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Column 55politicians put together; but then Dickens did not live in the enlightened age of the common agricultural policy and the common fisheries policy.
Mr. Colvin: I thank my hon. Friend for giving way and for pinching the quotation that I intended to make in my speech. However, I must correct him: the quotation is by Jonathan Swift from "Gulliver's Travels". My hon. Friend has saved me a couple of minutes in my speech.
Mr. Knapman: Bearing in mind the fact that, first, I have credited the quotation to the wrong person and, secondly, I am not certain that I have the quotation correct, I think it is incumbent on my hon. Friend to set it right at an appropriate time.
The recent announcement by my right hon. and learned Friend the Chancellor about inheritance tax on let land will ensure that the Bill is more effective. I could quote at some length from an unusually supportive leader in last week's Farmers' Weekly , which said that the massive boost to the tenanted farm sector
"has been heralded as the beginning of a new era by the Country Landowners Association and as a powerful boost to the tenanted sector by the Tenant Farmers Association".
I agree that that will not convince the hon. Member for Edinburgh, East, who is more concerned about highland land clearances. The article says:
"They speak for the whole industry in predicting that this important new tax break will encourage more owners to offer land for letting. In doing so they will ensure the success of the new farm business tenancy agreements which take effect this September. It should also encourage landlords to increase the length of new tenures because the tax implications of sudden death are less severe".
I hope that that is correct, but it will depend to some extent on whether the Inland Revenue can be prevailed upon not to offer too narrow an interpretation of what constitutes agricultural let land. The 1948 Act was extremely complex and it led to a lawyers' beanfeast in later years--but I suppose that most legislation does. That was especially so of the Agriculture (Miscellaneous Provisions) Act 1976, to which my hon. Friend the Member for Weston-super-Mare referred--it seems to be engraved on his memory--and the three generations of succession provision. After a number of years, it was obvious that landlords were becoming increasingly reluctant to rent land. One needs a certain amount of confidence to rent out land; one must be prepared to accept that land may be let for up to three generations and that, during that time, its asset value will be half that under vacant possession.
As a result, there were virtually no traditional lettings of agricultural land, which benefited no one. I had the privilege of visiting the Smithfield show the December before last and I spoke to a leading agent who managed hundreds of thousands of acres of land. I asked him how much traditional tenancy land remained and he looked at me as though I were joking. No one does that sort of thing any more. I must declare, rather late in the day, an interest in the debate. I am a partner in a small firm of land agents which is unsuccessful, first, because my partner is of advanced age; secondly, because he is over-fond of salmon fishing; thirdly, because he is fond of his own woodlands; and, fourthly, possibly because I spend so much time in this
Column 56place. It was the only firm of chartered surveyors and land agents that was not the subject of a takeover bid during the boom years of the 1980s.
We managed to survive despite the fact there were few traditional tenancies on offer--I think that my right hon. Friend the Minister of State suggested that the figure was 10 per cent., but I thought that the Royal Institution of Chartered Surveyors had said the figure was only 6 per cent. Whatever the figure is, it is very small. Of the total, 3 per cent. is let to existing tenants or their relations and only 3 per cent. is let to what might be termed "outsiders". I must tell those hon. Members who would vote against the Bill that that amounts to stagnation of the industry. The average farmer is now older than 50--although I have reached the stage of life where I do not consider that to be particularly old. All hon. Members should accept that the original purpose of the 1948 Act--to provide security of tenure--may have been sound, but, sadly, it has had precisely the opposite effect. As the hon. Member for Edinburgh, East was speaking, it occurred to me that there is no security if there is no tenancy available. That is the point to which the present legislation has brought us.
All those involved in the industry have known for many years that something is wrong. The National Farmers Union of England and Wales, the Country Landowners Association and the Tenant Farmers Association know that there is not a healthy balance between letting and owner-occupation. Even the National Union of Agricultural Workers, which the hon. Member for Edinburgh, East mentioned, must have suspected that something was wrong when it suddenly had so few members that it was obliged to merge with a larger union. I hope that, even at this late stage, the hon. Gentleman will try to appreciate the industry's problems.
