LAND SETTLEMENT (SCOTLAND) BILL.

HC Deb 27 March 1934 vol 287 cc1915-54

Order for Second Heading read.

9.44 p.m.

The Secretary of STATE for SCOTLAND (Sir Godfrey Collins)

I beg to move, "That the Bill be now read a Second time."

I am aware that there may be some exception to the Government taking this Bill at this hour, but I would remind the House that there was a very full discussion on the Financial Resolution for some hours last week, and, although the Bill itself was not available in the Vote Office until Friday last, the terms of it are very nearly identical with the terms of the Financial Resolution. I would also remind the House that there was a very full White Paper explaining in great detail the Government policy on this matter which was presented to the House of Commons on the 19th December last, and, especially as there was no division on the Financial Resolution, we ask the House this evening to come to a decision upon the Bill.

I think it would be for the convenience of the House, seeing that on two occasions within a week I have spoken on this subject, that I should make my remarks to-night very short. That must not, however, be taken as any disrespect to the House. I do not intend to develop the argument for the Bill. I would, however, mention one point which has arisen in the minds of many hon. Members. Exceptions are being taken to the rents—I think the noble Lord the Member for Perth (Lord Scone) is particularly interested—and a comparison is made between the rents which are being charged for these small intensive holdings, on an average of about six to nine acres, and the rent charged for similar holdings in other parts of the country, I submit that it is not comparing like with like to compare the rents of these new holdings, which will have a modern house, with three rooms, a kitchen and a bathroom, and with all the modern facilities, with the rents presently being charged in other parts of the country.

In that connection before we introduce this Measure we went at great length into the question whether the size of the rent was a determining factor as to whether a man would succeed or not on these holdings. I had very elaborate figures prepared to show what the proportion of rent was in proportion to the outgoings of the holdings, and I think I am accurate when I say that in every case the rent will never be more than one-seventh of the total outgoings and in many cases it will be a much smaller percentage. I will not worry the House with figures on that point, but I thought it was a point that hon. Members were anxious about and I have therefore touched on it in my opening remarks. As I explained earlier, it will be for the convenience of the House if I do not detain it further now but if I endeavour, after a full Debate, to answer any questions which any hon. or right hon. Member cares to put to me.

9.49 p.m.

Sir A. SINCLAIR

I want to enter a very strong protest against taking this Bill at this time of night. It is supposed to be a great new land settlement programme. It has been boosted as that throughout the country, and yet the Financial Resolution on which we are supposed to have had such a full discussion was brought on as the third Order of the day. Is that the way to treat a great new constructive policy? The Second Reading of this great constructive Measure is brought on at a quarter to ten. That does not look to me as the way in which the Government ought to treat a great constructive scheme. They are burking discussion of this Measure by bringing it on at this time of night. They are relegating it to what I hope to show is its true place, in accordance with its true proportions as a paltry Measure to meet a great demand.

The right hon. Gentleman said that the scheme was discussed very fully in the Debate on the Financial Resolution and that a very full White Paper had been issued explaining it in great detail. All I can say is that, as a result of the White Paper and of the discussion on the Financial Resolution, a great many questions have been left unanswered. The Secretary of State said he would answer them on some future occasion. I hope that he will answer them to-night and also a number of others that I am going to put to him. I hope he will answer them all to-night. They will certainly be re-echoed in Scotland. The House must have more information than it has yet had about the structure of the Government's plan. According to the White Paper, all the holdings to be constituted under this scheme are to come under the Agricultural Holdings Acts, but the Secretary of State said in his speech that he did not propose to alter in any shape or form the character of the tenure of these holdings so far as the Highlands of Scotland were concerned. Does that assurance apply to all future schemes in the Highlands of Scotland under this Bill? Will the holders in the Highland counties be settled under the Land Acts? On the other hand apparently in the Lowlands the Agricultural Holdings Acts are to apply. Is it the scheme that all holders in the Highlands are to be settled under the Land Acts and the holders in the Lowlands under the Agricultural Holdings Act, or on what principle are the Government going to proceed?

The White Paper says that rents amounting to 3 per cent. of the capital equipment will be obtained. Are the Highlands to be included in that? Is 3 per cent. going to be expected from the holdings constituted in the Highland counties? Will land settlement be accelerated in the Highlands, where land hunger is keenest and depopulation is the worst, proportionately to the acceleration in the Lowlands under the scheme? In short, I would ask the right hon. Gentleman to sketch his scheme to the House in some sort of perspective showing, roughly, the amount of settlement contemplated in the Highlands and Lowlands respectively and the relative proportion of family holdings, full-time holdings and part-time holdings which are going to be constituted under the scheme.

Many hon. Members seem to find it difficult to understand the importance attached by certain hon. Members and by smallholders all over Scotland to Land Act tenure as opposed to Agricultural Holdings Act tenure. Some hon. and right hon. Gentlemen have argued that one of the advantages of erecting holdings under Agricultural Holdings Act tenure is that holders can enter their holdings when they have been fully equipped, and that they can take their holdings on the basis of equipped rent instead of a fair rent, with rights of compensation.

As regards entry on a completely equipped holding, there is everything to be said for it. At any rate as regards the type of holdings which the right hon. Gentleman has mainly in mind there is nothing to be said against it. Nevertheless, the opposite principle has worked well in the past. It is the principle upon which the great mass of holdings in the Highlands and many of the Lowland counties were made, the holder working himself and getting his neighbours to come to his help; in fact the whole community working to build the house and the steading. That was the way in which the holdings were made all over Scotland in the old times and that is the way in which they are being constituted to-day in the Western Islands, very cheaply and very successfully, and in parts of the Western Highlands. I do not think it works well now in other parts of the country. In Caithness it does not work. People have lost the old habit of getting people to come and help in the building of the house. It was attempted after the War owing to great pressure to get holdings erected quickly, but it would be useless for the kind of holdings which the right hon. Gentleman has mainly in mind. It is far better, and here I agree with the Secretary of State, to have holdings equipped and to let people see them before they take them; but that has nothing to do with the question as to whether Land Act or Agricultural Holdings Act tenure should be the tenure for these holdings. That has been done in the past, and it can be done in the future, on the basis of Land Act tenure.

So with the question of letting holdings on equipped rents. There is a disadvantage in that system as you remove a big incentive to the tenant to keep his holding in repair. He has no longer to do the repairs, and therefore it is left a good deal to the landlord, in this case the State, to carry on, with improvements for which the tenant cannot look forward to compensation. But, again, this has nothing to do with the controversy between Land Act tenure and Agricultural Holdings Act tenure. It is true that the Nairne Committee devoted nearly all their criticism of Land Act tenure to the letting of bare land to applicants for holdings after the War, on which the holders had to erect buildings and steadings out of money which they got by borrowing from the Board of Agriculture when prices were high. As prices fell the effect of the whole transaction was ruinous in many cases and great difficulties have arisen from that fact. But here again it is no essential feature of Land Act tenure or Agricultural Holdings Act tenure. Holders can be, and have been in large numbers, settled on an equipped rent basis, which I agree in a great many cases has great practical advantages, but under Land Act tenure.

What then are the essential characteristics of Land Act tenure of which the new holders will be deprived under the Government scheme, and which we wish to preserve. They are three, security of tenure, compensation for improvements on the basis of their value to an incom- ing tenant, and fair rents. New tenants are to be deprived of all these rights; and against that we protest. The first of the Land Acts under which these rights were given was the Crofters Act of 1886, which gave the small tenant security of tenure to the extent that he was entitled to remain there, he and his heirs, for ever if he chose to do so. The fair rent was fixed under that Act not by the landlord or an arbitrator, but by a statutory body, the Crofters Commission, which fixed the rent on what belonged truly as opposed to legally to the landlord. In law, of course, whatever is built on the soil accresces to the owner. The Act also provided that the small man should get compensation for his improvements. In 1911 this system was extended to smallholders who farm less than 50 acres or pay less than £50 per year rent, and on this structure various other Acts were passed, including the important Acts of 1019 and 1931. So there is a steady stream of legislation directed to that end.

