House of Commons Hansard Debates for 6 Feb 1995

Mr. Enright: The hon. Gentleman will be delighted to know that the fields that used to proclaim their loyalty to the Conservatives have moved to the Liberal Democrats and are fast on their way to the Labour party. I can put the hon. Gentleman's mind at rest. Logic lives and thrives in Hemsworth.

As my father worked on the railway and we had to go round the London and North Eastern Railway region, I was brought up in a place called Gaisgill near Tebay. All the farms there were small farms with decent folk--families who had been there for generations and who were tenants. They did not own their property in any way. The richest person was the lady who owned the village shop. Hers was the sole shop and all the small farmers had to buy from her because, unfortunately, public transport even then did not run people rapidly to Penrith.

In thinking of those people, I am much reminded of ancient history, which I know that the Minister will appreciate. One recalls in particular the early Greek reforms--ges and anadasmos--and the whole problem of the threat to the stability of society caused by people who were landless and who were not part of society. It was well recognised that if there was to be stability in society, people had to have a stake in society. Even the most right-wing reformers were prepared to give certain guarantees to small people who could work on their land.

The Minister will recall, in early Roman history, Cincinnatus the great consul. He was tired of state affairs--perhaps some of the Minister's colleagues might take a lesson from this--so he went back to the land and tilled the soil until, once more, the ungrateful Romans called him back. He had learnt his lesson behind the plough; that was the essence of it. The Minister will also recall that Cato the censor, who was by no means a radical left-winger, extolled the virtue of medium-sized farms. He extolled not the great farms--the latifundia--but the medium-sized farms. The idea is expressed most beautifully, perhaps, in Virgil's "Georgics". Virgil says that happy are the farmers who have their small estates. He speaks not of large estates or too-small estates, but of medium estates. Indeed, this country has grown in democracy as a result of the people who have served as yeomen. I think especially of the people who served under Cromwell.

Mr. Waldegrave: I cannot resist a brief addition. The hon. Gentleman will remember the landless farmer in the "Eclogues" who left his farm, probably because it had been confiscated by the central Government so that it could be given to a soldier. If the protection, in terms of notice and so on, in the Bill had been available to that farmer, the situation would never have arisen.

Mr. Enright: I note that the Minister refers to the "Eclogues" and to what resulted from civil war. I knew that we had social turmoil in this country, but I did not know that we were on the brink of civil war or that the Bill would prevent little farmers from having their land taken away during it. The Minister's point does not really wear; it is a bit thin. It is a very poor "Eclogue" anyway, as I think that he will agree.

I now come to the point about British Coal, which is relevant to what the Minister has just talked about--the dispossessed farmer. After the privatisation of British

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Coal, property that had been let to farmers and, perhaps even more importantly, to allotment holders--there are many allotment holders in my constituency--was no longer to be owned by British Coal. What will the property board do? Will it say, "The Bill says nothing about allotments"? It jolly well should say something about them. Will the property board offer first choice to the allotment holders? Not on your life. Will it offer first choice to the farmers? The only advantage that the Minister gained from the President of the Board of Trade was that farmers who had previously put in a firm bid to buy their farms would be taken into account. That did not apply to anybody else.

How will that land be sold? I defy any hon. Member to defend the means, as it is to be sold in huge lots, in London, to people who have the ready cash. In other words, Hemsworth smallholders could become the property of Kuwaitis in next to no time, which is a living, breathing scandal. The Bill does not deal with that problem. The Country Landowners Association has an interest in this type of Bill, but that does not mean that it cannot speak intelligently on the subject. The association spoke intelligently on inheritance and how inheritance tax discourages people from letting their land, which is a valid argument. Tidying up that part of the law makes sense. Having said that, the Bill does not assist newcomers to the land, as my hon. Friend the Member for Edinburgh, East (Dr. Strang) said, or the county councils, which are in such a desperate financial position that they are having to sell some of their smallholdings and farms to raise capital. County council land was a prime source for people who wanted to set up afresh in farming with remarkably little capital.

Some of those people go to our excellent agricultural institutes, which are as good at training people in agricultural ways as any other section of our further and higher education. They do a magnificent job and I have yet to visit one in which standards are slack or there is no control over what is happening. They are able to make young people think about the future of agriculture and what they should be doing, not only in a United Kingdom context, but in that of Europe and the general agreement on tariffs and trade. Many newcomers do not have any capital and their interest originated in schools, which provide imaginative courses. How are such people to get into farming? It is extraordinarily difficult and the Bill does nothing to help.

