Agriculture Bill

HL Deb 02 July 1986 vol 477 cc893-951

3.40 p.m.

Report received.

Clause 1 [Provision of services and goods connected with agriculture and countryside]:

Lord Melchett moved Amendment No. 1:

Page 1, line 6, leave out subsection (1) and insert—

("(1) The Minister shall make provision free of charge for the supply of—

1. (a) advice to persons carrying on agricultural businesses on the conservation and enhancement of the natural beauty and amenity of the countryside; and
2. (b) advice to such persons on diversification into other enterprises of benefit to the rural economy.

(1A) The Minister may make provision for the supply to any person of any services or goods relating to—

1. (a) the production and marketing of agricultural produce and other food;
2. (b) the conservation and enhancement of natural beauty and amenity of the countryside; or
3. (c) any other agricultural activity or other enterprise of benefit to the rural economy;
• that are not covered by subsection (1) above.").

The noble Lord said: My Lords, with this amendment I think that it would be convenient to speak to Amendments Nos. 3 and 6, both of which are consequential.

Amendment No. 1 reinstates into the statute law part of the provision in Section 41 of the Wildlife and Countryside Act 1981 which at present is repealed by the Agriculture Bill. Section 41 was put into the Wildlife and Countryside Act as a result of amendments passed in your Lordships' House, and originally moved by the noble Lord, Lord Sandford. Section 41 of the Wildlife and Countryside Act makes it a requirement on the Minister of Agriculture to make provision for ADAS to give advice free of charge to farmers who carry on agricultural businesses on conservation and on diversification. That is the first part of the amendment, subsection (1)(a) and (b).

I have omitted from the amendment a third part of Section 41 of the Wildlife and Countryside Act about giving advice to other government departments. This is one of the matters to which the noble Lord, Lord Belstead, objected particularly when we discussed it in Committee. Therefore in tabling the amendment I narrowed the statutory duty on the Minister of Agriculture that applies in the Wildlife and Countryside Act, which was put into that Act by your Lordships' House, accepted by the Government as recently as 1981. This would be a narrower statutory duty, but would nevertheless contain the essential elements that I think people on both sides of the House agree ADAS should continue to have to do; that is, to give advice to farmers free of charge on conservation, on enhancement of the countryside and on diversification of farm businesses.

The second part of the amendment, subsection (1A) (a), (b) and (c), simply repeats the provisions already in the Bill and allows the discretionary power that the Government are keen they should have to give advice or supply goods or services to a wide range of people, farmers and others involved in production, marketing and so on. Some of those things will, of course, be commercial services sold by ADAS.

The only change that the amendment makes to the Bill is to reinstate parts of the provisions of the Government's Wildlife and Countryside Act about free advice on conservation and diversification. It is a narrow statutory duty, but nevertheless one to which a great many interests attach considerable importance, I think for a number of reasons. First, as all of us involved in the agriculture industry are aware, major changes are taking place and will continue to take place. Conservation is increasingly important, as is diversification from a business point of view.

It is generally agreed, I think, that ADAS has a vital role to play in giving farmers advice on diversifying their business opportunities and helping them to conserve the countryside and wildlife and enhance the beauty of the country. The amendment would ensure that ADAS had a statutory remit to give that free advice.

The Government have said in your Lordships' House and in another place that this will happen anyhow and that ADAS will do this. So far they have set their face against this remaining as it is at present in law, passed in 1981, a statutory duty. They have done so, so far as I can see from studying the debates carefully, on the grounds that previous amendments put too wide a statutory duty and would have obliged ADAS to give advice outside agriculture to other government departments or statutory bodies free of charge. The amendment does not do that, but is restricted to advice to farmers.

The final reason that I think it is particularly important to write this into the Bill is that all of us know that in practice what one Government Minister says as an undertaking when a Bill is going through Parliament binds no one else. It does not bind successive Government Ministers in the same administration, and it certainly does not bind successive governments.

We all know that the noble Lord, Lord Belstead, is committed to this and that he intends to see it happen, and I have no doubt that it will happen while the noble Lord occupies his current position. However a number of us on this side of the House in different parties do not believe that that will continue for very long. In any event, changes in governments will take place during the time that the legislation remains on the statute book.

The fact that this is a discretionary power to give advice is already causing uncertainty. For example, in last week's issue of Farmers Weekly, in discussing the free advice for diversification to which the Government are committed, there is a report of a farmer who is being given initial advice by ADAS free of charge on how to diversify but who will be charged if more detailed advice is sought. Despite the strong commitments that the noble Lord, Lord Belstead, has given on behalf of the Government and that were given in another place, already doubts are being raised about whether this free service really will be free and will continue to be free for a matter of days after the measure is passed, let alone many years into the future.

I hope that the amendment will be acceptable to the Government. I have tried to meet all the objections that the noble Lord had to it in Committee, and I have drawn it very narrowly. It would simply ensure that ADAS had a statutory duty to continue to give free advice, as it does now under the Wildlife and Countryside Act, on these limited topics of conservation and diversification.

3.45 p.m.

Lord Hunt

My Lords, I wish to support the amendment. If I had been able to attend the Committee stage of the Agriculture Bill when your Lordships debated it on 12th June, I should have argued with others—I noted particularly the speeches of the noble Earl, Lord Onslow, the noble Baroness, Lady Nicol, and the noble Lord, Lord John-Mackie—that it is impracticable and, more important perhaps, undesirable to separate the matter of advice by ADAS on agricultural matters on the one hand and environmental matters on the other. I support the amendment now because I am sure that unless advice on agricultural matters is provided free by ADAS, fewer farmers will seek advice on agricultural matters and consequentially fewer farmers will recieve the all-important advice on environmental matters that the noble Lord, I know, is so keen they should have.

I support the amendment because, if the Government are serious in their intention to attempt to achieve a true balance between the various interests contained in Clause 14, they must surely have a duty to do everything possible commensurate with the voluntary principle to persuade as many farmers as possible by expert advice how best to achieve that balance, and in particular having regard to the environmental interests, for which hitherto MAFF has not had a formal responsibility and which have not been truly weighed in the balance in the past.

I see no justification for making a difference in principle between this amendment and Section 41 of the 1981 Act, in which the duty is laid upon Ministers. As the noble Lord, Lord Melchett, has said, without the amendment the duties contained in the 1981 Act would be cancelled out. I see the retention of those duties as a test of the Government's good faith in respect of Clause 14 of the Bill.

Lord John-Mackie

My Lords, first, I thank the noble Lord, Lord Belstead, for the tremendous help that he has been since Committee in keeping us up to date with his thinking and for the amendments that he has tabled. This has been a great help to us. I do not suggest that we agree with all the amendments, but he has been a great help in every way, for which I thank him.

I do not think I need add to what has already been said by the two noble Lords who have spoken to the amendment. I agree very much with the amendment. Subsection (1)(b) says: advice to such persons on diversification into other enterprises of benefit to the rural economy". In my view that is most important in this year and, indeed, in this age, when we are asked to do so much diversification. Therefore, I and my noble friends support the amendment.

However, I want to make it clear that although I have put my name to my noble friend's Amendment No. 1 I did not mean to do so as regards Amendment No. 2. It is not that I disagree with the idea behind Amendment No. 2, but I feel that to refer to "promotion" is rather like saying that we have created a nice countryside for people and we are trying to chivvy them into it and make them enjoy it. I know that my noble friend does not mean that, but I should make it clear that I do not support that amendment although I do support the other three.

The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead)

My Lords, I should like to say a few words by way of background before dealing with the amendments of the noble Lord, Lord Melchett, and the noble Lord, Lord John-Mackie, whose words I appreciated about the way in which we have exchanged information since the Committee stage of the Bill.

Up until now all ADAS advice has been placed on the same statutory footing. In other words, the Minister of Agriculture has relied upon the same basic powers to provide advice on agricultural production or on conservation or on rural diversification. However, as the noble Lord, Lord Melchett, himself said in his introductory speech, we are certain now that in future the advisory service will need to be able to give its advice on a much wider canvas than it has hitherto. That is the reason why Clause 1 of the Bill provides for ADAS to give its services to the very wide range of people and on the wide range of subjects which are included in the clause. However, because the net of ADAS will now be spread much wider than it has been statutorily before, we have made Clause 1 a power and not a duty.

It is fair to say that your Lordships were somewhat suspicious during the Committee stage that this may be a licence to turn the coin on to its face: that ADAS, instead of spreading its net wider, could withdraw from the scene. Therefore, in order to give an undertaking to your Lordships' House on the face of the Bill that our advisory services will continue, the Government have tabled Amendment No. 4, which I hope we shall be discussing shortly. Indeed, if your Lordships agree to Amendment No. 4 we shall have an absolute guarantee in the Bill, which would be put on the face of the Bill by your Lordships' House, of the existence of an advisory service in the future, and also the general powers in Clause 1 would be spread much wider than hitherto. I suggest to your Lordships that that is really the only fair way in which to provide for the much wider role that ADAS is expected to play in the future.

With respect to the noble Lord, Lord Melchett, who put forward a very persuasive case, I think that our proposal is a much fairer way of going about the matter than the proposals put forward in the first three amendments. The noble Lord's present amendments (if your Lordships agree to them) would make a very unacceptable distinction. They would provide for conservation advice free of charge and so they would establish sub-categories of ADAS advice on a different statutory footing from the rest of ADAS's advice. That would therefore, by law, require distinguishing lines to be drawn where lines had not been drawn previously. A statutory obligation to provide advice on conservation or rural diversification free of charge would, I suggest, be bound to lead to arguments in the courts about what constituted conservation and what did not.

The noble Lord said in Committee that he thought that such court action could be an advantage to farmers and the countryside as a whole. With respect, I do not agree with that suggestion. I think that it would lead to great pressures on the Ministry's advisers and, indeed, from the industry to segregate off advice on conservtion and rural diversification so clearly and definitely from other advice that there would be a significant reduction in the effectiveness with which ADAS provided the balanced mix of advice that it does at present and that it will be required to provide in future, and upon which the noble Lord, Lord Hunt, quite rightly puts such enormous importance.

Incidentally, as a side-effect, these amendments would also prevent ADAS from entering into more detailed environmental planning and development work—in other words, the giving of environmental services—which at present it cannot undertake because of the enormously expensive resource demands that work of that kind would entail. But where customers are able and indeed willing to pay for expensive services, such as the drawing up of major management plans for monitoring, improving or enhancing the wildlife or other environmental interests of particular features of a farm or an estate, I do not see why such a service should not be provided. However, these amendments would forbid that happening.

Therefore, I am endeavouring to say to your Lordships that it was thought in Committee that in reality Clause 1 would be some kind of a licence for the Government to begin withdrawing ADAS from the role that it fulfils so well. Nothing could be further from the truth. I very much hope that the tabling of Amendment No. 4, when we come to it, will prove that that is so.

In addition, I assure your Lordships that the Government stand by their undertaking not to charge for the kinds of advice on conservation, animal welfare and rural diversification currently provided free of charge to farmers. I endeavoured to describe in Committee how ADAS and the industry can have practicable, workable arrangements for the future provision of advice on conservation and other issues free of charge. However, the difference between that and these amendments is that that can best be done with common sense and some give and take.

If these amendments were to be made, they would make agricultural advisers so wary of breaking the law that they would simply segregate off their conservation advice and the balanced mixture of advice that we all want to achieve would be lost. That would be an absolute disaster. However, I believe that it would be the inevitable consequence of these amendments. It is on that simple ground that I have to resist these three amendments.

Lord Sandford

My Lords, the debates which we have had on these amendments at this stage and the debates which we had on their predecessors at Committee stage, as well as those which we have had on other similar amendments to the clause, have served a useful purpose because they have dealt conclusively with the suspicions and doubts widely held that the Ministry of Agriculture have been less than wholehearted in their commitment to conservation.

The Ministry disliked Clause 41 to the Wildlife and Countryside Bill when it was introduced, and they have by no means exerted themselves as whole-heartedly as they have always claimed in its execution ever since. However, that is not to say that there are not a considerable number of farmers who understand and practise conservation well; it is not to say that the farming and wildlife advisory groups have not done sterling work in this field; and it is not to say that there are not a considerable number of officials both within the Ministry and within ADAS who have the cause of conservation at their hearts. However, there is a considerable number of hardliners in the Ministry whose will to keep clear of conservation has yet to be broken. Now, at the first opportunity to make an amendment in the field of conservation, the Ministry divest themselves of a statutory duty and leave themselves with a power. If that is not a reduction in their concern for conservation, I do not know what is! Nevertheless, we are now clear about how we stand, and that is a gain.

Lord Craigton

My Lords, I may be wrong but 1 did not understand what the Minister meant when he said that his Amendment No. 4 answered the question which we are now discussing.

4 p.m.

Lord Belstead

My Lords, may I reply to my noble friend Lord Craigton? By way of background, I just wanted to set the scene to make it clear to the House that any suggestion that Clause 1 is in some way a licence for ADAS to be withdrawn and to disappear from the scene is not the case. In order to prove that it is not the case, the Government have put down Amendment No. 4. It remains the case with Amendment No. 4, if your Lordships agree to that amendment, that Clause 1 will be a power and not a duty. This is what this amendment is all about.

The reason why the Ministry have put forward a power in Clause 1 and not a duty is, as I think my noble friend Lord Craigton is well aware, that we have drawn Clause 1 infinitely wider than the law stands at the moment; indeed, so wide that Clause l(l)(c) says that the advisory services in the future shall provide their goods and services to, any other agricultural activity"— other than production and marketing, and conservation and enhancement of the countryside— or other enterprise of benefit to the rural economy. It is a complete catch-all.

The difficulty we should be in if your Lordships had insisted that there should be a duty to provide all services at all times is that we would find ourselves overstretched, because otherwise we would be breaking the law in that we would have to meet all the particular bits of Clause 1 at one and the same time. It is for that reason that the noble Lord, Lord Melchett, is being selective in this amendment and saying that he wants a duty to provide free services for conservation and rural diversification only.

I admire the noble Lord (because he is consistent in this matter) for bringing forward this amendment, but I disagree with his view that it can work. If you lay a statutory duty on agricultural advisers to provide free advice—I honestly say this, my Lords—I think that the ADAS advisers will be so wary of breaking the law that they will not provide integrated advice when they go to visit a farm. What they will say is, "We are going to play safe and make absolutely certain that we either give husbandry advice or we give environmental advice, but we are jolly well not going to give integrated advice, becuse before we know where we are, if we do that we may find that we are up before the courts for having broken the law". It is on that simple ground that I have to resist the amendments put forward by the noble Lord, Lord Melchett, at the start of our debate.

Lord Melchett

My Lords, I have listened carefully to the noble Lord, Lord Belstead, and to the noble Lord, Lord Sandford, who was responsible for these provisions appearing in the Wildlife and Countryside Act 1981. But they have a long and honourable pedigree. They were first recommended by Sir Nigel Strutt in the Strutt report many years before that. It has been endorsed by everybody from the agricultural industry who has looked at the future for agriculture and conservation that ADAS should play a major part in giving advice to farmers on conservation matters. As the noble Lord, Lord Sandford, said, the provisions have not been wholeheartedly endorsed by the Ministry, and I find it bitterly disappointing that the noble Lord, Lord Sandford, should be as pessimistic as he is (and said he was this afternoon) about the future.

The noble Lord, Lord Belstead, raised the red herring about Clause 1 being a licence for ADAS to disappear. Amendments Nos. 1, 3 and 6, with which we are dealing, do not address that point. They are not looking at whether this Bill is a licence for ADAS to disappear but at whether this Bill provides a licence for ADAS free advice on conservation and diversification to disappear.

It provides that licence. The noble Lord, Lord Belstead, has not suggested otherwise. He has given a personal undertaking that he will not allow it to end. But, as I said in introducing the amendment, that only carries us forward as long as the noble Lord, Lord Belstead, holds his present job, and no further. The fact is that Clause 1 provides a licence for ADAS's involvement in conservation and diversification to end. It could end tomorrow if a Minister wished to end it tomorrow. That is what this Bill provides a licence for.

The noble Lord then said, "Even if that is not a good argument, Amendments 1, 3 and 6 would mean ADAS segregating off advice on conservation and diversification from the rest". The Government have already done that. They have said, "We will charge for some advice and give some advice free". That is segregating. ADAS officials, as we discussed at length at Committee stage, again have to know whether they are giving advice which is chargeable or free. The segregation has taken place. All I say is that we want to make sure in the Bill that at least the free advice continues into the future and does not disappear down the plughole. That is what this amendment would ensure.

I was disappointed at how pessimistic the noble Lord, Lord Sandford, was about this. He has just cause, because Sir Nigel Strutt's advice many years ago was not acted on; and even when this duty was put in the Wildlife and Countryside Act, accepted by Parliament, it was not forcefully taken up nationally. But I think it is fair to say that locally a great many ADAS officers, regional staff and local advisory officers have eagerly seized on this and have done an effective job, have trained themselves in conservation, made contacts, and given a lot of excellent advice to farmers. That is what I do not want to see ended by this Government or any future government. This amendment will ensure that it continues, and I think the House should insist that it does continue. I want to press the amendment to a Division.

Baroness White

My Lords, before we take a Division on this amendment, can the Minister not deal with the differentiation made in Lord Melchett's amendment between the goods and services which are included both in this amendment and in the Bill as it now stands, and advice? The noble Lord mentioned the difficulty of an ADAS officer being asked to draw up a scheme, or maybe to undertake some kind of survey, or something of that sort. Surely that is caught under "services or goods". Advice is different.

