New Clause 4

Orders of the Day — Agricultural Holdings Bill [Lords] – in the House of Commons at 4:45 pm on 6th June 1984.

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New lettings

'Incorporated or unincorporated institutional landowners whose principal business is other than agriculture shall make all agricultural land in their ownership available for letting to a tenant.'. —[Mr. Robert Hughes.]

Brought up, and read the First time.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

I beg to move, That the clause be read a Second time.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

With this is it will be convenient to discuss new clause 5—

Annual report to Parliament on tenancies and land ownership—`The Minister of Agriculture, Fisheries and Food and, in the case of Wales, the Secretary of State for Wales, shall make annual reports to Parliament on the amount and type of agricultural land available for tenure and changes in the ownership of agricultural land, with particular reference to financial institutions; and shall make such recommendations as he deems necessary to increase the amount of land available for tenure and the number of tenancies.'.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

All of us who are concerned with tenanted land are seriously worried about the continuing drift of that land to institutional ownership. The Bill does not begin to deal with the central problem of tenanted land. The objective of the new clause is to ensure that land which is in institutional ownership is made available for rent. The clause is drawn widely and it includes all institutional landowners but we wish to centre our attention on the new institutional owners, which are the financial institutions.

Since the 1960s the financial institutions have acquired a growing interest in agricultural land. During the second half of the 1970s, they were buying between 8 per cent. and 12 per cent. of all the farm land sold in Great Britain, which was equivalent to more than 50,000 acres annually. In December 1981, the current value of the funds' investment in agricultural land was estimated in a report produced by Savills-RTP to he about £900 million, of which let land represented about £700 million.

The analysis produced by Savills-RTP suggests: Purchasing on a regular basis only commenced in 1968 and the first half of the 1970s was a period of irregular buying and volatile market conditions. Since 1975, purchasing has been at a consistent and substantial level with a tendency for the annual rate of acquisition to increase. Over half the land owned at the end of 1981 has been bought since 1976. The largest part of that land was acquired in the east midlands, East Anglia and the south-east. Acquisition in the north was only 1·1 per cent. and in the north-west it was only 2·2 per cent.

It is clear that the concentration of acquisition has been in cereal and cropping areas. A more recent report by Reading university's department of land management estimates that in 1982 a further 59,000 acres were acquired. The proportion of all agricultural land owned by the institutions is small. In a debate in another place, Lord Northfield estimated that the percentage of land owned by the institutions is about 1·2 per cent. of all agricultural land. However, the financial institutions are a new factor and a fast-growing one, and its importance in certain areas is far greater than the national figures suggest. The financial institutions own 2·5 per cent. of grassland and cropping areas.

It is reasonable that we should be concerned with the behaviour of this newest and fastest-growing type of landowner. The House will recall that the Northfield committee produced a substantial report. The committee was appointed by my right hon. Friend the Member for Lewisham, Dept ford (Mr. Silkin). Its report was published once the right hon. Member for Worcester (Mr. Walker) became the Minister of Agriculture, Fisheries and Food.

It is true that the Northfield committee did not propose that restraints should be put upon the financial institutions involved in land owning but it thought — this was mentioned in paragraph 350 — that the acquisitions should be closely monitored. In paragraph 347, it stated: It is our opinion that the primary role of the financial institutions in agriculture ought to be as long term investors in let land and not as farmers. The purpose of the clause is to put that sentiment into practice.

In a debate in another place Lord Belstead claimed that 70 per cent. of the land owned by financial institutions is let. What about the other 30 per cent., which must be fairly substantial? The issue goes deeper than that, because the 70 per cent. of let land is a figure that hides more than it reveals.

According to the Savills-RTP survey, 39·8 per cent. of the land owned by the financial institutions is let as traditional tenancies, 45 per cent. on a sale-and-lease-back arrangement and 15·2 per cent. on other full repairing and insuring tenancies. We are all concerned about full repairing and insuring tenancies. Frankly, they are totally bad. We cannot assume, as might be assumed from the bare facts, that the institutions are only taking over the role of the traditional landlords.

