§ Order of the Day for the House to be put into Committee, read.
§ Moved, That the House do now resolve itself into Committee.—(Lord Barnard.)
§ On Question, Motion agreed to.
§ House in Committee accordingly.
§ [The EARL, OF DONOUGIDIORE in the Chair.)
§ Clause 1:
§ Compensation for disturbance in connection with sale.
§ 1.—(1) Notwithstanding any agreement to the contrary, where the tenancy of a holding is terminated after the passing of this Act by notice to quit given after that date—
- (a) in view of the dale or offering for sale of the holding or any part thereof; or
- (b) by or at the request of the purchaser of the holding before the expiration of one calendar year after completion of the purchase of the holding for any reason other than the wrongful act or default of the tenant in relation to the holding;
§ (2) Compensation under this section shah not be payable in any case to which the Small Holdings Act, 1910, applies.
§ (3) In the event of any difference arising as to any matter under this section the difference khan, in default of agreement, be settled by arbitration.
§ THE EARL OF ANCASTERMy Lords, to this clause I have placed on the Paper an Amendment which has for its object the exempting from the operation of the Bill of land sold in order to pay the duties which fall due on the death of the owner of the property. I may say at the commencement of my remarks that I am entirely in favour, when land is sold, of the tenant being most liberally compensated for all his improvements, and, indeed, of his losing nothing in any labour or improvement that he has put upon the land in the past. But this Bill is to a 94 certain extent an amending Bill to the Act of 1908, and in addition to compensation for improvements, compensation has to be paid fir losses to the tenant which he may undergo through having to leave his holding. It practically compensation for disturbance.
I am one of these who believe that in most instances a tenant ought to receive this compensation, but there are cases where it is extremely hard upon the landowner who has to find a large sum of money for the State that he cannot treat with his property in the best way he can. I have always argued, and I believe it has been argued by almost the whole Party with whom I generally act, that Death Duties, especially when raised to the high point at which they are at the present moment, must have the effect, not only of injuring the person who has to pay the taxes, but of causing loss and inconvenience to other persons as well, and undoubtedly they have caused loss and inconvenience to tenant farmers, I know that when we first were hold enough to say this, our statement was laughed at. I have here an extract from a speech made by the Prime Minister in another place when he held the position of Chancellor of the Exchequer, in which he dealt with this matter in almost a jocose manner. He laughed at the prophecies made by the Conservatives at the time of the passing of Sir William Harcourt's Budget of 1891, and he quoted the ease of a nobleman who said that he would be ruined, but when it came to the question it was found that all the economies he had effected amounted to, in his own words. "I have put down my pew." The right hon. gentleman went on to say—
I am not at all sire that a revision of the Death Duties ever had so prejudicial an effect as that on the spiritual welfare of the upper classes. I doubt very much whether they have all curtailed their contributions to the weekly offerings. But I am satisfied, after a great deal of investigation, that we may without injury to property, without checking the accumulation of capital, and without injustice to any human being, reconsider the scale of duties imposed in 1894.I should like to call your Lordships' attention especially to the phrase, "and without any injustice to any human being." These heavy duties primarily fall upon the person who has to pay them, but it is also perfectly certain that a great deal of injustice and inconvenience is 95 suffered by members of the community. Farmers and others whose farms have been sold have suffered injustice, as have other people who have lost their employment.I cannot conceive how these large sums of money can possibly be found nowadays unless a man effects large economies or realises part of his property. The moment he tries to effect economies he has to cut down expenses. Probably he has to reduce his wages bill, and those who have to go are those who have not very much to do and get pretty good wages for doing it. Naturally they stiffer a good deal of trouble and annoyance in finding other places, which may not be so lucrative. Take the case of any other form of property, say, a great industrial concern. The fact that the head of the business is no longer there to look after its affairs naturally has a tendency to make the shares fall, and if, in addition to that, his heirs have to sell a large block of their holding in the shares of the company the shares will fall in value and every one of the shareholders will suffer loss and inconvenience through the selling of those shares. There are, of course, other instances which will occur to your Lordships. But it is perfectly certain that when large sums of money have to be raised on the death of individuals it is not the heirs alone who suffer loss and inconvenience.
