§ 4.13 p.m.
§ Lord MELCHETT
My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
§ Moved, that the House do now again resolve itself into Committee.— (Lord Melchett.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The EARL OF List-own, in the Chair.]
§ Clause 21 [Opportunity for landlord to obtain Tribunal's consent to operation of notice to quit]:
§ Lord MIDDLETON moved Amendment No. 22:
§ Page 28, line 15, leave out (" Subject to subsection (3) below ").
§ The noble Lord said: I spoke to this Amendment when speaking to Amendment No. 13, which was accepted by the Government. I therefore move it form-ally.
§ Lord MELCHETT
I am delighted to be able to start the proceedings off in a good vein. I am happy to accept this consequential Amendment.
§ On Question, Amendment agreed to.
§ Lord MIDDLETON moved Amendment No. 23:
§ Page 28, line 23, leave out subsection (3).
§ The noble Lord said: The same remarks apply to this Amendment as applied to the previous one. I therefore formally beg to move.
§ On Question. Amendment agreed to.
§ 4.15 p.m.
§ Earl FERRERS: moved Amendment No. 24:1400
§ Page 30, line 15, at end insert—
§ (" (9) The tenancy to which such a direction entitles the person or persons concerned shall have effect as if the terms of the tenancy included—
§ (i) a covenant by the tenant to pay to the landlord an ingoing payment equal to the sum paid or payable by the landlord on the termination of the tenancy of the deceased in respect of:
§ (a) any of the items listed in the Second, Third or Fourth Schedules of the 1948 Acts; and
§ (b) the adoption of a system of farming for which compensation is payable under section 56 of the 1948 Act; and
§ (c) an away-going crop or any terminal compensation payable by the landlord under any custom or agreement save for game damage compensation. and
§ (ii) a covenant by the landlord to pay to the tenant a sum equal to any compensation recovered by the landlord on the termination of the tenancy of the deceased in respect of any such dilapidation, deterioration or damage to any part of the holding or anything in or on the holding as the tenant is liable under the terms of the tenancy to make good.")
§ The noble Earl said: We are getting on well and I hope that we will be able to continue today in the same vein. I am hopeful that this Amendment will be approved because it covers a point which I think has been overlooked in the Bill. It seems a formidable Amendment but it is really quite simple. It refers to the ingoing payments which are made on the granting of a new tenancy. At present when a tenant dies it is the practice, and indeed the statutory obligation, for the landlord to pay compensation to the deceased tenant's executors for tenant right matters such as growing crops. unexpired manurial values, improvements and so on. When a new tenancy is drawn up the ingoing tenant will clearly benefit from these tenant right matters, and so it is the practice for him to reimburse the landlord on taking on the tenancy. This is done by negotiation between the landlord and the new tenant; it is agreed between them and forms the basis of the new tenancy agreement.
§ Under normal circumstances, the new tenancy is drawn up by agreement, but under the Bill the new tenant does not get his tenancy by agreement. He gets it by direction of the Agricultural Land Tribunal and it is therefore specifically without agreement. As the Bill is drafted, the landlord will, under the 1948 Act, have to pay compensation to the deceased tenant's executors for improvements and 1401 tenant rights, and the landlord will be powerless to claim any of this back from the new tenant. The tenant could say, " I have this new tenancy. I have it by direction of the Agricultural Land Tribunal, and I am not going to pay the landlord a sum of money for what he calls residual manurial values. What are they? I have a tenancy to cultivate the soil, in whatever condition the soil happens to be." Having got his new tenancy, the tenant could then use the landlord's assets, for which he has paid the deceased tenant, without reimbursing him. I do not think for one moment that that is what is intended and the Amendment seeks to put the position right. And to be quite fair, the Amendment provides for the landlord to pay over to the new tenant any compensation for dilapidations for buildings for which the new tenant will be responsible and which compensation the landlord will have received from the deceased tenant's executors. I beg to move.
I hope the Minister will accept this or a similar Amendment because it is an extremely simple point, so simple perhaps that it has been overlooked. It would be manifestly unfair, indeed absurd, and not in the interests of the agricultural industry if the landlord paid the outgoing tenant for all those matters, by custom, agreement and Statute, and could not get it back from the ingoing tenant. I daresay that the noble Lord, Lord Melchett, will say that he accepts the principle of the Amendment but wants to redraft it.
In this connection, perhaps I could mention to him an ingenious suggestion that has been made by the Agricultural Law Association which would deal with the problem in a different way and which, at the same time, would get over other problems involved in the creation of a new tenancy. The Agricultural Law Association has suggested that instead of creating a new tenancy, which is what the Bill does, the old tenancy should be vested by a vesting order in the successor. They suggest that course rather than for it to be terminated and a new tenancy created. They point out that vesting orders are well known to the law. I am not a lawyer and I do not know the force of that argument, but it seems to me to get over other problems, including the 1402 difficulty of an incomer establishing his financial status, because that financial status is not known until such matters as dilapidations, tenant right and so on have been settled.
The Amendment of the noble Earl, Lord Ferrers, which I wholly support and which has been drafted by a lawyer with the help of a very eminent surveyor, looks to me to be all right. As I say, it is a very simple point, but there may be difficulties of which I am unaware. However, the other difficulties raised by the creation of a new tenancy instead of making the change by means of a vesting order may be something which the noble Lord would like to look at.
The Earl of CAITHNESS
This Amendment is different from anything we have so far discussed in Part II of the Bill. It deals with matters that form a specialised field within the agricultural industry and which, although very important, are among the less well known and understood tasks of some land agents. The Agricultural Holdings Act 1948 clearly entitles the outgoing tenant to compensation for certain improvements at the end of the tenancy, but only at the end of the tenancy. This was entirely just, as the compensation was paid to the person who was obtaining occupation of the land and, thus, the benefit from the improvements—the landlord. The principle that the person who benefits from the improvements should be responsible for paying the compensation must, in all equity, continue. That means, in effect, that the incoming tenant claiming under the provisions of this legislation must reimburse the landlord any monies paid by him to the outgoer for improvements.
The matter before us is not a mere technicality, but is of vital importance to both landlords and tenants. Compensation frequently runs to tens of thousands of pounds on larger units. Before adding my support to the Amendment, however, I should like to make a further point in relation to dilapidations. The proposed new clause is morally just and has the support of the CLA and legislates for the already common practice, in that the landlord pays over dilapidation monies to the incomer. It has been my experience on more than one occasion, however, that dilapidation monies have been paid to the incoming tenant in good 1403 faith by the landlord but the tenant has failed to carry out the remedial works until legal proceedings have been taken. That situation must be legislated against, particularly now that the selection of tenant is to be more remote. I should like to see the second part of the Amendment brought into line with an increasingly common practice whereby the money is only passed over to the incomer once the remedial work has been done, or in agreed instalments. If necessary, application could he made to an arbitrator if there were any dispute on this point.
I should welcome the Government's view of this matter and, should the Amendment be agreed, I reserve my position to table an appropriate qualifying clause bearing in mind two points: first, if the Amendment is agreed as it stands, a tenant who still might not do the work would be able to sue a landlord for breach of covenant if the money was not paid over to him and, secondly, on the implementation of Clause 12 of the Bill, it will be harder for the landlord to secure a notice to quit under Section 24(2)(d) of the 1948 Act.
§ Lord MELCHETT
May I say straight away, in keeping with what I hope has been the mood on both sides of the Committee while we have been dealing with this Bill, that I am happy to accept the Amendment in principle. it has been made clear on several occasions that the tenancy to which the successful close relative succeeds will be a new tenancy. This is made clear in the Bill by the side-heading to Clause 23. It was never our intention therefore that the family succession provisions should interfere with the normal flow of ingoing and outgoing payments between landlords and tenants.
Nevertheless, I agree with the noble Earl that there is a risk that the successful applicant may seek to evade handing over the ingoing moneys to the landlord. An Amendment is clearly necessary to deal with this and with the payment by landlord of the dilapidation money. My Department is already in touch with the CLA and the NFU and I should like to give an undertaking that the Government will introduce their own Amendment on Report stage. I will ensure that the consultations with the CLA and the 1404 NFU cover the points raised by the noble Lord, Lord Henley, and the noble Earl, Lord Caithness. I hope that noble Lords will agree that it would be wise to give us the chance to consult with outside interests before an Amendment is made to the Bill.
I am very grateful to the noble Lord, Lord Melchett, for saying that he agrees in principle with the Amendment. This is clearly something that has been overlooked. It may be only a small point but, as the noble Earl, Lord Caithness, said, this could run into a number of problems. I hope that it will be possible in the discussions which the noble Lord is to have to try to put the provision at a place in the Bill such as I have suggested where it will become part of the tenancy agreement and will not necessarily be subject to the Agricultural Land Tribunal or the arbitrators, because I believe that this would bring in a new stage and, again, would cause a degree of uncertainty. What we are really saying is that the principle is fairly simple: if a landlord has paid out or has received from an outgoing tenant a certain sum of money, he should pay that over to the incoming tenant. I am very grateful to the noble Lord for having considered this with approbation. I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 21, as amended, agreed to. Clause 22 agreed to.
§ Clause 23 [Arbitration on terms of new tenancy]:
§ 4.27 p.m.
§ The Earl of ONSLOW moved Amendment No. 25:
§ Page 31, line 2, leave out (" but not question (b) ").
§ The noble Earl said: With the permission of the Committee, I should like to speak to Amendments Nos. 25 and 26 together. These Amendments are intended to correct what appears to be a drafting error. Under this clause, after direction has been given entitling an applicant to a tenancy either party can refer to arbitration two questions: question (a), which deals with the terms of the tenancy, and question (b), which deals with the rent properly payable. 1405 One or both questions may be referred. However, subsection (4), in guiding the arbitrator as to how to deal with the questions, only takes the case where (a) and not (b) is referred to, and where (b) and not (a) is referred to. It would seem, therefore, that subsection (4) does not apply when both questions are referred to. Surely that is not the intention.
