Lords Sitting of 16 June 1986

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Truro.

National Parks: Roads Policy
Baroness Nicol: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what instructions have been issued to the Department of Transport regarding the construction or upgrading of roads in national parks following the controversy over the Okehampton Bypass.
The Parliamentary Under-Secretary of State, Department of Transport (The Earl of Caithness): My Lords, no new instructions have been issued. The policy on roads in national parks remains as stated in the Department of the Environment Circular 4/76.
Baroness Nicol: My Lords, I thank the Minister for that reply. Does not the Minister recall that one of the great difficulties during the Okehampton controversy was the worry about delay because the Ministry had gone ahead with working up that road and had not worked up alternatives? Does not the Minister consider that clearer instructions should be issued about roads in national parks to prevent the same thing happening again?
The Earl of Caithness: My Lords, I recall many matters during our discussions on Okehampton, and I understand that the policy followed on this occasion was similar to that on previous occasions.
Baroness Nicol: My Lords, I am sorry to press the Minister further, but there is a very strong rumour circulating at the moment that the CBI is trying to revive the motorway through the Peak District. Does the Minister know whether that is so? Is he able to confirm whether the department is working on that at the moment?
The Earl of Caithness: My Lords, there are two schemes in the national roads programme which will affect national parks. There are also two schemes in the regional programmes which will affect national parks. If the noble Baroness would like to be more specific I may be able to help on the one to which she refers.
Baroness Nicol: My Lords, it is the motorway between Manchester and Sheffield; I think it is called the Longdendale Road. It is a road which has been rejected in the past, but the rumour that it is to be revived is strong. Can the Minister give an answer in that respect?
The Earl of Caithness: My Lords, it does not appear on my briefing, so perhaps the noble Baroness will allow me to write to her on that matter.
Lord Underhill: My Lords, I think the noble Earl referred to four schemes in all. Will he write to my noble friend, and to others of us who are concerned with this matter, giving details of the four schemes?
The Earl of Caithness: My Lords, I can help the House. The four schemes are the A.65, Gargrave Bypass, where no objections were received on public consultation, and the A.590 High and Low Newton Bypass, where the villages lie within several miles of the Lake District National Park. The two regional schemes are the A.6 Taddington Dale improvement and the A.68 White Lee improvement.

Parking Facilities and Taxation
2.38 p.m.
Lord Bruce of Donington: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware that the Inland Revenue are seeking to tax as "benefits", in the hands of employees, car-parking facilities at their place of work provided by their employers and, if so, what action they propose to take.
Lord Brabazon of Tara: My Lords, the taxation of benefits arising from car-parking facilities is not a new feature of the tax system. The Government propose no changes in this respect.
Lord Bruce of Donington: My Lords, is the noble Lord aware that this particular development is a new departure from the tax system and that over the past few months PAYE audit teams touring the country have been making serious suggestions that this should be the case? Is the noble Lord further aware that the provision of car-parking facilities, which technically are classed as benefits under the taxing statutes, can be divided into four categories? The first is where a cash voucher is given to the employee; the second arises from card admission to a car park; and the third arises from the provision of car-park facilities on the premises of the employer concerned.
Even that can be divided into two. The first is reserved spaces and the second is the free-for-all spaces. If the noble Lord insists that car-parking facilities should be included in the taxable income of employees, will he at least ensure that it is done on a completely equitable basis? In the meantime, I ask the Government: how mean can you get?
Lord Brabazon of Tara: My Lords, no meaner than the Government in either 1948 or 1976, because those were the two years in which these particular provisions came into effect. The noble Lord asked particularly about vouchers. The scheme in that respect was introduced in 1976.

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I have to say that where the car park is owned or leased by the employer as part of his premises and no vouchers are involved, only directors and higher paid employees are taxed on the benefit. The measure of the benefit is the annual value of the space—either the rent paid by the employer or, where the land is owned, its rateable value. Therefore in most cases the annual value is negligible and any benefit would be de minimis and would not be charged.
On another point, if spaces or garages are rented off the premises from a commercial firm the cost would be taxed, as obviously it would be fair to do so.
Lord Bruce of Donington: My Lords, is the noble Lord aware that although the provisions in the taxing statutes giving rise to the taxation of benefits have been in existence, as he says, for a long time, the choice to include the benefits of car parking is a recent move altogether and previous governments have not sought to do that?
Lord Erroll of Hale: My Lords—
Lord Brabazon of Tara: My Lords, perhaps I may first answer the point raised by the noble Lord, Lord Bruce of Donington. It would be taxed as a benefit in kind and added in with all the other benefits in kind. However, as I have said, in most cases it is extremely unlikely that the annual value is sufficient for the tax to be worth collecting.
Lord Erroll of Hale: My Lords, is it not refreshing to find the noble Lord, Lord Bruce of Donington, speaking up in favour of the higher rate taxpayer?
Lord Brabazon of Tara: My Lords, I do not think that there is anything I can say to that.
Lord Williams of Elvel: My Lords, is the noble Lord aware that expenses of an individual travelling to work by car are not deductible and expenses of an individual travelling to work by rail are not deductible, but expenses of an individual travelling to work by aeroplane or helicopter are deductible? Does he have any comment to make on that?
Lord Brabazon of Tara: My Lords, I was not aware of it. I am most interested in what the noble Lord, Lord Williams of Elvel, has said, but I think it goes slightly wide of the Question on the Order Paper.

Tourism-Related Employment
2.44 p.m.
Lord Campbell of Croy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their view on the conflicting conclusions about the extent to which the tourism and leisure industries are increasing employment in the United Kingdom reached by authoritative bodies in recent reports.
The Minister of State for Defence Procurement (Lord Trefgarne): My Lords, the Government are in no doubt that tourism-related employment has risen substantially in recent years. For example, upwards of 100,000 additional jobs were created between June 1983 and June 1985 in the main industries in this field. The divergence of views on this matter probably stems from the different bases on which employment in tourism are assessed.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for his reply. Is he aware that the principal bodies who appear to be at odds on this matter are the English Tourist Board and the University of Surrey? Can the reason be that assessments have overlooked the self-catering part of the industry? In their own estimates, will the Government ensure that this important part of the industry is taken into account, particularly its expansion and future potential?
Lord Trefgarne: Yes, my Lords, my noble friend is quite right to point to the importance of that particular part of the tourism industry. As I said in my main Answer, different people work out their figures in a different way; and I am sure that is the reason why, they reach different answers.
Lord Campbell of Croy: My Lords, did my noble friend notice the statement by the English Tourist Board that 20,000 new jobs could be created if the licensing laws in England and Wales were to be rationalised? They have no doubt observed the enlightened way in which this has already been done in Scotland.
Lord Trefgarne: My Lords, despite the fact that no change has recently been made in those arrangements, nonetheless over a recent period 8,000 jobs were additionally found in public houses and bars.
Lord Elwyn-Jones: My Lords, is the noble Lord aware that there would be great trouble in Wales? If all the pubs were allowed to open on Sundays it would be a disaster.
Lord Trefgarne: My Lords, I bow to the noble and learned Lord's greater experience.

Customs Baggage Checks: Charges
2.46 p.m.
Lord Kennet: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will take the initiative to obtain an international convention against charging travellers for having their bags opened by the customs.
Lord Brabazon of Tara: My Lords, Her Majesty's Government have no such intention.
Lord Kennet: My Lords, while that Answer can only be very welcome, can the Government go further and

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actually answer the question whether their view of the world is such that it would be a good thing to have an international convention against any government doing this? Once any government start—and there is one government which intend to start, so we read in the press—there will be a tendency for it to spread.
Lord Brabazon of Tara: My Lords, the noble Lord presumably refers to the United States, where they are proposing to do this. I must say that we are looking into the question to see whether it is an infringement of the GATT agreement; and so is the EC, which has some reservations about these proposed charges. This Government have no plans to introduce such charges.

Business
2.47 p.m.
Lord Denham: My Lords, it may be for the convenience of the House if I announce that the Committee stage of the Agriculture Bill will be adjourned at approximately 7 p.m. for approximately one hour and that during this adjournment the Second Reading of the Road Traffic Regulation (Parking) Bill and the Report stage of the Housing (Multiple Occupation) Bill will be taken.

Criminal Justice (Amendment) Bill [H.L.]
Lord Silkin of Dulwich: My Lords, I beg to introduce a Bill to amend Sections 1(4) and 2(4) of the Criminal Justice Act 1982, and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Silkin of Dulwich.)
On Question, Bill read a first time, and to be printed.

Social Security Bill
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it be an instruction to the Committee of the Whole House to whom the Social Security Bill has been committed that they consider the Bill in the following order—

Clauses 1 and 2,

Schedule 1,

Clauses 3 to 6,

Schedule 2,

Clauses 7 to 37,

Schedule 3,

Clauses 38 to 47,

Schedule 4,

Clauses 48 to 50,

Schedule 5,

Clauses 51 to 64,

Schedule 6,

Clauses 65 to 70,

Schedule 7,

Clauses 71 and 72,

Schedule 8,

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Clauses 73 to 78,

Schedule 9,

Clauses 79 to 82,

Schedules 10 and 11,

>Clauses 83 to 86.—(Baroness Trumpington.)
On Question, Motion agreed to.

Parliamentary Constituencies Bill [H.L.]
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I rise to move that this Bill be now read a second time.
It is pure consolidation, consisting of the House of Commons (Redistribution of Seats) Acts 1949 to 1979 and certain related enactments concerning provisions related to parliamentary constituencies described in Orders in Council, and the provision of permanent machinery for reviewing and effecting changes in constituencies. If your Lordships give this Bill a Second Reading, it will in the usual way be referred to the Joint Committee on Consolidation Bills. I beg to move.
Moved, That the Bill be now read a second time.—(The Lord Chancellor.)
On Question, Bill read a second time and referred to the Joint Committee on Consolidation Bills.

Corneal Tissue Bill
Read a third time, and passed.
British Shipbuilders (Borrowing Powers) Bill
Read a third time, and passed.
Horticultural Produce Bill
Read a third time, and passed.

Agriculture Bill
2.51 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Belstead.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Lord Belstead: Before my noble friend Lord Middleton moves Amendment No. 26, let me say that I wish to suggest that consideration of two government amendments be postponed to places later than those shown on the Second Marshalled List, which has been prepared for us today. That is because I think it would be convenient for the Committee to consider milk quotas in England and Wales before those in Scotland.

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I apprehend that most of the debate on the first amendment will be on milk quotas in England and Wales, and perhaps it would lead to a logical train of thought if we kept to that.
If the Committee agrees—and this would have been more or less the sequence of events had we kept to the Marshalled List of last Thursday—it will mean that Amendment No. 40, a new clause concerning milk quotas in Scotland, will be debated immediately before Amendment No. 41, on page 17 of the Second Marshalled List, and Amendment No. 39, a new schedule which depends on the new clause, Amendment No. 40, will come after Amendment No. 75.
Lord John-Mackie: The noble Lord has spoken to me about this. We are perfectly agreeable to this suggestion, and I think that it is sensible.
Clause 11 [Compensation to outgoing tenants for milk quota]:
Lord Middleton Lord Middleton moved Amendment No. 26:
Leave out Clause 11 and insert the following new clause:
("Compensation for milk quota
( ) After subsection 70(1) of the Agricultural Holdings Act 1986 (Compensation for special system of farming) there shall be inserted the following subsections—
"(1A) Where the adoption by the tenant of an agricultural holding (or by an assignor of the tenancy to the tenant where the assignment occurred after 2nd April 1984) of a system of dairy farming has increased the value of the holding as a holding, having regard to the character and situation of the holding and the average requirements of tenants reasonably skilled in husbandry, by reason of the amount of milk quota allocated to him and registered as his in relation to the holding, the tenant shall be entitled on quitting the holding on the termination of the tenancy, to obtain from the landlord compensation of an amount equal to the increase.
(1B) Where by virtue of a transaction the cost of which was borne wholly or partly by the tenant of the holding (or by an assignor of the tenancy to the tenant where the assignment occurred after 2nd April 1984) some or all of the milk quota allocated to the tenant and registered as his in relation to the holding was obtained by the tenant, the tenant shall be entitled on quitting the holding on the termination of the tenancy, to obtain from the landlord compensation in respect of the milk quota so obtained equal to the increase in the value of the holding as a holding attributable to such milk quota.
(1C) Subsections (2)(b) and (3) of this section (a record of condition to be a condition precedent for compensation) shall not apply to compensation provided for by subsections (1A) and (1B)."
( ) At the end of section 70(4) of the Agricultural Holdings Act 1986 there shall be inserted the words "or milk quota".")
The noble Lord said: We now come to the clause which provides for compensation to an outgoing farm tenant who leaves on the farm a quota for the production of milk. I think that the Committee should examine this clause and Schedule 1 carefully for three reasons. The first is that this clause was not scrutinised in Committee in another place. The reason for that is that the proposal to compensate for milk quotas caused division and dissension within the industry, and the Minister spent several months trying to reach agreement on how to do it. He did not get agreement. This clause and its schedule were introduced at the final stage of the Bill's passage through the Commons.
Surely it was to his credit that the Minister of Agriculture tried so hard to find an acceptable solution. But if there are Members of the Committee who wonder whether it is worth while causing alarm and despondency and upsetting so many farmers and so many organisations for a measure that is peripheral to the real and urgent problems of agriculture in the community, they may be forgiven. This clause will do nothing to curb over-production of milk, and nor will it remove one ounce from any butter mountain.
The second reason is that I think we should be wary of legislation that might affect adversely our landlord and tenant system in agriculture. The lessons of 1976 were learnt the hard way. We laboured for many long hours both in and out of your Lordships' House over the Agricultural Holdings Act 1984, which was designed to limit the damage of the 1976 legislation, and no one knows that better than my noble friend Lord Belstead and I. The benefits of the landlord and tenant system, especially for young entrants into the industry, were clearly spelt out in a report by the noble Lord, Lord Northfield, which was commissioned by the Labour Government and published in 1979. The system is a tender plant, and it is a valuable one. It is in decline. There are those who say that this controversial decision will damage it yet further.
The third reason why I think that we should give this matter particular attention is that we may well see—and I should deplore it—quotas introduced by the European Commission for other commodities; wheat, for instance. The way that we legislate, if we have to, for tenants' compensation for milk quotas must set a pattern. If it is the wrong pattern we shall regret it; the industry will be torn by yet more wrangling.
Clause 11 and Schedule 1 were criticised on all sides of your Lordships' House at Second Reading. Indeed, not one noble Lord who followed my noble friend Lord Belstead in his introduction had anything good to say about it at all. The chief criticism of Schedule 1 was its complexity. In trying to produce a formula that would cover all cases, when every farm and every dairy business is different and when the respective inputs of landlord and tenant are infinitely variable, the Government have given us an 11-page schedule which is exceedingly difficult to understand. If the Committee were to approve Amendment No. 39, which would introduce a formula appropriate to Scotland, that would add another 11 pages for the lawyers and the valuers to sort out at the farmers' expense.
It is doubtful, too, whether the compensation sums that would emerge after applying that formula would be fair. Certainly the NFU did not think so. In its Second Reading brief to peers, a copy of which I received, it said:
"Schedule 1 would lead to some very illogical and inequitable results".
I have to say that the amendment of my noble friend Lord Stanley, Amendment No. 31, would in my view exacerbate the situation. I have seen calculations where quite small variations in the figures that are fed in at one end produce huge variations in the tenant's share of the farm quota at the other end—sums ranging from 20 per cent. to 60 per cent. as being the

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tenant's percentage where the size of the herd has been constant.
The Government have gone to immense trouble to try to produce a system acceptable to the farming industry and the professions, but they seem to have satisfied no one. The NFU wants to change it; the CLA is deeply unhappy; the Scottish Landowners Federation is incensed; and even the Royal Institution of Chartered Surveyors, which did a lot of work on producing the formula, does not think that the Government have it right. The Milk Marketing Board, in its brief to peers, says:
"The mechanism proposed is complicated and is in our view incapable of providing outgoing tenants with a fair deal".
I have just received a recent brief from the board which shows that it does not particularly like my solution, and nor does it like the Government's. Perhaps it is still sorting out its ideas.
The chairman of the Royal Association of British Dairy Farmers has written to the farming press a letter, part of which I shall quote because it sums up well the difficulty which we are in and why I am attempting by these amendments to solve it. The chairman states:
"The Royal Association of British Dairy Farmers believes most strongly that ministerial legislation based on percentages is neither necessary not desirable. It can only lead to extreme unfairness to one side or the other. Milk producers, whether landowners or tenants, having suffered two years of uncertainty and bewilderment following the imposition of milk quotas are deeply concerned as to where matters now stand. Tenant producers are embittered because impending legislation would appear to be bad news for them. From the many calls from members it has become clear that most are tired of and disgruntled at the never ending problems relating to quotas. Indecision and arguing must cease and common sense prevail … Practically every case relating to quota rights is different. If any agreement is to be achieved, it must be decided between landlords and tenants themselves or their respective agents and based on tenant right. If they cannot agree, the matter should go to arbitration".
That is what my amendment seeks to do. We start from what I believe is common ground: first, that a milk quota is attached to the land, and, secondly, that where a tenant by virtue of his hard work, efficiency and investment leaves a farm with a milk quota such that it has enhanced the value of the holding, he should be compensated.
From that base—what I call a common base—the Government have pursued a road which in my view ignores two important guidelines which were laid down in the old 1948 legislation and which have so well stood the test of time. The first is that any outgoing tenant should be compensated according to statutory provision, which is based on a sound principle of compensation, and, secondly that provision should be readily comprehensible. Schedule 1 is neither.
If we are to provide for end-of-tenancy compensation for milk quotas, it must be in a way that has regard to the well-established compensation provisions which were laid down in the Agricultural Holdings Act 1948. The provision must be laid down in a way which is simple to understand and operate. It will give much more scope for valuers to exercise and apply their deep knowledge of farming conditions and values in their own localities. In seeking how to achieve that my mind went back to Section 56 of the
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1948 Act which is now Section 70 of the consolidated Agricultural Holdings Act 1986. That section provides for compensation to the outgoing tenant where he has adopted a special system of farming beneficial to the holding. The measure of compensation under Section 70 is an amount equal to the increase in the value of the holding due to the tenant's system for farming. That is the same measure of compensation as for a tenant's long-term improvements.
Amendment No. 26 uses Section 70 and adds into it a provision for compensation to a tenant who has carried on a system of dairy farming which has increased the value of the holding by reason of the amount of milk quota he leaves attached to the holding. My amendment is less stringent—I should like to emphasise this—than the high farming Section 70(1). That high farming provision limited compensation to where a tenant has either adopted a farming system more beneficial to the holding than is required by his tenancy agreement or more beneficial than systems normally practised. The high farming compensation could be made only to the exceptional tenant.
The new subsection in my amendment says merely that the tenant,
"has increased the value of the holding as a holding, having regard to the character and situation of the holding and the average requirements of tenants reasonably skilled in husbandry".
That increase is due to the quantity of milk quota that he leaves behind him.
My amendment also caters for the tenant who has bought some or all of the milk quota that he leaves behind. It excludes the requirement for a record of condition which applied to compensation for high farming because that would be inappropriate to a claim for milk quota.
Finally, Amendment No. 26 brings milk quota into the subsection of Section 70 which excludes double compensation for improvements, and arbitration is then provided for by Section 83.
I shall say just a word about improvements because that has worried people. Where a tenant has carried out improvements such as putting up a cattle shed he will be compensated under the usual provisions of the 1986 Act. Where, however, the tenant right value of the improvement has been written off by a form of agreement between landlord and tenant—that is common—the fact that the tenant's buildings or improvements are on the holding, and have contributed to the size of the milk quota, will be taken into account in assessing the increased value of the holding.
The amendment removes Schedule 1 lock, stock and barrel, and it deals with milk quota in the same way that end-of-tenancy compensation has always been dealt with. As I have said, the measure of compensation due to the outgoing tenant will be an amount equal to the increase in the value of the holding. It will be up to the respective parties' valuers to assess that value. That is what they are trained to do. I thought that it was extremely important to ensure that the professions could work the system in practice. I am told that the new clause would be workable by valuers, and so with that knowledge I beg to move that

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this very much simpler measure of compensation be adopted.
Lord Walston: I put my name in support of the amendment moved by the noble Lord, Lord Middleton, not because I thought it was the final answer to this complicated question but because it gives the Committee an opportunity to discuss still further something which is of great importance. I put my name to the amendment also because it appeared to me to be a great improvement—I admit that that is faint praise—on the wording of the Bill as it was presented to us on Second Reading when, as the noble Lord, Lord Middleton, rightly reminded us, not one noble Lord other than the Minister spoke in favour of the clause.
It is a complex matter and one to which I have given a great deal of thought, as I am sure have many Members of the Committee. The difficulty arises because of the imposition or introduction by Brussels of quotas for milk production. It is worth reminding ourselves that this is an indication of the complexities which follow when actions such as the milk quota are taken. I hope that it will be a lesson and a warning to those who advocate future individual farm quotas. I stress "individual" because that is a different matter from the global or national quantum which we have discussed on many occasions.
We have heard a great deal about milk quotas. Most of the comments have been adverse. The ones we heard originally were those of aggrieved farmers whose quota was lower than they thought it should have been. We now have a position where the quota has created a value for those fortunate enough to own one in the same way as in the old days the hop quota created an artificial supplementary value for land on which one was entitled to grow hops.
The question we now have to decide is how that extra value, whether we think it justified or not, should be divided as between landlord and tenant. To my mind, neither of them has any right to it. Neither has done anything to create that value. It is a gift, not from God but from Brussels. It should perhaps in equity be returned to Brussels or returned to some other good cause. But that is clearly not very practical. Therefore in principle it seems to me right, as neither of them has done anything to create this basic quota, that it should be divided equally between them—a form of judgment of Solomon, if you like.
In default of any other argument, the value arising as a result of the quota that belongs to the farm, the farmer, the landlord—whichever way you like to put it—should be divided equally at the end of the tenancy between the farmer and the landlord. It is then open to either of those two parties to put forward a case claiming that the quota is larger than it would otherwise have been from some particular action that they themselves have carried out—by the landlord in terms of buildings, irrigation and drainage and by the tenant through good farming, improved grassland or various other things that the tenant may have done.
Those matters can be argued out by the valuer. This amendment at least lays the groundwork for that type of arbitration. What it does not do and what I am suggesting might well be incorporated at a later stage is
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that, in default of any such arguments and decisions about the extra value that has accrued, the division should simply be down the middle, with half to the landlord and half to the tenant. Thereafter the argument takes place, as outlined in the amendment, on how much of the extra value that has been created should go to the landlord and how much should go to the tenant.
I hope that the Minister will be able to say that this is something he is prepared to consider and that we can return to it at Report stage. I do not pretend—I repeat this—that the amendment is the last word in solving the problem. It is only the first step towards it. I suggest, however, with the greatest respect, that it is a considerable improvement on the Government's enormously complex scheme and even, I am sorry to say, on the scheme of the noble Lord, Lord Stanley, which, while not being quite so lengthy, still carries with it a fair degree of complexity.
3.15 p.m.
Lord Stanley of Alderley: I can agree with my noble friend Lord Middleton in his opening remarks that we need to give this matter some considerable thought. But that is where any agreement with my noble friend ends. If my noble friend on the Front Bench believes that he can pick up the sword of Solomon and cut the baby in half between us, I feel so strongly against my noble friend's amendment that I shall let him cut the baby. There is one point on which I would agree with my noble friend Lord Middleton. It is that his method of dealing with milk quotas appears simpler than Schedule 1—simpler for the landlord but simply horrendous for the tenant. I shall explain why within, I hope, two minutes.
This amendment requires a tenant to have achieved a certain level of quota on his holding, a level that a tenant reasonably skilled in husbandry should have achieved. Unless a tenant achieves that level, he will get no compensation at all for that part of the quota. In effect, the vast majority of tenants, who are reasonably skilled in husbandry and who would not be in the job if they were not, because they would have gone broke, will get absolutely nothing from my noble friend's amendment. Only those who are exceptional will receive any compensation at all. They will get very little indeed, as I shall show in a moment by giving some figures. Believe it or not, they will get far less than even the Government's Schedule 1 gives them. My noble friend Lord Belstead knows that tenants, the National Farmers' Union, the Tenant Farmers' Association and the Milk Marketing Board consider his amendment to be well under par, if I may put it that way.
I shall put figures to my noble friend's amendment to show how the value of quota might be apportioned between landlord and tenant compared to the Government's Schedule 1. I shall use the same method as that produced by the Milk Marketing Board, which in a brief that most Members of the Committee will have received criticised the Government's Schedule 1 as being unfair to producers. Assuming that the Minister prescribes 4,500 litres as standard yield per cow—that is, incidentally, in my terms, 1,000 gallons, which is quite a high yield, or was so in my day—the proportion of that quota available for the great

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majority of tenants will follow the pattern that I now give.
A tenant producing 4,500 litres having 10 per cent. of rental value gets 10 per cent. in the Government's scheme. He gets nil under my noble friend's scheme. A tenant who had 20 per cent. of the rental value would get 20 per cent. under the Government's scheme. Believe it or not, he gets nil under my noble friend's scheme. If the tenant was an exceptional producer and had a yield of 5,500 litres, his proportion under the Government's scheme would move up to 26 per cent. and 35 per cent. respectively. Under my noble friend's amendment, he might get a measly 18 per cent.
The figures on different yields are in similar proportion to those in my example. The exceptional tenant who produces, say, over 6,500 litres gets up to 31 per cent. in my noble friend's scheme whereas under the Government's scheme, which I complain about as measly, he would get 58 per cent. There are not many tenants producing an average yield of 6,500 litres. I am not sure that we want them to do so because we have, I believe, a surplus. But maybe I am wrong. I hope that I have explained one reason why this amendment seems to me to be a terrible one; as it does to the National Farmers' Union, the Milk Marketing Board and, believe it or not, the Tenant Farmers' Association, as well as to any producer or tenant or any Member of the Committee who considers that the tenant should be fairly treated. I would remind the Committee that there was not one single voice at Second Reading against fair compensation for the tenant. I include in that remark my noble friend Lord Middleton and, of course, my noble friend Lord Belstead.
I hope that I have made clear beyond any shadow of doubt that I am totally, completely and utterly against my noble friend's method. It is totally unacceptable not just to me but to all organisations putting forward the tenant's case. I have to tell my noble friend Lord Belstead that much as I always want to give him the chance to show his well-known expertise for compromise and his great skill—I say this with great feeling—in getting parties together, I can give him nothing. I can only remind my noble friend of the statement made during the Agricultural Holdings Bill when he turned down an amendment proposed by my late kinsman Lord Howard, I think it was, and said that if he accepted the amendment the noble Lord, Lord John-Mackie, the noble Lord, Lord Mackie of Benshie, and his noble friend would go through the roof. I do not know what state of elevation the noble brothers Mackie are in at the moment. I can assure the Committee that I am bumping against the ceiling. This time, there is not even a wooden partition; so I am that much higher.
I was going to say some fairly unpleasant things to the noble Lord, Lord Walston. But I was absolutely staggered when he brought up the scheme. I would say to him that if he is looking for a 50–50 split, I shall support him. I would remind him that this amendment was put forward in another place, was divided on and, sadly, was defeated. I hope that I have made it crystal clear that any one of your Lordships who supports this amendment will get the kiss of death so far as giving a fair deal to tenants is concerned.
Lord Mackie of Benshie: I was originally very attracted by the thought of simple arbitration. I must be a little kinder to the noble Lord, Lord Middleton, than his noble friends are. He has done a tremendous amount of work on this, and basically the idea is infinitely preferable to the 12 pages—or is it 16?—of amendments between the two countries which are difficult to understand, though, like the curate's egg, I understand them in part.
However, the snag about the amendment of the noble Lord, Lord Middleton, is that it lays down that compensation will be based on the average farmer's skill in production. Where did this manna from heaven come from? It came from the EC. But it was not manna for the people who were producing the milk; it was a bitter blow to the farmers. Many of them had invested a lot of money. Many of them were in debt and suddenly their production was cut back against rising expenditure. It hit an enormous number of milk producers extraordinarily badly. The extraordinary thing was that the landlord—who was not hit at all, who still had his rent—suddenly found that against a falling market the value of dairy farms with their quota rose by a considerable amount. It was an extraordinary phenomenon. The chap who produced the milk was hit badly; the landlord suddenly found the value of the farm rising.
When it comes to assessing where this manna from heaven should go noble Lords in this Chamber are agreed that there is obviously a case for sharing it. The Government have produced a very complex scheme which I think is very unfair. I think that the people who have been hit very hard are the tenants, and if we are looking at the raised value, they should get a very considerable share of it, to put it mildly. This amendment does not do that, unfortunately. The average farmer who has been dairying may well have put up buildings, but may well have a clause in his lease which says that no compensation will be paid for the buildings which he has put up. I know a considerable number of leases like that. That the manna from heaven should go almost entirely to the landlord I do not think is right. I do not think that is equitable. That is what this amendment in its present form proposes.
One then has the case—in, for instance, the west of Scotland, a traditional dairying area, with some good and rich landlords who have done up farms which are let as dairy farms—where the buildings are all provided. In that case the tenant has done little or nothing towards the quota and it might be quite right that he should get none of it. I would accept that. There is again no provision for this kind of situation in either the Government's scheme or this one. That is why I am afraid that I must be against this amendment. If it were differently based, it would be very much simpler. However, as the provision stands it must be wrong that the tenants, who have already been hard hit—with the average tenant producing the average amount of milk; and dairying is not a nice job, anyhow—should get nothing. Much as I sympathise and much as I admire the work that the noble Lord, Lord Middleton, has done, I must be against the amendment in its present form.
Lord Burton: I must declare an interest. I am a joint tenant of a large dairy farm in England. Last Tuesday I attended the Scottish Landowners' Federation Council—quite a large body with many farmers on it—and milk quotas were discussed. The council made a unanimous decision to oppose the proposals that landowners should pay tenants on waygoing what is currently a hypothetical sum for the quotas which cost the tenants nothing. Apart from anything else it is retrospective legislation for existing leases.
These amendments were inserted in the Bill at such a late stage that Members of another place had less than a week to consider the English and Welsh clause before Report and therefore no proper chance of consultation nor debate. They never even saw the Scottish proposals, which were received only last Thursday, giving us no chance whatsoever to have consultations. This is a typical example of the way that Scotland is treated, and we have been left on the sidelines all along while discussions have gone on in England on these amendments. Now at very short notice we are presented with a six page amendment—complicated, contentious and yet of extreme importance to agriculture. Today is the first day of the Royal Highland Show. The president of the Scottish Landowners' Federation, my noble friend the Duke of Atholl, has therefore no option but to be in Edinburgh. He wanted to speak on this. No doubt there will be other noble Lords from Scotland who will have prior engagements there. It has therefore fallen upon me to make the strongest possible protest against these proposals. We feel that this is no way to treat Parliament, agriculture, nor the large part of Britain called Scotland.
The Bill is not even now complete. We are to have an order to follow. I understand that it is a negative order which it will not be possible even to debate. Surely we should have an affirmative order on this very important matter. As a result we have no idea as to what the potential liabilities are to be, but for even small farms a landlord may well have to find £50,000 or more. I think that the noble Lord, Lord Mackie of Benshie, at Second Reading, suggested a sum of £54,000 for a 60-cow herd, which, after all, is not all that large a herd.
These amendments have been brought forward because it is contended that the milk quotas have a value as they can be bought, sold or leased. That is the case for an owner-occupier but not for the tenant farmer. The tenant could possibily lease his quota—and I understand that the Ministry of Agriculture is permitting this—but as it is attached to the land he would probably be contravening his lease by subletting. However, as it is attached to the land he clearly cannot sell as the land does not belong to him. How therefore can the quota be considered to have a value for the tenant? There has been a lot of talk about the tenant's hard work, but farming is hard work, and the Agricultural Holdings Acts make provisions that the farms let must be properly worked. Furthermore, these proposals are to give the tenant very large sums of money for something for which he had paid nothing. Furthermore, it is paying for something of a temporary nature which may cease to exist in a few years. What happens if there is a further cut in quotas, let alone the abolition of quotas?
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There is also the probability that if this legislation is passed, it could become a precedent for quotas on other commodities thereby raising the landlords' liabilities to what could be astronomical figures. In another place the Minister maintained that these payments would normally be passed on to an incoming tenant. Where is a young farmer to raise this money? If I were a bank manager, I would certainly refer to head office if a young man came to see me with this proposal; I would not make the decision. How could one possibly grant a loan to a tenant on a quota, knowing full well that the quota was not a saleable commodity? It is not a valid item to set against an overdraft. Is the Minister correct in saying that these payments would normally be passed on to a tenant? A farm with vacant possession could well fetch twice as much as a farm with a sitting tenant, and the owner could well wish to sell the farm if it became vacant.
I wonder whether we need to go on with this debate? What is now being proposed is not what stands under the existing Agriculture Act. I should have thought, in view of what I have already said, that the Government amendments should be withdrawn. If the Minister is not prepared to do so, then I must present him with more reasons which show why the Scottish Landowners' Federation is right, and that the Minister has been hoodwinked by the NFU and the Tenant Farmers' Association, some of the senior ranks of which are no doubt looking for lovely golden handshakes.
There will be cases where farms are not let as dairy farms but where the tenants with their freedom of cropping, have produced milk from them. The landlords may not feel that They are suitable units to produce milk, and they may well be right. Yet they will be obliged to pay for something which they do not want, and they may well have to pay very heavily.
There is considerable doubt as to whether a landlord could legally compel an incoming tenant to take over the quota. The new tenant may want some different type of farming and he may not want the quota. Will the Minister clarify whether or not quotas are to be classified as improvements under Parts I, II or III? Will they be like unexpired manures which the tenant is bound to take over? Will the improvements used to compile the tenant's fraction be those qualifying under the Agricultural Holdings Act, or will they be just any erections on the holding? If the latter, there could be substantial extra valuations required.
The whole concept of payments for quotas is unsound. I need scarcely tell my noble friend the Minister that the Government have no friends from the farming community over these proposals. Indeed, they have been attacked from all sides including several of their own party in another place. As my noble friend Lord Middleton said, not one voice was raised in favour of the Government's proposals in this House at Second Reading. The Government's idea is bad for British agriculture. I wonder how many dairy farmers are likely to retire each year? I understand that there are 37,000 producers in England and Wales, 40 per cent. of whom are tenants. There are more in Scotland, and there has been no mention of Northern Ireland.
However, assuming that there are 500 retirals at £50,000 each, it means that £50 million a year will go

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out of agriculture. On top of that, there will be very large legal and valuation fees to sort out the complicated mess. The Minister in another place confirmed that those payments would be subject to capital gains tax. Therefore, even the outgoing tenant will lose a large amount of what the landlord has paid him. I wonder whether VAT will also be due? A recent visit to my bank manager confirmed that agriculture in my part of the world can ill-afford to lose this type of money. He confirmed that overdrafts were very high—dangerously high—and he feared that many farmers were near bankruptcy.
However, perhaps the most damaging aspect of all is that landlords will think even more carefully before letting a farm. There are already many deterrents, such as the refusal of the Government to consider the management of tenanted land to be taxed as a business, and there is the threat of inherited tenancies. If this Sword of Damocles were also to hang over one as well, I think that one could say goodbye to tenant farming.
I am sure that when my noble friend has pondered these matters carefully he will withdraw the whole idea. If he cannot do so, then the orders needed to ascertain values must be published this week so that we shall know where we stand on Report. As I said earlier, we still do not know what we shall have to pay.
Regarding the amendment of my noble friend Lord Middleton, if the whole concept of payment for quotas is not wrong, then he has put forward an eminently sensible proposal. His proposal is simple, unlike that of the Government. His proposal is easily computed by a valuator, unlike the Government's proposal. It is not subject to dispute and legal difficulties, unlike the Government's proposal. It ties in with the existing principle reiterated by the Minister in another place who said that what tenants expect at the end of the tenancy is to be paid for improvements. Again, that is unlike the Government's proposal.
If the SLF did not disagree with the fundamental misconception in paying for quotas, then I could strongly recommend the Committee to accept the amendment. No doubt we shall return to this matter; but today I hope that the Committee will support my noble friend Lord Middleton.
Lord Mottistone: I should like to reduce this debate to a much simpler scale and to talk about the simple individual case of a friend of mine who is a tenant farmer on the Isle of Wight. I understand that in England and Wales—I do not know about Scotland—about half the dairy farmers are tenant farmers. There is no doubt that both the Bill as it stands at present and the amendment of my noble friend Lord Middleton will be extremely harmful to my friend. To use the words of the Milk Marketing Board:
"He provided a whole dairy unit in a green field site".
In the 12 years before what he calls quota day he increased the output of his farm by four and a half times what it was previously. If the noble Lord, Lord Walston, thinks that his share should be equal to that of the landlord who put nothing into the improvements at all—which is the sense of what I thought the noble Lord was saying—then in my view
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that is quite wrong. It is not for me to go into the detail—
Lord Walston: Perhaps I may put the noble Lord right. I said that if there were no arguments in favour of one side or the other, there should be a 50–50 division. However, if, for instance—as in this case—the tenant could come up with strong arguments showing how much he had increased the quota, then that should be taken into account by the valuer.
Lord Mottistone: As I understand it, the amendment of my noble friend Lord Middleton does not put that right. Therefore, without going into the detail which noble Lords far more expert than I may do, I shall leave the Committee with three particular thoughts.
First, the Bill as it stands does not provide a fair return for tenant farmers such as, for example, my friend and many others. Indeed, that is made particularly clear by the Milk Marketing Board's advice which we all seem to have received. Secondly, matters are made worse by the amendment of my noble friend Lord Middleton which is biased entirely towards the landlord; and no doubt that is why it is welcomed by my noble friend Lord Burton. Thirdly, the amendment which is proposed by the Minister does not sufficiently improve the situation. The amendment, to which I shall be giving my support if all else fails, has been put forward by my noble friend Lord Stanley, and in my view it is the best on the carpet at present, but it is still not good enough. I hope to have the opportunity to speak more on that matter as the various amendments come up.
Lord Burton: Before my noble friend sits down, will he please say how the value has been increased? Under this arrangement the tenant cannot get any value for the quota except when he goes out. At the moment he cannot sell that quota. The quota has no cash value to the tenant even if he went in on a green field site.
Lord Mottistone: As I understand it, the quota is at its present level because of the enormous amount of money and effort which my friend, as the tenant, has put into the farm over some 12 years in order to increase the dairy output of that particular acreage by four and a half times before what he calls quota day. That is a tremendous contribution for which in the long term he should receive some kind of recompense.
The Earl of Onslow: Is it not also true that the landlord could sell the quota over the tenant's head? Quotas are worth a lot of money. They could be sold just like that and the tenant would be landed with a great many cows, a milking parlour and no quota.
Lord Monk Bretton: I should like to say something in support of the amendment put forward by my noble friend. I am very glad that he has tabled it and that the noble Lord, Lord Walston, has supported it. It will not suit everyone; but the tragedy of this business is that in fact it can suit nobody because what we are really talking about is the division of a loss, and nothing else. There is a great deal of talk about windfall profits here