I should have thought that it is necessary that we make certain that advice will remain available, whatever happens to the goods and services. The goods and services may be charged for, and that is provided for both in the Bill and in the amendment. I cannot see why the noble Lord resists the desirability of providing advice. As the noble Lord, Lord Melchett, said—and as we discussed endlessly at Committee stage—the ADAS officers must be able to decide what it is they are going to charge for, and therefore they ought to be able to differentiate between that and what they are not obliged to charge for.

The Earl of Onslow

My Lords, before the noble Lord answers again—and to stop him having to speak three times on Report stage—presumably I am right in assuming that when my noble friend gives an undertaking from the Government Front Bench that certain things are going to happen, he is speaking for the Government. He is not speaking, as the noble Lord, Lord Melchett, implied, solely in his own personal capacity.

The Government have given an undertaking that these services will be provided. I accept that. I do not presume that if, by misfortune, noble Lords on Benches in another part of this House change places with ourselves, those people will then withdraw from that undertaking. Therefore I should have thought that the pledge is perfectly all right, and that it would be a mistake to go to a Division. Even though I believe that what the noble Lord, Lord Melchett, seeks is a good thing to do, I certainly shall vote for the Government.

Lord Belstead

My Lords, I do not know that I have the permission of the House to speak a third time, and it would be unfair if I made debating points and the noble Lord, Lord Melchett, could not speak again. Therefore may I, in one sentence, simply say to the noble Baroness, Lady White, that of course advice is a service under the Bill. I think that really answers the point she was putting to me.

4.9 p.m.

On Question, whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided; Contents, 85; Not-Contents, 139.

DIVISION NO.1
CONTENTS
Airedale, L.	Diamond, L.
Amherst, E.	Donaldson of Kingsbridge, L.
Ardwick, L.	Elwyn-Jones, L.
Attlee, E.	Ennals, L.
Banks, L.	Ewart-Biggs, B.
Barnett, L.	Ezra, L.
Birk, B.	Falkender, B.
Blease, L.	Foot, L.
Blyton, L.	Gallacher, L.
Brockway, L.	Gladwyn, L.
Bruce of Donington, L.	Glenamara, L.
Burton of Coventry, B.	Graham of Edmonton, L.
Carmichael of Kelvingrove, L.	Grey, E.
Cledwyn of Penrhos, L.	Hampton, L.
Crawshaw of Aintree, L.	Harris of Greenwich, L.
David, B.	Henderson of Brompton, L.
Davies of Penrhys, L.	Hunt, L.
Dean of Beswick, L. [Teller.]	Hutchinson of Lullington, L.

Jenkins of Putney, L.	Rugby. L.
John-Mackie, L.	Sainsbury, L.
Kilbracken, L.	Sandford, L.
Kilmarnock, L.	Seear, B.
Kirkhill, L.	Shackleton, L.
Llewelyn-Davies of Hastoe, B.	Shepherd, L.
Lloyd of Kilgerran, L.	Silkin of Dulwich, L.
Lockwood, B.	Simon, V.
Longford, E.	Stallard, L.
Mackie of Benshie, L.	Stewart of Fulham, L.
McNair, L.	Stoddart of Swindon, L.
Mayhew, L.	Strabolgi, L.
Melchett, L. [Teller.]	Taylor of Blackburn, L.
Mishcon, L.	Taylor of Mansfield, L.
Morton of Shuna, L.	Tordoff, L.
Mulley, L.	Underhill, L.
Nicol, B.	Vernon, L.
Oram, L.	Wallace of Coslany, L.
Phillips, B.	Walston, L.
Pitt of Hampstead, L.	Wells-Pestell, L.
Ponsonby of Shulbrede, L.	Whaddon, L.
Ritchie of Dundee, L.	White, B.
Robson of Kiddington, B.	Wilson of Langside, L.
Rochester, L.	Winstanley, L.
Ross of Marnock, L.

NOT-CONTENTS
Airey of Abingdon, B.	Gainford, L.
Alexander of Tunis, E.	Gisborough, L.
Annan, L.	Glenarthur, L.
Arran, E.	Granville of Eye, L.
Auckland, L.	Gray of Contin, L.
Bauer, L.	Gridley, L.
Belhaven and Stenton, L.	Grimthorpe, L.
Beloff, L.	Hailsham of Saint
Belstead, L.	Marylebone, L.
Bessborough, E.	Halsbury, E.
Blake, L.	Hardinge of Penshurst, L.
Bolton, L.	Harmar-Nicholls, L.
Boyd-Carpenter, L.	Hives, L.
Brabazon of Tara, L.	Hood, V.
Brentford, V.	Hooper, B.
Brougham and Vaux, L.	Hylton-Foster, B.
Broxbourne, L.	Inglewood, L.
Burton, L.	Ingrow, L.
Butterworth, L.	Kimball, L.
Caccia, L.	Kinnaird, L.
Caithness, E.	Lane-Fox, B.
Cameron of Lochbroom, L.	Lauderdale, E.
Campbell of Alloway, L.	Layton, L.
Carnegy of Lour, B.	Lloyd of Hampstead, L.
Carnock, L.	Long, V.
Cathcart, E.	Lucas of Chilworth, L.
Cayzer, L.	Lurgan, L.
Chelmer, L.	Lyell, L.
Clitheroe, L.	McFadzean, L.
Coleraine, L.	Mancroft, L.
Craigavon, V.	Manton, L.
Craigton, L.	Maude of Stratford-upon-
Cranbrook, E.	Avon, L.
Crawshaw, L.	Merrivale, L.
Cross, V.	Mersey, V.
Cullen of Ashbourne, L.	Middleton, L.
Davidson, V.	Milverton, L.
De Freyne, L.	Monk Bretton, L.
De La Warr, E.	Mountgarret, V.
Denham, L. [Teller.]	Mowbray and Stourton, L.
Denning, L.	Murton of Lindisfarne, L.
Derwent, L.	Noel-Buxton, L.
Drumalbyn, L.	Norfolk, D.
Eccles, V.	Nugent of Guildford, L.
Ellenborough, L.	Onslow, E.
Elliot of Harwood, B.	Peel, E.
Elliott of Morpeth, L.	Pender, L.
Elton, L.	Peyton of Yeovil, L.
Faithfull, B.	Plummer of St Marylebone,
Fanshawe of Richmond, L.	L.
Ferrers, E.	Portland, D.
Forbes, L.	Quinton, L.
Fortescue, E.	Radnor, E.
Fraser of Kilmorack, L.	Rankeillour, L.

Reigate, L.	Swinton, E. [Teller.]
Renton, L.	Terrington, L.
St. Aldwyn, E.	Teviot, L.
St. Davids, V.	Tranmire, L.
Savile, L.	Trefgarne, L.
Selkirk, E.	Trenchard, V.
Sempill, Ly.	Trumpington, B.
Shannon, E.	Ullswater, V.
Skelmersdale, L.	Vaux of Harrowden, L.
Slim, V.	Vickers, B.
Somers, L.	Vivian, L.
Somerset, D.	Waldegrave, E.
Stanley of Alderley, L.	Westbury, L.
Stodart of Leaston, L.	Whitelaw, V.
Strathcona and Mount Royal,	Wise, L.
L.	Young, B.
Sudeley. L.	Zouche of Haryngworth, L.
Swansea, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.17 p.m.

Lord Melchett moved Amendment No. 2:

Page 1, line 11, at end insert— ("( ) the promotion of public enjoyment of the countryside; or").

The noble Lord said: My Lords, in this amendment we return again to something we discussed at Committee stage of the Bill; namely the importance, as I see it, of ADAS having a remit to promote the public enjoyment of the countryside. Noble Lords who were present at the Committee stage will remember that this was something which the Government have now given to the Minister of Agriculture as part of his remit. In a later clause in the Bill the Minister has a duty to balance a number of things—agricultural production, conservation and so on; and one of them is enjoyment of the countryside.

When we debated this at the Committee stage it seemed to me—though I do not know whether the noble Lord, Lord Belstead, would agree—that the Minister had one major argument against the amendment. It was that the promotion of the enjoyment of the countryside was already in the remit of another statutory body, the Countryside Commission, and that the commission would not welcome this remit being given to ADAS. I said at the time that I did not think that that was the Countryside Commission's view. I have now been able to confirm that, because the commission tells me that when it saw the amendment prior to the Committee stage, our feeling was that it would be quite reasonable for ADAS to help us [that is, the Countryside Commission] in this way, in the same way that they will be offering advice on conservation. There certainly seems to have been a misconception of our likely attitude on this point, but I believe that this has now been cleared up with the ministry".

I hope that the point has been cleared up and that the noble Lord will be able to accept the amendment.

A number of other noble Lords took part in the debate and some of them seemed to be under the impression that this would in some way be a new remit for ADAS or would be widening its scope or taking it into all sorts of dangerous and unacceptable territory. Again, since the Committee stage debate I have been able to study some of the excellent documents which ADAS has recently produced. I have here one called The Living Farm. It is sub-titled Advice on conservation from ADAS. On the first page there is a list of the kinds of advice which ADAS is currently able to give. It says:

"What kinds of advice?

"ADAS can advise on",

and then it lists a number of things: ponds and wetlands, farm woodlands, hedgerows, appearance of farm buildings, landscape, farm wastes, wildlife, use of pesticides and fertilisers, and finally sporting or recreation.

So ADAS is already giving advice on recreation in the countryside, and it does not seem to me therefore that my amendment does more than recognise, first, that the Ministry of Agriculture, Fisheries and Food has now a new remit in this field, a balancing remit, but a remit nevertheless, introduced in this Bill by the Government; and, secondly, that that remit is likely to be carried out first and foremost by ADAS which already sees itself in this field with strong support from the Countryside Commission. My amendment simply recognises what is happening already and I hope therefore that it will be acceptable. I beg to move.

Lord Hunt

My Lords, there is always a danger in coming in at Report stage when one has missed the actual discussions and debates which took place in Committee; and this is my slightly handicapped position. But I rise to support this amendment on the simple premise, rather on the same lines that we have just been discussing, that it is quite unrealistic and pointless to separate the matter of the conservation and enhancement of the natural beauty and amenities of the countryside if you do not at the same time promote public enjoyment of it. That seems to me to be a perfectly good reason for including the words that are not at present on the face of the Bill.

Lord Stanley of Alderley

My Lords, I understand the philosophy behind the noble Lord's amendment and I go along with it quite a long way, but there are certain snags as I see it. One is in making it a statutory duty on the poor, unfortunate ADAS officer who comes to see me to advise me on this particular matter.

Lord Melchett

My Lords, I am sorry to interrupt, but this would not make it a statutory duty; it would make it a statutory power. This is now a discretionary clause, as the noble Lord will remember.

Lord Stanley of Alderley

All right, my Lords; I will take that back; but it will make it a duty on him to give advice on this matter.

Lord Melchett

No.

Lord Stanley of Alderley

All right, my Lords, a power. But my objection to it is that he will be put in an invidious position because enjoyment of the countryside is subjective; what is beauty and what is not? You may find the unfortunate ADAS officer saying, "I think that really you ought to make hay rather than silage because it is rather more beautiful". In fact, he may even think that I ought to make it in the way that Constable showed us how to make it 100 years ago. That is the first point.

The second point concerns access. I am surprised at what the noble Lord said about the Countryside Commission, for what he said about the commission did not mean that it supported his amendment. It just saw it, as it said. Perhaps he will comment on that later.

I turn to another pont about access. I really do not think the Minister is the right person to advise on this matter. I have had some experience in that my son had the privilege of winning the South-East Midland Area access competition, which was run by the Countryside Commission. The people who were of help to us were the Countryside Commission and the local authority. ADAS really was not of great help.

My final objection is that I think we are making the unfortunate ADAS officer, who is going to enter a very competitive world in the future, a jack of all trades, and I do not feel that that is right. So I do not like this amendment.

Lord Mackie of Benshie

My Lords, may I just say that when you give someone a power it is not long before he thinks that it is his duty.

Baroness Elliot of Harwood

My Lords, I do not think the amendment is necessary. We live in the country. We all want people to enjoy it. We do not want them to spoil it in any way. I cannot see the need to put this into the Bill, for it seems to be quite unnecessary. Also, in the area where I live the Forestry Commission has picnic places to which people go and which are very agreeable. The local authority also has areas where people may park cars and have picnics by the side of the river. Nobody told the local authority to do it. There is no need to put this in the Bill. The authorities want to do it; they want people to enjoy the countryside. Why not? I think it is unnecessary to put it into the Bill because in fact it is being done now and, as far as I know, is being done rather well.

Lord Somers

My Lords, I think that the suspicious thing about this amendment is what is meant by "enjoyment of the countryside". Those of us who enjoy it in the way that many of us do enjoy it for what it is and we want to keep it as it is. I have a strong suspicion that there are a great many people who should like to enjoy it entirely for the kind of amusement which they consider gives them pleasure—dropping litter all over the place, having "pop" camps or caravan sites and that sort of thing. I cannot think it is quite fair on a fanner to ask him to put up with all that.

Lord Belstead

My Lords, I am grateful to those noble Lords who have taken part in this brief discussion, and not least to my noble friend Lady Elliot of Harwood, speaking from the Benches on this side, and the noble Lord, Lord Somers, speaking from the Cross-Benches, for saying, in their slightly different ways, that they are concerned about this amendment. I must say that I too am concerned because I think it will put the agriculture advisory services into a very difficult position if they are put into the Bill in this particular way.

As I think all noble Lords have said, for many observers a well-ordered, well-tilled landscape is enjoyable and is something that we all look for. But do not let us forget that there are other people who do not want to see that. They want moorland and heath land and would prefer not to see the landscape looked after too minutely. Some naturalists delight in the spectacle of a field returning to nature with a succession of wild flowers, trees and shrubs and all sorts of other things abounding, while other people say that that is a bit like rural dereliction.

I think that we put ADAS into a difficult position if we start to try to interpret what is an individual's "enjoyment of the countryside". What we are doing is putting into Clause 14 of the Bill a promise that we in the Ministry of Agriculture will endeavour to balance the interests of agricultural production, conservation and rural economy. I am absolutely sure that Clause 14 is right. But if the amendment of the noble Lord, Lord Melchett, that we are now discussing is agreed, I think that the worries of my noble friend Lord Stanley will be justified and we will find a bewildering variety of conflicting views about what "enjoyment of the countryside" means, with it being claimed that the ministery's advisory services either are or are not promoting enjoyment of the countryside.

Having said that, I have to meet head on the point put to me by the noble Lords, Lord Hunt, and Lord Melchett, which in essence is this. If "public enjoyment of the countryside" is to be found in Clause 14, why is it not to be found in Clause 1? I think that probably this House is wise enough to know that there are dangers in harmonising for harmonisation's sake.

Clause 1(1), which is where this amendment would go if it were passed, has been drafted in response to the specific needs of ADAS for the future. But Clause 14 has been drafted for a different purpose altogether, which is to ensure that the whole range of the Ministry of Agriculture's policies relating to land, including ADAS advice, should take account of wider social and economic objectives relevant to present-day concerns.

Those two things are not entirely the same. Clause 14 contains an umbrella power, and I am very glad that we are proposing to put it in, but if you put this direct power into Clause 1 I really would feel sorry for the advisory service and I think all noble Lords who have spoken, except for the noble Lords, Lord Hunt and Lord Melchett, would feel there was a danger that the advisory service would be drawn into interminable wrangles about what does or does not constitute enjoyment of the countryside.

4.30 p.m.

Lord Melchett

My Lords, I assume that this glossy and attractive booklet entitled The Living Farm from ADAS is going to have to be amended in the light of what the noble Lord has said—and withdrawn and re-issued—because so far as ADAS are concerned they are currently giving advice on sporting and recreational matters. If recreation does not enable people to enjoy the countryside, goodness knows what it does. As the noble Lord said, these words appear in Clause 14 because the Government have put them there. If they are difficult to interpret when the Minister balances interests, they are going to be difficult for ADAS, but no more difficult. I know the Minister is very wise and wonderful, but I do not think he is that much wiser or that much more wonderful than the ADAS staff who are giving advice on the ground. If the Minister can manage to interpret what these words mean—and presumably he must, because he put them into the Bill—surely in his great wisdom he can pass on his interpretation to the staff in the field.

The fact of the matter is, if I may say so to the noble Lord and others who have taken part in this debate, that they are quite happy for meaningless words to go into a general clause applied to the Minister so long as nothing happens in practice. That is the real objection to this amendment: they are afraid that it might encourage more of the population of this country to enjoy the countryside; and they do not want to see that happen. I am sorry that the noble Earl, Lord Peel, was not listening when the noble Lord, Lord Belstead, described moorland as the sort of countryside, or one of the sorts, which people want to see in (as it were) the waste or the not-properly-managed category by comparison with well-tilled fields, because there are many more people than the general public who want to see moorland in the countryside. The game conservancy and grouse shooting interests, conservationists and many others want to see moorland in the countryside, and I do not think it was very wise of the noble Lord, Lord Belstead, if I may say so, to suggest that that was one of the nonsensical things wanted to be seen in the countryside by people who do not really know what is going on there.

