§ 6.14 p.m.
§ Debate on Second Reading resumed.
§ THE DUKE OF BUCCLEUCH AND QUEENSBERRYMy Lords, the majority of the proposals in this Bill should be helpful: they are overdue, and there has been a demand for them. But it should also be acknowledged that there are features which have been very worrying to many people in Scotland. The Bill will have far-reaching effects, mainly beneficial, but in some cases 583 adverse. I hope that we can look forward to the adverse effects being very few. I would thank my noble friend Lord Perth for the able way in which he has put before us all the essential points in this Bill, about which many of us in Scotland feel strongly. He has done it so well and thoroughly that there seems little need to say much more.
I should like to take part, very briefly, in this debate because of the uncertainty and anxiety, in case these are well-founded. Many of us have difficulty in understanding what will be the results of the Bill, and especially in foreseeing its effects much later. It is not easy to judge. I refer particularly to the changes and the effect in regard to heritage in land, in cases of intestacy, and the controversial views about the inclusion or otherwise of agricultural land. I feel rather between the representatives of the law in Scotland, who say that the proposals in this Bill are entirely sensible, and the Lord Lyon Court and others who forecast serious and inevitable effects—these effects being mainly on families who may have owned a farm or farms for many generations. Like the noble Lord, Lord Saltoun, I believe that we should think principally about the less well-off families. Most of those with bigger estates in land who are better off seem customarily to make wills, and should be able to make satisfactory arrangements for succession.
It might appear more natural for those of us who have a responsibility towards the well-being of others in land to be opposing the changes concerning heritage in land, and strong representations have been made during the last year or two. But as Members of one of the Houses of Parliament we have a wider responsibility, and it could be the other way. The observations from the noble Lord, Lord Craigton, are most important, and the facts and information given to us by him must influence our views on this problem. They bring some reassurance. His evidence is impressive, and there should be less cause for concern, certainly about most of those who have a heritage in land. But is there still reason for worry about a few? And how few are they; and how much concern? These are matters 584 with which the noble Lord, Lord Saltoun dealt very thoroughly, and I would congratulate him upon a tremendous achievement. I do not know how far he is correct. I hope that the concern may be overstated, and I hope that we may have some good assurances about that.
The retrospective nature of the changes in Clause 12 is naturally unwelcome, as also could be the possibility that too much of Scottish heritage might go to persons overseas, instead of to nearer relations in Scotland, and I hope that this point will be referred to again later. In 1922 the late Lord Birkenhead introduced what he described as a very important Bill indeed—the Law of Property Act for England. I do not know how close is the similarity, or what comparisons can be made between that Act and the Bill we are discussing to-day. I am not sure whether that Act was a matter of bringing the situation up to date and in line with our law in Scotland, or whether it was going ahead of us. I do not know of complaints in England over the matters about which we are anxious now. I am very pleased to see here to-day my noble and very learned friend of long standing, Lord Reid. I think we were in the other place together a long time ago. In our anxieties in Scotland at the present time I hope that we may look to him, and also to the noble Lord, Lord Guest, who has already spoken, to do the best they can to allay some of these anxieties, and I am quite sure that this Bill will then leave this House as a very good one.
§ 6.21 p.m.
THE EARL OF HADDINGTONMy Lords, the noble Lord, Lord Craigton, has presented this Bill with the courtesy and clarity which we have all come to expect of him, and while congratulating him on that, I am sorry to say that I can in no way share his enthusiasm for the Bill. My remarks will be very brief because I am going to associate myself very closely with everything that has already been said by the noble Lord, Lord Saltoun, and the noble Earl, Lord Perth. In the first place, I believe the Bill to be unnecessary. Who wants it? Who has asked for it? We have been told that the Legal Society in Scotland have wanted it; we have heard of 585 great pressure of responsible opinion; but it has been thirteen years (a fifth of a man's normal lifetime) after the Report on the subject has been made by the Mackintosh Committee before a Bill has been presented to Parliament. It has been drafted and re-drafted and found to be unworkable, and now a Bill has been presented which I hope will be workable, but I am quite sure that it is going to do irreparable damage to family life in Scotland.
Its object, apparently, is to make a more just and more equitable distribution of estates in the event of intestacy. But I see little justice in forcing a family to sever what might be a long connection with a property, be it large or small; and that is what is bound to happen in many, indeed in most, cases by the provisions of this Bill. By assimilating heritable property, which from time immemorial has passed under the law of primogeniture, with moveable property and dividing it equally among the intestate's next of kin, you are striking at the very roots of Scottish traditions and undermining the whole fabric of Scottish family life, because it is quite plain that in the absence of outside resources the heritable property will have to be sold in all cases where it represents more of the estate than the share of each entitled next of kin.
