`For the purposes of this Act and the 1949 Act, occupation of agricultural land by a Scottish partnership shall, notwithstanding section 4(2) of the Partnership Act 1890, be treated as occupation by each of the partners.'.—[Mr. O'Neill.]
§ Brought up, and read the First time.5.54 pm
§ Mr. Martin J. O'Neill (Clackmannan and East Stirlingshire)
I beg to move, That the clause be read a Second time.
By proposing new clause 1 the Opposition are seeking to take account of an anomaly which was drawn to the attention of the Scottish Grand Committee on Second Reading and which we pursued in Committee. During our consideration of the Bill in Committee the problem of partnerships in the occupation of agricultural land emerged. It is a problem that has become increasingly common in recent years, because while the level of owner occupation of land has remained constant, the level of tenanted land has fallen by about 5 per cent. during the past 10 years.
There has been an increase in the non-traditional holdings of land. We wish to draw the attention of the House to these non-traditional holdings of land. We should like to ensure that the rights enjoyed by what can only be called "junior partners" in these agricultural partnerships are protected. It has become apparent that when holdings and leases become available they do so in many instances as partnerships, where a large estate is prepared to introduce into partnership a young farmer who is willing to forgo many of the traditional rights of a tenant for the opportunity of participating in his first farm.
We believe that the clause will go some way to protect the rights of the junior partner. We feel that while the arguments advanced in the Northfield report are not without substance they would perhaps result in the ending of partnerships if we were to seek to outlaw them under the Bill. Nevertheless, we feel that it is important that the individuals who have entered into these agreements, primarily because of the absence of any other means of entering farming, should not be disadvantaged as against the rest of the tenants wanting to participate in Scottish agriculture who have been able to obtain, by whatever means, access to land through leases.
We hope that the Minister, having had some time to reflect on the matter, will find this improved clause acceptable and will take account of what could well become an increasing problem in Scottish agriculture—the young man or woman who wishes to participate in farming but does not have the resources to buy or does not have access to a holding and who is therefore virtually forced into accepting the offer of a holding from a large estate on what can often be regarded as extremely unfair terms. Therefore, in the interests of equity, we wish the 455 Government to accept the new clause in its new and improved form. We think that it will go some way towards meeting the objections that the Government raised in Committee.
We do not regard this problem of partnerships in quite the sanguine way that Northfield—which has been our bible as we have moved through the Committee—does. We think that it is a problem that has to be considered, if for no other reason than that it is most unlikely that we shall return to this subject in the House in the foreseeable future, even after the return of a Labour Government. It is a problem which we must solve now. We have to accept the changing conditions in agriculture, and one of the trends which has developed and which we believe will increase is the use of agricultural partnerships, especially for younger people entering farming. We feel that their rights should be protected and we believe that the new clause will go some way towards providing the sort of protection which they expect.
§ Sir Hector Monro (Dumfries)
Will the hon. Gentleman tell us what the new clause does relative to the present situation, so that we can have a debate on it?
§ Mr. O'Neill
I was endeavouring to be as brief as possible. We rehearsed the argument, but it may have been on one of the occasions when the hon. Member was not in the Standing Committee.
We wish the partners in an agricultural partnership to have a right of tenure and to the kind of protection under the leases which partners in other tenancies enjoy. This is a kind of quasi-tenancy because of the uneven balance between the two parties in the partnership, where one of them is in effect the landowner and the other becomes a sort of partial owner, with very few other rights. We seek to establish the rights of the tenant in the way that I have suggested.
§ Sir Hector Monro
I am grateful to the hon. Gentleman for elucidating what the new clause, which is really an amendment, is about because it shows straight away that if it were approved a large proportion of this Bill would become pointless. We should be back to square one relative to providing new tenancies, because obviously partnerships would become very much less popular if the new clause were accepted.
I think that we all realise, from the lengthy deliberations that we have had on the Bill, that there has been a very steady drop, now becoming a dramatic drop, in the number of farms available to let. This, of course, has been largely due to changes in capital taxation and the impossibility of landowners' gaining possession of their own farms, often when their need is particularly great. It is this issue of the possession of farms that is crucial to the Bill, and particularly to the new clause.
The hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) has highlighted the fact that he feels that the partnership idea is unfair to the partner who is going to work and run the farm. I think that he is wrong in that assumption, both from my own point of view and from the number of partnerships that have been set up in Scotland. The reports that I have had on them are particularly favourable. This arrangement has given an opportunity for many young and able farmers to obtain the tenancy of a farm through the partnership system without 456 the use of the very large capital sum which is almost inevitable now whether one is buying a farm or becoming a tenant.