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and windfall profits there because of quotas; but we are really talking about the division of a loss.
The reason why I am anxious to say something in support of the amendment is that I prefer the tailor-made approach. Circumstances alter cases, and the circumstances of every dairy farm are different. There are going to be difficulties at the fringes, undoubtedly, with the formula that we have seen in Schedule 1 as it now is. Feeding only very slightly altered base figures into that formula creates such major changes that it really is fairly frightening.
One of the few points of agreement we have is that we want some greater flexibility in the remedies we apply, and at least this amendment is an attempt to provide greater flexibility. There has been a lot of unhealthy comment in the press and elsewhere about windfall profits to landlords, but a loss is what we are thinking about, and the division of that. Inevitably there is not so very much cash to go round if the compensation is to come from landlords. Some may not have very great difficulty; some will have great difficulty; some will be able to pass these things on to well-heeled tenants, and in other cases that will be very difficult.
I think it must be stressed that premiums have always been a very bad thing in the farming industry. The industry has never been served well by substantial premiums being taken right out of it. They have always been had news and they can be ill-afforded. It is really for the sake of future farmers coming in that we have to remember that. I do not want to criticise the NFU because I understand the difficulties, but it must consider not only the farmers of today but those of the future.
I should finally like to mention just one case, where the landlord owns only part of a dairy holding and there are no buildings on his part of the holding. The tenant is a neighbouring owner-occupier and the dairy buildings are on his owner-occupied land. What happens there'? It is certainly not going to be a bed of roses on this occasion for the landlord. In fact, it could turn out to be a perfectly miserable affair, even under this much criticised amendment. Though that landlord had no choice in the matter and would not previously have expected it, it appears that now he must pay substantial compensation to the outgoing tenant for the increased value of his land because of the buildings and the business developed on the neighbouring land.
Either that landowner must pay for this himself, in which case he will be able to charge an increased dairying rent if he lets again; or, if he manages to get the tenant to take over the liability for that premium, he will then let merely at the value of the land without the quota. If he were unable to get the tenant to take over the premium and if, nevertheless, it had to be paid to the outgoer, it could well run up, with the depreciating land values, to half the value of the land concerned with vacant possession, and he might very well have to sell. Perhaps in that case the sale of a holding which is in any way fragmented does not matter too much, but what I want to stress is that if this sort of fate befell whole viable dairy farms which might otherwise have been relet, it could indeed be a tragedy.
3.45 p.m.
The Earl of Radnor: I should like very strongly to support my noble friend Lord Middleton and bring down, if necessary, the kiss of death and all sorts of things upon my head; though I should like to remind the Committee of the quotation which the noble Lord, Lord Middleton, made, which came from the president of the Dairy Farmers' Association and seemed to favour his approach to the question rather than many of the other ones that have been produced.
I am not going to speak for very long, but I feel that for once noble Lords have completely missed the point and are committing the same error that Schedule I and the amendments, though not my noble friend's amendment, have committed; in other words, you are going into too much detail, making too many suppositions, anticipating results rather than going back to principles which will last and perhaps set a pattern, as my noble friend said, for other quotas which will inevitably, should they come, involve once more the end of the tenancy and the landlord and the tenant.
The point that I think is being missed is that one cannot have a blanket solution to cover all dairy farmers and all tenants, which is what the schedule, Clause 11 and the amendment want to do, together with all its suppositions and all its guesswork. My noble friend Lord Monk Bretton briefly touched upon this. It seems to me that, as has always been done with matters of the same kind—I appreciate that quotas are in a way totally new—this should be sorted out between the landlord and the tenant, each case being taken as an individual case. It seems that the professionals who would be involved in these kinds of negotiations feel that that would be possible and reasonable to accomplish.
I shall not give examples, but as things are written at the moment I am very worried about the really good dairy farmer who produces very little milk on rather a lot of acres. He exists. There is a very famous farmer, Mr. Rex Patterson, who is known to many noble Lords. I do not think he would have fitted in any way whatsoever into these kinds of blanket arrangements that are being suggested. His cows gave about 650 gallons each, and I think they probably lived on air!
I have nothing further to add. I am not going to go into figures of what might happen, partly because I do not understand a great deal of this and I am quite certain that a lot of people in my part of the world, who are no more stupid than people in other parts of the world, would have a great deal of difficulty in sorting this out or understanding how it had been sorted out before. That in itself is a bad thing. The only suppositions that the noble Lord, Lord Middleton, has had to make are perfectly reasonable ones. There has to be a supposition somewhere or other, but his amendment is straightforward and simple; it adheres to a pattern to which farmers, landlords and their advisers are used, and I think noble Lords should not really look any further at all. If noble Lords go on and on discussing this matter they can only make it worse, as I believe they already have.
Lord John-Mackie: Many years ago I had a talk with the noble Lord, Lord Diamond, a former First

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Secretary of the Treasury, and asked him why he could not simplify income tax legislation. He said, "Well, if you want to make things fair, they have got to be very complicated. If you make them simple, they become unfair." If this legislation, as the Government have issued it today, is any criterion to go on, it is going to be very fair legislation indeed, because it is the most complicated I have ever had anything to do with in this Chamber and for that matter in the other place as well.
I started by having great sympathy for the noble Lord, Lord Middleton, early in the debate when he was getting little or no support, but it has gathered momentum as the debate has proceeded. I should like to say that the amendment—and I think that the noble Lord, Lord Stanley, and another noble Lord agreed with this—has the great virtue that it gets rid of 10½ pages of Schedule 1 which, as nearly everybody here has said—and I should like the noble Lord, Lord Belstead, to remember this—they cannot understand; nor can I.
I have looked at the amendment, and I have also spoken privately with the noble Lord. There is no guideline for a starting point that is an obvious standard quota that is thought to be fair. I know that the noble Lord made a good case for the centre of the first paragraph of the amendment, but I cannot see that that meets the tenant farmer's real need of a starting point that would be fair, and I cannot support the amendment unless that need can be met.
We are now faced with 10 pages in the Bill, and another 11 to 12 pages about Scotland, making, if I may correct my noble kinsman, I think 21 pages in all. I cannot think that it requires all this complicated legal phraseology to decide the issue. The noble Lord, Lord Burton, and several others made the point—and it is a real point—that really this has arisen because of a value being given to quotas. The noble Lord made the point that dairy farmers had no business taking advantage of that value.
I do not want to be personal, but I think that many landlords—and I am looking along the Bench at his noble friend Lord Lovat; and I look at the Bench here where the noble Viscount, Lord Thurso, sits—have had a lot of benefits from things that have happened outside their ken and with which they had nothing to do. You cannot blame farmers if something is dropped into their lap—I forget what my noble kinsman called it; manna from heaven, or something like that—and that gives more value to their operations. The noble Earl, Lord Onslow, was wrong in saying that the landlord could sell the quota at his will. The quota is tied to the land and he cannot sell it at his will; but that can be settled elsewhere.
So far as one can see, the whole question revolves around the point of how to calculate the starting point, or, as it is put, the standard quota. If this could be agreed, the noble Lord's amendment could well be something with which we could put up, and the aribtration would then be easy. But then I do not think that the amendment settles this point about the starting point.
In another place the Minister, on 17th April, at col. 1046 of Hansard, made the point:
"The starting point is that for each holding a standard quota will be calculated. That will be done by taking the number of hectares
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used for dairying on a holding and multiplying it by a standard yield per hectare which will be prescribed later in a statutory instrument."
We do not know what the statutory instrument will do or how it is going to work, and until that is settled it is going to be difficult.
On the Second Reading here on 6th May the noble Lord, Lord Belstead, made the point at col. 623 of Hansard:
"The assessment will be based on the concept of a 'standard quota'. This will normally be calculated by multiplying the number of hectares"
etc.
"If the tenant has more than this standard quota, he will receive the full value of the excess."
I do not know whether the noble Lord has any more information than we have, but who is going to decide this value? That does not satisfy everybody, but some alterations have been made which no doubt the noble Lord will explain to us today when later we come to his amendment. In his speech he mentioned "full value". A lot of noble Lords, and certainly a lot of farmers, wonder what this value is. Is it per litre? Who decides what value it is? Is it the figure of 17p mentioned in the outgoers' scheme, or is it to be left to the arbiters to decide? We need to know a lot of these things before we can decide on any amendment on this Schedule to the Bill.
The landlord having compensated the outgoing tenant—and the noble Lord, Lord Middleton, made this point—we have to look to the future. This has started off without being thought through on the question of quotas, and we should start to look a little further ahead than just at what the tenant and the landlord are going to share in the meantime. What is going to happen to this compensation after the tenant receives it? What does he do? Does the landlord charge the incoming tenant for it, or what? If he can do that, need he worry what his share is if he is going to charge the incoming tenant, and so on?
There are a host of anomalies that can arise. The Milk Marketing Board has made some calculations which we have all seen—and I have some calculations here as well—which show five examples. With very little difference in the situation other than that two of them have put up buildings and are getting a rental for them, and another has a low stocking per acre, the differences in percentage that these farms are going to get varies from 18 per cent. to 59 per cent. You see the enormous difficulty that there is to be solved before this part of the Bill can be agreed.
It is a pity that the Government put it into the Bill at all. I am not sure whether the Minister would not be wise to take it away, along with his colleague from Scotland (from whom we shall be hearing later) and see whether they can come up with something a good deal simpler than this. As one paper described it, it is a many-headed monster.
Lord Northbourne: I should like briefly but strongly to support the noble Lord, Lord Middleton, in his amendment. I think that everybody in the Committee is agreed that the Bill as proposed is thoroughly unsatisfactory. There is an old adage that hard cases make bad law. I suspect that the converse also is true and that bad law makes hard cases. I listened with fascination to the noble Lord, Lord

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Stanley of Alderley, and others bringing forward special cases which precisely illustrate the point I am making. Does it not seem better to leave these matters to the valuers' profession? It is a profession to which I have had the honour to belong.
Lord Stanley of Alderley: I was not bringing forward a special case. I was giving the Committee the majority of cases. I could bring special cases on the whole lot and put them in the Library, if the noble Lord wishes.
Lord Northbourne: I would question that the cases that the noble Lord brought forward represent the majority but that is perhaps another question. I should like to think that any profession that has been able over the years to cope with the Agricultural Holdings Act without civil disobedience has the confidence of both sides of the agricultural industry, and could also, with an amendment roughly in the form of the amendment proposed by the noble Lord, Lord Middleton—and some interesting and valid points have been made by the noble Lord, Lord Mackie of Benshie and others—provide a much more satisfactory solution than the solution proposed at the moment by the Government. I shall certainly march behind the noble Lord, Lord Middleton into the Lobby, if it comes to that.
4 p.m.
Lord Belstead: I appreciate the efforts that my noble friend Lord Middleton, together with the noble Lord, Lord Walston, have made in an attempt to find a more simple solution to the question of end of tenancy compensation for milk quotas. However, I have to say that a large number of people in the farming community would not see this particular amendment, apart from the attempt for simplicity, as being fair to the tenant.
I shall say a brief, a general word before I come to the amendment. My noble friend Lord Middleton was critical of Clause 11 and Schedule 1 on one ground: that it will not, as my noble friend said, solve the problems facing us in agriculture at the present time. Perhaps not, but the introduction of milk quotas has created the situation where the possession of a quota is an asset of some value. However, as the law stands because quotas are said by the Community to be linked to the land, when a tenant retires or moves he can have no share of that value whatsoever. Yet the tenant may have worked over many years to build up the level of milk production on which the quota is based.
Therefore, although landlord and tenant have each in their different ways contributed to the quota, unless we do something—and this Bill provides an opportunity—the tenant will receive nothing for the value of the quota when he leaves the land. My noble friend Lord Middleton quite rightly said that despite many months of discussion the National Farmers' Union and the Country Landowners' Association were not able to reach agreement on this problem. That is why my right honourable friend decided that we had to put some proposals into this Bill.
The Committee has with some justice said that Schedule 1 is complicated. But may I venture the
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remark that the objective of the system set out in Schedule 1 is based on not such a complicated principle. It is based on the concept of having a standard and an excess quota. When we come to Amendment No. 30 (if we do come to Amendment No. 30), I shall endeavour to put some figures before the Committee, but on this amendment all I should say is that standard quota would be basically the sort of amount of milk quota which one would expect to find on a farm calculated per hectare—I have listened to what the noble Lord, Lord Northbourne, has said—hut subject to adjustment by valuers if it were felt that the standard ought to be altered because of the quality of the land or the climatic conditions in a particular case.
Excess quota would be any quota above the standard. As that could fairly be regarded as the result of the tenant's extra efforts, under Schedule 1 the tenant can claim 100 per cent. of the value of the excess quota. The tenant's share of the standard quota would be based on the contribution he has made in terms of tenant's improvements. The landlord must get his share of the standard based on the value of landlord's improvements and on the provision of the land itself. The system proposed in Schedule 1 is to have a standard quota which landlord and tenant share, and any excess above that would be claimed in full by the tenant.
The difficulty with the system that is suggested in Amendment No. 26 is that it would only appear to provide a vehicle for compensating a tenant who has done better than might be expected. The amendment appears to provide nothing for those who have around the average level of quota on the holding, even if they have made a great deal of effort over many years to achieve their level. Furthermore, I suspect that even among those tenants who under the Government's proposals would have excess quota (that is to say those of above average performance) there may be some who would get nothing under the system being proposed in this amendment.
I say that because there is no certainty that the fact there is a higher level of quota on the holding than the norm would result necessarily in an increase to the value of the holding. After all, this could apply if the land concerned was in an area where other farming enterprises were more profitable than milk production. In addition, the removal of tenant's improvements from the valuation assessment might produce very disappointing results for tenants who have made a large contribution in this way to the quota level.
I suggest that in this respect the wording of the amendment might not reflect the real intention of my noble friend or of the noble Lord, Lord Walston.
However, whether I am right or not on that point, my noble friend Lord Stanley certainly was right in saying that this amendment would be much less satisfactory for tenants in general than the Government's proposals. With respect to the noble Lord, Lord Walston, this amendment would be miles away from the ideal 50–50 split which the noble Lord suggested to the Committee during his speech. I recognise that Section 70 of the Agricultural Holdings Act 1986, suitably adapted, might possibly have been used as a basic model if our aim had been only to

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compensate those tenants who are at the top of the range. However, as I have tried to explain that is not the Government's aim. We have to recognise that the average tenant has also made a contribution to the level of quota attaching to the land. It is for that reason I believe that the system proposed in this amendment would not be fair to tenants. Indeed, some would say that it would be heavily biased in favour of the landlord.
May I put one last point on this amendment because it is one that concerns me? I hestitate to cross swords with my noble friend Lord Middleton who knows such an enormous amount about this. But I wonder whether including milk quota provisions in the agricultural holdings legislation does not hold some very real dangers. Milk quotas are different from the physical improvement of land or buildings which are dealt with in the holdings legislation. Further than that, the proposal to apportion the value of milk quota between landlord and tenant will be an one-off exercise, as Schedule 1 makes perfectly clear, That is very important from the point of view of landlords. But once we come to integrate the quota provisions into the system of land law, I very much fear that we might be storing up problems of a more general nature for the future.
It is on those grounds with the greatest reluctance—because almost always I agree with my noble friend Lord Middleton and even, though we sit on different sides of the Committee, with the noble Lord, Lord Walston—I feel that on behalf of the Government, I cannot agree with this amendment.
Lord Broxbourne: I wonder whether before my noble friend sits down he would clarify one point. I am possibly not the only person in the Committee who finds this schedule rather difficult of interpretation. I have no expertise in the Agricultural Holdings Act, but I am not entirely inexperienced in arbitration in other fields not altogether less complicated. My noble friend more than once in his exposition of this matter—to which I listened with great respect and attention—used the phrase "excess quota". Will he clarify and identify that? Does it come within Schedule 1 in those terms? There are definitions in the interpretation clause, Clause 18, of six sorts of quota: milk quota, relevant quota, standard quota, transferred quota, etc. There is no interpretation so far as I can see of excess quota. Can my noble friend clarify that?
Lord Belstead: The figures which we intend to put before the Chamber for consideration for the computation of excess quota are something to which I was intending to come on Amendment No. 30. These figures would be written into the statutory instrument if Parliament agrees to Schedule 1 becoming a part of the Bill. In addition to that, the concept of an excess quota is also contained in Amendment No. 30, which I shall be hoping to move in a few minutes' time when we have finished with other amendments.
Lord Middleton: I listened carefully to what was said and particularly to what was said by my noble friend Lord Belstead. It is quite clear that we are agreed, all of us, about the principle of compensation. Where the Committee is in disagreement is as to what shall be the
612
measure of compensation. I and the noble Lords who support me have a totally different concept of what a tenant may or may not have contributed to the holding at the end of a tenancy from that of my noble friend Lord Stanley, the NFU and, indeed, the Government.
That concept is that a farm quota, whatever its size, looked at with that of other comparable farms, is an asset which must be carved up at the end of the tenancy according to the formula set out in the much criticised Schedule 1. That is the path which the Government have followed and this very complicated schedule is the result. I think the most trenchant objection to the Government's concept, and the National Farmers' Union concept, came in a letter to me last week from the Association of Land-owning Charities. At this stage I hesitate to quote it, but I ask the Committee's indulgence to do so because I think it answers in some measure the criticisms made by the noble Lord, Lord Mackie of Benshie. It says:
"Too much milk has been produced; so a quota system has been introduced. Its introduction has in no way increased the productivity (or value, which derives from productivity) of any farm; indeed, since the quota is in the nature of the case less than the farm could produce, productivity (and value) have been reduced. The notion, current in some circles, that quota is an adventitious additional value to be shared out is wholly erroneous and leads to total confusion of issues that are really simple. Quota is not a permission to produce more milk; it is a requirement to produce less".
Lord Mackie of Benshie: Would not the noble Lord admit that there must be something curious in that people are willing to pay quite large sums for a quota if they can transfer it?
Lord Middleton: I understand that you cannot pay large sums for quota divorced from land. It you are buying land with a quota on it, I take it that you pay the market value for that land having regard to the size of the quota on it. I think it is as simple as that.
This division of opinion which the Minister of Agriculture has made great efforts to reconcile has given rise to strong feelings in the industry, and so I am asking the Committee to take a different path. If I may repeat this for the benefit of noble Lords who have come into the Chamber since I first spoke, I am asking the Committee to take a different path forward from the basic common ground to which I earlier referred. I am suggesting that we solve this difficulty by going back to the old principle, long established and embodied in statute, that where a tenant leaves something on a farm that adds to its value he gets paid for it. That is the tenant right solution. The way that he gets paid for it is to be worked out by the parties. The valuing profession, as the noble Lord, Lord Northbourne, confirmed, are thoroughly familiar with working out and agreeing compensation. They have said that they can cope with valuing milk quota on the terms of my amendment.
Perhaps I may very briefly refer to one or two detailed points. I must deny most strongly the charge levelled at me by my noble friend Lord Stanley of Alderley that this is some kind of tenant bashing, some action by wicked landlords to squeeze the ultimate drop of blood out of the tenant. He says that it is horrendous for the tenant. My noble friend Lord Mottistone says that this is biased entirely towards the

613
landlord. I deny that. I deny that the vast majority of tenants would get nothing. I said when I opened the debate that I have taken the wording of my amendment and have modified it from the old Section 70 wording, so that it is not just the exceptional tenants who will get compensation.
The noble Lord, Lord Mackie of Benshie, said that this was manna from heaven which goes largely to the landlord. I do not agree. I hate producing figures in debate. I think they are always confusing and they are always suspect; but my noble friend Lord Stanley of Alderley produced figures to show how incredibly unfair it is going to be for tenants and how marvellous it is going to be for the landlords. I have just done a little scribbling on the back of an envelope to illustrate where I think this is not going to be all that unfair on the tenants. Let us take a 100-cow herd. A normal level of production from that herd would be 500,000 litres, and that would be worth, according to my calculations, about £65,000. We have heard that the tenant's share may vary between 30 per cent. and 50 per cent.—and this is under the Government scheme. So of the £65,000 which has to be carved up according to the Government scheme and according to this formula, if the tenant's share worked out at about 30 per cent., he will get £21,000 on 100 cows when he retires. If he is due to get 50 per cent., he will get £32,000 as his compensation.
Then I did a quick calculation on my own scheme, and I think it would be quite realistic. These quick calculations can always be faulty, but I hope that this is right. If we take the farmer with a 100-cow herd, it is quite realistic to suggest that he is producing the milk on a 150-acre farm. I think that if he has done well, it is realistic to say that he might have increased the tenanted value from, say, £500 an acre to £700 an acre. I calculate that his compensation in that case would be £30,000, which is about equivalent to what the tenant who was going to get 50 per cent. of the quota would have got. I do not think that is unfair.
My noble friend Lord Onslow produced out of the hat a statement that the landlord was likely to sell over the head of his tenant. Of course, he can. In a free country he can sell tenanted land whenever he likes. If he sells, the quota will go with it and so will the tenant; and he will get the market price, as I said just now to the noble Lord, Lord Mackie of Benshie. He will get the market price of the land according to its tenanted value and according to the size of the milk quota that is on it.
I take the point of the noble Lord, Lord John-Mackie. I think it is a very good point. I think he held out to my noble friend Lord Belstead a proposition which I would certainly go along with. The noble Lord, Lord John-Mackie, I think quite rightly, said that there was a shadow of doubt as to where the obvious starting point was in my amendment. I think there is something to be said for that point and I think that that is the reason why we are getting some misunderstanding.
It may be that the wording that I have used is not entirely clear because I referred to the average requirements of tenants reasonably skilled in husbandry.
614
Noble Lords have taken this to mean the average production.
I think my noble friend Lord Belstead said that only those above the average would get anything. My view is that a man reasonably skilled in husbandry is below average; he is just ticking over. If he was not reasonably skilled, he would not be in business, he would not be able to pay his rent. So we are looking at the minimal man and I should have thought that most British, Welsh and Scottish farmers were above the minimal and would be entitled to some compensation by reason of the increase in value.
I think that I have answered most of the points that my noble friend Lord Belstead has made. I do not agree that the tenants would be compensated only if they had done better than average. I think he is right in saying that some tenants would get nothing. The minimal man would get nothing. Why should he get anything? He will leave the landlord with a below average value for his farm since the milk quota cannot be increased.
I really could not agree with my noble friend Lord Belstead when he said he thought it might be dangerous to include milk quotas in agricultural holdings legislation and that I was doing this. But that is what the Government are doing. What is Schedule 1 doing except including milk quotas in agricultural holdings legislation? That is exactly what they are doing. Perhaps my noble friend can indicate that there is something to be said for the road along which I have asked the Committee to tread. Perhaps, as the noble Lord, Lord John-Mackie, rightly pointed out, my wording is not quite perfect or might confuse valuers, although they tell me they could operate under it. If there is a doubt and if my noble friend Lord Belstead can assure me that he will take this back and look at it, I shall be very happy to withdraw the amendment.
Lord Belstead: I do not wish to be unforthcoming to my noble friend; indeed, he is one of the last Members of your Lordships' Committee to whom I should wish to be unforthcoming on an agricultural matter. But there is really one particular difficulty in connection with this amendment. Incidentally, I think both my noble friend and I can take some comfort from the fact that the disagreement which has existed in the agricultural organisations and which has prompted my right honourable friend to come to Parliament with proposals in Clause 11 and Schedule 1 has to some extent been reflected here this afternoon in that your Lordships, in giving advice on this amendment, have not by any means always agreed, if I may say that gently and mildly.
But the comfort does not go further than that, I fear. A gulf—and a nasty one—which neither my noble friend Lord Middleton nor I wish for lies between this amendment and the position that the Government say they are trying to achieve in the Bill, in that the amendment is absolutely bound to give something only to those who are of above average performance. I shall look very carefully at what my noble friend Lord Middleton said in his closing remarks on that particular matter. However, from what I can see from the drafting of the amendment I still think that that is the case. If it is the case, with the greatest of regret I must say that the amendment is unacceptable to the Government.
Lord Middleton: I think that it is not just the above average tenant who is going to get compensation. If my noble friend will assure me that he will look at the matter again and come back at a later stage, I will withdraw the amendment, but if there is a real difficulty between us, I am afraid I must ask the Committee to decide.
Lord Stanley of Alderley: I wonder whether I may intervene because I think it might help the Committee. I have to tell my noble friend on the Front Bench that unless my noble friend Lord Middleton moves so much to the right or to the left to give average quota to 500 litres, which is ridiculous, I cannot accept this method of doing it. I must be honest here. I am sorry to fall out with both parties, but I must make it clear; otherwise we shall just go on with this.
Lord Middleton: I can understand that from my noble friend in the NFU. We must get right the matter of the milk quota and I do not think we can do that by tinkering with what is in the Bill. My way is the better way to do it.
My noble friend Lord Stanley has referred to the Tenant Farmers' Association, and since we are dealing with tenants' compensation I think we would do well to listen to what the Tenant Farmers' Association has to say. Two weeks ago it was giving evidence to the House of Lords EC Select Committee on Agriculture and in the course of that evidence the Chairman, Mr. Henry Fell, had this to say about milk quotas:
"I think you are referring to the clause on compensation and milk quotas. None of us"—
he was referring to the tenant farmers, apparently—
"has any hesitation in saying we think that is a recipe for chaos and dispute, and totally unnecessary. I do hope that next week and the week following it will be possible to do something much more constructive about that. We are optimistic that common sense will prevail. We have a lot of faith in the valuing profession. We work closely with the RICS and the CAAV. Our views are very close to theirs, and subject to provisions to safeguard in particular the man who started dairying on a low-cost system on a green-field site, the valuing profession and the system of compensation for tenants' rights improvements is the right road to go down to deal with that".
That is the road I am inviting your Lordships' Committee to tread. I believe it is the right road and I hope I have convinced the majority of the Committee to follow me into the Lobby.
4.25 p.m.
On Question, Whether the said amendment (No. 26) shall be agreed to?
Their Lordships divided: Contents, 28; Not-Contents, 133.

DIVISION NO. 1

CONTENTS

Annan, L.

Kinnoull, E.

Blake, L.

Manton, L.

Burton, L.

Middleton, L.

Cawley, L.

Monk Bretton, L.

Clinton, L.

Newall, L.

Derwent, L.

Northbourne, L.

Dulverton, L.

Peel, E.

Fitt, L.

Radnor, E.

Forester, L.

St. Davids, V.

Gisborough, L. [Teller.]

Sandford, L.

Grimthorpe, L.

Savile, L.

Harvington, L.

Stallard, L.

616

Stathcarron, L.

Wynford, L. [Teller.]

Truro, Bp.

Zouche of Haryngworth, L.

NOT-CONTENTS

Airedale, L.

Lane-Fox, B.

Airey of Abingdon, B.

Lauderdale, E.

Alexander of Tunis, E.

Layton, L.

Amherst, E.

Llewelyn-Davies of Hastoe, B.

Ardwick, L.

Lloyd of Kilgerran, L.

Auckland, L.

Lockwood, B.

Ayleston, L.

Lucas of Chilworth, L.

Barnett, L.

Mackie of Benshie, L.

Bauer, L.

McNair, L.

Belhaven and Stenton, L.

Mancroft, L.

Beloff, L.

Marley, L.

Belstead, L.

Marshall of Leeds, L.

Boston of Faversham, L.

Melchett, L.

Boyd-Carpenter, L.

Merrivale, L.

Brabazon of Tara, L.

Mersey, V.

Brockway, L.

Mishcon, L.

Brougham and Vaux, L.

Molloy, L.

Broxbourne, L.

Mottistone, L.

Bruce of Donington, L.

Mulley, L.

Butterworth, L.

Nicol, B.

Buxton of Alsa, L.

Nugent of Guildford, L.

Caithness, E.

Onslow, E.

Cameron of Lochbroom, L.

Oram, L.

Campbell of Alloway, L.

Pender, L.

Campbell of Croy, L.

Peyton of Yeovil, L.

Chitnis, L.

Phillips, B.

Cledwyn of Penrhos, L.

Pitt of Hampstead, L.

Coleraine, L.

Plummer of St Marylebone, L.

Constantine of Stanmore, L.

Cottesloe, L.

Ponsonby of Shulbrede, L.

Cowley, E.

Porritt, L.

Cox, B.

Portland, D.

Craigton, L.

Rankeillour, L.

Crawshaw of Aintree, L.

Reay, L.

Cullen of Ashbourne, L.

Ritchie of Dundee, L.

Davidson, V.

Rodney, L.

Davies of Penrhys, L.

Seear, B.

Dean of Beswick, L.

Selborne, E.

Denham, L. [Teller.]

Sempill, Ly.

Denning, L.

Shannon, E.

Dilhorne, V.

Shrewsbury, E.

Drumalbyn, L.

Skelmersdale, L.

Elles, B.

Stamp, L.

Elton, L.

Stanley of Alderley, L.

Elwyn-Jones, L.

Stewart of Fulham, L.

Ennals, L.

Stodart of Leaston, L.

Ewart-Biggs, B.

Stoddart of Swindon, L.

Fraser of Kilmorack, L.

Strabolgi, L.

Gallacher, L.

Strathspey, L.

Glenarthur, L.

Swansea, L.

Graham of Edmonton, L.

Swinton, E. [Teller.]

Gray of Contin, L.

Taylor of Mansfield, L.

Hailsham of Saint Marylebone, L.

Teviot, L.

Thorneycroft, L.

Hanworth, V.

Tranmire, L.

Hirshfield, L.

Trenchard, V.

Hives, L.

Trumpington, B.

Home of Hirsel, L.

Underhill, L.

Hood, V.

Vickers, B.

Hooper, B.

Vivian, L.

Hughes, L.

Wells-Pestell, L.

Hylton-Foster, B.

White, B.

Jeger, B.

Whitelaw, V.

John-Mackie, L.

Wigoder, L.

Kaberry of Adel, L.

Williams of Elvel, L.

Kilbracken, L.

Winchilsea and Nottingham, E.

Kinloss, Ly.

Kitchener, E.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
4.33 p.m.
Clause 11 agreed to.
The Chairman of Committees (Lord Aberdare): The next amendment is No. 40.
Lord Belstead: I beg to move that consideration of the new clause in Amendment No. 40 be postponed to before Amendment No. 41.
Moved accordingly, and, on Question, Motion agreed to.
Schedule 1 [Tenants' compensation for milk quota]:
Lord Belstead Lord Belstead moved Amendment No. 27:
Page 17, line 13, after ("had") insert ("instead").
The noble Lord said: I beg to move Amendment No. 27, and ask for the Committee's agreement to speak also to Amendments Nos. 28, 29, 34 and 35. The first three amendments, Nos. 27, 28 and 29, are clarifying amendments. The main amendments, Nos. 34 and 35, are necessary in order to clarify the procedure where a tenancy has been terminated and there is the possibility of statutory succession on death. These amendments will prevent a claim being made under paragraph 11 of Schedule 1 until the succession issue has been resolved.
In another place, concern was expressed that the provisions as drafted might give rise to the situation where both the executor for the deceased tenant and the statutory successor might be able to claim compensation. We think it is doubtful that this could happen, but the issue highlighted another possible problem. Although there are unlikely to be many occasions when a tenancy will terminate before the Agricultural Lands Tribunal has ruled on an application for succession, it is by no means impossible and problems could arise if the current wording is not amended. An executor could surrender the tenancy and claim the compensation due to the deceased tenant and we would not wish the executors to claim as this right should pass to the statutory successor. If executors were paid compensation, in practice the landlord would be unable to claim this back from the statutory successor who was eventually given a direction to the tenancy.
Our intention is, and has always been, that the right should pass to the statutory successor even though there may be a gap. We have therefore introduced these amendments to overcome such difficulties by ensuring that no claim can be made while an application for succession is being considered. The quota originally allocated or transferred to the former tenant will be treated as having been allocated or transferred to the successor. I beg to move.
Lord John-Mackie: It seems an eminently fair point that the Minister has put forward and I think we would agree to it. I presume that should the succession not be agreed to, it would go back to the deceased's or retiring tenant's executors?
Lord Belstead: Yes, that of course would be the case if there was then no statutory succession. May I just underline the fact that, as Schedule 1 makes clear, this is a one-off exercise. This payment of compensation at the end of a tenancy to retiring or moving tenant farmers who have a milk quota is a once and for all payment. That is made clear, I think, in Schedule 1.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved amendment No. 28:
Page 17, line 33, after ("had") insert ("instead").
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 29:
Page 18, line 1, after ("had") insert ("instead").
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 30:
Page 19, line 2, leave out paragraph 6 and insert—
("6.—(1) Subject to the following provisions of this paragraph the standard quota for any land for the purposes of this Schedule shall be calculated by multiplying the relevant number of hectares by the prescribed quota per hectare; and for the purposes of this paragraph—

(a) "the relevant number of hectares" means the average number of hectares of the land in question used during the relevant period for the feeding of dairy cows kept on the land or, if different, the average number of hectares of the land which could reasonably be expected to have been so used (having regard to the number of grazing animals other than dairy cows kept on the land during that period); and

(b) the prescribed quota per hectare means such number of litres as the Minister may from time to time by order prescribe for the purposes of this sub-paragraph.

(2) Where by virtue of the quality of the land in question or climatic conditions in the area the amount of milk which could reasonably be expected to have been produced from one hectare of the land during the relevant period ("the reasonable amount") is greater or less than the prescribed average yield per hectare, then sub-paragraph (1) above shall not apply and the standard quota shall be calculated by multiplying the relevant number of hectares by such proportion of the prescribed quota per hectare as the reasonable amount bears to the prescribed average yield per hectare; and the Minister shall by order prescribe the amount of milk to be taken as the average yield per hectare for the purposes of this sub-paragraph.
(3) Where the relevant quota of the land includes milk quota allocated in pursuance of an award of quota made by the Dairy Produce Quota Tribunal for England and Wales which has not been allocated in full, the standard quota for the land shall be reduced by the amount by which the milk quota allocated in pursuance of the award falls short of the amount awarded (or, in a case where only part of the milk quota allocated in pursuance of the award is included in the relevant quota, by the corresponding proportion of that shortfall).
(4) In sub-paragraph (3) above the references to milk quota allocated in pursuance of an award of quota include references to quota allocated by virtue of the amount awarded not originally having been allocated in full.
(5) In this paragraph—

(a) references to land used for the feeding of dairy cows kept on the land do not include land used for growing cereal crops for feeding to dairy cows in the form of loose grain; and

(b) references to dairy cows are to cows kept for milk production.