As my hon. Friend the Member for Edinburgh, East said, reform of the common agricultural policy does not depend on the pious utterances of the Government, or of the Opposition, but on making farmers willing to go along with root and branch reform. Those with large farms have been unwilling to do so, especially when the reforms have been allied to environmental considerations. Those with family farms consider the environment and can see what is happening in the wider world. They are sufficiently flexible to respond, and to feed into the Government machine the sort of policies that can best be put across.

Short-termism is another worrying aspect of the Bill. The right hon. Member for Selby (Mr. Alison) expressed it when he said that tenancies must not be too long. Short-termism has crept into our economy and I am not thinking merely of those people who have made great profits from electricity, water or whatever, although they must certainly take their share of the blame for creating a

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certain atmosphere. I am thinking of the many short-term work contracts of three or six months, which lead to all sorts of insecurities. The Bill will introduce those same insecurities into the farmer's world and the family farmer's world.

I have no worries for those with large farms, who can look after themselves. They can always get out and go into something else--if they cannot, they do not deserve to succeed. Family farmers need our support, however, and they need to be able to plan over a long period. They must plan from "generation unto generation", to quote the Bible again. It is important for people to be familiar with the land that they farm and to have sympathy with it. People have feelings about the land--that is a difficult concept, but it is true. I have also been extremely worried about the number of tax farmers and I am sure that that concerns the Minister too. It is appalling that rich people, such as pop idols or footballers, can save huge sums of money in tax by investing in farms to which they bring no productivity. The family farm is part of the core and the foundation of this country. The Bill does nothing to strengthen such farms and much to destabilise them.

5.5 pm

Sir Jerry Wiggin (Weston-super-Mare): I speak as a former tenant farmer who has consistently opposed security of tenure, which has done so much damage to the system. It is extraordinary for the hon. Member for Edinburgh, East (Dr. Strang), who propounds the merits of the system, to talk about improving entry to the industry. No man alive has done more harm to the system than the hon. Gentleman did in the Agriculture (Miscellaneous Provisions) Act 1976. It is clear from the tone of his speech that nothing much has changed in his mind. I sat through the Standing Committee that considered the 1976 Act with him and I acknowledge that he probably knows as much about the subject as any hon Gentleman, but somewhere in his soul he hates landlords and believes that tenants should be preserved. The inevitable result of such a policy is that the supply dries up, as it did with housing, and the system stagnates.

It is universally accepted that the system will not continue without some sustenance. I acknowledge the hon. Gentleman's point--his only point--that the Conservative party has failed to grasp that nettle despite the fact that it has been in power for so many years. Minister after Minister felt that to act without the agreement of all sides of the industry would simply be stirring up a hornets' nest, which is not something that Ministers like to do.

Not long after I succeeded the hon. Member for Edinburgh, East as Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food in 1979, the Northfield report came to the Government for an answer. The then Minister--the noble Lord Walker--was very nervous of the whole subject. He felt that the problems of the agricultural world were similar to those of the housing world. I tried to persuade him that that was not so and that tenants did not feel the same about their landlords as housing tenants felt for the Rachmans of the day.

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In a debate in another place, the noble Marquess of Hertford described the status of landlord as having an "aroma of sulphur"--an apt description. Those of us who have been tenant farmers recognise that, to a large extent, one's prosperity depends on the amount of rent that one has to pay. I observed that no sooner had my farm begun to prosper than the landlord would collect an extra slice of rent every three years, which put one back to where one started. Matters such as capital investment, plant and drainage were constantly negotiated and those negotiations were crucial to the business. If one recognises that the return from owning agricultural land is tiny, even at today's much increased rents, and that the opportunities to find capital to buy land are extremely limited, one can well see the merits of a system that divides the owning of land from farming it. That is why we had such a strong and prosperous landlord-tenant relationship for so many years, with landlords minding their landowning business and tenants getting on with farming. I accept that the cost of equipment in a modern milking parlour, probably installed by the tenant, runs into tens if not hundreds of thousands of pounds and does not compare with the elementary equipment that farming required only 50 years ago. Substantial changes have been made, but there is no reason why there should not be a free market.

The Agriculture Act 1947 spelt the beginning of the end and the 1948 and 1976 Acts made matters worse. Landlords have lost their land for three generations. If a landlord signed a lease under the 1976 Act, he could say goodbye to his land for his lifetime and probably that of his sons. There is no need for such contracts, which should be an agreement between a willing landlord and a willing tenant. Historically, that was so, but the Acts of 1947, 1948 and 1976 were all retrospective and imposed new conditions on contracts that had been freely entered into.

