HC Deb 24 March 1927 vol 204 cc713-39

The subject which I desire to raise to-night has already achieved a certain notoriety in this House, largely as a result of the persistence and assiduity with which my hon. and gallant Friend the Member for Caithness and Sutherland (Major Sir A. Sinclair) has pursued it during the past three months. it is the subject of the Erribol Farm, which has been disposed of by the Scottish Board of Agriculture. This is the first opportunity we have had of raising the matter in a consecutive way. I myself was asking questions about it as far back as the beginning of November last and my hon. and gallant Friend the Member for Caithness and Sutherland has asked some 30 or 40 questions since then. To-night we have an opportunity of raising the whole issue on the facts, so far as they are known, and of inviting the Secretary of State for Scotland to state the position of the Hoard of Agriculture. When I say the facts "so far as they are known" I mean so far as they are known to us on this side of the House, because the Secretary of State, despite all the questions with which he has been baited has never shown any extraordinary expansiveness on this subject. He has never shown any garrulity and has never made any attempt to stretch matters so as to give us any more information than the limits of an official answer allowed. In fact the right hon. Gentleman has been an understudy of Brer Rabbit, but I trust to-night we shall be able to draw him further out of the hole.

So far as I know them here are the facts. There was a farm at Erribol in the parish of Durness, away up near Cape Wrath, in Sutherlandshire, of 32,100 acres. It was bought in 1919 by the Scottish Board of Agriculture to provide holdings and enlargements of holdings for ex-service men. By Whitsuntide, 1922, there had been provided seven holdings and eight enlargements absorbing some 5,500 acres. Far this farm the Board of Agriculture made a cash payment of £12,000. In addition, I understand, they paid the legal costs of transfer from the private owner to the Board; they also spent £415 on drainage, £670 on improvements, and £478 on manures. Then the sheep stock was taken over, after valuation, for a sum of £43,295. So far as I know those are substantially the facts. The seven holdings and the eight enlargements having taken up 5,500 acres there was still left in the hands of the Board a farm of 26,550 acres and the sheep stock. The Board tried repeatedly to sell the sheep stock to the small holder applicants on the basis that the small holder should make a cash payment of 25 per cent, of the value of the sheep stock. The sheep stock was valued at £43,000—let us say £40,000. Assuming that the value had fallen by half, making the value of the sheep left on the farm £20,000, the small holder applicants were being asked to pay £5,000 cash down. Taking 16 small holder applicants each small holder was therefore asked to find somewhere about £300—roughly —in order to get his share of the sheep stock and get a holding. It was obviously impossible for the poor people who were applying for these holdings to put up that sum of money. They could not make a joint offer. They could not borrow the money anywhere or raise it in any way.

There was no lack of applicants provided they were not called upon to find this heavy initial sum. As a matter of fact the Scottish Board of Agriculture at the date of its last report, had over 10,000 applicants on its books, 3,800 being ex-service men and last year they had additional applications from 705 other men. They were only able on an average since 1912, to deal with half the number of fresh applications received. In Sutherlandshire alone there is a waiting: list of 1.055 applicants, 495 having been favourably reported upon by the officers of the Board, while 550 are not yet reported upon, and, of the total, 149 are ex-service men. What did the Secretary of State for Scotland do? When he could not get the impoverished small holder and ex-service man to put up the necessary capital he proceeded, not to find other means of assisting the ex-service men to take over farms, but to put up this farm for auction. He put it up twice and got no bid. Then he put it up a third time and got no public bid but got a private bid. He sold off the sheep, for which he had paid £43,000, for a sum of £9,388 l1s. It has been admitted at Question Time that these sheep were sold on a Martinmas valuation and not on a Whitsuntide valuation. I have heard the statement made, though I cannot myself justify it, that the sale on a Martinmas instead of a Whitsuntide valuation meant a reduction in the value of the sheep stock by round about 33⅓ per cent. Perhaps the right hon. Gentleman will tell us why the sheep were sold on a Martinmas and not on a Whitsuntide valuation? I ask the House to note that the stock was sold for £9,388 but the small holding applicants in the year 1922 were asked to pay not £9,000 but £17,265 for the stock. When he asks the small men collectively to buy the sheep, he says the price is £17,265, but when he disposes of the sheep to a private bidder, a multiple, pluralist farmer, he sells them for £9,388. We have, I think, to turn up the last Annual Report of the Scottish Board of Agriculture to see whether there are any grounds of public policy upon which the Secretary of State for Scotland should put financial difficulties in the way of the smallholder and, instead, hand over the sheep at this remarkably small figure to this large farmer. On page 10 of the Report we read: The demand for land settlement shows no signs of abatement. The Board continue to receive more applications than they can hope to satisfy under present conditions. Further on, we learn that the experience of the Board has been such since 1912 that only 2 per cent. of the smallholders settled on the land under the Board have been failures, and that if the numbers of holding enlargements are brought in, the figure is even less than 2 per cent. When we get the figures from Canada and discover that something like 16 per cent. of the new starts at agriculture there are failures, and when we find that only 2 per cent. in Scotland are failures, we are the further amazed at the right hon. Gentleman consenting to this new policy of de-nationalisation of the land under the Scottish Board of Agriculture.

