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Lords Chamber

Volume 447: debated on Tuesday 7 February 1984

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House Of Lords

Tuesday, 7th February, 1984.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers—Read by the Lord Bishop of Chelmsford.

The Lords following took and subscribed the Oath:

Philip William Bryce, Viscount Leverhulme

Harold, Lord Woolley.

Tributes To The Late Lord Byers

My Lords, as Leader of the House it falls to me to pay tribute to the memory of the noble Lord, Lord Byers, whose sudden death yesterday came as such a shock to me and to your Lordships. The noble Lord became a Member of this House in 1964, having already achieved distinction in several fields. While still at Oxford he won renown as an athlete, and held the British Universities' record for the 440-yard hurdles as well as taking part in several international athletic meetings.

The noble Lord had a distinguished career in the Army in the Second World War, in the course of which he served under Lord Montgomery as a member of the Eighth Army staff and, later, of the 21st Army Group Headquarters. He was awarded the OBE, was mentioned in despatches three times, received the Croix de Guerre and was made a Chevalier of the Legion of Honour.

Between 1945 and 1950 he served as a Member of Parliament for North Dorset; and from 1946 to 1950 he was Chief Liberal Whip in another place, an appointment which, as your Lordships will appreciate, personally endeared him to me. After ceasing to be a Member of Parliament, he remained a prominent and active member of the Liberal Party. In 1965, soon after he came to this House, the noble Lord became Chairman of the Liberal Party, an office which he held until his appointment in April 1967 as Leader of the Liberal Peers. That post was one which he was to hold with distinction for the rest of his life—almost 17 years. In 1972 he was appointed a Privy Counsellor.

Many of your Lordships will have had much longer experience than I of the major contribution which he made to this House over a period of many years, particularly in his position as Leader of the Liberal Peers. When I came to this House and found myself working with him as a fellow member of "the usual channels", I found him very much true to the form which I would have expected from my friendship with him over the years. He was always friendly and a pleasure to work with, while at the same time vigorous and determined. My own sense of loss will I know be shared by noble Lords in all parts of the house, for Frank Byers was a devoted and assiduous worker in the interests of the House as much as of his own party. The whole House will wish to express its deepest sympathy to the noble Lord's widow and family.

My Lords, on behalf of my noble friends I would wish to say that we share the sorrow and the shock which everyone felt on hearing the sad news of Lord Byers's death. Frank Byers gave outstanding service to his country in war and peace, and to the Liberal Party, to which he was dedicated; for although he was respected and successful in the business circles in which he became active, it is as a devoted Liberal that he will be remembered. He had served in this House for 20 years, and it was clear that he had a great affection for this place and was well-versed in its ways. As Leader of his party here he was firm, sensible and plain-spoken. Frank Byers never left you in any doubt about his views. He will be greatly missed, and we send our warm sympathy to Lady Byers and the family.

My Lords, the Liberal Peers deeply appreciate the tributes that have been paid to their late Leader, both by the noble Viscount the Leader of the House and by the noble Lord the Leader of the Opposition Peers, Lord Cledwyn. Those tributes were generous and yet at the same time were entirely well-merited.

Of Lord Byers's achievements in public life, it is perhaps not right that I should devote too much attention this afternoon to them, although as a friend of his for some 40 years I am very much aware of them. Perhaps I might say just a few words about his service as Leader of the Liberal Peers for the unprecedentedly long period of some 17 years. During that period he became ever more mindful of the traditions of this House and ever more keen to act as their guardian.

He was the ideal leader for a minority party. He was firm, he was incisive, he was the most able of negotiators, and he had an instinctive political flair which meant that his judgment was almost infallible. Added to those qualities, he was a superb administrator, he was totally efficient; and he was extremely effective in your Lordships' House. The House will remember his speeches: invariably short; invariably packed with original thought and common sense; and always imbued with a warm humanity. Your Lordships may have seen that one of the obituaries in this morning's papers referred to the fact that, had he chosen to join another political party, he would no doubt have held high ministerial office. I have no doubt that that is true. I have no doubt also that the thought would never have occurred to him because he was at all times passionately imbued with his political ideals.

He passed away yesterday afternoon suddenly, and I think as he would have wished it: in his room in the Houses of Parliament to which he had devoted his life and to which he had contributed so much. I join with what has already been said in expressing our deepest sympathy to Lady Byers who was his happy partner in marriage for some 44 years, and to the members of his family of whom he was so proud and who brought him so much happiness.

My Lords, I hope that I may join in paying a short but very warm tribute to a great parliamentarian and a most co-operative colleague. Although it was as long ago as 1945 that I first came to know Frank Byers, and well remember how at that time as Liberal Chief Whip he earned the respect of all of us who were Members of Parliament, it was only in more recent times that I had the privilege of working with him very closely, very co-operatively, very harmoniously, and indeed very happily. Your Lordships have already been reminded what a great all-rounder he was; and I should like to endorse what has just been said about the force of his speeches, which always seemed to me to be equally remarkable for their clarity, their common sense, and their brevity. But I feel that it is to his wife, Joan, that our first thoughts must go. I can only hope and pray that out of the love of her family and the warm and affectionate admiration of his very many friends she will find the inner strength to cope with her sudden and tragic bereavement.

My Lords, I am sure that all those sitting on the Cross-Benches will want to be associated with the sympathy and tributes already expressed to the family of Lord Byers and to the Liberal Party. It was the noble Lord's clarity of thought and therefore brevity of speeches that set such an example to us all. He will be sadly missed in this House.

My Lords, I should like to associate those of us on these Benches with the expressions of sympathy that we have already heard. We respected Lord Byers as a forthright speaker; as one who, in the words of today's psalm, "spoke the truth from his heart". He never wasted time or words, and he was a consistent guardian of the rights of minority groups in your Lordships' House. We greatly regret the suddenness of his passing. We should like to express to his colleagues on the opposite Bench and to the members of his family the assurance of our sympathy and our prayers at this time.

My Lords, there are a number of noble Lords, including the noble and learned Lord who sits on the Woolsack, who will remember Frank Byers from the Parliament of 1945–50 when he was a Member of the Commons. He showed then some of the qualities which have already been referred to both in the Army and later in Parliament, but I should like to refer to an area which has not been mentioned; namely, his contribution in industry. He was one of the driving forces, with Val Duncan, in creating the Rio Tinto Zinc Corporation. It was his liberal views which permeated and created a sense of humanity, particularly in the activities of that company in Africa, which have made a mark for history. This is particularly true in Zimbabwe, and I would not want this real achievement to be forgotten. He was a modest man. His entry in Who's Who is a very short one, but it could he a very long one.

Other noble Lords have referred to his parliamentary performance. Along with a number of colleagues, particularly the noble Earl, Lord Jellicoe, and the noble and learned Lord, Lord Gardiner, I worked with him on House of Lords reform. Although it did not come about (for reasons I shall not go into now) he made a contribution of common sense, and was a good colleague. He was a colleague whom one implicitly trusted; somebody with whom one was happy to work.

The noble Lord, Lord Diamond, has already referred in felicitous terms to the brevity of the speeches of Lord Byers. A number of times I have said to Lord Byers, "I really am jealous. You can say in 10 minutes what takes me 25 minutes". It was this succinct and decisive mind that contributed so rapidly and usefully to your Lordships. We all had an affection for him. He was a man of great energy, and he was properly described as a true Liberal. He was a man of the highest integrity.

Parole Policy And Prison Discipline

2.50 p.m.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what additional disciplinary problems are being encountered in prisons in England and Wales as a result of the Home Secretary's declaration at the Tory Party conference that parole is to be denied automatically to certain classes of prisoners.

My Lords, parole is not being automatically denied to any prisoners. My right honourable friend has every confidence in the prison service, and the small number of minor incidents allegedly linked with the new policies on parole have been handled quietly and well.

My Lords, the Minister knows perfectly well that parole is being automatically denied to the classes of person referred to by the Home Secretary in his speech to the Tory Party conference. Is the Minister aware of the remarks made by the prison chaplain in Parkhurst which were quoted in yesterday's Guardian, that the Home Secretary's decision gives inmates more reason to be actively disruptive? Is the noble Lord aware that the Prison Officers' Association recently had to see the Secretary of State to tell him that he had created enormous problems for it by his announcement? Is he aware that prisoners and their families are bewildered and dismayed, particularly those on the point of being released, at being knocked back sometimes for years? Does he not think that in those cases the decision of the Home Secretary constitutes a violation of Article 3 of the European Convention on Human Rights which prohibits cruel and unusual punishments?

My Lords, I cannot accept almost anything that the noble Lord has said. The policy was worked out and openly stated in the full light of understanding of the pressures that might result. There have been pressures. My right honourable friend is aware of them through the channels that the noble Lord mentioned and others. As I have already said, they have been handled well and successfully The fact is that we have a policy which reassures the public that there is a direct relationship between the seriousness of an offence and the length of a prisoner's service of sentence as a result of that offence. This was introduced at a time when the public was becoming disturbed by perceiving that these two factors were diverging.

My Lords, does not the noble Lord the Minister agree that in any study of penology a policy that gives no hope must be hopeless in itself?

My Lords, there is no policy that gives no hope. There is a policy under which those serving for serious offences and those serving for life know where they stand and what they can expect.

My Lords, does the Minister not agree that Parole Board reports over the past 15 years since the Parole Board was set up have shown clearly that few prisoners serving long sentences for acts of violence and for drug trafficking have received parole at the first review with the maximum eligibility, that most have to wait a second and, in many cases, a third review if they are to get parole for a few months before their normal date of release? Against that fact—I think that the Minister will have to agree that is so—can he explain what useful purpose is likely to be served by the Home Secretary's new policy which would justify the great difficulties now created for prison staff owing to tension in prisons?

My Lords, the purpose of imprisonment is not only reform—which is rarely achieved—it is also deterrence and retribution. The cases of all eligible prisoners will continue to be reviewed by the local review committee as before, and will continue to be selected for reference to the Parole Board as before. All cases will continue to be considered by the committees and the board on their individual merits, bearing in mind the Home Secretary's stated intention in relation to the exercise of his discretion. The Parole Board, to which the noble Lord rightly gives great weight and of which he has great experience, is still involved in every case. I believe that the system is just.

My Lords, is the noble Lord aware that there is widespread indignation in the prison service, both among governors and among members of the Prison Officers' Association, that neither of their professional organisations was consulted before the right honourable gentleman made his speech at the Conservative Party conference?

My Lords, the prison governors and the Prison Officers' Association are fully in the confidence of my right honourable friend who has had discussions about this matter. The policy was not worked out in conjunction with them in detail; but he has been in close consultation with them ever since and he does not need reminding of the close involvement of these dedicated members of the service, without whom no prison policy would work.

My Lords, may I ask the Minister whether child sex offenders are supervised when they are eventually discharged? Would not some form of parole system be a safeguard when they go back into the community?

My Lords, prisoners are customarily under supervision when they are on release on parole.

My Lords, does not the noble Lord agree that the Prison Officers' Association made representations to the Secretary of State on the lines that I have mentioned, and that they feel a continuing anxiety about the possibility that serious disturbances may result from the psychological pressures on these prisoners whose expectations have now been dashed? Does he not think also that when the courts originally sentenced those persons they did so in the expectation that parole would be considered on its own merits by the statutory authorities constituted for the purpose, and that the Secretary of State, by usurping those powers, has created a dangerous situation?

My Lords, on the noble Lord's first point, certainly the Prison Officers' Association came to see my right honourable and learned friend, and it was proper that they should. They told him of the feelings in their service and it was also proper that they should. There is no feeling of panic or alarm. The only thing that contributes to the danger of ugly incidents now is the way people constantly say, "Isn't it going to happen?", in the terms that the noble Lord has. On the noble Lord's final point, I am glad of this opportunity finally to debunk a complete misunderstanding of what has happened. The Lord Chief Justice has refuted the heresy that sentences are made in the expectation of parole. If I may quote the passage in The Times Law Report of 13th December 1983 which could not have made this clearer,

"Questions of parole were not for the Court of Appeal. Their Lordships had repeatedly said that the sentences were imposed by trial judges and reviewed by the Court of Appeal without regard to the impact or lack of impact of possible release on parole",
I hope that will be remembered.

Probation Service Statistics

2.58 p.m.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they will make a statement on the collection of probation statistics in view of the advice given by the National Association of Probation Officers to its members not to carry out such work.

My Lords, Her Majesty's Government deplore the continuance by the National Association of Probation Officers of action to disrupt the collection of probation service statistics. The loss both to the Home Office and to the probation service caused by the lack of timely information, both local and national, about the service's activities is likely to be substantial and will undoubtedly prejudice the effective management of the service's work, to whose value many noble Lords and I myself have often paid tribute in this House.

My Lords, I thank the noble Lord for that reply. Does he not agree that the failure to obtain adequate information through probation statistics will make it increasingly difficult to argue the case for increased resources for the probation service?

My Lords, that is something that I hope will be noticed by the probation service itself.

My Lords, can the Minister confirm that, in correspondence with the National Association of Probation Officers last August, his department expressed their readiness to discuss the setting up of negotiating machinery especially to deal with this very controversial problem of trainees' pay? Does he not agree that this would be by far the best procedure for dealing with this controversial and sensitive problem? Is he able to let the House know what progress, if any, has been achieved in the setting up of this machinery during the past five-and-a-half months?

My Lords, subject to correction, I think that the exchanges started a little more recently than last August; but I can confirm that the National Association of Probation Officers has expressed a wish for fuller involvement in discussions on the pay of probation students through the establishment of formal negotiating machinery. The Home Office has been discussing this matter with the national executive committee—and I stand corrected by my own words—since last August. These discussions are now continuing.

My Lords, stating first, if I may, my great admiration for the probation service, may I ask my noble friend the Minister why it is that they are being obstructive about this? Could he inform the House?

My Lords, the action that they have taken is about the fact that from 1983 the salary paid to probation students newly embarking on Home Office-sponsored courses was reduced. I should add that it was reduced to a level which was, on average, at least £1,000 a year higher than the points being paid to student social workers and teachers.

International Development Association: Funding

3.2 p.m.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government what is their present policy towards the potential shortfall in the International Development Association's budget for 1984–85.

My Lords, I refer the noble Lord to the reply given in another place by my right honourable friend the Minister for Overseas Development on 27th January to the effect that Her Majesty's Government are prepared to make a contribution to supplementary funding of the seventh replenishment of the International Development Association on the basis of the usual equitable burden-sharing among donors.

My Lords, this gives me the unique opportunity of congratulating the Government twice within the last two weeks on the lead which they have taken in this matter. May I ask the noble Lord to clarify some of the words of his honourable friend in another place? These are questions of elucidation. Is it the case that the British contribution will be 195 million dollars or £139 million? If it is, how does this square with the report that the United Kingdom's share has fallen from 10·1 per cent. to 6·5 per cent? Thirdly, when he quotes his honourable friend in another place by referring to equitable burden-sharing among the countries concerned as a condition for the new British contribution, what exactly does that mean? Does it mean that, if one of the other countries defaults or refuses to pay, the British Government will not make their new contribution?

My Lords, the answer to the noble Lord's last question is, no. This does not mean that we should not make a contribution at all but it means that we should not enhance our contribution to make up for any shortfall from some other source. As to the earlier supplementary question that the noble Lord put to me, our contribution to the main replenishment of IDA 7 will be £403 million out of 9 billion dollars, which, as the noble Lord says, is 6·7 per cent., but that does not take into account any supplementary contribution which we may make. That supplementary contribution was taken into account in the earlier contribution of about 10 per cent. which we made to IDA 6.

My Lords, is it not the case that the original target was 16 billion dollars, that this was reduced to 12 billion dollars and that the 12 billion dollars was the sum which the United Kingdom, Japan, Western Germany and France were anxious to achieve; and the reduction to 9 billion dollars (which the noble Lord has just mentioned) is a serious lowering of the level of aid which the United Kingdom was anxious to achieve? Could he say whether the 12 billion dollars is still negotiable, whether there is still a possibility that more might be achieved; or whether the United States is insisting on the 9 billion dollars? If that is the case, why is the United States so anxious to reduce the figure?

My Lords, the 9 billion dollars is the figure which has been agreed among the donors for the main replenishment. We hope that the figure will be made up to around 12 billion dollars by means of supplementary funding and we shall be ready to play our part in that.

My Lords, can my noble friend say whether there is any chance of the supplementary contribution taking into account the fact that apparently British Leyland are thinking of closing down their car and truck division whereas the third world is desperately short of trucks?

My Lords, may I ask the noble Lord two further questions? Is it not the case that, unless the 16 billion dollars is provided for the next tranche starting next July, the work of the IDA will have to be cut because it requires 16 billion dollars just to stand still? Secondly, I was referring to the supplementary amount that the British Government have offered, and I understand that the British Government, along with other governments, are hoping to hold a new meeting later in the year in order to make up some of the shortfall. Can the noble Lord tell us how the arrangements for that meeting are progressing and whether, as happened in the case of Japan and West Germany, it is likely to be deliberately sabotaged by the United States administration?

My Lords, I would not accept the terminology which the noble Lord chose to use at the end of that supplementary question. I can say that negotiations on the creation of the supplementary fund are proceeding and that we hope very much that they will be in place by the 1st July this year.

My Lords, the noble Lord has not answered my first supplementary question. Is it not the case that unless 16 billion dollars are provided for the IDA this year then, according to the World Bank, there will have to be a cut in the operations of the IDA?

My Lords, I do not believe that 16 billion dollars was ever a realistic target for this replenishment. The Government were able to agree to the 12 billion dollar figure to which I referred.

Business

My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Lord Lucas of Chilworth will, with the leave of the House, repeat a Statement being made in another place on the Severn crossing.

It may be for the convenience of the House if I announce that dinner will be available at the usual time of 7.30 this evening. The Report stage of the Agricultural Holdings Bill will be adjourned at approximately 7.30 p.m. for approximately one hour and during that adjournment the Pedal Bicycles (Safety) Regulations 1984 and the Report stage of the Prohibition of Female Circumcision Bill will be taken.

Public Health (Control Of Disease) Bill Hl

3.9 p.m.

My Lords, I rise to move that this Bill be now read a second time. It seeks to consolidate those parts of the Act relating to public health that are concerned with the control of disease. Besides the general regulatory provisions for preventing the spread of disease, it contains specific provisions relating to burial and cremation and the regulation of common lodging houses and canal boats. In order to produce a satisfactory consolidation, the Law Commission have made recommendations which are set out in their report on the Bill laid before this House on 20th January. If your Lordships give this Bill a Second Reading, it will be referred in the ordinary way to the Joint Committee. I beg to move.

Moved, That the Bill be now read a second time— (The Lord Chancellor.)

My Lords, I think the House would want to pay tribute to the Law Commission, to the noble and learned Lord the Lord Chancellor and, if I may say so, to the Joint Standing Committee, of which I am proud to be a member, for the many consolidation measures which are coming before the House. Obviously they are extremely welcome and I think that the House ought to note the point.

My Lords, I am very grateful to the noble Lord for what he has said. Of course, the praise goes to the Law Commission, but I attach a great deal of importance to the work of consolidation which makes the duties of the legal profession and those who have need to know the text of the law so very much easier than it would otherwise be.

On Question, Bill read a second time, and referred to the Joint Committee on Consolidation Bills.

Agricultural Holdings Bill Hl

3.11 p.m.

Report received.

Clause 1 [ Determination of rent of agricultural holding]:

moved Amendment No. 1:

Page 1, line 16, leave out from ("holding") to ("and") in line 17 and insert ("at the next termination date").

The noble Earl said: My Lords, I fear we have another long session in front of us, but I am sure my noble friend on the Front Bench will defend his angles slightly better than his compatriots did at Murrayfield, although I was delighted at the way they played. This amendment is really a very small one. It is designed to bring the rent review date into line with the normal contractual rent reviews by requiring the arbitrator to determine the rent payable on the termination date; that is, the relevant anniversary date of the tenancy. It is illogical and unsatisfactory to have a rent review date which can vary widely when the intent should be to fix the rent properly payable at the anniversary date. It would otherwise be possible, as it is at present, for a landlord or tenant to judge in, say. May or June how the levels of the rents are likely to move between then and the date of termination, and to demand an early reference to arbitration, if that were felt to be in his personal interest.

The point I am driving at is this. As worded, the Bill presents an opportunity for an aggressive landlord or an aggressive tenant to use the Bill to manipulate the situation with regard to rent reviews. I think this is a dangerous precedent to set. Although it has worked satisfactorily to date, in the future when everybody has had time to scrutinise the Bill and go through it with a fine toothcomb they will want to seek every opportunity to maximise their interests. I beg to move.

My Lords, may I start the afternoon by agreeing with my noble friend Lord Caithness. I have some sympathy for this amendment. If I may give an example to fortify his case, what is happening today is that some land agents are negotiating Michaelmas rents now under the old rules because they fear—in my opinion, quite incorrectly—that the new rules under Clause 1 might not be attractive for them.

I hope that my noble friend Lord Belstead and the House in general will agree that such a practice is unattractive in the extreme while legislation is going through your Lordships' House. Similar situations could be envisaged, as my noble friend has said, whereby the tenant might want to go early because he thought farming was improving or because the landlord in the case was going early. I hope that the Government will give this some thought.

My Lords, we have indeed given this quite a lot of thought and I have discussed it outside the House with my noble friend Lord Caithness; but I think that his cure may be rather worse than the disease. At the moment an arbitrator is required to determine the rent properly payable at the date the arbitrator is appointed, and in most cases I think it is fair to claim that he is appointed close to the termination date so there is no real gap between the date at which the rent is determined and the date on which it comes into effect. It is true that arbitrators may be appointed well ahead of the termination date, in which case there will be a period of perhaps several months between the date of the reference and the termination date. I absolutely take that point. In these relatively few cases, therefore, the rent is determined some months in advance.

The purpose of my noble friend's amendment is to overcome this perceived difficulty by seeking to delete the date of the reference and insert the words "at the next termination date". This would require the arbitrator to embark on the really very difficult task of trying to estimate what the rent properly payable would be at that time, which of course could be several months ahead. He would be required to guess what the conditions would be relating to the holding at that time, rather than proceeding as he does at present under the law on the basis of the actual conditions obtaining at the time the arbitrator is doing his assessment.

