I beg to move, in line 4, to leave out the word "accordingly," and to insert instead thereof the words "as including every such statutory small tenant."

This is really a drafting Amendment, but it is a necessary one, because the Clause we are considering must be read in connection with the other Sections of the Act of 1911, and the Clause, as drafted, has omitted to indicate that Section 2 of the Act of 1911 deals not only with holdings, but with holders. That Section 2 refers to yearly tenants and qualified leaseholders who may be either landholders or statutory small tenants. The end of the first paragraph of the new Clause reads:

"and the word 'landholder' shall he construed accordingly."

My Amendment is to leave out the word "accordingly" and to substitute the words "as including every such statutory small tenant."

I beg to second the Amendment.

I am sure that I shall be interpreting the general wish of the House if I begin our proceedings this morning with a brief reference to the passing of one of our highly respected and esteemed Scottish colleagues whose mortal remains are to be laid to rest to-day. James Stewart, late Member for the St. Rollox Division of Glasgow, was a man greatly beloved by Members in all parts of the House for his great human sympathy and kindness, which was one of his chief characteristics. To everyone with whom he came in contact he endeared himself. His manner and methods were all his own. He had a great fund of pawky Scottish humour peculiar to himself, which gave great pleasure to his friends, and enabled him to overcome the difficulties inseparable from physical weakness. I was associated with him at the Scottish Office in the Labour Administration of 1924, and I shall always treasure the recollections of those days. In the post which he then filled he was a capable and pains-taking Minister. His great knowledge of health and housing, and, indeed, of the whole domain of sanitation, made his service of infinite value both to the Scottish Office and to the Government itself. For that work he was equipped as few men are. He was a man we were all proud to know and to have worked with. He gave his life willingly in the service not only of his people in St. Rollox, but with loyalty, fidelity and devotion to all the great humanitarian causes to which he had pledged himself. Mr. Speaker, he has fought a good fight, and the House is all the poorer for his absence this morning. His life was an inspiration to us all. He was a great Scot, without fear and without reproach, and, on behalf of my Scottish colleagues I want to tender our sincere sympathy and condolence with the family in the great loss which they have sustained.

With regard to the Amendment which has just been moved, I am advised that it is unnecessary, and I hope that the hon. Member for Aberdeen and Kincardine (Mr. Scott) will not spend much time over it, but will agree to withdraw it.

The Secretary of State has begun the proceedings to-day by a reference to our late colleague, Mr. James Stewart, and I would like, on behalf of those with whom I am associated, to join in the tribute which has been paid to his memory. Mr. James Stewart occupied the office which I also have had the honour to occupy, the Under-Secreship for Health for Scotland. I think the Secretary of State struck the most appropriate possible note in the word he used of James Stewart and his character—the word "beloved." He was a singularly attractive character, who endeared himself to all people and to all sections of the House. He fought valiantly for his party and for his cause, but I do not think he ever said a bitter word about anyone. He was able to carry on a long career of public life without ever making an enemy, and without ever compromising the principles which he upheld, and the combination of those qualities is rare indeed in our public life. He not only represented his party and his cause, but he also represented this House, in the Parliamentary mission which went to Australia, and he did that with the utmost acceptance, and those of us who had the privilege of his acquaintance realised what a breadth of vision this public servant was able to bring to bear upon public problems though starting from circumstances which he would have justified a very much narrower and more bitter view than that to which he had attained. He took a broad and statesmanlike view of problems which were presented to him. and there is no one whose counsel, either in public or in private, I myself would more willingly have adopted. I have been indebted to him on more than one occasion for counsel and for advice on questions of the day, and it was given on no narrow lines, but on the broadest possible lines of service to this country. Death has been busy among us in these last few days, and James Stewart, like one of Bunyan's pilgrims, has gone to his rest. He leaves his frail body here as ashes, and he leaves his valiant spirit to those that come after him.

On behalf of the party which I represent, I would like to associate myself, by adding a few words, with the exceedingly appropriate speeches which have just been delivered by my two hon. Friends. The hon. and gallant Gentleman the Member for Kelvingrove (Major Elliot) referred to Mr. Stewart's tour with the Empire Delegation round the world. I had the privilege of accompanying him, and I remember well the courage with which he expounded his convictions in every corner of the globe. His body was frail, but his spirit was indomitable, and he had that which it is almost impossible to simulate, a fine and rare sincerity. Nothing pleased him more than to take sojourners from the Dominions and from America round these ancient precincts; and those of us who were present will remember about this time last year the joy which he felt when his life's work ended by the passage of a Bill for which he had struggled and fought manfully for many years, and in my judgment that will be a fitting memorial erected to him in this place which he loved. I associate myself entirely with the message of condolence to his friends. Many of us regret that we shall see his face no more.

On behalf of my hon. Friends, I desire to associate myself with what has already been said. In the earlier years, Mr. Stewart was a fighting pioneer of the Labour and Socialist movement in Glasgow. He was actively associated with the whole development of the Labour movement in that city. He was one of our pioneer workers in local government work, first on the Glasgow Parish Council and then on the Glasgow Town Council. He was a typical representative Glasgow citizen, and we in Glasgow who have been associated with him both in local work and in more recent years in the House of Commons, will miss him very much from our midst. I desire to associate myself wholeheartedly with the remarks which have been made.

After the explanation which has been given, I beg to ask leave to withdraw my Amendment.