The Government's proposal constitutes an important departure from this historic development of Scottish land legislation, a departure for which no adequate explanation has been offered to the House. For the first time the Government are depriving smallholders of statutory rights higherto accorded to them, and are offering the inferior rights under the Agricultural Holdings Act. Why is this being done? None of the arguments in favour of purchase as against scheduling, of the equipment of holdings before entry, equipped rents, touch the point, because whether the Government's view on these subsidiary points is right or wrong it can find expression under the Land Acts. The question remains, and I press the right hon. Gentleman for an answer, what is the public advantage for which new tenants are being compelled to forego their rights of fair rent, compensation for improvements and security of tenure?

It may be asked in what respect will the rights of the new tenants be inferior to those of existing smallholders. In the first place there is the fundamental issue of this proposal, that a tenant's rights instead of being statutory will be defined in the lease. What will be the terms of the lease? On that, the House wants more information, and I ask the right hon. Gentleman to give it. What will be the tenant's rights under the lease? The right hon. Gentleman spoke of some standard form of lease; let us know what is in the lease. The amount of the rent must vary according to the character of the holdings, but what are the tenants' rights to be under the lease in regard to the fixation of rent, security of tenure and compensation for improvements?

Will the tenant, for example, be bound for seven years under his lease or will he be able to throw up his tenancy at any time, as a landholder can under the Land Acts? Will the Department of Agriculture be bound to let him have his holding in perpetuity at a rent fixed by the Land Courts every seven years, or will the Department have the right to determine the lease? Will the continuation of the lease at the end of the seven years' period be at the tenant's option or at the mutual option of the Department and the tenant? Will the new holder enjoy any rights of bequest, and lastly, and by no means the least important of these questions, will the new holder's rights to compensation be restricted to those defined in the Agricultural Holdings Acts? That would be the gravest misfortune of all. The ordinary smallholder is a practical, hard-working man, with little time and even less opportunity for studying the intricacies of Acts of Parliament, even when they touch his own interests. Nor does he employ, as hon. Members do when they take an ordinary lease, an agent to protect his interests. He cannot afford it, he is busy from daylight to dusk working on his small plot of land. If he is under the Land Acts the State and the land court watch over him and see that he is fairly treated and properly compensated for the result of his labours, in so far as they have added to the value of his holding. In practice, therefore, if the landholder finds that his holding wants draining or reclamation or additional buildings or more fences, he does the work, and at the end of the time he goes to the land court and says, "This is the work I have done," the land court values it at its value to an incoming tenant and it gives him whatever is due. But the new holders, if they are to be under the Agricultural Holdings Act, are only entitled to compensation within strictly defined limits, and only in so far as they are aware of and have observed the red tape formulae laid down in the Agricultural Holdings Act. Let us see what the Secretary of State said on this point on the Financial Resolution. He said: The leaseholder, under the protection of the Agricultural Holdings (Scotland) Acts, can make all but major improvements either without reference to the landlord or by giving simple notice to the landlord, and at his outgoing he is entitled to compensation for these improvements at their full value to an incoming tenant."—[OFFICIAL REPORT, 20th March, 1934; col. 1167, Vol. 287.] With great respect I must offer to the House a different and, I am afraid, even a contrary opinion. I assert, and invite contradiction of the statement, that under the Agricultural Holdings Acts a tenant gets compensation only for removal of obstacles such as bracken and boulders, for manures and improvement of the soil of all kinds, and for temporary pasture. Every other improvement, such as adding to buildings, making roads and fences, making market gardens and doing drainage, requires prior notice and often prior consent under pain of forfeiture of compensation.

I ask the House to look at the First Schedule to the Agricultural Holdings Act of 1931. In Part I of that Schedule there are nine categories of improvements, for all of which, before the work is begun, the tenant must obtain the prior consent of the landlord in writing, without which he receives no compensation whatever. What are those categories? The making of gardens, the planting of orchards or fruit bushes, protecting young fruit trees, making of embankments and sluices against floods; the erection, alteration or enlargement of buildings. The very first is the erection, alteration or enlargement of buildings. So the new holders will have no claim whatever to any compensation for any such improvements unless they can wring from the Department—which will be pre-occupied with its obligations to the Treasury to show a three per cent. profit on the groups of holdings—written consent to these improvements.

I ask the House to look at Part II of the same Schedule, improvements which must be notified to the landlord before they are begun. They include the provision of electrical equipment other than moveable fittings and appliances. The Secretary of State made great play in his speech on the Financial Resolution with the improving spirit of the smallholder whom he visited, who had electrical appliances on his eight or nine acre holding. Then there are the repair or renewal of embankments and sluices against floods, the reclaiming of waste land, the making or removal of permanent fences, roads and bridges and drainage. Drainage is one of the improvements which require notice, and the new holders will have no compensation unless they give such notice. The ordinary thing is that a smallholder goes to a field to work on the land and prepares it for a crop. He notices a patch which is wet and which can be improved by putting in a drain here or there. But let him beware. Before he takes any steps to do that let him go to his library and get down this book, and let him look up the First Schedule, Part II, and he will find that unless he solemnly sits down and writes a notice to his landlord he will forfeit all claims to compensation.

Again, if he wants an embankment or sluice to protect him against floods he must get the consent of his landlord under Part I of the Schedule. If he wants to repair a sluice or embankment he must give notice, and if he has only given notice when he ought to have obtained consent his claim for compensation vanishes. Turn next to Part III of the Schedule. Here are the improvements which the tenant can carry out for himself without asking consent or without giving notice. There are 11 of them. They all fall into those three classes which I have mentioned—manuring, improvement of soil with chalk or lime, removal of obstacles and temporary pasture. Even here let him beware of legal pitfalls, because there is one exception that I have not mentioned, one other category. It is repairs to buildings. It is under Part III of the Schedule headed: "Improvements in respect of which consent of, or notice to landlords is not required." Item No. 30 is: Repairs to buildings, being buildings necessary for the proper cultivation or working of the holding, other than repairs which the tenant is himself under an obligation to execute. Let him beware again. He must read on: Provided that the tenant, before beginning to execute any such repairs, shall give to the landlord notice in writing of his intention, together with particulars of such repairs, and shall not execute the repairs unless the landlord fails to execute them within a reasonable time after receiving such notice. Yet these things come under the heading, "Improvements in respect of which consent of or notice to landlords is not required." These are some of the difficulties with which tenants who are under agricultural holdings tenure are faced. Most of the tenants will be deterred by all these obstacles and conundrums from making these improvements at all. Those who do execute them may well find at the end of the day that they will fall to the Department without compensation to the holders at all. Contrast their position with that of the man who holds under the Land Acts tenure, who requires no consent from the proprietor, who requires to give no notice to the proprietor, who just does from day to day what it seems to be his interest to do, and who receives compensation from the Land Court without worry or bother or forms or formulae for any values which he has added to the holding.

It may be asked, do farmers, in practice, suffer from failing to get adequate compensation under the Agricultural Holding Acts. I answer "undoubtedly." Many tenants who have spent much money and labour in effecting genuine improvements have been deprived of any compensation on way-going, and the improvement has accrued to the landlord as a windfall because there has been failure on the part of the tenant to notify him or obtain his consent.

I put this question to a man who earns his livelihood in connection with the management of land. I asked him what number of claims were lost through failure to observe the necessary forms under the Agricultural Holdings Acts. He said that in quantity, though not in value, he thought 50 per cent. of the claims were barred. I do not make myself responsible for that figure, but it is clear that a large number are barred. On the whole, however, the grievance is not very great, because the majority of landlords deal fairly with their tenants. They either make some offer to the tenant or, if there is a dispute, it goes to arbitr- ation. But a Government Department cannot do that. They are bound by statute and by their obligations to the Treasury. The Secretary of State in the Debate on the Financial Resolution said that land settlement was a purely business proposition. If this is interpreted by the Department in a narrow spirit, woe betide the smallholder who has neglected to carry out his statutory obligations. Whatever the statute gives to the waygoing tenant the Department of Agriculture will pay, but where the waygoing tenant has not fulfilled the statutory conditions to the letter, they will reject his claim.