This would be an additional obligation upon arbitrators, The present date for making an arbitration is well established and is one which I gather has become well used to in agriculture. Indeed, I think that my noble friend very fairly said that it has not given rise to any difficulty. I think we ought to bear in mind that of course the rent will be payable for a whole three years until the next rent review, and I suggest to my noble friend Lord Stanley that just a few months really are not of very great significance in the context of a three-year review, whereas, as I have said, there would be a difficulty in requiring arbitrators, on top of all their other work, to have to look ahead in some cases and conjecture what the rent ought to be at a date not even reached.

It is for these reasons that I cannot accept my noble friend's amendment. I am sorry, because I know that my noble friend feels that this would be an improvement, but, as I have said, I think it may not turn out that way.

My Lords, I am sorry that the noble Lord has taken the line that he has with regard to the amendment. I would suggest that he canot really have it both ways. As I understand his argument, it is twofold. Either there is absolutely no difference or there will be no difference between the rent at the time the arbitrator is setting about his work and at the time the tenancy comes to an end and the new rent comes into force. That is one argument; and the other argument is that it is impossible for an arbitrator to look so far ahead, that he is not going to be able to see what the conditions are at that time. They seem to me to be mutually contradictory arguments.

The difficulty could be overcome, although I am not suggesting that it should be in this case, by stipulating that the arbitrator may not give his judgment until, let us say, two months before the termination of the tenancy. In default of that-—and I do not put that forward as a realistic suggestion—it seems to me that this amendment is a minor one though a useful one. I very much hope that, if not at this stage at any rate at some later stage, either here or in another place, the noble Lord and his colleagues will see fit to accept this proposal.

My Lords, with the leave of the House perhaps I might just reply to that point, which is the one point I have not replied to. I do not think that the noble Lord, Lord Walston, uncharacteristically, is being wholly fair in this matter. What I am saying is that, on the one hand, there are not many cases where the arbitrator has to look a long way forward. Therefore, in the context of the three-year period for every rent review, I do not think the problem is a very great one. But, on the other hand, if I accepted my noble friend's amendment we would be requiring the arbitrator in every case always to have to look some period of time ahead in order to conjecture what the rent ought to be, instead of being able to say what it ought to be at the time the arbitrator is doing his work.

I do not want to be difficult about this because I realise there has been support from both my noble friends and from the noble Lord, Lord Walston. I shall be happy to look at this again, if that were the wish of the House. It might be possible, if we were persuaded, to bring forward an amendment on Third Reading. I will not give an assurance on that, however, because there are difficulties. If my noble friend would agree to withdraw his amendment on the basis of what I have said, perhaps I could meet him again and talk about it.

My Lords, I am grateful for the support I have received, and also for that last answer from my noble friend the Minister. He referred to there being few cases where the arbitrator would have to look ahead any length of time. We have spent many hours in Committee, and we shall spend a few more hours today, debating the very few cases where rents go to arbitration, so I do not think that that is any justification for excluding this from the Bill.

My noble friend also raised the point that rents will not vary greatly by making an arbitration decision a few months in advance. I can well remember rent reviews in which we started our homework in February for a Michaelmas review, and by the time we came to Michaelmas the rents had changed substantially, depending on the farming climate during the summer. It is exactly that situation that I am trying to avoid. However, in the light of my noble friend's kind words when he said that he will look at this again, I beg leave to withdraw the amendment with a view to discussing it with him and, perhaps, bringing it before the House at a later stage.

Amendment, by leave, withdrawn.

My Lords, I have to point out that if Amendment No. 2 is accepted I cannot call Amendment No. 11.

3.21 p.m.

Lord Belstead moved Amendment No. 2

Page 1, leave out from line 22 to end of line 17 on page 2 and insert—
("(3) For the purposes of the foregoing subsection the rent properly payable in respect of a holding shall be the rent at which the holding might reasonably be expected to be let by a prudent and willing landlord to a prudent and willing tenant, taking into account (subject to subsections (4) to (6) of this section) all relevant factors, including (in every case) the terms of the tenancy (including those relating to rent), the character and situation of the holding (including the locality in which it is situated), the productive capacity of the holding, and the current level of rents for comparable lettings, as determined in accordance with subsection (4) of this section.
(3A) In subsection (3) of this section "productive capacity", in relation to the holding, means the productive capacity of the holding (taking into account fixed equipment and any other available facilities on the holding) on the assumption that it is in the occupation of a competent tenant practising a system of farming suitable to the holding.").

The noble Lord said: My Lords, I beg to move Amendment No. 2, and would speak also to Nos. 14, 15, 16, 17 and 18; and, coming towards the end of the Bill, Amendment No. 74 brings into the Bill exactly the same concept.

Amendment No. 14: Page 2, line 18, leave out ("subsection (3)(d) of this section") and insert ("that subsection").
Amendment No. 15: Page 2, line 27, leave out ("those relating to rent)") and insert ("terms fixing the rent payable)").
Amendment No. 16: Page 2, line 28, leave out from ("shall") to end of line 30 and insert ("disregard—").
Amendment No. 17: Page 2, line 36, leave out ("and") and insert—
("(aa) any element of those rents which is due to the fact that the tenant of any comparable holding is in occupation of other land in the vicinity of that holding that may conveniently be occupied together with that holding; and").
Amendment No. 18: Page 3, line 13, leave out from ("holding") to ("and") in line 15.
Amendment No. 74: Schedule 1: Page 27, leave out lines 13 to 18 and insert—
(""(6) For the purposes of this section the rent properly payable in respect of the holding shall be the rent at which the holding might reasonably be expected to be let by a prudent and willing landlord to a prudent and willing tenant, taking into account all relevant factors, including (in every case) the terms of the tenancy or prospective tenancy (including those relating to rent) and any such other matters as are specifically referred to in subsection (3) of section 8 of the 1948 Act (read with subsections (3A) and (4) of that section)".").

My Lords, I wonder whether my noble friend has considered, and whether the noble Lord on the Woolsack has considered, the desirability of discussing all the amendments between Nos. 2 and 11, inclusive, together. One general discussion on the various alternatives which arise on those amendments would undoubtedly save time.

My Lords, I have discussed with the noble Lord, Lord John-Mackie, and, through the noble Lord, Lord Mackie of Benshie, the noble Lords, Lord Hooson and Lord Walston, the desirability of doing just that. I understand that all noble Lords are agreed, except that Amendment No. 11 falls outside in the sense that it is not an amendment to Amendment No. 2. But for the Government's part I should be only too pleased to discuss Amendment No. 11 at the same time also.

My Lords, if we are taking all amendments between Nos. 2 and 11, I would say that my amendment No. 7B hardly falls in the general discussion. So I should like to reserve the right to say something about that separately.

My Lords, I believe that the noble Lord the Deputy Speaker said that if Amendment No. 2 was accepted No. 11 could not he discussed.

I am sorry, my Lords. I said that if No. 2 was agreed to I could not call No. 11. I cannot prevent your Lordships from discussing Amendment No. 11.

My Lords, may I take it, then, that we are agreed that I am moving on behalf of the Government Amendment No. 2—

My Lords, if I may interrupt my noble friend very briefly, we are getting ourselves into the most appalling muddle, totally by mistake, and with no disrespect meant to the noble Lord, Lord Aberdare, in the Chair. Some of us feel that Amendment No. 11 makes a very great deal more sense than Amendment No. 2, because it happens to be written in rather better English, and that is something which we all appreciate. I do not see why, if it receives a large amount of support on the Floor of the House, and if noble Lords on all sides of the House say that my noble friends Lord Renton and Lord Dilhorne are correct in their interpretation of what we want to do, we cannot have a Division on it, if the spirit so moves your Lordships.

My Lords, I think that I ought now to move Amendment No. 2 and speak to Amendments Nos. 14, 15, 16, 17 and 18 with it. It seems to be generally agreed by noble Lords that they will be speaking to Amendments Nos. 3 to 10, which are of course amendments to Amendment No. 2. I think I must leave it to my noble friend Lord Renton to allude to Amendment No. 11 if he and my other noble friend wish to do so, and I shall not stop them. Indeed, if my noble friend raises points on Amendment No. 11, then on behalf of the Government I shall of course do my best to reply.

Your Lordships will recall that during Committee we had a very extensive debate on the rent formula. I believe that we had under consideration no less than eight different formulas, although your Lordships seemed to be agreed on one objective, which was to do no more than provide statutory cover for arbitrators' current practice. The Government had hoped that the original formula contained in the Bill had achieved this objective, but in the light of the arguments put forward by your Lordships in Committee I undertook to consider whether we could introduce modifications which would help to achieve a greater measure of agreement. Over the last two months we have tried to do just that, and I hope with some success, for Amendment No. 2 and the related amendments reflect views expressed in Committee by many of your Lordships.

I must say a word about the organisations which are closely concerned with this and which have also been involved in consultations. All of them have approached this issue in a very constructive way. There has been broad agreement on the objective; namely, to find a way of reflecting in law what arbitrators currently do. I hesitate to claim that we have got everything quite right, and indeed my noble friend Lord Onslow has already said that he favours another amendment, although with the very greatest respect I am not completely sure that that amendment is entirely, in some parts, in line with what almost all your Lordships agree you would want to be doing. But we can look at that in a moment or two. What we have done in Amendment No. 2 is to retain the key elements of the original formula. This is very important, since we have been careful to avoid doing anything which might upset the delicate balance which was established in the NFU/CLA agreement which underpins the concept of the Bill.

The individual changes in detail which I am moving are these. First, there is a newly-drafted subsection (3) to Clause 1. The first part of this subsection reflects much of the amendment which was moved in Committee by my noble friend Lord Kinnoull, and which was tabled also by the noble Lords, Lord Howard of Henderskelfe, Lord Northfield and Lord Northbourne. The effect is to give arbitrators a starting point and, more importantly, an end point, by expressing the rent properly payable in terms of the rent at which the holding might be expected to be let by a prudent and willing landlord to a prudent and willing tenant. There is, however, an important qualification. In arriving at this rent an arbitrator must in every case pay full regard to the four particular relevant factors mentioned in subsection (3). The factors are those contained in the original rent formula, but I will say just a word more about that in a moment. Subsections (3) and (4), because of the words "in every case", must be taken by the arbitrator as a whole.

There are two further changes in subsection (3). We have made it clear that the arbitrator can consider under the terms of the tenancy any terms relating to rent, including the current rent if he considers this particularly relevant; and this is a point to which the noble Lord, Lord Northfield, attached importance at the Committee stage. We have also accepted that the locality of the holding ought to be included. This was always the intention, but I am indebted to the noble Lords, Lord John-Mackie and Lord Prys-Davies, for bringing out this point, although I see from the amendments that my noble friend Lord Onslow does not agree with them.

In subsection (3A) we have not reproduced the reference to profit from farming the holding. I see that the noble Lord, Lord John-Mackie, has Amendment No. 10 down on that, so may I explain why. In the discussions on the rent formula which have taken place since Committee, it was pointed out to us that the words which we included in that formula,
"could reasonably be expected to profit from farming the holding",
could be regarded as precluding the arbitrator from considering, for the purposes of rent determination, any other profit produced by the holding from non-farming activities. The most obvious example is the letting of land for rent sites, or something of that kind.

We did not believe that this would be the case, since any additional profit of this type could be considered as an additional relevant factor. But if the specific reference to farming profit put, alone, into the Bill jeopardised the consideration of earnings generally, we felt that we had to do something about it. We felt that it was advisable to delete the reference to "profit", since the most important factor is the productive capacity of the holding in the hands of a competent tenant. This encompasses the idea of profit, since in converting productivity into the rent properly payable the abitrator must form some idea of the degree of profit which the holding can produce when farmed by a tenant of average ability.

Having said this, I shall listen very carefully on behalf of the Government to what is said on the profit issue. If it is the general wish that these words ought to be reinstated without endangering the reference to earnings generally, the Government will of course not stand in the way, but I believe that the formula we now have, for the reasons I have just given, preserves the interests of everyone and endangers the interests of no one. In summary, these amendments seek to introduce into subsection (3) a change that I believe achieves an objective to which great importance is attached by noble Lords.

There is also one change to subsection (4). It was brought out by your Lordships in two very interesting debates. It is this: the purpose of paragraph (aa) is to make it clear that in considering the rents of comparable holdings the arbitrator must disregard any element in these rents which is the result of proximity—that is, the fact that the tenant of the comparable holding is occupying other land close to it. That puts into the Bill the effect of an amendment which my noble friend Lord Stanley of Alderley moved in Committee. At the same time, however, we have deleted the latter part of subsection (6)(a) which would have required an arbitrator to disregard proximity in the case of the subject holding. The advantage which proximity gives to a tenant will therefore be something which the arbitrator will be permitted to take account of in assessing the rent for subject holdings.

This is the response to the amendment which was moved in Committee by the noble Lord, Lord Howard of Henderskelfe. And that is the effect of Amendment No. 2 and the related amendments. I beg to move.

My Lords, as an amendment to Amendment No. 2, I call Amendment No. 3. If Amendment No. 3 is agreed to, I cannot call Amendments Nos. 4 and 5.

3.34 p.m.

moved Amendment No. 3:

Line 3, leave out from ("let") to end of line 4.

The noble Lord said: My Lords, I beg to move Amendment No. 3. Clause 1, as amended, reproduces the nine or 10 elements which were contained in the original Clause 1, with one exception—that is, the second limb of (3)( c)—but they have been moved about and they reappear in Clause 1, with one exception and one addition. The additional words which we are unable to support are in lines 3 and 4: the reference to a prudent and willing landlord and a prudent and willing tenant.

We are not sure what is the true significance of this modification. I have seen at least two interpretations of the significance of the additional words. According to one view, they are merely cosmetic because they do not include a reference to the "open market". The opposite view is that, although the words "open market" have not been introduced into the new section (although they were included in the old 1958 Act), their sense has nevertheless been retained.

One wonders what the arbitrator will make of these additional words. What meaning will be attach to them? Obviously that is not ascertainable. Arbitrator A may consider that he has to pay regard to market value, to be discounted later on in order to have regard to scarcity. But arbitrator B may take a different view and consider that, as the words "market value" have been omitted although they were included in the 1958 legislation, there is no duty on him to seek a rate which might be acceptable as between a willing and prudent landlord and a willing and prudent tenant. There will therefore be considerable uncertainty.

I agree very much with the noble Lord, Lord Renton, and the noble Viscount, Lord Dilhorne, that the code set out in Clause 1(4), which determines the rent, is sufficiently complex without the concept of a willing and prudent landlord and a willing and prudent tenant being introduced on top of the eight or nine other elements to be found in Clause 1. My noble friends and I pleaded in Committee for a simpler code. Therefore we press this amendment because of the uncertainty which the words introduce. We believe that they will lead to conflicting interpretations and will take us perilously close to the open market. I beg to move.

had given notice of his intention to move Amendment No. 4:

Line 4, leave out first ("prudent and").

The noble Lord said: My Lords, perhaps I may speak now—hoping that I am in order in doing so—to Amendment No. 4. I invite your Lordships to consider

at the same time Amendments Nos. 5 to 9 inclusive and Amendment No. 11 as mentioned by my noble friend Lord Belstead when he opened this debate.

Amendment No. 5: Line 4, leave out second ("prudent and").
Amendment No. 6: Line 6, leave out ("(in every case)").
Amendment No. 7: Line 7, leave out ("(including those relating to rent)").
Amendment No. 8: Line 9, leave out (", the productive capacity of the holding,").
Amendment No. 9: Leave out lines 12 to 17.
Amendment No. 11: Page 1, leave out line 22 to end of line 19 on page 3 and insert—
"(3) For the purposes of the foregoing subsection the rent properly payable for the holding shall be the rent at which the holding might reasonably be expected to be let without premium by a willing landlord to a willing tenant, the arbitrator taking account of all relevant factors but disregarding—
  • (a) any effect on rent of the occupation of the holding by the person in occupation thereof
  • (b) any effect on rent of the proximity of the holding to other land occupied by the tenant;
  • (c) any scarcity of comparable holdings in the part of the country where the holding lies;
  • (d) any tenant's improvements or fixed equipment other than improvements executed or equipment provided under an obligation imposed by the terms of the contract of tenancy; and
  • (e) any landlord's improvements, insofar as the landlord has received or will receive grants out of moneys provided by Parliament or local government funds in respect of the execution of those improvements.
  • (4) On any such reference the arbitrator shall not fix the rent at a lower amount by reason of any dilapidation or deterioration of, or damage to, buildings or land caused or permitted by the tenant.").

    The noble Lord, Lord Prys-Davies, has just referred to the complexity of the law. It really is most unfortunate that our largest industry, which affects the lives of so many of our people, should now, from the legislative point of view, be overridden by one of the most complex groups of legislative provisions that we can find on the statute book. I only wish that I could say that Amendment No. 2, which was moved by my noble friend Lord Belstead as an alternative to what appears in the Bill as amended at the Committee stage, had reduced the complexity. I fear that I shall have to explain in some detail that it increases the complexity. Before I go any further, may I say that I have no objection to Amendment No. 3, moved by the noble Lord, Lord Prys-Davies, but I prefer Amendment No. 4, which I have moved. That is clearly understood.

    I propose, although this is such a big and complex subject, to simplify as far as I can my remarks to your Lordships by dealing with the amendments in this way. First, I propose to comment on Amendment No. 2 in detail. Second, I shall draw attention to Amendments Nos. 3 to 9, which are intended, modestly, to improve the Bill. Third, I shall invite your Lordships to consider Amendment No. 11, which is a constructive and more simple alternative to Amendment No. 2 and, indeed, to subsections (3) to (6) inclusive as they stand—or as they will stand if Amendment No. 2 is accepted.

    I have to accept the fact that, owing to the nature of our procedure, I could be stymied, and those who agree with me could be stymied, if Amendment No. 2 is carried. I shall therefore ask my noble friend Lord Belstead, who has shown such wonderful open-mindedness in this difficult matter—open-mindedness in the face of all kinds of conflicting advice which he has received—whether he will be so good as to take away Amendment No. 2 in any event, so that we may have a further chance of getting it right. I hope very much that either there will be no Division on Amendment No. 2 or, if there is one, that it will be defeated.

    My Lords, I am rather puzzled. At the top of page 2 of the Marshalled List there are printed the words:

    "[As amendments to amendment No. 21]",
    which I take it cover all the amendments to the bottom of page 2, including that of the noble Lord, Lord Renton. So his is really an amendment to Amendment No. 2; it is not a separate amendment to the main Bill. If we discuss the two or three other amendments and they are all withdrawn, voted upon, or what-have-you, we will then come, before the main amendment, Amendment No. 2, is put, to the amendment of the noble Lord, Lord Renton, which is Amendment No. 11. I should like some guidance, but surely that is the process, is it not?

    My Lords, it may be that the noble Lord is a much greater authority than I am, but, with respect, that is not my understanding of the procedural position. The procedural position is that before Amendment No. 2 is put to your Lordships for voting, Amendment No. 3 will be put. If that is carried, Amendments Nos. 4 and 5 will fall. Then Amendments Nos. 6, 7, 8 and 9 will be put. If any of those amendments are carried, or if they are not, then Amendment No. 2 will be put. If Amendment No. 2 is carried, with or without amendment, then Amendment No. 11 cannot be put or discussed any further. I understand that to be the position.

    My Lords, the noble Lord is not quite correct, because Amendment No. 10 is an amendment to Amendment No. 2. So we shall go through all the amendments to Amendment No. 2; that is, from Amendment No. 3, which we are now debating, to Amendment No. 10. They also include Amendments Nos. 7A and 7B.

    My Lords, I am most grateful to the noble Lord on the Woolsack. He is of course quite right; I should have mentioned also Amendment No. 10.

    My Lords, why not include Amendment No. 11, which is an amendment to Amendment No. 2?

    3.45 p.m.

    My Lords, may I try to save time by dealing with the matter in the three ways I mentioned? First, I should like to comment on Amendment No. 2. My noble friend, as I said before, has been wonderfully patient and open-minded, but I suggest to your Lordships that he has been much too indulgent. The outcome as expressed in Amendment No. 2 is not satisfactory. I am also very sorry for the draftsman; I should think he has had an awful time behind the scenes.

    In order to try to please somebody, my noble friend Lord Belstead has introduced into the rent formula the requirement that the parties must not only be willing—which is plain, sufficient, well-understood and established—but that they must also be "prudent", which is new, unnecessary and, as I shall show, likely to cause confusion. If the word "prudent" has been inserted to make it unnecessary to introduce an express disregard of scarcity, or an express disregard of what has come to be known as "marriage value"—a strange expression which is very descriptive, because although it has nothing to do with marriage between human beings it does concern the marriage of pieces of farmland—then it does not achieve either of those purposes. If that word is added, arbitrators and those addressing them will have to consider why it was added by Parliament. That in itself will cause people to wonder.

    It cannot be assumed that a prudent landlord will necessarily ignore the scarcity factor. Indeed, some landlords—a minority, no doubt—may concentrate upon it. The National Farmers' Union will then indeed have something to worry about—and I believe that they, among others, were content for the word "prudent" to be inserted. The insertion of the word "prudent" certainly will not bring rents down, or stop them from going up. Indeed, in the long run—and I stress "in the long run"—it may cause rents to go up still further.

    I am told that when the present rent formula in the 1958 Act was being devised in that year, the word "prudent" was thought about but was rejected on the ground that it added nothing to the law. Strangely enough, I was then responsible, as Under-Secretary at the Home Office, for agriculture in Northern Ireland. I was therefore a sort of "mini agriculture Minister". I must confess that I remember nothing of that particular discussion, but I am convinced that the word "prudent" does not add anything to the law and would have no legal effect.

    My next criticism of my noble friend's Amendment No. 2 is that all the words appearing between brackets are unnecessary. One wonders why they were put between brackets at all, rather apologetically. Let us consider each instance. The first occurs in subsection (3), where it says:
    "(subject to subsections (4) to (6) of this section)".
    That is a very strange point to insert, because all subsections of every section in every Act of Parliament are subject to all subsections within that section. So those words are unnecessary.

    Then we come to the words:
    "all relevant factors, including (in every case)".
    Of course the law applies in every case if we enact it, and it is mere surplusage to write that in, whether or not it is between brackets. There then appear the words:
    "the terms of the tenancy (including those relating to rent)".
    One wonders whether any sane arbitrator can take account of the terms of the tenancy without thinking of those relating to rent. So those words between brackets also are mere surplusage.