It may include the whole family home, a farm, a garden, anything you please, into which, perhaps, some impersonal landlord may step in the form of a company or a combine quite foreign to the countryside and the working of the countryside, probably with no further interest in it than speculation or extracting as much as possible from the land itself. It seems clear, too, as the noble and learned Lord, Lord Guest, has pointed out, that the rights of the widow, under Clauses 8 and 9, to claim the value of the house and furnishings as well as £5,000 is going to aggravate the difficulty for whichever member of the family wishes to continue the property.
Do the Government really think they are abolishing an old feudal law for something better and more fitted to modern society? It may be feudal, but many feudal laws still exist to-day: they are still the best and we still retain them. The proposed change could affect every owner of heritable property, 586 the largest and smallest, who dies intestate. Supporters of the measure say: "You have a simple remedy. If you do not like it, make a will and you need not bother any more." But people die intestate from a variety of causes. A man may come into a little property or some money. In these dangerous days he might be killed in an air accident or a motor crash the next day, before he has had time to make a will.
Many people wait before they make their will till later on in life when they have been able to find out and understand how their children are going to develop, how they are going to marry and what position they are going to be in at the date of their death. It is normal for people to delay making a will. Of course, the heir at law may not be the most suitable person to carry on a farm; we can quite appreciate that. He may not have the training and may not wish to do so. But at least under the present system an inheritance could be left intact and some amicable agreement might be made among the other members of the family to preserve it.
I have promised to be brief. I have almost finished, and I have no intention of making a detailed examination of the Bill to-day, but I hope I have made it clear that I challenge the whole principle of the Bill. I believe the basis of our civilisation is to ensure the continuance of the family, and that one of the basic instincts of family life is for a family to prefer to keep the family home in the family. Surely, if the law needs changing, it should try to provide so far as possible for the distribution of estates to be made in a way in which those dying intestate would have wished. How many of those dying intestate would have wished to dispose of them in the manner suggested in this Bill, by selling everything up and dividing it equally? Very few, I am sure, because that is absolutely contrary to human nature. The doctrine that the distribution of money is more important than the protection of the family and the inheritance is a very dangerous one indeed.
If the Government are determined on the principles which govern this Bill. I see little use in having a Division in the House this evening. I do not know what the noble Lord's intentions are, 587 but I do hope that there will not be a Division. But I hope also that the Bill will be very seriously and drastically amended in Committee.
§ 6.28 p.m.
§ LORD REIDMy Lords, may I add my congratulations to my noble friend Lord Craigton upon the clarity of his exposition, more especially as the Bill is one which is extremely difficult to grasp without a great deal of study. I am bound to say that I found it necessary to read some of the provisions two or three times before I thought I understood what they meant. I hope that I now do understand, but I am not yet quite sure.
Most of the provisions I would agree to. Not only would I agree, but I think they are a great improvement. Some I am not very enthusiastic about, particularly those having the effect on agricultural land which has been so well explained by my noble and learned friend Lord Saltoun. But I am afraid it is rather difficult to deal with that situation in a satisfactory way. I have been thinking about an answer, and, to be honest, I have not been able to find one. And if we cannot find one, the next best thing, of course, is to try to bring home to everybody in Scotland that the law has now been so altered that, if they have any interest in agricultural land, it is essential they should make a will as soon as possible after they have succeeded. We should try to get into their heads that even a provisional will is necessary. A man may well say, "I see no reason why I should not live many years. My affairs will alter, and it seems absurd to start now putting down what is to regulate the distribution of my affairs, 10, 20, 30 years hence". I think that we must get into the heads of the agricultural owners and tenants that they must make a provisional will, even if they are not yet ready to make a final one, so as to avoid what would otherwise be the quite disastrous effect of the Provisions of this Bill in regard to intestacy.
I do not propose to pursue that matter, but there is one aspect of the provisions with regard to intestacy about which I feel very strongly. As has been said, particularly by the noble Earl, Lord Perth, the widow is getting far too much, 588 in many cases at the expense of the children. I am not concerned with the very small estate, of up to £5,000, £7,000 or £8,000, because there, probably, if there is an intestacy, the proper thing is to give the widow the lot. I am not concerned with the large estates; I am not much concerned with the estate of £25,000, above which figure the noble Lord said there were only 32 intestacies in the one year—although 32 is not wholly negligible. And when we get up to the range of £50,000 estates, not much injustice will be done by these provisions. I am primarily concerned with the estates (and there must be many of these) of between, say, £15,000 and £25,000. And in regard to these, to my mind, the provisions of this Bill with regard to intestacy just will not do at all, and they must be altered. I very much hope that, when we come to Committee, if there is any difficulty some of my noble friends will divide the House, because I do not think the provisions can pass as they stand without all the protest we are able to bring to bear.