Mr. Colvin: I shall not mention the authorship of any quotation on this occasion. Surely one reason why the tenanted sector has dried up is the enormous extent of distortion because the industry is heavily subsidised and enjoys all manner of Government support. One reason why landlords were not prepared to let farms was that they could make much more money farming land in hand than they could letting to tenants. That is why landlords tended to take farms in hand whenever the opportunity arose.
Mr. Knapman: I agree with my hon. Friend that most landlords go through that stage of thinking. It is only when they have the privilege of meeting several different managers--some better than others--that they go off the idea. Theoretically, land in hand should show a better return than tenanted land. I believe that landowners--and the Church Commissioners-- want to continue with the traditional letting of land, provided they are satisfied that they can, at a reasonable stage, have vacant possession. That seems to be the guiding principle of most professional land agents and surveyors.
I have mentioned on numerous occasions the complexity of the 1948 Act, and I wonder whether my hon. Friend the Minister of State has thought about ensuring that we do not enter another minefield. There
Column 57have been many cases of "horseyculture"--the letting of agricultural land for use by horses. If we mean to encourage extensification and diversification, we must be sure that any farm business tenancy can include letting to horses without the protracted rigmarole that occurred in the courts some years ago.
The popularity of litigation linked to the 1948 Act was second only to divorce at the time. Most cases revolved around what was a short let and an agricultural tenancy. There was a great deal at stake, which is why we were relieved when Gladstone v. Bower seemed to settle matters once and for all, albeit in the short term--which the hon. Member for Edinburgh, East should not like. Many cases were based on the various notices that had to be served one or two months before the end of a tenancy.
There is no end to it. One must constantly check one's professional indemnity insurance to ensure that such notices have been served in time. Even then, there have been court cases disputing the validity of such notices. Estates Gazette has been clogged with reports of such cases for nearly half a century. I hope that will end under the new legislation.
I must enter a caveat. Although I greatly welcome the Bill's brevity of 31 pages, compared with the 1947 and 1948 Acts, we must ensure that the brevity of contracts is not balanced by the complexity of valuation clauses and custom, where appropriate. The shorter the tenancy, the more likely it is that the contract will be silent--and where agreements are silent, we need a clear indication of the code of practice, which I understand is being prepared by the Royal Institution of Chartered Surveyors. In short, we must not generate more legal action based on the new legislation.
The hon. Member for Edinburgh, East took the House on a little history tour, and I agree with some of his points. If a farmer died in July or August in the 19th century, it was unfortunate, not just because he was severely short of breath but because one was not in a position to harvest his crops--and had no right to harvest them. Whatever was planted or attached to the soil remained with the soil. In Latin, as my hon. Friend the Minister will know, that is "quic quid plantatur solo, solo cedit."
If someone had the misfortune to die in July, having gone to all the bother of planting the corn, no claim could be made once the crop was ready for harvesting. It was obviously necessary to introduce legislation, and that dated mainly--although not exclusively, despite our briefing--from 1875.
The initial legislation was based primarily not so much on security of tenure, which so concerns the hon. Member for Edinburgh, East, as on equity between landlord and tenant in terms of the value of crops--particularly at the end of a tenancy. That is where the hon. Gentleman goes wrong. If he said that he was looking for equity between
Column 58the two parties but would leave them to decide the contracts themselves, we would all be together. I am sorry that we are not.
Sir Jerry Wiggin: My hon. Friend wants to see a contract freely entered into by the landlord and tenant. Is not the problem that, because we have not repealed the 1947 and 1948 Acts and others, the contract must be specified or one will appear as a result of the 1948 Act, for land let for more than two years? Something must be written into the Bill, unless we are prepared to repeal all the other legislation.
Mr. Knapman: My hon. Friend is entirely right, which is why I mentioned the number of court cases to determine whether there was a grazing let or a full-blown tenancy. The financial rewards of winning a case that decided an agricultural tenancy were huge. One understands why so many people were tempted to suggest that they had a tenancy. It was an artificial form of legislation in the first place, and I hope that we can leave all that behind.
I thoroughly support the proposals of my right hon. Friend the Minister and his Front-Bench team, largely because my right hon. Friend made the point that the Bill will provide greater market flexibility and, I hope, opportunities for more tenancies. One recalls Disraeli's dictum of
"lies, damned lies and statistics."
I like to think that 1 million extra acres will come on to the market, but I suspect that one could as easily make a case for 100, 000 or 100 million acres. It is not that vast amounts of land will come on to the market as a result of the Bill, but it will release some extra land.