In its last Report, the Board of Agriculture actually goes out of its way, on pages 18 and 19, to show the increased population and increased stock carried whenever these smallholders are set up. They take, for example, on page 19, four pastoral farms taken away from large farmers, pluralist farmers, I suppose, and broken up into small holdings, and they show that, prior to the Board splitting up these farms, the total population maintained was 97, but that under the Board it has risen to 545. The acreage under crops, ether than hay and grass, has risen from 107 to 499; the number of horses has risen from 22 to 98, up four times; the number of dairy cattle up from 34 to 228; the number of poultry from 300 head to 1,289 head; pigs, 8 up to 38, and so on. There is every indication from their own Report of an increased population, increased prosperity and increased national productivity, with less than 2 per cent. failures, and yet, with this opportunity of farming in their own hands, they do not proceed to develop this successful policy, but they actually sell over £43,000 worth of sheep for"£9,000 to a large pluralist farmer.

I asked the right hon. Gentleman at Question time what were the decreases in population in this County of Sutherland during the last four Census periods, and I got the answer that at the last Census there was a decrease of 2,377 in the population of the county; at the previous one, 1,261 of a decrease; at the previous one 456 of a decrease; and at the one before that, 1,474. In four Census periods, you have got 5,568 of a decreased population, and another Department is busy finding public money to take these people, or some of them, away beyond the seas to start farming, at a cost which was stated in the House last night in some parts of Australia to be £1,500 per settler. Here we are at home, with land under-cultivated and uncultivated, with a peasantry starving, and the right hon. Gentleman and his Board of Agriculture, with this opportunity in his hand, actually disposes of the farm of Erribol for a sum of money which, I submit, demands the anxious attention of this House.

Provided the facts are admitted, provided that I have stated the facts any- thing like completely and reasonably-and I have sought to do it, and have taken them all from the Reports of the Board of Agriculture—I think the least this House is entitled to demand is some form of inquiry—I do not- press for a Select Committee or a Committee of any particular kind—but some form of public inquiry into all the circumstances surrounding this Erribol transaction. The inquiry should be public. If only to relieve the apprehensions in the public mind, it should be held. But quite apart from the apprehensions in the public mind as to the price, as to the method by which this price was secured, as to the fact that ex-service men were asked £17.000 while one private bidder got off with £9,000, quite apart from all that, I submit that, on grounds of public policy, on the ground that our country is being de-populated, that we are losing the best of our kith and our kin, our brawn and our muscle, on the ground that Sutherlandshire is being turned into a county of large sheep farms and deer forests, on all these grounds, I submit that this House is entitled to demand an inquiry into all the circumstances surrounding the Erribol transaction.


I am within your recollection, Sir, and within the recollection of the House in stating that I have been addressing to the Secretary of State for Scotland an unusually lengthy series of questions on the subject which is now under discussion, namely, the purchase and sale of the farm, sheep, stock, and estate of Erribol, and I have not yet succeeded in eliciting all the facts which are necessary for conducting a proper debate on this important transaction. Indeed, it was only yesterday that I learned, through the courtesy of my hon. Friend the Member for Dundee (Mr. Johnston), of this opportunity which was going to arise for a discussion of the subject. As a matter of fact, I desire, and I shall have on some future occasion, to put a considerable series of questions to the right hon. Gentleman, but I realised that it was not fair to the right hon. Gentleman to expect him to be able to answer such a series of question at 24 hours' notice, and I, therefore, gave him notice last night of a number of quite simple and non-technical questions to which he will easily be able—I hope, without inconvenience to himself—to furnish the answers to the House to-night. But before I come to these questions, I desire to indicate to the House the broad justification which I feel that I have for the length of time of the House that I have ventured to appropriate to an investigation into this question.

The first point I wish to make is this, that this estate, as my hon. Friend the Member for Dundee has said, was bought in 1919. The sheep stock was actually taken over in 1921. For the estate, sheep stock and all the appurtenances, a sum of no less than £55,000, or rather more, was paid by the Board of Agriculture for Scotland. The sheep stock has been sold by the right hon. Gentleman's Department for less than £10,000. In addition, there are some oddments.

I think the total amount which the Secretary of State may eventually get is something like £22,000, and I am anxious to be very careful in putting this case that the balance, if anything, is on the side 'of the Secretary of State. That means a loss on this transaction, not of 5 per cent. or 10 per cent., but of over 50 per cent., and the actual loss on the sheep stock is greater even than that. In all, the loss amounts to £33,000. There is another figure I want the House to bear in mind, and that is the valuation which the Secretary of State or his officials made last year of the sheep stock, namely, £17,800, or, roughly, £18,000, and that' as the Secretary of State said in answer to a question I put to him the other day, makes no allowance for acclimatisation value. To take a very moderate figure, the Board of Agriculture paid 10s. a sheep as acclimatisation value in taking over the farm of Armadale. A more rational and more ordinary figure to take would be 14s. to 16s. But let us take 10s., I want to know exactly how many sheep were sold last Autumn. The number is a good deal more than 3,000, but, taking 3,000, the total value of the sheep stock, as estimated by the Secretary of State at Whitsuntide last year, would be a little over £19,000. For that, he has got less than £10,000.

10.0 p.m.