§ This is a matter which I find fiendishly complicated and difficult to understand, but there seems to be a misunderstanding here. I hope the noble Lord can clear it up. If, when we are studying the Bill, we cannot understand it with great clarity, perhaps he will wish to make sure that we can understand it. I beg to move.
§ Lord MELCHETT
I am grateful to the noble Earl for that explanation of his Amendment. However, I think that there is some misunderstanding about the purpose of subsection (4). It simply gives alternative procedures when one or other of the two matters mentioned in subsection (3) is referred to arbitration. The words in subsection (4) which would be deleted by these Amendments are necessary to make it clear beyond doubt that, when the sole question referred to arbitration relates to variations in the terms of the new tenancy, only paragraph (a) of the subsection will apply, and, when the sole question is that of rent, only paragraph (b) will apply. Paragraph (a)(ii) specifically empowers the arbitrator to vary the rent of the holding if it appears to him that it would be equitable to do so because of any variation made by him in the terms of the tenancy under subparagraph (i). If both questions are referred to arbitration under subsection (3)—and I believe it was this that particularly concerned the noble Earl —then subsection (4) does not apply because, in this situation, it is not necessary to prescribe alternative procedures for the guidance of the arbitrator. The award will cover any variations in the terms of the tenancy and the rent properly payable for the holding. I hope that that explanation has made the mind of the noble Earl a little clearer and that he will be able to withdraw the Amendment.
§ The Earl of ONSLOW
I shall certainly look at what the noble Lord said. I hasten to say that this is a terribly complicated and difficult matter to understand. 1406 If after I have looked at what the noble Lord said, I find it is not sufficiently clear I might return to this matter on the Report stage. In the meantime, I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ Clause 23 agreed to.
§ 4.30 p.m.
§ Lord SANDYS moved Amendment No. 27:
§ After Clause 23 insert the following new clause:
§ (" Glebe Land
§ . This Part of this Act shall not apply to glebe land or to tenancies thereof.").
§ The noble Lord said: This Amendment is concerned with glebe land and I wish to introduce it with an explanation. Today, in 1976, glebe land is thought to amount to approximately 160,000 acres; that is the nearest accurate figure I have been able to obtain. As your Lordships will be well aware, this land is managed sometimes by the incumbent of a benefice himself or sometimes by a diocesan board of finance. It is applied wholly for the benefit of the Church and the incumbents and it can be regarded as charitable land of the very first order. The aim of the Amendment is to disapply Part II of the Bill in relation to all glebe land.
§ I should like to draw the attention of your Lordships to two matters which will be within your recent memory. The first concerns the Community Land Bill (as it then was) last year and the second, its ugly sister, the Development Land Tax Bill which is at present before another place. I turn first to the question of the law of ownership of glebe land when a benefice becomes vacant, and it is here that we find one of the fundamental reasons why we believe that it would be a good thing to disapply glebe land from Part II of the Bill. Let us suppose that a benefice falls vacant and that, as often happens, there is a period of time—it may be a few months or even longer—before the new incumbent is appointed; or, alternatively, there may be a reorganisation within the diocese, uniting the number of benefices. At all events there is a gap in time. Furthermore, let us suppose that during that gap, be it short or long, a tenant died. That would have a very serious consequence, because if glebe land came within the 1407 provisions of Part II of the Bill, hardship would undoubtedly be caused to the family concerned and it might give rise to litigation and all the consequences that flow from that situation.
§ A second, and equally compelling, reason to disapply glebe land is the question of the situation in which the Church finds itself today. It is in desperate need of financial support—I do not think that any noble Lord in any part of the Chamber would disagree with that statement—and what it needs is fertiliser, not poison. We on this side of the Committee believe—and perhaps we may receive some support from other parts of the Chamber—that the result of glebe land being incorporated within the provisions of Part II would be unsatisfactory, to say the least.
I should like to refer to what the right reverend Prelate the Bishop of London, said in a series of very notable speeches last year. Your Lordships will recollect that on 4th November we were discussing Amendment No. 31 on Recommitment, in order to attempt to persuade the Government that it would be a very good idea to exclude Churches and charities from the provisions of the Community Land Bill, as it then was. On that occasion the Government were wholly obdurate, and despite a very wide measure of support from your Lordships, they were unwilling to listen to the special pleas made by the right reverend Prelate, and in particular they were unwilling to listen to the force of his argument. As that argument is undoubtedly applicable to this Amendment, I should like to refresh the memory of your Lordships regarding what was then said. At column 996 of the Official Report of 4th November 1975 the right reverend Prelate quoted an expert on the administration of charities as saying this:
What the Bill does actually is to confiscate part of the value of land and apply it to public purposes chosen not by the donors but by central or local government. This is an entirely different proposition, and cuts at the constitutional position of charity whereby the State guarantees, as it has since the Tudor Parliaments, to enforce the purposes of charitable trusts against all comers.'
The right reverend Prelate went on to cite that the Nathan Committee in 1950 followed the practice of Tudor Parliaments, that the Charities Act 1960 enshrined it and, further, that the Land Commission in 1964 and in 1965 gave an agreeable nod
towards these precedents. I whole-heartedly agree with what the right reverend Prelate said on that and other occasions, and I should now like to quote one more sentence from what he said. lower down column 996:
In our view, the Bill " —
the Community Land Bill—
as it stands confounds that traditional policy and sets up in its place a system under which the assets of charitable land could be used in a way in which it was never envisaged they should be used.
We feel that this a matter of great importance because charitable land has been made as an endowment, as a gift, in wills for many centuries, even prior to the Tudor Parliaments; indeed one can say that this has been so for well over a thousand years. The Church Commissioners and the diocesan boards of finance are charged with a very great responsibility to carry out the intentions of the original donors, and so this situation should be protected in law as it has been up to date.
§ So far as the effects of the present Bill are concerned, we believe them to be wholly unsatisfactory because they are slipped in, as if almost by inadvertence. This is a phrase which was also used by the right reverend Prelate when he gave the Government the benefit of the doubt in a very charitable manner. Yesterday the Chamber was filled with supporters of the Motion of the most reverend Primate the Archbishop of Canterbury and the Ecclesiastical Benches were thronged with those who supported his Motion. It is hardly surprising that there is no one occupying those Benches at the moment, because in relation to this Amendment it will be very clear that the Church cannot have felt that the Government were going to extend a friendly hand to them after they had received such a severe rebuff last year. I hope that the Government will examine the case which I have endeavoured to lay before them. I beg to move.
§ 4.40 p.m.
§ Baroness ELLIOT of HARWOOD
I should like to support this Amendment. Speaking about the glebes which apply to the churches in Scotland I know this is considered to be one of the great assets of a church and one of the great assistances to the minister of the day, and it will be viewed with grave despair, I think, if an alteration is to be made 1409 in the way in which glebe land is handled. It goes back an incredibly long time in history, that churches have had glebe land, and if we now try to change it we shall he changing something which has been going on for hundreds of years. I think it will be a great mistake, and I hope very much that the Government will support this Amendment, which is a simple one, which is highly practicable and which will be of considerable assistance to the churches.
§ Lord HYLTON
I should like to support this Amendment moved by my noble friend. He mentioned the Community Land Act. I think we should be quite clear that there is no parallel between that Act and this Bill. The Community Land Act was concerned with the recovery of betterment, and betterment created by the provision of services and by planning decisions made by local authorities. The second half of this Bill, as I understand it, is to do with the avoidance of hardship to tenants, and on that I think it should be borne clearly in mind that the great majority of glebe land exists in small parcels, in scattered fields, in tiny little bits of parishes all over England. Because of its nature, in these scattered parcels, I do not see how any noticeable hardship could be inflicted on any farming family, tenant family, if it were excluded, as is proposed under this Amendment.
§ Lord STRABOLGI
This is an interesting Amendment, and I think we are grateful to the noble Lord, Lord Sandys, for putting it down. It has provided an opportunity to debate this important matter of glebe land. The noble Lord, Lord Sandys, and the noble Baroness, Lady Elliot, have explained in detail why they believe the tenanted glebe lands should be excluded from the scope of Part II of the Bill, and I am sure we are grateful to them for putting their views with such clarity. Of course, no one would doubt that the clergy can be relied upon to act compassionately towards the family when one of their tenants dies, but this is also true, surely, of many other landlords, as has been said continually throughout the stages of this Bill. It is true of many other landlords, including the Crown, which is also, I may say, bound by Part II. It is also true of the Church Commissioners themselves, who have a statutory link with Parliament for 1410 exercising their trusteeship of many hundreds of acres of agricultural land.
The provisions of the family succession clauses embody in the Statute Book what is to all intents and purposes the procedure adopted by most enlightened landlords today. Many good landlords have tenants whose families have been in occupation of their land for a considerable time. I think the noble Duke, the Duke of Buccleuch, as was mentioned at an earlier stage, has tenants who have been tenants of his family for, I think, 500 or 600 years. I do not see how the scheme need interfere with these arrangements in any way. The noble Lord, Lord Sandys, of course drew our attention once again to the provisions of the Community Land Act and the status of charitable land: but as the noble Lord, Lord Hylton, said, this is really not applicable, I think, to this particular Bill, because the provisions of the scheme do not alter the ownership of the land or its status as tenanted land. What they deal with is simply the succession to the tenancy of the vacant holding. I understand that as the ecclesiastical law now stands the question of ownership during a vacant benefice can take a long time to resolve, but, if I may say so, I cannot see that this is a valid reason for excluding glebe lands from the Bill. Therefore, although I think it has been a useful point to have debated, I am afraid I am unable to accept the Amendment, for those reasons.
§ Lord HYLTON
I would ask the noble Lord, Lord Straholgi, to examine the facts of the situation. He has quoted the examples of the Crown Commissioners and the Church Commissioners. If one looks at their land holdings it will be found that they own quite large estates and that these estates are composed of consolidated farms which are not scattered fields. They are farming units which provide a livelihood for, in some cases, very substantial farm tenants. This is not the case with a great majority of glebe land. Therefore, there is a clear distinction, through size of holding and viability of holding, in the possibility of hardship arising to a tenant family. I would very strongly ask the Government to look again at this matter.
