HL Deb 22 July 1919 vol 35 cc912-23

Order of the Day for the Second Reading read.

THE LORD CHANCELLOR

My Lords, the subject dealt with in this Bill is of a technical character, and I think I can most usefully adopt the course of setting out the result of its provisions, and the changes which they effect in the existing law, in a form which may be convenient for reference by any of your Lordships who intend to take part in the Committee discussion. The object of the Bill is to simplify the procedure which now regulates the acquisition of land for public purposes, and to secure that the compensation payable on the land, while fair to the landowners, shall not be excessive in amount.

The whole procedure for compulsory acquisition of land has lately been the subject of careful consideration by a Reconstruction Committee consisting of gentlemen of very great experience, who devoted a great deal of time and attention to this matter. They made two Reports, and although it may be that some of your Lordships have studied those Reports, it would be well to explain that one of them dealt with the procedure for obtaining the power of compulsory acquisition, and the other dealt with the assessment of compensation when such power was put in force. The second also made recommendations on the very difficult questions of betterment and recoupment. It would undoubtedly have been desirable to introduce legislation which dealt with all the matters affected by these Reports, but this would have involved the introduction of an extremely long and complex measure, which would certainly have raised great controversy, and equally certainly have taken up a great deal of time, in the course of its passage into law. In those circumstances the Government adopted the decision, in view of the great urgency which exists for some modification of the Lands Clauses Acts, under which the acquisition of land is now carried out, to deal solely with the question of the assessment of compensation, and to leave the other matters referred to in these Reports to be dealt with as and when time permits.

The proposals which I am about to explain were criticised from both angles in the House of Commons, where the matter was very fully and carefully considered. They were criticised by some who thought that the methods of compensation adopted were unduly liberal to the land owner, and criticised by others who thought that they were not liberal enough; and the Government are sanguine enough to hope that they have found a middle course between those two criticisms. The measure deals with four points. (1) The constitution of the tribunal which is to assess the compensation; (2) the definition of certain principles which are to govern assessments; (3) the procedure of the Tribunal; and (4) the costs of the proceedings.

At the present time the tribunal to assess compensation under the Compulsory Acquisition Act is, apart from special legislation, either two arbitrators and an umpire, or a jury over which the Under-Sheriff presides. In certain small cases, with which I need not trouble your Lordships, the compensation is assessed by two justices. This Bill provides that the compensation shall in all cases be determined by a single arbitrator. This is a plan which has already been adopted in the Small holdings Act and in other Acts, and which has been found, I believe, to work very satisfactorily in practice. The arbitrator may be chosen by the partners to the arbitration if they can agree upon him, and if he is not so chosen he will be selected from a panel of whole-time officers who, while holding such an appointment, may not directly or indirectly engage in private practice. Important decisions were necessary to reach that conclusion.

Any of your Lordships who have had their business dealt with under the Lands Clauses Acts provisions will, I think, support the observation which I intend to make. It was found by experience that the procedure under the Lands Clauses Act is cumbrous and unduly expensive. I, like many others whose business it has been to conduct arbitrations under the provisions of the Lands Clauses Acts, hold very strongly the view that the procedure had almost every conceivable disadvantage which could attend a tribunal or a legislative scheme of this kind. Making a sub stitute in the form of a single arbitrator, the question arose, Was the most convenient and effective method to select gentlemen of eminence in the profession of surveyors and allow them one day for their own private practice as witnesses and another day to sit as judges, or was the most promising course to select those gentlemen and say, You shall be in the same position as those who occupy judicial positions to this extent, that you will work for the State, and you will discharge a public function, and will not one day be engaged on private practice and the next day in giving a decision on behalf of the State? "The Government decided, after consideration, that the work would be more efficiently and more satisfactorily, and on the whole not more expensively, done by the employment of whole-time valuers. It is not expected that they will exceed five for England and Wales, two for Scotland, and one for Ireland. The proposed salary is £3,000 a year.