I fully admit that tenant farmers, when their farms are sold, will suffer loss and inconvenience just as well as other people, but I hardly think it is fair that, at the very moment a man has to realise his property in order to find large sums of money for the State, incidentally his property should be depreciated to a considerable extent. Compensation under this clause is so nebulous that it is very difficult to tell to what the compensation will amount, but I should say myself that it would certainly depreciate the value of the property five per cent., and I believe this Bill will certainly have the effect of rendering null and void a good many of the valuations which have already been made throughout the country. I do not wish, as I have said, that this compensation should not be paid in most cases, but I do think that we ought to take into consideration the grave injustice to 96 individuals when they are called upon to pay these Death Duties, and I hope that the noble Lord in charge of the Bill will give this Amendment his favourable consideration. The promoters of the Bill already specially state that this compensation for disturbance is not to be paid to a farmer who is turned out in order to make room for small-holders.
THE PARLIAMENTARY SECRETARY TO THE BOARD OF AGRICULTURE AND FISHERIES (LORD LUCAS)May I point out to the noble Earl that the Small Holdings Act of 1910 entitles a man whose farm is purchased for small holdings to be compensated in exactly the same way as it is proposed to compensate him here.
§ THE EARL OF ANCASTERIt is said in the Bill that "Compensation under this section shall not be payable in any case to which the Small Holdings Act, 1910, applies," which looks on the face of it as if this compensation for disturbance was going to be specially cut out in the case of a farm taken for small holdings.
§ THE EARL OF ANCASTERIf an exemption is to be made, there is a much stronger case for making it when land is sold in order to pay taxes to the State than there is when a man's property is to be taken from him in order to make small holdings. Certainly as I read this clause it seems to me specially to leave out small holdings from the operation of the Bill.
LORD LUCASI am sorry if I did not make myself plain to the noble Earl. The man who has his farm bought for small holdings is compensated under the Small Holdings Act of 1910 in precisely the same way that it is proposed in this Bill to compensate men whose farms are sold over their heads. The first class of man is now getting the compensation which this Bill proposes to give to other farmers.
§ THE EARL OF ANCASTERI do not profess to be a Parliamentary draftsman, but certainly to the uninitiated it would appear from the Bill that no payments were going to be made in compensation when land was taken for small holdings.
97 However, I will not press the point if the noble Lord tells me that I am reading the Bill wrongly. I submit that if compensation is to be paid it should be paid by the Treasury. They are the people who get the money. The estate may be already considerably burdened; yet from one-tenth up to one-quarter of the capital value of the estate has to be paid over to the Treasury. Most men have to realise in order to pay the Treasury, and if any injustice is done to the tenants it would be very easy for the Treasury, which gets the money, to pay some of it back to the dispossessed tenants. I am aware that the tenant will suffer a certain amount of injustice, but I believe that if an Amendment such as mine were inserted the cases where it would occur would be very few indeed compared with the large number of sales now going on all over the country.
Before we embarked on these new theories and during the time of depression when agriculture was in extremis we had no doctors stepping in to cure us. Now that the clouds have somewhat passed away we have a host of would-be doctors arriving, all anxious to amputate the men, both landlords and farmers, who for thirty years have faced the storm and lived through those years of depression. It is on account of that, far more than for any other reason, that these sales are taking place throughout the country, and I am certain that if agriculture were given a rest from these no doubt well-intentioned but rather foolish reformers it would be much better off. My Amendment is one which should receive consideration, because when a man is called upon to pay large taxes on entering into his property every facility should be given to him to sell to the best advantage. At present you are saying to one class and to one class only, "No, you are not to sell your property to the best advantage." I beg to move.