Photo of Robert Jackson Robert Jackson , Wantage 5:30 pm, 6th June 1984

I am glad that I was able to catch the hon. Gentleman's eye. Does the hon. Gentleman recognise that the effect of new clause 4 is to discourage the institutions that invest in land, reduce the availability of capital for agricultural development and reduce the type of innovations to which my hon. Friend the Minister referred?

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

I certainly do not believe that the sale-and-lease-back arrangements and full repairing and insuring tenancies are innovations that we wish to support. I am opposed to them. If we decide to tell the financial institutions that they must let their land, they may decide not to buy the land. I am not aware of evidence that, because the institutions are buying the land, they are necessarily putting in capital for development. In discussing new clause 5 I shall say something about how we might make more land available for tenancy. The hon. Gentleman will find that new clauses 4 and 5 dovetail neatly.

The fact that a large proportion of the land owned by the institutions is being let does not necessarily mean that the number of tenancies remains the same. Land may be tenanted, but the number of tenancies may differ because of amalgamations and the working of larger units.

The remarks on this subject made by Lord John-Mackie can be seen at columns 206 and 207 of the House of Lords Hansard for 13 December 1983. I cannot quote all his remarks. He cited a number of cases in which the number of tenants was severely cut by the acquisition of land by financial institutions. It is important, in considering agricultural tenancies, to look closely at the role of the institutions. New clause 4 will assist the central objective, which appears to be shared by both sides of the House. The tenanted sector is important, and the decline in the number of tenancies should be arrested, if not reversed.

New clause 5 calls for an annual report to Parliament on rented land and on the changes needed to increase the amount of land available for tenancies and the number of tenancies. The Northfield committee thought that the subject was of such importance that it devoted a section of its report to the subject. The committee took eight pages to discuss the need for more and better information about what is happening.

Paragraph 259 of the report states: Throughout our work we were hampered by the lack of detailed information on many of the topics we studied. It is disturbing that so little is known about the pattern of acquisition, ownership and occupancy of agricultural land and that Governments should have to take decisions, which may have far-reaching effects on agricultural structure, on the basis of incomplete or non-existent data. That is precisely what we are doing in the Bill. Paragraph 280 states: in the long term, a full system of land registration with land use identified and beneficial interests visible would be desirable for the agricultural reasons outlined. The reasons given by the committee for having better information on proper land registration were threefold: first, to monitor the industry's performance and judge, for example, the relative efficiency of different types of owners and occupiers and farm sizes; secondly, to know how those who saw themselves as stewards of one of the nation's most important resources were carrying out their function; and, thirdly, to monitor important trends, such as land purchase by financial institutions or overseas buyers.

In the meantime, the Northfield committee recommended that the agriculture Departments should put in train action to fill in the most important omissions from the currently available statistics. The committee recommended that the Ministry of Agriculture, Fisheries and Food should identify and monitor trends in acquisition. The committee identified an urgent need for data to be collected on acquisition by financial institutions and overseas buyers.

The committee argued that we need to provide a better background to the pattern of ownership. With better data, estimates about the future structure of land because of policy changes could be more rationally based. We need to improve the understanding of the complexities of tenurial structure in agriculture.

It is now five years since the Northfield report was published, and we are still handicapped by a paucity of information about what is happening. It is astonishing that Ministers come forward—I admire their honesty—to say, "In many cases, we do not know what is happening.'' Ministers refer to an aim, which we all share—to encourage greater tenancies to be made available and encourage tenant farming—yet do little to achieve it.

The best gloss one could put on the Bill—some of the Minister's colleagues in the other place tried to put the best gloss on the legislation—is that it would have the most marginal effect on increasing the amount of tenanted land.

