HL Deb 11 June 1974 vol 352 cc331-43

3.7 p.m.

THE MINISTER OF STATE, SCOTTISH OFFICE (LORD HUGHES)

My Lords, I beg to move that this Report be now received.

Moved, That the Report be now received.—(Lord Hughes.)

On Question, Motion agreed to.

Clause 5 [Redemption by law of feuduty ground annual, etc. on transfer of land for valuable consideration]:

LORD HUGHES moved Amendment No. 1:

Page 6, line 24, at end insert— ("(13) This section shall not apply in any case specified in subsection (1) of section (Redemption of feuduty, etc. on acquisition of land by authority possessing compulsory purchase powers) of this Act except to the extent (and subject to the modifications) specified in that section.")

The noble Lord said: My Lords, Amendment No. 1 is one of a group of four Amendments, Nos. 1,2,4 and 5, the purpose of which is to apply the Bill's provisions for the redemption of feuduty to cases where land is acquired by a body having compulsory purchase powers. Amendment No. 1 (Clause 5, page 6, line 24) is merely a paving Amendment for the proposed new clause after Clause 5. As it stands, Clause 5 would govern redemption of feuduty in all cases where land is acquired for a valuable consideration, including acquisitions for value by authorities possessing compulsory purchase powers. The purpose of the Amendment is simply to exclude such transactions from the effect of Clause 5 so that they can be governed instead by the provisions of the proposed new clause.

The substantive Amendment in this group is contained in the proposed new clause itself, subsection (1) of which defines the type of transaction to which the clause is intended to apply. There are basically two forms of compulsory purchase procedure, one provided by the Land Clauses Consolidation (Scotland) Act 1845 and the other provided by Section 278 of and Schedule 24 to the Town and Country Planning (Scotland) Act 1972, the latter being known as the "general vesting declaration" procedure. A fundamental difference between these two procedures in relation to feuduties is that under Section 107 of the 1845 Act an acquiring authority need not redeem the feuduty provided that the superior does not demand redemption. On the other hand, the effect of a "general vesting declaration" is to extinguish the feuduty payable in respect of the land being acquired. Subsection (1), therefore, disapplies Section 107 of the 1845 Act, so that redemption of feuduty under the new clause will apply to transactions under the 1845 Act—this is achieved by the words, "notwithstanding the provisions of section 107 of the" 1845 Act. Conversely, since the effect of a "general vesting declaration" is already to extinguish the feuduty, there is no need to interfere with established procedure in that case.

Subsection (1) contains also an important extension of the circumstances in which a feuduty is to be redeemed in cases involving acquiring authorities. Under Clause 5, redemption is to take place only where land is transferred for valuable consideration—that is, on a sale. This is to avoid inequity where, for example, a widow simply inherits a house from her late husband or where land is given for charitable purposes without any consideration being received for it. No such question of inequity can arise, however, under this clause, which puts the onus of redemption on the acquiring authority. Therefore, the new clause takes the opportunity to speed up the total abolition of feuduties by requiring redemption in all cases where an authority acquires property and not just in those cases where a valuable consideration is paid. This is achieved by the words, "whether or not there is an obligation to pay valuable consideration therefor".

There is one further important point in subsection (1) to which I should draw attention. Redemption of feuduty is to occur when entry to land is taken "by an authority possessing compulsory purchase powers". In other words, redemption is required not just in those transactions in which the acquiring authority uses its compulsory purchase powers, but also in transactions where the acquisition is by agreement or by way of gift. This again is perfectly equitable in a situation in which the redemption money will be paid by the acquiring authority; and indeed to limit the requirement to cases of compulsory acquisition could give rise to anomalies.

Subsection (2) of the new clause applies those provisions of Clause 5 which are appropriate to redemption by acquiring authorities, as defined in subsection (1): paragraph (a) of the subsection is a straightforward application of subsections (1) and (2) of Clause 5, subject to the omission of the reference to "valuable consideration" and to the extension of the meaning of the words "obligation to grant a conveyance" to include notices and deemed notices to treat under Section 17 of the 1845 Act. Paragraph (b) applies subsection (3) of Clause 5, which makes it clear that no feuduty will be paid after the date of its redemption, but that any feudal conditions will remain in force. This is, however, modified to the extent that the feuing conditions will continue only insomuch as they are not discharged under the procedures provided for in the Lands Clauses Acts or the Railway Clauses Consolidation (Scotland) Act 1845.