I bitterly regret the fact that the Government, while giving a general clause to apply to the Minister in Clause 14, are not prepared for it to apply to ADAS when they are on a farm giving advice to farmers on enjoyment of the countryside and on recreation. It seems to me that that makes Clause 14 largely meaningless. It clearly demonstrates, as did the reaction of the Government and the noble Lord to the first amendment, that their real commitment to conservation and to changes in the countryside is skin-deep and meaningless. I am afraid that is the message people outside this House will have gained from our debates, not just on this amendment but on many others. I beg leave to withdraw the amendment.

Earl Peel

My Lords, may I just reply to what the noble Lord has said about open moorland? I take his point, but I think it is fair to say that, as things stand at the moment with regard to moor-owners and the general public, the relationship is extremely good. What concerns me and many other moorland owners is that if the pressure is to increase—and, of course, we have at the moment the common land forum which many noble Lords will know about—and if we were to get access to common land, I think the problems would intensify greatly. Of course that is a different matter, but as things stand at the moment they work well.

Amendment, by leave, withdrawn.

[Amendment No. 3 not moved.]

Lord Belstead moved Amendment No. 4:

Page 2, line 4, at end insert— ("(2A) The provision which may be made under this section includes provision for the supply of such services and goods as are mentioned in subsection (1) above through any organisation; and the Minister shall establish an organisation through which such a supply may be made.").

The noble Lord said: My Lords, during the debate at Committee stage concern was expressed by your Lordships that if the powers in Clause 1 are permissive rather than mandatory it will somehow weaken the status of ADAS. That is emphatically not true. This may come as a surprise to some of your Lordships, but the present law does not in fact impose any obligation on the Government of the day to maintain an advisory organisation. Indeed, that has been the position since 1970, when the Agriculture (Miscellaneous Provisions) Act 1944 was amended by the Agriculture Act, and yet ADAS is still here and flourishing.

Nevertheless, I considered carefully the concerns that were expressed by your Lordships in Committee, and we have looked very carefully to see what could be done to meet those concerns. As I explaind at the Committee stage, we simply could not accept a duty to provide advice across the whole range of matters covered by Clause 1. I have been over that ground already this afternoon. What this amendment does is to impose a duty on the Government to maintain an advisory organisation while leaving the Government the discretion that is essential, I believe, about precisely what services or goods the organisation will supply. The amendment would also permit goods and services to be supplied in other ways as well, if that seemed more sensible in particular circumstances. But that would be in addition to, and not instead of, an advisory service, which is the concern of this amendment. I hope your Lordships will feel that this really is a step forward inasmuch as it puts what is in fact a guarantee into the Bill for the continuation of the Ministry's advisory service, which I believe does such good work. I beg to move.

Lord John-Mackie

My Lords, I thank the Minister for at least giving some thought in putting down this amendment. In speaking to it, I should like also to speak to Amendment No. 5, if I may, because the two are complementary in some ways.

First, I should like to say that what is worrying me about ADAS is the morale in the service—a service which we all know has served the industry and the farmers so extraordinarily well for many years. There is no question about it: it seems to me that if in the last few years one-sixth of the staff has gone, that is not something that raises morale. During our debate at the Committee stage the Minister said that he had visited some demonstration which ADAS were running and had found that morale was very high. I visited the ADAS stand at the Royal Show on Monday and I was not surprised but, again, was delighted by the quality of the displays they had there. I liked particularly the way they had laid out what they had done and what they were doing in respect of all the different sections of agriculture, the advice they were giving and everything else.

I thought I should talk to some of them, and I did so; but I am certain that they did not know who I was. I talked to three members and found that the one thing they are not happy about are the cuts in staff. They are not happy either about the cuts in research and development, because that is where they get their knowledge and experience so that they can give advice to farmers. They are very unhappy also about charges, and particularly about the complexity of the charges and the problems that will arise—the noble Lord, Lord Stanley, mentioned this earlier—in connection with exactly what they will have to charge and how the amount will be decided.

There is also the difficulty in approaching a farmer about staying longer if more time is needed. I forget the figure, but I believe the noble Lord gave us a figure of around £35 an hour. One can quite see how difficulty could arise when a farmer might be in doubt about asking them to stay for another hour and look at another field, and so on.

I explained that so far as I could see the Government were determined to raise some money in this way. The ADAS people were quite adamant that they should have preferred the levy system that I proposed at the Committee stage, which would have given them a free hand and the farmers a free hand on advice. I was quite struck by the fact that they were quite worried about all these items, and certainly in my opinion their morale is not as high as it should be.

When I look at the Minister's amendment it strikes me as a model of ambiguity. I am not lawyer; nor is my grammar very good; but am I right in thinking that the "may" in, the provision which may be made governs whether the Minister "shall establish"? I should like the Minister to make that quite clear because I think it is ambiguous in that respect. Then there is another question. Why not use the term "ADAS"? Why use the word "organisation"? It seems to me that the Government are trying to avoid something in the amendment to give them a loophole. I hope I am wrong; and if I am not wrong, why not take a look at our Amendment No. 5?

This amendment is straightforward. If the Minister says that ADAS is going to continue, why not just say so, as we say in our amendment? It would give tremendous assurance to the staff of ADAS if they would come straight out and accept the amendment, or, if they like, amend the amendment if it is not as well worded as they would like. But I think it is; I checked it fairly carefully. That would be of tremendous assurance to the staff.

I do not want to see the relationship with ADAS go, or ADAS itself go. It has been a tremendous help to me. We should not forget that nearly 75 per cent. of ADAS members are members of the Institute of Professional Civil Servants. I do not think we should forget that the union has collected a good deal of information from its members. It is quite adamant that there is considerable worry and that an amendment such as mine would be of assurance to its members.

The agricultural press was mentioned earlier. We all know the press in many ways. Nevertheless, nearly every agricultural paper has had articles about the difficulties in ADAS over the past few weeks which cannot be ignored. One should think very carefully about giving this assurance which we want to give in our amendment. I appeal to the Government to amend their amendment to make it an absolute assurance, and not what I consider to be a very ambiguous one.

Lord Walston

My Lords, I endorse entirely what the noble Lord, Lord John-Mackie, has said about ADAS and about both its value and its morale. There can be no doubt at all among those who are close to it or are involved in any way in farming that the morale in ADAS at present is low and is in danger of going still lower. That does not in any way mean that the work it is doing is not just as valuable as ever. In some ways it is even more valuable. All the more credit is due to a group for carrying on in this way, although numbers, as the noble Lord will know, have declined severely.

The provisions in the Bill for payment, into which I shall not go again, undoubtedly put an even greater strain on ADAS and make things harder for it. All these things have been thrashed out both at Second Reading and in Committee, and I shall not elaborate any more. The noble Lord, Lord Belstead, has tried his best to produce an amendment which will overcome those difficulties. Quite frankly, I do not think he has succeeded. It is no fault of his. I am not blaming him in any way. It may be a mercy, but it is a very small mercy indeed. I suppose we should accept it for what it is worth, but there can be no confidence in our minds that it will go in any significant way towards overcoming those difficulties which have been mentioned on many occasions.

My noble friend Lord Mackie of Benshie will be talking about Amendment No. 5. If I were given a straight choice between the two amendments, I should go every time for Amendment No. 5 rather than Amendment No. 4. Amendment No. 5 does something; Amendment No. 4 does no more than provide rather emollient words.

4.45 p.m.

The Earl of Onslow

My Lords, I think we are in danger of being a little ungracious to my noble friend. To expect governments to write clear legislation is surely asking for the moon. The noble Lord, Lord John-Mackie, has written an amendment which to most of us makes complete sense. The letter which my noble friend Lord Belstead has sent to my noble friend Lord Buxton—several of us have had a copy—basically says that that is exactly what he is going to do, but he has to write it in gobbledegook. For heaven's sake, let us accept the gobbledegook and know that we can never get anything better.

Baroness White

My Lords, we should be able to get something better. I ask noble Lords in all parts of the House to consider what their feelings would be if they were ADAS officers, who have been proud to belong to an existing organisation which receives warm praise from all quarters, and had to read, if they have had the pleasure of seeing this list of amendments, and the Minister shall establish an organisation". If it said "should maintain an organisation", that might be a little less insulting; but if you belong to a proud organisation which is there and if you are assured that it is the intention at least of the present Government that that organisation shall be maintained, how would you feel about an amendment in this form—that they shall establish an organisation—when they already have an organisation? Why cannot they refer to it straight-forwardly and indicate that they propose to maintain this organisation?

The statute would not oblige them to maintain it at any particular strength—that is true—so their main concern about the large cuts which are still apparently in prospect will not be removed. But at least they could feel that they were being treated with the kind of respect which they deserve instead of being told that they are not really an organisation in being because an organisation has to be established. It seems to me that it is utterly lacking in sensitivity, whatever the good intentions may be.

Lord Stanley of Alderley

My Lords, for once I agree with my noble friend rather than my noble kinsman Lord Onslow, for a change. I think we are being ungrateful to the Minister for the trouble he has taken in bringing forward this amendment. I have no reason to know but I suspect he had quite a job getting this past his colleagues.

I should like to ask him two questions. Can he expand at all on what sort of jobs and services are going to be provided by ADAS? The other question concerns the difficult matter of the services with regard to statutory duties. Noble Lords will remember that we discussed statutory duties last time, when my noble friend said that the Government were determined to charge for them. As I understand it—and perhaps the Minister will let me know—the charges will be in the regulations. When he comes down to making the regulations will he look kindly on the amount that farmers will have to pay when the Ministry performs its statutory duty?

Perhaps I may bring up a point that is sensitive for me personally. I should feel very aggrieved if at the moment I had to pay for the services which are being given by the Ministry with regard to my radioactive lamb. I may say that the Ministry has done a superb job in North Wales—it is its usual polite, long-suffering self. I am sure it has brought in a large number of people. However, it would be rubbing salt into my wound if I had to pay for that sort of service. I hope that my noble friend will say that in the circumstances where a statutory duty is being carried out he will perhaps charge the minimum rather than the maximum amount. Otherwise, I thank my noble friend for his amendment.

Lord Hunt

My Lords, I rise to make the same apology that I made earlier about not having followed the discussion that took place in Committee leading to the noble Lord's amendment, although I have read Hansard. I rise only to seek clarification. It is not clear to me what relationship this new organisation which the noble Lord would establish through his amendment, which I understand to be separate and different from ADAS, will have with ADAS. Is there confusion in any other noble Lord's mind about this? If I am correct that a separate organisation for the supply of goods, following the advice of ADAS on whatever matters, is to be set up to handle the business of supply, then we should be informed what relationship that new organisation will have with ADAS.

Lord Mackie of Benshie

My Lords, as we are speaking to both amendments I rise to support Amendment No. 5, but that is no disrespect to the Minister and his amendment. We are speaking about ADAS in England, but the position is illustrated by the Scottish colleges. I should like to say with all the seriousness I can muster that any assurance is probably too late.

In my area the local college staff who are quite excellent, are slipping away very fast. There were six of them. The senior man has gone to a commercial job. The second man, also a good man, is going to a commercial job. The third is negotiating to do so. My understanding is that this organisation, in an important agricultural and scenic area of Scotland, will be absolutely decimated long before this Bill becomes law. I should have thought that in the interests of morale in the service, in both Scotland and England, the strongest possible expression of intention to maintain the service is necessary.

For many people it will be too late. The senior man to whom I refer has gone to a commercial firm, where he is of immense use to me because I am a good customer of the firm. These good men who understand agriculture and the countryside are needed for the broad picture of keeping the countryside together and giving all the advice we have been speaking about today. They are slipping away like snow off a dyke.

Earl De La Warr

My Lords, I sympathise very much with my noble friend in this. Like the noble Lord, Lord John-Mackie, I should like to give assurances to members of ADAS who I know from my own experience are feeling most insecure. I am about to make a great deal more use of ADAS than I have in the past, knowing that it is going to cost me money. I have a large number of cows and I know exactly what I want ADAS to do for me, and it is bound to be worth my while.

However, the fact is that there must be uncertainty as to whether a large number of farmers who use ADAS now will go on doing so. One may have uncertainty about the whole philosophy of the Government that ADAS is required to charge, but it must follow from what the Government are doing that if ADAS cannot get farmers to pay for the work, the business will, in part, fold up. Under those circumstances I do not see how I can expect my noble friend to give the firm undertaking which the noble Lord, Lord John-Mackie, is expecting.

Lord Belstead

My Lords, my noble friend Lord De La Warr is kindly endeavouring to assist me. If your Lordships want a cast-iron undertaking that an advisory service of the Ministry is to continue, covering England and Wales—this clause does not extend to Scotland—please support Amendment No. 4. I shall come to Amendment No. 5 in a moment. Amendment No. 4 provides an absolutely cast-iron undertaking that whatever goods and services—in other words, advice and so on—may be provided, the Minister "shall establish an organisation." That is an absolutely cast-iron undertaking.

Perhaps I may reveal to your Lordships that when I read the way in which the amendment had been drafted by parliamentary counsel I and my advisers went back to them to get this absolutely underlined. It is a cast-iron assurance that whatever goods and services are being provided, the organisation is to be there for the future.

The noble Baroness, Lady White, quite under-standably asked why we refer to "an organisation". Why not, she asked, refer to ADAS? The reason is that we are putting an obligation into legislation, if your Lordships agree to Amendment No. 4, which has not been in legislation since 1970. We therefore feel that it is logical to refer to "an organisation" because statutorily ADAS does not exist and has not existed for the past 16 years. It is extraordinary, but it was taken out of the law in 1970. If your Lordships agree, we shall be putting it back in, and I shall find that very cheering.

May I now say to the noble Lord, Lord John-Mackie, why I feel it is not possible for the Government to support Amendment No. 5. It is true that as regards Amendment No. 5 one could say that great minds think alike—in other words, the Government and the noble Lord are trying to reach exactly the same objective. However, we have not referred to a named organisation because, in addition to the reason 1 gave to the noble Baroness, names can change. If in, say, 25 years' time someone thought of a different name, they would find that ADAS has been cast in stone. That was another reason. Incidentally, to refer to an advisory service without naming it has a respectable precedent. In the Agriculture (Miscellaneous Provisions) Act 1944, under which ADAS was established, there was not specific mention by name of the advisory service.

The other difficulty with Amendment No. 5, if I may say this to the noble Lord, Lord John-Mackie, is that it refers to economy and efficiency. I admit that we do not do so in our amendment; first, because these concepts are central to the ability of ADAS to provide chargeable advisory services on a competitive basis and, secondly, because there could be considerable legal problems, I am advised, arising from concepts such as these which cannot clearly be defined.

May I therefore lead your Lordships back to Amendment No. 4. It is an absolutely cast-iron guarantee that an advisory service—ADAS—will continue for the future. It is a service which has well over 4,000 officers in England and Wales and which continues to run 19 experimental husbandry farms and horticultural stations. My noble friend Lord Stanley, who obviously takes the closest of interest in this, almost prompted the Government to bring forward their amendment, perhaps more than any other of your Lordships. He tabled an amendment in Committee about consultation if one changes ADAS. I felt that the way to do this was to make a clean breast of it and to come back to your Lordships, not going on about consultation but saying, "Come on, let us put into the Bill that there shall be an advisory service for the future".

The sort of jobs and services that ADAS will provide for the future were detailed in leaflets which I believe the noble Lord, Lord John-Mackie, saw at the Royal Show on Monday. Those leaflets have been deposited in the Library of your Lordships' House.

My noble friend Lord Stanley said to me, "When ADAS moves to charging be careful and be sensitive if you find that there is a difficulty—for instance, such as the problem of radioactivity at the moment when maybe farmers are needing special advice". Well, we are not into a charging situation at the moment. However, as an earnest of our good intentions in the Ministry of Agriculture perhaps I may remind my noble friend that last winter, when things were very difficult, we went out of our way to provide ADAS advice to farmers in the hills to do special tests on hay and silage in order to find out the quality of the forage. We made it quite clear that those particular services for farmers who were facing a very bleak winter would be absolutely free and would be provided as quickly as possible.

So, yes, we shall try to be as careful as we can in the future, even though—and we must not go over this ground again—we are going to introduce a charging regime. If the noble Lord, Lord John-Mackie, will forgive me, from the Government's point of view we have great difficulty in supporting Amendment No. 5. I think that it has aspects that do not make it an amendment that we could put on the face of the Bill. In view of the fact that I am saying that in Amendment No. 4 there is a cast-iron assurance that an advisory service will continue for the future perhaps the noble Lord, Lord John-Mackie, will feel that we are substan-tially meeting the point that he is making in his own amendment.

On Question, amendment agreed to.

5 p.m.

Lord John-Mackie moved Amendment No. 5:

Page 2, line 4. at end insert— (" ( ) In furtherance of the provisions of this section the Minister shall ensure that the Agricultural Development and Advisory Service is maintained as an efficent and effective organisation.").

The noble Lord said: My Lords, I beg to move this amendment. I should just like to say that I put it down in good faith, believing that it was legally possible. However, the noble Lord says that there are difficulties. He mentioned the word "economy" I did not use the word "economy", but I used the words "efficient and effective", which of course may not be easy to define. However, I think that the assurance that the Minister has given will allow me with a fairly clear conscience to withdraw this amendment.

Amendment, by leave, withdrawn.

[Amendment No. 6 not moved.]

[Amendment No. 7 had been withdrawn from the Marshalled List.]

Lord Gallacher moved Amendment No. 8:

After Clause 8 insert the following new clause—

("Food Consumers Committee.

