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Dr. Strang: I shall not intervene again, but I think that it is a question of terminology. The hon. Member for Stroud (Mr. Knapman) may agree with us. It is one thing to compensate the tenant for his improvements; in so far as the Bill ensures that, we support that. I have no doubt that we shall even try to make that stronger. However, when we talk about security of tenure in relation to agricultural tenancy legislation, we talk about tenure, and a minimum term was quoted.
There was a time when, as several hon. Members said, the National Farmers Union supported a minimum term. I am sure that the Minister understands the Bill, which proposes no minimum term, so when it becomes law someone could have a tenancy of three years or five years. We do not regard that as adequate security of tenure.
Mr. Jack: I am afraid that the hon. Gentleman shows an inability to distinguish between the period of an agreement and the security embodied in that agreement. The Bill is drafted in terms of the definition of farm business tenancy: willing partners come together, in mutual interest, to define their rights and responsibilities, and to make very clear one with another the length of time that they agree that the tenancy should run. The Bill gives precise legal protection on the ending of the tenancy. Once agreed and signed, it is cast iron and copper-bottomed and provides excellent security of tenure. That is the whole basis and construction of the Bill. Dr. Strang indicated dissent .
My hon. Friend the Member for Weston-super-Mare opened with a full-frontal attack on the hon. Member for Edinburgh, East. He pointed out that, in his opinion, the
Column 106hon. Gentleman was anti-landlord, and certainly a flavour of that emerged from what the hon. Gentleman said. My hon. Friend made some telling points about the cost of entry into farming. I received a letter from Barclays bank on the subject, part of which read: "Having read the Bill through carefully and considered the implications for the bank's future approach to farm financing with my colleagues in Barclays, our opinion is that, should the Bill become law in its present form"--
it would seem that the bank supports the Bill's enactment-- "Barclays will continue to consider each application for farm finance on an individual, case by case basis."
The letter continues:
"We lend currently into situations ranging from lifetime tenancies to annual seasonal lets."
The bank showed an understanding of the argument of my hon. Friend the Member for Weston-super-Mare and rebutted the claims made by the hon. Member for Carmarthen.
Mr. Alan W. Williams rose --
It is important to understand that banks take into account the costs of going into farming. They understand the various problems that are faced, especially by new entrants.
I am glad that my hon. Friends have welcomed compensation mechanisms by agreement and the proper operation of the written agreement and notices, which are built into the framework of the proposed legislation.
Hon. Members have questioned information about land availability. My hon. Friend the Member for Cirencester and Tewkesbury dealt with the point when he referred to the excellent survey of its members by the Royal Institution of Chartered Surveyors. It is the institution's members who will determine the amount of additional land that will be available over five years. I have been asked by hon. Members when the extra land will come into the marketplace.
We have never claimed that the floodgates will open. We are merely saying that a more flexible farm business tenancy will reflect farming in the modern world. Opposition Members often talk about strengthening the rural economy. They should realise that without the flexibility of the farm business tenancy to combine agriculture with other forms of economic activity, it will be difficult for the countryside to live. How can enterprise be fostered without that flexibility? The Government understand the need for flexibility; it is regrettable that Opposition Members do not.
Compensation for milk and other forms of quota has been mentioned. As some of my hon. Friends have said, where additional quota has been bought during a tenancy it could be the subject of compensation arrangements with the landlord's permission. The rest of the quota would attach to the land. Sheep quota would move with the tenant. It is possible, as with all these detailed matters, for the landlord and tenant, in reaching an agreement, to define precisely where each party stands. That is an element of responsibility that the Government understand.
My right hon. Friend the Member for Selby spoke with authority and knowledge on behalf of the Church Commissioners, who are major landowners. Deprecating remarks were made by Opposition Members, who failed
Column 107to place due weight on my right hon. Friend's remarks. He made the telling point on behalf of the Commissioners, in welcoming the Bill, that it was a deregulatory and simplifying measure. My right hon. Friend also said--the hon. Member for Clwyd, South-West failed to take up the point when he replied on behalf of the Opposition, as did the hon. Member for Edinburgh, East--that the Opposition had not clarified their intentions for the future of this proposed legislation. Tenant farmers, young farmers, the Country Landowners Association and the National Farmers Union will all have taken note. I shall have more to say about that later.
My hon. Friend the Member for Stroud spoke with knowledge and qualification. He went into important detail on repairs, for which tenants will be able to claim compensation for improvements with the landlord's consent.
