HL Deb 31 January 1974 vol 349 cc449-71

2.57 p.m.

THE MINISTER OF STATE, SCOTTISH OFFICE (LORD POLWARTH)

My Lords, I beg to move that this Bill be now read a second time. The Bill represents the first part of the Government's programme on the reform of land tenure in Scotland, as foreshadowed in the Green Paper which we published in July, 1972. The Bill is largely concerned with the Scottish system known as feudal tenure—a term which may surprise some of your Lordships from South of the Border where I understand that the feudal system ceased to exist a very long time ago. In Scotland, however, it is the form of tenure under which most land is still held; we have lived with it for nearly 1,000 years, even if with the passage of time it has undergone some modifications.

The original concept of a grant of land from a superior to a particular vassal in return for personal service of some kind has long since passed away. The grant of land has become perpetual and heritable, and the return to the superior now takes the form not of services but of monetary payments. The feudal system as it now exists has two basic features: first, the obligation on the proprietor of the land (still technically known as "the vassal")—and I declare my interest at this point in that I am a vassal—to pay in perpetuity an annual feuduty to the superior, which I am not, and to that extent it resembles in some ways the English ground rent; and, secondly, the obligation on the proprietor to observe any land conditions laid down in the feudal charter.

The first of these features—the obligation to pay an annual feuduty—has in recent years become increasingly resented and it is difficult to justify it in modern circumstances. However, the position in regard to the other feature—the right of the superior to impose land conditions which, in the Scottish expression, "run with the land"—is by no means so clear-cut.

Many land conditions are beneficial, for amenity or other reasons, not only to the superior but perhaps primarily to the proprietors themselves. If I may give an example which will no doubt be familiar to many of your Lordships, the extent to which the Georgian New Town of Edinburgh has been preserved as such a magnificent part of our heritage is due largely to the fact that the relevant feu charters contain far-seeing provisions of an amenity kind which not only greatly ante-date our Statutory planning code but which also serve to regulate the use and appearance of the property in much greater detail than would be possible using the broader brush of the planning Statutes.

I might quote, perhaps, from the feu charter of our own house in the New Town of Edinburgh, which is dated 1825, The houses to be erected in the said lots of ground or said Regent Terrace shall be built according to the said feuing plan and in strict conformity to the elevation prepared by the said William Henry Playfair, architect in Edinburgh … It goes on: …the whole of the fronts of the buildings as well as the ornamental parts shall be built with stone from Craigleith Quarry or any other quarry which is not inferior to it in quality". So, my Lords, in this way conformity of design and appearance was very simply achieved and maintained.

So much by way of general background. After publication of the Green Paper, to which I have referred, the Government undertook very extensive consultations on it, and I am glad to say that our proposals have met with a very wide measure of approval. In particular, there was very general agreement that, in the words of paragraph 17 of the Green Paper, the major reform of land tenure to which the Government are committed must involve the abolition of feudal tenure. It is important, however, that this should be carried out in a way which is fair to superiors and vassals alike … and that the good points of the present arrangements should be preserved so far as possible. My Lords, the Government's programme of land tenure reform involves some very complex and far-reaching problems; and we want to give further consideration to some of these so as to make quite sure that we arrive at the best solutions in the interests of Scotland as a whole. We have decided, therefore, to proceed in stages. The present Bill deals at once with the most urgent aspects of that reform, relating mainly to feuduties; and it is our intention to introduce as soon as possible further legislation to make provision for the important questions of the creation and enforcement of future land conditions and of the enforcement of those existing land conditions which are at present enforceable only by a feudal superior. I would stress to your Lordships, however, that, as my right honourable and learned friend the Lord Advocate made very clear in another place, the Government are resolved to complete this important task as soon as practicable. I would emphasise, also, that this Bill, besides paving the way to further reform, is of considerable importance in its own right and will bring about a number of fundamental and very significant changes in the law of land tenure in Scotland.

My Lords, the Bill contains three main provisions, It prohibits the creation of new feuduties other than nominal ones of one penny a year if asked; it allows the proprietor of land to have his feuduty reduced to that same nominal amount on payment to his superior of a fair redemption price; and it prohibits the future creation of long residential leases. With your Lordships' permission, I will not go through the Bill in any great detail but merely touch on its main provisions. Clause 1—and Clauses 2 and 3 follow on to it—provides that any new feuduty must be one penny only, if asked. The retention of this nominal feuduty is necessary in the meantime in order to preserve the feudal relationship until the system as a whole can be abolished. A measure of the importance of this clause is that in the past year some 11,000 new feuduties have been created, most of them substantial and some of them as high as £30 or £40 a year. If a deed in future purports to impose a feuduty greater than one penny, the feuduty will automatically be cut down to one penny, but the deed will remain valid in other respects. Thus, the purchaser will not find himself obliged to re-negotiate the sale of the property merely because of the attempt to impose a feuduty by the seller.

