§ Order of the Day for the Second Reading read.
§ THE MARQUESS OF SALISBURY
, in moving that the Bill be now read the second time, said, that its object was to enable limited owners to spend their own money on their own property. The larger number of the estates in this country were in strict settlement, so that the tenant in possession was only tenant for life. That was a system to which most of them were much attached; but among many advantages there were some disadvantages attached to that state of things, arising from the principle of law that if you spent money upon the freehold, or upon anything that was affixed to the freehold, the money could no longer be dealt with separately, but stuck to the freehold and went where the freehold went. The result was that if a limited owner spent money upon the freehold, that money would go to his successor—the limited owner could not get it back out of the freehold. At the present day, people were more anxious than they used to be to provide for their younger children, and there was frequently a struggle in a limited owner's mind as to whether he should save his money for the younger children or should invest it in the improvement of his estate. He (the Marquess of Salisbury) wanted by this Bill to enable them to do the best to improve the estate without taking the money from their younger children. He was well aware that many persons would solve this matter in a different manner by saying that these difficulties were occasioned by the law of entail, and that if entail prevented these improvements, why not abolish entail? He would not touch upon the political point of view of this question. Many persons attacked and many persons defended the doctrines of entail from political motives; but setting aside political considerations, he thought it could be shown that entail tended rather to the improvement of land than otherwise. The reason was this. Settlement prohibited two things—it was a prohibition against sale and a prohibition against mortgage. If the tendency of land being relieved from settlement would be that owners would sell half 8 their land to improve the rest, then—however deeply he might deprecate such a proceeding upon political grounds—he must admit that there were certain cases where upon economical grounds there would be an advantage. Supposing it to be true that owners of land would take that course, no doubt the abolition of the law of settlement would tend to the improvement of land. But it was not true. The law of settlement, or the practice of settlement, had not been created by English law, but had been thrust upon it. The practice of people leaving large estates together with the hereditary tenure of land were dear to the hearts of the English people, and, therefore, he was quite certain of this—that if they abolished the practice of settlement what they would encourage would be not sales, but mortgages with all their consequent evils. Take the case of a man who felt himself embarrassed, or who wanted to spend money for unproductive purposes, or who had got "out at elbows;" the result in such a case would be that he would borrow. The abolition of the system of settlement would not set the land free in the market; but the result would be that land would be gradually more and more burdened with mortgages, until in the end we should want a Landed Estates Court for England. No one would dispute that the very worst thing that could happen to land would be that it should be under a general system of mortgage. They would then have a number of persons who had the burden of land upon them, but were utterly unable to discharge the duties attached to it. This difficulty, which he now proposed to deal with, had been felt by Parliament for some time, and many attempts had been made to apply a remedy. The mode that had been adopted had been upon this—that it should be permitted to burden land not with unproductive, but with productive mortgages, and to empower the owner to leave the money spent in improvements a charge upon his successor. But all these Acts had been only to some extent successful, because they were hampered with various difficulties. The first effort of the kind was the Public Drainage Act by which public money was to be lent for the purpose of general drainage. Another set of Acts enabled companies to lend money to limited owners who were anxious to im- 9 prove, giving them power to charge the money upon their land. That was good in theory, and was productive, no doubt, of a certain amount of benefit; but if they loaded improvements of land with interest at 5 per cent, to be paid to the company, and with money also to be paid to directors, surveyors, and the staff of the office, the result would be that the profit vanished altogether, and many persons who tried to improve estates in this mariner had found themselves burdened with the weight of an annuity quite out of proportion to the amount of benefit received. In 1864 Parliament made a further experiment in the direction of assisting limited owners, and passed an Act empowering such owners to expend their own money on improving their estate, having first obtained the approval of the Inclosure Commissioners, and to charge the estate with the money so expended. This was exactly the principle of the Bill which he now laid before their Lordships, only he was desirous to avoid the unnecessary complications that he thought had made those previous Acts almost inoperative. Under the Act of 1864 anyone wishing to spend his own money upon his own land must go to the Inclosure Commissioners and lay before them plans to be prepared by their surveyor, the approbation of the Commissioners being a necessary preliminary. The Commissioners were then to see that the work was properly done and the building carried out in accordance with the plans. The action of the Commissioners did not end there, for after that and during the whole life of the limited owner the Commissioners might send a surveyor down once a-year to see that the improvements were kept up. That was an amount of tutelage that very few landowners would submit to; and he believed that the Act had been mainly used by persons who were in the position of corporation sole, and had been used very little by ordinary owners of land. The object of these tiresome and irksome provisions was to