The implied criticism of the partnership scheme needs to be answered, because in effect the estate sets up the partner in business and provides perhaps a quarter of the capital required— which may be £20,000 or £30,000, and I have even heard of as much as £60,000. The farmer, with all that assistance and help, is able to run the farm as a working partner.
Profit sharing is, of course, on an agreed basis and, from what I have heard, seems to be reasonably equitable. The farmer has the first share of the profits up to, say, £4,000 or £5,000. Thereafter profit is on the basis of equal shares. There is a third tranche, which is again on a percentage of the gross sales. I emphasise that the estate normally gets nothing until the partner has had his first share of the profits. If there is a loss, it is shared equally.
In the estate company that I am talking about, Buccleuch Estates — a very able company running largely in my constituency and, of course, in the constituency of the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel)—the farming partner is there for five years and thereafter on an annual basis.
It has to be accepted that a person goes into a partnership with two considerations in mind. First, it is entirely voluntary, and, secondly, he goes into the partnership on a basis of trust—trust that if he maintains good husbandry and the farm is running well there is no likelihood of the estate's wishing to close the partnership after the five years. And it will, of course, be continued on an annual basis. Trust and confidence between the estate and the partner are vital, and no good estate would ever want to regain possession if the farm was being well looked after by an able partner.
In Buccleuch Estates, I understand there are about 24 partnerships, so obviously this scheme is working satisfactorily. No partner has come to me and said that the arrangements made between the estates and himself are unfair. This has been going on for about seven years or more and has enabled many able young men to get into farming.
§ Mr. O'Neill
From his detailed knowledge of the Buccleuch Estates, can the hon. Gentleman tell the House how many tenancies have been withdrawn from the market to be reformed in the shape of partnerships?
§ Sir Hector Monro
When a farm comes up to be considered for a partnership the previous tenant will have left the farm, of course. It must be vacant possession, because it is impossible to turn out an existing tenant in order to set up a new tenancy, so a new situation is started with a partnership.
I think that it is wrong for Opposition Members, whether in Committee or in the short speech by the hon. Member for Clackmannan and East Stirlingshire today, to knock the idea of partnerships, because these have brought new men into farming and this is as likely to be as effective as the provisions in the Bill in making more tenancies available, which is what the Scottish landowners and the National Farmers Union of Scotland want to happen. To attack one of the arrangements that can bring new men into farming seems to me to be very unsatisfactory and most undesirable.
We want to maintain the structure of tenanted farms. There is an opportunity, through the partnership scheme, 457 to do just that. After all, there will be little desire on the part of the estate to regain possession unless it can see some of the worst things on the horizon occurring, such as land nationalisation by the Labour party or a form of capital taxation, which might make it absolutely essential to regain possession.
We have to keep in mind all the time in the farming structure of Scotland the value of estates to farming and the rural economy. The farming companies and the big estates provide foresters, tradesmen, builders, stonemasons, drainers and so on with an immense amount of highly expert management, which is available to the tenants or partners. Within partnerships in the big estates there are other benefits, such as bulk buying of feeding stuffs and fertilisers. Another aspect that people tend to forget is the opportunities in large estates for access to the public, which is now becoming more important as people enjoy recreation in the countryside.
The key thing is that partnerships must be ones of mutual trust between the estate company and the farming partner. I see no reason why we should try to devalue that scheme by the new clause. I hope that my hon. Friend the Minister, who put the case so admirably for the scheme that was agreed by the Scottish landowners and the National Farmers Union of Scotland, will reject the new clause, because it will not in any way help to bring more people into farming.
§ Mr. John Home Robertson (Berwick and East Lothian)
The House will be indebted to the hon. Member for Dumfries (Sir H. Monro) for advancing the difficult case on behalf of landlords who use this ploy. Evidently, he has been well briefed by the factor's office in the Buccleuch Estates, which is in his constituency. I think that the hon. Gentleman has let the cat out of the bag. In reply to an intervention by my hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. O'Neill), he admitted that in future new lets on the Buccleuch Estates, as in so many others, would not be carried out under the terms of the Agricultural Holdings (Scotland) Act 1949 and the Bill that we are discussing. On the contrary, the farms would be let in the form of a partnership, which effectively avoids the protection of tenants.
§ Sir Hector Monro
I would much rather that the hon. Gentleman did not put words into my mouth. All I said was that partnerships could not begin until there was vacant possession. I did not say that every farm that had vacant possession would become a partnership.
§ Mr. Home Robertson
I am grateful to the hon. Gentleman for clarifying that point. If he reads his speech in Hansard, he will be able to check what he said. I have the impression that what is happening on the Buccleuch Estates, as on other estates, is that when there are new lets they are not under the terms of the tenancies under the agricultural holdings legislation, but in the form of partnerships.