Paragraph (c), by applying subsection (4) of Clause 5, ensures that in transactions by acquiring authorities the redemption money will be calculated under the same 2½ per cent. Consols formula as will be used in transactions among private individuals. It is necessary at the same time to disapply Section 20 of the Lands Compensation (Scotland) Act 1963, which provides a rather cumbersome and slow method of arriving at the compensation for extinguishment of feuduties in compulsory purchase transactions; this will bring about a considerable saving in the time and trouble involved in assessing the compensation. Paragraph (c) also effects the major change which has already been touched upon; namely, that the redemption money is to be paid by the acquiring authority instead of by the proprietor from whom the ground is acquired. This is a very desirable simplification which makes it unnecessary to import into the new clause the provisions of subsections (5) to (9) of Clause 5. Paragraph (d) simply applies subsections (10) and (11) of Clause 5 in an absolutely straightforward way.

Subsection (3) of the new clause deals with the situation where the land which is being acquired is part of a larger area of land in respect of which a feuduty is payable. Sections 109 and 111 of the Lands Clauses Consolidation (Scotland) Act 1845 provide a procedure for the apportioning of the feuduty in such cases, between the land acquired and the land remaining in ownership of the proprietor; and the effect of subsection (3) is to make that procedure available in cases of redemption under the new clause.

As I have mentioned, the effect of a general vesting declaration is to extinguish feuduties, and for that reason subsection (4) provides that the new clause will not, in general, apply to acquisitions by the general vesting declaration procedure. However, the present method of calculating the compensation for the extinguishment of feuduties under that procedure is the cumbersome and slow method provided by Section 20 of the 1963 Lands Compensation (Scotland) Act; and so subsection (4) goes on to provide that, instead, Clause 5(4) (that is, the 2½ per cent. Consols formula) will apply in this case also. The concluding words of the subsection make it clear that redemption of feuduty is to take place on the date of vesting of the land.

Subsection (5) of the new clause simply provides that the acquiring authority must give the superior a notice of redemption (in the form prescribed in the proposed new Schedule), and that interest is payable from the date of redemption until the redemption money is paid. Subsection (6) of the new clause exactly parallels corresponding provisions in Clauses 4 and 5. Subsection (7) contains the necessary definitions of "authority possessing compulsory purchase powers" and of "feu-duty". The proposed new Schedule after Schedule 2 prescribes the form of notice of redemption to be served by an acquiring authority. It follows very closely the style of the normal Clause 5 notice of redemption, prescribed in Schedule 2.

Finally, there is a purely consequential Amendment to the Title, line 6. As drafted, the title refers to "the redemption … of feuduties … on transfer of land for valuable consideration" The proposed new clause, however, provides for redemption of feuduties by acquiring authorities even although there is no valuable consideration given for the land. As a consequence, the words "for valuable consideration" must be dropped from the Title. My Lords, I beg to move.

On Question, Amendment agreed to.

LORD HUGHES

My Lords, I beg to move Amendment No. 2.

Amendment moved—

After Clause 5 insert the following new clause:

Redemption of feuduty, etc. on acquisition of land by authority possessing compulsory purchase powers

".—(1) Subject to subsection (4) below, and notwithstanding the provisions of section 107 of the Lands Clauses Consolidation (Scotland) Act 1845, this section shall have effect in relation to the case of the redemption of the feuduty exigible in respect of a feu to which entry is taken (whether or not there is an obligation to pay valuable consideration therefor) by an authority possessing compulsory purchase powers (hereinafter in this section referred to as "the acquiring authority"); and the enactments relating to the acquisition of land by such an authority shall for the purposes of this section apply accordingly as they apply in relation to acquisition by purchase.

(2) The following provisions of section 5 of this Act shall apply for the purposes of this section as they apply for the purposes of that section:

  1. (a) section 5(1) and (2) shall apply, with the omission in the said subsection (1) of the reference to valuable consideration; and for the purposes of such application the references in the said subsections to an obligation to grant a conveyance shall include references 336 to a notice to treat or deemed notice to treat under section 17 of the said Act of 1845 or under any other enactment having similar effect;
  2. (b) section 5(3) shall apply, subject to any of the provisions of the Lands Clauses Acts or of the Railway Clauses Consolidation (Scotland) Act 1845 which apply to the case;
  3. (c) notwithstanding the provisions of section 20 of the Land Compensation (Scotland) Act 1963, section 5(4) shall apply, with the substitution, for the reference to the person who was the proprietor of the feu immediately before the date of the obligation or (as the case may be) the execution of the deed there referred to and to his representatives, of a reference to the acquiring authority;
  4. (d) section 5(10) and (11) shall apply.