I beg to move, in line 10, at the end, to insert the words:

"Provided further that this section shall not apply in the case of any statutory small tenancy where the tenant has served on the landlord written notice as aforesaid if the landlord, by an undertaking in writing lodged with the Land Court, consents that the tenant shall be entitled, on the expiry of his tenancy, to compensation for any permanent improvements suitable to the holding which have been executed or paid for by the tenant or his predecessors, including permanent improvements executed in virtue of a specific agreement in writing unless the tenant or his said predecessors have received fair consideration for the same as such compensation, failing agreement, may be determined by the Land Court."

I am suggesting that this Clause shall not apply where the statutory small tenant has served on the landlord a notice if the landlord, by an undertaking in writing lodged with the Land Court, consents that the tenant shall be entitled, on the expiry of his tenancy, to compensation for any permanent improvements. As hon. Members are aware, the Statutes dealing with small landholders are difficult to follow. Perhaps Scottish Members will recollect that statutory small tenants are those and the successors of those who held at the commencement of the Act of 1911 holdings not exceeding 50 acres or 50 pounds rental, and who had not provided the whole or the greater part of the permanent improvements. One might say that in nearly all the cases outside the Highland area the permanent improvements had been provided by the landlord, because it is always customary in these tenancies in Scotland for the landlord to put up the buildings.

My hon. Friend the Member for Aberdeen and Kincardine (Mr. Scott) has more than once made a point that there are cases in which the tenant had himself provided a certain number of the permanent improvements which could not be considered as being the greater part, and in that case he would not become a small landholder but a statutory small tenant. It was suggested that there were cases in which the tenant had provided a substantial part of the permanent improvements and got no compensation. Here we provide that, if when the statutory small tenant exercises his option and gives the landlord notice that he wishes to become a landholder, the landlord can lodge an undertaking with the Land Court consenting to the tenant being paid for any permanent improvements which he or his predecessors have made. If there is a dispute as to the amount, it can be settled by the Land Court. If the landlord takes this step, the Section shall not apply. I think that is reasonable. I think that what was at the back of the mind of my hon. Friend the Member for Aberdeen and Kincardine in moving various Clauses and Amendments was that there were cases where the tenant had provided a substantial part of the improvements. These cases are very few, but, in order to meet them, I am proposing this Amendment which provides that the option given to a statutory small tenant of becoming a landholder shall not apply if the landlord lodges an undertaking with the Land Court consenting that the tenant shall be entitled to payment for any buildings or permanent improvements which he or his predecessors have made.

I think that will meet the point of my hon. Friend the Member for Aberdeen and Kincardine, and it ought to meet with the approval of the Government, because they cannot be anxious for a large number of statutory small tenants to become landholders for they would be faced immediately by demands from them for loans to pay for their buildings. For these reasons, I think the Amendment ought to appeal to the Government. My Amendment also restricts to some extent a further extension of this system, under which buildings which, for the most part, have been provided by the landlord are handed over to the care of the tenant who must continue their maintenance. The tenant has not paid for them, and has no incentive to keep them up, while the landlord has no duty in regard to maintenance. I think that is an unsatisfactory system. If there are cases where the tenant has provided a certain amount of buildings, we say that compensation for such improvements as he has provided should be paid. I think this is an entirely reasonable Amendment, and the Government ought favourably to consider it, because it will save them from further demands for loans for buildings.

I beg to second the Amendment.

I hope that the hon. and learned Gentleman will see his way not to press this Amendment. May I draw his attention to the extraordinary set of circumstances that would arise if it were carried? According to the proposal in the Government's new Clause, which was moved last Friday, a statutory small tenant is given the option of becoming a small landholder if he so desires. This was our compromise—our view of the best way of meeting an admitted difficulty. Hon. Gentlemen on the Liberal benches sought to make it compulsory on the statutory small tenant to become a, landholder; hon. Gentlemen on the Conservative benches sought to prevent that; and we seek a middle course, namely, to give an option. The hon. and learned Gentleman says by his Amendment that he will only agree that this option should be offered in cases where the landlord is willing to pay for any improvements that the statutory small tenant or his predecessors may have created. I think that roughly that is his proposal.

That it should not apply.

That is the same thing—that it shall not apply in cases in which the landlord has offered to pay for the improvements. Let us observe what would happen. If a statutory small tenant has in fact made improvements and the landlord offers to pay for them, then he does not get the option. That is to say, the statutory small tenant who has been an efficient tenant gets no option, but the statutory small tenant who has made no improvements at all is, according to the hon. and learned Gentleman's Amendment, not prohibited from getting his option. Therefore, you arrive at this curious position, that, in a case where there has been an efficient statutory small tenant, he may have his option refused, but where there is an unefficient statutory small tenant, who has made no improvements, the hon. and learned Gentleman and his friends do not seek to prevent him from getting his option. I hope that that ludicrous effect will be sufficient to induce them not to press the Amendment.

I have been advised that there are only about 2,000 statutory small tenants left. They are a diminishing class. We do not know how many of them desire this option; nobody knows; but we do know that there is a demand in certain circumstances that these tenants should not be compelled to become landholders, so that the number who may exercise this option is very small. The hon. and learned Gentleman seeks further to lessen that small number by saying that, if they or their predecessors have been efficient and have provided buildings and so on, they may be barred from the option. There will be opportunities later on in the proceedings on the Bill for fighting on things that matter, and I do hope that this Amendment will not be pressed.

