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4.50 p.m.

Lord Elis-Thomas: My Lords, it falls to me, although with a voice which is not as strong as I should like, to second the congratulations from the Cross-Benches to the noble Earl, Lord Yarborough, on his contribution and to welcome him to this House. As a nominated Member, perhaps I may say that he provides some argument for the intelligence of the hereditary principle. But I shall not take that argument further this evening.

For me, the test of the Bill is its contribution to sustainability--whether it creates the concept for sustainable development as it applies to agriculture and what contribution it makes to that. Sustainability can be taken in different ways. There is the sustainability of the general environment, which must be our major context.

In that regard, I have an anxiety about the Bill; namely, that it does not talk enough about the environmental content of any agricultural tenancy agreements and new business farm tenancy agreements that are made. It will come as no surprise to the noble Earl on the Front Bench, because I have spoken on this theme before in this House, that I believe that we should write an environmental obligation into new legislation which has an environmental impact. Farm business tenancies are not just a matter for the free market between landlord and tenant. They have an environmental impact which should be registered. In that context, I am concerned that reductions in public expenditure which may be determined tomorrow in another place may have an impact on the very effective environmental agricultural schemes which have been produced by MAFF in England, the Scottish Office, the Welsh Office and the Countryside Council for Wales. The environmental contents of agricultural enterprises must be addressed.

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The other form of sustainability is that which applies to agricultural skill within communities. That is another form of sustainability. It is a cultural and generational sustainability. That was the traditional argument in favour of the previous legislation: that there should be a right of lifetime tenancy and succession on a basis of agricultural skill.

Those who have argued for the Bill on the basis of deregulation do not attract my immediate support because deregulation as a philosophy and as an effective form of management to me smells too much of an ideological position and not enough of a practical application. It may well be that when we are "contractorising" everything, we should be contractorising the management of agriculture. But it seems to me that we must have sterner arguments in terms of the effective use of the land resource and agricultural skills.

I am impressed by the fact that the CLA, the NFU and the Tenant Farmers' Association and the young farmers clubs have come together to produce this package. As someone who lives in Wales, I regret that the Farmers' Union of Wales did not feel able to subscribe to the package for its own reasons. I know that its policy is directed towards lifetime tenancy and in Committee I shall wish to support or move any amendments which seek to secure assurances from that viewpoint.

The Farmers' Union of Wales has a particular anxiety about the impact of the Bill on the livestock sector and areas where agricultural enterprise is perhaps based more on sheep and hill cattle. Therefore, in the context of the HCLA income position and environmental, market and other pressures, it is concerned that the Bill may bring about a further undermining of the viability of longer-term tenancies.

However, it seems to me that its argument is based on the fact that in principle it would want lifetime tenancies. If landowners feel unable to make such tenancies, then it seems to me that it should concentrate its argument more on the fiscal and general aspects of agricultural policy because after all, a tenancy is a freely agreed understanding between landlord and tenant. Therefore to try to legislate further for control over that area in a reducing market is to reduce the amount of land which will become available.

We must address also the other issue of sustainability; that is, how we can ensure that the longer-term performance of our agriculture industry is improved by the Bill. That is not just a matter of improving productivity. It is a matter of ensuring efficient productivity within environmental and social parameters. Again, we need to see the Bill in the context of the future of the common agricultural policy of the European Community and the future of environmental policy as it relates to the CAP and to look for ways in which to encourage diversification in the countryside in the most positive way possible.

I should like an assurance from the Minister that nothing in the Bill will prevent farm enterprise from diversifying. It seems to me that we are now in a situation in which we must look at countryside policy in a comprehensive way. We must say that agricultural

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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. All those aspects come together in the farming enterprise.

The farming enterprise is important because it provides a clear productive base in countryside life. If we can increase that prospect for younger farmers--and I think we have the support of younger farmers in doing that--we can create a context in which the countryside again will appear to be a sharp end of imaginative community life.

Far too often the countryside is produced and reproduced as an image of tradition, an image of the past and an image of practices that were inherited. For goodness sake, we must look to the 21st century! I feel that I speak here for the young farmers' clubs of Eryrys and other parts of Wales. We must look to the countryside as a place where young people will feel they want to live; where people coming from the city will feel they want to live; where people from outside Wales and other parts of the European Union will feel they want to live. We must see that in a European framework.

The countryside should not be seen as merely a repository for traditional practices. It must be seen also as an area where young people feel that they can invest and have a future. That requires a feeling of security; not just a feeling of security of tenure, but security of income and enjoyment of the facilities within the countryside.

For all those reasons, I have some reservations about the Bill which I shall wish to develop further as we talk it through. But basically I believe that we are now in a situation in which traditional forms of landlord-tenant arrangements no longer apply. However, we have what is, for me, the fundamental test of seeing the Bill in terms of its contribution to the sustainability of life in the countryside. That means security not just of tenure but security of income and the ability to contribute to countryside life, which again contributes to the broader life of the region and to the broader life of the diversity of urban and rural society.

