Determination of Rent of Agricultural Holding

Part of Orders of the Day — Agricultural Holdings Bill [Lords] – in the House of Commons at 8:30 pm on 6 June 1984.

Alert me about debates like this

Photo of Mr John MacGregor Mr John MacGregor Minister of State (Ministry of Agriculture, Fisheries and Food) 8:30, 6 June 1984

We had long debates in Committee about these words and I gave a clear commitment in response to the debate, which I did willingly.

The three Government amendments introduce a specific reference to earning capacity in relation to the productive capacity of the holding, without preventing an arbitrator from taking into account earnings from non-farming activities as a relevant factor. I shall explain the amendments in more detail to make clear beyond doubt the Government's interpretation of the change and how the problems have been overcome.

In determining the rent properly payable in respect of a holding, one especially relevant factor which the arbitrator must take into account under clause 1(3) will be the productive capacity of the holding and its related earning capacity. Amendments Nos. 3 and 5 define these terms. The earning capacity specifically relates to the holder's productive capacity. Under its terms it will include potential farm earnings within the limit of these definitions. That is fair.

The related earning capacity does not include earnings from non-farming activities such as tourism. Where such earnings exist they would be one of the unspecified relevant factors which the arbitrator would be bound to take into account. We cannot start listing in the clause possible relevant factors because that would immediately raise doubts about which other factors might or might not be regarded as relevant for determining rent. The rent clause, therefore, spells out only specific relevant factors which apply in every case. The effect of the amended formula enables actual earnings from non-farming activities to be taken into account as relevant factors.

I can give my hon. Friend the Member for Penrith and the Border (Mr. Maclean) the assurance he seeks. I sought guidance and advice from experts on these matters. I am advised that amendment No. 4 does not add anything to the amendments I propose. Both the National Farmers Union and the Country Landowners Association declared themselves content with the wording we have adopted. The points referred to in brackets in the Opposition's amendments are integrated in our amendments. For example, quotas affect earning capacity, and therefore where quotes exist, as they do in the dairy sector, they would be taken into account as a factor of earning capacity.

I am advised that there is no need to be specific. If one starts to specify particular factors, others are left out. The hon. Gentleman probably thinks that he has thought of everything relevant, and perhaps he has. However, five years from now, there could be a problem when another factor becomes relevant. There is always a risk when one specifies particular factors and leaves others out. There is an inclination to think that the others are less important and less material, and that they should perhaps be disregarded.

On that basis, I hope that the hon. Member for City of Durham (Mr. Hughes) will be content that my amendments match the commitments I gave in Committee and meet his points.