SHEEP STOCKS VALUATION (SCOTLAND) BILL. (Hansard, 20 April 1937)

§ LORD THANKERTON
My Lords, to many of your Lordships it will be familiar that on hill farms in Scotland the sheep stock is generally what is called "bound to the ground," and with that in view there are provisions in the ordinary lease between landlord and tenant which provide, for instance, that the sheep stock shall be taken over from the tenant at the end of the lease by either the incoming tenant or, failing him, the landlord—that is the usual form—the amount to be at a valuation to be made by an arbiter or arbiters and oversmen. The reason for that, as your Lordships will readily understand, is that in these hill lands it is a great advantage to have a permanent breeding stock on the ground which become acclimatised to the conditions of the high ground, and in addition there is the other not unimportant consideration that they become 962 what is known as hefted to the ground—that is to say, they become familiar with the ground and do not stray, a very important matter.
The result is that the persons who are really capable of being arbitrators are a very limited class, for they ought to consist of people who are familiar not only with the breeding and maintaining of sheep stocks and prices, but also with the particular part of the country in which the valuation is to take place. Complaints have been made for some time about, let us say, lack of information mainly as to any principle on which these valuations proceed, and the Secretary of State for Scotland in 1933 appointed a Committee presided over by Lord Kinross to look into the question as to whether any improvement could be got with regard to the system of valuation of these sheep stocks. There are various forms in which the clauses in the lease may be dealt with, but almost inevitably there is an arbitration of some kind. I do not require to go in detail into the various forms of the clauses in the lease. As a result of the recommendations of that Committee, which reported the following year, the present Bill is proposed, and it has already passed through the other House.
It consists of three distinct proposals and I cannot do better perhaps than refer to the conclusions of the Committee on these points. Under Clause 1 it is proposed that the arbiters to be appointed should disclose the basis on which they proceed for the valuation of each class of stock and state the amounts separately. I may perhaps read what the Committee say about their reasons for arriving at that conclusion. It is: We were informed that whilst detailed particulars of the basis of valuation were practically never given, the basis and details of the valuation were in fact freely discussed between the two arbiters and the oversman, if appointed. We were assured that there would therefore be no difficulty in supplying particulars of the basis of valuation, if necessary, and it appeared that the omission to do so in the past has probably been due largely to the belief that in principle it is undesirable to give reasons for a decision unless absolutely necessary. That may be a very excellent idea in its appropriate place.
Then, under Clause 2, it is proposed, as regards leases entered into after the passing of the Act, that the arbiter should 963 be entitled to apply for a point of law to be decided by the Sheriff under similar conditions to those which are provided in the Scottish Agricultural Holdings Act. This is an old question. The valuation of sheep stock and other kinds of farm stock was expressly excluded from the arbitration provisions under that Act, and this proposes to bring them into line, with the result that it will be possible during the course of the arbitration, if a difficult question of law arises—because this embraces written leases and there might be a pure question of law as to the construction of the leases—to have that question of law decided. In making that recommendation the Committee point out that they are certain that this will be welcomed not only by the parties but by the arbiters themselves. I think there need be no difficulty about that clause. The third and last proposal is based upon the suggestion of the Committee that if the parties agree they shall be entitled to go to the Land Court and get that Court to be the arbiters and decide the cases on the lines of arbitration. The clause authorises the Land Court to do this by means of their ordinary procedure. That is a point which has been for some time desired among the parties, and as it is only by agreement that it can be done I think it is right that the opportunity should be given to the parties when they do so desire. I beg to move.