(6) An order under this paragraph may make different provision for different cases.
(7) The power to make an order under this paragraph shall be exercisable by statutory instrument and any instrument containing such an order shall be subject to annulment in pursuance of a resolution of either House of Parliament.").
The noble Lord said: The Committee will recall that during the debate on the Second Reading of this Bill many noble Lords said that there ought to be greater flexibility for individual circumstances to be taken into account in any given case. "Why not leave it to the arbitrator?" was the sort of thing said by many noble Lords with considerable experience. It is with this in mind that I bring this amendment before the Committee.
The Committee will recall from our earlier discussion of the matter on Second Reading that the question of the level of the standard quota is at the

619
heart of the calculation of the compensation which will be payable. As I said, concern has been expressed that our existing provisions are too restrictive and that more account should be taken of the individual circumstances of a farm. Following an assurance that I gave on Second Reading, this amendment, No. 30, will remove the 20 per cent. restriction on variations in the standard quota.
The amendment also makes some other related adjustments which are important. Sub-paragraph (1) of the amendment provides that in calculating the standard quota we should look at the area of land used by the dairy cows alone, excluding followers, and that the calculation should therefore reflect the yield achieveable on that basis. Although the Bill makes provision for the figures to be prescribed by order, it may be helpful to the Committee if I give an indication of what we would intend to prescribe.
In setting the prescribed quota per hectare we would intend to see a stocking rate of around 1·8 cows per forage hectare and a yield per cow of 4,500 litres, which reflects the 10 per cent. cut back on production when quotas were introduced. With a little rounding down this would give a standard prescribed quota per hectare of 8,000 litres. This is the figure where the land in question could reasonably be expected to give a yield of around the national average of 9,000 litres. The difference between 8,000 litres and 9,000 litres takes account of the quota cutbacks.
If it is felt that a particular piece of land ought to give a yield higher or lower than the national average, the percentage variation from the national average has still to be calculated. This percentage adjustment will then be applied to the standard figure of 8,000 litres per hectare to arrive at the standard quota for the land. The purpose of this is, as I have said, to ensure that all tenants receive the benefit of the fact that in order to reflect the quota cutbacks the prescribed quota at 8,000 litres has been set at a lower level than the national average of 9,000 litres per hectare.
In sub-paragraph (2) we have made it clear I hope that any variations made by an arbitrator from the standard prescribed yield per hectare will have to be strictly related to the quality of the land in question or to the climatic conditions of the area.
Concern has been expressed that if the provisions had been left as they currently stood in the Bill, it might be argued that just because it was the normal practice in the area where the land was situated for, let us say, three times a day milking to take place, or that very high levels of concentrates were being fed, the standard quota should be varied upwards accordingly. I am sure that the Committee will agree with me that such practices are a result of the managment skills or enterprise of the tenant and ought therefore not to be used as an argument for increasing the standard for farms upwards and thereby reducing the tenant's share of the quota value.
Since our original provisions were published concern has also been expressed about the case of the tenant who had received a development award from the Dairy Produce Quota Tribunal. The fear has been that where that award has not been allocated in full because of the limited amount of quota no account ought to be taken of this.
Sub-paragraph (3) of this amendment recognises that in many cases farmers do not have the full amount of their development award and makes provision for an appropriate adjustment to be made to the standard quota where a tenant has not received his development award in full.
Before I sit down perhaps I may go back to subparagraph (1) and try to add some figures to the explanation I have given of what I think is at the heart of the amendment which is before the Committee. I shall take two different examples. The first is of a farm which is just above the national average in terms of land quality. The arbitrator, if it is an arbitrator, who comes in looks at the farm and decides that it ought to yield 9,000 litres. That means there is no deviation from the national average in the case of this farm. So the standard prescribed quota of 8,000 litres per hectare will be used in this case. The number of hectares used for the dairy cows is that multiplied by 8,000 to get the standard quota for the holding. If the actual quota is more than this, the tenant gets the full value of the excess.
Perhaps I may try again with a second example. It is along the same lines, but it involves a different farm. This farm is rather below the national average in terms of land quality. Here again let us suppose that an arbitrator comes in, looks at it and says he feels that a yield of 8,400 litres per hectare would be reasonable on that farm. This is just over 6 per cent. below the national average of 9,000 litres. So the standard prescribed yield of 8,000 litres per hectare must be reduced by just over 6 per cent. This would give 7,467 litres per hectare, which will be used to calculate the standard quota in this case. The number of hectares used for the dairy cows is then multiplied by 7,467 to get the standard quota for the holding. If the actual quota is more than this, again the tenant gets the full value of the excess. I hope that this perhaps is one of the occasions when putting some figures on an explanation helps. I beg to move.
4.45 p.m.
Lord Stodart of Leaston: On Thursday my noble friend was kind enough to say that I was one of the few who had given him some friendly support. I am afraid that this afternoon he will have to face up to some very reluctant criticism because, despite his latest effort to introduce more flexibility which undoubtedly is welcome, with great respect he has not provided us with even a morsel of simplicity. The hungry sheep still look up for simplicity and they really are not getting fed. I cry out for simplicity. It was certainly one of the things which attracted me, and still does, to the drafting of the amendment of my noble friend Lord Middleton. I still hope that at the end of this debate the impossible may come to fruition and that if the drafting of the noble Lord, Lord Middleton, can be so amended as to meet with the approval of noble Lords, we can then build on that.
This schedule was debated at short notice in another place. It contains, believe it or not, between 7,000 and 10,000 words. In no conceivable way can that be good legislation. Indeed, out of just short of 10,000 words in the debate in another place came only one clear piece of information. It was when my right honourable friend the Minister for Agriculture said:

621
"the tenant who has performed well could receive more than about two thirds of the total value of the quota. At the other end of the scale the tenant who has invested nothing and has a low level of milk production could get nothing".—[Official Report, Commons, 17/4/86; col. 1048.]
Even now I do not know how this two-thirds is arrived at. Nor do I understand how or why it is that the NFU is widely claiming that on average a tenant's share of the quota will be between 25 per cent. and 30 per cent. How it arrives at that is a mystery to me. In answer to this my right honourable friend in another place said:
"It is not the average that matters anyway. What matters is the result for each individual farmer and whether the individual is being treated fairly. If tenants and landlords are being treated fairly in individual cases, we can say that the totality of the system is fair."—[col. 1049.]
However, by basing the system on what is called a standard quota—which is not stated here but I gather is to appear in the statutory instruments—and then bolstering this up with something called a tenants' fraction, you are giving birth to a system which is based on an average. I am hound to say that the Government are making not only a gigantic meal of this, with the length of the schedule, but a totally indigestible one. I hope that the Government realise that there will be many aches and pains still to come.
I find it totally incomprehensible. Therefore, although I know the intentions behind the amendment are admirable I am also bound to say that I find the amendment of my noble friend Lord Stanley pretty difficult to understand, although I think I get the gist of it. Where you have failure to understand there is suspicion bred, and by and large tenant farmers are convinced that something is being put across them, that they are being conned.
Is not this the situation—and this is probably trying to simplify things to the ludicrous—each farm has a quota of its own and that quota is an actual number of litres? It goes with the farm and it has a specific value. If that is so, why invent the standard quota? The quota is an estimate. In the course of his earlier remarks my noble friend said it was a different asset to the cows which produce the milk, the buildings which house them and the fences which keep them in the fields. To my mind the quota is still an asset of the farm to which it is allocated. Therefore, why not allocate the value of this actual quota between the tenant and the landlord according to the commercial value of the contribution which each side makes to the process of producing milk?
It is perfectly clear that the landlord provides the land. He probably—but not necessarily—provides the buildings. Again, very probably, he provides much of the fixed equipment for which he is responsible. So be it. The tenant's share would come from the value of the herd, the feed, the labour and the management provided. An arbitration along these lines is perfectly well understood and is totally accepted in the agricultural world. That approach would be fair, it would be simple and it would be easy to understand and to operate.
My imagination goes back over a period of 20 years to a Committee room upstairs in another place. There I can see the noble Lord, Lord John-Mackie, on the Government Front Bench facing an Opposition
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putting forward a schedule of the same sort of length as this one. It would certainly be on a Thursday morning because on that morning the Minister would excuse himself in order to attend a Cabinet meeting and the junior Minister would have to take the flak from across the Floor of the Committee. I am in no doubt who it would have been on the Back-Benches of the Opposition 20 years ago excelling in the taunts, the jibes and the mockery that he would be slinging across the Floor of the Committee room with brilliance, enthusiasm and great panache. It would most certainly have been the present Minister of Agriculture.
As I said earlier, I think my noble friend Lord Middleton has got somewhere near the principle of what we want. I do not think he has it right, and I believe he agrees with that. I would only say to my noble friend Lord Belstead that I believe he would take a tremendous weight from the shoulders not only of those noble Lords here but many outside if he could tell us at the end of this debate that he will take away this difficult subject and have another look at it.
Lord John-Mackie: As the noble Lord, Lord Middleton said, and I think the noble Lord, Lord Belstead would agree, putting figures across in Committee is not easy and it is difficult to follow where they get one. The amendment certainly seems to get somewhere in the calculations. The noble Lord gave us two examples which I quickly noted. Having forgotten my arithmetic, I always carry a calculator in my pocket which I have used in trying to work out how this amendment would operate against figures that have been given to me on how little differences in the calculations can make such a variation in the percentage that the tenant might get.
Taking the noble Lord's figure of about 1.8 cows per hectare, and taking someone who is on worse land, or however one looks at it, with one cow per hectare, you can arrive at differences as big as 34 per cent. or 60 per cent. in the calculations. I have my calculations in front of me and I shall not read them out to the Committee or try to explain them; but that seems to be exactly what could happen. I believe that is too wide a difference. Admittedly, the arbitrary 20 per cent. variation which has now been removed might have been too rigid; but I am not sure that the calculations given by the noble Lord would make it as fair as we would all like it to be.
The noble Lord, Lord Stodart, was reminiscing and I may say that on one of those occasions he caught me and my honourable friend napping. We did not have our troops available—I was not so good at that as is the noble Lord, Lord Denham—and he defeated us on a Bill, which he had no business to do! I had some sympathy for him but unfortunately I never managed to get my own back. However, that is beside the point.
All I should like to say is that if these calculations could be incorporated—I believe this is what the noble Lord, Lord Stodart, was getting at—in the amendment of the noble Lord, Lord Middleton, we might have something simple because, like the noble Lord, I only counted the pages and he only counted the words in the schedule. We might then be getting somewhere.
I again make the plea that the Government should look at the matter more carefully to see whether they cannot come back on Report with something that

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would satisfy tenants and farmers better than at present. I cannot see that I object to the amendment as given to us by the noble Lord but, as I have said, the calculations give a very wide variation. I have given the noble Lord the calculations I have in front of me and if he looks at them he will see the differences that can arise.
5 p.m.
Lord Mackie of Benshie: I am sorry that I cannot take part in the nice chit-chat between former Ministers of another place, but I should like the Minister to explain to me a little further what it is that this amendment achieves. As I understand it, the amendment would give a percentage advantage to a tenant of poorer ground who had done well by reason of suitable cows, good manuring, good feeding of concentrates and so on. It gives an advantage which I suppose is well worth having, if he exceeds the standard figure of 8,000 litres per hectare, which figure can in fact be reduced further if an arbiter says that the land is worth that much less. If I have that half right, perhaps the Minister will give me a nod—and I see that he is giving me a nod.
I do not think this amendment really solves the problem because one has to go a tremendous distance down the way in order to make it worth while. The calculation of the tenant's fraction—of the widow's mite, as I call it—is grossly unfair. The calculation is done apparently by taking as the numerator the annual rental value at the end of the relevant period—and I am not quite sure what that means; I view it with some suspicion and I must ask about it—of the tenant's varied improvements and fixed equipment. One does not take his cows or anything like that. One takes the fixed equipment that he has provided and a rental value is put upon it. But then the fraction is arrived at by adding that sum to the rental value of the land on which the cows are kept, and of course in that way the more that the tenant has done the more the tenant's fraction is automatically reduced. That is how I read it and I think that I have understood it aright.
The trouble is that this amendment is merely tinkering with the problem. I agree with what both the noble Lord, Lord Stodart, and my noble kinsman have said—that we must find a simpler method. I voted against the amendment of the noble Lord, Lord Middleton, simply because the amendment itself did not perform its task. We have to look at something simple which will give justice to both sides, and I do not think that this amendment does that. I do not object to it much; it just does not solve the problem. It tinkers with the problem and that, I think, is the trouble.
Lord Stanley of Alderley: Before my noble friend replies, I should like to ask him a few specific questions. I do not think he answered them when he made his original speech, but if he did perhaps he will answer them again. First of all, I go along with the noble Lord, Lord Mackie of Benshie. I am afraid that the amendment only tinkers with the problem and does not really deal with it radically enough.
The first question I should like to put to my noble friend is in relation to paragraph (2), which says:
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"Where by virtue of the quality of the land in question of climatic conditions in the area".
I was not absolutely certain whether that was intended to be a regional or a national criterion. I think I understood it to be national but perhaps my noble friend can confirm that. I have to say that I am interested in this amendment and in my noble friend's approach. I hope he will not mind my saying it, but I think it is moving slightly toward the principle of my next amendment, Amendment No. 31, as I shall explain to my noble friend Lord Stodart.
Secondly—and I am fairly certain that he answered this question when he told us about the average hectares per cow—am I right in saying that the average yield per cow will be 5,000 litres, and therefore 9,000 litres per hectare according to paragraph (2), which is then deflated (as I call it) because of the cut? I think I am right, in saying that.
Lastly and most importantly there is paragraph (6), which I do not think my noble friend mentioned. I wonder what he has in mind here. Paragraph (6) says:
"An order under this paragraph may make different provision for different cases".
Is he thinking about low yielding cows, for instance Jerseys? The other question which my noble friend may not want to answer at this stage is whether he is perhaps thinking of less favoured areas. Could both those points be covered by that paragraph?
Lord Walston: Very briefly, I should like to go along with what the noble Lord, Lord Stodart, has said. I felt rather sad that the last amendment was not treated as a probing amendment, which would have given a chance for more discussion later, though it is still not too late for that to happen. I hope that the move toward simplicity that is embodied in the amendment can be discussed before Report stage and that some of the difficulties can be overcome. I agree with what my noble friend Lord Mackie of Benshie has just said.
There are two very minor points that have occurred to me. One of them has been touched on by the noble Lord, Lord Stanley of Alderley. I speak as a former breeder of Channel Island cattle, and would ask whether the Minister is satisfied that the interests of farmers who have high quality but lower yielding breeds have been taken into account in this formula. I am not sufficiently in the picture now with regard to the amount of feed that is needed per gallon produced and so on compared with other breeds to know whether they are properly taken care of.
Secondly—and this is a rather more important though perhaps more hypothetical question—as I understand it, it is always open to the Commission to alter the quotas. We know that in spite of quotas milk production is still vastly in excess of the requirements of the Community. It is not inconceivable that quotas will be reduced any year. If that happens, will this legislation take care of it? Are the figures that the noble Lord has given firm figures which will not vary depending on the quota, or can they be varied without any need for new legislation? I hope that that is an unnecessary question but I think it is one which deserves an answer.
Lord Belstead: I am, grateful to the Committee, which I must admit has looked at this government

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amendment in a questioning and not uncritical frame of mind. I think that perhaps I ought to say that I entirely realise why my noble friend Lord Stodart regrets that the element of simplicity is not present in either the amendment or the schedule, though my noble friend was good enough to say that he felt that this amendment was importing more flexibility.
One thing that I hope I have learnt from the exchanges of the past 20 minutes or so is that, even with all the expertise that is available in the Committee, there are still differences of view which require the Government at least to try to suggest what they believe is a practicable way forward. For instance, I think it is fair to say that my noble friend Lord Stodart welcomed the fact that this amendment brought more flexibility. On the other hand, the noble Lord, Lord John-Mackie, said that he was a little suspicious of that flexibility because there would be such a wide range of figures that could be found in different cases.
As I said when I spoke on the early part of the amendment of my noble friend Lord Middleton, the main organisations in our industry felt that in a period of some three months or so they simply could not reach an agreement on this very difficult issue. I repeat that I come to just one conclusion. Without wanting to be hidebound and certainly without wanting in any way to imply that the Government will not listen to what the Committee is saying—because this is exactly the point of putting a difficult Bill through the Committee stage in this Chamber—nonetheless the Government have a responsibility to try to find a way through the middle.
I understood why my noble friend Lord Stodart said that if something is complicated people become suspicious of it, and in this case tenant farmers may feel that something is being put across them. Let me say two things in reply. First, if Schedule 1 passes into law in some form tenant farmers will receive payments which they would never have guessed a few months previously would be coming their way. Along with many Members of the Committee, I rejoice in that. Having worked in the ministry for the past three years I realise the difficult problems that have assailed our milk producers through the imposition of milk quotas. But at the same time we must remember that if the outgoing tenant may be receiving a payment that he did not expect, the incoming tenant will almost certainly be called on to pay something to the landlord which he would not have expected to pay. We have to keep a sense of proportion therefore in looking at the size of the payments.
On Second Reading my noble friend Lord Mottistone was concerned that tenant farmers were not being well enough treated by the government proposals. As I said, my noble friend Lord Stodart said that there is a suspicion that something is being put across tenant farmers. But if the amendments are passed, substantial sums are involved for tenants.
Quite a few of the briefs put out by organisations of the highest reputation in all the cases that I have seen were probably written before the Government put down their amendments, and that is the difficulty. But that is my fault for having put down the amendments
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late. For instance, a brief prepared by the Milk Marketing Board suggests that the maximum that our provisions in the Bill would provide would be 40 per cent. for the tenant. I believe that that very much understates the position, even before these amendments were put down. I am confident that a significant number will obtain more than 60 per cent.
Let me be specific. It is dangerous to put figures on individual cases. It may be misleading. But purely by way of illustration let me take the hypothetical case of two identical farms, each of 100 hectares, of average quality, used solely for grazing cows, each paying a rent of £100 a hectare and in each case, let us say, the tenant's improvements are worth £5,000 per annum. The only difference is that in one case the tenant has earned a lower than expected quota of 600,000 litres; in the other the quota is at precisely the level expected, 800,000 litres.
Assuming that the value of a quota is 13p a litre, which is the figure that it is reckoned the profession would light on at the present time, in the first case the total compensation payable would probably be in the region of £19,000 and in the second case some £34,000. We are talking about a lot of money. On behalf of the Government, I feel that that is only fair to the tenants. It is not something that is being put over on tenants as a sector of the farming industry.
5.15 p.m.
Lord Mackie of Benshie: The calculation appears to be nice and simple and even I can make it. The fraction is £5,000 over £5,000 plus £10,000, which is a third. The tenant would get one-third and the landlord two-thirds. The tenant might regard that as unfair. When the tenant goes out the landlord can sell his two-thirds and he can add to his value twice what the tenant gets. The tenant would regard that as unfair.
Lord Belstead: The noble Lord's intervention demonstrates the Government's difficulty and the different views put forward. He feels that the idea of the tenant's improvements being related to the amount that the tenant gets of the standard quota (which is called the tenant's fraction) is not fair, whereas Members of the Committee who voted for the first amendment of my noble friend Lord Middleton would say that what is in the Bill is fair and that the amounts that I have read out are considerable.
Finally, let me try to answer the questions put by my noble friend Lord Stanley and the noble Lord, Lord Walston. I hope that all Members of the Committee will feel that the changes proposed are right and will let the profession have a much freer hand in deciding in the case of an individual farm whether the whole basis of the valuation should change. When we say that that ought to be done only on the grounds of either land quality or climatic condition, we bear in mind that we are talking about regional variations.
When we get to the subordinate legislation we wish to propose that in the original less favoured areas—and I am talking about England and Wales at the moment—there should be a standard prescribed quota not of 8,000 litres but only of 6,000, and that in the new (what we called extended) less favoured areas there will be a standard prescribed quota of 7,000 and

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not 8,000 litres. Separate average yields would also be prescribed for those areas.
My noble friend secondly asked me whether the average yield per hectare per cow is 9,000 litres. He is right in that. He and the noble Lord both asked about the question of making different provisions for different cases. The Government precisely had in mind the need to think of the special characteristics of yield from, for instance, Channel Island herds. We hope that we would cover the matter in that case. The noble Lord finally asked me what would happen if quotas were altered. That will alter the basis of the valuation.
On Question, amendment agreed to.
Lord Stanley of Alderley Lord Stanley of Alderley moved Amendment No. 31:
Page 19, line 2, leave out paragraph 6 and insert—
("6.—(1) For the purposes of this Schedule standard quota shall be calculated by multiplying—

(a) the average number of hectares of land in question which could reasonably be expected to have been used during the relevant period for the feeding of dairy cows kept on the land (having regard to the number of grazing animals other than dairy cows fed from the land during that period); by

(b) the amount of milk quota which could reasonably be expected to have been allocated to one hectare of the land in question.

(2) The amount of milk quota referred to in sub-paragraph (1)(b) above shall be the number of litres of cow's milk which could reasonably be expected to have been produced by dairy cows fed from the land in question taking account of any reduction from the level of production in the relevant period subsequently imposed by the Minister.
(3) In this paragraph references to the feeding of animals are to grazing and feeding of crops (other than loose grain) harvested from the land in question and references to dairy cows are to cows kept for milk production.").
The noble Lord said: On previous amendments my noble friend Lord Belstead said that unless we did something, no share at all of the quota would go to the tenant. We cannot be like ostriches and do nothing. I shall now put my head on the block and I have no doubt that in common with others, including my noble friend Lord Middleton, I shall have it cut off.
Arbitrators will have to interpret the law. I suggest that the situation is similar to that of a person caught speeding. He knows that he is wrong and he roughly knows the situation but he will not know the small print of all the road traffic Acts. He will rely on his solicitor. When it comes to the calculation of quotas, the farmer will have to rely on expert advisers.
The purpose of my amendment is simple. It will give a fairer deal to tenants than that offered by the Government, but it does not give them the whole cake. I agree with my noble friend on the Front Bench that in order to achieve anything like a fair deal for tenants and to ensure that it is standard throughout the country, it is absolutely necessary to lay down a starting point for the arbitrator. That has been acceptd by my noble friend on the Front Bench and by arbitrators. Each Member of this Committee who spoke on Second Reading and who said that tenants should receive some value for the quota was saying, although he may not have known it, just that.
The problem and the question that the Committee has to ask and decide is: what is fair? As I have said, no tenant to whom I have spoken, or the NFU or the Milk Marketing Board, considers the Government's
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amendment to be fair. The amendment moved in another place which allowed the arbitrator to start 50 per cent. for the landlord and 50 per cent. for the tenant was considered by many tenants to be unfair. My amendment does not go so far as that. I noted that my noble friend Lord Stodart and the noble Lord, Lord Walston, were saying that they would like such an amendment. If they like to table an amendment to Clause 11 it could be just as simple as that of my noble friend Lord Middleton.
This amendment gives a simple guide to the arbitrator as to where he should start in the division of standard quota. It rests on the principle of giving into Caesar that which is Caesar's. I hate to say it, but in this case Caesar just happens to be the landlord. I start by accepting the definition given by the noble Lord the Minister that standard quota is the amount that could reasonably be expected to be produced from the holding.
I therefore ask the Committee to consider whether it is the landlord or the tenant who is responsible for that production. My amendment gives to the landlord that proportion of the quota that can be produced from his land and the forage that that land should produce. It gives to the tenant the proportion that the tenant has produced by way of bought-in feedingstuffs, his herd management, his expertise and his hard work—I would say slavery, because I managed only two years of it and gave up. That is the substance of my amendment. I suggest that it is simplicity itself.
Moreover, anyone who farms knows that there are proven figures to show what should be produced from grass for the arbitrator to refer to. In fact, the method that I was taught and still use for how to feed the grazing animal rests on that. Because of the need to keep my amendment simple, I accept that relatively the extensive, low-cost producer or small producer does not fare so well as the vast majority of reasonably normal tenants, whoever they may or may not be. But he fares very much better under this amendment than under the one proposed by the Government. If the Committee considers he is still hard done by, I can assure the Committee that I shall draft a further amendment on Report to deal with his specific case.
I must cover one point which was mentioned by my noble friend Lord Monk Bretton, because I think that there is concern, though my noble friend Lord Belstead dealt with it to some extent. It is the concern that has been expressed that if the tenant's share of the quota value is increased, it would increase the financial burden of any incoming tenant to the holding. The problem of new tenants to the dairy industry will not be solved merely by giving the greater part of the quota value to the landlords. A regulated quota transfer system would provide the best opportunity to take account of the needs of new tenants.
Furthermore, landlords do not always relet their farms with quota to new entrants. There have already been instances where landlords, once they have the whole quota, have been selling them at the expense of the outgoing tenants. That will not necessarily help the incoming tenant. I hope that I have made that point clear. My character, whether I am wearing the hat of landlord, owner-occupier or tenant—I wear all three—does not change. If I have quota, I am afraid

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that I am greedy whichever hat I am wearing. I am sorry about that, but it is human nature.
I must repeat that my amendment is only giving the arbitrator a starting point. I agree with the Committee that the arbitrator should be given latitude, and there is no question in this amendment of tying his hands. The amendment merely gives him the necessary starting point. I hope that the Committee will accept the logic of my argument. I beg to move.
Lord Middleton: When speaking to the last amendment, my noble friend Lord Stodart said that he thought that he had understood the gist of what my noble friend Lord Stanley was trying to do with it. I think I understand very well the gist of what he is trying to do. He must have had his tongue in his cheek when he spoke. The key part of my noble friend's amendment is to be found in paragraph 3. Let us be reminded that the basic fact is that the lower the standard quota the higher the compensation that has to be paid to the outgoing tenant by the landlord and finally by the incomer.
This is a device to reduce the standard quota and therefore to increase compensation by taking out of consideration that part of the farm's milk production which is attributable to the feeding of concentrates. We all know that no respectable yields are possible without feeding some form of concentrates. The whole basis of the Government's calculations assumes a level of production by a reasonably competent farmer and one who feeds concentrates. If this scheme is favoured by the NFU, I have to say that it is being greedy. I am surprised that my noble friend Lord Stanley should move this amendment.
Lord Mackie of Benshie: I am grateful to the noble Lord for giving way. In the Government's amendment paragraph 5 states:
"In this paragraph—
(a) references to land used for the feeding of dairy cows kept on the land do not include land used for growing cereal crops for feeding to dairy cows in the form of loose grain".
Lord Middleton: That is a different point. I am surprised that my noble friend Lord Stanley should put forward this amendment. Let us not forget that there are two tenants affected by compensation. There is the outgoer and the incomer. The greater the compensation to the outgoer, the more the incomer will have to pay to get into the tenancy. If the NUF favours the amendment, I should have thought it would do well to think of those members who are likely to be incomers. This amendment should be opposed.
5.30 p.m.
Lord Belstead: I should like to say to my noble friend Lord Stanley that we have now had about two and a half hours or more of close discussion, and I know that whenever I have spoken it has been a bit tortuous. My noble friend has produced an amendment which contains a good deal of ingenuity. It is terse, clear and based on an interesting concept, but I agree with my noble friend Lord Middleton that my noble friend is opening his mouth a little wide.
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The fundamental point which my noble friend Lord Stanley is making and which worries me is the suggestion that the standard quota for any holding should be based on what the holding could produce if no concentrates were fed to the cows. There is an objection in principle to that. My noble friend Lord Middleton talked about that. There is also a practical problem.
As to the matter of principle, if the tenant has, through his own efforts, acquired a higher quota than the standard he will receive full compensation for the excess as well as an appropriate share of the standard quota. Although the noble Lord, Lord Mackie of Benshie, and I have not agreed about the amount of the standard quota that the tenant should receive, nevertheless that is what the Government are putting forward.
My noble friend defines standard quota in his amendment in a very different way to saying what a holding ought reasonably to produce. In this amendment it would no longer be the amount that one would reasonably expect. In most cases it would be a very much lower amount. This is the point that my noble friend Lord Middleton has fastened upon. The reason is that the amendment takes into account only the milk that could be produced from the forage grown on the holding. However, as the Committee will be the first to tell me, all dairy farmers, to a greater or lesser extent, feed concentrates. Leaving concentrates out of the picture completely would result in standard quota being well below the level of quota that one would expect when looking at a farm. This is, in the Government's view, an artificial distortion and would substantially increase the amount of excess quota. This means that even tenants who had performed significantly less well than the average would be rewarded with excess quota on which they would receive compensation from their landlords at 100 per cent. value. Honestly, I do not think that this is a just solution.
There is, I believe, a difficulty of practice. The amendment contains the serious danger that the method proposed could not be operated so as to produce even and consistent results. After all, we are law-making. The energy system on which my noble friend bases Amendment No. 31 is a well-recognised management tool for measuring the efficiency on grassland utilisation. But my noble friend proposes to use it for a purpose that was never intended; namely, to define a statutory right. The difficulty is that in the first place the contribution made to milk production by forage is not, I understand, a constant factor. Weather and the quality of the forage, both grazed and conserved, can affect the picture considerably. My goodness, did we not all realise this last winter?
In the second place, the contribution made to milk production by concentrates cannot be assumed to be proportionate or precisely predictable. We have all heard of cases where a farmer has increased concentrate usage and got a disappointing response in terms of milk production. Equally, we know the results of a report from Milk Minder, the dairy enterprise recording scheme developed by ADAS and the Milk Marketing Board, that compared 2,000 herds over a two year period, 1983–84 and 1984–85. The Committee may remember that this showed that

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overall production fell in 1984–85 by 5 per cent. while concentrate usage fell by 25 per cent. I cannot resist the temptation to observe that if we pursued the logic of my noble friend's amendment to its conclusion, it could imply results very different from those that might be expected. If a 25 per cent. drop in concentrate usage leads to only a 5 per cent. drop in milk production, does it not follow that stopping concentrate usage altogether would only reduce milk production by 20 per cent.? Of course, things do not happen quite like that. I am over-simplifying. But it demonstrates that the method that my noble friend tries to use in the amendment is far too insufficiently precise to be used in making a law and in defining statutory rights to compensation. In other words, with great respect, to my noble friend I am saying that I do not think that it will work.
It is much too soon, in the time that has elapsed since last week, for me to report what the profession is saying. I have not read on paper that the profession has reached any final view on the amendment. I have nonetheless heard that the initial reaction of the profession is one of anxiety. It would consider that we were presenting valuers with serious professional difficulties if we asked them to implement the method of calculation indicated by the amendment. I am conscious of the additional work that we shall, in any case, be putting on the profession in asking it to arbitrate for the purposes of Schedule 1, if eventually your Lordships agree to it. The task will not be easy. I do not believe that we should burden the profession additionally with a methodology that I understand it would find difficult.
There is one last point that my noble friend himself very fairly mentioned. We should not forget that these are going to be payments to the outgoing tenant from the pocket of the incoming tenant. The amounts of money we are talking about will in many cases be substantial. Do not let us jeopardise the landlord-tenant system upon which we have worked so hard in this Chamber by over-egging the pudding however much we may wish to see a fair deal for the tenant. It is because I believe there are both practical problems and a problem of principle in the amendment that the Government regretfully feel that they cannot support it.
Lord John-Mackie: I am in some difficulty. Although the Milk Marketing Board seems to have been eminently fair, the amendment proposed by the noble Lord, Lord Middleton, is too hard; that proposed by the noble Lord, Lord Stanley, goes the opposite way; and the Government amendment is about halfway between. One wants to be fair. I have received some calculations this afternoon while sitting on the Front Bench. It appears that the noble Lord, Lord Stanley, is being too kind to his friends, and the noble Lord, Lord Middleton, too kind to his. I should like a solution somewhere between the two but also one that is simple. However, as the noble Lord, Lord Belstead, has said, whatever the outgoing tenant gets, the incoming tenant has to pay for. A balance has to be struck.
I do not believe that the amendment now being discussed strikes a fair balance in the same way that the amendment proposed by the noble Lord, Lord
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Middleton, did not strike a fair balance. Whether the Government amendment is as good as it should be, I do not know. It seems to contain fluctuations that are rather too big. I admit that I am not being very helpful. I am simply re-stating the point made by the noble Lord, Lord Belstead, that we are in a difficult position. One hopes that the noble Lord may be able to go back and think again. I know that the noble Lord says that he has gone back often enough and that if one cannot get agreement between landlord and tenant, what is the sense of doing so again. But it is amazing what one can do if one tries. I hope that he will try to see whether he can come up with something that would satisfy us.
The Earl of Onslow: I have listened to most of the discussion. It reminds me of the Irishman who, when asked the way to so-and-so, said, "I would not be starting from here". It also reminds me of Schleswig-Holstein and Palmerston's remark, I think, that only three people understood it and one was in Switzerland. Would it not be better, instead of these highly complicated arrangements, to have a system of totally negotiable quotas, bought and sold on the open market? If, then, the European Community wanted to allow an increase in milk production, it would sell some extra quotas. If it wanted to reduce milk production, it would buy in extra quotas. As an investment, one would be able to buy a quota, not having to be a farmer, and lease that quota at 2½p a litre, or whatever the price is, to someone who is farming. That seems miles more sensible and might even be Community-wide. But the complications—the Clonmels and the Schleswig-Holsteins mentioned during this debate—have not been understood by most of us. I have certainly not done so. There must be simpler ways.
Lord Mackie of Benshie: This is a little complicated, but if I can understand it, most people should be able to do so. The Government have brought forward their own extremely complicated amendment, which we have just passed, that will cause just as much trouble for valuers and arbitrators as that proposed by the noble Lord, Lord Stanley. It is reasonable, having failed to get an agreed, simple measure, that efforts should be made to produce an amendment to bring what we feel to be justice to one party or another. This is quite simply what the noble Lord, Lord Stanley, is trying to do. He is trying to "up" the proportion which goes to the tenant.
I think that I have already produced figures for the tenant's fraction showing that it is about a third. My noble friend has said that he thinks it should be about 50 per cent; that that is the fair starting point to go for arbitration. That is the kind of situation towards which we are moving. I do not think that the Minister can complain about the amendment because it would lead to trouble for arbiters—you call them arbitrators, I call them by the old term—in settling a question. We are trying to get a proper adjustment which we think is fair. We have to use the Bill as it stands. That is what the noble Lord is doing.
I see no reason why we should not support this amendment if we think that the present division, as worked out by the tenant's fraction, is unfair. I happen to think that it is a little unfair. I therefore think that it is a rather good amendment.
Lord Walston: It was very refreshing to hear both the Minister and my noble friend Lord Mackie of Benshie use the words "just" and "justice". I think it is the first time that they have been used in our discussion. However, what is confusing matters is this. So far as I know the Government have not defined what they consider to be a just division of the value of the quota as between landlord and tenant. I think they agree that any quota in excess of a certain amount per standard quota belongs mainly, if not entirely, to the tenant because he has been responsible for creating it. However, we have not heard from the Government what they think is a just division of the standard quota—if we may use that term; I think that we now understand what it means—between landlord and tenant. Possibly they consider that it should all belong to the landlord; I do not know. It would be helpful if the Minister could make that clear to us.
It would also be helpful if the noble Lord, Lord Middleton, could make it clear to us what he thinks is a just division of the standard quota as between landlord and tenant If we can reach agreement on that, I think most of our difficulties will be solved.
I would make one further observation. Both the Minister and the noble Lord, Lord John-Mackie, made the point that the more the outgoing tenant receives, the more the incoming tenant pays. That surprises me. I thought that what we were arguing about was not the value of the quota—that is presumably fixed by the open market—but what proportion of whatever the incoming tenant pays should go to the landlord and what should go to the outgoing tenant. If I am wrong about that, and the incoming tenant pays more or less depending on what the outgoing tenant demands or is able to obtain, I hope that the noble Lord, Lord Belstead, will make it clear to us.
Lord Belstead: Perhaps I may make one point before we finish. The noble Lord, Lord Walston, has said that this Chamber does not know what the tenant's fraction amounts to. The way in which the tenant's fraction is to be computed is set out in paragraph 7 of Schedule 1. It is supposed to be the part of the standard quota which is to be credited to the tenant. Its size will depend upon the value of the tenant's improvements compared with the rental value of the land.
I would just add that when we come to Amendment No. 32, with which I shall seek to take Amendment No. 33, the Government will propose that the tenant's share of the standard quota should be related to his dairy improvements and fixed equipment on the land used, for the feeding, accommodation or milking of dairy cows only, and that the rent paid to the landlord similarly will be based on the land used for the feeding, accommodation or milking of dairy cows kept on the land only.
I do not think that it needs very much imagination to see that this again is a slight but significant move in the direction of the tenant. I say this because I am sure that my noble friend Lord Stanley will not take it amiss when I say that this amendment, notwithstanding considerable moves this afternoon in the direction of the tenant by the Government, would be a very significant shift in the direction of the tenant. With
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respect to my noble friend, for the reasons which I have attempted to deploy in my speech this is an amendment which I do not think will work anyway.
Lord Walston: May I pursue this for a moment in order to clarify the position? It is a very important point. As I understand it, the Government's position is that the tenant is entitled to no proportion whatsoever of the standard quota other than that to which he has contributed by his own activities as a tenant over a certain number of years. If he has contributed nothing, if he has taken over a well-equipped farm with all the right buildings, with good grassland capable of carrying 100 milking cows, and he continues to carry 100 milking cows and continues to farm adequately so that the grassland is kept up to standard but not improved, he is entitled to nothing. But he is entitled to that which by his own actions has increased the quota. Have I understood the Minister correctly?
Lord Belstead: That is correct.
5.45 p.m.
Lord Cledwyn of Penrhos: I apologise for rising to speak, bearing in mind that my other commitments elsewhere in this building have prevented my being present throughout the course of this very important debate. We are dealing with the most complex matter in the Bill before us. I have read with great care the multitude of papers that have come to me through the post. I have followed with great interest the arguments in the debate on the amendment of the noble Lord, Lord Middleton; it seems to me that the judgment of Solomon is required to come to a conclusion that would please everybody. That would be impossible. Nevertheless, I believe that the amendment moved by the noble Lord, Lord Stanley, is worthy of further consideration. Given the number of speeches that have been made by noble Lords who I think can properly be called experts in this field I believe that the noble Lord, Lord Belstead, should give this matter further consideration and come back to us again.
In my view if there is one organisation in this field to which we should listen with respect, it is the Milk Marketing Board. It has great experience, great knowledge, and is furnished with all the facts. It is in touch with the dairy industry throughout the country. It is fully aware of all the implications of the three amendments before the Committee. What has it said? I have carefully studied the brief that it sent me. I shall quote what the board says. It says that it supports the amendment of the noble Lord, Lord Stanley of Alderley,
"believing that it would produce a much fairer distribution of the value of quota between the landlord and the outgoing tenant".
I am bound in all fairness to agree with the noble Lord, Lord Belstead, when he says that the Government amendment is a shift in the right direction. However, whether it is a big enough shift, or whether it is a fair enough shift, is another matter. Without detaining the Committee much longer I would say that this is so important a matter to such an important segment of the agricultural industry that I think the noble Lord has a duty to take this back again and to come to us at Report stage, having studied the implications of all the figures.