On a number of other points I shall reply in detail in writing to my hon. Friend the Member for Stroud, as the details are important. He covered the central issue of the Royal Institution of Chartered Surveyors' code of practice, which will be very important in guiding people and in determining the nature of their tenancy agreement. That will be backed up by the professional information to which my hon. Friend adverted in his comments.
My hon. Friend the Member for Stroud asked about compensation. Clauses 15, 16 and 17 adequately define compensation--not only the circumstances in which it can be claimed but the methodology that can be used to determine the amount payable. Arbitration mechanisms are available in statute to resolve disputes between landlord and tenant. I hope that my hon. Friend will find those clauses interesting reading, and I commend them to him.
My hon. Friend the Member for Harborough rightly said that the current law is too complex and that it has inhibited the availability of land for rent. Many of my hon. Friends, in excellent analyses of the history of tenanted land, pointed out that there has been a long-term decline in the amount of land available for rent. The hon. Member for Clwyd, South-West tried to suggest that we are arguing that the availability of land declined only between 1976 and the present. We agree that it had been declining, but I must point out that the amount of land available dropped between 1976 and the present by a further 10 per cent., so the legislation must take some responsibility.
My hon. Friend the Member for Harborough pointed out that there was widespread support for the Bill. I am amazed that the Opposition do not feel deeply uncomfortable about that widespread support. Nobody would ever claim that there was not some disagreement in certain parts.
Mr. Jack: The hon. Gentleman may say that, but I disagree. We do not disagree that people will have sensible questions to ask about the Bill, which will no doubt be explored properly in Committee, but the Opposition must surely feel uncomfortable about our success in bringing together the powerful players whom I have mentioned.
Column 108My hon. Friend the Member for Worcestershire, South (Mr. Spicer) who, sadly, is unable to be in his place, told us about the Evesham custom, which is no small matter in his constituency. I hope that my hon. Friend will have an opportunity to read the Official Report , because I want to reply in detail to the points that he made. The Bill is not retrospective. I am advised that when a tenant passes on a tenancy, under the Evesham custom a new tenancy arises, although it is not treated as such for the purpose of the rent review provisions of the Agricultural Holdings Act 1986. Any new tenancies after 1 September 1995 will be covered by the Bill. Thereafter, the tenant will not be able to claim compensation on improvements that he installs without the landlord's consent. That will not affect the legal position of the tenant's existing tenancy. The Evesham custom applies--as I understand it--only where the tenant has served notice that he is leaving, so the decision to a certain extent is in my hon. Friend's constituents' hands.
My hon. Friend fears that a tenant deciding to leave might have difficulty in finding a new tenant to reimburse him for his capital expenditure, but other options are open to him. One is for the tenant to remove his fixtures and buildings and relocate or sell them. Another is to suggest that the new tenant agrees suitable provisions with the landlord on how the matters are to be dealt with in the new farm business tenancy. These are complex matters, and I shall write in more detail to my hon. Friend. I hope that he understands that his principal concern about retrospection is not an issue about which his 420 constituents need to worry any longer.
The House will agree that my hon. Friend the Member for Cirencester and Tewkesbury was knowledgeable, thought-provoking and probing--all in one speech. I congratulate him on what he had to say. My hon. Friend is a qualified chartered surveyor. He presented the plight of young farmers and he referred to the problem, to which I adverted, of the amount of tenanted land drying up following the passage of the 1976 legislation. He also gave a critique of the Opposition's views about the marketplace.
In one document, the Opposition say that they are worried about the operation of the free market, but then Opposition Members say that they want what they describe as a "fair market rent". They cannot have their cake and eat it, as my hon. Friend the Member for Cirencester and Tewkesbury said in his speech.
My hon. Friend talked about clause 4 of the Bill--not the Labour party's clause IV, but our respectable clause 4--and he highlighted the fact that this key element of law stops retrospection. He knew that the Opposition were not prepared to give a similar commitment. My hon. Friend specifically picked out clause 4(1)(d) and asked whether it could be simplified. I will examine that clause in Committee. He also referred to clause 37 as defining "agriculture". I disagree with him on that point: we believe that it is an adequate description but, as always, I will consider carefully what he said about industrial crops and biomass. On his point about downward rent review, if he studies the detail in the relevant clauses he will find that, once an arbitrator is involved, the arbitrator can review either up or down and the terms under which that occurs are defined clearly in the Bill.