The Government, by their proposed new Clause, have endeavoured to find some compromise which will be acceptable to the House, and they have made a considerable improvement upon the original proposal. I think, however, that hon. Members are still rather in the dark as to how widely the Clause would apply. From what was said in Committee, I was led to believe that in the South of Scotland it might not apply at all, or at any rate only in very exceptional cases, and if possible I would like to know whether that is so. I understand that the object of the Clause is to enable a number of statutory small tenants in the North of Scotland to claim compensation for permanent improvements which they have provided for themselves, in the event of their giving up their holdings. If it were only to meet such claims, there would be less opposition to the Clause, but, as it is drafted, it goes very considerably further, and there would in many cases be a serious and unnecessary disadvantage to the landlord as well. I consider that it would be reasonable and wiser if the Clause were so worded as to remove any unfair handicap or liability from the owner.

It was shown in Committee that the disadvantages to the owner as a result of this form of conversion must be serious. Various points have already been raised showing that there must be depreciation in selling value and in capital value, and that the value of capital improvements already executed by the landlord would be lost to him. There must also in future be a greater loss to the landowner in other ways, and there is, moreover, the possibility that, if this Clause be passed as it stands, all statutory small tenants in Scotland might be encouraged and persuaded to apply for this conversion. Therefore, I consider that the owner should have the opportunity of compensating the tenant himself, without being forced to resort to and accept this form of conversion. I hope that the Government intend to act justly, and not to favour one side at the expense of the other, but certainly, as the Clause stands, the landowner has no option but to accept disadvantages by conversion which could be avoided without any harm to the tenant. The addition of the words of this Amendment would settle the issue in a manner favourable to both sides. The statutory small tenant would secure his claim either to compensation or to conversion, and the landlord would be obliged to meet his claim one way or the other. I think the Amendment does justice to both landlord and tenant, and I hope also that it meets the claims of the Liberals and of the Government. Therefore, I support the Amendment.

I hope that the Government will resist this Amendment. It is notable for two admissions by the Conservative party, which they make for the first time, namely, that a tenant is entitled to compensation for his improvements, and that he should not be debarred if there is any specific agreement in writing to make such improvements. The intention of the Amendment, however, is to whittle down the Clause altogether. The desire is that the tenant shall remain a statutory small tenant, and that, after the end of his tenancy, his holding shall drop out of the Acts. That is what we wish to prevent; and the salient point in connection with this matter is that, if a tenant has put improvements on the holding, no matter whether they are of greater or less amount than one-half, he ought to be paid for them.

It has been admitted by the Government that this form of holding in the Lowlands of Scotland is not a good thing. If it is not admitted by the Government, it is certainly admitted by the authorities in Scotland, with the exception, perhaps, of the Liberals that it is a bad thing. The first proposal was that all statutory small tenants should be allowed to become landholders. Then the Government departed from that, and brought forward this Clause as representing a reasonable agreement. The Under-Secretary asked why the unfortunate tenant who has been a good tenant and has made improve- ments himself should be debarred from becoming a small landholder. We consider that the landholding tenure in the Lowlands of Scotland is not good for agriculture, and therefore we say that it should not be instituted if it can possibly be avoided. We are out to protect the tenant, and we desire to protect the tenant by this Amendment. We say that we disapprove of the landholding tenure in the Lowlands of Scotland, but we do not want to bring hardship on tenants who happen to be statutory small tenants. Therefore we propose that the tenant shall suffer no loss by what he has done as a statutory small tenant in the way of improvements, and he will not lose anything if the landlord is willing to pay for the improvements as if he had made them himself. The landlord could perfectly well have made these permanent improvements himself, and then there would never have been any talk of the holding being made a statutory small holding. Therefore, provided that the tenant is not going to suffer, and in our Amendment we make provision that he shall not suffer, any pecuniary loss, we think that our proposal is very reasonable, and I would ask the Government to accept the Amendment.

I hope the Government will not persist in opposing the Amendment. We have been most rational on this side from the beginning to the end in connection with the Bill. Without the Amendment, it is a thoroughly bad Bill from the point of view of the taxpayers. I am not concerned as regards tenants, landholders or landowners, but without the Amendment it is almost certain that a Lumber of people will have money advanced to them at a very low rate of interest. It is a most unholy alliance between certain parties below the Gangway and the Government. Up to date, the Government has tried to run straight in connection with the Clause, but, unless they accept the Amendment, they will be entirely off the lines of righteousness. We were told by the Under-Secretary that there were about 2,000 of these statutory small tenants. As far as I can remember, it has taken a good deal to extract those figures from him. He has told us that he has not the least idea how many are likely to come under the Act. It is acknowledged on all hands that, to turn these occupiers into statutory small tenants, a certain amount of money must be advanced from the State.

You cannot create new statutory small tenants at all.

I thank the hon. Gentleman for his explanation, but he has mentioned 2,000 people, and I fail to see what else they are but statutory small tenants. I realise that it is almost impossible to find out the exact position, but, at the same time, unless the Clause is absolutely valueless and has no meaning, you must presume that some of these people will be put into such a position that, for the work they have carried out on their tenancies, they shall receive a certain amount of loan, and that is what I am objecting to. I realise that hon. Members opposite do not like that point being brought out, but it is my job on this occasion to see that the money of the taxpayers is well spent, and, without the Amendment, I do not think it is being adequately guarded, and that there will be a laxity of administration which is not justified in any way.