Therefore, on the valuation which he and his officials made last year, they received a few months later, 50 per cent. less from the purchaser of the sheep stock. I would point out that every one of my figures has been scaled down. 10s. is absurdly low for acclimatisation; 14s. to 16s. would be nearer the mark. More than 3,000 sheep were sold. The loss was probably greater, therefore, than 50 per cent., and that on a valuation made a few months before the sale. My right hon. Friend the Member for Ross and Cromarty (Mr. Macpherson), speaking on another Bill yesterday, said that it was rather a shame to hold the Secretary of State responsible for all the intromissions of the Board of Agriculture. The hon. Member for Dundee (Mr. Johnston), who, I think, is entitled to a seat on the Front Bench, said it was not quite fair to attribute all the faults of the Board to the Secretary of State. I am going to draw my indictment against the Secretary of State. Everyone on this side of the House would say that he is one of the most courteous and one of the most zealous in the public service of the many distinguished men who have adorned the office which he now holds. But it is one of the penalties attaching to the great position of a Minister under the Crown that he has to hold himself responsible for the blunders, the errors and misfortunes of his subordinates and of his colleagues in the Cabinet. Therefore, without imputing any personal responsibility, I do hold the right hon. Gentleman constitutionally responsible for this transaction, and it is against him that I propose to draw my indictment. He is responsible to this House for the loss of this very substantial sum of public money. In criticising the right hon. Gentleman, I am not being wise after the event. I am not one of those who, for political reasons, has been luring him into pitfalls. For 18 months or more, I have been doing my beet to help him, I have been in correspondence with him, and in touch with those advising him. I have warned him against the sale of this estate. I have put to him alternative proposals and made various suggestions to him, and done my best to warn him against the policy he has pursued. About June last year, I wrote him a letter, in which I pointed out that the circumstances in which the estate up to that date had been offered for sale were, to say the least, extremely unsatisfactory. The first offer was made during the general strike. The other two offers were made during the industrial crisis— not a very good time to sell an estate of 32,000 acres. The last offer was made after Whitsuntide, when the entry into the sheep-grazing should lave taken place, and I warned the right hon. Gentleman that the so-called effort to sell the estate appeared to a great many people as a blind—that it was believed by many people there was a favoured purchaser in the background who would get the estate at a knock-out price. If the right hon. Gentleman will look at my letter of June or July of last year, he will see that I warned him at the time. My error was in underestimating the loss. When I heard there was to be a sale at Martinmas, I wrote again. I used the figure my hon. Friend the Member for Dundee has used. I said he would lose one-third. I was wrong; he lost more. I was not aware of the many unprecedented conditions to which the right hon. Gentleman submitted at the hands of his favoured purchaser.

There is one other point which I desire to make. This loss has not been incurred in connection with land settlement. At Question Time a number of hon. Members opposite have spoken in a chaffing way about this having been due to the Liberal land scheme, and that it is a warning against the Liberal land scheme. But the transaction is no argument against land settlement. There has been only a slight attempt at land settlement in this case. The hon. Gentleman the Member for Dundee said that eight men had settled and that eight enlargements had been given. That is true to a certain extent. That was the answer given to me across the Floor of the House by the right hon. Gentleman, but it needs qualification. The facts are that only one new holding has been constituted on this estate. Eight enlargements have been granted and seven people who had not before held any land got a share in a small common grazing, and that counts as a new holding for the purposes of this Report. That is the whole extent of the land settlement carried out on this estate of 32,000 acres. I want the House to realise that this is not a question of a failure of land settlement. It is nothing of the sort. There has been no land settlement attempted or, at any rate, perhaps I may say that there has been only a very small amount of land settlement attempted, on this estate. There is a further point to be considered in connection with this matter, and that is the claim of those ex-service men who have been waiting for eight or nine years for the land which has been promised to them. That claim will have to be met, and it will have to be met at further cost to the State. We have not yet finished with this bargain. We do not know yet what our whole liability will be, because, added to this great financial loss, there is the further cost of meeting the claims of these men to whom this House, the Government and the Secretary of State himself are honourably committed.

I would like also to refer to the question of the sheep stock and to explain to the House exactly what the bargain is in relation to the sheep stock. The sheep stock was bought in 1921 for £43,000, and it was sold for less than £10,000 last year. That is a loss of something between 400 and 500 per cent. The Secretary of State will no doubt say that the numbers are slightly different and that the composition of the sheep stock is slightly different, but I warn the House against being led off the track by the red herrings of the Secretary of State. The numbers are a few hundreds Fewer, but no conceivable explanation of the diminution in the numbers of the sheep stock could cover this loss of between 400 and 500 per cent. In the second place, the actual quality of the stock has improved in proportion to its size, because, in the old days, the stock consisted partly of wethers, of male sheep, and at the time it was sold the proportion of ewes to the total had been increased and it has become a ewe stock. Therefore, the sheep stock was of the greatest value at the time it was sold. But, in the third place, there are those improvements which have been referred to. There are the manures the grass seeds, and these have invariably been considered as a charge against the incoming tenant or the purchaser. But that is not included in the valuation. It is unprecedented that, in this case, the purchaser by special provisions should apparently—because I have never heard it before, and this was given to me in answer to a question which I put to the right hon. Gentleman who said that the purchaser was not paying for these things—have been exempted from paying for this expenditure by the public on improving those grazing and arable land. There was also the furniture in the lodge, for which they are getting hundreds of pounds less than they had to pay for it seven years ago. In the meantime, quite apart from the furniture having possibly slightly deteriorated, they have added to it and they have improved it. In those days it was furniture suitable for a farmhouse, but now it is suitable for a shooting lodge. That has been done at the cost of hundreds of pounds, and the whole of that money has been lost in addition.

