to see that written into any Act of Parliament. I would also prefer to see some minimum sum specified which should be the landlord's contribution. Whether it should be 5 per cent.—and I must say the figures that the noble Lord, Lord Northbourne, gave us are extremely valuable and interesting; and surprisingly encouraging—or whether it should be 2½per cent., I do not know. All I would say is that, in principle, I support the proposals of the noble Lord, Lord Monk-Bretton, provided the amendment of Lord John-Mackie is agreed to; and I would very much prefer to see more thought given to the workings of this particular scheme and the actual figures, if possible, incorporated in any Act of Parliament.

Lord Belstead

My Lords, my noble friend Lord Monk Bretton has moved an amendment, the effect of which would be to provide for compulsory retirement at 65. We discussed about an hour ago Amendment No. 82 (which was moved because it was a paving amendment for Amendment No. 31) which is the new schedule which runs to nine pages on the Marshalled List and provides for voluntary retirement in the case of existing tenancies by making it easier for an eligible and suitable successor to take over earlier than on death. I believe, particularly because it has got the voluntary agreement of the organisations concerned, the NFU and the CLA, for this to be done, this may prove to be a really effective provision.

Having said that, the Government are reluctant to go as far as to introduce an element of compulsion because immediately you then come near to the difficulty of creating fixed tenancies. So far as the amendment of the noble Lord, Lord John-Mackie, and the noble Lord, Lord Prys-Davies, is concerned, while the concept of a pension is fine, I really think that this is a matter for private arrangement between landlord and tenant and not appropriate to agricultural holdings legislation. Before any of your Lordships jump down my throat and say that is not the case, I would just put the simple point that, although the concept may be fine, I wonder whether the provision, if it were written into legislation, would in fact have the effect that we are aiming for in this Bill; namely, to encourage landowners to let more land.

Having said that, what it comes to is that we do have agreement on voluntary retirement: that is in the new schedule, Amendment No. 82. We do not have agreement on compulsory retirement. Of course, I will read this debate very carefully, but I would ask my noble friend to look at the Hansard record, if he would be so good, of the short debate we had about an hour ago on Amendment No. 82. Then perhaps my noble friend and I could have a word about his amendment. There are some things I would like to look at which he has put forward, but there are also points that I should like to underline to my noble friend outside the House. The Government want to go as far as people want to go down this road, in a voluntary way. Looking at Amendment No. 82, we have gone quite a long way, but we have not gone as far as compulsory retirement, and that is the difficult point.

Lord Northfield

My Lords, I do not wish to prolong the debate and I shall be extremely brief. May I just say to the noble Lord, Lord Monk Bretton, that he might care to look at the section of the Northfield Report which deals with smallholdings. He will find that we had some good figures (like those given by the noble Lord, Lord Northbourne) about the effects of small sums put aside for pension. But we made one other vital point which has not been mentioned: that provision for retirement should he included—and regarding not only money but a house. That, of course, is very important for many small farmers who on compulsory retirement would find themselves out of a home. That is a very important extra issue that should be taken into account as well as the issue of pension.

Viscount Mountgarret

My Lords, may I intervene at this moment to remark that one of the reasons put forward by the Tenant Farmers' Association as to why this amendment might commend itself to your Lordships' House is that the tenant's successor knows the maximum length of time of the farm tenancy and therefore has to plan his future rather than gamble that his father will reach the age of 90. I suggest that perhaps some of your Lordships have sons who will have to gamble whether they will reach the age of 90; and if we are going to insist on a fixed-term tenancy up to the age of 65 for tenants, perhaps other people may think that there should be a fixed-term tenancy of your Lordships' House. I do not think that would be very desirable. Let us do this voluntarily rather than in any other way.

Lord Monk Bretton

My Lords, may I, before the noble Lord, Lord John-Mackie, speaks again, say that of course I should be willing to talk about it. I hope indeed that we might be able to come to some better conclusions. I know the Tenant Farmers' Association do not think it is necessary that all tenants should be provided with pensions by the landlord. However, I am not ruling out discussion in any way at all. I believe it would be much better to find a solution over pensions if that would produce the result that I wanted. I also wanted to say that I wish to be cautious and not rush into this, in order that we should get it right.

Lord John-Mackie

My Lords, I have nothing to add. If the noble Lord is going to withdraw his amendment, my amendment falls anyway.

Amendment to the amendment, by leave, withdrawn.

Lord Monk Bretton

My Lords, we have had a valuable discussion. I should like to thank my noble friend the Minister and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10.35 p.m.

The Earl of Caithness moved Amendment No. 39: Page 9, line 38, at end insert— ("( ) There shall be added the following new Case— Case J—the notice to quit relates to a holding where—

1. (i) at the date of the granting of the tenancy, the holding was not a "commercial unit "as defined in the 1976 Act,
2. (ii) at the date of the granting of the tenancy the tenant was already in possession of a "commercial unit ", and
3. (iii) the written contract of tenancy records that the tenant acknowledges the fact that the landlord or his successors in title may require vacant possession of the holding upon the giving of 12 months notice to quit under the Agricultural Holdings Act 1984 to terminate the tenancy on a date not less than 5 years from the beginning of the tenancy

and it is stated in the notice to quit that it is given by reason of the matter aforesaid. For the purposes of this Case, no valid notice to quit shall be served under this Case where, for a period of 7 years before the granting of the tenancy, the holding formed part of an agricultural unit comprising a commercial unit (disregarding any part acquired by a Public or Local Authoriy in exercise of its compulsory powers).".")

The noble Earl said: My Lords, I moved a similar amendment to this one at Committee stage. It was clear then, and confirmed later, that many people, including some at the Ministry, completely failed to grasp the point of the amendment. However, I am most grateful to my noble friend the Minister for the time that he has taken between then and now in trying to understand my concern, and I believe that he now appreciates the reasons for this amendment.

The principle is simple. There are many uncommercial—and I stress uncommercial—units that are being farmed all round the country on a plethora of different agreements, varying from a gentleman's agreement to a partnership. The type of land in question can vary from off-lying land which cannot be farmed commercially with other land held in hand, to glebe land, to land adjoining one's house which one does not want to farm in hand. In each case, it is the owner's wish to remain in a position to obtain vacant possession should he so desire it, and some sort of agreement has to be entered into so that the land is farmed.