I give this illustration to the Secretary of State. There is a farm in Caithness the name of which I will mention to him privately if he wishes, but I am sure his Department knows of it, because it is a very recent case. In the case of this farm, on arbitration the Department stood firm on the Agricultural Holdings Act and refused compensation for all improvements for which notice had not been given. The man who gave me that information added that in his opinion these were improvements for which a private landlord would have been willing to make an offer. This is the Department to whose tender mercies, tempered by Treasury control, we are going to commit all these new holders. We are going to hand over these tenants, under the conditions I have described, to the unfettered bureaucratic control of a State landlord who is pledged to Parliament to exact from them rents, higher in relation to the cost of equipment than any landlord in Britain is able to exact to-day. That is the worst and most reactionary type of Socialism.

The Land Acts gave freedom to the tenant. They gave him the greatest possible incentive to put his whole zeal and resources into the improvement of his holding on the basis of security of tenure and compensation for improvements. It is admitted even by the Nairne Committee that the Land Acts have changed the face of the Highlands. Let the Government hold to the Land Acts, with the statutory right of the tenant to appeal to the Land Courts—a statutory right and not merely one conferred in the lease—with fair rents, freedom in improvement, compensation for improvements which add to the value of the holding and security of tenure. So much for the question of security and compensation.

I come to the third aspect of this problem, the question of rent, and here again it is important to have further and more precise information as to the Government's policy. There was a great deal of confusion of thought during the Debate on the Financial Resolution as between two conceptions of land settlement. There was my hon. Friend the Member for East Fife (Mr. H. Stewart) who wanted part-time holdings for industrial workers on the Dutch, Belgian and German systems. As I said then, that is a view with which I have every sympathy. It is a most attractive view. It has been adopted in Germany with great success, with the object of doing what the Germans call making their industrial workers crisis-resisting, so that when hard times come they have their house and their bit of garden ground, on which they can eke out a pretty good livelihood, with the help of such unemployment allowances as they may be entitled to.

The hon. Member for West Renfrew (Mr. Scrymgeour-Wedderburn), who made such an interesting speech on that occasion, leaned obviously to this interpretation of the Government's policy, and informed us that models had been prepared in the Scottish Office of houses similar to those let at 15s. a week in urban areas. This fits in very well with a scheme of constituting crisis-resisting holdings for well-paid industrial workers, who, if they have the misfortune to lose their employment, can continue to draw unemployment benefit and to look, if necessary, further for the payment of economic rents, to public assistance committees or to the new Unemployment Assistance Board, because that is what people are doing now who are paying 15s. a week in rent for their houses. When hard times come, they have somewhere to go to get help in paying such rents, but is that what is in the mind of the Secretary of State? Is he constituting part-time holdings, or holdings out of which a man and his family are expected to get their living; and if he is constituting some part-time holdings for industrial workers and some whole-time holdings, roughly how many of one and how many of the other? I think the answer to these questions is important, but even in so far as these holdings are to be part-time holdings, I do not think the analogy of the hon. Member for West Renfrew is altogether happy, because if whereas they should happen to be constituted in the park of Holyrood house or on Glasgow Green, you would expect high rents, the Government have said that these holdings would be erected 10 or 15 miles from a town, and no industrial worker will long continue to pay £24 of rent, plus £l or £2 of rates, plus maintenance and repairs, plus transport charges. What is going to be done about rates? Even under de-rating there will be a good deal to pay on £24 of rent. Presumably the occupier will have to pay the occupier's rates in addition to his rent, and presumably the rent will have to be such as will pay the owner's rates too, and such as to enable the Department of Agriculture to recover the owner's rates from the tenant, or else how will the Department show their 3 per cent. profit to the Treasury? Have they agreed with the Treasury, will the right hon. Gentleman tell me, that the owner's rates are to be a deduction from the 3 per cent. profit? As a scheme for part-time working it may, by its novelty, be attractive, as an escape from slum areas, for a few years, but it will not last long, and it will prove a costly failure.

If we are to regard this as a scheme for land settlement on wholetime holdings, what are we to think of the development of the ideas of the Secretary of State on the economics of the problem? He starts sceptical of the value of smallholdings at all, but he finishes by believing that a small holder can pay £3 or £4 an acre in rent, plus rates, plus maintenance and repairs. When the noble Lord the Member for Perth (Lord Scone) says that this is a somewhat high rent per acre for the small holder to pay compared with the large farmer, he says, "But remember what a fine house he is going to have, with a kitchen, bathroom and three rooms." But what has that to do with the yield that can be extracted from the agricultural unit. Nothing. If you put a palace on a smallholding it will not make it much easier—it will make it more difficult—to get a living out of it.

Smallholdings are not supposed to be so economic as large farms, and to com- plete the absurdity—for it really is nothing less—the farmers with much smaller rents, and I should have thought with as good houses as these new houses, are falling in nearly every county in Scotland into bankruptcy. It is ludicrous to suppose these small holders will be able to carry these burdens. The Government are putting forward this scheme in open defiance of the facts of the agricultural situation. It has generally been agreed by agricultural economists that no landlord, even in times far more prosperous than these, can look for more than ½ per cent. on his outlay in creating a farm. Does the Secretary of State dispute that? How many landlords in Scotland are receiving anything like 2½ per cent. to-day 3 Few, if any, and the Secretary of State and the Department of Agriculture know that perfectly well. When they go and buy a farm for one of these smallholding schemes, will they value it on the cost of erecting the buildings less depreciation? Certainly they will not. They will buy on so many years' purchase of the rent actually paid, and if they offer for equipped farms the amount of the insurance on the buildings, they will have hundreds of farms all over Scotland to choose from.

Few if any landlords are getting rents for an equipped farm equal to 3 per cent. or 2½ per cent. on their expenditure in equipping them, and the Secretary of State is ignoring the lessons of experience in attempting to standardise rent on the cost of equipment alone. I would ask the Secretary of State if this new principle is to be acted upon when renewal, repairs, replacements and improvements have to be provided for. Is the cost to be added to the rent on the 3 per cent. basis, or will the Government at that point abandon the attempt to secure 3 per cent. on their total outlay? The only sound basis for the rent of smallholdings, as all experience has hitherto shown, is the assessment of the value of the buildings for the holding as an agricultural unit, and that assessment should be carried out not by the officials of the Department as hitherto, but by the Land Court.

The fundamental fallacy of the proposed method of fixing rents is that the Government have adopted the cost of construction basis which bears no necessary relation to the agricultural rent which the subject can afford to pay—not that the Secretary of State will not get his tenants. Men drawn by the natural optimism of human nature, by the lure of a new adventure with a nice tidy home and pleasant surroundings, and driven by unemployment and the dislike of life in the towns, will take a big risk. They will rely upon a sympathetic public opinion to see that they are not made to suffer for the Secretary of State's miscalculations, and will troop into the Department's offices with their applications. The difficulties of the Secretary of State will start in three or four years' time, when he will find himself between a deep sea of smallholders floundering in debt and arrears and the devil of the Treasury holding him to his 3 per cent. bargain.

The Secretary of State rightly attaches importance to getting costs down. In speaking on the Financial Resolution I said, referring to certain answers which he had given to Parliamentary questions which I put, that his achievements in that respect were disappointing; but I tell the House frankly that I had overlooked a letter which I received only a day or two before that Debate took place, arising out of a somewhat long correspondence which I had had with the Secretary of State on this very subject. That letter shows clearly that the cost of constituting holdings has now been substantially reduced. The Secretary of State now estimates that the cost of constituting a holding of 47½ acres—the average initial net capital cost—would be £1,937, and the average valued net cost £791. In the case of a small-sized holding of 7¾ acres, the average initial net capital cost would be £765 and the average valued net cost only £239. These reductions are, of course, mainly due to the fall in prices and interest rates, but it would be ungenerous of us to withhold our congratulations, which I gladly offer, to the Secretary of State and the officials of the Department for the energy and resource which they have shown in taking advantage of these favourable factors. The truth is that never have conditions been so favourable to land settlement as they are to-day, and they may never be so favourable again in our lifetime. It is the more deplorable that the Government should be throwing away this magnificent opportunity on a paltry scheme of 300 holdings a year.