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I believe that Lord Stanley's amendment would be fair to the landlord, and I also believe that it would be fair to the tenant. The Committee will bear in mind that agricultural tenants have recently gone through an enormously difficult time, and they deserve the most careful consideration. I am not asking the noble Lord to give a final decision now: I am asking him to take the matter away and to come back to your Lordships' House on Report and to give us the benefit of the further discussions which he may have had with his right honourable friend.
Lord Belstead: I always listen with the very greatest care to what the noble Lord, Lord Cledwyn of Penrhos, says. The noble Lord was a Minister previously, and he has unrivalled experience. However, there is one difficulty as regards what the noble Lord has just said. The noble Lord understandably attributed some of his views on this particular matter to briefs which had been issued by the Milk Marketing Board. I think it is fair to say that the Milk Marketing Board's assessment understates the value of the Government's proposals to tenants. For example, it ignores the fact that we have allowed for the full effect of 10 per cent. quota cut-back even though many tenants have had some of that cut-back made up.
What I am really saying is that I think—and I repeat, "I think"—that probably the Milk Marketing Board brief was written just before the Government tabled their amendments last week. I referred to this matter a little earlier this afternoon, and the noble Lord will forgive me for repeating it now. Indeed, I hope that all Members of the Committee will forgive me for repeating one more point, and that is: for goodness sake, let us be fair to all tenants, both incoming as well as outgoing. We are talking about very large sums of money in this particular schedule to the Bill, and quite rightly so, in the interests of milk tenants who have suffered very considerably from the imposition of quotas over the last two and a half years.
However, we can only go so far. The Government have genuinely tried to go a long way this afternoon, and I know that some of my noble friends have been worried that the Government have gone as far as they in fact have. We have all looked at the matters carefully. We have thought seriously and, as regards this amendment, I have to say quite seriously that I think that it goes too far as well as not being practically possible.
Lord Cledwyn of Penrhos: I am most grateful to the noble Lord, whose observations I obviously respect. In reply to my point about the Milk Marketing Board he prefaced his remarks with the words, "I think". He was not absolutely certain. He said, "I think" that they drafted these observations before the Government published their amendments. The noble Lord may or may not be right, but given the importance of this matter he should be absolutely sure before he stands at the Dispatch Box to make a final definitive statement on behalf of the Government.
I suggest, therefore, that the noble Lord's speech supports my argument that he should take the matter away and talk to the Milk Marketing Board and get the benefit of its advice. Certainly from my
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experience—and this is probably true of the noble Lord—the Milk Marketing Board was the one body to which I listened on questions of milk production and the dairy industry. It is the one body whose observations I took very carefully into account. Therefore, I say say to the noble Lord that if he is not sure now when he stands at that Dispatch Box that the Milk Marketing Board drafted its observations before or after the Government tabled their amendment, then it is his duty to go back and talk to it and to come back to your Lordships' House and give us the benefit of that consultation.
Lord Belstead: I was indulging in a courtesy. The figures which the Milk Marketing Board had set out in its briefs are not correct.
Lord Mackie of Benshie: This weeping over the incoming tenant is a little inaccurate, to put it mildly. To think that the landlord will not extract his full share of the quota value by way of rent or in some other way is absolute nonsense. The hard-pressed landlord—and we have heard them today—will of course do that, but the tenant does not need to pay it. If he does not want to go into dairying, if it is too expensive, he will go into something else. The argument that we must be fair to the incoming tenant has nothing to do with justice for the tenant who is going out.
Lord Stanley of Alderley: First, I should like to repeat what the noble Lord, Lord Cledwyn, has said: this is a very important matter which gets everyone very steamed up. As I have said, I spent most of the beginning of this afternoon somewhere on the ceiling, and I am just about coming down. We must return to the matter again because it affects so many people.
I must also thank the noble Lord, Lord Mackie of Benshie, for the last point which he raised about the incoming tenant. I thought that I had laid that point to rest, but I obviously had not done so. There will be a value of quota on that farm when the tenant leaves. The incoming tenant will have to pay for that. He may pay for it in tenant's rights as he comes in, in notes. But it is much more likely, I suggest, that the landlord will charge him extra rent. It does not matter one hoot whether it belongs to the outgoing tenant or the landlord: the money is still there for the incomer. If you cannot see that, I cannot explain it any better than the noble Lord, Lord Mackie of Benshie, tried to do.
I should have liked a simple amendment. As I said to the noble Lord, Lord Walston, and to the noble Lord, Lord John-Mackie, I am quite happy to go back to a 50–50 division: let us start in the middle of Clause 11 with no schedule. However, that was not accepted in the Commons.
As far as my noble friend Lord Onslow is concerned and the point which he raised about negotiable matters, I do not want to go down that path. It still does not solve the problem of where we are now. The Committee knows my feelings—I would not have quotas anyhow. I am like the person who said, "I wouldn't have started from here, anyhow". However, we are here and we have to solve the matter. That is the Committee's job.
I understand very well the point made by my noble friend Lord Middleton that I am being greedy. I think

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that my noble friend on the Front Bench thinks that I am being greedy. It will be up to the Committee to decide. As the noble Lord, Lord Cledwyn, said, it will require a judgment of Solomon. You will have to decide between us in the end. You will have to make a decision, if not now, later. It will not be now because we have not seen the end of the story. As has been mentioned, the Milk Marketing Board has issued four or five different briefs. I do not know whether my noble friend on the Front Bench has the most up-to-date brief. There are no dates on mine, and I keep getting myself in a muddle as to which brief I am looking at. I ask my noble friend to ask the Milk Marketing Board between now and Report how it sees his new amendment. I think—and I only say, "I think"—that the last brief which I saw from the Milk Marketing Board took into account his amendment, but I shall not swear to it.
My noble friend on the Front Bench says that my amendment is imprecise. As the noble Lord, Lord Mackie of Benshie, has said, I do not think that it is any more imprecise than his. However, I can certainly try between now and Report to make it more precise. I accept absolutely that I have moved in favour of the tenant compared with my noble friend Lord Middleton. Of course I have done so. I do not hide my light (if I can call it that) under a bushel. Again, the matter will have to come back to your Lordships to decide whether or not it is the landlord who should receive it. He certainly works hard. He owns the land. I was a tenant, and I am trying to see whether my noble friend Lord Butterworth is present because he was my first landlord. I was a tenant for many years. I greatly liked the system, and profited from it. I should hate to see it ruined. However, the tenant also works hard, particularly the dairy tenant. He gets up at 5 o'clock every morning. It is slavery. He deserves something, too.
I know that my noble friend will think about this matter between now and Report. If we could come nearer a judgment it would be to everyone's advantage. At the end of the day I am sorry to say your Lordships will have to listen to the arguments again and will have to decide. Bearing that in mind, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6 p.m.
Lord Belstead Lord Belstead moved Amendment No. 32:
Page 20, line 9, leave out ("in connection with the production of cow's milk") and insert ("for the feeding, accommodation or milking of dairy cows kept on the land").
The noble Lord said: I beg to move Amendment No. 32, and I wish to speak also to Amendment No. 33.
I mentioned earlier when we discussed the government amendments to paragraph 6 of Schedule 1 that in assessing the standard quota for any land account should be taken of the area of land used by the dairy cows only, excluding land used by followers. It would therefore seem appropriate when assessing the relative contributions of the landlord and tenant that a similar concept should be used. The purpose of these amendments is to achieve that aim. The tenant's share
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of the standard quota will be related to his dairy improvements and fixed equipment on the land used for the feeding, accommodation or milking of dairy cows kept on the land. The rent paid to the landlord similarly will be based on the same land. I beg to move.
Lord Mackie of Benshie: I wonder whether the Minister can answer a few questions for me on this matter. How is the rental value to be calculated? Is it to be at the cost of overdraft at the present time on the initial cost of the buildings? Is it on a valuation of the buildings if he has put up the buildings? How is it to be done? Is depreciation to be taken into account? If he can explain that to me I shall be most grateful.
Lord Belstead: Annual rental value at the end of the quota base period, normally 1983, of the tenant's dairy improvements and fixed equipment is to be the basis, so it is proposed in paragraph 7 of Schedule 1—that is, so far as the tenant's contribution is concerned—that the annual rent paid for the land used for the feeding, accommodation and milking of dairy cows during the base period will be the assessment of the landlord's input.
Lord Mackie of Benshie: But how do you calculate the tenant's bit? I asked whether you calculated it on what he would pay on overdraft interest. There does not appear to me to be a method of calculating the value of old buildings which have been put up 10 years previously by the tenant. It is a very difficult matter and one on which we need some guidance.
Lord Belstead: I should have thought that the answer I gave first does not include overdraft interest. It is a straight annual rental value at the end of the quota base period of the improvements and the fixed equipment. If that leads still to trouble of interpretation for the noble Lord, perhaps I may write to him.
Lord Mackie of Benshie: I am sorry to bother the Minister, but does he mean that perhaps you would get an arbitrator or arbiter to assess the value of the buildings? Is it the annual value at which we are looking?
Lord Belstead: I have just been passed a note to the effect that of course if it has been genuinely written down one will take the written-down value. Does that take us a step further forward?
Lord Mackie of Benshie: A step backwards so far as this amendment is concerned.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 33:
Page 20, line 17, leave out from ("improvements") to end of line 18 and insert ("to, or tenant's fixed equipment on, land used for the feeding, accommodation or milking of dairy cows kept on the land in question").
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 34:
Page 21, line 44, at end insert—
("(2A) In any case where on the termination of the tenancy in question a new tenancy of the land or part of the land may be

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granted to a different tenant by virtue of a direction under section 39 of the Agricultural Holdings Act 1986 then, as respects any claim in respect of that land or part, references in sub-paragraphs (1) and (2) above to the termination of the tenancy shall be construed as references to the following time, namely—

(a) in a case where no application is made under that section within the period within which such an application may be made; the expiry of that period;

(b) in a case where every such application made within that period is withdrawn, the expiry of that period or the time when the last outstanding application is withdrawn (whichever is the later);

(c) in a case where the Agricultural Land Tribunal refuse every such application for a direction under that section, the time when the last outstanding application is refused; and

(d) in a case where the Tribunal give such a direction, the relevant time for the purposes of section 46 of that Act;

and no notice may be served under sub-paragraph (1) above before that time.").
The noble Lord said: Amendment No. 34 went with Amendment No. 27. I beg to move.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 35:
Page 22, line 2, after second ("tenancy") insert ("or, in a case where sub-paragraph (2A) above applies, after the time substituted for the termination of the tenancy by virtue of that sub-paragraph,".
The noble Lord said: This amendment also is consequential on Amendment No. 27. I beg to move.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendments Nos. 36 and 37:
Page 24, line 31, leave out paragraph (d).
Page 24, line 46, leave out ("revenue") and insert ("revenues").
The noble Lord said: I beg to move Amendments Nos. 36 and 37 together. The first of these amendments is a technical amendment. Paragraph 17 of Schedule 1 relates to Crown land and provides that such land will be subject to the schedule or to such modifications as may by regulations be prescribed. Paragraph (2)(d) refers to land held in trust for Her Majesty for the purposes of a government department and states that the department will represent Her Majesty and be deemed to be the landlord. The advice now is that this subparagraph is no longer required because government land nowadays is held always on trusts directly vested in the appropriate Secretary of State or Minister who will accordingly be the landlord under the general law.
Amendment No. 37 is a purely drafting amendment. I beg to move.
On Question, amendments agreed to.
Lord Belstead Lord Belstead moved Amendment No. 38:
Page 25, line 47, at end insert—
("(1A) In this Schedule references to land used for the feeding of dairy cows kept on the land and to dairy cows have the same meaning as in paragraph 6 above.").
The noble Lord said: This amendment is consequential on Amendment No. 32. I beg to move.
Lord Mackie of Benshie: I do not want to hold up the Committee, but really we are going back to further complications. It was my impression that this amendment and the previous one meant practically the same thing as the amendment of the noble Lord, Lord Stanley. I think I recall that the Minister said that the tenant would be compensated for the skilful feeding of concentrates over and above the standard
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quota. He may or may not have said that, but certainly the inference was that it was one of the things that a tenant could profit from in raising his quota. I accept the amendment quite happily, but I think it illustrates the enormous complexity of the Bill and the need to consider further whether a simpler solution could not be found.
Lord Belstead: With respect to the noble Lord, Lord Mackie of Benshie, if I may say so there is a world of difference between the Government's proposal in Amendments Nos. 30 and 32, which seeks—and the Committee has agreed—to use as the basis for calculations the land used for the feeding of dairy cows when looking at what ought to be the quota on that particular farm, taking into account normal management, and my noble friend Lord Stanley's amendment, Amendment No. 31, which we have disposed of, which specifically said that one only took into account the actual land itself and the feeding of no additional concentrates in deciding what the standard quota ought to have been. I hope that makes it clear. I think the amendments are entirely different, and Amendment No. 38 is really consequential on Amendment No. 32. I beg to move.
On Question, amendment agreed to.
On Question, Whether Schedule 1, as amended, shall be the First Schedule to the Bill?
Lord Middleton: I think that had my amendment been approved by the Committee, Schedule 1 would have fallen. Clearly, as the Committee did not agree to my amendment, Schedule 1 must remain part of the Bill.
Schedule 1, as amended, agreed to.
The Deputy Chairman of Committees (Lord Wells-Pestell)The Deputy Chairman of Committees (Lord Wells-Pestell): Amendment No. 39.
The Minister of State, Scottish Office (Lord Gray of Contin): I beg to move that consideration of Amendment No. 39, this new schedule, be postponed until after Amendment No. 75.
Moved accordingly, and, on Question, Motion agreed to.
Lord Gray of Contin Lord Gray of Contin moved Amendment No. 40:
After Clause 11, insert the following new clause:
("Scotland: Compensation to outgoing tenants for milk quota.
.—(1) Schedule [Scotland: Tenant's compensation for milk quota] shall have effect in connection with the payment to outgoing tenants who are—

(a) tenants of agricultural holdings within the meaning of the Agricultural Holdings (Scotland) Act 1949;

(b) landholders within the meaning of section 2 of the Small Landholders (Scotland) Act 1911;

(c) statutory small tenants within the meaning of section 32(1) of that Act;

(d) crofters within the meaning of section 3(2) of the Crofter (Scotland) Act 1955,

of compensation in respect of milk quotas.
(2) On a reference to arbitration or, as the case may be, on an application to the Scottish Land Court regarding the fixing of a rent under any of—

section 6 of the Crofters Holdings (Scotland) Act 1886;

section 32(7) of the Small Landholders (Scotland) Act 1911;

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section 7(1) of the Agricultural Holdings (Scotland) Act 1949;

section 5(3) of the Crofters (Scotland) Act 1955,

the arbiter or, as the case may be, the Scottish Land Court shall disregard any rights the tenant may have under Schedule [Scotland; Tenant's compensation for milk quota] of this Act.".)
The noble Lord said: Perhaps it may be for the convenience of the Committee if, in moving Amendment No. 40, I speak also to Amendment No. 39 and Amendments Nos. 73 and 74. These amendments introduce a new clause and schedule to the Bill to provide in Scotland for compensation by landlords to tenants in respect of milk quotas on the termination of the tenant's lease. This amendment is broadly comparable to the provisions for England and Wales contained in Clause 11 and Schedule 1, and takes account of such additional amendments thereto, introduced earlier by my noble friend Lord Belstead, as are relevant in a Scottish context.
This amendment is the outcome of a great deal of discussion between the Government and the agriculture industry. These discussions have not been easy and have been conducted against a background of highly emotive public debate. We have worked hard in Scotland for an acceptable agreement with representatives of landlord and tenant interests, and it is a source of deep regret to me that it has not been possible to achieve a consensus view with these bodies as to how the matter should be resolved, especially in view of the good relationship which exists in Scotland between landlords and tenants, and, indeed, the good relationship which exists between both bodies and the Scottish Office. In these circumstances, and given the Government's acceptance that waygoing dairy tenants have a right to compensation in milk quota, we have had to devise a statutory framework which balances the interests concerned and which allows the individual circumstances of each case to be taken into account.
At this stage I must take issue with what my noble friend Lord Burton said a little earlier, when he suggested that something was just being pushed off on to Scotland and that there had been insufficient time for consultation. I was involved in several meetings with both the Scottish Landowners' Federation and the Scottish National Farmers' Union. I was engaged in two special meetings with them, each of an hour's duration, in an endeavour to try to bring the sides a little closer together. Although at the second meeting the mood was harmonious, I am afraid that I failed in my endeavour to try to reach a consensus, but it is quite wrong of my noble friend to suggest that every effort was not made to try to be helpful so far as a solution was concerned.
The basic legislation governing milk quotas comprises European Community regulations. This means that we have to be careful to avoid any discrimination between farmers in similar circumstances north and south of the Border. Nevertheless, clearly some recognition has to be given to the particular circumstances of the Scottish dairy tenant where they differ from his counterpart south of the Border, and I shall return to that point in a few moments.
All in all, I believe that the arrangements we have devised in this new clause and schedule provide a workable and fair solution to this thorny issue. The
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need for a separate provision for Scotland in the Bill is of course caused by the different and more complex body of Scottish land tenure legislation, and this, along with weather, accounts almost entirely for the differences from the provisions for England and Wales.
As the Committee have already agreed to this approach for England and Wales, I shall not trouble you with a further detailed exposition of the approach but instead will concentrate of the differences to which I have referred. The first and most significant is the need in Scotland to cater for four different land tenure systems and categories of tenant farmer: namely, tenants of agricultural holdings; crofters; small landholders; and statutory small tenants. Within these various systems there are differences in provisions for arbitration, in certain circumstances involving the Scottish Land Court instead of, or as an alternative to, an agricultural arbiter; and in provision for succession.
The arbitration and succession provisions in the context of this amendment are also the main differences between land tenure legislation north and south of the Border. The succession provisions in particular are much more liberal in Scotland in their protection of the security of tenure enjoyed by the tenant farmer. The Committee may be interested to note that one result of this will be that we anticipate far fewer cases in Scotland than might be expected as a direct proportion of those likely to arise in England and Wales. Indeed, only a handful of cases per year seem likely.
A further difference in paragraph 2(4) of the schedule is the inclusion of provision to override this schedule where the landlord and tenant agree in writing as to the amount of compensation to be paid. This reflects the situation which obtains for compensation available under existing legislation. In addition we have made provision in paragraph 7(4)(c) of the schedule to ensure that certain private agreements between landlords and tenants in relation to waygoing compensation payable under existing legislation, which are a feature of the Scottish system, do not unfairly disadvantage the tenant in the calculation of the amount he is due in respect of quota compensation. Finally, there are some minor differences in a few of the terms used in the schedule.
May I now return to the point I made earlier about the recognition of particular circumstances of Scottish dairy tenants where they differ from their counterparts in the South. These circumstances, such as a greater dependence on marginal land and on bought-in feed, are of greater significance in the case of the tenant dairy farmers in the original less-favoured areas in Scotland and will be reflected in the standard yield per hectare figure which will be prescribed by the Secretary of State by statutory instrument. The figure we have in mind for original less-favoured areas in Scotland is 5,500 litres per hectare. This concession is particularly significant for Scottish dairy tenants since the majority are located in the less-favoured areas. Figures for extended LFAs and non-LFA tenants are likely to be the same as for England and Wales. We have in mind to prescribe an average yield figure for the original LFAs in Scotland of 6,200 litres per hectare.
In conclusion, I commend these provisions to the Committee as a fair and balanced solution to the milk

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quota compensation issue in Scotland which takes account not only of the complex body of existing legislation but also of the particular circumstances, production patterns, and farming practices of the Scottish dairy tenant. I beg to move.
Perhaps I may now briefly make mention of Amendments Nos. 73 and 74. These amendments to Clause 16 are consequential amendments that require to be made if Amendments Nos. 40 and 39, to which I am also speaking and which deal with compensation for outgoing tenants for milk quotas, are inserted in the Bill. It is desired that the Scottish clause on compensation for milk quotas should come into force on the same day as the English clause on milk quotas. Clause 16(2) provides for certain sections of the Bill to be brought into force by means of an order made jointly by the Minister of Agriculture, Fisheries and Food and the Secretaries of State for Scotland and Wales. One of these sections is the clause in the Bill on milk quotes. The first amendment is to the effect of including a reference to the Scottish clause on milk quotas; the second, small amendment being made in line 29 is consequential on the first.
Lord Burton: Until recently, in Scotland landlords were at a disadvantage compared to their English neighbours. They were allowed to revise rents only once in every five years. Thus some Scottish landlords are sitting with three, four or five-year-old rents. Indeed, for crofters it is seven years. I know that the Conservative Government have slowed down inflation, but it will be appreciated that a five-year old rent is now far too low, and yet the Government's proposals are that tenants will benefit from these out-of-date rents. Once again this is quite unfair to the landowner. In three years' time this situation will cease to exist; but the Government are desperately trying to rush through this legislation. Are Scottish landowners to suffer until then?
The schedule also excludes cereal crops for feeding dairy cows. This is part of the dairy enterprise, and why should this land be excluded? The schedule also refers to the fixed equipment which is relevant to keeping dairy cows on the tenancy. Would this include retail equipment such as bottling plant? The schedule also refers to the situation in relation to crofting. I do not know of any crofts with a dairy unit, but no doubt there are some in Orkney. Clearly there has been no opportunity to consult over the weekend with the Orcadians. The seven-year revisions of what are pittances of rents for crofts must be an unfair comparison with the rents of ordinary agricultural holdings.
I think that the landlord's position could well be difficult in this decision. Clearly, we must have more consultation on this matter and we shall reserve our position. Scottish landlords must not be placed at a greater disadvantage than their English counterparts. From what my noble friend has just said, it seems that tenant farmers will be better off in the poorer areas where there is an LFA and presumably that means that in these areas the landowner will have to pay greater compensation. Because the land is poorer it seems totally unreasonable that the landowner should have to pay higher compensation. We hear that the English National Farmers' Union is possibly being
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greedy, but it seems to me that the Scottish union is being even more greedy. I do not see why Scottish tenants should have more than English ones.
I submit that once again the schedule is bad. It has been taken largely from the English proposals. It states that
" 'Dairy cows' means milking cows and calved heifers".
In England many dairy farmers rely on what I believe is called a flying herd, that is bought-in cows in milk which are then sold out when they are dry. In Scotland, very wisely, it is not often that this happens. The farmer is much more inclined to rear his own stock. Surely therefore the words should be "dairy animals" and that should cover the whole dairy herd.
I am afraid I have given my noble friend quite a few, perhaps rather thorny, questions. If he cannot answer them now then perhaps between now and Report stage I may have an answer to these problems.
Lord Stodart of Leaston: I am bound to say I am a little sad that my noble friend has allowed himself to be taken through the uncharted waters in the wake of his colleagues at the Ministry of Agriculture because, so far as I am aware, there is no history or experience in Scotland of translating the worth of a tenant's improvements into annual rental values. Yet these figures are an essential element in determining the tenant's share of the standard quota. I am bound to say that I should have thought in echoing or repeating my earlier cry for simplicity in all this what a marvellous system we already have in Scotland so far as hill sheep transfers are concerned. The system is known as the hefting of a stock which is bound to the farm on which it is running and I should have thought it would have been admirable to build this Scottish system of valuation of an outgoing quota on a foundation which exists in Scottish law but not, I think, in English law. We should have been spared all the arguments we have had because the incoming tenant merely takes over the stock at valuation and the landlord would be left out of it altogether with no argument at all.
Lord Mackie of Benshie: I agree entirely with the noble Lord, Lord Stodart of Leaston, that it is a pity that we should have had the debate entirely on the English half, followed by a short speech by the Minister, on the differences (which will be beautifully set out as the Scottish Office is very good at that) between the systems of crofting, land tenure, and so on. I think we can trust the Scottish Office to do that well enough.
But to follow the basic method in England was a grave mistake. There is no question but that what the noble Lord, Lord Stodart, has said is right. Nothing could be simpler than to follow the taking over of a sheep stock; the quota is valued, the new tenant takes it over and that is it. It could have been easily done and no one need have any fear. The noble Lord, Lord Burton, need have no fear that he would be denuded of all his worldly goods. He knows that if he lets the farm they will take it over and the poor chap—I mean the noble Lord!—will have cause, I fear, greatly to regret the reduction in the period for arbitration from five years to three years, as I am certain that the next tenant who comes up for arbitration on his rental will have it reduced. I do not think he should beef too much about that.

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I should like to ask the Minister how he gets the figure of 5,500 litres per hectare, which is well over 1,000 gallons per cow, whereas the old figure for keeping a cow used to be 2½ acres, which I understand is a hectare. It appears to me to be a high figure for the less-favoured areas, In the original less-favoured areas, I think he said, to produce 5,500 litres off 2½ acres from that sort of land appears to me to be a creditable performance. I did not quite understand the other figure, also for an LFA, of 6,200. Was that for better LFAs? I should be interested to hear. But this is, I am sorry to say in a Scottish debate, rather pointless. We have had the argument on the English figures. The Scottish Office has followed the English method so those of us who oppose this or those of us who think it is a dog's breakfast reserve our position until Report stage. However, I should like an answer to those two questions.
Lord Stanley of Alderley: I am sorry to come in on Scottish law, but there are two small technical points. I understood my noble friend to say that for less-favoured areas the standard quota would be 6,000 litres. I did not hear him say anything about ordinary areas. In paragraph 6 it comes, where he has "standard yield per hectare". Do I gather this will be the same as the English at 4,500? I wonder whether he would let me know that. I was concerned about another remark. My noble friend talked about tenant's improvements. He said if they were genuinely written down that would be the value. Can he explain that more fully?
Lord Mackie of Benshie: I should like that too.
Lord Gray of Contin: I am sure that when I give my noble friend Lord Stanley his answer he will be willing to share it with the noble Lord. My noble friend Lord Burton asked me at the outset: why exclude loose grain from harvested crops?—farmers often grow grain for feeding their dairy cows. This is to ensure an even basis for assessment. The standard yield per hectare which will be prescribed will be based on a stocking ratio figure which represents the average number of cows kept per hectare of grass and fodder crops. This figure cannot be compared directly with one which takes account of areas used for grain crops.
My noble friend also made a point about rents and said that the rents would be out of date. The rent applicable is the rent at the relevant period of 1983. I think it would be possible to argue this both ways. It is almost a swings-and-roundabouts situation.
My noble friend also asked about dairy followers. They are excluded, of course, but my noble friend suggested that they should not be excluded. Quota is milk produced. Dairy cows produce the milk; dairy followers do not produce the milk. The numbers of followers carried vary by production practice. We felt that that is not a consistent enough basis to introduce into a statutory calculation. The noble Lord raised a number of other issues with me and suggested that I might write to him with answers to them. I am happy to accept that suggestion.
My noble friend Lord Stodart of Leaston highlighted the differences between the Scots and the English and suggested that we had perhaps followed
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our English colleagues rather too closely. This was echoed by the noble Lord, Lord Mackie of Benshie, but I would remind my noble friend and also the noble Lord, Lord Mackie of Benshie, that we are dealing with a situation which has a very strong relationship to our membership of the European Community. The scope for difference between what we have south of the Border and what we have north of the Border is limited.
We believe that we have been able to reflect the more difficult circumstances which exist north of the Border, particularly in the less favoured areas, but essentially the principles on which the statutory instrument will be made will have to be the same north and south of the Border. I think, to be fair, that this was broadly recognised by the Scottish National Farmers' Union from the outset. They were anxious that the differences should be reflected; but they were sufficiently realistic to appreciate that those differences could not be as radical as they would wish.
The noble Lord, Lord Mackie of Benshie, asked about the calculation of annual rent. I dealt with this when I answered the noble Lord, Lord Burton, but I shall perhaps become a little more forthcoming and I could give the noble Lord, Lord Mackie of Benshie, a copy of the letter which I let my noble friend have which will deal in more detail with this point.
My noble friend Lord Stanley asked about the standard yield in the original less favoured areas. The noble Lord, Lord Mackie, also asked about this. I quoted 5,500 litres. This is a reflection of the difference which exists north and south of the Border. The other areas, the non-LFA areas, and the new LFAs, will be the same as in England and Wales.
The question of the written-down value was also raised by my noble friend and had previously been raised by the noble Lord, Mackie, with my noble friend Lord Belstead. I cannot do better than give the answer which my noble friend gave: that the depreciation in the asset value occurs principally because of the passage of time. That is the depreciated value, the written-down value, and that is the value which will be accepted.
Lord Mackie of Benshie: Is the noble Lord telling me that if buildings have been put up at a cost of £50,000 and they are 10 years old and are therefore written down, the tenant's fraction will not improve by one iota because of the buildings although they may be valued today at £150,000?
Lord Gray of Contin: The tenant's balance sheet will indicate that the buildings have been written down. While it is our endeavour to try to be as fair as we possibly can to the tenant, it is rather difficult to have it both ways. If the buildings are completely written down, they will not affect the tenant's fraction as much as they would if they were only half written down. But in such circumstances I am sure that the noble Lord would agree that there will be other issues which will be taken into account in the tenant's fraction. But so far as the buildings are concerned we cannot do other than take the asset value.
Lord Stanley of Alderley: I am afraid that I am at a loss now. What I understood to be the case not in

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Scotland but in England—though I understand it is the same—is that when we discover how to do the tenant's fraction the valuer will come along, look at the buildings as they are today, and say to himself, regardless of what the tenant has put into it, "They are worth X". If, on the other hand, it is going to be written down, as the noble Lord has said, I think it is time the tenant really jumped in the sea. Rather than ask my noble friend to answer this now perhaps I may ask him to write to me between now and Report because I am worried about this one.
Lord Gray of Contin: I can perhaps do even better. I shall give an answer and write to my noble friend. The situation is that arbiters are accustomed to assigning values to tenant's improvements in rent determinations. The method will be to assess the full rental value of the holding and from that deduct their assessment of the rental value of the holding where there are no tenant's improvements or fixed equipment. The difference will be the annual rental value of the tenant's improvements and the fixed equipment.
Lord Mackie of Benshie: The noble Lord the Minister has just completely contradicted what he said before—that it will be based on the written-down value. But that is sensible; I thank him very much.
Lord Gray of Contin: If I have completely contradicted what I said earlier, I am sure that will give the noble Lord great joy. He will have an opportunity to study this when he sees the report and my reply. I am glad to hear that he is satisfied at the end of the day.
Lord John-Mackie: If the noble Lord, Lord Stanley, feels that he can enter a Scottish argument, I think that a renegade Scot can enter it as well. Quite frankly, to me these 10 or 11 pages containing an extra schedule seem to be quite ridiculous. I have farmed in both Scotland and England dairy and arable land at the same time and I could never see any difference whatsoever between the two. I cannot for the life of me see dairy farming in Scotland in less favoured areas as being very different from dairy farming in Wales in less favoured areas. I should be glad to know how the noble Lord was persuaded by the Scottish NFU that there is this great difference.
Lord Gray of Contin: I am extremely interested to hear the noble Lord say this, particularly with his experience of farming. I think that he would find it very difficult to spend as much time as I have with the Scottish NFU and not be persuaded by some of the arguments that they put forward. Apart from anything else, I think there is a very considerable difference in the physical attributes of the less favoured areas in many parts of Scotland, particularly the old LFAs, compared with those south of the Border. However, if the noble Lord is suggesting that there should be no difference, I would have to disagree with him very strongly indeed.
Lord Mackie of Benshie: My noble kinsman has lived for too long in England!
Lord Burton: I am grateful to my noble friend for offering to write to me, particularly on the crofting point, because I think we would be getting into deep water if we tried to negotiate that one. I am relieved to say that I am not the landlord of any dairy tenant so that I do not myself have these problems. But in the south-west of Scotland I think they will be very concerned at the suggestion that the landlord of poorer ground is going to have to pay more to his tenant than somebody on better ground. I hope I am mistaken about this, but I think that will be the case. I should be grateful if my noble friend could confirm that that is the case.
Lord Gray of Contin: Yes, that is so.
Lord Stodart of Leaston: May I press my noble friend on one point? Was it not possible to adopt what I suggested about treating the quotas in the same way as "bound" farm stock because of European Community regulations? Was it impossible to do that, or did he not regard it as a good plan?
Lord Gray of Contin: That is a point that we did look at, but the best advice available to me was that it would not be preferable to that which has been presented.
On Question, amendment agreed to.
Clause 12 [Duty to balance interests in exercise of agricultural functions]:
Lord Melchett Lord Melchett moved Amendment No. 41:
Page 10, line 2, leave out ("in relation to any land").
The noble Lord said: I beg to move Amendment No. 41, which brings us to Clause 12 and the new clause inserted by the Government, which was warmly welcomed by a number of us during our debates last week. I am happy to repeat that today. I do think it is a pity that the clause could not have been contained within my honourable friend's Wildlife and Countryside (Amendment) Bill last summer, when it was pushed very hard and the Government said it would be quite impossible for a statutory duty of this sort to be imposed. I am delighted that things have changed so rapidly in such a short space of time.
This is a probing amendment because I want to ask the noble Lord the Minister why the functions connected with agriculture in which the Minister has to balance the various factors mentioned in paragraphs (a), (b), (c) and (d) are restricted by the phrase "to any land". I particularly wanted to ask the noble Lord whether this meant, for example, that in making appointments to advisory bodies and the many other bodies to which the Minister of Agriculture makes appointments this new clause would not be applying. I beg to move.
6.45 p.m.
Lord Belstead: I am grateful to the noble Lord, Lord Melchett, for welcoming this clause. I think I ought just to say, as we embark on Clause 12, that the arguments about whether an amendment to a clause of this sort ought to have been written into a Private Member's Bill some months ago were in the context of

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furthering a duty rather than introducing a balancing duty, which is found in this particular clause. And, of course, in this particular case we have four different considerations which need to be balanced and which we believe are important, whereas in a particular amendment to that Private Member's legislation some months ago there were only two considerations (agriculture and conservation) which were under consideration. So we are talking about a different kind of clause and also a much wider-ranging one. We are also talking about a different kind of duty.
Clause 12 is about balancing the needs of an efficient and stable agricultural industry with the other interests in the countryside. The primary purpose of agriculture is food production, and since agriculture is carried out on the land and since the interests cited in the clause all relate very closely to the land, I think it is important that the clause should be clearly defined in terms of functions relating to land.
I think the achievement of the required balance would not be possible were that not the case. If a balance is to be achieved then the interests involved, I think, must be identifiable in some sense. Even if not strictly quantifiable, they must be what I would call in focus; and by widening the scope of the clause to include all agriculture functions I think one could bring in functions in relation to which the extent of the various interests for consideration could not easily be related to the others with which they must be balanced. For instance, it occurs to me that it might be difficult to assess the balance which one ought to achieve between the effects of the price-fixing settlement and the public enjoyment of the countryside, just to give one example.
The noble Lord was generous in saying that the clause is to be welcomed. Of course that is so, because it requires the Ministry to take into account a wide range of considerations in making decisions. I think we have got the wording right. if we are serious, as we certainly are, in wishing to achieve a balance, then we must not jeopardise that achievement by widening the scope of the clause to such an extent that eventually we lose sight of the original purpose. I hope that in the circumstances the noble Lord will feel that this is a clause which is wide and really ought not to be widened further.
Lord Melchett: I did ask the noble Lord a specific question, but I may have put it too briefly and perhaps he missed it. I shall be delighted to put it again. What I was trying to find out for clarification, for those outside your Lordships' Committee as well as those inside, is whether the new duty, in being restricted to land, will not apply, for example, to appointments made to advisory committees and similar bodies by the Minister. I had in mind the Hill Farming Advisory Committee for England, Wales and Northern Ireland and the sub-committee for Wales, about which I recently asked the noble Lord a Question for Written Answer. The noble Lord said in reply to my Question that when Clause 12 (the clause we are now discussing) was enacted it would provide statutory backing for what Ministers of Agriculture are already doing. He also said (and I quote from col. 534 of Hansard on 22nd May):
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"In keeping with its existing approach the membership of the Hill Farming Advisory Committee for England, Wales and Northern Ireland and its sub-committee for Wales already embraces a considerable range of expertise and experience in these broader areas, as well as covering practical involvement in hill farming".
The broader areas are of course those covered by the four paragraphs in this clause. What was not clear, if I may say so, from the noble Lord's reply to that Question—nor is it clear from the reply which the noble Lord has given to my amendment today—was whether the appointments made by the Minister of Agriculture to the Hill Farming Advisory Committee and similar bodies are going to be governed by the new clause that we are discussing now or whether the appointments are simply to be made on a wide-ranging basis because that is what the Minister already chooses to do. Could the noble Lord help me on that particular point?
Lord Belstead: As the noble Lord says, we have communicated with each other about the Minister's Hill Farming Advisory Committee and, of course, there is a wide range of experience on that committee in regard to all aspects of hill farming. I have a feeling that the noble Lord, Lord Melchett, does not approve of that reply, but I do not really think I can improve on it.
Lord Melchett: I neither approve or disapprove, because that is not the reply to the question I asked, with respect. I asked the noble Lord whether or not, when the Minister comes to make appointments to the Hill Farming Advisory Committee, the clause we are discussing today will cover those appointments.
Lord Belstead: Clause 12 will be taken into account when the committee consider relevant agricultural functions. There again I am not entirely sure that the noble Lord will like that reply, but I think it is the right one.
Lord Melchett: The noble Lord does not like the reply only because it is so obscure and it is difficult to tell what it means. I wonder whether I could ask the noble Lord the specific question: will Clause 12 influence the Minister and will the Minister need to take account of his new duty under Clause 12 when making appointments to the Hill Farming Advisory Committee?
Lord Belstead: If I may say so, the previous answer which I have just given to the noble Lord is the one which I must stick on. We have Clause 12. We take it into account where committees relate to relevant agricultural functions. If the noble Lord feels that in the case of the Hill Farming Advisory Committee the appointments we made were not consonant with Clause 12, then the noble Lord must say so to me. But I do not think one can stand by that thesis.
Earl Ferrers: May I add to this obscurantism and perhaps throw a little clarification on it? The noble Lord, Lord Melchett, has not said what he means by his amendment. As I understand it, at the moment the Minister appoints the Hill Farming Advisory Committee from among those people who he feels are competent in hill farming. What I think the noble

