SMALL LANDHOLDERS AND AGRICULTURAL HOLDINGS (SCOTLAND) BILL.

HL Deb 12 May 1931 vol 80 cc1119-74

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(Earl De La Warr.)

On Question, Motion agreed to.

House in Committee accordingly:

[The EARL OF ONSLOW in the Chair.]

Clause 1 agreed to.

Clause 2 [Department to be entitled to require information]:

THE EARL OF LAUDERDALE moved to insert the following new subsection: (3) Any information supplied to the Department under this clause shall be treated as confidential, and shall not be disclosed by the Department to third parties without the consent of the landlord.

The noble Earl said: Leases entered into between landlord and tenant are ordinarily their private property and should not be disclosed to anybody. I understand that the Government simply wish to ask for this information with the object of arriving at the fact whether the land which they propose to acquire is suitable for small holdings. The Amendment is not controversial and I hope that the noble Earl in charge of the Bill will be able to accept it.

Amendment moved— Page 3, line 9, at end insert the said new subsection.—(The Earl of Lauderdale.)

THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (EARL DE LA WARR)

As the noble Earl says, this Amendment is not a very controversial one, but at the same time we would rather not insert it in the Bill, because at the present moment all information that is gathered by the Department in this manner, or in such manner as is outlined in this Bill, is treated with absolute confidence, and apart from anything else the insertion of this Amendment in the Bill would rather imply that other information, not specified in this Bill, which is going to be gathered by the Department, need not be so treated. At the present moment, as I have said, all this information is treated confidentially and it is therefore unnecessary to insert this Amendment. I hope, therefore, the noble Lord will not press it.

THE EARL OF LAUDERDALE

My point is that there is nothing in the Bill which says it is going to be treated confidentially. It may be so treated by the present Government, but supposing we have another Government which do not treat it confidentially? I do not think that they should make public such information any more than they make public Income Tax returns. It is a very small point, and not controversial, and I hope the Government will accept the Amendment.

EARL DE LA WARR

I have discussed this matter with my right hon. friend, and he does feel, while he is in full sympathy with the idea underlying the Amendment, that it would be better not to put it in the Bill, for the reason I have given. As your Lordships know, the Department already collects a great deal of this sort of information under various powers, and all of it has always been treated as confidential. Therefore the Amendment is unnecessary, and I hope it will not be pressed.

THE MARQUESS OF LONDONDERRY

I am inclined to think that the noble Earl in charge of the Bill is right. The amount of various information which passes through the Department, is so great and so wide, and it has always been deemed to be confidential and has been treated as such, that I feel that if the Amendment is inserted in the Bill it is making a new departure. I should have thought it was really unnecessary, and I suggest to my noble friend that he should not press it.

Amendment, by leave, withdrawn.

Clause 2 agreed to.

Clauses 3 to 7 agreed to.

Clause 8:

Amendment of provisions as to resumption of holdings.

8.—(1) The occupation by a landlord, for the purpose of personally residing thereon, of a holding being his only landed estate, shall not be a reasonable purpose in respect of which the Land Court may authorise resumption by the landlord of a holding.

VISCOUNT ELIBANK moved to leave out subsection (1). The noble Viscount said: The subsection in question provides: The occupation by a landlord, for the purpose of personally residing thereon, of a holding being his only landed estate, shall not be a reasonable purpose in respect of which the Land Court may authorise resumption by the landlord of a holding. The effect, therefore, of the Amendment which I am now proposing is that, as has happened in the past, the Land Court may allow the resumption by the landlord for the purpose of his personal occupation of a holding which is his only landed estate. Prior to the Act of 1911, that is, under Section 2 of the Act of 1886, resumption could be granted by the Land Court for any reasonable purpose having relation to the good of the holding or of the estate, but the Land Court apparently felt that some definite guidance should be given to them in certain respects, and Section 19 of the Act of 1911 was passed.

That section provided that the resumption of and the occupation by a landlord for the purpose of personally residing on the holding, being his only landed estate, should be deemed a reasonable purpose. The Land Courts have interpreted this section to mean that they are bound to grant resumption for the purpose of personal residence if the holding is the applicant's only landed estate, and that apparently is the reason why subsection (1) of Clause 8 has been inserted in the Bill. The most sensible compromise between these two extremes seems to me to be that the Land Court should have full discretion to refuse or grant the application, whilst taking into consideration any reasonable request for resumption for personal occupation. This clause as it stands, on the contrary, deprives the Land Court of that discretion, and it categorically directs the Court to refuse resumption for personal occupation. It seems that in the House of Commons no compromise could be arrived at. The subsection as it stands is most unfair and unjust, and if it remains as it is landholders' holdings will become practically unsaleable. My noble friend the Duke of Atholl, who is supporting the Amendment, will have further observations to make upon that subject, I am sure.

On referring to the years 1919 to 1929, or to the last three years, I find that the number of cases in which resumption was given for personal occupation was very small indeed. In fact, during the last three years, there have only been eighteen such cases. I submit this Amendment to your Lordships in the belief that it will remove from the Bill a subsection which, as I have stated, is most inequitable, and which I cannot help feeling is instigated to some extent by class prejudice. I am sure that it is quite uncalled for by any transgression of the spirit of the Act which now exists, or by any public demand in Scotland.

Amendment moved— Page 5, line 7, leave out subsection (1).—(Viscount Elibank.)

THE DUKE OF ATHOLL

I beg to support the Amendment which has been moved by my noble friend. This is not a clause which in any way affects agriculture in Scotland. It does not help the case of the small holders, nor does it affect the generality of proprietors. It is wonderfully mean in its action, and very petty in its conception; and I cannot understand any Party, such as the Labour Party, which stands for, or at all events says it stands for, equity—in other words "A man's a man for a' that"—or the Conservative Party, which also alleges that it stands for justice and equity all round, agreeing to it. In effect, it means that if a man's property is so reduced in one way or another that the last bit of land he has got is no bigger than a small holding, he is to be deliberately prevented from occupying it.

Up to now under existing Acts it has been recognised that it would be a decided hardship if this were to be the case, and it would mean that certain individuals, probably the poorest owners of land in this country, reduced to the status of small holders, would not be allowed to occupy and work the land which they themselves possessed, although it would be open to them to claim to become small holders on someone else's property. Just after the War there were a few cases of this sort, and the Land Court considered that under the Act there was a just claim for resumption. In 1927, however, there were only six cases, and in 1929 there were only three cases. In this Bill it has all been altered, and under this clause a landlord's occupation of a small holding for the purposes of residing thereon is not to be deemed a reasonable purpose in respect of which the Land Court may authorise resumption. I cannot understand any more reasonable reason. Attempts were made in Committee in another place to get a compromise, to the effect that the position that existed prior to 1911 should be restored, and that the Land Court should have discretion. That is suggested by my noble friend, and one would have thought it was a reasonable way out of the matter. This, however, has been refused, and we have no alternative now, except to move the rejection of the whole subsection.

I will give a case in point. It is imaginary, but it might quite well happen. Imagine an owner of property, we will say in the Highlands of Scotland. He perhaps fought all through the War, and his people had fought for their country for generations, and were perhaps the owners of the land for hundreds of years. He is so impoverished that he has had to sell the whole of his estate except a small corner. Perhaps he has gone to the Colonies to earn just a little money to enable him to live at home. Is it reasonable to stop such a man coming back to his own home, and telling him that he may not reside upon it? It is perfectly open for him to go and become a small holder, and have another bit of land somewhere else, but he is absolutely debarred from going on the land which is his own. On the other hand, it is not a hardship for a small holder to turn out. He may be a man from outside. He gets full compensation for going, and he can get a small holding again immediately somewhere else.

The proposal in the Bill is absolutely unfair, and I hope your Lordships, for the good of all parties, will strike it out. I believe it was put in some time ago in a one-clause Bill by the Secretary of State for Scotland—probably for some quite different reason, and in different circumstances; but I am quite sure that when it is realised from what I have said, how unjust it is, the Government ought not to oppose this Amendment, or at least should agree to put the clause back as it was on the Report stage in another place. Otherwise, I hope my noble friend will press the Amendment to a Division.

VISCOUNT NOVAR

I do not think I was fortunate enough to attract the attention of the noble Earl in charge of the Bill on the Second Reading when I dealt with this portion of it, and therefore I would like to emphasise what I then said. There was a good old Liberal doctrine that nothing adds so much to social stability as the wide diffusion of property in small holdings and houses. We have many of us observed its good effects in other countries, comparing them with our own system of larger holdings—which was also very successful in its way—and we have found that that view is a sound one. And one may say in these days of triumphant democracy that there never was a time when social stability was more required, and when it deserved to be more encouraged. The Government, by this clause, are putting a bar in the way of occupying ownership. The cases may not be very numerous, but this is one of the ways in which private ownership is being ended in this country. On a large estate this provision might make the small portion of it which remains, as the noble Duke has just described, quite uninhabitable. It might make it unlettable. It does not often happen, but there are black sheep in every class, and a cantankerous crofter is about as objectionable a neighbour as you could have. The number of possible cases of hardship is infinitesimal, and cases of real hardship could probably be counted on the fingers of one hand within our experience of the sale of crofts and small holdings. They are practically unsaleable now: this would make them absolutely so. I trust that the noble Earl will go to a Division unless the Government give way.

EARL DE LA WARR

With the remarks which have fallen from the lips of noble Lords, opposite it is very difficult to disagree, but at the same time we have to remember that there are two sides to every question. The purpose of this clause is to remove an undoubted grievance that has existed among small holders, and to do away with a danger to their security which has occurred in the past when, we will say in consequence of the break-up of an estate, the holder is confronted with the alternative either of buying or removing himself. Under the existing law if the buyer can show to the Land Court that he has no other landed estate, and that he wishes to occupy the holding himself, the Land Court have no option but to grant an order for the removal of the present occupier. There is no doubt this does make for hardship, and hardship which could be prevented if this subsection is allowed to remain in the Bill.

Noble Lords opposite have referred to other hardships. One noble Lord mentioned the case of a man who has been away, and who returns and wishes to farm a bit of his own land. If he cannot get a bit of his own land undoubtedly that is bad luck; but it is equally unfortunate—in fact I should say more unfortunate, because after all the returning owner has been away—for a small holder, who has been on the land possibly all his life (possibly his family before him have been there) to be thrown out. The noble Viscount, Lord Novar, referred to another case. He asked: What about the man who has bought a holding and wishes to resume occupation? In the next sentence I think he really answered himself. He asked: Who will buy a farm that he cannot occupy? That is the reply. In fact it will simply mean that anyone who wishes to acquire land will doubtless have to satisfy himself that he is likely to obtain voluntary possession of it afterwards. This Amendment raises a point that was debated at considerable length in another place. On the balance of justice and injustice and of hardship for this man or that I think there is very little doubt that the clause as it stands really meets the demands of the situation. I hope, therefore, in spite of what the noble Viscount said, that your Lordships will not decide to delete the subsection.

THE DUKE OF ATHOLL

What is the objection to leaving it to the discretion of the Land Court?

EARL DE LA WARE

That still leaves the position one of uncertainty. I think that is really the reply.

THE DUKE OF ATHOLL

In other words, it will be loaded against the landlord but it is to be in favour of the other. There is to be no idea of equity. Is that the idea?

EARL DE LA WARR

No.