Your Lordships will see that this work must be done by men of high professional standing, and if it is to be done by men of such standing it is necessary that there should be an adequate salary. Having regard to the expenses under the Lands Clauses Acts, it is hoped that the substituted proposals will contain in themselves the germs of very great economy. The arbitrator will be appointed for a definite term by what is known as the Reference Committee, and the cost to the State of their salaries will be entirely, or almost so, covered by the fees which will of course properly be charged to the parties who come before them. The Reference Committee which will appoint the panel of arbitrators, and will make Rules to deal with the particular case, will consist in England of the Lord Chief Justice, the Master of the Rolls, and the President of the Surveyors' Institution. Analogous arrangements are proposed in the case of Scotland and Ireland.

I will now give a summary explanation of the Rules for the assessment of compensation. The first of those Rules is that no allowance is to be made on account of the acquisition being compulsory. As many of your Lordships know, the Lands Clauses Acts nowhere provide that any such allowance be made. The practice depends upon no statutory basis, and has never had any statutory sanction, but the practice has arisen of allowing in England an addition of 10 per cent., and I believe in Scotland of a considerably higher percentage. The proposal to abolish this arbitrary addition is by no means new, and has been already adopted in the Small Holdings Act, 1908, the Housing Act, 1909, and other Acts. The next Rule in order of importance is that the value of the land is to be taken to be the amount which the land, if sold in the open market by a willing seller, might be expected to realise. I have no doubt that at a later stage the question may arise, Why does not this provision contain any allusion to a willing buyer? If that observation is made, I shall hope to be able to satisfy your Lordships that the phraseology adopted is that which is best calculated to define what is generally known as a fair market value. I emphasise most strongly these words, because it is the genuine desire of the Government to see that those who are parting with their property under the singular circumstances shall receive an honest and a fair market value for what is taken away from them. The third Rule directs the valuer to exclude from consideration any value which is clue to the special suitability or adaptability of the land for any purpose to which it could be applied only in pursuance of statutory powers, or for which there is no market apart from the special needs of a particular purchaser. Those words are a little general in their character, and your Lordships will rightly scrutinise them closely, and they will require explanation and justification.

But I may perhaps say that, owing to the ingenuity of the expert witnesses who have appeared in cases of compulsory acquisition, arbitrators have been induced to award sums relatively immense for land which in itself is of very little value, and where there cannot be the slightest doubt that if the promoters had not sought to take the land for a particular purpose, say for a waterworks or a firing range or similar project, no other person would have been found to give any fancy price for the land, certainly not to give a price in any way comparable to that awarded. Your Lordships canot believe that is right. Indeed. I may say that one of the elements in the situation which caused the greatest difficulty has been the extraordinary disparity of view that has been taken in giving their evidence by gentlemen of the highest influence in the profession of surveying. It is quite common to find a case in which one witness of the highest possible position has been found to advance the view that the value of the claim put forward was £20,000, whereas the witness en the other side, of equal eminence, has been able to contend that under no conceivable circumstances could the property be worth more than £10,000—a most amazing contrast from gentlemen of equal eminence. Let us hope that the definition of these Rules, if your Lordships should ultimately approve them, and the appointment of a whole time panel, will do much to correct the inequalities and anomalies to which I have drawn attention. The fourth Rule excludes any compensation for value due to the premises being used for a purpose which is either illegal or detrimental to the public health; and the fifth Rule deals with certain special cases in which what is generally known as compensation for reinstatement is properly paid.

I come to Clause 3 of the Bill. This regulates the procedure under which the additional valuers will carry out their functions. It limits the use of expert witnesses, and the view taken by the Government upon that point is this. Useful and, in fact, indispensable as expert witnesses are in these matters it is on the whole possible to have too much of a good thing. The prodigal employment of expert witnesses is one of the principal causes of the most scandalous costliness of arbitration proceedings to-day, awl it is believed that a useful provision will be that which lays down that the official valuer shall, if so required, specify the amount awarded in respect of any particular matter. This provision ought to remove the misconception which has so often arisen where a large sum is awarded as compensation for the acquisition of an area small in itself and of very little apparent value, and yet where the damage to the rest of the estate by severance is indisputably serious. The explanation of this will perhaps throw light upon many awards which may otherwise seem obscure.