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Lord, Lord Melchett, means by his amendment is: will the Minister in future be able to appoint, and will he appoint, people who are basically conservationists and not hill farmers? If that is what is implied by the noble Lord's amendment—and I think the answer by my noble friend that he would not wish to do so, is equally obscure—I think my noble friend is right, because the point of the Hill Farming Advisory Committee is to advise the Minister on hill farming and the inference and influence of conservation matters, important thought they are, are secondary to the Hill Farming Advisory Committee.
Lord Melchett: We are on a narrow point and I do not want to prolong the debate, but the noble Lord's reply to my question in Hansard says, unlike what the noble Earl supposes, that the Government are taking into account these wider interests in making appointments to the Hill Farming Advisory Committee, and the membership of that committee apparently already embraces a considerable range of expertise and experience in these wider areas. So I was not at this moment wanting to quarrel with that. I do quarrel with it, but I was not raising that point on this amendment.
What I wanted to know on this amendment was whether the Minister was doing this just because he felt like it, or because in due course Clause 12 would require him do that, when he came to make appointments to the Hill Farming Advisory Committee. The noble Lord, Lord Belstead, was kind enough to give me a general answer, but he has not given me an answer to the specific question: will Clause 12, when it becomes law, cover appointments to the Hill Farming Advisory Committee?
Lord Belstead: Let me follow what my noble friend Lord Ferrers said, and give one more reply to the noble Lord, Lord Melchett. The purpose of my right honourable friend's Hill Farming Advisory Committee is to have advice given to the Minister on hill farming affairs. I was very careful, in starting my reply to the noble Lord, Lord Melchett, on this amendment, to say that we must remember that the primary purpose of agriculture is still food production, but that in carrying out that primary purpose Clause 12 is saying that there should be a balance. That is why the word "land" is there and why paragraphs (a), (b), (c) and (d) are in subsection (1) of Clause 12. The Hill Farming Advisory Committee of my right honourable friend is all about the management of land in the hills; but in getting advice on that primary purpose we will of course be taking into account our duties under Clause 12.
Baroness White: I wonder whether the noble Lord could enlighten us as to the attitude to forestry, because this is the favourite alternative of the Minister of Agriculture for land use in the less favoured areas. Leaving aside the more general socio-economic factors which are referred to in the question of balance, and the conservation matters which are no doubt in the mind of the noble Lord, Lord Melchett, many of us really want to know something which is hardly touched on, if at all, in this Bill—that is, the relationship envisaged between forestry and agriculture as alternative uses of many areas of land. Will the
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advisory committee have any people who know something about the pros and cons, and advantages and disadvantages, in specific areas with which they will be concerned, of using the land for food production in some shape or form or turning it over to trees?
Lord Belstead: I think it would be fair to say, because I chair the committee and my noble friend Lord Ferrers chaired it before me, that we have a wide range of expertise on this committee and are not wanting members of the committee who have a working knowledge of forestry. But I think the committee would not mind if I said that, when we were specifically considering farmers in the hills and uplands, we would obviously want to have expert advice. I assure the noble Baroness that we would certainly consider the importation of expert advice if we were considering forestry on this committee.
Lord Melchett: I think I have either to withdraw the amendment or to press it, and I am inclined, despite the noble Lord's reluctance to give me a straight answer to a specific question, to withdraw the amendment. I take it from what the noble Lord said in reply to my last intervention that in fact Clause 12 will apply when the Minister comes to make appointments to the Hill Farming Advisory Committee in future, because the noble Lord said that the Hill Farming Advisory Committee is all about land. He did not say yes to my question, but he answered it by saying that the Hill Farming Advisory Committee is all about land. I therefore assume that Clause 12 must apply to future appointments to the committee. If I find after reading Hansard that I have it wrong, I am sure that the noble Lord or somebody else will correct me. But, in the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees The Deputy Chairman of Committees: Perhaps I ought to point out to the Committee that Amendments Nos. 43 and 44 should be in the name of the noble Lord, Lord Melchett. I call Amendment No. 42.
Lord Montagu of Beaulieu Lord Montagu of Beaulieu moved Amendment No. 42:
Page 10, line 12, after ("physiographical") insert ("and archaeological").
The noble Lord said: I am sure that those concerned with the environment very much welcome Clause 12, which clearly places a formal duty on agriculture Ministers to take into account conservation interests in exercising their functions. However, the definition in paragraph (c) of what constitutes the natural beauty and amenity of the countryside is in my view defective; and I speak, in particular, as the chairman of English Heritage which is the statutory adviser on archaeology to the Secretary of State for the Environment.
It is not perhaps sufficiently understood, notwith-standing the growing popularity of archaeology, that large tracts of the countryside which we wish to preserve are not natural at all, but man-made. For instance, prehistoric field systems, deserted settlements, groups of barrows and other features are

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part of our rural heritage and often relate inextricably to areas of high scientific value and scenic beauty. It is illogical for Ministers to have regard to conservation of the countryside without reference to the archaeology which constitutes an integral part of what we seek to preserve.
The noble Lord may well put to me that the present wording of Clause 12(1)(c) is sufficiently wide to include archaeological features, but with great respect I must question that. The very strong impression left by the present wording is that this clause is intended to cover only natural flora, fauna and physiographical features. If it is the Government's intention that the paragraph should have a wider meaning, I cannot see why they should object to putting the matter beyond doubt by including a specific reference to archaeological interests.
The present wording of Clause 12(1)(c) is even more illogical when viewed alongside Clause 13(1)(c). There it has been explicitly recognised that there is a need to take not only archaeological but other man-made structures into account in designating environmentally sensitive areas. I believe that at least two of the areas under consideration for designation at the moment contain important archaeological sites. So, in brief, what I am seeking here is not a change in policy, since I assume that it is not the intention of Ministers to ignore our archaeological heritage. I am simply seeking a definition of conservation interests which matches the reality of countryside management. I beg to move.
Lord Denning: I should like to support this amendment. In our part of North Hampshire, when I was young we had seven barrows which were the burial places of the Stone Age people. Now, I am afraid, there are only two left. A high road has knocked off one or two, and agriculture has worked off the rest. They ought to have been preserved. People nowadays go over the fields with metal detectors in order to try and find Roman remains and the like and they call it treasure trove. They make money out of these things that they find. It would be a very good thing to have the word "archaeological" added to the others. I support the amendment.
Lord Walston: As the son of an archaeologist, the father of an archaeologist and the uncle of an archaeologist, I have perhaps some interest to declare. I support the amendment most strongly. This is a matter of very great value and importance, not so much at the present time but for many years. Farmers, in complete ignorance, have very often destroyed places which have potential archaeological interest. This matter has been far too much ignored in the past and it would be extremely valuable if this modest addition to the clause were made. What is more, I think this amendment is completely uncontroversial and I hope that the noble Lord, Lord Belstead, will accept it with both arms.
Lord Melchett: I too should like to support the amendment and make one point which I do not think has been made. In drawing up environmentally sensitive areas and in particular the management
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prescriptions for environmentally sensitive areas under Clause 13 of the Bill, I understand that county archaeologists were consulted and note was taken of the importance of archaeology and archaeological features in the countryside. If it is possible to do that when designating and deciding on the management of ESAs under Clause 13, it would be very helpful to accept this amendment to Clause 12.
Lord Belstead: I agree with all that has been said on this amendment. Our intention was that archaeological features should be covered. But I quite see that there might be some element of doubt in the minds of those who have a particular interest in the archaeological aspect as to whether these interests are to be taken into account on the face of the Bill.
I had hoped to be able to accept this amendment straight out but I think there is a difficulty in that the word "natural" seems to us to govern the rest of sub-paragraph (c). I think that just to put in the word "archaeological" might not sit very happily with the other words which are there. I should therefore like to give an assurance that the Government accept this amendment in principle but we should like to think carefully about the precise wording. I undertake to bring forward a slightly modified version at Report stage to carry out the intention of this amendment.
Lord Montagu of Beaulieu: I thank my noble friend very much for that assurance, and in view of it I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Swinton: This may be a convenient and rather amicable time to resume the House. In doing so, perhaps I may suggest that we do not return to the Committee stage of this Bill before eight o'clock. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Road Traffic Regulation (Parking) Bill
7.3 p.m.
Lord Dean of Beswick: My Lords, I beg to move that this Bill be now read a second time.
First of all, perhaps I may pay tribute to my friend and colleague in another place, the honourable Member for Kingston-upon-Hull, North, Mr. Kevin McNamara, who chose this subject as his Private Member's Bill and piloted it through another place. Noble Lords will probably be aware that this is the second Bill I have dealt with in this Session. I hope that it will not become too much of a habit.
The Bill is relatively modest but is important and has two main aims. I shall do my best to explain what they are. First, there is at present confusion whether it is legal in areas of permit parking for the local authority to charge or not to charge and to have a variable scheme. Clause 1 will give the local authority flexibility in this matter. This is an important measure for areas such as the seaside and other areas which are or can be heavily congested for brief periods during the

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day where the local authority seeks the power to protect its residents but at the same time to facilitate parking for visitors to the area. The Bill will give the local authority power to charge or not to charge residents, non-residents, permit holders and non-permit holders. This practice will allow the local authority to gauge its needs for its own area.
The second aim is probably more interesting and may be deemed to be more important. It deals with metering devices to be used in arranging car parking. There are three aspects concerned: in-car parking discs, parking meters and parking meters without clocks. The legislation in being at present is somewhat confused and the Bill seeks merely to clear up the principles. Basically it means that there can be in-car parking devices for charge or rent which are costed, and this will be made legal. This will be important in areas of natural and outstanding beauty where it would be an advantage to control and charge for parking but where the public or people do not want to clutter up a good view by indiscriminate parking. It could also affect such places as a cathedral or church close or other parts of our heritage. Therefore the Bill will make it legal to have these in-car parking meters, with which a number of companies in conjunction with local authorities are now experimenting.
The meters already being used in various parts of this country are technically far superior to the outmoded ones we are currently using. There is also an export potential for this type of equipment. They are difficult to misuse. The last part of the Bill allows for people who abuse the meters to be dealt with.
I have no wish to detain your Lordships any longer. I have tried to explain what are the objectives of the Bill. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Dean of Beswick.)
7.7 p.m.
Lord Brougham and Vaux: My Lords, I should like to thank the noble Lord, Lord Dean of Beswick, for introducing this Bill to your Lordships this evening and for explaining it to us. Unlike the Public Order Bill which your Lordships debated last Friday and which had a marathon 80 hours in Committee in another place, this small but important Bill went through all its stages in 12 minutes. At Third Reading there were two speeches.
I very much like the idea of a parking meter in which one can insert a card and buy parking time, in the same way as one can buy telephone time with a British Telecom phonecard. This Bill will allow for that and one will not have to worry about having the right change or the right kind of coins. The other day I happened to turn on the television to watch the six o-clock news. It showed, albeit briefly, the kind of parking meters which are undergoing trials in the Midlands. I was quite impressed by what I saw.
This Bill would also allow for a prepaid parking device to be displayed in the vehicle, which to my mind would be even better as we could then do away with all the lines of rather unsightly meters that we see on the pavements. I have one question to ask my noble friend the Minister. Will BSI standards be approved
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and will they apply to card and token operated parking machinery? I welcome this Bill and I hope that it goes through quickly.
7.10 p.m.
Lord Graham of Edmonton: My Lords, I apologise to the Minister and to my noble friend for rising in the gap on the list of speakers to take up just a minute or two of your Lordships' time. It was only today that my attention was drawn to some aspects of the Bill by the Association of London Authorities. I happen to be its president and therefore declare that tangential interest in the matter. The association drew my attention to the Bill and asked me to deal with one or two aspects not of car parking in general but of the use of meters in the environs of London.
My noble friend Lord Dean quite properly referred to two or three scenarios in which improved metering facilities and improved meters could be of benefit to the community. If I heard him right, he mentioned seaside towns, areas of natural beauty, cathedral closes and so on. The problem that besets many London authorities is born out of the desperate shortage of traffic wardens to police or to monitor effectively the use of meters by the public. I have been told that in the heavily congested streets of London a motorist will park at a meter, pay the money and, because of the shortage of traffic wardens, nine times out of 10—I asked whether nine times out of 10 is correct and was told it is—will be lucky enough not to be caught if he stays after the time has expired. In other words, he will get away with it. That is not only unfair to drivers in the rest of the community who may well be searching and searching for a proper place to park while someone who has paid only the basic charge gets away Scot free; it also means that income is lost.
I am told that at least two London boroughs—one is Islington and the other is Kingston-upon-Thames—have begun to employ people called meter attendants. Their function is to police or monitor areas where there are a large number of street meters and to observe, perhaps a little more diligently than even the traffic wardens are able to do because they are overstretched. Where they come across a meter where the excess period has begun to run—that is, after two hours—they are, I am told, legally empowered to serve on the motorist a notice for the excess period; not the penalty period which comes after the excess period.
The Minister may not be able to give me full details tonight, in which case perhaps he will write to me, but can he tell the House whether this situation is being taken seriously and urgently by his department? I am told, for instance, that last year the Select Committee on Transport reported that the minimum number of traffic wardens that ought to be employed in London is 4,000, but there are only 1,800. If the reason for there being only 1,800 when 4,000 are needed relates to budgets and staffing totals, and, in effect, Government policy of one kind or another, the Government can do much to make sure that the people who are not using but are abusing meters are brought to book.
Secondly, can the Minister tell the House whether there are discussions, and at what level, between the London authorities? I am told that there is no political

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animus involved, and I have mentioned two authorities which, because the situation was desperate, decided to take the action that I have described. I think it is fair. I think that many people who ought to pay are getting away with not paying. We are talking about deterrents. We want people not only to pay the proper charge; we also want them to be deterred from not paying. Unfortunately, the present under-staffed traffic warden system enables these people to get away with a great deal. Therefore, I hope the Minister will be able to tell me today, or later, that he shares the concern of all London authorities, whatever their political persuasion, to improve the quality of life, the quality of road safety and the quality of the environment for the people who live, work and travel in their boroughs.
7.14 p.m.
Lord Underhill: My Lords, it would be wrong if in the debate on a useful Bill of this nature a few words were not said from the Official Opposition. The proposal on new metering devices is, I believe, a useful part of the Bill, though frankly I do not regard it as the most important part. I am reminded of a recent occasion when I went to a Tube station in a neighbouring London borough—I live just over the London borough border—where after a certain number of hours the parking charge is £1 but the meters take only 10p pieces. Your Lordships can imagine the complete hullabaloo and dislocation that occurs with people rushing around all trying to find 10 10p pieces. I wonder how many noble Lords have in their pockets 10 10p pieces with which to meet that situation.
My noble friend Lord Graham of Edmonton raised an additional point which I believe should be carefully looked at. I hope that the Minister can say whether the warden numbers in London are up to strength and what is the general position elsewhere. Once again I remind your Lordships that I live in a county district just over the Greater London border but within the Metropolitan Police area. In that district is a very large shoppers' car park, with no charge at all, and yet there is parking on yellow lines along the main road with two lines of traffic. There are no wardens. Whether that is due to Metropolitan Police policy or to difficulty in getting wardens, I do not know. This is in the Epping Forest district and perhaps the noble Earl will look into it.
The other important point is that the Bill clears what is a grey area in permit parking areas. The Bill enables a local authority to adopt flexibility in this matter, striking a balance between residents and visitors according to how it sees its own needs. An important part of the Bill allows for shared parking at different times of the day according to the needs of the area.
My noble friend Lord Dean of Beswick should be thanked for bringing forward the Bill. I echo what he said in congratulating Mr. Kevin McNamara, the honourable Member for Kingston-upon-Hull, North, on bringing forward the Bill in another place. I believe that the Bill has the full support of the Government and the department and I hope that it will have a speedy passage through your Lordships' House.
7.17 p.m.
The Earl of Caithness: My Lords, we, too, are grateful to the noble Lord, Lord Dean of Beswick, for the very succinct way in which he introduced the Bill. As he said, this is a Bill which deals with detailed matters, but it is nonetheless welcome for that. The Bill provides useful additional flexibility to both local authorities and manufacturers of parking apparatus and I am sure that it will be welcomed by them. It will have the added benefit, I believe, of reducing crime associated with the present equipment. Furthermore, the new equipment that the Bill permits will help to increase the efficiency of the operation of parking schemes.
With the leave of the noble Lord, Lord Dean of Beswick, I shall answer a couple of points on his Bill that were put to me directly. My noble friend Lord Brougham and Vaux asked about British standards. I can tell him that the British Standards Institution is working on standards for different types of new equipment, including electronic parking meters and pay-and-display machines. It is also studying cashless systems. The Department of Transport hopes to adopt these standards in due course. In the meantime my department will ensure, in granting special approvals for equipment, that appropriate consultations with the motoring organisations are carried out. But to make compliance with BSI standards a requirement in all cases would, I believe, be inflexible and would prevent useful small-scale experiments which might be helpful in the preparation of countrywide standards.
With due respect, I think the noble Lord, Lord Graham of Edmonton, went a little wide of the Bill, but I shall look into the points he raised with regard to the enforcement of meter schemes and the shortage of traffic wardens. One thought that struck me was that if nine out of 10 motorists get away with it, I must have been frightfully unlucky, or else the one out of 10 cases came round a lot more quickly than I anticipated. But I can assure the noble Lord that the Government take the problem of meter abuse very seriously. I can tell him that in October the Government will be introducing the extended, fixed penalty system under which unpaid penalties are converted into fines with a 50 per cent. surcharge, and that this summer the metropolitan police are also introducing contracted-out clamping and removals in central London, which should help enforcement.
Lord Graham of Edmonton: My Lords, I am more than grateful and understand the problem, but I should be grateful if the Minister would give the assurance that if the Association of London Authorities feel that it has a useful contribution to make in dealing with this problem then he and his colleagues will be happy to meet the association to discuss these problems.
The Earl of Caithness: I go further than that, my Lords. I welcome anybody who has a contribution to make to any of the existing or proposed legislation. Of course I shall look into that particular point for the noble Lord. I think that comment, too, covers some of the points that the noble Lord, Lord Underhill, raised, and I shall also write to him and put a copy of my reply in the Library.

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In conclusion, on behalf of the Government I am happy to support this Bill in full and wish it the same success and speedy progress as the previous Bill that the noble Lord, Lord Dean of Beswick, introduced.
Lord Dean of Beswick: I shall not delay your Lordships much longer. I am grateful to the noble Lord, Lord Brougham and Vaux, to my colleague on the Front Bench, Lord Underhill, and to my colleague the noble Lord, Lord Graham of Edmonton, for their support. I can understand the concern of Lord Graham regarding the London boroughs, because if there are major parking problems generally, surely the metropolis itself has the worst one of all.
I am glad that the Minister, in his very kind reply to my small Second Reading contribution, made reference to the type of equipment that is under experiment and being used. I understand that there are now meters based on a somewhat similar system to the British Telecom card, where by inserting a card the customer can buy his or her time. I understand that eventually a type of card will be used by which it will be possible to debit directly.
Having made those further few brief points, let me once again express my appreciation to the noble Lords who have spoken in support of this Bill.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Housing (Multiple Occupation) Bill [H.L.]
7.22 p.m.
Report received.
Viscount Davidson: My Lords, I beg to move that the House do now adjourn during pleasure.
Moved accordingly, and, on Question, Motion agreed to.
[The sitting was suspended from 7.23 until 8 p.m.]

Agriculture Bill
House again in Committee on Clause 12.
Lord Melchett Lord Melchett moved Amendment No. 43:
Page 10, line 13, after ("promotion") insert ("and maintenance").
The noble Lord said: In moving Amendment No. 43, it may be convenient if I speak also to Amendment No. 44. The amendments are on slightly different but related points, and it may help us take things more quickly. Amendment No. 43 is simple and it is designed to bring subsection (1)(d), which covers
"the promotion of the enjoyment of the countryside by the public",
into line with subsection (1)(a), which covers
"the promotion … of a stable and efficient agricultural industry".
However, paragraph (a) contains the phrase "promotion and maintenance" of the agricultural industry. As a farmer, I wholeheartedly support that; I make no bones about it. But it would be useful for the same wording to be followed in paragraph (d), otherwise somebody might think that there is a reason for the difference, and I cannot see what it might be. It
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is important not just that effort be put into a one-off event to promote the enjoyment of the countryside by the public; it is important also to maintain the facilities that the public use to gain that enjoyment.
Amendment No. 44—which should be in my name on the Marshalled List but is not—covers a similar point and extends paragraph (d) a little by drawing attention to the main way in which farmers can help public enjoyment of the countryside by observing the law on public rights of way and in particular by keeping them free of obstruction, by providing new public footpaths and bridleways across their land and by ensuring that such footpaths and bridleways are clearly and discreetly waymarked. I am sure there is no disagreement about that. Waymarking is supported by the Countryside Commission, which produces an attractive leaflet of advice on how footpaths should be waymarked. It is also supported by the CLA, which has produced waymarks which I have seen in use on its members' land, most recently in an area of outstanding natural beauty in North Wales. I hope that it will be helpful in paragraph (d) to be a little more specific about things that the agricultural departments can do to encourage the enjoyment of the countryside. I beg to move.
Lord Craigton: I hope that the Minister will agree to the amendment. The addition of the word "maintenance" means something in relation to the whole business of preserving facilities for the enjoyment of the public. But I do not support Amendment No. 44. It seems to pick out one issue when there are so many others that could be picked out. The provision probably loses force by underlining that point.
Lord Northbourne: I would make the same point. I support the insertion of the words, "and maintenance"; but I am not happy about the proposal in Amendment No. 44. It selects a partisan interest considerably to the detriment of others. Many groups want access to the countryside for various purposes, quite apart from the farming and forestry communities. The constant emphasis of one interest tends to antagonise the farming community. I hope that the objectives to which the noble Lord so keenly adheres and to which I would claim, even as a farmer, to be an equally ardent adherent can best be achieved by co-operation, and co-operation is not helped by one interest constantly being pressed, particularly that of a group which has shown itself consistently to be against an inherent revision of the provisions for access to the countryside by the public.
There is room for a countryside charter and for provision for integrated access to the countryside for all groups, including those who want to fly model aeroplanes; those who, like me, like butterfles; bird watchers; bicyclists; and short distance as opposed to long distance walkers. All those people ought to be taken into consideration. On those grounds, I urge the Minister not to accept Amendment No. 44.
Baroness Nicol: I support both amendments, but particularly No. 44. It will help the farmer. The vast majority of people who go into the countryside to walk use public rights of way. It is entirely in the interests of

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farmers that they should stick to rights of way. Most of the problems occur because members of the public stray from the way.
I am sorry that there is a history of antagonism. I do not know where or when it began. I wish that we could now end it. It seems to me that a public right of way is what it says it is; a right for the public to walk along it. That right should not be extended to the destruction of the property of the farmer round about. Unless the public right of way is clearly marked and unobstructed, the farmer is in danger. It is entirely sensible to accept the amendment.
Lord Northbourne: Perhaps I did not explain sufficiently clearly that the problem to which I allude is the resistance by the Ramblers Association to any variation of rights of way. There is room for variation in the interests of all parties, including the walkers.
Baroness Nicol: The amendment does not say what the noble Lord suggests. It refers to established rights of way and the need to keep them unobstructed and clearly marked. That is entirely sensible.
Lord John-Mackie: The word "maintenance" to a farmer always means something physical. Amendment No. 44, which talks about:
"the use of clearly marked and unobstructed public rights of way",
seems to me to suggest that there is physical work to be done in the maintenance and the marking of these unobstructed public rights of way. Can the noble Lord clarify what he means?
While we are on the subject of rights of way, on my farm we have a plethora of ancient footpaths which are no longer used. I have lots of meetings with the Ramblers Association and various other conservation bodies about deviating them. But the various conservation societies appear to think that it is the farmer's job to pay the legal fees. I simply tell them that if we agree on the route I shall mark the deviations and carry out any improvements. We have built bridges over ditches to deviate paths around fields and away from crossing areas, which nobody used anyway. There should be a better arrangement. On one occasion the council planning officer said that the legal operation to deviate a footpath would cost £1,000. That seems slightly ridiculous. Will the noble Lord clarify what he means by "maintenance" and deal with the point about deviating footpaths?
Lord Melchett: It may be helpful if I respond to that question before the noble Lord replies. On the issue of altering public rights of way, the Ramblers Association and as far as I know other users or footpaths and bridle ways are not opposed to changing the rights of way network. The Ramblers Association is opposed to changing the rights of way network in a way that will make it less convenient or enjoyable for the public. There are public rights of way which are laid down in law as being available to the public. In law, they are as open to the public as the M.1 motorway or the A.1, or whatever it may be. The legal duty not to obstruct them is exactly the same.
In other words, it is as illegal to put a piece of barbed wire across the public footpath as it is to put it across
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the M.1. I know that the consequences of putting a piece of barbed wire across the M.1 will be more serious and more immediately noticed, but it is the same offence in law. It is unfortunate that that point is not borne more firmly in mind by local highway authorities, on whom the task of enforcing the law rests.
In my experience in Norfolk and throughout the country, from being involved in the Ramblers Association, I know that anyone who proposes a change in the rights of way network which will improve things for walkers and give them the same or a longer footpath will find their proposal readily accepted. It is where someone wants to close footpaths without providing more suitable alternative routes or to reduce the total length of rights of way that there is resistance. The reason for that is that about 20 per cent. of the population goes for a walk of two miles or more once a month in the countryside, according to government statistics. That is about 12·5 million people going for a walk at least once a month in the summer months. The figure does not fall much below that even in the worst months of the year. In February about 14 per cent. or 15 per cent. according to government statistics, go for a walk. That is why changes which reduce the length of rights of way are opposed.
My noble friend asked also about maintenance. I covered that point when I introduced my first amendment. It is important that action taken to promote the public's enjoyment of the countryside should be subject to continued observation and maintenance. In other words, it should not be a one-off effect: consideration should be given to continuing to promote the enjoyment of the countryside and maintaining that enjoyment. That was the purpose of inserting the word in paragraph (d). I assume that is the purpose of inserting it in paragraph (a), as the Government have already done.
Lord Northbourne: While I am delighted to hear that the situation in Norfolk is as described by the noble Lord, Lord Melchettt, it is not so, alas, in Kent. A scheme, promulgated by the local authority with the approval of all the local councils and amenity societies, is at the moment being blocked by the Ramblers Association.
Lord Melchett: That may be so; but, the noble Lord did not go on to say that the scheme provides a greater length of public footpaths than is currently the case.
Lord Northbourne: And the scheme provides a greater length of public footpaths.
Lord Melchett: I should be happy to look at the case if that is so. I have seen a proposal for the rationalisation of footpaths in Kent which does the opposite. It would end up with a shorter total length of public rights of way than is currently the case. I do not know whether the noble Lord and I are talking about the same scheme. If we are, our measuring tapes have come to different conclusions.
Lord Belstead:It is fair to claim that the Ministry of Agriculture, Fisheries and Food has given a good deal

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of advice and encouragement to farmers who wish to diversify their activities and to provide improved facilities for public recreation on their land. That is why we thought it right to include a reference to the promotion of the enjoyment of the countryside by the public in this clause. So far, there is nothing between the Government and the noble Lord, Lord Melchett, in the moving of these. two amendments. I would go further and say that we are very ready to play our part in trying to ensure that the public has reasonable access to the countryside wherever that can be accommodated alongside the maintenance of efficient farming practice.
There is a genuine difficulty with Amendment No. 53. The reference to the maintenance of rights of way is likely to give rise to confusion. Enforcement of the law on rights of way is properly the responsibility of the highway authorities, and any input which agriculture departments can make must of necessity be of a more general nature. Any attempt to imply, as the amendment would if adopted, that agriculture departments and agriculture Ministers have specific responsibilities in that area would undermine the position of the highway authorities and would encourage farmers and others to look to agriculture departments for advice which they are not in a statutory position to give.
My fear is that losers from such a confused state of affairs would inevitably be the public. I have raised the point previously about not duplicating statutory responsibilities. It is a serious point, and it arises again on a subsequent amendment.
As to Amendment No. 44, I think that the noble Lord, Lord Northbourne, is right. I think that to add the additional words in Amendment No. 44 would be adding to paragraph (d) in a way which would be a little difficult to understand for anybody reading the Bill for the first time. I think that the reader would say, "Why has paragraph (d) had those words added; and, having added those words, why are other examples not given of ways in which public enjoyment of the countryside can be fulfilled?"
I hope that the noble Lord, Lord Melchett, will not think that I am taking a legalistic attitude in the first part of my reply to the amendment. It is a serious point that at the end of the day the highway authorities are responsible for public footpaths.
8.15 p.m.
Lord Melchett: The noble Lord has a good point on the first amendment. I had intended that the word "maintenance" should be used in the same sense as it is clearly used in paragraph (a). It is possible to misread it in the way the noble Lord suggested. I should be the last person to want to see any diminution in the statutory duty currently placed on highway authorities. I also accept the point he made about the picking out of one interest in my second amendment. I can see the objection to that. The noble Lord, Lord Northbourne, made that point also. He asked about cyclists, and as a cyclist I share that concern.
The argument for doing so would be that walking in the countryside is overwhelmingly the most popular recreation. The number of people who cycle and who take part in the various other activities the noble Lord,
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Lord Northbourne, suggested are insignificant when compared to the huge proportion of the population which walks regularly in the countryside. Nevertheless, I concede that there would be disadvantages in picking out particular interests, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 44 not moved.]
Lord Oram Lord Oram moved Amendment No. 45:
Page 10, line 14, at end insert ("and
( ) the effect of the industry's production levels on world agricultural trade and, in particular, on the agricultural prospects of developing countries.")
The noble Lord said: Clause 12 is welcome in its present form in that is recognises that agricultural interests cannot be considered in isolation. It provides for a balanced consideration of other interests. The amendment which I am moving draws attention to another aspect of the balanced development of agriculture—a very important one to my mind—which is the need for balance in international terms. Just as agricultural interests cannot be considered in isolation, so the interests of British agriculture cannot be treated in isolation from the trading and production interests of other countries, particularly the interests of developing countries.
Agricultural policy in this country is largely determined by our membership of the European Community. What we do is controlled largely by the common agricultural policy. If it can be established,as I believe it can, that agricultural policies, including our own, are under the requirements of the CAP, deterimental to the interests of the developing countries, then I believe it to be our duty to adapt those policies and to seek to reform the CAP so as to avoid the harm which is done to developing countries. If we do not, surely there is a basic contradiction between our agricultural policies and our declared objective of helping developing countries to overcome their immense problems of poverty and hunger.
I believe that there are a number of ways in which our present policies, based as they are on the CAP, are detrimental to the interests of the developing countries. First, the costly production of surplus food in Europe followed by subsidised exports and the disposal of exports through food aid programmes may clearly be justified in meeting short-term needs in famine conditions, as seen recently in the case of Ethiopia. But the long-term effect is often an undue reliance by developing countries on food aid.
It is a disincentive to developing countries to pursue effective programmes of food production domestically for their own consumption. That effect is reinforced when subsidised exports from developed countries reduce world prices. In consequence, when developing countries compete in these markets, their export earnings are correspondingly reduced, a most important factor in these days when their debt problem is overwhelming.
Of course, the protective measures that are a basic element of the CAP are detrimental particularly to those developing countries that wish either to diversify their agricultural production into products that compete with temperate zone products or those that

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wish to engage in the processing of their traditional export crops. It is true that under the Lomé 3 Convention, that effect is mitigated. We must remember, however, that the CAP countries, which are concerned in Lomé 3, are limited. The mitigating effect of Lomé 3 does not extend to most important areas of the third world, especially the most populous areas in southern Asia, because they are excluded from the benefits of Lomé.
It is in order to meet the problems that I have briefly summarised that I believe it to be desirable that the amendment that I move should be made to the Bill and that the Minister should agree to accept this additional obligation under Clause 12. I recognise fully that it is an obligation that would be most difficult to fulfil because, as is well known, once one enters into the international sphere of agricultural trade policy, one faces a daunting task. But that is no reason, to my mind, why we should not tackle the task, even though it is a difficult one. In the long run, attention to these problems of the developing countries will not only benefit them, although that is my main motivation in moving the amendment, but it will also in the long run, I believe, benefit the developed world as well, including ourselves. I beg to move.
Lord Monk Bretton: I am afraid that I do not like the amendment very much. I do not see why we should opt out of all international trade in agricultural products in favour of other nations which go on overproducing—I might say, other developed nations which go on overproducing. This smacks to me, frankly, as the same kind of thinking as unilateral disarmament. I suggest that we should not put anything like this into our own legislation, but that we should leave our Government's hands free to see that if we do anything about these surpluses, other people do so too. It is, I believe, a matter essentially for international agreement. If no adequate agreement can be obtained, we should leave ourselves free to remain in the rat race.
Lord John-Mackie: I see this in a slightly different way from the way the noble Lord, Lord Monk Bretton, sees it. We are told by the FAO that there are 800 million people in the world today whose state of nutrition is a disgrace and that half of them are actually on a starvation diet. At the same time, we have surplus food in the world. I know the difficulty that my noble friend Lord Oram has described. This surplus, put on the market or given away free, can have an effect on agriculture in countries that we want to see developing their own agriculture and feeding themselves as much as possible.
I put this point to the Committee. In the 1950s and the early 1960s, we began to have in this country not surplus food but a greater availability of food from other countries. This began to depress the price of our agricultural products. The noble Lord, Lord Soames, was, I believe, Minister at the time. We started a system of deficiency payments to ensure that the effect of imports into this country did not affect the livelihood of farmers here. That is what should be done, I suggest, by countries that are very short of food but whose farmers are affected if food is given free or supplied cheap. That is the way to solve the problem.
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It seems ridiculous to argue that they should be kept starving and that they will then learn to produce their own food. That is a dreadful thing to suggest. We should be training these countries in how to deal with their farmers in these circumstances while at the same time helping them develop their agriculture. I would not advocate any reduction of food production until people in the world are no longer starving.
Lord Belstead: I sympathise with the considerations that have led noble Lords to put down the amendment and with the intention, as the noble Lord, Lord Oram, explained, that underlies it. It is very much the considerations that the noble Lord explained in his speech that lead Her Majesty's Government to argue in the ministerial councils of the European Communities, which determine the Community line taken in the GATT, in favour of policies that encourage the free flow of trade in agricultural products and the participation in that trade of the developing countries. To convert that line of thought—that policy—into this amendment would nonetheless be difficult.
The interests that, by virtue of the clause, must be taken into account are all to a greater or lesser extent within the immediate purview of Her Majesty's Government. That is to say, a considerable degree of freedom exists within which government can determine their own priorities and influence the matters referred to in the four areas which we say that agriculture Ministers should balance in Clause 12. This is less true of world trade where the ground rules for contracting parties are laid down in the General Agreement on Tariffs and Trade and in the European Communities. Here, the principles of trade with the rest of the world are determined not by one country acting unilaterally but by the Community acting in concert. Against this background, it would be very difficult to isolate the trade effects of policies connected with the land in relation to particular trade effects.
In opposing the amendment, I do not for one moment mean to imply that the considerations that motivate it are irrelevant to the determination of agricultural policy. My noble friend Lord Monk Bretton made a plea for fairness if we were to draw in our horns in respect of agricultural production. What my noble friend said, in terms, was that if we were to do that, on the argument that we must not swamp the developing world with surpluses built up within Europe, then other countries in Europe and indeed elsewhere must do the same. The noble Lord, Lord John-Mackie, whose name is attached to this amendment, says that he would not wish to see agricultural production artificially reduced while any people in the world remain starving. It is therefore difficult actually to put down an amendment which says, as this amendment seeks to do, that the effect of agricutural production levels on world trade and in particular on the agricultural prosperity of developing countries must be one of the considerations that government take into account in guiding their actions.
May I add one last point? Some noble Lords have spoken from personal experience, and mine is very slight. It is nothing like that of the noble Lord, Lord Oram, who has a particular interest and experience in