1. .— (1) The Ministers shall appoint a Food Consumers' Committee consisting of nine members each of whom will serve for a period not exceeding four years and renewable thereafter at the discretion of the Ministers. A chairman will be appointed by the Ministers to serve for such period as the Ministers may decide.
2. (2) The Food Consumers' Committee shall replace the existing Consumers' Committee and shall discharge the current functions of the Consumers' Committee and in addition shall give views to the Ministers on food policy matters either on request by the Ministers or on the Committee's own initiative.
915
3. (3) Secretarial and information services to the Food Consumers' Committee will be provided by the Ministry of Agriculture, Fisheries and Food, and that Ministry shall also reimburse the cost of travel to meetings incurred by members of the Food Consumers' Committee as well as paying claims for subsistence by members attending meetings of the Committee on a scale approved by the Ministers and the Treasury.
4. (4) The Food Consumers' Committee will meet at least quarterly and will report bi-annually to the Ministers who will publish their reports.").

The noble Lord said: My Lords, no one who has read the Bill that is before your Lordships' House or who heard the Second Reading debate or sat through the Committee stage can be in any doubt that the interests of primary producers and those whose major concern is the environment are fully catered for in this measure; and if there are any lingering doubts, then our postbag in recent days will have fully dispelled any notion that farmers and environmentalists are slow on the draw so far as concerns their legitimate interests.

The purpose of the amendment that is before your Lordships today is to try on the face of this Bill to do something modest for consumers by way of appointing a Food Consumers' Committee to report periodically to the Ministry of Agriculture, Fisheries and Food on matters of common concern to consumers. I think it is legitimate to say that there are in existence bodies funded by the taxpayer which do a very useful job on behalf of consumers in general. I refer specifically to the National Consumer Council, which was establisshed in 1975, and to a more modest organisation called Consumers in the European Community Group, with which the Members of your Lordships' Select Committee on the European Community will be very familiar.

The National Consumer Council is a fully funded body, but of course it comes under the wing of the Department of Trade and Industry, which is specifically a non-food ministry. Consequently, in recent years, the activities of the National Consumer Council have been concerned with interests other than food, and the assignments that it has been asked to undertake by the Department of Trade and Industry have naturally had no food connection whatsoever. The smaller organisation is only modestly funded by the taxpayer, to the extent that its secretariat receives an annual grant to cover its outgoings. Specifically it looks at legislation promoted by Brussels which could have an impact on the consumer, whether that legislation relates to food or non-food matters. The members of the Consumers in the European Community Group are not ministry-appointed as are members of the National Consumer Council. They are in fact volunteers from representative national bodies which have an interest in consumer affairs.

Finally, in this connection I should perhaps mention the body which is specifically charged by the Ministry of Agriculture to look after the affairs of consumers under the Agricultural Marketing Act. I refer to the Consumers' Committee for Great Britain to which reference is made in the amendment. That, too, is a very modest committee whose existence is perhaps not particularly well known in your Lordships' House. In fact it performs a useful job in looking at the activities of the marketing boards, and in recent years it has said some useful things on behalf of consumers about potatoes and about the milk scheme which has been in existence for so many years.

The Consumers' Committee for Great Britain recently undertook a review of its activities and naturally found that to some extent the way in which Community law impinges on the marketing boards has had the effect of reducing their volume of activity and the scope which they have for giving opinions to the Ministry of Agriculture on food matters affecting consumers. In a report to the Minister it suggested that the Consumers' Committee in its present form might be wound up and its activities subsumed in a new committee entitled the Food Consumers' Committee. I saw that proposal and thought that peaceful persuasion might be the answer, and so I put down a Question for Written Answer, asking the Minister to give sympathetic consideration to the request which the Consumers' Committee for Great Britain had made. Unfortunately, the Minister decided otherwise and said that although its recommendation had been given full consideration, his right honourable friend the Minister was not convinced that the existing extensive arrangements for consulting consumers would be materially improved by the addition of a body of the sort proposed.

I think it is common ground—and indeed much of the discussion surrounding the Bill that we have presently before us acknowledges that it is common ground—that farming and the environment are major questions, and that as a result of changes in the common agricultural policy—changes which are more easily talked about then legislated for—we shall see major changes in the farming structure of Great Britain which will perhaps involve new methods whereby farmers may farm less intensively. In my view the impact of these changes on the consumer is perhaps the one area which has not adequately been discussed, nor looks like being adequately discussed. Yet at the end of the day it is the consumer who will have to pay the price for it all, regardless of the form that farming and conservation of the environment may take in the future.

So, modestly we ask in Amendment No. 8 for the Government to agree in effect to what the Consumers' Committee for Great Britain asked for and to transform that committee into a Food Consumers' Committee consisting of nine members to be appointed by the Minister of Agriculture for a term not exceeding four years—it may be less—renewable at the Ministers' discretion, with a chairman separately appointed. We envisage the secretariat of the committee being provided by the Ministry of Agriculture and such information as the committee may need to discharge its functions similarly being provided by MAFF. We are suggesting that in addition to the work that it does presently under the Agricul-tural Marketing Act, the Food Consumers' Committee should also from time to time undertake assignments given to it by the Minister and at the same time it should have the power of own initiative so that it can look at problems which it considers are necessarily of importance to consumers and worthy of investigation.

We are not proposing a paid committee but simply a committee whose members will serve in an honorary capacity and simply have their travel and subsistence expenses reimbursed by the Minister. We suggest that in order to ensure continuity the committee should meet at least quarterly. We suggest that its reports to Ministers should be published—the amendment says "bi-annually", though I had rather hoped that this would come out in draft as "biennially". I have had a handwriting problem since my childhood which does not get any better with the passage of time. I envisaged not six-monthly but rather two-yearly reports.

This is a most modest proposition. It represents a matter which is not sufficiently discussed at present. The Minister's response to the consumers' committee suggestion was somewhat disappointing. This is an attempt to get him to reconsider his response and to put on the face of the Bill a proposition which would be of importance to the person who is after all predominant in all our deliberations, the food consumer. I beg to move.

Lord Walston

My Lords, it is many years since the Ministry of Agriculture enlarged its sphere to become the Ministry of Agriculture, Fisheries and Food. Despite the passage of time, we must admit that most of us—not just those of us who are farmers—look at it as the Ministry of Agriculture. We may occasionally call it MAFF, but usually we call it the Ministry of Agriculture. Whatever it is called, it is regarded by the public as the department of state which looks after food production and farmers' interests. Some farmers may disagree with that, but that is the general opinion.

This amendment, which is a modest one, as the noble Lord, Lord Gallacher, said, will not make any significant difference to the representations made to the Government by the consumer. It is a valuable and useful amendment. It would establish in the public's eyes that this is the Ministry of Food as well as Agriculture. The expense and time involved would be minimal. I hope that the Minister will consider the amendment favourably.

5.15 p.m.

Lord Stanley of Alderley

My Lords, I find this an interesting amendment. I am sorry that more noble Lords are not present in the House at the moment. As a farmer, I am desperately interested in the consumer. Without him or her I should not be in business. It is important to know what he or she wants, as opposed to what I think he or she wants or the conservationists or the animal welfarists think he or she wants. I want to know what the consumer wants, and then I may be able to produce what he or she wants.

I am not sure whether the amendment would achieve that. Some years in the future I may well take some sort of bait in some sort of way. I am grateful to the noble Lord for raising the matter.

Lord Belstead

My Lords, I agree with my noble friend Lord Stanley of Alderley that this is an interesting amendment. It casts a new angle upon the Bill. The effect of the amendment is to oblige the Government to set up a Food Consumers' Committee to replace the consumers' committees established under the Agricultural Marketing Act 1958 and to advise on food policy matters generally.

The amendment is interesting for three reasons. The first is that the noble Lord, Lord Gallacher, has great expertise on this matter. It was right that he moved the amendment. I am grateful to him for doing so. Secondly, I am most interested to hear that my noble friend Lord Stanley, as a primary producer, is a farmer whose mind dwells on marketing. That is something which my noble friend Lady Elliot of Harwood never allows us to forget for long when we are talking about agriculture. These days we must always think about where our produce is going.

The third reason I find the amendment interesting is that the noble Lord, Lord Walston, reminded us that the ministry in which I work is the Ministry of Agricul-ture, Fisheries and Food. My mind goes back to the war when I was at school. We ate what was called the Lord Woolton surprise. Your Lordships may remember that that was a baked potato in the middle of which was minced meat. As the war went on, one had to dig that bit deeper into the potato to find the surprise in the middle. I think that I am right in saying that it was from those great days of Lord Woolton that the food part of the ministry was taken on. I see the noble Lord, Lord Walston, nodding. As he reminded us, food is very much part of the ministry's responsibilities.

In that context, what is the Government's response to the amendment? It is that we rightly, I think, receive a great deal of advice at present. For instance, there are the annual price fixing negotiations which now largely determine the level of support given to most agricul-tural commodities. They are always preceded by the ministry consulting the consumer interests. Another area of considerable interest to consumers is the composition and safety of food. Parliament has already recognised the need for Ministers to have expert and independent advice on such matters and has established the food advisory committee, whose membership includes consumers, for this purpose.

The consumer's view is also safeguarded through the statutory requirement for Ministers to consult a wide range of interests, including consumer representatives, before making regulations under the Food Act. There are also the consumers' committees set up under the Agricultural Marketing Act to report on the effect upon consumers of agricultural marketing schemes.

I am worried that if we accede to the amendment, we should be duplicating a great deal of the good work which is done through those consultative arrange-ments. I believe that the way of making progress would be via increased co-operation among consumer organisations, possibly on an European basis. I also agree with what I think is the thinking behind the amendment—that the consumer interest should always be taken fully into account, not least in Government appointments to marketing boards and advisory committees. Although I resist the amendment because I feel that there would be duplication with valuable existing organisations and our present consultative arrangements, I hope that the noble Lord, Lord Gallacher, will feel as I do that it was well worthwhile moving it.

Lord Gallacher

My Lords, I thank the noble Lord for his remarks. I thank other noble Lords who have either spoken in support of the amendment or expressed interest in it. Nevertheless, I feel that on balance the Minister has not been helpful to us. In particular, I think that the suggestion that a new committee is being created in addition to those which currently exist is not strictly correct, as we envisage the new committee taking over the functions of the existing Consumers' Committee of Great Britain established under the Agricultural Marketing Act 1958. It would be the same committee with a rather wider remit. To that extent it would not duplicate but merely replicate an existing committee.

I am aware of course of the consultation with consumers that takes place in a variety of ways. I am also aware that from time to time consumers' representatives are appointed as independent members of marketing boards. In my youth I once believed that if one could get enough people of one's persuasion on to marketing boards and the like, they stood a good chance of capturing the boards. Salutary experience has led me to think that the reverse happens, and in fact the board captures those good people because they assume responsibility for the policies of the board as such. To that extent, they are inhibited in the discharge of their initial loyalty to the concept of the supremacy of the consumer.

Nevertheless, I am grateful to the Minister for his assurance that such consultation that exists will continue. In the wider context this is a problem which will not go away. Ironically, there is reference in the Treaty of Rome in the articles establishing the common agricultural policy to fair prices for the consumer. Whether the consumer thinks that the Treaty of Rome gives him or her fair prices is a moot point. What is not in doubt is that the Treaty of Rome gives the consumer substantial surpluses. The great argument as to how we shall farm, grow food and distribute will go on and on. The voice of the consumer must be heard in that argument to an increasing extent.

I am grateful, as I said, for the support I received and the words of encouragement that the Minister gave me. Although we shall not see the amendment in the Bill at this time, it is reasonable to assume that from time to time we may legitimately return to the matter to press the Minister for further consideration of this vital issue by what he admits is the Ministry of Agriculture, Fisheries and Food. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Belstead moved Amendment No. 9:

After Clause 11, insert the following new clause:

(" Validation of Apple and Pear Development Council Orders. S.I. 1980/623 S.I. 1980/2001.

. The Apple and Pear Development Council Order 1980 and the Apple and Pear Development Council (Amendment) Order 1980 shall be deemed to have been validly made notwithstanding that they were made by the Minister of Agriculture, Fisheries and Food acting alone rather than by that Minister and the Secretary of State acting jointly.").

The noble Lord said: My Lords, this amendment concerns the Apple and Pear Development Council, which many of your Lordships will know to be a body which does an excellent job in promoting British top fruit. The council is funded entirely by a levy which it raises from apple and pear growers, and it then uses the money to fund a number of advertising and promotional activities aimed at increasing the consumption of our excellent native varieties of these fruit. But a problem has arisen.

The council was first set up in 1966 under a statutory instrument which covered both England and Wales, and it was continued in being by a new instrument in 1980 which consolidated the 1966 order with a number of amendments. However, there had been an order passed in 1978 which transferred a number of functions to my right honourable friend the Secretary of State for Wales. Prior to that order all powers relating to the council in England and Wales—it does not cover Scotland or Northern Ireland—lay with the Minister of Agriculture. Moreover, the Transfer of Functions Order, which transferred a number of responsibilities to the Secretary of State for Wales, specifically excluded, any function exercisable in relation to the Apple and Pear Development Council by virtue of any Order made under the Act of 1947".

That is, these powers were to stay with the Minister of Agriculture.

But while the Minister retained his functions under the order, the power under the parent Act to make a new order, such as the one intended to continue the council in being, had in fact been transferred to the Minister and the Secretary of State for Wales acting jointly. Unfortunately, this was overlooked in preparing the Apple and Pear Development Council Order of 1980 and the amendment order later in the year, and these orders purported to be made by the Minister of Agriculture alone. My right honourable friend has been advised that this defect renders these orders invalid not just in Wales, where, in fact, the number of apple and pear growers is extremely small, but in the whole of England and Wales. If this defect were not corrected, it would mean that many of the council's actions between 1980 and 1986, including its levies from growers, could be open to legal challenge.

I apologise for going into this at a little length, but if your Lordships agree to this and an associated amendment, it will, in fact, be retrospective legislation. It is, however, in a good cause. I beg to move Amendment No. 9 and speak at the same time to Amendment No. 63.

Lord John-Mackie

My Lords, I do not believe that any of us could disagree with the Minister in taking this opportunity to put a wrong right. He has done so very well. I recognise that retrospective legislation is frowned upon by most people, but, as the noble Lord says, in this case it is in a good cause. We shall therefore allow it to slip through.

On Question, amendment agreed to.

Lord Sandford moved Amendment No. 10:

After Clause 11, insert the following new Clause:

("Entry to food premises of trainees.

1. .— (1) The Minister may make regulations empowering an authorised officer entering premises under the right of entry conferred by section 87 (1) of the Food Act 1984 to take with him a person who is receiving instruction in the performance of enforcement functions under that Act.
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2. (2) The power to make regulations under this section shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
3. (3) Regulations under this section may relate to a particular class or particular classes of premises.
4. (4) "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 noble Lord said: My Lords, I beg to move this amendment. In doing so I shift the scene from the problems of pears to the problems of poultry. This amendment, like the previous amendment I moved on this subject at Committee stage, is not so much to change the statute book but to secure a debate on a rather intractable problem. Since the Committee stage my noble friend on the Front Bench and I have met and discussed how we might move forward. As a result I issued an invitation to the British Poultry Federation to send me a letter from which I could set out the background of the problem to your Lordships. The federation has provided that letter. I shall read it out in a moment. It is necessary, I believe, to read it at length as, on the previous occasion, we were dealing with the last amendment on a late-night sitting and I thought it more prudent at the time to spare the Committee the detail that is really necessary.

I also invited the British Poultry Federation, the Association of District Councils whose job it is to provide poultry meat inspectors, and a representative from my noble friend's ministry to meet. This they did today. I shall be relaying the outcome of that meeting to the House as well. First of all, however, I should deal with the background. I shall now read from the letter of the British Poultry Federation. It states: Dear Lord Sandford, With reference to your proposed amendment to the Agriculture Bill, which would allow rights of entry inter alia by trainee poultry meat inspectors into poultry meat processing plants, you might find it helpful to have the views of the British Poultry Federation on this vexed issue. The crux of the matter is the failure of the EEC Commission, over many years, to prescribe realistic standards of poultry meat inspection which would apply uniformly throughout the Community. The same European hygiene directive can legitimately be interpreted to require higher numbers of inspectors (a 'policing' system) or a lower number of inspectors (a 'sample' system). British poultry meat processors have been at a cost disadvantage in comparison with many of their EEC competitors because our numbers of inspectors (and the number of birds rejected in consequence), have been higher; further, other EEC governments have subsidised their poultry meat processors to a greater or lesser extent. Our objective has always been, therefore, to press the British Government and the EEC to grasp this discriminatory nettle, by agreeing and enforcing uniform standards, to be applied equally in the Common Market. It is consequently difficult for us actively to promote (as we did in the past) an inspection regime which is flawed and discriminatory as is currently the case. However, we have always recognised the difficulties in which this might place local authorities where numbers of inspectors fall below realistic levels. In such cases, with the agreement of the processing plants concerned, we have co-operated to ensure that the poultry meat inspectors are recruited and trained. This is an open-door policy to the local authorities, but as a matter of record we have received no such request for a considerable time. If a request is received it will be sympathetically and speedily progressed. You may also wish to know that the British Poultry Federation is trying to launch a new initiative to bring the local authorities, the Ministry of Agriculture, and the industry together to resolve outstanding problems once and for all. At the moment this initiative is informal but, if successful, we hope it will lead to formal agreement and co-operation for the future between all concerned".

That needs to be understood in conjunction with what I had to say on behalf of the Association of District Councils at Committee stage. My noble friend, who has a copy of the letter, will no doubt comment if he wishes to add to or subtract in any way from what is written there by the federation's director-general.