It would be so much simpler and provide for better farming if the landowner could let his uncommercial unit on a tenancy from year to year, but with his interest safeguarded by being allowed to serve an incontestable notice to quit when he wanted to, the parties to the agreement having agreed this in writing before commencement. My amendment at Committee stage was structured to allow existing farmers and new entrants to farming a chance to obtain these new tenancies. However, following discussion with the NFU and others, it has been decided to include paragraph (ii) to protect the tenant in the event of a notice to quit.

This I have done by making sure he is in possession, either as a tenant or as an owner-occupier, of a commercial holding before entering into the agreement. This means that he will not be deprived of his livelihood when the notice to quit has been served. I think this is tough on the new entrant; but the mood clearly is to protect the existing farmer rather than provide an opportunity for a new one. I have also built in the necessary safeguards to prevent the possibility of a commercial holding being deliberately split into uncommercial units to get round the Bill.

In summary, therefore, my aim is to simplify the position relating to existing agreements on uncommercial units, in order to provide for more continuity and better farming of the land. If this amendment is acceptable, then I would seek to amend the definition of a "commercial unit" in this Bill, rather than in the 1976 Act as in my amendment. My Lords, I beg to move.

Lord Belstead

My noble friend has worked extremely hard on not only this amendment, but a great many other aspects of the Bill, and I am sorry that I am not helpful more frequently, although I have had the pleasure on the Government Front Bench of accepting some of my noble friend's amendments. I say this because, in this case again, there is a sticking point and the problem is this.

If my noble friend's intention is, as I know it is, that land in small parcels should be let for periods of longer than five years, to which Section 2 of the 1948 Act could extend at the Minister's discretion, then we run into fixed-term tenancy problems. We shall come to this in more detail on Amendment No. 51. But this is the difficulty, and, although my noble friend hedges his amendment round with safeguards, and has taken the very greatest care to do so, I have to say that we feel that they ought to be either Section 2 lettings or some other sort of lettings for less than 365 days. If my noble friend is thinking of more than five years, then we are at a sticking point where the Government feel that we are in danger of talking about fixed-term tenancies.

Lord Gisborough

My Lords, I should like to support this amendment. The present situation is a farce. You let a field for 364 days and you make certain that the tenant gets out the sheep. Then you go along on 2nd January and say, "You can put them in again." He knows, and you know, that you are going to do it, and it goes on year after year. But one mistake about even a week has been held to be good enough to create a tenancy. As this situation goes on now, it would be sensible to make it possible for land to be let on the understanding that notice can be given at any time.

The Earl of Caithness

My Lords, I am grateful for the support of my noble friend Lord Gisborough. I understand fully the comments of my noble friend Lord Belstead: that we shall run into problems about Section 2. Since I last spoke to my noble friend I have received a letter from an estate near Peterborough which, out of a total of 57 holdings, has 28 uncommercial units upon it. Goodness knows under what kind of arrangements those units are held. The present law could be simplified. However, I take my noble friend's point and beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Northfield moved Amendment No. 39A: After Clause 5, insert the following new clause: ("Additional consent to operation of notice to quit. . The following paragraph shall be inserted in section 3 of the 19/7 Act (Tribunal's consent under s. 2 to operation of notice to quit) after subsection (3)(b)— (bb) that the tenant is holding by statutory succession a tenancy, joint tenancy or tenancies which form a commercial unit as defined by subsection (3A) of section 18 of the 1976 Act (taken with subsection (3B) of that section) and that the landlord is willing to create and let a new agricultural holding that includes the lease to which the notice relates;".")

The noble Lord said: My Lords, I should say first that there is a misprint in the amendment. The word "lease" in the penultimate line should be "land". I hope that the amendment will be read with the word "land" in mind instead of the word "lease".

I see that at 10.27 p.m. on 28th November I moved an amendment similar to this. It is now 10.41 p.m. I do not seem to have much luck with this amendment, although it is rather important. I see that, when I spoke about that amendment, the noble Lord, Lord Belstead, said in his reply: At this hour I do not want to go through a lot of reasons as to why we do not like the amendment. However, I am advised that there are certain technical defects. If the noble Lord would not mind my leaving the matter in that way at this hour of the evening, I should like to have a close look at what he has said". In other words, the noble Lord was then in the position, at 10.27 p.m. on the 29th November, that we are in now: that we have had enough for today, that we are slightly punch drunk and this is not a very good time at which to deal with an issue of this kind.

Nevertheless, let me suggest with what the amendment attempts to deal. It is a defective amendment which I could not possibly press to a Division, but I want to assert the principle that underlies it: that when we look at the supply of farms to rent there are two ways in which we could obviously, as the Northfield Committee recommended, make more farms available. First, if an eligible successor is already farming on his own account a perfectly good farm, he should not have the right to inherit a tenancy from his parents or from somebody else. If he already has a good farm of his own, he should not have the right to inherit further tenancies which allow him to build up much more land than he requires. This matter is not covered by the amendment but we shall be discussing it—the noble Lord, Lord Belstead, alluded to it—when we reach the issue of the eligibility of successors.

There is a second way in which we could make more farms available to let. If a son is not farming on his own account and does not have another farm, should he nevertheless be able to inherit a whole patchwork of holdings that his father has built up, or should his right to succession be limited to one viable holding? Should a limitation of some kind be put on what a son can inherit in terms of size? This would make many more farms available for letting. However, it should be accompanied by the proviso contained in the amendment: that if a restriction is imposed about the amount of land which can be inherited by way of tenancy, the landlord should have the right to prevent inheritance only if he agrees that he will either re-let the land and form a new holding or add it to other land, thus putting an extra viable holding on the market. That is the principle I want to put before the noble Lord, Lord Belstead. I should like to know whether it has been considered. It is a cardinal recommendation of the Northfield Committee that if we really mean business about making more farms available to let we should begin to restrict the amount of land which somebody can inherit by way of tenancies.

There are all sorts of situations in which people have built up not just a patchwork of tenancies but a good deal more than that: a whole labyrinthine connection of tenancies which somebody inherits. When the person who has built all that up dies, we have to ask whether or not we should then intervene and say that there is a limit to the amount of land which can be inherited under the 1976 Act; the land ought to be made available for other people so as to build up extra opportunities for renting farms.

