[BILL 86.] SECOND READING. (Hansard, 4 July 1877)

§ MR. J. W. BARCLAY,

in moving that the Bill be now read a second time, explained that its objects were to encourage and stimulate improved cultivation of the land, to give security to the tenant for the value of improvements which benefited his successor, and to secure to the landlord his fair right to the increased value of the soil. What with untoward seasons, higher wages, cattle diseases, and foreign competition, farming had been very unremunerative in recent years; and many hon. Members had doubtless experience of difficulty in letting farms, and larger arrears of rent than usual. Farmers did not complain of low prices or foreign competition; but they did complain that they had not a fair amount of control over their farms, and had not the same opportunities which manufacturers possessed of making the most of their business. The law by declaring that the money which a tenant might expend in improving his farm belonged to the landlord when it was incorporated in the soil, or even, as in the cases of houses, when placed upon the landlord's soil, and perhaps even more, the antiquated and often absurd conditions regarding cultivation and crops imposed by the landlord on the tenant prejudicially affected, not only the interests of the tenants and of the public at large, but that of the landlord himself. It was to endeavour to find a remedy for some of these evils he had introduced this Bill. It was true that 783 the present Parliament had passed an Agricultural Holdings Act to remedy this state of things; but that Act was practically a dead letter. Landlords generally did not give their tenants security for the money they invested in improving the soil. Certainly the ordinary 19 years' lease which prevailed in Scotland was not sufficient to enable the tenant to recoup himself from his crops for the capital which it was now found necessary to invest in the soil. No doubt, the lease had done much to encourage the improvement of land in Scotland; but although a 19 years' lease might have at one time been sufficient, it was not now adequate to permit a farmer to recoup himself for the much larger amount of capital found necessary to meet the requirements of modern agriculture. The principles which he had endeavoured to embody in the present Bill were simple. Improvements were to be divided into two classes, called respectively permanent and temporary improvements. Under the name of permanent improvements the Bill included those improvements of land which should properly be executed by the landlord; but inasmuch as many landlords would not put themselves to the trouble, or encounter the risk of executing these improvements, the Bill provided that if a tenant carried out these improvements at his own expense, he should be entitled to a reasonable compensation for them at the end of his lease. The tenant, however, when he resolved on the improvement would first have to give notice to his landlord of what he intended to do; and if the landlord agreed to interest himself so far in the matter, he could ask the tenant to give him an estimate of the cost of the improvement, and if he offered to advance three-fourths of that cost himself, the remaining fourth would be expended by the tenant, who would also have to pay the landlord during the remainder of his lease 5 per cent per annum interest upon what the landlord expended. That was an arrangement which would be advantageous to the landlord, because he would have an improvement made upon his estate on advancing three-fourths of its cost, and during the remainder of the tenant's occupation he would receive 5 per cent interest on his outlay. Power would be reserved to the landlord to object to any improvement which the tenant desired 784 to make on the ground, either that it was not suitable to the holding, or that it would prejudice the estate generally; and those seemed to Mm (Mr. Barclay) to be the only two grounds on which any reasonable landlord would object to improvement of his land. On either of these two grounds the landlord could object, and if he showed that his objection was well founded, he could prevent the tenant from carrying out improvements; or, at all events, would cease to be responsible for them himself. The other class—that of temporary improvements—set forth in the Schedule of the Bill, included only those which ought naturally to fall on the cultivator of land, and which the landlord ought not to be called upon to execute. They were improvements the successful carrying out of which very much depended on the individual, both with regard to the cost and to the quality of the work, and which ought to recoup themselves in a few years. If the tenant carried them out and had to leave the farm before he had had time to recoup himself for the outlay, he was to have compensation, but the compensation would come practically, not from the landlord, but from his successor in the farm. The first class of improvements—those of a permanent character—were those which the landlord should pay for, and for which he would recoup himself by an increased rent from succeeding tenants; and the second class—or temporary improvements—were those which the cultivator of the soil ought to execute, and for which, if he was not repaid during the continuance of his tenancy, he would be recouped under this Bill by the in-coming tenant. The in-coming tenant again would be indemnified by receiving the farm in much better condition than it otherwise would have been. These were the two main principles of the Bill. There was also a provision for compensation of the tenant for unexhausted manures or fertilizers; but, as that was merely an extension of the present system of compensation, he would not dwell upon it. The Bill would have the effect of enabling parties, who as matters stood at present could not have the opportunity of contracting together, to adjust claims upon equitable terms—he referred to the outgoing and in-coming tenants. This, he considered, would be very advantageous 785 for both parties. The Bill sought to lay down the general equitable principles whereby the in-coming tenant should pay to the out-going tenant a fair and reasonable compensation for the money which the latter had left to benefit the former in the soil. In settling what should be the amount of compensation, he had endeavoured to embody in the Bill provisions, not to enact a custom, because that was impracticable, but to lay down general principles the application of which was not tied down by any hard-and-fast rules, but in regard to which there was a considerable amount of elasticity, so that those principles might be fairly and equitably adapted to the various districts of the country. In dealing with such a question as improvement upon land, hard-and-fast rules as to the amount of compensation could not be laid down, because what would be a fair amount of compensation in one district would probably be unfair in another. He had laid down in the Bill what were the matters in respect of which an outgoing tenant was to be compensated, and he hoped that under the provisions of arbitration a custom would by-and-by grow up in various districts throughout the country, under which it would be well known and clearly established what was a fair and proper compensation to allow to the out-going tenant under the peculiar circumstances of each case. The compensation both with regard to permanent and temporary improvements was to be fixed by arbitrators, who, after taking into consideration what was the increased value of the farm due to the improvements, what had been the cost of the improvements, and what benefit the out-going tenant had derived from them, would fix such a sum as they thought fair and equitable under the circumstances; but the compensation was limited by an over-ruling clause, which specified that no compensation for permanent improvements should exceed 15 years' purchase of the increased value of the holding due to the improvements, and in the case of temporary improvements, that the compensation should in no case exceed five years' purchase of the increased value of the land due to the improvements. Then it was provided, on the other hand, that the landlord should have power to obtain compensation for depreciation, or 786 else to eject the tenant. Arbitrators were to have power to examine a farm in the interest of the landlord, and if they found the farm in bad order, the tenant was bound to conform to the instructions of the arbitrators, and if he failed to carry out an improved cultivation, the landlord should have power to eject him. It might seem hard to the tenant that the landlord should have that power, and representation of this point had been made to him by many farmers; but it seemed to him equitable and just that, while on the one hand the tenant had a right to claim from the landlord compensation for improvements, the landlord, on the other, should have a right to claim compensation for depreciation, and to ultimately eject a tenant who persisted, after the arbitrators had given their award, in exhausting or improperly cultivating the farm. The hon. Member was proceeding, when—