Against that background, a meeting took place this morning between the Association of District Councils who train the inspectors, the Ministry of Agriculture, and the British Poultry Federation. They have agreed the following addition to the letter: This morning representatives of the ADC, MAFF and BPF have met. As a result we have all agreed to an early meeting to deal with the short-term difficulties facing the local authorities. As to the longer term, the BPF and ADC will get together shortly to review current poultry meat inspection practices, to try to identify problem areas and to prepare possible solutions for discussion with MAFF thereafter".

In view of that, and subject to anything that my noble friend might care to say in addition or subtraction, or by way of comment, I propose to withdraw my amendment because of the degree of progress that has been made. I propose to ask a parliamentary Question during the overspill period some time in October to ascertain how matters are going. However, before I withdraw the amendment my noble friend on the Front Bench may care to comment. I beg to move.

5.30 p.m.

Lord Belstead

My Lords, I am grateful to my noble friend Lord Sandford for explaining the problem to your Lordships. I am also exceedingly grateful to my noble friend for suggesting that this amendment should be used as a vehicle for getting agreement for further meetings and not for a Division.

I would add only two points, if I may. The first is that we cannot get away from the fact that the European Community legislation which created the poultry meat inspection system is not being equivalently enforced in all member states of the European Community. It is not surprising that poultry producers are aggrieved at this unsatisfactory situation. The Government have made strenuous efforts to achieve an even standard of enforcement across the Community and it is a matter of regret that success has so far eluded us. However, it has eluded us, and therefore my noble friend, in his capacity as president of the Association of District Councils, and I, working for the Ministry of Agriculture, are drawn into this matter.

As I said, in responding to my noble friend. I am exceedingly glad that the tabling of the amendment at Committee stage and again at Report stage has now led to correspondence which shows that there will be discussions, that the first steps have been taken, and that all concerned have agreed that further meetings should be arranged. I hope these contacts have helped to reassure my noble friend that there are prospects for constructive progress to resolving the difficulties that there are. I am sure that this is the best way to proceed.

Lord Sandford

My Lords, I am most grateful to my noble friend. For the record, perhaps I may say that I was president of the ADC until last Friday, and am now vice-president; but I am ready to see this matter through. I beg to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Speaker (Lord Cullen of Ashbourne)

My Lords, if Amendment No. 11 is agreed to I cannot call Amendments Nos. 12 and 13.

Clause 12 [Compensation to outgoing tenants for milk quota]:

Lord Belstead moved Amendment No. 11:

Page 10, line 21, leave out subsection (2).

The noble Lord said: My Lords, I beg to move Amendment No. 11. I should like to take with it Amendments Nos. 12, 13, 14, 43 and 64, if noble Lords will agree with that grouping.

If I may speak to the government amendments—and indeed to the group—I think it would be helpful to take with Amendment No. 11 the other amendments I have mentioned. This stems from efforts which have been made by my noble friend Lord Kinnoull who, together with the Royal Institution of Chartered Surveyors, came to see me in order to try to ensure fairness to tenants on a particular point. The first of these amendments deletes subsection (2) of Clause 12, but I can assure your Lordships that the effect of that subsection is not lost. It is covered, albeit in a different way, in the Government's new clause which is Amendment No. 43.

The existing provisions in Clause 12(2) were intended to ensure that the prospect of compensation for a tenant in respect of milk quota should not affect the rent of the holding. Without this provision it is possible that, at a rent review, an arbitrator might take the view that if part of the value of the quota has been attributed to the tenant, then that element should be treated in a similar way to a tenant's improvement. This would reduce the rent payable by the tenant.

The Royal Institution of Chartered Surveyors—who I understand are supported by the Central Association of Agricultural Valuers—have suggested in conjunction with my noble friend that whereas this provision is right so far as quota allocated by the Minister is concerned it is inequitable to apply it to quota which the tenant has effectively acquired through a land transaction and transferred on to the holding covered by the tenancy. This is what is called "transferred quota" in the Bill's terminology.

The Government recognise that this is a point for which we should legislate. If a tenant has literally paid for a quota to get it transferred on to his holding, it is surely reasonable that it should be treated similarly to a tenant's improvement and, in the terminology, disregarded in assessing the rent.

Amendment No. 43 is much longer than the amendments proposed by the noble Earl, by my noble friend Lord Stanley, and by other noble Lords. I feel embarrassed that the government amendments are so long and your Lordships' amendments are so short. But this is a complex issue and I am advised that the drafting of appropriate provisions is full of pitfalls. This is why, in Amendment No. 43, we feel that we have had to draw up fairly detailed provisions to cover a basically very simple point. The heart of the matter is contained in subsection (1) of the new clause, Amendment No. 43. This makes it clear that transferred quota acquired by the tenant is to be disregarded at a rent review; that is to say, it is to be treated in a similar way to a tenant's improvement. The tenant will not be charged rent on it.

Subsection (1) achieves what the old Clause 12(2) was designed to do, though in a different way. By saying that transferred quota is to be disregarded, subsection (1) makes it clear that allocated quota— that is, quota allocated by the Minister—is not to be disregarded. Thus the fact that a tenant may be eligible for compensation in respect of allocated quota when eventually he gives up the holding will not affect the rent payable in the meantime. This preserves the original intention of Clause 12(2).

Subsection (2) of the new clause in Amendment No. 43 makes it clear in paragraph (a) that if an incoming tenant has made a payment to the landlord on taking over a holding to which quota is attached, this does not count as the acquisition of transferred quota. This is a quite different type of transaction which the two parties enter into freely. We must assume that they cover themselves adequately in the agreement they reach. I am advised that it would not be appropriate for this legislation to intervene in these private agreements.

Subsection (2) of the new clause, Amendment No. 43, also makes it clear that the statutory successor or assignee of the original tenant—the tenant who was there when quotas were brought in—and the head tenant of an original subtenant are to be treated in the same way as the original tenant. If the original tenant paid for quota in connection with a land transfer then, just as his entitlement to compensation passes to his successor, so his entitlement not to be rented on the transferred quota will also pass to his successor.

I apologise for that rather lengthy explanation of Amendment No. 43. I should be very grateful if noble Lords who have amendments down on the same point would care to speak to them at the same time in this discussion. I beg to move Amendment No. 11.

Lord Stanley of Alderley

My Lords, I think that I am being asked to comment on the series of amendments that I have on this point. I am glad to say to my noble friend that I am happy with his arrange-ment, albeit it is a little more lengthy than mine.

Lord Northbourne

My Lords, the noble Earl, Lord Kinnoull, is unable to be in his place because he is in some remote outpost of the world; I am not sure where. He has therefore asked me to do my best to speak to this amendment. Having looked at the amendment tabled by the Government, I feel that it very amply covers the point that we were trying to make and I should therefore be very happy to withdraw the amendment.

Lord John-Mackie

My Lords, quotas having been introduced in the early days, they have not been followed through. Some difficulties may appear when they begin to be examined a little more closely. We may hear a little more about this later in the debate.

On Question, amendment agreed to.

[Amendment No. 14 not moved.]

The Deputy Speaker

My Lords, Amendment No. 15 relates to Schedule 1 and has been put in the wrong order.

Lord Mackie of Benshie moved Amendment No. 16:

Leave out Clause 12 and insert the following new clause:

("Compensation to outgoing tenants for milk quota.

1. .—(1) Subject to the provisions of this section the tenant shall be entitled on the termination of the tenancy, on quitting the holding, to obtain from his landlord compensation for that portion of the value of the quota on the holding which:—
1. (a) the parties agree is attributable to the tenant; or
2. (b) in the absence of agreement between the parties is determined by an arbitrator under subsection (4) below to be attributable to the tenant.
2. (2) In determining what compensation the tenant is entitled to under subsection (1) above on the termination of the tenancy the landlord or tenant of an agricultural holding may by notice in writing served on his tenant or landlord at any time during the continuance of the tenancy or before the expiration of two months from the termination of the tenancy demand a reference to arbitration under the Agricultural Holdings Act 1986 of the question of what proportion of the value of the quota on the holding is attributable to the landlord and tenant respectively.
3. (3) No such reference as is referred to in subsection (2) above shall be possible unless the landlord or the tenant of the holding has requested his tenant or landlord to enter into an agreement as to their respective proportions of the value of the quota on the holding but no such agreement has been concluded.
4. (4) On a reference under subsection (2) above the arbitrator shall determine what proportion of the value of the quota available on the holding at the date of arbitration is attributable to each party according to his respective contribution to the establishment of quota allocated by the Minister.
5. (5) In making his determination under sub-paragraph (4) above the arbitrator shall have regard only to the period prior to the allocation of quota by the Minister.
6. (6) For the purposes of subsection (4) above the value of any quota brought on to the holding by whatever means other than quota allocated by the Minister shall be attributed to the party who acquired it and shall not be apportioned by the arbitrator.
7. (7) (a) For the purposes of subsection (4) above and subject to paragraph (b) below, in determining the respective contributions of the landlord and tenant to the establishment of quota on the holding the arbitrator shall take into account the quality of land used for dairying, if relevant, and the contributions of each party to any land improvements specific to dairying, the dairy buildings, their appurtenances and plant, the dairying equipment and machinery, and the provision of the dairy herd, feed, labour and management.
• (b) In any case where the landlord has provided all the dairy buildings and their appurtenances and plant, land and land improvements specific to dairying, and the tenant has provided all the dairying equipment and machinery, the dairy herd and management of it, the quota value shall be apportioned equally between the landlord and the tenant and the arbitrator shall have regard to this principle in making his determination under sub-section (4) above.
8. (8) The value of quota to be taken into account for the purposes of subsection (1) above is the value of the quota at the time of the termination of the tenancy in question and in determining that value there shall be taken into account such evidence as is available, including evidence as to sums being paid for freehold and leasehold interests in land and in respect of grazing licences for periods of less than one year:—
1. (a) in cases where quota is registered in relation to the land; and
2. (b) in cases where no quota is so registered.
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9. (9) Where the parties fail to agree the value of the quota to be taken into account under subsection (8) above such value shall be determined by arbitration under the Agricultural Holdings Act 1986.
10. (10) In this section "dairy buildings, their appurtenances and plant" shall include any buildings used for cow housing and other dairying purposes and includes parlours, dairies, silage pits, feed stores, slurry stores, collecting yards and any associated yards, and other relevant constructions of whatsoever nature; "dairying equipment and machinery" shall include the milking equipment and parlour fittings, bulk milk tanks and associated equipment, cubicle divisions, equipment used in connection with the dairy herd for forage harvesting, feeding and the disposal of slurry, and other relevant equipment of whatsoever nature; "Minister" means—
1. (a) in the case of land in England, the Minister of Agriculture, Fisheries and Food, and
2. (b)in the case of land in Wales, The Secretary of State; "quota means direct sales quota or wholesale quota as defined in the Dairy Produce Quotas Regulations 1986; and "Quota allocated by the Minister" means any quota allocated by the Minister under the Dairy Produce Quotas Regulations 1984, the Dairy Produce Quotas (Amendment) Regulations 1985 and the Dairy Produce Quotas Regulations 1986".
11. (11) For the purposes of subsection (7)(b) above "management" means the level of management which a competent tenant would be expected to achieve.").

The noble Lord said: My Lords, I beg to move Amendment No. 16. It is typical of our dealings with this Bill that, because it is so complex, we do not quite know where we are between the schedules one way and the clauses the other. Amendment No. 16 is one of the attempts by myself and my co-signatories from all parties to solve the problem which is the main one bedevilling the imposition of quotas by the EC and the troubles that arise continually one after the other when an artificial state is forced upon any section of an industry.

There have been so many negotiations which have failed that it is time we put all the facts to the House as we see them. No doubt many people have different facts to put. However, we must look at the quota system as it has affected the industry, and we must look at who it has affected most.

There is little doubt that the person who has been most affected is the milk producer, whether he be an owner-occupier or whether he be a tenant. He is the fellow who has been hit. In some cases he has been hit enormously hard if he has laid out a great deal of money on expanding his production and has done so at the wrong time as regards the assessment of quota. However, the landlords of milk-producing tenants have not been hit in the same way at all because, although the quota is tied to the land, the rent has not suffered. The position is that, in view of the state of the industry, where land values are falling very fast, those which have held up best or even appreciated a little—but certainly those which have held up best—have been milk-producing farms with a substantial quota.

Therefore, whatever we may think of the perversion of the economic system, the fact is that a value has been created. People have agreed that it should be split between the landlord and the tenant. What we are fighting about is the self-interest of the landlords and tenants. We should try to deal with that not on the basis purely of self-interest but on the basis of what we consider to be a fair and reasonable split, and that is what we are endeavouring to do.

Everyone has been involved in the negotiations— the CLA, the NFU, the Government, the Tenant Farmers' Association—and they have been extremely complex. Therefore, although my amendment is much longer than the other one, it takes in everything and the simplicity is the same. We say that we should start from the simple basis of a 50–50 split where there is a traditional split between landlord and tenant as regards the work involved in producing the quota. That means that where a landlord has provided the land, the buildings and their appurtenances— whatever that may mean—and the tenant has provided the equipment, such as the milking machine and so on, and his management has been competent (in other words, the quota is the quota which one might expect for a district which we are leaving to the valuator) it should be split 50–50. That seems to us to be a reasonable start.

However, we have not left it there. It is up to the valuator—the arbiter—then to say how it must be varied. The noble Lord, Lord Mottistone, told us about a friend of his in the Isle of Wight, a personal case, where the tenant had put up all the buildings on a green field site, and obviously great injustice would be done to him. In that case the arbiter has a perfectly clear run to arbitrate in favour of the tenant.

We have many cases in Scotland—and although the Bill will apply to Scotland the amendment which I am moving does not apply to Scotland—in traditional dairying areas where landlords have erected excellent buildings and where there may be a tenant who is not very competent and the quota is below what it should be. In such a case the arbiter would have the right and the duty to award a bigger share of the value to the landlord. What we are doing is giving the arbiter a fair basis from which to start, and to that end we have defined "management" in the amendment.

As far as I can see, the main cause of the objection of the Scottish Landlords' Federation and the CLA is that landlords will have to pay out large amounts of money amounting to tens of thousands of pounds if a tenant goes out. That money must be found from somewhere, and it is obviously a cause of great worry to those people who let land and another nail in the coffin of the landlord-tenant system that we all want to perpetuate. It is a snag. However, I think I can show that it will not apply.

The arbiter will set the value. If he sets the value, he will only set the value that someone is willing to pay. If there is a value, there is no question at all that the incoming tenant must be able to pay the money, or, if the landlord is rich—which traditionally they are supposed to be—he may want to take on the capital sum and receive interest on it. I understand that the Chief Secretary to the Treasury said that he would consider (and that is as far as he went) whether the purchase of the tenant's portion (and the tenant's portion only) of a quota value would be an allowable expense to set against tax.

Therefore, the point which I am making is that if the arbiter puts a value on the quota, it must be borne in mind that he knows the district, he knows what the size of the quota should be and he also must know whether there are people willing, as incoming tenants, to come in and take it over; otherwise, he obviously cannot put that value on it. There is only a value if you can get the money. Therefore, the landlord can properly feel that he will not be pinned down, that his resources will not be stretched, and it will be the old business of taking over the asset when you come in.

People say that it would be very hard on a young tenant. Of course it will be hard on a young tenant. It is very hard on a young tenant to get into farming anyway. If the quota has a particular value, we simply cannot interfere any more with the economic system by doing anything special about it. He may be able to borrow the money at a reasonable rate; it is up to him to make an economic assessment.

This amendment is an attempt to solve the quarrel—and quarrel it is— that has broken out in the industry. We have tried to be as fair as we can. We make the point that the milk producer is the person who has been hit. We appreciate the position of the landlord and we think that, starting from the basis of power to the arbitrator to ensure that justice is done, we have a solution. I beg to move.

5.45 p.m.

Lord Walston

My Lords, I should like very strongly to support the amendment. Those of your Lordships who have allowed your eyes to wander ahead will see that there is another amendment—Amendment No. 25—in the name of the noble Lord, Lord Stodart, my noble friend Lord Mackie of Benshie and myself. The two amendments are in their effect identical and in their intention identical. It is purely a question of which one is the more effective, but the principle is the same; and it is to the principle that I shall confine myself.

I am a very strong supporter of the landlord-tenant system. I think that it is one of the greatest assets of farming and it is to me always a cause of unhappiness that over the years it has been eroded and continues to be eroded. I hope that that trend may be reversed. Nothing that I say is in any way antagonistic either to the landlord or to the tenant.

As my noble friend Lord Mackie of Benshie has said in rather politer terms, what this is all about in effect is a confrontation between the landlords and their organisation on the one hand and the tenants on the other. Both, quite naturally and understandably, wish, to get the largest amount of this rather unexpected bonus for their own members. There is a bonus; there is no point denying it. It is rather peculiar, perhaps paradoxical, that a method that restricts the amount of milk that can be produced in fact adds a special value to dairy farms depending on the quota, but that is a fact. It is one of the main arguments against the individual quota system, but we have it with us. It is quite understandable, therefore, that landlords and tenants wish to get the largest amount of this unexpected bonus that they can.

As my noble friend Lord Mackie of Benshie has said—I do not want to repeat it at too great length, but it is of vital importance to both amendments and the intention of those who support them—in default of any evidence to the contrary, that bonus should be divided equally between the landlord and tenant since neither of them has done anything to justify or earn it. It is, as was said in Committee, manna from heaven.