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this area. I do not know whether the noble Lord will agree, but my impression is that although there is a great deal of debate, sometimes acrimonious, in both Houses of Parliament, about the level of aid which Government give to developing countries, one thing which we do extremely well is to turn the available aid which we have generally into training and support. We try to see that the agricultural structure of developing countries is improved so that the long-term objective of individual countries will be achieved; namely, that they will be able to feed themselves.
I like to think from the little experience that I have of these matters that this is something that we in this country genuinely try to do well, although at the same time we have been ready to send overseas agricultural produce in kind, where there have been disasters; for instance, that which we saw in Ethiopia recently.
I hope that the noble Lord, for the reasons which I gave, will not mind if I resist this amendment on behalf of the Government. I am simply saying that while there is much very sound sense in this amendment, it is difficult to put it into Clause 12. It is a different area from the four areas which we have put into Clause 12. Those four areas are directly under the control of Her Majesty's Government. If we were to put this amendment into the Bill, it would involve something that the Government would have to do by international co-operation.
8.30 p.m.
Lord Oram: I anticipated and was therefore not surprised to hear the main argument which the Minister has put forward against my amendment; namely, that the four considerations standing in the clause at the moment are under the direct control of the British Government, whereas the consideration that I have put forward was different in that the British Government were only one authority among many that would have to take policy decisions in the international sphere.
I recognise that as a strong argument against what I have put forward. But I should like to disagree with the suggestion of the noble Lord, Lord Monk Bretton, that there was anything unilateralist in what I was proposing. In what I said I recognised that we, as members of the European Community, had those obligations and duties. In pursuing the amendment, if it were to be added to the Bill, it would be through our membership of international organisations that we would act.
For the reasons I have given I shall not press this amendment. The noble Lord, Lord Walston, and I put it down to draw attention also to the close link that there is between domestic agricultural policies and the international effects. Having done that, and without any commitment not to bring it forward on other suitable occasions, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 46 and 47 not moved.]
Clause 12 agreed to.
Earl Peel Earl Peel moved Amendment No. 48:
After Clause 12, insert the following new clause:
("Capital grants.
.—(1) In section 28 of the Agriculture Act 1970, there shall be added to the definition of "agricultural business" the following words: "and, for the purposes of capital grants, includes such ancillary farm-based businesses as the Ministers may, from time to time, by order specify".
(2) The Ministers shall have the power to extend the provisions for the making of capital grant payments in respect of farm tourism and crafts to areas beyond the less-favoured areas.
(3) Orders made under subsection (1) or (2) above shall be exercisable by statutory instrument, subject to annulment, in pursuance of a resolution of either House of Parliament.").
The noble Earl said: I am sure that everyone will agree that the problems facing farming today and the consequences for the social fabric in the industry are in need of very careful consideration. There is no simple answer to this. However, I am sure that through my new clause we should try to encourage the expansion of rural diversification and ancillary businesses.
The 1981 Act, plus Clauses 1 and 12 in this Bill, have considerably widened the responsibilities of the Ministry of Agriculture and the role of ADAS to meet the changing needs and demands of the countryside. However, I believe there are shortcomings with regard to the ministry's ability to grant aid certain ancillary farm-based businesses. I am sure that these should be rectified to allow the ministry to play its role not simply in terms of responsibility and advice but with a full financial back up, as has been the case in the established agricultural practices.
Grants available under the current agricultural grants arrangement are, in certain cases, I feel too narrowly defined. These should be widened to include value adding enterprises—enterprises such as processing, preserving, sterilising, freezing, dehydrating (one can go on for ever)—and indeed smoking. In saying "smoking" I refer to smoking of salmon rather than to other activities. Farmers wishing to expand into such diversified schemes could find that they make all the difference to the survival of what are now fairly frail enterprises, either in an individual unit or through co-operative schemes. At the moment these enterprises do not qualify for grant. With particular regard to the small farmer, with the tremendous increase in tourism that is developing the opportunities for selling such products would be very considerable. In addition, opportunities for obtaining jobs in rural areas could well be lost where such enterprises are passed on to retailers outside the rural areas.
Furthermore, processing of traditional food and drink products—such as cream, cheese, honey and so on—while qualifying for grant for the conversion or improvement of a building does not qualify in respect of equipment, fixtures and fittings. This amendment would allow the ministry to widen its grant-aiding powers under Section 28 of the 1970 Act to include the type of businesses that I have mentioned and any other that the Minister may wish to include.
A similar amendment was moved in Committee in another place but was withdrawn as there were objections from the Government that the clause was too widely drawn. However, I hope that by including the words,

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"such ancillary farm-based businesses as the Ministers may, from time to time, by order specify",
I can persuade the Government to agree to this amendment as it overcomes their original objection and gives the Minister the power of discretion that was lacking in the original clause that was moved by Mr. Colin Shepherd.
I think it is fair to say that the objectives behind the original clause had all-party support. Indeed, the Minister himself, Mr. Gummer, when replying, said:
"It is too widely drawn—but I hope that my honourable friend will accept that the points he has made strike a chord in our hearts, and that we are trying hard to meet the requirements that he has underlined".
Subsection (2) of this new clause would give the Minister the power to extend grant aid for farm tourism and crafts to outside the less favoured areas. It is therefore simply complementary to the aims of subsection (1). However, I should point out that subsection (2) would be subject to the EC state aid rules, but I am advised that national legislation can be prepared now with a view to it being accepted, one hopes, at a later stage.
For farmers to overcome the ever increasing problems within their industry will undoubtedly require imagination and ingenuity. I am sure that they will be able to do that. Indeed, expressions of confidence were put forward by a number of noble Lords on Second Reading. However, I am sure that it is right that as wide a diversification of grant aid should be made available to them as is practicably possible. It would surely seem logical for ADAS to have the financial clout to accompany the advice and services that we hope they will be giving.
Since the war the Ministry has proved how successful it can be in meeting the needs of our times: straightforward agricultural output. That has been achieved through a formula of good advice backed up by financial incentives and a corresponding response from the farming industry. Now that same industry and that same Ministry have a new challenge. I believe that this new clause will help or go some way towards providing the Ministry with the wherewithal to face the future with the same enthusiasm and success as it has faced the past. I beg to move.
Lord Sandford: I should like to support my noble friend in this amendment because I have long wanted to do anything I can to encourage diversification on the farm. I do so not particularly because I want to see farmers receiving yet more grants, but because I want to see farming making not only a profit for the farmer but a better contribution to the countryside as well.
I want to see farmers and landowners getting out of the mess in which present policies have landed them. I believe that diversification on the farm has a great deal to offer, certainly as much as any of the other changes that are being canvassed.
It was because I thought that diversification on the farm should be encouraged that I caused what has become Clause 41 of the Wildlife and Countryside Act 1981, to be inserted in that Bill. However, I must say that I have been disappointed at the meagre progress that has been made in the five years since
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then—meagre progress in the capacity of ADAS to give advice on diversification; meagre progress in the development of policies to support diversification; and relatively few examples of diversification on the farms.
However, I welcome the production of two recent directories for which I think we have to thank the Development Commission: first, a directory of farms that are processing their own products, and secondly a directory of craft workshops in the countryside, the majority of which are in redundant and disused farm buildings. My welcome is particularly because more accurate and more up to date and wider knowledge of diversified farm enterprises are a sine qua non of any further progress, particularly further progress in modifying the land use planning framework that is needed to encourage and not to frustrate farm diversification.
Following the short debate which we had here on 19th February, initiated by the noble Lord, Lord John-Mackie, I have recently been talking with my noble friend on the Front Bench in, my capacity as chairman of the South-East Regional Planning Conference about the process of modifying the planning framework (the structure plans and the local plans) and about the machinery we are setting up to get this modification process going in the Home Counties. As part of the process it will be necessary to study cases of successful diversification and to analyse them—to analyse the ingredients of success, to analyse the fruits of success—what it does for the local and for the farmers' economy—and to analyse the causes of frustration, about which the noble Lord was chiefly talking when introducing that debate.
However, we do not need any further study to see that present farming policies are now failing us badly. They are continuing to produce growing surpluses of a growing number of farm products at great cost both to the consumer and to the taxpayer, and with reducing benefit to the farmer. All along there has been a constant loss of jobs in the countryside resulting from these policies and not infrequently damage to landscape and wildlife.
I put it to the Committee that we cannot indefinitely pursue land use planning policies which merely safeguard the best of rural land for types of agricultural production and a set of agricultural policies which continue to serve us all as badly as that. In such circumstances farmers who want to escape the downward slide will be well advised to consider whether it is not possible for them to diversify their farming as much as they possibly can. By that I mean of course processing and adding value to whatever it is they produce; finding their own markets for premium products; and optimising the alternative uses of their land and of their buildings. I am referring to optimising them for recreational uses, for field sports, field study, leisure, holiday uses, tourism uses, the creation of woodlands and water space appropriately to support those uses.
The CLA and the NFU must realise that they have a very considerable duty in the task of helping to modify the present planning processes which would otherwise, in their present unmodified state, stand in their members' way as they set about trying to make this change. My reason for saying that is as follows.

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The main thrust of planning policy towards agriculture has been and still is safeguarding the best of the rural land for agricultural production. Inevitably that leads to negative controls against any other alternative use.
That is a policy which has yet to be formally reconsidered and changed. What are now needed—and they are still only rarely seen in structure and local plans—are positive inducements to promote other rural uses of farmland and farm buildings besides pure agricultural production.
While agriculture was being claimed—and it went on being claimed long after it ceased to be true—as the reliable mainstay of the rural economy, it was inevitable that structure plans and local plans were silent on any other economic use of the countryside. What is now needed, and has been needed for some time, is recognition of the value of other pillars upon which the rural economy could be based and inducements to development.
Therefore, I hope that my noble friend will look with favour on the general thrust of this amendment, if not on its actual wording, and the broad line of philosophy that lies behind it. I hope that he will indicate to the Committee what measures he contemplates—if not precisely those in the amendment—to encourage and facilitate diversification on the farm, because I believe that that is one of the more promising ways out of the present tribulations which not only beset farmers, but which are frustrating the better uses of land in the countryside.
Lord Middleton: Perhaps I may briefly add my support from a slightly different angle. It seems to me that the thinking behind the amendment is very much in line with the efforts which the European Commission is making to devise schemes to encourage the diversification of agriculture in the Community away from the production of commodities now in surplus. As the noble Lord, Lord Gallacher, will know very well, they have made draft proposals to give effect to a package of socio-structural measures to re-orientate agricultural production in conjunction with the 1986 CAP price fixing. One proposal is to modify the marketing and processing grant regulation (355/77) to encourage alternative production by providing enhanced assistance and allowing individual projects not falling within existing investment programmes to be aided.
Therefore, if the UK Government are in agreement with such a policy, then surely my noble friend's proposals would be looked on with sympathy. I hope that that will be the case. I support my noble friend in his amendment.
Lord Mackie of Benshie: I too should like to support the amendment, but not in quite the same terms as the noble Lord,Lord Sandford, who seems to think that agriculture is not and has not been the mainstay of the countryside. I disagree strongly with that proposition, but I agree strongly with the amendment. If the Government are serious, then of course they must take powers to do this in order to support the further extension of agricultural business from the production to the manufacture, or the treating, of agricultural
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produce to add value along with tourism. It is a very sensible amendment. I am sure the Government must accept it.
Lord Stodart of Leaston: I should like very strongly to support this amendment. I am chairman of the Agricultural Credit Corporation which gives guarantees to farmers which are backed by public money when they are short of the necessary collateral to get the amount they want from the banks. We are extremely aware of the stresses which the industry is under at the moment, and indeed also of the encouragement that is given by the Ministry of Agriculture that farmers should diversify.
A lot of our clients want backing for tourist enterprises: for example, installing bathrooms for bed and breakfast accommodation, and so on. We cannot help them where capital grants are not available. That is why I am particularly interested in subsection (2) of the suggested new clause. We can give guarantees for tourist development in what used to be called the hill areas and which I see are now called the less-favoured areas. I am strongly in favour of the extension of grants being given to those outside those particular areas in order that we can help as well.
Lord Melchett: I should also like very strongly to support this amendment and to take up the point also in subsection (2) about extending grant-aid outside less-favoured areas. Let me say immediately that not enough of the public support available to agriculture currently goes to maintain the incomes of farmers in less-favoured areas who in many circumstances have a very hard time of it compared with those people such as myself found in the South-East.
Nevertheless, I think that there is a very strong argument for encouraging diversification in farming enterprises wherever they might be located—and in particular in some case in areas outside less-favoured areas—for two reasons. The first is that if curbs on production are going to come, in particular in the cereal section, they are mostly going to fall on farmers from farms outside the less-favoured areas, on farmers particularly like myself who farm in East Anglia. Therefore, those farmers are going to face a particular need to diversify their agricultural business.
Secondly, one factor which I think has been overlooked in some of the discussion about future agricultural policy is the importance not just of maintaining the income of farmers but maintaining the income and jobs of farm workers. Many of the agricultural workers will have to be employed by farmers outside the less-favoured areas and again in areas like the South East where agricultural holdings tend to be larger and the number of people employed on farms tends to be higher.
If I can make one final point: I speak as a farmer who is in the process at this moment of converting an unused agricultural building to another purpose. We are converting an old cattle shed to cheap accommodation for people who will be walking the new long-distance footpath in Norfolk, the Peddar Way and the Norfolk coast path. In doing that and in looking at implications for management and the income likely to be derived after the conversion, I have been particularly conscious of the two following things. First, that

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being able to do this will provide a part-time job for one more person in an area where, like most rural areas, unemployment is distressingly high; secondly, that the conversion would have been quite impossible were it not for very generous grant-aid towards the capital costs, in this case from the Countryside Commission and the Norfolk County Council, grant-aid which was only available because it is an experimental project.
I am quite convinced that capital assistance of that sort can help individual farm businesses diversify. It can help provide new sources of income for people living and working in rural areas, and I believe in the long run it can potentially be a source of new jobs for people living in rural areas. For those reasons, I strongly support the amendment.
Lord Belstead: I am bound to say , after listening to all your Lordships saying the same thing, that we are indeed sympathetic to the approach in this amendment. We have actually been carrying out studies in this field and looking at the type of approach embodied in this amendment. May I just say how very encouraged I was to hear what the noble Lord, Lord Sandford, said about trying to free up the planning attitudes to rural diversification. The difficulty which I have in replying to this is that the following issues are raised, and I do not think they are issues which I have heard in speeches already.
Briefly, first of all I think one has to decide how far it is right to have the Ministry of Agriculture in this field along with the Development Commission, the Department of Industry, the tourist boards and a number of other bodies. Of course, this does not rule out the case for assistance from the Ministry of Agriculture, and this Committee well knows that last year we introduced grants for farm tourism and crafts in the less-favoured areas. But anything more will cost money, and that would have to be taken from the grant-aid which the Ministry of Agriculture has to give which has been very considerably reduced over the past three years. In the present economic circumtances, the only way in which diversification of grants could be funded would be to take money from other grants for these grants. That is the first thing which is in my mind.
The second is that I think it is a serious point as to whether capital grants are the proper mechanism for encouraging diversification. Up to date we have largely concentrated on doing our best to provide interested farmers with advice, encouragement and, indeed, access to the experts in other government departments and agencies concerned. This can very often be more valuable than a government handout. In particular, it enables us to identify those farmers who really have the right skills and qualities to diversify, and I think we ought not to forget that diversification is not the answer to every farmer's problem. Capital grants can thus be a rather blanket form of help which may not always be the most appropriate way, let alone the most cost-effective way, of promoting diversification.
There is a third point. I think this is difficult so far as subsection (2) of the amendment is concerned. The aids proposed in the amendment would have to be approved by the European Commission under the
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state aid rules of the Treaty. I am not sure that we would get approval on the aid to ancillary farm businesses covered in subsection (1). I am sorry to disappoint my noble friend Lord Stodart in saying this, because my noble friend does such very good work for the Agricultural Credit Corporation and is, I know, very interested that an amendment of this sort should be made. I think it is almost certain that if one looks at the part of the amendment covered by subsection (2) we would not get Commission approval for a general extension of aid to tourism and craft enterprises outside the less-favoured areas.
However, if I may return to a more positive theme, I am in support of the idea behind the amendment. I like to think we have shown our serious intention by taking the power to grant-aid crafts and tourism in less-favoured areas which of course means an enormously extended area of land in England and Wales, and particularly in Scotland, since we had an extension agreed by the Community. But the objections that I have outlined to the amendment are real; and while, as I say, I am in no way dismissing what my noble friend Lord Peel is saying, I think it would be difficult to agree to write this amendment into legislation without solving these objections.
May I make this offer to my noble friend, and indeed to both my noble friends who have spoken on this amendment? If they would be prepared to withdraw the amendment, which has certainly received very strong support from all sides of the Committee, without commitment I shall take it away. I say that in particular in the context that, as my noble friend Lord Peel asserts, it is drawn much more narrowly than the amendments in the House of Commons were drawn. I shall see whether there is anything that I can do—but without commitment—to try and come back with a constructive response at Report stage. If I say that I will do that, I ask my noble friends if they will have a look at what I have sought to say on this amendment. The objections I have raised are real and have to be either overcome or at least answered, or got round in some way, if we are to get anything on the face of the Bill.
9 p.m.
Lord Sandford: Before my noble friend responds formally to that, may I ask my noble friend on the Front Bench whether, when he comes back (as I hope he will) with another amendment to cover these points that have been raised from all sides of the Committee, he will also give us an indication whether the Ministry of Agriculture is now prepared to modify, or at least reconsider, the agricultural policies at the moment written into the structure plans, and which in effect preclude movements in the direction we all want to see?
Lord Melchett: I am delighted at the noble Lord's reasonably positive response. Will he think before Report stage about one other thing? While he may be right at this moment that going to the European Commission and asking for an extension beyond the less favoured areas of the kind that subsection (2) suggests might meet with a rebuttal, I hope he will remember that the common agricultural policy is changing rapidly. Only a couple of years ago he was

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himself saying that an approach to the European Commission to ask for the kinds of environmentally sensitive areas that we now propose in this Bill would have met with exactly the same rebuttal.
The noble Lord said in your Lordships' Select Committee upstairs that it would be illegal under the Treaty of Rome to do what we are now doing in this Bill. In other words, agricultural policy in the Community is changing rapidly. I have no doubt—and I am sure this would be a generally accepted view—that diversification of farm enterprise is something that the Commission will rapidly take hold of and that will gain general support throughout Europe. It would therefore be useful to have the provision ready in our domestic legislation; otherwise the noble Lord will be coming back with another agriculture Bill next year to put this clause into our statute law.
Lord Belstead: I can hardly wait. I am not sure that I share the optimism of the noble Lord that the Commission will get hold of this objective. The objective is laudable, understandable and desirable, but do not let us fool ourselves. The Commission realises clearly that the agricultural budget has to have a brake put on it; otherwise we shall find the European budget breaking through the ceiling. I shall not go down that road now, but money is very much in the minds of the Commission and the agriculture Ministers. Nevertheless, I take the point on board. The noble Lord has a valid point.
What the noble Lord said about the evidence I gave is true, and I give him that point. May I take away the point that my noble friend made about structures. I think my noble friend Lord Sandford was referring to county structure plans. I should like to have a look at the point, and perhaps have a word with my noble friend subsequently, or maybe write to him.
Earl Peel: I have witnessed two fairly unusual things this evening in moving this new clause. First, every person who spoke to it was behind me and supported it. Secondly, I actually heard a farmer say that he was satisfied. I am grateful to my noble friend on the Front Bench for what he has said, though I was hoping that he might have gone a little further.
He made three points. He said first that he was sympathetic, and I am grateful for that. He also asked how far it is right that the Ministry should be involved with other agencies. This Bill is full of the Ministry getting involved with other agencies. My noble friend talked about capital grants and asked whether they are the right method for diversification. In view of the fact that they have been so successful in the past with established agricultural practices, I see no reason why they should not have the same level of success with any new enterprises that farmers may wish to move into.
On the question of subsection (2), my noble friend said that it is technically unsound. I am not in a position to say whether or not this is the case, but I take heart from the fact that my noble friend said that he was prepared to take this away and look at it. I hope I shall have the opportunity of discussing it further with him and perhaps coming back with something at Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Melchett Lord Melchett moved Amendment No. 51:
After Clause 12, insert the following new clause:
("Keeping of bulls on land crossed by public rights of way.
.—(1) Section 59 of the Wildlife and Countryside Act 1981 (prohibition on keeping bulls on land crossed by public rights of way) shall have effect subject to the amendments provided for by subsections (2) to (4).
(2) In subsection (2) paragraph (b) shall be omitted.
(3) Subsections (4) and (5) shall be omitted.
(4) After subsection (3) there shall be inserted the following subsections—
"(4) On the application of an occupier who wishes to permit a bull to be at large in a field or enclosure crossed by a right of way to which this Part applies, a council may, subject to subsection (5) below, order the diversion of the right of way for a continuous period of not more than four months.
(5) Before making an order under subsection (4) above the council—

(a) shall consult with any other council, or parish or community council, in whose area the right of way is situated, and with any organisation prescribed to receive copies of public path diversion orders for the area in which the right of way is situated, giving in each case a period of not less than 28 days during which representations or objections to the proposal to divert the right of way may be made;

(b) shall consider any representations or objections; and

(c) shall satisfy itself that the diversion is necessary in the interests of good farming and will not cause undue inconvenience to users of the right of way.

(6) On the making of the order the council shall forthwith cause a copy of the order, together with a plan at a scale of not less than 1:10,000, to be sent to any council or organisation consulted under subsection (5)(a) above, and to be displayed, and maintained for the period of the diversion, in a prominent position at the ends of the diversion.
(7) It shall be the duty of the council to ensure that the diverted right of way is, throughout the period of the diversion, properly signposted throughout its length, and the provision of any necessary signposts may be included in an agreement under subsection (9) below.
(8) A council shall, before refusing to make an order under subsection (4) of this section, consult the Ministry of Agriculture, Fisheries and Food.
(9) An order under this section diverting a right of way—

(a) shall not affect the line of the right of way on land not occupied by the applicant,

(b) shall not divert any part of the right of way on to land not occupied by the applicant, unless written consent to the making of the order has been given by the occupier of that land, and by any other person whose consent is needed to obtain access to the land,

(c) may require as a condition of the taking effect of the order the provision and maintenance, for the duration of the order, of any necessary facilities for the convenient use of the diversion,

and the council may enter into an agreement with the applicant for the provision and maintenance of any such facilities by the council at the expense of the applicant.
(10) In this section "council" and "public path diversion order" have the meanings given to them by section 329(1) of the Highways Act 1980.".").
The noble Lord said: I beg to move Amendment No. 51, which deals with something about which I hope we shall be able to achieve the same degree of unanimity as on the previous amendment; but I think that may be overoptimistic. In debating the Wildlife and Countryside Bill in 1981 the Government introduced a provision which allowed farmers to put beef bulls above the age of 10 months running with cows or heifers in a field crossed by a public right of way.
May I for a moment go back before 1981 and remind the Committee of the history of that provision? Before 1981 there was a discrepancy round the

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country because different local by-laws had introduced different controls on the placing of bulls in fields crossed by public rights of way; though I think it is true to say that over the great majority of the countryside in England and Wales it was illegal to put any bull in a field crossed by a public right of way. The law was varied; different local by-laws had different effects. It was generally agreed by all the interests concerned that the law should be changed and that a statute law covering the whole country should be introduced.
Before consultations on the Wildlife and Countryside Bill got under way there were extensive discussions between those representing farmers, the National Farmers' Union, and those representing walkers, in particular the Ramblers' Association, about how this could be achieved. For a period at least—it did not last very long—there was agreement. The agreement is more or less embodied in the amendment I move tonight, Amendment No. 51.
The agreement was that there should be a general prohibition on the keeping in any circumstances of any bull above a certain age in a field crossed by a public right of way, but there should be a procedure whereby farmers who particularly needed to keep a bull in such a field could go to a local authority and ask for the public right of way to be diverted around the field for the period during which the bull had to be in it.
That compromise failed to get into the 1981 Act because it was opposed by the Government. It was not opposed at the time on grounds of practicality; it was not opposed at the time on grounds that it would be unduly onerous or difficult for farmers; it was opposed simply on the grounds that the Government had a general policy not to place new duties upon local authorities, not to give them additional work and not to ask them to incur additional expenditure. That was the basis on which the Government did not accept the compromise, which, as I say, was briefly agreed, and, instead, introduced Section 59, which is now the law and which allows a beef bull over the age of 10 months to be run in a field crossed by a public right of way if it is with cows or heifers.
The effect of my amendment would be, as I have said, to revert to the compromise. It would introduce a total ban on the keeping of bulls over that age in fields crossed by public rights of way, but would allow farmers or occupiers who were particularly inconvenienced by a general prohibition to apply for a temporary diversion. I hope at this stage that we can stick to the general principles of this compromise: I see it as a compromise. I am quite happy to agree that the procedure for asking for diversions should be as simple as possible. I should be quite happy if the Government were happy to agree that the costs of applying for diversions should fall on the local authority and not the farmer or landowner. I would think that it would be possible to devise a simple and straightforward procedure and that once it had gone through one year it would happen regularly every year because on the whole farmers would want to use the same field at the same time of the year every year. I should envisage this being a relatively simple procedure and one that a relatively small number of farmers would need to make use of in practice.
The next matter I need to cover is: why change the law? Why suggest changing the law now when it was agreed as recently as 1981? The fact is that the change in 1981 was a disastrous mistake. It has led to numerous incidents in which people have been severely frightened. In at least one case a walker has encountered a bull in circumstances made legal by the 1981 Act and has been seriously injured. He was a walker in Cornwall who was tossed into a river by an Aberdeen Angus bull and severely injured, and is now likely for medical reasons to have to retire early from his job.
When we discussed this in 1981 on an amendment moved by, finally, the noble Lord, Lord Avebury, we had a fairly hilarious discussion. A lot of jokes were made about bulls and walkers, about bulls getting tents wrapped round their horns, and a great deal of mirth was occasioned on all sides of the Chamber. But since then the matter has become altogether a great deal more serious and the Ramblers Association has been collecting evidence of incidents that have occurred. I hope shortly that the association will be able to provide the Government with a dossier of such incidents.
Before giving the committee one or two examples. I should like to make one or two points. First, the Ramblers Association has advised all walkers never to go into a field where there is a bull present whatever sort of bull it is and in whatever circumstances. The advice has been always to trespass, to go round the field and avoid the bull. That advice was given by the Ramblers Association after studying the advice given by the Health and Safety Executive to farmers and farmworkers. It is clear from the guidance note issued by the Health and Safety Executive to farmers and farmworkers that it is totally impossible for walkers to cross a field which contains a bull in circumstances which would be deemed safe by the Health and Safety Executive if that walker were a farmer or farmworker.
In those circumstances, it seems to me that the only possible, responsible advice to walkers in such circumstances would be to advise them to trespass. From the letters I have received that is what a large number of walkers are now doing. They are simply not going into fields if they find a bull there; they are going round fields, trespassing on land where there is no public right of way, to avoid the risks that they feel, rightly in my view, they would be incurring in going into the field.
But some walkers are more law-abiding. They are not willing to leave the line of right of way even in quite frightening circumstances, and I shall give the Committee a few examples from a number of cases. There was a family of four, including two young children, walking in Oxfordshire. They were walking through one field when a bull emerged from a connecting field pawing the ground and roaring. The family had to retreat through a hedge into the next field, to which the bull still had access, but luckily for them the bull remained behind the hedge knocking and shaking it. Another case some noble Lords will have heard about already on the North Wolds Way, which is a recreation path waymarked by the local authority. A party of eight handicapped walkers had gone for a walk with some adults. The handicapped walkers were young children. They had stopped for a

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picnic in a field which they assumed to contain a small number of cows a long way away. That is how it continued to be for a considerable period of time. When they were about half way through their picnic lunch a bull emerged from behind the cows and came charging down the field towards them. The adults managed to get the handicapped children out of the field, but they had to leave all their possessions behind, which gives, I hope, some idea of the speed with which they had to get out of the field. They had to scale an embankment to get out and they left behind their clothes, their picnics and their rucksacks, which the bull proceeded to paw and to muck around with.
Another adult walking between Reading and Henley was chased by a bull which again had been grazing with cows. This woman made her escape over a stile but the bull remained snorting and bellowing on the other side of it. The incident was reported to the police, who went to the farmer and asked him to remove the bull. There had been a number of complaints to the police about that particular animal from walkers. The farmer, in response to the police, maintained—I am quoting the farmer's words—that the bull was in a legal situation. He therefore did not intend to remove the animal. I understand that the police subsequently attempted to have warning notices erected.
I must pause at that point to draw the attention of the noble Lord, Lord Belstead, particularly to that case, because when he wrote to me recently about this he said in his letter of 27th May:
"It seems to me unlikely that a farmer would knowingly turn a dangerous bull out to graze in a field crossed by a public footpath and so leave himself vulnerable to prosecution under the Health and Safety At Work Act".
This was an issue about which I had written to the noble Lord.
Here is an example where the farmer, even when contacted by the police after numerous complaints had been made about the bull, relied on the change of the law which was made in 1981 to maintain that he had a legal right to keep the bull in the field whatever the circumstances. A family walking near Daventry—two adults and three young daughters—came face to face with a beef bull grazing with cows. In that case they had to make their escape down the line of the public right of way and found to their horror when they got to the edge of the field that the public right of way had been illegally obstructed with an electric fence and a rickety wooden fence. The electric fence was just in front of the rickety fence, which made it an extremely difficult obstacle even for a fit and healthy adult to get through, let alone three young girls.
In that case, the incident was also reported to the police and the Health and Safety Executive. Finally (I could give a number of instances but I do not want to take up too much time) a family of four, including two children under 10, walking in Gwent were chased by a Hereford bull, again grazing quite legally with cows. They had to run to the nearest edge of the field, off the public footpath in that case, and dive through a thorn hedge, a process made more difficult by their discovery halfway through the hedge that there was also a barbed-wire fence where the hedge was.
Their experience may well be typical of many walkers. Their attitude since has been simply to avoid public footpaths or fields where there were bulls, which is something which many walkers are now doing. A number of other instances which have been reported to the Ramblers Association or to me personally involve elderly people or people with a physical handicap; for example, a man who had walked through the Somerset countryside all his life and who 10 years ago had to have one leg amputated. His artificial leg is such that it is not easy for him to walk over rough ground and he therefore walks through the Somerset countryside on crutches. His view about the change in the law is that it has put him into perpetual fear when he is walking across farmland. He feels that he would be completely at the mercy of a bull. He certainly would not be in any position to climb across a rickety wooden fence topped by an electric fence or through a thorn hedge with barbed-wire laced through it.
It may be thought that this is simply something that a few who go walking in the countryside are concerned about. But that is not the case. A large number of farmers and farmworkers have had, from personal experience, cause to know how dangerous any bull of any breed in any circumstances can be. I am myself a farmer with beef cattle. We have had somebody injured on the farm by a beef bull in circumstances where it was not confined to a building. Bulls are dangerous. The Health and Safety Executive's advice to farmers includes the phrase, "All bulls are unpredictable". There is no suggestion in its official safety advice to farmers and farmworkers that bulls running with cows and heifers can be treated as not being dangerous; in fact, quite the opposite. It says that all bulls are unpredictable and it gives quite specific advice about not placing bulls in fields with footpaths across them if the footpaths are likely to be used by elderly people or children.
All footpaths may be used by elderly people and children. It seems to me quite clear that the Health and Safety Executive's advice is that the change in the law which the Government made in 1981 was wrong and is not sustained by the facts. I have said that this is not just something which concerns walkers. I had a letter recently from a farmer in Clwyd in North Wales. He is a breeder of pedigree Aberdeen Angus cattle and also keeps other livestock. In his letter he says:
"As a breeder of bulls for the pedigree and commercial market I will go along with you. No bull is safe".
That is tragically borne out by the number of serious accidents and indeed deaths which continue to occur to farmers and farmworkers, many of which are caused by beef breeds of bull. In the years since 1981 a number of farmers and farmworkers have been killed or seriously injured by beef breeds of bull.
I should like to make one other point about the change of the law. It has been suggested by some people that at least this was an improvement in some areas on how the law stood before 1981, because at least all dairy bulls are now prohibited from fields crossed by public rights of way. There is no doubt that if you are likely to be injured by any bull, you are slightly more likely to be injured by many breeds of dairy bull rather than by most breeds of beef bull. I do

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not think it is possible to generalise any further than that. Unfortunately, walkers in many cases are still finding that dairy bulls are being kept in fields crossed by public rights of way.
One of the arguments against the change in the law which was made in 1981 was the suggestion that it would lead to confusion. That is borne out, to give just one example, by a case arising recently in Cumberland, where a woman walked across a field where a Friesian bull was running with cows. She was chased out of the field by the bull, and reported the incident to the police. The police said they had had previous complaints about the same bull running with cows; but a chief superintendent wrote to the person concerned, saying there was nothing he could do about this because the law had been changed in 1981 and it was now legal for bulls to run in fields crossed by public rights of way so long as they were with cows. If a chief superintendent of police can be confused about this, I suggest to the Committee that it is not all that surprising that many farmers are confused, and indeed many walkers also. For example, it is quite legal to run any cross-breed of bull, of which there are some in the countryside, in fields which are crossed by rights of way. In a number of instances where people have written to me it has been quite difficult to determine the breed of bull concerned in a particular incident.
I have absolutely no doubt, on the basis of what has actually happened in the countryside since 1981, that sooner or later somebody is going to be killed by a bull when they are walking along a public right of way. They are going to be killed by a beef bull that has been running with cows and heifers. The question I suggest we need to ask ourselves is whether the certainty that that will happen sooner or later to a handicapped or elderly person or to a child is worth running that risk, in the light of the fact that a compromise is available. That compromise might cause minor inconvenience to a small minority of farmers and it could cause some inconvenience to some walkers who would have to follow diversions rather than rights of way marked on a map. But I would suggest to the Committee that that very small cost in terms of inconvenience would be very minor if we could get rid once and for all of the serious risk of death or injury caused to innocent people walking along rights of way in the countryside. Incidentally, it would also get rid of the inevitable trespass that takes place as people avoid fields with bulls in them, as they do at the moment on a wide scale. I beg to move.
Baroness Macleod of Borve: Before the noble Lord sits down, may I say I have listened with great interest to the stories he has told us tonight. Would he take it from me, as one who lives in one of the Home Counties where there are a great number of rights of way, that the majority of ramblers have no idea of the difference between a bull and a cow?
Lord Melchett: No, I would not. In fact there has been one court case where this particular point had to be determined by the court, where a rambler said he had been chased by a bull (in this case, a dairy bull) and the farmer concerned was taken to court. He said
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that it was not a bull at all but that the particular animal concerned was a cow with a hormone deficiency. The farmer was found guilty and fined by the court. And, if I may, just to wipe the smile off the noble Baroness's face, I ought to say that the particular animal concerned was put down after it had seriously injured one of the farmer's farmworkers.
Lord Belstead: The noble Lord, Lord Melchett, has explained the concerns he has about keeping beef bulls in fields. I will just say that Section 59 represented, five years ago, a compromise between the practical needs of farmers and the legitimate concerns about rights of way. For most farmers raising beef, artificial insemination is simply not a practical alternative. The beef cow, unlike the dairy cow, is not brought in twice a day and may indeed be quartered outside and at some distance from the farm buildings for the greater part of the year. Thus the only way successfully to get cows or heifers into calf is to run a bull with them over a period and in many cases, it may be possible to avoid doing this in fields crossed by rights of way.
I must declare a personal interest in that I keep a beef bull and beef cows. However, I am fortunate in being in the position which I have just explained, where it is possible to avoid keeping them in fields crossed by rights of way, at least when the bull is with them. But in cases where beef is the predominant enterprise, such alterations to farming practice may be difficult or impossible. There may be particular difficulties in the hills; and, or course, if most or all of the farmer's fields are crossed by rights of way, the choice may be restricted or, in extreme cases, non-existent.
That said, the noble Lord has told the Committee that this would be some minor inconyenience but there would be a solution to the problem. With very great respect, I think that the amendment would tie everyone up in miles of red tape. The amendment provides for the possibility of local councils making temporary path diversion orders for periods not exceeding four months, but what hurdles has the farmer to scale in order to persuade the council to make an order?
The farmer must satisfy the council that the keeping of a bull in a field crossed by a right of way is necessary to good farming practice. The council must then consult with other councils who may have an interest and then with other representatives of the user organisations who may very well object. Objections must then be considered, and the council must eventually decide whether or not to make the order and what work ought to be undertaken, either by the occupier of the land concerned or by the council at his expense, to signpost the way and to provide as necessary for the convenience of users. Then the whole process has to be gone through again, year after year.
I am not saying that there is not a matter for concern, and I listened carefully while the noble Lord made his speech. But I really think, when the Government are working hard to try to reduce the burden of bureaucracy and regulation on small businesses, that this would be a very heavy piece of legislation where the heavy hand of bureaucracy is not to this extent required. There are, as I say, competing