In his speech on the Financial Resolution the Secretary of State challenged comparison with the achievements of previous Governments. Let me take up his challenge. He said that the number of holdings created in the great effort after the War was about 275 per year. Under this scheme, if they could secure the land, he said, and the tenants which they aimed at getting, they hoped to create 333 holdings this year, or 1,000 holdings in three years. What are the facts about the previous efforts at land settlement? In 1921 there were 415 new holdings created; in 1922, 435; in 1923, 322. In those three years, 1920–21–22, there were 1,077 holdings created, and, what is more, 701 enlargements. In the three years 1921–22–23 there were 1,172 holdings created and, in addition, 719 enlargements. In the years 1922–23–24 there were 1,026 holdings created and in addition 538 enlargements. The Secretary of State's scheme will produce less even than in any of those periods which I have quoted. Let me ask another question of the right hon. Gentleman, on the subject of enlargements. There is no form of land settlement which is more important to the Highlands than enlargements. We want to get enlargements particularly of sheep outruns. Will those enlargements be of the order of from 200 to 300 a year, as they were in those years with which the Secretary of State invited comparison, in addition to the 300 new holdings which he proposes to constitute every year?

These achievements which I have quoted, and which are greater than those which the Secretary of State contemplates to-day, were made at a time when costs were from 50 per cent. to 70 per cent. higher than they are now. If land settlement can be carried through on a basis of 3 per cent. profit to the State, the Secretary of State ought to be talking not of 300 but of 3,000 holdings per year. The comparison which the Secretary of State has invited with the achievements of previous Governments is not to the advantage of the present Government's programme. Even if it were, why should the Government rest content with just managing to equal the achievement of some previous Government? The country expects something better than that of the Government, with their great majority and with public opinion demanding action, particularly in the direction of home development and land settlement. With the unique opportunity created by the low level of costs, the Government should be planning land settlement with greater vigour and accuracy than we can find in these proposals. They should be bringing forward something commensurate with the resolve of the Scottish nation to re-populate its countryside.

10.37 p.m.

Commander COCHRANE

The right hon. and gallant Gentleman the Member for Caithness and Sutherland (Sir A. Sinclair), in the cause of his speech, suggested that in his view part-time holdings would prove a costly failure to the State.

Sir A. SINCLAIR

The hon. and gallant Gentleman must allow me to correct that. I said I was in favour of them, and I said that I agreed with the remarks made by the hon. Member for East Fife (Mr. H. Stewart) on a previous occasion, if it were intended to erect part-time holdings on that basis.

Commander COCHRANE

I think that I am within the recollection of the House as to what the right hon. and gallant Gentleman said. I believe he said that if this scheme were used to provide part-time holdings, they would prove a costly failure to the State. I was going to quote what he said on a previous occasion, but if I am to understand that I have not correctly taken up his point of view, I will not do so, because naturally I accept his correction. In another part of his speech he dealt with land tenure, and he drew a lurid picture of what might happen to the holder of a five-acre holding, because if the holder wished to get possession, he would have to inform the landlord before the construction of bridges or roads. I thought that the right hon. Gentleman was doing a little less than justice to the intelligence of this House. We are dealing with very small holdings in this Bill, and to say that it is a hardship on the occupier that he should inform the landlord before he constructs bridges or roads, is not relevant to the question before the House. I would like to go back to the question of part-time holdings, which is of tremendous importance.

Sir A. SINCLAIR

I understand that the Bill is not confined to small holdings. The Secretary of State, in his speech last night said—and in fact this is in the White Paper—that all settlement, including Highland settlement and the fairly large settlement of family farms, is to be conducted on the same basis.

Commander COCHRANE

The right hon. and gallant Gentleman might be correct, and to the extent to which he is correct I am wrong. About that we need not dispute. Before I come to the subject of part-time holdings, which I say is of some importance, I should like to ask a question in regard to the purpose for which this fund can be used. The Secretary of State will, I think, be aware that at Old Kilpatrick there have been very interesting schemes in existence for some time. The first was one of plots of about 10 to the acre, of which there were over 100. About a year ago, with the assistance of the Board of Agriculture, it was possible to start one-acre plots, of which at present there are 10 or a dozen. But it has been impossible to stock those plots. There is one instance of a man who had a plot of one-tenth of an acre, and who has been able to get one of these one-acre plots, on which he wishes to rear poultry. He has been unemployed for some years, and has no financial resources of his own. Indeed, in this particular case, he started to stock his one-acre holding with a clutch of 14 eggs given to him by a friend. He then made himself an incubator, with a lamp made out of old tins, and he is now trying to stock his holding, but hon. Members will appreciate that it is going to be a long and weary process. I wish to ask my right hon. Friend whether it is possible in cases such as this, of unemployed men who have now either small plots of a tenth of an acre or one-acre plots, to help them to stock their holdings, so that they may as soon as possible do something to support themselves?

My second point is a similar one. When it comes to choosing occupiers for these new holdings, will my right hon. Friend undertake that these men, who have proved by their personal exertions their desire to be holders, shall have an opportunity? Of course, I am not asking him to pledge himself to any particular individual or anything of that sort, but I would beg him, in view of the great exertions which these people have made, to give an assurance that they will not be ruled out merely on the ground that they have not the amount of cash which is generally considered necessary. If I may put it in this way, I think that the will to make a success of a holding, which these people have proved that they have in abundance, ought to be taken into account as equivalent to £100 or £150 in cash; and I hope it will be possible to do that.

I would like now to come back to the question of part-time holdings, or rather, to the question what is the purpose of this Bill. I think we must consider it in relation to the general condition of things in Scotland. We have a depopulated countryside, and we have overcrowded towns. Those are the two principal factors which must be taken into account in considering what we should try to do under a proposal of this sort. There is the further factor that, while our views may differ as to the extent to which the introduction of machinery actually throws people out of employment, there cannot, I think, be any doubt that the introduction of high-power machinery has the inevitable effect of increasing intermittent or irregular employment. I would like very much to know whether the Government, with this scheme, are merely trying to continue a long series of attempts to create agricultural smallholdings, or whether they have in mind something greater and, I think, more useful.

If these are to be purely agricultural holdings, certainly after a period we shall be 1,000 holdings better off, but I think we shall have lost a great opportunity. These holdings, as I understand it, are to be created near towns, and, if they are to be purely agricultural holdings, I think that, instead of doing anything to solve the general problem with which we are faced in Scotland, they may tend to make it even more difficult of solution. If you set up these purely agricultural holdings, as it were, in a belt round a town, you are saying in effect to industrialists employed in the town, "That is your area. Stay in your crowded conditions. It is true that we are setting up smallholdings round the town, but they are nothing to do with you. They are purely agricultural." I firmly hold the view that the rigid demarcation between agriculture and other productive industries has been one of the greatest curses of our country for the last 100 years or more, and I believe that in this Bill there is a great opportunity to do something to break down that rigid division. If it were a fact that in productive industry-to-day there was full time and regular employment, I, of course, agree that the argument that I am putting forward would have so much less weight, but I do not think that anyone would suggest that that is the condition that we have to-day.