A broad-brush approach to compensation seems to be favoured. What is the status of the RICS guidance notes? Will they be ready and agreed when the Bill becomes law? It is rather important that they should be.
What part, if any, of the customs of the country will apply? If the Minister cannot tell me now, perhaps he will do so in Committee. Those customs are still important. Cornwall has a fairly clement climate--I am sorry to alliterate in such a way--and the Pennines have a rather harsher climate, especially currently. Their customs need to be retained wherever possible.
I am not clear in my own mind about the compensation provisions for relatively short-term lets. I hope that my right hon. Friend will take an interest--I am sure that he will--in the RICS's
recommendations. For instance, it was traditional, under a 1947-48 tenancy, with, perhaps, a 200 acre heavy clay soil farm, to conclude that a proportion of the drains and ditches should be cleaned or cleared every year. There was more or less a seven-year term then, and it was thought reasonable that a tenant farmer should go around the farm. I am not sure that it is entirely equitable that a tenant with, perhaps, merely three years--in the Bill, it amounts to four--of farming should have the whole of that liability placed on him or her during that short tenancy. I am not sure that I have thought that matter through entirely--perhaps that is all too evident--but it should be borne in mind. We cannot place wholly on short-term
tenancies--three to four-year terms--all the obligations laid on those tenants under the 1948 Act.
It was a pleasure recently to read an article in Estates Gazette , entitled "Implications of the Agricultural Tenancies Bill", written by Mr. Christopher Jessel of the
Column 59London firm of Farrer and Co. I am happy to give it publicity, bearing in mind the fact that it acts for a certain noble Lord in the west country who leases me my salmon fishing, which keeps me sane--although I appreciate that that might be a contentious observation. Mr. Jessel said:
"There is, though, no provision in the Bill that would stop the landlord from restricting the use to pure agriculture if he wishes, although that will be reflected in the rent. If notices are not served (for example, where the tenant goes in on the basis of a handshake) and the character of the occupation changes, then it may become protected by the Landlord and Tenant Act.
In the past it has not usually mattered which protection has applied, so long as the tenant could claim some security, but this could become important in the future, for example, where someone is allowed to keep horses in a field in return for payment." My hon. Friend the Minister of State mentioned some of the difficulties of horses, but I hope that he will take that point on board.
It is all very well for a parliamentary draftsman to say that all the improvements will be determined by the increase in the value of a holding. I have tried to imagine the increased value of a holding a good many times over the past 30 years or so and find that a somewhat theoretical guidance for any valuer.
Many of the extra bits of land that we all hope will come on to the market as a result of the proposed legislation will be 50, 100 or 200 acres of bare land. That is where the so-called "intangible improvements" envisaged by the Bill become most tempting to tenants; they may suddenly-- particularly if there are enough acres--put in an application for an agricultural dwelling.
I can quite understand that whatever a tenant is going to spend should be returned on the appropriate basis at the end of the tenancy, but merely to obtain planning permission, and perhaps against the landlord's wishes? Is that the way in which we should proceed? If that is not my hon. Friend's intention, I should be pleased to hear him say no.
Mr. Knapman: That is all well and good. One of the replies to a survey by the Royal Institution of Chartered Surveyors read: "We consider that if the present proposals for new farm business tenancies go through unaltered, then no landlord could be advised to let a farm to a tenant under any circumstances".
"The reason is quite simple. It is proposed that a farm business tenant may carry out improvements without the landlord's consent, for which the landlord will be liable to pay at the end of the tenancy. This amounts to writing a blank cheque to the tenant when he moves, and no landlord could possibly be advised to take the risk. I am not alone in that opinion, and I think that the Government is so anxious to put through a consensus agreement that the point has not been addressed."
I am sure that that point has been addressed, but that is the fear of some people. I hope that my hon. Friend the Minister of State will see that such concerns are resolved.
Despite all that, I am perfectly satisfied that this is an excellent Bill. It is long overdue, as my colleagues have pointed out. We need greater flexibility and a fresh supply of tenancies to come on to the market. It has been traditional in agriculture to rely on entry either through patrimony, matrimony or parsimony. I hope that my hon. Friend the Member for Romsey and Waterside (Mr.