There has only been one explanation of this by the Secretary of State in the course of the questions addressed to him, and that was an astonishing explanation to anybody who knows anything about sheep farming in Scotland. He said: "Ah! the price of sheep has fallen 50 per cent. since 1921."He said that across the Floor of the House only a few weeks ago. I was amazed for two reasons; first, because I did not think that sheep prices had fallen to anything like that extent, and, secondly, because, if they have fallen 50 per cent., that is a poor bridge over a gap of 400 or 500 per cent. I, therefore, have looked the figures up. In reply to a further question, the Secretary of State said that perhaps he had under-estimated the fall, perhaps it was more than 50 per cent. I have, therefore, had recourse to the figures published in the Proceedings of the Highland and Agricultural Society of Scotland of the sale prices of sheep stock. They had the figures in every year for the sheep of Scotland. I have looked up the prices in 1921 and by the courtesy of the secretary of the society, of which I am a member, I have received from them in advance the figures which they are going to insert in their coming number for 1926 as representing the prices of Cheviot sheep at last year's sales. These prices are grouped under three classes: wethers or male sheep, ewes and lambs. I find that in not one of these classes is the fall in price as much as 50 per cent. The greatest fall is less than one-third—33⅓ per cent. Taking a mean of all three classes, the fall is between 20 and 25 per cent., or less than half of what the right hon. Gentleman assured the House was an under-estimate of the fall in the value of the sheep. And it is this figure of 20 to 25 per cent that has to be compared with the fall of 400 or 500 per cent. in the report.

Commander WILLIAMS

I am sorry to interrupt the hon. Baronet, but will he explain how he gets a loss of 400 or 500 per cent?


I want to be quite clear on this point. The actual price paid was £43,000, and the actual price received for this stock was £9,000. That is, between four and five times what was received was originally paid for the stock. In other words, 400 or 500 per cent.

Commander WILLIAMS



I made it quite clear. I have said that the figures were £43,000 and £9,000. We have actually only received between one-fourth and one-fifth, and that, is a loss of between 400 and 500 per cent.


75 per cent.


it is certain that 43 is between four and five times nine, and, therefore, I say it is a loss of between 400 and 500 per cent. [Laughter.] Hon. Members may have a different opinion, but the important point is that there has been a loss, whatever way you look at it. The original figure was £'43,000 and the figure received is less than £10,000. I have warned the House that the figures are not quite comparable because, on the one hand, rather fewer sheep were sold, and because of the improvements that have been made on the estate for which no compensation has been received. Therefore, it is roughly true to say that that is a fair estimate of the loss which has been incurred since 1921. The Secretary of State may well say that he is not himself responsible for the price at which the stock was bought. That is quite true, because he was not Secretary of State at the time, but this does not mean we are not entitled, or, indeed, that there is not an obligation upon us, to conduct a rigorous and searching examination into the transaction to discover why it is there has been this great loss of public money.

I would point out that, although this transaction happens to have taken place in my own constituency and therefore I have taken a particular interest in it, it is upon the taxpayer as a whole that the loss falls; so it is a matter which touches the vital function of this House in controlling public finance. Obviously investigation is essential in the interests of the taxpayer, and in the interests of land settlement in Scotland. Let us take the standard of comparison for which the Secretary of State is himself responsible—he is responsible for the period during which he has been in office—and compare the price paid for the stock with the valuation of the Secretary of State himself and his officials only a few months before. We find that whereas the valuation was £17,800 plus acclimatisation value, say between £19,000 and £20,000, that only four months later he sold that stock—the same stock—for under £10,000. In view of those facts the Secretary of State is in no position to come down to the House and attempt to carry this thing off with a high hand, as he has done on several occasions when I have been putting questions, nor is ho entitled to deprecate the efforts we are making on behalf of the taxpayers to subject this transaction to a searching examination. Does he appear to be so vigilant a guardian of the taxpayers' interest, so scrupulous an economist, so careful a custodian of the national estate, that he can afford to refuse to lay papers and documents in which the details of this transaction are recorded? As a matter of fact, people have been writing to me about this transaction from all over Scotland—information has been reaching me from the most unexpected sources, and actually from England as well. The Secretary of State may say that some of these sources have got their own axes to grind, or, perhaps, old scores to pay off against his Department. I will tell the House frankly that I think that is true to a certain extent. Why? Because a great many of these people would themselves have been not only willing, but anxious, to offer very much, more for this farm if they had known they could have got it on the terms of a Martinmas valuation of the sheepstock.


Why did they not offer it?


The hon. Lady asks why they did not offer it. The answer is quite simple. Because they had no idea they could get it on the basis of a Martinmas valuation of the sheepstock, a basis which I warned the right hon. Gentleman, after consultation with some of these gentlemen, meant at least one-third less than the valuation of the sheep- stock, which in practice—though I admit it was largely owing to these other concessions which were made to the purchaser—actually meant less than half the Secretary of State's valuation of the stock. That is why these other gentlemen did not make offers. Nevertheless, they made inquiries, and the Secretary of State for Scotland knows that they did, and they were choked off.


May I ask the hon. and gallant Member if any of these would-be purchasers would have put the ex-service men on the land?


I must remind the, hon. Lady that I am dealing with two points, one is the question of the necessity of putting ex-service men on the land and I know that is something that the hon. Lady has very much at heart. I shall deal with that particular point later on. The point I am dealing with at the moment is the loss of public money involved in the sale of this estate under the conditions under which it was sold, and the fact that other purchasers would have been prepared to give a higher price and then the taxpayer would have suffered less if these other intending purchasers had had a chance of bidding on the terms and conditions upon which the estate was eventually sold. We are in the position of a landlord in this matter. The taxpayers and the people of this country owned this estate. The right hon. Gentleman opposite was in the position of our factor or agent and he sold the estate for us. He has disposed of part of our property at a loss of over 50 per cent. on his own valuation, and this took place only a few months ago. [HON. MEMBERS: "To whom?"] I am not going into that matter, but it was sold to the present purchaser. [Interruption.] I am trying to discuss this matter without personalities and purely from the point of view of the public interest, and of the interests of these ex-service men who have failed to get the land.