VISCOUNT ELIBANK

I do not think the reply of the noble Earl on behalf of the Government is at all satisfactory. He advanced an entirely new theory of ownership. He might as well have said that if he owns a house and rents that house to some one that person should have the right to remain in the house whether the owner wishes to resume occupation of it or not. That is the doctrine he is applying to land. It is an entirely new doctrine in this country, so far as I know, except amongst a few, and it is a doctrine which savours very largely, if not wholly, of confiscation. I do not agree that the reply of the noble Earl however conciliatory it might be, is one which I can accept, and I am sure that noble Lords who are acting with me in this matter would not be prepared to accept it. If the noble Earl could see his way on the Report stage to propose some Amendment which would provide for the discretion of the Land Court being brought into play, as suggested by my noble friend the Duke of Atholl, we might be prepared on this side to consider not pressing the Amendment now. If the noble Earl will not do that we have no option but to go to a Division and see what the result of it may be.

THE MARQUESS OF LONDONDERRY

I listened to the reply of the noble Earl opposite and I regretted that he seemed somewhat uncompromising in his attitude towards the Amendment. I should have thought this Amendment was a very reasonable one indeed. My noble friends who have spoken to it have put forward the points in its favour and I venture to think that an unanswerable case has been made. I am not really clear why the Government are determined to resist the Amendment unless it is due to the continual antipathy which they seem to have towards the class of individual known as the landlord. The case made against the subsection is, to my mind, a very strong one. The subsection means that in no circumstances whatsoever can the owner of a particular piece of land resume the ownership of that land. After all, the only thing that is claimed in the Amendment is that if some reasonable case is brought forward it shall be decided by the Land Court. I should have thought no more reasonable suggestion could be made, and I am bound to say that if my noble friends decide that this is an Amendment on which a Division should be taken I shall be very happy to support them in the Lobby.

THE LORD PRESIDENT OF THE COUNCIL (LORD PARMOOR)

I have been listening to the very interesting discussion which has taken place on this matter. Would it suit the views of the noble Viscount who moved the Amendment and the Duke of Atholl who suggested a compromise to let this matter stand over in order that the course suggested should be considered? I am sure it would have favourable consideration, and I think that was rather the view of the noble Marquess. If we could arrive at a compromise on what appears to have a good deal to be said for it I think that would be a right method of procedure. If it could stand over now in order that the point might be considered later I think that would be the best plan.

THE DUKE OF ATHOLL

I understand that we shall have an opportunity of dividing against it if it is not satisfactory on the Report stage?

LORD PARMOOR

Certainly.

THE DUKE OF ATHOLL

That would enable one to put down the same Amendment on Report stage in case the compromise is not a satisfactory one?

LORD PARMOOR

Certainly.

VISCOUNT ELIBANK

In those circumstances I beg leave to withdraw the Amendment. Will the Government put an Amendment on the Paper?

LORD PARMOOR

I understood when I made the suggestion that the Amendment would come from your side. I do not think it much matters, but that is the suggestion which I understood to be made.

Amendment, by leave, withdrawn.

Clause 8 agreed to.

Clauses 9 to 13 agreed to.

Clause 14:

Option to statutory small tenant to become landholder.

14. In the Landholders' Acts the word "holding" shall, in addition to the holdings mentioned in Section two of the Act of 1911, include as from the date hereinafter mentioned every holding which at the commencement of this Act is held by a statutory small tenant and the word "landholder" shall he construed accordingly:

Provided that this section shall not apply in the case of any statutory small tenancy unless, not later than one month prior to the expiry of the period of tenancy current at the commencement of this Act or of any subsequent period of tenancy, the tenant serves on the landlord of the holding written notice that he desires that this section shall apply, and the date hereinbefore referred to shall be the expiry of the period of tenancy current when such notice was served.

VISCOUNT NOVAR moved to leave out Clause 14. The noble Viscount said: Under the Landholders' Acts procedure the fixtures, in fact if not in law, are the landlords. The statutory small tenant becoming a small landowner would naturally apply for lowered rent and compensation for upkeep of fixtures belonging to the owner. There is no reason why he should uphold them. They are not his. He can get no compensation for them. And the owner has no power to keep them up as the tenant has a free hand. Some deduction may become due to the outgoing small landholder. I dealt with this point on Second Beading and I quoted the Minister's speech on the Committee stage of the Bill in another place, in which he said that there had not been a single application for this change in the law; no one had asked for it.

Part II of the Bill gives the statutory small landholder further rights. He is the man who has all these buildings and fixtures provided for him by the landlord like any other tenant. By this clause as soon as the statutory small tenant becomes a landholder he can assign his holding. Why should he assign buildings which are not his and for which he never paid, and claim compensation for any other fixtures he may choose to make without any consent of the owner? The Land Committee reported that the crofting experiment initiated by the Act of 1911 had not been a success in the Lowlands and should not be extended, as it will be by this clause. The Government act in the teeth of the recommendation of that Committee, and refuse to add, like their predecessors I may say, far more important recommendations, such as the rating of small holdings and other subjects. I beg to move.

Amendment moved—

Leave out Clause 14.—(Viscount Novar.)

EARL DE LA WARR

I think the history of the clause is, as the noble Lord has just stated it to be, that it is the result of a compromise in another place. A certain section in another place wished to insert a clause saying that all statutory small tenants should be declared landholders, and, as the noble Lord quite rightly said, my right hon. friend the Secretary of State was by no means convinced that there was a very great demand for this. However, after discussion, I think he was impressed with the fact that there was undoubtedly some demand, and, therefore, it was agreed to insert this clause giving the option for transfer from one status to another. I think it is a reasonable proposal. If, as the noble Lord says, there really is no demand for such provisions as are in this clause, then it will not be utilised. At the same time, I think your Lordships would agree that if there is a demand it is quite right there should be the option.

THE DUKE OF ATHOLL

I cannot quite follow the argument of the noble Earl who has just spoken. He talks about compromise in another place; but compromise on what? The other day the noble Earl said he was dealing with principles in this Bill. I cannot quite see where the principle enters in this, a matter which is certainly not to the good of agriculture. But apparently there was a bargain between His Majesty's Government and certain people who held the whip hand. They knew it was wrong; they did not like this clause a bit; but, because they had their tails twisted, they had to compromise on what they knew was wrong. That is the position as I understand it, and I put it that way in no offensive spirit. People do get into awkward places, and have to be grateful to those who help them out With regard to Clause 14, personally I have considered every sort of Amendment to see if it was possible to make it in any way acceptable to agricultural opinion in these areas, and after all it is agriculture that matters, or ought to matter, in an Agricultural Bill.

This Bill is supposed to be a Bill amending existing legislation, but we find slipped into it a clause which would put the whole of Scotland, including the South of Scotland, than which there is no finer agricultural area in the world under the Crofting Acts, and under a system which is not the best, and I am certain not one which is in the interests of agriculture, as apart from politics. No one, no matter whether he may be a proprietor, or farmer, or ploughman, is in the least anxious to see such a thing happen as is proposed in this clause. The statutory small holders are infinitely better off than they would be if they were landholders; in other words, crofters. In the case of the statutory small holders the buildings are put up and maintained by the landlord, and an annual rent is paid for them. That is very much better for the tenant, as he has not to waste his money on any kind of buildings, and has, therefore, more capital with which to stock his farm and make a profit than he would have if he were a crofter where he would be responsible for his own buildings.

In ninety-nine out of one hundred cases in the South of Scotland, in the non-crofting areas, the landlord has himself made the buildings and improvements, whereas in the crofting areas the buildings and improvements are mainly made by the crofter, and, as the great majority are as I have described, it seems absurd to bring in a Bill for a very small minority which could be dealt with quite easily in any way under ordinary arbitration, under the special Act that exists for the two cases. It seems absurd to change the whole system in Scotland for a very few people who might come under the hardship that the noble Lord has just told us of. The crofter in the North generally wishes to stay on his holding for ever, and has other kinds of work to go to, such as fishing, at odd seasons. The small holder in the South, on the other hand, very often wants to make his start in agriculture on an ascending scale by commencing on a small holding and gradually building up, and by this suggestion you tend to a great extent to stop that.

If this clause passes, agriculture in the South will be put back to the conditions that obtain in the North, and in any case, if this clause becomes law, there would be, I think, a hopeless muddle over compensation, for on the statutory small tenant becoming a small holder there may be some buildings which he has made himself, but the greater proportion would be the property of the landlord. Repairs would be made by the small holder who would, of course, have to keep up the buildings, but the premises would definitely belong to the landlord, actually as well as legally. There is not a single case, so far as I know, of anybody representing farming interests having asked for this clause, which was put in by pressure, I believe, from one individual who makes politics more his hobby than anything else. The noble Earl told us that there was a great want for this clause in the South, or at any rate a desire for it, and that, therefore, there ought to be a compromise, but I would ask him to pay attention to the following statement made by the Secretary for Scotland, now Lord Privy Seal: I have had no letter of recommendation from a solitary statutory small tenant in Scotland. I have had no evidence and I know of no hon. member who has any evidence that they desire this change. Last year when the previous Bill was going through, we did have letters, speaking from recollection about fifteen or so, from statutory small tenants who took the trouble to write to us and say that they did not want this change. The change would not be beneficial to them and they did not desire it. Why does the noble Earl bring in this clause which nobody wants? Perhaps he will explain to me what the reason is.

From the proprietor's point of view it is objectionable to bring in two forms of land holding on his estate. It would prevent the circulation of smaller tenants to the larger farms, and in the event of a small holder being unable to work his holding through illness, old age or infirmity, he would be able to assign his holding to someone else. That is all right where a man has made the buildings himself, but why should a person who is no longer able to keep the holding have the power to assign to another the right of occupying buildings which are not his, and for which he has never paid a single penny? That is not the way to encourage people. So personally, if the noble Karl still adheres to the reply he has given, I shall support the noble Viscount if he goes to a Division.

EARL DE LA WARR

May I add one or two words to what has already been said? I think the noble Duke in his speech very largely answered his own case. During the greater part of his speech he was engaged in telling us how few people wanted this alteration. As it is purely a permissive clause, only giving an option, why should the noble Duke mind its being given, if he is so sure that nobody is going to take advantage of it? The noble Duke made a quotation from the speech of my right hon. friend in another place. That speech was delivered upon a different clause from this one. It was delivered, I think the noble Duke will find—I speak subject to correction—in regard to a clause which altered automatically the status of the statutory small tenant to that of landholder. He was not replying to the clause which simply gives an option.

The noble Duke asked: Why make this change in the general law for a very few people confined to certain areas? There again I make the same reply. This is not a change in the general law. It is merely the giving of a permissive power to those parts of the country that wish to use it. It leaves all his friends in the South—whom the noble Duke is convinced do not want it—free not to make use of it. I hope, therefore, noble Lords will not press this opposition to a clause which does give a right, which we understand a number of people—I cannot tell your Lordships how many, possibly not a great many—would desire to use.

LORD CLINTON

The noble Earl in his reply used the rather curious expression "if there is a demand" the option to take over should be given. Does that really mean that if somebody, some day, somewhere, wants to have leave to erect buildings that do not belong to him, therefore as a matter of policy it should be given? He regards this as a very small change. It is a very large change. It effects the system of land tenure of all these statutory small tenants. They already have many advantages not given to the small holders. Except for this advantage the whole of these people are in the same position not only in Scotland but throughout England. If this clause is passed and the Government are able to lay down that any smallholder may take over for himself, not the legal ownership but the rental value of the buildings, how can they resist a demand from all over the Kingdom? I say that this is a very important change in land tenure which I hope your Lordships will not allow.