    The next words appearing between brackets occur in the phrase:
    "the character and situation of the holding (including the locality in which it is situated)".
    The only relevance of considering the situation of the holding is in respect of its locality, so those words between brackets are also mere surplusage. I hope that my noble friend, with all his wisdom and patience, will agree that all the words appearing between brackets in his amendment should disappear. Then we come to "productive capacity". May I say in passing I am so glad that the references to profit have been cut out; that would have taken up an awful lot of time at every arbitration without getting anyone anywhere. But what would "productive capacity" do? That is mentioned in line 9. I suggest that there is a nice little pot of gold for professional people in that concept. There will be endless argument as to the facts, as to what is the productive capacity of a particular holding, and endless arguments in law as to my noble friend's definition of "productive capacity", and even more perhaps as to the way in which that definition affects the amount of rent to be fixed by the arbitrator in the particular case. Would it not be better to leave this question of productive capacity to be dealt with simply as a relevant factor, a broad question of judgment on the arbitrator's part, instead of trying to pin him down with a formula within a rent formula?

    The net result of Amendment No. 2, coupled with the minor amendments to which my noble friend referred, Nos. 14 to 18, would be this: to leave subsections (4), (5) and (6) of the Bill intact, having redrafted subsection (3) and added the new subsection (3A). The rent formula would then be contained in one and a half pages of detailed directions to arbitrators, some of them unnecessarily verbose and complex, when in my opinion we should leave matters mainly to their judgment, after hearing the parties, inspecting the land and buildings, and using their knowledge of the part of the country. I have tabled only six amendments to leave out unacceptable parts of my noble friend's amendment, and may I say with humility that in doing so I have been surprised by the restraint that I have shown. I hope that some or all of my amendments to my noble friend's amendment will appeal to him.

    Lastly, I come to the constructive alternative to it contained in Amendment No. 11 on which I have the valuable support of my noble friend Lord Dilhorne and other noble friends who have said that they agree with Amendment No. 11. It has the merit, first, of being short and simple. It reduces the length of the statutory directions to arbitrators from one and a half pages to half a page. That is of no mean merit in itself. We start with the simple hypothesis that the rent should be that at which the holding might be expected to be let without premium. Subsection (4)(b) of the Bill as at present before us refers to "premium" in a different way. I suggest that it is right that the arbitrator should assume that the rent to be fixed should not have any key money element in it and should not have any regard to premiums. That should be clearly stated in the initial and important part of the instructions to the arbitrator. Then we say it should be between a willing landlord and a willing tenant, the arbitrator taking account of all relevant factors.

    There is a danger in being selective about the factors to be taken into consideration, because as a rule of interpretation which binds our courts and everyone who has to apply the law, if you express one thing you are presumed to have omitted other things intentionally: if I may use the Latin tag, "expressio unius est exclusio alterius". My noble friend has selected in lines 6 to 9 some things that the arbitrator has to bear in mind as relevant factors. There will be a temptation perhaps on the part of some arbitrators, and of those addressing them and trying to persuade them, to say, "These are the factors that matter; really, Parliament is not worried about the others". Whereas we say that we should invite arbitrators to take a broad view of this vital matter.

    However, we say—and we agree with the Government, the Opposition, and with others, too—that there are some matters which should be expressly disregarded by the arbitrator, and that this should be made plain to him. We have mentioned five, partly for removal of doubt and partly to meet the views expressed by interested bodies. Paragraphs (a), (b) and (c) in our new subsection (3) are already in the Bill in various ways. We have simplified the drafting. Paragraphs (d) and (e) are taken from subsection (5) of the Bill as it stands using just the same drafting, so presumably there is nothing exceptional about them.

    If I may finally refer to the drafting of paragraph (c)—"any scarcity of comparable holdings in the part of the country where the holding lies"—that brings together several different propositions. I hope your Lordships will feel that it has been done in a compendious and fair way. There should be no difficulty about the expression "part of the country". If I may give an example, I am not a Yorkshireman but I would say that the plain of York must be regarded as a different part of the country from the Yorkshire Dales. In the part of the country where I live and which I used to represent in Parliament, I would say that the Fens are so different in character and in locality that they must be regarded as a different part of the country from the neighbouring Clayland. So there should be no difficulty about that definition. If we look at the Bill as it stands, without my noble friend's amendment, there is nothing new in our amendment as expressed in paragraphs (a), (b), (c), (d) and (e).

    In conclusion, may I say that we are trying to help—and this is not a wrecking amendment; this is a constructive alternative to my noble friend's amendment—by asking your Lordships to consider a simple alternative to the Government amendment, which I ask my noble friend not to press today. In spite of his valiant efforts to get it right, it really will not do as it stands.

    4 p.m.

    My Lords, I should like to speak on one or two points made by my noble friend Lord Renton, but first I should like to thank my noble friend on the Front Bench for his Amendment No. 17. I do not think it is quite right and I propose amending it with Amendment No. 17A, but I shall speak to it then.

    Secondly, my noble friend on the Front Bench referred to earning capacity and how that has been left out. That is a very grave error and I cannot accept the case that he put forward. It might happen that there is a very highly productive farm producing potatoes, but it has no quota so, therefore, it has no earning capacity. The same could apply to hops or sugar beet and it does not take a great stretch of the imagination to see further controls like those being put on through the common agricultural policy, which I believe is in surplus on certain items.

    I should like to speak very seriously on Amendment No. 2, and also Amendment No. 3, which is an amendment to Amendment No. 2, moved by the noble Lord, Lord Prys-Davies, because that is where my sticking point lies. My noble friend Lord Renton said that the National Farmers' Union was perfectly happy with the word "prudent". I can assure him that we are not. Secondly, as regards what my noble friend said—much of which, as usual, went well above my head—there is one part of the words in brackets which I should like kept in. I agree that the rest do look pretty unnecessary. The words I refer to are:
    "including those relating to rent".
    My noble friend will find in the original draft the words,
    "other than those relating to rent".
    I would rather deal with this point when my noble friend Lord Kinnoull and the noble Lord, Lord Howard, speak to Amendment No. 16A because it is a valid point.

    I support Amendment No. 3 because despite what my noble friend Lord Belstead said I am still not clear what the words "prudent and willing" mean. If my noble friend Lord Kinnoull and the noble Lord, Lord Howard, care to tell me what they think the words mean I shall be deeply indebted to them. Do the words "prudent and willing landlord" and "prudent and willing tenant" mean in practice the same as the original amendment tabled by my noble friend Lord Kinnoull in Committee, including the words "open market"? If they do not, can someone tell me the difference? I know that your Lordships will consider that I am excessively sensitive about the words "open market". Indeed, I am. I am sensitive about the whole of Clause 1 which is, for me, the whole reason for the Bill.

    I have heard that certain organisations, particularly the landowning charities, consider that the phrase "prudent and willing" in effect means that it is the open market rent that is referred to, in which case we might as well go back to the original amendment of my noble friend Lord Kinnoull. Certainly, the CLA says in its brief that these befuddling words:
    "give the arbitrator a clear objective and starting point".
    If this interpretation is correct I shall find myself at the end of the day in the same Lobby as the noble Lord, Lord John-Mackie. Frankly, I do not think—I do not hope—that these interpretations are correct. Listening to my noble friend Lord Belstead, I think he takes my view. The trouble is, I only think; I do not know. Despite the soothing words of my noble friend to reassure me and the soothing words he has addressed to the House, at the end of the day it will be the arbitrator in the field, appointed by the RICS, and eventually, perhaps sadly, the courts, who will decide what this funny phrase means. That is my real objection.

    The original Clause 1 was clear; or it was to me. Perhaps the institutions did not like it, but it was clear. We now have substituted a new clause which is not clear. That is bad parliamentary practice. It should be our job to make the law as clear as possible and I fear that the Government, in order to try to placate everyone, have fudged the issue and produced this very difficult clause.

    It is always difficult to be unkind to my noble friend on the Front Bench. I listened very carefully to his opening remarks but I am still not happy. I shall wait to see what the lawyers outside your Lordships' House make of the new Clause 1. If in their wisdom the lawyers persuade me that this phrase "prudent and willing" and Clause 1 are not as originally agreed between the National Farmers' Union and the Country Landowners' Association, I shall object on Third Reading, in which case the Government may well have to proceed with this Bill without the support of the National Farmers' Union.

    My Lords, today I am standing in the shoes of my noble friend Lord Mackie—shoes which are rather too large for me—and it is the only time that I have intervened on this Bill. My noble friend told me that he was broadly in favour of the amendment moved by the noble Lord, Lord Belstead, but having listened to the criticism of the drafting of it by the noble Lord, Lord Renton, I very much sympathise with the viewpoint of the noble Lord, Lord Renton, and I think that he is basically right. It seems to me that the great danger in drafting this kind of Bill is that there are so many lobbying interests that one tends to get a cosmetic Bill. The interests concerned want to see the words that they have suggested to the Minister, and were agreed when they saw him privately in his room, in print in the Bill itself. That leaves very bad drafting.

    I should like to talk for a moment or two about Amendment No. 3, moved by the noble Lord, Lord Prys-Davies. Your Lordships have to consider whether the words:
    "by a prudent and willing landlord to a prudent and willing tenant"
    add anything to the Bill. I am astonished to learn that they are regarded as a disguise, as it were, for an open market rent. It appears to me that the two words "prudent" and "willing", in juxtaposition as they are in this drafting, are very difficult to interpret. After all, we are concerned with an arbitrator deciding a rent in a controlled tenancy. I am told that in the present economic climate the situation is that if a landlord is prudent he is not willing, and if he is willing he is not prudent.

    How do you interpret the words together? It seems to me that the words are put in to satisfy lobbying interests and add nothing to the clause. The message has come loud and clear from the noble Lord, Lord Renton, over many years that we should be much more simple in our drafting. He must be basically right and his criticisms are entirely justified, but I do say to the noble Lord, Lord Prys-Davies, that I entirely support him in his amendment.

    My Lords, as I tabled Amendment No. 7A I should like to talk very briefly to it. My amendment proposes that we leave out,

    "(including the locality in which it is situated)".
    This refers to the situation of a holding. It seems to me tautological that one could add that set of brackets after the first sentence. It is rather like saying. "a blackboard is black". How one can avoid a situation where something is situated and ignore the locality blows one's mind and imagination as to how that could have been drafted. My criticisms are the same as those made by the noble Lord, Lord Hooson, and my noble friend Lord Renton. The Minister's amendment does not make sense. I suggest that we are attempting to do something which, if I were to draw a parallel with the 1920s, would be to enact an Act of Parliament and say, "You will not take into account the scarcity value of tenants and therefore you will automatically charge 5£ an acre rent", as opposed to the market rent which was something in the region of 30 shillings, "or give it away if you can possibly get it farmed".

    If you mess about with the open market formula beyond a very limited amount on the sideline, you will destroy that market. It is as simple as that. If we try to hedge about with the tautological subsections that we have in the new Government amendment, we shall make a situation which is bad, worse and it will not achieve the objects of the Bill. As I understand them, the objects of the Bill are to produce more order and slightly less injustice than that caused by the Agriculture (Miscellaneous Provisions) Act 1976 and also to produce more tenancies. This clause will not produce one single tenancy more.

    I strongly suggest that the amendment put down by the noble Lord, Lord Renton, and the noble Viscount, Lord Dilhorne, is much, much clearer. It sets out in words of one, and at a maximum three, syllables something that we can all understand. I make a small criticism of that amendment. It is the same point that was made forcibly in Committee by the noble Lord, Lord Northfield. If a farmer for the next-door 50 or 60 acres when it comes on the market bids silly money—by that I mean £120 or £130 an acre, or even £60 in some circumstances—I see no reason why he should go back to the arbitrator three years later and say, "Look, I obtained this land by bidding silly money, but the Act says that I have to be acquitted of my silliness and I need not hid the money I offered the landlord". In those circumstances, it seems to me totally right that, if the tenant is prepared to pay silly money for his tenancy, he should be made to pay for his misjudgments. That of course means deleting the word "prudent".

    If a tenant can suddenly go back to the landlord and say, "Look, I made the most terrible mistake. I was not prudent over this", and the arbitrator has to say, "No, I am afraid, dear boy, you were not a very prudent fellow. We shall reduce your rent by 50 per cent.", that is not how to run an agricultural landlord and tenancy system, nor even a sweetshop on the corner. It is a total and utter formula for disaster and will not improve the letting of land, which for social and agricultural reasons we all want to see. I beg my noble friend, who is a wise and civilised man and for whom we all have great respect, to take this away and he less wise and civilised and slightly nastier to the people who have been banging on his door and begging him to do this.

    4.13 p.m.

    My Lords, there has been a lot of talk about muddle. I am one of the people who are muddled by the Bill, the clause, these amendments and the omnibus discussion of all the amendments. It is very difficult indeed. I presume that I am now talking to our Amendment No. 10 and may speak to all the other amendments at the same time, including the amendment of the noble Lord, Lord Renton, Amendment No. 11. I apologise for being a little befogged about why it was not an amendment to Amendment No. 2. I see that it deals with the original Bill, as amended, and not with Amendment No. 2. Had the noble Lord thought that he would be frustrated in the way that he has been, he might have put down his amendment to Amendment No. 2. That would be a perfectly sound approach. However, it is too late for him to take my advice now.

    The noble Lord, Lord Belstead, said that he could not agree to the word "profitability". He thought that a curious difficulty would arise, as extra activities on a farm—and for some reason the parking of caravans seems to be the main one—would distort the situation if the word "profitability" was inserted. I cannot follow that at all. After all, on how many farms do caravans make much difference to profitability? That may occur along the coast and in one or two other places, but there are 200,000 farms in the country. The main point in the NFU brief is that there must be some reference in the clause to profitability.

    The matter was well enough put by the noble Lord, Lord Stanley of Alderley. A whole host of things can control the profit of a high productivity farm. I had a first-class farm in Scotland in the late 1920s and early 1930s. Its productivity was very good indeed but we could not make a profit. If the word "profitability" is not included, I can imagine a farmer producing his books to an arbitrator and saying, "Look at the past three years and see how low my profits have been", or, "Look at my losses"; and the arbitrator saying, "I am sorry, old boy, but it is not in the Act that I take any account of that. It is just too bad".

    At this point I must take to task the noble Earl, Lord Kinnoull, and others who seem to think that, irrespective of what happens in farming, people who have invested in agricultural land must have their cut, whatever else happens. That seems to be the basis of the amendments that they have put down—whether or not a tenant farmer makes a loss, he has to pay the rent to the landlord and that cannot be an argument to bring down the rent. When people invest in shares and various other things, if they fall in price there are no dividends, and they have to accept that. Why should farming be different?

    My Lords, does the noble Lord not recognise the fact that there is a rent review every three years?

    My Lords, yes, but I point out that three years is a long time if you are making a loss. I want to insist on our amendment, which would insert the words:

    "taking into account the extent to which a competent tenant practising a system of farming suitable to the holding could reasonably be expected to profit from farming the holding".
    To a certain extent that should satisfy the NFU.

    I should like to say a word or two about the earlier amendment to which my noble friend Lord Prys-Davies spoke concerning the terms, "prudent and willing tenant" and "prudent and willing landlord". I am glad that it has considerable support from the noble Lord, Lord Hooson, and to a certain extent from the noble Lord, Lord Renton, although he seems anxious to retain the word "willing".

    I move now to Amendment No. 11.

    My Lords, perhaps the noble Lord has overlooked the fact that the word "willing" is in previous rent formulas and is now well established and understood.

    My Lords, I take that point; but in the noble Lord's amendment it would appear that both words could be left out and the proposition still remain perfectly sound. In Committee we put down an amendment to simplify Clause 1. It was almost the same as the noble Lord's amendment, apart from missing out his disregarding points. We left it to the arbitrator to use his common sense about what he had to disregard. I am sorry that the noble Lord did not support us then, but I am glad that he has had second thoughts and produced Amendment No. 11. We shall have great pleasure in supporting it. We are perfectly certain that it is much, much better than the amendment of the noble Lord, Lord Belstead, Amendment No. 2. Having listened to what every speaker has said so far, it seems to me that that is the feeling of the House. It will be interesting to see what happens in due course.

    My Lords, I think it is time that there was voiced some support for my noble friend Lord Belstead and for the Government amendment. As my noble friend Lord Belstead has reminded us, in recognition of the very long debate in Committee, he then undertook to consider some of the improvements that were proposed, to see whether they could be incorporated in the Bill without destroying the sense of the original formula that had been threshed out over such a long time, and with such care, by the CLA and the NFU, and, despite what is frequently said to the contrary, with valuable help from the profession.

    My noble friend also undertook to see what measure of agreement he could obtain before the Report stage. Just as one would expect, he has honoured those undertakings in the most painstaking way, and I and other noble Lords who are interested in Clause 1 are very well aware of the immense trouble that he personally, and his departmental advisers, have taken to do precisely what he promised your Lordships in Committee he would do. The result of that labour and consultation—I repeat, consultation—is the amendment which we are now debating.

    I think that we should also congratulate my noble friend Lord Kinnoull and the noble Lord, Lord Howard of Henderskelfe—and I say this despite what was said just now—on introducing the idea of the prudent and willing parties, which is incorporated in the amendment of my noble friend Lord Belstead. I remember saying in Committee that I thought that their original amendment contained elements which, if incorporated into a new amendment, might stand a chance of wider acceptance.

    Though I was involved in the negotiations which produced the recommendations for the original rent formula, I was well aware of the constraints under which we were working, and I have no hesitation in saying that the Government amendment, Amendment No. 2, that we are now looking at is an improvement. I believe that it meets some of the quite understandable criticism of the original version. I believe that it could easily be understood by arbitrators. I consider that it is helpful to landlords without being disadvantageous to tenants. It is not perfect, and this fact is clearly reflected in the debate that we are having this afternoon. But it is the best that we shall get and still obtain substantial acceptance.

    I always have enormous respect for the advice and wisdom of my noble friend Lord Renton, but I shall not support any of the amendments to the Government amendment. I very much hope that we shall agree to Amendment No. 2. That is the one that I shall vote for, and so I hope will a great majority of noble Lords.

    My Lords, perhaps I may remind your Lordships' House of the fact that some years ago my noble friend Lord Renton chaired a committee which looked into the murky subject of the quality of our statute law. The hostile verdict which that committee, with justification, felt obliged to deliver on that occasion was endorsed by a very slender audience in another place. That endorsement was accompanied by expressions of every kind of regret and determination to do better. It came as no surprise I think to anyone present that such expressions of determination and good resolutions were soon jettisoned.

    While I have every sympathy with my noble friend on the Front Bench, who is obliged to father this amendment, I am bound to recall my own agreement of years ago with my noble friend Lord Renton that opaqueness was not necessarily a virtue in the law. Here in Amendment No. 2, proposed by my noble friend on the Front Bench, we have a quite extraordinary marriage between confusion and explanation where none is needed, but explanation which when offered only seems to make things worse.

    We are told—I suppose that we should greet the information with some surprise—that the terms of tenancy are in every case intended to include rent. That, I am bound to say, came as no news to me, and I do not doubt that it will not be news to any of your Lordships. Then we are told that character and situation, which are also to be considered, should include locality, but the words "in every case" are omitted.

    I do not wish to take up your Lordships' time, nor to add to the pain which my noble friend must already have experienced in listening to my noble friend Lord Renton. But in conclusion I wish to make a modest plea that my noble friend on the Front Bench should take away this rather nasty, messy amendment. Though I entirely endorse what the noble Lord, Lord Middleton, said about my noble friend's patience and his willingness to take pains, I hope that he will take away the amendment and inflict some pain upon those who produced it.

    My Lords, I think that we are due for a speech from this side of the House. First, I should like to echo what noble Lords have said from all sides of the House about the immense patience and courtesy of the noble Lord, Lord Belstead. Since the Committee stage no one could have worked harder, nor, I guess, longer hours than he has to try to reach agreements about this matter. In a very long parliamentary experience I have known no other Minister who has put so much effort into reaching agreement, and I think that we should all record that with immense gratitude to the noble Lord.

    However, if the noble Lord will allow me to say so, that does not absolve us from being immensely critical of the net result of his labours. I suppose that the noble Lord is sitting thinking that he is doing rather well; he is sailing carefully between the Scylla of the excessive demands for protection of the NFU and the Charybdis of those who want the total open market situation restored. The noble Lord must think that that is rather a good position to be in, and that he will finally carry the troops along with him.

    The noble Lord also might think that we who are critical of this draft are making a mistake; namely, that, despite what the noble Lord, Lord Renton, has said—and, if I may say so, I very much agree with him—we are concentrating too much on the fine print and the drafting and forgetting to examine whether the solution that the noble Lord has provided is in principle a good one. It is that question which I wish to ask.

    What is the noble Lord proposing? He opened the debate with what I thought was a very skilful speech. In listening to his first speech no one could have thought that this was a climb down, that this was the Government doing a volte-face, and saying, "Of course we must bring back in the open market". Oh, no, the noble Lord did not say that at all. What he said was—and I can almost quote him—that he thought that noble Lords wanted to bring back what is now happening in practice and legislate for it. That is a very skilful way of disguising his retreat.

    But is he really doing that? Of course he is not. What he is bringing in is a system of regards and disregards. He is saying that the arbitrator must regard a whole list of factors, but he must also disregard one other main factor, which is scarcity in the market, and one or two other factors as well. But I say to the noble Lord, Lord Belstead, that that is not what arbitrators are doing at the moment. In the package he is not legislating for what is going on at the moment. He is altering it to bring in a mandatory disregard of scarcity. That is not in either present law or present practice. It is what many of us feel will end up as the real basic trouble.

    What the Northfield Committee said was that there should be no mandatory disregard of this kind. As I remarked on Second Reading—we all seem to come back to this—what we should have basically is an open market situation for arbitrators to take into account with discretionary, not mandatory, ability to say that sometimes they had better use their common sense to disregard some elements of scarcity. That perfectly sensible practice happens now. I would legislate for it tomorrow. It is not what we are legislating for here. We are bringing in the mandatory disregard of scarcity. That will cause all hell and high water.