There are many occasions when one side or the other, landlord or tenant, will be able to bring forward evidence to show that they have in fact done quite a lot to increase the quota beyond what it would otherwise have been. In such cases it is manifestly fair that they should receive a larger amount. No Act of Parliament can possibly lay down how much that amount should be. It depends on an almost infinite variety of circumstances, ranging from my noble friend Lord Mottistone on the one hand to the type of tenant who neglects his farm and has not made full use of the great amount of money and expertise that the landlord may put into it.

This amendment deals with that in a very simple manner, as does the other amendment. In default of any evidence to the contrary, the manna should be divided 50/50. The valuers of each side should consult to see whether they can reach agreement for some different form of allocation and, failing that, it should go in the usual—the well-tried—way to arbitration.

There is one matter that my noble friend raised concerning the capital sum that the landlord might have to find. If the incoming tenant did not have the capital himself but the landlord agreed, because he was a good young man, to take him on and recoup it over the years by rent, it seems to me that it is reasonable—I believe that it is already enshrined in practice—that the amount that the outgoing tenant receives need not be paid by the landlord in a capital sum if he had not received a capital sum but could be spread over four or five years to ease the burden that undoubtedly might be a very real one on the landlord.

We are discussing solely milk quotas, but there is much talk in the air about quotas being extended to other commodities. I have no idea whether they will be. I have my own ideas on the desirability, but I will not go into that at this stage. I think that we must bear in mind that whatever system we evolve in the Agriculture Bill for the allocation of the value of the quota will undoubtedly be taken as a precedent if further quotas are imposed for the allocation of those quotas. Therefore, the simpler we can have it the more applicable it will be to other commodities and the more effective it will be for the future. I support the amendment.

Lord John-Mackie

My Lords, my noble kinsman made the remark that this was a complex Bill in every way. The amendments are an attempt to do something to simplify that. I think that it was summed up in a letter that I received from the National Farmers' Union, Scotland, which said that, to be acceptable and practicable, the procedure adopted must be fair, simple and easy to understand and operate. Whatever one can say about the Government's plan, it certainly does not stand up to those criteria by any manner of means; hence the amendments.

The noble Lord, Lord Walston, has spoken on Amendment No. 25, which was an effort to comply with this aim. It is straightforward in every way and is short, but, as he pointed out and as I understand, it will not stand up legally. Of course, that is the trouble with simplicity—it never does. Therefore, we have to take a look at Amendment No. 16, proposed by my noble kinsmen, which I think may get over some of the difficulties that Amendment No. 25 might run into.

Amendment No. 16 has the virtue of cutting out the old clause and the 10-page schedule, and I understand that it stands up legally. I should mention that the noble Lord, Lord Stanley, has an amendment later which is an effort to alter the formula to give a better share of the quota to the tenants, especially in the case of small producers. I shall be discussing that later. On some calculations it seemed to me that it went a bit too far. We look forward to hearing what the noble Lord has to say about the amendment.

The Minister cannot simply ignore the amendments, especially as they are backed up by many figures and calculations, particularly those of the Milk Marketing Board. I think that the noble Lord would agree that the Milk Marketing Board probably has more knowledge of the situation than many of the other interested bodies that my noble kinsman mentioned. One major point that it makes is that much of this is based on the rental value of tenants' improvements. The Milk Marketing Board is convinced from surveys that this is likely to average about 16 per cent. to 17 per cent., rather than the figure of 33 per cent. that the noble Lord, Lord Belstead, used in his example. That is 50 per cent. less, and it makes a very big difference indeed.

We had a letter from the noble Lord pointing out that the valuation of improvements by a tenant, which might have been carried out quite a time ago, would not be at the written down value but at market value. It is difficult to decide the market value of a tenant's improvement. It might be a building which is 20 or 30 years old. The tenant cannot sell it; the landlord can only take it over. There are advertisements galore in the press for milking parlours which say "Buyer to remove" and other things like that. The market value of a tenant's improvements would be very low indeed and they might be much less than the Milk Marketing Board's figure of 17 per cent.

The MMB also made the point that the noble Lord, Lord Belstead, took a farm with a quota of 800,000 litres. It points out that only about 8 per cent. of milk producers in the country achieve that figure and the average is much less. In fact the average size of a herd in the country is just under 60, I understand.

I do not want to go into all the points that the MMB makes. Various calculations have been made, not only by the MMB but by other bodies, which show that the Government's plan will create a series of variations in the percentage figure for very small variations in circumstances. We have to watch that carefully.

In a communication that came about a fortnight ago the RICS also makes two important points. It says: Until the basis of the calculation of the production levels is known in detail it is impossible to comment fully on the proposals". On the next page it makes the point that I have just made: In particular we believe that the definitions should be expanded to eliminate variations in interpretations". Almost every body is worried. One can be adamant that the government proposals will not be fair. They say that the NFU, the CLA and for that matter the MMB could not come to an agreement, and so what could they do? I do not think that that is an excuse for producing a system that will not be fair to everybody.

The amendment works on a 50/50 basis. I thought that we might get agreement on the basis of 60 per cent. to the landlord and 40 per cent. to the tenant as a starting point, but we could not. The case for dropping the Government's plan and accepting the amendment is a strong one. I beg to move.

6 p.m.

Lord Stodart of Leaston

My Lords, the argument is about whether one adopts the methods in Amendments No. 16 or 25 or goes along with the Government's schedule. Undoubtedly Amendment No. 25 suffers from the sheer simplicity with which it was drafted. On the other hand, there may be certain significance in the fact that those who produced the Marshalled List must think extremely well of it. They have printed it twice—once at the bottom of page 8 and again at the top of page 9.

With all respect to my noble friend on the Front Bench, the schedule has been criticised from the moment anybody set eyes upon it. On Second Reading the noble Lord, Lord Walston, described it as enormously complicated. My noble friend Lord Middleton said that it had unbelievable complexity. My noble friend Lord Radnor said that it horrified him to read it.

Everyone must be agreed that, with all the flak that has been flying around about it, the patience that my noble friend on the Front Bench has shown throughout has won the highest appreciation of everybody. From the start I think that he has had misgivings about attaching milk quotas to the agricultural holdings legislation and, as he rightly said on Second Reading, the legislation was never intended for that.

But the irony of the situation now is that the bodies which are most concerned—namely, both the NFUs in England and Scotland and the CLA—believe that that is the way we should go. At least the amendment of my noble friend Lord Middleton in Committee pointed that way. One hardly meets anyone in the agricultural world who does not say "Surely this is a job for an umpire".

I think that the amendment of my noble friend Lord Middleton was immensely attractive. It fulfilled two of the three conditions which I consider are required for a successful outcome for what I believe is developing into an unhappy wrangle. The noble Lord, Lord John-Mackie, quoted the three points made by the NFU of Scotland. The amendment was easy to understand and it would have been easy to operate. But it fell down on the third test, and that was of fairness, equity or justice—call it what you will—through too narrowly restricting the activities of the arbitrators. I believe that this amendment fulfils all three of those objectives and therefore I support it.

Lord Middleton

My Lords, this amendment is getting a great deal of encouragement. As I read through the new clause I found myself in sympathy with it. It seemed to me to be consistent with what the noble Lord, Lord Mackie of Benshie, was asking for during earlier stages of the Bill. It has brevity and it gives arbiters more responsibility and more flexibility than is provided in Schedule 1 of the Bill.

I was in agreement until I reached subsection (7)(b), which tells the arbiter how to do his job. As the noble Lord explained, in what is probably the most usual situation regarding the respective contributions of landlord and tenant, the value of the quota shall be apportioned on a 50/50 basis. That is what the subsection says. It seems odd to me to tell an arbiter to use his expertise and valuation skill and then in that subsection tell him what the answer is.

If I remember correctly, a 50 per cent. tenant share of the value of a quota would be an extreme case under the proposals in the Bill. The arbitrary split seems to be starting at the wrong place to begin with. Such a solution, whatever the split—whether it be 50/50 or 60/40 or whatever else—would not get my support. I understand that it would be objectionable to the Tenant Farmers' Association, which says, as I understand it, that it is against any arbitrary apportionment.

Lord Stanley of Alderley

My Lords, I wonder whether my noble friend would give way? I spoke last night to the chairman of the Tenant Farmers' Association. They are very much in favour of this amendment, and they do not say what the noble Lord thinks that they have said. I am sorry to have to say that, but I can say it categorically—unless they have said something different to the noble Lord, of course.

Lord Middleton

My Lords, it obviously depends to whom in the Tenant Farmers' Association you speak.

Lord Stanley of Alderley

I quite agree, my Lords.

Lord Middleton

My Lords, as I understand it they would be against any arbitrary apportionment because it would be wrong in nearly every case. It would take no account of the reality of the contribution of the parties. If a milk quota must be carved up, the method prescribed by the Government, though hideously complicated, provides for more flexibility in the assessment of compensation than does an arbitrary apportionment such as lurks in subsection (l)(b), even with the encouragement to arbiters, contained in the other subsections, to use their skills.

Furthermore, the thought behind the Government proposal is that the greater the amount of the quota on the holding, the greater the compensation for the tenant. However, under this proposal the thinking is that the tenant would usually get 50 per cent., whatever the size of the quota. The Government approach is a more sensible one.

The noble Lord, Lord Walston, and my noble friend Lord Stodart have referred to Amendment No. 25. I am not clear whether it is going to be moved. Of course it also sets out a 50/50 share as the norm, and you have to prove under that amendment that such an allocation between landlord and tenant is wrong. Of course I have to say that I would object to that one for all the reasons I have just given for disliking an arbitrary apportionment in principle and a 50/50 split in detail.

The main objection to Amendment No. 25 is that it refers landlord and tenant to arbitration under Section 12 of the 1966 Act, which is the section dealing with rents, and that would not seem an appropriate section to deal with compensation. I believe that noble Lords would be misled if they were to be seduced by the simplicity of this amendment, and by the arguments of the noble Lord, Lord Mackie of Benshie. Although I believe—and I said so in Committee—that the Government are doing the wrong thing, the way they are going about it in the Bill is preferable. When my noble friend Lord Belstead opposes this amendment, as I hope he will, I shall be on his side.

The Earl of Radnor

My Lords, I perhaps have the advantage that I have not taken part in any conversations or negotiations, although I am grateful for a note from my noble friend Lord Belstead. I also was interested in this amendment, if only because it would get rid of what is there at the moment, which is bad legislation. But I must admit that I still feel that a mistake is being made.

The movers of this amendment, as politicians, are trying to tell individuals, in what must be always a highly individual situation, what they should do and are endlessly trying to establish baselines from which they should kick off. To me this must mean that there is bound to be a quarrel; which indeed, as the noble Lord, Lord Mackie of Benshie, has said, there has been. It has been quite evident that the disagreement between the landowners and the farmers has been a considerable one.

Therefore, we reach a position where rules have to be laid down, and immediately things become more and more complicated, more and more based upon guesswork and supposition, and so more and more unsatisfactory. I cannot see why, if it were brought forward again, this amendment should not be perfectly effective—if one trusts individuals to work out their own destiny with the help of arbitration—as far as subsection (7)(a), leaving out subsections (7)(b), (8), (10) and (11).

It is shorter, which in itself is a merit, and it gets over all the difficulties of deciding what is a dairy appurtenance. It leaves out all the difficulties that there must inevitably be in varying tenancy agreements in regard to the financial arrangements which are made over buildings and the question of whether they have been put up by the tenant or the landlord. It avoids all those things which will cause so much trouble when tenancies come to an end and which will also cause trouble if these sort of arrangements are ever used as a pattern in the event of other quotas coming along. Therefore, if the noble Lords who brought forward this amendment feel that it is possible to bring it forward again at Third Reading in the way that I suggest, I shall be in favour of it. At present, I cannot say that I am.

6.15 p.m.

The Earl of Onslow

My Lords, can my noble friend on the Front Bench help me on the question of quotas? Under either this scheme or the Government schedule quotas would be bought and sold on the open market. It is no use pretending that this is not happening; It was reported in the press the other day that quotas are being sold at 20p a litre in Cumberland, and they are all done on artificial grass rents. In effect, the system is detaching the quotas from the land, and making a muddle which could possibly result in extra legal transactions and large sums of money changing hands.

The whole situation of quotas under this sort of arrangement—with the Ministry of Agriculture possibly adopting a Nelsonian pose to what is going on—is building up nothing but trouble for the future. Can my noble friend give us some information and help on this point?

Lord Stanley of Alderley

My Lords, as I put my name to this amendment perhaps I may intervene. The first point raised by my noble friend Lord Radnor and others concerns subsection (7)(b). The trouble is that the arbitrator needs a starting point. We all agree on that. My noble friend Lord Middleton and I can disagree where that starting point is. He had a starting point in his amendment. It was not what I liked, but it was a starting point. I have a starting point in my amendment which we shall deal with later. Incidentally, I may say to the noble Lord, Lord John-Mackie, that mine is a good deal lower than this one. I did not have the courage to put my name to this to start with, but we shall come to that later.

The Government have a starting point in their amendment. I would ask my noble friend Lord Belstead whether he knows where his starting point is for the average tenant. I think he misled himself last week—when perhaps I caught him on the hop—in giving an example; he gave an extreme example. I think I know where his starting point is. His starting point is around 30 per cent. In my later amendment it is between 30 per cent. and 50 per cent., but I should like to know what he thinks his starting point is to an average tenant.

The second point about this amendment which 1 do not think your Lordships always see is that it involves only a starting point. In all our amendments—well, at least in my amendment and the one we are speaking to now—the arbitrator can vary it 100 per cent. one way or the other, but he must have a starting point, and that is the trouble with taking out subsection (7)(b); he would not have a starting point.

The final point I should like to make is on the question of the incoming tenant. The noble Lord, Lord Mackie of Benshie, dealt with it extremely well, but may I add one other point on it. When you come in as a tenant, as I have said before, it really does not make any difference, whether you pay me, the outgoing tenant, or the landlord. You have to pay one or the other. If you pay one a bit and the other a bit, it does not make any difference; it is the same notes coming out of your pocket. Also at the end of the day all this quota will come into the landlord's hand. It will be an asset for him forever, provided that quotas continue. It is an asset today, as my noble kinsman has said. It is an asset that one cannot get away from. I wish it was not, I wish the things were not there, but it is there and we have to deal with it. Whatever happens at the end of the day the landlord will get this unexpected benefit. I am saying that he did not earn it in 1983 or 1984 when this suddenly came from heaven (or I should say hell?) any more than the tenant did. What your Lordships have to decide is where does the arbitrator start from? The noble Lord, Lord Mackie of Benshie, says with good British compromise, "Down the middle". I support him and I hope your Lordships will.

Lord Belstead

My Lords, simplicity has very great attractions. This amendment of the noble Lord, Lord Mackie of Benshie—the noble Lord is not such a simple soul as some might think but a highly skilful farmer and a highly knowledgeable man in the industry—this schedule, with the greatest respect, gets simplicity but desperately at the expense of accuracy. The truth of the matter is that the great attraction of this amendment in leaving out the Government's Schedule 1 with all its length and complexity is that that is achieved by leaving out so much that there is considerable uncertainty about the operation of Amendment No. 16.

I put to your Lordships some of the main difficulties, as the Government see them, if Amendment No. 16 were to be agreed to. First, the noble Lord's amendment is based on the idea of a typical holding. But a holding may not be typical at all. Secondly, it provides for an arbitrary 50/50 split of the quota as the norm, rather than looking at the facts of each farm separately. Thirdly, it would mean that a tenant who had run down his holding and had a low quota would still have compensation even though he had arguably damaged his landlord's interest in the land. I do not say that pejoratively. I say it as something that is sometimes a matter of fact. Alterna-tively, the tenant who, through his great efforts, had earned allocated quota above what could reasonably be expected (very often that happens) might, as I understand this amendment, get relatively little recognition under this method because there are no criteria written in.

Finally, one of the things which worries the Government most of all is, if the noble Lord will forgive me, the vagueness of the wording. It could lead to arbitrations which would be lengthier and more costly than under the provisions of the Bill. There are also a number of omissions. No provision is made for tenants of Crown land, statutory successions, assignments or sub-tenancies. Indeed the absence of any indication as to which tenants are to be eligible means that the effect could be that each successive tenant on a particular holding would be eligible for compensation, not just the original tenant to whom quota was allocated or his statutory successor or assignee. Thus, landlords could in effect find themselves having to pay several times for the same quota.

As I see it, those are the problems with Amendment No. 16. Let us not forget, we could in many cases be talking about very large sums of money. Indeed, in the interests of many tenants I hope that in some cases there will be considerable sums of money being talked about, although we should not forget that at the end of the day it is the incoming tenant who, finally, will have to pay. That is something we need to keep very much in mind.

We have also been talking about Amendment No. 25. My noble friend Lord Middleton put his finger on the essential difficulties with Amendment No. 25. This is familiar because my noble friend mentioned it so clearly and it has already come up on Amendment No. 16. But I mention it again. There is not really a starting point. The individual circumstances that may exist on a particular holding cannot be taken into account because the idea is a 50/50 split. I think that is unfair. There are no criteria to say how one goes away from a 50/50 split.

My noble friend Lord Stanley asked me a direct question about where our starting point was. As I sought to make clear at the Committee stage of the Bill, the Government's starting point in the interests of the tenant is linked to a standard quota which is well below—in fact it is about 11 per cent. below—the average yield for the country with the right for the arbitrator to vary the arrangements if, when he looks at a particular farm, either the quality of the land or the climate conditions lead him to believe that he ought to start from a different basis.