I do not think the interpretation that the Under-Secretary gave of the wording of the Amendment is quite correct. He seemed to think it could be of no value to the statutory small tenants who have not made any improvement, but it proposes to give the tenant an entitlement, on the expiry of his tenancy, to compensation for any improvement that he has made, and therefore, if there were certain statutory small tenants who at the passing of the Act had not made any improvements, they could remain on their holdings as statutory small tenants happy in the

I beg to move, "That the Clause be read a Second time."

This Clause is in pursuance of a pledge which I gave on the Committee stage. I understand that it meets the general sentiments of hon. Members, and that the Amendment on the Order Paper—in line 4, to leave out from the word "the," to the end of the Clause, and to insert instead thereof the words

"payment or fair consideration has been received for the improvement"

is not to be moved. Therefore, in order to save the time of the House, I simply formally move the Clause.

As the Under-Secretary of State has said, this new Clause is in fulfilment of an agreement come to upstairs, and, therefore, I do not propose to move the Amendment standing in my name and in the names of other hon. Members on these benches.

I beg to move, "That the Clause be read a Second time".

The effect of the new Clause is to provide for the exclusive jurisdiction of the Land Court in the matter of the removal of the landholder for a breach of the statutory conditions. Under the existing law, there are concurrent jurisdictions which are thought undesirable. Accordingly, this Clause gives effect to what, I think, is the general desire of the House. I hope that the House will accept it without further Debate.

We on this side thank the Government for introducing this Clause. We suggested an Amendment more or less on these lines in Committee, and I think that the new clause effects a desirable improvement. The Clause follows out a recommendation of the Nairne Committee. There is no doubt whatever that the Nairne Committee, an important committee appointed by my right hon. Friend the former Secretary of State for Scotland, considered carefully the questions of landholding tenure, and so on. They made a very valuable and useful report. They pointed out that the present procedure of going to the Sheriff Court for the removal of a landholder under the old Act of Sederunt anent Removing is very costly and cumbersome. It means the employment of expert witnesses and so on. Here is the Land Court, with legal and agricultural members, which can give judicially and expeditiously a decision which will get rid of the difficulties under the old procedure, and it is a court where the interests of the small landholder will be adequately considered. I think that the new Clause will be an improvement in the law, and we on this side welcome it.

I beg to move, "That the Clause be read a Second time".

This is also an agreed Clause and fulfils a pledge which was given in Committee. It deals with the question of disputes in respect of estates held under the Department, where, without it, the Department would be a judge in its own cause.

I am glad that the Under-Secretary of State has fulfilled the pledge which he gave to us when we raised this particular point.

I beg to move, "That the Clause be read a Second time."

This new Clause is also an agreed Clause, after considerable discussion in Committee.

The proposed new Clause is a reasonable improvement in the law. No doubt in many cases arbitrations are very expensive, and it is reasonable where a landlord and tenant agree that, instead of its being necessary for them to go to arbitration, they should be able to go to the Land Court.

I beg to move, "That the Clause be read a Second time."

This new Clause is purely consequential upon the two Clauses that have just been added to the Bill.

I beg to move, "That the Clause be read a Second time."

This is a Clause to which the Farmers' Union in Scotland attach considerable importance. Where buildings on agricultural holdings are insured against fire in the landlord's name and the tenant is bound to pay the premium, the Clause provides that the landlord must apply in restoration of the buildings damaged by fire any money which he recovers from the insurance company. I understand that there is general agreement in regard to the Clause.

I beg to move, "That the Clause be read a Second time."

This Clause, again, is an instance where general agreement was reached in Committee. I beg formally to move the Second Beading.

This Clause was moved by our party in Committee, although the Government could not accept our words. I think it is a reasonable proposal. It deals with rather an obscure point. It is a common enough stipulation in a lease that the landlord shall be entitled to resume part of the holding for building and other purposes. In certain leases it is provided that notice shall be given, but in other leases there is no provision with regard to the giving of notice. If a landlord gives notice for the resumption of part of the holding as stipulated in the lease the tenant is entitled to compensation for disturbance, but if a landlord resumes any part of the holding, being entitled to do so by provision in the lease, and there is no stipulation in the lease for the giving of notice, the tenant is not entitled to compensation for disturbance. That is an anomaly which I do not think anyone can justify. This Clause proposes to remove that anomaly, and therefore we welcome it.

I beg to move, "That the Clause be read a Second time."

This new Clause provides that a landlord's claim for compensation for deterioration shall not apply in the future unless a record of the condition 12 n. of the holding has been kept. I understand that that part is generally agreed to, but hon. Members on the Liberal benches seek to make the Clause retrospective. We have examined that suggestion very closely, but if we start to make it retrospective, we shall be up against a difficulty. As the law now stands, a landlord may have been accumulating a claim for deterioration against a tenant who is allowing his holding to get into bad condition, and it may be the last year of the tenancy. If we make it retrospective we shall be in reality taking away from the landlord the accrued right of a claim for deterioration which he has enjoyed under a previous Act of Parliament. The difficulties which always occurs in retrospec- tive legislation are very much greater than any benefits that can be secured by making this Clause retrospective. I therefore-sincerely trust that the hon. Members on the Liberal benches will see their way not to press their Amendment.

We are opposed to this Clause. We are in favour of a record being kept of the condition of the holding and of the buildings, but it seems a pretty strong suggestion to make that if no record has been kept, the landlord shall not be entitled to compensation for deterioration.