Let me say why. I will take as an example an estate of £20,000, a moderate estate, and let me see how this Bill, as it stands, will work. The first priorities are the claims of the widow under Clauses 8 and 9. I do not want to take any exceptional, unusual types of case, but it must be very usual for a man leaving £20,000 to own his own house, and I should have thought that £5,000 as the value of a house is a very moderate figure these days. I noted with interest that the noble Lord, Lord Craigton, was going to introduce some ceiling here—at least I understood him to say so. I do not know what he has in mind. In my criticism of a figure of £5,000 for the widow, as the value of the house, I am talking about a £20,000 estate. Over and above the £5,000 for the house the widow will get up to £5,000 for furniture and plenishings. It may well be that most men in that rank will not have furniture worth £5,000, but it is very common now for people to buy, as an investment, silver, books, pictures, minor collections of one kind and another; and all these are included in the definition of plenishings. So I take the case of a man who has put some of his money into pleasant things to adorn the house and afford himself a hobby. And I take 589 another £5,000 as the value of the furniture and plenishings. That is half the estate gone already. That is not nearly the end. The widow then gets all this free of estate duty. And she gets two more things beyond that: she gets £2,500 in cash (I am assuming there are children), and she still gets her legal rights. Therefore, in a case such as I have imagined she will get £14,000 or £15,000, whereas the children will probably not get more than £4,000 between them.
My noble friend says that the object of the Bill is to reflect what the average Scotsman would do if he thought about it. Is it really to be thought that the ordinary Scotsman, leaving £20,000, would leave three-quarters to his widow and one-quarter to his children? And remember, the three-quarters has been left outright to the widow, so that she can do as she likes with it. I should have thought that was very far removed from what the ordinary man would do with an estate of that magnitude, and I should have thought we must somehow or other see to it that the children get more and the widow gets less. There are several ways in which that could be done. It could be done by reducing the widow's right to the house to a life-rent. I recognise that there are certain difficulties there. In the case of the smaller estates it would not make much difference, because the widow's right under the other provisions would probably take the house anyway, and it is only in the moderate-sized estates that it would make much difference. I should prefer that it should be reduced to life-rent, but if that is too difficult there are other things.
I should have preferred that it should be reduced to liferent partly because, as several noble Lords have said, there is a family, sentimental affection for the house, and it seems right that the children should be entitled to have the house when their turn comes. But, apart from that, observe how capricious this proposal is. If a man with a £20,000 estate happens to have been in receipt of a good salary, and does not want money to run his business, he has probably bought his house outright, and the whole value of the house therefore will go to the widow. If on the other hand, he is a man in business, and wants all the money he can lay hands on for that business, then he has either bonded the 590 house up to the hilt or is living in a rented house, in which case the widow gets nothing except the right to live in it under conditions which she probably cannot finance. Is it sense that in order to benefit the widow there should be this grave difference, according to whether the man has chosen to put money into his house or into his business? Surely we must do something to make conditions more even for widows who are in a corresponding position but one of whose husbands happened to be a businessman and the other a professional man, or a man with a salary.
There are other possibilities. I should have thought that, in a case such as I have mentioned, £5,000 is much too much for furniture, because it will almost certainly be composed in part of things which are not really furniture at all but are more in the nature of a collection. I should have thought that only part of it would be suitable for the smaller estates—those up to, say, £30,000. There is another thing we could do. Why should the widow get all three of her provisions under Clauses 8 and 9 and get her legal rights in addition? I should have thought we could make some provision to reduce the disparity there. I should not greatly mind how this was done, provided that it is done somehow. As I say, the Bill may be all right for very small estates; it may be all right for very large estates. But I do not think it is all right for the moderate estates.
There is only one other matter that I would mention; it has been mentioned by other noble Lords. It will be apparent from looking at the Bill that, whereas on intestacy the widow is extremely well-off, if a will is made she may be quite badly off. She does not get the house, she does not get any of the other provisions; she gets no legal rights out of the heritage. If I understand the Bill aright, all she gets is legal rights out of the moveable part of the estate. That is not much. It is still for her to discharge her legal rights by a marriage contract. If she has discharged her legal rights while the family are comparatively poor and the husband makes a lot of money then she can be left virtually penniless by a rich husband who makes a will. Why this great disparity between the rights of a widow on intestacy, 591 and her rights when a will is made? I should have thought there is room for some investigation there.
The only other point is about legitim. I can quite see that we are going a little too far in making this retrospective. On the other hand, I do not go all the way with my noble and learned friend in thinking that it is an entirely bad thing to make it retrospective at all. I would hope that we might be able to get some compromise, so that if a reasonable provision is made for the children otherwise, then they shall not be able to claim legal rights where the operation of the Act would be retrospective. I throw that out only as a possible suggestion, because if one has to choose between making it retrospective without any qualification and not making it retrospective at all, I think we really ought to make it retrospective without any qualification at all. Therefore, I hope that some solution can be found.
