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Lord Carter: We now have it very firmly on the record that the Government have succeeded in bringing forward an Agricultural—I emphasise the word "Agricultural"—Tenancies Bill in which a farm tenancy, to use the words of the Minister, does not have to comply with the agricultural conditions. The case rests. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 1 shall stand part of the Bill?

Lord Carter: I certainly do not wish to repeat the arguments used in the Second Reading debate; but as Clause 1 is central to the operation of the Bill, we now have a chance before we move into more detailed consideration to reflect on where we are and where we are likely to go. The point which primarily concerns this side of the Committee—indeed, almost solely as far as I can make out—is the danger that the Bill and its move towards simplification, deregulation, and so on, will tend to throw out the tenant with the bath water. That is our feeling.

I wish to introduce a brief quotation which was sent to me by the Farm Tenancies Action Group, whose motto is "Fighting to give tenant farmers a fair deal for the future". The quotation is as follows:

Those are the words in 1978 of the noble and learned Lord, Lord Hailsham of Saint Marylebone, who was speaking in his judicial capacity, I suspect upstairs, in a legal case. But the quotation puts the case extremely well.

Our detailed consideration of the Bill between Second Reading and today has confirmed our doubts. Perhaps I may deal immediately with the industry agreement which is continually referred to. I would suggest to the Minister in the friendliest way possible that it is not always the case that the leaders of an organisation or even a political party necessarily represent the views of all its members. Indeed, it is the case that even at the top of an organisation there are differences of view which are sometimes expressed on the television screen. Therefore, I hope the noble Earl will not make too much

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of the fact that, because there is an industry agreement, everyone in the industry necessarily agrees with the point.

I have already said that the tenant farmer action groups, the Farmers' Union of Wales and individual farmers have all expressed their anxieties about the possible results of the Bill if it becomes law. It is interesting to consider what might be described as almost the change of stance within the industry over a very short period of time. Only two or three years ago influential people in the industry were looking for a minimum fixed-term tenancy—we do not have that; they were looking for adequate compensation provisions to be part of the statutory framework—that has been achieved; they were looking for compensation for disturbance—which perhaps is in the Bill or perhaps not; they were looking for the 1986 Act rent formula and not the open market that we have. This has all changed within only two or three years.

They wanted clear statutory obligations for maintenance and repairs—it is unclear whether those are in the Bill; they wanted a statutory first option for the sitting tenant to accept the revised terms of rent at the end of his tenancy—they do not have that; and they also wanted a special provision to give some security for the tenant of a farmhouse. As we have just heard, they do not have that, either. We shall have to deal with this whole question at later stages of the Bill; but we are now discussing, as it were, the heart of the Bill and the definition of the tenancy—the whole business of the written and the unwritten agreement.

I know from discussions with the Minister that this is intended to be helpful and that the department would see the unwritten agreement, if it were not covered by the Bill, as a way around the Bill. The department believes that people would enter into unwritten agreements just to get around the Bill. That is unlikely. But if the unwritten agreement were excluded, presumably the tenant or the landlord would have to rely on the common law. They might be in a farm business tenancy; they might be under the Landlord and Tenant Act. Indeed, this point is made in paragraph 8 of the detailed proposals put by MAFF on the consultation.

I am interested to know why the Government rejected proposals by the Agricultural Law Association, which recommended that all agreements should be in writing. It is a small point but this is a good chance to raise it. Can a fixed-term tenancy of five years or more be underwritten under Section 52 of the Law of Property Act 1925?

The other argument for the Bill is that it will increase the number of new entrants into farming and a tenancy. We all know that young people have the quality of supreme self-confidence. They are sure that they will succeed and often the age of 40 seems so far away as not to be worth bothering about. In my professional experience I have seen too many examples of youngsters who have taken on a share or a partnership agreement on penal terms. They are taking a frightful risk with their health, to say nothing of their finances, just because they must farm. There is a real danger that we

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might see imprudent bidding for further term tenancies from that class of would-be farmer under the Act. I do not believe that there is any protection against that.

The central question is this: would most landlords let to these young tenants anyway? I believe that most agents and landlords would let to the devil they know. It would be the established farmer, eager to expand, who would bid for and get the neighbouring farm on some sort of term.

I referred to industrial organisations. For some time there were those who were promoting the idea of retirement tenancies. Those tenancies are certainly not in the Bill. They are a form of a term tenancy without a lot of disadvantage. They recognise the landowner's need to have a definite date for the end of the tenancy. A start was made with that in the industry only a year or two ago and it has changed quite dramatically.

