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5.50 p.m.

Lord Geraint: My Lords, we have listened to excellent speeches from both sides of the Chamber. They have all been very constructive and helpful. I congratulate the noble Earl, Lord Yarborough, on his maiden speech. I must say that he is very fortunate in

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being young, tall and handsome; he is very able and is capable of delivering a very short speech but one that is to the point on the issue today. I wish him the best of luck in his deliberations in this House for many, many years to come.

Each year we hold Liberal conferences in different parts of Britain; sometimes we go to Scotland; sometimes they are held in England, and sometimes in Wales. We have a "Welsh night", and on that particular night sing hymns, songs and arias. Every time we sing the old Lloyd George swansong, "The Land belongs to the People", which we repeat and repeat. Whether it has any effect on our policies these days I am not so sure, but we still sing it.

The noble Lord, Lord Cledwyn, reminded me of how things were at the turn of the century. My grandfather was a tenant farmer. He and my grandmother reared a family of nine, including my mother. She told me many times that my father had to vote for a particular candidate at the general election because if he did not do so he was afraid that he would be turned out. My grandmother did not do the same; she voted for another party. (There is no need to pursue which parties they voted for.) Those are the days that have gone by. Today, things have changed dramatically. In Wales in particular we have more owner occupiers than we have tenants. We are very proud of that--although in the majority of cases they have very small farms and they are part-time farmers.

We have to make sure of one thing: we are here to try to persuade landlords, to encourage them, to let their land. We cannot force them. It is their land. Therefore we have to introduce legislation. It should be our main objective to introduce legislation that will persuade landowners to let their land to the new young entrants that we have in this country. I am in favour of the reform. I declare my interest, as I have done many times before. I am a farmer and an occupier, and I live on the land. In my view that is the best occupation possible.

Today I hope that the Minister and others will forgive me if I "diversify" a little. I feel very strongly about the smallholding tenants in this country. In England, there were 5,044 tenants of local authority smallholdings as at 31st March 1993. At that date, the total area of land held by local authorities in England for smallholding purposes was 133,816 hectares. Looking at the three leading county councils in England, we should congratulate Cambridgeshire council: it has 16,914 hectares of land let to farmers. In Lincolnshire, the council has 10,125 hectares. In Norfolk 9,405 hectares are let. We should also congratulate Hampshire and Wiltshire, which have acquired another 189 hectares and 55 hectares respectively over the past few years.

What worries me more than anything is that we are to have local government reorganisation next year, especially in Wales. The Dyfed County Council has a very proud record of not selling a single council holding in that area. But next year or the year after, Dyfed County Council will come to an end, and revert back to three unitary authorities, of which I am in favour: Cardiganshire, Carmarthenshire and Pembrokeshire. I would like an assurance from the Government that they

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will do everything in their power to make sure that once the councils return to being unitary authorities--in Wales next year and in other parts of the country later--this policy will continue, and that the Government will urge the county council to carry on helping the local authorities and, if at all possible, give them extra financial assistance in order that more land could be bought by councils and let to young entrants.

As I said, I am in favour of reforming the Agricultural Tenancies Bill. We shall have the opportunity to debate and discuss the legislation at Committee level. There is one union which is against the present proposals. Although I am supportive of the NFU, the Tenants' Association, the young farmers' organisation and all the others which are united in their deliberations to reform the Agricultural Tenancies Bill, the Farmers' Union of Wales is not. I feel duty bound, as 40 years ago I was one of the founder members of the Farmers' Union of Wales and I have its brief with me, to quote a few passages from it in order to be fair to every side in this argument:

    "FUW policy is working-life tenancies to end when the tenant reaches 65 years of age".

There is a lot to be said for that policy.

    "(Such tenancies are frequently used by County Councils when letting their smallholdings.) Fiscal incentives are also required, plus a close scrutiny of the way grazing agreements and Gladstone v. Bower agreements are currently used".

The union goes on to say that,

    "It must be stressed that farming is a long-term enterprise"--

we all tend to agree with that--

    "particularly in the case of a traditional livestock farm. One has to plan ahead and make considerable investment in stock, machinery, quota rights etc. With short term lets, tenants would face constant uncertainty, unable to plan ahead.

    Looking into the 'crystal ball', FUW believes that the established farmer would gain, resulting in fewer farmers, larger holdings, and little hope for the young farmer/new entrant, to gain access to the industry. Banks could not support an entrant to the industry who only had a short-term agreement.

    There is a danger that, with short-term lets, onerous terms could be imposed. There is also a danger that entrants would accept any terms in their desperation to enter the industry (as witnessed by the high number of applicants for Council holdings).

    If it were possible to let farms and land on a short-term basis, then we fear that land could be exploited for short-term gain, but would result in long-term detriment to the land. This might well have repercussions for the environment and the countryside in general".

The union says finally that,

    "The farming industry provides the backbone for communities in rural areas. It is our view that, under the proposed new regime, the identity of such communities would be changed and the days of the small, traditional farm would be numbered".

I hope that, given the views of the farmers of Wales--although I disagree with some of their points, there are also merits in what they say--many of us on this side of the House will perhaps consider tabling amendments to coincide with the minority view on this occasion.

6 p.m.

Lord Gallacher: My Lords, I should like to begin by offering our congratulations to the noble Earl, Lord Yarborough, on his maiden speech. They may be

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somewhat belated, coming from the much maligned Opposition, but we congratulate him on what I am sure all your Lordships agree was a witty and erudite speech.