§ The Earl of ONSLOW
On a previous day of this Committee stage, the noble 1411 Lord, Lord Melchett, was eloquent enough to persuade us that we should not put into the Bill local county council smallholdings. Judging by what my noble friend Lord Hylton has said about the size of the glebe lands—and from what little I know about these lands I am sure he is right—surely the arguments for keeping the local authority smallholdings out of the Bill apply equally forcefully to keeping glebe lands out of the Bill. With the greatest respect to Her Majesty's Government, there seems to he an element of having it both ways.
§ Lord MELCHETT
I must correct an impression which the noble Earl has erroneously got from the debate on a previous Amendment. I said that county council land was out, but not for the reason that some of the land they owned might he in small parcels. In fact, we had a debate on an Amendment where we made the point that very small hits of land might well comprise a larger holding and a viable holding, and I think that on that occasion I was lucky enough to persuade noble Lords opposite to leave the Bill as it was for that very reason. I would have said that that was a more exact parallel because, of course, as I also said in the debate on the Amendment on county councils, the Association of County Councils have agreed that the provisions of the family succession scheme should apply to their holdings.
§ The Earl of ONSLOW
The noble Lord, Lord Melchett, has made my point for me much better than I could make it. I admittedly got the exact Amendment and point of discussion wrong, but he has now presumably given a very good reason why glebe lands should be excluded from the Bill.
§ Lord SANDYS
There is still. I think, a wide measure of agreement between both Front Benches that this is an important matter, and at the present moment I feel that it should he further investigated before we reach any decision upon it. So far as the views expressed by my noble friend Lord Hylton are concerned. I entirely agree with him that the Community Land Act, and its purview, differs, but one must remember that the freeholder, be it the incumbent of the benefice or the Diocesan Board of 1412 Finance, is being subjected to a series of Acts of Parliament which pile Pelion upon Ossa. The effect is total upon the management of this land. It makes the freeholder a person who finds that his situation is being broadly diminished.
I should like to draw your Lordships' attention to what my noble friend Lord Middleton said at an earlier stage—I think it was on Second Reading—when he quoted the figures at present officially published by the Ministry of Agriculture, Fisheries and Food so far as the value of tenanted land in England and Wales was concerned. If my memory serves me aright, there is an average value of tenanted land of £291 per acre. What are the effects of this Bill going to be? Clearly as it diminishes the situation so far as the freeholder is concerned, the value of that land will be diminished still further. I feel that we should consider this further and I should like to ask the noble Lord, Lord Strabolgi, if he would he prepared to reconsider this.
§ Lord STRABOLGI
The noble Lord, Lord Sandys, has done his best to be persuasive, but I am sorry to have to disappoint him because I do not think that we can accept this Amendment. After all, if there are difficulties, if the owners of the ecclesiastical lands, the glebe lands, have difficulties over a succession they can go to the Agricultural Land Tribunal in the same way as any other landlord can do so. But we do not think that tenants of glebe lands should be at risk any more than any other tenant. We think they should be afforded the same amount of protection and that the landlord of the glebe land, the Church, should also have the other protections afforded to the landlords in the Bill. I cannot see there is any case for excluding glebe land and for making it operate on a different kind of system. I am sorry but I cannot accept it.
There is one problem which comes up again and again on this Bill. It is that Government take the view that all the problems can he resolved by going to the Agricultural Land Tribunal. With respect, I think this is thoroughly unsatisfactory. Anyone who has had a landlord-tenant relationship knows that you do not go to the Agricultural Land Tribunal at every opportunity. It is the 1413 end of the road. Here we are producing a Bill which ought to make fairly clear-cut lines as to what is right and what is not right. The whole time through previous debates on the Committee stage—and the noble Lord, Lord Strabolgi, has mentioned it again now—the answer was always given that if a muddle arose or if anything was unclear, then go to the Agricultural Land Tribunal.
I quite accept that the noble Lord might find a difficulty in accepting my noble friend's Amendment, but I put this word of caution. To produce a Bill, a new law, a new Act of Parliament, which is going to alter the landlord-tenant relationship in a way in which it has not been altered for hundreds of years and without any consultation—to do that and to use the fallback position that everything can be' resolved by going to the Agricultural Land Tribunal is something that is most unsatisfactory and something that will work unsatisfactorily in the future.
§ On Question. Amendment negatived.
§ 4.57 p.m.
§ Lord MIDDLETON moved Amendment No. 28:
§ After Clause 23, insert the follow ire new clause:
§ Notice to quit over twenty-five years
§ (1) Save for section 16, this Part of this Act shall not apply where
- (a) on or before the commencement of the tenancy, the landlord gave notice in writing to the tenant that possession might he recovered under this section; and
- (b) the tenancy commenced on or after 29th September 1970.
§ (2) Section 24(1) of the Agricultural Holdings Act 1948 (which provides for the challenging of notices to quit by counter-notices) shall not apply where notice to quit is served in respect of a tenancy to which this Part of this Act (save for section 16) does not apply by reason of subsection (1) above and at the date of the giving of the notice to quit at least twenty-five years had expired since the commencement of the tenancy, and it is stated in the notice to quit that it is given by reason of the matter aforesaid.
The noble Lord said: In moving an earlier Amendment, I referred to the
misgivings voiced here on Second Reading by several noble Lords lest the inheritance measures in this Bill could tip the balance so far away from the landlord as to endanger the whole of the landlord-tenant system up to the point of collapse. At the same time I referred also to the discussion
document of the Young Farmers' Clubs which is entitled, A Farming Future for Young Farmers? The printed title of that document frames the question with a very large question-mark after the word " Farmers ". Clearly they are far from confident about the future. If I may quote briefly from that document, they say:
We oppose current Government proposals and go much further in saying that young farmers' interests would he best served by existing legislation being changed to make it possible for fixed-term tenancies to he agreed between landlord and tenant. Repossession after the agreed period of tenancy would be legally enforced. Fixed-termed tenancies would encourage mobility and thus prevent stagnation. The tenant would he free to move to another holding before the conclusion of the existing tenancy, thus providing more opportunities at the bottom of the ladder. We believe that such provisions would encourage landowners to make available far more land for tenancies and thus benefit all concerned.
§ What this Amendment does is to put in a new clause the purpose of which is to encourage future lettings of holdings by introducing a form of tenancy which could certainly he ended after 25 years. The family inheritance provisions would not apply and after 25 years the tenant could not serve a counter notice under Section 24(1) of the 1948 Act to a notice to quit and the landlord therefore could not he required to seek the consent of the Tribunal. Such a clause as this is necessary to rescue the landlord/tenant system once family inheritance is introduced. A strong case was argued for this clause in Standing Committee C in another place on 8th April.
§ It should be acceptable to all sides for two main reasons. First, the kind of hardship the family inheritance provisions are supposed to deal with will not arise because from the start it will be known that the tenancy is due to be ended after 25 years. The clause applies only to new tenancies beginning on or after 29th September 1976. The formula of giving notice on or before the beginning of the tenancy that it would not be a protected tenancy is precedented by the Rent Act 1968. Secondly, it will give aspiring tenants the opportunity to get tenancies, whereas without such a clause the family inheritance provisions will kill off such opportunities, except for " eligible persons ". Landowners, as noble Lords have pointed out in discussing the Bill, will be so discouraged from letting land 1415 that alternative arrangements will inevitably be made. This clause would enable land to be let with a reasonable degree of security. Perhaps I should add that a notice to quit under this clause would take effect after 27 years at the earliest, because the notice could not be served until after 25 years had elapsed, and the 26th term date would then be fewer than 12 months ahead. I beg to move.
§ 5.2 p.m.
§ Lord SANDYS
I should like to support this Amendment because it lets a little fresh air in on the Bill. I approach this subject from the point of view of the law of contract. Under the laws regarding agricultural holdings and the very long series of Rent Acts since 1915, the law of contract, as it applies to both properties and agricultural holdings, is very difficult indeed so far as the recovery or the reversion of the property to the owner is concerned. Properties which are let over a long period—and in the vast majority of cases farms which are let at the present time —are let on the basis of the Agricultural Holdings Act 1948, and in some cases prior to that Act are holdings which are let on a year to year basis. To all intents and purposes they are permanent tenancies.
The burden of my noble friend's argument has been to set a term to these tenancies. It does not mean that at the end of this period the tenancy will not be renewed, but it offers the opportunity for the landlord to review the situation. This is not a question of rent review but contract, because in our view the contract, as it will stand between the landlord and the tenant when this measure receives the assent of Parliament, will be a very one-sided affair. It will not be a closed-ended contract at all; it will be an open-ended one extending so far as infinity. Therefore, we believe that it will benefit the industry as a whole. We believe that it will have very beneficial effects so far as pension arrangements are concerned.
Should the Government be pleased to accept this Amendment, we believe that built upon it will be some beneficial arrangements within the Life Offices Association whereby retirement would be made possible for the existing tenant and, 1416 in a large number of cases, it would be most acceptable to the sitting tenants concerned. I feel that my noble friend Lord Middleton has explained the purposes of this Amendment very well and I hope that it will have the support of your Lordships.
§ 5.5 p.m.
§ Lord STANLEY of ALDERLEY
My noble friend Lord Middleton moved his Amendment kindlily, and indeed, seductively. But quite honestly I cannot support it. As I understand it—and I know I shall be corrected if I am wrong—the effect of this Amendment would first of all be to create first- and second-class tenants, which I know would he a retrograde step. Apart from this, may give your Lordships an example of what might occur. I hope that your Lordships will forgive me if I quote my own case if I started farming this September as opposed to September 1954. I was fortunate in being given a tenancy when I was 26 years of age, so if this Amendment is carried I would have only three years before being evicted. I do not even have a child old enough to succeed the tenancy, even if my landlord was prepared to offer it to him, something which this Amendment makes voluntary. In passing, I should say that my eldest child, due to a University education, has found the folly of going into farming and does not want to succeed to the tenancy. I will not go on with the argument which we had the other day.