The Bill has been dressed up as a provision that will re-establish the tenanted sector. As the hon. Member for Dumfries said, it is the product of negotiations behind closed doors between the Scottish Landowners Federation and the National Farmers Union of Scotland. The Minister defended the package through thick and thin in Committee. Evidently, it will be difficult for anyone to 458 insert constructive amendments into the package, which is a pity, as there is a wider interest in land tenure in rural Scotland than the interests of those in the Scottish Landowners Federation and the NFU of Scotland.
If the new clause is not accepted, the Bill will be fairly superfluous. As has already emerged from our discussions, landlords and their agents have well and truly discovered and developed a device of bogus partnerships whereby farms are let, not to tenants, but to an entity, which is a partnership between the landlord and the tenant. It has been described by many people in Scotland as a system that is little better than share cropping. It effectively drives a flock of sheep through all the provisions of the agricultural holdings legislation, which is supposed to protect tenants' security and control their rents.
The Minister took it upon himself in Committee to advise prospective tenants not to enter into those medieval arrangements, which leave tenants with rights that are little better than those of feudal serfs. However, the fact is that prospective tenants have no choice. When a farm is available to let, they find that it is available to let only to a partnership. As there are far more prospective tenants in Scotland than farms available to let, prospective tenants cannot pick and choose, but take what the landlord is prepared to offer. In all too many cases, the partnership is bogus.
In Committee I cited instances of those arrangements. As the hon. Member for Dumfries has explained, when Scotland's biggest landowner, the Duke of Buccleuch, lets farms nowadays, he does so on the basis of one of those partnerships. I have a copy of the particulars of let, to which I referred in Committee. It lists all the normal particulars of farms available to let. The catch-all clause, headed "Partnership", states:The successful applicant will, prior to the date of entry, enter into a Participating Partnership with a Buccleuch Estates Limited Subsidiary Company to take a lease of the farm.The Partnership would be on the usual Estate form of Participating Partnership Agreement, a pro forma copy of which may be seen at the Estate Office by intending applicants.Whether prospective tenants like it or not, unless we accept the new clause, they will be stuck with those partnerships, without protection, rather than the tenancies that we would like to see in rural areas of Scotland.
Whatever the hon. Member for Dumfries and other supporters of the Duke of Buccleuch might say, I can say with confidence, having met tenant farmers, secretaries of NFU branches and other people all over Scotland, that the system is bitterly resented by tenant farmers in Scotland. It is deliberately and blatantly designed to circumvent the wishes of Parliament about the status of Scottish farming tenants. I suppose that it would have been too much to expect the Government to address themselves to this problem, because to do so would be to dispute the interests of Tory supporters in the Scottish Landowners Federation. It is too much to hope that the Minister or his noble Friend the Minister of State would do anything as enlightened as that.
I fear that the failure to take this problem on board could render the Bill, which has been heralded as the new dawn for Scottish tenant farmers, a giant flop. It may be a long time before the House has another opportunity to discuss the matter. I support the new clause. I hope and believe 459 that before long a Scottish Parliament will be able to frame completely new legislation covering the whole land tenure system in rural Scotland.
§ The Under-Secretary of State for Scotland (Mr. John MacKay)
In Committee we had a lengthy discussion on farming partnerships, and we have by and large ploughed the same field today. The hon. Member for Berwick and East Lothian (Mr. Home Robertson) has ploughed the field just as badly as he did in Committee. I only hope that his rolling acres on the border are not ploughed half as badly as he has treated this subject both here and upstairs.
I accept that there is a considerable range of partnership arrangements and that some might not be as satisfactory for the working partner as others, but I do not accept that all those who enter farming by means of a farming partnership do so on impossible conditions imposed by the kind of ruthless landowners that seem to bedevil the hon. Member for Berwick and East Lothian.
The Northfield committee of inquiry into the acquisition and occupancy of agricultural land, which reported in 1979, looked into the question of farming partnerships. It found that in many cases partnerships worked well in practice and concluded that legislation to regulate partnerships was not justified. The Government share Northfield's view and are opposed in principle to legislate to end farming partnerships.
The new clause would effectively end partnerships and almost certainly encourage landowners to take the land into their own hands or to find other ways of having quasi tenancies, as Northfield suggested might be the case. The new clause would not, therefore, lead to any increase in the let sector and would effectively eliminate the opportunity that exists, as my hon. Friend the Member for Dumfries (Sir H. Monro) pointed out, for people to enter farming under a partnership agreement.
As we have had a brief debate here and a much longer debate in Committee, I hope the hon. Member will withdraw the motion.
§ Question put and negatived.