It is in Clause 4 that we come to the second of the Bill's main provisions. That clause gives to every person who at present pays a feuduty greater than one penny the right, if he so chooses, to "redeem" that feuduty; that is, to have it reduced to the purely nominal one penny a year, if asked. This is to be achieved by the payment to the superior of a sum of money so calculated as to produce an income equivalent to the feuduty if appropriately invested at current interest rates. This is a formula which should be fair to both the superior and the proprietor of the land. The clause also prescribes, along with Schedule 1, necessary forms to be used in the procedure for redeeming feuduty. I should say that it is the Government's intention to produce an explaantory leaflet, which will be made widely available, explaining the procedure in simple and straightforward terms.

Turning now to Part II of the Bill, this is concerned with a change in land law, which is in some ways even more radical than those effected by Part I; that is to say, the prohibition of long residential leasehold. Perhaps I may give your Lordships a brief account of the reasons for seeking this. In our Green Paper we pointed out that long leasehold was in many ways similar to feuing. So far as this Bill is concerned, the outstanding point of resemblance is that the rent under a long lease could readily be used as a substitute for feuduty. So a landowner who is deprived by Part I of the Bill of the power to impose a feuduty, other than a nominal one, on land may instead be tempted to grant a long lease—say, for 60 or 100 years—for which he could charge an initial sum and a continuing annual rent; and the result would be little different from the point of view of the householder from buying a house and paying feuduty on it thereafter. But, my Lords, quite apart from this possible use of a long leasehold as a device for avoiding the provisions of Part I, we believe that long residential leaseholds can bring with them social effects which are inherently undesirable. There is no doubt that many tenants in long residential leases imagine that they are the owners of their houses, and they make repairs and perhaps improvements to a house which they do not realise will one day revert to the landlord, usually without compensation. Obviously, this is liable to cause hardship and resentment. This confusion between long leaseholds and ownership is I think particularly likely to occur in Scotland, where most householders are used to paying a feuduty, and the tenant in a long lease tends to think of his rent as a sort of feuduty. Of course, we understand that the confusion arises only because the tenant has not ascertained his true position, but that is cold comfort to a person who finds himself evicted from what he had believed to be his own house.

A further unfortunate effect of long leasehold of houses is that where a tenant does realise that he is only a tenant he naturally grudges any money spent on repairs and maintenance towards the end of the lease, when the property will shortly revert to the landlord. As a result, it can happen that property which would otherwise have been useful for many years falls prematurely into decay. Moreover, there remains the inescapable fact that, as the expiry of the lease draws nearer, so the value of the tenancy decreases. This means that an occupier who, some years previously, had paid almost as much for his lease as he would have had to do to buy the house will find that he cannot sell the remainder of his lease for enough to allow him to go back into the property market.

As your Lordships are well aware, the long residential leasehold is a well-established, indeed normal form of tenure in England. Nevertheless, I believe that in Scotland we are fortunate that long residential leaseholds have never really taken on, though I know that there are some pockets of it scattered across the country; and principally for the reasons which I have just outlined, the Government are determined that it should not take on. It is particularly important that long residential leaseholds should be prohibited now because, as I have said, the prohibition of new feuduty might make it more attractive than formerly to prospective sellers of land. Accordingly, my Lords, Clause 6, in Part II of the Bill, makes the fundamental provision that, after the Bill comes into force, every long lease will be deemed to contain a condition that there is to be no residential use of any part of the leasehold property.

One exception to which I shall draw your Lordships' attention is that a limited residential use will be allowed on land held on a long lease if that residential use satisfies the double test that it is ancillary to the main use and that its absence would be detrimental to the efficient exercise of it. This means that it would be permissible, for example, for a hotel held on a long lease to include a manager's flat, or for a resident supervisor to live on a factory site—but only if the house must be genuinely on the leasehold land in order to serve the main industrial, commercial or other use.

Parts III and IV deal with a wide range of miscellaneous and formal matters which I do not think I should worry your Lordships with now, though of course I will do my best to answer any questions on them. Some of the provisions are designed to preclude other devices which might be employed to circumvent the main reforms proposed; others give additional protection to the proprietor in a feu; and others are of a more technical, but nonetheless important kind.

My Lords, to sum up, the Bill will prevent the creation of new feuduties and allow the equitable redemption of existing ones. It will ensure, by a prohibition on long residential leasehold, that the disadvantages of that form of tenure will not become widespread in Scotland. Finally, it will achieve a number of important technical reforms in the law of land tenure, particularly in relation to leases. But, beyond all this, the Bill represents an important stage in a wider programme for the comprehensive reform of the land law of Scotland—a programme to which the Government are fully committed. So I commend the Bill to your Lordships both for its value in itself and as a major instalment in that wider reform. My Lords, I beg to move.