THE DUKE OF BUCCLEUCH

There is one point which I would like to raise. This clause was not in the original Bill. It is quite obvious that when the Bill was introduced the Government did not think it necessary or even desirable. It was resisted on the Committee stage in another place, and according to my noble friend on my right—and I have no doubt that he is correct—it was only inserted in the interests of a small section. There has been really no case made out for it. There has been nothing to show why the Government changed their views from their first position when they thought it unnecessary. In the greater part of Scotland, except in the Highlands, landowners provide all equipment. This Bill gives an option to the tenant to take over equipment if he likes and to be put in the position of a crofter. I believe there have been certain grievances in the North where tenants have erected some of the buildings themselves. It would be perfectly easy to put in some provision by which any tenants who have erected buildings themselves on statutory small holdings would be able to obtain compensation, but to alter the whole law, for which there is no demand whatever, and for which no demand has been shown by anyone except one or two members in another place, I think is most undesirable; and, as I would point out again, it was not the intention of the Government when they introduced the Bill. It is an entirely new clause brought in on Report.

On Question, Amendment agreed to.

Clause 15 agreed to.

Clause 16:

Amendments of s. 7 of Act of 1911.

16.—(1) The subsection which is by Section nine of the Act of 1919 directed to be substituted for subsection (9) of Section seven of the Act of 1911 (which requires notice of intention to prepare a scheme to be given to the landlord of land to be comprised therein), shall be amended by the substitution in paragraph (a) of the proviso of the words "twelve months" for the words "six months."

THE DUKE OF ATHOLL moved to leave out subsection (1). The noble Duke said: Since putting down this Amendment I have learned that the Scottish Office feels that it is absolutely necessary to take twelve months instead of six in which to prepare a scheme on account of the multiplicity of interests involved, forms to be filled up, people to be consulted and so on. It is certainly not a very good advertisement for the ability of a Government Department in speeding up things, but they seem to think twelve months necessary to have a complete scheme rather than take six months for a half-baked scheme. I can only say that I think when this hardy annual comes up again, just as now we find six months extended to twelve so we shall find twelve months extended to eighteen, and so on. As a landlord will be debarred from letting his holding for twelve months instead of six months, and thereby have his losses doubled, I want to be assured that the landlord will not be penalised, and that he will have the same rights for twelve months as he would have for six months in the way of compensation, of course pro rata. I understand that that is the case, but I would like to have an assurance given in your Lordships' House by the noble Earl opposite. If that is given I will not press the Amendment.

Amendment moved— Page 7, line 6, leave out subsection (1).—(The Duke of Atholl)

EARL DE LA WARR

I thank the noble Duke for offering to withdraw the Amendment. On the point of compensation I can certainly give him the assurance he requires. Rights of compensation will be in no way prejudiced.

Amendment, by leave, withdrawn.

Clause 16 agreed to.

VISCOUNT NOVAR moved, after Clause 16, to insert the following new clause:

Amendment of s. 11 of Act of 1911.

". Section eleven of the Act of 1911 (which relates to obligations of new holders under Public Health Act) shall be amended by inserting after the words 'have been erected on a holding' the words 'by a landholder or'."

The noble Viscount said: I move the insertion of this new clause as an Amendment of the Act of 1911. It is not very easy to follow, but that is one of the results of legislating by reference. A nominal landlord should not be made responsible for public health requirements. That is provided for by this new clause. He is not responsible for the buildings and has no say in their erection. This Bill would impose larger and more excessive obligations on a large owner than an occupying owner, especially as regards water supply. I can give your Lordships an example. I was instructed by a board in Edinburgh to introduce water to five small holdings. The rentals were £18 and the cost of putting in the water would have been £400. I had to sell two of these small holdings before I was relieved of the obligation to put in a water supply costing £400. As soon as two small occupying owners came in there was no more said about water supply.

Amendment moved— After Clause 16 insert the said new clause.—(Viscount Novar.)

EARL DE LA WARR

Section 11 of the Act of 1911 enacts that where buildings have been erected on a holding for a new holder liabilities under the Public Health Act in respect of nuisances or of the provision of a water supply shall rest on the landholder, and not on the landlord so long as he receives no rent for the buildings. The object of this Amendment is to extend this provision so as to apply to all landholders and not merely to new landholders; that is, people whose holdings were constituted after the 1911 Act came into operation. I think the noble Viscount will agree with my statement of the case. The Amendment would not be unreasonable as regards buildings which are erected in the future. If the landholder puts up a building without the consent, or possibly even against the will of a landlord, it seems only right that the landlord should not have to incur any responsibility under the Public Health Act in respect of that building, seeing that the transaction is entirely beyond his control. It makes no difference to this question whether the holding became a small holding on April 1, 1912, by virtue of the Act of 1911 coming into operation, or was constituted a small holding thereafter.

In regard to the noble Viscount's Amendment, it would apply, as it stands, to buildings already in existence. I think your Lordships and the noble Viscount will see that this really does raise a difficulty, because, as regards such buildings, the liability is on the landlord now. It was imposed on him when the lease was made and was taken into account in fixing a fair rent. If, therefore, the clause in the form which the noble Viscount suggests were applied to these buildings, the effect would be to transfer to the landholder an obligation now resting on the landlord, and there would be no means of making any adjustment to balance that transfer until the arrival of the next term when the rent would be reviewed, which in some cases might be seven years or so. It seems to me that, bearing in mind the point to which I have already referred, it would be better if the noble Viscount were prepared to withdraw this Amendment, and we might discuss the point with him, as we should be quite ready to do, between now and the next stage.

THE EARL or ANCASTER

I put my name to this Amendment for a reason which is easily explained. As both noble Lords who have spoken on the subject have pointed out, the question is a difficult and complicated one, and I do not pretend that I thoroughly understand it. What I should like to be assured of, if the Government can help us on this point, is in regard to cases where premises have been erected without the landlord having anything to do with it or being liable in any way, as a great many crofts have been erected in Scotland by people who live in them. In such cases, where the Landlord has had no chance of conforming to the requirements of the medical officer of health for the district, it seems rather hard that he should be attacked and should have to pay to have these places put into a sanitary condition. I think that is the point. Where the landlord has put up a house and has not made proper sanitary arrangements, and the medical officer complains that the result is a nuisance, then the landlord would probably have to do the work, but where the landlord has not erected the building, it is a little hard that he should be called upon to make good the delinquencies of somebody else. I think the point ought to be made perfectly clear in the Bill.

THE DUKE OF ATHOLL

As I understand it, the new clause proposed by my noble friend simply means that, whoever the party may be that has erected buildings or made certain additions to them, that person is responsible to the public health authorities for such buildings complying with the public health regulations. If the landlord has put up the buildings, then it is only right that he should be responsible for their compliance with the regulations made by the public health authorities, but if, on the other hand, the building is erected on the small holding by the tenant on his own initiative, without the consent of the landlord, it is surely only right that, during the period in which the buildings are in the occupation of the tenant, the tenant should be responsible, not only for complying with the views of the local health authorities, but also for maintaining the buildings in a proper sanitary condition. It would hardly be fair to ask any landlord to father a scheme in which this is not provided for; it is hardly reasonable to make the landlord responsible for a building over which he has no control and which he has not erected; and it would be wrong not to make the tenant responsible. Otherwise you will get the tenants putting up anything they like.

VISCOUNT NOVAR

I am afraid I cannot respond to the request of the noble Earl opposite. I can conceive of no more flagrant injustice than to make a man responsible for the water supply and sanitary convenience of a house belonging to somebody else. There can be no hardship in the man to whom the buildings belong being obliged to do so and, if the local authorities see fit to make objection, it ought to remain a question between the owner and themselves. I very much regret the concession made on this side on Clause 8. I thought it ought to have been insisted upon, leaving it to the noble Earl to bring up any compromise he desired on Report. I think that this had better be done in this case, and I am afraid I must put your Lordships to the trouble of a Division. If the noble Earl has anything to bring up on Report he can do so.

LORD PARMOOR

I do not think the offer made by the noble Earl has been altogether appreciated. Where holdings have been created with liabilities of a certain character between the landowner and the tenant, these have had to be considered in fixing a fair rent when the agreement, is made. They are existing obligations as between the two parties. What the noble Earl has suggested is that in the future, as regards the obligations between the two parties, the matter should be altered in the way which the noble Viscount has suggested. I should have thought that this was perfectly equitable as between the landowner and the tenant. It certainly would be so in my part of the country, but I do not know the Scottish principle. You fix the rent on conditions as they exist and, if you want them altered for the future, you can do it. I think the suggestion of alteration in the future is very reasonable.

THE DUKE OF BUCCLEUCH

I do not think the noble and learned Lord opposite quite understands the position. I will give one instance. On certain land the Department of Agriculture erected byres which did not fulfil the local bylaws approved by the medical officer of health. Suppose that had been done by somebody else, who had erected such buildings on the land of an owner who had nothing to say in the matter but who, under the Bill, would probably be called upon by the medical officer to put the byres right. Where a Government erects buildings that will not meet the by-laws there is no protection whatever, and private persons are still more likely to offend in this particular. In that case the owner would be responsible. I think it is seasonable that whoever has erected the buildings, whether it be a Government Department, a small holder or a landowner, should be responsible for putting them in proper sanitary order.

THE MARQUESS OF LONDONDERRY

The noble Lord and I suffer under the same disability that we are not very familiar with the law regarding these matters in Scotland, but I cannot help thinking that my noble friends behind me have made out a very strong case, which has hardly been answered from the Front Bench opposite. I venture to suggest to the noble Earl in charge of the Bill that the Amendment might be inserted in the Bill at this stage, and that between now and the next stage various deliberations and negotiations could take place for settling this matter. I hardly think, from what I understood from the noble Earl's speech, that he was fully aware that there was an element of injustice in the Bill as he proposes that it should go forward, and I think it is quite possible that the Scottish Office

and my noble friends behind me could consider this matter between now and the next stage of the Bill, and arrange words which could be inserted on Report. I agree with my noble friend Lord Novar that it would be unwise at this stage of the Bill not to insert words which are reasonable words and which would carry out the sentiment which has been urged on this side very forcibly and eloquently. Then, after negotiations, the noble Earl might bring forward words which would suit the case equally well.

EARL DE LA WARR

I would say this, that when the Government admit there is point in an Amendment, but point out that the Amendment as proposed to be applied is not equitable, because it would make this clause retrospective in its effect, I do think that the noble Viscount might withdraw that Amendment. I hope that noble Lords opposite will not take advantage too much of the fact that a, great many of us in this House do not know too much about Scottish law, but when the Government admit frankly that there is a certain justice in this point, I think we are justified in asking the noble Viscount to withdraw his Amendment.

VISCOUNT NOVAR

I have already informed the noble Earl that I was unable to withdraw the Amendment. I do not know why an injustice should be sacred merely because some clause might be made retrospective. It is a most extraordinary argument to use, and I must ask the Government either to accept the Amendment or divide upon it.

On Question, Whether the said new clause shall be there inserted?

Their Lordships divided:—Contents, 47; Not-Contents, 8.