Column 60Colvin) was not going to say this: patrimony and matrimony are still in fashion, but parsimony, sadly, is no longer enough. So huge are the amounts involved that it is just not possible, however parsimonious a person is, to save up enough money to get into farming on a vacant possession basis. The only way in which we can allow young farmers with limited capital behind them to get into farming is to increase the number of tenancies coming on to the market. That is what the Bill does. That is why I enthusiastically support all that my right hon. Friend the Minister proposes.
Mr. Elfyn Llwyd (Meirionnydd Nant Conwy): I am pleased to be able to make a contribution to the debate. A generation ago, my family were farmers. Indeed, if it were not for the fact that the farm occupied by my paternal grandfather was too small, I might today be a farmer myself.
In the 1930s, in Meirionnydd Nant Conwy, my father, like many others, faced the prospect of leaving the land because there was no room for him to farm. Not enough land was available for new tenancies. We heard today--and we are aware of it--that the percentage of let land has been in decline consistently since the beginning of the century. Indeed, in the 1900s, the figure was about 90 per cent., but, as we heard today, a recent survey showed that it is now 30 per cent. or less. The Minister mentioned that in his opening remarks. Undoubtedly, legislation is necessary for several reasons. The present law on agriculture and agricultural holdings is complex and is contained in a plethora of statutes. I speak as a country solicitor who had substantial dealings with agriculture law. "Scammel on Agriculture" was actually read by lawyers in Meirionnydd, not simply used for pressing flowers. I also speak as one who has the honour to represent a constituency in which at least one in five families has some financial connection with the industry. Of course, farming is what gels the community together. Daily life in Ambridge is very much what it is in parts of my constituency, although the language used may be different. The farming community is the backbone of the rural economy. I realise that this is a Second Reading debate, and I cannot hope to cover all--or even most--of what I believe should be examined in Committee. I think, however, that hon. Members on both sides of the House will readily acknowledge the need to deal with the dramatic decline in the availability of land to new entrants. I have argued for some time for the inheritance tax relief concession that has just been granted. It will make a substantial contribution, and I am pleased that the Treasury is to amend the Finance Bill to that effect. It will release many hundreds, if not thousands, of acres for letting at a stroke. The much-maligned Farmers Union of Wales, which was treated less than respectfully in another place, had campaigned for the move for some time; apparently it was entirely right in that regard, but wrong in others. I attended the Royal Smithfield show with the hon. Member for Stroud (Mr. Knapman). He has already been corrected once or twice this evening, and I hope that we shall not fall out if I correct him again. I was with him, and the rest of the group, when we spoke to a partner in a large west country firm with, I believe, 25 or 30
Column 61branches. To the best of my recollection, he said that two or three full tenancies had been created out of several hundred, rather than none. That may be nitpicking, but--
Mr. Knapman: The hospitality at the Smithfield show was generous, and I am prepared to accept that the figure may have been two or three rather than nil. I concede that I may have lost some of the argument.
Mr. Llwyd: I may not have lunched as well as the hon. Gentleman, but we will not go into that now. I meant no disrespect; suffice it to say that very few full tenancies were coming on line. No doubt the bulk of the tenancies that were created--I call them tenancies, although in strict legal parlance they are not--resulted from the Gladstone v. Bower agreements, which have already been mentioned. They have done nothing for agriculture, and I do not think that they have done anything for rural stability. They fell through because of an unfortunate judgment. I do not decry the judge concerned, but I think that they will become outmoded if the Bill is passed. That, in general, will be a welcome development.
Although it is beyond doubt that change is needed, if we want to give new entrants more opportunities we should consider a retirement scheme for farmers. For all its faults, the European Union has produced a mechanism for partial funding of such a scheme. Many farmers in my constituency, throughout Wales and beyond are in their mid-50s but cannot afford to think about retiring: the return on their investment has not been good, farming has had its ups and downs over the years and they have been able to put nothing aside. They will have no houses to live in once they leave their holdings, so they are in a difficult position.
The European Union perceived that difficulty, and sought to deal with it. The Government must reconsider; such a scheme would undoubtedly provide more opportunities for new entrants, and I feel that that is one of the main concerns of the Bill. The hon. Member for North Cornwall (Mr. Tyler) suggested a three-pronged milking-stool approach; this is one leg of that stool, which should be added to the inheritance tax exemption and the basic provisions of the Bill--some of which, at least, meet my approval. If we seriously wish to bring more people into the industry and to release more units of land, we should adopt the arrangements already adopted by the European Union.