3.12 p.m.

LORD HUGHES

My Lords, the noble Lord, Lord Polwarth, began by saying that one aspect of this subject might be a surprise to some of their Lordships from South of the Border. They were already in process of voting by the feet to make certain that they were not subject to any such surprise, and they have left us very largely to it. That does not surprise me because a great many of us North of the Border do not have a very great knowlege of the intricacies of the feudal system. We know the main part, having to pay the feuduty, and we know some of the consequences of the powers of the superior. The noble Lord declared an interest as a vassal; I must also declare a wider interest as I am a director and shareholder of a company which, at one and the same time, is a superior and a vassal, but none of that will in any way affect the way in which I approach this Bill.

My Lords, this is a measure for which many people in Scotland have been calling for a long time, although, as the noble Lord, Lord Polwarth, has said, it goes only part of the way. It does not alter the structure in the way in which most of those who have been calling for reform want it altered. They want it to be changed to a simple system whereby someone sells land, another one buys land, and that is the end of the transaction. But it will not surprise your Lordships to know that this matter has been under consideration for a very long time, starting off in the time of the previous Government. One thing which I think all of us have learned is that it is a very complicated and difficult business to alter the land law of a country, particularly when, as in Scotland, this is one which has been in existence for centuries and which in many ways has changed in practice through the years. Many of the things which are part of the structure are perfectly acceptable, and one thing which any Government have to be careful about in changing a law is that they do not throw out the baby with the bath water. We want to hang on to those things which are beneficial to people generally.

The Bill as it stands, as the noble Lord, Lord Polwarth, has said, contains a variety of things, but the one which is of immediate concern is the abolition, to all intents and purposes, of feuduty in the future. It does not really abolish it because it substitutes the nominal feu-duty of one penny, if collected, but it continues the possibility of superiors imposing conditions on the person who is now to be known as the owner of the land. I would point out that this is perhaps the least satisfactory part of the Bill, and it is going to be deferred to some future date. I understand that in another place the Lord Advocate gave a firm undertaking that this next measure would come along within three years. Of course that is a rather difficult undertaking to give, and it is an even more difficult one to comply with because the Lord Advocate does not know that his Party will have anything to do with the matter in three years' time—or even in three months' time. However, as a statement of intention it is something which perhaps can be accepted by both Parties as desirable, having started on this road, to bring to a conclusion as soon as possible.

The Church of Scotland is probably the largest holder of feuduties in Scotland and they have been expressing views to a number of your Lordships on ways in which they would like this Bill amended. I will come back to that very soon. Before doing that I should like to say that in the past the system worked much better than it has in the last 20 years because, by and large, the superior was on the spot and conditions which he imposed for the protection of the general amenity of the area were under his observation, and if they were not being complied with in the interest of all he was able to do something about it speedily. But in the last 20 years—and particularly the last ten years—many of these feuduties have passed into the ownership of large companies, insurance companies and the like. They are not in a position to know whether the conditions are being observed. Then, to a certain extent, feuduties have passed into the ownership of property development companies, who in many cases have been subject to very severe criticism for the way in which they have sought to gain inflated sums through the conditions which they are able to impose, for instance, by change of use inflating the price of the land out of all proportion. In the main, it is these things which have accelerated the demand for reform.

There were also, as is inevitable in any system as widespread as land tenure, some private landlords who brought the system into a certain amount of disrepute because of the way, as individuals, they exercised their rights as superiors, sometimes seeking to exact larger sums of money for reasons which did not appear to anyone but themselves to be ones which ought to be put forward—the sort of thing which has been suggested in the past as a condition of being able to sell something on the land. They say, "You are not allowed to do that. If you want to do that I want to treble, quadruple or maybe increase tenfold the feuduties". That sort of thing happened, although rarely, and every time one individual did this it tended to bring the system into disrepute.

The Church of Scotland put forward three proposals. The first of these I support entirely, and the noble Lord, Lord Balerno, and I will in fact be tabling an Amendment for consideration at Committee stage, although it is possible that an Amendment which I believe the Government are putting down may serve the same purpose, in which case the Amendment of the noble Lord and myself would not be pressed. This is on the subject of the document which will have to be completed where the feu is redeemed. This is contained in a Schedule to the Bill and the suggestion is made that at the present time this could be a legal document of some complexity which will involve someone in fairly substantial legal fees.