CONTENTS.
Sutherland, D.	Midleton, E.	Addington, L.
	Peel, E.	Annaly, L.
Zetland, M.	Stanhope, E.	Banbury of Southam, L.
	Strange. E. (D. Atholl.)	Clinton, L. [Teller]
Abingdon, E.	Vane, E. (M. Londonderry.)	Elgin, L. (E. Elgin and Kincardine.)
Ancaster, E.	Yarborough, E.
Breadalbane and Holland, E.		Ellenborough, L.
Denbigh, E.	Bertie of Thame, V.	Elphinstone, L.
Doncaster, E. (D. Buccleuch and Queensberry.)	Burnham, V.	Fairfax of Cameron, L.
	Churchill, V.	Forester, L.
Lauderdale, E.	Elibank, V.	Gage, L. (V. Gage.)
Lucan, E.	Hailsham, V.	Jessel, L.
Mar and Kellie, E.	Novar, V. [Teller.]	Joicey, L.
Lamington, L.	Phillimore, L.	Strathcona and Mount Royal, L.
Leigh, L.	Rayleigh, L.
Newton, L.	Saltoun, L.	Templemore, L.
Oxenfoord, L. (E. Stair.)	Sempill, L.	Wharton, L.
	Sinclair, L.	Wynford, L.
NOT-CONTENTS.
Sankey, L. (L. Chancellor.)	De La Warr, E.	Marley, L. [Teller.]
		Ponsonby of Shulbrede, L
Parmoor, L. (L. President.)	Dickinson, L.	Snell, L.
	Hay, L. (E. Kinnoull.) [Teller.]

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.

VISCOUNT NOVAR moved, after Clause 16, to insert the following new clause:—

Amendment of s. 32 of Act of 1911.

".The following paragraph shall be substituted for paragraph (4) of Section thirty-two of the Act of 1911:—

"(4) Except in any case where the landlord satisfies the Land Court that there is reasonable ground of objection to a statutory small tenant (hereinafter in this section referred to as the tenant) and the Land Court find accordingly, the tenant for the time being, unless he has himself by notice or letter of removal intimated to the landlord that he is to renounce his tenancy shall, notwithstanding any agreement to the contrary, be entitled on any determination of the tenancy to a renewal thereof on the terms and conditions hereinafter specified."

The noble Viscount said: This again is an Amendment of a section of another Act, namely Section 32 of the Act of 1911. It is designed to prevent a statutory small holder from backing out of his notice to quit. A tenant now has a right to vacate his holding and give a notice to quit and then go back upon it, which is often very disturbing to the owner of the estate. A tenant in one case intimated on May 10, 1930, that he was to vacate his holding at Whitsuntide, 1931. The landlord replied accepting his notice as sufficient. On July 25, 1930, the tenant made a verbal offer, which was refused. Upon getting that refusal he informed the landlord at the same interview that he was not desirous of renewing his tenancy, as he was getting a farm on another estate. His wife, however, intervened, asking for a written statement of the proprietor's terms, which were given in due course. To that letter the tenant made no reply of any kind. When the proprietor had advertised the place in January, 1931, and was taking in offers on the expressly stated condition that the existing tenant was not to be an offerer, the tenant informed inquirers that he was not through with the place, thus prejudicing the bona fides of the proprietor with the inquirers. He then made an offer through his law agent on the last day advertised for taking in offers, and accompanied it with a threat that, failing its acceptance, he would apply to the Land Court. The offer was refused, because better offers had been received. As the matter now stands, the proprietor cannot let the holding except to the tenant, who is not a desirable tenant, and whose offer was in the circumstances unacceptable, and he has to wait for developments.

The effect of the Amendment is that if a tenant, after giving a notice to quit, changes his mind, and withdraws, he must do so not leis than six months before the end of the tenancy. This gives a landlord six months in which to find a new tenant, and it also gives the tenant six months in which to reconsider his, notice to quit. It is an Amendment that is very favourable to the tenant. This kind of thing gives a good deal of trouble. I remember a case in which the Board of Agriculture intimated that a farm was not to be let, and it was not till six weeks before the term that permission was given to let the farm, which meant that it had to be let offhand to whoever would take it, unless the landlord took it over himself. Nothing could be much worse for decent estate management than to have public Departments and tenants acting in this kind of way.

Amendment moved— After Clause 16 insert the said new clause.—(Viscount Novar.)

EARL DE LA WARR

As things are, statutory small tenants are entitled to a renewal of their tenancy except where the landlord satisfies the Land Court that there is reasonable objection. In this Amendment it is suggested to add the words "unless he"—that is, the tenant—"has himself by notice or letter of removal intimated to the landlord that he is to renounce his tenancy." Are these words really necessary? If the tenant has given notice that he wishes to quit, he has thereby entitled the landlord to commit himself with another party. He has entitled the landlord to enter into negotiations with another party for a new lease. Surely, this is a circumstance which it is for the Land Court to deal with in considering the case when the matter is brought before it. Therefore I suggest that this point is already quite satisfactorily covered by the Bill.

LORD LAMINGTON

I do not think the noble Earl's answer meets the concrete case put by my noble friend, in which a tenant withdraws his notice to give up a farm and leaves insufficient time for the landlord to find a new tenant.

EARL DE LA WARR

My answer was specifically directed to that point. It showed that, under the Bill, if the landholder, that is, the tenant, has given notice that he wishes to quit, then he has entitled the landlord to enter into negotiations with another party for release, and that is a matter which, undoubtedly, will have to be taken into account by the Land Court. Apart from that, I think the noble Viscount will find that his words are rather contradictory, because first he says, "unless he has himself by notice or letter of removal intimated to the landlord that he is to renounce his tenancy," and then he leaves in the words "notwithstanding any agreement to the contrary." Those two phrases are directly contradictory. But that is only a drafting point.

VISCOUNT NOVAR

I do not know that I quite follow the noble Earl's argument, but this I would put, that the tenant at any rate should not have the right to withdraw his notice to quit within six months of the time when he quits his farm so as to enable the estate owner to provide another tenant; and if the noble Earl cannot agree to that I am afraid I shall have to ask the House to divide.

THE MARQUESS OF LONDONDERRY

I have listened to the debate, and I would really suggest to the noble Viscount that these are matters which can be discussed quite easily between the Scottish Office and the representatives of the Scottish Peers in this House. I would really make this appeal to him, that he would delay his activity on this point until we come to the Report stage, and if no compromise can be reached in the meantime that would be the occasion to raise the matter.

VISCOUNT NOVAR

I do not know whether the noble Marquess has had any experience of trying to convince the Scottish Office of the desirability of making concessions. I remember that the noble Marquess who led the House on the Local Government (Scotland) Bill was quite convinced by my arguments in favour of three Amendments, and he did not ask me to go to the Scottish Office, but he undertook to go there himself and see what he could do. Perhaps the noble Marquess might do the same. I do not anticipate much success myself in going there, but perhaps he might succeed where I anticipate failure.

On Question, Amendment negatived.

Clause 17:

Amendment of s. 10 of Act of 1919.

17.Section ten of the Act of 1919, which relates to the erection of fences, shall be amended by the omission of the words from "as may be necessary" to "in the scheme," and by the substitution therefor of the words "as the usual and reasonable practice of agriculture and estate management may require in the conditions."

THE EARL, OF BREADALBANE moved, after "amended," to insert "by the substitution of the words 'have made' for the word make'". The noble Earl said: The object of this Amendment is to amend Section 10 of the Act of 1919. As the section reads at present it provides: Where the Board make any order for the constitution of new holdings, they shall, if so requested by the landlord, be bound to erect and maintain, or cause to be erected and maintained, such march fence, or fences, as may be necessary to prevent the stock of the landholder straying beyond the limits of the land comprised in the scheme, any dispute as to the necessity for or the adequacy of such fence or fences to be settled, failing agreement, by the Land Court. The object of the Amendment is to compel the Department to put up a march fence if asked for subsequently. As the Act stands at the moment it is not considered to be sufficient because it refers only to fences asked for when the holdings are being constituted. The need for their erection may not become apparent until some time later.

Amendment moved— Page 7, line 24, after ("amended") insert ("by the substitution of the words 'have made' for the word 'make'").—(The Earl of Breadalbane.)

EARL DE LA WARR

As the noble Earl says, the object of his Amendment is to enable a demand for a fence to be made subsequently to the carrying out of the scheme. Your Lordships will realise, I think, that this might be a most serious matter for the public Exchequer. In deciding whether or not to carry out a scheme it is essential that the cost of that scheme should be known. As your Lordships are very much better aware than I am, some of these fences which are required are very long fences and likely to be very expensive. It is possible that the Department might be faced suddenly with a demand for a fence costing, let us say, three or four figures even five or ten years after the initiation of the scheme. If there is any case for the alteration of this clause I suggest it is almost in the other direction of putting some specific time in. I understand that hitherto a specific time has been more or less understood, although it was not actually in the Act. Therefore I am afraid the Government could not possibly accept this suggestion.

THE DUKE OF ATHOLL

I think the noble Lord has not quite got the point. I see his difficulty, that when you make a scheme it is necessary to know the finance. But there are cases in which the whole scheme is so altered, or might be so altered, as to necessitate fences which might be agreed upon by both sides, in which case, no doubt, they would be put, up. But it is better to leave it open in the event of a scheme being altered for different forms of cultivation, pasture and so on, or same of the land being sold, so that another landlord might have to be dealt with. It might be necessary in a big out-run, for instance, to put up march fences as between two proprietors. I suggest that that should not be entirely cut out. I would not ask the noble Lord to press his Amendment, but I do ask that it should be carefully considered before the next stage, because cases might occur and possibly some reasonable arrangement could be arrived at so that if it was thought necessary in the opinion of those concerned to put up fences in certain eases, they may not be entirely debarred.

EARL DE LA WARR

That is quite a new point which is not included in the Amendment.

THE DUKE OF ATHOLL

It is what it is intended to cover; at least I think so.

EARL DE LA WARR

Perhaps the noble Earl would be satisfied if it was left over.

THE EARL OF LAUDERDALE

I should think it would be far better for the Government to have a contingent rather than an assured liability. If the landlord finds that he cannot take it up later on he would have to press for it straight away. In that case the Government would have au assured liability instead of a contingent one which they might not have to face.

EARL DE LA WARR

Of course, His Majesty's Government are so keen to carry out the Bill "economically," to use Lord Hailsham's word, that we really prefer not to accept the Amendment as it stands.

On Question, Amendment negatived.

THE EARL OF BREADALBANE

The next two Amendments are consequential.

Amendments moved— Page 7, line 28, after ("may") insert ("at any time"). line 28 and 29 leave out ("in the conditions").—(The Earl of Breadalbane.)

On Question, Amendments negatived.

Clause 17 agreed to.

Clauses 18 to 25 agreed to.

Clause 26:

Amendment of s. 3 of principal Act.

26.—(1) Subsection (1) of Section three of the principal Act (Which subsection requires notice to be given to the landlord as to certain improvements) shall be amended by the substitution of six months for three months and of three months for two months.

(2) Where the landlord of a holding to whom notice has been given by the tenant under subsection (1) of Section three of the principal Act of intention to execute an improvement, gives notice to the tenant within one month after receiving the aforesaid notice that he objects to the making of the improvement or to the manner in which the tenant proposes to do the intended work, the matter may be referred on the application of either party to the Department who shall determine the same, and in any case where the landlord has so given notice of objection compensation shall not be payable in respect of the improvement unless the Department are satisfied that it ought to be carried out, and where the Department prescribe the manner in which it shall be carried out, unless it is carried out in accordance therewith.