If I were on the Standing Committee of this Bill--I sincerely hope that I shall not be--I would table amendments proposing that those who signed leases under those Acts should no longer be subject to retrospection. For example, if a tenancy was held before 1947 between a willing landlord and a willing tenant, the tenant knew that he would have short-term notice, different rent reviews and other conditions, but the Government of the day altered such contracts and then altered them again in 1976. If a landlord and tenant have signed a contract under the 1976 Act, that is between a willing landlord and a willing tenant. The Bill is an opportunity to remove retrospection from the agricultural landlord and tenant relationship.

If someone owns an office block as an investment, it is worth much more when it is let than when it is empty, but precisely the opposite is true of a farm, which is worth twice as much with vacant possession as it is with a tenant. I hope that my right hon. Friend the Minister will be in his position for many years to come and will swiftly give further thought to how he might progress the improvement of the landlord and tenant system. He will not succeed until a let farm is worth more than a vacant farm; that position prevailed until 1947 and we should seek to return to it. We have succeeded in doing so in housing and we must work towards that in farming.

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Many benefits derive from freedom of movement. The hon. Member for Edinburgh, East admits that the only benefit in his proposal is that he has "locked in"--those were his words--a number of tenants. I see no benefit whatever in that.

The Bill is a small acknowledgement of the fact that the various interested parties have managed to agree. I referred to the Leasehold Reform Act 1967, which I voted against, as the Building Societies (Robin Hood) Act. If ever the Robin Hood principle applied, it applied to the landlord and tenant system in the agricultural world: rob the rich and give the proceeds to the poor. It is no longer entirely that way round, because many tenants have had a good deal. For a small percentage of the capital cost of the land, they have been able to rent that land, sometimes for many years, but now they are unwilling to give up their position and they scream their heads off at the thought of some justice being returned to the system. They argue that they have invested a lot in their farms. That is fair enough, but provisions for tenants' and landlords' rights are well established. I shall discuss landlords' rights in a moment. I am delighted to see that, in the short term, leases that will be available under the Bill will include a definition of "tenant right". The important point is that the improvements concerned will be made only with the landlord's approval. Tenants have sometimes been able to improve their farms without permission but, on termination of the tenancy, landlords have had to find a substantial sum to pay to the tenant. That did not encourage movement.

Mr. Knapman indicated assent .

Sir Jerry Wiggin: I see my hon. Friend the Member for Stroud (Mr. Knapman) nodding. He is an expert in those matters.

I strongly welcome the inclusion in the Bill of written agreements, which are essential. In my long experience of misunderstandings between landlord and tenants and affairs of the countryside, agents or landlords often cannot remember having said that a tenant could make certain changes. When it is the other way round, nor does the tenant. I welcome the definition in the Bill that those agreements must be in writing. I foresee a majority of those agreements being fairly short term to start with. Landlords will tread warily, and I do not blame them for doing so. They will gradually gain confidence in their new tenants. I take the point that they may be old tenants with expanded farms. The law can do nothing to prevent that. It is surely the landlord's right to let his farm to whom he wishes. A great deal of nonsense is spoken about new entrants into agriculture. Few businesses of substance today allow new entrants to start with little money or experience and become their own masters overnight, yet for some reason people say that newcomers have the right to enter agriculture. It is a lovely theory but in practice it should be examined in today's scene, where high capital, high technology and education are more important than ever before. I entirely endorse the view of my hon. Friend the Member for Salisbury (Mr. Key). County council smallholdings--I call them that because that is what the relevant legislation is entitled--are an anachronism of the past.

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Mr. Enright indicated dissent .

Sir Jerry Wiggin: If the hon. Member for Hemsworth (Mr. Enright), who shakes his head, were to go to the Library and examine the annual report, he would discover that hundreds of millions of pounds of public money are tied up in county council smallholdings, all of which could be sold tomorrow to their tenants or at an equivalent tenanted price. County councils such as Somerset, where I live although my constituency is elsewhere, have thousands of acres of county council smallholdings yet bleat that they must make cuts in education. They had an opportunity to sell those, and they should be sold to their tenants. When the hon. Gentleman reads the bottom line, as he no doubt will, he will be astonished to discover how few new tenancies are being created. The capital and running costs of county council smallholdings are a scandal that should be exposed.

Mr. Clifton-Brown: Is my hon. Friend aware that the Agriculture (Miscellaneous Provisions) Act 1976, passed when the hon. Member for Edinburgh, East (Dr. Strang) was on the Front Bench, specifically excluded county council smallholdings because they needed mobility of tenants, and the right to tenancy succession was not given?