The next important clause is Clause 5, and that contains certain provisions relating to costs which, even on a Second Reading stage, I ought to explain. At the present time a person whose land is acquired is in the fortunate position that he can for all practical purposes embark upon an arbitration at the expense of the promoters. And the dislike for litigation which is common to all humanity has in practice been found to be very considerably modified by this evil, and it is one which in the opinion of the Government should not survive. It is quite true that if the amount awarded does not exceed what is known as a sealed offer by the promoter the landowner has to bear his own costs, but this provision is in practice found to be inadequate for the protection of promoters, who are very seriously handicapped in their negotiations by their liability to costs if the negotiations, which in themselves are often very costly, fail.

This Bill provides that if the landowner is awarded no more than the sum which the promoters have offered him he is to bear his own costs and also those of the promoters. I hope your Lordships will, on reflection, think that is a fair and reasonable provision. When an offer is made to a man whose property is being taken it is his duty carefully to consider the offer which is made to hint by the promoters, and. it certainly does not appear to me unreasonable (though I shall have the advantage of hearing your Lordships' views on that in Committee) that we should act thus in cases where the landowner is seeking what ex hypothesi is au unfair profit.

And conversely, if the landowner offers to accept a certain sum and the sum awarded is not less than that which he has offered to accept and the promoters refuse, the promoter in his turn must pay the costs of the landowner. Subject to these two provisions, which deal with the two cases, the costs of the arbitration are in the entire discretion of the official valuer, and he can disallow the costs of counsel if he considers that they have been unnecessarily incurred. In my judgment the amendment of the law as to costs should do more than almost any other provision to induce both promoters and landowners to be reasonable in their negotiations as to compensation, and the Government think that the result should be to reduce the number of eases which will actually require a decision by the arbitrator to a number small enough not to render it necessary to provide a larger equipment of valuers than I have attempted to indicate to your Lordships.

There may conceivably be cases (such eases have been known in the past) in which both parties would have preferred that the compensation should be assessed by the Commissioners of Inland Revenue, and provision is made in Clause 8 to enable this course to be adopted. The provisions of the Bill will supersede any inconsistent provisions in the various Acts which dealt heretofore with compulsory acquisition, except in certain cases which are specifically referred to in Clause 7.

The Bill does not carry out, or pretend to carry out, all the reforms that would be useful if unlimited time were at the disposal either of the Government or of your Lordships. It contains many provisions which your Lordships, if I may say so, may rightly think it proper to examine and to debate, but the Government knows that this House is deeply alive to the fact that it is impossible to translate into the terms of a Statute the pledges which I think all parties in the State have made to soldiers—the hopes that have been held out that those who are suited to such employments should be enabled to settle upon the land—unless the machinery by which land can be compulsorily acquired is simplified, is made less expensive, is made less dilatory. It is the hope of the Government that they have produced a Bill which, whatever else may be said, this at least may be claimed in its favour, that it will produce the results which are necessary if the first-fruits which the whole community owe to those who have done so much to save the country are to be paid. I beg to move that the Bill be read a second time.

Moved, That the Bill be now read 2a—(The Lord Chancellor.)

VISCOUNT HALDANE

My Lords, I ant sure the House feels the same sense of gratitude which I feels to the noble Lord on the Woolsack for having given us so full and lucid an exposition of the scheme of the Bill and of the clauses. Because this is essentially a Bill which consists of detail, and without the account which has been given to us we could not have followed it.

My impression about this Bill remains what it was when I fist read it. It is a Bill which will do good, and will be useful, but it will disappoint a great many people, and I venture to think it will not be a permanent solution of the question. It does the useful thing which the noble and learned Lord pointed out, but on the whole it sticks to the old-fashioned tradition and practice. Eminent bodies, not the Government, but Chief Justices, Lord Presidents of the Court of Sessions, Lord Chief Justices of Ireland—with always, of course, the President of the Surveyors' Institute—are to select a panel of gentle men who are to receive £3,000 a year—this to be paid, we will hope, by fees received from the litigants. I hope so—that is all I have got to say; but, at any rate, a number of new and very valuable appointments are created in the first instance in this country. But that is not all. These gentlemen have certain powers of circumscription, but the good old-fashioned method of counsel and expert witnesses still obtains. True it is that there will be generally only one expert witness, and that the learned arbitrator may say that he disallows the fees of counsel; but you may be sure that the expert witness will be a person of eminence, with a remuneration which corresponds with eminence, and that in every case there will be counsel and solicitors. It is impossible to get land cheaply upon that principle.