(3) Sections 109 and 111 of the Lands Clauses Consolidation (Scotland) Act 1845 (which relate to the discharge of land from feuduty, etc., and the apportionment and continuance of the charge for such payments on land not taken) shall apply in relation to the redemption of feuduty under this section (whether the land subject to the feuduty is acquired compulsorily or by agreement) as they apply in relation to the discharge of charges under that Act.

(4) The foregoing provisions of this section shall not apply in relation to the acquisition of land by means of a general vesting declaration within the meaning of Schedule 24 of the Town and Country Planning (Scotland) Act 1972; but section 5(4) of this Act shall, notwithstanding the provisions of section 20 of the Land Compensation (Scotland) Act 1963, apply in relation to such acquisition as it applies in relation to the acquisition of land to which the said section 5 applies, with the substitution, for the reference to the person who was the proprietor of the feu immediately before the date of the obligation or (as the case may be) the execution of the deed there referred to and to his representative, of a reference to the acquiring authority; and in such a case the date of redemption means the date of vesting of the land in the acquiring authority under paragraph 7 of the said Schedule.

(5) In every case to which, by virtue of subsection (1) or (4) above, this section applies, the acquiring authority shall—

  1. (a) not later than the date of redemption, give to the superior or his agent a notice of redemption in or as nearly as may be in the form contained in Schedule (Form of notice prescribed under section (Redemption of feuduty etc. on acquisition of land by authority possessing compulsory purchase powers)) to this Act; and
  2. (b) be liable to pay to the superior interest on the redemption money from the date of redemption until payment at such rate or rates as may be determined.

(6) Where the interest of the superior in a feuduty which is redeemed in terms of this section to any trust, liferent or entail, the redemption money shall be treated for all purposes as capital money.

(7) In this section, authority possessing compulsory purchase powers" has the same meaning as is conferred by section 275(1) of the Town and Country Planning (Scotland) Act 1972. feuduty", in any case where part only of a feu subject to a cumulo feuduty is acquired, means such portion of the feuduty (if any) as may be settled thereon under section 109 of the Lands Clauses Consolidation (Scotland) Act 1845 as applied by this section or, in the case specified in subsection (4) above, by paragraph 32 of the said Schedule 24; and includes any payment (or any such portion thereof, as the case may be) of ground annual, standard charge, skat or any other perpetual periodical payment in respect of the tenure, occupancy or use of land or under a land obligation, not being a payment of teind or stipend, or in defrayal of or contribution towards some continuing cost related to the land, or under a heritable security; and this section, in its application to any payment to which it is extended under this subsection shall have effect subject to any necessary modifications."—(Lord Hughes.)

On Question, Amendment agreed to.

3.18 p.m.

THE EARL OF DUNDEE moved Amendment No. 3:

After Clause 5 insert the following new clause:

Amendment of Conveyancing (Scotland) Act 1924 .Section 12 of the Conveyancing (Scotland) Act 1924 insofar as it excludes provision for symbolic heritable conditions for tenure of land shall cease to have effect.

The noble Earl said: My Lords, I do not think that it is necessary to say anything more on this Amendment than has already been said on this subject on Second Reading, except to thank the noble Lord, Lord Hughes, for his kindness in forwarding views to the Lord Advocate, and particularly to thank the Lord Advocate for giving up his time to interview the noble Earl, Lord Perth. and myself and one or two other people who know a great deal more about this subject than I do. As a result of this discussion, I have put down this Amendment, which I think enables some symbolic condition to be attached to the tenure of land particularly for the benefit of people of Scottish descent who may live in the Commonwealth, the United States, or any other part of the world and who may wish to acquire some legal interest in some spot or locality in Scotland to which they are historically and sentimentally attached, and which may perhaps induce them to come over here a little more often than they otherwise would.

I must be careful to add that the Lord Advocate has not committed himself and his colleagues to this Amendment or to its wording because it is always possible that subsequent examination might discover some unforeseen difficulty, but I should like to thank him very much for his help and I hope that the Government will see their way to accept it.

LORD MOWBRAY AND STOURTON

My Lords, I should like to support my noble friend in what he has said. He referred to this matter at Second Reading and if the Minister can find a way to solve this problem, which is a matter mainly of sentiment, he would earn a debt of gratitude not only in Scotland but also within the Commonwealth and the rest of Great Britain.