Photo of Mr Paul Hawkins Mr Paul Hawkins , South West Norfolk

Does the hon. Gentleman agree that any information should be broken down into regions? I am sure that I am correct in saying that in East Anglia the largest number of purchases are made from pension and other funds. It would be helpful if the regions were mentioned in any information. Will the hon. Gentleman explain his objections to full repairing leases or sale and lease-back? I cannot understand his point.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

My basic objection to the full repairing and insuring leases is that the landowners who are supplying the tenancies are not putting money into the industry. There are tax advantages to them for doing that. I have some figures, although I do not know whether they will help the hon. Gentleman. I understand that in East Anglia 17·2 per cent. of land acquisitions were made by the financial institutions. I entirely agree with the hon. Gentleman that we ought to observe the pattern in different parts of the country. Although figures for, say, England or Wales would advance the discussion to some extent, they would not take us much further forward.

The Bill will not meet its stated objectives. The Labour party has solutions to the problem. It believes that the best methods of ensuring, first, stability of tenant farming and, secondly, the expansion of the amount of tenanted land and the number of tenanted farms would be to establish a rural land authority to administer land already publicly owned, to extend public ownership in the tenanted sector and to go further and acquire more land for tenancy. If radical action is not taken, those who, in their evidence to the Northfield committee, predicted the end of tenant farming by the end of the century will be proved right.

There can be no doubt that tenant farming has been a success. Farming practices have changed for a variety of reasons, but they have not been the fault of the tenants, many of whom have invested their lives as well as their money in farming. The way in which landlords have moved into in-hand farming has nothing to do with tenant farming. It has to do with tax changes, the common agricultural policy, modern technology, and so on.

The figures show clearly that the landlords have failed the tenanted sector. We owe it to tenants who have invested their lives in farming to do all that we can to sustain the system. New clauses 4 and 5 will do a great deal towards that. If the Minister has to give a detailed report each year on the situation and how he believes it should be changed, the work of Parliament and agriculture will be greatly asisted. I commend the new clauses to the House.

Photo of Mr Kenneth Weetch Mr Kenneth Weetch , Ipswich

It is a sad state of affairs that on the state of institutional investment in the land in this country there is no Government source comparable with the Savills' agricultural performance analysis, produced by commercial valuers. That is where I had to look to discover the trends in institutional investment in land in this country. It is sad indeed that there is no comprehensive register showing the ownership of agricultural land and the trends in such ownership. I should have thought that on a prima facie analysis an accurate idea of land ownership would be an extremely useful basis for any kind of policy. Whatever political line one wishes to pursue, it should be based on an accurate set of statistics and related information about the current situation. I am open to correction from the Minister on this, but to the best of my knowledge one looks in vain for any comprehensive body of information about land holding and the trend in institutional investment in this country.

5.45 pm

My purpose is to ask the Minister, as a repository of information, to assist our lack of information by answering a few brief questions. First, does the Ministry regard institutional investment in the countryside as a good thing? Is investment by financial institutions in agriculture to be welcomed? I do not ask for a precise answer today, but perhaps he will give us the broad lines of the Ministry view.

I have read the section of the Northfield report dealing with institutional investment and I have taken opinions on the matter in East Anglia, which is naturally the area that I know best. I am no specialist or expert on this, but I gather that investment in the land by financial institutions is a complicated affair with complex arguments on both sides. I discern, however, the following consensus. First, financial institutions buy agricultural land not through any intrinsic interest in farming but as part of a long-term investment portfolio. In other words, they consider the land not from the point of view of farming but as part of a financial investment bottom line, if I may so put it. Does the Minister regard that as a good thing? I confess that I do not know. Can he give the Ministry view?

Savills' agricultural performance analysis openly states that when such investment takes place, Almost all the farms bought meet the narrowest investment criteria". In other words, a very particular — not to say idiosyncratic—influence is being brought to bear on the land market and agricultural investment. I suspect that we are considering part of the institutional property market and not anything specifically to do with farming.

I am advised that the extent of institutional ownership of farmland is about 3 per cent. Can the Minister tell us whether that is anywhere near correct? Can he give the Ministry's figure and enlighten us as to the exact extent of the problem? I am further advised that, although only about 3 per cent. of the total acreage of crops and grass is under such ownership, the purchase by institutional investors of land coming on to the market each year is higher in the let land market than in any other part of the market and thus has a more marked impact than anything else on tenancy.