It may be that I look old—indeed, sometimes I feel positively ancient—but I cannot afford to he put on the scrap heap at 51 years of age; but that is what could happen. I am sure none of my noble friends would grant me a tenancy after this speech: though on second thoughts maybe the noble Lord. Lord Melchett, might, with his background, persuade ICI to offer me the tenancy of my former estate. On a further personal note, should I be evicted at 51 years of age, I should have more time to attend the House of Lords which fact must surely finally persuade my noble friends not to press this Amendment.
To be serious, I agree that there is a strong case for looking at the question of getting farmers to retire at 65, but surely this should be done, as we all hope, when the Agricultural Holdings Act is 1417 thoroughly overhauled. Perhaps this could he coupled with the right of his heir to apply for the tenancy to the ALT, and various forms of terminal tax relief to improve holdings rather than dilapidate them, as I fear so often happens nowadays. That may he a possible solution. Certainly, this is not the time, place or right Amendment to do it now. I hope that I have not irritated my noble friends to the extent that they feel inclined to press this Amendment; it is ever so lonely in the "Not-Contents" Lobby, and I do not want to find myself there. I hope that they will delay moving such a drastic Amendment until they have had time for further thought, which I am sure the Government at some time will give them.
§ 5.8 p.m.
§ Lord GISBOROUGH
I should like to support the Amendment. Without it one cannot stress too strongly that there will he no tenancies to let whether they be for a person of 25 years, for a 50-yearold, or whatever. Obviously, if somebody who is aged 25 wants a tenancy he will think twice about a 25 year term, whereas the 40-year-old would find that suitable. This is important because the county council smallholding of from about 15 to 40 acres is a stepping stone up the ladder, and if we are going to use those for the purpose for which they were started, we have to provide larger farms for farmers when they are aged about 40. This obviously works very well. A man takes a smallholding at an age from between 25 and 40; at 40 he gets a limited term 25 year tenancy, and at 65 he retires. This fits in very well. In addition, there is the case of the landlord with a farm which, for some reason, he does not wish to farm. He is not prepared to let go, he is not prepared to lose it, so he farms it for many years, even at a loss. He might well be prepared to let it for 25 years knowing that in 25 years' time his son would probably be of an age when it could be let to him. That farm has been on the market available to a tenant for those years; this will have been very valuable. In addition to that, there will he the inclination to maintain the farm because it is coming back into hand or is able to be brought back into hand and he improved. I think it will help with tenant relations, which could deteriorate under the proposals of this Bill.
The Earl of CAITHNESS
There is a growing feeling among professional advisers and much of the farming community of this country that a tenancy of this type would be an asset to agriculture. Under the new legislation before us, I believe it would help to fill what has become an obvious and ever-increasing void. I refer to the inevitable absence of new lettings, if no such provision is made. We have heard time and time again that if this Bill becomes law there will be a very great reduction in land to let on the market. Young aspiring tenants will have the door closed on a future which has hitherto been available to them. If this Amendment is agreed, it will encourage some landlords to let land, knowing that it is for a fixed term and that vacant possession can be obtained at the end of the tenancy if required. This can only be of benefit to all involved in agriculture.
Furthermore, there is nothing to prohibit the landlord from letting to the tenant for a further period at the end of the first term, should lie so wish. This is the flaw in the argument of the noble Lord, Lord Stanley of Alderley. I agree that the landlord could take it in hand in three years' time in his case, but if it has been a good relationship—and this is what the landlord-tenant system is about—then I have every reason to expect the land lord to let it to him again for a further term.
§ Lord STANLEY of ALDERLEY
I am grateful to the noble Earl for giving way, but does he honestly think that any self-respecting private landlord today would ever let a farm again, with the present CCT? I think we are deluding ourselves. It is not just the hereditary tenancy: it is the fact that he is so badly penalised by taxation that he will not let any land again. I am saying nothing about the institutions.
The Earl of CAITHNESS
I have every confidence that the landlord would let land again if it was for a fixed term and he knew that lie could get vacant possession. If the landlord is aged 25, his life expectancy must be longer than 25 years. He has every right to let that land if he knows he can get vacant possession at the end of that term. I disagree entirely with 1419 the noble Lord on that point. I support this Amendment, and look forward to hearing that the Government will also give favourable consideration to it in the interests of agricultural tenant throughout the country.
§ Lord HYLTON
On Second Reading I ventured to say that I thought the Bill, as then drafted, would lead to very great uncertainty. Everything I have heard since then confirms me in that view. This Amendment, if approved, would at least bring the possibility of some certainty on some holdings for some people: and I support it for that reason.
§ The Earl of ONSLOW
When the Agriculture Act 1948 was passed several people said that land would no longer be tenanted. In my area—and I speak now from personal experience—the proportion of tenanted land and owner-occupied land has fallen very drastically indeed. I am sure that with the hereditary element or this Bill, those of us who say that tenanted land would further dry up and a young man would be less able to get into land without capital. will be proved right. Perhaps this is not exactly the right moment to introduce a fixed term provision and perhaps it has not been properly drafted or completely thought through, but I would beg Her Majesty's Government to think seriously about the possibility of allowing some form of fixed tenancy which would enable the retirement of a hard-working tenant farmer, and I speak With a certain amount of experience on this.
I know a tenant farmer who went on farming until he was well over 80, far longer than he should have done. The net result was that the man Who bought the farm from the executors had to spend a vast fortune because that man was not honestly capable of running the farm in the way it should have been run— not in the interests of any special person hut in the interests of agriculture itself. Therefore. it is essential that relatively young men should be enabled to come into farming and it is essential that the older people in farming should be able to retire at a reasonable time in comfort and peace. I hope the Government will seriously think along the lines of introducing some form of fixed tenancy when they do their review, 1420 as they have said they will, of the agricultural holdings system.
I can see that the Government are in difficulties here, because if they were to accept this Amendment it would take all new lettings straight out of the Bill. This is quite clearly not what the Government want. Nevertheless, I think that everything that has been said on this Amendment, including indeed certain aspects of what the noble Lord, Lord Stanley of Alderley, said (though I did not agree with all his points), is extremely sensible. I believe that the Government themselves are aware of that and or the fact that there are too many old men holding on to farms for far too long.
I think the Government are aware that the views put forward by the Young Farmers' Clubs have great force. I said on Second Reading that I thought they probably had more sense than their fathers, and this is partly true because the pressure on the National Farmers' Union to accept this—and the Union's acceptance of this was by no means unanimous—was because the financial gain from doing this is too great to be resisted. But the young farmers see themselves being squeezed out of the profession altogether. So there is obviously something wrong with those aspects of the Bill which create this closed society or privileged class, which the Government must get round somehow. It may well be that, as the noble Earl, Lord Onslow, has said, that cannot he done by this Amendment, but nevertheless it is something which the Government must think about, because if they do not they will have done the damage which many people on their own side, including the Minister of Agriculture, have feared: namely, that it will damage and finally destroy the landlord and tenant system, which has operated to the benefit of agriculture in this country for many years.
§ Lord MELCHETT
I hope that the speech made by the noble Lord, Lord Stanley of Alderley, made it clear, as I have said before in discussing the Bill, that these particular clauses of the Bill do not represent a Party political matter. It is something which I hope we can discuss on its merits. indeed, I find myself in the somewhat odd position of feeling obliged to stick up for the National 1421 Farmers' Union. As your Lordships may know, there are some differences between this Government and the NFU over another Bill concerning agriculture; the tied cottages legislation in another place. So I do not think anyone would say that the National Farmers' Union and the Labour Government are usually in very close co-operation over these matters. But perhaps i might say to the noble Lord, Lord Henley, that to accuse—I think what he said amounted to an accusation—a body with 140,000 members of farmers of all kinds of experience and of different ages in this country of taking a view on this Bill because of short-term financial gain or, as somebody did the other day— I think it may have been a noble Lord opposite—of being incapable of taking a rational view on the long-term interests of farming, seems a little unfair. I would hope that we could look at the representations made by bodies outside this House in a reasonable way. After all, I have not attempted to cast any doubt on the views expressed by the Young Farmers' Clubs ——
May I interrupt the noble Lord, because he, in turn, has sent a fairly good ball across the table. He said that some noble Lord opposite had accused the National Farmers' Union of not being able to take a rational decision. I do not know whether that was aimed at me, but if it was, it was aimed at the wrong person.
§ Lord MELCHETT
I did not say that, and it was not aimed at the noble Earl. I said that someone had said earlier, when we were discussing the fact that the National Farmers' Union supported some clauses in this Bill, that they were not taking a long-term view; the view that they were adopting was not in the long-term interests of farmers. I thought that was rather harsh criticism of a body which is not here to defend itself. It is for that reason that I felt it incumbent upon me, although I tried to stress at the outset that I had no interest in defending the National Farmers' Union particularly, to say something on their behalf, because I think that some of the things that have been said about their support for these clauses by noble Lords who do not agree with them were unfair.
I am sure that the proposal behind the new clause is well-intentioned. It 1422 apparently springs from a belief held by certain landlords that the family succession scheme will mean the end of the landlord and tenant system based on annual agricultural tenancies, and therefore lead to a drying up of fresh tenancies. This has been said very often in our debates, during the Committee stage and on Second Reading, on this Part of the Bill, but I confess that I am still not clear why it is that noble Lords opposite feel that this is likely to be so.
The noble Earl, Lord Onslow, said that he had experience in his own area of something happening. I did not intervene at the time to ask him what the figures were, hut, if I may say so, I think there is a certain amount of dual standards applied to myself, when answering for the Government on these matters, and noble Lords opposite who make assertions about their personal experience in these matters, without any attempt at all to back them up with statistics. The same thing happened the other day when I asked the noble Duke on the Opposition Benches for some figures and lie was not able to supply them. I hope that if the noble Earl can contain himself, he will allow me to go on to give him some figures in a minute.
§ The Earl of ONSLOW
The noble Lord, Lord Melchett, has the whole resources of the Ministry of Agriculture behind him. I have my own personal sense of observation. Which of the two is more competent, I would hesitate to pass judgment on.