The Bill is designed to deregulate the law governing agricultural holdings. The agreement to let land is essentially a contract between a willing landlord and a willing tenant, in which I consider equality of bargaining to be a key factor. I hope that, in freeing the legislation as they are, the Government are not thinking along the same lines as they were when they abolished some of the wages councils recently. The aim then was to allow employee and employer greater flexibility in the setting and agreeing of terms, but the only flexibility that I could see was the lowering of wages, as employers always had the right to pay more than the statutory minimum.
I fear that, similarly, agricultural landlords who are less than scrupulous will impose onerous terms on tenants who will be so desperate for land that they will accept those terms. I do not wish to create anxiety--I am trying to express an honest opinion on the basis of a little experience--but it is clear to me that there will be no equality of bargaining if that happens.
Column 62If a commodity is in short supply, a premium attaches to it. In this instance, the premium could manifest itself in unfair terms that would do nothing for individual tenants and even less for the industry as a whole. Let us not pretend that there will be true equality of bargaining. It follows logically, therefore, that we must build in safeguards for the weaker party in the negotiation--the tenant.
Rural stability and the future of our communities rely on a healthy and buoyant agriculture industry. I do not deny the need for incentives for landowners to let farms, but tenants must have enough security to enable them and their families to earn a decent living. Farming is at best an onerous and difficult task, and a balance must be struck between both parties; I believe that the Bill is the right vehicle for that balance.
The Farmers Union of Wales has mooted the idea of a working life tenancy lasting until the tenant reaches the age of 65. That is a halfway house between the 1986 system of successions and the complete so-called freedom of contract in the Bill; for reasons that I have already given, I challenge the phrase "freedom of contract". The idea of a working life tenancy is worth investigating, and deserves better than to be put down as it was in the other place. I hope that time will allow a full discussion of it in Committee.
If the Government do not accept the idea, as they may not, I think that there should be a minimum term. That will not drive a coach and horses through the purpose of the Bill. I respectfully suggest that a minimum term of 15 years with a right of renewal for, say, five years would deal with the problem of one-sided bargaining.
Mr. Colvin: The hon. Gentleman said that he would comment on the views of the Farmers Union of Wales. Much has been made of the unanimity of support among landowners, tenants and other organisations. According to current reports, the union is alone in resisting the Bill. Is the hon. Gentleman speaking on behalf of the union or are his views his own? It would be useful for us to know which aspects the union does not like, so that we can deal with them in Committee.
Mr. Llwyd: With respect, I thought that I had made the position clear, but I shall do so again if it assists. The Farmers Union of Wales wants a lifetime tenancy until the tenant reaches the age of 65. That is an excellent idea, but I do not think for a moment that it will be realised. If I am on the Committee, I shall advocate a minimum term of, say, 15 years plus a renewal for five years. That would bring an element of stability and equalisation to the bargaining process. I do not know whether that assists the hon. Gentleman, but I thank him for raising the issue.
The second reason for some form of minimum term is that farming in general and animal husbandry in particular are long-term occupations. Years of careful development are needed to produce a good dairy herd or even a flock of upland sheep or cattle. No one can move in with a two-year agreement and expect to get anywhere. Further, it obviously takes time for a tenant to achieve a return on his investment. Many new entrants will have to borrow substantial sums from banks or lending institutions before they can purchase an item of equipment or stock.
Will banks queue up to lend a large capital sum to a new entrant whose only asset is perhaps a three-year or a five-year agreement? I do not think so. That matter was brought into clear focus by Lord Cledwyn of Penrhos in
Column 63the other place. That may mean that the Bill will not assist the vast majority of family farmers, especially in Wales, or young entrants who are anxious to enter the industry and who see that opportunities are becoming fewer and farming is becoming totally impractical for them.
Alas, many youngsters have already voted with their feet. It is sad to note that the intake to agricultural colleges, particularly in north Wales, has been in sharp decline for the past five or six years. I suppose that that shows a lack of confidence in the industry.