LORD HUGHES

My Lords, I am certain that it will be a great disappointment to the noble Earl, Lord Dundee, when I say that the word at the top of my brief is "resist". I learned only yesterday of the nature of the noble Earl's Amendment and I should like to tell your Lordships what I said in the first instance about it. I said that the first question that has to be answered is whether this in any way conflicts with the purposes of the Bill. If it does not, does it do something which would not be done if the Amendment were not there? I will not be content with the argument which is so frequently brought forward on these occasions, that "It is not really necessary to do it; it can, in fact, be done in other ways under the Bill"

Thirdly, the other possible objection to it is whether the Amendment is technically defective and whether the defect can be cured by another Amendment gone into more fully. The answer which I arrived at ultimately was that the Amendment fell at the first hurdle because it runs contrary to the provisions of the Bill. The Bill is the second stage in a procedure designed to bring the feudal system of land tenure in Scotland to an end. The first stage was the Act passed some year ago. This is the second stage, doing away with the monetary side of feudal transactions but keeping the rest in existence. The third and final stage is the one which lies ahead of us, and perhaps the most complicated part of all, which is the reason why it has been necessary to take so many steps to arrive at this ultimate destination.

May I first say something about Section 12 of the 1924 Act which the Amendment would evade. The primary purpose of that Act was that in feus granted on or after January 1, 1925, the feuduty must be stipulated in sterling money. Secondly, in the case of feus granted before January 1, 1925, where the feuduty was paid in grain or other fungible (you get some lovely words in these legal Bills) the parties could enter into a binding agreement commuting the feuduty into an annual money payment and, thirdly, that in the case of any such existing feu where the payment had not been commuted into a monetary feuduty by December 31, 1932, the feuduty thereafter was to become an annual sum of money representing the average annual value of the feuduty over the previous ten years. The section contained provision also for the extension of these arrangements to dry multures calculated by reference to the price of grain. In addition, Section 12 provided that ten years from the commencement of the Act: … carriages and services such as are referred to in Sections 20 and 21 of the Conveyancing (Scotland) Act 1874, and which shall not have been commuted in terms of those sections shall cease to be exigible". It may be of interest to your Lordships to note that "carriages" were payments of feuduty in kind, usually agricultural produce or some other fruit of the land such as timber. The term "carriages" refers to the obligation to carry the goods to the seat of the superior—fortunately for the vassal he was not expected to carry the goods to the superior personally wherever he happened to be. "Services" on the other hand, were personal services to be performed by the vassal for the superior. In ancient times the primary service was military and in fact one of the categories of feudal tenure was "ward holding", under which the land was held by the vassal under an obligation to perform military service whenever called upon to do so. Ward holding was finally abolished by the Tenures Abolition Act of 1746, but that Act did not prevent the imposition of services of a non-military nature, and such services were frequently made a condition of feudal grants both before and after 1746. An example quoted in the textbooks is that of an obligation on one of the Duke of Argyll's vassals to provide a boat, six oarsmen and a steersman for the use of the superior's family and to keep the mansion house wind and watertight. This was in the courts in 1762.

To sum up, therefore, the overall effect of Section 12 was to ensure that all future feuduties were expressed in monetary terms; that all the then existing non-monetary feuduties were commuted to monetary terms by December, 1932, at the latest, and that any carriages and services which had not been so commuted by December 31, 1934, at the latest were then extinguished.

My Lords, the position we have reached is that the non-monetary side of the feudal system started to be abolished some 250 years ago and the abolition of that was completed some 50 years ago. While I appreciate what the noble Earl, Lord Dundee, wishes to do, the effect of his Amendment—and this has only been discovered, in fairness to him, after much closer examination than was possible at the time of his meeting with the Lord Advocate—is to re-introduce or to make possible the re-introduction of the carriages and services parts which have now been out of existence for some 50 years. However, I do not think that the noble Earl need be unduly worried because as a result of finding that the Amendment was not acceptable we have gone even more fully than we have done hitherto into the effects of the Bill on the purposes which the noble Earl had in mind.