There is another way which appears in the Bill, a more excellent way, but it is introduced in such a very timorous and tentative fashion that I am afraid it will amount to very little. The noble and learned Lord has alluded to it. The Inland Revenue Commissioners, as your Lordships know, are now valuing the land throughout the country. Sometimes people put their land at a fair figure because they do not want to be assessed at more than it is worth, but some do not tell the truth. On the other hand if they have told the truth—I think that on the whole they try to tell the truth—they have given very fairly what the value of the land is. Now, Clause 8 enables ally one who wishes to do so—but it is not to be the normal practice—to refer the question of disputed compensation to the Commissioners of Inland Revenue, who have already been valuing the whole thing and who have the whole of the materials before them. One would have thought that this would have been an admirable plan to make the normal kind of thing, allowing a departure from it for those cases which were not covered. Indeed, as some of your Lordships are aware, there has been an inquiry going on by a Committee, there has been a great deal of investigation, and a great deal of reference to the use which might be made of the work which the Commissioners have done, but I feel that in this Bill the Commissioners play a very small part and, so far from being the normal method of getting at the truth of the value of the land, it is so abnormal a method that no one is very much encouraged to consult the Commissioners. No, on the whole things will go on not as they were, of course, but in very much the same spirit; and as for the hope of getting a cheap procedure for valuing land I think we may give it up in the light of this Bill.

No doubt the Bill is much better than the old procedure under the Lands Clauses Act, with the two arbitrators and an umpire—the arbitrators being always advocates, and the umpire's business being to keep them right. There will be fewer expert witnesses, there will not be the great arrays of learned counsel, and the costs (as the noble and learned Lord said) will be substantially diminished; moreover the costs will be in the discretion of the arbitrator and they will be limited by the amount which the litigant recovers. All these things are good. But what I regret about the Bill is that I think we have reached the stage when people are very much in earnest about the principle that no one can be allowed any longer to keep any more than the value of his land if the land is wanted for public purposes. If land is wanted for public purposes it ought to be in the freest way available for public purposes, and the owner ought to get its value. That value can be ascertained by cheaper and more effective methods than this Bill embodies, and I think the course to which we shall inevitably come will be that the value as ascertained—either by the Inland Revenue Commissioners or by some other way—will be the standard basis on which land is taken. Therefore I doubt whether this Bill represents the permanent machinery for carrying out the objects the Government have in view.

LORD BLEDISLOE

My Lords, I warmly welcome the provisions of this Bill. The procedure of arriving at the value of land, even of agricultural land, has, as the noble and learned Lord on the Woolsack has pointed out, been in the past very cumbrous and expensive, and any thing that will simplify or cheapen the method should, I think, be welcomed by members of this House. This appears to be the first chapter, if I may say so, in the process of settling upon the land a large number of ex-soldiers and sailors, and I am sure that your Lordships will agree that any extra burden that might be imposed on land by way of charging for the land which they will occupy—as soon as they themselves eventually become the owners of it, as I hope they will—an excessive price, or charging them a rent based on too high a value, is in every way to be deprecated.

While saying this, I hope that the Government will not be opposed to our moving certain Amendments in Committee which we may deem to effect an improvement in the Bill and, in fact, facilitate the carrying out of its provisions. Personally I rather regret that while the Government were about it they did not go in for a much more comprehensive scheme to apply to all these transactions on which a valuation has to be set on land in this country. This is legislation of a piecemeal character and applies only to transactions as between the Government or a public authority on the one hand and a private owner on the other hand; it leaves out of account certainly nine-tenths of the transactions in which valuations have to be made and which I cannot help thinking will have to be dealt with by a much more comprehensive and consolidating measure in the days to come. I was interested to note that the noble and learned Lord who moved the Second Reading started by speaking of these gentlemen who are to decide the value of land as "arbitrators." Forced by the phraseology of the Bill, he went on later to speak of "official valuers." They are, of course, arbitrators and not valuers at all; and as they are not valuers there seems no particular reason for calling them so in the Bill. There is a strong reason against calling them valuers because the term "official valuer" has come to have a somewhat repugnant meaning to many of us, it having been used in relation to those gentlemen who have acted, under the Finance Act of 1910, in carrying out a task which has been not only very distasteful to many of them but somewhat inoperative in its results.