Mr. Clifton-Brown: I assure the House that the hon. Gentleman did not give me the black eye. He rightly spoke about the willingness or otherwise of banks to lend money to short-term tenants. Does he agree that a better criterion for bank lending would be the ability to repay the debt rather than the security offered? Does he further agree that banks are increasingly moving to that point of view?
Mr. Llwyd: I take the hon. Gentleman's point, but, traditionally, banks look at all sides. One matter to be looked at is the available equity, capital or collateral. Someone with a three-year agreement will not be entertained on that score. Perhaps he or she is exceptionally able. The applicant may have graduated with honours in agriculture or may come from Seale Hayne or some other college. However, we must remember that he has not been put to the test in that he has not been working as a farmer.
I should like to speak more positively but I am not making this up. I am reflecting what I hear and read every day in my constituency. No doubt there is some validity to what the hon. Gentleman says, but the length of the agreement is a telling feature.
Another important point is that in the Bill as it stands there will be no real security for farmers and their families. At the end of the term people will risk losing not only their businesses, however well they may have farmed, but their homes. That cannot be just or equitable on the verge of the 21st century. It is a backward step that is more in keeping with Victorian times.
There may be even fewer new entrants because the detail of the Bill may be tailor-made for expansion by established farmers. It will assist owner- occupiers with large farms who are looking for additional land so as to maximise profits. What will that do for the industry and for our communities? It is potentially damaging. I agree that the Bill contains important principles that are broadly acceptable to hon. Members in all parts of the House. But another recent measure which was heralded for its principles was the Child Support Act 1991. I do not think that I need to say any more. The Act has not worked out and has gone through a process of metamorphosis. It is still not right and many thousands of people in England and Wales are suffering because of it.
I hope that I am not putting forward too black a view, but I read with considerable interest the debates in the other place and note that there is a potentially serious
Column 64environmental problem in the Bill. Short-term lets may lead to exploitation for short-term gain which would result in long-term detriment to the environment. Furthermore, in Wales there are three pilot areas for a scheme called Tir Cymen, which is similar to the farm stewardship scheme in England. Several schemes operate in my constituency and have been a great success. For example, there is heavy over-subscription for entry to the schemes. That typifies the environmental awareness of farmers who have been excellent and sympathetic custodians of the land for centuries.
Secondly, the modest sums that are available under these schemes are welcome in the current economic climate. The core point is that, typically, the schemes involve a 10-year cycle of works to be carried out. Many tenants in my constituency have signed up to them, but what is to become of such schemes in future if those tenants--I use the term loosely--have agreements that are for five years or less? I put that question to the previous Minister of Agriculture, Fisheries and Food on two occasions--once on the Floor of the House and once during a private discussion. I regret to say that I am still awaiting a reply.
The matter is important not simply for the tenants but more broadly for the environment. The mere fact that the Tir Cymen scheme and the stewardship schemes are so popular means that the point should be urgently addressed. If there is a prevalence of agreements with terms of five years or less many thousands of people will not be able to enter these environmentally sustainable and friendly schemes. On Second Reading in the other place Lord Elis-Thomas said: "agricultural production and food production is an essential part of countryside management as is environmental and land management and the ensuring of countryside sustainability in environmental and landscape terms for future generations."--[ Official Report , House of Lords, 28 November 1994; Vol. 559, c. 507-8.]
To that I say, "Hear, hear". No doubt in debates on the Bill the Government will be able to assure us that that point will be cleared up and that diversification in farming will not be hampered. That is also an important aspect, although it may not matter as much in my constituency because people who live on a mountain cannot start to grow coconuts. However, in many areas of England and Wales it is important. I hope that nothing in the Bill will stand in the way of further diversification because that is necessary. Something to that effect would be better in the Bill.
At a later stage I hope to develop the need for a written tenancy agreement in each case. Banks and lending institutions will be even less impressed if nothing is reduced to writing.
I remind the House of the provisions of the Solicitors Act 1974. I note that the hon. and learned Member for Montgomery (Mr. Carlile) is gazing in my direction. It is obviously to remind me to declare an interest as a country solicitor. The Act clearly states that agreements disposing of or dealing with an interest in land of more than three years' duration must be evidenced in writing and must be drawn up by solicitors. The Bill changes that responsibility, which will now be shared with the Royal Institution of Chartered Surveyors. I have read the debates in the other place, when the RICS was quoted almost as though there was no tomorrow. It is obviously in great favour with the
Column 65Government. I am not sure why, but it is one of the flavours of the month. I want a uniform notice period of 12 months. That is a simple but sensible suggestion.