THE LORD CHAIRMAN

I would call the attention of the noble Duke, the Duke of Buccleuch, to the Amendment of the noble Viscount, Lord Novar, which would come in between the first part of his Amendment and the new subsection he proposes to add. To save the noble Viscount's Amendment I would suggest to your Lordships that I should put the question down to "to arbitration"; that after that I should put the noble Viscount's Amendment, and then, thirdly, the second part of the noble Duke's Amendment. I think that is the way it would come in.

THE DUKE OF BUCCLEUCH

The noble Lord, Lord Clinton, is moving.

THE LORD CHAIRMAN

In that form?

THE DUKE OF BUCCLEUCH

Yes.

LORD CLINTON moved, in subsection (2), to leave out all words after "referred" and insert "to arbitration." The noble Lord said: I understand the suggestion of the noble Earl, the Lord Chairman, is that I should move to leave out the remainder of the clause after the word "referred" in line 31 and insert the words "to arbitration." This clause deals with claims for compensation which may be made by tenants for improvements under Part II of the First Schedule of the Agricultural Holdings Act. Your Lordships will recollect that that Schedule deals with improvements made under varying conditions. Part II, with which we are dealing, is concerned with improvements made without the consent of, but after giving notice to, the landowner. As that Part stands the only item which it includes is drainage. Parliament has been exceedingly jealous about allowing any alteration to that Part on the ground that it is not reasonable that one man should spend another man's capital without his consent. The principle of that clause will, no doubt, be debated later. For the moment I have to deal with the question of arbitration.

Drainage was the only improvement included under Part II of the Agricultural Holdings Act. Now there are seven or eight items added many of them of great importance. The Government have rightly recognised the necessity of some appeal and they suggest that the Board itself or the Department of Agriculture in Scotland should be the body to whom appeals should be addressed. I really want some information on this because there are a great number of cases in which appeals are allowed under this Bill, everyone of them to arbitration except in this one clause when the appeal is to the Department. I do not know why there should be an alteration in the method of these appeals. The appeals themselves are of very great importance and deal with irrigation and water supply, embankments and the installation of electricity. The latter is particularly important because an unsuitable electrical installation may endanger the safety of the whole of the landlord's buildings. We must require that the appeals should be made to people who are competent to deal with them. I do not suggest that the Department is incompetent but, as a matter of fact, I should prefer that it went to arbitration rather than to the Department in Scotland. I will not deal with the details of the matters that would come before the arbiters. They will require special instructions. We can give those instructions to the arbiters; I do not think we can give them to the farmer. For that reason I suggest that the words "to arbitration" should be inserted.

Amendment moved— Page 9, line 40, leave out from ("referred") to end of the clause and insert ("to arbitration").—(Lord Clinton.)

EARL DE LA WARR

The noble Lord has addressed himself to the one point in this Amendment, and asked me why it is that in this particular case the Department has been chosen rather than an independent arbiter. I think there are two reasons. The first is one that the noble Lord gave himself; that is, that we are dealing here with such a large number of points, and very complicated points, that it is most important as far as possible to get uniformity of decision over the whole country. While the principle of arbitration does certainly I think have for some of our minds rather an attraction as against the Department, we do undoubtedly want uniformity, and I think we will get it more from the Department than from a number of different arbiters. There is the other point, the question of expense. There, again, I do not think there is very much doubt that the matter could be decided by the Department a good deal more cheaply than by outside arbiters who, as we know, have to be first-class, competent men, and who would require somewhat large fees. This is a point upon which the National Farmers' Union of Scotland have strong views. They support us in our view that the Department should be the body chosen. I do not offer that to your Lordships necessarily as a reason why you should support us, but rather because we will get greater uniformity and less expense.

THE DUKE OF BUCCLEUCH

I quite agree with the noble Earl opposite that it is a somewhat difficult question; still I think it very doubtful for many reasons if it is desirable to have the Department for this purpose. The Department has to administer, and you do not want to have them between two people. That might make them unpopular. I am very doubtful, also, whether it is a sound thing to do. I admit there is something to be said for uniformity. The noble Earl said it would save expense. So it will as regard the actual arbitration, but judging by the past performances of the Department of Agriculture, I do not think it is likely to reduce the expense of carrying out the works. There may be a slight saving in the first place, but considerably extra expense in the second place. I am sorry the Government have put this in, because it is placing the Department in a somewhat invidious position. As, however, the Government are very strong upon this, perhaps my noble friend will not go to a Division.

Amendment, by leave, withdrawn.

VISCOUNT NOVAR moved to add to the clause: "declaring always that no tenant who has effected an improvement or improvements under the said subsection at an aggregate cost exceeding one year's rent of the holding shall be entitled to terminate his tenancy without the landlord's consent, before the lapse of five years after the execution of the improvement last in date." The noble Viscount said: This Amendment has been asked for by the Central Association of Agricultural Arbiters in Scotland and the Border. I do not know of any more reliable source of information. It is evidently a reasonable Amendment and therefore I move it on their behalf.

Amendment moved— Page 9, line 38, at end insert the said words.—(Viscount Novar.)

EARL DE LA WARR

The point of the noble Viscount in moving this Amendment is to safeguard the landlord against heavy compensation for improvements which are carried out in the last years of tenancy, but it is very difficult to see how a tenant can be debarred from reliquishing his tenancy under certain circumstances. He may die; he may fall ill; he may become bankrupt; he may be disabled. I do riot know what would happen then under the noble Viscount's Amendment. Again, we have to remember that the landlord has the right, under Clause 26, of appeal to the Department before the work is carried out. Further, the landlord will only be required to pay the outgoing tenant such compensation as represents the value of the improvements to an ingoing tenant, and would presumably be able to get the equivalent of that from the new tenant. Your Lordships will notice that the Amendment uses the word "cost" of the Improvement, but the amount of compensation need not bear any relation to the cost. It is the value to an incoming tenant. In practice, the new tenant would generally take over the improvements from the outgoing tenant. This Amendment would tend, I think, to make some tenants, even if the Amendment were workable, unwilling to risk making what we would all agree are desirable improvements. I hope, therefore, the noble Lord will not press an Amendment which is undesirable and, we think, unworkable.

VISCOUNT NOVAR

As my noble friends seem to take no interest in the Amendment, I will withdraw it.

Amendment, by leave, withdrawn.

THE EARL OF ANCASTER moved to insert the following new subsection: (3) When any matter is referred to the Department under this section the Department shall have regard in particular to the estimated cost of the improvement in relation to the size and value of the holding and to the probable return on the capital outlay, and shall also take into consideration any injurious effects which the execution of the improvement may have on neighbouring owners or occupiers.

The noble Earl said: I think this Amendment is of some importance. It does give a certain guidance in regard to the improvements to be carried out. I refer particularly to that part of the Amendment which deals with taking into consideration any injurious effects which the execution of the improvement may have on neighbouring owners or occupiers. I think that is a very important direction to the Department when these works are carried out. Some of the works will alter the water of the countryside in parts of Scotland, where, as we know, there is a great deal of water. It may very easily be that by altering embankments and sluices, water courses, ponds, walls and other works very serious damage may be done. The alteration may suit one tenant, but may do very serious damage to neighbouring tenants. I hope, therefore, the noble Earl will accept the Amendment, which I think is a very harmless one, only giving instructions which it is very necessary should be given to the Department.

Amendment moved— Page 9, line 38, at end insert the said new subsection.—(The Earl of Ancaster.)

LORD LAMINGTON

I hope the noble Earl will accept this Amendment. It really carries out what my noble friend Lord Clinton proposed in his Amendment regarding arbitration. It merely gives some safeguard in the direction which has been indicated by the noble Earl, Lord Ancaster, when he stated that there may be considerable danger or expense in carrying out so-called improvements in regard to embankments, rivers, water supplies and so on. It is only right that the Department should have these matters under its consideration specifically before the compensation is assessed.

EARL DE LA WARR

There is nothing in either of the Amendments to which we could possibly take exception, but I hope your Lordships will not ask us to insert this Amendment in the Bill for a quite general reason. It is always preferable to avoid giving detailed instructions to an arbitrator or court for the reason that, while it is possible that at the time you may think your instructions are quite complete, very often important matters are left out. The tendency of such instruction, therefore, is rather to narrow the field of the point of view from which the arbitrator or the court must view the matter. The inclusion of certain instructions is inclined on the whole to exclude certain other instructions that are not mentioned. For that reason alone I would ask your Lordships not to insert the Amendment in the Bill, although I admit that everything the noble Earl, Lord Ancaster, and the noble Lord, Lord Clinton, have mentioned will have to be taken into account by anyone dealing with this matter.

LORD LAMINGTON

That is a real bureaucratic reply by the noble Earl. I am all the more convinced of the necessity of the Amendment.

VISCOUNT HAILSHAM

I speak in these matters as a child when it comes to a case of Scottish law, but I do know that it is a dangerous thing to specify certain particular matters which are to be taken into account, because the Courts are apt to construe inclusio unius as exclusio alterius, and to say that those are the only things which the tribunal has to take into account. Therefore, it is rather dangerous to insert a specific instruction unless it is something clearly outside what would normally be taken into account in the absence of instruction. The noble Earl said he agreed entirely with my noble friends behind me that these are matters which ought to be taken into account. As I understand his objection to the Amendment, it is that they would be taken into account without specific direction. I fancy that all that my noble friend wants is to be quite sure that they will be taken into account, and perhaps the noble Earl would ascertain from the legal advisers to the Scottish Office whether there is any doubt that in Scottish law all these matters would necessarily come within the purview of the tribunal. If there is any doubt then I think, at any risk of any undue definition, the proposed subsection would have to go in, or part of it. If, on the other hand, they are all quite clearly covered, then no doubt the noble Earl is right in saying that it is a dangerous thing to define too much. I do not know whether the noble Earl would undertake to consult the Scottish legal advisers to the Government who are, of course, of high authority in these matters, and to tell the House before Report whether they can quite specifically assure us that there is no possible danger of these matters being excluded by the tribunal.

EARL DE LA WARR

I can certainly give that assurance, and I can say now that I have already asked them specifically on this point and that is their reply.

Amendment, by leave, withdrawn.

Clause 26 agreed to.

Clause 27:

Compensation in respect of temporary pasture.

27. Where the tenant of a holding claims compensation in respect of temporary pasture laid dawn in accordance with paragraph (27) of Part III of the First Schedule to this Act, arid the laying down or the leaving at the termination of the tenancy of such pasture is in contravention of the provisions of the lease or of any agreement made by the tenant respecting the method of cropping the arable lands, the tenant shall be entitled to compensation notwithstanding any such contravention but in ascertaining the amount thereof the arbiter shall take into consideration any injury to or deterioration of the holding duo to such contravention except in so far as the landlord shall have recovered damages in respect of such injury or deterioration.

LOUD CLINTON moved, after the third "contravention," to insert "or any loss due to the holding being left in other than the rotation of cropping prescribed in the lease or customary in the district." The noble Lord said: This clause in effect does away, I think, with the last vestige of the cropping clause usually found in farm leases. By the Agricultural Holdings Act cropping was made free during the tenancy except that in the last year of the lease the farm had to be restored to ordinary rotation, for the main purpose of making quite certain that the farm had not been deteriorated and so that the farm might be handed over in working condition to the incoming tenant. When it is stated, as it is in this clause, that compensation shall be paid for all temporary pasture instead of the limited amount laid down in the previous Act, it does mean that the farm cannot be handed over in proper rotation.