    An example was given by Mr. Peter Trumper, of Cluttons, in a lecture last week. Let us get down to what happens on the ground. We have three farms. Rents are at the moment £35 an acre. One of the farms comes up for re-letting and goes out to tender. The tenders come in at anywhere from £75 to £55 an acre. People say that this is a sensible sort of level of rent given the passage of time and possibly taking into account some scarcity in the market and the ability of the new tenant to work harder and make the farm pay at a slightly higher rent.

    What does the poor arbitrator have to do? Or, to take it one stage further, what would a sensible landlord do in those circumstances? He would probably disregard the bottom tender and the £75 an acre tender. He would probably say that the sensible answer was about £65 an acre. But the poor arbitrator under the Bill has to say, "I am sorry, but that rather sensible approach, which is to discount ridiculous tenders, cannot now be followed. I have to discount for all scarcity in the market. I have to pretend that there is equilibrium in the market, just enough people demanding and just enough farms on the market".

    The arbitrator will have to say—this is mandatory, so he has no discretion—that it is not £75, it is not £65 and it is probably not £55 an acre. It is probably, in practice, nearer £40 an acre. We shall therefore have a special class of tenant created, if you like, who will be able to say, "I am now protected from all those elements of scarcity in the market and, whereas someone who was prepared to work harder or take an extra risk would have paid £55 an acre, I have had my rent assessed as if there was total equilibrium in the market". In a totally artificial situation which no one can imagine, the rent comes down to about £40 an acre.

    That is not the end of the story, as Mr. Trumper points out, based on his years of experience in valuing and arbitrating. You have then to take into account whether the present rent of £35 an acre contains an element of scarcity. If so, the figure has to be brought down even further. If you take such examples, you see the absolute folly of legislating to make this disregard of scarcity mandatory. We shall have a totally artificial set of tenants on totally artificial rents with no room for play of market forces and everyone regretting that greater elements of market forces had not been left in the picture. It will mean disaster, as many people have forecast, unless—our best hope, if this poor proposal goes through in its present form—quite sensibly, as at present applies, arbitrators take no notice of it and begin to use their common sense all over again. I hope to goodness that this is exactly what will happen. I hope that arbitrators will put this on the shelf in the belief that no one will challenge their common sense as they have practised it up till now. So we end up having spent all this legislative time for no good purpose except to tell arbitrators that we have made such a mess of it that they had better continue using their common sense.

    There are two other points that I wish to make before I conclude. I shall make it one point, and spare the House the other. It is the point that the noble Lord said that he had met. In his kind opening remarks he referred to me and said that he had met the point about taking into account rents that the tenant is already tendering for land he is farming. With respect, I do not think that he has met the point. Again, let me give an example. A farmer has a tenancy but also has a separate piece of land, another 10 acres on which he is paying a fancy rent because he can average out the rent beautifully over the whole holding. When he comes to a rent review on the original holding, not on the extra 10 acres on which he has bid a fancy rent, the arbitrator must discount this silly money that he has paid to get hold of an extra piece of land. It is a comparable holding. Under subsection (4)(a) it must be disregarded. It is one of the disregards.

    Can we really have anything much sillier than that? Here we have a farmer who goes round bidding up land all round him because he knows, happily, that he is sitting on a lovely island in the middle of rent protected land. He can bid up all the others round him to get extra acreage without it ever being reflected on the rent of his original holding. To try to meet that, I have put down Amendment No. 7B which says that this is to be taken into the regards as opposed to the disregards. We must pay regard to what he is tendering and getting in the way of land all round him. His own actions on the market must not be disregarded; otherwise we are in a very silly position with his freedom to avoid all the penalties of his own folly.

    I must ask your Lordships to consider these fundamental points about the amendment. I shall follow the noble Lord, Lord Renton, into the Lobby, if he so wishes, on his redraft. Given what the Government intend, that is a much better way of putting it. I beg noble Lords, however, to address themselves to the fundamentals. Do we really want mandatory disregard of scarcity with all the nonsense that it brings instead of discretionary disregard, which I would favour? Do we want farmers able to go round bidding up land and this not having any effect on their present holding when rent reviews come along? I hope that we shall discuss the fundamentals of the Government's approach and leave on one side for a moment the redrafting so eloquently suggested by the noble Lord, Lord Renton.

    My Lords, before the noble Lord sits down, can he comment on the possibilty that if you have a silly rent bid for a neighbouring piece of farmland, the arbitrator can then reduce it, disregarding the scarcity value?

    My Lords, that is another point. The noble Earl has made the point successfully. I did not want to repeat it. I think that he is right and that farmers will be able to get their rents down at rent reviews under the present draft if they have offered silly money for it in the past. If so, the situation is even worse than I had imagined.

    My Lords, I, too, should like to thank my noble friend Lord Belstead for all the time that he has devoted between Committee stage and now in trying to arrive at a formula that he believes would be acceptable to everyone, taking into account the manner in which he has been pushed and pulled. The proposal is a great deal better than what we had originally, but I still do not like it. The reasons have been well expressed by my noble friend Lord Renton and by the noble Lord, Lord Northfield. I dislike the last part of Amendment No. 10 to which the noble Lord, Lord John-Mackie, spoke in regard to the word "profit". I can think of nothing worse than an arbitrator being put in the position of assessing the farm accounts which the noble Lord, Lord John-Mackie, wanted to present as evidence of the profitability of the holding. I would not mind looking at the accounts of the noble Lord, Lord John-Mackie, but I would not trust at all the accounts of some tenants. That would be a very dangerous opening.

    With regard to the point raised by my noble friend Lord Stanley, may I just remind him that it is not the NFU that makes laws? It is Parliament that makes laws. If the NFU wishes to go off by itself, let it go off. I think, however, that the NFU would do better to stay with us and work to try and improve the situation.

    If my noble friend Lord Belstead presses his Amendment No. 2, I shall not be able to speak to my Amendments Nos. 12 and 13, which are amendments to the amendment in the name of the noble Lord, Lord Renton. Therefore, if the House will bear with me, perhaps I may briefly go through them.

    There is much to recommend in the amendment in the names of my noble friends Lord Renton and Lord Dilhorne. It is noticeable for its conciseness and brevity, while at the same time conveying the essential points which my noble friend Lord Belstead wants to get across to the arbitrator. I hope that it will receive the support which it deserves for its principles and its drafting. Indeed, as the noble Lord, Lord John-Mackie, has already stated, it embodies many of the thoughts behind his amendment, which he moved in Committee.

    To my noble friend Lord Belstead I would again pose the question, as the noble Lord, Lord Northfield, did: why tie the hands of the arbitrators? They are highly qualified, experienced and respected surveyors who—and there is no dispute on this point—have performed an extremely good job to date on a brief and concise rent formula. Surely it is wrong for us to tell them now: "Here is a list of items that you must include; here is a list that you must disregard; but if we have missed any, do not worry because you are covered by the words 'relevant factors' ". On a point of law, I know that my noble friend Lord Renton says that that is not quite correct because, having put something into a Bill, the Government are automatically saying that one must disregard everything else. At the same time my noble friend Lord Belstead says that that is not the case because one can include it under "relevant factors". I believe that what we are doing is an insult to the intelligence of the arbitrators; that it reveals a lack of understanding of their work and shows a lack of confidence in them when, quite plainly, this House has given them a tremendous vote of confidence in the job that they are doing.

    On a point of detail in relation to the amendment of my noble friend Lord Renton, my Amendment No. 12 seeks to leave out the words relating to what we now call "marriage value" in lines 8 and 9 of his amendment. The noble Lord, Lord Northfield, has gone into this in some detail. I would also add the point that it would be retrospective legislation, for, as I explained in Committee, on behalf of owners I and many others have let vacant farms to existing tenants. The farms remained separate holdings on separate agreements, but it was agreed that, when assessing the rent of one holding, the fact that the tenant was in occupation of the other was also taken into account. The tenant was happy with this, for by farming the two units he was able to improve his efficiency and the farms' ability to make money.

    Turning to my second amendment, I believe that my noble friend Lord Renton has got it wrong when he refers to the "scarcity of comparable holdings". Surely we are all concerned with the effect on the rent as a result of that scarcity. Amendment No. 13 therefore defines "scarcity" and seeks to reduce a tender rent, should the need arise, to one which a willing tenant would agree with a willing landlord. I believe that this covers the point that we want to take the froth off the top of the tender rents, because at the moment there are three tiers of rent: there is the mad tender rent, which none of us really wants; there is the open market rent, or thereabouts; and there is the sitting tenant rent—and the sitting tenant always gets the benefit of the doubt. He takes a long time to change his habits; he takes a long time to adapt his farming policy in the light of the common agricultural policy.

    Therefore, on review, we must seek to discount the mad tender rents, but at the same time we must give the arbitrator a base to start from and a point at which to finish, saying: "Ignore that froth on the top, if there is any; if it can be proved that it was a mad tender rent, we will reduce it a bit"; but let us work on that and then let us go for what the sitting tenant in occupation could reasonably afford to pay.

    My Lords, I spoke at considerable length a great many times during the Committee stage of this Bill. On this occasion I do not intend to repeat that performance, but there are one or two comments which should be made from these Cross-Benches on what has been said this afternoon. First. I wish to join with others in thanking the noble Lord, Lord Belstead, for the extreme courtesy with which he has treated all of us, and for the way in which he has tried to reconcile often irreconcilable positions.

    Secondly, I should like to deal with what the noble Lord, Lord Renton, said about simplifying legisation. It is all very well to talk about simplifying legislation, but that is a very different matter from trying to do it. I speak as someone who is not a lawyer. Due to continual criticism of a similar nature in previous years, when I was about four years of age a Bill was introduced which had something to do with rent, which was supposed to express in simple, understandable, everyday English what the new law was to be. As I have understood it since—and it is true that at that age I was not reading Acts of Parliament—the amount of legislation on that matter which subsequently ensued has exceeded that of any other Act of Parliament. If one wants to be clear, one often has to be abstruse. I am afraid that that is a fact of drafting life.

    I want to return to one or two of the points that I made at an earlier stage of this Bill, and in particular I want to thank the noble Lord for bringing to the front of this particular provision a clear objective towards which the arbitrator can work. I am not sure whether it was the noble Lord. Lord Northfield, who mentioned a military analogy, but previously we had a position in which we told the infantry what their start line was and what their time was, and similarly we said how the barrage was to be operated as the artillery progressed; but what we forgot to say was what our actual objective was—whether we were trying to capture a particular hill or wipe out a particular formation of infantry, or whatever it might be. Therefore, in this provision we now have a clear statement of the objective.

    I would further remind those noble Lords present who have been associated with agriculture for many years (and who have perhaps forgotten) of one of the first phrases they ever heard in connection with the relationship between landlord and tenant; namely, "a prudent and willing landlord and a prudent and willing tenant". I suppose that that is one of the best understood phrases in the business. It may be a term of art; I do not know. I shall not attempt to define it exactly for the House. Anyone who has anything to do with the landlord-tenant system in this country knows exactly what it means. It means that we exclude the loonies; it means that we work towards the kind of objective which the noble Lord, Lord Northfield, expressed so very clearly and without any humbug whatever in his speech.

    If we had asked the noble Lord, Lord Northfield, to draft the brief to parliamentary counsel for this Bill, rather than adopt the somewhat extra-parliamentary convention of getting organisations which have nothing to do with this House to do so, then we might have had a much better Bill. Certainly the clauses relating to scarcity would have said that this is one of the elements which must be considered and which must not be completely disregarded, because if one did completely disregard it one would get a lunatic situation. Certainly we would have something better than we eventually received. We might even have had a better solution in relation to the further lunacy of succession of tenancies; but as that does not come under this clause, obviously I must not refer to it.

    However, of all the amendments which I see on the Marshalled List at the present time, I shall certainly vote for the Government's amendment. All that the amendment of the noble Lord, Lord Renton, has to commend it is that it is shorter than the Government's amendment, but I do not think it expresses as clearly as the Government's amendment what the Government themselves are trying to do.

    4.50 p.m.

    My Lords, may I briefly say that I have sat through all stages of this Bill. I also sat through all the stages of the 1958 Bill because I moved it from the Front Bench here as the junior Minister. I totally agree with what has been said to us from the Cross-Benches, that us "oldies" know perfectly well, as I am sure the noble Lord, Lord Middleton, knows perfectly well, what a prudent and willing landlord and tenant relationship is. It is a term that has always been used in the Ministry, and that we had to deal with.

    All I wish to say now is that I have listened carefully to all these matters. Over and over again a phrase has come into my mind as I have listened this evening. The late Lord Butler of Saffron Walden, who spoke from our Benches in the past, used to say—and he wrote a book about it—that politics is the art of the possible. I am certain that the amendment in the name of the noble Lord, Lord Belstead, today is by that definition politics. It is the art of the possible.

    That could help the noble Lords, Lord Middleton and Lord Stanley of Alderley, to keep the cohesion between the landlord and the tenant side of this industry which, after so much trouble and so much hard work, has to get together. We should not revert to the legalistic troubles and bothers of everybody hoping to get something frightfully complicated so that they can all go to law about it. These are things we shall not settle here tonight, and I hope that we can support the Govenment amendment which has been thought out with so much care.

    My Lords, may I intervene briefly to say that I have never known so many experts on a subject such as the Agricultural Holdings Bill both inside and outside the House. I suspect—and I do not know whether noble Lords and noble friends will agree—that at the end of the day the arbitrators will carry on the good job that they have been doing for many years. Having said that, I believe that this debate has proved two things. First, it is understood, whatever the noble Lord, Lord Hooson, suggests—and perhaps he was not completely briefed by the noble Lord, Lord Mackie—in the industry what is a prudent and willing landlord and a prudent and willing tenant. As the noble Lord, Lord Howard, said, it is a firm understanding, and I assure the noble Lord that it is understood in the professions, among landlords, and among tenants.

    The second thing I would say which has not been said is that so far as I know both the NFU and the CLA have gone along with my noble friend's amendment for the Government. That is important to remember. The third thing one should remember is that this all arose because there was considerable concern outside the House as to the original drafting of this rent clause. As the noble Lord, Lord Howard, said it got us nowhere. It used the strange words:
    "shall determine what rent should be properly payable".
    The question really was: should Parliament leave it all to the arbitrators to decide what decision they made—there are no registered rents; there is no appeal on their decision; there is even no criticism if there is inconsistency—or should Parliament give some clear guidance? I think that my noble friend with this amendment has done that. He has given an objective and he has restored a vital confidence among those who are investors in land; and, after all, that is the purpose of this Bill.

    I say finally something that other noble Lords have said, and that is a word of thanks to my noble friend for the effort he has shown in seeking a way through this difficult rent clause. I do not think that I have ever known a Minister more patient, or indeed more willing to give sympathetic listening, and to give accessibility. I know the charities which have consulted many of your Lordships here are indeed grateful to the noble Lord for removing some of their anxieties in a difficult clause.

    My Lords, I should like to support my noble friend Lord Renton very strongly and vigorously. I am really incapable of adding anything to what my noble friend has said for he put the point marvellously. However, I am forced to get to my feet by what has been said about the word "prudent". The word "prudent" may well be hallowed in jargon, in general chit-chat, but it has never been used in a statute, and it is the statute that is going to operate. It is not common chit-chat and jargon and what we talk about as "a prudent and willing landlord". What has to work is this Bill when it is enacted.

    I do not wish to recite everything that the noble Lord, Lord Renton, has said; but I wish to bring before this House one or two things that my noble friend Lord Renton raised just to remind your Lordships. Under a new Section 8 which had the word "prudent" included in it, it would be extremely hard for a tenant to argue that a landlord who accepted a rent which reflected scarcity was imprudent, or that a hypothetical tenant whose bid reflected scarcity was acting irresponsibly. The noble Lord, Lord Hooson, put it equally well as my noble friend Lord Renton, and to allow "prudent" to remain as part of this Bill would only cause confusion. The word "willing" does it all, and I really have no more to say on that particular point.

    My Lords, before the noble Viscount sits down, would be give us the benefit of his experience? The term "willing" has often been used in Acts of Parliament, in the Rent Acts, and so on, but it has not been interpreted. It has never been held to add anything to the meaning, and therefore why should "prudent and willing" be in at all?

    My Lords, I did not get the full sense of what the noble Lord was saying. Did I understand the noble Lord to say that "prudent and willing" really is just the same as "willing", and that really "prudent and willing" should be left out?

    My Lords, I should like the noble Viscount's comments on whether the word "willing" is necessary. I know that it is time-hallowed in that it has been in previous legislation, but has it ever added anything? If a judge or an arbitrator is interpreting the matter, why should he be burdened with the word "willing"?

    My Lords, I do not know whether it would be in order for me, with the leave of the House, just to tell the noble Lord, Lord Hooson, that the expression "willing" has been interpreted by the courts in more than one case. It was held to exclude any element either of reluctance or of over-anxiety on the part of the assumed landlord or tenant.

    My Lords, as I did not take part in the early stages of this Bill, your Lordships will perhaps forgive me if I wander about a little on matters that are well known and perhaps on a very well trodden path, so I ask your patience for a few minutes. The first thing that strikes me, coming rather fresh to the scene, is that we are rather losing sight of the origin of this Bill. For quite a long time there has been this great unease about the legislation and about the arbitrations, and about the whole of the private landlord and tenant system.

    Ever since I have been involved, which is quite a long time now—I was involved in the original 1948 legislation as chairman at that time of the National Farmers' Union committee, the parliamentary committee dealing with it—there has been a high regard for our system of land holding. Granted that the proportion of owner-occupiers and tenants has been changing and there are now many more owner-occupiers, but things have been getting much more difficult. I have been rather concerned, not being as closely involved as I used to be, to find when I have taken part in my own county and listened to discussions on this matter that what I can only describe as disenchantment for the system seems to be growing. I believe we are at a stage where it is important for the landlord tenant/system that we try to get this right. It is no time for trying to seek party or sectional advantages.

    Reference has been made to the National Farmers' Union. The noble Lord, Lord Stanley of Alderley, was criticised for referring to it, as were at least two other noble Lords. But let us recall that this legislation could only come forward and the Minister for Agriculture could bring it forward only if there was agreement between the National Farmers' Union and the Country Landowners' Association. They have been very much involved. As I appreciate the situation, it has been understood right throughout that there should be agreement of these fundamental points and a wide measure of agreement has been reached.

    I am wondering now whether that agreement is beginning to split because one important element has been taken out, which I believe is fundamental to the Bill; that is earning capacity. The noble Lord, Lord John-Mackie, has referred to this. He has referred to his own experience. The productivity of the farm is different from the ability to pay a level of rent. It has a bearing, clearly. A more productive farm has a better capacity to pay a good rent; that is obvious. But it is important that, if we are to give these guidelines to arbitrators, we should do this fully.

    The noble Lord, Lord Renton, said that if these things are included others are automatically excluded. I do not think that is true in the Government's amendment. It says that regard shall be paid to all relevant factors and then it points to five or six particularly important factors. That seems sensible.

    As regards the "prudent and willing", I see that the noble Lord, Lord Howard of Henderskelfe, has returned. He has more enthusiasm for this phrase than I have. I suspect that this phrase will be received with much more enthusiasm by the landlords than by the tenants. I do not think it will be at all well received by the tenants. To say that it is supported by the National Farmers' Union is incorrect. At best it is simply flowery language. At worst it can be regarded as being sinister. I would rather see the Bill without it.

    But far more important is the omission of the reference in the amended Bill, as it came from Committee, to earning capacity. I believe that Lord John-Mackie and his colleagues are right in their amendment. I say, without any question in my mind, that if this reference is omitted and the Act is brought forward finally without that reference—having regard to the fact that in the first instance the legislation is based on agreement between the NFU and the CLA; and there was agreement between the NFU and the CLA that this reference to earning capacity should be embodied—that will be regarded as being a sinister change. I am sorry to say that that is what will happen, and it is no use my not making that point clear.

    It would be a great pity because we have the opportunity to do something. Of course the Bill will not cure the whole situation and immediately bring many farms on to the market to let. But it will move in the right direction. With other measures which are not appropriate for me to talk about now, we could be moving towards a sounder position in the landlord/tenant system which has served us well for many years. I am sorry to see this change but it is the fundamental point I wish to make. I hope your Lordships will support the amendment that the earning capacity should be embodied in the Bill.

    My Lords, after the speech of the noble Lord, Lord Woolley, there is hardly anything I can say to help come to what I think would be a conclusion of the debate on this subject. We have had an extremely good debate this afternoon. On behalf of my noble friends in Opposition we pay tribute to the Minister for the work he has done. Someone said that no predecessor of his—I am one of them—could have done more to be co-operative in this matter. We recognise the way he has co-operated following his wise agreement to take back Clause 1 at a much earlier stage.

    The House will recognise that Amendment No. 2 has very few friends today. I will summarise the remarks of the noble Lord, Lord Renton, who has enormous legal expertise, by stressing the appeal he made to his noble friend the Minister to take back Amendment No. 2 which, as he said, is at the very core of the Bill. The noble Lord, Lord Renton, also expressed, as did many other noble Lords, including the noble Lord, Lord Stanley of Alderley, the importance of productivity. This is embodied in my noble friend's Amendment No. 10 which stresses that we should have regard not only to productivity but to profitability at the same time. The noble Lord, Lord Stanley, mentioned several matters including potatoes and the quota, sugar, and we now can bring in milk which is in surplus, and we do not know about the future profitability of the milk sector. That is another point which stresses the importance of the amendment which has received widespread support on all sides.

    The noble Earl, Lord Onslow, also stressed that Clause 1 will not produce more tenancies. Of course, this is what the Bill is all about. It is not just a matter of gaining more tenancies and allowing more people to enter farming, but there is also the matter of retaining the viability of those already in the industry. This is, therefore, most important.

    The House is blessed with a great multitude of farmers, landowners, tenants and people such as myself who are concerned with charities. I am concerned with the Church Commissioners and the National Trust, although I speak for my noble friends in Opposition. We have had legal experts as well and the benefit of all their expertise. It is not only a matter of what is wanted in legislation, but how it is expressed to avoid any legal uncertainties when the Bill comes into force. The aim of the Bill is to encourage more to come into the industry. Although we applaud the cooperation of a package deal between the NFU and the CLA we also have to recognise that it is important to get the matter right now. Some have said on other occasions that we do not reform land law very often, so getting it right now is far more important than making progress, although we want to make both.