4.59 p.m.

Earl Peel: My Lords, I am aware that there are some who are not perhaps as happy about this Bill as others. But I believe that the majority of people who have an interest in the well-being of the countryside warmly welcome it. Like my noble friend Lord Stanley, I was rather disappointed in the reaction that I heard from the noble Lord, Lord Carter, on the Opposition Front Bench. However, I was, perhaps, a little encouraged when the noble Lord, Lord Cledwyn, said that he would pay "constructive attention" to the Bill. I very much hope that we can expect constructive attention from the Benches opposite. I believe that through the Bill we have a very real chance, as the noble Lord, Lord Middleton, said, of actually bringing something forward which will really help bond the landlord and tenant system for the future. That is what we are talking about.

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Congratulations are due to the Government for acting so positively, and also to all sides of the industry for coming together in the way that they have. I know that it has not been easy. I know that many a meeting has gone on long into the night to try to produce this balanced package. I congratulate everyone on having produced such an acceptable Bill; and special attention is due to the Royal Institution of Chartered Surveyors which has done so much in such an impartial way by acting as honest brokers.

As has already been identified by many speakers, there is a need for change. As we all know, agriculture is going through a difficult time. There are the uncertainties surrounding the agricultural policy and the flexibility of GATT. Unless there is a real will and a realism from all sides of the industry for flexibility and dynamism I believe that the traditional land tenure is under threat. The fact that there has been such an increase in Gladstone v. Bower agreements is a testimony to that. As my noble friend the Minister said in his opening speech, conditions must be right for landlords to let land. That is absolutely fundamental to the whole question. That reality is every bit as important as the other realities mentioned by noble Lords opposite.

The 1976 Act, which worked--and I can only describe it in this way--so effectively against market forces, put the landlord-tenant relationship into a strait-jacket from which it has been trying to escape ever since. We had the various Acts of the 1980s and no doubt they helped considerably. But this Bill addresses, for the first time, the problems in a thoroughly comprehensive way. As the noble Lord, Lord Northbourne, said, it treats both parties in a grown-up fashion. That is why I believe that the noble Lord is absolutely right: it identifies the real strengths of the Bill.

The landlord-tenant system has proved the test of time, despite efforts to derail it. As the noble Lord, Lord Middleton said, it has provided opportunities for young people--and those not so young--to enter farming at a comparatively low cost. It has also given those who want to let land an effective means of having that land managed. But, as in any relationship, for that relationship to work, whether it be business or personal, there must be confidence. That confidence comes from flexibility on both sides. I believe that that is what the Bill creates.

The number of acres occupied by tenant farmers has declined rapidly, as was mentioned by many speakers, thus producing a reduction in the number of those entering into farming. I believe that that needs to be addressed, not just in simple farming terms but also as part of an overall desire to establish more permanent jobs in the countryside.

The RICS predicts that an extra 1 million acres will become available to let--and this is somewhat different from what was said by the noble Lord, Lord Carter--

    "soon after the Act comes into force".

I hope that the institution is right. I have to say that, like the noble Lord, I am a little sceptical about it. I suspect that there will be relatively few extra farmers created. I

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should have thought that short term tenancies, to which reference was made, will be taken up either by existing tenants or by owner-occupiers. However, I do not believe that that matters. Clearly, some people will come into the industry for the first time. Surely that is to be welcomed. But I fear that the decline in agricultural holdings, the increase in size brought about by market forces and the need for economies of scale are bound to happen. The long-term prognostications for the number of people on the land is bound to drop.

There is a further point that I should like to make which I believe has been referred to by virtually every speaker. I refer to the absolutely essential matter of tax incentives. All we are asking for is that let land and in hand land be treated the same. We are not talking simply about income tax schedules; we are talking about capital gains tax and inheritance tax. I am sure that my noble friend on the Front Bench is only too aware of the strong feeling that exists on the matter. I very much hope that he will--and I am sure he will--mention that to his right honourable friend the Chancellor of the Exchequer. Of course, it is a little late for tomorrow, but at least we can but ask.

Inevitably, there are certain aspects of the Bill that are contentious. Indeed, there are one or two points about which I am not particularly happy. For example, I came across the term "intangible advantages". I suspect that that will need tightening up. Equally, I am somewhat concerned about the compensation for planning permission. It is a tricky subject which, unless dealt with carefully, could end in difficulties in the future. However, I know that the latter are important matters of detail which will be dealt with later in Committee.

It is most important that the Bill should be perceived to be fair. By and large, I believe that it is. Our overriding need is clearly to strive for a balance which will work to free up the agricultural industry. I believe that that has been achieved through the Bill. As I said, I also believe that all parties should be congratulated. I very much hope that the Bill will achieve what I believe it can achieve.

I conclude by pleading with the Opposition to take this opportunity to bring both sides of the industry together so that we have something which we can all work towards in the future, thus giving confidence to both landlord and tenant.

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