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claims here. There is the need to look carefully at what are the legitimate concerns of rights of way, but there is also the requirement to look at the practical needs of farmers.
Lord Kilbracken: I should like to intervene for a moment while my noble friend considers what to do. I speak as a former breeder of Hereford cattle because of what my noble friend has said about beef bulls. I was at one time secretary of a Hereford breeding society, so I have to declare an interest there. I just want to say that, although he has been talking about beef bulls being more dangerous—that means, in principle, the Hereford and the Aberdeen Angus—I have found that the dairy breeds, such as the Friesian and the Jersey, are much more dangerous, and I do not like to hear any slander of the Hereford breed.
Lord John-Mackie: Like my noble friend, I do not believe there is any question of bulls being trusted. Years and years ago we had a bull which we thought was as quiet as a lamb. But, suddenly, it broke out on a dairyman in Scotland, and he was fortunate not to have been seriously hurt. On my farm in Essex, I had an Aberdeen Angus bull. He was in the field for a few years and was never any trouble at all. There was a footpath right through the middle of the field. I do not know whether people noticed the bull or whether or not they used the footpath, but somebody left the gate open and the bull got out. They then discovered there was a bull in the field, and I had to remove him.
My noble friend has a serious point here, and I think the noble Lord, Lord Belstead, is slightly exaggerating the difficulty of putting up signs to deviate walkers around a field. It is not a big job really, particularly if it is a dairy bull, or just a bull—I do not want to miscall the noble Lord's favourite bulls. If it is a bull it might be dangerous, as most of them can be at some time or other. It should be a duty at least to put up a sign and give some pointer to the deviation that could be made.
I must support my noble friend to a considerable extent, although I appreciate that he has gone a long way in making all these rules and regulations which admittedly would be a problem for county councils and district councils. Nevertheless, I think we should take the matter seriously, because it is a problem.
9.30 p.m.
Lord Winstanley: I am bound to say that I accept what the Minister said in reply to the amendment moved by the noble Lord, Lord Melchett. It would produce a whole lot of bureaucratic entanglements which would be well nigh intolerable for the farmer and the landlord, and also for the local councils which would have to administer it. I accept all that. But it does not seem to me that one necessarily ignores a situation merely because the solution is a difficult one or an awkward one. Perhaps the simplest thing to do would be to go back to the position before the law was changed in 1981. In that connection, perhaps the Minister could tell us what deprivations and what difficulties there really were for farmers and landowners before the change in the law under the Wildlife and Countryside Act 1981.
Lord Belstead: I am not sure that I am equipped to do that this evening. I am not equipped to do that because that is not what the noble Lord, Lord Melchett, wants. The noble Lord is not satisfied with the move that was made in 1981 and now wants to move further. I do not think the noble Lord, Lord Melchett, will thank the noble Lord, Lord Winstanley, if we return to the law as it was before 1981.
Lord Northbourne: The points made by the noble Lord, Lord Melchett, emphasise a point I was making earlier this evening that there is a real need for an overall consideration of the problems of access to the countryside and in particular for the re-routing of rights of way to give the same or greater lengths of walk, walks more attractive to all the people who want to have access to the countryside, and at the same time be more convenient to farmers. The reason walks currently go across fields is that they were designed for specific purposes associated with the life of the countryside, many of which no longer exist.
I hate to cross swords with the noble Lord, Lord Melchett, again on a question of fact, but I have before me a letter from the Cattle Breeders Association. It says, among other things:
"There is practically no evidence of any damage being caused by bulls to the public on footpaths in the last 10 years. Where reports of bovine interference occur it can rarely be proved that a bull was involved. Interference can be caused by cows, heifers and steers for reasons of curiosity".
It might be helpful to the Minister in the context of the identification of bulls to remember the story of the little boy who electrified the guests at his parents' party by piping up and saying, "I know how to tell the difference between a bull and a cow—a bull has a ring in its nose". This might be a useful guideline.
My real point is that the proposed amendment hits particularly hard at exactly the type of farming we are trying to encourage in the context of the reduction in the intensity of agriculture in the present situation of surpluses. In the marginal areas we shall be looking for more extensive systems of agriculture, and those must mean the maintenance of the countryside by extensive grazing by sheep and by cattle—where sheep are not appropriate, grazing has to be carried out by cattle. As the noble Lord said, where enclosures are large, it is exceedingly difficult to pursue a system of beef production which works unless you are able to run bulls with the cows. I believe, therefore, that the only situation lies in the permanent diversion of rights of way and not in this extremely inconvenient procedure of temporary diversion.
The Earl of Radnor: There is one very small point which I think should be made but has not been made. I agree with everything that my noble friend on the Front Bench said and I would not want the law altered so quickly after it has been made. The point I make is that if the law is made too hard for farmers they will fence off the rights of way. I cannot think of anything more unattractive to a rambler or anyone walking through the countryside than a footpath, which is very narrow, or a bridlepath, which is not very wide, fenced off with barbed wire or plain wire. That has been done, and if matters become so bureaucratic, so complicated and so aggravating as has been suggested in the face of

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a risk, though not a huge risk, we might be building a birdcage over certain parts of England. I do not think that is what anyone wants.
The Earl of Enniskillen: I should like to say that it is quite incredible to me, in regard to what the noble Lord, Lord Melchett, said about this matter, that insufficient reliance is placed on the rambling associations and all these organisations to educate their people. A goose is dangerous. A goat is dangerous. There are many instances. But these unfortunate people are led by others who know nothing whatever about the countryside and they get into trouble.
Lord Melchett: As an ex-president of the Ramblers Association, I do not know whether the noble Earl was referring to me; but I earn my living from farming and I dare say that does not necessarily qualify me to talk about cattle and their dangers. Therefore I rest my case largely on the advice given by the Health and Safety Executive, which investigates all deaths caused by livestock to farmers, farmworkers and other people. The noble Earl, if he is a farmer, will no doubt have seen a copy and should look at the advice given. He will see that the Health and Safety Executive, having investigated the actual cause of death, is quite clear in saying that bulls are extremely dangerous, that they are unpredictable and that they should not be trusted.
The Ramblers Association only issued advice to its members after the Health and Safety Executive had issued its advice. As the noble Lord on the Front Bench will know, after the 1981 Act which introduced this law was passed the Government gave a commitment in this Chamber that they would get the Health and Safety Executive to issue advice to walkers. They never did that. They broke their word. The reason they broke their word was that the Health and Safety Executive refused to give advice to walkers. It refused because it disagreed with the change in the law that the Government had made. The executive thought that it was dangerous and it was not prepared to tell walkers what they should do in a field with a bull in it. It would have given the same advice as the Ramblers Association; namely, to trespass around the field. If I may say so to the noble Lord, the Government caused this problem, and the Ramblers Association has simply followed the advice given by the Government's statutory advisers on that point.
My noble friend mentioned beef bulls. I think I said in my speech—and perhaps my noble friend will look at Hansard—that it is true that some breeds of dairy bull are more dangerous than many breeds of beef bull. However, that is not always the case. There have been just as many deaths, I believe I am right in saying, caused to farmers and farmworkers by beef breeds of bull as there have by dairy bulls. It is certainly the case that some of the new Continental breeds of beef—Simmental, Charolais, and so on—are extremely dangerous and are of a size to cause severe physical injury if you come into contact with one that is moving quickly.
The noble Earl, Lord Radnor, talked about fencing and raised a point which I had intended to mention myself; namely, that if a farmer is in a difficult position
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and cannot find somewhere to divert a footpath, as my amendment suggests he should, then it would be possible to fence the bull from the walker and the walker from the bull. With an electric fence it would not necessarily be a difficult or expensive operation to carry out. It seems to me that that is an argument for saying it is possible to separate walkers from bulls rather than the other way round.
The Earl of Radnor: Would the noble Lord give way? I wonder whether the noble Lord would like to think of two sponsored walks meeting head on between two electric fences, each group consisting of 30 or 40 people. I wonder how they would manage to get past each other. That is the kind of situation of which I am thinking. I think it is thoroughly undesirable to fence in rights of way in the countryside from a visual point of view and from a practical point of view so far as concerns the ramblers—and we always talk about ramblers—and anyone else who wants to walk across the countryside. Rights of way were originally not made only for ramblers but for everybody, including hearses and coffins and so on.
Lord Brougham and Vaux: Would the noble Lord help me? I always thought that suckling cows with calves were as dangerous as bulls. How are we to differentiate between the one and the other?
Lord Melchett: The only way I suppose it is possible to come to an objective view on this matter is to look at the statistics for deaths and injuries caused to people by various breeds of livestock. If the noble Lord cares to do that, he will see that bulls cause considerably more deaths than other livestock. Did the noble Earl wish me to give way?
Earl Peel: I rise merely to say that much earlier the noble Lord gave the statistic of 12½ million people who walk through the countryside. He cited exactly five or six cases, and I hardly think that, statistically, five or six out of 12½ million people are a reason to change legislation.
Lord Stanley of Alderley: Before the noble Lord sits down, I should like to say that I read his Parliamentary Question the other day and found it quite fascinating. From the Answer I found that over the last five years five people have been killed by bulls, four by sheep and four by cows. Should we ban the sheep as well? In that case, what would your Lordships' grandchildren do for cuddly toys?
A noble Lord: Cuddle ramblers!
Lord Winstanley: Before we leave this matter, I do not honestly think that we should allow the extraordinary intervention of the noble Lord opposite to go unanswered. It appeared to suggest that no one should be allowed on our public footpaths, of which there are a great many, except members of the Ramblers Association. Public footpaths are for the public, and not for people who have been on courses of education to this or that college, or who have undertaken special courses with the Ramblers Association. The idea that the Ramblers Association has some kind of public duty to educate each and every person who wanders on

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to one of the wonderful public footpaths in our national parks is really absolutely absurd, and I hope that the noble Lord will accept that fact.
The Earl of Enniskillen: Not only do I accept it, but I am sorry that I should have been taken up in that context. I understood from the noble Lord, Lord Melchett, that he was referring to various instances of guided parties conducted by the Ramblers Association. It seemed to me that that was a fault of the Ramblers Association in conducting those parties and getting them into difficulties which they ought to have been able to avoid.
Of course I appreciate that, but it is a matter of education for all concerned. No countryman is lacking in that education because he grows up with it. No town dweller could be expected to have that education because he has not grown up with it. It is not natural for him to spot a bull among a herd of cows or to suspect danger where he sees none. It is a matter for local council authorities in areas where these things happen to publicise the dangers that exist in the countryside and to issue the necessary legal precautions to people who are going to take the risk. You would not cross the M.1 on foot—at least, I would not.
9.45 p.m.
Lord Melchett: I am sure that the Committee is anxious to get on to a number of other amendments that we have to face. I have now been interrupted by Members opposite on four or five occasions, and I have a list of about six points to which those opposite, sitting behind the noble Lord, Lord Belstead, have asked me to respond, and I am sure that they would want me to do that before I withdraw this amendment.
The noble Lord, Lord Stanley, mentioned my Question for Written Answer which produced some statistics on deaths caused by livestock, and I took the trouble to investigate a little further. For example, the noble Lord mentioned that four people had been tragically killed by sheep since 1980. I hope that for the sake of the relatives of those people who were killed we can at least discuss that part of the matter without noble Lords opposite laughing too much, particularly given the fact that two of the people who were battered to death by rams were retired farmers' wives.
According to the Health and Safety Executive, that is the most common cause of death caused by sheep. It is the farmer's wife who is elderly and finds it difficult to move quickly, and who has not realised the fact that she is not still as nimble as she was when young, who, when dealing with a ram that she has looked after for many years, finds that the ram suddenly charges her. Usually the ram does not injure the woman very seriously, but these people are of an age where a minor injury can lead to death, and that was certainly the case of two of the people who were killed by rams.
The noble Lord also mentioned the four people killed by cows or heifers. They were mainly killed in circumstances where they were handling cattle and
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loading them on to a vehicle. For example, in 1980 a farmer was killed loading cattle. A lorry gate gave way and the farmer was crushed to death. In another case a woman catching calves slipped, broke a femur and later died in hospital. That was recorded as a death caused by a cow, but I think that the noble Lord will accept that that is rather a long way from an attack by an animal causing death, which is what we are talking about in this debate, I hope that that will allay the considerable concern of the noble Lord, Lord Stanley, for the people who have died according to the Health and Safety Executive statistics through contact with cows or sheep.
A number of noble Lords in writing to me about this suggested that pigs were just as dangerous as bulls. But the noble Lord will have noticed that pigs have not killed anybody in recent years. Indeed, I understand that the provisional statistics for deaths from injuries or attacks caused by livestock in 1985 showed that one person, a farmworker, was killed by a bull and no deaths occurred from contact with cows, heifers, pigs or sheep. I hope that that will assure noble Lords that we are concentrating on the right problem. Bulls are particularly dangerous and the fact that there are a number of tragic deaths through accidents involving other farm livestock should not distract us from that point.
The noble Lord, Lord Northbourne, suggested that the answer once again was to change the route of paths. But, as I mentioned, a number of the incidents of which we now have evidence occurred on long-distance footpaths. One occurred, for example, on the coast in the north of Cornwall, which is a long-distance path. I also mentioned one in Yorkshire on the World's Way. Those are paths that have been designated by the Secretary of State for the Environment and agreed by the Government, and they receive a lot of public money for maintenance. Nevertheless, they go through fields in which occasionally under the present law bulls are grazed. Because they are used much more frequently than other footpaths, as they are long-distance paths, incidents seem to happen particularly frequently.
The noble Lords, Lord Winstanley and Lord Belstead, suggested that the procedures in the amendment for securing diversions were unduly complicated. A load of red tape, I think the noble Lord, Lord Belstead, suggested, would descend on farmers. I was interested to receive only this morning a brief from the Countryside Commission which made much the same point. In earlier debates on amendments to the Bill the noble Lord has aligned himself firmly with the views of the Countryside Commission and shown considerable anxiety not to cross swords with it in any respect. That is something which I have subsequently learnt it welcomes very much. I think that it would be sensible for me to have further discussions with the Countryside Commission, of which the noble Lord, Lord Stanley, was a distinguished chairman, to see whether it is possible to redraft the amendment so that its concern about the procedures being unduly complex—which is one shared by a number of noble Lords—can be met. As I said in introducing the amendment, I am particularly

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concerned that the procedures for obtaining a diversion (which, after all, will be only a temporary diversion) should not be complex or burdensome on farmers. I think that that is right. I have no intention to make life more difficult for farmers than present government policy towards agriculture has already achieved.
The final point that I wanted to make is this. As I said in introducing the amendment, a dossier of cases, of which I have been able to quote only a small number, is currently being prepared at the
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Government's request. The Ramblers Association recently had a meeting with Mrs. Angela Rumbold, the junior Minister at the Department of the Environment. That department appears to be concerned with the safety of walkers whereas the noble Lord's department is concerned with the interests of farmers. As the Department of the Environment has asked the Ramblers Association for that dossier of cases so that it can evaluate it, I think that it would be helpful that that should be done before we return to the matter at Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 13 [Designation and management of environmentally sensitive areas]:
Lord Buxton of Alsa Lord Buxton of Alsa moved Amendment No. 52:
Page 10, line 24, leave out ("particularly").
The noble Lord said: This is a small matter. It is a tidying-up amendment. I can promise the Committee that I shall be particularly brief. I put it in that way because I think that at the end of the debate there may be a difference of opinion as to whether I have been brief or not. I want to make the point clearly that "particularly" is a matter of opinion, which is why I have put forward the amendment.
If an ESA is to be designated, the statutory bodies concerned, with all the qualifications and decades of experience, which are required to give their advice are the Countryside Commission and the Nature Conservancy Council in England; the Countryside Commission and Nature Conservancy Council in Wales; and the Countryside Commission for Scotland and the Nature Conservancy Council in Scotland. Having reached their conclusion they may decide that designation is desirable or not. They have the perfect right to decide that it is "extremely" desirable or "particularly" desirable. That is their function and duty. They then submit their recommendations to the Minister.
It is perhaps only a drafting question that I am putting to my noble friend the Minister. As the provision is drafted it appears that the Minister, having received his advice—and highly professional advice at that; there is probably no better advice that he could obtain in the Kingdom—may then decide whether something is "particularly" desirable or not. That seems to open up an enormous loophole.
I venture to suggest with great respect that legislation which is not easy to understand is bad enough but legislation in which we do not know what will happen and cannot understand the result is the worst legislation of all. I strongly urge my noble friend to look carefully at this provision and realise that if we are to have the word "particularly", it should refer to the statutory bodies which have the experience, authority and knowledge to make such a judgment. It should not refer to the Minister, apparently after statutory advice has been given. I beg to move.
Lord Renton: I wish to support the amendment moved by my noble friend, but for slightly different reasons. The word "particularly" in an Act of Parliament is unusual. What does it mean here? Either it merely means "very", in which case it is unnecessary and indeed absurd, or it is a subterfuge intended to enable the Government to designate as few areas as possible so that if they were challenged in the courts they could say, "Oh, but this is something that does not have to be done because we do not think it is `particularly' desirable". Surely it is either desirable or not desirable. Had we not better leave it like that and support my noble friend's amendment?
Lord Belstead: The amendment would enable agriculture Ministers to designate large tracts of the countryside as environmentally sensitive. In many
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ways that is an appetising prospect. The trouble is that we would end up with something that we could not administer. ESAs will require a great deal of personal commitment if they are to work properly. Farmers will need help, advice and encouragement and, for that matter, ministry staff will need to learn a great many new lessons. If we spread all that effort too thinly, we shall not get the results we want. We should have to run the scheme essentially as a desk exercise instead of as a practical course in commitment to conservation. That is why I am most anxious that we do not try to run before we have learned to walk in this matter. We believe that we can have six or so areas out of the £6 million which has been set aside by properly and wholeheartedly administering the first ESAs rather than rushing in without due preparation.
My noble friend Lord Renton was a little suspicious of the Government's motives in including the word "particularly". We have very much in mind the point that although we have expenditure constraints—I do not conceal that from my noble friend—we also know that the European Commission will not approve designation of every area suggested to us. If it did that, it would be giving carte blanche to other member states to use similar measures as a general income subsidy. Indeed, we shall have to be careful and meticulous in putting forward to the Commission our proposals for environmentally sensitive areas so as to avoid any danger that the Commission says that we are getting near to having unacceptable income aids. This idea of ESAs was a British one. We managed to get it in long negotiations with the European Community. We have to prove that these are areas that we believe are particularly desirable to designate. For those reasons, I do not think that this amendment is right.
I accept what my noble friend Lord Buxton says about the Countryside Commission and the Nature Conservancy Council, in putting forward proposals for designation, being expert bodies to whom to go for good advice. But at the end of the day, when one comes to the moment of designation, the statutory responsibility has to be laid on the Government to carry the can in answering the European Commission that what we are doing is designating areas that are particularly in need of conservation. With respect, I am differing from my noble friend Lord Buxton. If we are to have the word "particularly" (and I believe that we have to have it) it is, I believe, in the right place.
Lord Mackie of Benshie: The Minister's argument is particularly weak. It is extraordinary that he should put it. If the Minister thinks that it is desirable and he does not have the money, he will not of course do it. He could well take it out. It is a silly word. The Minister knows, surely, that it is a wholly objective decision anyhow. The word could come out without any trouble at all.
Lord Renton: It would seem from what my noble friend has said that the words "particularly desirable" do not truly reflect what the Government have in mind, which seems to be "financially acceptable".
Lord Buxton of Alsa: I was able to agree with almost everything my noble friend the Minister said except his argument against "particularly". I see entirely all the

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points that he made—that the Government cannot possibly have more ESAs than the country or Europe want or can afford and that several may have to be turned down whatever the Nature Conservancy Council says. I see nothing wrong with the Government saying, "Sorry, we have got too many. Sorry, we cannot afford it. Sorry, the policy has changed". Nor is there anything wrong in the Government saying nothing at all. But to say that something is particularly one thing or the other seems pointless. I hope very much that my noble friend will hear what we say and that he will think hard about it. If that is the case—I would like to assume so—I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Craigton Lord Craigton moved Amendment No. 53:
Page 10, line 30, at end insert:
("or
(d) to promote and maintain the enjoyment of the countryside by the public,").
The noble Lord said: Clause 12 includes the promotion of the enjoyment of the countryside by the public. But the words "enjoyment of the countryside by the public" have been left out of Clause 13, to which I have proposed this amendment. These words having been left out, one can only assume that the public are not supposed to be encouraged to enjoy these environmentally sensitive areas. Yet paragraph (c) of subsection (1) is designed,
"to protect buildings or other objects of archaeological, architectural or historic interest in the area".
What on earth is the use of protecting a building of historic interest, spending perhaps a great deal of money on it and then not being able to enjoy it? I realise that visitors might make difficulties. They might trespass and that sort of thing. That aspect is, however, covered by the fact that the whole scheme is approved by the Nature Conservancy Council.
I am therefore asking the Minister to put back these words. The amendment that I propose uses the words "promote and maintain" because I had thought that the Minister—I still do not know why he did not—would have agreed to the amendment of the noble Lord, Lord Melchett, that has just been turned down, to put in the word "maintain". I shall be very glad of an explanation why this is left out.
10 p.m.
Lord Melchett: I am delighted to support this amendment. As the noble Lord said, I moved the inclusion of some similar words earlier. It is very important that the new kinds of agricultural support for environmentally sensitive areas (and I hope that we shall soon be able to stop calling them that absurd name) succeed, because this will provide a new source of funds for many people involved in the agricultural industry and one which will be extremely welcome, I have no doubt.
As the noble Lord, Lord Belstead, said on an earlier amendment, everyone is conscious of the rising expenditure of the common agricultural policy, but
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bringing that under control will involve bringing surplus production under control, as I am sure the noble Lord will agree. Once we have done that we have to find, in my view, new ways of providing public support for rural communities in general and agriculture in particular. Environmentally sensitive areas and the support which will flow through them to farmers, farmworkers and rural communities will be absolutely vital. If they are going to be vital to farmers it is desperately important that they are popular with the public because it is public money—taxpayers' money, as this Government are constantly reminding us—that will be spent in these areas.
I said earlier that a very high proportion of the public walk in the countryside and enjoy it. I think it is particularly important that where we are opening up new sources of funds for agriculture—which I very warmly welcome—we should do everything in our power to ensure that they have public support now and continue to have public support in the future. That is not a factor which has been notable in all the support for agriculture which we have provided under successive governments in the past.
It is for that reason, in the long-term interests of the farmers who will be farming in these areas and receiving support from the public (which I want to see not only continue but grow), that I think this is an important amendment, and I strongly support it.
Lord Belstead: My noble friend Lord Craighton is right to remind us that the introduction of environmentally sensitive areas will make a big contribution to the public's enjoyment of the countryside. Many of the areas proposed for designation are enormously popular with tourists and a source of pride to local people. But I am not so clear what would be gained by specifying enjoyment of the countryside as a separate objective. Indeed, I think it could be counterproductive. Naturally, the public right of access to environmentally sensitive areas has to be maintained, but to say that access to working farms must be promoted as a statutory duty could very well conflict with a desirability to conserve and enhance flora and fauna.
I am grateful to my noble friend for raising what is an important point and drawing our attention through this amendment to the fact that the creation of environmentally sensitive areas ought to contribute to the enjoyment that we all take from the countryside. I am sure that we shall all appreciate the protection of the landscape and wildlife habitats which environmentally sensitive areas will give. At the same time, if we are to succeed in encouraging some rather fragile species in these areas and in maintaining their unspoilt appearance it would be prudent of us not to go too far in the direction of encouraging (as a statutory duty) far greater numbers of people to visit these sensitive areas.
I agree with noble Lords that to see the public coming into the countryside and enjoying it is something that all of us want to attain. The Ministry of Agriculture is involved in that. Indeed, we are delighted to have been involved in the access to the countryside charter which the Countryside Commission has produced. But I am simply saying on this amendment that if one makes the promotion and

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maintenance of public enjoyment of the countryside a statutory duty one could soon begin to find that the conservation and enhancement of, for instance, flora and fauna could be endangered. Therein lies the difficulty.
Lord Craigton: Before I withdraw the amendment, I should like the Minister to look at one point again. As I read the Bill—and I have read a lot of Bills in my life—I took it as a discouragement that we were not intended to look at the Bill in relation to historic interest. Will my noble friend look and see whether it achieves what he has just said—that is, that people can enjoy the buildings and the conservation without the inclusion of some words to that effect? I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Craigton Lord Craigton moved Amendment No. 54:
Page 10, line 31, at end insert ("and other appropriate").
The noble Lord said: Once again, we are concerned in particular with buildings of historic interest. In Clause 13 it says:
"and that the maintenance or adoption of particular agricultural methods is likely to facilitate such conservation, enhancement or protection".
Therefore agricultural methods are supposed to enhance the protection of historic buildings.
I shall not weary the Committee, but let us look at the definition of agriculture as set out in Clause 12(2). The Agriculture Act 1947 (Section 109(3)) says:
"'agriculture' includes horticulture, fruit growing, seed growing, dairy farming and livestock breeding and keeping, the use of land as grazing land, meadow land, osier land, market gardens and nursery grounds, and the use of land for woodlands where that use is ancillary to the farming of land for other agricultural purposes, and 'agricultural' shall be construed accordingly;".
Therefore, as I read it, the Minister, or whoever it may be, can only use agricultural methods which are very strictly limited. How on earth do you restore a building of historic interest only by using agricultural methods? I have inserted the words, "and other appropriate" methods to get round the narrow interpretation in the Act of "agriculture".
Lord Belstead: My noble friend Lord Craigton indicated on Second Reading that he would be tabling this amendment and Amendment No. 59. I have studied what my noble friend said then and I have listened carefully to his comments today. I believe that it is the duty of the Ministry of Agriculture to work, through agriculture, towards the wider objectives that my noble friend recommends. I think that in that respect I am at one with my noble friend. However, I part company with him on a further point.
My noble friend is right to say that the beauty of the countryside is influenced by factors other than agriculture. On Second Reading my noble friend mentioned commercial forestry and buildings, which is what he has particularly emphasised this evening. One could add a host of other items from public highways to general industrial development, and there lies the problem.
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Of course the Government as a whole will have to take account of the environmental designation of these areas when planning their policy towards them. However, I do not think that it would be right for the Minister of Agriculture to take decisions about, let us say, the siting of industrial premises within an environmentally sensitive area which, so far as I can see, would fall within the scope of my noble friend's amendment. We may influence some of these decisions through our involvement in planning procedures but we have neither the authority nor the expertise in the Ministry of Agriculture to venture into placing direct controls on, for instance, factory owners.
This clause is not a vehicle for transforming my right honourable friend into a Minister for the countryside; it is supposed to be a clause for harmonising agricultural and environmental interest in certain areas. If we lose sight of that fact we shall, apart from anything else, step quite outside our European Community framework. We must keep reminding ourselves of the need to follow Community rules, particularly if we are to get some funding from the European Community. Those rules do not allow us to go beyond the relationship between agriculture and the environment.
I think my noble friend said that he did not understand how one could have the protection of buildings or other objects of archaeological, architectural or historic interest in an area if one did not then accept the thrust of the amendment which my noble friend is putting forward. I should like to look at that point which my noble friend has put to me, as, indeed, I am certainly prepared to have a look at the previous amendment which my noble friend put forward.
Before I sit down, however, may I reiterate the point I made about the scope of this clause. I ask my noble friend to accept, if he will, that it is a clause not to transform my right honourable friend into the Minister for the countryside but to enable us to try to improve conservation and protection of the things that are listed in the clause by means of the relationship which we have between agriculture and the environment. Under the Community rules we are not supposed to go further than that.
Lord Renton: As I think we are supposed to be referring to Amendment No. 55 as well, I wonder whether my noble friend Lord Belstead would be so good to explain what he understands the word "sensitive" to mean.
Lord Craigton Lord Craigton: No, we are not considering Amendment No. 55.
Lord Renton: I am so sorry.
Lord Craigton: I really am very disappointed in my noble friend. He has read out a brief most of which has not in any way referred to the amendment which I seek to move. I am not talking about the Common Market or something wide like that, or about rebuilding factories. What I am saying is that there must be tools, devices and methods for putting right a building of architectural importance, of historic interest, which does not come under the legal description of "architectural", that is all. That is my only point. I can go into

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a shop and buy all sorts of machinery which, under the law, is not architectural. That is my only point, and that is why I want to put in the words "and other appropriate devices". Would the Minister like to reply to that because I am really not very satisfied?
Lord Belstead: The point I am trying to make is that agricultural practices are relevant to the protection of archaeological sites. For instance, field barriers can be damaged by agricultural methods. As my noble friend knows, sites of archaeological interest can be damaged by ploughing; equally, historic buildings can be protected through agricultural use—by using them for the housing of livestock rather than letting them fall into dereliction. These are all things which can fall within the agricultural scope of this particular clause. I repeat that if we start going beyond that, we will be trying to turn the Minister of Agriculture into a Minister for the countryside. He then would be responsible for a much wider range of development, even industrial development, and would have a much wider range of powers than he could possibly have. Once we start to try to do that we shall find that we fall foul of the Community regulations under which we are introducing ESAs.
Lord Melchett: I hesitate to intervene in the argument between the two noble Lords opposite. However, it seems to me that the noble Lord, Lord Belstead, is answering this amendment as though it related to subsection (5), which prescribes the things which the ministry can do in an area once it has been designated, rather than to subsection (1), which describes the sort of area which is to be designated. Those are two quite separate points. The basis on which you designate the area is one thing; what the ministry then has power to do in the area is a different matter.
If I may have the attention of the noble Lord, Lord Belstead, I am trying to be helpful. I should have thought that it would be a different matter if the noble Lord, Lord Craigton, had made his amendment to subsection (5). He would then be attempting to give the Ministry of Agriculture power to rehabilitate historic buildings, or something of that sort. What the amendment says is that if there is an area in which these various things are desirable, they do not have to be things which are only capable of resolution through agricultural policy. There may be matters where other policies may also he helpful. Surely that is the distinction. I think the reply of the noble Lord, Lord Belstead, was directed at subsection (5) and not subsection (1).
10. 15 p.m.
Lord Belstead: I do not agree. I am looking at line 31. Let me read from paragraph (c). The clause says:
"If it appears to the Minister that it is particularly desirable—

(a) to conserve and enhance the natural beauty of an area:

(b) to conserve the flora or fauna …

(c) to protect buildings or other objects of archaeological, architectural or historic interest in an area".

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Then line 31:
"and that the maintenance or adoption of particular agricultural"—
and then my noble friend wishes to put in—
"and other appropriate methods is likely to facilitate such conservation".
I am simply saying that my right honourable friend's powers do not extend to other appropriate methods. They extend only to agricultural methods.
Lord Melchett: I accept that, but we are not trying to change the noble Lord's right honourable friend's powers. That happens in subsection (5). What we are saying is that it would be unduly restrictive to say that areas where it is desirable to conserve or protect these various things can only be areas where the conserving or protecting is done through the mechanism of agricultural policy. There are very few buildings of architectural merit where agricultural policy is going to make a huge difference to their protection, but they nevertheless may add to the general beauty and importance of the area from a conservation point of view.
That is the decision about designating the area. You then come to what the Ministry of Agriculture do about it. That is subsection (5). There might well be an area with a lot of beautiful buildings in it where it would be nice, for other reasons also covered in Clause 13(1), to maintain the countryside and improve the farming practices. But it might be possible to argue, in the clause as it is drafted, that because the buildings could only be conserved by methods other than agricultural then they could not be designated an environmentally sensitive area.
Lord Mackie of Benshie: The Minister will be pleased to hear that I understand him perfectly and agree with him.
Lord Belstead: I am grateful to the noble Lord, Lord Mackie of Benshie. My noble friend Lord Craigton has exactly the same amendment down to subsection (5). It is clear that that amendment, Amendment No. 59, and this amendment stand together. I resist both of them.
Lord Craigton: I moved both of them together. I have done my best to help the Minister of Agriculture. I am sorry I have failed. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Craigton Lord Craigton moved Amendment No. 55:
Page 10, line 33, leave out ("an environmentally sensitive") and insert ("a conservation farming").
The noble Lord said: I hope that I am going to be more successful with this amendment. The words used are "an environmentally sensitive area". I feel sure that is the wrong phrase to use. Every SSSI is an environmentally sensitive area. The phrase is far too wide, and it applies to so many different sorts of sites. Looking at it as a conservationist, it really is misleading. It is almost inaccurate, because the Countryside Commission and the Nature Conservancy Council did not look for the most environmentally sensitive area; they looked for the