Sir Jerry Wiggin: I would hate to be reminded of all the aspects of that long--I was going to say "friendly"--tussle. It was not friendly at all. It was hard-fought legislation, imposed, if I recall, in the absence of the Minister. The Parliamentary Secretary picked up the torch and ran with it, to the eternal pleasure of his socialist friends and to disastrous effect throughout the system. We have new complexities and new complications. Quotas have rightly been mentioned. They are a highly important and emotional subject, but I would say to the farming community that they came out of the blue, that they have acquired a value and that they may go back into the blue. It is the Government's avowed policy, in many cases, to get rid of quotas. Nevertheless, one or two of my friends retired upon selling their quota, and if I had 1 million litres of milk quota and someone offered me 60p a litre for it, I too would retire. It is extraordinary how those things have come from nowhere.

The premium paid for sheep on the higher land now runs into substantial sums of money, and quite small flocks can fetch tens of thousands of pounds because they are eligible for the sheep premium.

Mr. Michael Colvin (Romsey and Waterside): My hon. Friend mentions quotas. Given the debate about farmers retiring on the basis of their quota, does he agree that what Governments give, Governments can take away, and that, although quotas may be worth something today, if the quota system ended tomorrow those quotas would be worth nothing?

Sir Jerry Wiggin: I was trying to say that, and my hon. Friend put it in much more succinct language.

That presents a problem for the landlord and tenant system. Let us take as an example the less-favoured areas ewe premium. A farm--probably an extensive farm--at a high level that did not attract that premium would find it hard to make a profit, but, if the previous tenant has sold that quota, either the landlord or the new tenant will have to buy it back, and we are getting into extraordinarily

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large sums of capital. I do not know the simple solution to that, because in Europe and in Brussels the excellent way in which our system operates is not recognised, which is a great pity. I know that it causes my right hon. Friend the Minister problems. Perhaps when he replies he will say a word or two about the way in which that is to be tackled.

I strongly welcome the recognition, at long last, that there is merit in tax relief on let land. I wish only that we had been sensible enough to have introduced that many years ago, but I understand that it will apply only to land let after 1 September under the terms of the Bill--which by then I hope will be an Act--and to land that continues to be tenanted as a result of the succession provisions. I would go further, and say that, if there is merit in a family farm, which indeed there is, there is certainly merit in a family landlord letting his land, provided that the land is let. I think that that is perfectly reasonable.

As long as hon. Members on the Opposition Front Bench do not give an absolute statement of their intentions, there will be no confidence in the agricultural industry to employ the terms of the Bill, and the hon. Member for Edinburgh, East knows that, because he well knows what happened under the Agriculture (Amendment) Act 1984, which I voted against.

I was the only Conservative to vote against that Bill because it did not go far enough. I said that the Bill would not work, and my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), who has just left the Chamber, the then Minister, said, "Ah, but there will be new tenancies because the Country Landowners Association has promised me that there will be." I wonder how many there have been; perhaps a handful. I will bet that there have been fewer than 100.

Unless there is confidence--unless the landlord can return to the free and open possession of his own land at some definable period in the not too distant future, under the terms of a contract freely and willingly entered into with a tenant--the landlord will opt to keep his own land, use some other legal device or in some way seek to avoid the penal provisions of security of tenure.

I know that the hon. Member for Edinburgh, East has some responsibility for that matter, and at some time he will have to make that statement if he wishes the Bill to work. Given the agreement in the industry, I plead with him not to delay making that statement too long. We should not waste our time in the House with legislation that will take some time in Committee and on Report and so on, only to find that, in practice, it is destroyed as a result of a lack of confidence.

If the hon. Member for Edinburgh, East believes in the system, I hope that he will say so, and that he will at least give an assurance that contracts made under the Act-to-be will not be dishonoured by a future Labour Administration.

5.24 pm

Mr. Paul Tyler (North Cornwall): I am not a farmer. I do not declare an interest, but I have lived all my life surrounded by the working countryside. My present home is surrounded by tenanted farms--both by Cornwall county council's smallholdings and by Duchy of Cornwall farms.

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In the past few weeks, I have been to Scotland, to Wales, to all parts of England and of course in the Celtic country of Cornwall, and I have met tenants in all parts of the kingdom.

Although the Bill is extremely important, it is only part of a three- pronged approach that must be adopted by the Ministry of Agriculture, Fisheries and Food, and by the Government generally, if opportunities for new entrants are to increase and if a healthy tenanted sector is to be maintained and expanded to everyone's benefit.