The Bill has the support of most sections of the agricultural industry, but there are certain exceptions. However, as such, it deserves to be seriously considered by your Lordships' House and I am sure that it will be. My noble friend Lord Carter has said that at Committee stage we shall table amendments in an attempt both to improve the Bill and to make it clearer. I am certain that other Members of your Lordships' House will do the same.

Perhaps more than most we are concerned that the Bill appears to be drafted on the assumption that tenants have a legal capacity to trade and to do as they wish unimpeded and unhindered by other factors. That is essentially the heart of the law of contract. But I respectfully suggest to the House that such considerations need serious qualification when one takes into account agricultural business tenancies. The rules which matter are not the rules devised by the Ministry of Agriculture and they are not rules arising from the laws of supply and demand. They are in fact the rules devised by the consent of the Council of Ministers on the basis of recommendations made to it by the Commission of the European Union. Those rules, regarding all aspects of farming, whether they be milk quotas, cereal production, stocking densities or whatever, dramatically affect the capacity of the farmer to farm. Therefore they seriously affect his ability to enter into tenancy agreements of a business character.

The landlords have welcomed the Bill. One appreciates the genuineness of that welcome. They would wish to see more rented land. Undoubtedly they would also wish to see more land available for rent at higher rates of rent. One of the submissions that we have received from one of the groups interested in this matter is that it would not wish to see regular rent reviews in which the rents consistently moved upwards. Again, account would have to be taken of factors such as prices negotiated in Brussels and, in particular, variables such as the important question of the conversion of the European currency unit green rates.

Young farmers are hoping--quite rightly in our opinion--that the passage of the Bill will increase the availability of farms for them. We are producing from our colleges and elsewhere a very large number of highly qualified people for whom the prospects of becoming farmers in their own right are not great. To the extent that the Bill gives them hope, their welcome for it is understandable.

In his peroration, the Minister seemed to assume that the law of supply and demand would be unleashed by the Bill and that we live in an era when free competition is to be stimulated and encouraged. But as was said, the fact of the matter is that Article 39 of the Treaty of Rome and the objectives set under that article for the common agricultural policy, are dominant in this matter and must at all times be taken into consideration. We know that the common agricultural policy determines what we may grow, rear or milk as well as what we are paid for doing so. In addition, there are set-aside, quotas and stocking densities. Indeed, the only remaining

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variable seems to be the weather. As Mark Twain is supposed to have said, "If you don't like the weather in England, wait a minute." I cannot speak for the weather in Wales, but we have certainly heard a great deal from Wales in the course of this debate.

When the common agricultural policy rules have to be uniform in 12 member states--soon maybe in 15 or 16 member states --where land tenure law is anything but common, taking into account such things as the Code Napoleon and so on, to draft an Agricultural Tenancies Bill without reference to the CAP is a considerable achievement. It reflects Her Majesty's Government's obsession with the free market and market forces. Where those genuinely exist, we say "Give them free rein"; where they do not exist, in our opinion it is dangerous all round to pretend that they do.

Milk quotas are a classic example of rule by Brussels based on the original advocacy of quotas by the United Kingdom. The Milk Marketing Board was abolished to prepare the way for a non-existent free market; one where Her Majesty's Government now seek "freedom" to buy unused quota from other member states. If, in addition, for example, the use of bovine somatotropin is legitimised throughout the Community during the currency of the present quotas, one can see more milk from fewer cows and new uses being sought for pasture land. That is but one example of non-commercial variables.

On the assumption that the Bill provides what Her Majesty's Government hopes for, will there be spin-offs? For example, will investment in agricultural land become more attractive to, say, pension funds, because of fixed term tenancies, or will such funds be put off by the prospect of more public access to land of which they are the owners?

The prospect of change of use is an intriguing part of the Bill. Clauses 17 and 18 require tenants seeking permission to get the landlord's consent to be eligible for compensation for improvements. There does not appear to be any appeal against the landlord's refusal of a tenant's desire to apply for a planning consent. The effect of that is to confer rights on the landlord at a time when, as the Bill itself recognises and as the common agricultural policy changes now encourage, changes of use are part of modern farming and are likely to increase.

In the matter of applications for planning consents, will landlords be able to apply and can third parties also make application? If so, it does not require much foresight to see such applications as farm business tenancies near the end of their agreed span. If big money is at stake, and sometimes that is so under planning law, the final years of a tenancy could be made difficult for a farmer. This could be compounded by the desire of local authorities to bring more of agricultural practice within the scope of planning laws. There appears to be some encouragement for that within certain government departments in this country.

Privity of contract is not a term much encountered in dealing with farm tenancies. It is an issue of considerable importance to certain retailers who were

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disappointed that a Bill on the subject was not promised in the gracious Speech. Privity of contract may be something for exploration at a later stage of the Bill.

A related matter is the development of a landlord and tenant code, which was instigated by the Department of the Environment this summer. I should like to ask the Minister whether MAFF is taking part in this review. We believe such a code to be vitally necessary under the proposals contained in the Bill.

Reference has already been made to the Royal Institute of Chartered Surveyors and its views about codes. We on these Benches believe that the Government themselves have a specific responsibility for such a code; indeed we may table an amendment to that effect at the Committee or Report stages of the Bill.

As we said, the Bill has been welcomed on many sides of the industry. As my noble friend Lord Carter said, we shall seek to improve the Bill at all stages where such improvements are possible. We already have support for some of the amendments from organisations which support the Bill. We believe that certain of the amendments that we shall table on our own behalf and argue under our own auspices will commend themselves to your Lordships' House.

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