§ 11.36 p.m.
§ Mr. Donald Stewart (Western Isles)
I am glad to have secured this Adjournment debate on behalf of my constituent, Mr. Donald Macdonald, of 13 Aird, Benbecula. In my view he has had extremely harsh treatment. By a Land Court order dated 14th April 1975, he has suffered a fifth resumption from his holding and the compensation offered in the form of development value is derisory.
For a man whose whole livelihood is based on stock rearing, the compulsory resumptions from his holding are intolerable and it is a gross injustice that he has not received compensation which would cover the loss he has suffered. His holding originally consisted of 4940 acres and a total of 29.42 acres have been resumed. He had to sell six cows last October due to the building work which is due to start. As a self-employed person, he cannot qualify for unemployment benefit and it is virtually impossible to find work in the area at the present time.
The Land Court in its order stated that if some of the money were applied to the installation of a water supply to another part of his holding, he would be able to continue to carry the same head of stock. He has stated to me that the water main is a quarter of a mile from the field and that an estimate for the work has been £3,000, which makes the suggestion quite impracticable.
The Minister has accepted that some land for housing in the Uists has been sold at between £2,000 and £2,500 per acre. He added in his letter of 3rd September 1974:This was, however, for small areas of land for individual housing sites adjoining a road and convenient for the necessary services. In valuing land the District Valuer must clearly take into account the cost to the developer of providing roads and services where these do not already exist.The point is that the piece of land in question does adjoin a road—indeed, it is bounded on two sides by roads—and the services are in close proximity. This factor 1131 has been clearly ignored by the district valuer in arriving at his valuation, and this raises the question of when the district valuer visited the site. My constituent is of the view that he did not do so. What is certain is that he did not make contact with Mr. Macdonald to say that he would be examining his land with a view to valuation.
Against the district valuer's valuation, which amounted to approximately £522 per acre, I submit the valuation of Mr. Malcolm Michie, a Fellow of the Royal Institute of Chartered Surveyors and a partner in a respect firm of chartered surveyors in Oban. I need not give the backup reasons for Mr. Michie's figures, since I have already submitted to the Minister a copy of his report. But, against the district valuer's figure of £522 per acre, Mr. Michie's opinion is for approximately £2,350 per acre, making a total valuation for the 6.42 acres of £15,000.
It is accepted that the compensation which a crofter receives on the resumption of his land is normally confined to his statutory entitlement under the Crofters Acts. Part of the area being resumed is being resumed on behalf of the Ministry of Defence. The Ministry has spent millions of pounds on various developments in Benbecula and South Uist, and it is wholly wrong that a crofter losing land should suffer financially and in his prospects of a living in a case where reasonable compensation would be a minuiscule part of the Ministry's outlay.
I do not blame the Ministry of Defence, because it did not carry out the negotiations. But, naturally, my constituent feels aggrieved when he compares the small figure at which his land was valued against the millions of pounds that the Ministry has spent in the area.
The landlord of the croft in this case is the Department of Agriculture and Fisheries, and the Minister has a direct responsibility because of his duties in the Scottish Office. According to his letter to me of 3rd September:In the case of the Secretary of State's estates however, we are operating within the spirit of our crofting reform proposals in anticipation of the necessary legislation and are giving crofters a share, on an ex gratia basis, in the market value of the resumed land as determined by the District Valuer.I do not think, in all fairness, that consideration has been offered in this case, 1132 and my constituent, with good reason, does not consider that he has had a fair deal. I ask the Minister to reopen the matter with the valuation office with a view to an equitable settlement and to correct a grave injustice to my constituent, Mr. Donald Macdonald.
§ 11.43 p.m.
§ The Under-Secretary of State for Scotland (Mr. Hugh D. Brown)
I am very grateful to the hon. Member for Western Isles (Mr. Stewart) for giving me this opportunity to reply to an Adjournment debate. Mr. Macdonald is lucky to have had his case presented so well and so fairly, and I am indebted to the hon. Gentleman for giving me advance notice of one of the points that he intended to raise. But I have to say straight away that I reject any allegation of harsh treatment of Mr. Macdonald by the Department or district valuer or anyone else.
It is true that I have not the advantage of having visited the site, and certainly I note that it might cost £3,000 to run a quarter of a mile of water supply in Benbecula. On the face of it, that seems a little excessive, but perhaps there are good reasons, and I am sure that the hon. Gentleman will accept the knowledge and experience of the Land Court in these matters. Since the suggestion was made by the court, I assume that it had knowledge of the possible costs. However, perhaps that is a point of detail.
