Orders of the Day — Agricultural Holdings (Amendment) Bill

Part of the debate – in the House of Commons at 1:32 pm on 16 February 1990.

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Photo of Mr Alex Carlile Mr Alex Carlile , Montgomery 1:32, 16 February 1990

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

I am most grateful for the all-party support that I have received. As hon. Members will see from the Bill, at is a lawyer's dream and I am a lawyer. As such, it gives me great pleasure to move the Second Reading.

This is more than merely a technical Bill. It is intended to be, and I hope will be, of importance to secure the position of farm tenants. Farm tenancies are a scarce commodity. They are vital in our agricultural system because they enable young people to gain a foothold on the farming ladder. They enable people to become farmers who cannot raise capital from inheritance or financial institutions—the sort of capital needed to start a farming business these days if one has to buy land. Many successful tenant farmers go on to succeed as owners of farms.

To succeed, tenants need reasonable security of tenure. There are many tenant farmers in my constituency and tenant farmers there have brought home to me the importance of this modest measure.

I acknowledge a considerable debt to the National Farmers Union—nationally and in my constituency—as it has assisted me with the Bill. I also acknowledge my gratitude to the Minister and to Baroness Trumpington who sent me my only Valentine on 14 February, but a welcome one none the less. She told me—I hope that we shall hear the same from the Minister—that the Government regard the Bill as a sensible precaution for the benefit of farm tenants.

I must touch on some technical issues to explain the Bill. Case B of schedule 3 to the Agricultural Holdings Act 1986 states that a landlord can give notice to quit if the land is required for non-agricultual use, either where planning permission has been granted, or where it is not required other than by virtue of the town and country planning legislation.

Until July last year the consensus of legal opinion was that that second provision referred only to the Crown as being exempt from the requirement of planning consent, and that any private landlord wishing to resume possession of tenanted land for normal agricultural use could not do so without having first obtained planning permission. The case of Bell v. McCubbin, however, turned 40 years of legal thinking on its head. Any hon. Member can read about the case if he pops into the Library and looks up page 54 of (1990) I All England Reports, which, I am sure, is everyday reading for us all: I have a copy with me. Bell v. McCubbin, heard in the Court of Appeal, altered the understanding of those who deal in agricultural holdings law, and in doing so altered—dramatically—the circumstances of tenants.

The court held that a landlord could serve a valid notice to quit all or part of a tenancy under case B of schedule 3 to the Act if the land or buildings in question were already being used for a non-agricultural purpose, and the landlord wished to resume possession for the same purpose. In Bell v. McCubbin, the landlord wanted to resume possession of a farmhouse that was being sublet as a residential dwelling. He also wished to let it as a residential dwelling; thus no change of use was involved, and planning permission was not required.

Many tenants have taken advantage of Government-encouraged schemes for their farms. A number have diversified and set aside land, using parts of it for non-agricultural purposes that bring them a portion of their income. Although a landlord's ability to serve a notice to quit part of the land is limited for technical reasons, most modern tenancy agreements contain a clause enabling him to do so. If, for instance, a tenant is using a building for holiday letting, and his tenancy agreement contains a clause specifying that the landlord can resume possession of part of the holding for non-agricultural use, the landlord can serve a valid notice to quit, provided that he does not wish to change the use of the building. Once he has regained possession, however, he may change its use at a later date.

The knock-on effect of Bell v. McCubbin is that landlords may use the precedent as a technical mechanism for dispossessing tenants. That may not be confined to cases in which only part of the land is required. It could provide carte blanche for unscrupulous landlords and, above all, to the minority of estate and land agents—I emphasise that they are a minority—who are sharks, and could help an unscrupulous landlord to get a tenant out at any cost and on a technicality if possible. Such agents smile wryly when they find a new technicality, however much injustice it will cause.

Tenants could be dispossessed of their entire holdings if the landlord wished to resume possession—for example, for shooting purposes. Shooting rights generally cover all the land. If a landlord purported to wish to use all the land for that purpose, no change of use would arise. Therefore, no planning consent would be necessary and the tenant would be out. One can think of many other examples whereby a landlord might, on entirely spurious grounds, obtain the land, although his intentions may be disingenuously expressed.

Where a tenant is dispossessed of land under case B, statutory compensation is currently payable. However, it is only a maximum of five to six years' rent. That is wholly inadequate, given the drastic reduction in the availability of tenanted land in recent years and bearing in mind current land values.

In my constituency—which I believe is, statistically, the one with the most agricultural land in the United Kingdom, with a higher proportion of its work force employed in agriculture—it is almost impossible to find a tenanted farm. Whenever such a farm becomes available, there is a long list of applicants. Shortlists are drawn up and the interviewing procedures are harsh. They are not unfairly harsh, bearing in mind the scarcity, but they are harsh for the many able people who fail to acquire a tenancy. If a dispossessed tenant receives only statutory compensation, it is almost certain that he will not have sufficient capital to buy another holding. He will face financial disaster and unemployment and misery for his family.

There is a call from certain sections of the farming industry for a reduction in security of tenure for tenants. There is a call from some quarters for fixed-term tenancies. There is undoubtedly room for genuine debate about the future of the agricultural holdings law. I do not want for one moment to discourage that debate, which has only recently started to gather momentum. I hope that we shall review carefully the agricultural holdings law. Our aim should be to start from the status quo as it was understood before Bell v. McCubbin and try to create agricultural holdings law that will ensure that tenancies are a vital and living part of an industry that allows farmers to develop at all stages of their lives, and at all levels. The Bill in no way prejudices the longer-term view of the agricultural tenancy law. As I have implied, I should like to take part in that review, if such an opportunity presents itself in the House.

As my proposal in no way prejudices future reviews, I should be unable to understand any opposition to the Bill. I believe that it will do perhaps more than it deserves, to be honest, to boost confidence among tenants. It would give me a great deal of pleasure if, with the support of right hon. and hon. Members, the Bill reached the statute book.