In the future.

Shall not be entitled to compensation in the future. I appreciate the position taken by the Under Secretary of State in regard to the past, and we resist the attempt to make such a provision retrospective. A record is an excellent thing, but why the landlord should be deprived of his right to claim compensation for deterioration in the future because a record has not been kept, I cannot understand. Why should he not have the chance of proving deterioration. He has to prove deterioration during the currency of the lease.

This applies to the future.

It seems rather arbitrary to say that he shall not have the right to claim compensation in the future if there has not been a record kept. He ought not to be debarred from attempting to establish a claim for deterioration simply because there has not been a record kept. It is unreasonable to debar him of the right to attempt to prove deterioration simply because of the lack of the record. The tenant is bound to farm according to the rules of good husbandry, and, if the holding is in a bad state it is a reasonable assumption that he is not farming in accordance with those rules, and it is unreasonable to debar the landlord from proving deterioration. An argument was based on the analogy of the provision in Section 9 of the Act of 1923, where compensation for high farming cannot be obtained unless a record has been kept of the holding. That is quite a different thing. If a tenant does more than the lease requires, by some special method of beneficial cultivation, a record is neces- sary in order that it should be proved. The case with regard to deterioration is different. It is a good thing to keep a record of a holding, but it is wrong to deprive the landlord of any opportunity of proving that there has been deterioration simply on the ground that a record of the holding has not been kept.

I do not know why the Government should insert this entirely unnecessary new Clause. It is perfectly useless. It is a little more verbiage which will be of no benefit to the people concerned. Why the Government make these unfortunate people keep a lot of unnecessary records is absolutely beyond my understanding. We have been told over and over again that the object of the Bill is to simplify the position, but the Government are now inserting a new Clause which will only make matters more complicated, and I appeal to the Under-Secretary of State, who knows that I have done a great deal to help to make this a better Bill, to withdraw this new Clause. He has made out no case for it, not because he lacks the capacity, but because there is no case to be made out for it. Landlords have enough already to do in the way of keeping records, and this is a new record which is not necessary. Unless it is kept the Government propose to deprive landlords of any possible claim for compensation. That is placing them in an unfair position. I hope the House will refuse to support the Clause and that the Liberal party will support us in the Division Lobby.

I beg to move, "That the Clause be read a Second time."

This is a matter upon which there was agreement in Committee and I do not propose to say anything about it. I see that hon. Members opposite desire in Sub-section (2) to insert after the word "purposes" the words "and subject to the conditions of." I hope they will not press that Amendment because it is quite unnecessary. The new Clause is quite clear and the insertion of the proposed words would only lead to confusion.

My hon. Friends and I put down the Amendment to which the Lord Advocate has referred in order that the matter might be made quite clear. We thought that the Section of the Ground Game Act which deals with the use of poisons might apply in this case but after the assurance given by the Lord Advocate we do not propose to move the Amendment.

I desire to support the new Clause. I must remind the Under-Secretary of State that this is only part of the agreement which was reached in Committee. He promised a conference with the Committee which the Secretary of State has instituted to consider the whole question of ground game.

I do not want there to be any misunderstanding on this point. What I said was that the questions considered by the Committee which had been appointed would require fresh legislation and could not be inserted in this Bill.

That is exactly my point. We accepted this in Committee as being part of the general programme, and I should like it to be on record that the Government promised us that they would consider new and fresh legislation dealing with the other points that were raised.

I beg to move, "That the Clause be read a Second time."

This new Clause is really an extension of a process which has been going on since 1886. In 1911 the next step was taken when the Landholders Act was extended to the non-crofting counties of Scotland, and we are now proposing that the Act should be further extended to 100 acre farms or farms of a rental of£100. The provision in the 1911 Act to 50 acre farms and£50 rent was a purely arbitrary one. A farm may be rented at£50 but the acreage may go up to 1,000 acres and, conversely, a holding may be only 30 or 40 acres hut the rent may be£100 or£150. It depends on the proximity of the holding to a town. The position of the Liberal party has always been that all farmers should receive the benefits of the Smallholders Act irrespective of the size of their holdings. We want to go by easy stages. We think we are making definite progress if we begin by including farms of 100 acres in extent or£100 rental, and may I assure the Government that if they accept this new Clause they will confer a boon upon some 10,000 small farmers in Scotland who will welcome the benefits of the Act as applied to them.

The only substantial objection raised in Committee to the proposal was that it might involve a burden on the Government in giving loans to a large number of smallholders. I suggest that the Government need have no apprehensions of that character. When the 1911 Act was passed the applications for loans were few in number and small in amount. Then in support of the Clause I would also say that the Nairne Committee, which is so constantly appealed to by the Conservatives, favoured the extension that we are here suggesting. If the Government wish to get an analogy from across the Border they will find in the English Act, the Small Holdings and Allotments Act, a limit fixed at 100 acres and£100 rent. But, confining ourselves to Scotland, we find that the proposal of this Clause was commended strongly by the Scottish Land Court in their Annual Report of 1916, and cogent reasons were there given for the proposal. Further, in 1919, the Conservatives brought forward a proposal, in the discussions on the Bill of that year, to extend the limit up to£80. If they got that length in 1919 it is conceivable that they might reach£100 now. I, therefore, suggest that they support this Clause. The Government might be supported in accepting the Clause by the recollection that in the Debates in 1919 members of the then Government who are members of the present Government brought forward a Clause in practically identical terms with that I am moving.