The approach that must be adopted is, if you like, Madam Deputy Speaker, a three-legged stool. First, we need the end of tax discrimination. I shall discuss that in a moment.

Secondly, we obviously need the maintenance of a flourishing county farm estate. In the light of what the hon. Members for

Weston-super-Mare (Sir J. Wiggin) and for Salisbury (Mr. Key) said, it is a key part of the tenanted sector. I believe that it could play a much better part in future, if it returns to its original function of being a first rung on the tenanted ladder--the first rung of the farming ladder--instead of being the only rung that some tenants have found themselves able to get on to.

Thirdly--the subject of the Bill before the House--we need a legal framework that both potential landlords and potential tenants accept is reasonable, acceptable and likely to remain permanent. I shall return to the argument made by the hon. Member for Weston-super-Mare in a moment.

Those are the three elements that the sector requires to retain confidence.

Mr. Garnier: The hon. Gentleman describes the county council holdings system as the first rung on the ladder. Can he give some evidence, from his own county or the Duchy of Cornwall, of the number of farmers who have left county council smallholdings to move on to other, larger, tenancies? We do not appear to be hearing much about that.

Mr. Tyler: I am grateful to the hon. Gentleman for making my argument for me. The Bill is important precisely because smallholding tenants on county farms do not have an opportunity to move on to other tenancies. I think that he and I would recognise that the Bill will make it possible for tenancies to be loosened up in future. However, if we simply sell all the smallholdings to their tenants, or if the pressure on the county councils' budgets forces them to dispose of their holdings outright in the open market, the first rung of the ladder is removed. It is not an argument for strengthening the second rung of the ladder if one removes the first one.

It is obvious throughout southern Britain, where I have some experience, that it would be a disaster for the tenanted sector if county councils were forced by Whitehall to sell their prize possessions, especially when they may not be able to obtain the best of prices for them, as a result of local government reorganisation or budgetary restraint. The pressure on the other tenancies would put the system in an impossible position.

Mr. Colvin: On county council smallholdings, will the hon. Gentleman give us some evidence that county council tenants on smallholdings have moved to larger tenancies?

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In the county of Hampshire, there have been plenty of new lets of agricultural holdings. We also used to have a county council land settlement. The county council, in its wisdom, eventually sold that settlement--most of it to the sitting tenants, because there was no evidence that any of the tenants of those land settlement holdings were moving anywhere. They were very happy and cosy doing what they were good at, but they had no intention of moving elsewhere. It was not the first rung on a ladder, but a first rung to nowhere. They were content to stay where they were.

Mr. Tyler: I cannot speak with authority about Hampshire. In any event, it would be wrong for me to spend too much time on the issue that the hon. Gentleman raised. I have, however, met the county land agents for seven of the south-west counties. It is because they recognise that it is difficult to move from the first rung on to the second that they support the Bill. If Conservative Members think that the work that the agents are doing is wrong and that the agents' values and judgments are wrong, they should reflect that those professional advisers support the Bill, as I do.

The second leg of my three-legged stool is the tax treatment of tenanted land. As a member of the Committee that considered the Finance Bill in 1992, I moved an amendment which seems now to be remarkably close to the change that the Government seek to introduce by means of the current Finance Bill. The Minister, in urging his hon. Friends to reject my amendment, said:

"If agricultural landlords were to benefit from 100 per cent. relief there would be ensuing pressure from other landlords for similar treatment and if 100 per cent. relief from inheritance tax were extended to other landlords, it would increase pressure for their businesses to be treated as qualifying for trading reliefs from other taxes. To extend trading reliefs to all landlords throughout the tax system would cost hundreds of millions of pounds."--[ Official Report , Standing Committee B , 30 June 1992; c. 422.]

Of course, but we were not asking for that. When my hon. Friends and I pressed the amendment to a Division, all the Conservative members of the Committee voted it down.

Tonight, Conservative Members come before us as converted sinners. I welcome them aboard. I wish only that we could be sure that the tax distortion that has been built into the system for so long can be completely removed. It would be good to find in future that land, whether owner occupied or in tenancy, was treated in a

non-discriminatory manner in terms of inheritance tax.