As the hon. Gentleman said, we have had considerable correspondence about the case. He suggested—and he repeated it tonight—that an injustice had been done. But it can be claimed that the Government have acted not only fairly but generously, since the Secretary of State for Scotland is one of the few croft landowners who, despite the fact that there is at present no legal obligation to do so, are already sharing the development value of resumed land with their tenants. I thought that the hon. Gentleman might have made a favourable mention of that. But, first, I should like to go over the general background against which this case is set.
In July last year, my right hon. Friend the Secretary of State for Scotland intimated in the House his main proposals for the reform of crofting tenure which we shall be discussing tomorrow. One of these proposals was that crofter tenants 1133 should have an entitlement to an equal share with the landlord in any gain accruing from the sale or development of land resumed from crofting. In anticipation of legislation, the Secretary of State set an example to other crofting estate landlords by granting to his own crofting tenants, so far as this lay within his powers and on an ex gratia basis, such rights as they would be entitled to when the proposed crofting reform legislation was enacted.
Thus, when the former Inverness County Council and the Ministry of Defence approached my Department for land for housing and other purposes at Benbecula, my Department was able to offer to the six tenants involved a new and additional payment. Mr. Macdonald is the only one who seems to be in dispute. This was to be calculated on the basis that the tenant would be entitled to one-half of the difference between the market value of the land resumed from his croft less the statutory conpensation to which a crofter is entitled in such a situation in terms of Section 12(1) of the Crofters (Scotland) Act 1955 and the crofting value of the land. This seems to us to be a very fair division of development value as between crofting tenant and landlord and, indeed, the formula is not in dispute.
What is being claimed by the hon. Member and his constituent in this particular case is that the market value—that is, the price fixed by the valuation office for the purpose of sales to the Ministry of Defence and local authority—is grossly understated. The Crofting Reform Bill, which is due to be considered as to principle tomorrow, provides exactly for the procedure that took place in this situation, namely, for the market value of the resumed land to be fixed at the amount of compensation payable by the acquiring authority to the landlord.
It has, of course, for long been the practice when land is being conveyed between Government Departments and local authorities possessing compulsory purchase powers for the district valuer to set the price, and I have no reason whatsoever to doubt that it has been done in this case with due regard to all the circumstances and in accordance with the complex code of legislation on the valuation of compensation; and, furthermore, with all the professionalism which the 1134 valuation office is wont to exercise in such cases which are a matter of daily concern to it and of which it has some knowledge. Despite all the knowledge and experience of the district valuers, it is not unusual for people to feel that they are not getting enough for their land. However, it is unusual to suggest that district valuers are departing from the normal practice and are assessing or valuing the land in a new or unusual way that is different from the practice built up over the years.
In the particular case before us the tenant has a number of crofts on the Secretary of State's Benbecula estate. These crofts are worked as one agricultural unit and now extend to 51.85 acres, land having been resumed from the crofts on four previous occasions. When it was proposed in 1974 to resume another 6.42 acres, Mr. Macdonald protested that he would not be able to make a livelihood from the reduced acreage and that the ex gratia payment, based on the compensation to be paid on the sale, was unrealistic. Mr. Macdonald, who is a full-time crofter, acknowledged that this form of payment was ex gratia. I have no doubt that he knew that the payment resulted from the decision taken by the Secretary of State to deal with his tenants as I have described. Had Mr. Macdonald been a tenant on a private estate, there would have been small chance indeed of his receiving any share of the development value. He was not, however, moved by this good fortune.
I confess that I have some smypathy for Mr. Macdonald and can understand his resentment at the continuing demands by Government bodies and local authorities for more and more of the land which he occupies. I can understand, therefore, why he has pressed to get the best possible terms for himself. But I am in no doubt that there is a real public need for this land—the hon. Gentleman did not dispute that point—and therefore that it was right that the due processes to acquire the land were proceeded with. Thus, despite Mr. Macdonald's opposition, my Department applied to the Land Court in November 1974 for an order to enable it to resume the land.