The Secretary of State for Scotland is in the position of a factor who has sold our land at a loss of 50 per cent., and yet he refuses to produce the documents by which we can judge the transaction. I ask him will he produce to this House the missives of sale, the minute of reference to the arbiter, copies of any communications which have passed between the Board of Agriculture and the arbiter after the minute of reference was sent to the arbiter and before the arbiter's report was received, and a copy of the arbiter's report. Those are documents which any landlord would be entitled to demand from his factor, and this House is entitled to demand them from the Secretary of State for Scotland. In the absence of that information, which is essential to form an instructed judgment on this transaction, I have been compelled to address to the right hon. Gentleman a long series of questions, and I hope by what I have said tonight I have justified my action because that has been my endeavour. I felt it was my duty to put questions and cross-examine in every way I could, to elucidate the facts, and that has been my only object. I hope I have established this case. It is not my intention to debate the question this evening. We have not sufficient facts. I am not going to debate this blindfold. If the right hon. Gentleman will produce the facts, and is willing to have a Debate, I shall be ready and anxious to meet him; but we must have the facts before we can have a formal Debate. To-night I only wish to ask a few questions, none of which is complicated or involves any technical details. They are on one aspect only of the case, but one on which I think the Secretary of State can easily answer. They are these:

Were Messrs. Knight, Frank and Rutley the agents appointed by the Board for the sale of Erribol?

Did they pass on to the Board certain inquiries, as I have been informed by the Under-Secretary of State for Scotland, as to whether an offer of a lump sum for the estate farm and sheep stock would be considered?

What figures were suggested as a basis of negotiations?

What reply was returned to those offers?

Was it that no alteration of the published conditions would be favourably considered, or were the inquirers encouraged to increase their offers and modify their proposed conditions? That would seem to me to be the natural course. If I were selling a property, and someone made an inadequate offer, or an offer hedged about by conditions, I should say, "Will you modify those conditions, or increase your offer?" Was that done by the Secretary of State?

Was the eventual purchaser introduced by Messrs. Knight, Frank and Rutley, who were the official agents appointed by the Board to sell the estate?

Was the bargain completed through them?

Through whose agency were the negotiations with the eventual purchaser conducted?

Why was no opportunity given to other inquirers to make competitive offers on the new basis?

Why was there no exposure at public auction on the basis of the revised conditions?

In conclusion, I have only one more question to put to the Secretary of State, and this is, perhaps, the most important of all. It is: What is he going to do for the disappointed applicants—for those ex-service men who were applying for grazing on Erribol farm?

The sheep stock which, as my hon. Friend said, was offered to them for £17.000 on Whitsunday, 1926, has been sold to a wealthy sheep farmer for less than £10,000. Why were they not given a chance of getting it at that price? I wish to make it clear to the hon. Lady the Member for Berwick (Mrs. Philipson) that I do not for one moment want the Secretary of State to sell the estate to a sheep farmer for more than he could get from the ex-service men, but what I am criticising now is the selling of it at less than he could have got from the ex-service men. They would have gladly given much more for it. What is he going to do for them?

What is the position in the county of Sutherland? My hon. Friend gave broad figures; I want to give a little more detail. It is only very short. There are 149 first preference ex-service men, according to the last Report of the Board of Agriculture, in the county of Sutherland, who have not yet been provided with land. If we include the second preference ex-service men, the total is 183; and if we include those who require enlargements as well as new holdings, there is a total of 194 ex-service men who have not yet been satisfied. And what about other applicants? Many of these were applicants for land before the War. There are 115 applying for new holdings, and 746 for enlargements. Therefore, we reach the total figure mentioned by my hon. Friend the Member for Dundee, of 1,055 unsatisfied applicants for land in the county of Sutherland alone. These are men, or, at any rate, the 194 ex-service men to whom I have referred, to whom this country, this House, this Government and the right hon. Gentleman himself are under a solemn obligation to provide land. They are men who were told that, if they went to the Front and did their duty, their country would stand by them when they came home, and see that they got land. They carried out their side of the bargain nobly, bravely, amply, promptly, and they have waited for eight or nine years for this land; and now they see that the Secretary of State has sold this sheep stock which was earmarked for them, to a wealthy pluralist farmer, for only two-thirds of the price they were asked to give. It has been sold for £10,000, and they were asked, according to the last offer made to them, £17,248 for this sheep stock.

These men would have given the Secretary of State a better bargain than the wealthy purchaser, though it is true they would not have paid in cash, but there is not a single case in which money has been advanced for forming a sheep stock club in which the men have failed to meet their obligations, and these men would in fact have paid 70 per cent. more than the purchaser the right hon. Gentleman secured, though, of course, the payment would have had to. be spread over a period. Does the right hon. Gentleman recognise his obligation to these men? Does he recognise their feeling of bitterness? Does he understand the provocation that this treatment is to crofters and land seekers and ex-service men all over the islands of Scotland? To have settled these men at a serious cost to the State would at any rate have given the right hon. Gentleman the satisfaction of knowing ('hat he and the Government had discharged their solemn obligations towards them. To have deprived them of this opportunity, to have sold the estate at a profit, or even at a small loss, would no doubt have earned the plaudits of many Members of the House, possibly of a majority of the right hon. Gentleman's supporters, of the Treasury and of the Public Accounts Committee, though, of course, it would have been to ignore the interests of the ex-service men. But to have sustained a loss of public money of this magnitude and at the same time betrayed the interests of these ex-service men, that surely from every point of view is an indefensible transaction and on3 which will, I hope, not escape the attention of the Controller and Auditor-General and of the Public Accounts Committee and which calls for investigation by a Select Committee of the House.