My amendment suffers from the defect that I have made the limit much too small. I have suggested the kind of limitation used for a commercial holding set out in the Bill—and that is very small. I inserted that limit simply to indicate that something of that kind could be drafted if there was a will on the part of the Government to begin giving thought to limiting the amount of land which someone can inherit by way of tenancy.

I shall be glad to know what the noble Lord, Lord Belstead, has been doing about this issue since I last raised this matter in Committee. He replied to me at that late hour on 28th November: I should like to have a close look at what he has said because there is no question about it that the objective of the noble Lord is to try to deal with an intractable problem. I accept that. I am not absolutely certain, to be perfectly honest, whether this particular amendment, No. 52, would achieve it, quite apart from the need to find the right definition".—[Official Report, 28/11/83; col. 538.] That was a nod in my direction that there was an issue here worth consideration. The noble Lord the Minister did not take the matter any further at that time; can he now tell the House whether this principle is open to negotiation? I beg to move.

Lord John-Mackie

My Lords, I have discussed this amendment with my noble friend Lord Northfield and I can certainly see his point. I happen to know that a friend of mine has built up a series of tenancies in a particular county, milking somewhere between 600 to 700 cows scattered over quite a wide area. It would seem unfair that he could leave all that to one son. It would certainly create far more tenancies if he were limited to some size of unit. But as my noble friend Lord Northfield has said, deciding the size of unit is a very difficult question indeed. Supposing that a farmer had the tenancy of a 300-acre farm and of a 200-acre farm. If he dies or wants to pass on the succession, who does the choosing as to which farm the successor gets—the landowner or the successor?

Lord Northfield

The tribunal, my Lords.

Lord John-Mackie

My Lords, I can see that enormous difficulties could arise in such situations. But we agree with the principle, and we would like to hear what the noble Lord, Lord Belstead, has to say as to whether it is possible to incorporate that principle in legislation.

Lord Belstead

My Lords, I do have sympathy, genuinely, with the noble Lord, Lord Northfield, in his moving of this amendment; not only with the noble Lord having to do so at this hour again, two months after he did so before, but also with the objective. This amendment is in line with the basic objective of the Government in bringing this Bill before Parliament, which is to try to create more tenancies.

However, this amendment seems to be largely unnecessary, because since the noble Lord last spoke about this matter we have put down Amendment No. 65—which we have yet to reach—which seeks to restrict succession to not more than one holding of commercial unit size and sets out the procedure by which that will be decided.

Amendment No. 39A could only bite in respect of holdings which were less than commercial units in size. Given its very limited advantages and the difficulties of enforcing the re-letting condition—and I freely admit that re-letting is not involved in Amendment No. 65—I feel we would not be justified in supporting this amendment as it stands. But the noble Lord is not asking me to do that; he said that he feels the amendment is defective and that he would not want to press it.

I hope that the noble Lord, Lord Northfield, will not feel I am being evasive, but I believe we ought to take Amendment No. 65. If the noble Lord feels that he cannot press his amendment, I do not consider that I am by any sleight of hand trying to do him out of anything. We still have the final stage of the Bill, when we could see whether the noble Lord wanted to press an amendment along these lines, or whether he was satisfied with Amendment No. 65, or whether he felt that Amendment No. 65 in turn ought to be improved. I say this because there is very little between what the noble Lord is trying to do, and what the Government wish on this particular matter.

Lord Northfield

My Lords, I am very grateful. I did not read Amendment No. 65 in that way. It is my mistake, I freely admit. If the noble Lord thinks Amendment 65 meets the point, I will be absolutely delighted. I have read it several times but I do not understand it in that way. Let us proceed and see whether the noble Lord can explain when we reach it. In the meantime, I beg leave to withdraw this amendment.

Amendment, by leave, withdrawn.

Clause 5 [Circumstances to be taken into account by Tribunal in cases of non-compliance with notice to do work]:

10.51 p.m.

Lord Renton moved Amendment No. 40: Leave out Clause 6.

The noble Lord said: My Lords, to set your minds at rest, this is only a probing amendment on a narrow point but an important one. Your Lordships will see that Clause 6 deals with the circumstances to be taken into account by a tribunal in cases of non-compliance. With a notice to do work. Under the present law, when this arises, the tribunal shall consent to the operation of the notice to quit unless in all the circumstances it appears to them that a fair and reasonable landlord would not insist on possession. But, in the Bill as it stands, under Clause 6, they shall have regard only to the three sets of circumstances set out there instead of all the circumstances. I should be grateful if my noble friend would explain why that is so. Why is it necessary to change the law? Would it not be better for the tribunal to have regard to all the circumstances? I beg to move.

Lord Belstead

The answer to my noble friend's final question, and indeed the general thrust of his argument, is that, as presently worded, Section 4 of the 1977 Act does not specifically prohibit the tenant, during the proceedings before the tribunal, ranging over the whole matter of the work he has been required to do, even though he will already have had the opportunity to raise questions as to the justification for the notice to do work at the earlier stage of arbitration on the notice to do work itself. It was not the intention of the original provision that the tenant should have a second chance to raise matters of this kind. I really do not think it reasonable that it should be possible to go over the ground all over again. Clause 6 therefore makes it clear that for the purposes of Section 4 the tribunal is only concerned with the tenant's failure to comply with the notice to do work and whether in the light of such a failure a fair and reasonable landlord would insist on possession.

My noble friend said this was a probing amendment to discover why the tribunal should not be able to consider general hardship to the tenant. It is not intended that Section 4 should provide for issues of general hardship except to the extent that a fair and reasonable landlord would not displace a tenant for failure in his repairing obligations which were not of a serious nature or which were attributable to the adverse circumstances surrounding his failure. I hope that in the light of that explanation my noble friend will feel that we are not unjustified. If I may go back to the original point, it is to try to prevent the tenant ranging on two separate occasions over the whole matter of why he is being required to do work that Clause 6 is included in the Bill.

Lord Renton

My Lords, I am most grateful for that explanation. I think those advising me and the Agriculture Law Association on this amendment will wish to consider very carefully what my noble friend has said. Speaking for myself, I am grateful and I do not wish to carry it further at this moment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Speaker (Lord Ampthill)

Amendment No. 41. I should point out to your Lordships that, if this amendment is agreed to, I cannot call Amendment No. 42.