The third leg of my milking stool is that the Bill produces a new legal framework. It is pleasant, for once, to be able to welcome a Bill that is both sensible and progressive. Given the Government's record of unwanted and unnecessary legislation, it is encouraging to welcome a Bill that has widespread support in the industry. Indeed, it derives its parentage far more from the working group of all the interested parties--the Country Landowners Association, the National Farmers Union, the young farmers' groups and, most important of all, the Tenant Farmers Association--than from the Ministry. Perhaps it would be fair to say that the Ministry had washed its hands of trying to find an acceptable formula. It should be said that the persistent work of the organisations to which I referred achieved an important consensus.

It is worth noting that the TFA says firmly that it believes that the Bill is a major step towards the revival of tenanted farms. The Royal Institute of Chartered Surveyors, in undertaking a survey last year, considered

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the possible effect of the Bill. It projected that about 1 million acres would be let for five years or more soon after the Bill came into force, if it were enacted. It foresaw that over half of that land would be let for periods of 10 years or more and that more than 1,000 fully equipped farms and over 3,000 blocks of bare land would provide opportunities for new entrants, for farmers and for businesses to engage in restructuring, with better security and lower capital overheads, because it would not be necessary to buy expensive land to enable them to expand. That does not square with the nightmare scenario that the hon. Member for Edinburgh, East (Dr. Strang) was describing a short while ago.

The TFA endorses that view. In giving a warm welcome to the Bill, it states:

"The tenanted sector is the traditional way into the industry for those with skill and energy but who cannot afford to buy land. Yet it has been in steady decline for reasons which include owners' fears that any letting could create life tenancies under present legislation and tax discrimination against letting land. Almost no land is now freshly let on full tenancies under the present law. Agriculture, facing economic and political pressures, needs the business flexibility that a free tenancy market can give for it to remain competitive; paying a rent rather than having to buy high priced land."

It is clear that there will be continuing difficulties if we make no changes to the law. It is equally clear that in Committee we must be careful about the way in which the detailed provisions of the Bill operate, especially as regards compensation--I have noted the arguments advanced about compensation for quota, which will be extremely difficult to calculate in the current speculative environment that is being suffered by the milk industry--and to ensure that we have the best possible arrangements for arbitration. I am confident that we have a good legal framework, which is a good basis on which to make progress. I am equally sure that it will be extremely important to deal with some of the concerns that tenants are already expressing about some detailed provisions.

I think that it was the hon. Member for Weston-super-Mare who referred to tenant right. There are still some problems about that, which have not been resolved. They were explored in another place, but they still require some definition. It is extremely important that the approach that is taken to the issue should follow the amendment to clause 17 that was put before the other place. I hope that it will be possible to identify specific exceptions to the general rule where consent is required for compensation.

For example, it is difficult to obtain specific consent from a landlord at each stage of the growing of annual crops, but that may be extremely important when it comes to compensation. The same can be said of pasture and beneficial acts of husbandry, which can add to the value of a farm but may not be appropriate for specific consent from the landlord. Similarly, there is the liming of land and the application to land of purchased manures and fertilisers. In the normal yearly management and husbandry of a farm, there are elements that can add greatly to the value of the holding, and they must be taken into account when it comes to compensation. Tenant right will require some attention in Committee.

The fly in the ointment must be the attitude of Her Majesty's Opposition. I understand from the Opposition's press release that their spokesman in this place takes a different view from their spokesman in another place. It

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was evident from the way in which Lord Carter approached the Bill's provisions that he regarded the measure as a sensible framework for reform. He made a positive contribution to the debates upon the Bill, as one would expect. He has great practical experience of agriculture. He did not divide the other place on any of the principles underlying the Bill.

That being so, the issues to which the hon. Member for Edinburgh, East referred this afternoon and in his press release require some attention. I do not propose to analyse them myself. Instead, I shall take advantage of the work of the TFA. After all, it is members of that association who will be affected by the Bill. The TFA has, point by point, rebutted the objections of the hon. Member for Edinburgh, East to the Bill.

Labour suggests that the Bill will end security of tenure for tenant farmers. That is not true. It is absurd to frighten people by suggesting that that is the position.

Dr. Strang: I have already responded to that issue. I explained in answer to an intervention that I was talking about new tenancies under the proposed legislation, not existing tenancies. There will be a voluntary contract and no statutory right, as the hon. Gentleman will understand.

Mr. Tyler: I heard the hon. Gentleman's explanation. However, I have had the benefit of re-reading his press release. Having done so, it is far from clear that what he says is the position. It is important that we take the TFA's views into account. There is a good case for saying that without this legislation, the position of tenants would be increasingly difficult.