As a layman making innocent inquiries, I am told on one side of the case that institutional investors have been responsible in part for the rise in rents and land prices in the countryside, that they have brought instability to the land market and that they are partly responsible for the deterioration of the tenants' situation. As a layman, one is further confused when one hears the other side of the case. I have also been told that institutional investors are responsible for more money coming into farming, bringing a new business approach and a breath of fresh air to agricultural investment and that by and large they are good landlords. Which side of that equation is true? What is the Minister's assessment of the effect of institutional investment?

I gather from the Northfield report that in 1977–78, or thereabouts, 81 per cent. of the land owned by institutional investors was in the form of tenanted in-hand farming or partnerships. The performance analysis from the commercial surveyors Savills estimates that in-hand farming or farming related to partnership now stands at about 86 per cent. Does that mean that prospects for tenant farmers are improving under financial institutions? Before we can assess institutional investors or anyone else, we need some sort of land register so that we can understand who owns what, and what the trends are.

I return to my initial point. If we are to have any policy that makes coherent sense for landholdings and tenancies and for all things related to that, there must be some form of monitoring. We need a register and a repository of information, because without that we shall be just as much in the dark in future as we are now.

Photo of Mr Paul Hawkins Mr Paul Hawkins , South West Norfolk

I wish to concentrate initially on what the hon. Member for Aberdeen, North (Mr. Hughes) said about full repairing leases or sale and lease-back. I do not see anything wrong with transferring responsibility for maintaining the buildings and houses to the tenant. An adjustment in the rent is then made, because obviously a bigger burden has been placed on the tenant. The only disadvantage, perhaps, is that the landlord may not take so much interest in the matter, although that is not necessarily so, because he will need to see whether his tenants are maintaining the buildings, and so on. I see nothing wrong with the change that has taken place in many tenancies during the past 10 years.

Sale and lease-back means selling to an investor who wants an income while still retaining the tenancy for the agricultural holding. One can make what conditions one likes. However, the more onerous the conditions in a sale and lease-back, the lower the price for the land. Thus, I cannot see what is wrong with sale and lease-back. It is very advantageous to certain families to sell their land, while retaining the tenancy, so that they can go on farming it. They then know that they have some cash in the bank to give, perhaps, to a daughter who marries or with which to readjust the family's finances. Thus, on those two points I disagree with the hon. Member for Aberdeen, North.

I do not believe that pension funds should farm. I am very much against that. Pension funds do a first-class job and since the middle ages City money has always gone into agriculture. Indeed, we want that constant stream. However, I do not like what is happening in East Anglia at present. I shall not mention all the pension funds because my hon. Friend the Minister no doubt knows some of them better than I do——

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

Has the Minister got shares in them?

Photo of Mr Paul Hawkins Mr Paul Hawkins , South West Norfolk

I do not think so.

For example, the coal board farms 10,000 acres in Norfolk. It does not only own it but farms it. I could cite companies such as Vauxhall and Guardian Royal Exchange. I reckon that another 300 or 400 farmers could be earning a living, with 500 acres apiece, from the amount of land that pension funds not only own but farm. I hope that my hon. Friend the Minister will make a public appeal before too long, asking those pension funds—with all the advantages that we have given them through fiscal changes in Budgets, and through the Bill—to let their land.

Pension funds as both landlords and tenants are operated from London, Manchester or one of the big cities, and so do not take as much interest in village life and in the social aspect as farmers have traditionally done. I know of an exceptionally good firm that farms extremely well. There is a first-class manager, but he has to operate across three of four counties. Unlike the farmer who has traditionally been a part of village life, he has no opportunity, for example, to support the church. Farmers' wives have traditionally helped in leadership of the village, yet in many villages in Norfolk that has gone, because of the pension funds' influence. The Minister should make an appeal. At this stage, he could not and should not take any legal measures to control that influence, but he should point out that it can lead to great dissatisfaction among those who want to farm.