There are many other points of minor importance which may come out on the Committee stage. I would not propose to detain your Lordships with them at this late hour, and certainly I would not oppose this Bill as a whole. But what might happen on the Committee stage is a different story. I hope that my noble and learned friend Lord Craigton will excuse me if I do not remain for his reply, because I am afraid there are rather special reasons why I shall have to leave.
§ 6.43 p.m.
VISCOUNT COLVILLE OF CULROSSMy Lords, I would not propose to be in entire opposition to the main principles of this Bill, any more than other noble Lords who have spoken this afternoon have, with one or two exceptions, said that they would be. Indeed, I do not want to traverse again a great deal of the ground that has been gone over by previous speakers, although I would say that I most sincerely agree with a great deal of what has been said, and in particular with the speech of my noble friend Lord Perth.
I should like to take up one point, to start with, made by my noble friend Lord Haddington, who explained many of the circumstances in which intestacies 592 can arise simply by failure to make a will in particularly understandable cases. I should like to add to that the fact that it is by no means impossible for a man who has gone to a great deal of trouble in making a will which he thought was suitable for the circumstances of the case, to find, either because of something which he himself has done, such as marrying again or having another child after the will was made, or else because of some slip on the part of the lawyer, that his will falls into intestacy after all, despite everything that he has sought to achieve.
If we are aiming to do as nearly as possible that which the testator would have done if he had made either a will or a valid will, then I think that where a will falls into intestacy it would be a serious test of this Bill to see how nearly its provisions carry out the reasonable proposals which the testator himself made although his will was invalid. If there is one thing that I am sure that he would try and do, if he possibly could, it is to keep land, heritage, in one piece.
There is now no provision in this Bill for the agricultural unit. It was found unworkable in another place and it was taken out. I am certain that one of the main principles that should underlie everything that your Lordships think and say on this Bill is that, if possible, none of its provisions should provide for an unnecessary split up of agricultural land, whether it be the large estate or the small one. They are equally important to the country and to the people who farm them and who live on them. There are many places in this Bill where this point comes to the fore.
Of course, it is most important when considering the table of ranking in Clause 2. It may be that this is the right thing to do now; but it is quite clear that by bringing in the brothers and sisters or the uncles and aunts, each to have his or her share of the whole of the intestate estate including the land, there will be much more opportunity to split up farms and other agricultural units than there has been before. This is something which is quite inevitable if this Bill goes through in its present form.
It is further to be noted that the same underlying principle is much in evidence in Clause 8. I do not much mind 593 how Clause 8 is amended. I feel that the widow gets far too much, and it may be that a liferent on the house is the answer, although that does have the difficulty that there will be a continuing statutory trust of some sort to administer for some time after the intestacy. It may be that her £2,500 when she has children, or the £5,000 when she has not, could in some way be cut down. It may be that her jus relictae ought to be diminished or abolished; or it may be that the answer lies in the estate duty point.
I would ask my noble friend Lord Craigton, on the last point, whether he would look carefully at this, because on the figures that he has given to the House this afternoon it is quite clear that most of the estates with which this Bill will be, or is likely to be, concerned are small ones. If they are small estates, then to give the widow the house and plenishings free of estate duty is really going to achieve nothing at all, because there will be no estate duty at all. Whereas, if there should be the unfortunate case where it is a large estate that has to be administered and split up under this Bill, then to give the widow the house, even if there is a ceiling on its value, and the plenishings free of estate duty, is going to be even harder than ever on the children, who will have to find that estate duty out of the small part that is left to them.
There is another provision to which I would refer in talking about the widow being given the house, which I think underlies the danger in this Bill of splitting up agricultural units and farms. As I understand it, Clause 8(4)(b) will not allow the widow to take the farmhouse out of the farm as her own, but rather that she shall be given a proportion of the money, the value of it, as an equivalent. If it is a small farm, this in itself is inevitably going to mean, I should have thought, that the farm is split up and sold; because otherwise there will not be enough cash—particularly when there is taken into account the fact that the stock, the tractors and everything else are moveables—to satisfy the value of the house and to give it her as an outright cash payment. This seems to me another great danger that has to be faced. So I hope that, when we come to the next stage of this Bill, Clauses 8 594 and 9, and possibly the inherent provision in regard to jus relictae, will be carefully examined and thought about again.
I need say little on Clause 12, except that I earnestly support the plea that has been made by other noble Lords to do away with the retrospective provision in paragraph (b) of that clause. This seems to me to be entirely unnecessary, and a really deplorable precedent in a Bill of this or, indeed, any kind.