For example, many of the feus on small houses created, shall we say, before 1960 were probably somewhere between £2 and £10 a year; certainly most of them created before 1939 would not exceed £3 or £4. And on the basis of something like the present values eight years' purchase, the sum which might have to be paid to redeem the feuduty, or to reduce it to 1p, would be something of the order of £20. In my experience—and I am quite certain that it does not differ from the experience of anyone else—you get little from a lawyer for £20. It is not clear in the Bill who would have to pay these legal fees. If it is the former vassal, then the £20 would be more than doubled; there would be £20 to the landowner and £20 to the lawyer, or perhaps even more. If it is to be paid by the superior, he will be in the ridiculous position of being due to collect £20 from his former vassal for redeeming a feuduty and none of the money would reach him because the lawyer would take it all in fees in the first instance. As the Church of Scotland holds a large number of these comparatively small feus, obviously it has a strong interest, which could be shared with its vassals, in keeping the expense of such transactions to the minimum. It therefore wishes a simple form of receipt which would not require recourse to a lawyer at all or, if it was considered necessary to go to a lawyer, would call for only the minimum fee. This is desirable and I support it.

The second point, about which I am not so certain—although I think that what the Church wants is reasonable—is that the Church of Scotland wants to make redemption of a feuduty, or its reduction to a nominal sum, compulsory on a first sale. At a meeting yesterday when views on the legal position were expressed on behalf of the Government some of us were made aware of the difficulties of such a transaction. I cannot say that I was completely convinced that the difficulties are insuperable. At the meeting I ventured to point out that it must have been something of this kind that the late Sir Winston Churchill had had in mind when he said that for every solution a civil servant could find a problem. That certainly is very much the case in connection with compulsory redemption. The disadvantage of the way in which the Government are going about this (though I accept that in existing circumstances it is probably the only way) is that it will take a very long time for the system to change from one method to the other as there are many transactions every year.

It would probably speed up the matter considerably if on a first sale the vassal were compelled to redeem the feuduty out of the selling price of the house or more correctly, to reduce it to the nominal amount of one penny. Again an Amendment will I think, be put down by the noble Lord, Lord Balerno. I am not joining him in putting it down, but I want to look carefully at it. In the meantime I hope that the Government will give closer consideration to the possibilities of doing something about this and will not be so obsessed with the difficulties. I accept that they are real and not imaginary; but it may be that, given the will, they can be overcome.

The third point which the Church is raising is the question, in connection with certain churches, of abolishing the right of pre-emption. I cannot go along with the Church on this. I have no objection to abolition, but it must apply both ways. When selling something the Church in many cases imposes a right of pre-emption in its favour. If the Church of Scotland wants to abolish pre-emptions both ways, at least it has a justification; but I have never been very enthusiastic about these one-sided bargains. So on this point, even though I am a Church Elder (do I have to declare an interest as an Elder of the Church of Scotland?) I do not go along with the Church.

My Lords, I must confess that I have not looked too closely at the miscellaneous provisions. Some of them are now completely unenforceable. I do not know when the right to irritate a feu was last exercised, though I could give an indication when it was last threatened. In fact the threat to exercise it generally produces results and it is almost never necessary to carry it out. I doubt whether, in existing circumstances, any court would allow a feu to be irritated. Perhaps I should explain that to irritate a feu means that if a feuduty has not been paid for two years, at the end of the day if the court agrees, the land and anything on it reverts to the superior and the man who has not paid his feuduty loses his interest in it. Needless to say, a threat of that kind generally results in the arrears of feuduty being paid up very quickly, if not by the individual at least by the building society which is nominally the owner of the property.

If I am giving a somewhat limited welcome to the Bill, my Lords, it is because the Bill itself is limited. So far as it goes I think it will be generally acceptable, but I want to finish on a note of warning to those who are liable to pay feuduty at the present time. Many people have got it into their heads that when the campaign to abolish the feudal system came to an end, it would mean that the payments which they were making would come to an end, and that they would not have to pay anything in return. I am sure that there is no intention on the part of this Government, or a successor Government, to expropriate the land in favour of the man who has the house. He is going to have a choice, as the Bill stands at the moment, of continuing to make an annual payment of feuduty or to pay a capital sum which will terminate it. Those who choose to exercise the second choice at the present time will be getting a much better bargain than they could have secured a number of years ago because, with interest rates as they are, they will be able to buy out a feuduty at something like eight years' purchase. Twenty years ago it would have cost 25 years' purchase. I welcome the Bill, and I hope that this Government, or their successors, will be able to comply with the Lord Advocate's undertaking that the process will be completed within three years.

3.28 p.m.