I should like to sum up some of the facts and figures which have come before us. This estate was purchased in 1919 for £12,000. The sum paid at this time for the land was £10,000. In the interval the sum of £l,546 had been spent on various improvements. For the sheep stock there was paid £43,295. That stock was valued in 1925 in the books of the Board of Agriculture at over £20,000, it was valued in 1926 at £17,808 and it was sold for £9,388. I can anticipate some of the replies which may be given by the Secretary for Scotland. He will be able to point out that it was the Martinmas valuation of the sheep. It was elicited by question and answer, as I understand, that it was stipulated by the purchaser that he should get this stock at the Martinmas valuation, and that I think is a serious feature and one for which some explanation is due. He will be able to point out also that there was not exactly the same number of sheep purchased at this time as the number for which the sum was paid. It was somewhat diminished, but I do not think any numbers you can indicate will be in any way able to bridge over the big gulf that has been mentioned. Anything you can make in the depreciation of the value of the stock is not sufficient. The right hon. Gentleman said in answer to a question that it might be 50 per cent., or perhaps he had understated it. It turns out that it was an overstatement and it has to be balanced by the fact that the sheep were acclimatised. I do not like to be quoting scripture but there is that verse in the 23rd Psalm in the old Scottish version: He leadeth me in richt rodens. It is the old shepherd's psalm, the idea that it takes sheep a long time to learn their track and they are more valuable when they have learnt it and have got acclimatised to the soil. My hon. Friend the Member for Caithness and Sutherland (Sir A. Sinclair) did not give the figures in regard to the furniture. The depreciation of the furniture even with additions was from £775 to £453.

I wish to state the figures as to the history of land settlement in Scotland. From 1913 to 1925, there has been a decrease in small holdings in Scotland of 1,078. It is fair to the right hon. Gentleman and his Department to admit that the present number of small holdings is larger than it was five or six years ago; but since the system of these settlements was initiated there has been a drop of 1,078. There are 10,055 applicants in Scotland awaiting small holdings, who cannot be satisfied, and 5,704 ex-service men have made applications for small holdings, of whom only 1,976 have been satisfied. A little over one-third only have been satisfied. That is a most important factor in the situation. Lastly, I wish to refer to one or two statements made at Question time. One hon. Member said that this was an example of public ownership of the land. Let me deal with that in a sentence. We have never on this side of the House said that you can get a perfect system of public ownership so long as the present system continues, and so long as private administrators with their present ideas of social order are administering a public system.

My second reply is that the right hon. Gentleman has refused to lay on the Table a copy of the missive of sale and a report of the arbitrator. That is not our idea of business. We believe in open diplomacy on this side of the House. Therefore, I cannot accept this kind of procedure as representative of public ownership. The right hon. Gentleman will probably say in regard to smallholders at present in existence that their rights are conserved under the Act of 1911. They are conserved to a degree, but that does not affect the planting down of new smallholders and the enlargement of this estate. It is a serious fact to bring a. multiple farmer into a district like this, with the whole idea that these men have of small holdings. We know that in the Lindean judgment it was held that to many land owners and large farmers the existence of small holdings on a farm was an eyesore, and because of their presence there they must get artificial compensation. They must get an eye salve because it is an eyesore. You are bringing in a large multiple farmer whose whole traditions and ideas are against the settlement of small holdings. The hon. Member for the Acton Division of Middlesex (Sir H. Brittain), in the course of discussions on this matter, said that all these matters should be left to private enterprise. There has been too much private enterprise in this transaction. There has been a rigging of the market and the whole conditions of sale of this estate were not to the credit of private enterprise or the present system of land management.

The SECRETARY of STATE for SCOTLAND (Sir John Gilmour)

This is a problem which has been engaging the attention of this House at Question time to a considerable extent. I want to make it quite plain that I make no complaint as to the inquiries which have been made; I have nothing to hide either from this House or from the public in these transactions. A good deal of what has been said to-night has ranged over subjects which may be connected with this problem but which are outside the particular matter which, as I understand, the hon. Member for Dundee (Mr. Johnston) wished to raise. The hon. Member has had to leave the House in order to catch a train, and has apologised to me for having to go, but he and the hon. and gallant Member for Caithness and Sutherland (Sir A. Sinclair) have desired to show that there has been some method of dealing with this matter which is perhaps not entirely above board; that there have been underhand methods and means employed in dealing with it. Indeed the hon. Member who has just spoken talked of rigging the sale. I want to make it quite plain that, so far as my responsibility in this matter is concerned, I can show the House that there has been nothing of the sort. When I took over the administration two years ago, it was my plain and bounden duty, in the sense of a factor, which has been referred too, or as the trustee of the national purse, to review the whole conditions of land settlement, and to make myself conversant with the various properties which the Government hold, which they have developed or failed to develop.