Information is badly needed. I have discussed that point with Lord Northfield in the Agriculture Committee of the Council of Europe. I am very sorry that various Governments have not yet been able to bring themselves to get that information together. As a quid pro quo for letting the Royal Institution of Chartered Surveyors instead of the Minister appoint arbitrators, perhaps he will suggest that it does a free basic survey and produces a new Domesday Book to be presented to the Ministry.

Photo of Mr Eric Deakins Mr Eric Deakins , Walthamstow

I thoroughly endorse what the hon. Member for Norfolk, South-West (Sir P. Hawkins) has said about the role of institutional pension funds in agriculture. He made some important points, which were not always put as clearly as that in Committee. It is nice to hear from a Conservative Member who has great experience of the subject and who represents one of the best farming areas in the country. He can see at first hand what is happening. I sincerely hope that the Minister will consider the hon. Gentleman's very good points and, in particular, the fact that pension funds do not behave like traditional farmers when they engage directly in agricultural production.

Farmers have had, and I hope will always continue to have, an important social role that is not always connected—as the hon. Gentleman rightly pointed out—with their farming activities. Many traditional farmers, although sadly not all, are very good at looking after the countryside. However, I regret to say that, from what I have seen of East Anglia and the south and east midlands in the past 20 or 30 years, it would seem that the institutions which have been at least in part responsible for the deterioration in farming practices have much to learn from the traditional farmers whom they have replaced. It has been a retrograde step that so much institutional money has come into agriculture directly through buying farms and then engaging in farming activities. The Minister must address his mind to what is the appropriate role of financial institutions in agriculture.

6 pm

Pension funds invest not only in agriculture but in industry and services, both in the United Kingdom and overseas. I cannot think of a single example of where the pension funds invest in industry—for example, in the manufacturing industry — and then seek to run that industry themselves. The behaviour of pension funds in agriculture is almost at odds with their behaviour in all the other areas in which they invest. Surely the appropriate role for institutional investors in agriculture, as in other areas of economic and commercial life, is to supply funds with appropriate guarantees—for example, mortgages—but not directly to engage in agriculture themselves. I wonder why they are doing so. Perhaps there is something in the tax concessions available or in other aspects of agricultural activity that leads the institutions to take a greater interest in agriculture than other areas, to the detriment of the traditional tenant farmers.

It is the policy of both the Labour party and the Government to encourage an increase in the amount of land available for tenants and an increase in the number of tenant farmers. The activities of the institutions in East Anglia and elsewhere are leading us in the opposite direction. The Bill gives us an opportunity to express the concern felt by hon. Members on both sides of the House about what is happening and what is likely to happen if present trends continue.

I hope that the Government will accept new clause 5. There can be no objection in principle to the idea of an annual report to Parliament, and therefore to the nation, about what is happening in agriculture. As my hon. Friend the Member for Ipswich (Mr. Weetch) said, figures are difficult to obtain. As the Government's stated objective is to increase the supply of tenanted land, they should have the means at their disposal to show the trends from year to year. Parliament should be the judge, year by year, of whether the Government are achieving their stated objective. If they are not, it should be a matter of concern to both sides of the House.

Photo of Mr John MacGregor Mr John MacGregor Minister of State (Ministry of Agriculture, Fisheries and Food)

This has been a short but interesting debate. As we have a great deal ahead of us today, I shall be brief in my reply.

I shall deal first with new clause 4. A number of hon. Members have referred to the recent Savills survey, and I shall do the same. What is important about that survey, apart from the fact that its information is up to date, is that it has concentrated on the financial institutions' total holding and not on all institutions as they are traditionally defined.

The survey shows that the total holding of the financial institutions is only about 3 per cent. of the area of crops and grass in Great Britain, although I readily concede the point made by my hon. Friend the Member for Norfolk, South-West (Sir P. Hawkins) and by the hon. Member for Aberdeen, North (Mr. Hughes) that there are regional variations.