    I also stress the point made by the noble Lord, Lord Woolley, that there is no party advantage in this. Indeed, comments have been sincerely made from all sides of the House, some from practical experience of farming, of tenants, of surveying, of land law and advice from our legal friends as well. I believe that it is most important that we should be free to vote on this occasion to get the matter right and not to pass something because it is an agreed package and that is the best we can do. That does no service to the industry which has such an important role to play in our economy.

    5.10 p.m.

    My Lords, we have listened to a very long discourse but I think that it has been of value and it has clarified the matter—although it has obscured certain points. I should like at the outset to associate myself with those who have expressed thanks to the noble Lord, Lord Belstead, not only for his courtesy but for the care that he has taken over this Bill. It is refreshing to find a Government Minister who is prepared to listen to all the arguments, to do his best to take out the best of them and to reject the worst. My own opinion is that I dislike the language of his amendment and much prefer the language of Amendment No. 11 put down by the noble Lord, Lord Renton—and it is rather surprising that two distinguished lawyers should be able to write such clear and intelligible English. Although I prefer his method of expression, in the case of content I prefer Amendment No. 2 in the name of the noble Lord, Lord Belstead.

    It has been criticised on a number of points. People have made great play with his "prudent and willing"—including my noble friend Lord Hooson. To me, as a layman, there is nothing confusing about this. Let me give one simple example which is relevant to the types of case that we might be discussing, You can have a landlord who has a farm for rent and he may be offered by one tenderer an inordinately high rent, a rent which has been described as a silly rent. A willing landlord who is not prudent, who does not understand the situation of agriculture, who has newly come into it, who possibly might be an institutional landlord or a landlord without good professional advice, willingly accepts this very high rent, ignorant of the implications for the future; whereas a prudent landlord would not accept such a rent. I believe that it is necessary to have the two words "prudent" and "willing" in this Bill.

    The noble Lord, Lord Northfield, talked a lot about the importance of the free play of the market. I must say that it is quite refreshing and stimulating to find from the Opposition Benches, the Labour Benches, such forceful arguments being put forward for the free play of the market and the importance of the market mechanism. I believe that the market mechanism is of enormous importance but I do not think that it is of overriding importance. Amendment No. 2 bridges the gap well between reasonable control of market forces and the importance of market forces. After all, the arbitrator is instructed to take into account not only the productive capacity of the holding—and I shall come to that later—but also the current level of rents of comparable lettings. That surely must be a rather deep bow in the direction of market forces.

    But there is a caveat after that (which is in the Bill as it stands) which tells him that he must not take into account any element of a rent which is due to appreciable scarcity. It may be that one can find better words to do that. I certainly cannot. But the meaning of that to me, as I think to most noble Lords, is absolutely clear; and it is what was expressed in our Committee stage. I believe that this amendment covers it adequately.

    With regard to the question of productivity and profitability, I believe the use of the word "productivity" is correct because, to my mind, productivity is what is in the farm itself; whereas profitability depends upon the farmer. You do not see farms being advertised for rent or for sale saying, "This is a profitable farm" because nobody knows whether it is going to be profitable; that depends upon who will farm it. But you do see a farm advertised as a productive farm—which is something which can be objectively assessed by arbitrators. Therefore, I think that the wording here is correct.

    It is very easy to criticise this amendment and this Bill on the grounds that it gives an undue number of instructions to the arbitrators. I have heard many people say—and some of your Lordships have said it—that arbitrators are skilled and experienced people who know their job; and that it is not for any Act of Parliament to instruct them as to every factor to be taken into account. Also, one has heard criticisms of this Bill and of other Bills saying that there is not enough instruction given, that the intention of Parliament is not made clear. This Bill could be criticised on both grounds. If I were to criticise it, I would say that it gives rather too many instructions and that some, without detriment to the Bill, could be left out. But those are minor criticisms. In general this appears to be a valuable amendment, an amendment which takes into account the expressions of opinion which we have heard not only today but at Committee stage, and I hope that your Lordships will support it.

    The noble Lord, Lord Walston, has just succeeded in saying everything that I intended to say and therefore I shall not weary you for more than a moment. I rise only to say how much I endorse what has been said by all those who have congratulated the noble Lord, Lord Belstead. I would add our thanks not only for his industry and the care that has been taken in the preparation of this Bill but also his success in re-wording it. I shall support the amendment.

    My Lords, I was once told that in religious matters we do well to follow the same sort of precautions that we would if we had a box of fireworks in our hands which we were about to let off—look carefully at the label which says that you are strongly advised to follow the makers' instructions. I wish that I could affix to Amendment No. 2 just such a label which reads: "There are the instructions. I ask you to follow them".

    But I realise from the debate, which comes from an enormous amount of experience in this House, that there are areas of difficulty. Nonetheless, I should like to add to what the noble Lords, Lord Walston and Lord Northbourne, (the last two speakers in this lengthy debate) have been kind enough to contribute in support of Amendment No. 2 by saying only the briefest word about the areas, as I see them, of agreement. First, Amendment No. 2, as a result of the long debates in Committee on the amendment of my noble friend Lord Kinnoull, includes the concept of the prudent and willing landlord and the prudent and willing tenant. I would say to noble Lords opposite who seek in Amendment No. 3 to remove that concept that we are talking here of landlords and tenants who are not reckless and that in doing this we are following substantially the advice given by the Northfield Committee on this particular point when the noble Lord's committee said that rents needed to be acceptable to a willing landlord and prudent tenant.

    But if that concept is to mark both the start and the finish of an arbitrator's work, it is important to make explicit that the whole rent formula in subsections (3) and (4) are to be taken together as one. So, we have inserted the words "in every case" into line 6 of Amendment No. 2, which confirm that the four particularly relevant factors must be considered by the arbitrator in every case in order to arrive at the rent which the prudent and willing landlord and the prudent and willing tenant would agree. For reasons which I gave when I opened this debate, we have not attempted to mention specifically either profit or earning capacity.

    I am absolutely delighted to see the noble Lord, Lord Woolley, here this afternoon. His name was a household word when I was starting to work in farming, and of course I listened with the greatest attention to him. But, if I may say so with respect to the noble Lord, he was not here during the previous debates that we had on this Bill, and I do not think that his interpretation of the difficulty of "profits" and "earning capacity" was quite on the nail. As I said earlier, by simply remaining silent on profit and earning capacity we have prejudiced the interests of none and preserved the interests of all. In particular, by making absolutely certain, as both the NFU and the CLA were so anxious to do, that the productivity of the holding is expressed in legislative form for the first time, the concept of profit must be encompassed when the arbitrator converts productivity into the rent properly payable which a prudent and willing landlord and a prudent and willing tenant would agree.

    I was most grateful to my noble friend Lord Waldegrave for saying that politics is the art of the possible and that at the end of the day, however well or badly we have done, we perhaps ought just to try and get what we can. I say this because I think that if we are contemplating starting again with an entirely fresh draft, we have sadly only to look at Amendment No. 11 in the name of my noble friend Lord Renton. My noble friend is an absolute authority on drafting—a very kind and wise counsellor over the years to me and to others of us who try to make our way in politics—and he is practically always completely right. But just for once Homer has nodded!

    What does my noble friend's Amendment No. 11 do? First, it leaves out the word "prudent", which goes clean contrary to what the noble Earl, Lord Kinnoull, and the noble Lords, Lord Howard, Lord Northfield and Lord Northbourne, all wanted in Committee; and, if I may say so, that was quite rightly severely criticised in Amendment No. 11 by many noble Lords this afternoon. Secondly, Amendment No. 11 (for some reason which is not explained) disregards proximity so far as the subject holding is concerned. That was criticised root and branch by my noble friend Lord Caithness. Thirdly, Amendment No. 11 omits all reference to the four particular relevant factors which I guess would make noble Lords opposite and my noble friend Lord Stanley of Alderley go through the roof and come down again in a few hours' time.

    Finally, Amendment No. 11 contains the words "without a premium", which I think, with respect to my noble friend, would have a meaning contrary to that which he intends. By putting those words in, instead of disregarding excessively high tender rents it could mean that without a premium there would need to be much higher rents assessed for arbitration, which would have an effect entirely opposite to that which my kindly and generous noble friend intends.

    If I may say so, I think that we are left with a simple choice: that is, whether we want to put the simple concept of a prudent and willing landlord and a prudent and willing tenant into the formula. I am sorry that noble Lords opposite do not want that but that is what the Government are asking your Lordships to agree to. If we do that I believe it will be said that we have inserted a simple concept into the formula which will work. On that point I have had an extremely firm letter from the Royal Institution of Chartered Surveyors, saying that it most certainly will work and that we will have a formula which will provide legislative cover for the current practice of arbitrators and by that means therefore will not artificially alter rents from levels which they ought to be at.

    I also believe that if we write Amendment No. 2 into the Bill it will be said that your Lordships have turned a difficult situation, through your skill and forbearance, if I may say so—and with perhaps just a bit of common sense—into an improvement in the law which people will welcome. I beg to move.

    On Question, amendment to the amendment negatived.

    [ Printed earlier.]

    On Question, amendment negatived.

    [ Amendment No. 5 not moved.]

    [ Printed earlier.]

    On Question, amendment negatived.

    [ Printed earlier.]

    On Question, amendment negatived.

    [ Amendment No. 7A not moved.]

    moved. Amendment No. 7B:

    Line 9, after ("situated), ") insert ("the rent of any comparable land already farmed with the holding.")

    The noble Lord said: When we began our proceedings this afternoon I mentioned that I would like to say a special word about this and I said something briefly in the course of my general remarks, but I did not have a reply from the Minister on this general point. Could he now tell me whether he sees force in my argument on Amendment No. 7B that what we should include in the regards, as opposed to the disregards, which arbitrators have to take into account is the fact of tendered rents which the tenant has made and had accepted for other land which he is farming with his present holding.

    As I said, I think it would be totally wrong for him to be sitting on an island of rent-controlled land bidding up other land and not having that fact reflected in the rent review of his original holding. I think the Minister is seized of the point. I do not think it is covered by his Amendment No. 2, as drafted. The effect of my words would be to bring this wider tendering which he does voluntarily himself into the regards which the arbitrator would take into account. I beg to move.

    My Lords, with the leave of the House, I must apologise to the noble Lord that I did not reply to his point on Amendment No. 7B, which was put down on the list at a late stage. I do not cavil at that, of course, but I do apologise. My understanding is that my Amendment No. 18 would cover the point which the noble Lord is making. If he feels on reconsideration that this is not so, I most certainly say that we could and should return to the point; but for the moment I believe that Amendment No. 18 covers the point.

    My Lords, I am most grateful to the noble Lord. I had not realised, and do not yet realise, until I have studied what has been said, that Amendment No. 18 could possibly cover my point. However, the noble Lord has generously conceded that the point must be taken into account and therefore for the moment my best plan is to seek leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Printed earlier.]

    On Question, amendment negatived.

    [ Amendment No. 9 not moved.]

    5.30 p.m.

    moved Amendment No. 10:

    Line 15, leave out from ("holding") to end of line 17 and insert ("taking into account the extent to which a competent tenant practising a system of farming suitable to the holding could reasonably be expected to profit from farming the holding.")

    The noble Lord said: My Lords, I beg to move.

    On Question, Whether Amendment No. 10 (as an amendment to Amendment No. 2) shall be agreed to?

    Their Lordships divided: Contents, 55; Not-Contents, 173

    DIVISION NO. 1

    CONTENTS

    Ardwick, L.Llewelyn-Davies of Hastoe, B.
    Barnett, L.Lockwood, B.
    Birk, B.McIntosh of Haringey, L
    Bishopston, L.Melchett, L.
    Blyton, L.Molloy, L.
    Brooks of Tremorfa, L.Mulley, L.
    Bruce of Donington, L.Nicol, B.
    Carmichael of Kelvingrove, L.Oram, L.
    Cledwyn of Penrhos, L.Ponsonby of Shulbrede, L. [Teller.]
    Collison, L.
    David, B. [Teller.]Prys-Davies, L.
    Davies of Penrhys, L.Ross of Marnock, L.
    Dean of Beswick, L.Sefton of Garston, L.
    Donnet of Balgay, L.Stallard, L.
    Elwyn-Jones, L.Stanley of Alderley, L.
    Ennals, L.Stewart of Alvechurch, B.
    Gaitskell, B.Stewart of Fulham, L.
    Gallacher, L.Stoddart of Swindon, L.
    Graham of Edmonton, L.Strabolgi, L.
    Hale, L.Taylor of Blackburn, L.
    Houghton of Sowerby, L.Taylor of Mansfield, L.
    Jacques, L.Underhill, L.
    Jeger, B.Wallace of Coslany, L.
    Jenkins of Putney, L.White, B.
    John-Mackie, L.Willis, L.
    Kagan, L.Wilson of Rievaulx, L.
    Kirkhill, L.Woolley, L.
    Kissin, L.Wootton of Abinger, B.
    NOT-CONTENTS
    Abinger, L.Diamond, L.
    Airey of Abingdon, B.Dilhorne, V.
    Alexander of Tunis, E.Drumalbyn, L.
    Allerton, L.Duncan-Sandys, L.
    Amherst, E.Dundee, E.
    Ampthill, L.Ellenborough, L.
    Auckland, L.Elliot of Harwood, B.
    Avon, E.Elton, L.
    Aylestone, L.Fanshawe of Richmond, L.
    Bauer, L.Foot, L.
    Belhaven and Stenton, L.Forester, L.
    Bellwin, L.Fortescue, E.
    Belstead, L.Fraser of Kilmorack, L.
    Bessborough, E.Gainford, L.
    Bledisloe, V.Geoffrey-Lloyd, L.
    Boyd-Carpenter, L.Gibson-Watt, L.
    Brookeborough, V.Gisborough, L.
    Brookes, L.Glasgow, E.
    Bruce-Gardyne, L.Glenkinglas, L.
    Caccia, L.Gray of Contin, L.
    Caithness, E.Grey, E.
    Campbell of Alloway, L.Gridley, L.
    Carnegy of Lour, B.Grimond, L.
    Carrington, L.Grimston of Westbury, L.
    Cathcart, E.Hailsham of Saint Marylebone, L.
    Chitnis, L.
    Clinton, L.Halifax, E.
    Cockfield, L.Hampton, L.
    Coleraine, L.Hawke, L.
    Colville of Culross, V.Hayter, L.
    Cork and Orrery, E.Henley, L.
    Cottesloe, L.Hives, L.
    Cox, B.Holderness, L.
    Craigavon, V.Home of the Hirsel, L.
    Craigton, L.Hood, V.
    Cullen of Ashbourne, L.Hooson, L.
    Daventry, V.Hornsby-Smith, B.
    Davidson, V.Howard of Henderskelfe, L.
    Denham, L. [Teller.]Inglewood, L.

    Ingrow, L.Radnor, E.
    Kaberry of Adel, L.Raglan, L.
    Kemsley, V.Rathcreedan, L.
    Kinnoull, E.Reay, L.
    Kintore, E.Renton, L.
    Kitchener, E.Rochdale, V.
    Knutsford, V.Rodney, L.
    Lane-Fox, B.Romney, E.
    Lauderdale, E.St. Aldwyn, E.
    Lawrence, L.St. Davids, V.
    Lloyd of Hampstead, L.Saint Oswald, L.
    Long, V.Salisbury, M.
    Lonsdale, E.Sandford, L.
    Lucas of Chilworth, L.Sandys, L.
    Lyell, L.Savile, L.
    McAlpine of Moffat, L.Seear, B.
    McFadzean, L.Sempill, Ly.
    Mackay of Clashfern, L.Shannon, E.
    Mais, L.Sharples, B.
    Malmesbury, E.Skelmersdale, L.
    Mancroft, L.Stedman, B.
    Margadale, L.Stodart of Leaston, L.
    Marley, L.Strathspey, L.
    Massereene and Ferrard, V.Sudeley, L.
    Maude of Stratford-upon-Avon, L.Suffield, L.
    Swansea, L.
    Merrivale, L.Swinfen, L.
    Middleton, L.Swinton, E. [Teller.]
    Milverton, L.Taylor of Gryfe. L.
    Molson, L.Terrington, L.
    Monson, L.Teviot, L.
    Morris, L.Thorneycroft, L.
    Mottistone, L.Tranmire, L.
    Mountgarret, V.Trenchard, V.
    Mowbray and Stourton, L.Trumpington, B.
    Murton of Lindisfarne, L.Tryon, L.
    Newall, L.Tweedsmuir, L.
    Northbourne, L.Vaux of Harrowden, L.
    Northchurch, B.Vivian, L.
    Nugent of Guildford, L.Waldegrave, E.
    O'Brien of Lothbury, L.Walston, L.
    Onslow, E.Ward of Witley, V.
    Orkney, E.Westbury, L.
    Orr-Ewing, L.Whaddon, L.
    Pender, L.Whitelaw, V.
    Peyton of Yeovil, L.Wigoder, L.
    Plummer of St. Marylebone, L.Windlesham, L.
    Winstanley, L.
    Portland, D.Wynford, L.

    Resolved in the negative, and amendment to the amendment disagreed to accordingly.

    5.41 p.m.

    On Question, Whether the said Amendment (No. 2) shall be agreed to?

    Their Lordships divided: Contents, 156; Not-Contents, 53.

    DIVISION NO. 2

    CONTENTS

    Abinger, L.Brookeborough, V.
    Airey of Abingdon, B.Brookes, L.
    Alexander of Tunis, E.Brougham and Vaux, L.
    Allerton, L.Bruce-Gardyne, L.
    Amherst, E.Caccia, L.
    Ampthill, L.Caithness, E.
    Auckland, L.Campbell of Alloway, L.
    Avon, E.Carnegy of Lour, B.
    Aylestone, L.Cathcart, E.
    Bauer, L.Clinton, L.
    Belhaven and Stenton, L.Cockfield, L.
    Bellwin, L.Coleraine, L.
    Belstead, L.Cork and Orrery, E.
    Bessborough, E.Cox, B.
    Bledisloe, V.Craigavon, V.
    Boyd-Carpenter, L.Craigton, L.

    Cullen of Ashbourne, L.Middleton, L.
    Daventry, V.Molson, L.
    Davidson, V.Morris, L.
    Denham, L. [Teller.]Mottistone, L.
    Diamond, L.Mountgarret, V.
    Drumalbyn, L.Mowbray and Stourton, L.
    Duncan-Sandys, L.Murton of Lindisfarne, L.
    Ellenborough, L.Newall, L.
    Elliot of Harwood, B.Northbourne, L.
    Elton, L.Northchurch, B.
    Faithfull, B.Northfield, L.
    Fanshawe of Richmond, L.Nugent of Guildford, L.
    Forester, L.O'Brien of Lothbury, L.
    Fortescue, E.Orkney, E.
    Fraser of Kilmorack, L.Pender, L.
    Gainford, L.Platt of Writtle, B.
    Geoffrey-Lloyd, L.Plummer of St. Marylebone, L.
    Gibson-Watt, L.
    Gisborough, L.Portland, D.
    Glasgow, E.Radnor, E.
    Glenkinglas, L.Raglan, L.
    Gray of Contin, L.Reay, L.
    Gridley, L.Rochdale, V.
    Grimston of Westbury, L.Romney, E.
    Hailsham of Saint Marylebone, L.St. Aldwyn, E.
    St. Davids, V.
    Halifax, E.Saint Oswald, L.
    Hawke, L.Salisbury, M.
    Henley, L.Sandford, L.
    Hives, L.Sandys, L.
    Holderness, L.Saville, L.
    Home of the Hirsel, L.Seear, B.
    Hood, V.Sempill, Ly.
    Hooson, L.Sharples, B.
    Hornsby-Smith, B.Simon, V.
    Howard of Henderskelfe, L.Skelmersdale, L.
    Inglewood, L.Stanley of Alderley, L.
    Ingrow, L.Stedman, B.
    Kaberry of Adel, L.Stodart of Leaston, L.
    Kemsley, V.Strathspey, L.
    Kinnoull, E.Sudeley, L.
    Kintore, E.Suffield, L.
    Knutsford, V.Swansea, L.
    Lane-Fox, B.Swinfen, L.
    Lauderdale, E.Swinton, E. [Teller.]
    Lawrence, L.Terrington, L.
    Lindsey and Abingdon, E.Teviot, L.
    Lloyd of Hampstead, L.Thorneycroft, L.
    Long, V.Tranmire, L.
    Lonsdale, E.Trumpington, B.
    Lucas of Chilworth, L.Tweedsmuir, L.
    Lyell, L.Vaux of Harrowden, L.
    McAlpine of Moffat, L.Vivian, L.
    McFadzean, L.Waldegrave, E.
    Mackay of Clashfern, L.Walston, L.
    Mais, L.Ward of Witley, V.
    Malmesbury, E.Westbury, L.
    Mancroft, L.Whaddon, L.
    Margadale, L.Whitelaw, V.
    Marley, L.Wigoder, L.
    Massereene and Ferrard, V.Windlesham, L.
    Maude of Stratford-upon-Avon, L.Wrenbury, L.
    Wynford, L.
    Merrivale, L.
    NOT-CONTENTS
    Ardwick, L.Ennals, L.
    Barnett, L.Gaitskell, B.
    Birk, B.Graham of Edmonton, L.
    Bishopston, L.Hale, L.
    Blyton, L.Hayter, L.
    Brooks of Tremorfa, L.Jacques, L.
    Carmichael of Kelvingrove, L.Jeger, B.
    Cledwyn of Penrhos, L.Jenkins of Putney, L.
    Collison, L.John-Mackie, L.
    Colville of Culross, V.Kirkhill, L.
    David, B. [Teller.]Llewelyn-Davies of Hastoe, B.
    Davies of Penrhys, L.Lockwood, B.
    Dean of Beswick, L.McCluskey, L.
    Dilhorne, V.Molloy, L.
    Elwyn-Jones, L.Mulley, L.

    Nicol, B.Stewart of Alvechurch, B.
    Onslow, E.Stewart of Fulham, L.
    Oram, L.Strabolgi, L.
    Pearl, L.Taylor of Blackburn, L.
    Ponsonby of Shulbrede, L. [Teller.]Taylor of Mansfield, L.
    Tryon, L.
    Prys-Davies, L.Underhill, L.
    Renton, L.Wallace of Coslany, L.
    Ross of Marnock, L.White, B.
    Sefton of Garston, L.Willis, L.
    Shannon, E.Wilson of Rievaulx, L.
    Stallard, L.Wootton of Abinger, B.