protect the successor of the limited owner. He (the Marquess of Salisbury) would protect him in a more simple way. His proposition was that any limited person who desired to invest money in improvements of his estate, such as drainage and building (but not building upon his own house), should be enabled to do so; but 10 he must deposit and register his improvements with the Commissioners; when he had done that he had nothing further to do. He might leave the value of these improvements to his younger children, or to whom else he liked. When the legatees claimed the value of the improvements the Commissioners would ask the successor to the estate if he disputed the claim; and if he did dispute it then there was provided a simple mode of trying the issue—that issue being whether the improvements at that moment had or had not added to the letting value of the land. For that and for that alone he proposed that the successor should be required to pay; so that he would pay for absolutely nothing which he did not receive. In this way a limited owner would be enabled to invest his money upon his own estate, and to obtain a better income for himself; and also to obtain a national object—that of the improvement of the land. There was already abundant machinery to enable limited owners to charge their estates for the value of improvements; but the difference was that his machinery was cheap and effective, whilst the other was unnecessary, cumbrous, and costly. There was, however, no difference in principle between the two systems. There was one thing that must have sometimes troubled all their Lordships, and that was the question of labourers' cottages. Good cottages for the labourers were in these days an improvement essential to every well-managed estate. But building cottages must always be, to some extent, a matter of charity, because—except in cases where they would command 3s. 6d. weekly rent, which in most parts of this country was a mythical rent—they did not pay a fair percentage on the cost. It was very hard that the whole of such cost should come out of the limited owner's pocket. The limited owner who now built cottages, in fact, paid part of the money spent to the labourer, part to his own successor, and retained very little of it for himself. It would be a considerable improvement if a limited owner could lay upon his successor a fair proportion of the cost of building cottages; and by this Bill the limited owner would be able to charge on the estate the value of such cottages in the same way as he would that of other buildings. It had been suggested to him that it would be well to extend 11 the operation of the Bill to Ireland and Scotland. He could have no objection. No doubt, the Bill would be found capable of amendment in its details; but he believed that its principle would be of advantage in facilitating the improvement of land, and in divesting the present conditions of settlement in entail of some objections that were made to them.
§ Moved, "That the Bill be now read 2a."—(The Marquess of Salisbury.)
§ THE DUKE OF CLEVELAND
rather doubted whether his noble Friend had not considerably overstated his case. He believed that limited owners availed themselves of the Act of 1864 to a very much larger extent than the noble Marquess seemed to suppose—large sums of money had unquestionably been raised under it. He apprehended that no one would be opposed to the principle of his noble Friend's Bill, but he regarded some of the details as open to objection. For instance, in its present shape it would have a retrospective operation. He doubted whether that was advisable, seeing that limited owners had been acting with a full knowledge of the existing law. Again, he thought that 50 years was too long a term for the repayment of the capital sum borrowed—under the Act of 1864 the limit was 30 years.
THE MARQUESS OF BATH
said, he feared that if the Bill became law the effect would be to lead to a more general mortgaging of estates throughout the country. The noble Marquess (the Marquess of Salisbury) described the Bill as one to enable a man to spend his own money on his own estate; but it would better be described as a Bill for enabling a man to spend another person's money on his estate. At the present moment an owner of a limited estate could, by applying to the Commissioners, and having any improvement which he might make valued and certified, charge his estate with an annuity which would pay off in 30 years the money he had expended, and the interest on that money also. Now, according to his noble Friend's Bill, instead of a person having to apply to the Commissioners to certify and report on the improvements which he contemplated, and carrying them out to their satisfaction, before he could create a charge on his estate—under this Bill a limited owner 12 might first spend the money, and then go to the Commissioners with an ex parte statement. The Commissioners had no means of inquiry into the desirability of the improvements made, or of ascertaining how the money had been laid out. Well, this person died, leaving his unsettled property to some other person than his successor. This person would be enabled to come forward and claim as part of the deceased's personalty, the charges he had created on his estate by his own ex parte statement, and on his own valuation, and the schedule lodged with the Commissioners, and unexamined by them would be proof. The successor was required to object to the claim within six months, and if he failed to do so, the provisional charge became absolute. Again, under this ex parte statement a successor might be charged with the cost of improvements which, if of any value at the time, were no longer of value when he succeeded, or which might even involve continuous outlay. In the case of drainage, it was well known that it required to be renewed after 20 years, and few buildings were in a good condition after 25 years. The noble Duke who had just spoken (the Duke of Cleveland), referred to the provision in the Bill by which the charge was to run for 50 years. The noble Marquess would, probably, however, reduce the term; nevertheless such a provision showed how loosely the Bill had been drawn up. He hoped their Lordships would pause before passing the Bill to remedy a grievance which he had not been able to discover to exist.