In terms of the most up-to-date information, it is interesting to note that 86 per cent. of land owned by financial institutions is let. When compared with the estimates made by the Northfield committee at the end of 1978, the figures show a movement towards a higher proportion of land being let as against being farmed in hand either directly or through partnerships. The Northfield estimate was 81 per cent., whereas the survey gave a figure of 86 per cent.

There is evidence that the purchases by the financial institutions are falling off. It is worth quoting one paragraph in the conclusion of the survey: The year to the end of December 1983 has been one in which the Institutions have been particularly inactive. That point could have been made more clearly, but it means that the institutions have not greatly been involved in investing in agricultural land. The survey continues: Net purchasing by the Funds in the Analysis was 4,100 acres—the lowest since the mid-sixties. Contrary to the impression that it is the Institutions which have made the market in land in recent years, in 1983 the price of good vacant possession land has hardened in spite of the inactivity of the Institutions. We could for ever analyse the position. I agree that we should have better information, and I shall deal with that point later.

One of the interesting points about what happened in 1983—I have my views about why the institutions have not been active in the market—is that the price of land has been held up largely by the activities of existing farmers, who have been adding to their holdings. That showed that the position is nothing like as simple as some people previously thought it would be in terms of the impact of the institutions, and the belief that it was the institutions that were pushing up the prices of agricultural land. It is important to have that piece of information.

I shall now deal with the general principle of the Bill, having established that the farming in hand by the institutions is nothing like as serious as some people would have us believe. It is important to give landowners flexibility. If we remove the flexibility, we shall run the risk of frightening the institutions away from investing in agricultural land as a whole. Some people may think that that would be a good thing, but I do not share that view. If we impose the restriction suggested, we should run considerable danger of discouraging investment in agriculture and of diminishing a useful source of capital for farming, and institutions undoubtedly bring in capital. It could also cause the further problem of more farms for sale on vacant possession being split into parcels. There is evidence of that in some sales. It is done to enable the existing units of agriculture that are large viable farms to be sold to existing owner-occupiers. Hence, that farm goes out of the prospect of being in the tenanted sector.

The position is not as simple as some would have us believe. There are threats to the tenanted sector other than from the institutions. There is danger in discouraging institutions from investing in agricultural land and then letting it.

Photo of Mr Paul Hawkins Mr Paul Hawkins , South West Norfolk

There is a great deal in what my hon. Friend says. I dislike the recent trend with land agents and others in splitting a large acreage—perhaps 1,000 acres—into three, four or five blocks and then selling the house. That good farm can never be put together again. I do not know whether my hon. Friend has a solution to the problem, but I would like him to find one if possible.

My hon. Friend should think about the position in East Anglia. Although there was a downward trend in institutional farming in 1983—I am no more certain than he is of why that happened—previously there was an upward trend, and I believe that currently there is an upward trend. I think that 1983 was a one-off. There is a growth of institutional farming in East Anglia. Has my hon. Friend any solutions to that problem?

Photo of Mr John MacGregor Mr John MacGregor Minister of State (Ministry of Agriculture, Fisheries and Food)

I can think of some solutions, but they would be unacceptable in a free country, and unacceptable to the House and to me.

I was trying to make it clear that there is not a simple black and white case that the institutions are making it more difficult to have tenanted land. Indeed, there is a case for saying that by continuing to invest in land, keeping farms together and continuing with the high proportion of let land, the institutions are actually maintaining the process of having a large number of tenanted farms.

It would be invidious to differentiate between different classes of landowner, even if it were practicable to do so, which I strongly doubt. The Northfield committee has been quoted a great deal in the debate. That committee recommended no restraints on the involvement of the institutions in landowning. It was interesting to note that Lord Northfield himself said in debates in another place that the financial institutions should not be subject to special rules which did not apply to all landowners, which is precisely what the new clause would do.