    Resolved in the affirmative, and amendment agreed to accordingly.

    The Severn Crossing

    5.52 p.m.

    My Lords, this might be a convenient time to interrupt the Report stage of the Agricultural Holdings Bill and, with the permission of your Lordships, to repeat a Statement which has been made in another place by my right honourable friend the Secretary of State for Transport. The Statement is as follows: "I should like to make a further Statement about the Severn Crossing, as I promised the House on 17th November last.

    "As I explained on that occasion, there are three issues which need to be considered together: the strengthening of the existing crossing, the traffic control arrangements while the remedial works are carried out and the question of a second crossing.

    "As regards the existing crossing, I have carefully considered the advice of the consultants, and have decided to proceed with a programme of strengthening and repair in order to enable it to cope with the expected loadings while at the same time meeting current safety requirements, as well as to operate without restriction on the flow of traffic. The programme is expected to take five to six years to carry out. The precise extent of the works and the timing of their execution will depend on the outcome of further technical studies. Preparations for the more important works have already been put in hand. 1 intend that such works will begin later this year.

    "There will be the least possible interference with traffic while the repairs are being done. Wherever possible, the work will be carried out at off-peak times; complete closures of the crossing are expected to be few and brief, and where possible limited to overnight hours. Local authorities and user organisations will be consulted about any traffic restrictions that may be necessary. Advance warning of all restrictions will be given, and alternative routes will be signposted as appropriate.

    "I am confident that when the strengthening and repair works have been completed the crossing should continue to provide a safe, ready and reliable communications link, vital to the prosperity of South Wales. I want to give a double assurance that this vital link will not be interrupted as a result of some unforeseeable event or circumstance.

    "I have therefore decided that a study should be instituted into how a second crossing might be provided in the general corridor of the existing crossing. The study will examine other forms of crossing, as well as a bridge, and it will have regard to the desirability of convenient links to the M.4 motorway. It will start as soon as the detailed terms of reference and other arrangements have been drawn up. I expect the study to take about two years to come to conclusions. I emphasise that this is not a decision to build a second crossing. Before such a decision were taken the Government would need to take full account of the outcome of the study, forecast traffic requirements at the time, as well as of progress of the work on the existing crossing. But the completion of the study will ensure that there is no unnecessary delay in providing a second crossing as soon as it is needed.

    "Mr. Speaker, the Government fully recognise the vital importance of the Severn Crossing to the economy of Severnside and South Wales. The three measures I have announced today—the strengthening and repair of the existing crossing, the conduct of the works so as to minimise traffic restrictions, and the study of a second crossing—all demonstrate the Government's determination to maintain an adequate and reliable communications link between South Wales and its markets in the rest of Britain and in Europe on which its prosperity depends. I believe that they should dispel any doubts among potential investors and the public at large about the Government's commitment to this aim, especially during the period while the strengthening and repairs are in progress. In all these matters I shall act in close consultation with my right honourable friend the Secretary of State for Wales and shall keep the House informed of progress made".

    My Lords, that concludes the Statement.

    My Lords, the House will be grateful to the noble Lord for repeating this important Statement. At the outset I must comment that I am pleased that the Statement emphasises in a number of places the importance of the Severn Crossing to the economy of Severnside and South Wales. In general, we on these Benches welcome the three decisions, which are somewhat in line with the points made when the earlier Statement was made on 17th November last.

    The fact that the repair and strengthening work will take five to six years indicates the degree of seriousness of the structural weakness of the bridge, and should remove any of the thoughts there were in the minds of some that the concern originally expressed about the bridge was creating something in the form of panic. In view of the long period of the strengthening and repair work, it is essential that there should be a sound and effective system of traffic control. Even though it is hoped that the closures, if they are necessary, will be in off-peak times, I presume that the monitoring of incidents will continue, as stated in the original Statement in 17th November. I presume also that there will be a continuous check on traffic arrangements, with opportunities for flexibility according to circumstances.

    I am pleased to note that local authorities and users are to be consulted on any traffic restrictions. This is an important point because not only is advance notice required in time but advance notice of signposting is required on important routes if long diversions of traffic are to be avoided.

    We welcome the feasibility study on the question of a second crossing. We completely agree that those concerned should keep an open mind on the nature of the crossing. It was stated that there will be a two-year study before any conclusions are drawn. I hope there will be full consultation with local authorities and road users in that study of possible alternatives and possible sitings and that it will not be left to a White Paper after the two-year study is completed.

    Is there any estimate available of the cost of the structural work? May we assume that the cost will be met nationally, through the Department of Transport? This leads to the question of tolls. Noble Lords will recall that on 17th November I raised the question of tolls and asked whether, in the light of the traffic restrictions which have to be observed, the tolls could not be abolished at least during the period of restriction. I repeat that question in view of the long period of work that is to be involved. Would it not be sensible to remove tolls from the Severn Crossing?

    Noble Lords may have seen from the debate in another place last night on the Dartford Tunnel that my honourable friend Mr. John Prescott questioned whether this is not the time to consider the whole subject of tolls. In connection with the study, could not that aspect be considered as a matter of some importance?

    6 p.m.

    My Lords, the Statement made is clearly very important because the importance of this crossing to the economy of South Wales cannot be over-estimated, nor indeed its importance to the rest of the country. Therefore, I welcome the three assurances that have been given by the Government. But would the Minister deal with one or two matters which are bound to cause some worry? First, he says that after the work has been done the bridge will provide a safe, ready and reliable communications link. But clearly it has to be used for the next five years in a more limited way. Will he confirm that during that period it will provide a safe, ready and reliable communications link, that though obviously basic remedial work is necessary, with its present limited use it is nevertheless a safe means of communication?

    Secondly, in regard to the investigations to take place into a second crossing, there are the limiting words that a second crossing might be provided in
    "the general corridor of the existing crossing".
    These words seem to me to limit the remit of those investigating it. It might well be, for example, that lower down or higher up the question of the Severn Barrage ought to be considered at the same time, which might provide a means for both a bridge and a tunnel simultaneously. Therefore, why is it necessary to restrict that inquiry with the words,
    "in the general corridor of the existing crossing"?
    As the Minister will appreciate, this is a very important estuary, not only from the point of view of communication but because of the possible other uses that may be made of it. As necessity forces this second inquiry, it seems to me that a virtue should be made of necessity and the Severn Barrage should be looked at very seriously as a means of providing not only one means of crossing but possibly two.

    My Lords, I am grateful to both noble Lords, Lord Underhill and Lord Hooson, for their general remarks in response to the Statement I have repeated. Perhaps I could answer the questions in the order in which they were put to me. The noble Lord, Lord Underhill, said that the length of time for the repairs, between five and six years, indicated the great seriousness of the structural weakness of the bridge which had led to near panic. I have to tell your Lordships that the timescale of five or six years is not resultant upon any structural weakness nor grave serious deficiency. I was unhappy to hear the noble Lord use such an emotive word as "panic". The five-year or six-year timescale is to ensure that there is the minimum disruption of traffic. Quite obviously, if the lanes were even more severely curtailed than they are at the moment work could proceed a little faster. I have already explained that the major works will be carried out particularly at offpeak times. There is no suggestion that the bridge is unsafe for use at this present time—none whatever. That under certain circumstances, particularly wind and excessive loading at peak hours, my right honourable friend has thought that to be doubly sure traffic restrictions should be made, is, I think, quite reasonable.

    Monitoring will continue, as will the traffic arrangements, and these are in the domain of the local authority, Avon County Council personnel and the police. So far as monitoring is concerned there is a live patrol across the bridge at most times that it is in use.

    The noble Lord, Lord Underhill, asked about publicity. Where there are to be major diversions, or in the event of the unlikely but possible necessity to make a short total closure, all responsible bodies, trade bodies, the CBI, and motoring bodies, will be consulted in very good time. There will be at the time what we consider to be adequate publicity via radio and local signing.

    The noble Lord also asked about the cost. The estimated cost in September, or it might have been October, 1983 was £33 million, and although there are further technical studies to be undertaken it is not thought that this figure will vary greatly. The £33 million is, of course, at 1983 prices. He asked also about tolls. I can tell noble Lords that there is no intention to remove tolls, and the general principle that major estuarial crossings that give particular benefit to users shall be tolled remains Government policy.

    The noble Lord, Lord Hooson, asked about the condition of the bridge over the next five years. I think I have answered that in my earlier remarks to Lord Underhill. I would emphasise that we are talking about "strengthening" and so on; I would have preferred to have used the general term, "remedial and renewal works". There have been further technologies developed in terms of concrete structures and steel work and so on; so any work undertaken during this five-year or six-year period might be classed as renewal.

    The noble Lord asked about the second crossing. So far as the so-called "general corridor" is concerned, the precise area of search will have to be defined when we finalise the terms of reference for the study. The existing corridor of traffic demand is along the M.4 motorway. As was said in the Statement, the study will have particular regard to the desirability of convenient links between a second crossing and the motorway. So to all intents and purposes I suppose one should really be saying that it would be reasonable to suppose that the area of search would be within the area of the existing crossing, as distinct from many miles up river.

    The noble Lord asked about the barrage. I think that perhaps all I can say at this stage is that both the barrage proposals, the Bondi scheme and the smaller Wimpey-Atkins scheme, are still at the feasibility stage. Whether a barrage is built will be determined, I think, essentially by energy considerations. If such a project went ahead we would naturally look at the possibility of incorporating a road. At this stage the feasibility study is designed to indicate the various options. The Government have no firm view as to where the crossing need necessarily be. That would be determined in the light of the study in about two years' time.

    My Lords, can my noble friend explain why the Severn bridge has deteriorated in such a comparatively short time for such structures? Is it because the designers underestimated the growth and density of traffic over the years? There must be some reason—possibly poor material. I do not want to ask the noble Lord a question to which he has not been given an answer, but if he has any clue I should be very glad to hear it.

    My Lords, my noble friend Lord Massereene and Ferrard is quite entitled to ask any question, and if I do not have the answer I can promise that I will provide it for him. He asks: why has the bridge deteriorated? There is no evidence of failure at the design stage nor of the actual building. There has been a very marked change in the traffic using the bridge and the densities at which the bridge is used. This has caused concern that, given certain circumstances, the margin of safety would be diminished to a degree which would be unacceptable. Certainly on any bridge or engineering structure repairs or renewals must be taken care of over a period of years. I think that there may have been a good deal of misinformed publicity in the early stages which have not been borne out by the studies undertaken by engineers.

    My Lords, in view of the uncertainties and anxieties in relation to the Severn Bridge over the past two years or so, is the Minister aware that the three proposals in the Statement will be warmly welcomed in South Wales? Is he further aware that the proposal to have a study into a second crossing is, in all the circumstances, a sensible step to take?

    Can the noble Lord clarify one point in the early part of the Statement which refers to further technical studies? The Statement says that the extent of the works on the bridge and the timing of their execution will depend on these studies. Are we to assume that the work of strengthening and repairing—the remedial work, as he described it—will start at once and will not be dependent on any of these technical studies which the Minister, quite properly, may require?

    My Lords, I am grateful to the noble Lord, Lord Cledwyn of Penrhos, and I am glad that he accepts that the Government realise the importance of the crossing to the Principality. The noble Lord asked specifically about the further technical studies referred to in the Statement. A number of points in connection with the strengthening, repairs and renewals require further detailed examination. Basically, these include the choice of the hanger system, any change in the deck strengthening and the use of particular surface materials. It will be necessary for these further studies to be undertaken but in no way will they affect the basic feasibility of the programme.

    The noble Lord particularly asked about the time scale and I can assure him—I do not know whether I can assure him, but I can attempt to assure him—that the studies will not delay the programme as they will be conducted while the other strengthening work is being undertaken.

    My Lords, the Government will have had impressed on them again and again the enormous economic importance of the bridge link to the Principality and also the importance of a reliable link of adequate capacity, which I think is one of the things which annoyed us more than anything when I had quite a lot of responsibility for inducing industry to go to South Wales. Are the Government also aware that Bristol and parts of the South West also derive enormous benefit from the existence of the bridge because the economies of the two littorals have become, to some extent, interdependent through the existence of the bridge? To deprive either side of this enormously valuable link would be a great blow to both economies.

    My Lords, I think I can only agree with the noble Lord, Lord Raglan. The Government recognise the strategic and economic importance of the crossing to Wales, to other parts of the United Kingdom, and to Bristol and the South-West, as the noble Lord said.

    As regards the capacity of the bridge, I can do no more than repeat what I said earlier, that apart from the bunching element which is due to the type of vehicle and the journey times now being undertaken there have been chages over the years. It is for those reasons that difficulties have arisen and not because of the total capacity, which remains quite adequate for the forecast volume which we see over the next few years.

    My Lords, can the Minister tell us whether it would be possible to instal on the M.4 itself, and on the major roads leading to it, electronic notices which give up-to-date—I emphsise up-todate—information as to the periods of delay when there are considerable hold-ups? Is the Minister aware that there are very many users who, given that information well back from the bridge, could divert, particularly through Gloucester? At the moment one only finds that there is a delay when one gets into the traffic jam leading up to the bridge and by then it is far too late to turn off. Congestion would be alleviated if people could have information which would enable them to divert before they reach the crossing.

    My Lords, yes is the short answer, but I think that the noble Lord would like something a little more expanded than that. Diversion signs were put up last year at junctions 15 and 24 on the M.4. They are manually operated and advise of delays on the Severn crossing. They are to be replaced with signs which are remotely controlled—which is perhaps synonymous with "electronically"—from the police point at the Almondsbury M.4—M.5 interchange. It is expected that the sign at junction 15 will be operational in a few weeks' time, at Easter. The sign at junction 24, however, will not be ready until the end of next summer. The criterion for activating the signs are likely to be delays of one-and-a-half to two hours at the crossing. The new signs also will be capable of warning of restrictions on account of high winds. The whole monitoring and sign procedure is continually under review and I can assure the House that my right honourable friend the Secretary of State will ensure that adequate warnings are given should those currently planned not prove to be as effective as all of us should like.

    My Lords, can the Minister assure us that he will take into account the fact that the sign at the interchange between the M.4 and M.5 is too late? Surely motorists want the sign one step back from that.

    My Lords, I certainly take note of what what the noble Lord said and will draw the attention of my right honourable friend to that. But I wonder whether, if motorists perhaps slowed down a little knowing that they were coming to the junction, they would have time to stop before they actually got there.

    Agricultural Holdings Bill Hl

    6.18 p.m.

    Consideration of amendments on Report resumed.

    My Lords, I think the House understands that Amendments Nos. 11, 12, and 13 cannot now be moved. We therefore come to Amendment No. 14.

    [ Printed earlier: col. 1007.]

    The noble Lord said: This is the first of a string of amendments to which I spoke with Amendment No. 2. I beg to move.

    On Question, amendment agreed to.

    [ Printed earlier: col. 1007.]

    On Question, amendment agreed to.

    [ Printed earlier: col. 1007.]

    On Question, amendment agreed to.

    My Lords, the next amendment is an amendment on a supplementary list, Amendment No. 16A, and it should be in the names of the Earl of Kinnoull, Lord Howard of Henderskelfe, Lord Northbourne and the Earl of Caithness. It should not be in the name of Lord Northfield.

    moved Amendment No. 16A:

    Page 2, line 31, at beginning insert—
    ("In respect of tenancies which commenced not more than three years before the date of the Arbitrators' Award and of prospective tenancies").

    The noble Earl said: My Lords, I hope that the amendment will be supported by the noble Lord, Lord Northfield. Subsection (4) is a matter of very deep concern for those existing long-term landlords in the agricultural industry—the charities and the universities—which are at the sharp end of the interpretation and effects of the Bill, which we are trying to clarify. As the House knows, subsection (4) introduces a new concept of a discount of scarcity which arbitrators must take into account when considering evidence of comparable lettings. The language of the subsection is complex and somewhat vague. Although the concept of removing key money from comparable evidence is not at all in dispute, the wording and effects of the subsection are matters of considerable concern.

    No one knows at the moment how the subsection will work, not even the greatest valuers or the greatest lawyers. Only time will tell. But we know that this new concept will be taken very much into account not only for new lettings—which was the original purpose of the working committee of the NFU and CLA—but also for existing lettings, which is not what it was intended to include. This little amendment which we have put down and to which I hope my noble friend will be sympathetic is to restrict the evidence of comparable lettings to new lettings. The wording is to cover new lettings which may have gone back three years and which have not had a rent review, or existing prospective lettings which are subject to negotiation at the moment.

    Earlier on, the noble Lord, Lord Northfield, gave examples of the effects of the rent clause which particularly concerned the provisions in this subsection about scarcity. He gave examples of three farms which a leading valuer at a meeting last Thursday used in his interpretation of the Bill. I must admit that they present a gloomy picture. This little amendment does not really at all remove the major worry but it limits it to new lettings.

    This restriction, if accepted, will be identical to that in the Scottish legislation which was passed only last May. That is an important point which I know that the noble Lord, Lord John-Mackie, will take on board. The restriction was then accepted and no doubt the noble Lord spoke in favour of it. The amendment would restrict the potential harm if an arbitrator misused or over-calculated the discount element of the rent under subsection (4). I hope that my noble friend will give the amendment a fair wind and will accept the principle if not the wording. I beg to move.

    My Lords, I find this a rather interesting amendment, because it touches on the problem I raised in Committee. Does my noble friend Lord Kinnoull consider that after three years, when the rent goes for arbitration or review, the premia that the person has paid in order to get into the farm will be reduced to nil? If that is so, I would accept the amendment. But my reading of it is that that will not be so. The position will be roughly the same as today, where a new tenant comes in and is forced to pay a very high rent. He has no option. Over a period of, say, three reviews—nine years—his rent becomes more or less the same as those of his neighbours; theirs have gone up and his has gone down. If in the future that would be the position, I cannot accept the amendment, because there is an element of premium and scarcity after three years.

    My Lords, the purpose of this amendment is to require that any discount for appreciable scarcity under subsection (4)(a) shall apply only to newly or recently tendered rents. It would therefore exclude all sitting tenant rents, although for some reason my noble friend Lord Kinnoull has not excluded arbitrated or agreed rents for new succession tenancies, which, if I may say so, may be a defect which he did not intend.

    Perhaps I may leave that aside for the moment, and go to the merits of the case. It is common ground that appreciable scarcity is likely to appear only in respect of newly or recently tendered rents. If I may, I shall come to the point of my noble friend Lord Stanley of Alderley in a moment. In the case of sitting tenant rents, the present practice of arbitrators has itself tended to eliminate appreciable scarcity, in that arbitrators tend not to apply the full rigours of the current rent formula. The proposal of my noble friend Lord Kinnoull would not therefore be likely to have a very substantial effect. The discount for appreciable scarcity is, however, an objective test, and it would therefore not be consistent to apply it to one category of rents and not to another, we believe.

    If I may come to the point of my noble friend Lord Stanley of Alderley, it is not inconceivable that some element of appreciable scarcity could have crept into a few arbitrated rents. If this is indeed the case, then it would be right, we believe, and so apparently does my noble friend Lord Stanley, to ask arbitrators to apply an appropriate discount if these rents are to be used as comparables.

    In short, what I am trying to say is that I think it is a difficult concept to try to say that some rents ought to be treated as comparables and others not. If I may say so, I think that this has led my noble friend Lord Kinnoull into a small drafting error which I think was not intended. But the point of principle is that the discount for appreciable scarcity is an objective factor and should therefore be taken into account in all comparable rents. What I am saying is that, if there is no appreciable scarcity, then there will be no discount. I think that that is how the matter ought to be left.

    My Lords, the noble Earl, Lord Kinnoull, mentioned my name when he mentioned the Scottish Bill. I cannot find the precise reference.

    My Lords, I am quoting from a brief which I have received and which I have no doubt is accurate. It makes the point that under Scottish legislation passed last May the comparable evidence is limited to new lettings and does not cover existing sitting tenants.

    My Lords, as I understand it, the object of this Bill is to make more tenancies available. If we are to achieve this objective, we have to be absolutely satisfied that the legislation to which we contribute and which eventually goes on the statute book is fair to both parties and is clear and unambiguous. The noble Lord, Lord Belstead, has done an enormous amount to clarify the intention of Clause 1 by the introduction of Amendment No. 2. However, there is still one major area which lacks clarity, and I refer to the words "appreciable scarcity".

    It has been stated by a number of valuers and other reasonable people that it is impossible to assess the amount of a particular rent or of any other transaction which is attributable to "appreciable scarcity". Scarcity is in the nature of the market and the market is in the nature of scarcity. What is appreciable scarcity? What is great scarcity? What is no scarcity? If there were indeed no scarcity, the landlord would presumably be glad to have the tenant occupy the farm in order to see it being occupied and the buildings being kept up. Possibly there would be no rent at all. Some noble Lords have drawn attention to the situation in the 'twenties.

    We must I think accept that the word "scarcity" is unclear. I for one should prefer to have the word "scarcity" entirely expunged from the Bill. This I understand is not politically possible. I should prefer to see it more clearly defined, or in some way limited. It has, for example, been suggested that it might be limited by introducing another subsection which would ensure that scarcity applied only in so far as the relevant rent was also in excess of the rent which would be agreed between a willing and prudent landlord and a willing and prudent tenant. That alternative has not been tabled today. This particular amendment was thought to be more moderate and, it was hoped, entirely acceptable. The amendment simply brings the drafting of the Bill back, as we understand it, to the intention of the original joint working party of the NFU and the CLA. In paragraph 3(a) of its report, the working party referred to:
    "Rents paid or tendered in respect of comparable lettings to the extent that they contain an element due to scarcity of holdings available for letting…"
    These must by definition be new lettings. Therefore it was in the minds of the NFU and the CLA when they made that agreement that the scarcity element should refer only to new lettings. It is the intention of this amendment to reintroduce that idea. I submit that it is most important that we should do so if we want the Bill to be clear and not to cause misunderstanding and fear in the minds of landowners, which would discourage them from letting their land in the future.

    My Lords, I am very keen to support the amendment. I must be very careful because the next amendment, No. 16B, in the name of the noble Lord, Lord Northfield, deals with appreciable or substantial scarcity, and I do not want to go over the same ground twice. To my noble friend Lord Stanley I would say that every rent contains a scarcity element because it is an integral part of rent. There cannot be a value without scarcity, and therefore if there were no scarcity, the land would be occupied free. Therefore, scarcity is an element of a rent; it has got to be; it is an element of anything which has value.