THE EARL OF SELKIRK

My Lords, I should like to thank the noble Lord, Lord Polwarth, for the very clear way in which he explained the main principles of this Bill, though I am bound to say that the matter is not quite so simple to understand as the speech which he made so admirably. I do not in any way disagree with the noble Lord, Lord Hughes, that feudal tenure is not always understood in Scotland, even among some members of the legal profession. It is only those in a specialist branch of that profession who are able fully to grasp all the problems that arise. I am in the happy position of not having to declare any interest whatsoever. I agree that the passing of this Bill is a necessary step. But it is regrettable that, inevitably, it is an interim step. Interim law in regard to land tenure is unfortunate, to put it no higher, but we have a system [...] land tenure which requires amendment. I must say, without trying to make too much of its implications, that a Parliament more sensitive to the requirements of Scotland would have done this 150 years ago. Things have been allowed to drag on which never should have been allowed to do so. If there had been people in charge who were closely in touch, they could have made the amendments as the need for them occurred. The Government have laid emphasis on the abolition of the feudal system. I should like that to be made secondary to ensuring that we have a better land tenure system in Scotland. By that I mean primarily three things: first, security of tenure; secondly, assurance in regard to amenity; and, thirdly, a simple and cheap method of land disposition. This is what I hope the Government will keep very clearly in their minds in the formulation of their final policies.

The noble Lord, Lord Hughes, has mentioned the problem of change. It is very easy for all of us—indeed for anybody in this world—to complain of the nature of land tenure, but in the course of time we have learned how to work it and if you go to a country where it has not been worked out to the same extent and where the words "injurious affection" are unknown, it is easy to realise the great advantages that we have in this country. Anyone who lives in a tenement in Scotland automatically knows all the details of who cleans which step, and so on, half-way up the tenement: it is a simple matter and well established in custom. There is no difficulty about it. But if you go to some other country where this has not been worked out, all manner of problems can arise from a system such as this.

I was glad that the noble Lord, Lord Polwarth, mentioned the value of the feudal system, and he mentioned the new town of Edinburgh. This system has an imense advantage over the law in England. Whereas in England you can put a negative condition which will run with the land—and I believe that a good example of this is Leicester Square, where the only rule was that you could not build in the middle of the square. That was negative,. But in the feudal system you can have positive rules, as the noble Lord has said. The original architect, I believe, was Gillespie Graham; and his architectural system had to be imposed over the whole area. This is a very real advantage in planning which we are letting go, and I think we ought to recognise that something will be lost thereby. I would not deny that many misuses have occurred; for instance, the whole system of mid-superiorities is quite ridiculous. Many persons now who hold dominiurn directly have quite detached themselves from the land for which they hold a certain degree of responsibility. I am told that at the present time there have been considerable abuses, closely connected with the rising price of land, which are quite unjustified. In these circumstances, I have no hesitation in saying that something of this character is necessary and in that sense I certainly welcome the Bill. But at the same time I believe we must recognise that this is something that will affect every single person holding a house in Scotland. We have a duty to examine the implication of this matter very carefully indeed and to see that so far as possible it is made clear and comprehensible to everyone.

If I may, I should like to ask one or two questions. The basis of compensation, I think, is one of rough justice. There are about 750,000 feus in Scotland, and to give perfect compensation, of course, you would have to value the whole of them—which is clearly impossible. I should like to ask: what is the position with regard to mid-superiorities? May I put the question in this form, and if the noble Lord does not know the answer, perhaps we can hear it later: supposing the proprietor redeems his feu to the mid-superior, the mid-superior under the section of the Bill headed "Miscellaneous" is under no obligation to pay his feuduties—at least in respect of any action by the over-superior—for five years. The proprietor redeems and five years go by. By that time the mid-superior is bankrupt. Can the over-superior then come down on the proprietor for the payment of what is due to the over-superior? In other words, has the proprietor the possibility of having to pay redemption twice? We need to be quite certain that the Bill would ensure that such unfairness could not take place.

I wonder, too, whether the noble Lord could tell us a little more about the conditions of feudal holdings? I think the Government are absolutely right to retain these. Many of them are very important. Houses have been bought on the understanding that certain standards of amenity will be maintained. If all the feus are redeemed, the superior will have no interest whatever in seeing that those amenities are maintained. Who is going to do it? The co-feuars in the majority of cases have not the right to appeal to the Lands Tribunal and they cannot bring any action to it. In some cases, I believe that tenant associations are formed. These are not very easy to run and they do not necessarily accept their neighbour's advice. What do the Government envisage as a way in which the conditions (which in many cases are of the utmost importance to the land-owners) are properly maintained? In many cases this is done by the superior. This costs money but it is necessary to do it and if there are no feu duties being paid, he may well take no trouble. This may be only an interim period, but I stress that it is most important that somebody should have authority to do it. I am certain that local government will not. We are now going through a period of considerable reorganisation, and I suspect that most of the planning departments are hopelessly overworked: they have not got their new organisations going and will find it extremely difficult to exercise the minimum powers with regard to these matters. They certainly will not go into many of the details with regard to the future.