This Erribol Estate was one which was bought at a period of great pressure in the land settlement scheme, bought at a high price and at a time when, as everyone knows, extraordinary and extravagant prices were paid for land, for stock and for furniture. Indeed, if I have any criticism to make it is this— that if one had to consider this question on its merits and in proper time this estate would never have been bought for the purpose for which it was bought. I say quite frankly that I think I can substantiate that point of view. What are the facts? The estate was bought in 1919. It is true that the stock, the sheep, were not taken over until a later period. The actual property was bought in 1919 for the sum of £12,000. I have sold it for the sum of £10,000. In so far as the actual estate is concerned that difference is not really, considering all the circumstances, a very material one. But, of course, when you come to consider the price which the Government paid for sheep stock and other stock, then indeed that is a matter of considerable moment to the State and to those who have to deal with it. The stock was taken over on a valuation on exactly the same principle as has been carried out before, a single offer. It was very well known that this stock was being taken over by the Government. It was being taken over at a time of great extravagance, when quite admittedly a Government was fair game. Anyhow, the valuation was an extraordinarily high one.

Let me say at once that I am not making any allegations against individuals in this matter, but it is common knowledge that where the Government is concerned, when it comes to fixing prices, those prices are fixed upon a pretty generous scale. Be that as it may, the price of the sheep stock amounted to £43,295, and of the other stock to £1,815, or a total of £45,110 The price of sheep in that year was extraordinarily high. You find that ewe and lamb were bought at that time at £10 5s. gimmers at. £7, and others at prices in proportion. I have sold the land, as I have said, for £10,000, and the sheep and other stock for £10,724. That, of course, is a very considerable difference. But it is a matter of opinion on the part of the valuer. I say at once that those who were responsible for the management of this farm placed a value on this stock which was far in excess of that which was received. [Interruption.] Quite so ! That is a matter of opinion It has been said that the stock was greatly improved. At least it must be remembered that between these periods 5,500 odd acres were given off to settlers, either as enlargements or in other ways. That was taken off the estate, and a certain number of sheep were disposed of. The stock was reduced by at least 1,000, so far as my information goes. It is true, as the hon. Member has said, that the class of stock was changed to a ewe stock, but a large proportion of that ewe stock was over five years of age, and anyone who knows anything about the circumstances knows that, whatever you may say about the increased value of that sheep stock, it is a matter of opinion as to the immediate value of the stock.


The Board was responsible. The Board had taken control.


It was very largely because it was impossible for the State to keep a property on its hands which it had not been able to develop. As the hon. and gallant Gentleman knows well, none of the suggestions made to the Board was found to be feasible or capable of being carried out. When I am told that the price to be paid on the part of these smallholders was an impossible one, may I remind the hon. and gallant Gentleman and others who know the circumstances, that there are many other schemes which are being carried out in which these prices and higher prices than we were asking of these holders are being paid and are being successfully met. But the fact remains that this estate could not be developed and if these men have not been able after all this period of time to take up that opportunity, then it is little short of lunacy for the State to continue to hold the estate and endeavour to develop and carry it on themselves by officials from the Central Board in Edinburgh. In my judgment, the only right and proper thing was to cut your loss and to turn your money and your energy in those directions where you can usefully settle ex-service men, which is the policy in this House and which I as Minister am responsible for carrying out and am bound to carry into effect.

The hon. Gentleman has asked me a variety of questions and I am very willing to do my utmost to answer them. The estate was put up for auction and Messrs. Knight, Frank and Rutley, who are well known, were the people charged with that duty. It was put up three times in public auction and not an offer was received on either of these three occasions.


That was during the industrial crisis.


It was well known that this estate had to be put up and business cannot stand still because of an industrial crisis. The fact remains, industrial crisis or not, that a private offer was made. I would like to add that there was a tentative inquiry but no definite offer was made. A tentative inquiry was made and there was nothing to show that the offerer did not expect to go in at the same time that the other offerer went in. I had to choose between these two circumstances, that the estate had been put up three times and no offer had been made, until this offer came along. The offerer offered to me a sum of £10,000 to be followed by the valuation of the stock by a single auditor to which both parties were to agree. That was an ordinary business transaction, and if the valuation of those who spoke on behalf of the Board was a valuation which could be relied on in any sense, I was justified in thinking that the offer of £10,000, plus Valuation of stock, would be a better offer for the State than a blind lump sum offer of £25,000, with no valuation of stock, to take over the estate, it might have been, immediately.


£25,000 and you have only got £19,000.


The valuation made by the representative of the Board and the advice given, led the Board to expect a considerably larger sum. I am not hiding anything from the House, but the fact remains that that valuation did not in any sense materialise, and it is a matter of judgment and opinion by the auditor. I have no reason to suppose, and I do not think the House has any right to suppose, that the auditor who made this valuation was anything but an absolutely straight and fair-minded man. I must make that perfectly clear, but be that as it may, it is quite certain that the valuation which he made was a valuation materially less than that which the Board expected or led me to think would be received. The fact remains that, in addition of course to those sheep which were originally taken off the estate, and sold, a considerable number of others has also been sold. I think I am right in saying they have added some £3,000 to what was actually received for sheep not taken over by the purchaser of the estate. Taking it big and large, I would like to say that it is impossible for anyone in my position to lay before the House, on every occasion, all the details of transactions of this magnitude or any magnitude in connection with my Department which are constantly coming up. It is a matter of estimate, and it would be impossible to lay before this House every time the whole of the remit to the auditor and all the circumstances and every detail.


Why not?


If I were obliged to do that it would entail a great increase in printing and expense which I do not think would be justified by any questions which the hon. Gentleman may put. I have been frank with the hon. Gentleman in my replies and I have been frank with the House.


Yes, but will the right hon. Gentleman complete his replies'? I gave him, last night, the whole of these questions. W hat answer was returned to these inquiries? Were they encouraged? Were they asked to give terms?