    What concerns us is the situation with established sitting tenants. I have spoken to a number about this point, and they have all said that because they are on agricultural holdings, part of their rent relates to appreciable scarcity. Frankly, I think that is a very one-sided way of looking at the matter and it could lead to enormous problems. That is what really concerns landowners, and that is why we have come forward with the amendment to provide that when looking at comparables it is only with the most recent lettings—or, I think it would be fair to include, the most recent arbitrated lettings—that one must discount the element of appreciable scarcity. If a landlord and tenant willingly have agreed a rent, I do not think that there should be any scarcity element in it.

    My Lords, my noble friend said that he felt that there was no substantial effect that this small amendment would have upon subsection (4). My advice from outside was that in fact it would have a substantial effect; it would have an effect of at least giving more confidence to existing landlords. This is a very complex subject and I do not intend to try to press it or to argue it further, but I should like to say that I shall withdraw the amendment on the understanding that I shall look at it again and perhaps see my noble friend before the Third Reading. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    6.35 p.m.

    moved Amendment No. 16B:

    Page 2, line 32, leave out ("an appreciable") and insert ("a substantial").

    The noble Lord said: My Lords, our earlier long debate was characterised by an anxiety on all sides to seek common ground, and I thought that that was a very laudable way to conduct our proceedings on this very important Bill. If I may say so, I voted with the Government on their amendment because, to use the words of the noble Earl, Lord Waldegrave, given what is possible, they had not done too bad a shot with Amendment No. 2, and it went a long way along the road towards getting the Bill right.

    But at one time or another we have all made the point that the common ground could be extended just a little further. I want to quote the words which the noble Lord, Lord Belstead, used in winding up the debate half an hour ago, or whenever it was. I took down his words at the time. He said that what we want the arbitrator to disregard when he starts looking at comparable lettings in order to take them into account—and these were the noble Lord's words—"are the excessively high tender rents". I think that that is common ground. We would all agree that in rent fixing we want to exclude what the noble Lord calls excessively high tender rent, and what the noble Earl, Lord Caithness, and I call silly rents, the stupid ones right at the top end of the market, the crazy ones that we know nobody could really achieve.

    If that is our common ground, how do we express it? I have suggested one way which the House has not followed. I suggested that the way that we should approach the question—and I shall return to it on Third Reading—is that we should allow the arbitrator discussion in this matter; it should not be mandatory for him to disregard every element of scarcity, which I think makes a nonsense of the situation. I gave examples of rental questions where I felt it would become a nonsense and arbitrators would simply take no notice of what is in the statute.

    Another way to achieve what we want is contained in the present amendment. The amendment would provide that an arbitrator would disregard—to use the words which are at line 31 on page 2 of the Bill—

    "any element of the rents in question which is due to a substantial scarcity of comparable holdings …".

    My view is that if we were to say that, it would leave arbitrators with some discretion to say, as the noble Earl, Lord Kinnoull, has just said, that there is always an element of scarcity around, and there is probably always an element of appreciable scarcity. What we want the arbitrator to take no notice of and to disregard are elements of substantial scarcity that have resulted in silly rents or, to quote again the noble Lord, Lord Belstead, excessively high tender rents.

    That is the aim of my amendment. It is one step, I hope, towards a little more common ground in trying to exclude what we are really all trying to exclude, and not trying to pretend that somehow we can make an unreal situation real; that is, to pretend that there is any equilibrium in the market. All that the arbitrator should be asked to disregard in the comparable rents are the stupid ones. That is the aim of my amendment. I beg to move.

    My Lords, we did not have a very positive discussion on the words "appreciable scarcity" at the Committee stage because my noble friend Lord Belstead had already agreed to look again at the rent clause. At that time the amendment was, I think, No. 16, in the name of my noble friend Lord Kinnoull, who did not move it when we reached it. However, my noble friend Lord Belstead said in col. 149 of Hansard of 22nd November:

    "Amendment No. 16, which deals with an alternative method of adjusting for appreciable scarcity, is something which need not perhaps present quite the same problems—certainly it is something which we should consider very carefully."—[Official Report, 22/11/83: col. 149].
    Despite important consideration, we still have the same wording in the Bill but we have managed to tackle, with tremendous help from my noble friend Lord Belstead, the primary problem, which was the rent clause amended today. The words "open market" are a red rag to the NFU. I appreciate its concern. Similarly, the words "appreciable scarcity" and, particularly, the word "scarcity", are a red rag to the land owners. These two words, "appreciable scarcity", give rise to as much cause for concern as anything else in the Bill.

    During recent discussions on the matter, I believed that I had a revised form of words that met with the passive approval of the NFU; in other words, it would not oppose them if the Minister backed them. Alas, he did not. It is therefore right that the subject is being fully aired now. I am grateful for the amendment put forward by the noble Lord, Lord Northfield. I am concerned by what the words "appreciable scarcity" mean. I have seen several lawyers, QCs and surveyors and each one has come up with a different answer. It is perturbing if one is to be faced with the problem of interpreting these words at a rent review. It will be the first point at which the landlord or tenant will say, "Right! Enough is enough. We are never going to agree. Back to the courts we go". This is one thing that we do not want to happen if we can avoid it. I therefore ask my noble friend, please, to reconsider the matter. The whole question of subsection (4)(a) was raised by the noble Lord, Lord Northbourne, on the last amendment. Can he please have one more look at it?

    My Lords, I would have thought that "a state of scarcity" is a state of substantial deficiency. What does the word "scarce" mean in ordinary English? Does it need to be qualified at all?

    My Lords, at an earlier stage of the Bill, there was a good deal of discussion of the fact that one of the reasons why we had to have the Bill at all was that arbitrators and valuers generally were completely ignoring what the law said, in other words, that they were deciding themselves what they were going to do without any guidance from the law. Fears had been expressed that at some stage those same arbitrators or valuers might be taken to court, that the full rigours of the law would start to bite and that we should get huge rents, and so on. This was one of the reasons put forward for the Bill.

    We are beginning to get back to the position where it is suggested that arbitrators and valuers will be told to do certain things in the Bill but that they will do what they have always done in the past. It cannot be good if the chief reason for the Bill is not achieved by the Bill. I do not know what the words "appreciable scarcity" mean. I have a fair idea what "substantial scarcity" means. I do not like the word "scarcity" at all. I believe, for all the reasons already given, that, without some form of scarcity, there cannot be any value. A little elementary economics of the sort that has not led us down too many garden paths, might prove rather helpful here. Nevertheless, without some form of scarcity, there cannot be any value. "Substantial scarcity" certainly means much more in the minds of those who have to deal with these things than "appreciable scarcity". I wish strongly to suport the amendment.

    My Lords, I should also like to support the amendment for almost identical reasons to those given by the noble Lord, Lord Howard of Henderskelfe. I should also like, while we are dealing with this exact point of scarcity, to express my opinion that the reason for the scarcity of tenanted land is a scarcity of landlords willing to let at a return that they think reasonable. If that happens, it is almost impossible to legislate for substantial scarcity because I suspect that the scarcity will get worse anyway. Adam Smith must be revolving in his grave over this. All those lovely 19th century liberals who are Her Majesty's Government's present advisers must be equally going dotty because they seem to be in the vice-like grip of the NFU. It is rather like suggesting that a press law should be cobbled up by the National Graphical Association and the Newspaper Publishers Association with my noble friends expecting to push it through an unwilling House.

    We have got ourselves into a muddle. I believe that "substantial" is better than "appreciable" because it means a big scarcity that we must ignore. That is what we want to ignore. We do not really want to ignore a medium sized scarcity. That is what we are trying to say. I do not think that it will work. I thought at first that it would be better. But the more one looks into it, the more dottiness comes bubbling happily to the surface. But the amendment of the noble Lord, Lord Northfield, who is probably a truer liberal than some of the present advisers to Her Majesty's Government in this context, says that it makes slightly more sense than "appreciable scarcity". I therefore support it.

    My Lords, we have now heard the word "dotty" together with the word "muddle" applied to the Bill. This seems to be an argument about the meaning of the word "appreciable" against "substantial" or the legal meaning of the word "scarcity". Frankly, I do not want to take part because I am neither a lawyer nor an English scholar. But "substantial" seems to emphasise it better, if emphasis is required. I therefore support my noble friend on the word "substantial".

    My Lords, at the risk of being labelled the noble Earl's 12th lawyer, may I say that in my view, as a lawyer, the word "substantial" is a great deal clearer than "appreciable". "Substantial" is a concept very well known to law, while "appreciable", I imagine, would be very difficult. If "appreciable" was, as it might well be held to be, to mean anything other than minimal, one would be landing arbitrators with the enormous task of trying to give a 2 to 3 per cent. discount on other rents because there was an appreciable scarcity, albeit not a substantial scarcity. I believe that "substantial" would be clearer and would make the arbitrator's task a great deal easier.

    My Lords, perhaps some of the reason for this debate is the fact that it was I and not my noble friend Lord Belstead who spoke about scarcity and appreciable scarcity at the Committee stage. If noble Lords care to consult Hansard for 22nd November 1983 they will find the discussion recorded in cols. 205, 206 and 207. Perhaps, unlike my noble friend, I made no impression upon anyone, because noble Lords seem to have forgotten what took place. I did at that time go into a fairly lengthy description of the reasons for using the words "appreciable scarcity". I should like to repeat them.

    The word "appreciable", I am advised, would exclude de minimis scarcity. It means something less than substantial but is intended to be a pointer to the arbitrator not to be influenced by insignificant scarcity. Scarcity must therefore be qualified and "appreciable" seems as good a word as any. In fact, we had quite a long and interesting debate. Noble Lords may care to refresh their minds by consulting Hansard.

    I turn now to the proposal before the House of the noble Lord, Lord Northfield. The effect of this proposal, by substituting "substantial" for "appreciable", would apply a much stronger test. I remind the noble Lord and other noble Lords who have spoken that the qualification "appreciable" means that we have in the Bill a stronger wording than in the new Scottish rent formula where scarcity stands on its own. To go further and to refer to "substantial scarcity" would be a major change—in fact, a change of substance—which would markedly alter the balance of the new formula. The noble Lord, Lord Northfield, said he hoped that this would bring unanimity to the matter. I suggest that, far from bringing unanimity, it would bring discord. I was amazed that the noble Lord, Lord John-Mackie, rose from the Opposition Front Bench to support his noble friend. I should like to remind the noble Lord that his colleagues on the Benches opposite pressed in Committee for all scarcity to be disregarded. I would not go that far. But, equally, I would certainly not go as far as the noble Lord proposes here by the insertion of the word "substantial". Therefore, I hope that the noble Lord will withdraw this amendment.

    My Lords, before the noble Lord, Lord Northfield, replies, I should like for a change, to give a little help to my Front Bench. If this amendment is accepted, I would agree with my noble friend that it would drive a coach and horses through the whole idea of scarcity which is in the clause and which has been agreed, or has sought to be agreed, over a long period of time.

    My Lords, I think that the little debate that we have had has been very interesting, because it has raised two matters which have always amused me in this House, one is that when we want to disregard Scottish parallels, we do so by saying, "Why should we follow Scotland?" But we now have it plotted out the other way. The Government want it both ways. This time they want to say, "Of course we should always keep in line with Scotland". It is funny how it is used one way one day and the other way another day according to the suitability of the circumstances for the Minister concerned. Therefore, I think that that falls by itself. At this point I do not think that the Scots got it right anyway, and therefore I do not think we should follow it. Nor is their precise situation on holdings similar.

    My Lords, in fact, "appreciable scarcity" is not in the Scottish Bill, so we are not going the same way. It is "appreciable" in England and Wales and just "scarcity" in Scotland.

    My Lords, to use my own words, the noble Earl was saying that it is such a substantial departure from the Scottish formula. Never mind, he was having it both ways as Ministers do.£

    The other point that is interesting about this is that the noble Lord, Lord Stanley, again let the cat out of the bag, as he has kindly been doing all the way along: this is one of those sacred tablets that came down from the NFU, and who are we to start disagreeing with them? Once again, it shows the sordid ancestry of this Bill. It did not start from principles; it did not start with Ministers saying, "This is what we want. Parliamentary draftsmen, go away and do it". There was nothing as sensible as that. No, it was a sordid deal in some smoke-filled room between men who we otherwise might look twice at, and then we are told that we must follow its hallowed words into legislation. Is it not tragic that the House is reduced to this situation? It really is tragic.

    In his reply to me the noble Earl said that he accepts that "substantial" means more scarcity than "appreciable". I stick to that. I will join him in that definition. I thought that that was the common ground; that we wanted to exclude those silly tender rents that came in conditions of substantial scarcity, and we wanted arbitrators to be able to take account of, and not have to disregard, a reasonable appreciable scarcity. The noble Earl has called the troops in to vote down what I think is an amendment of common ground that was emerging beautifully from our earlier discussions. It is a very sad situation. I think that I will withdraw the amendment.

    No, my Lords? My instinct is to withdraw it and to ask the noble Earl at least to have some talks about it. The noble Lord, Lord Belstead, was extremely helpful during earlier stages of the Bill and if he would, by a nod of the head, indicate that we will have another talk about this, it would not close doors. If I were to divide on this and be voted down by the troops, who have obviously turned up given the number in the Divisions earlier on, it would not help me to get a bit of common sense on to the statute book. If the noble Earl would agree to have another chat about this with those of us from all sides of the House—not just on this side—who see the force of trying to get common ground extended this little step further, I should be more than content to withdraw the amendment.

    My Lords, by leave of the House, as this is the first amendment for which I am responsible, there is nothing I would like to do more than give way. But I think that this amendment would drive a cart and horses through this Bill and I simply cannot give way.

    My Lords, I will even try knocking at the noble Earl's door between now and Third Reading. But I shall move it and probably press it on Third Reading. Meanwhile, I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Printed earlier: col. 1007.]

    The noble Lord said: My Lords, I spoke to this amendment when I moved Amendment No. 2. I beg to move.

    My Lords, I shall now call Amendment No. 17A as an amendment to Amendment No. 17.

    6.56 p.m.

    moved, as an amendment to the amendment, Amendment No. 17A:

    Line 2, after ("holding") insert (", or any person tendering for such a holding,").

    The noble Lord said: My Lords, I should like to ask my noble friend whether or not he will accept this amendment. I think that he should.

    My Lords, the answer is, more or less, yes. I have been advised that we need to look at the wording of this amendment. I agree with what my noble friend is trying to do. If my noble friend will accept from me that I undertake to bring forward an appropriate amendment to cover the point on Third Reading, or at least to discuss it with him so that perhaps he can bring forward such an amendment, perhaps he would agree to withdraw this amendment.

    My Lords, I shall certainly be very happy, not more or less to withdraw it but completely to withdraw it until Third Reading. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    On Question, Amendment No. 17 agreed to.

    [ Printed earlier: col. 1007.]

    The noble Lord said: My Lords, I also referred to this amendment when I dealt with Amendment No. 2. I beg to move.

    My Lords, when I moved Amendment No. 7B the noble Lord was good enough to say that he thought this amendment covered the point I was making in Amendment No. 7B. I have taken some advice and I do not think that that is so. In this amendment he is talking about marriages; I am talking about something quite separate. Perhaps I could leave it that if the noble Lord would be kind enough to look again at what I said on Amendment No. 7B; we could then have some further discussion about it, as he indicated that Amendment No. 7B raised a matter that ought to be covered somewhere. If I may hold him to that, I would simply say that I am advised that Amendment No. 18 does not cover my point.

    My Lords, I must apologise if I have misled the noble Lord. I have also taken advice since I said that and, to be absolutely frank, I have been told that I was wrong. I have a short speaking note here, but if the noble Lord would prefer to discuss this matter outside the Chamber with a view to returning to the point possibly on Third Reading, that would be the way to go ahead. Of course, I agree to the noble Lord's suggestion.

    On Question, amendment agreed to.

    [ Amendments Nos. 18A and 18B not moved.]

    The noble Lord said: My Lords, I am sorry to say that Amendment No. 19 has been the subject of an attempt by some splendid person in the Public Bill Office to improve upon my own work. As a result, I am afraid that he or she has got it wrong. It should read:

    "Page 4, line 23, leave out (b)",

    instead of as written. I only discovered this today so it was too late to put the matter right. It is hardly fair on my noble friend to ask him to comment on the point. In any event, I shall withdraw the amendment.

    Like most of my remaining amendments, this one is detailed, technical, boring and important. Perhaps I may just explain the short point that arises here. The purpose of leaving out paragraph ( b) is to ensure that variations in rent at times other than those specified in subsection (7)( b) of Clause 1 will not start or restart the three-year cycle: for example, a variation in size of the rent agreed within three years of the beginning of the term. I should mention that, in order to get over that difficulty, we shall also be doing something consistent with Section 8(3) of the 1948 Act. That is the short point involved. I think it is a sound one, recommended by the Agricultural Law Association. I beg to move, but sympathise with my noble friend.

    My Lords, my noble friend has explained that due to a slip between my noble friend's pen and the Marshalled List the reference to line 26 ought to be to line 23. This is a pity, I agree, because my noble friend—and indeed those whose advice he has been taking in the Agricultural Law Association—are on to a series of detailed but important points. Before we take any further amendments which have come from the advice of the Agricultural Law Association through my noble friend, I should like to say that the Government are indebted to them for the detailed work they have done on the Bill, and to my noble friend for the detailed' interest he has taken.

    Having said that, I do not think that it is for anybody's advantage if I simply say that the reference was wrong, and therefore could we go at it again. I have a brief note here which I should like to use for the record in reply, because then my noble friend will know whether to pursue the matter or not, because with respect to my noble friend I do not think that this particular amendment is necessary. We are coming to one or two amendments soon which certainly are necessary, but I am not sure that this one is.

    It is already the position, I am advised, under Section 8 as drafted that an increase or reduction of rent falling within paragraphs (a) to (d) of Section 8(10) does not start the rent cycle regardless of when such an increase or reduction of rent is made. An increase or reduction of rent starts the three year cycle by virtue of Section 8(7)(b) unless the increase or reduction of rent falls within one of the categories in new Section 8(10) which are specifically excluded from the application of new Section 8(7)(b).

    If that sounds complicated, then all I can say is that the amendment is complicated. I hope that my noble friend will think it is helpful for me to have given that brief and rather tortuous reply as to why I am advised that this particular amendment is not necessary. I hope that it may assist my noble friend in deciding what to do so far as the amendment is concerned for the future.

    My Lords, my noble friend has been more helpful than I was entitled to expect. I am grateful to him, and beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    moved Amendment No. 20:

    Page 4, line 28, at end insert (" , or any reduction of rent agreed between the landlord and the tenant of the holding in consequence of any change in the fixed equipment provided on the holding by the landlord;").

    The noble Earl said: My Lords, this is an amendment similar to one I raised at the Committee stage. My noble friend and kinsman Lord Swinton agreed to have another look at it. It has been redrafted and is a technical amendment to make sure that if a reduction of rent is agreed between the landlord and tenant as a result of a reduction of fixed equipment, it does not start the three year cycle for rent again. I beg to move.

    My Lords, I am most grateful to my noble kinsman for raising this point at Committee stage and putting down this amendment again today. He is absolutely right. It is something that had escaped us. Clearly where the landlord and tenant agree a reduction in rent in the way suggested by my noble kinsman this should not count for the purposes of the three year-old rule on rent reviews, and I am happy to accept this amendment.

    My Lords, we have made substantial progress. I am very grateful.

    On Question, amendment agreed to.

    moved Amendment No. 21:

    Page 5, line 19, after ("tenant") insert ("either during any preceding tenancy held by him or during the current tenancy").

    The noble Lord said: My Lords, I beg to move Amendment No. 21, and suggest that No. 22 should be taken with it because they stand or fall together.

    Amendment No. 22: Page 5, line 25, at end insert ("or without the tenant having been compensated therefore;").

    Your Lordships will recollect that in subsection (5) of Clause 1 there is a reference to tenant's improvements. Then we find on page 5 in the new proposed Section 8A of the 1948 Act, and particularly in subsection (3) of it, a definition of tenant's improvements. I am obliged that that definition is all right so far as it goes, but it needs to have added to it the words on the Marshalled List set out in Amendments Nos. 21 and 22.

    The reason is that we ought to ensure that the tenant's improvements are disregarded whether they were carried out during the current tenancy or by the same tenant during a previous tenancy, unless equivalent allowance or benefit was made, or given, by the landlord in consideration of those improvements being made, or compensation paid for them. It is felt therefore that the definition on page 5 of tenant's improvements should be amended accordingly. That is the purpose of these two amendments, and I beg to move.

    My Lords, I am grateful to my noble friend for proposing this change. As I promised during Committee stage, we have considered the proposal put forward then by my noble friend, and it is really a single proposal of course although it needs two amendments. This amendment is a modification of what my noble friend was saying at that time. It has however been necessary to iron out certain difficulties which were raised by some organisations who were looking at the amendment, and who were I think entirely sympathetic to it; but I am glad to say that this has now been done although only in the past few days.

    What I should like to do is to accept the amendment; but I am in a difficult position over this. Owing to the time factor, parliamentary counsel has not even seen it at all. If my noble friend will not think that I am cavalier in this matter, I would ask that I could have time to consult parliamentary counsel, but with an assurance that an appropriate provision will be handed to my noble friend to put forward, or if my noble friend by any chance is not in your Lordships' House to another noble Lord on my noble friend's behalf, or the Government on my noble friend's behalf. This is a matter which has been spotted by my noble friend and those who advise him, and we are extremely grateful.

    My Lords, I am obliged. This is a satisfactory answer. As I said at an earlier stage, I have great sympathy with parliamentary counsel over this aspect. Trying to dovetail what the various parties want to get done by means of this Bill and dovetailing it into the previous law is a most frightful business. In the nature of things one could not table one's own amendments, even though people outside had been helping one with the drafting of them, until one saw the Government amendments on the Marshalled List. It is almost a vicious circle. But I understand, I sympathise, and I am grateful. I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    [ Amendment No. 22 not moved.]

    7.9 p.m.