In his press statement, the hon. Member for Edinburgh, East said that the Bill would mean the end of tenanted family farms, but the TFA rebuts that too, saying firmly that that is not expected to be the case. Through the freeing up of tenancies, many farmers will be provided with the flexibility that they need to cope with the radical changes that lie ahead for British farming.

The Labour press statement says that the Bill will cause a free-for-all and the fragmentation of many farms. But there is no empirical evidence to suggest that that would be the case. The TFA points out that economic pressures have caused that to happen. Those pressures include tax regimes, and local authority holdings and other big estates have been pressured to the point that they find it impossible to maintain their tenancies, and they have--when the opportunity has arisen--sold.

Labour's amendment in the other place, which insisted on long-term protection for farms with a dwelling, was not pressed because it became perfectly apparent to anyone with practical and realistic common sense that, if such a measure were introduced, landowners would simply avoid the burden by hiving off farmhouses, treating them separately and finding tenants who did not need the farmhouse. The so-called residential farm business tenancy was originally proposed by the noble Lord Carter, but he sensibly backed off because he had experience of the practical realities.

I did not understand what the hon. Member for Edinburgh, East said about the breaking up of holdings, or that holdings would just become larger rather than there being more of them. There is no suggestion that that would be the case, unless his own amendment on

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residential farm business tenancies was pursued. In that case, there would undoubtedly be a tendency to break up holdings.

Dr. Strang: I am not quite sure what the hon. Gentleman is talking about when he refers to "my amendment". He may be referring to a probing amendment that was tabled in the other place.

I said earlier that there may have been a case for addressing the point to which the hon. Gentleman refers, but clearly if one does--this is a fair point, which the Country Landowners Association made in its briefing for the debate--one must do it in a way that will not achieve the outcome that the hon. Gentleman is suggesting; that is, encouraging the splitting of the farmhouse away from the holding. I thought that there was a consensus in the House that we should seek to discourage the breaking up of farms, which the hon. Gentleman will be aware is happening throughout the country, including in Cornwall.

Mr. Tyler: I am again grateful to the hon. Gentleman for clarifying that point. If he does not press the probing amendment in this House, as his colleagues did in the other place, I shall be only too pleased. The amendment would have precisely the effect that I identified. It would tend to encourage the break-up of holdings, rather than their consolidation.

I hope that at end of the debate--not necessarily this evening's debate, but the debate during the whole process of the Bill--there will be consensus. The part of the agriculture industry with which we are dealing needs some long-term confidence and some real appreciation that the political system has reached a consensus about the way in which it is tackling what is undoubtedly a difficult problem. I hope that the Opposition spokesman who winds up will come clean and say whether they would seek to repeal the legislation should they ever come to government. For our part, I and my Liberal Democrat colleagues would wish to reach a point with this legislation at which it is not required to be torn up and thrown out of the window again, and we would wish to build on it, to make progress in the future.

Sir Jerry Wiggin: Before the hon. Gentleman comes to his peroration, may I say that I have been able to obtain figures on county council smallholdings, which may be of interest to him? In the county of Cornwall, there are no less than 4,600 hectares of land, where there are 167 tenants. In the year before last, nine new tenancies were granted. In the country as a whole, out of 5,000 tenants, only 125 new tenancies were granted. There is public investment, however, in over 133,000 hectares of land. Surely that is not showing a first step on the ladder. It is simply showing that the concept is completely out of date. I hope that the Liberal Democrats will join us in seeking to destroy such a system.

Mr. Tyler: The hon. Gentleman has proved my point. He obviously did not listen to what I said--perhaps he was studying the figures. It is because there has not been a second or third rung of the ladder that the tenanted sector has seized up in recent years. That is why I support the Bill. I thought that the hon. Gentleman would be pleased that I am supporting it.

It is not the fault of a bottom rung of a ladder that there is no way up after it. The hon. Gentleman and I may agree that, for a number of reasons which we have been discussing, we have not been able to free up other rungs

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of the ladder. That is why the land agents responsible for the county estates right through southern Britain are convinced that the legislation is important. They are convinced that we must get it right, and that it is extremely important that we have a political consensus. We can then give everybody confidence that they can get off the bottom rung and move up. The last thing that we want to do is to remove the bottom rung, as that would not help one little bit. That is the first leg of my three-legged stool. The second leg is tax discrimination. I hope that the Minister will be able to explain why that is limited in its present format, as the logic of the situation is that it should be extended throughout, as the hon. Member for Weston-super-Mare said earlier.