There is the other consideration that the amount of land available is limited. I am not now thinking merely of land close to the towns, because I do not think it is, for the purpose of marketing agricultural produce, necessary to limit yourselves within the immediate vicinity of a town, but, if you take the whole of the Lowlands, and such part of the Highlands as are similar to the Lowlands, there is only a limited amount of land suitable for intensive cultivation. The problem with which we are faced is, in view of the conditions which we know to exist, how we can make the best use of that land. In productive industry to-day it is exceedingly difficult to give regular whole-time employment. In agriculture it has been difficult in the past, but if we set up these purely agricultural holdings, we shall not be employing the largest possible number of people in the production of foodstuffs, which in itself is desirable, and at the same time we shall be refusing to do anything for those people engaged in productive industry whose need to-day is so very great.

We have all recently read moving accounts of the state of affairs in Durham, which is called a derelict area. We have areas of that kind also in Scotland, though perhaps not to the same extent. I notice that, when a solution is put forward for a derelict area, it is suggested that new industries should come in. An appeal is made even for small industries to come in. I think that is obviously the only way out of the difficulty. If we are to prevent a recurrence of the conditions which now obtain in Durham, is it not clear that we must prevent the population of any particular part of the country being dependent for their whole livelihood on a single industry? If that is to be so, it is essential that we should enable as many people as possible to have a share in the productive industry of agriculture. I mention that for this reason. Recently the Government have intimated to the steel and iron industries that they should reorganise. No conditions have been laid down, but conditions were suggested in this proposed reorganisation which would lead not only to a centralisation of the production of raw steel but also to a corresponding centralisation of those far more numerous industries which are dependent on the raw or semi-finished steel. Then all the efforts of my right hon. Friend would be entirely useless, because instead of dispersing our industry and giving our people an opportunity to be engaged, as they must in these days be, in part-time productive industry and agriculture, we should be making that state of affairs more difficult. That is why I have mentioned this question of the derelict areas and the reorganisation of the steel industry.

I would appeal to my right hon. Friend to give an indication of the intention of the Government in this matter. I hope that it will be possible for the Government to say that in their view we must do all we can to give as many people as possible, whether they be engaged in productive industry or occupied in any other way, an opportunity of obtaining some part of their income from agriculture or from some other source which is not governed by the same economic circumstances as those which govern the source from which they get the main part of their livelihood. That is of enormous importance. I believe that this Bill gives an opportunity for giving effect to that policy; I believe that the country is willing to consider such a policy, and I most sincerely hope that my right hon. Friend will be able to give some encouragement to the view that this is the intention of the Government.

10.53 p.m.

Mr. HENDERSON STEWART

I am very glad to hear support for the suggestions I offered to the House a few days ago from my hon. Friend on this side and my right hon. Friend opposite. The present scheme does not, of course, meet at the present time—nor is it intended to meet—the need for part-time holdings. In my previous remarks I was stating my view on the general position of these small-holders. Facing, as one must face, not only the possibility but the certainty of the increase of leisure and the shortening of hours it is inevitable that we should tackle this problem of how to create constructive leisure. This, I contend, is one method: by providing these part-time holdings.

During the Debate on the Financial Resolution I ventured, in about four minutes—which was all the time available—to express approval of the general principles of the Bill. Since then I have made it my business to examine with great care some of the actual holdings which my right hon. Friend has made in the last year or two—some of those, in fact, with which this Bill deals. I come back to this Debate more than ever convinced not only of the necessity for this Measure but of its full justification. Six miles from a great industrial centre I have seen, in the course of the last few days, holdings already created and others being created. I have examined the men's accounts and have seen their methods of cultivation. I wish that all hon. and right hon. Gentlemen could see those conditions for themselves. Especially do I wish that English Members of Parliament could go there, because, sooner or later, England will have to face and conquer this same problem. We in Scotland are acting merely as a pilot engine. The matter has to be approached in a far bigger way in England in the near future. If hon. Members could see those holdings now and see their success they would not be content with speaking in terms of hundreds; it would be a question of thousands, and tens of thousands. I am putting a case which is not very dissimilar from that of the right hon. and gallant Gentleman the Member for Caithness and Sutherland (Sir A. Sinclair), but which, I hope, is a little more gracious to the Government and recognises more readily the big steps my right hon. Friend the Secretary of State for Scotland has taken.

On these smallholdings of five, six and seven acres homes are being built for the men and their wives and families, where their children can live under comfortable conditions and enjoy a healthy life, and where they can all create within themselves the precious gift of independence which it is not possible to find so easily in the towns. But apart from that these men are actually making a profit. I know of this, because I went into the facts and fully satisfied myself. Men who were idle two years ago are now working. Families, huddled to- gether in town tenements in 1931, are now living in the countryside. To meet these people and to see their holdings has been one of the most cheering experiences I have had for a good many years, and I have returned more than ever convinced of the soundness of the general objects of this proposal.

But there are two matters in regard to the Bill on which I feel less satisfaction, and to which I should have referred previously had there been time. The first is with regard to the scope of the Bill. It is intended to create 1,000 holdings in the next three years. With the greatest respect to the right hon. Gentleman, and recognising the fact that he has broken through the walls of prejudice in the Treasury and elsewhere, 1,000 holdings in the present conditions of the country are quite inadequate for Scotland. I say that in the most helpful spirit. Yesterday I saw settlements of between 30 and 40 smallholdings of this kind. These smallholders are literally besieged nearly every day of the week by miners, artisans, and industrial workers from towns in the neighbourhood asking how such holdings could be obtained. I am advised that in that single district alone there are at least 500 men who would take holdings to-morrow if they were available. That is in one district alone. One knows that on the shelves of the Scottish Office there are some 5,000 unsatisfied applications for holdings. I say that there are 10,000 men in Scotland at this time with capital and experience ready to take on holdings if they were there for them to occupy. Why confine this scheme to 300 a year, or a thousand in three years? We are not justified in saying that we must go slow to see how this particular scheme is going to work. The Department of Agriculture in Scotland has been working this scheme for two years. It began during the regime of my right hon. Friend the Member for Caithness and Sutherland. It has been working for 24 months and working exceedingly well.

How much more test do we want? How many more years are we going to wait until we reach a state when we are automatically or sufficiently satisfied that it is a success? The right hon. Gentleman must know as well as all of us that it is now that these holdings are needed. It is now that money is cheap, building is cheap, and land is cheap. I agree with my right hon. Friend the Member for Caithness and Sutherland that such an opportunity may not occur again. In the most helpful and constructive spirit I suggest to my right hon. Friend the Secretary of State that now is the time to prepare a scheme for something greater and not for a comparatively small number of holdings like this.

The Secretary of State said that no vast scheme of small holdings had ever been a success. That may be right or wrong. But he cannot call this a vast scheme. I know that it is a very good scheme and I recognise it. I have expressed more than once my gratitude to the right hon. Gentleman for what he has done, and my recognition of the advance he has made, but I do ask him to do more than he is doing in this scheme. In Germany I understand they are talking about settling 4,000,000 people. That is a vast scheme. A thousand holdings is not a vast scheme. I should like the regime of my right hon. Friend to be more successful than that of any of his predecessors, not only because I am on the side which supports him but because I believe that he has this problem at heart. I want the Government which I am supporting to be a great success. There is a magnificent opportunity now to do something really big. It is an opportunity which no previous Government has ever had. The conditions are infinitely more favourable. We have got over the original financial crisis, we have buttressed the walls, and I ask my right hon. Friend to take his courage in both hands and to instruct his Department to make plans for the creation of 5,000 new holdings in the next five years. I am certain that I speak for the whole House when I say that a proposal of that kind would obtain the vigorous support of the House. There might be a few critics like my hon. Friend the Member for Perth (Lord Scone), but the House would carry such a scheme, because we want an imaginative and courageous policy at this time.

