FEUDAL REFORM (SCOTLAND) (Hansard, 25 February 1969)

§ Mr. James Davidson (Aberdeenshire, West)

I beg to move, That leave be given to bring in a Bill to enable vassals, proprietors, &c., to require the redemption of feu duties; to limit the legal effects of feu charters; to make compensation on termination of long leases obligatory; to enable allocation of feu duty to be required; and for purposes connected therewith. On a previous occasion, the Secretary of State for Scotland declined to refer the predecessor of my proposed Bill to the Scottish Grand Committee to be considered in relation to its principle under Standing Order No. 62, but I hope that he will change his mind about this Bill, which is a much simplified version of the previous Bill. I hope that any criticisms which hon. Members had of its predecessor have been overcome. It was argued that the feudal system in Scotland is too complicated a matter to be dealt with by a Private Member's Bill. My answer has been to draft an even simpler Bill. It was claimed that the Government were already looking into the whole question of reform of the conveyancing system in Scotland. Maybe. But they have left themselves very little time for action. Unless legislation is initiated very shortly, it will be too late to get anything done in the life of this Parliament.

Scotland's archaic feudal system can obstruct development, exert financial pressures not far short of blackmail on prospective developers, and even overrule a local planning authority. Americans and Australians who have talked to me about the system are astounded that we still permit its existence in the 20th century. Europeans, who abolished it centuries ago, just think that it is comic.

Once upon a time, the Sovereign was the owner of all land. He granted it to vassals in return for goods and services, including military service. In the Guthrie Report of 1952 the Sovereign was said to be paramount superior of all feudal land in Scotland", while a proprietor, who is the same as a vassal under the feudal system, is defined as 'the person holding the estate at the lowest point in the vertical chain. 1283 To quote paragraph 10 of the much more recent Halliday Report: The technical language of the system … perpetuated from an earlier era, has marked psychological disadvantages today. The terms 'feudal', 'superior' and 'vassal' and the obligation to make payment of 'feu duty' in perpetuity ail tend to suggest to a proprietor that his status is inferior. It is evident that the use of those archaic terms detracts from a sense of full ownership …". But there is a lot more to it than words. Apart from being an anachronism in a property-owning democracy, and an immense complication in the legislation relating to conveyancing, the feudal system provides a "second planning permission" which may or may not be wisely used. It has been argued that the feu system makes building land cheaper by spreading the financial burden, but in practice building costs are higher in Scotland. The system merely adds to the cost. There is no deliberate lowering of the price of a house to allow for the feu duty.

In Europe, there is no such thing. The old Germans, as described by Tacitus, had no feudal system. It never took root in Norway. Under the ancient "odel" system, the Norwegians are a real property-owning democracy. In France, feudalism was finally abolished on 4th August, 1789, when feudal dues and services were made redeemable by purchase. All personal services, as distinct from dues on property, were abolished without compensation. What is more, no manorial dues had to be redeemed unless the landlord could show an original title to the land. How many of our feudal superiors could show such a title today?

Much of the land which is now in the hands of hereditary land owners was simply appropriated from the Church at the time of the Reformation or grabbed in the Highlands after the Heritable Jurisdictions Abolition Act, 1746. Where it was not actually purchased or taken by force of threat or reprisal, the land was granted by the Sovereign, who before the influx of Norman families from the South had no claim to the land, in return for sundry services.

Today, if the vassal or proprietor wishes to redeem a feu duty by a once-and-for-all payment, he has no right to do so. May I give one or two examples of how it works in practice? A company purchases a site, say, 1284 for building a whisky distillery. The purchaser obtains planning permission from the local authority and approval for a grant from the Board of Trade, but he may have overlooked the small annual feu duty payable on the site, because it is only the tip of the iceberg.

Beneath it there may be a mass of feudal conditions embodied in a feu charter. The feudal superior, who may not be the man who sold the land, sees the opportunity of making some money and refuses the purchaser permission to build on the ground that the distillery might destroy the amenity of the area. It may take several thousand pounds to persuade the superior to waive his feudal rights and overcome his aesthetic objections.

Take the man, just demobbed, who bought up some old Nissen huts situated close to a fine sandy beach and to a river estuary popular for sailing and fishing. By hard work and ploughing back the profits over a period of 20 years, he built up a valuable summer chalet business with excellent amenities. When he wished to sell and to purchase an annuity so that he could live in comfortable retirement in his old age, he was firmly held by the feudal superior. On the one hand, the superior could refuse permission for further development, thus putting a ceiling on the sale price of the property; on the other, under the terms of the feu charter, the superior could reserve the right of pre-emption and could come in and purchase the property at the highest price offered. Unless my proposed Bill is enacted, he stands to lose about half of his investment.

There was the similar case of a blacksmith who wished to expand his business into a light engineering works equipped to undertake all types of repairs to agricultural machinery and the construction of equipment such as snow ploughs, cattle crushes and steel trusses for the roofs of farm buildings. His working area was severely restricted and his buildings were archaic. He was proprietor of a piece of land suitable for development, but, although he obtained planning permission and Board of Trade approval for a grant, the feudal system provided an insurmountable obstacle. The feudal superior would not grant him a waiver. A development which would have provided a valuable service for the area, additional 1285 employment, and some reward for the blacksmith's enterprise was lost—at least, for the time being.

The present feudal system permits a racket which is to be recommended to the unscrupulous. All that is necessary is to find a piece of land with planning permission for the building of houses. For example, suppose a developer purchases 10 acres of building land with a feu duty of £20 per annum on it. He divides the land into 20 plots, builds a house on each of them and sells each house with a feu duty of £10. Finally, he sells the block of feu duties, now worth £200 per annum, as an investment for a capital sum of £2,000.

Not only has he made a profit from nothing in addition to anything he may make on the house, but he has left the proprietors of the houses with a feu duty in perpetuity and the purchaser of the block of feu duties with a "second planning permission" on the whole housing estate. In addition to annual interest of 10 per cent. on the capital, the purchaser, now the superior, has a chance of dividends in the form of waivers on fuedal conditions in relation to any further developments on the individual properties on the estate.

A parallel situation arises in the case of long leases, since no compensation is payable by the landlord in respect of any developments or improvements carried out by the tenants in course of the lease. The nearer the date when the lease expires, the higher the price the landlord can ask for redemption of the ground rent. So much for the restrictive effects of the feudal system in practice.

1286 The Bill does not seek to deprive individuals or companies of their investment. It has the simple aims of giving the feuar the legal right to redeem feu duty or multure by payment of a capital sum of ten times the annual payment, subject to certain rights of appeal; of invalidating any obstruction of planning authority permission by a feudal superior; of avoiding sub-infeudation and the malpractices arising therefrom; and of ensuring fair compensation to the tenant for any improvements on termination of a long lease.

Planning permission would be reinvested in the local authority, which is responsible to the community through its elected representatives. It would no longer depend on the whim of a feudal superior who may be good or bad, wise or unwise, but who, under the present system, is answerable to nobody.