May I also come back on one other point, because the noble Duke did give some figures about tenancies in Scotland. The funny thing was that, although he was able to give them, when I put down a Question for Written Answer I was told by the Government that the figures were not available. So the noble Duke evidently had some advantage which the Government did not have.
§ Lord MELCHETT
I am not sure that on the occasion I am thinking of the noble Duke did give the figures. The noble Earl and I may be thinking of different occasions. I take the noble Earl's point that I have some resources to help me provide the figures. At the same time, 1423 I am merely saying that it would be fair of him to say that his assertion based on personal experience may not tally with the figures available nationally; and if that point had been made I should have no quarrel at all with him.
If it were true that the clauses in the Bill will lead to a drying up of tenancies and an end of the landlord and tenant system as it currently exists, the evidence ought surely to show that every tenant today has been succeeded by a close relative, that every tenancy has been held for three generations—or, as noble Lords opposite would now have it, one generation—and that landlords have never succeeded in an application for the consent of the Agricultural Land Tribunal to a notice to quit. That simply is not true, and I do not think anyone on either side of the House would accept it.
If I may, I should like to quote again from the CLA survey, which I mentioned when I was winding-up on the Second Reading of this Bill in your Lordships' House. I said then that in only 28 per cent. of the 844 tenancies surveyed did the tenancy end on the death of the tenant. Had the family succession scheme been running, therefore, the landlord would have had in bettin2, terms a 72 to 28 chance of regaining possession of the holding, even with this scheme in existence. That is from the survey conducted by the CLA. So I hope that on the basis of those figures, noble Lords will at least cease to say that the scheme will result in a total drying up of new lettings.
Of the 28 per cent., which represented 234 holdings, 65 were relet to a close relative of the deceased, 67 were amalgamated with other land and 41 were taken in hand by the landlord, either to be farmed by him or sold. So in only 108 out of the 844 cases would the landlord's plans have been looked at critically by the Agricultural Land Tribunal under the family succession scheme. How this can possibly be described as a scheme which will so shake the confidence of landlords in the landlord and tenant system that they will be unwilling to let their land ever again. I simply fail to see. Neither do I see how it can be said that this will mean that young entrants will not be able to find an opening for themselves into 1424 farming. If I may say so, both of those allegations are gross exaggerations.
I mentioned the position in Scotland earlier, but I said I should like to revert to it in speaking to this Amendment, and if I may bore your Lordships with some figures I will do so. According to figures prepared by the Department of Agriculture and Fisheries for Scotland, the proportion of full-time farms let to tenants was 46 per cent. in 1967, 44 per cent. in 1971, 43.5 per cent. in 1973 and 43.6 per cent. in 1974 and 1975. As I said in giving these figures to your Lordships earlier, there has been a marginal decline, although not—and I do not claim any great significance for this—over the last three or four years when there was, first, a marginal increase and then stability in the last two years. But even if there had been a marginal decline, I would say to noble Lords that all that could possibly be is an indication of a long-established and continuing trend, which has been going on for a good time longer than the family succession scheme in Scotland.
This new clause tabled by noble Lords opposite introduces an entirely new concept which I suggest, with the noble Lord, Lord Stanley, would seriously erode tenants' security of tenure and this at the very time when we are attempting to extend this security through the family succession scheme. If the Amendment were to be accepted then, far from acting as a counterbalance to the family succession provisions, which I believe the noble Lord said was the purpose of the Amendment, it would almost entirely defeat the family succession scheme while seriously limiting the lifelong security of tenure of all tenant farmers.
Apart from any other considerations, this would not be, I suggest, in the interests of good farming. A tenant in this situation, having held the tenancy for over 20 years, would have no incentive to farm to the best of his or her ability, nor could the tenant plan ahead with any confidence. The tenant would be very conscious that the tenancy could be terminated by the landlord at any time after 25 years without reason, and with no right of appeal against the notice to quit. I know that the Young Farmers' Clubs are said to be in favour of fixed-term tenancies. I suggest, with great respect to the members of the Young Farmers' Clubs who take that view—and 1425 I find myself in the slightly embarrassing position of having to knock the younger members of the farming lobby—that some of them might take a different view, when they are approaching 45 with a wife and family and a much reduced chance of getting another tenancy elsewhere when their fixed-term tenancy conies to an end, and know that without any right of appeal they can he forced by the landlord, with no reason needing to he given, to leave the farm.
I know that the landowners' representatives are pressing strongly for the reintroduction of fixed-term tenancies, and I suppose with that in mind that noble Lords opposite might be tempted to press this Amendment to a Division. But if they did that they would he making another radical change in the landlord and tenant system. I suggest that one radical change—and we accept that the family succession scheme is a radical change—is quite enough for the industry to digest at the present time. Moreover, such a change cannot be considered in relation to England and Wales alone as this new clause proposes.
Clearly, fixed-term tenancies must be examined with considerable care before any decision is taken for or against their reintroduction. I consider, with the noble Lord, Lord Stanley of Alderley, that this is something which is much better considered in the context of an overall review of agricultural holdings legislation which, as he said, cannot be long delayed. Indeed, my right honourable friend the Minister of Agriculture has already spoken of the need for such a review. For all these reasons, I cannot accept the Amendment and I hope that noble Lords opposite will agree to withdraw it. I feel sure that when the scheme has been running for a time, landlords will find that it is as fair to them as it is to the close relatives of tenant farmers. It might interest the Committee to know that for several years now there have been no references under the Scottish scheme to the Scottish Land Court. I would suggest that Scottish landlords have accepted their family succession scheme and I see no reason why the same should not apply in England and Wales.
§ 5.31 p.m.
§ Lord NUGENT of GUILDFORD
Before we proceed to a decision on this matter, I should like to answer a point 1426 made by the noble Lord, Lord Melchett. He claims that the Opposition are grossly exaggerating their case and that they have put forward no solid grounds for the assertion that has been made from this side of the Committee that the tenant succession scheme in this Bill would have the effect of drying up farm tenancies. I shall not take very long to answer his point, and I should like the noble Lord to listen.
The existing farm tenancy scheme of landlord and tenant which has been running for a very long time now has depended upon mutual interest and trust between landlord and tenant and has operated to the great advantage of both landlords and tenants and the country. The leadership in farm technology which We have established in the Western World has to a very large extent been based upon that scheme. It suited the practical farmer very well that the landowner should provide the capital for the land and that the farmer should provide the capital for developing the farm, and farm production in this country has benefited greatly from the scheme.
The effect of the noble Lord's Bill is to disturb that balance. It is perfectly true that the effect of various fiscal measures—mostly those of the noble Lord—have already disturbed the balance to some extent, and my noble friend Lord Stanley of Alderley has referred to this. But despite the disturbance of the balance to that effect, many landlords will continue to let their land to farmers because, for one reason or another, it suits them to do so. Although there are difficulties now in getting back their land, there is some prospect of the landlords getting it if they really want it. Therefore, the system continues and there is still a mutual interest in it. The point is that what the noble Lord is proposing will destroy that mutual interest.
There is a condition in commerce—and the noble Lord's antecedents, certainly his grandfather, should have taught him the truth of it—that when you are making a deal of any kind in business you must leave something in it for the other fellow. The noble Lord is leaving nothing in it for the landlord. This is why the noble Lord will cause the drying up of the landlord tenant system. At my age I shall not see much of it, but the noble 1427 Lord certainly will. By the time the noble Lord reaches my age he will see the serious decrease of this system, greatly to the disadvantage of the younger men who would like to come into farming but who have no farming antecedents. I reckon that in the long run it will also work to the disadvantage of farming production in tins country.
The noble Lord's proposals will leave nothing in it for the landlord, and he is being told this by the eloquent representatives of the landlords on this side—the CLA—who are notable for taking a most responsible, long-term view. The noble Lord is being urged not to do this and he is being offered the olive branch of some kind of fixed tenancy for 25 years. It does not mean for a minute that the landlord will take back his farm at the end of 25 years. If it suits him to do so, he will continue to let it, just as he has in the past, but it gives the landlord some prospect of getting back his farm after that period it', for one reason or another, he needs it. I urge the noble Lord to look at this point as a proposition which has much good faith and sense in it.
§ Lord MELCHETT
May I make three points to the noble Lord. I did listen very carefully to what the noble Lord had to say, just as I listened with great care to what he said on the two previous occasions when he made much the same point about the provisions in the Bill. First of all, the noble Lord did not deal at all with tile statistics that I gave about the 844 cases where tenancies had come to an end and new tenancies were made. I said that in only 108 of those cases would the scheme have come into play at all. In other words, in the vast majority of cases the scheme will not have any effect on the landlord and tenant system and their relationships with each other. That seems to me to he a very important point which noble Lords opposite have not taken on hoard.
May I make two other points to the noble Lord. He quoted my ancestors and said they would tell me that where you are entering into a commercial deal you have to leave something in it for the other fellow. With great respect to the noble Lord, I suspect that my grandfather might also have told me that in a commercial deal which is fair to both sides there has to be 1428 equality between both sides, and I cannot see how a tenant, who can be thrown off his farm with no reason and explanation whatever being given, can be said to be entering into a deal where there is any equality on his side.
The noble Lord placed great emphasis on mutual understanding and confidence between tenants and landlords. That is something to which we on this side attach great importance. May I say to the noble Lord that where that is the case, the scheme will have no effect on the landlord or the tenant and that mutual confidence and trust will continue. All that the scheme will do will he to interfere in situations where that is not the case.
§ Lord NUGENT of GUILDFORD
As we are in Committee, we can continue to exchange views. I should like to congratulate the noble Lord, and even more his advisers, who have thought up for him this ingenious argument indicating that there is a seven to two chance so far as the landlord is concerned. In past years I have taken some part in the Ministry of Agriculture, and by producing arguments like this they are obviously well up to standard. Unfortunately, however, the argument does not convince. It is a good, dialectical argument but it does not deal with the substance of the point. The noble Lord is being told by the landlord representatives that this is fact. With a quite ingenious dialectical argument the noble Lord has failed to establish his case.
I will not deal with the other two points. It is a matter of opinion whether there is a fair balance in the present situation. The fact that it has endured so long and worked so well indicates that there is a fair balance and that it would be unwise to upset it.