Column 109My hon. Friend raised the difficult and complex question of privity and I am grateful to him for giving me prior notice of his intention to do so. I think that he described accurately the long-term consequences for the tenant of the first party in relation to any liabilities that might ensue vis-a -vis assignment. With foreknowledge of the issue, it may be possible to design the agreement to cater for such circumstances--although that may not become a reality in view of the current limited time scale. I do not think that I can assuage my hon. Friend's concerns in that area. As he said, the Lord Chancellor's Department is examining the matter in the round. I believe that that very difficult problem should be dealt with in that way.
My hon. Friend the Member for Cirencester and Tewkesbury and other hon. Members discussed the various aspects of planning permission. My hon. Friend outlined a scenario whereby the landlord could be forced to pay a huge amount in compensation for planning permission without having consented to the application for planning permission. That nightmare scenario will not occur under the Bill. The refusal of consent for planning permission cannot be referred to arbitration under clause 18. The Bill deals with planning permission carefully and it ensures that, if gain is made by the tenant, proper compensation is available, subject to the landlord's consent. My hon. Friend the Member for Romsey and Waterside, in an excellent review of the remarks of hon. Members on both sides of the House, asked about the nature of the farm business tenancy. I think that he was confused about the various briefings that he received on the subject. The Bill provides more scope for the types of
non-agricultural business that can be developed during the lifetime of the tenancy.
Initially, the tenancy must predominantly involve agricultural activity, but if the tenant develops a new business within the curtilage of the holding it will not obstruct the tenancy agreement that has been signed. The early clauses of the Bill deal with that subject very clearly. I am grateful for my hon. Friend's support for the Bill because he speaks from a practical and a knowledgeable base.
My hon. Friend the Member for Gloucestershire, West made a wide-ranging speech, finally homing in on the heart of the matter. He welcomed the Bill's provisions for compensation. I will consider the Bill's approach to tenant right, which was mentioned by a number of my hon. Friends. That is a tricky subject but it can be covered by the terms of the tenancy agreement. There is an element of responsibility on the parties concerned to identify matters important to them and to specify them in the agreement.
It would be churlish to spend all my time commenting on Conservative Members' excellent speeches and not remark on others. The hon. Member for Hemsworth, an expert on rhubarb and classics, entertained the House with an interesting speech.
The hon. Member for Hemsworth mentioned British Coal. My right hon. Friend the Minister had discussions about that matter with my right hon. Friend the President
Column 110of the Board of Trade. British Coal has written to the remaining tenants who have expressed interest. That matter is primarily for British Coal and the Department of Trade and Industry. We are closely monitoring the position and understand the sensitivity surrounding that matter. I hope that the hon. Gentleman takes some comfort from that response.
I welcome the support of the hon. Member for North Cornwall. Unlike some Liberals, he has not changed his mind since 7 December 1993, when he put on record his support for the measure. We must be charitable occasionally when we receive support. I am glad that the hon. Gentleman commented on the tax situation, which was a triumph of negotiation by my right hon. Friend, in responding to the genuine concerns expressed by farmers and landowners. It was important to ensure no fiscal barrier to more land becoming available. The hon. and learned Member for Montgomery (Mr. Carlile), who intervened briefly, cannot have his cake and eat it. The Bill is not about forcing county councils to sell smallholdings, although several of my hon. Friends advanced extremely good suggestions for ways in which councils could make use of those assets.
The Bill will cover all forms of farm business tenancy from the beginning of September. I hope that answers the hon. and learned Gentleman's point. He commented also on the RICS survey, which indicated the source of additional land. I welcome his analysis, and we will examine his point about tenant right. He also attacked Labour's attitude to that issue, which shows unanimity across the House. We want to know more of Labour's thoughts about that matter. It is possible that some of the concerns listed by the hon. and learned Gentleman could be dealt with in the tenancy agreement. The hon. Member for Meirionnydd Nant Conwy--
The hon. Member for Meirionnydd Nant Conwy spoke about planning issues. Where consent for improvements has been given by the landlord, it is possible for compensation to be paid to the tenant. If the landlord refuses consent, the tenant can refer the matter to arbitration. Clearly, there may be important issues of planning that reflect the tenant's own thoughts about developing the holding. I refer the hon. Gentleman to the Bill, where those matters are dealt with in considerable detail.