Every opportunity was given for an offer at public auction. That opportunity was not taken. No definite offer was made to Messrs. Knight, Frank and Rutley beyond tentative suggestions and inquiries, and the circumstances were that I had to run the risk of losing a definite offer for something which might have turned out to be worth nothing. As I have told the House, I considered the relative values of a blind lump sum on the one side and a definite sum for the property and a valuation for the stock on the other. I took the second. I admit to the House I was- disappointed, and I believe so were the Board and those who valued for the Board, that the valuation was not higher. There is nothing to conceal in that; there is nothing wrong.


Why cannot we have the documents?


After all, this is a business transaction.


With whom?


When you enter into an undertaking to sell property on condition that the decision of an auditor shall be agreed to by both parties, then that decision must be agreed to. In my judgment hon. Members- opposite are serving no good or useful purpose either to themselves or to the interests which I admit they have at heart by trying to imply that there has been dishonesty or unfairness in dealing with this matter.


I never desired to imply that there was such below-the-board play. I desired that the right hon. Gentleman might be able to prove to this House that there was not, and it is for that reason that I have asked for these documents. The answer is not convincing.

11.0 p.m.


I am sorry to take part in Scottish matters, but this affects not merely Scotland but all of us who represent constituents. I was always under the impression that when you placed the sale of an estate or of property of any kind in the hands of auctioneers, those auctioneers were in control of the sale, and some of us would like to know where we are in this matter, [interruption.] I know that wherever the interests of private individuals conflict with those of the State, you back the private capitalists against the State every time. You believe in private property and public robbery, and this Debate has proved it. All we have heard from the right hon. Gentleman is a series of evasive answers to questions definitely put. Here is public property absolutely sold behind the backs of the people, and up to now we do not know who the buyer is. We want to know who is this favoured person, and we shall find out, and we shall find him somewhere among the relations of the gentlemen sitting on that bench. [HON. MEMBERS: "Withdraw!"] I withdraw nothing. We want to know where the public interest is in this matter. We find public property being sold at knock-out prices. You cannot deny that. We have been told, and no question has been raised as to its accuracy, that you have sold that estate for nearly £10,000 less than you could have had for a public property. I am standing by figures presented by the people who have gone into the matter, which have not been contradicted.

The Minister has not contradicted the statement made that this property was sold for less than was offered by another party. [HON. MEMBERS: "No!"] It was sold for less than they could have sold it for, and this Debate proves it. I know, of course, quite easily, how these things are done. Scotland is not the only place where the market is rigged in favour of private individuals. Some of us have sat on local authorities, and the best part of our time has been spent in watching these believers in private enterprise, who do not care a tinker's damn—[Hoy. MEMBERS: "Withdraw!"] —I believe that is perfectly correct language. I believe it is even used in Holy Scripture. So far as we on these benches are concerned, a large number of us think we ought to know all the facts connected with this transaction. We have only had one side, and the other side has been discreetly silent. The real facts have not been explained as to why public property has been sold at a price less than could have been received for it. [HON. MEMBERS: "No!"] It is very peculiar that the people who have been interrupting me have never got up to defend their own Minister, because they know that there is something fishy about it. The House has not been taken into the confidence of the Government, and if any private individual were to commit a transaction of this character, he would find himself in a very serious position, yet here is a Minister of the Crown who is being defended by the gentlemen of England. [Interruption.] If I wanted to make money in that way, I would join your party. In so far as we are concerned, we do not want to see public: property prostituted to private ends. When you have made promises to people to look after their interests, is this the way you do it? The right hon. Gentleman tonight has not made any defence of his Department in this particular transaction, and I say it is a disgrace to the House of Commons that such a thing should be allowed to go on.


I do not think the party opposite, particularly the right hon. Gentleman who has made the explanation to-night, can get away with that statement. After all, the statement to which we have listened makes it perfectly clear that there was a valuation on behalf of the Scottish Department which 12 months ago put the value of the estate at a much higher figure than that which the right hon. Gentleman was finally willing to accept. I understand, from the statement which has been made here to-night by the right hon. Gentleman, that the right hon. Gentleman was willing to accept £10,000 as an interim figure, subsequently modified by the decision of an arbitrator, and that finally £10,000 odd was actually paid. [Interruption.] As hon. Gentlemen, when they look at the OFFICIAL REPORT, will find, they are quite as confused as they consider me to be. That is a reason why they ought to be willing, with myself, to agree that further inquiries should be made into the figures that have been put before us. It is perfectly clear to me, from the statement that has been made, that, if the right hon. Gentleman personally had adopted a different policy from the one that was adopted, there might have been obtained for the sheep at least, and, as I believe, for the land, but certainly for the sheep, a very much bigger sum than actually has been obtained. That we should have sat here to-night and watched hon. Members opposite, who pretend on all sorts of occasions that they want the practice of public honesty by hon. Gentlemen on this side of the House, sneering and passing lightly over a statement so unsatisfactory as the one to which we have listened, with no support for the demand we now make for further inquiry, is a very grave reflection upon the probity of Members on the opposite side who have acted in that particular way. After the explanation which the right hon. Gentleman has made to-night, there ought to be a much closer investigation of an impartial nature. I see that I receive support from the opposite benches, and I hope that hon. and right hon. Gentlemen who now on that Front Bench will convey to their right hon. colleague the opinions that have been expressed from their own benches. I hope an early opportunity will be taken to give us a more satisfactory explanation than that given to us to-night.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill accordingly read a Second time, and committed to a Committee of the whole House for To-morrow.