Further than that, I question whether it is necessary to take the full step that is taken in this clause, even though the Mackintosh Report recommended it. After all, it is only the children's provision which is now being dealt with, even under this clause, and it will still be possible to defeat the wife's legal rights by means of an ante-nuptial contract, even if the Bill becomes law in its present form.
There are two arguments on this. First, it is said that it is unfair that the children should be done out of their legal rights by a contract made when they are yet unborn, particularly in circumstances when, as it turns out later, their father becomes very much richer than was ever contemplated before the ante-nuptial contract was made. If that is the argument, exactly the same applies to the wife. She did not envisage either that her husband was to become that much richer than expected, yet she is given no recourse under this or any other clause to be given more than that provided for her under the ante-nuptial contract.
In any event, as I understand the Mackintosh Report, it is the hardship to the children at which they were aiming. If that is so, some such suggestion as that put forward by my noble friend Lord Perth would seem to me entirely adequate to meet that danger, without doing away with one of the basic rights of any Scotsman, one of the freedoms left to him: to deal with his estate in the way he thinks fit rather than in a way imposed upon him by somebody else—by law, by Parliament, or by means of a provision like this. I shall be sorry to see even this small freedom taken away unless it is absolutely vital. I do not believe that it is so vital.
I should like now to draw attention to one clause which has not so far been mentioned this evening, Clause 14, other 595 than by the Minister. I think I understood my noble friend Lord Craigton rightly when he said that this was purely an administrative clause and was not intended to affect the division under a will between heritage and moveables. In other words, I think my noble friend said that if a will is made it will still be possible for the testator to leave his entire heritage to whomsoever he thinks fit, whatever may be the effect of any of the subdivisions which will happen on intestacy. Now he will have even greater freedom, because his widow will not have any right of terce.
It is a pity that the rubric to the clause should refer to "assimilation". If I understand assimilation rightly, it means that the two sorts of property, heritages and moveables, are put together before any split-up is made. I understand that this is exactly what is not intended. Unless I have misunderstood the word "assimilation", I feel that it should not even be suggested in the side-note that this is going to happen. I should very much welcome an assurance by my noble friend that there is no suggestion under this clause that the administrator is to lump together all the property, both heritage and moveable, pay legal rights out of it and then deal with the testator's wishes under the will after that, If so, it is going to be a considerable limitation of his power to leave the heritage as he thinks fit.
The last point to which I wish to draw your Lordships' attention is one of great complication and one which I shall probably be unable to explain properly. It occurs in Clause 30 of the Bill. This is a reproduction, with some alterations, of a provision which came into English law by the Law of Property Act 1925, and it is Section 184 of that Act. It provides for certain presumptions for the purposes of inheritance where people die simultaneously or in circumstances where it is uncertain which died first. The present law of Scotland is that there is no such presumption one way or the other and that it is up to the person claiming under a will or intestacy to show that the person upon whom his claim depends was the one who survived.
This clause, as it now stands, will introduce two presumptions which will 596 make such things unnecessary in most cases. It is interesting and perhaps significant that the clause has added the word "simultaneously" to the English provision and thereby blocked up another freedom on the part of the person claiming to get away from the presumption; because in England it was held that, in circumstances where it was more or less certain that the deaths were simultaneous, the presumption should not apply. That is the case of Hickman v. Peucey in 1945, A.C. 305.
The danger that I see is this, and it is another case where I foresee fragmentation of agricultural estates. It does not so much concern presumption (a) in Clause 30, but presumption (b) where it is presumed that the younger person survived the older. I should like to suggest an instance of the danger I have in mind in order to help my noble friend to understand the problem of which I am afraid. I foresee a situation where a man and wife have a son, and the man and his wife have brothers and sisters. The man has made a will leaving his estate to his son, whom failing to the son of his eldest brother—in fact the son's first cousin. The husband, wife and son are all killed simultaneously in a car accident.
As the law now stands, as I understand it, it would be perfectly possible for the nephew who was in the will as the substitute for the son to say that the son died either simultaneously or before the father and to claim in the way in which the father obviously intended under the will. If, however, the proposed law is adopted as set out in this Bill, if the son was young and intestate, instead of the nephew getting the estate, as was clearly intended by the father, it would go first to the son, who would then die intestate, and thence through him, under the provisions of this Bill, it would be split into several parts and given to his uncles and aunts—the brothers and sisters of his father and mother. And only through one of them would the nephew, who was originally intended to inherit, get a very small portion of the whole.
I do not believe that it is desirable to do this, for two reasons. First, it creates an unnecessary fragmentation of an estate which was well dealt with under a valid will. Secondly, it provides that 597 there will be two death duties possible in those circumstances, although it may well be that they will be relieved by the quick succession relief, whatever that may be. I think it might be possible to deal with this in two ways: either to say that the presumption shall always be that the two persons concerned died simultaneously (and I do not think that would lead to any serious interference with people's rights); or, if that is not thought suitable, to insert some words into the Bill to provide that the presumption in paragraph (b) will not have the effect of passing property through the intestacy of the younger of the two who died together which would otherwise pass in accordance with the will of the elder. I hope that something of that nature can be inserted, because, although this is a clause of a technical nature and will not have effect very often, it is, in my opinion, a presumption which may have grave dangers and result in great unfairness.