First, may I refer to the feudal link which a clan may have with a particular piece of land. The noble Earl on Second Reading mentioned the case of a Scot (or perhaps a group of Scots) who went abroad and was no longer even a citizen of the United Kingdom but who bought an old clan stronghold and then proposed to give it in feu to some representative of the clan, or to a clan society, thus providing a clan centre to which members of the clan from all over the world can come. There is nothing in the Bill which will prevent the continuance of such arrangements. It will still be perfectly possible for the wealthy overseas Scot to purchase, say, a piece of the old clanlands and then grant it in feu to, for example, a clan society. He can still have this satisfaction and still give his fellow clansmen this satisfaction and in this way establish a link between himself and the country of his forebears. The only difference is that in future he will not be entitled to impose a feuduty. My Lords, I cannot for one moment imagine that the lack of a feuduty is likely to prevent anyone who wished to enter into this sort of arrangement from doing so.

The other point which the noble Earl raised on Second Reading was the possible effect which the abolition of feuduties might have on certain heraldic rights—in particular, rights affecting the Baronage of Scotland. Once again I can reassure the noble Earl. There is nothing in this Bill which will detract in any way from the position or rights of the Baronage. I should perhaps explain, for the benefit of any of your Lordships who may not be entirely familiar with these matters, that the Barons of Scotland who hold their lands by grant from the Crown in perpetuity, are not Barons entitled to membership of your Lordships' House, but they are entitled to style themselves as being "of" the land in question.

Where a Baron still owns the actual land as a direct vassal of the Crown, clearly no difficulty arises; the Bill will not affect the position at all. I understand, however, that in some cases the Barony lands may have been subfeud and the possessor of the Barony title may no longer himself hold any of the actual lands from which the title derives, although he can at present still use the Barony title by virtue of having retained the superiority of the land in question. The Bill does not alter this position. As I have explained, the superiority title will still remain in being, even although the feuduty may have been redeemed. Thus, if a Barony title has been kept in being by reason of a superiority title alone, the position will remain as it is. The noble Earl need have no fear that this Bill is interfering in any way with the Baronage of Scotland. I hope therefore that, with these very clear assurances which I give on behalf of Her Majesty's Government, the noble Earl will find it possible not to press this Amendment.

THE EARL OF DUNDEE

My Lords, I can only say another brief word by leave of the House. I should like to thank the noble Lord for the great trouble he has evidently taken in this matter. It would of course be absurd in the circumstances for me to press this Amendment. The noble Lord will understand that I had not been informed of these further examinations which he has mentioned. Therefore, would it be possible for us to reassure ourselves by looking into the subject between now and Third Reading, so that if we find anything which could improve the situation we might have another opportunity of perhaps moving an agreed Amendment then?

LORD HUGHES

My Lords, with the leave of the House, I would certainly gladly give that assurance. I tried to find the noble Earl before the House met in order to let him know what was happening. It is surprising that so large a man as the noble Earl could not be found, but I did not find him.

THE EARL OF DUNDEE

My Lords. I appreciate the difficulty. I only heard from the Lord Advocate on Friday evening, so there has been very little time. In the circumstances, my Lords, I would ask your Lordships' leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

3.33 p.m.

LORD HUGHES

My Lords, I beg to move Amendment No. 4.

Amendment moved—

After Schedule 2 insert the following new Schedule:

"SCHEDULE

FORM OF NOTICE PRESCRIBED UNDER SECTION

(Redemption of feuduty, etc. on acquisition of land by authority possessing compulsory purchase powers

"Notice of Redemption

under section (Redemption of feuduty, etc. on acquisition of land by authority possessing compulsory purchase powers) of the Land Tenure Reform (Scotland) Act 1974 (redemption of feuduty, etc. on acquisition of land by authority possessing compulsory purchase powers).

[Name and address of authority sending notice, and Date]

To [name and address of superior, etc. or his agent]

Take notice that, in terms of section (Redemption of feuduty, etc. on acquisition of land by authority possessing compulsory purchase powers) of the Land Tenure Reform (Scotland) Act 1974, the [feuduty] [ground annual] [or otherwise] of [amount] per annum exigible in respect of [give sufficient identification of the land in respect of which the feuduty, etc. was exigible] as at [give date of redemption] will be deemed to be redeemed at that date [to such extent (if any) as may be settled under section 109 of the Lands Clauses Consolidation (Scotland) Act 1845 as applied by virtue of section (Redemption of feuduty, etc. on acquisition of land by authority possessing compulsory purchase powers) of the said Act of 1974].

[To be signed on behalf of the acquiring authority]"").—(Lord Hughes.)

On Question, Amendment agreed to.

In the Title.

LORD HUGHES

My Lords, I beg to move Amendment No. 5.

Amendment moved— Line 6, leave out ("for valuable consideration").—(Lord Hughes.)

On Question, Amendment agreed to.