The noble and learned Lord spoke of these gentlemen as being whole-time valuers. I do not know whether your Lordships will think it worth while to raise again in this House the question as to whether you, in fact, will get the most reliable and best-informed arbitrators by asking them to give up the whole of their time to the task imposed upon them under t his Bill. I am not at all satisfied in any case that the Bill should not be modified in this respect, and whether, in Clause 1, subsection (3), it is not open to these gentlemen to carry on some other business altogether in addition to what they would do in connection with this Bill so long as it cannot be described as "in private practice or business as estate or land agent, surveyor or valuer." If they are really to be whole time servants, it seems to me desirable to make the Bill watertight to ensure that. I may say, in passing, that I myself have very grave doubts whether, even by giving gentlemen in the position of a professional surveyor what is deemed to be a large salary—namely, £3,000 a year, which after all is only the monetary equivalent to something like £1,500 a year before the war—you are going to get men who are best acquainted for the time being with the land of which they will be asked to assess the value. It is very difficult for gentlemen who are professional surveyors, unless they take their pant in the day to day business of valuation as conducted in a valuer's office, to realise what are the changing values of even agricultural land, still more of land which has some other attributes besides its value for agricultural development or cultivation.

I was rather sorry to hear—it is a fact of which I was not previously aware—that the salaries of these gentlemen are to be paid out of the fees charged to those persons who are at issue upon the value of the land. I hope that the Government will reconsider that proposal, because it does not appear, as I understand, on the face of the Bill. It seems to me that if the salaries are as high as in my judgment they ought to be in order to get the cream of the profession, it may impose quite an undue burden upon those, possibly in some cases poor men, whose land is being taken from them compulsorily, and who may be doubtful as to its true value.

As regards value, it occurs to me extremely difficult to assess at the present time what the true value of agricultural land is. In any case, I am quite satisfied that, although land has been recently changing hands very considerably and passing to a large extent into the hands of sitting agricultural tenants, agricultural land in this country is still far cheaper, considering its inherent value, than land in any other country in Western Europe, and possibly in any other country iii the world. Agricultural land, at any rate, at the present apparently enhanced value, is sold at prices which to my knowledge some of the Continental cultivators view with considerable envy, bearing in mind the very much higher prices they have to pay both for proprietorship and by way of rent in the case of occupation.

I venture to hope, my Lords, that this Bill will receive the full sympathy of your Lordships' House; at the same time, I hope that the Government will regard with favour any reasonable Amendment that may be moved in the Committee stage, and not be in any way prejudiced by the idea that because many of us are owners of agricultural land we are influenced in our judgment upon this Bill by those considerations. On the contrary, we are, as I believe, prepared to make as easy as possible the lot of the men who, having served the country in a military or naval capacity during the war, desire to settle upon agricultural laud with as easy a burden upon their shoulders in the matter of rent as is possible. Many of these men will be none too well qualified from an agricultural standpoint to carry on their operations, awl we do not want to add to the difficulties of their position by charging them an undue amount for the land which they will occupy.

LORD PHILLIMORE

My Lords, there is no doubt that this Bill has been improved a good deal during the course of its passage through the other House, but I hope that it will receive further improvement in this House and that the Government will not find itself obliged to oppose certain very reasonable Amendments which have been suggested by authoritative bodies possessing great knowledge upon this subject, such as the Surveyors Institution and the Auctioneers and Estate Agents Institute. For this latter body, knowing something of the leading men who compose it, I have a very great respect as a valuable, impartial, and knowledgeable business body. There are suggestions made by both these bodies which I trust will be before your Lordships and will receive your Lordships' attention. One Amendment to Clause 8, which is strongly supported by the Auctioneers and Estate Agents Institute, I shall take the liberty to put down for your Lordships' consideration.

On Question, Bill read 2a, and committed to a Committee of the Whole House.