The second point is in regard to the machinery of this scheme. First, about the houses. The hon. Member for West Renfrew (Mr. Scrymgeour-Wedderburn) described the new houses as excellent, attractive and very fine. I understand that he was talking after a visit to the model houses in the Scottish Office. I have not had an opportunity of seeing those model houses, but I have visited new houses that are actually being built under the scheme of smallholdings. They are very attractive from the outside; they look nice; but I wish they were more commodious. You are charging for them 3 per cent. on the capital cost, and yet they are definitely inferior to those built on smallholdings under the other landholder system at the present moment. They are less convenient, and more cramped for space. I suppose that they are up to the standard required by the public health authority, but I should say only just up to the standard, and I hear that one local authority is at least questioning the standard of these new houses. Why should they be below the standard of houses on other smallholdings across the road, and below the Department's own standard? I understand that there will be a saving of £40 or £50: is it worth it? Ought not the Government, instead of being on the border-line of public health standards, to be above it, in advance of the standards? They should set an example to all local authorities in Scotland. I hope that the right hon. Gentleman, who I know is anxious for the success of this scheme, will give it further examination and see if he cannot remove what is a blot on it at the moment.

Sir A. SINCLAIR

I am reluctant to interrupt the hon. Member, but his speech is interesting. When he was visiting these houses built under the Agricultural Holdings Act and under the Land Act, did he inquire the rents?

Mr. STEWART

I did, and I can give them to the right hon. and gallant Member.

Sir A. SINCLAIR

Can the hon. Member give them now?

Mr. STEWART

I have not the figures with me. I do not think that it affects my point. I am not competent to speak of the relations of the Scottish Office with the Treasury, although in years gone by one came to the conclusion that they were not very happy, but I wonder whether it is not possible to obtain for these smallholding houses some measure of the subsidy which is given to other kinds of houses. This new smallholdings settlement scheme is different from anything in the past. Other schemes have all been subsidised by the State as to land and equipment. This scheme is different, and it is not apparently subsidised to the extent of a single halfpenny.

Sir G. COLLINS

It is subsidised to a degree.

Mr. STEWART

My right hon. Friend misunderstands me. You are here charging the smallholders 3 per cent. on the total capital cost. That is going to give a clear return to the State. I cannot see the Treasury losing a single halfpenny here. It is a new departure. In these special circumstances I wonder whether we cannot obtain for these houses some part of the Scottish housing subsidy. I cannot understand why a roadman's cottage on one side of the highway should receive a subsidy and the smallholder's cottage on the other side should receive none. You are dealing with precisely the same class of person. I imagine that if some kind of subsidy could be obtained it would just about equal the extra cost that would be needed to bring these houses up to the old and good standard.

As to tenure, again I hope that my right hon. Friend the Secretary of State will not think that I am speaking in any unfriendly spirit. I am speaking with the sole intention of making this scheme not only popular but workable and successful. This new holdings scheme is to be on the basis of the Agricultural Holdings Act. When the Opposition objected to that the other night the Secretary of State said, "Oh, yes, but the holders will have recourse to the Land Court at the end of seven years." Again, with great respect, that is not any answer. Any tenant farmer in Scotland can go to the Land Court, if he wishes, under the 1931 Act. So that there is nothing new, no extension at all. The Bill is only offering what the present Agricultural Holdings Act offers now to any agricultural tenant.

Captain ARCHIBALD RAMSAY

The argument on this side was not that this was not new, but that the tenant was to be put in an inferior position.

Mr. STEWART

I have given some study to this problem as I am sure my hon. and gallant Friend has, but my contention is that under the Agricultural Holdings Act smallholders do not, and cannot, possibly obtain the rights they have under the Landholders Act. There is no answer to that proposition. The Land Court, if employed in that way, is going to act only as arbiter just as any unofficial arbiter would act. I cannot understand why the Secretary of State refuses to give these holders the old tenure. I wonder what is in his mind, what is behind his mind. I wonder why he chooses to reverse the legislation and the custom in Scotland for smallholders for the last 30 or 40 years.

It is no use saying that the Nairne Committee recommended it. The only man on the Nairne Committee who knew anything about the smallholdings system reported emphatically against a change of the system. Therefore the Nairne Committee means nothing. The suggestion that this landholders' tenure is difficult to work and is not understood by the smallholders in Scotland is so much nonsense. There is nothing difficult or obscure about it. If you go to one of these smallholders he does not talk in terms of two rents and three rents, and so forth. He simply states the amount, and there is no difficulty about the matter. I denounced the Majority Report of the Nairne Committee when it was published, and I denounce it now with still more emphasis.

What objection can there be to applying the old system to these new proposals? It cannot be with regard to the fixing of the first rent, because it is the Department of Agriculture which fixes the first rent, and the Land Court has nothing to do with it. Nor can it be with regard to security. It cannot be that the old landholders' system is going to give the men too much security, because the Undersecretary assured us that those holders would not be ejected in any circumstances. Neither can it be that the landholders system prevents the eviction of the incompetent tenant. Under the old system you could and still can, eject an incompetent tenant any time by applying to the Land Court and proving your case. It cannot be with regard to compensation for improvements, or the fixing of the second rent or the third rent. We have been assured that there is going to be the right of recourse to the Land Court. On no one of these grounds—and I cannot imagine any other—is it possible to defend this departure from the established tenure of Scottish smallholders. Why is the system altered? What are the real grounds for doing so? The old system is an admirable one and it took years of effort to get it. In many respects the Scottish landholders system is the envy of the world. It is the envy of many tenant farmers in England and in Scotland too. It provides three indispensable conditions of good farming—security of tenure, fair rent and fair compensation for improvements. Because of these three indispensable conditions it provides the most important incentive to improving farming, improving the home, and improving the economic conditions of the man and his family. The predecessors of my right hon. Friend spent some of the best years of their lives trying to get this right for the smallholders of Scotland. Do not let my right hon. Friend do anything which will cause their efforts to have been in vain. Do not let the National Government spoil its reputation by breaking the cherished right of poor men, who are fine citizens of Scotland.

11.19 p.m.

Sir ROBERT HAMILTON

I wish to associate myself strongly with the protest which has been made against this Bill being taken at such a late hour. The most appropriate comment that can be made on the position is that here we are at almost half-past eleven o'clock, still asking for information as to the purport of the Bill. The hon. and gallant Member for Dumbartonshire (Commander Cochrane) made that the purport of his speech, and my right hon. Friend the Member for Caithness and Sutherland (Sir A. Sinclair) asked various questions on the same point. I also wish to ask a few questions, because it is a very regrettable state of affairs that on this, one of the major Measures of the Session, promised in the King's Speech, we are still not knowing what is intended under the Bill. The Bill itself is the most innocent-looking little Measure that can possibly be imagined, a Bill simply for paying a certain sum by the Treasury into a certain fund, but we know that behind that innocent little Bill there lies a very great departure of policy. Will the Secretary of State be good enough to tell us, as far as he can, in what respect this money will be applied to the various categories of holdings which we have been discussing? There is the family holding, in the Highlands; there is the part-time holding, to which the hon. Member for East Fife particularly referred; there is the smallholding of four or five acres in the neighbourhood of big towns; and then there will be the very important question of enlargements. In some parts of the Highlands the question of the enlargement of existing holdings is even more important than the creation of new holdings, and there is also this to be said about enlargements, that for the sum that is necessary for an enlargement the advantage in many cases is far greater than it would be if spent on the creation of a holding.

I was very glad to hear my hon. Friend the Member for East Fife (Mr. H. Stewart) speak so strongly on the contemplated change of tenure, and I would like to ask the Secretary of State if he will tell us what is really the reason for the change. I do not know if I am right, but I think I am, in believing that the right hon. Gentleman was in the Parliament which passed the 1911 Smallholders Act for Scotland, and he knows what a fight it was in those days to ensure the passage of the big programme of land settlement and land holdings and this question of land tenure, smallholders' tenure—how fights were carried on with another place—and I would ask him in all seriousness what is the reason for this change now. We know that it has not come from the farmers of Scotland. The National Farmers' Union themselves say they would like to see this system of tenure extended throughout the whole of Scotland, and we have seen by experience that the three great points which are the pivots, so to speak, of this tenure are those which have tended to make smallholdings in Scotland a success, because it is security of tenure and compensation for improvements, with a right to go to the land court to fix a fair rent, that bring out the very best there is in a man to make his holding a success. That being so, and that having been proved by a generation and more of experience, we really want to know some serious reason for the departure from that old procedure, and whether the right hon. Gentleman considers now that it would be more in the interests of the State or of the holdings; or is it because it is more easy for the Department? Those matters were gone into very thoroughly by my hon. Friend opposite, and he showed that there was absolutely no reason why the system of tenure to which we have been accustomed should not be continued.