Before any of your Lordships say to me that that will lead to a lot of different decisions, I should say that I know it will. But it is fair, precisely for the reason that, starting off from at least a standard that is understandable in national terms, it allows the arbitrator to take account of the circumstances of the farm in question. It takes into account the situation where a tenant took over a non-dairying holding and turned it into a flourishing milk-producing unit, but it will also safeguard the landlord in the case where perhaps bad farming practice has resulted in a very much reduced quota being allocated.

A specific 50/50 split as the starting point would not, I suggest to my noble friend Lord Stanley, take account of such situations. I think it could be highly unpredictable in its operation. I have to say this straight out: I think these Amendments Nos. 16 and 25 will shift the balance substantially towards the tenant. I say that bearing in mind that the Government brought forward amendments, to which your Lordships agreed at Commitee stage, whereby we shifted towards the tenant in Committee. Let us remember that although that creates problems for the landlord, who has to make arrangements, at the end of the day it is the incoming tenant who finally pays the bill. For the good of young farmers in this country and the landlord-tenant system generally, surely we ought to remember that.

Of course I understood when my noble friend Lord Stodart said that he wished he could do away with all the complexities of Schedule 1—something which my noble friend has said to me inside and outside the House on more than one occasion. Of course I understand that, but may I gently say that it was the industry itself which came to us in the Ministry of Agriculture originally and said that it wanted a basic framework from which to start. The absence of guidelines for arbitrators will, I believe, mean that producers in similar circumstances could receive very different treatment under these amendments which are being put forward. Again, I was very interested to hear my noble friend Lord Middleton put his finger on that point. If my noble friend is right, then at the end of the day these amendments, put forward in good faith, of course, are not in fact going to be fair either to landlord or to tenant. On those grounds, with regret, I must oppose them.

6.30 p.m.

Lord Burton

My Lords, may I put forward one suggestion which might meet the wishes of a number of your Lordships? Our Scottish legislation is not at all as satisfactory as the English legislation, but it does have one saving provision in it which might be acceptable to England and Wales. It is that the landlord and tenant can agree between themselves and can contract out of the Government proposals. Therefore, the tenant and the landlord could make an agreement; and I should think that in a great many cases they would do so rather than accept what we have in the Bill.

Lord Mackie of Benshie

My Lords, the debate has been interesting and objections have been put forward to our scheme. The Minister, who is always fair and very thorough, has pointed out that there will be difficulties arising from this amendment. I accept that that may well be so. But let us not beat about the bush. What we are doing here is looking at a principle, which has been accepted as a principle by the Government, that we split this uncalled-for bonus between the landlord and the tenant. That is accepted. We are looking for a starting point.

It has been said that the 50/50 split would apply in all cases and would be very unfair to the landlord with a bad tenant and to the tenant who had a high quota through his own efforts and skill as a dairyman. We do not think so. We think that it is so cast that with 50/50 as a starting point the arbiter will be perfectly capable of assessing whether the split should be in favour of the landlord or of the tenant. The arbiters are accustomed to doing this. They know the district better than the Government can assess the district. I think that on this basis they can make a fair job of the assessment.

If there are flaws, then I think the House should express its opinion on how the split should be made. The noble Earl, Lord Onslow, said that we are talking about a lot of money and that money is being paid over right now. It is not coming out of any landlord's pocket; it is being dealt with in the business. The example quoted by the noble Lord, Lord Belstead, was that the tenant would get £34,600 and the landlord would get £69,000. This was considered to be much fairer to the tenant.

When the Milk Marketing Board took a different set of figures, a more average set of figures, we got figures of £17,000 for this 800,000-litre quota to the tenant and £86,700 for the landlord. For an average quota of 340,000 litres, the figures were £7,400 to the tenant and £36,800 to the landlord.

Is it going to be considered fair in the country that this unexpected bonus, which has already hit the tenant, the milk producer, extremely hard, this artificial value, should be split in that way? That is the point that this House has to decide. Is the 50/50 starting point much fairer than the one at present, which is heavily biased in favour of the landlord? Are they going to say—and this is a slightly dishonest argument—that this is "a landlords' House"? But it is not so. There is none fairer than the Members of your Lordships' House.

But it does look to be an unfair basis for starting on the figures that we see. Imperfect though our amendment may be, I know that the Government are efficient and kind, and have excellent draftsmen, and that if we get the principle right then they will be able to correct the actual mechanics. So I am afraid I must press the amendment.

6.35 p.m.

On Question, whether the said amendment (No. 16) shall be agreed to?

Their Lordships divided; Contents, 78; Not-Contents, 107.

DIVISION NO.2
CONTENTS
Addington, L.	Llewelyn-Davies of Hastoe, B.
Airedale, L.	Lloyd of Hampstead, L.
Amherst, E.	Lockwood, B.
Attlee, E.	Longford, E.
Banks, L.	McIntosh of Haringey, L.
Barnett, L.	Mackie of Benshie, L.
Birk, B.	McNair, L.
Blyton, L.	Melchett, L.
Brockway, L.	Milverton, L.
Carmichael of Kelvingrove, L.	Mishcon, L.
Crawshaw of Aintree, L.	Morris, L.
David, B.	Morton of Shuna, L.
Davies of Penrhys, L.	Nicol, B.
Diamond, L.	Phillips, B.
Donaldson of Kingsbridge, L.	Pitt of Hampstead, L.
Donoughue, L.	Ponsonby of Shulbrede, L.
Elliot of Harwood, B.	[Teller.]
Ennals, L.	Prys-Davies, L.
Evans of Claughton, L.	Rea, L.
Ewart-Biggs, B.	Rhodes, L.
Foot, L.	Ritchie of Dundee, L.
Gallacher, L.	Rochester, L.
Glenamara, L.	Ross of Marnock, L.
Graham of Edmonton, L.	Simon, V.
Greenway, L.	Stanley of Alderley, L.
Grey, E.	Stodart of Leaston, L.
Hampton, L. [Teller.]	Stoddart of Swindon, L.
Hanworth, V.	Strabolgi, L.
Harris of Greenwich, L.	Taylor of Mansfield, L.
Hooson, L.	Tordoff, L.
Howie of Troon, L.	Underhill, L.
Hunt, L.	Wallace of Coslany, L.
Hutchinson of Lullington, L.	Walston, L.
Hylton, L.	Whaddon, L.
Jenkins of Putney, L.	White, B.
John-Mackie, L.	Wigoder, L.
Kagan, L.	Winstanley, L.
Kilbracken, L.	Winterbottom, L.
Kilmarnock, L.	Wise, L
Kirkhill, L.

NOT-CONTENTS
Airey of Abingdon, B.	Lawrence, L.
Beaverbrook, L.	Layton, L.
Beloff, L.	Lindsey and Abingdon, E.
Belstead, L.	Long, V. [Teller.]
Bessborough, E.	Lucas of Chilworth, L.
Bolton, L.	Lurgan, L.
Boyd-Carpenter, L.	Lyell, L.
Brabazon of Tara, L.	McAlpine of Moffat, L.
Brougham and Vaux, L.	McFadzean, L.
Broxbourne, L.	Mancroft, L.
Burton, L.	Manton, L.
Caithness, E.	Marshall of Leeds, L.
Cameron of Lochbroom, L.	Massereene and Ferrard, V.
Campbell of Alloway, L.	Maude of Stratford-upon-
Campbell of Croy, L.	Avon, L.
Carnegy of Lour, B.	Merrivale, L.
Carnock, L.	Mersey, V.
Chelmer, L.	Middleton, L.
Clitheroe, L.	Monk Bretton, L.
Coleraine, L.	Mountgarret, V.
Colwyn, L.	Murton of Lindisfarne, L.
Craigavon, V.	Northbourne, L.
Craigton, L.	Onslow, E.
Crathorne, L.	Orkney, E.
Crawshaw, L.	Peel, E.
Davidson, V.	Rankeillour, L.
Denham, L. [Teller.]	Reigate, L.
Drumalbyn, L.	Richardson, L.
Elliott of Morpeth, L.	Rochdale, V.
Elton, L.	St. Aldwyn, E.
Faithfull, B.	St. Davids, V.
Ferrers, E.	Sandford, L.
Forbes, L.	Savile, L.
Forester, L.	Seebohm, L.
Fortescue, E.	Selkirk, E.
Fraser of Kilmorack, L.	Sempill, Ly.
Gisborough, L.	Shannon, E.
Glenarthur, L.	Skelmersdale, L.
Gray of Contin, L.	Somers, L.
Gridley, L.	Somerset, D.
Grimthorpe, L.	Strathclyde, L.
Hailsham of Saint	Strathcona and Mount Royal,
Marylebone, L.	L.
Halsbury, E.	Sudeley, L.
Hardinge of Penshurst, L.	Swansea, L.
Henley, L.	Swinfen, L.
Hives, L.	Tranmire, L.
Hooper, B.	Trenchard, V.
Hylton-Foster, B.	Trumpington, B.
Ingrow, L.	Vaux of Harrowden, L.
Kimball, L.	Vernon, L.
Kinloss, Ly.	Vivian, L.
Kinnoull, E.	Waldegrave, E.
Lane-Fox, B.	Whitelaw, V.
Lauderdale, E.	Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.43 p.m.

Earl De La Warr moved Amendment No. 17:

Leave out Clause 12.

The noble Earl said: My Lords, in speaking to Amendment No. 17, I should like to speak also to Amendment No. 42, because Amendment No. 42 asks for the same fate for the schedule as Amendment No. 17 does for Clause 12. Since this clause came into the Bill at Report stage in another place, the conflict of interest between landlord and tenant has been the only subject we have debated. Indeed after this we are going to go on debating it. I rather wish I was going to speak at the end because I should like to lift your Lordships' minds to the wider and longer-term issues that I think are concerned here.

In the debate on Second Reading in your Lordships' House on 6th May, my noble friend Lord Belstead said, "In the last two years quota has acquired a value". That was at col. 623. With the greatest respect to my noble friend, I believe that this proposition was a little bare and perhaps a little bland: certainly it requires further analysis. He went on to say—and we shall return to the point later—that because quotas are tied to the land a tenant cannot sell or take his quota with him.

Let us remember what a quota is and what it does. A quota specifies for each farm how much milk by volume can be sold without incurring a levy on the excess production: normally known as a super-levy. If it is relevant to the question of whether quotas do create an asset, then the answer, as I see it, is that the capital or rental value of a farm that is equipped for dairying will depend on whether it has a milk quota and, if it has, how much it is.

Every farm that is thus equipped and that was producing milk in 1982–83 was given a quota and, with its output thus restricted, it suffered then a loss of earning power—a loss which it carries today and a loss which will get greater if demand falls further. Therefore I maintain very strongly that while quota remains linked to the land it does not have a value: it has a negative value. I very much doubt whether a tenant, however wealthy he is, would wish to take on a share of that. I hope I have made it clear at this stage (and I shall have more to say later) that I reject the basic logic the Government have used and which has apparently been adopted by most sides of the industry that we are starting with an asset which we have to share out.

I believe, as I said on Second Reading, that is the logic of the looking-glass and I will not have it. In any case I do not relish the idea of seeing the Government go into Looking-glass Land, because, like Alice, once they get there they may tend to do some very strange things. So much, then, for the nature of quotas while they remain attached to the land.

This brings us to the next question. "Are there any circumstances in which quota can have a value?" Yes, indeed there are, but only when it is allowed by the Government to leave the farm and so become mobile. For at this point, for the first time, the purchaser acquires the right to sell more levy-free milk to rectify the loss of earning power that he has suffered since 1983. So quotas do not become assets unless or until they leave the farm.

If any of your Lordships were to go to, for instance, Denmark you would find no trade in quotas. There quotas are linked to the land and unused quota is withdrawn, though not necessarily cancelled. National regulation or legislation exists and has existed from the first—because the Danes thought about this—to enforce this linkage to the land. That does not seem to be the way the Government are going about things in this country. Apparently they are encouraging or at least allowing a trade in quotas to develop. It has not got very far but it has started. I use the words "encouraging" and "allowing" because it does not appear to me that the Government are clear exactly where they stand in this matter, as the Danes were clear when they addressed the subject right at the start. It appears that they are content at least for farmers to use the flimsy legal loophole of temporary land transfer for the purpose. I wish they had addressed themselves to these fundamental points right at the beginning of the quota era.

I believe that mobility of quotas—and here I know I am on contentious ground—is in the long run very damaging to the industry for two main reasons. First, the demand for dairy produce continues to drop and stocks continue to rise. Whereas not long ago we were talking about 1 million tonnes of butter, we are now talking about 1¼ million tonnes. If quotas are allowed to circulate freely without any withdrawal, total production will stay at its present level. Take-up from the Community scheme will be nil because the free market terms will be very much better—up to 20 per cent., we have heard this evening—and paid at once as against something like 17p over seven years.

If total production does not drop by fall-out the only solution as demand goes down—and I am certain that it will—will be more and yet more across the board cuts in quota. So every dairy farmer will continue to live under the Damoclean sword of uncertainty, unable to plan ahead and probably unwilling to invest—a well-trodden downward path in any industry, whether it be milk, motor cars of microchips.

My second objection is just as serious. As total quota drops so will the traded price per litre go up. There will be more and more money chasing fewer and fewer goods—the classic inflationary road. This industry is chronically and at times acutely short of liquidity. I use the word "liquidity" in its financial sense. It cannot afford any new increases in its costs; it cannot afford new premiums; it cannot afford compensation.

In little over two years' time, quotas and their method of operation will be up for review. The Government will want to make substantial changes. But what are they doing now in this Bill? It may be unintentional, but they are using primary legislation to solve what they perceive as a problem. Here is the crux of the matter. In doing so, they are enshrining the principle that quotas belong to people and not to the land, in spite of what my noble friend said at Second Reading. If they do that, then automatically quotas become tradeable and mobile; and as I have said, I do not believe that this is in the long-term interests of the industry.

And so I interpose this suggestion among the debates that have taken place on the sectional interests. I say to the Government that it would be far better to avoid primary legislation. The only way they can do that is to leave this clause and its schedule right out of the Bill; and that is what I am proposing. I beg to move.

Lord John-Mackie

My Lords, there is one thing about the noble Earl's amendment—it would certainly solve all our problems straight away if we accepted it. Quite frankly, I agree with his amendment in one way, except that he has come with it too late. If we had looked at the matter in the very early days of quotas and realised what the situation was going to be, we could have been clever and given the whole of the quota to the Milk Marketing Board and not allowed it to have any value at all. That would have solved the situation.

I claim a little credit for having said early on that we had not looked at this matter clearly enough and had not seen it through. Nevertheless, it is with a little hindsight that one sees the situation today, a situation with which we are saddled. In spite of my agreement with the noble Earl, I cannot see that we can go back now, much as he would like it and much as I would perhaps like it. With that, although I support the noble Earl in one way, I cannot see that we can support the amendment.

Viscount Massereene and Ferrard

My Lords, I should like to agree with the noble Lord who has just sat down. I remember the days of the hop market quota. Quotas were not tied to the land. The quota was a certain figure and all the hop farmers together could not exceed that. This prevented overproduction. It would have been a good thing if we could have done the same with milk. It is too late. I just wanted to make that point, and I agree with what the noble Lord said about it. It is too late.

Lord Middleton

My Lords, as my noble friend Lord De La Warr pointed out, both at Second Reading and again today, one would think that a milk quota, where it remains firmly attached to the land, is a restriction on production and in itself a thing of no value. But the fact is that milk quotas are being traded. There are devices by which this is being done. They have acquired a value, and we have heard this several times this evening.

It seems to me that our own Government have departed from what I believe was the intention of the Council of Ministers and have departed, as my noble friend has reminded us, from the way milk quotas were treated in other member countries by countenancing what my noble friend calls the mobility of milk quotas by means of the temporary transfer of land. The argument runs like this. If a milk quota can be traded for value, why should not a tenant farmer who leaves his dairy farm with a quota attached to it get something for what he leaves behind? The Government were persuaded, wrongly in my view, that a milk quota should somehow be treated as a tenant's asset irrespective of whether or not it enhanced the landlord's reversion. My noble friend Lord Belstead will remember that I expressed my misgivings about that when the proposal was first floated.

I believe that a case can be made for compensating a tenant for the milk quota provided he can show that he has left something behind which improves the landlord's asset. I suggested in Committee how the long-established principles of compensation in the Agricultural Holdings Act could be adopted in order to provide for that, but the Committee did not accept my proposal and so we are thrown back to the Government's proposals in the Bill.

I have to say that I believe these proposals are based on a wrong concept. My noble friend has explained why it is wrong. He is right to point out the difficulties that may follow. Because the Government did not read, or misread, the signpost they went down the wrong track at the outset; and I was interested to hear what the noble Lord, Lord John-Mackie, said about that. I agree with him.

Months of dispute followed because of the difficulties inherent in applying this concept to our own landlord and tenant system, and those difficulties were amply demonstrated by the debates on this issue in Committee, and again at length tonight. My noble friend is right to raise this fundamental issue, but I fear that he may be only illuminating that signpost which the Government missed many months ago. Nevertheless, I support him just in case—and it is a great deal to ask, as I recognise—the Government can see their way not just to alter the Bill in the way that my noble friend proposes but to make a radical reappraisal of their milk quota policy.

7 p.m.