§ Amendment moved—
§ Clause 1, page 1, line 21, after ("payable") inert ("(a)")
§ Clause 1, page 1, line 22, after ("applies") insert ("or (b) In connection with the sale or offering for sale of the whole or part of a holding passing on a death within the meaning of sections one and two, subsections (1) (a), (b) and (c) of the Finance Act, 1894, as amended by any subsequent enactment with a view to provision of any duty payable under Act of Parliament on the occasion of such death").—(The Earl of Ancaster.)
98§ LORD BARNARDMy Lords, I sympathise with my noble friend and quite understand the difficulties in which owners of agricultural land are sometimes placed when they have to pay heavy Death Duties and are compelled to sell farms in order to do so. But I think my noble friend is somewhat mistaken as to the scope and object of this measure. This Bill does not introduce the principle of compensation to a tenant who receives notice with a view to his land being sold. Whether we agree with it or whether we do not, that principle was settled by Parliament in 1908, and for two years after that time it was supposed that that applied to every case. It was only, as I explained to your Lordships the other night, when the case of Clewlow v. Briscoe was heard by a County Court Judge that it was found out that in the opinion of that Judge notice to quit with a view to a sale was not "inconsistent with good estate management." Had it not been for that County Court judgment there would have been no necessity for this Bill.
I have consulted my friends ill the House of Commons who are the promoters of this Bill, and I find that on both sides of the House they regret very much that it is impossible for them to accede to my noble friend's suggestion. I regret equally to say that I feel entirely in the same position. The law has given farmers who have to go a certain right, and we feel that if in one particular set of circumstances they are not to have that right it would be very unjust to the tenant farmer community. I have, perhaps, as great an association with tenant farmers as most of your Lordships, and I have the highest respect for them. I value the way in which they have stood by the landowner and done everything they could to make the association of landlord and tenant pleasant. For that reason I feel bound to lose no opportunity of doing all I can to assist them in every way.
I by no means agree with my noble friend that giving notice to quit with a view to sale depreciates the value of property. I have made some inquiry on the subject, and I find that auctioneers of eminence are divided on the subject. I happen to know, for example, that in many cases when an auctioneer gives advice as 99 to the terms and arrangements to be made for the selling of a farm he does not think it necessary to put the tenant under notice. My noble friend was not in the House the other afternoon or he would have heard the noble Marquess the Leader of the Opposition himself say that he bad sold land and had not found it necessary to give these notices. And I have in my possession at this moment particulars of a farm in Shropshire which it was hoped that I would purchase at auction, and I notice that the tenant was not under notice to quit. At the same time I may say that I have had similar notices with regard to a considerable amount of agricultural land in the North of England, which I arranged to bid for. The tenants in those cases were all under notice to quit, and before finally settling upon whether I should bid for the land I consulted my agent. I said, "As a matter of practice, supposing you buy the land do you mean to act on the notice to quit and turn the tenants out?" He replied, "I mean to do nothing of the kind." Therefore vacant possession by no means, in my judgment, possesses the enormous value attributed to it by some.
One other thing I should like to mention. This Bill has been passed by the universal consent of all Parties in the House of Commons. If an Amendment is inserted at this stage it is as good as sealing the doom of the Bill; and I do not think, if my noble friend will permit me to say so, that the tenant farmers in this country, in spite of the kind words which he used towards them just now, will thank him for a step which, rightly or wrongly, they will consider as depriving them of a valuable privilege which Parliament intended to confer on them in 1908, and which it only now proposes to confer on them because of its having been found, owing to the County Court case to which I have referred, that they have not got it. In the circumstances I cannot see my way to accept my noble friend's Amendment, and I hope the House will not insert it.