Hon. Members have mentioned council-owned smallholdings. There is a ridiculous anomaly in that set-up--it is that people aged 40 and over are automatically disbarred for applying for such a tenancy. I know of an experienced farmer who has moved into my constituency and applied for a tenancy. His wife works locally and his children go to the local school. He has been on the short list three times, but he is not being considered because he is 43. Being that age myself, I feel a little uneasy about such a provision. I sincerely believe that it should be reconsidered.
Quite astonishingly, the Bill does not contain a definition of the word "land". It is highly desirable to have such a definition in an agriculture Bill. The compensation provisions need further explanation and elucidation, especially regarding planning permission and the refusal of a landlord to grant that. In fairness, the Minister has said that there will be room for further discussion on that point and I am grateful for that.
Many other points arise and, no doubt, will be argued in due course. The authors of the Library research document say on the cover that farm tenancies will now be
"in a similar position to business tenancies."
The Library is usually very good and I rely on it, but I regret to say that that is a complete misstatement. Nothing could be further from the truth. Farm tenancies are not in the same position as business tenancies.
As Lord Prys-Davies said on Second Reading in the other place, part II of the Landlord and Tenant Act 1954, which relates to general business tenancies, allows for an almost automatic renewal. This Bill does the opposite. He asked why a right of renewal would be available under the 1954 Act for a tenancy of a shop or an office, but will not be available to a tenant of a farm. I hope to raise that question in more detail in due course.
If the Bill is to be the panacea that it has been heralded to be, a great deal of detailed thinking and discussion will have to take place at a later stage.
Mr. Alex Carlile (Montgomery): I apologise for missing the earlier part of the hon. Gentleman's speech. As he has instructed me as counsel on numerous occasions over the years, I can testify to his expertise as a solicitor in drafting the sort of tenancies that we are discussing. Does he agree that the fiscal treatment of agricultural tenancies that the Government have announced needs careful examination? Welcome and necessary though it is to encourage tenancies by fiscal means, does he agree, from his experience as a solicitor, that if there is a danger that very short agricultural tenancies could be used as a way of evading inheritance tax that will dramatically push up the price of land and may make it more difficult for young entrants to come into the profession? Does he further agree that we need to consider a sophisticated means of ensuring that the fiscal provisions can work effectively?
Mr. Llwyd: I am grateful to the hon. and learned Gentleman for that view. I am sure that he is right. Indeed, I said earlier that I welcomed the fiscal amendment. I believe that there should be a minimum term. If there were, that would deal with the problem highlighted by the hon. and learned Gentleman. There could even be a
Column 66sliding scale, which is not uncommon with fiscal arrangements. I have no doubt that we shall return to that matter in Committee. The Government are deriving a great deal of misplaced comfort from the so-called industry agreement. The president of the National Farmers Union said recently:
"As part of the deal the NFU will accept that there should be no provision for a minimum term."
The word "deal" is interesting. What is the deal? Will the NFU have two knighthoods a year instead of one? Time does not permit idle speculation, so we will have to speculate further about that outside the Chamber. However, I wonder whether it is a big deal. I do not know.
The Farmers Union of Wales is implacably opposed to the proposals and it wants a minimum term for the reasons that I have given. Many members of the NFU in Wales, Lancashire and Cumbria oppose the Bill on the simple ground that there needs to be a minimum period of tenure. The leadership of the NFU, having gone through the painful process of arguing with the membership, has reached some sort of consensus. However, when the Government say time and again that there is consensus in the industry, they are not really correct because a large percentage of NFU members have yet to agree. The whole of the FUW strongly disagrees with the Bill. Therefore, the argument continues.
If a reasonable minimum term were to be included in the Bill, that would not destroy its purpose of freeing up units. Common sense dictates that there is a great difference between tying up land for three generations and tying it up for 15 years. I am sure that such a provision would not drive a coach and horses through the raison d'e tre of the Bill.
Much of the Bill needs to be amended and strengthened, for the reasons that I have given. As it stands, the Bill is similar to the curate's egg--good in parts.