I beg to second the Motion.

I hope that the Government will accept this new Clause. We discussed this matter at great length not only this year but last year in the Standing Committee. Last year the Committee by a majority accepted the principle of the Clause. This year for some reason or other they did not see their way to do so. The majority of Scottish Members supported it last year on the ground that it was an attempt to extend security of tenure to a very deserving class of holder in Scotland. Every one agrees that nothing has been so beneficial to the smallholder in Scotland as security of tenure. The National Farmers' Union and, as far as I know, every other body that has know- ledge of agriculture in Scotland, has been trying year after year to extend this principle from the 50 acres limit to 100 acres. As my hon. Friend has said, the Nairne Committee has approved this principle, and so has the Land Court. There is no one in Scotland with such a genuine knowledge of land conditions in Scotland as the Land Court. Its members go about all over the country; they watch agricultural conditions, and they have on more than one occasion advocated this very proposal. I beg the Government to reconsider their decision and accept the Amendment.

I have no quarrel whatever with the presentation of the case for this Clause. It raises a matter of very considerable importance, and, indeed, this is one of the few new Clauses which the House would be well advised to consider carefully. It is true that the National Farmers' Union of Scotland have hitherto pressed very strongly indeed for the inclusion in legislation of something like this Clause, but it is also fair to say that in virtue of other provisions of this Bill, particularly in view of the changes in the Schedules to the Bill, and the fact that farmers in Scotland are henceforth to be allowed an increase in the number of operations on their farm without getting the prior consent of the landlord, a difference has been made in the situation. I happen to know that the National Farmers' Union in Scotland is exceedingly anxious that the Schedules to the Bill shall be passed. It is the Schedules that they regard as the vital matter.

Then we come to this specific case. I am not going to raise objections to it on the purely technical ground that the new Clause as drafted would have the very curious result that it would enable the Department of Agriculture to make new holdings on the land of private proprietors within the limits of£100 and 100 acres, but would not enable them to make new holdings of that size or with that rental upon their own estates. The reason is this: the Clause as drafted refers only to Section 26 of the Act of 1911, whereas the powers of the department in the purchase of land are operated under the Colonies Act, and it has not been sought to amend the Colonies Act of 1916 by the new Clause which has been moved. We are, therefore, left with the curious anomaly that if the Clause as it stands were passed, the Department would still be limited to 50-acre farms and£50 rents upon their own elates, but they would be permitted to create 100-acre farms and£100 rents on the estates of private proprietors. I know that that is not the intention of the Clause.

Next I come to what is a more substantial point. It has been said that if this Clause were carried it would not be a great drain upon the Exchequer. That is not the evidence at our disposal. Under existing arrangements, the Department can give loans for buildings, and has to give them at 3⅛ per cent. interest, and it gives them at 4 per cent. interest, including sinking fund. That is very cheap money.

Our information is that outside proprietors cannot borrow at less than 6 per cent. Therefore, to put it no higher, there is a 2 per cent. inducement upon proprietors of bankrupt and semi-bankrupt estates and derelict or semi-derelict estates to come forward and say: "We can now get loans from the Department in regard to the farms on our estates between 50 and 100 acres and between£50 and£100 rent, in view of the fact that farms of that size have now been brought under the Landholders Act." It is only human nature that proprietors in those circumstances would make a demand on the Department for loans, and thus funds which have hitherto been devoted to the creation of new holdings would henceforth, to some extent be diverted to relieving landlords and bondholders of burdens which they had previously carried.

It may be the right and proper thing that ultimately the State should become the supreme bondholder, but let us face that issue as a separate issue. It ought not to be raised here by a side wind. If we are going to change the acreage and the rent under which smallholders tenure exists in Scotland, let us face the fact that there would be a temptation, at any rate to certain proprietors, to make a raid upon funds which have hitherto been devoted solely to the creation of new holdings.

Let me put this point to the hon. Member for Aberdeen and Kincardine (Mr. Scott). The latest figures which I have got for the purposes of this discussion show that the new holdings projected on the Department's estates are 366 in number, whereas those under Part II, that is to say holdings on private estates, number 80. The tendency, therefore, is for new holdings to be created on Departmental estates, while fewer and fewer are being created on the estates of private landowners. The tendency is, and has been under previous Governments, towards the acquisition of land by the State and the creation of holdings upon that land and for the buildings to be owned by the Department as well. The hon. member has said that this proposal would not involve very much in money. It might not, but nobody can say how much it would involve. At any rate, about£250,000 is out now in these loans, and the best advice which we can get is that there would be a considerable demand,—particularly with agriculture in its present state—upon these funds under this proposal. The proprietors of farms, and landlords, some of whom are in a depressed financial condition, would be likely to make demands to have loans upon buildings transferred from private bondholders to the State at a cheaper rate of interest.