THE EARL OF AIRLIE
thought that the noble Marquess who had just spoken (the Marquess of Bath) could not have read the 9th and other clauses of the Bill, or he would not have seen that under them an owner, coming into possession might have to pay for that which was of no value to his estate, for the clause enacted that—The Commisssioners should determine what amount (if any) of addition to the letting value of the land comprised in the settlement is produced by the improvement; and if they determine that there is none, the provisional charge shall absolutely cease.The noble Marquess said that the owner of a settled estate wishing to improve his land might now go to the Inclosure Commissioners and get their sanction to 13 such improvements as he desired to make, and then borrow money from a company in order to execute them. That was quite true; but he himself (the Earl of Airlie) had had some experience of that mode of proceeding, and having tried it once he would never try it again. The expenses of one kind and another attending it were so great that after paying them there was but very little margin of profit left upon the improvements. This Bill provided a much simpler and better method of doing those things. When disputes arose as to the amount of value added to the estate by particular improvements, it was of great importance—especially in cases where the sum involved was small—that they should have a summary means of deciding such matters as expeditiously as possible. The Bill seemed to him a good one, and the objections to it to be for the most part such as could be best considered in Committee, rather than in a discussion on the principle of the measure.
§ LORD PORTMAN
said, that as this was an important Bill not only as affecting tenants for life, but as affecting remaindermen, he would request the noble Marquess (the Marquess of Salisbury) to give them a long interval between the second reading and the Committee. Several points of the measure would require very careful consideration. One of those points referred to the power given to the tenant for life by the Bill to select any land under the settlement for the operations contemplated by the measure, and not as hitherto to confine the charge to the lands improved. Another related to the question of drainage. Under the present law something like £9,000,000 sterling had already been taken up and charged on the land for drainage. Draining was really a temporary improvement, requiring at the end of a certain number of years repairs costing almost as much as the original outlay. Moreover, draining was often experimental, and a great deal of money was thrown away which ought not to be charged on the successor. These and similar matters well deserved the noble Marquess's careful attention. He did not doubt, however, that the Bill might be ultimately moulded into shape; but great care must be taken to require a certificate of improved letting value when the improvement was made, 14 as well as at the time when the charge was proposed to be made.
§ LORD REDESDALE
said, he was unable to see how that Bill, if adopted, could work. How, he asked, was anyone to tell that the value of the estate had been increased by the outlay made upon it, unless he knew what the condition of the property was previously to the charge being put upon it? They would require to see the estate both before and after the improvement was executed, in order to judge what the improvement was worth. Moreover, the tenant for life, the person who sought to make the change, was not to be put to any expense in making the claim; but the person who was to succeed to the estate would have to go into an inquiry whether the charge on it was a fair one or not. He thought these were objections fatal to the proposal, and could not be got rid of in Committee.
§ LORD COLCHESTER
said, he should support the Bill. The Report of the Agricultural Labour Commission of two years ago showed the importance of some legislation such as this, with a view to improve cottage accommodation, and he feared that if no new facilities were granted, such as this Bill proposed, a powerful weapon would be put into the hands of those who desired to upset the existing laws of settlement. The worst cases of defective cottage accommodation were not on estates such as most of those of their Lordships. They were either in the case of small freeholds or where cottages had been run up by speculators. But it was also found that on the smallest class of settled estates and limited estates the life tenant was unable to execute such improvements in cottage building as were necessary. He trusted the Bill would go into Committee, and pass in a shape which would produce the results anticipated.
§ THE DUKE OF RICHMOND
said, a measure of this kind was a step in the right direction. He thought that when money was laid out in real improvements, which rendered the estate more valuable than it was before, then, and only then, should the estate be held liable. He agreed, however, with the noble Duke (the Duke of Cleveland) that the term of 50 years was too long. As regarded the condition of farm buildings, this Bill was of great importance. The proposal was not novel, as a some- 15 what similar law existed in Scotland already, and, he believed, worked well. Believing that the measure would effect a decided change for the better, he should support his noble Friend's Motion for the second reading.
said, he had had practical experience in Wales of the evils of the existing law. He had been desirous of laying out some of his own money on an estate of which he was limited owner; but on consulting an experienced lawyer he had been informed that the expenses of proceeding under the existing law were so heavy, and the inconveniences so great, that he would inevitably lose money, and he had therefore desisted from any such injudicious proceeding. He was glad, therefore, that this state of things was to be altered by the Bill of the noble Marquess. He thought it was capable of some modifications, which might be done in Committee; and while believing it ought not to have a retrospective action, he anticipated great benefit from its future operation. He ventured to differ from the noble Lord opposite (Lord Portman) who spoke of drainage as a mere temporary improvement. If it were well done there could be no better investment from a landlord's point of view.
§ Motion agreed to; Bill read 2a accordingly, and committed to a Committee of the Whole House on Monday the 8th of July next.