    Clause 2 [ Abolition of statutory succession to agricultural holdings in the case of new tenancies]:

    moved Amendment No. 23:

    Page 6, line 15, at end insert—
    ("( ) the tenancy was granted or vested in the circumstances specified in section 18(5) of that Act;")

    The noble Lord said: My Lords, this Amendment No. 23 has as consequential amendments Amendments Nos. 63 and 64 to the first Schedule. They are set out on page 13 of the Marshalled List at the bottom of the page, and I should like to refer to them.

    Amendment No. 63: Page 14, line 6, after ("let") insert ("(whether under a tenancy granted by the landlord or by an assignment of the current tenancy)")
    Amendment No. 64: Page 14, line 8, after ("grant") insert ("or assignment")

    Clause 2, as we all know, abolishes statutory succession to agricultural holdings in the case of new tenancies, but it states four exceptions to that rule. Those four exceptions are set out in subsection (2), and there is no need for me to repeat them. It is suggested that subsection (2) should be amended in such a way that Section 18(1) of the 1976 Act shall continue to apply in the case of an inter vivos cession. If I may, I should illustrate what may lie at the back of this. Let us suppose that in 1976 a tenancy was granted to a tenant whom we shall call T1. In 1985 the tenancy granted to T1 was surrendered by him in return for a new tenancy to T2 in circumstances specified in Section 18(5) of the 1976 Act. Unless Clause 2(2) of this Bill is amended, that new tenancy will be free of succession. That may be the wish of many of your Lordships. This, therefore, is a probing amendment. I am not committing myself to the principle. But the point should he clarified. The Government should state a view on it, one way or the other.

    I am advised that what is in the Bill is not consistent with Government policy, which is to leave the arrangements already covered by the 1976 Act unaffected by the abolition of succession. In other words, the Government are saying—it is always right for Governments to say it where the citizen is concerned, where there are no concessions being given by the Government—"no retrospective legislation". It is to avoid retrospection that these amendments have been tabled. That is also the point I am making.

    It could be said, "Let the parties in the circumstances I have mentioned contract in to the 1976 Act and make no special provision". That might work in some cases, but it might not be fair to some simple souls who were not alert to the need to contract in the avoid retrospection. Although my instinct is to go along with those who want to modify the right of hereditary succession, I feel that in justice and for the sake of clarity this is a matter that needs to be resolved. I shall be most interested to hear what my noble friend says. I beg to move.

    My Lords, I have listened with interest to the argument put forward by my noble friend but I feel that I must resist his amendment for the following reasons. After succession to new tenancies is excluded by Clause 2(1), a situation could arise in which the grant of a new tenancy is voluntarily offered by a landlord in circumstances similar to those discribed in Section 18(5). Your Lordships will remember that Section 18(5) of the 1976 Act is the provision for retirement counting for succession.

    However, the landlord might voluntarily offer a new tenancy in those circumstances on condition, under this new law, that no further succession was to follow that tenancy. The prospective tenant may wish to accept these terms to avoid a contest and the risk of not succeeding at all. It is therefore not desirable for Clause 2(2) to apply automatically to inter vivos grants of a new tenancy in the circumstances to which Section 18(5) applies, because this would prevent agreements of the kind I have just tried to describe.

    My noble friend said that it could be said that we were being retrospective. My noble friend fairly went on to say that he supposed that the landlord and the tenant could contract in. That is precisely what we should expect a landlord and tenant to do; to contract in to the succession arrangements by providing in the tenancy agreement that succession shall apply. An agreement in writing of this kind will be covered by Clause 2(2) (c).

    I hope that that sounds fair. I believe it is and I hope that this has been a useful exchange and will enable my noble friend and those who are advising him to think whether they wish to carry this matter any further.

    My Lords, we are indebted—everybody should be—to my noble friend for the clarification he has given as to the effect of the Bill in the circumstances I have described. It may be that that clarification is enough to alert all concerned, because it goes to show how in this branch of the law, which has become one of the most complicated branches of the law, nobody should ever act without the assistance of a professional adviser who can find his way through this labyrinth which already exists and which is becoming even more of a maze.

    There it is. My noble friend's words are on record. I thought that he skated a little lightly over the retrospectivity point, but all concerned have been alerted and with what now is on the record I think we should leave the matter. It may be the subject of further consideration in another place, but I beg leave to withdraw the amendment.

    Amendment, by leave, withdrawn.

    moved Amendment No. 24:

    Page 6, line 16, leave out ("an agreement in writing") and insert ("a written contract of tenancy")

    The noble Lord said: My Lords, this is a drafting amendment. I regret to say that I cannot find my notes. I beg to move.

    On Question, amendment agreed to.

    The noble Lord said: My Lords, I think the House was right to take the Minister on trust on the last amendment when he said that he could not find his notes, but sometimes we are giving too much trust to the Minister on the Bill. I am not being personal because the Bill is an agreed package, I will not say of a holy trinity, but of the trinity of the NFU, the CLA and the Government. It seems that we are taking a lot on trust today because, as the noble Lord, Lord Renton, said, he has been among the foremost critics of Amendment No. 2 which, as he and others have said, is substantially the core of the Bill. The noble Lord, Lord Renton, said a few minutes ago quite correctly that this is a labyrinth of a Bill. I wish to be fair and say that that may apply to much legislation of this sort.

    My Lords, if the noble Lord is quoting me he should do so accurately. I said that the existing law was a labyrinth and that this Bill makes it more of a maze.

    My Lords, the noble Lord has made an amazing observation. I will not go into the difference between a labyrinth and a maze, but I may be right in what I said, that any legislation of this sort is likely to be a labyrinth whether it is past legislation, present or future. When he says that those concerned would be well advised to seek specialised advice, that undoubtedly is true.

    In the amendment we urge the House to leave out Clause 2, which is the clause which brings about the abolition of statutory succession to agricultural holdings in the case of new tenancies. This has been touched on in Lord Renton's last amendment. We have to look at the ancestry of this Bill. I think it was my noble friend Lord Northfield who referred to the sordid ancestry of the Bill. We must be absolutely sure that the industry and, in particular, all those who have an interest outside the NFU and CLA, are satisfied with the passage of this Bill and that it will achieve what it set out to do. That was, as we have said many times, to give more opportunity for new entrants into the industry and also to ensure the viability of those in the industry. We were also assured by the NFU that they were in support of the 1976 Act, which is concerned with succession, and in relation to which this clause seeks to end the statutory right. As we know, this concerns three generations, including the tenant concerned.

    I do not wish to go into the merits of succession and of the 1976 Act because this has been debated many times and even many of those who support the Bill also have some regard for the 1976 Act with the security that it gives and the fact that a lifetime of work and capital investment and a lot of skill and training go into the building up of a farm and that this can be passed on to those who succeed. After all, there are still new entrants although one gets the impression that, unless land is put on the open market for sale to the highest bidder or what have you, the entry of new people is rather restricted.

    It is important to remember that the NFU are exchanging the rights of many farmers in the succession aspects of the 1976 Act for the package which we have before us. The Minister will say that the House has voted in favour of Amendment No. 2—which was essentially the core of Clause 1 and much of the Bill itself with regard to the rent formula—but one wonders whether the voting in the Lobby was because that was about the best formula before the House and not necessarily because it was the right formula to do the job we have to do. I made a plea before we voted that it was not a matter of getting the best deal we can but of getting the right kind of deal. We all know that this kind of legislation does not come before the House very often and if we do not get it right at the start, then we are lumbered with a lot of shortcomings which will be irksome, to say the least, and cause an enormous amount of trouble to the industry. That, I think, accounts for the fact that the Government got Amendment No. 2 through the House. When one looks at some of the comments which were made during the debates on Amendment No. 2 and on other amendments which the noble Lord, Lord Renton, and my noble friends and others tried to amend with our amendments to Amendment No. 2, the noble Lord, Lord Renton, as I said earlier, said, "Take back Amendment 2!" This is hardly a sign of great confidence in what it seeks to achieve. He had concern about the meaning of productive capacity. He called some aspects of the amendment unnecessarily verbose. I think I am right in saying that the noble Earl, Lord Onslow, said that Clause 1 will not produce more tenancies. The noble Lord, Lord Peyton, spoke about the extraordinary marriage of confusion with explanation and I think I am right in saying that he said, "Take this nasty thing away!"

    There were an enormous number of critics and it is rather surprising to have a Government measure opposed by so many Lords who had misgivings about what Clause 1 would do. But the clause has been passed and, as I say, I think that is was because the House thought that it was the best amendment before us. If one were to ask noble Lords—especially noble Lords opposite—if they really believed that this is the kind of thing which the NFU and the CLA set out to achieve in the package, then I think that there would be some misgivings, to say the least.

    This is the opportunity now on Clause 2 for us to ask whether in Clause 1 (which is the main part of the package) although it has been passed, we can all be satisfied without any doubt that this is exactly as we would have wanted it. I will not press that point. Maybe noble Lords will say what they think about it; although I am going by what has been said in the debates earlier today. The Minister rightly considered Clause 1 during the Committee stage and afterwards; and Clause 1 has been amended. But I ask whether it is the kind of thing that we should expect.

    The House has voted after debate against the amendments which my noble friends and I tabled, amendments which added not only the need for productivity but also the profitability of a holding. It may be that in future, when the arbitrators are told by noble Lords opposite and their friends, that the profitability of a holding is not something of concern and is not in the Bill, then they may have some misgivings that they were not wise enough to vote for that when they had the opportunity. The CLA and the other bodies have been concerned that income from all uses of land, including non-agricultural land, should be taken into account in assessing the rental value. Amendment No. 10, to which I have made reference, sought to ensure that the holdings should not only be productive but profitable as well. It may be in the way in which things are going—and I have mentioned the dairy industry where the surplus is subject to a penalty and the co-responsibility levy and so on which will discourage over-production or, indeed, any production at all by cutting profitability—this is going to be an important point.

    I would not want to say more about the CAP except that no-one in the industry can be happy about the future prospects of profitability on many aspects of food production. I say now that Clause 1 has been amended and that we are therefore, in this amendment, looking at Clause 1 not in view of the fact that the House passed it but as to whether it is adequate to do the job and whether it has justified the NFU saying that they are prepared to sacrifice the succession aspects of the 1976 Act in order to achieve Clause 1 as the main part.

    I notice that the Central Association of Agricultural Valuers' survey of the let sector in 1983 was not as pessimistic about letting prospects as some who wished this Bill to be brought before us have claimed. I think I am right in saying that almost 60 per cent. of the tenanted land in private ownership was not re-let and that there were 5 per cent. more private lettings than during the year before. The House will recognise by the report (which they will have had an opportunity to study in full) that the situation is not as bad as some would wish and that the succession aspects of the 1976 Act have a real contribution to make. Therefore, I believe that the House will be well advised to question whether Clause 2, as it is, should stay in the Bill devoid of some of the improvements which the noble Lord, Lord Renton, and other noble Lords on both sides of the House wished to put in before Amendment 2 to Clause 1 was accepted in its raw state.

    I believe that this is the opportunity for the House to speak because it may well be too late if we allow the Bill to go on unamended in the way that it has; because this will surely not be what the two main organisations in the industry wanted when they were pressing the Government for reform. I think the time is coming when many outside will be saying that it is a pity that they sought any package deal at all in view of what they are getting as a consequence.

    7.30 p.m.

    My Lords, I hope the noble Lord will forgive me if I say that I have found him a little difficult to follow. I could not make out whether he was saying that because Clause 2 was complicated it should be abolished or whether he genuinely wants to put the clock back by saying we must keep succession provisions that came with the 1976 Act for the benefit of the industry, which is the only thing that can be inferred from this amendment.

    If that is so, I must say that we discussed very fully in Committee the importance of Clause 2 of this Bill. The noble Lord has referred to the fact that we regard it as a key clause. I do not wish to rehearse again all the arguments as to why it is the centre of this rescue operation which the Government, by this Bill, are launching for the landlord-tenant system. I would merely remind noble Lords opposite that if there is anything which unites the whole industry and all the professional bodies concerned, it is that something ought to be done and done urgently to modify the succession provisions in the 1976 Act. If the Labour Party take the opposite view, then they do so in disregard of this great weight of opinion and of what has happened to the landlord-tenant system since 1976.

    If there has been any criticism in this House of Clause 2, it has been that it does not go nearly far enough. Back in 1976 I took the charitable view that the Labour Party of the day just lurched into that unfortunate Bill, animated by very laudable but mistaken motives. But seeing this amendment being moved now, I must say that it raises all sorts of doubts in my mind. Do they really want a thriving letting sector or do they want to see it crippled so that it would appear to be ripe for the kind of treatment envisaged in the Labour Party's 1983 policy document, The New Hope for Britain? Or would it be the solution that was advocated by the noble Lord, Lord Melchett, when we debated agriculture just about a year ago and this subject was raised? The provision of farms to let depends on confidence and the landlord-tenant system needs a shot in the arm. It does not require a coup de grâce, which is what you would get if you knocked out Clause 2.

    My Lords, I should like to rise and totally support my noble friends on the Front Bench. I have listened to the noble Lords opposite, who are supposed to agree with Clause 4 of the Labour Party constitution, arguing for a hereditary landed caste, and it is something that gives me quite enormous pleasure. It really is the most extraordinary piece of mental gymnastics or skating on a line, like one of those produced by Torvill and Dean on the ice rinks of Nottingham and Belgrade.

    The merits of succession, the noble Lord, Lord Bishopston, said he was not going to discuss. I would suggest to your Lordships that the merits of succession are such that there are none to discuss. My noble friends, in my view, have not gone nearly far enough in releasing land from hereditary tenanted succession. We all agree—I think this is common ground between everybody—that it is very important to have a thriving tenanted sector. If you deprive the landlord, be he institutional, charitable or private, of the motive to let, he will not let. It is as simple as that; and since for a long time we have been depriving the people of the motive to let, consequently, as the Northfield Committee showed, we have been reducing the tenanted sector.

    I must repeat again to your Lordships the parallel which there would be with the 1920s if we had said: "You will be forced to inherit a tenancy and you will be forced to pay more than you can afford for that farm". That is an exact parallel to what is being imposed upon the private landlord and the institutional landlord now. Unless we take that very simple lesson on board the system will fail; but if we are going one small step up the road towards abolishing hereditary tenancies on new lettings, that is—what was it Buzz Aldrin said?—"A small step for man but a large step for mankind", or something when he set foot on the moon: a very, very small start towards getting the landlord and tenant system such that we can increase the number of tenants in the countryside, so that we shall broaden and make the social life of the countryside come more to life than it is at the moment.

    My Lords, I agree with my two noble friends in what they have said. I, too, support the Government on this. I would only add that I am very surprised indeed that the noble Lord, Lord Bishopston, whom I have known for many years and for whom I have a high regard, should have fallen into the error of saying that because some of us thought that Clause 1 was defective (for numerous reasons on which he and I agree) therefore Clause 2 should be jettisoned. I simple do not understand the reason for that. There is no reason and no logic. It is what lawyers pompously call a non sequitur.

    My Lords, my noble friend, who has left his seat, used the word "hysteria" earlier (and he said he was not including me) on an earlier amendment. Quite frankly, I would suggest that a good number of noble Lords opposite are getting almost pathological about succession, and I use the word advisedly. If you take a look at a report which has just come out from the surveyors which gives some interesting figures, they show that last year 5 per cent. more farms came to be let and in their survey something round about 300 farms came on the market to let. That is 5 per cent. more than in the year before. So landlords are letting farms. You would think that the letting of farms had stopped completely, but that is not the case——

    My Lords, would the noble Lord give way? He mentioned surveyors—did he say that a report had been introduced by surveyors?

    My Lords, it probably is. I am sorry if I used the wrong word. This is the problem that we have of getting accurate figures of what is actually happening. Many noble Lords have just taken it into their heads that this has stopped lettings when the figures prove that it has not stopped the lettings, and farms are being let. As I pointed out in the figures that I gave at Committee stage, the graph shows a steady decline all the way from 1920 to the present day, with scarcely a move upwards or downwards, as the case may be, between 1976 and the present day. The Northfield Report, which has been quoted very freely, said that so far as they could see nothing would stop the graph from continuing. Certainly nothing up till now that has been produced in his Bill will stop it. A number of your Lordships have said that they do not think the Bill will do any good in increasing tenancies—if not in this House, then it has been said privately. I think I could quote the noble Lord, Lord Howard, but he is not in his place, I believe he thinks that as well—I beg the noble Lord's pardon; I see that he is in his place.

    My Lords, I should like to go back to what the noble Earl, Lord Swinton, said during Second Reading when he pointed out what his family had done in the way of estate management and the letting of farms. I think he said that 8.9 was the proportion of land they had in hand and that that was about the correct amount of land. He also said that they had always re-let to sons and even looked for second sons to let to, but when it became mandatory to do that they objected to it. It is like the seat belt legislation. I remember that a noble Lord who is not here was very much against the seat belt legislation. He always wore a seat belt before, but when it became mandatory he objected co it. It seemed an extraordinary thing to do.

    I should like to take the noble Earl, Lord Onslow, to task. He said that I was anxious to create a dynasty of farmer tenants. I would ask him: Why not? I feel that a dynasty of farmer tenants would make a much better job of looking after the land than a dynasty of hereditary landlords has done. Over the last 50 or 60 years, they have had to sell upwards of 60 per cent. of their estates. I know that I shall be told that that is due to taxation and so on, but that is absolute rubbish. There are any amount of estates under good management which have held on to their land, have managed it well and where people have succeeded in remaining as good landlords. So, for goodness sake, do not let us get emotional about landlords, taxation and everything else! My noble friend's point was simply that he was perfectly certain, as I am, that the NFU have nothing of what they wanted in Clause 1. That was the quid of the matter. The quo was giving up the tenancies, and because of the position in that connection we wish to retain the 1976 Act.

    My Lords, I wonder whether I may just explain to the noble Lord, Lord John-Mackie, the reason for many landowners' fears of the hereditary provisions of the 1976 Act by telling a little story. Let us suppose that I let a farm which has fallen vacant. I go home to lunch with my son—who happens to be sitting on the steps to the Throne, listening to me—and I say "Charles, I have just given away half your birthright." He asks, "What do you mean?" and I reply, "Well, I've just signed a tenancy which reduces by half the value of the land that you are going to inherit." He then says, "I suppose you've let it to some worthy charitable cause", and I have so say, "No, I have let it to that nice guy down the road with a Range Rover and two daughters at Benenden." So he replies, "But I wanted to farm", and I have to say, "The only answer is that you will have to marry the eldest daughter. She will inherit the farm." It is the value of a farm that you give away when you sign a tenancy agreement today.

    My Lords, I do not think I can say very much more than has been said on this point in the last quarter of an hour. Perhaps my noble friend Lord Renton, characteristically, had what should have been the last word when he said that Clause 2 stands by itself and, standing by itself, it does not look too good and it ought to fall. The fact of the matter is that this proposal would have the effect of continuing the three-generation succession, about which the noble Lord, Lord Northbourne, has just spoken in a very personal way, and it would have that effect for all tenancies, including new ones.

    Noble Lords opposite will forgive me if I say that the amendment would be largely ineffective, because, as my noble friend Lord Onslow explained so clearly, the deletion of Clause 2 would ensure that very few new tenancies would come on to the market. Both the noble Lord, Lord Bishopston, and the noble Lord, Lord John-Mackie, spoke about the CAAV's statistics, which show a rosier picture so far as the number of farms being let is concerned. That was entirely characteristic of both noble Lords, because, both having been Ministers in the Ministry, they have these matters at heart and are knowledgable on the subject. So, of course, I accept from both noble Lords that this picture is an accurate one.

    But why has the picture been painted rosier in the last few months? It has been so painted, no doubt, because landlords and tenants knew that a splendid new piece of legislation was to go on to the statute book, which my right honourable friend the Minister of Agriculture, Fisheries and Food has very wisely put into the hands of your Lordships' House. Also, there is no question that landowners know that there is capital transfer tax relief which, in all equity and justice, has been granted by two successive Conservative Chancellors of the Exchequer in 1981 and 1983. It must go to the hearts of both noble Lords because——

    My Lords, will the noble Lord let me get to my next full stop? It must go to the hearts of both noble Lords, because their hearts are so much in the right place. But, my goodness me, seven months ago what did the Labour Party do? They said, as part of their election manifesto, that they would remove all those CTT reliefs. I do not think you will find, if that sort of manifesto undertaking were carried through, and certainly if the move to leave out Clause 2 were carried through, that there would be such a rosy picture painted of the number of lettings in this country.

    My Lords, is it not a weakness of the Minister's case that he has called in aid some matters which are quite irrelevant to those that we are discussing? With regard to the report which we have quoted, surely this legislation is not retrospective. The lettings figures concerned are subject to the 1976 legislation on succession, and the provisions of this measure will not come into force until a date to be given later.

    My Lords, both the points which the noble Lord has raised show that I was being relevant and I will now immediately explain why. Both noble Lords talked about statistics, but I ventured to put to the Committee of your Lordships' House that there had, if one was talking about the total area of the tenanted sector, been an accelerated decline in tenancies following the enactment of the 1976 legislation. That led to a certain amount of debate across the Floor, as to whether those statistics were valid, because one ought to talk not about area but about individual tenancies.

    What I could have done, but did not, was to go on to point out that, other things being equal, one would have expected that the 1976 Act would, on any statistics, have slowed down the decline in the tenanted sector. That is because its effect has been forcibly to retain land in the occupation of successor tenants, when it might otherwise have fallen vacant. So I suggest that the effect of the succession provisions in the 1976 legislation, in terms of their disincentive to new lettings, must have been even substantially greater than the figures that I quoted in Committee some weeks ago.

    But I return to the absolutely basic point which my noble friend Lord Swinton made when he wound up the Second Reading debate on this Bill in 1983. If we do not do something now about the succession provisions, there will be very few new tenancies. My noble friend Lord Middleton talked about a rescue operation. If noble Lords opposite want to preserve some form of tenanted sector, they will not do it by trying to force landlords to let land subject to three-generation succession. Those who want to obtain a first rung on the farming ladder realise this more clearly than most and that is why, in 1976, the young farmers came out strongly against that legislation. I put it to your Lordships' House that this clause is needed. As my noble friend Lord Middleton said, it is wanted by a great weight of agricultural opinion. It is therefore one of the fundamental objectives of this Bill, and I ask your Lordships to ensure that Clause 2 remains part of the Bill.

    On Question, amendment negatived.