My Lords, these will be matters which will have to be dealt with on the Committee stage. Apart from this, I wish to do nothing except to say that I give the Bill a limited welcome. I should like to see many and quite considerable changes in it, and will listen with great interest to what my noble friend Lord Craigton has to say when he comes to wind up.
§ 7.0 p.m.
§ LORD CRAIGTONMy Lords, the noble Lord, Lord Greenhill, has asked me to apologise for his not being here. I echo the advice he and other noble Lords have given that people should make wills. I am grateful for the welcome given to many parts of this Bill and for the constructive suggestions made. Our discussion has hardened as it were, on to comparatively few major issues. There are no short answers in replying to a debate of this sort, and I will try to deal just with the few major issues. There are a number of other points that have been made. These will be carefully studied and I will write to the noble Lords concerned, but to answer them now as they should be answered would, I am sure, take longer than your Lordships would like me to take. I can answer quickly my noble friend Lord Colville of Culross. His reading of Clause 14 is, as usual, if I 598 may say so, correct. There is no intention that heritage and moveables should be lumped together for legal rights. The present arrangement will continue under this Bill.
Let me deal first with the broad principle of the exclusion of agricultural land in some form or another from the provisions of the Bill. I feel that I should deal with this on its merits on the proposition that the new rules of intestate succession should not be applied to agricultural land or, alternatively, to land in excess of an arbitrarily fixed area such as three acres or some other figure. Your Lordships feel that property excluded in this way should descend on intestacy under the present rules of heritable succession. If we were excluding agricultural land, however defined, we should, broadly speaking, be enacting one law of intestate succession in the country and another in the town. Even in the country we might be enacting one law for the estate owner and another for the man who owned a house and garden or business premises. Certainly, such provisions could well lead to divided ownership and, therefore, to the break-up on intestacy of estates which are now viable units with both town and country property.
Artificial distinctions of this kind would be bound to lead in practice to difficulties and anomalies, apart altogether from the drafting difficulties, For example, the fortunes of the intestate relatives might be quite different according to whether certain valuable subjects descended according to the rules of primogeniture or according to the Clause 2 rules of the Bill. My own feeling is that the statistics of intestacy may convince many people that there is not enough, if any, agricultural land falling into intestacy for this to be a problem requiring any special legislative provision at all. But if any such legislation were found to be desirable, the problem would not be one merely of finding an acceptable definition of agricultural land, or of deciding the right acreage for exclusion; the real objection would be the complications and anomalies and the break-up of mixed estates that would undoubtedly arise from the existence of two different systems of succession applicable according to an artificial subdivision of 599 heritable property that falls into intestacy.
I feel that I should deal in a little more detail with the various suggestions that have been made on this subject. If the proposal to exclude agricultural property as a whole were adopted, the result would be that heritable estates under the 1894 Act definition would go to the heir at law. Feu duties would go to the beneficiaries under Clause 2 of the Bill; so, probably, would the minerals—such minerals as are severed from the surface. Salmon fishings would also go to the beneficiaries under Clause 2, and they are as often as not one of the principal amenities, if not the main source of income, of the country estate itself.
If the proposal to exclude all land over three acres in extent were adopted—and I assume for this purpose that the proposal is that land of any kind exceeding three acres should be excluded—the result would be that the heir at law could succeed to a factory or hotel property covering more than three acres of land, but if the factory or hotel property covered less than three acres it would go to the heirs under the Bill. Again, a mansion house or other rural property of less than three acres would go to the heirs under the Bill, whereas if it happened to be just over three acres it would be succeeded to by the heir at law. And what is the position of feu duties? Are these, exigible from land over three acres in extent, to descend one way, while the remainder and probably far larger numbers go the other way? If there are several properties in an intestate estate, some under three acres and others covering more than that, is it proposed that the former should descend according to one set of rules and the latter according to another?
The third proposal is that all land outwith burgh boundaries should be excluded from the new rules. This, I think, might be even more difficult than the two suggestions I have mentioned. There are farms and other country properties within burgh boundaries, just as there are factories and many urban type dwellinghouses outwith burghs. There will be single estates partly within and Partly outwith burghs, and of course burgh boundaries have a habit of changing in certain places quite frequently. I 600 believe, and I hope that your Lordships will agree, that we should not legislate in such a way as to result in this sort of thing happening. The confusion, both practical and legal, which would result would be really unlimited, and the Scots law of succession, which has some reputation for being sound in its intention and fair in its effect, would have become a code with little rhyme and little reason.