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area that would suit this particular scheme. Therefore one has to find a solution for it.
On of the bodies suggested calling it a conservation farming area. I do not know whether the Minister will agree to that phraseology, but I move that we cut out the words "an environmentally sensitive area", which it would be unwise to use, and make it a "conservation farming area". I beg to move.
Baroness Nicol: I should like to support this amendment and to quote one small example which I came across only this afternoon when I was reading the Government's deregulation proposals which have just been published. In the planning chapter—I regret I do not have the document with me to quote chapter and verse—the Government refer to the need to maintain planning controls in environmentally sensitive areas. They obviously do not mean "ESAs", with capital letters. To continue with this phrase, unless it is required by the Community legislation (perhaps the Minister will tell us that), will only lead to utter confusion in the end. I support very much the idea of "conservation farming"—a suggestion which I think came from the CPRE.
Lord Renton: I think the Government's intentions are probably good, but we have to make sure that the words they are using will fulfil those intentions. I would therefore ask my noble friend Lord Belstead if he would explain what he means by "sensitive" in this context. It could, I suppose, mean vulnerable. Does it mean sensitive to particular farming or forestry practices which might impair the natural beauty of the environment or impair the wildlife? Does it mean, simply, that it is suitable to be designated? Also, we have to consider the other side of the coin. If an area is not designated, does it mean that it is not sensitive?
Lord John-Mackie: My noble friend Lady Nicol seemed to suggest that the alteration,
"by order designate that area as an environmentally sensitive area",
is simply an expression and that it will not be an official ESA. I cannot think that that is right, because it is to be designated by order. If it were converted to "a conservation farming area", that would preclude it from getting any help as an ESA. I wonder whether that is correct.
Lord Belstead: I appreciate that "environmentally sensitive areas" may not be an ideal name, although I think that the idea of using the word "sensitive" meant very much what my noble friend Lord Renton suggested. "Vulnerable"? Indeed, we have made it quite clear that we believe that the areas we ought to designate are areas that would otherwise be in jeopardy. Certainly we have made it clear that they are areas which, from a national point of view, are important environmentally.
If that is not a very good explanation, may I move on and say that it is the term used in Article 19 of the Community Structures Regulation, which is what the noble Baroness asked me, and so we are familiar with it. Changing it at this late stage would be a little confusing, even though the noble Baroness has asked me a difficult question, which the noble Lord, Lord John-Mackie, pursued, about "environmentally
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sensitive area" being a term used in connection with deregulation—a matter which I should like to look into if I may.
Finally, I have to look at the amendment. Here my noble friend is putting forward the suggestion of talking about "conservation farming areas". With great respect, I think that sounds to me a little too much like farming museums, and that is certainly something that we do not have in mind. We believe, and believe very deeply, that when these environmentally sensitive areas are designated, farming life will go on in those areas and will continue to develop; but the whole point will be that the methods used must be, in their turn, sensitive to the areas in which the farms are located.
"Environmentally sensitive areas" may not be a perfect name but I ask the Committee to stick with a description which is now familiar to us all. I think that if we changed now we would be in trouble unless we had an alternative which commanded complete support. I have to confess that the one which my noble friend has put forward in this amendment is one that I do not support.
Lord Melchett: I think that that is a bitterly disappointing reply. I hope that the noble Lord will think about it again. If he will cast his mind back to the Wildlife and Countryside Bill debates, we discussed the possibility of changing the name of sites of special scientific interest to something that was rather less of a mouthful and rather less intimidating to those who were going to receive notification about it. We were not able to do so in that case mainly because the term "site of special scientific interest" appeared as a sideline to the Bill and, in that position, it was not capable of amendment.
At least we do not face that problem here. But I think it is universally agreed that if something could have been done to simplify SSSI—and anybody who has had to say that repeatedly on a television programme or at public meetings will know what I mean—we should have done it. I am sure that "environmentally sensitive area" is going to hang like a millstone round the neck of everybody involved over the years to come, for two reasons. First of all, I do not agree with the noble Lord that it is a well-known and familiar phrase. The fact that it appears in European Community legislation does not mean that we have to adopt it in our domestic legislation, as the noble Lord knows. We are free to choose any terminology that we wish.
Secondly, the problem with "environmentally sensitive area" is, first, that it describes the area and not what is going to happen there. Surely what is important from the point of view of getting commitment from the farmers and the general public to this new idea is to describe what is going to happen; in other words, to be positive rather than negative. Negative seems to me to describe the restrictions or the limitations of the area which is environmentally sensitive. To be positive is to describe what we are going to do there and why public money is going into the area; and that what is going to happen there is farming which is sensitive to conservation requirements. "Conservation farming area" seems to me to be a quite straightforward description.
Earl Peel: Surely the whole idea, as my noble friend on the Front Bench has said, is to try to get a balance on this matter. Farmers are not going to be farming primarily for conservation reasons. They are going to be farming in a way which is going to be sensitive to the environment. To call it conservation farming would imply that the farmer is simply farming for conservation reasons and conservation reasons only. That surely is not the purpose of this exercise.
Lord Melchett: It is the purpose of providing public money in these areas, as the noble Earl knows.
Earl Peel: But we put public money into farming anyway.
Lord Melchett: I am well aware of that, but if we were not putting new public money into these areas we would not be bothered with this clause in the Bill. The point of this clause is to provide a new source of money for farming. What I want to see is that being generally accepted by the public at large, unlike most support for farming at the moment. It seems to me that we have designed a phrase to describe these areas which could be really designed to put the public off and put farmers off, rather than to persuade the public that it is a good idea and that their taxes should be spent on supporting farmers in an additional, new way over and above what we do already.
That is what is going to happen in these areas. I think it is very important that the terminology should be changed. I do not believe that ESAs or environmentally sensitive areas—and they are going to be called ESAs, just as sites of special scientific interest are called SSSIs—are really going to be tremendously enthusiastically welcomed by the people there.
The noble Lord, Lord Belstead, said that his main objection was that the farmers' main objective in farming in these areas was not conservation. I certainly accept that. But the main objective of putting new public money into these areas is going to be to encourage farming for conservation. Surely that is the point that we want to get across. I very much hope that the Government will have another think about this. We get landed in these bits of legislation with ridiculous acronyms like SSSIs and ESAs. Anybody sitting down for five minutes could think of something more sensible and much less of a mouthful to call them, something that would be less intimidating and more popular. I do not think that we should miss the opportunity that we have in this Bill of changing the name—to get it changed to something simpler and more sensible.
10.30 p.m.
Lord Craigton: The Committee may be surprised to hear that I agree with my noble friend Lord Peel. I woke up in the middle of last night and thought, "This name is really not exactly what is wanted but I have to move the amendment and there has to be a discussion." I will ask the leave of the Committee to withdraw the amendment, but I should like the Minister to consider whether he would like me to put down an amendment containing the words, "environ-
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mentally sensitive farming area". If that could be the term, there could also be environmentally sensitive wetland areas, and so on. It could bring forward a type of scheme which might be much better. I should like my noble friend to think whether, "environmentally sensitive farming area" would not meet all the points that have been raised both for and against.
Lord Belstead: Of course I shall think about that. I feel rather sad because we have gone down the second half of this page of the Marshalled List and it was my intention, when I began going through my noble friend's amendments a few days ago, to see whether there was something which could properly be accepted because my noble friend always has plenty of ideas. He occupies an extremely distinguished position in the conservation world, as chairman of the all-party environmental committee. I was rather sad when I found that I kept having to say no. I must not mislead my noble friend: I think that three words are better than four when you are designating something; and although the noble Lord, Lord Melchett, said it had not become all that familiar, I must say that the expression "environmentally sensitive area" is now pretty well known throughout the world which is dealing with this. I shall certainly look at my noble friend's suggestion of "environmentally sensitive farming area"; but I must say I have a hankering after "environmentally sensitive area": indeed, I confess that I rather like it.
Lord Craigton: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Buxton of Alsa Lord Buxton of Alsa moved Amendment No. 56:
Page 10, line 36, leave out ("the Treasury have consented to the making of the order and").
The noble Lord said: I am delighted that the noble Baroness, Lady Nicol, will be able to reinforce the points that I want to make. There are certain similarities in aspects of the arguments between this and the amendment that I moved recently, and there is even an aspect, to which my noble friend Lord Renton referred, which also could conceivably be in the back of my mind—a sort of arrière pensée.
This seems to me to give the Treasury an authority and power to veto way down the scale in a highly specialised area, in which the Treasury has absolutely no statutory experience or responsibility. We all know that the Treasury control our lives, can cut us off without a shilling and can dictate how the country is to be run, and so forth. In this particular question of ESAs (as I shall call them for the moment) the Treasury can say, "We will have none" or "You can only have six" or "You can have four and you are only going to get a fiver for each". But for the Treasury to consent to the making of an order, implying that they know something about it and more than the Countryside Commission, the Nature Conservancy or the Countryside Commission for Scotland seems to me to be quite incomprehensible. Again, it is perhaps simply a question of drafting and it has not been properly appreciated what the serious implications and the significance are.
I absolutely accept, and I am sure my noble friend the Minister will make the point, that the Treasury must have power to decide what the country can afford in terms of ESAs, designations, or whatever; but for them to seem to have the power to say there is going to be one in Dorset, none in Yorkshire, two or three in Scotland but none in East Anglia seems to me to be quite incomprehensible and entirely beyond what one would expect. I would ask my noble friend to look at this extremely carefully and to say whether he accepts that this does not appear to be exactly in the right order, just as it was not in the right order before. I beg to move.
Baroness Nicol: I wish to support the amendment and to make one point, and only one, which the noble Lord, Lord Buxton, has not made. We have just had a discussion on an earlier amendment about how very carefully these areas are to be chosen. We had an argument about the fact that they have to be particularly desirable, and this will be the combined opinion of the Ministry of Agriculture, Fisheries and Food, the Nature Conservancy Council and the Countryside Commissions. After all these bodies, with their great expertise, have decided that such an area is worthy of designation, it then seems quite wrong that the Treasury should, apparently, just be able to say, "Sorry, you can't have it." I am sure that that is not what is intended by the Bill and I hope that the Minister will spell out what is intended and tell us very clearly why this phrase cannot be left out.
Lord Renton: My noble friend Lord Belstead on an earlier amendment revealed the financial reality of this matter. He mentioned that there would be £6 million available for five or six areas. Surely the reality of the matter is that estimates will be laid in the usual way and the Minister of Agriculture will have to keep within those estimates. Therefore, the Treasury will have given their consent a priori. To ask that the Treasury should then have to consent to each order of designation is unnecessary and might cause delay. We have this expression creeping into statutes time and time again when it is totally unnecessary, because, in any event, the responsibility of the Treasury is engaged in the normal course of administration within the government.
Lord Melchett: I very strongly agree with what the noble Lord has just said. It is perfectly clear to all of us, whether we have been in government or not, that the Treasury control government expenditure. It is true under governments of all parties and you do not need to write something like this into an Act of Parliament to secure that, much as many spending ministries would wish that you could get round it in some way.
But the weird thing about the Treasury's appearance in this place in this clause is that they are not here to control expenditure. At this point we are not talking about the level of expenditure. You can designate an area and spend 2s.6d. on it. What we have here is the Treasury deciding which bits of the British countryside are—unfortunately, we have to say now—environmentally sensitive and which bits are not.
This is after the advice of the two statutory bodies
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has been taken into account by the Ministry of Agriculture. The Nature Conservancy Council and the Countryside Commission have been consulted. They have been going through that process. They have consulted not only the two statutory bodies, but farmers, landowners, county councils, archaeologists and all sorts of other interest in the areas that might be subject to designation. Now we have the Treasury coming in, not to decide how much is spent in these areas, not to decide the total limit of expenditure overall in environmentally sensitive areas, but to decide which of these areas chosen by the experts are sensitive enough to be designated.
It is complete and utter nonsense. What has happened is that somebody has been briefed by the Treasury to put some financial control on any new agricultural expenditure and they have put this in the wrong place in the Bill, by mistake. That is the only rational explanation for the appearance of the words here. I hope that the noble Lord can be persuaded that it would be right to take them out, even if he has to lean on the Treasury a little to do it.
Lord Belstead: As drafted, this clause envisages that individual environmentally sensitive areas will be designated by statutory instrument. The statutory instruments will be signed by the Minister of Agriculture and by a Treasury Minister. By signing the instrument, the Treasury Minister will simply be confirming that the Treasury has agreed to provide the money to fund the ESA. In short, his signature will simply reassure all concerned that any agreement they enter into will duly attract the promised payment.
If this amendment were passed by the Committee, the ministry would still need to get the Treasury's agreement before spending any money in environmentally sensitive areas. All that the amendment would do would be to remove from the face of the statutory instrument the Treasury's confirmation that funding is guaranteed.
Perhaps I may say something which I think will be rather better received by the Committee. I hope it is clear that the clause does not attempt to give the Treasury any kind of veto over a particular kind of environmentally sensitive area. The consultations will have taken place with my right honourable friend the Secretary of State for the Environment, the Countryside Commission and the Nature Conservancy Council. The Treasury will not be obliged to visit any environmentally sensitive areas or consider the fate of red kites or field barns. It will simply have to decide whether the money is available and ensure that our estimates of costs are sound and sensible.
That is all too well precedented. For example, Section 29 of the Agriculture Act 1970 enables agriculture Ministers to pay capital grants to farmers. That section reads:
"The appropriate authority may with the approval of the Treasury by scheme provide for … grants … towards expenditure incurred … for the purposes of … the carrying on … of an agricultural business".
That, if I remember rightly, comes from a Conservative Government. One which comes to my mind from a Labour Government, Section 61 of the Agriculture Act 1967, requires Treasury approval for

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grants to agricultural co-operatives. Sections 1 and 9 of the Agriculture Act 1957, to go back to a rather older Conservative one, required Treasury approval for determining guaranteed prices by order for agricultural producers of such things as wool or potatoes.
Lord Renton: My noble friend may be interested to know that there are about 100 examples in the statute book of this particular nonsense.
Lord Belstead: This will make 101.
Lord Buxton of Alsa: I have a lot to learn from my noble friend Lord Belstead because he made the case for my amendment far better and more eloquently than I did at the start. I am very grateful for that, because it will add weight in Hansard when everybody is able to read what has been said on this amendment.
Baroness Nicol: I do not know whether the noble Lord is about to withdraw his amendment, but I should like to ask one more question before he does so. I am not quite sure that I fully grasped the import of some of the things the noble Lord said. May we come at it another way? What could the Treasury not do that it can now do; or what is there that it would want to do that it would be prevented from doing if we remove this clause from the Bill?
Lord Belstead: If you removed this provision from the Bill you would be removing from the face of the Bill the recognition that the Treasury's agreement is necessary before spending any money in environmentally sensitive areas. The assurance I have given, however, on this amendment is that this is not some kind of veto of the Treasury to say that a particular environmentally sensitive area is a good thing and another one is not. That is all done, as it is put in the clause, by consultation between my right honourable friend the Secretary of State and the statutory conservation agencies—the Nature Conservancy Council and the Countryside Commission—and there are other discussions going on as well. That is the answer to what the noble Baroness asked me.
Lord Melchett: I should also like to ask a question. The noble Lord seemed to imply that if any order was signed simply by the Minister of Agriculture under which the Ministry was going to incur expenditure, nobody would believe that money was going to be spent. In his original reply he said that the purpose of having the Treasury here was to persuade people that when the order was signed by both the Minister and the Treasury Minister money would actually flow.
That is a constitutional monstrosity. The Minister of Agriculture is in the same Government as the Treasury Minister. They are not divisible. The Minister of Agriculture signs on behalf of the Government, just as a Treasury Minister does. The idea that the Minister of Agriculture is not to be trusted to cough up unless he has a Treasury "minder" signing every piece of paper that he ever signs is patently absurd. There must be hundreds of examples of the Minister of Agriculture signing orders or other matters under which expenditure is going to flow where the Treasury does not insist on putting its name
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alongside it. That is really ridiculous, if the noble Lord does not mind me saying so.
Baroness Nicol: Perhaps I may make a final point. I have said it all before, but it seems to me that if we leave this in as it is it may be perfectly all right with the present Minister, or even with one or two subsequent Ministers, but the day may come when the clause could be abused. As it stands at the moment it means that the Treasury could exercise a veto. It may not be the intention, but certainly that is how it reads. For that reason I hope that the Minister will think again about taking it out.
10.45 p.m.
Lord Melchett: May I suggest to the Minister that the statute might at least convey what he has said in Parliament if it said that the Treasury's consent is needed for making an expenditure under the order? The Minister is suggesting to us that the Treasury are not going to consent to the making of one order as against another but simply to the making of expenditure under all these orders. If that is the case why does it not say that in the Bill? What the Bill says is quite different from what the noble Lord is saying.
Lord Buxton of Alsa: I did not realise what a hornets' nest we were putting our foot into. We seem to have flushed out an enormous constitutional issue which I find absolutely fascinating.
Far from agreeing to go along with the notion that it should be 101, I think that we should stop it here dead and start working back from 99 all the way down. I have to agree with all noble Lords, the noble Baroness, and the noble Lord, Lord Melchett, that this can only be described as a complete nonsense. I am left absolutely convinced, and there is no doubt in my mind, that it is a power of veto by the Treasury. While I have absolute confidence in my noble friend and in this Government, who I support, I have no reason to have any confidence whatever in future governments and in their interpretation of this clause. Therefore, I have to leave it that in withdrawing the amendment I intend to return to the matter with equal or greater vigour at the next stage.
Lord Belstead: Before my noble friend withdraws the amendment, may I make two simple points? First, as my noble friend Lord Renton said, there are literally hundreds of examples. Those examples are peppered into legislation for good reason; that is, because this is a normal formulation. The other point is that there is a reason for seeing that you need more than the Minister of Agriculture's signature on the order. In just the same way as we have put into this clause that there shall be consultation with the Countryside Commission, the Nature Conservancy Council and my right honourable friend the Secretary of State for the Environment, because a great many people felt that that was right, so in this case it is I suggest right that if the Treasury are to provide the money anyway, and it is well precedented, then the Treasury need to sign the order at the same time as the Minister who also has the departmental responsibility.
That is literally all there is to it. I repeat that it does not mean, if I may give an assurance to my noble

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friend Lord Buxton, that the Treasury will be able to withhold agreement because of the conservation merits of one order against another. There is nothing on the face of the Bill to suggest that.
Lord Renton: Will not my noble friend face up to this? In the light of what he says the Treasury will always consent, because if it does not consent it will be exercising a veto. If the Treasury is always going to consent what is the point of writing into the Bill that it requires the consent of the Treasury?
Lord Belstead: It may be that the Treasury would not consent if the budget was being overspent—and it is common knowledge what the budget is at the moment; it is £6 million. If the departmental Minister, my right honourable friend or one of his successors, decided that he would deliberately flout the budget, at that moment it would be perfectly proper for the Treasury to withhold consent. Therefore, it would not be automatic.
Lord Renton: That would be a veto.
Lord Buxton of Alsa: On the basis of what I said previously and in anticipation of returning to this subject, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Radnor The Earl of Radnor moved Amendment No. 57:
Page 11, line 9, at end insert ("and
( ) the freehold owners within this area.")
The noble Earl said: I sincerely hope that this simple amendment is not a hornets' nest. I cannot possibly see how it should be. In fact, I believe that it does nothing but good to the Bill. It does not in any way alter the thrust of the Bill. I think that it will make it work, on the ground, a great deal better than it will work if it goes through as it stands.
First, we have got past the Treasury as having to be consulted, leaving behind whether or not it has the veto. Then we go on to various public bodies who are consulted and have to be consulted. The Countryside Commission and the Nature Conservancy Council are the bodies of people in the three areas. I must say that when I read the Bill I was absolutely staggered that the people in the area were not brought into the picture at that very early stage. If ever there was a recipe for irritation in a situation where co-operation should really be the watchword, this is one. Surely we want these ESAs to be put through with the co-operation of everybody. They will not work terribly well if they are not.
I cannot see why the most important people, the ones who might perhaps cause the most trouble if they were annoyed, were left out. I can see no harm in their being consulted at this early stage. In point of fact, I can see a lot of good. One would not dream of suggesting that the Countryside Commission and the Nature Conservancy Council do not know a very great deal about these potential areas, but I think that the people who are actually living there properly in a practical manner would know more. So not only would it be discourteous but it would be rather silly to leave them out at the very beginning of the whole process.
I feel most strongly that this irritation is avoidable and should be avoided in this manner, and if not in this manner, then in the manner which will be suggested later by my noble friend Lord Peel. If anyone thinks that there is no irritation in such situations and that it does not slow up the whole process, I would suggest that in the past it has been most unfortunate that people have gone through the countryside listing buildings and letting the landowners or freeholders or both know of it only later.
It has been very irritating to receive through the post something stating that a large area of one's land holding is to be an SSSI. I have never understood why one should not be asked at the very beginning. There is no question of being given the right to overthrow the whole process or anything like that, but it is irritating that nobody acknowledges that the landowner or freeholder might have something to add to the situation that would be of value. I suggest to my noble friend that this amendment is simple, short, and slots in very well here. He really should accept it. I beg to move.
Earl Peel: In supporting the amendment of my noble friend, I think it would be appropriate for me to speak at the same time to my own Amendment No. 64. I think I should point out that there is a basic difference between the two amendments. In the case of my noble friend's amendment it would appear to me that when an ESA designation is made it will be the responsibility of the ministry to inform all landowners, or indeed the freehold owners as he refers to them. In my amendment it would only be obligatory on the ministry to inform the landlord if an agreement were to proceed with one of his tenants.
I strongly support what my noble friend has said. I suspect that by not having this provision in the Bill the ministry has formed the principle on the basis of management agreements. But so far as concerns management agreements, one is more often than not talking about relatively small areas of land, whereas of course in the case of an ESA designation one would be talking about whole farms.
These agreements will be of great singificance not only to the tenant but also to the landlord. If a tenant were to proceed with an ESA agreement with the ministry, he may be in breach of his tenancy agreement. Furthermore, he could be asked to meet dilapidation claims at the end of the tenancy. It is absolutely imperative that the landlord is brought in right from the word "go". As things stand, the Government are talking in terms of up to five years. But if the ESAs are to be effective, it must be their intention that they carry on. If that is the case, of course the landlord has to be involved.
The provision is not strong enough. I do not think either of us would wish to press the amendment at this stage, and I am sure that the Committee is delighted to hear it, but I hope very much that the Minister will look upon the amendment favourably with a view to coming back to it at the next stage of the Bill.
Lord John-Mackie: We do not know how big these areas will be and how many farms there will be. It may be a major job to consult all the farms. I should have thought that the amendment of the noble Earl, Lord Peel, is much better. If farmers are notified, they can

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appeal or discuss the issue, rather than the Government consulting 30, 40 or 50 owners. Then there is the point of where the tenant comes into the picture, as the noble Earl said. I think that his amendment is worth considering and I look forward to hearing what the Minister has to say.
Lord Belstead: I assure both my noble friends that we have looked with great care at the two amendments. They are very important. Amendment No. 57 would impose an obligation to consult all landowners before an area was designated. That reveals my noble friend's desire to see that as a matter of common courtesy and sensible prudence the Government will listen to people living in the area and find out what they think about the area being designated. The serious point is whether a scheme in a particular area will succeed, and my noble friend put his finger on that.
I would say three things in that connection. First, already through ADAS we hear what farmers say concerning the possibility of an area being designated as an ESA. As there is a short list of 14 areas, the possible areas are well known. We have our ear to the ground in that way.
Secondly, let us not forget that the scheme should be voluntary and not compulsory. When the time comes to ask landowners and farmers whether they will join a scheme they can say yes or no. Together with the Countryside Commission we designated the Norfolk Broads. It was an entirely new idea, and we thought that it was better to do it in co-operation, but also it was the Countryside Commission and not the Government who had the power to do that. We are trying to take our powers from the Bill. We kept our ear to the ground, but we had to do much hard thinking together about the level of payments. Eventually we opted for £50 per acre, provided that the rules of the ESA of the Halvergate grazing marshes were kept. In a sense the Broads area was easier than a lot of the areas now up for designation. It had a particular kind of farming—grazing marshes. In the dales, the Derbyshire peaks or many other areas it may be low fields or high hills, it may be wetland or craggy hills.
We have taken on board what my noble friend Lord Radnor said about the absolute necessity of finding out so far as we possibly can before we designate an area whether we are liable to receive a friendly reception. My noble friend may well say to me, "All right, in that case accept my amendment." It would be a massive task. In Amendment No. 57 my noble friend is saying that the freehold owners within the area should all be consulted. That would, as the noble Lord, Lord John-Mackie, said, take up quite a bit of time, energy and pen-pushing. It is something that I rather shrink from. The CLA and the NFU are aware both locally and at their headquarters of the ideas that have been proposed for the areas that are under consideration. We are in close touch with them. We shall take proper account of the advice which they are giving to us. Therefore there is no reason to fear that legitimate interests will be overlooked.
I repeat: when the moment comes nobody will be dragooned into doing anything. The scheme will be entirely voluntary. I beg my noble friend to think
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before he forces us into going through the enormous bureaucratic exercise of consulting all landowners in an area before there is a designation.
The amendment moved by my noble friend Lord Peel rightly seeks to protect the landowner's position in environmentally sensitive areas. It is a matter about which my noble friend has spoken to me outside the Chamber. We are most anxious to ensure that tenants do not sign up for this sort of agreement without their landlords' knowledge. In another place my right honourable friend the Minister of State gave an assurance that that would not happen. He said that invitations to join the environmentally sensitive area would normally be sent or taken to the farm and would therefore be received in most cases by the tenant or the owner-occupier. If the applicant were a tenant he would have to sign a declaration stating that he had notified his landlord and shown the agreement to him.
If we went through the exercise, as my noble friend asks us to in Amendment No. 64, of notifying all the landowners and inviting them to participate in drawing up the agreements, that would be the most enormous exercise. It is simpler and more efficient for the tenant to contact the landlord. If the tenant refuses to do so, he will not have his application accepted.
There may be some misunderstanding about the landlord participating in the drawing up of an agreement. All farmers in any one ESA will be offered a standard form of agreement. There is no question of tenants being asked to draw up individual agreements with the ministry. Equally therefore there would be no call for landlords to have the idea of different agreements. The essential point is for the ministry to draw up the standard agreement in a sensible way. We have been having an enormous number of consultations on that. They have included consultations with the CLA, the NFU and many others over the proposals that the NCC and the Countryside Commission have put to us. Those consultations will continue until we are sure that we have reflected all the interests concerned.
I admit openly to both my noble friends that one of the reasons why I feel that I have to resist the amendments is that once again we should be into the most enormous bureaucratic exercise in getting in touch with all landowners in both areas. I have genuinely—the Government are genuinely concerned—taken on board the need to ensure, so far as we can, that those who own land and farm, landowners and tenants, in a particular area which may be designated should be able to get their views through to us or we run the danger of making a designation and then finding that it does not work. We shall do our best to avoid that danger.
I hope that the ways in which I have tried to sketch out that we shall avoid that danger will persuade my noble friends that although the amendments have elicited a great deal of information from me, it is not necessary to press them.
11 p.m.
The Earl of Radnor: Like my noble friend Lord Peel, I have no intention of dividing the Committee, although I might reserve the right to bring forward

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something, should I so wish, in a slightly different form at a later stage of the Bill. The main criticism seems to be that the amendment will cause a great deal of trouble, work and bureacracy. But "consult" is a wide term. I put in the word for that reason. I did not expect that people would be running around and talking to every single person in an area that might become an ESA. I had more in mind the calling of a general public meeting, all done in contact with the NFU and the CLA, at the local hotel where the matter could be thrashed out. That would at least enable people who know the area and who live there to put their views.
I agree that the word "freehold" is perhaps unwise and that "landowners" might be better. I was tempted to suggest "freeholder". According to my reading of the Bill, houses of note, architecture and practically everything seemed to be taken into account in respect of environmentally sensitive areas. I shall say nothing more at the moment. I shall read most carefully what has been said. I do not believe, however, that it is quite the complicated operation that my noble friend feels it is. I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
Lord Buxton of Alsa Lord Buxton of Alsa moved Amendment No. 58:
Page 11, line 9, at end insert—
("( ) An area designated by order under subsection (1) above shall be managed in accordance with guidelines prepared in England and Wales by the Nature Conservancy Council and the Countryside Commission, and in Scotland by the Nature Conservancy Council and the Countryside Commission for Scotland.")
The noble Lord said: This is a non-controversial amendment. I hope sincerely that my noble friend the Minister will find it helpful and constructive. Following the designation of an area, one asks what is to happen next. It appears that in a Bill which contains so much that is good and which, on balance, all of us want to reach the statute book there is an omission or a vacuum. There is no reference to the management of what I shall describe as ESAs. There is no provision for statutory bodies to contribute their input. My noble friend the Minister referred to the Broads and to the very effective and efficient follow-up in which the main statutory bodies and scientific bodies were involved. But here in the Bill there appears to be nothing. Without the amendment the vacuum remains.
There should be strong management teams, as in the case of the Broads. They should be small but highly effective units that have sufficient staff and resources to make the whole thing a great success. There are obviously such bodies in existence—the Nature Conservancy Council, the Countryside Commission, ADAS and so forth. It is necessary, I believe, to refer to this function in the Bill. I hope that my noble friend will feel that the amendment provides what is required. I beg to move.
Lord Renton: I wonder whether my noble friend Lord Belstead can say whether the Nature Conservancy Council and the Countryside Commission for Scotland are to be called in to manage. I feel that if they are, the amendment of my noble friend Lord Buxton should be accepted. This should be made clear in the Bill. If they are not to be called in, who is going to manage the areas? Is the
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Secretary of State, through his officials, going to take it upon himself to manage the areas, which will obviously be quite considerable and will require day-to-day expertise on the spot?
Lord John-Mackie: The noble Lord, Lord Buxton, has a very real point here: that there has been very little word on the management of these areas. As the noble Lord, Lord Renton, says, this could be a very big job, if 50 farms in an area are to be managed in this way.
I presume that the amendment of the noble Lord means that the advice on management is coming from these bodies, but the actual management will not be done by them. It will be by somebody from the ministry—ADAS, or some body like that. It would be very interesting to know what the Government's thoughts are on who will be responsible for the day-to-day management of what will be a fairly big job. If the ESAs are going to be managed to the extent that we have heard then it is a big job. It will be interesting to see what they have to say.
Lord Melchett: I am sure that my noble friend on the Front Bench is right that ADAS and the ministry will manage the schemes. However, what is equally important is that the provision in the amendment of the noble Lord, Lord Buxton, is the way that it will work. In other words, the ministry "manage" after taking advice from a number of experts, in particular the two statutory bodies which are responsible for conservation and countryside amenity, and so on. I think that that is what has happened in the Broads. I know that the Countryside Commission staff and the ADAS staff in Norwich have worked very closely together, and have consulted regularly with the Nature Conservancy Council although—rather unusually—that area is not of particular importance from its wildlife conservation interest. It is much more, as the noble Lord, Lord Belstead, knows, a landscape conservation area. I am quite convinced that if ESAs are to succeed it will be vital to draw on the expertise —although it will be limited initially—of the Nature Conservancy Council and Countryside Commission in drawing up the management guidelines which will then be implemented by ADAS working with the farmers concerned.
I hope that the noble Lord will accept this amendment for that reason, and because I think that it will go a very long way to reassure the many conservation interests outside this Chamber that their interests will be looked after when it comes to drawing up the management guidelines for ESAs.
Lord Belstead: This amendment raises a very interesting issue. On various occasions we have been asked to agree that the management prescriptions proposed by the Nature Conservancy Council and Countryside Commission should be implemented without amendment. This amendment of my noble friends Lord Buxton and Lord Onslow is saying that an area designated as an ESA shall be managed in accordance with guidelines prepared by the Nature Conservancy Council or the Countryside Commission in England, Scotland and in Wales.
We have now the recommendations of the NCC and the Countryside Commission. I am full of admiration

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for the work that they have done to devise realistic and effective schemes of management. We have discussed the recommendations with the agencies, with farmers' representatives and with local ADAS staff. I am almost coming back to the amendment of my noble friend Lord Radnor—Amendment No. 57—in revealing that we have been in close touch with the farming community in certain areas. The Countryside Commission and the Nature Conservancy Council were gestating for many months and finally produced the management prescriptions for us at our request during the month of April. They were up to time and we were enormously grateful to them for doing that. These are the prescriptions as to management for the future.
We have had discussions about these recommendations that have come forward from the two statutory agencies with farmers' representatives and local ADAS staff. In the process it has emerged that, while in general the proposals which have been put forward for management fit the Bill splendidly, some of the recommendations which the NCC and the Countryside Commission have made would perhaps not attract enough farmers for a particular environmentally sensitive area to succeed. If this amendment were to be agreed to, what would we do in those circumstances? Should we leave the recommendations as they stand and accept that farmers would not come forward and voluntarily become members of the environmentally sensitive area? That would be the effect of accepting the amendment.
Turning to the second half of the debate, as the noble Lord, Lord Renton, said, once the environmentally sensitive areas have been designated, how shall we keep an eye on them and manage them? As regards the Broads, which is the area which has been dealt with, we had a joint team. As the noble Lord, Lord Melchett, well knows, the team was based in the ministry divisional office in Norwich; but the team was headed by a Countryside Commission officer. I understand that it worked extremely well. It did just what my noble friends have been proposing: it managed the scheme, keeping in close contact with farmers, and if there were difficulties and problems, it smoothed them out and generally acted as the agent for the givers of the grants.
In this particular case I admit that we have not proceeded as far as that. It seems most sensible for the ministry to discuss with the environmental agencies whether changes can be made to attract the farmers without sacrificing the environmental objectives. That does not mean that we shall try to undermine the proposals which the agencies put forward. On the contrary, we shall be using our good offices to try to build on their work, keeping in close touch with them throughout.
I ask that we be allowed to continue with that approach. I have to say that the NCC and the Countryside Commission are valuing the work that they are doing with us, and we are certainly valuing the work that we are doing with them. I must reveal that my information is that neither the NCC nor the Countryside Commission have pressed for this particular amendment. I hope that we have had a
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helpful exchange and that the Committee will feel that once again I have given information which has been of some value.
Lord Buxton of Alsa: I am very grateful for that reply. I fully understand the arguments which my noble friend has put forward. However, I have one slight apprehension. I entirely agree with his notion of flexibility in order to make sure that nobody feels that he is being railroaded or overruled. I hope he will keep in mind that there is a danger that once he is seen to be too flexible in one case the buzz will get around that one does not really have to agree with this and that if one kicks up enough fuss they will either go away or change it. There is that slight danger in not having a fairly firm approach to the matter. Nevertheless, I am grateful for all that my noble friend has said and for all that he has in mind. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 59 not moved.]
Lord Craigton Lord Craigton moved Amendment No. 60:
Page 11, line 26, after ("the") insert ("amendment or")
The noble Lord said: This is purely a drafting amendment. I see nowhere in the clause the ability of the Minister to alter the order once it has been made. We have a precedent in the Wildlife and Countryside Act in Section 37(7)(b) where the Secretary of State may after consultation:
"make any such amendments of any byelaws so made as may be specified in the direction."
I ask my noble friend whether there is power to amend the order, if necessary. I beg to move.
Lord Belstead: An environmentally sensitive area agreement will constitute a contract between the Minister and the farmer. Contracts can of course normally be varied from time to time, but it would have to be by mutual consent. After all, if it is to be a voluntary scheme, it would have to be even-handed. If the Government were able to alter the contract, then the farmer must be able to opt out too.
Having said that, it is my great hope that we shall not see variations. I say that for these reasons. The farmer surely needs to sign an arrangement which he can be certain will be kept. The onus must surely be on the Minister and indeed the advisory bodies, to whom we have been referring in previous amendments, to get the agreements right in the first place so that farmers know what they are letting themselves in for. That is not a simple task, I know, but I think that we can do it. We have said that the agreements will generally run for about five years, and then will be subject to review. Experience with SSSIs and the like suggests that this is perfectly feasible without undue risk to the environment. Of course, that will give a break clause, as it were.
If I may go back to the beginning, my noble friend asked me a direct question: is there a power? My answer is: these agreements will be contracts. Yes, I suppose it would be possible to vary them provided it was by mutual consent; but I very much hope that we are going to have agreements which we are going to get

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right and which can last for five-year periods before coming to the break period.
Lord Craigton: If the contract can be varied by mutual consent and the way this Bill is drafted that is allowed, then I am quite satisfied and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Craigton Lord Craigton moved Amendment No. 61:
Page 11, line 34, after ("he") insert ("from time to time")
The noble Lord said: I take Amendment No. 61 with Amendment No. 62. As I read the Bill, once the NCC and the Countryside Commission have given the Minister the scheme, the NCC and the advisers are out: they have no power to look at anything that is going on; they have no power to interfere; they have no power to advise. That seems to me to be very wrong indeed. Surely, if you are going to employ an expert to lay down a scheme the Bill should enable the expert from time to time to ring up the Minister and say, "Look—this isn't going right here". That is why I put in the phrase,
"such provisions as he 'from time to time' considers are likely to facilitate such conservation",
and mention subsections (1) to (3). I am sure my drafting is not perfect, but what I want to be sure is that once this scheme is going the advisers and experts have a say or are able to contact the Minister and have their say with the Minister. I beg to move.
Lord Belstead: May I give my noble friend a direct and very brief answer about this? I think I have already revealed that we have not got that far; in other words, I admit to your Lordships quite openly that we have not yet decided what we ought to make arrangements for so far as detailed monitoring and management of ESAs is concerned. We have a lot of ideas so far as monitoring is concerned—for instance, aerial surveys and things of that kind—and obviously we are gradually getting our thoughts together so far as management is concerned, which is really the object of this particular amendment, but we have not got it in detail as yet. The Broads scheme has been a happy example—the co-operation between the Countryside Commission and the Ministry of Agriculture, based, as I have said, on the Norwich office—and obviously we are going to take all the evidence into account in deciding exactly how we are going to manage.
May I just add this. When my noble friend asks what is going to happen to the advisers after environmentally sensitive areas have been designated, do not let us forget that the Countryside Commission and the Nature Conservancy Council are the statutory environmental advisers to the Government, and nothing can take that away or prevent that. Obviously, under those circumstances, the communication between the Ministry of Agriculture—we are not, of course the sponsoring department; the Department of the Environment is—and the statutory advisers on conservation to the Government is going to be very close.
I do not think that at the moment I can be any more specific than that. I am glad my noble friend has moved this particular amendment because I think it is
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important, and before we go very much further we are going to have to formulate our ideas more accuratly than we have so far.
Lord Craigton: I am grateful to my noble friend. As I read the Bill, this does not happen, and if we have his assurance that there will be continuing consultation that, of course, is what we want; that is what this amendment is all about. It is not what the Minister says in the debate; it is what the Bill says, and that the Bill should cover the point that my amendment seeks to make. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 62 and 63 not moved.]
Earl Peel Earl Peel moved Amendment No. 64:
Page 11, line 36, at end insert—
("( ) Prior to the making of an agreement other than with the owner of the land, the Minister shall notify the landowners and invite them to participate in drawing up the agreement; and in any event the Minister shall provide the owner with a copy of the agreement.").
The noble Earl said: I have spoken to this amendment already, but my noble friend was so quick in withdrawing his amendment that I failed to make one or two points and I should like to make them briefly now. First, I should like to make reference to something that my noble friend the Minister said on the question of signatures. I think my noble friend said that a tenant would be required to get his landlord's signature before an agreement would be acceptable. At what stage will that signature be sought? Will it be at the beginning of the consultation or at the end of the consultation? Obviously there is a tremendous difference between the two.
Particularly so far as SSSIs are concerned, the Nature Conservancy Council is obliged to inform the landlord as well as any tenant. That is another reason why in this case the ministry ought to have an obligation to inform the landlord. We have discussed this matter, and I am going to withdraw the amendment, but perhaps my noble friend will respond to those points. I beg to move.
Lord Belstead: My noble friend asked me a direct question about what moment in the consultations on ESA designation will the tenant applicant have to sign a declaration stating that he had notified his landlord and shown the agreement to him. The answer to that is that it will be when we approach the tenants before they send back the agreement. If they have not notified their landlord, and have not shown the agreement to the landlord, they will not have their application accepted.
Although my noble friend, because of the time, did not go into it, he is worried about land values and rent levels so far as landlords are concerned. The ESA agreements and the value of the holding are something we do not need to get worried about. Let us remember that these agreements are going to be voluntary. Farmers will enter them only if the terms make good financial sense. In any environmentally sensitive area we shall offer agreements to owner-occupiers as well as tenants. We shall therefore have to make sure that from all angles the terms we devise are financially realistic. Few owner-occupiers are going to volunteer

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to join a scheme that reduces the value of their land. May I leave it there for this evening?
Earl Peel: I am grateful to my noble friend for that reply. I think I can speak for my noble friend Lord Radnor in saying that we are not happy about this. We feel that there ought to be an obligation on the Minister to inform the landlord. I am not going to say any more on that now. We shall return to it at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Belstead Lord Belstead moved Amendment No. 65:
Page 11, line 38, leave out ("as respects any land") and insert ("with any person interested in any land in England and Wales").
The noble Lord said: I beg to move Amendment No. 65 and I wish to speak also to Amendment No. 66. It has been represented to us that for agreements to be binding on successors in title to the land might not cover any person who, say, succeeded to rights in common land. For this reason we are proposing to amend the provision in this clause, in subsection (7), so that the agreement would be binding on any person deriving title under, or from, a person with an interest in the land who had entered into an agreement. This amendment also limits the provisions to England and Wales, as separate parallel provisions for Scotland have been included in the new clause. This is essentially a technical amendment and reflects the provisions of Section 39(3) of the Wildlife and Countryside Act which relate to management agreements. I beg to move.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 66:
Page 11, line 39, leave out from ("title") to ("and") in line 40 and insert ("under or from that person")
On Question, amendment agreed to.
The Earl of Swinton: I think perhaps we have made enough progress in the Committee for this evening. I therefore beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.
House adjourned at twenty-nine minutes before midnight.