Consequential Amendments

Part of Orders of the Day — Agricultural Tenancies Bill [Lords] – in the House of Commons at 5:42 pm on 19th April 1995.

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Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West 5:42 pm, 19th April 1995

As is well known, the two organisations have taken a different view. I had a productive and positive meeting with them during one of my visits to the Principality. They remain sceptical. I am not claiming that there is total unanimity; some members of the National Farmers Union in different parts of the country remain doubtful. I do not want to over-exaggerate, but it is fair to say that there is wide consensus in a pluralistic industry. In my experience, most' of the participants are characters with strongly held, independent views. Therefore, I think that the level and extent of agreement is remarkable.

I should add one additional word of thanks. The House is always sympathetic to constituency points. Without getting into trouble over advertising, I should like to thank the principal legal experts on the subject, Burges Salmon and Andrew Densham, and others of my constituents who have helped my Department and Members of Parliament with advice during the passage of the Bill. As I am talking on a personal basis, may I say that I should have begun my speech by repeating a declaration of interest? As the House knows, I have a shareholding in a family tenant farm. It is unaffected by the Bill, as we have not made the mistake of introducing retrospective legislation.

The Bill's aims, as we said on Second Reading, are to tackle the decline in tenancies offered, to open up opportunities to new entrants and to provide flexibility for agriculture to remain internationally competitive. The background must be not that the present position is a satisfactory one that we need to maintain but that it is unsatisfactory. Whatever the theoretical intentions behind previous Acts passed by the House may have been, we know what the position is.

We know that the great majority of tenancies that are being let are for fewer than two years under various loophole arrangements that have been devised—largely by Burges Salmon and other of my constituents. We are not removing rights that apply to secure tenancies that are being let. They are not being let—instead, short, loophole tenancies are being let. The number of new tenancies under the Agriculture (Miscellaneous Provisions) Act 1976 is minuscule—it has almost dried up. That has brought the present legislation into disrepute and has brought the Tenant Farmers Association and others to their present conclusions.

Many of my hon. Friends are knowledgeable on the subject and, as has been said, the Bill's main feature is to respect the freely entered into contract between landlord and tenant. There may have been periods in our social history when there has been a great imbalance one way or the other between the two partners. I would not deny that that happened in the 19th century, but if we look at the modern British farming industry we see that those days are long past. We can expect a reasonable degree of negotiation and a reasonable balancing of interests to emerge from freely entered into tenancies.

I think that we shall see a variety of such tenancies after September this year—some for long periods, some for medium-length periods and some for short tenancies. The length of each tenancy will reflect what is economically sensible and what suits the best interests of both parties. It will be affected by the nature of the holding and so on. The key point for new entrants is that, if they can overcome the all-important initial hurdle of gaining access to land, at least they have a chance to show their mettle and build up a track record and a long-term business.

All landlords want good tenants, and most want to keep them once they have found them. Longer tenancies will flow from mutual trust, not legal compulsion. We have tried that policy and it has not worked. That fact was well expressed in a press release issued by the Tenant Farmers Association, which states:

It must be better to bring more land on to the market than to face the present steep decline in the long term let sector, one which would continue if the law imposed a long term tenancy. That view now prevails in all the main industry organisations. Sir David Naish, the president of the NFU, is on record as saying:

tenancy reform will breathe new life into the farming industry". We have made a number of amendments to the Bill, both here and in another place, which we think have improved it. Some of those amendments have been introduced with the agreement of the Labour party; all of them, without exception, have been fully supported by the industry. Others have been argued for by my hon. Friends, as we heard today.

We have also included a new clause—a key complementary step—in the Finance Bill that will extend inheritance tax relief to new lettings. All in all, we are doing everything within our power to revitalise the tenanted sector.

Some commentators have expressed doubts about the extent to which we will succeed and about the lack of security for tenants. However, I have not heard anyone suggest a practical way in which the Bill could do more to persuade those who own agricultural land to provide new tenancy opportunities.

I was a little saddened by the fact that the Labour party voted against Second Reading. It seemed unwise for the Opposition to fly in the face of such wide support in the farming community and I had hoped that they would take a more constructive approach.

It is perhaps ironic that the House seems to take a more old-fashioned attitude to such matters than one would expect. The noble Lord Carter, in explaining the Labour party's position in another place, adopted a more temperate approach to the matter. I would hardly expect Labour Members to agree now that we have been right all along and they have been wrong. One lives in hope, but I think that it would be surprising if they were to change their minds tonight.

I make one point to the Opposition. We have taken great care to avoid retrospection in the Bill. We could have decided quite reasonably—in fact, many people urged us to do so—to go back and clear up what many consider to be the mess that Labour created with its 1976 legislation. We could have decided to abolish the succession rights that applied to pre-1984 tenancies, to give security to generations of successors and so on. There was quite a lot of pressure on us to do that.

We resisted the temptation on the ground that in this area, above all others, retrospective legislation is bad. We did not intend to follow Labour's precedent of passing retrospective legislation. Where the Bill might have had retrospective effect unintentionally or indirectly—such as in relation to the constituents of my hon. Friend the Member for Worcestershire, South (Mr. Spicer), who followed the long-established Evesham custom with which the House is now expert—we took steps to amend it in order to avoid that consequence.

Surely it is right to ask the Opposition to make the same commitment today. I think that the Liberal Democrat spokesman, the hon. Member for North Cornwall (Mr. Tyler), made the same point. I advise people that the risk of a Labour Government in the foreseeable future is very small. Nonetheless, others are less well informed than me, about the matter. Some landowners—for reasons best known to themselves—may harbour such fears. If they are to be encouraged to let land now—I think that that is the unanimous view of the House—it is vital that they should not be put off by the spectre of retrospective legislation introduced by a future Labour Government. In order to remove any disincentive to letting that may stem from such fears—unjustified though they may be—I call upon the Opposition to make a firm and clear pledge today not to introduce any future legislation on the subject which would have a retrospective effect.

Opposition Members have referred to monitoring today and my hon. Friend the Minister of State has responded positively to their points. We should allow the Bill to work effectively and not damage its chances of working by passing remarks about it or by making promises or pledges into the future. That is the least that the Labour party should be prepared to do in order to give the Bill a proper chance to work effectively in the interests of tenants.

I believe that we have improved the Bill a great deal during consideration in this and in another place. It is now a very good Bill which goes as far as it is reasonable to go. We should now look with confidence to a significant boost in the tenanted sector from 1 September this year onwards. Perhaps then the distant echoes of 1976 will finally die away. I commend the Bill to the House.