Almost parallel with that is the problem of the owner-occupied farm which, as many of your Lordships pointed out, is not passing according to Mackintosh's recommendation in paragraph 8 of his Report, although his recommendation, of course, was not that it should go to the heir at law but that it should go to one particular person. As your Lordships know, we tried in the first draft of the Bill to enact the Mackintosh recommendation that the farm should be offered in turn to the relatives, but it soon became clear that the procedure, to be fair to all, including the son in Australia, would he too expensive and lengthy to contemplate and the end result would most likely be no better than that achieved by common sense and good will. So we have taken the alternative course of treating the owner-occupied farm as normal heritable property on intestacy; a course approved by the Law Society and the Scottish Land Owners' Federation but not by the N.F.U.
What will be the result of this? Fragmentation which the noble Lord, Lord Saltoun, is worried about, is, I believe, unlikely, if only because new farmhouses and steadings would get no assistance under the Farm Improvements Scheme. The family may, and I am sure in many cases would, get together and hand over the farm to one member of the family on mutually agreed price and terms. This may happen.
§ THE EARL OF PERTHIt could happen.
§ LORD CRAIGTONI say they may. If not, a farm may be sold to another farmer and the price divided among the heirs. This might be unfortunate for the family but not for national agriculture. But the most important consideration of all is: how many owner-occupied farms will this change of policy affect? Mackintosh was not to know precisely. We now know fairly 601 accurately. I have given the figures before. Out of 9,600 intestate estates all but five had heritable property valued at under £10,000. There can be few, if any, farms that are valued at under £10,000 for confirmation that are viable units. There may be two or three farms among the five intestate heritable estates—I do not know. But if there were three, then three intestate farms a year not passing under the rules of primogeniture and preference for males but under more modern rules, cannot really be said to he an unbearable hardship on the families of the farmers or on farming generally. My Lords, if the facts tell us anything, they tell us that Scottish people with something substantial to leave do, in fact, make wills, and that that includes Scottish farmers.
Now I come to the point—and I am sorry the noble and learned Lords, Lord Reid and Lord Guest are not here: the question of the widow getting too much and the children too little. I must make it clear that Clauses 8 and 9 are not similar to the legal rights of jus relictae and legitim and jus relictae and legitim are not by this Bill extended to heritable property. The right to the house and a sum of money of £2,500, £5,000, are legal rights only on intestacy. The right to £5,000 on intestacy where there are no children is already the law under the Intestate Husband's Estates (Scotland) Acts, and the Bill extends this right to £2,500 where there is issue. That is the effect of Clause 9. Clause 8, as we hope to amend it, will give the spouse of the intestate the house, if it is worth less than £15,000, or £15,000 if it is worth more, plus the furniture and plenishings to a maximum value of £5,000, which they will seldom be worth in estates under £10,000 of total value.
My Lords, if the estate is a really large one—and we know that large estates must seldom fall into intestacy—it will be no real burden on the other heirs to give the widow her claims under Clauses 8 and 9, and especially if we place a limit of £15,000 on the value of the dwelling-house. I think that is agreed by your Lordships. If the total estate is around the £25,000 mark, then I believe it is unlikely that the house and furniture will be valued at anything like the maximum of £15,000 for the house, plus £5,000 for the furniture. The 602 noble and learned Lord, Lord Reid, is mainly concerned about this limited class, and we shall have to study very carefully what he said. We hope that he may be able to help us. We are grateful to him for his suggestions. What really concerns me, and what I suggest to your Lordships must concern us, are the 1,999 cases out of every 2,000 where the intestate, if he leaves a house, leaves one valued under £10,000. In these cases do the provisions in Clauses 8 and 9, together with jus relictae, give the widow too much at the expense of the children? Here we have to exercise a nice blend of judgment between what the intestate would have been most likely to do, had he made a will, and what should be done to be as fair as possible in such cases to all parties concerned.
Let us look at these small intestate estates from the children's point of view. Whether the widow has the liferent or the ownership of a family house, their share of the legitim can be, at best only spending money, the price of a small car. If the widow has a liferent, the small house or their share of the proceeds, if it is sold, comes to them only when the widow dies. But while she is alive, as several noble Lords have pointed out, the small estate requires continuous administration and expenditure on behalf of the liferenter and those who will ultimately take. What is the widow's point of view? The house may be too large, or she may wish to move nearer her married children; but such a course might make difficulties for the executor who is to preserve the value of the heritage. The widow may wish to leave the house to an unmarried daughter who lives with her, or to one particular child or relative who is most deserving. She cannot do this. Is this, I must ask myself, what her husband would have wished? I do not believe so, in spite of what the noble and learned Lords have said. In all probability, he and his wife have worked and saved together to acquire the house: to some extent it is hers as well as his, and he would wish her to have it, and all the prestige and freedom which goes with it.
