New Clause 4

Part of Orders of the Day — Agricultural Holdings Bill [Lords] – in the House of Commons at 5:30 pm on 6 June 1984.

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Photo of Mr Kenneth Weetch Mr Kenneth Weetch , Ipswich 5:30, 6 June 1984

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.