The application came before the full Land Court in Benbecula in March this year. The court was, of course, concerned only, in the first place, to decide 1135 whether the purpose for which the resumption was required was reasonable in terms of Section 12(1) of the 1955 Act and, secondly, to determine the compensation payable under that section. It had no authority to inquire into the question of the crofter's share of the development value of the land and, of course, did not do so. It observed, however, in its note on its judgment:In the landlord's application reference is made to ex grotto payments which the landlord may make, additional to the compensation awarded by the Court if the craves of the application are granted. This is satisfactory indeed, but it is not a question for the Court to adjudicate upon.The court found that the purpose of the resumption was reasonable and held that £224 was adequate compensation under Section 12(1). It also rejected Mr. Macdonald's agrument that he would lose his livelihood if the land was resumed.
I am sure that the hon. Gentleman knows from his own experience that the Land Court is held in high esteem in dealing with matters within its competence. I am surprised that some of the points that he made tonight were not put before the court. I am sure that they would have been given due consideration. The court considered that if Mr. Macdonald were to apply some of the money he received by way of compensation to installing a water supply on another part of his unit, he would suffer no diminution of income.
§ Mr. Brown
The hon. Gentleman says, "Come off it". I do not know whether there was any argument about where the water supply should be provided. This knowledge was certainly available to the Land Court and the suggestion seemed to come from it. The lay members of the Land Court have a great deal of agricultural expertise. The court also reduced Mr. Macdonald's rent from £12 to £8'50 per annum and, in accordance with its custom, found that he was entitled to expenses.
Since then Mr. Macdonald has concentrated his complaint on the district valuer's valuation of the land. He has claimed that the district valuer's figure is very low compared with other valuations of land in the area. I think we are entitled to assume that the district valuer 1136 would have knowledge of all the transactions that have taken place that have any relevance to the affairs on the island or to this spot, and I fail to see how Mr. Macdonald can think that there is any unfairness in treatment as between one individual and another. Any difference—not unfairness—obviously reflects to some extent where the site is and the value of the site as it is, and I think that perhaps that is something that has not been explained.
Indeed, to some extent that is confirmed by the view of the chartered surveyors who, in their valuation of the resumed land, made an assessment of its worth at £15,000, or approximately £2,350 per acre. Obviously, there was a misunderstanding, or a lack of understanding, about how the district valuer operates and, indeed, about the whole basis of the valuation. The figure decided by the chartered surveyors was based on the development for which the land was being acquired. It was their view that their valuation was reasonable, having regard to the type of development envisaged.
The code that governs valuation procedure is complex. It is founded on common law, statute and judicial decision, and one of its basic principles, I am advised, is that the effect on valuation of the scheme underlying the acquisition of the land must be ignored. Put another way, the district valuer has to ascertain the value that this land would have on the open market, ignoring in this case the actual schemes that are being undertaken by the Ministry of Defence and the local authority. If this development is discounted, there is little demand for land for housing development in the area. Land values are, therefore, relatively low, but the figure given by the district valuer of over £500 per acre is a substantial one compared with crofting values.
In view of the representations made by the hon. Gentleman on behalf of his constituent, the valuation office has made a very careful study of its valuation, but it advises that it can find no good reason for amending it. It assures me that there is not supportable evidence that the private market would pay in excess of the figure determined by the district valuer.
As I had said, I have sympathy with Mr. Macdonald in the losses of land that he has suffered. I think it is fair to concede 1137 that he has been quite generously treated in the past—I am talking about the new house provided by the Department on a previous resumption. Perhaps the thought that the Government should again be so generous has influenced his approach to the current problem. The hon. Gentleman might concede that there is something in that. It happens to so many of us in life. Our expectations are greater than what is realised. Perhaps that is part of the reason behind the complaint by Mr. Macdonald and his disappointment.
We have tried, and I think we have been successful, not only to be fair but to be generous, and I am satisfied that on the basis of the acknowledged principles of valuation Mr. Macdonald has not been treated unjustly or harshly. I hope that with that explanation the hon. Gentleman will be in a better position to understand the basis of the decision and that he will communicate it to his constituent.
1138 I am sure the hon. Gentleman will appreciate that it is a question of the procedure. It is not that it is the Secretary of State's land at the moment. It is a challenge on the basis of the valuation by the district valuer. Strictly speaking, that is not my responsibility, but I do not suppose that the Treasury will worry unduly if I make this comment.
If the hon. Gentleman wants any other information, or if he wishes to discuss the matter further with me, I shall be happy to help him, within the narrow area of responsibility that I have. Although I appreciate that that explanation will not do anything for the hon. Gentleman's constituent, I hope that at least he will now be in a better position to explain some of the detail I have given tonight.
§ Question put and agreed to.
§ Adjourned accordingly at Twelve o'clock.