I move: "That the Bill be now read a second time".
The main purpose of the Bill is to exclude agricultural leases from certain provisions in the Statute Book which might be regarded as inhibiting the development of leasing as part of our land tenure system. At the same time, the opportunity is being taken to include a group of provisions of a technical nature aimed at tidying up some existing, largely domestic, land settlement operations and functions.
There is now a growing awareness that our owner-occupier system of land tenure is rather rigid and inflexible and that it seriously retards the pace of structural change. Land owners persist in holding on to land long after they are able to work it fully. It is quite evident that this attitude which attaches unwarranted status to the mere possession of land contributes, to a very substantial degree, to the rigidity of our land structure. If agriculture is to make its optimum contribution to the economy, then it is the use to which land is put that is of importance. The rigidity in the system must be replaced by mobility.
Since coming into office, I have given particular attention to the problem of increasing the rate of land mobility. I want to ensure that more and more of our unused land is put into production by being channelled into the management of those willing and able to work it to its full potential. One of the most promising ways of doing this is, in my view, through the encouragement of land leasing.
The programme of reform of landlord-tenant relations in Ireland saw the tenant advance from the position of occupation at the whim of the landlord to himself becoming the owner of the land. The process began around 1860 with a series of Statutes which granted progressively more rights to the tenant until the balance of advantage lay with him over the landlord. Following the successful struggle of the Irish farmer to gain ownership of his own land, there was a natural determination to ensure that the old system of landlordism should not be revived. Accordingly, the Land Commission were given the power to control leasing and the legislation favouring the tenant remained on the Statute Book. This emphasis on ownership led to a situation where possession of land, per se, tended to be regarded as an end in itself and more important questions of user and management tended to be overlooked. The instinctive and basic motivation of land holders was the determination to retain control of their holdings. Because the legislation was so much orientated towards the tenant, the adoption of leases, even of a short- or medium-term nature, came to be seen by land holders as a threat to their secure ownership of the land.
This situation led, in turn, to the adoption of the 11-months letting system as a source of revenue for those who were unable or did not wish to work their lands themselves. As this is merely a licence to use lands for a certain limited purpose for a certain limited period it does not constitute a letting in the full legal sense and is not, therefore, governed by the existing landlord-tenant legislation. If, therefore, we wish to persuade those at present letting under the 11-months system, and any other farmers for whom the arrangement might be beneficial, to turn to leasing instead, then an obvious requirement is to repeal any legislation which might appear to act against their interests. This is precisely what I propose to do in this Bill.
In my view it is obviously right that a prospective lessor should have the assurance that, when the lease has expired, he will be able to resume possession without fuss or legal complications. Any apprehension about claims under law for tenancy interests, compensation, and so on, would present a serious, if not decisive, deterrent for a lessor. Because of this I considered it proper that those statutory provisions in the old legislation which seem to favour the tenant unduly during the course, or on expiry, of a lease should be identified and revoked. This course was recommended in the report of the Inter-Departmental Committee on land structure reform and accepted in the 1980 White Paper on Land Policy. The effect of the present Bill, therefore, will be to give equal status to both lessor and lessee and to enable them to come together and agree between themselves on the terms of the lease without any over-riding statutory provisions. I might add, in passing, that two model leases are widely available at the moment. One was drawn up jointly by the Irish Farmers' Association and Allied Irish Banks working in co-operation with the Incorporated Law Society of Ireland and the Royal Institute of Chartered Surveyors. The other model was drawn up by the Irish Co-operative Organisation Society. These documents are, of course, models only. The precise provisions to be included in any individual lease, will, as I have said, be a matter for the parties concerned in each case.
I will now outline briefly the sections of the old Acts which are covered by the Bill at section 3 (1). The intention is that these enactments will not apply to a lease of agricultural land made after the Bill becomes law.
Sections 70 and 71 of the Landlord and Tenant Law Amendment Act, Ireland, 1860, provide for reinstatement of a tenant if he pays all arrears and costs within six months of the execution of a decree for possession and applies to the court for reinstatement. It is felt that a lessee who is in breach of the terms of his lease and against whom a decree for possession has been executed should have no further claims on the leasehold and that the lessor should be entitled to resume undisputed possession of his land. Subsequent minor amendments of these provisions contained in section 13 of the Land Law (Ireland) Act, 1881, sections 7 (3) and 30 (2) of the Land Law (Ireland) Act, 1887 and section 16 of the Land Law (Ireland) Act, 1896, are also provided for.
Sections 3 and 7 of the Landlord and Tenant (Ireland) Act, 1870, provide for the payment of compensation for disturbance by a lessor. There is legal advice that ejectment of a tenant on expiry of a lease could be regarded by a court as disturbance. As indicated already, one of the main aims of the Bill is to ensure that it will be the terms of the lease itself which will govern the relationship between the lessor and lessee. If the lessor is forced to take ejectment proceedings in order to regain possession of his property on expiry of a lease, then he should not be put at risk of having to pay compensation to the lessee.
Section 4, Landlord and Tenant (Ireland) Act, 1870, provides for a claim by a lessee, on quitting the lease, for compensation for improvements carried out by him on the leasehold. Such improvements might have been carried out against the wishes of the lessor, or be of no value to him. Again, it seems much more appropriate that the arrangements for improvements, as agreed between the parties, including compensation, if any, should be determined by the lease agreement itself.
Section 1, Land Law (Ireland) Act. 1881, gives the lessee the right to sell his interest in the leasehold. Here, also, I feel that the parties themselves should prescribe the terms of the lease, including any provisions regarding sale, subdivision or sub-letting by the lessee as they may agree.
Section 4, Land Law (Ireland) Act, 1881, provides that a lessee from whom a lessor demands an increase in rent is entitled to compensation, to be fixed by the court, in respect of the fall in sale value of the tenancy in consequence of the increased rent. It is probable that this provision was primarily in respect of tenancies based on the simplest documentary, or even verbal, agreements. Modern leases would normally make provision for adjustments of the rent during the term of the agreement, so that the questions of the lessor "demanding" an arbitrary increase would not arise.
Section 13, Land Law (Ireland) Act, 1881, permits a lessee to sell his interest within six months of the execution of a decree for possession for non-payment of rent. The intention here is to ensure that the lessor is entitled to retain undisputed possession of his property on termination of the lease for whatever reason.
Section 22, Land Law (Ireland) Act, 1881 renders void an agreement by a tenant to contract out of any rights conferred on him by statute provided the holding concerned has a PLV not exceeding £150. Because of the Supreme Court decision declaring the PLV system to be unconstitutional, it is possible that this provision is no longer operative. However, it is included here in order to put the matter beyond doubt. The intention is that, as already indicated, the terms of a lease will be those agreed between the parties and will not be subject to overriding statutory provisions.
Let me emphasise here, once more, that this Bill is not, and was never intended to be, a great charter for the promotion of leasing. It has one simple purpose and one only. That is to deal with the purely legal constraints which are at present inhibiting the making of leases. It is a small but very fundamental piece of legislation which will clear the legal difficulties and enable us to proceed on an all-out effort to promote the leasing system and I would ask Deputies to debate it in that light.
I am well aware that the removal of these inhibiting provisions will not, of itself, succeed in getting leasing established as a normal farm management practice. However, it will help clear some of the worries farmers have in regard to leasing their land. It will now be open to those looking for land to lease and those willing to make land available to come together freely to agree on the conditions which should attach to each letting.
The major task still facing us is to get people to see that the letting of their land for a term of years is a very simple and profitable option for those who are unable, because of age or other reasons, to work it. There is, of course, an amount of such land available at present. Here I have in mind not only those who are already letting under the 11-months system but also those many farmers whose concern for their land would not allow them to risk its exploitation under seasonal lettings. Such a farmer would see an advantage in making a leasing arrangement with a neighbour whom he could trust who would not abuse the land and would hand it back in prime condition. Neither have I in mind only smallholders, especially those in the west. I can see great advantages in leasing for farmers with good holdings in the prime farming areas such as the Golden Vale or any other prime farming area.
Even with the way cleared by this Bill it will take a great amount of promotion to get the concept of leasing accepted. Considerable progress has already been made. My Department are taking a positive role in promoting it. Area officers have been assigned specifically to the task of promoting and encouraging leasing in their areas. They are fostering discussion and interest and are co-operating with farming organisations, co-operatives and other national and local bodies who are anxious to bring potential lessors and lessees together.
The Social Welfare Act, 1984, contains a provision for new rules for the assessment of means for social assistance in cases where land is leased. Previously, income from leasing of any kind of property was based, broadly speaking, on the capital value of the property while income from 11-month lettings was taken to be the actual rent received. Under the new rules rent received on foot of bona fide leases of agricultural land will be treated in the same way as rent from 11-month lettings for the purpose of assessing income unde the Social Welfare Acts. This has removed what I considered to be a serious obstacle to the adoption of leasing. Before I leave the subject I would like to say that I am at present considering other factors in leasing, including the impact of social welfare schemes and of taxation as well. Of course, the budgetary constraints under which we work at present will limit the options to be explored.
It has been claimed that, in introducing this Bill, I am bringing back landlordism to this country, that I am ignoring the lessons of history. In my view, the people who make these claims are themselves ignoring the fact that conditions now are in no way comparable to those which existed in the 1800s. At that time almost all our land was owned by a comparatively small alien class and Irish tenants were completely dependent on them for the renting of the farms they had. It was to protect the helpless tenants that this legislation we are talking about was introduced. Today we are talking about Irish farmers who own their own land. If one of these wishes to lease his land are we to regard him as a modern-day Lord Leitrim or Castlereagh? I hardly think so. What I see is an Irish farmer coming together with his neighbour to lease his land, an arrangement working to their mutual benefit. At present this legislation stands in the way of such an arrangement. If we are to be serious about promoting leasing it seems to me obvious that we must remove this great stumbling block.
Before dealing with sections 4 to 14 of the Bill I should like to mention the recent Government decision to abolish the Land Commission.