The country has always benefited from a diversity of people being prepared to invest their time and money in land ownership. There is no reason to suppose, on the whole, that the new institutions are less good landowners than the traditional ones. Indeed, as has been pointed out, in some ways—for example, by their sale and lease-back arrangements—the financial institutions can create new tenancies.

The hon. Member for Walthamstow (Mr. Deakins) made an interesting speech in Standing Committee—he spoke about the opportunities for new entrants into farming which the financial institutions could offer—which was somewhat at variance with his comments today. He made some good points in his Committee speech, which I will not repeat now, to demonstrate the contribution that the institutions make.

I remind the hon. Member for Ipswich (Mr. Weetch) that we must consider who are the beneficiaries of the institutions' investments in these cases. By and large, they are trade unionists, the members of pension funds, and I have heard some interesting cases in that respect from an institution in which I should declare an interest in that it is one in which I used to be employed, though not on the agricultural side of the company. I refer to the Hill Samuel agricultural property unit trust, which is showing trade union members where their investments lie in agricultural land — this is a feature of its annual reports — and demonstrating how they are doing a great deal by way of encouraging conservation, planting trees, making financial contributions to village life and the communities in which the farms lie. The institutions are explaining the wider benefits of investment in agricultural land.

At best, therefore, the new clause is largely unnecessary, as the overwhelming proportion of land owned by the financial institutions is already let, and, from the current signs, that proportion is increasing. At worst, by arbitrarily and unnecessarily restricting the institutions' freedom of management, it would act as a disincentive to investment in agriculture, and that could only be to the detriment of the industry as a whole. My answer to the hon. Member for Ipswich, therefore, is that the contribution of the institutions has been beneficial to agriculture and agricultural efficiency as a whole.

My hon. Friend the Member for Norfolk, South-West, who knows the feeling in the countryside better than anyone in the House, made some fair points. Not least because of the efforts that he has been making, more of the institutions are responding along the lines that he desires, and I commend that. I share his view, however, that taking clear-cut legislative steps of the sort proposed and trying to make these changes by legislation is not the way to deal with the problem. The case has not been made for the change proposed, either in terms of the harm to farming that the institutions are said to be doing or for the benefits to be achieved by such a change.

6.15 pm

I accept the point that the hon. Member for Aberdeen, North made about information, in that part of new clause 5 flows from the recommendations of the Northfield committee. As he knows, as a result of section 2 of the Agriculture (Amendment) Act 1984, a private Member's Bill which has just completed all its stages through the House — it was introduced by my hon. Friend the Member for Gainsborough and Horncastle (Mr. Leigh), who is present today—agriculture Ministers now have additional power to obtain information on types of land occupancy. That explains to a large extent why that information has not existed until now. Until my hon. Friend's measure became an Act, the powers were limited to asking for the names and addresses of owners and occupiers, whether the land was let and, if so, at what rent.

The new powers cover the collection of information about the terms on which, or the arrangements under which, any land or any part of it was owned, occupied, managed or farmed by any person. This will allow Ministers to ask questions about the family relationship between occupiers and to ask whether the land is held under a partnership or occupied by a private company, trust, charity and so on. As I say, this legislation has been enacted in the light of the Northfield recommendations and will ensure that the necessary statutory powers are available to identify important trends in the pattern of land ownership and occupancy. I am sure that the hon. Member for Aberdeen, North will welcome that, although it means that to a large extent the new clause is not necessary.

I could not follow the hon. Member for Aberdeen, North in asking for a separate report to Parliament each year. To do so would be unnecessary, and therefore we need not burden the Bill with such a provision. The results will, in due course, be published in the normal way. We have not taken precise decisions on how the information will be published—because the necessary powers for its collection have only just been obtained — but it is reasonable to assume that it will be widely available in much the same way as the results of the Department's annual rent surveys are published, in booklets, or it could be made available in the annual review. Either way, that information will be available to Parliament and a separate report, as suggested in the new clause, is not necessary.