I was a little surprised that the noble Lord, Lord Melchett, brushed off my noble friend's argument quite so quickly, because, it' I may be permitted to comment upon it, he spoke with great conviction and in a most reasonable manner and I hope that the noble Lord will consider his argument. My noble friend Lord Nugent of Guildford referred to the fact that the noble Lord, Lord Melchett, has been advised by people who are landlords. I understand that my noble friend Lord Nugent of 1429 Guildford is not a landlord. We on this side of the Committee labour under a great difficulty because it so happens that quite a number of noble Lords are landlords. However, when he first stood up to reply, the noble Lord, Lord Melchett, said that this was a non-Party political point. It is wholly a non-Party political point. In no way is this a wrecking Amendment and it should not be construed as favouring either the landlord or the tenant. This Amendment has been put down for the simple reason that we on this side of the Committee believe that it will be in the long term interests of British agriculture. The noble Lord, Lord Nugent of Guildford, and my noble friend Lord Middleton have both pointed out, as it has been pointed out by many others throughout the whole course of this Bill, that the real trouble is that it will dry up the supply of tenanted farms. The noble Lord, Lord Melchett, shakes his head and he has said that he has produced statistics to prove that this is not so. Those statistics will have to be considered, but I do not believe one can produce statistics to show what will happen in the future as a result of a Bill which we are now discussing. He says that there is a 72 per cent. chalice of a tenancy ending without the death of a tenant. Possibly that has been so, because very likely the father has retired in order to give way to his son. Therefore, as a statistic that counts as a retirement and not as a death: but that is not the same as statistics giving the continuation of tenancies.
But whether or not one believes that this Bill will dry up the supply of land for hire, I think the noble Lord, Lord Melchett, would concede this point; at least it is a real possibility. This Amendment seeks to do something totally different. It is not in favour of the tenant. It is not in favour of the landlord. It is produced in order to provide something totally new; that is, a short-term fixed contract for a tenancy agreement. The noble Lord, Lord Melchett, said that, if you take out any form of tenancy, there must be equality. There is equality here. Nobody need take out a tenancy if he does not know what he is going to enter into. He is entering into an agreement for 25 years, in the same way that a person may take the lease of a house for a period of time; he knows the starting point, he knows the finishing point, and the reason why that is done is —
§ Lord MELCHETT
And in the same way as people may go to a chemist's shop to buy some arsenic, because they know perfectly well what will happen to them if they swallow it.
I think that is one of the most extraordinary arguments I have heard. The noble Lord referred to businesses; he knows perfectly well that the very fundament of any agreement is the contract. Ali we are saying here is that we are not undermining the Bill by producing this. We are giving something else which might help to continue the landlord and tenant system to which he and his right honourable friend have given their support. So far as I know there is not one person in this Chamber who has disagreed with the principle of the landlord and tenant system or who has said that it has not been of great advantage to British agriculture. Our real tear—not shared, I accept, by the noble Lord, Lord Melchett— is that this Bill will dry it up. Therefore, as a constructive Amendment we are saying why not put this in, so that when a tenancy comes up, in view of the fact that some landlords may not be prepared to let a farm go for 60 or 70 years, and therefore no young farmers will be able to get any land, why not have something totally separate: namely, an open contract between the landlord and the new tenant so that the tenant can take the land for 25 years. I suggest that at least that should be considered.
My noble friend Lord Nugent of Guildford put it delicately. He said that this Bill disturbed the balance of the landlord and tenant system. The noble Lord, Lord Melchett, was stronger in his remarks; he said that it was a radical change. I agree, but if there is to be a radical change incorporated in the middle, then he cannot suggest, with respect, that the statistics which he has provided which refer to the past will therefore continue into the future. He said that one radical change is enough and that this kind of thing would be much better left for an overall review. It has always been our contention that before producing a radical alteration one should have had an overall review of the landlord and tenant system and, having had it, one should then produce the Bill if that is the conclusion that is arrived at. But if you are going to produce a radical alteration 1431 and then, when an Amendment is tabled to try to counteract what we believe to be one of the serious drawbacks of the Bill, say that it is a second radical alteration and therefore should not be incorporated, in my view it is wrong.
I do not say that this is necessarily the kind of thing which would have been done, and it certainly should not have been done, without a full-scale review. But in view of the fact that the Bill has been produced without a full-scale review of the landlord and tenant system, I suggest to the noble Lord that he ought to consider bringing in this Amendment as an alternative to be offered to aspiring tenants in order to ensure that the landlord and tenant system continues.
§ 5.46 p.m.
§ Lord MIDDLETON
In order to help noble Lords to make up their minds about this and with the permission of the Committee perhaps I may deal with some of the points which have been raised. It has been said, I think, by the noble Lord, Lord Stanley of Alderley, that the landlords would only grant new tenancies under this clause if it were passed. I think that is very likely and it would be far better for aspiring tenants than no lettings at all. I believe the noble Lord referred to first- and second-class tenants. If by first-class tenants he means tenants under the existing 1948 arrangements, of course they will fade out in course of time, due to these measures alone. Without the creation of fixed-term tenancies there just will not be any tenancies. This Amendment would ensure the continuation of lettings. You may call them second-class lettings if you like, but they will be lettings.
I will now deal with the points raised by the noble Lord, Lord Melchett. He said he was not clear why landlords would not continue to let. I think that point has been adequately dealt with by the noble Lord, Lord Nugent of Guildford, and by my noble friend Lord Ferrers. I know that the clarity of my diction leaves a great deal to be desired but I certainly referred to it at some length on Second Reading. Perhaps the noble Lord would like to refer to columns 979 and 980 in the House of Lords Official Report of last Monday, when I reiterated my fears in moving an earlier Amendment.
1432 The noble Lord, Lord Melchett, referred to the CLA survey. May I first remind him that the survey was done before Part II was put into this Bill. He said that in 72 per cent. of the cases the question of family succession in terms of this Bill would not have arisen anyway. Although the survey showed that only 28 per cent. of the tenancies ended as a result of the death of the tenant it also showed that in an additional 98 cases, that is 11.6 per cent. of the total, the tenancy was relet to a near relative of the previous tenant. This was presumably on retirement and would also come within the scope of the Bill. In an additional 53 cases although a tenancy had not ended, a near relative was brought into the tenancy agreement with an existing tenant. These cases could also be influenced by the Bill and I venture to think that the noble Lord. Lord Melchett, is wrong to conclude that because in the past 72 per cent. of the tenants left the farm before death they would be willing to do so in future.
§ Lord MELCHETT
Just to make it clear, I would point out that I also gave the figures that the noble Lord, Lord Middleton, has just read out, and if he refers to Hansard he will see that that was the case.
§ Lord MIDDLETON
I am grateful for that correction: I will certainly look at Hansard; perhaps I was not completely attending at that moment. I think the main point is that the survey was done before these measures were thought of. The noble Lord referred to Scotland: when earlier clauses were debated on Monday we had some interesting contributions from noble Lords with experience of the present state of the landlord and tenant system in Scotland, notably the information that was given to us by the noble Lord, Lord Home of the Hirsel, and by the noble Duke, the Duke of Atholl.
It is quite clear that the figures which the noble Lord, Lord Melchett, has quoted again, given by the Scottish Department of Agriculture, are not by themselves sufficient to judge the present trend. I have seen a letter to the Department of Agriculture in Scotland and they admit that there is a long-established decline. I think that the opinions and 1433 forecasts of noble Lords with hard practical experience of the system in Scotland are of more value than figures which merely show what we all know. There is a decline of lettings, but it is slow to take effect. I think that it is to be expected in an industry where, happily, the turnover (if one might call it that) of tenants is at a low rate. I think the advice we have had from Scottish Peers is quite clear, that given this kind of legislation we must expect a decline in lettings in England and Wales in due course.
The other point the noble Lord made was that it would seriously erode security of tenure. That is just what we are saying that Part II of the Bill does in the long term. It may achieve short-term security, but in the long term the effects will be such that the ability of people without capital to farm will be severely limited. When talking about security of tenure, I must refer to the kind of arrangements and devices already being undertaken in Scotland, and which will undoubtedly happen here.
The kind of arrangements I can envisage are partnerships and farming companies where the farmer has a 49 per cent. share interest in the company. In these cases there is no security of tenure whatever (if we may call him a tenant) for the farmer. In the case of a partnership, it could he dissolved at almost a moment's notice, and a farming company could be wound up very quickly. If we envisage these kinds of arrangements and devices succeeding in the present form of tenancies, there the farmers are being faced with a situation of much worse security for the future.
The noble Lord said there would be no strong financial incentive to farm well 1434 under a fixed-term tenancy. I think the financial incentive to farm well will be very strong, as it is now, and I do not see that that would possibly be eroded in any way. The noble Lord said that if we divide on this, we should be making another radical change in the landlord and tenant system. My noble friend Lord Ferrers referred to this. We have a radical change in Part II of the Bill. If you are going to put in one radical change, I see no strength in the argument which suggests that you must not put in another in order to try to redress the balance. With regard to England and Wales, I do not see much value in that argument, because this Bill by itself is an argument that you can legislate for England and Wales, without Scotland. I think I have spoken quite long enough in reply.
§ Lord STANLEY of ALDERLEY
My noble friend has not told me why he has chosen 25 years. If he chose, say, retirement, I would feel much happier. Why has he chosen 25 years?
§ Lord MIDDLETON
I think this was the best kind of arrangement whereby a young man has a good farming future ahead of him. It gives him virtually a generation of farming. I feel very strongly that this Amendment would he good for agriculture and that it would help to sustain the landlord and tenant system. We must ask noble Lords to make their decision.
§ 5.54 p.m.
§ On Question, Whether the said Amendment (No. 28) shall be agreed to?