It is not a matter of the equipped holding. A great many people have an objection to equipped holdings, an objection which I have not got, and in some cases an equipped holding is undoubtedly the most suitable holding to put a new holder into. But that is no reason why the new holder of that equipped holding should not be in it with the rights of tenure that the land holders are accustomed to in Scotland. The Land Court as an arbiter, as a balancer in disputes between landlord and tenant, as an arbiter with unrivalled experience, commanding universal respect, is a big thing to be put on one side, and I am sure that the right hon. Gentleman would regret if the uses of the Land Court were not availed of and his scheme suffered in consequence. It is true that he told us in his speech the other night that all right of access to the court and the right of compensation would be included in the lease, but he knows perfectly well that that is a different thing from a statutory right. He might include certain covenants to-day for one set of landholders which might not be included by his successor at a later date. The rights to which he referred were the rights of access to the Land Court and the rights of compensation under the Agricultural Holdings Act and not under the Smallholdings Act, where the rights are on a much higher scale.

We press the right hon. Gentleman most strongly to give us some reason for this departure of policy. This matter has never been discussed in Scotland. It has been brought before the House of Commons before it has been realised in Scotland that there is this big departure in policy. We had a late Debate the other night on the Financial Resolution, and we are having a late Debate again to-night on the Second Beading of the Bill. I am sure that if this matter had been discussed in Scotland and it had been realised there what was the intention behind this Bill, we should have had a great many protests before now. As it is, the Government, without any reason given, are embarking on this new departure in spite of the advantages which we know accrue under the old system.

The question of rent has been referred to. I should like to ask the right hon. Gentleman whether the 3 per cent. to which he referred is to be calculated merely on the equipment of the farm or on the equipment plus the cost of the land. That is a matter which is not yet clear. In any event, I hope that the right hon. Gentleman will drop this question of 3 per cent. right away. Once the Department gets it into its head that 3 per cent. is to be collected on the equipped cost of the holding, it will try and get it. There is no doubt about that, and I am not sure that it would not be a sort of obligation and a duty on the Department to do so. If the basis on which the holding is being farmed is that 3 per cent. is to be recovered, the Department may, where the tenant has given the necessary notice for compensation, act as an ordinary landlord, and it will be for the Department not to give way but to stand on their rights; and the Treasury would encourage them as the watchdogs of the taxpayers' money and try and get that 3 per cent. by hook or by crook.

I beg the right hon. Gentleman to give up the idea of the 3 per cent. He will not get it in any event, and it is much better that he should drop the idea at once and see that the Department lays itself out not to collect the 3 per cent., but to make a success of these smallholdings and to see that there is as little friction and as little dispute as possible between them as landlords and the tenants. We know how easy it is for these disputes to arise when there are repairs or small additions to be made and questions of who is to do this and who that, and what is to be the cost. There, again, I hope the Department will get out of their minds that the 3 per cent. has got to be recovered. If they keep the 3 per cent. in their minds it will be a handicap to the success of the scheme. It is not a large scheme, only a very small one—some 300 holdings a year for three years, and that at a time when the whole nation is calling out for something on a very much bigger scale. The Secretary of State would get the backing of the whole House and the whole nation if he went in for something on a national scale. He said he was afraid of doing anything large, anything which savoured of being rash in land settlement. We do not want him to do anything like that, but, at the same time, to grapple with land settlement in a national manner. It will be a good thing if these 300 holdings are created, but the needs of the nation being what they are, and now that we have the advantage of cheap money I beg the right hon. Gentleman to consider land settlement not in terms of tens and hundreds but in terms of thousands.

11.33 p.m.

Lord SCONE

Were it not that I feel greatly concerned about this question I should not dream of inflicting myself on the House at this late hour, and I shall be considerably briefer than some of those who have already spoken. Before I make my main point I have one observation to address to the right hon. Gentleman the Member for Caithness (Sir A. Sinclair). He has been grumbling about the lack of time, but whom has he to thank for that, except himself and other Liberals on this side of the House. He and another hon. Member occupied 50 minutes and 30 minutes respectively, and, without wishing to be in any way offensive to the right hon. Gentleman, I suggest that most of his speech was taken up with committee points.

Mr. HENDERSON STEWART

I would call to the mind of the Noble Lord that while he occupied some 20 minutes in a previous Debate on the same subject I spent only four minutes.

Sir A. SINCLAIR

The point is not the length of an hon. Member's speeches but getting the subject thoroughly ventilated. There are important principles at stake and they ought not to be discussed in the middle of the night, but if the Government insist on taking this Order at a late hour I am not going to be deterred from putting my views before the House. They were not views on committee points but on questions of principle—this important question of the 3 per cent. profit, the question of rents, the question of security—

Mr. DEPUTY-SPEAKER (Captain Bourne)

The right hon. Gentleman has already addressed the House at very considerable length and has exhausted his right to speak, and he must not make another speech.

Sir A. SINCLAIR

On that point of Order. Is it not a fact that if an hon. Member makes a personal reference to another hon. Member and the latter gives way that the hon. Member is entitled to reply on that personal reference? It was only on that personal reference that I was replying, and I say they were not committee points but points of principle.

Mr. DEPUTY-SPEAKER

The right hon. Gentleman is quite entitled to reply that they were not Committee points, but it seemed to me that he was starting a second speech.

Lord SCONE

I shall not discuss the actual value of the right hon. and gallant Gentleman's speech. As to the observation made by the hon. Member for East Fife (Mr. H. Stewart), if he will consult the OFFICIAL REPORT, he will see that I spoke not for 20 minutes, but for 10. If those who have raised these points could have their way, all the agriculturists in this country, including the smallholder, would have the disadvantages resulting from a Free Trade system. If the fiscal system advocated by the right hon. Gentleman the Member for Caithness and Sutherland were still in operation, the tenants of these holdings would be bankrupt and starving within a year. I wish to make a point with regard to rent. With great respect to the Secretary of State, I feel that he has brushed aside my objections rather too lightly. He is trying to make out that it is all a question of a new house. That has nothing to do with the matter. These new landholders are not to make their living out of their houses, but out of their land. While I was in Scotland last weekend I worked out figures relating to our problems. At this late hour I am not going to deal with them in detail. They showed that if holdings similar to these were to be set up, the gross return, not the nett, would be roughly 1½ to 1¾ per cent. The nett rent, which is the equivalent of 3 per cent., which the Government hope to get, would be less than ¾ per cent. to 1 per cent. on all agricultural land. The Government expect to get 3 per cent. nett return. That means that, gross, it will have to be 4 per cent. or more, and that means rents up to £32 or £35 for the landholders, rents raised £5, £8, or even more. That is a factor which we cannot overlook, because it would undoubtedly inflict unfair burdens upon this new class of landholder which we are proposing to set up. I know that the Under-Secretary—who I regret is not on the bench at this moment—is almost fanatical in his devotion to the smallholder, and I respect him for that devotion, but his views are not shared by most of the agriculturists of Scotland.

I do not want to do anything which will stand in the way of getting more people on to the land, but I must confess that this scheme seems to me to be of a rather perilous nature. Some people may ask: "Does it really matter if these holders have to pay £5, £10 or £15? It is an economic rent." Such sums may not be much to the large farmer for the year, but they are a great deal to the struggling smallholder. One must think not of £5, £10 or £15, but of 4s. or 6s. to the man who is likely to be earning only 40s. per week at the best. While I commend the Government for making a spirited attempt to deal with the land problems of Scotland, I hope that they will, before the Bill comes downstairs again, give up all hope of extracting 3 per cent. from the landholders who would have an intolerable burden placed upon them.

11.39 p.m.