I hope I am right in saying that the curious holding called "kindly tenants" will not be touched by the Bill. This unusual holding has been brought about by a private Act of Parliament and affects only four towns in the neighbourhood of Lochmaben in Dumfriesshire and, I believe, has never been committed to writing. This has never been a far-reaching matter. So far as I can see, the Bill does not touch them, and I should be rather sorry if it did. I understand that the tenure is supposed to go back to some services rendered to Robert the Bruce, and I hope that those affected by it will continue to enjoy the benefits they have had up to now. Regarding leasehold tenure—

LORD HUGHES

I am sorry to interrupt the noble Earl but I have never before heard of the expression "kindly tenants", and I hope that at sometime later he will explain it to me. I wonder whether there is a corollary to it—was there also a kindly landlord?—because in Scotland it is often thought that there is no such animal.

THE EARL OF SELKIRK

I think we had better have a confrontation afterwards. I am not very happy about the leasehold arrangement. Leasehold has never held the same position in Scotland that it has in England, and of course the reason for that is that there we have feudal tenure. The majority will always want a fair amount of leasehold tenure, because people move about and it is the easiest way of doing it, and 20 years for this purpose is quite reasonable. There are two things which strike me as being not unimportant. First of all, concerning land for residential development, nobody is going to take a piece of land for 20 years and build a house on it. That, quite clearly, is out. Secondly, I am concerned about the people we sec in their later years in life—perhaps a pensioner, a widow, or some elderly member of a family. Is it possible to get a liferent which may exceed 20 years? There seems to be an increasing number of people who reach four score years and ten nowadays. It seems to me to be of the utmost importance at that stage of life that they should not be removed from their property on expiry of a 20 year lease. I should like the noble Lord to go into this matter. I believe it is covered, in a sense, by Clause 7(4), but I must confess I could not understand it. No doubt the noble Lord will explain what this means, as it is important. There are many cases of people having retired, and it is important that they should have security of tenure during their lifetime. I should like the noble Lord to have a closer look at that.

If I may sum up, I am worried about the question of amenity in certain cases. I am doubtful whether planning development in this country has reached a stage when it can cover all the details which are envisaged in some of the feudal arrangements which have been made. There may be an interim period when a lot of damage could be done which would undermine the security of some tenants. The third point made referred to the ease and cheapness of disposition. This raises the question of registration of land titles. Can the noble Lord give us a ray of hope that this will be seriously dealt with at an early date? English experience shows that it takes a long time to deal with this and to get it completed. It is not an argument to say that you have to complete the reform of land tenure before doing it; land tenure reform will go on indefinitely. There will always be changes in land tenure to meet the changes in social circumstances. There will have to be adjustments to whatever form of land registration may be necessary. I hope that this can get started at any early stage for it will make an important difference to the cost of housing.

My Lords, I welcome this Bill as an interim step. I do not think it is going to help a great deal in making land available for housing property, and I am sorry about that. I should like to get some assurance from the noble Lord regarding registration, or at least a recognition that this is in the mind of the Government as something which requires attention at a very early date.

3.43 p.m.

THE EARL OF CROMARTIE

My Lords, being the superior of some feus in the North of Scotland, perhaps I should declare an interest: not, I can assure noble Lords, a very large one financially speaking. I think that many of us in this House who know something about feus and feuing would agree that so far as country as opposed to city feus are concerned, much of the agitation has been artificially fomented in the popular Press who have made these admittedly antiquated words "vassal" and "superior", dirty words.

If feuduty had been called "ground rent". I doubt whether we should have been subjected to all this blether, and indeed the Bill might have never been necessary. In a great many cases it suits a feuar better to pay a reasonable annual sum than to have to fork out a capital sum, and I consider that the proposed legislation which prevents the creation of any new feuduty payments may work against the would-be feuar in quite a number of cases. I know of cases where young couples who want their own house and are probably living on a council estate, are not able to put down a lump sum. But if they paid a reasonable feu-duty they would have their own home, which we all agree is desirable. I certainly follow the argument of the noble Lord, Lord Hughes, that there are difficulties where companies which we do not care for very much have taken over properties and there has been great abuse in certain areas. But I am talking about the rural country areas in the Highlands.

Regarding feudal tenure, this has worked well in most cases over hundreds of years—nine hundred or more. Its chief unpopularity lies at the door of some planning officers and their like who resent anyone else having a say. This is not altogether their fault as they are too often trained as town planners only, with the added implication that they are the Lord's annointed. I feel therefore that the Government's proposals are more or less reasonable, with the exception that it would be in the interests of new feuars if they still had the option of paying an annual sum instead of a capital payment if they so wished. Also, I think that a fixed figure of ten years purchase for redemption would be an easier method of calculation. I am, my Lords, opposed to any compulsory redemption and I should like to give feuars an option in the unlikely event of new feus being created.