There is first of all the objection that the incoming tenant cannot make full use of it. I know of one or two cases in the North-East of Scotland where farms have been laid down entirely in temporary pasture. If the incoming tenant comes in, say, at Martinmas term he has no use for that farm during the winter. He has no straw, no food for his stock and, except perhaps for letting forage for sheep, there is nothing he can do with the farm. He may, if he is wise, perhaps plough up some of that pasture to make ready for crops next year; but the poor man has already paid for what is upon that land and it seems unfair that he should have to break it up without any further use for it. The clause lays down that compensation shall be paid and that "the arbiter shall take into consideration any injury to or deterioration of the holding" due to the contravention of the lease. In most cases it is probable that there will be no injury to the holding itself because the land remained in pasture, loot in certain circumstances there might be loss. If the land had been fed with certain stock—dairy cows, young cattle, horses—the land might deteriorate. But the arbiter is quite open to take that into account.

What is not provided for is the loss to the incoming tenant because he has not received the farm in any sort of rotation upon which he can work it. My Amendment provides for that and lays down directly that "any loss due to the holding being left in other than the rotation of cropping prescribed in the lease or customary in the district" shall be taken into account. I hope the noble Earl will pay some consideration to this matter because it may affect quite a considerable number of people, and we do not want to encourage too much the laying down of land to grass. From the national point of view it is a disadvantage, although for temporary reasons people may be very much encouraged to do so. I beg to move.

Amendment moved— Page 10, line 10, after ("contravention") insert ("or any loss due to the holding being left in other than the rotation of cropping prescribed in the lease or customary in the district").—(Lord Clinton.)

EARL DE LA WARR

The Government quite agree with what the noble Lord, Lord Clinton, says. The only question is whether the words in the Bill really cover his point or not. The words in the Bill, as the noble Lord told your Lordships, are "injury to or deterioration of the holding due to such contravention." I am advised that those words really cover the noble Lord's point. Therefore there is no disagreement, and if the noble Lord would like to discuss the question of drafting with us we are quite prepared to meet him.

THE DUKE OF ATHOLL

May I point out that injury and deterioration do not necessarily cover the point raised by my noble friend? There might he no deterioration but the expense of putting the land back into crop again might entail loss.

LORD CLINTON

The noble Earl was good enough to say that he agrees with this and that there is a possibility of compensation to the man who receives a farm in such rotation that he cannot make use of it, and he told us that that loss is covered by the words of the Bill. I am very glad to hear that, although I am advised that that is not the case. He suggested that perhaps the draftsmen might get together and see what the legal position is and I shall he glad to agree to that.

LORD SALTOUN

In the North of Scotland Martinmas, which is in November, is not an uncommon entry but is a very inconvenient one and will be still more so if the land is laid down in grass. It really makes it absolutely impossible for a man who enters at that time to prepare the land to receive the crop of the following year. On the other point, the noble Earl who replied said that it was covered by the words "injury to or deterioration of the holding." I cannot find any place in the Bill where that is shown to cover the land that the incoming tenant will take over. I think this is a very serious consideration for him, and I hope that the noble Earl will do something to help us before the Report stage.

EARL DE LA WARR

I am quite ready to consider that point.

THE DUKE OF BUCCLEUCH

I will not detain your Lordships for more than a moment, but I am glad that the noble Earl opposite has given us an encouraging answer. This is really a question of very great importance and, as I mentioned on the Second Reading, it very largely affects farm servants. It is admitted that certain people now have to put down more land to grass, but it is very undesirable to encourage them to do so to a greater extent that is really necessary. I hope that the noble Earl will give very favourable consideration to this point, which affects not only the landlords, whose claims, I suppose, are not to be treated seriously, but the interests of a very large number of ploughmen, where too much land has been put down to grass. I am sorry to have detained your Lordships.

THE EARL OF LAUDERDALE

Could the noble Earl assure us that, where buildings are part of the holding and such buildings deteriorate because the labourers living in the cottages have to leave the farm, the point will be properly covered?

EARL DE LA WARR

I do not think the noble Earl must ask us to go further. We quite admit Lord Clinton's point, and we have agreed to discuss it.

LORD CLINTON

I understand that the draftsmen might get together and possibly satisfy us that the Bill covers what we want. I suggest that we should leave it at that and, if we are not satisfied, put the Amendment down again on Report.

EARL DE LA WARR

That is it. You are quite free on the point.

Amendment, by leave, withdrawn.

Clause 27 agreed to.

Clause 28:

Amendment of s. 10 of principal Act.

28. Section ten of the principal Act shall in its application to any case where the lease has been entered into after the commencement of this Act have effect as if the following subsection were added thereto:— (2) This section shall not apply unless a record of the condition of the holding has been made under this Act or in respect of any matter arising before the date of the record so made.

VISCOUNT ELIBANK moved to leave out Clause 28. The noble Viscount said: In moving this Amendment I should like to make a few remarks. Section 10 of the Act of 1923 provides that— Where a landlord proves to the satisfaction of an arbiter appointed under this Act, on the termination of the tenancy of a holding, that the value of the holding has been deteriorated during the tenancy by the failure of the tenant to cultivate the holding according to the rides of good husbandry or the terms of the lease, the arbiter shall award to the landlord such compensation as in his opinion represents the deterioration of the holding due to such failure. It will be noticed that, under the Act of 1923, the onus of proof is on the landlord. He has to prove that the holding has been deteriorated by the fault of the tenant; and further that the deterioration has taken place during the tenancy. Under this clause, in order to prove his case, it is necessary for the landlord not only to prove those two points, but to produce a record of the condition of the holding, or in respect of any matter arising before the date on which the record was made.

It is possible that proof would be easier if a record of the holding was in existence, but, if the fact is proved to the satisfaction of the arbiter, the landlord should not be deprived of the right of compensation merely because no record has been made. It is difficult enough now to claim for the deterioration of land, but if this clause is put on the Statute Book it will make it even more difficult to obtain compensation for bad farming. The noble Earl will probably know, or at any rate I would venture to suggest to him, that the tenant is supposed to be farming according to the rules of good husbandry. In fact, he is under an obligation to do so and, if the holding is in a bad state, the reasonable assumption is that the arbiter will be likely to take the view that it has not been farmed properly. I understand that the National Farmers' Union asked for this Amendment because, under Section 9 of the Act of 1923, a tenant cannot get compensation for high farming unless there is a record of the holding. I should like to point out to the Government, however, that the two cases are not parallel. Deterioration is obvious, and an experienced arbiter can generally say whether it is the result of recent failure or not. On the other hand, it is much more difficult to prove or disprove an improvement in cultivation, unless there has been a careful record of the holding.

Indeed, without an authoritative record of the state of the holding, the landlord would be at great disadvantage in rebutting any evidence put forward by the tenant who, as I have stated, must he assumed to be farming according to the rules of good husbandry. It must further be remembered in this connection that the tenant is entitled to claim compensation for a large number of improvements which must increase the fertility of the land, such as liming, applying artificial manures, and the consumption of cake and other foodstuffs. As I have said, the two cases are not on all fours, and the only effect of this clause would be to assist the bad farmer in Scotland more easily to evade his responsibilities, and to make it difficult for a landowner to secure compensation from a farmer for the deterioration of a holding owing to bad farming.

Amendment moved— Leave out Clause 28.—(Viscount Elibank.)

EARL DE LA WARR

The noble Viscount's Amendment is, so far as I can see, based on the supposed difference in the situation of the farmer who is claiming compensation for all-round improvement of a farm and that of the landlord who is claiming for deterioration, but really I cannot see that there is very much difference. I do not think the noble Viscount established a difference. It does seem to me very hard to resist the claim of the Farmers' Union in Scotland, who tell us that, if they wish to obtain recognition of improvements on their farms they have to produce a record. I regard it as perfectly reasonable that, having said that, they should go on and say that, if the landlord wishes to make his claim for deterioration, he also should produce a record. I do not see any great hardship in that. I think many of us always make a principle of having records of farms at hand when tenants go into them. I should think that this is done on the majority of well-managed estates.

VISCOUNT ELIBANK

What does the noble Earl mean by a record in that case? Does the noble Earl suggest that a record of farms is kept? Is it a record under an Act?

EARL DE LA WARR

Some record of the state of the farm when it is taken over. I think there are a great number of landlords who do have some record—I do not say under any Act—for practical purposes, and it is very hard to prove deterioration of the farm unless there is some such record. I certainly would not like to find myself in the position of arguing before the Farmers' Union in Scotland that this provision was not desirable. It is only fair and just that these two points should be dealt with in the same way.

LORD CLINTON

There is some element of unfairness in providing that where a tenant has to prove his case there must be a record, but where a landlord has to prove his case there need not be a record. The arrangement for records was made in one of the Agricultural Holdings Acts, but it has seldom been taken advantage of because you cannot lay down with sufficient nicety the actual state of fertility and cultivation of each field at the beginning of a lease, and compare it with any closeness with the state of the land perhaps a lease later. It is, however, very simple indeed for any arbitrator to say if the land is in a bad state of cultivation or bad harvest. For that purpose you do not want a record. The deterioration has perhaps taken place only in the last three or four years. I do not know whether the noble Viscount thinks it necessary to press his Amendment. I should not like it to be said that we were arguing against a thing which is fair when a tenant claims, but unfair when the landlord has a claim.

VISCOUNT ELIBANK

In view of what my noble friend has said, I will withdraw this Amendment. I do not want it to be thought that I was putting forward an Amendment which would be unjust to the tenant and fair to the landlord. The points which have been made by Lord Clinton have cleared the matter up, and therefore I will not press my Amendment.

Amendment, by leave, withdrawn.

Clause 28 agreed to.

Clause 29:

Amendment of s. 12 of principal Act.

29. Paragraph (b) of subsection (7) of Section twelve of the principal Act (which section relates to compensation for disturbance) shall cease to have effect as regards tenancies terminating more than one month after the commencement of this Act.

THE DUKE OF BUCCLEUCH moved to leave out Clause 29 and to insert the following new clause:— .Paragraph (b) of subsection (7) of Section 12 of the principal Act (which relates to compensation for disturbance) shall be amended by the omission of the words 'not less than one month'.

The noble Duke said: Perhaps the noble Earl opposite will give an explanation of this clause, and very likely that will satisfy me.

Amendment moved— Page 10, line 21, leave out Clause 29 and insert the said new clause.—(The Duke of Buccleuch.)

EARL DE LA WARR

Under Section 12 of the principal Act, it is provided that under certain conditions a tenant is entitled on leaving his holding to receive from the landlord compensation for disturbance to the amount indicated in subsection (6) of the section. It is provided, however, in subsection 7 (b), that no compensation under this head shall be payable unless the tenant has not less than one month before the termination of the tenancy given notice in writing to the landlord of his intention to make a claim. It has been represented that tenants have frequently overlooked this provision. In practice it may be accepted that all tenants entitled to this compensation intend to claim it, and accordingly landlords cannot hope to avoid the liability except by misadventure. There would seem to be no reason why tenants should require to give notice of a claim before the termination of the tenancy or before the time when other claims in regard to improvements may be lodged. Other ordinary claims may be lodged within two months after the termination of the tenancy, and the purpose of this clause is to place a claim for compensation for disturbance on the same basis as other ordinary claims.