Of course, there is the other side. She may want to sell the house and live with her family. She may wish 603 to marry again. Why should she not? It is her life, not her children's; and her married daughter may one day find herself in the same plight. As there are so many more widows than widowers, it is the women whom Clauses 8 and 9 protect, as a generality, in these small estates, at the slight expense of the men, who are better able to fend for themselves. And at what expense? The ownership or part ownership of a small house—it is no more—when the parent dies; and, at best, a smallish sum at some uncertain date in the future.
My Lords, there is no Government policy here other than to do what is best. I am convinced, for the reasons I have given, that the balance of justice and the average small intestate's intention falls on the side of giving the house to the widow, and I am fortified in this view by the inquiries I have made, both personally and officially, from those who prepare wills for people who leave heritable property valued under £10,000. These sources, without exception, tell me that the great majority leave the family house and furniture outright to the other spouse, and that few indeed are the liferents on property under £40,000 to £50,000 valuation. I would beg noble Lords, if they doubt if what I say is right, to ask similar solicitors who deal with small estates, and to find out for themselves what their views are. I shall, however, look at the estate duty point raised by noble Lords.
Several noble Lords talked quite strongly about the widow who could take the family pictures, and the possibility that, under Clause 8, the surviving spouse might take a family heirloom, such as pictures, and that these might pass out of the family. I have much sympathy with the noble Lords' point of view on this matter. The point is a difficult one, because, although we all know what is meant by an heirloom, this is something which I am told it is very difficult to define with precision, as is required in a Bill of this nature. However, I will consider most carefully the possibility of finding some way of distinguishing between furniture and plenishings in current use, which must clearly go to the widow, and heirlooms, which might better go to other heirs.
On Clause 12, I have listened with great care to the criticism made and to 604 the views of the noble and learned Lord, Lord Reid. I readily agree that Clause 12 is, in effect, retrospective legislation, and that, as drafted, it might upset plans legally made at the time. One has to set this factor against the undoubted wrong of allowing certain children yet unborn to be deprived of legal rights available to all other children. On balance, my Lords, so far as I can see now, it seems right to say that what is done is done, but that it should not be done in the future. So in Committee I hope to move an Amendment restricting the application of Clause 12 to ante-nuptial contracts made after the Bill becomes law. If the clause is amended in this way, it will not disturb arrangements made in good faith under the existing law. I will also look carefully at the points made about giving the courts some discretion and about the position of the wife. My Lords, I have not mentioned everything, as the hour is late, but I will most carefully examine the constructive speeches, for which I thank your Lordships, and I look forward with keen anticipation to the Committee stage.
§ 7.18 p.m.
LORD SALTOUNMy Lords, I have listened with very great interest to what the noble Lord, Lord Craigton, has said about my Amendment, and I do not want to take up much more of your Lordships' time on it. I will say only two things. The first is that he says that it would introduce terrible confusion if we now had one law for the burghs and one law for the rural areas. Let me remind your Lordships that it was just because of those arguments 90 years ago that the trouble which has caused this Bill to come into existence took place. Before that time there was no trouble at all.
The second thing I should like to say to my noble friend Lord Craigton is this. Every possible effort has been made to bring in agricultural land, without unfairness, but the debate to-day must show that it is impossible to do so. The noble Lord's own defence of the agricultural part of the Bill was very unconvincing, and he made one mistake which I will correct in a minute; but I should like to remind him that all the land under the Land Court is already taken out of the Bill, which gives him 605 a precedent. The Land Court are not going to have any nonsense of this kind. The point where he mis-translated me was that he attributed to me a suggestion that small farms would suffer fragmentation as a result of this Bill. My Lords, I said exactly the contrary. I said that these farms must pass as a whole. I know far too much about it to fall into that trap.
§ LORD CRAIGTONMy Lords, I apologise to the noble Lord.
LORD SALTOUNI said that the farm will have to be sold.
The noble Lord said that the agricultural country will not suffer: what matters the family? Many noble Lords who have great hereditary estates have had them for a long time. Ought we not to consider and think of the humble men who also have hereditary estates, small though they be? Why should they be forced into the market to supply the agricultural demand of these rich men who want to put money away? I hope that when I sit down the noble Lord will rise and correct his statement. It seemed a horrible doctrine. For the rest I want to thank those noble Lords who have spoken. Everyone contributed something which I value and which I will study. The noble Lord who has remained and who asked me to put down this reasoned Amendment, has asked me to withdraw it; and the other noble Lord who asked me to do so has departed. Therefore, I beg leave to withdraw this Amendment.
§ Amendment, by leave, withdrawn.
§ On Question, Bill read 2a, and committed to a Committee of the Whole House.