3.46 p.m.

LORD KILBRANDON

My Lords, I should like to say a few words for the purpose of assuring your Lordships that in my apprehension this Bill, so far as it goes, has the support of the legal profession in Scotland. I know that this sounds like faint praise. I do not regard this, rightly or wrongly, as a law reform Bill; this is a social reform Bill. Whether or not the legal profession approves of it is perhaps neither here nor there. But on the other hand it deals with matters which the legal profession had to deal with themselves and I see no difficulties in their way in the proposals in this Bill.

I said "so far as it goes", and of course most noble Lords who have spoken have said that the Bill does not go far enough; and I agree with this. On the other hand, I remember painfully when, nearly nine years ago now, I was appointed Chairman of the Scottish Law Commission, I thought law reform and reforms of legal matters could be dealt with very quickly. I was very rapidly disillusioned and terribly disappointed, but I am sure it was very salutary. I know that things cannot be done quickly, although I am still absolutely convinced that they can be dealt with a great deal more quickly than they are. But this is a particularly sensitive area and it would be quite wrong to approach this rashly or without thinking out all the ramifications which may have to be considered. I for my part cannot say that there has been any dragging of the feet. Regarding the abolition of feuduties, many of us have thought for a very long time that the redemption of feuduties was right. The control of feu conditions is now, to a great extent, vested in the Lands Tribunal. I welcome the clauses in the Bill which provide for the prevention of long residential leases.

I listened with great attention to the words of my brother, the noble Earl, Lord Selkirk, and I go along with him to a great extent. I would not wish to be quite as critical as he was on the Scottish system of land tenure and conveyancing, awkward as it is. There is a great deal wrong with it, but there is also a great deal of good about it. It is as least as good as systems which we see not very far away. Lecturing at Cambridge the other night, at the end of my lecture I was asked a question by an intelligent undergraduate who said, "Supposing you were going to introduce some part of the law of Scotland into the law of England, which part would you select?" I thought that was a very fast question. After giving it such consideration as I could I said, "If you could persuade English lawyers to understand the difference between a real right and a personal right, they would know how to deal with 'gazumping'." I was glad to hear a reference to the kindly tenants of Lochmaben. They are very much alive; they are not as archaic as people might think. I remember when I was at the Bar being concerned in a case relating to them. I had to argue the question of whether they were rateable in respect of their right to fish for salmon in the river Annan. So there they are, and I hope they may remain.

My Lords, that is really all I have to say. I support this Bill in principle. No doubt there will be Amendments which I might also support, but in the meantime I would certainly support the Second Reading.

3.49 p.m.

LORD STRATHCLYDE

My Lords, we have to-day embarked upon what my right honourable friend the Secretary of State claimed in another place, a claim which has been repeated by my noble friend the Minister to-day, is the first stage of a reform of the whole system of land tenure in Scotland; a claim which, by the way, the Opposition in another place rejected, holding that the first step was taken with the Act of 1907. Which of these claims is the more correct is of little importance to us to-day, for what we are concerned with now is the Bill before this House. There would appear to be at least one fact which is beyond dispute; that is, that the present system has existed for over 900 years and has ramifications in many aspects of Scottish life and activity. As a layman, it seems to me that any legal system which has lasted for so many centuries cannot have been objectionable for any considerable body of our fellow countrymen, and indeed must have contained matters which were considered to be of benefit to the nation as a whole.

I am all the more inclined to that opinion when I discover that our existing system of land tenure has been under critical examination almost constantly since the year 1912 when, if my information is correct, that very great Scottish legal figure, the noble Viscount, Lord Dunedin, presided over a committee or a commission set up to examine the matter. Over all the years since 1912, various important bodies have been seeking—as my right honourable friend the Secretary of State says he is seeking today—the best system to replace the one we are reforming. If it has taken all these years to seek out and still fail to find the best system, it is perhaps going to take many more years, whereas my right honourable friend also said in his Second Reading speech in another place that it is clearly of the utmost importance to ensure that, in this highly complex field of law, whatever changes we make are the best changes after full consideration.

The truth of the matter would appear to be that neither my right honourable friend nor the Government have as yet finally formulated their ideas of the changes which will be required and the time that it will take to construct in place of the existing system an effectual and working system of tenure for the future. So far as your Lordships' House is concerned, our hope surely must be that the Government have progressed further than those who have examined the reform of land tenure over the past 60 years, and that in the end the time and work involved will be found to have been well worth while.