Column 111The hon. Member for Lancashire, West and I share at least one thing--we both know Mr. Heyes of Mossborough hall. The hon. Gentleman knows him as a constituent; I know him from my former incarnation in the horticulture business and have done business with him. He is an excellent salad and vegetable grower. I, too, have spoken to Mr. Heyes, whose enthusiasm for criticising the Bill has perhaps matured with time. My noble Friend Earl Howe, the Parliamentary Secretary in another place, and I had a meeting with him, at which we listened carefully to what he had to say.
The hon. Member for Lancashire, West mentioned the security of tenure. I refer him to clauses 1, 5, 6, 7, 16, 23, 24 and 25, all of which lock together a security of tenure once the landlord and the tenant have reached an agreement and which offer very good protection not afforded by many of the existing arrangements.
I think that I have already dealt with the point made by the hon. Member for Carmarthen.
I now deal with some of the substantive comments made by the hon. Member for Edinburgh, East. When I looked at the Opposition's approach to the matter, I could not believe my eyes. I read the document, "Encouraging new entrants into farming". I thought that it would be a voyage of discovery. Would there be some new truth in it that I had missed? I turned to the first page. One of its headings is, "Background". Then, "The Tory Response". It talks about "their"--the Tory--"plan". Clearly, Labour had not heard that the Country Landowners Association, the National Farmers Union, tenant farmers, young farmers and many others had helped to write the Bill. I continued reading this illuminating document. The next thing that I found was, "Land Tenure Legislation at Present"--a sort of description. I thought that it would be a brief summary, but, no, it runs on for the next two pages--I am still nowhere nearer understanding what the great plan is. I finally got to, "The Labour Party's Tenancy Reform Strategy", followed by "Structural Support for New Farmers". We have heard much this evening about retirement plans. Where will the money come from? As the hon. Member for Edinburgh, East said, the shadow Chancellor has not given him any right to spend anything, so any claims that the hon. Gentleman makes on that are as nothing.
The first part of the document talks about compensation. Where is the money to come from? It is yet another false agenda from the Labour party. The next part of the great document deals with quotas. The Labour party wishes to take away from those who have and create some pool of new quota. That is not supported within farming. I went through the rest of the document: rent, European aid, county council aid--I am still searching for the great Labour plan, but nowhere can I find it. What it eventually says is:
"the 1986 Act would be reformed and simplified".
I think that I am getting nearer the holy grail, but where is the detail of the reform, the simplification, the improvement, the factors that will attract new, young blood into agriculture? I have waited for hours this evening to hear the answers to those questions and we still have not heard them. All we have heard is a tatty, second-hand critique of the existing situation, which is the Labour party's own legislation.
Column 112The present arrangements do not serve farming well, as Marie Skinner said in an article entitled "Talking Point", in the NFU magazine. She said:
"Landowners cannot be forced to rent out land. They can be encouraged to do so".
She also said:
"There is a widely held misconception that security is vital if land is to be farmed well. However, the opposite is probably true. Too much security in an industry creates complacency and mediocrity."
We have heard complacency and mediocrity from Opposition Members; I commend that article to them.
As we reach the end of a thoughtful and well-argued debate, I am struck by the fact that members of the so-called new Labour party--the modernisers-- are behaving like Luddites. Young people who want to hang on to the dream of going into farming need the support of Conservative Members: they are not getting it from Labour. Question put , That the Bill be now read a Second time:-- The House divided : Ayes 177, Noes 129.
Division No. 64] [9.59 pm
Column 112Alexander, Richard
Arnold, Jacques (Gravesham)
Arnold, Sir Thomas (Hazel Grv)
Atkinson, Peter (Hexham)
Banks, Matthew (Southport)
Beith, Rt Hon A J
Beresford, Sir Paul
Bonsor, Sir Nicholas
Bottomley, Peter (Eltham)
Brooke, Rt Hon Peter
Brown, M (Brigg & Cl'thorpes)
Browning, Mrs Angela
Bruce, Malcolm (Gordon)
Campbell, Menzies (Fife NE)
Carlile, Alexander (Montgomery)
Carlisle, John (Luton North)
Cope, Rt Hon Sir John
Cormack, Sir Patrick
Currie, Mrs Edwina (S D'by'ire)
Davies, Quentin (Stamford)
Deva, Nirj Joseph
Douglas-Hamilton, Lord James
Duncan Smith, Iain
Durant, Sir Anthony
Evans, Jonathan (Brecon)
Evans, Nigel (Ribble Valley)