Lord Monk Bretton

My Lords, I should like to say a few words about this matter. I hasten to explain, to backtrack for a moment, that in fact I preferred Schedule 1 to the Bill to Amendment No. 16, but I also have the strongest sympathy for the amendment of my noble friend Lord De La Warr. It is a matter that we should consider very seriously.

I do not believe that it is altogether too late. I think that affairs in Europe may well compel some most draconian measures in this country if we do not pay heed to what is happening elsewhere within the EC. I think it was the original intention of the Commission as far as possible to avoid a value being put on quotas. It seems that we have not really made up our minds about this matter. We have had a hankering, and have never been quite sure whether to opt entirely, for what I describe as the North American option—the option of allowing quotas to acquire value. If we did that and followed the North American option, we should have to ask ourselves a number of questions.

First, we must ask the extent to which it is in the interests of the consumer. I gather that the price of liquid milk in Canada is 28p a litre and that here it is only 16p. It may well be that that has had something to do with the North American option. But let us suppose that one does not get 28p instead of 16p here. I wonder whether it is going to be in the long-term interests of British agriculture to embark wholeheartedly on that course.

I emphasise that it is particularly unsatisfactory in our circumstances that premiums should be taken out of the industry—that is, unless cash can come in from somewhere else. It may be that it will have to come from the consumer in the end. Therefore, I have the gravest fears about the future under the course we are now following because, as has already been pointed out by my noble friend Lord De La Warr, these quotas will increase in value. Moreover, one must look at the value of quota in relation to the actual cost of a cow today. It is a substantial item. We must also remember that there may be quotas coming for other commodities and that we are now setting a precedent as to how they are to be handled.

It may be that to seek an alternative to the North American solution is more bureaucratic, but I am concerned about our present posture. In fact, I am reminded of the grand old Duke of York and his 10,000 men. As your Lordships will know, he marched them up and he marched them down, and when they were only half-way up they were neither up nor down. I feel that if we are not careful that is where we will end.

Lord Northbourne

My Lords, I think that the noble Earl, Lord De La Warr, has raised an important point in relation to the nature of the value of quotas. To speak briefly on this subject, it seems to me that the nature of the value of quotas is associated with the value of land. The creation of quotas has, in fact, creamed off some of the value of the land and made it transferable. Quotas have made land a negotiable asset. Land which has less quota will be less valuable, and land which acquires more quota will become more valuable. The nature of quota is intimately associated with the value of land.

It is for that reason I am not happy with the amendment of the noble Lord, Lord Mackie of Benshie. I believe he is wrong in saying that value has been created. Value has not been created but has been transferred from the farms which have a low quota or no quota to the farms which have a high or good quota. For that reason it would seem logical that if the tenant is to participate in the benefit of having a large or high quota he should also contribute, and other tenants should contribute, in the same measure in respect of the farms where the quota is low because of inadequate performance, or for whatever reason. It has been the essential nature of quotas that they run with the land and that their value is part of the value of the land, whether or not they are transferable.

The Earl of Onslow

My Lords, I thank my noble friend Lord De La Warr for bringing forward this point because, as I said earlier, the fact that quotas are changing hands at between 14p and 20p a litre, depending on the part of the country, and the fact that people have received large sums of money, has partially liberated them. It has also created a problem because we are not quite sure whether or not these are extra-legal transactions. People have paid money for something which, in all honesty, is dubious.

I arrive at a totally different conclusion from that of my noble friend Lord De La Warr. I should much prefer the quotas to be totally divorced from the land. I should like to see a system where you buy the licence, or there is a licence to sell X litres of milk. I could then buy that licence and I could let it to someone else. A landlord could buy it and even let it to someone else's tenant. Above all, when the Community wants to reduce the amount of milk that is produced the Commission itself could buy in quotas. That is exactly what is done by central banks when they want to control the exchange rate. That would seem to be a sensible way of proceeding. If it can be Community-wide, so much the better. It would be a fully tradeable asset.

We know of some of the difficulties that have occurred recently. For example, I know of one landlord who has two almost identical holdings with two identical milk parlours on them. On one, there was a good tenant with 120 cows, milking away like mad and producing a considerable amount of milk, and so on. The other tenant was idle, or was doing what many of us think is a good idea—he had low input, low yield, careful grass management of his farm and consequently was producing much less milk from the same amount of land.

That seems to me to have produced some form of inequality. I do not quite know how to get round it, but I am absolutely certain that once the quotas become fully marketable these problems will vanish. It is only what is done with the first change of ownership of the windfall—and let us be honest, it is a windfall. People known to me have sold quotas from Hampshire to farmers in Wales on grass lets and they have received a lot of money for them. I must raise the point of who will pay and whether it is to be the consumer. Surely, if it is a quota to produce milk at a certain price, the consumer does not come into it. He will only buy milk at price X, and as there is a licence to produce it at that price, that is the price at which it is traded. The consumer is not affected.

I could not be more pleased that my noble friend Lord De La Warr has brought up this matter because I think it is vitally important; and the development of selling quotas with slightly dicey grass lets is something which will end in a lot of—I nearly said spilt milk— tears, certainly.

Lord Burton

My Lords, I also should like to support my noble friend Lord De La Warr. I am very interested to note that it seems that he has unanimous support from all sides of the House. Since our deliber-ations on the previous stages of this Bill, during which endless criticisms were levelled at the Government's proposals on quotas, it has become clear that very few people, if any, are in favour of the current intentions. It was to be hoped that the Government would come forward with such an amendment. I wonder whether these proposals would ever have come to us had this clause been debated in Committee in another place.

There was bound to be friction over any split of a value of quotas. British agriculture does not want to be split in this way. Surely the Government do not wish to destroy the landlord and tenant system, but it is hard to think of any other legislation which would do more to destroy this liaison in agriculture. What is equally serious is the amount of money which these proposals will take out of agriculture. The retiring farmer will take with him the money that he receives and that money will be lost.

What is the answer? I think that we are the only country in Europe that has got itself into this muddle. The answer is to accept this amendment, drop these quota proposals, look at what has happened on the other side of the Channel or, indeed, the North Sea, and then ensure that quotas are allowed to have no value, which I believe to be in the spirit of the EC regulations.

If a quota is not required, it should be called back into a pool, as one of your Lordships said—though I cannot remember who it was. This would give flexibility. If there was a need for further reduction in milk supply (which is a not improbable situation), individual farmers would not have to adjust, they would not have to cut by a further 1, 2, 5 or 10 per cent., or whatever it may be, at great inconvenience to themselves. There would be a quota pool which need not be issued. If there were need for further milk, the Government could produce quota from the pool and any spare quota would be available for any farmer starting up dairy farming. The noble Lord, Lord John-Mackie, said that we were too late, but surely it is better late than never. As we are, we are getting into an awful muddle, and we had better try to put it right now, even though we are a little late.

If the Government's intentions are allowed to pass—and in view of the Government's amendments today it can be seen that they have already run into some unexpected difficulties—we are in for a problem. What happens when a farmer is an owner-occupier and the tenant of the neighbouring farm? There would be enormous scope for abuse. What happens if a tenant rents some extra grazing from a nearby farm? We are to compensate the tenant • "for his expenditure". Is it to be net expenditure after grant or his gross expenditure that is taken into account? I do not think that this is made clear.

The tenant is to be compensated for dairy improvements and fixed improvements, which are relevant to the keeping of dairy cows on the tenancy". Surely what is important is that the improvements and fixed equipment are specifically adapted for dairy cows. There are improvements such as cattle courts which could equally well be used to store cattle or even sheep.

Since the Committee stage I have been doing some homework and I have found two dairy farmers who are giving up dairying. One is on a large Scottish estate which is giving up the dairy farm in hand and proposing to let it to a limited partnership. I asked the factor whether this was wise in view of the current legislation in the offing, and he said that in no way would he be handing over the quota, but he would be charging the incoming tenant extra rent for it. I asked him what might be the value of the quota and, calculating it on the Government's recommendation, it appears that it will be about £180,000. So after we had finished our telephone call, I decided that I had better try to work out what the tenant might have to pay, and I thought that perhaps 10 per cent. would be a not unreasonable amount to put on £180,000. So before starting to pay his ordinary rent the tenant will have to pay £18,000 a year rent for his quota. That is not on.

Then there is another case of a large estate that has rented a dairy farm from a small neighbour. The quota value in this case is reputed to be £110,000 and presumably this would have to be split between the landlord and the tenant. However, as the tenant has provided nearly all of the equipment, the compensation would be largely payable to him and the small, poor landlord would have to provide a very large sum of money in way of compensation to his neighbour. I do not think that this is very sound legislation.

At Committee stage my noble friend, in referring to Scotland, intimated that it was his intention to give tenant farmers in Scotland a different standard quota on which to calculate the compensation due other than the one used in England. What he appears entirely to have forgotten is that average Scottish rents are well below English rents. So on the basis of the calculation worked out by the Government for England and Wales the Scottish landowner would already have had to pay more; and now, with a different standard quota, the poorer the ground, the more he will pay, and the more money will be taken out of circulation and out of the areas where it is most needed. I think that these are very bad and very unjust proposals.

I cannot put down an amendment because of course this matter will appear in an order at some future date. However, if it appears, as I gather it may do, it looks very much as though someone will have to pray against the order.

It is fair to say that it is said there would be very few cases in Scotland; but it does not matter if there is only one case; it is one case too many. I really cannot understand why my noble friends on the Front Bench, who I feel are probably not too happy about it themselves, should continue to push this legislation forward. Surely my noble friend's amendment is the answer. Any tenant, whether in England or Scotland, who is giving up dairying must have made his decision before this legislation appeared, whether the term day was in March or May. This legislation came into force only in June and so he had already given his notice to leave. It will be no hardship to put this measure back so that we would have nine months up to next March in which to produce a proper reasoned amendment and pass a proper Bill.

I hope that this might remove any value on quotas, as my noble friend suggested. I am sure that if his amendment is accepted, we could take this measure back and I am certain that all sides of the industry could tell the Government what would be satisfactory and how they should deal with milk quotas.

Lord Mackie of Benshie

My Lords, I think that in this case the noble Earl, Lord De La Warr, whom I admire greatly, is missing the point just a little. It is all very well, but if Clause 12 is abolished, the people who have the quotas now are left with them. In spite of what the noble Lord, Lord Northbourne, said, of course the quotas have a value, and it is a positive value which has been proven. The noble Earl has quoted case after case, and of that I have no doubt whatsoever.

If one is simply going to leave the situation as it is, how will quotas be reduced and how will the industry be brought back onto a proper basis? Most people produce too little milk in relation to their capital equipment and so one hopes that farmers will leave dairying. And who is going to allocate the quota? My goodness, landlords will be keeping their tenants alive in order to maintain the value of the farm, passing the lease on in order to maintain the quota. Without any doubt, it gives the farm extra value. That is the flaw in that highly simplistic argument. It has a value. I do not like it. I do not think that we should have had quotas, but they are here and they have a value. The only real answer is to trade them.

Lord Belstead

My Lords, like other noble Lords I am indebted to my noble friend Lord De La Warr, provided he does not successfully press the amendment. He has raised an interesting debate in which I have learnt things and to which I shall draw my right honourable friend's attention. Like the noble Lord, Lord John-Mackie, 1 feel that perhaps he was referring to the quota system as he wished that it should have been. Although he made many valid points, as my noble friend Lord Massereene said, it is now a little late for that.

Let me briefly put the Government's view by saying a word about the quota system as we have it. The first point to bear in mind—which, with great respect, I think my noble friend Lord Burton wished to sweep aside—is that this was not a bright idea of the British Government but was something to try to solve a desperate problem of overproduction of milk in Europe, which was and still is costing individual taxpayers enormous sums. The council passed a regulation, amending Regulation No. 804/68, which says that it is all about curbing the increase in milk production while at the same time permitting the structural developments and adjustments which are required. The Ministers in Europe had two things in mind. The first was to try to curb the rapid expansion in the milk sector. The council also recognised the danger of any quota system—ossification of the industry at an arbitrary point in time—and so it specifically recognised the need for development.

The regulation that it produced makes it clear that the quota is allocated to the producer. But at the same time the regulation also made it clear that the quota is tied to the land. That summarises the essential tension in a difficult situation. The quota is tied to the land, thus giving the landlord a definite interest in its future, but it is assigned to the producer; and in that context it may be helpful to regard the quota in a similar light to a licence. It allows a producer to sell a certain amount of milk without attracting the levy while he retains occupancy of the land. In those circumstances it is difficult to say that the quota belongs to anybody at all. That is why the Government find it difficult to agree with anyone who may suggest that the clause and the schedule in the Bill have the effect of giving ownership of quota to the producers, so breaking the link with the land.

Were there no link with the land there would be no need for compensation to the tenant. The tenant would be able to take the quota away with him or sell it, in which case there would be an argument for the tenant compensating the landlord. But as it is our aim has been to try to provide some form of recompense to tenants who have worked, sometimes for a whole lifetime, to build up milk production on the holding and who cannot at present realise any value from the asset which they have helped to create. I was so glad that the noble Lord, Lord Mackie of Benshie, who I have also agreed with earlier today, brought that point out with absolute clarity.

I realise that my noble friend Lord De La Warr is highly suspicious and critical of the whole idea of the thing being an asset. I understand when your Lordships deprecate the fact that it is an asset which is inevitably being created. But we have to face the fact that there is now a Community precedent for the compensation of tenants, and indeed landlords, for the loss of quota. The Community milk outgoers scheme clearly provides that it is for the tenant to determine whether he wishes to enter the scheme. It also recognises that both landlord and tenant have an interest in the quota and provides that both may share in the compensation in the event of the surrender of the quota scheme.

I agree with my noble friend Lord Onslow, who twice this evening has said what a great pity it is that we cannot have a sensibly tradeable asset if we have to have quotas. All I can say is that the Government, more or less urged on by the entire industry, have sought consistently to achieve greater mobility of quota. Without such mobility, the dairy industry cannot develop efficiently within the constraints of the quota system. We have managed to introduce leasing. We shall keep up the pressure on the Commission to see whether we can get a better system.

The impression from listening to my noble friends Lord Burton and Lord De La Warr was that if only we had a system where at least we could take quota out, put it in a pool and reallocate it, things might be pretty good. That is what the Danes are said to be doing. I understand that they have been making a habit of confiscating unused quota. But the European Commission has made it absolutely clear that that is not in accordance with Community rules. Quota, once granted, cannot be withdrawn exept where Community rules make explicit provision. Denmark is the only member state operating in that way, and Denmark will have to answer if the Commission takes action.

My noble friend Lord Burton said that we were storing up trouble which no other country had. I wish that I could agree with him but, with respect, I understand that the problems over which we have been agonising in the past half hour have been occupying the minds of those involved in the industry in France, in Ireland and in Germany.

I repeat that the Government are genuinely indebted to my noble friend. It is not the first time that I have been involved in debates with him on matters which are absolutely fundamental. He initiates such debates, which is exactly what the House is about. But, seriously, I beg him not to press this amendment. If he did, I think it would be looked upon with deep resentment by the tenants of this country, who feel that at least the Government, with the help of your Lordships, reluctant though I know it has been, have tried in a difficult situation to feel their way through to a fair solution which will recognise that the tenant, just once—it is a once-and-for-all payment—is able, when he either moves or retires, to take some value of the quota which in many cases he may have spent the whole of his lifetime working up for the good of the holding. That is all that I can say on behalf of the Government, except once again quite genuinely to thank my noble friend for moving this difficult amendment.

Earl De La Warr

My Lords, I am most grateful to my noble friend. In the past few minutes he has tempted me very much. I am a tenant. I am the tenant of my six year-old grandson. I spend a lot of my time resenting every penny that I pay to the little blighter. That is the first point.

Perhaps I may just refer to three points that have been made, two by my noble friend. He talked about the precedent created on compensation. There are two very different types of compensation, and one is compensation to an outgoing tenant where there is no removal of milk from the system. We all know that we are still producing too much milk. The other compensation is used to induce milk to leave the system. I want to draw my noble friend's attention to that. Allied to that is what he said about the encouragement of mobility. That is the one matter that alarms me. To avoid ossification we have gone for mobility and thus done what we can to keep up the level when we know that demand is going down. That was central to my argument.

The third point is that the noble Lord, Lord John-Mackie, said that we are too late. He may be right. Maybe we are in many ways too late, but at least this has served notice, and the noble Lord, Lord John-Mackie has assisted in this, on the Government that we may be on a dangerous path. During the next two years when we come up to the review we should be looking at whether we should change the system to bring supply and demand more in line with each other.

I hope that what has been said not only by me but by other noble Lords will be taken on board by the Government and that they will watch carefully to see that they do not become too entrenched. That is why I sought to link what I had to say with this clause, because it seemed to me that by using primary legislation the Government were becoming too entrenched.

I am sorry that the noble Lord, Lord Mackie of Benshie, thinks that my arguments were simplistic. I shall try to do better next time. I shall not cease, and I hope that other noble Lords will follow me, to watch what is happening to the demand and supply of milk and the quota system. I am much more interested in that than in the squabble between landlord and tenant. That is not fundamental. I hope that my noble friend will not think that I am lecturing him and, having said that, I think that I can safely take the view that I have served my purpose by bringing these matters to your Lordships' attention. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Skelmersdale

My Lords, I hope that your Lordships will feel that we have reached a suitable break point in the consideration of milk. I suggest therefore that we do not return to this matter before 8.35 p.m. I beg to move.

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