§ Their Lordships divided: Contents 68; Not-Contents, 34.1435
|Amulree, L.||Craigmyle, L.||Ferrers, E.|
|Auckland, L.||Cullen of Ashbourne, L.||Gisborough, L.|
|Balerno, L,||Daventry, V.||Goschen, V.|
|Banks, L.||Denham, L. [Teller.]||Hailsham of Saint Marylebone,|
|Boothby, L.||Dormer, L.||L.|
|Brooke of Ystradfellte, B.||Elles, B.||Hanworth, V.|
|Burton, L.||Elliot of Harwood, B.||Harmar-Nicholls, L.|
|Caithness, E.||Elton, L.||Hawke, L.|
|Campbell of Croy, L.||Emmet of Amberley, B.||Henley, L.|
|Carr of Hadley, L.||Exeter, M.||Hylton, L.|
|Colville of Culross, V.||Falkland, V.||Hylton-Foster, B|
|Craigavon, V.||Falmouth, V.||Ironside, L.|
|Long, V.||Nunburnholme, L.||Skelmersdale, L.|
|Loudoun, C.||O'Hagan, L.||Spens, L.|
|Mancroft, L.||Onslow, E.||Strathclyde, L.|
|Marley, L.||Powls, E.||Strathcona and Mount Royal, L.|
|Merrivale, L.||Rankeillour, L.||Strathspey, L.|
|Middleton, L.||Rathcreedan, L.||Tenby, V.|
|Monck, V.||Redesdale, L. [Teller.]||Trefgarne, L.|
|Morris, L.||Sandford, L.||Vivian, L.|
|Mountgarret, V.||Sandys, L.||Ward of North Tyneside, B.|
|Moyne, L.||Semphill, Ly.||Wigoder, L.|
|Nugent of Guildford, L.||Shuttleworth, L.||Young, B.|
|Ampthill, L.||Harris of Greenwich, L.||Phillips, B.|
|Annan, L.||Henderson, L.||Platt, L.|
|Aylestone, L.||Jacobson, L.||Shepherd, L. (L.Privy Seal.)|
|Birk, B.||Jacques, L. [Teller.]||Shinwell, L.|
|Brimelow, L.||Leatherland.L.||Stanley of Alderley, L.|
|Brockway, L.||Llewelyn-Davies of Hastoe, B.||Stedman, B.[Teller.]|
|Cole, L.||Lovell-Davis, L.||Stewart of Alvechurch, B.|
|Collison, L.||Mais, L,||Strabolgi, L.|
|Cudlipp, L.||Melchelt, L.||Wigg, L.|
|Elwyn-Jones, L. (L Chancellor.)||Oram, L.||Winterbottom, L.|
|Gaitskell, B.||Pannell, L.||Wootton of Abinger, B.|
§ Resolved in the affirmative, and Amendment agreed to accordingly.
§ 6.3 p.m.
§ The Earl of ONSLOW moved Amendment No. 29:
§ After Clause 23 insert the following new clause:
§ Covenant against assignment etc. in written agreements.
In the First Schedule to the Agricultural Holdings Act 1948 (which specifies matters for which provision is to be made by arbitrators in written tenancy agreements) there shall be inserted:—
10 A covenant by the tenant not to assign, sub-let or part with possession of the whole or any part of the holding or of the tenancy.
§ The noble Earl said: The purpose of this Amendment is to correct certain anomalies that could arise. Before the war large numbers of tenancies were verbal and consequently no prohibition on assignment was included. There are still quite a few of these tenancies in existence. Lack of non-assignment clause was in those days almost certainly intentional. The fiscal disadvantages of farming were fairly widespread in the slump, and landlords were on the whole extremely keen to find tenants. It was in the interests of everybody that there should be the maximum number of tenant farmers. Above all, of course, there was no security of tenure until the 1948 Act. Section 24(2)(g) of the 1948 Act is being redrafted in this Bill so that tenancies do not end on the death of the assignor but with the death of the assignee. Thus, if this Amendment is not 1436 included, it is quite possible that the inheritance clauses can be bypassed provided that the assignment is done prior to the sitting tenant's death.
§ The fairness of this Amendment is recognised by Clause 22(4) of the Bill which in effect writes such a prohibition to assignment into any tenancy arising out of a direction by the Tribunal. This Amendment will enable the landlord in the case of any assignability remaining in leases to go to the Tribunal and ask them to put in a covenant against assignability. They will almost certainly have to. The Agricultural Law Association, which, as your Lordships know, is completely unbiased in this matter, is in favour of an Amendment on these lines. I beg to move.
§ Lord MELCHETT
I entirely agree that where a lease does not contain a non-assignment clause, or where, for example, there is an oral lease, it would he possible for a tenant who is getting on in life, or maybe on his or her deathbed, to assign the tenancy to somebody else. This has always been so, although I have no idea how many cases there have been. Certainly none has been brought to the attention of the Ministry of Agriculture, so it is difficult to know whether we are dealing with a real or theoretical problem.
So far as the family succession scheme is concerned, we have recognised that in instances where a lease does not contain a non-assignment clause, it would be possible for a successor to the tenancy to assign his tenancy to someone else. 1437 This could occur before the landlord can refer the terms of the new tenancy to arbitration under Clause 23. The landlord has three months in which to do so. Subsection (4) of Clause 22 therefore provides that the new tenant cannot assign, sublet, or part with possession of the holding or any part of the holding without the landlord's consent in writing. Where succession takes place, therefore, and the old lease does not contain a restriction on assignment, the landlord's position will be protected and the landlord will be able to correct this omission in the new lease.
The position is less straightforward where a deathbed or earlier assignment takes place. This would have nothing to do with the family succession scheme as such. The Agricultural Law Association have pointed out in a memorandum to my right honourable friend that there will be a side effect to Clause 16, which now makes the notice to quit on death apply on the death of the occupier, who may he an assignee, rather than on the death of the original tenant. This side effect will be that the benefit of the new succession clause will pass, if there is a series of assignments, to the family of the last assignee completely outside of the family succession provisions. That clearly is an unintended effect of the family succession scheme, and I should like to be able to consult on the narrow point further with the NFU and the CLA. I am certainly very grateful to the noble Earl and the Agricultural Law Association for drawing this point to our attention.
§ Lord SANDYS
I should like to support this Amendment and at the same time welcome what the noble Lord, Lord Melchett, has said. It of course refers back also to Amendment No. 3, on which I think the noble Lord made a slight error in his reply; we naturally would be very happy to give him an opportunity of correcting anything he said on that occasion at a later stage. I said in regard to Amendment No. 3, which referred to Clause 17—that was the " sole (or sole surviving) tenant "—that we would be returning to it on Report, and I shall be very happy to do so. In regard to the covenant, I am wholly in support of what my noble friend Lord Onslow has said. I believe 1438 this would be a beneficial alteration to the 1948 Act.
§ The Earl of ONSLOW
All I can say is that I thank the noble Lord, Lord Melchett, very much, and I beg leave to withdraw the Amendment.
§ Amendment, by leave, withdrawn.
§ 6.10 p.m.
§ The Earl of ONSLOWmoved Amendment No. 30:
After Clause 23 insert the following new clause:
" Provision Jar fixed term tenancies
—(1) Notwithstanding any previous enactment a landlord and tenant may enter into a fixed term tenancy for not less than 25 years if—
(a) at the commencement of the term the landlord takes out a life endowment assurance policy upon the life of the tenant; and
(b) the premium of the said assurance is 20 per cent. of the annual rent payable by the tenant to the landlord.
(2) Where the tenant dies during the currency of the fixed term, the successors of the tenant as defined by section 17(1) above, may—
(a) claim the benefit or the relative part thereof of the life assurance on the deceased tenant; or
(b) continue to farm until the expiry of the fixed term.
(3) Where the successors of the tenant claim benefit in pursuance of subsection (2)(a) above, the tenancy shall be terminated.
(4) Where the successors of the tenant continue farming in pursuance of subsection (2)(b) above, the tenancy shall continue until the fixed date of expiry, upon which the successors may claim the benefit of the life assurance from the Insurance Company with whom the policy was effected.
(5) Where the tenant survives the fixed term on the expiry of the term he may claim the benefit of the life assurance and the tenancy shall be terminated.
(6) Where the tenant wishes to retire during the currency of the fixed term, he may claim the benefit, or the relative part thereof, of the life assurance, and the tenancy shall he terminated.
(7) In the event of a Receiving Order in Bankruptcy being made against the tenant, the tenancy shall he terminated and the tenant or his Trustee in Bankruptcy may claim the benefit, or the relative part, thereof, of the life assurance.
(8) Notwithstanding any previous enactment relating to the assignability of an agricultural holding the tenancy created by virtue of this section cannot he assigned by the tenant, or on the death of the tenant by his successors, during the currency of the fixed term.
(9) On termination of The tenancy by any of the events specified in subsections (2) to (7) above—
(a) the landlord will pay compensation for improvements (for which compensation is payable) made by the tenant or his successors
during the currency of the term;
(b) the landlord will be entitled to compensation against his outgoing tenant in respect of dilapidations and deterioration and any other damage caused to the holding or anything on it.
(10) The landlord may serve notice to quit in the event of bad husbandry or failure to pay rent.
(11) No premium shall be paid for a tenancy granted pursuant to this section.
(12) The rent shall remain fixed throughout the duration of the term.
(13) There shall be no obligation on the landlord to provide capital improvements.
§ The noble Earl said: I come back to the subject of fixed tenancies, with no great apology. We heard the advantage of them when we were discussing them just now. I have put down this new clause solely as an idea for discussion and debate and to be looked at. The scheme put forward in this clause seems to me to have some advantages, for in a novel way, it channels outside funds into agriculture, and I shall elucidate on that later. Secondly, it overcomes any hardship element on the death of the tenant, and so obviates the need to activate Clause 17, et cetera, of this Bill. Consequently it, or some such scheme like it, could really go as an item of choice. I realise that it is improperly drafted. I also realise that a completely new system of land tenure should not be dragged into an Agriculture (Miscellaneous Provisions) Bill, but we have had this argument on and off now since Second Reading and right through to the end of Committee stage.