The second part of the new clause—the requirement that Ministers should make recommendations on ways of increasing the amount of land available for letting—is equally unnecessary. I do not believe that by asking for an annual report we shall change matters. We need to take action, and that is precisely what we are doing by the Bill and by the changes that we have made, in successive Finance Bills, to capital taxation which has been a great disincentive to landlords. I have pressed the hon. Member for Aberdeen, North on many occasions to give his support to the changes that we have made in taxation, but so far without success.

The hon. Gentleman could do something that would help a great deal more than asking for annual reports. He could go further than he went in Committee by saying that, if there is general agreement in the industry that clause 2 is a desirable part of the legislation, he will make it clear that the Labour party, should it ever return to power, would not repeal that clause.

Photo of Mr Robert Hughes Mr Robert Hughes , Aberdeen North

I begin by answering the Minister's final question, although I thought that in Committee I gave a more than adequate answer. The Labour party's position is clear, We believe strongly in the principle of succession of tenancy, as laid down in the 1976 Act. We have made it clear that, on being returned to government, we shall restore the succession of tenancy to new tenants.

What I said in Committee was not exactly what the Minister said I said. I said that if, after the next election, the circumstances presented to the then Labour Government showed that the enactment of this measure has meant a great difference to the amount of land being made available for tenancy—in other words, if the drift away from farming tenancies has been arrested—that Labour Government will have to take account of that at the time. That is as clear as I can put it, and I hope that my remarks stand the test of time.

I am very grateful for all the support from my hon. Friend the Member for Ipswich (Mr. Weetch), my hon. Friend the Member for Walthamstow (Mr. Deakins) and the hon. Member for Norfolk, South-West (Sir P. Hawkins), especially in relation to financial institutions. They should not fund directly. We should, as Parliament and Government, be taking decisions on the basis of the best knowledge that is available.

May I tell the hon. Member for Norfolk, South-West what the Savills-RTP performance analysts said about the pattern of financial institution ownership?

As might be expected, ownership is concentrated mostly in the east midlands, with 21·8 per cent. of institutionally held land. East Anglia has 17·2 per cent. and the south-east of England has 16·4 per cent. Scotland contributes 16·5 per cent. to the total. That shows the position at the end of 1981. The analysis goes on to say that there has been a move away from the eastern counties towards parts of Yorkshire. However, I do not want to spend all my time reading this excellent analysis into the record.

I strongly support my hon. Friend the Member for Ipswich. I hope that all hon. Members will do so. He paid tribute—if he did not, I shall do so now—to Savills-RTP for its analysis. We should not be dependent upon private sources for information in our debates.

The Minister of State made the case, perhaps more strongly than anyone, for the need, especially, for new clause 5 and the annual report to Parliament, when he referred to land prices and the amount of land purchased by financial institutions based on anecdotal evidence. It is not good enough for a Minister to speak on the basis of anecdotal evidence. That is no way to run a country.

I am very grateful to the hon. Member for Gainsborough and Horncastle (Mr. Leigh). I was going to say, tongue in cheek, that I was aware of the detailed provisions of the hon. Member's Act, but I had not really appreciated its importance, and I am glad to know of the provisions. I pay tribute to the hon. Member for putting them through.

I draw a different conclusion from the Minister. I do not think that that Act invalidates new claue 5. If anything, it reinforces it, boosts it and shows all the more reason why an annual report to Parliament is feasible. The Minister has no excuse to say that it is difficult to get the information because he does not have the power to do so. He has the powers and he should produce the information. He let the cat out of the bag when he said that the Government had not decided exactly how to make the information available, whether it would be in annual report, or as information in booklets.

By far the best way of making information available is in an annual report to Parliament. After all, new clause 5 simply says that the Secretary of State shall make such recommendations as he deems necessary. Once he has that information, perhaps he will say that there is no need to change things or make representations to change matters because they all follow as night follows day, after the passing of the sun.

I hope that new clause 5 will be written into the Bill. With the leave of the House, I should like to withdraw new clause 4 and formally move new clause 5.

Motion and clause, by leave, withdrawn.