THE DUKE OF BUCCLEUCH

I am obliged to the noble Earl. I thought that might be the explanation, and I beg leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Clause 30:

Amendment of principal Act as to matters referred to arbitration.

30. The following provision shall be substituted for subsection (1) of Section fifteen of the principal Act (which relates to matters to be referred to arbitration)— (1) Any question or difference between the landlord and the tenant of a holding arising out of any claim by the tenant against the landlord for compensation under this Act or any Act by this Act repealed, or out of any claim by either party against the other for breach of contract or otherwise in respect of the holding or out of any claim by the landlord against the tenant for waste wrongly committed or permitted. by the tenant, or as to the construction of the lease, and any other question or difference of any kind whatsoever between the landlord and the tenant arising out of the tenancy or in connection with the holding (not being a question or difference as to liability for rent) shall, whether such question or difference arises during the currency or on the termination of the tenancy, be determined by arbitration.

LORD CLINTON moved to leave out "or out of any claim by either party against the other for breach of contract or otherwise in respect of the holding." The noble Lord said: I am not quite clear why these words should come in here at all. Before those words occur, we have questions of a claim by the tenant against the landlord for compensation. Immediately after they occur, we have a claim by the landlord against the tenant for waste, and later still any question or difference of any kind whatsoever between the landlord and tenant. Are not these words, which I propose to omit, redundant, or what is the reason for inserting them?

Amendment moved— Page 10, lines 33 to 35, leave out ("or out of any claim by either party against the other for breach of contract or otherwise in respect of the holding").—(Lord Clinton.)

EARL DE LA WARR

Perhaps in answering the noble Lord's question, I may deal with the purpose of the whole clause. Then I think the matter will explain itself. The object of Clause 30 is to amend subsection (1) of Section 15 of the principal Act, which details the matters that may be referred to arbitration under the Act. From the construction of Section 15 of the principal Act, it has been held by the Court that questions or differences (except those concerning the construction of a lease) cannot be referred to arbitration during the currency of a tenancy. They can be the subject of a claim only at the end of the tenancy, when in some cases the time for satisfactory adjustment of questions has passed. The new clause therefore makes it clear that all questions arising during the currency of a tenancy as well as at its termination shall, except questions relating to liability for rent, be dealt, with by arbitration.

Section 15 at present includes among the matters that may be referred to arbitration, questions concerning "breach of contract or otherwise." As the law stands, however, such questions could be referred to arbitration only at the end of the lease. The apparent object of the Amendment is to remove questions relating to "breach of contract or otherwise" altogether from the matters that may be referred to arbitration whether during the currency or at the end of the lease. I am not quite sure from what the noble Lord has said that he really intends to do that and I hope he will not press his Amendment.

LORD CLINTON

The noble Earl says that these words are put in to make sure that all matters are referred to arbitration. It does not appear to me that it makes it more sure because you say it twice over; but if the words are necessary I do not want to leave them out, and will not press my Amendment.

Amendment, by leave, withdrawn.

Clause 30 agreed to.

The Earl OF BREADALBANE moved, after Clause 30, to insert the following new clause:

Amendment of s. 16 of the principal Act.

".Section sixteen of the principal Act, which deals with the procedure in arbitrations, shall be amended by the omission of the words 'sheep stocks' in subsection (5) and by the addition of the following subsection:—

(6) After the passing of this Act all valuations of sheep stocks tied to the ground and bound under a lease to be taken over from the outgoing tenant at the termination of a tenancy by the landlord or incoming tenant shall, unless the outgoing tenant and the landlord or incoming tenant otherwise agree, be made by an arbiter selected by the Department out of a panel of arbiters appointed specially for that purpose by the Lord President of the Court of Session after consultation with the Department."

The noble Earl said: Before I move the Amendment which stands in my name, I should like to submit to your Lordships a few particulars with regard to sheep stock valuation in Scotland, and particularly in relation to acclimatisation value. I emphasise that, because although it is a somewhat complicated and intricate principle to explain, it is there that the crux of the difficulty lies, and there the seeds of a deep and widespread grievance have developed. It is hoped by means of the Amendment to alter the whole conditions under which in future arbiters will be selected for the purpose of making these valuations, and in place of the present somewhat haphazard panel of three sheep farmers, to substitute a more judicial type of arbiter who will be ready to approach the matter in an impartial and open-minded manner. What is wanted is a fair valuation based on real value, and just to landlord and tenant alike. It is proposed by the Amendment that an arbiter shall he selected by the Department of Agriculture from a panel of arbiters especially appointed for that purpose by the Lord President of the Court of Session in consultation with the Department. Whether that is the best possible solution, or whether the Land Court would be an even fairer tribunal, I do not know, but I see there is another Amendment later which I would be quite ready to support. At any rate, I think more equitable results would be obtained by either system than under the present most unsatisfactory arrangement.

This vexed and difficult question of sheep stock valuations arose a good many years ago, when black-faced sheep from the South were first introduced into the Scottish Highlands and largely displaced the original Highland cattle. It was undoubtedly a sound and progressive step in the history of Scottish farming, but it carried with it this disadvantage, that sheep were brought into a land of much heavier rainfall and more severe climatic conditions than those to which they were accustomed. They consequently suffered an abnormally high rate of mortality during the first few years, until they had become acclimatised to their new surroundings. It therefore gradually became recognised that where a flock of black-faced sheep had become acclimatised to a particular Highland farm they possessed, by virtue of that acclimatisation, and so long as they remained on that particular ground, a greater value to the farmer than they would possess if driven down to a market for sale. Now, this increment in value due to acclimatisation, when added to the market price of sheep, forms the total which is known as the acclimatisation value.

Although many experts consider that the importance of acclimatisation has been over-estimated, I think it is common ground to say that there is a general opinion that such a value does definitely and in fact exist. But it is when we come to place a precise figure on this acclimatisation increment that the difficulty really begins. Evidently it varies with the market price of sheep, for if the market value is very low, then the acclimatisation increment must be correspondingly very small. To take an extreme case, if there is no demand for sheep at all, then obviously an acclimatised sheep is worth no more than one freshly introduced to the farm. Again, it varies with the severity of the climate, for if we take sheep from one mild climate to another equally mild and dry climate then they will do as well as sheep which have been there for some time.

So you will see that this acclimatisation increment is not a constant, but is compounded of such variable factors as the market value of sheep and the climatic conditions under which they are being farmed. Now, if a farmer at the expiration of his tenancy sold his flock away from the ground to which it had been acclimatised the acclimatisation increment naturally evaporated, and he could only expect to receive the market value for his flock, and not the greater acclimatisation value. Furthermore, a new farmer would be forced to incur the losses incidental to acclimatising a fresh flock. Therefore, it seemed a much sounder policy that the sheep stocks should remain tied to the ground, and that on a change of tenancy they should be handed over from the outgoing to the incoming tenant at an acclimatisation value fair to both. But the difficulty arose that when making a lease with the farmer it was not possible to say what his successor would or would not be willing to do in years to come, for it was not known at that time who the succeeding tenant would be. Still less would it be possible to bind him to take over the sheep stock at acclimatisation or any other value. And yet the farmer who was about to incur loss in acclimatising a flock naturally desired this loss to be recouped to him. And so the most practical solution of the dilemma seemed to be that the landlord should guarantee to take over the flock from the tenant at acclimatisation value on the expiration of the tenancy. The proprietor had really no personal interest or responsibility in the matter at all. He was simply assisting in the handing over from one tenant to another and acting as a sort of stake holder or go-between.

The question arose by whom was this valuation to be made. The old leases read that "it was to be made according to the custom of the country at the valuation of neutral men," and the original valuations appear to have given satisfaction to all parties concerned. But gradually the custom developed of appointing two arbiters, one for the landlord and one for the tenant, and one "oversman," usually a man of more influential standing, to adjudicate between the two; and, possibly because they were the most easily available, and possibly because they possessed the requisite knowledge of sheep values, it became usual that all these three men should be chosen from among other sheep farmers. The valuation arrived at under this system gave such increasing dissatisfaction and appeared so exceedingly one-sided that in 1908 the situation called for remedy, and by the Scottish Agricultural Holdings Act the two arbiters and the "oversman" were swept away and a single arbiter substituted. It was confidently hoped that, by this means fairer valuations would ensue. However, within two years the Scottish Chamber of Agriculture got the new arrangement cancelled and the former one-sided system reinstated. This practice is still in force to-day and I submit that it consists in nothing but a travesty of justice. For here you have a valuation between landlord and tenant by which the landlord, and the landlord alone, is bound, being made by three tenant sheep farmers. That is to say, by men who are making a living out of sheep farming, who have largely invested their capital in sheep stocks and who are, therefore, in the nature of things deeply and personally interested in maintaining the nominal value of sheep at the highest possible level. Their own flocks, even, may be coming up in a year or two for valuation under precisely the same system.

I submit that the acclimatisation value arrived at by this method has been an unfair and an inflated one. Now, how is that statement to be proved? It has been said that the value of an article is the price which it will fetch. This may be somewhat cynical and may not in all cases be the complete truth, but it does at any rate afford a pertinent and practical test. Let us apply it in this case and see whether the incoming tenant is ever willing in fact to accept as a fair-valuation for the sheep stock the price which the arbiters have compelled the landlord to pay; and the answer is that never will be do anything of the sort. I understand that he would be very ill-advised if he did, because, as I venture to repeat, the valuation is unreasonable and artificial.

I will give a few actual instances from a good many collected by the Scottish Land and Property Federation. Between 1900 and 1910 on a certain Scottish property, it happened that at various dates forty leases came to an end. The total difference between the acclimatisation values placed on the sheep stocks by the arbiters and the highest prices offered by the incoming tenants for the same sheep on the same farms amounted to a difference of no less than £37,000; that is to say, this enormous sum of £37,000 represented a dead loss to the proprietor and one for which he had no moral responsibility and against which he had no possible means of redress. In 1925 a stock of 1,319 black faced sheep were valued on a farm in Dumbartonshire at an acclimatisation value of £8,051. They were handed over on the same day and on the same ground to an incoming tenant whose highest bid was £5,872. That is to say, there was a dead loss to the proprietor, simply for having been the nominal owner of these sheep for the matter of a few hours, of no less than £2,178, or about £1 11s. on every head of sheep. In 1927 there was a farm in Argyllshire let at a total annual rent of £70. The arbiters valued the sheep stock at an acclimatisation value of £5,700. The highest price offered by any prospective tenant was £2,700. That is to say, that there was a dead loss to the proprietor of no less than £3,000 or £2 10s. per head of sheep.

One last instance, although they could be multiplied indefinitely. Two farms in Argyllshire were let at a combined rent of £190. They carried a black-faced sheep stock of 2,100 sheep. The difference between the value placed by the arbiters on the sheep stock and the price paid by the incoming tenant was the sum of no less than £4,370. It so happened that these farms were shortly afterwards valued for Death Duties at £2,850; that is to say, the loss incurred by the proprietor, at one handing over of the sheep stock, amounted to considerably more than the total value of the two farms put together. I venture to emphasise these facts because I think that noble Lords who sometimes say that they are not familiar with Scottish affairs hardly realise the injustice that has gone on in the making of sheep stock valuations. What is the effect of this most inequitable system? It is this, that although there are undoubted advantages to the sheep farming industry as a whole in having the sheep stocks tied to the ground, yet in every case as opportunity offers and as leases fall in, proprietors are being driven to cut their losses, to extinguish sheep rights, and to take very good care that they do not again commit themselves to this nebulous and menacing responsibility. It has done, and is doing, a great deal to breed a feeling of injustice and grievance between landlord and tenant, and it is the very negation of that mutually helpful atmosphere that should rightly exist if farming is to prosper in future.