§ I move this Amendment just to test people's opinions, and to hear what Her Majesty's Government have to say, to see whether they can improve on it, and whether they think it is totally impractical. It might be useful if I pointed out its disadvantages, albeit an odd thing for the mover of an Amendment to do. First, the landlord has no insurable interest in the life of a tenant. This, I am sure, could be changed by legislation if it were so required. There are some landlords who might be chary of letting at fixed rents even if this system was introduced. A fixed rent at the start of a tenancy would almost certainly be higher in anticipation of inflation than a rent that could go up at three-year periods. The second disadvantage is that it would go against the tradition of the partnership between the landlord and the tenant 1440 which has been such a beneficial factor to British agriculture. This latter point would put the landlord in the rentierclass, with all the disadvantages and disapprovals which that entails.
§ Let us, however, look at the other side, the advantages. The tenant would be financially secure. He could borrow against his life insurance for capital improvements and investment, and so on and so forth. This is where the money from outside sources would come in. He would have a good start with a collateral to borrow on. British agriculture is still as efficient as anyone else's, probably because it has invested so much, and it must go on investing in the new and most up-to-date methods. This is a very expensive amusement. Above all, the system would enable the tenant to have no worries about his relatives in the event of his death or retirement.
§ The disadvantages of the tenant not wanting to put in capital towards the end of the tenancy are provided for in that the tenant would get the financial benefit of the new investment, safe in the knowledge that he would be reimbursed for the written-down value of that investment when the tenancy came to an end. His wife or children would similarly be protected if he died. The landlord would be safe in the knowledge that his property was being well looked after, and that at the end of the tenancy the property would have had, throughout that tenancy, the requisite investment to keep it up to modern conditions. Also, because the tenant had not been tempted to stop investing towards the latter part of the tenancy, it would still be kept up in good order. This idea has advantages, as I have tried to point out, but to me the overriding one is that a tenant can retire at 65, or thereabouts, with a nice capital sum so that his retirement would be free or should be free, of any financial worries as would his dependants. I beg to move.
§ 6.14 p.m.
The Earl of CAITHNESS
Although it is now late in the third day of a Committee stage on a miscellaneous Bill, this Amendment should not be passed over lightly. In my opinion, it puts forward a new concept in agriculture which, as I have said, is gaining favour with professional advisers, and I believe will 1441 find increasing favour. My comments on Amendment No. 28 are equally applicable in this instance, but I hope your Lordships will bear with me while I comment on some of the details in so far as they differ from the previous Amendment, No. 28.
The first point is life assurances. At the moment, as the noble Earl has said, there is no insurable interest between a landlord and tenant, but I feel provisions should be made to allow for this, or for the insurance for the fixed terms, which would be even better and more useful. There will then he no grounds for complaints of hardship as monetary compensation would he payable in accordance with subsections (2), (4), (5), and (6), Over and above this advantage there is the very useful one whereby a tenant could draw monies against the policy to help finance certain operations on the holding. on the clear understanding of the effects on the policy. This could be of immense value to the successor if he took over during the middle of the term.
On the question of premiums. I would support the payment of the first premium in equal proportions. The landlord/tenant system is a partnership, with the owner providing the investment expertise and financial backing and the tenant providing the working capital and professional farming knowledge. This is a proven system and I feel that it would strengthen the relationship if both sides were to make a contribution in equal proportions. If, as time progressed. the tenant wished to add to the fund, then he would be entitled to do so without incurring a landlord's payment.
I now move on to notices to quit. Provision is very properly made for the termination of the lease for bankruptcy, bad husbandry, and, in certain circumstances. death. There is no mention of the other instances covered by Section 24(2) of the 1948 Act. I should like to see the clause enlarged to encompass paragraphs (b), (d) and (e) of that section of that Act. On the proposal for rent to be fixed for the entirety of the term, quite apart from being totally impracticable, I doubt very much whether it is in the interests of either of the parties to the tenancy agreement. In my view professional advisers would almost certainly advise potential lessors against entering 1442 into such a commitment, and thus the main objective of realising more land to let would be totally frustrated. We cannot, in these times, even with the ever-increasing battery of Government statisticians, forecast costs and values 12 months ahead. let alone 27 years.
It would again in my view be quite inequitable to fix such a fundamental business cost as rent while the other landlords' and tenants' costs are permitted to fluctuate according to the circumstances at the time. Even in the sphere of commercial building rents review periods are decreasing. The agricultural industry has, since 1948, incorporated its own counter-inflation code in the 3-yearly rent review restriction. This was progressive in 1948, and I submit is still right today. There is nothing magical about the term of 25 years, and 21 might be more appropriate, with the notice to quit being served at least a year before the end of the term. As I said. the agricultural industry was progressive in 1948. and Would be enterprising to accept the new dimension and idea put forward in this Amendment. I am grateful to the noble Earl, Lord Onslow, for tabling it, and giving us the opportunity of discussing it, and although I might disagree on some points of detail I support the Amendment.
§ 6.19 p.m.
§ Lord MELCHETT
This is an interesting variation on the theme that we have been discussing at some length already this evening, and I know that the noble Earl will understand if I do not spend too much of your Lordships' time in replying to the points he has made. To begin with, I should like to make two general points. The noble Earl said that he accepted that this introduced a new system of tenure, but that that argument had already been dealt with. What I said, so far as the family succession scheme in the Bill was concerned, was that it made a radical change to the framework in which landlords and tenants operate. I do not think for a moment that it introduces a new system of tenure. Some may wish that we had introduced a new system of tenure; that we had altered the structure of ownership of land in this country and gone a great deal further in that way than we have, but we have not. All that we have done, as I have said several times, is ensure that all landlords 1443 behave as all good landlords already behave and I do not think that that is making a radical change in the system, to the extent at least that introducing a new system of tenure would be doing.
The noble Earl, Lord Caithness, spoke of the landlord and tenant system being a partnership. I would have agreed with that—a partnership seems to me to involve something which is fair and equal on both sides—had it not been for the Amendment which noble Lords opposite saw fit to press, an Amendment introducing a fixed-term tenancy where, at the end of what is alleged to be a partnership, one partner can boot the other out without even having to give a reason for doing so, which does not seem to me to be much of a partnership. There is another general point I would make, and this seems to me to be the most important point which the Amendment would introduce; the concept of retirement and provision for retirement of the tenant. As I said when speaking to the previous Amendment which touched on this point, I had some sympathy for it. I confessed that I would have more sympathy for it if there were a little equality between the two partners. Nobody has suggested in the discussion of the Bill, for example, that landlords should retire at 65. There are some who I know would feel that while people should be able to retire at 65 if they wish, it should not necessarily be made compulsory for them to retire.
The innovation in the proposed new clause, as I say, is the provision for the tenant at the expiry of the term, or his successors if he dies during the term's currency, to claim the benefit of the life assurance which the landlord would be required to take out for the tenant. I accept that the noble Earl's intention is to provide an incentive to landlords to let their land and to ensure that the tenant, or his relatives if he dies during the tenancy, have something to live on when the holding reverts to the landlord. I confess that my general objections to the previous Amendment which was pressed apply to this one and I do not think that this is the time to consider the re-introduction of fixed-term tenancies which would completely escape the security of tenure provisions of the agriculture holdings legislation. But, assuming that the principle of fixed-term tenancies were to be accepted, the noble 1444 Earl's proposal for some financial recompense to the tenant on quitting the holding and to his successors is, as I say, attractive at first sight. However, it is always open to the tenant to provide for his own retirement and for his relatives when lie dies by means of an insurance policy to suit his own particular circumstances and it is not clear that the proposed scheme would necessarily work to the tenant's advantage.
I think it is reasonable to suppose that no landlord would be willing to pay the insurance premiums of 20 per cent. of the rent unless the rent were pitched high enough to allow for this. In other words, the tenant would have to pay the cost of the premiums, otherwise the premiums would eat into, and possibly in time overtake, the return which the landlord gets from his investment in the land after he has met the landlord's costs of maintenance and so on. Furthermore, if the tenant is to get a lump sum which is worth while in real terms, the premiums would have to be sufficient to take account of future inflation. I do not believe that it would be practicable at the commencement of the term, when the rent is to be fixed, to look 25 or more years ahead so as to cover all these situations. Furthermore, any future changes in tax law might have serious implications for such an arrangement.
This is not really a landlord and tenant matter, and in my view it would be best to leave the tenant to make his or her own arrangements for the future. As I say, besides that comment on the particular novel feature of the Amendment, I confess that my over-riding objections to a fixed-term tenancy which would avoid the safeguarding provisions of the Agricultural Holdings Act still remains firmly where it was when we were discussing the previous Amendment.
§ The Earl of ONSLOW
I am slightly disappointed at the reply of the noble Lord, Lord Melchett. Not that I really expected him to look at the matter with any great sympathy, but I thought that he might just like to take the matter away and think about it. It is only an idea and I should not dream of expecting the chap who drafted the proposed new clause, who is only about 22 and a law student and who has done very well, to write Acts of Parliament. The Amendment was put forward as an idea so that we might look 1445 at the problem to enable us to get round any hardship case
Lord Melchett made two points. He said that the rent would have to be high; but in this case the landlord would not have to put in the landlord's capital, which would involve the landlord becoming a render as opposed to it being a partnership. But I do not think the noble Lord quite understood that. He also said that the premium could not be fixed 25 years ahead, but I would remind him that this is done every day of the week, several times every day by several different life assurance companies all over the country. Secondly, he said that to make it a worthwhile sum it would have to be a very big rent. Let us assume that a man is renting a farm of, say, 250 acres and the rent is £20 an acre, which is about average for farms at this time. Twenty per cent. of that would be £4.
§ Several noble Lords: Oh?
§ The Earl of ONSLOW
I always get into trouble when I do mental arithmetic on my feet; £4 times 300 is £1,200 a year, which is an extremely good life insurance premium and one would get quite a good sum in return if that were invested properly on a with-profits basis, so in my view the two objections which the noble Lord put forward are not well founded. However, I would not dream of pressing the Amendment and I beg leave to withdraw it.
§ Amendment, by leave, withdrawn.
§ Remaining clauses and Schedules agreed to.
§ House resumed: Bill reported with the Amendments.