If the slate is to be wiped clean—and this Bill certainly does that—the question to be asked is this. Why do the Government need, in the national interest, to have any involvement in the details of the legal relations between landlord and tenant? I am not saying they do not. But it is interesting briefly to explore why over a long period of years there has been intervention by government in the legal relationship between the landlord and the tenant of agricultural land. We can argue that it is for the protection of the supply of food; to ensure that natural resources are being used to the best advantage; in order to maintain the economic well-being of rural communities; and to remedy social injustice. I believe that the matter of the food supply can be left to the common agricultural policy and GATT, not the landlord and tenant legislation.

We shall have amendments later to deal with the resources. This Bill might militate against the best use of national resources in terms of conservation, and we shall deal with that. Concern for the environment is a compulsory element in the policy considerations of any western government and will remain so for many years to come. But, as I said, the landlord and tenant system is not the vehicle to enforce environmental policies. We do not want a Bill which makes that any harder, and this one may well do that. If short-term tenancies seem to result in farmers taking less care of the countryside or overfarming the land, there is certainly justification for government intervention in the relationship between landlord and tenant.

We all know that the rural community is not structured as it was when the first agricultural tenancy protection laws were passed at the end of the last century or as the situation was in 1947. Your Lordships will remember that it was a Labour Government who introduced for the first time security of tenure for tenants and the subsequent Acts of Parliament. I do not believe that we should surrender to the notion that the way should be cleared for the easy and swift growth of the mega-farm. I know that a great number of noble Lords opposite will agree with that. Despite the steady decline in the numbers of those engaged in the industry, agriculture is still a source of income for a substantial proportion of our rural population. That income is best

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protected by supporting the existence of a middle range of farms, which have been so heavily under threat in recent years and which will remain so.

I have dealt with the point about the flow of new entrants. There will be some well-intentioned landowners who will set part of their estates aside for letting to young new entrants. That will be an act of philanthropy. Higher rents, more capital input and better farming practice will result from a let to a neighbouring established enterprise or to a mature farmer who brings equipment and know-how from a previous farm. Furthermore, the whole concept of the farming ladder is seriously flawed for all but a minority, as several reports on council smallholdings have shown. We believe that the landlord and tenant relationship does have a relevance to the economic and social well-being of rural areas. The fact that this Bill leaves unmolested the existing arrangements under the 1986 Act is welcome.

I now return to the point of social injustice. I have said throughout, at Second Reading and in all the amendments which we are dealing with, that we are out to increase the security of the tenant. In many other areas of law such as consumer protection, the sale of goods, company law, housing and in business tenancies the state intervenes to ensure that the party in the weaker bargaining position is not commercially abused. I ask: why should farm business tenancies be an exception?

We are in agreement on all sides over the importance of providing incentives for landowners to let farms. The tenant must have sufficient security to enable him to earn a decent living. The right balance has to be struck between the power of the landlord and the tenant. All of us engaged in the industry know that the playing field is not level at the moment and that the scales are not even. The landlord has an advantage because there is a substantial number of farmers who would like to get into tenanted farming if at all possible. We have to make sure that the tenant farmer is protected under statute.

I have already said that farming is a long-term enterprise, particularly in the case of a traditional livestock farm. One has to plan ahead and make considerable investment in stock, machinery and quota rights. With short-term lets tenants will face constant uncertainty and they will be unable to plan ahead.

I remind the Committee of a point I raised at Second Reading. The RICS survey showed that 50 per cent. of both the occupied and the bare land units were expected to be let within the first two years of the five-year term or less. As I said then, that is short-termism with a vengeance. I believe that the established farmer will gain. The result will be fewer farmers, larger holdings and not much hope for the young farmer or new entrant to gain access to the industry.

If it proves possible to let farms and land on a short-term basis, we fear that land may be exploited for short-term gain which would result in long-term detriment to the land. I refer the Committee to the quotation from the noble and learned Lord, Lord Hailsham, with which I started.

In conclusion, I believe that the industry group which I have referred to, and which I am sure will be referred to again, is well intentioned but misguided. If this Bill

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becomes law I believe that there may be a re-ordering of the existing arrangements as regards the share farming and the contract farming, the Gladstone v. Bower arrangements and the rest of it. These are not the new lettings that we all want to see. I do not believe that they will come about. I believe that there will be a tendency to have fewer and larger farms. Our concern about the rural structure persuades us that Clause 1 should not stand part of the Bill.

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