Sir G. COLLINS

We have had again to-night a full and comprehensive Debate. I will endeavour to answer each and all of the questions put to me by my right hon. Friend the Member for Caithness and Sutherland (Sir A. Sinclair). Let me remind the House that if I do not answer fully, sufficiently or accurately, in the opinion of hon. Members, any questions that have been put to me, there will foe two or three further stages. I think I am accurate in saying that, when the Question on Clause 1 is proposed in the Committee, the whole Debate on this question can foe raised again. My Noble Friend the Member for Perth (Lord Scone) has expressed once again his real nervousness as to the ability of the tenants to pay the rent that we ask for. Naturally, I cannot tell what these men will be successful in paying in years to come; I can only judge the situation as I have found it last year and this year; and from all the inquiries that I have made, as I told the House the other night, I am convinced that the rents asked for under this Bill will not cripple an individual from making a success of his holding. The rent is but one factor in the economics of these holdings.

My hon. Friend the Member for Orkney and Shetland (Sir R. Hamilton) asked me various questions, and also referred to the question of dropping the interest. It would be very easy and pleasant for any Minister of the Crown to stand here, thinking only of the tenant, and drop all thoughts of interest, but I should be false to the duty which falls upon me as regards the spending of the taxpayers' money in future years if I did not try to deal fairly as between the interests of the taxpayer and the interests of the tenant. If experience showed that the rents which we are asking for were excessive and burdensome, then, I submit, the scheme would fall altogether.

My hon. Friend the Member for East Fife (Mr. H. Stewart) thought that the scheme was inadequate, and took great exception to it on the ground of the tenure which we propose, as well as the inadequate nature of our proposals. I have never submitted or suggested to the House that this was a big scheme. All that I suggest is that it is a step forward, I hope in the right direction, and, if experience proves that the rents we are asking for under this Bill can be secured and paid, then future Parliaments may be enabled to build on the basis to which I am asking the House this evening to assent. My hon. and gallant Friend the Member for Dumbartonshire (Commander Cochrane) put to me one or two questions regarding the plots—

Sir I. MACPHERSON

May I ask my right hon. Friend one question, which is very important? I think he said, when we were discussing the Financial Resolution, that the rents, if they were found to be excessive, might be reviewed after seven years by the Land Court. That is exceedingly important. That provision is in existence under the Small Landholders' Act, and it would be well if these people could have the same privilege.

Sir G. COLLINS

I am grateful to my right hon. Friend for raising that point. I was proposing to deal with it comprehensively when I came to answer the several questions put to me by my right hon. Friend the Member for Caithness and Sutherland. Undoubtedly, at the end of seven years, the leaseholder under this scheme will be able to go to the Land Court and get the rent reviewed, and, therefore, there will be a fair deal.

My hon. and gallant Friend the Member for Dumbartonshire asked one or two questions about the plots. He asked whether we could not give further assistance to these plotholders. He will understand, however, that there is only a limited sum available, and, if that sum is utilised to assist some plotholders to a larger extent, then, unfortunately, we shall have less money for finding plots for other people. We have not found on the whole, though my hon. and gallant Friend may have found it in his constituency, that there has been so much difficulty in getting men with a little money to take these plots; the difficulty is rather in getting suitable land near the homes where these people live. If he has any particular case in his own constituency, we will endeavour to find land suitable for these people, for I am convinced that this scheme of a small plot of land near the house of a man who is out of work is not only of some economic advantage to himself but is of greater value in that it gives a man during his weeks and months of unemployment a real incentive to work on the land. I was also asked whether men working on these plots could be transferred in time, if they desired, to small holdings. If anyone at present working on these plots is suitable and is likely to succeed, his case will be favourably considered by the officers of the Department.

May I now pass to the main burden of the criticism advanced by the right hon. Gentleman? In answer to his first question, all the holdings in the Highlands will be settled in future as in the past under landholders tenure, but all the holdings of this kind in the Lowlands will be settled under Agricultural Holdings Act tenure. Then he asked whether the rents of any properties developed in the Highlands in future years will be on a 3 per cent. basis. No. There will be no change in the policy of the Department so far as rents are concerned. The 3 per cent. refers to the new type of holdings and not to holdings in the Highland area. Then he asked if the tenant will be bound for seven years. The answer is Yes, just the same as if he were a tenant under the landholders tenure, no worse and no better.

Sir A. SINCLAIR

Under the Land Act he can give up his holding.

Sir G. COLLINS

Not in the first seven years.

Sir A. SINCLAIR

He can renounce it at any time.

Sir G. COLLINS

I was asked as to compensation, whether a tenant would be any better or worse off under the Agricultural Holdings Act or Landholders Act tenure. I have studied the point and I am convinced that the old Landholders Act tenure created difficulties in practical working in that it created dual ownership, but under the Agricultural Holdings Act tenure, especially so far as compensation for improvements is concerned the interests of the tenants are better provided for than under the Landholders Acts. Under the Agricultural Holdings Act tenure the tenant, if he obtains the consent of the Department, is certain of compensation for improvements at their value to an incoming tenant as fixed by the Land Court. On the other hand, under the Landholders Acts the landholder gets the value of his improvements, fixed again by the Land Court, at their value to an incoming tenant so far as they are adjudged to be suitable to the holding. There is, therefore, real doubt in the mind of the tenant whether he will receive full compensation.

Then I was asked about bequests. The tenant may bequeath his tenancy to any person. I was asked a question about the break at the end of the seven years. At the end of the seven years, if the tenant wishes, he will go on, and if he desires to have his rent revised, he can go before the Land Court or an arbiter. Then I was asked a specific question about electrical equipment. The answer is that the provision of electrical equipment other than removable fittings or appliances is an improvement in respect of which the tenant must give notice to the landlord in order to qualify for compensation.

I was also asked whether we were intending to make part-time or whole-time holdings. My answer is that, side by side with the policy of plots for unemployed persons—that is, our scheme for those who are part-time working on the land—is our larger scheme, under which only whole-time workers are included. The hon. Member also asked me several questions about rent. All I can say is that during the last 18 months we have formed holdings on some three or four estates, in one of which there were 12 and in another 32 holdings. A large number of very suitable people applied. I know that the right hon. Member will say, as he has said, that they will not pay their rents to-day. We all respect my right hon. Friend; it is a fair debating point, but he cannot prove it. He will say that I cannot prove mine, but I can assure him from a close study of these men on the holdings in different parts of Scotland that it is true. My study may be inaccurate; the figures I have received may be wrong; the information given me by many of these people may be false. If, however, my study has been right, and if the information which these men have given me is at all accurate, they are able to pay to-day the rents which we are demanding.

Then my right hon. Friend said, "Surely this is the time of all times for the State to go forward with a large scheme for land settlement." Why? Because the people on the land under the present Government have some confidence that the Government are trying to safeguard their interests. Surely my right hon. Friend would allow that if, on the one hand, he stands for a policy of free imports, he cannot say in the same breath that this is the time, when the produce of the world is at the lowest possible price, for the State to put large sums of money into land settlement. He can have it one way or the other; he can say that the policy of free imports is justified, but he cannot twit me for not going forward with a large scheme of land settlement in these days. I know that he demands action and that the whole resources of the State should be utilised for the policy of public works and land settlement. This evening, in this small scheme, I am asking the House of Commons to face the economic realities of land settlement.

My noble Friend twits me and doubts its success. Time alone can show, but, first of all, we have endeavoured in this scheme to cut down our costs. I am grateful to my right hon. and gallant Friend for his kindly reference to the efforts of my officers. The costs have come down. We shall proceed, when the Bill is passed, to create these holdings, but in doing so, it would not be right, if faced with a heavy burden, that we should single out 1,000, 5,000 or 10,000 persons and give them an economic advantage over their fellow men. In the policy which we are submitting and asking the House to adopt, we are steering a middle course in endeavouring to secure that, with a reasonable return to the State, a new movement of intensive smallholdings around our large towns may be developed in the immediate future.