The third leg is that it is very important not only that the legislation reaches the statute book in its best possible form, but that we all make sure that there is no future threat by any potential Government to undo the work that we do with the Bill this Session. Retrospection is a very unhappy way to deal with such problems. It almost always results in injustice and diseconomy.

Naturally, members of the Committee will want to scrutinise all parts of the Bill and I am sure that hon. Members on both sides will wish to make sure that the legislation meets all the requirements, not just for 1995 but, I hope, for many years to come. I hope and trust that Labour Members, both here and in Committee, will adopt a positive attitude to the legislation, listen to those with practical experience of the industry-- including the noble Lord Carter--and come round to accepting that, at a later stage, the Bill should be given fair wind on to the statute book.

5.46 pm

Mr. Roger Knapman (Stroud): It worries me greatly that the Government have the support of the Liberal Democrats on the Bill. However, I find the news release from the hon. Member for Edinburgh, East (Dr. Strang) far more predictable. It says that it is not for use before Monday 6 February 1996; when one has read it, one wants to change the year to 9996.

The hon. Member for Edinburgh, East sees this as an issue of social justice. It would be interesting to know just which subject the hon. Gentleman does not see as an issue of social justice. We did hear this afternoon that he was basing his argument on the highland land clearances. He also complained that the Bill would result in the fragmentation of farms, but that is exactly what has been going on. It is precisely because the Agricultural Holdings Act 1948 and the Agriculture Act 1947 bear no relevance to the needs of today that we need the Ministry's five-year terms and other partnerships to get around the existing legislation. That is why we have the fragmentation of farms, and why so few tenancies are available for those who wish to enter the industry.

I turn from the press release of the hon. Member for Edinburgh, East to the real world, where the Bill has been welcomed by almost every body associated with the industry, including the Royal Institution of Chartered Surveyors, the Country Landowners Association and the Tenant Farmers Association. To get those groups to agree was not just good; it strikes me as a minor miracle. That was acknowledged very much in the other place, where there was acknowledged to be a wealth of expertise, and a number of valuable amendments were accepted.

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My right hon. Friend the Minister has not said whether there is a wealth of expertise here, although I must claim to be one of the few Members who can understand the residual manurial values of farmyard manure. I do not know whether that constitutes expertise, but I am tempted to take a few minutes on the subject.

As someone who was obliged to study agricultural law at Cirencester agricultural college--which, 30 years ago, some people thought was an alternative to education--I am pleased to see lengthy and complicated legislation reduced to a Bill of just 31 pages. It is a change also to consider legislation that deals with people who live and work in the countryside--bearing in mind the fact that so many think that the countryside is the green bit that separates the towns and that it is there primarily for access by, and for the recreation of, townspeople.

The number of people who live and work in the country is declining. The Labour party should consider the fact that the Bill is responsible for that decline to some extent. We must restore and increase the number of available tenancies.

We all agree that the Agricultural Holdings Act 1948--I note what my hon. Friend the Member for Weston-super-Mare (Sir J. Wiggin) said--is well out of date. It was probably appropriate for its time, although my hon. Friend would have trouble accepting that. It is interesting to look at the report of the Second Reading debate on the Agricultural Holdings Bill in 1948, which lasted for two minutes. The Solicitor-General begged to move the Second Reading motion and Major Legge-Bourke of the Isle of Ely said:

"I think that hon. Members on this side of the House would like to say that we are grateful to the Government for this Bill".--[ Official Report , 16 July 1948; Vol. 453, c. 1659.]

Hon. Members were commendably brief on that occasion and I shall try not to trespass too much on the time of the House on this. What was right in 1948 is certainly not appropriate now. Some Opposition Members cannot come to terms with revising clause IV, let alone revising the 1947 and 1948 legislation. At that time, circumstances were very different and the policy behind the Act was that Britain should not be caught out again and that we should not be short of food after the war. Convoys had saved us from defeat in the war and there was no post-war food surplus. Every effort was made to increase production.

In those circumstances, tenants were encouraged to rent smallholdings and to have county council smallholdings. The county council smallholdings--I think that the hon. Member for North Cornwall (Mr. Tyler) said this--were supposed to be the first rung on the ladder. However, once people got to the first rung of the ladder, they found it very comfortable and stayed there for ever. In any case, as a result of the prescriptive Agricultural Holdings Act 1948, when people reached the first rung of the ladder they looked up, to see that the other rungs had been sawn away because no one was letting larger areas of land.

That was the view in 1948. I think it was probably Charles Dickens--I may be misquoting him--who observed that any man who could make two ears of corn or two blades of grass grow where only one grew before deserves more from mankind than the whole race of

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