§ THE EARL OF ANCASTER
My Lords, it is not my intention in any way to offer opposition to this Bill, but I should like to ask the noble and learned Lord, before we further consider the Bill in Committee, whether he would give those who are interested in the subject some time to consult with their friends as to Amendments and alterations to the Bill. I have read the Bill through, but I think it has come up rather quickly from another place, and was not printed before April 15. Therefore, we have only had a very short time in which to study its provisions or to consult with those who are interested in the Bill. I suppose it is my gross neglect not to know whether it is so or not, but I imagine this Bill to be founded on the Report of what is known as the Kinross Committee. I am afraid I must say that up to date I have been unable to 964 obtain a copy of that Report or to learn what the recommendations in that Report are; but I have no doubt that within a few days I may be able to get a copy of the Report and see what it has to say.
I do not wish to oppose the general principle of the Bill in any way, because, undoubtedly, this is an effort to alter something which has become in many parts of Scotland—if what I have heard appears in the Kinross Committee's Report is correct—what one might almost say is a scandal. The noble and learned Lord has explained the system on which the valuation of these sheep stocks on hill farms in Scotland is made. I do not think such a system exists under any other land tenure in the United Kingdom. I have no doubt that it came into operation first of all—and becoming the custom of the country afterwards acquired the status of law—owing to the fact that it was supposed when sheep were first introduced into Scotland in the eighteenth century, and even down to comparatively recent times, that sheep could not live on the hills of Scotland in winter, and that they all had to be put in houses during the severe weather, though I believe some of the breeders of black-face sheep are angry when that is said. I believe that what are now known as Scottish sheep came originally from Cumberland, and, being of a hardy nature, many of them managed to survive the winters in Scotland. The custom of acclimatisation valuation sprang up after it was known that these sheep were hardy and, having got accustomed to the hills, could survive winter and other climatic hardships. In consequence they became more valuable to the ground than a fresh stock brought on to it would be. In addition, as has been pointed out, if you brought new stock in and placed them upon the hills before the days of wire fencing, it was quite possible that they might make off to the neighbouring county.
Consequently, there sprang up this valuation which became known as an extra price valuation. This extra price put upon the valuation of the sheep was known as their acclimatisation value. It is no doubt quite right and proper that there should be some extra value placed upon these sheep owing to their knowing the hills and having become acclimatised, but there have been cases in Scotland in which the price placed upon the sheep would have bought the land. No doubt 965 it was very pleasing for the outgoing tenant to get this enormous price for the sheep, but it made it extremely difficult for anybody to go in and follow in his shoes because of this enormous valuation put upon the sheep. Consequently, what generally happened was that the landowner had himself to pay this acclimatisation value and let the sheep stock remain for the incoming tenant, although the landowner had paid the acclimatisation value out of his own pocket. There have been some very gross cases of overvaluation in Scotland. As the noble and learned Lord said, the number of people who go about valuing the sheep are few, and it is said that they must have special qualifications. It has practically come to this, that a certain number of big sheep farmers go about valuing for each other and consequently they are not inclined to value the sheep at a less value than their proper value.
This Bill, I think, has a moral value, though I do not know that it has really very much more than a moral value. In Clause 1 it is provided that the valuer or arbiter has to give reasons for his valuation tinder the different heads. Undoubtedly, having done that, his valuation will receive a certain amount of publicity. Even at the present time most of these sheep-stock valuations are published in the newspapers, and that has, I think, given rise to a good deal of severe comment in certain cases owing to the enormous values that have been put upon sheep stocks. Consequently Clause 1 may have a certain moral effect in restraining an arbiter from giving a very excessive award, but as drafted it puts no practical limitation on what his valuation may be. All that he has to do is to declare publicly his reasons and the 'basis on which he makes his valuation. I think Clause 2 requires a certain amount of discussion. Under this clause, if a point of law arises, there is an appeal to the Sheriff and, pending the decision of the Sheriff, an arbiter may say that the landlord or the person who has to pay the valuation must pay a certain amount into Court. To take an extreme case, if a valuation is for £9,000 and a question of law crops up, the arbiter may say that £8,000 should be paid into Court when really the value of the sheep stock may be only £4,000 or £5,000. The effect of paying money into Court may, it seems to me, stultify to a large extent 966 the decision of the Sheriff. If the arbiter has ordered this large amount of money to be paid into Court pending the Sheriff's decision, it appears to me that the case will be largely pre-judged.
Then Clause 3, which I think is valuable, might in my opinion be a little extended. That clause provides that if both parties agree the case, instead of going to the oversman and arbiters, may be transferred to the Land Court. If a tenant thinks that he can get some arbiter to put an extreme value on his sheep stock—as has been done in certain cases in the past—he is not likely to agree to go to the Land Court where probably he would get a great deal less. If that clause is to be really effective, I think it should be amended so that on the application of either party the case should go to the Land Court instead of being decided, as is generally the case now, by two arbiters and an oversman. As I have said, I have no intention of trying to defeat the Bill or of trying to hold it up; but I think it could be improved, and therefore I would ask the noble and learned Lord to give us time, before he takes the Committee stage, to consult with our friends as to what Amendments ought to be put down to improve what may be a valuable Bill and a Bill which may bring justice to all.

LORD FAIRFAX OF CAMERON
My Lords, I rise to support the observations of the noble Earl. This Bill was only ordered to be printed on April 14 and it is submitted to us for Second Reading six days afterwards. I am continually receiving protests from noble Lords who are interested in Scottish affairs that they are not given sufficient time in which to consider such legislation. I hope, therefore, that at least two weeks will be allowed to elapse between Second Reading and the Committee stage of this Bill so that we may give it full consideration. We have been in consultation with friends of ours in Scotland who are interested in the Bill, but owing to the shortness of the period they have not had an opportunity to send in replies. I sincerely hope that before this Bill is brought to the Committee stage my noble friends in Scotland will be given ample time to consider it.

LORD SALTOUN
My Lords, I should like to associate myself with what my noble friend has said in asking for ample time for the consideration of Amendments to the Bill.

§ LORD STRATHCONA AND MOUNT ROYAL
My Lords, I rise only to say that, as was explained by the noble and learned Lord who moved the Second Reading, this is virtually an agreed Bill in that representatives of landlords and tenants concur in its terms. Therefore it has the Government's support.

§ LORD THANKERTON
My Lords, with reference to what has been said by the noble Earl, Lord Ancaster, and other noble Lords, I would say that of course I am not anxious to rush the Bill through or to hide it. The Bill did not originate in my thoughts. Representatives of all parties interested were consulted about it, and I thought they were all agreed, but I shall be delighted to consider Amendments. With reference to Clause 2 (3) I would like to point out that when a question of law is raised affecting in any way the whole or any part of the amount of the award given by the arbiter, he is not entitled to direct any payment on account which will be affected by the appeal. It must be something outside the matter of the appeal. In regard to Clause 3, dealing with the Land Court, I may point out that this is the only one that interferes with freedom of contract. It applies to leases both before and after the passing of the measure and therefore it was thought right that it should operate only by consent of the parties. In future leases it will be quite possible to have a clause giving the option of going to the Land Court if the parties so agree.