A few days ago I listened to a noble Lord who sits on the Government Benches regretting that more money was not available for agricultural research, and I heard the noble Earl who is in charge of the Bill himself advocating the expenditure of no less than one million pounds of public money so that the most modern, the most up-to-date and the most scientific methods of farming might be encouraged. With all of this, under more favourable circumstances, I would heartily agree. But when Scottish landed estates are in many cases barely solvent and are reeling beneath the staggering blows of falling prices, Income Tax, Super-Tax and the rising cost of labour, I would ask how on earth can Highland proprietors be expected to indulge in model farming when they are being so savagely and so extortionately hit by such utterly unfair valuations. The very word valuation is a misnomer, for how can the same sheep on the same hills possess one value for the landlord to pay in the morning and another entirely different, and much smaller, value for the tenant to pay in the afternoon? Your Lordships can well imagine the outcry that would arise if the positions were reversed.

I have not the agricultural experience and I have not the debating skill adequately to present this case in your Lordships' House with the vigour which its injustice and its demerits warrant, but I appeal to noble Lords who do possess those attributes to support this Amendment and to press home the arguments which I have endeavoured to lay before your Lordships this day. I appeal to the noble Earl who is so ably taking charge of the Bill not only to investigate the question of the acclimatisation values to the hilt, but also sympathetically to consider this Amendment; for in it there seems the only real hope of placing sheep stock valuations on a fair basis in the future and of putting an end to what, through the length and breadth of the Scottish Highlands, has been known for many years as a flagrant injustice and a crying scandal. I beg to move.

Amendment moved— After Clause 30 insert the said new clause. —(The Earl of Breadalbane.)

THE EARL OF ANCASTER

I have on the Paper a very similar Amendment. The only difference really is that whereas the noble Earl, who has just made such an excellent speech in support of his Amendment, recommends that the valuation should be made by an arbiter appointed by the Department, I am proposing that the Land Court should arbitrate on matters connected with the valuation of sheep stock. After the noble Earl's very eloquent speech I propose to make very little addition to the arguments that have been put forward. But it is rather strange that when a Bill has been presented to Parliament to regulate, improve and make more just the position of landlord and tenant, and when the land tenure of Scotland is to be more or less overhauled and where there may be suspicion of injustice as regards compensation between the two parties, no mention should be made of the one most crying example of ridiculous valuations made upon a ridiculous principle. I think it is only right that attention should be called to this matter when Parliament is amending the law between landlord and tenant in Scotland and some effort should be made to amend what has been a crying evil for so many years. I should prefer the Land Court as arbiter in these matters. We should then get a judicial decision and a general ruling laid down. It would not be left to be talked over among a few big sheep farmers in the country who practically value for each other. We should get an independent person to lay down certain laws and regulations regarding such valuations and to recognise what is a fair charge to make for acclimatisation value.

I rather differ in one thing from the noble Earl. He seems to think, and he may be right, chat there is on most farms a real acclimatisation value attached to the sheep stock. From my own personal experience I think that value is very little indeed. I know plenty of eases where the whole of the sheep stock has been sold and another sheep stock bought and put on the farm, and there has been no particular mortality among the new sheep. They have seemed, in fact, healthier and better than the sheep which were on the farm before. I think the legend that black-faced sheep could not live on certain hills in Scotland unless their fathers and mothers, their great-grandfathers and great-grandmothers, and their ancestors for ten or twelve generations had lived there before is not altogether true, though, of course, it may apply to some rather unhealthy farms or farms on very high land. The whole thing probably arose because nut so very long ago, not a hundred years I think, it was believed that no sheep could live on the hills in Scotland. I believe I am right in saying that almost all the few of the wretched sheep that were left among the mountains and glens of the North were generally put in a house during winter.

The black-faced sheep have, after all, been a very good friend to me, because I have made a good profit out of sheep farming during the last twenty years. It is the only farming I have made a profit out of. Therefore it would perhaps seem a not very patriotic thing to say that the black-faced sheep are, I believe, natives of Cumberland and Westmorland. Smile intelligent person introduced these black-faced sheep into Scotland, I think something under a hundred years ago, in place of the sheep that they used to keep in the houses during the winter. These Cumberland and Westmorland sheep were put upon the hills and glens of Scotland, and it was found that they could survive the winter. In all probability that was the beginning of what has come to be known as acclimatisation value. I am glad to say that there are now a good many black-faced sheep all over the country. I think that a change of stock is often very desirable on certain farms.

The noble Earl in charge of the Bill is always telling us that it is preferable to have either the Department or the Land Court to settle these disputes. In one part of the Bill we have dealt with a large number oh small holders who, in the old days, had their differences of opinion with the landlord settled by means of an arbiter. These people are now placed under the Land Court. A short time ago the noble Lord below me was moving to put arbitration into one of the clauses instead of the Department, and the noble Earl made a very great defence of the Department, saying that in these matters between the landlord and tenant the Department was on the whole better than the arbiters. Let us have the same thing for sheep valuations. We have tried arbiters. The sheep farmers themselves are arbitrating on this matter. I have no doubt the outgoing tenants have derived very considerable satisfaction from the enormous prices which the arbiters have placed upon the sheep. Whether those prices have given the same satisfaction to the incoming tenant or to the landlord is a very doubtful matter; in fact I am quite sure they nave not given satisfaction at all. Here is an opportunity for the noble Earl to put into force those arguments which he has used during discussion on previous clauses of the Bill, to the effect that the Land Court or the Department is the proper body to settle these differences between landlord and tenant. Let us have such a body in the case of sheep stock valuations as we have in so many other cases where differences arise between landlords and tenants.

VISCOUNT NOVAR

This is by far the most important matter which has been raised this afternoon, and the noble Earl who moved this Amendment has exposed one of the greatest ramps that has ever been exposed. Most of the agricultural valuations in Scotland have, I think, on the whole, been fairly conducted, but anything more dishonest than the sheep farm valuations could not possibly be found. No one is better qualified to deal with the subject than the noble Earl who opened this discussion. It is one upon which he spoke both eloquently and well. There is such a thing in some cases as acclimatisation value, but, as he said, on some lands there is none. It may go up to twenty or twenty-five per cent., and I should not think very much more, but the values which have to be paid by the landlord are sometimes 200 per cent. of the real value—more than double what the sheep are worth in the market. That means that at least three-quarters of the acclimatisation value given in some cases does not exist, and ought never to have been awarded. I admit the evil result which in this case has followed from arbiters voluntarily appointed, and for once, I believe, if we could get arbiters appointed under some kind of judicial sanction, we might he relieved of this disgrace to the system of valuation in Scotland.

EARL DE LA WARR

I am sure, whatever we do about this Amendment, many of us will feel very grateful to the noble Earl who moved it for the amazingly clear exposition of what is to many of us a most difficult subject. What the noble Earl wants to arrive at is machinery for a fair value (I think his words were) to the farmer and to the landowner and one that is more equitable than the existing machinery for arriving at that value. We are all agreed upon that point. That is the goal which we all desire to reach. The question is, has a case been really made out that the existing system is unsatisfactory? There is no doubt that the noble Earl feels most strongly on this matter, and he has produced a number of cases. On the other hand, we have to recognise that this system has been working now for over twenty-two years, and at the end of it, I am informed by my advisers that no representations at all have been received by the Department in favour of altering the system. The National Farmers' Union of Scotland, and also the Scottish Chamber of Agriculture, which is, I understand, a body representative of a great number of interests in agriculture, are both opposed to this change. Not only that, but as the law is to-day, if landlords feel that this system is so iniquitous, I understand it is open to them to insert in their leases any provision for any form of arbitration that they desire. What is more, even under the present system, if they do not do that, it is within their power to appoint whom they like to represent them as one of the two arbiters.

While the noble Earl has undoubtedly, at first sight, put up a very strong case for the alteration, I must say that on examination, and on examination by bodies that intimately know the system and its working in Scotland, that case seems to disappear. In view of the fact that not only the Farmers' Union of Scotland but the Scottish Chamber of Agriculture favour a continuance of this system, in view of the fact that no representations have been received, I understand, in favour of altering the existing practice, and in view of what the landowners can already do under the existing law to modify the system, which, after all is really only based on custom, I ask your Lordships not to make this alteration.

THE DUKE OF BUCCLEUCH

Perhaps I can speak more impartially than other noble Lords upon this system, for in my part of the country we have always set our face against it. The result is that when a new tenant comes in he and the outgoing tenant agree between themselves, and there has never in that case been any difficulty. Therefore I am quite impartial myself. I think it must be admitted that there is a very great grievance and it is not quite so easy as the noble Earl opposite thinks to put any agreement into the clause to get out of the difficulty. In fact, I think, it would be almost impossible. I admit there are great difficulties in this matter, but I think there is rather a greater hardship than the noble Earl opposite realises.

THE EARL OF BREADALBANE

should like to reply to one or two points raised by the noble Earl. He says that no representation has been made before about the injustice of this system. It may be so—I do not challenge his statement—but personally I simply cannot understand how it has gone on so long without being raised. It is notorious in Scotland. Articles appear on the subject in factors' magazines and in agricultural magazines, and if the Government are properly in touch with agricultural affairs I should have thought it impossible that they should not be aware of it. The noble Earl says it is quite open to the landlord to alter his lease. That may be so in future leases, because I think every Highland proprietor takes very good care he does not repeat this opportunity for extortion in new leases. It is the old leases which have not come to an end that I am thinking of. At the end of the lease the sheep stock has to be valued, and what is wanted is a fair valuation, a fair panel one can go to. The noble Earl says there is a representative for the landlord. So there is. But there is also one for the tenant and they cancel out, and it has to be decided by the third man. They are all sheep farmers. I make no charge against tenant sheep farmers but they are personally interested in keeping values up to the highest possible theoretical value, and because there are a large number of tenants and a small number of landlords the procedure is perpetual. I would seriously ask the noble Earl not to take my word for it—I do not want to exaggerate the case—but to look into it. Unless he can give me some more comforting assurance than he has done I should like to divide on the Amendment.

EARL DE LA WARR

I am afraid I cannot give any undertaking at the moment. Certainly the noble Earl has put forward a strong case and it is for him to do as he likes. I am afraid I cannot give any undertaking now.

Clauses 31 to 35 agreed to.

THE DUKE OF ATHOLL moved, after Clause 35, to insert the following new clause:—

Amendment of s. 49 of principal Act.

".Subsection (1) of Section forty-nine of the principal Act (which deals with arbitration) shall be amended by the substitution in the definition of the expression 'Manuring' of the words 'twenty-three, twenty-five and twenty-six' for the words 'twenty-five, twenty-six and twenty-seven.'"

The noble Duke said: I think this is accepted by the Government. I beg to move.

Amendment moved— After Clause 35 insert the said new clause.—(The Duke of Atholl.)

EARL DE LA WARR

I agree to this Amendment.

Remaining clauses agreed to.

First Schedule: