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The Earl of Shrewsbury: I am grateful to the noble Baroness for tabling this government amendment. No doubt she recalls that a number of noble Lords who spoke at Second Reading made it abundantly clear that the big issue was that if a ban was to be implemented, an adequate and fair compensation should be made both for the loss of income as well as other losses. What she had to say in the last few minutes is most welcome.

The Government's new position as stated in this amendment is to be welcomed, as I said. But I wonder if I could press the Minister on three issues very briefly. First, is the noble Baroness able to indicate where the Government intend to draw the line between losses that would be claimable and those that would not? Secondly, the noble Baroness will be aware that, in compulsory purchase situations, 90 per cent of the compensation is payable up front, on account. Is it the Government's intention to pay compensation? If so, will they consider paying compensation to fur farmers on the same basis as that paid in compulsory purchase situations? It would help their cash flow enormously.

Finally, within the compensation arrangements, will the Government include the reimbursement of the claimant's reasonable professional fees and charges involved in settling their claim for compensation? I believe that to be an important point and that it is only fair that such reimbursement be taken on board by the Government. It is a normal set of circumstances in virtually all other compensation situations.

Finally, Clause 5(5) says,

Is it not the case that the Lands Tribunal could take an inordinate amount of time to process this particular dispute? Would it not be better--as happens in the case of property disputes--if all else fails, for the arbiter to be the president of the Institute of Chartered Surveyors? Its experience is very widespread. Perhaps the noble Baroness could consider that.

Lord Monson: One understands perfectly that the noble Baroness cannot possibly give us the precise figure or even an approximate figure for the cost of the Government's compensation scheme. But her department must surely have produced some guesstimates as to the highest and lowest possible cost. Are we talking about a seven digit sum, or an eight or nine digit one? I wonder if she could give us some indication.

Baroness Miller of Chilthorne Domer: Can the Minister give me some indication of the length of time under her scheme for which income losses would be paid? Would it be until the person could reasonably set up another business? What would happen if they were virtually of retiring age? What sort of criteria will the

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Government set for how long that income should be paid? And will it be able to take account of personal circumstances such as approaching retirement age?

Earl Ferrers: Perhaps I can underline that, because it was a question that I was going to ask the noble Baroness. It is a very important factor. If compensation is going to be given and it is going to be given for loss of earnings, obviously it makes a difference whether the person is to receive loss of earnings for one year and then be left on his own, or whether it will be for three, four or even 10 years. That is important. Whatever figure the Government arrive at is a very important one.

The only thing that worries me--and I think it worries one or two other people--is that this Bill was considered way back in July and it is now half-way through October. One wonders why these discussions have not begun before now so that the Government had some kind of idea as to what they propose. The noble Baroness said that the decision would be made after Royal Assent. I find that rather curious. I quite perceive that we cannot put on the face of the Bill exactly what the figures are going to be. But people should know before this Bill goes through--a Bill which deprives them of their rights--whether they are going to receive one kind of compensation or another. It is important that they know. I hope that the noble Baroness, Lady Hayman, will be able to find ways of concluding those discussions before Royal Assent even if they do not appear on the face of the Bill.

Lord Davies of Coity: Discussions certainly have to take place. The Minister has indicated that discussions will take place with the farmers' union and with representatives from the fur industry. However, we may be in danger of locking ourselves into another inflexible position when we talk about compensation for future years. I would rather like to think that the compensation will not be an ongoing payment as though these people will never work or do anything again, but that it will assist in building an alternative business which might be as profitable as the previous one. Those areas are more fruitful to consider than saying that an amount of money must be paid because those concerned will never do anything else again.

Earl Ferrers: I agree with the noble Lord, Lord Davies of Coity. It would be wrong if a certain sum were suggested and then there were to be annual payments or whatever. There should be one big payment to cover however many years it concerns. The amount of years ought to be known in advance.

Baroness Hayman: The noble Lord, Lord Monson, asked me to make a guesstimate of costs. I am always nervous about doing so, but if he looks at the explanatory notes to the Bill he will see that a preliminary assessment in paragaraph 26 puts the costs to the Government up to £400,000 for loss of assets, and up to four times that for income, but it would be subject to the valuation exercise.

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In the debate we come back to something of a circular argument around the valuation of assets, something that we have not been able to do up until now. It would need the consent of the fur farmers and would be very much in their interests. We intend that to happen very quickly after Royal Assent.

In Amendment No. 20 we have gone as far as we can to ensure that we include loss of income in the compensation scheme. However, the detailed issues raised by noble Lords and the noble Baroness, Lady Miller, about the period over which the income compensation should apply and whether there should be some cap on it if someone was near retirement age, are the very issues that we will need to consider in detail as part of the consultation exercise.

At the moment, we do not know how we will measure income loss as we need to visit the fur farmers to look at their books, but we have in mind concepts such as the loss of trading and profits. Details will be established later. However, in addition to loss of income, compensation will be paid where assets cease to have a use and investment cannot be recouped by sale. The principal assets of fur farming are the land, buildings and equipment, breeding stock and young stock for slaughter. No compensation should be required for the land--that would have alternative uses--but compensation may be required for buildings and equipment which do not have alternative usage. Compensation may be required for wastage of some livestock over a winding-down period of two to three years.

I say to the noble Earl, Lord Shrewsbury, that compensation will also be considered for miscellaneous closing-down costs such as the valuer's fees, redundancy payments, land clearance costs and interest payments before compensation is paid. Those are all issues that the farmers will want to debate in order to influence the shape of the scheme.

Disputes over compensation claims--because we all know that this cannot be ruled out in these circumstances--could be settled by the Lands Tribunal. However, I should tell the noble Earl that they could also be settled by arbitration. The Bill clearly provides for that and the arbiter could be a person appointed by the president of the RICS if that was what the parties agreed. In the interests of putting the case clearly, however, arbitration can sometimes be just as slow as a decision by the Lands Tribunal. It is not an absolute guarantee that there will be a quicker answer and the parties have to pay the arbitrator in those circumstances. However, the Bill is even-handed here and allows for that possibility, if that is a possibility that Members of the Committee would prefer.

I am sorry that I have not been able to be more specific. I hope that I have laid down as clearly as possible the framework and the areas in which we shall be looking to put flesh on the bones of the scheme. But I do not believe that we can undertake that exercise until we have the bones; namely, achieving Royal Assent for the Bill. On that basis, I hope the Committee will support these amendments.

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5.45 p.m.

Earl of Shrewsbury: Before the noble Baroness sits down, I wonder whether she could give me some guidance on the question I asked her about on-account payments of compensation, and whether she would be prepared to look at that issue. It is a fairly common occurrence in these matters.

Earl Ferrers: I just want to ask a couple of questions. The noble Baroness has been very helpful and she has given a description of what is expected and what is proposed. However, I cannot quite understand the mystique of Royal Assent. The noble Baroness said that all this can be done very quickly once the Bill receives Royal Assent. If that is so, one wonders why it cannot be done in advance of that so that we may have some idea of what is going to happen. One has a horrible feeling that, once Royal Assent is over and this becomes law, the Government may not be quite so flexible and open. After all, the Government have the Freedom of Information Bill going through this House. The fur farmers are to lose their livelihood. Why can they not know what sort of compensation they are likely to receive?

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