While the future is unknown, we know, as my honourable friend has said, that this Bill will prevent new feuduties, other than those of the nominal amount of one penny, being introduced. In that connection, as the Minister also told us, many thousands of new houses in recent years have had feuduties of from £20 to £40 attached to them. When, for a number of years, I lived in Glasgow, I had to pay feuduty in respect of my house. Although at first I found this somewhat strange, I did not resent it when I came to realise that I was paying my annual contribution, which went on for ever, as part of the cost of my house on the land on which it stood; but for the value of feuduty the capital sum required to purchase the house would have been considerably greater. I was also glad to discover that my feudal superior, to whom the feuduty was paid, performed what seemed to me to be a very useful service. As the superior he was in a position to control, and did control, any development on the estate, and to safeguard the environment, which was very much in the interests of his vassals.

My Lords, there is one effect of this Bill which would seem to be of current concern to all of us. Clause 1 affects the abolition of feuduties of more than a mere nominal amount. As I said a moment ago, many new feuduties of from £20 to £40 have been created in recent years. If income is not to be received from that source, allowance for it will undoubtedly be made in the capital cost of land, and that would seem to me to be inflation and less than welcome to a Government dedicated to controlling that most serious threat to the living standards of the nation. Perhaps my noble friend would care to comment on that aspect of the Bill when he comes to reply.

In regard to the limitation on the length of leases of property referred to by the noble Earl, Lord Selkirk, I can find neither sufficient reason nor justice for it. A man buys a house but later for some personal reasons decides to let that house for a period of, say, 50 or 100 years—it does not matter how many. He may well be performing a public service by making his house available for some persons whose need is greater than his own. But in any case in what way, I should like to know, is he harming anyone, far less harming the community? According to my right honourable friend the Secretary of State—and I again refer to his Second Reading speech—he justifies this imposition on private property, as indeed has my noble friend to-day, because the owner might charge an initial capital sum and also a rent. It is claimed that that would, though not technically, have much the same effect as a feuduty. I say to that argument that if my right honourable friend's present advisers are not capable—which I do not believe—of drafting a provision to stop that kind of practice if it is found to be so objectionable, then the sooner other advisers are sought the better both for the Secretary of State and for Scotland.

Then my right honourable friend went on to say—and this has also been repeated to-day—that long residential leases have undesirable social consequences, and he gave us some examples. My right honourable friend spoke of a grandfather obtaining a long lease of a house. On his death the lease passes to his son, and on the son's death it probably passes to one of the grandchildren. My right honourable friend then says that having made improvements and extensions to the house—which, let me say, the new leaseholders had no right to make without first obtaining permission from the owners, and which if they did make they made for their own convenience—they come to look on the house as their family home. Then when the lease expires they find to their bewilderment that the house belongs to a landlord. How could they imagine that the house was their own when every half year they were receiving notice that a half year's rent was payable, and how could they then be bewildered? I find such a story rather pathetic.

But that is not the end of the story, for we are told that the house to which they have devoted so much attention—I wonder whether that is true of all tenants—is to pass into the possession of the landlord. What I should like to know is this. When it ceased to be the property of the landlord, was it not the duty of the occupiers to devote attention to the house and return it to the owner in the state in which it had been leased to them?

I would ask my noble friend to consider whether this limit on the length of the lease is not really a gross intrusion on the private affairs of the individual citizen. So far as I know, most fathers wish, if they possibly can, to ensure that their widowed daughters or unmarried daughters are assured of a roof over their heads during their lifetime, and provide by means of a will or otherwise that they should have the lifetime use of the family home where they have spent the greater part of their lives. Is that now to be denied to them? For if such a lease is to be limited to 20 years, then these elderly women will have no certain security of tenure in the latter years of their lives, as my noble friend Lord Selkirk has said.

I am told that the purpose of this part of the Bill is to put obstacles in the way of speculators. The speculator these days has become the bogeyman in our economy, and we go to very great lengths, taxation-wise and in other ways, to circumvent his activities. But it may be that, in our anxiety to stop the activities of these elusive people, we do not give sufficient thought to the hurts we may unwittingly inflict on straightforward, honourable and decent citizens. It is in that connection, and in relation to the matter I have mentioned that, like my noble friend Lord Selkirk, I most earnestly appeal to my noble friend the Minister to re-examine this part of the Bill, and to endeavour, either by exceptions or modifications to the 20-year rule, to make it tolerable for those ordinary people who I have indicated are most likely to be injuriously affected by it.

My Lords, there are other matters to which one might refer, but I will content myself in advising my noble friend that at the Committee stage Amendments may be tabled to Clause 4, Clause 6(4) and Clause 11 among others. While it is our duty to criticise and indeed to voice our disagreement with certain provisions in the Bill, we can also, I am sure appreciate the immense amount of work and detailed study which has been involved in its preparation.