Clause 7 [Transfer of certain functions of Minister to President of R.I.C.S.]:

Lord Stanley of Alderley moved Amendment No. 41: Page 10, line 23, leave out from ("by") to end of line 25 and insert ("such person (referred to in this section as "the Appointing Authority") as the Minister may, after consultation with such bodies of persons as appear to him to represent the interests of landlords and tenants of agricultural holdings, appoint by order made by statutory instrument; but no order shall be made under this subsection unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.")

The noble Lord said: My Lords, with the permission of the House I shall speak to Amendments Nos. 41 to 49 inclusive as they seek to tackle the same problem and it will give the Government and your Lordships the chance to decide which amendment they like best. Amendment No. 42: Page 10, line 23, leave out ("Royal Institution of Chartered Surveyors") and insert ("Chartered Institute of Arbitrators") Amendment No. 43: Page 10, line 31, leave out ("President") and insert ("Appointing Authority") Amendment No. 44: Page 10, line 32, leave out ("President") and insert ("Appointing Authority") Amendment No. 45: Page 10, line 41, leave out ("President") and insert ("Appointing Authority") Amendment No. 46: Page 11, line 11, leave out ("President") and insert ("Appointing Authority") Amendment No. 47: Page 11, line 12, leave out ("President") and insert ("Appointing Authority") Amendment No. 48: Page 11, line 13, at end insert— ("( ) The Minister may, after consultation with the Appointing Authority, vary by order made by statutory instrument the provisions of the Sixth Schedule to the 1948 Act; but no order shall be made under this subsection unless a draft of the order has been laid before and approved by each House of Parliament.") Amendment No. 49: Page 11, line 13, at end insert— ("( ) The Minister may, after consultation with the President, vary by order made by statutory instrument the provisions of the Sixth Schedule to the 1948 Act; but no order shall be made under this subsection unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.")

We discussed Clause 7 late at night on 28th November and I fear that the matter did not receive the attention that it should have done. Certainly I was off-hand with my noble friend Lord Belstead and even if he listened to me I certainly did not listen to him. I hope for better things tonight.

The problem is perfectly simple. The Government want to get rid of the responsibility for appointing arbitrators. In fact, they want to privatise them. I cannot object too strongly to that although the cost in saving according to the Government will be only £63,000. What I do object to is the responsibility being given to the RICS for, rightly or wrongly, the RICS is seen by tenants to be landlords' men. It will be seen as judge and jury in its own case. Moreover, there will be no appeal to the Minister as there is at present under the 1948 Act should the tenant feel that the arbitrator is fixing too high a charge. The only appeal will be to the RICS itself. That has led to incriminations in the past because, as my noble friend Lord Belstead reminded the Committee, and as is my opinion, such is the unsatisfactory situation existing today with Crown lands.

During debates on this Bill the Government, I believe very unfairly, have been accused of consulting too much with, particularly, dare I say, the National Farmers' Union and the CLA. On this clause the Government did not consult anyone at all until 12th September. I therefore suggest that they should do just that. Amendments Nos. 41 and 43 to 48 inclusive provide for that. My noble friend Lord Belstead cannot complain about this causing delay because, as the Government said in Committee, they do not intend to bring Clause 7 into operation for at least another year.

Having consulted fully, the Government can decide on whom it wants to devolve the responsibility for appointing arbitrators. Perhaps I may remind your Lordships that in an Answer on 5th December the Government stated that neither the Incorporated Society of Valuers and Auctioneers nor the Central Association of Agricultural Valuers were in favour of transferring responsibility to the RICS. I remind your Lordships that neither do the National Farmers' Union, the Tenant Farmers' Association, the Farmers' Union in Wales nor, I believe, the CLA favour such a move. Neither does my noble friend Lord Kinnoull. I cannot, therefore, understand how my noble friend Lord Belstead could state in Committee that the RICS would "admirably discharge the work". I suppose he must have some friends somewhere—and if my memory serves me aright I believe it was my noble kinsman Lord Howard.

If your Lordships do not like our Amendments Nos. 41 and 43 to 48 inclusive, you may prefer our Amendments Nos. 42 and 49 which put the responsibility for appointing arbitrators on to the Chartered Institute of Arbitrators. This body would be seen as impartial. It is usually headed by a distinguished lawyer, the president at the moment being Lord Justice Kerr.

Sadly, this Bill has seen a conflict of opinion between the farmer and the RICS surveyor in the sticks, and certain sections of the RICS, particularly that section commonly nicknamed, dare I say it, the "Mayfair Mafia".

I believe that for the good of our industry such a conflict should be buried for good and all, and as soon as possible. The least that the Government can do to help me and to help the industry is to make sure that an impartial body is given the job of appointing arbitrators. I am sorry to tell the House that the RICS cannot do that after what has happened on Clause 1, and in this case it cannot be considered to be impartial. I beg to move.

Lord Prys-Davies

My Lords, we are very pleased to support the noble Lord, Lord Stanley of Alderley, in the amendment which he has just moved. The appointments made under Section 16(2) and paragraph 1 of Schedule 6 to the 1948 Act in particular will be concerned with the exercise of a judicial function. The farming community has confidence in the present system where the appointments are made by the Minister. This has proved a reliable system in years gone by. It has been impartial and inexpensive and both sides of the industry have confidence in the system. Therefore not merely to delegate but to transfer the power to the president of RICS will undermine the confidence of the community in the proposed regime.

We are particularly attracted by the amendment, with its emphasis on an appointing authority, to represent the interests of landlords and tenants of agricultural holdings". We approve of the amendment and hope that it will win the confidence of the House.

The Earl of Caithness

My Lords, as my noble friend Lord Belstead knows, I do not like Clause 7. I think that the power should remain with the Ministry. But if it is to be moved I think the right body to whom it should be moved is the Royal Institution of Chartered Surveyors. The RICS is impartial and in the past has carried out its functions very well.

Looking at the amendments put forward, I do not think that the Chartered Institute of Arbitrators is the right body, as it lacks the requisite agricultural knowledge. I think that Amendments Nos. 41 and 43 to 49 are woolly. We have to decide who will carry out the function while the Bill is going through rather than waiting for further consultations.

It might ease the mind of my noble friend Lord Stanley a little if he realises that the arbitrators are appointed by the noble and learned Lord the Lord Chancellor. If he wishes to criticise the Lord Chancellor, that is up to him. Of the panel in England, on which there are 175 arbitrators, 173 are members of the RICS; 138 are both members of the RICS and of the CAAV. I should think that number could be increased. I was a member of the CAAV and also a member of the RICS. It was not known to a lot of people that I was a member of the CAAV, and a lot of surveyors do not put that forward. It has already been discovered on the Lord Chancellor's panel that there are surveyors who are also members of the CAAV. In Wales, which is dear to the heart of my noble friend Lord Stanley, there are 30 arbitrators, 29 of whom are members of the RICS; the other one is a member of the CAAV. Sixteen are both members of the RICS and of the CAAV.

I stress this point because it is the CAAV which said that the NFU/CLA agreement was workable. It said that it was workable; the CAAV is considered to be more in favour of the tenant than of the landlord, although that is ridiculous. In the same way, surveyors are supposed to be landlords' men rather than tenants' men. Both act in equal proportions for landlords and tenants.

I cannot see the validity of the criticism that my noble friend Lord Stanley has levied against the RICS and its constructive attitude on Clause 1 of the Bill. I find that very difficult to follow. I am even more confused when I look to Amendment No. 52, and see that the noble Lord, Lord John-Mackie, who is a sponsor of the amendment, is quite happy for the president of the RICS to continue with arbitrations on Crown estates.

Lord Walston

My Lords, as one of the members of the holy alliance of Conservative, Labour, Liberal and SDP Peers who have put their names to the amendment, I wish, very briefly, to give vocal support to the noble Lord, Lord Stanley of Alderley. He has put the problem extremely well, in his usual forceful manner, and I very much hope that the Government will be able to accept at least one of the two alternatives which have been put before them.

11.6 p.m.

Lord Belstead

My Lords, I really think that the appointment of arbitrators is a matter which ought to fall to the agricultural and land-owning industry to carry out itself. I feel that even more strongly after listening to the very telling points put by my noble friend Lord Caithness. I immediately concede that there is a function for Government here, and that is to ensure that those who are appointed to such very important work are entirely suitable as arbitrators. As my noble friend said, this safeguard is provided by my noble and learned friend the Lord Chancellor, who maintains the standing panel of arbitrators from which individual appointments are made. I give the assurance that the Lord Chancellor's standing panel will continue to be maintained in the future.

But, if I may say so, I really am at a loss to know why the clause is being criticised for a second time. It can scarcely be because the Royal Institution of Chartered Surveyors could be said to favour some panel members and not others, because out of 206 members of the Lord Chancellor's panel, 202 are members of the RICS, though, as I understand it, many of the panel members are members of other important organisations as well. Nor surely can the lack of experience be a charge levelled at the RICS, which makes appointments in excess of 2,000 a year for commercial arbitration cases; and indeed at a previous stage of the Bill the noble Lord, Lord Howard of Henderskelfe, said that that was a considerable underestimate. Further, the RICS is designated by statute to appoint arbitrators in agricultural cases whenever the Crown is a party.

There is one misunderstanding which I think I just must clear up. It has been said, and it was said again this evening by my noble friend Lord Stanley, that money is a problem here. The priority of all this is to save manpower in the Civil Service, and those who would otherwise be doing this work could be deployed for other work in agriculture. That is not just a form of words. My noble friend, whose heart is in his farm—indeed, his feet were in his farm at five o'clock this morning when I think he was delivering lambs—would be the very first to say to me, why are there not more members of the veterinary service, the land and water service, the agricultural service, and the science service in Anglesey and in his part of the world? If only we could agree to the clause, there would be a little more elbow room, in a very hard-pressed department, to be able to try to redeploy people.

The House has every right to be extremely careful about this matter, and so your Lordships will ask, what are the safeguards? The first is that the Lord Chancellor will continue to maintain the panel from which the selection of arbitrators is made. The president of the RICS has given an assurance that the procedure currently allowed will remain substantially the same, with the most suitable appointments being made in all cases. Further, I have previously given your Lordships an assurance that at least a year will be allowed after the Bill passes to ensure that the new arrangements operate well from the start. I have to say that the Government believe most firmly that the RICS is a body admirably qualified for this function. I therefore have no hesitation in expressing the hope that Clause 7 may be enabled to continue to stand part of the Bill.

Lord Stanley of Alderley

My Lords, I did not get a great deal of change from my noble friend, but I should like to thank noble Lords from both sides of the House who have supported me. My noble friend Lord Caithness did not do so. He pointed out, as did my noble friend Lord Belstead, that the appointments were made by the Lord Chancellor. Perhaps they are in theory, but in fact it has always been the Minister of Agriculture or the Secretary of State for Wales who has made the final appointments.

My noble friend Lord Belstead asked me why I want to continue along this track. Perhaps the most important reason is that every single member of the RICS whom I have met would like someone from outside the organisation to be responsible for their appointments. I accept fully that the same people will probably do it. It really does matter, however, that appointments are seen to be made by an independent person.

I am certainly not quarrelling—I said so in my speech—with the Ministry cutting down on its staff. Of course, I want to see as many veterinary scientists as possible. It has to cut down where this is possible. My amendment would not do this. It would merely achieve transfers outside to the Chartered Institute of Arbitrators or to some other body. I have to withdraw the amendment as I have no intention of dividing the House at this time. I am not happy. Whether I shall come back on Third Reading I do not know. But the matter may well rear its ugly head in another place. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments No. 42 to 49 not moved.]

Lord Belstead moved Amendment No. 50: Page 11, line 14, leave out subsection (6).

The noble Lord said: My Lords, I should like also to speak to Amendments Nos. 59, 72 and 73. Amendment No. 59: Page 12, line 8, leave out ("(within the meaning of section 7)") Amendment No. 72: Page 23, line 41, after ("(interpretation)") insert— ("(a)") Amendment No. 73: Page 24, line 5, at end insert ("and (b) the following definition shall be substituted for the definition of "the Minister"— "the Minister" means—

1. (a) in relation to England, the Minister of Agriculture, Fisheries and Food; and
2. (b) in relation to Wales, the Secretary of State.".")

The effect of these amendments is to replace the old definition of Minister in Section 94 of the 1948 Act, when the Minister of Agriculture and Fisheries had jurisdiction over Wales, with definitions for Minister in relation to England and Wales separately. The definition at present in Clause 7 of the Bill becomes superfluous and can then be omitted together with the reference to that definition in Clause 10. I beg to move.

On Question, amendment agreed to.

The Earl of Onslow moved Amendment No. 51: After Clause 7, insert the following new clause:

Fixed term tenancies (" . After section 3 of the 1948 Act there shall be inserted the following section— 3A.—(1) The Minister may approve for the purposes of this section a proposed tenancy of agricultural land for a fixed term not exceeding 20 years if satisfied—

1. (a) that the land will be or may be required on the expiry of the tenancy in order that it may be farmed either—
   1. (i) where the owner is a beneficial owner, by himself or by a member of his family; or
   2. (ii) where the owner is a trustee, by a person for whom he holds the land on trust; and
2. (b) that the owner and the proposed tenant have agreed that the provisions of this section shall apply to the tenancy.

(2) The following provisions shall apply to a tenancy approved by the Minister for the purposes of this section—

1. (a) the tenant may at any time terminate the tenancy by giving twelve months' notice to quit expiring on an anniversary of the date of commencement of the tenancy;
2. (b) section 8 of this Act (arbitration as to rent) shall apply to the tenancy as if it were terminable by the landlord by such a notice;
3. (c) if the landlord serves notice under section 3(1) of this Act of his intention to terminate the tenancy on the expiration of the term and the tenant serves a counter-notice under section 2(1) of the Agricultural Holdings (Notices to Quit) Act 1977, the Agricultural Land Tribunal shall consent to the operation of the notice if they are satisfied that the land is required in order that it may be farmed by the landlord or by a person who, at the commencement of the tenancy, was such a person as is referred to in subsection (1)(a) of this section:

Provided that this paragraph shall not apply in the case of a landlord who became landlord by purchase after the commencement of the tenancy. (3) For the purpose of this section "member of his family" means—

1. (a) the wife or husband of the owner;
2. (b) a brother or sister of the owner;
3. (c) a child of the owner; or
4. (d) any person (not within (b) or (c) above) who in the case of any marriage to which the owner is or was at any time a party was treated by the owner as a child of the family in relation to that marriage.".")

The noble Earl said: My Lords, it is very late. We have heard an awful lot of speeches, quite a few too many for me, this evening. I hear the Chief Whip agreeing with me loud and clear. That is probably because all Chief Whips do not want anyone to say anything at all because then their business is hastened rapidly. The amendment takes us back to fixed-term tenancies. It is really concerned with one specific case. In the not too distant past a landowner was approached by his neighbouring farmer who said to him, "Please may I rent your land for 10 years until your son becomes of age". The landlord said, "Yes, you may". They entered into a signed agreement that the land should be let to the neighbouring farmer until the son became of age.

After 10 years, when the son—I think he was at Cirencester—was due to leave, the tenancy came up for falling through. But the farmer said, "No. I am sorry, I have changed my mind. I do not agree with what I signed 10 years ago. I am not going to give you back your land. I am going to claim protection of the 1948 Act". This he duly did, and the case went the whole way to the House of Lords. I am suggesting to your Lordships that that sort of behaviour is morally wrong, but what is worse is this.

We are all trying to increase the amount of land supplied for tenancies. This is a very small sector of land (and it is very closely defined) which could possibly be released because, if there is a minor who is the beneficiary of some land from trustees, the trustees themselves may not want to farm that land. If there is a man who is incapacitated or, for instance, has died but who left the property to his wife, she may not want to farm that land herself, and it may not be appropriate that she should do so. But it may be appropriate that this land should be farmed by somebody else properly and efficiently; and, in turn, it then goes to the younger generation.

We have heard much about hereditary landed castes from the Benches opposite because they seem to think that they are a good idea. I am suggesting that this does not in any way breach the general principles of the 1948 Act. It does not produce a standard norm of a fixed-term tenancy. It allows for fixed-term tenancies under very closely defined circumstances. It will without a doubt increase—admittedly by a very small amount—the amount of tenanted land available. Therefore, I suggest that this is something which we ought to consider and which we ought to accept as a good idea. I beg to move.

Lord Prys-Davies

My Lords, the noble Earl has advanced an attractive argument; however, as he anticipated, I very much regret that we cannot support the concept of a fixed-term tenancy of up to 20 years. I appreciate that this amendment is addressed to a particular circumstance, but, unless we are careful, the particular can also lead to the norm.

I do not think that our view is inconsistent with the view that we took to the amendment in the name of the noble Viscount, Lord Ridley, to Clause 5. The distinction was that new subsection (2)(d) of that amendment ensures that the tenant will be offered a suitable alternative tenancy when his tenancy is terminated. When the fixed-term tenancy is terminated, then there will be no suitable alternative tenancy. In our submission,and to answer the noble Earl, we can support Amendment No. 33 because it provided that the landlord would have to offer a holding suitable to the tenant's needs. A holding which did not ensure the enjoyment of paragraph (d) of the subsection would not be a suitable holding. Therefore, our position on both amendments can be reconciled.

Lord Northfield

My Lords, as the noble Earl knows, I have a good deal of sympathy for this principle. I intervene very briefly to say that I think the Minister will say that he will do something about this kind of case under Section 2—that he will start making provision for this kind of case with three- to five-year tenancies. If the Minister says that, as we strongly suspect he will, please will be reconsider the three to five years? It is unduly restrictive, given the needs of cases like this. It ought to be wider than three to five years. If he would make it wider than three to five years, it would go a long way to meet the case which the noble Earl has in mind.

Lord Belstead

My Lords, it is right to consider with the very greatest care the implications of this proposal and how in practice it would work out. I realise that my noble friend did just that before bringing the amendment before your Lordships' House. I therefore hope that my noble friend will forgive me if I say that a practical objection is that the new clause would require the Minister to satisfy himself, possibly for 20 years ahead, that the land which is to be let under this sort of fixed-term tenancy will, or may, be required by the owner to farm on his own account or by a member of his family.

I know that my noble friend Lord Onslow is always enormously polite to the Government Front Bench, but even his courtesy would not extend to crediting the Government with being able to foretell the future quite so far ahead. The serious point is that in practice Ministers of Agriculture in the future would find it virtually impossible to refuse any request for a fixed-term tenancy. The result would inevitably be a general availability of term tenancies, which would mean that they would tend to become the norm.

Despite the great care which my noble friend has taken to hedge this amendment round with safeguards—and he has taken great care—we should find that we were not considering a proposal which would have just a limited effect; this amendment would have a far more unrestricted effect that at first appears. This would have consequences for the years to come. I find myself asking the same sort of questions as the noble Lord, Lord Prys-Davies, asked. Do we really want to see the lifetime tenancy, which I think everyone regards as the ideal, replaced by fixed-term tenancies of varying duration?

There would be great pressure on potential tenants to take these on, since they would initially be the only forms of tenancy generally being offered, but, when their term expired, what would happen to the tenants, by then possibly in late middle age? Would it be easy for them to find alternative holdings? The report of the Northfield Committee drew attention to the problems which would be caused by a system of unrestricted fixed-term tenancies, which is what I am suggesting that, despite my noble friend's care, these proposals would eventually come to. It was for this reason that, in paragraph 641, the Northfield Committee unanimously rejected unrestricted fixed-term tenancies and made it clear that any restricted system would need to be subject to a whole range of detailed conditions. Not one of those conditions is to be found in this amendment.

I am sorry to appear so obstructive to my noble friend, because I know he has taken this great care and I know also that he will not take very kindly to it when I say that the Minister's discretion under Section 2 of the 1948 Act for trial tenancies, and where the landlord's son or daughter expects to take over the holding at a later date, is being extended by us by administrative action at the same time as this Bill, and I hope that that will help. But that is as far as we can go. To go much further, as my noble friend has proposed, would open the door very wide indeed, and there would be unpredictable consequences.

The Earl of Onslow

My Lords, I had had it intimated to me that that was the line that my noble friend was going to take, and I am not over-surprised by it. I am disappointed simply because I happen to believe that the element of fixed-term tenancy increases the supply of tenanted land. I should certainly have been prepared to accept, or would have welcomed, in this amendment the naming of a successor. In other words, it would be son X, or son Y. If that successor did not want to take up farming, then the tenancy automatically became a lifetime tenancy.

But as it was intimated by my noble friend that he was not going to accept it anyway, I was really too idle, if the truth be known, to go to the effort of redrafting it and putting down another amendment, which I think would have wasted everybody's time. It would have been better if we could have taken the way suggested by the noble Lord, Lord Northfield; in other words, that the three- to five-year tenancy could possibly be extended. If that could be done, then we might have got quite a lot, and I should be happy with that. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 52 not moved.]

Lord Northfield moved Amendment No. 52A: After Clause 7, insert the following new clause:

Crown Estates. (" . After subsection (3) of section 1 of the Crown Estates Act 1961, there shall be inserted the following subsections— (3A) The Commissioners shall manage in accordance with the general provisions of this Act any land added to the Crown Estate by order of the Treasury or the Secretary of State. (3B) With the consent of the Secretary of State, and with monies provided by the Treasury, the Commissioners may acquire by agreement and manage in accordance with the general provisions of this Act any land which they consider suitable for letting as small farms."")

The noble Lord said: My Lords, we had a discussion on the principle of this matter at the Committee stage and therefore I shall try to be brief. We are here referring to an important recommendation of my committee of inquiry in paragraphs 668, 669 and 670. I readily recognise that it was a majority recommendation of the committee and not a unanimous one.

Why was it in the report of my committee that members of the committee, who would not normally think of any conceivable extension of publicly-owned land, came down in favour of some measure of action of this kind to improve the supply of let land? Bluntly, it was simply because by the time we had spent a couple of years on this issue we were desperate to find some way of preventing the inexorable, inevitable, continuing decline in the tenanted sector, which will reach very low proportions very quickly unless we are extremely lucky in ways we cannot foresee at present. It was the sheer measure of a dozen people who had worked desperately hard to find a way of holding the let sector, that some of them, who would never think of agreeing to this sort of thing, came to the conclusions in paragraphs 668, 669 and 670. There is no other way of really being sure that we will have a continuing surviving let sector of any size than to take anything that looks possible in the way of reasonable extension of the small area of publicly-owned land that we have.

When we discussed this matter in Committee on an amendment moved from this side of the House, I suggested that one way to do this was to improvise on, to improve on, and use a mechanism we already have; namely, the Crown Estates Commissioners. My amendment is in three parts. It does not necessitate starting up new bodies, buying vast amounts of land or anything like that. The amendment seeks to accomplish three aims. We pointed out in paragraph 670 that there are probably 15,000 acres of land that the Ministry already has in the hands of the agriculture Ministers, which could be made suitable for letting as small farms. We said that that ought to be identified and it ought to form the basis of a small farm let sector.

The first part of the amendment, in subsection (3A), is to add to the work of the Crown Estates Commissioners any land that the Treasury or the Secretary of State—that means the Minister of Agriculture in particular—makes over to them, and says, "Make good use of this. We think it could help to retain a better let sector than looks likely at the moment, if you use it." The Crown Estates Commissioners would be able to add this to their stock and manage it in with the whole, providing perhaps a ladder as well within the general system that they run so that people could move up from any small farms on it.

The second suggestion made in the report was that the Chancellor might, from time to time, be given limited discretion to accept suitable land in payment of taxation, particularly capital transfer tax. If he did that—and it is entirely discretional in the draft that I place before the House—the subsection (3A) amendment on the Marshalled List would allow that land to be transferred for management purposes to the Crown Estate. This seems a sensible way steadily to build up, quietly, a little further, the letting sector which the Crown Estates provide. The third possibility, which we put in the report, and it is now in subsection (3B), I read from the report in paragraph 670. It is this: The Chancellor could also be given power to put aside limited sums for purchase in the open market. The initial return, compared with the interest on money borrowed or invested elsewhere, would be small. Accumulation by this method would be slow but some community investment, such as that in New Towns, is for the future and gives no 'profit' for a substantial period. There will be limited opportunity for Chancellors to forego revenue, add to the Borrowing Requirement and invest in land which may give an economic return only in twenty or so years hence and as a result we foresee the growth of this development as modest.

There are the three ways; to transfer some land already owned by the department, possibly accept some land occasionally in payment of death duties; give it to the commissioners, manage it and make it into small farms. Thirdly, make a little money available from time to time so that the commissioners, by agreement—with no compulsion—in the open market can manage land which they have bought because they believe it suitable for adding to the sector of small farms to let. There it is in a nutshell. I have been very brief about it. It is a modest amendment. It tries to meet a very important need: namely, that there should be some way of trying more vigorously than we have seen so far in parts of this Bill to maintain the let sector.

I will say a final word about the Crown Estates Commission. I have every admiration for what they do but it is really a fiction now that they are managing the Crown estates. This land was handed over to the country in return for the Civil List, originally. The thing has gone on. It is very happy fiction. It is a very contented set of farms, very well managed, and so on. But really it is time for the fiction to come to an end. It really has no relationship now to the Civil List at all. It is just a sector of publicly-owned land, managed by some volunteer commissioners who do it extremely well. All that the Northfield Committee (or the majority of them) said was, "We have got a good working example of what could be done. Why do we not occasionally add to it? It is all discretionary land; it is all when and if Chancellors and Secretaries of State can find some money and some land to add to their holding. Why stick at the original, rather artificial lumps of land that they were given? Why not give them some to make it slightly larger and more useful in preserving the let sector?" I beg to move.

Lord Bishopston

This is the kind of amendment which deserves the support of every noble Lord tonight. As my noble friend has said, it provides more opportunity for entry into the industry, something which this Bill is all about; it is invoking the aid of a body which is already established with a very good record of service to the country, with over a quarter million acres of agricultural land. It is accountable to the public for what it does and there is no compulsion. It is land given quite voluntarily to the Treasury in death duties, and so on.

There can hardly be any other way in which we could have an amendment which could commend itself to the House. The public sector, apart from the Crown Estates, are well known: the landowners, as I have said, the National Trust, the Church Commission, the colleges, the Crown, and so on. So we have the voluntary giving of land to a publicly-accountable body of proven record. I am very pleased to commend my noble friend's amendment because my noble friends and I who tabled Amendment No. 52, very much on the same subject, much prefer this amendment for the reasons which my noble friend has given the House so clearly tonight. He has quoted from the Northfield Report which went into a lot more detail than is in this particular amendment. He is not really invoking all the justifications which he and his distinguished colleagues thought were worthy of public attention when they brought the report before the public. I believe that the amendment should commend itself to the Minister because it does ensure more entry into the industry in ways which surely should cause no objection and which justify your Lordships' support.

The Earl of Onslow

My Lords, it is nationalisation, taxation, which has nothing to do with us and, furthermore, hypothecation of revenue—all of which are abhorrent to the constitution. Therefore I think we ought to resist this amendment as strongly as possible.

Lord Walston

The noble Lord, Lord Northfield, is perfectly right. This is a modest proposal: for me, it is far too modest. As the noble Lord, Lord Belstead, may recall, at Committee stage I put down an amendment which went considerably further and which unfortunately was rejected out of hand. Therefore I am very happy to support the proposal that represents a half-loaf rather than the whole loaf which I think would have made more succulent eating, and which was rejected by the Government.

I will not rehearse the arguments or go into details. As a former Crown Commissioner, I am happy to hear the kind things which have been said about those who do it now, and I think they deserve a great deal of credit. I would not entirely go along with the comments of the noble Lord, Lord Northfield, concerning the anachronism—that was not the word he used: I think he said "fiction"—of the Crown Estates. They are in fact a very real entity; but that is not the issue at the present time.

My only criticism of his amendment refers to the last line, where he talks about, land which they consider suitable for letting as small farms". I see no reason why their hands should be tied in this way. Some land would be suitable for letting as small farms, some for medium-sized farms and some for large farms. I think the commissioners should be free, as they are at present, to decide in accordance with the best interests of agriculture as to how the land should be let. With that relatively minor proviso, I hope that the noble Lord, Lord Belstead, will at least be able to say that this is worthy of serious consideration.

The Earl of Swinton

My Lords, I have listened with interest, as always, to the noble Lord, Lord Northfield, but he will not be surprised to learn that I cannot accept his amendment. If the proposal is to have any significant effect, it would involve substantial Government expenditure in the form of purchasing land at vacant possession value for the purpose of letting. The Government's policy in relation to land held by government departments is to dispose of it where it is not required for departmental purposes, very often by sale to the existing tenants. Therefore, there would be little purpose in handing land over to the Crown Estates. It conflicts with the Government's policy of disposing of land assets and of not increasing public ownership of land. While I realise that the objective is the laudable one of making more land available for letting, the noble Lord's method is, I would say, almost one of desperation. I think the noble Lord used the word "desperation" more than once in introducing the amendment. It is very near to land nationalisation and I do not think that at this late hour of the night I need detain your Lordships with the Government's views on why that is totally unacceptable to the Government.

Lord Northfield

My Lords, the reply was not unexpected, of course. May I say two things very briefly: first, I am astonished to hear the noble Earl say that the Government are now disposing of their let land to make it all into owner-occupier land. That really is a bit much to hear at this time. Here we have a Bill, the prime aim of which is to preserve the let sector, and the Government now announce that they are going to ruin their own let sector by selling it off to owner-occupiers—something they are hoping that all the other landlords will not do. Here they are, telling the private landlord: "Look, we want to encourage you to let: stop selling it off to owner-occupiers." Yet tonight, the Government are saying, "We are not going to set any example. We are going to show you how to do exactly the opposite." That is scandalous. I am astonished to hear it and extremely disappointed. It was a recommendation of the whole of my committee that the Government should not sell any of this land to owner-occupiers, but should retain it to try to keep a let sector. It is undoing the very purposes of the Bill.

Secondly, I simply say to the noble Lord, Lord Walston, that I did not say that the Crown Estate Commissioners were a fiction. I said that the link of this land with the Civil List, as providing money for the Civil List, is now a fiction. This is a sector of publicly owned land on a modest scale and we should accept it for the real thing it is. This is extremely disappointing; but this is not the time of night to press an issue like this. It is very sad to hear a totally doctrinaire reply, when we know that this is the only sort of thing that will help us get a decently preserved sector of small farms. This would have been a reason for having in the Bill the words "small farms".

What is missing from our system is the ladder, and the idea of my committee was to say that we have smallholdings; and, as the noble Lord, Lord Belstead, said earlier, very few people progress upwards out of them. This would have given a very interesting part of the ladder, providing small farms that smallholders could move onto, filling a very big gap in the ladder—if there are gaps in ladders. That is the reason why the words "small farms" are in the amendment. This is extremely disappointing and I am rather scandalised by the announcement tonight that the Government are giving their own Bill a kick in the teeth by selling off their own land for owner-occupation. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Denham

My Lords, we have probably reached a stage where we do not need to proceed any further tonight. I beg to move that further consideration on Report be now adjourned.

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

House adjourned at eighteen minutes before midnight.