§ LORD HENEAGEMy Lords, I would appeal to my noble friend to withdraw his Amendment. It is forty years since I was first chairman of a Chamber of Agriculture, and I have never known of a Bill which met with more unanimity 100 than this one. It is only a matter of justice that this Bill should be passed, and it is very unlikely that if it fails to pass this year it will get into such a favourable position in another year. I cannot myself see what the difference is to the tenant whether an estate or a farm is for sale for one reason or for another. Whether it is in order to raise money for Death Duties, or whether it is to raise money for racing debts, or to raise money for anything else, I do not see what difference there is to the tenant with regard to the notice for sale. I hope my noble friend will not press his Amendment, because I believe that it is in the interests of landlord and tenant that the Bill should pass. I might add that auctioneers now as a rule are becoming dispossessed of the idea that vacant possession is necessary. I believe that this Bill indirectly will have the effect of preventing that action in the future in regard to these sales.
LORD LUCASMy Lords, I should like to say one word in support of the position which Lord Barnard has taken up with regard to this measure. As far as the Government are concerned, they would much prefer to see the Bill go through in its present form. We regard this Bill as dealing with what has been admitted by the House of Commons and by this House, when it passed the Second Beading, to be an undoubted grievance under which the tenant suffers; and I think it would put this House in a rather illogical position, having once admitted the grievance and admitted the need for repairing that grievance if we said that in certain classes of sales, where the grievance exists in the same degree, the tenant is not to receive compensation. As the noble Lord who spoke last said, it does not make the least difference to the tenant what the cause of sale is. After all, this is a Bill to assist the tenant, not a Bill to assist the landlord; and the tenant is entitled to just as much consideration whatever the motive of the landlord may have been. Therefore if we accept the noble Earl's Amendment we shall find ourselves in what seems to me to be the extremely illogical position of having admitted the grievance under which farmers suffer in this case and then of deliberately excluding a certain portion of them from the remedy which we are prepared to offer to other farmers.
§ *THE MARQUESS OF LANSDOWNEMy Lords, my noble friend who is responsible for this Bill has stated so dearly and completely the case against this Amendment that I need not trouble your Lordships by a repetition of his arguments. My noble friend behind me (Lord Ancaster), from whom I am sorry to differ because I know how much attention he has paid to these matters, dwelt with force upon tile hardship which may be occasioned to an owner of land who is compelled to sell by the heavy taxation to which we are now liable if he were not permitted to sell his land under conditions which would secure for him the top price which the market would produce. But I think he fixed his eye too much on the point of view of the landlord. Really the proper point of view with which to regard this question is the point of view of the tenant. We are not concerned with the motives of the landlords; wit are concerned with the injury sustained by the tenant; although in this case the motive of the landlord in selling subject to notice to quit may be perfectly legitimate, the injury done to the tenant by his dispossession remains exactly the same. I was glad to hear front my noble friend that, in agricultural circles a feeling was growing that this practice of selling with vacant possession was not a desirable practice to encourage. I hope that as a rule owners of land who find it necessary to sell their estates will sell them as going concerns, and if there are to be any rearrangements of the map let them be done by the new owner. Therefore I hope that my noble friend will not think fit to press his Amendment.
§ THE EARL OF ANCASTERMy Lords, after what has been said I wish to withdraw my Amendment. I fully realise, of course, that I have been speaking on behalf of landlords who have to sell their 102 property owing to taxation, and that the farmers are in favour of the Bill. But as regards the justice of my Amendment I am absolutely unrepentant, and I ant certain that the elect of this Bill will be to depreciate property and spoil the valuations which have been made at great expense throughout the country.
§ Amendment, by leave, withdrawn.
§ Clause 1 agreed to.
§ Remaining clause agreed to.
§ Bill reported without amendment and to be read 3ªTo-morrow.
§ CRIMINAL JUSTICE ADMINISTRATION BILL. (No. 188.)
§ PATENTS AND DESIGNS BILL. (No. 189.)
§ Read 1ª, and to be printed.