That is one reason why we have not been able to accept the Amendment. We prefer to spend what moneys we have in the creation of new smallholdings, rather than to take over liabilities and burdens which have hitherto been borne by private proprietors. In the discussion of this matter up to the present, we have been to some extent in the region of speculation, but I would now direct the attention of hon. Members to some facts of the existing situation. In the First Schedule which we shall shortly be discussing, Part II contains a list of improvements in respect of which only notice to the landlord is required. These, with the exception of numbers 16 and 17, have been transferred from Part I—improvements to which consent of landlord is required—and are now, for the first time, in the second category. In other words, these are improvements which the farmer, whether his acreage is over or under 100, whether his rent is over or under£100, can henceforth undertake without the consent of the landlord. That is a most remarkable fact and is the crux of the whole matter. The farmer can now, for instance, create silos, erect permanent fences, carry out reclamation, make embankments and sluices, provide sheep-dipping facilities and electrical equipment, all without the consent of the landlord. These are remarkable advantages which the farming community of Scotland appreciate very much, and they alter the whole position. Without the changes which are made by this Schedule, there would be a very much stronger case for giving farmers what may be called the privileges of the Landholders Acts, permitting them to carry out these improvements and get compensation without the landlord's consent. But under this Schedule we are giving them the right to make those improvements without the landlord's consent, and that, I submit, substantially alters the position.

We come now to the question of security of tenure which is still in dispute. What is the position between us in reference to this matter? There can only be eviction now as I understand it, for non-payment of rent, for substantial deterioration or for sub-letting. I think roughly that is the case. But under the agricultural holdings tenure on which the vast majority of farms in Scotland are held to-day, the farmer can lose his farm at the end of his lease or for a breach of tenancy conditions such as deterioration, or on a certificate from the Department of bad farming. If the farmer is evicted at the end of his lease, he gets compensation which may be up to two years rental.

The investigation which I have been able to make goes to show that most of the cases of compensation for disturbance in Scotland in recent years are due to the Department itself; and they are due to this fact, that the Department of Agriculture are purchasing farms for the creation of smallholdings and literally buying out the existing tenant farmers. That is about all that happens in the way of disturbance or lack of security of our farming population in Scotland. I have taken up so much time on this question because it is a matter of substantial importance, and I recognise the strength of opinion that is behind hon. Members who have moved this Clause in their demands. I have only sought to put up to them as clearly and succinctly as I could the reasons which have actuated us in refusing to accede to their demands and in asking the House to reject them.

We all wish to benefit agriculture in Scotland, and it is only because we take a different view of what would result from the proposed new Clause from that taken by the Liberal Members that we are so strenuously opposed to it. After all, the hon. Member for Aberdeen and Kincardine (Mr. Scott) and the right hon. and learned Member for Ross and Cromarty (Mr. Macpherson) constantly quote the Land Court Report of 1916, but we have gained a good deal of experience since then into the working of the landholding system, and a great many difficulties have manifested themselves, and are familiar to most of us. In the first place, let me say that the Under-Secretary of State pointed out an anomaly in the new Clause: the settlements under the 1916 and 1919 Acts would not be affected. He then went on to show the very large compensation rights which a tenant has under the First Schedule to the present Bill, and, with regard to security of tenure, he pointed out that cases of compensation for disturbance at the present time are chiefly arising on the Department's own estates, so that there is very little in it in the way of security of tenure, and there is a great deal of argument against extending this very unsuitable form of tenure to the Lowlands.

As regards the extension to 100 acres or£100 rental, there are, of course, the cases of a farm near a town with a rental of£3 or£4 an acre, and of a sheep farm up to 4,000 acres, carrying possibly 600 sheep, both of which would be included if the new Clause were carried. But really there is a strong case to be made against extending this landholding tenure further. We all know that it came into being because of the conditions in the crafting counties. There you had a crofter putting up a dwelling-house on land which did not belong to him, and it surely was right and proper that when he came to leave he should get some compensation, because the house belonged in law to the landlord. Therefore, the Crofters Act was passed, entitling him to money compensation for the value of the buildings which he had put up, when he came to leave. In 1911 it was resolved to extend that tenure all over Scotland to an entirely different set of conditions with a system under which the landlord kept up the buildings and the permanent equipment of the farm. That has not been a success. The Nairne Committee went most fully into the matter, and I personally have found their report of the greatest value. That was a hard-working body who since the war have gone into this question most thoroughly. In my view we are not entitled to pass judgment on this question without studying that report carefully.

What has happened under this tenure in the Lowlands? When the Department are setting up a new holding they have to advance money to the tenant to pay for the value of his buildings, because the landholding tenure, properly understood, means that the landholder acquires a pecuniary interest in the buildings. It is found that many landholders do not like this tenure, because it seems to them that they have to pay two rents, the ordinary rent to the landlord and the instalment on the loan which they have to pay to the Department. Then again there is another difficulty that arises under this tenure, and it is a real one. My hon. Friend attempts to deal with it in a later Clause when he asks for revision of loans to new holders. Under this tenure it has happened in many cases that a man has come in and been given a loan by the Department. The buildings, valued at, say,£500 when he started farming on the holding, are valued when he leaves at their value to an incoming holder, which may be only£400, so that the man drops a solid£100. Naturally enough, these holders feel that there are drawbacks attaching to this tenure, and they do not like it.

There is another drawback. You require a man with a considerable amount of capital before he can go into one of these holdings. You may have a man who has saved a bit of money and who wants to move into a small farm, but this form of tenure does not suit him. He has to provide the money to acquire the buildings, and, therefore, if you extend this tenure widely throughout Scotland, you will make it more difficult for the small farmer to get a farm, and you will limit your choice for these holdings to people with sufficient capital to pay for the value of the buildings. The hon. Member for Kincardine shakes his head, but that is what has been found by those who have gone about taking evidence and inquiring from the holders what their views are. Therefore, I say that we are not doing a service to Scotland in extending this landholding tenure any further. It has been referred to before, but it is an important matter and worth referring to again. This system of dual ownership has certain inherent difficulties. In Ireland the State had to spend immense sums of money in buying out people. In other countries they have developed a system of occupying ownership. Therefore I urge the House most strongly, in the interests of Scottish agriculture, not to extend this system further, with all its complexities and difficulties.

It was thought honestly enough, when the Act of 1911 was extended to the Lowlands, that you would be giving to holders further security of tenure and a further incentive to work and develop their holdings. That was the view held by many Members of the Liberal party. Those on the Unionist side at that time, with more knowledge of Lowland conditions, was very strongly opposed to the extension of the system, but after all these years of experience the country has found that this tenure, while suitable enough in the crofting parts of Scotland, is not suitable for extension to the Lowlands. It has grave drawbacks in its operation; and that the House should now be asked widely to extend that tenure to holdings up to 100 acres and£100 rental is to ask the House to take a mistaken step. Surely, from what the Under-Secretary of State has told us to-day with regard to the position of a tenant under the Agricultural Holdings Act, with regard to his rights, if he loses his holding, to compensation for disturbance and so on, there is no case whatever, on the ground of security of tenure, for supporting this extension; and on various other grounds which I have given, I ask the House to support the Government in taking a course which I think is most emphatically in the interests of Scottish agriculture.

I am not surprised at the speech of the hon. and learned Member for South Aberdeen (Sir F. Thomson), who has just sat down. After all, his party has been against giving security of tenure to agricultural tenants all along. They opposed the Act of 1886, and they opposed the Act of 1911, and every extension along these lines that has been made has been in the teeth of their opposition. But I am surprised to find the hon. and learned Gentleman combining with the spokesman of the Labour party to oppose a provision which appears in their own Labour manifesto "Labour and the Nation", and by putting down this Clause we are only giving them an opportunity of putting into operation their own policy. It is quite true that they have, over and over again, and in their last manifesto, stated that they are out to give the agricultural tenant security of tenure, and it is amazing to me to hear the hon. Gentleman trying to argue now that, as a matter of fact, they have got it. I wonder whether he would go to the Highlands of Scotland and into the agricultural districts of Scotland, and proclaim that proposition. The hon. and learned Gentleman who has just sat down has always quoted the Nairne Committee, and he quoted that committee, I understand, as being against this proposal. Surely he has forgotten that one of their recommendations was distinctly to the effect that the Board of Agriculture for Scotland should be empowered "to provide holdings of a greater annual value than£50, if exceeding 50 acres in extent."

I think if the hon. and gallant Gentleman looks at the preceding lines he will find the answer to his statement:

"If effect were given to our recommendation, it would be necessary to revise the statutory limits."

Obviously, the Nairne Committee are speaking about the landholdings which should be set up with landholders' tenure, above 50 acres, and in this Clause we are only seeking to put in force, therefore, a recommendation of the Nairne Committee. We are also seeking to put in force the recommendation of the Farmers' Union of Scotland, and it is, as every one will admit who is conversant with the subject, in line with agricultural opinion throughout the whole of Scotland. It is therefore, disappointing to find that the hon. Gentleman, who, all along, has supported this policy as giving greater security of tenure to these landholders, should now oppose this proposal. What are the reasons he gave? They seem to me to be excuses rather than reasons. First of all, he tells us that by this Bill he is proposing in the Schedules to extend the rights to compensation. I agree that there is some extension of the rights to compensation given by these Schedules, and I am very glad that that should be so. But the fact that you are going to take a step forward in one direction, is no reason why you should not take a step forward in another direction, if there is good ground for taking that step, and we say that it is absolutely necessary to give more than merely the additional rights to compensation given in these Schedules.

After all, what is the main condition of this security of tenure? It is the right to appeal to a Land Court to get fair rent. None of the Schedules touch that question at all, and that is the main advantage, to my mind, that is given to these landholders, and that would be given to the other tenants whom we would take within the compass of landholding tenure. Also, they would have complete security such as they have not got at the present time. I am not going into the question as to whether the compensation for disturbance which has been recently given is sufficient and really amounts to giving them security of tenure. The hon. Gentleman knows perfectly well that tenants in Scotland would not admit that that is so, and I am going to leave it for him to settle the question with agricultural opinion in Scotland.

What is the other, and the main, objection or excuse which he has put forward? It is on the ground of loan. He says that if we took these additional tenants within the purview of this particular type of tenure, we should increase the demands on the public Treasury for loans. On what ground does he say so? After the Act of 1911 was passed, not more than£15,000 in five years was granted in the form of loan to existing holders. On what ground, therefore, should he anticipate that there would be such an enormous demand for loans? In any case, even supposing there were a large demand for loans, they have no right to a loan. They can ask for a loan if they like, but there is no obligation on the Department of Agriculture at all to give the money. Therefore, the fact that these requests should be made does not alter the situation in the slightest degree, and it would be quite possible for the hon. Gentleman, in accepting this proposed Clause, to make it clear that he does not consider that its acceptance means any obligation or undertaking by the Department that they are to give loans beyond the money at their disposal, or that they consider themselves to be in any way under an obligation in that direction. If that were not enough, if the mere statement by the Secretary for Scotland at that Box were not enough, there is nothing to prevent a reservation being put into this Clause that the extension of this tenure shall not carry with it a right to money in respect of loans for new buildings. That, I suggest, would meet entirely the objections which the hon. Gentleman has raised.

Another point is that if you extended the size of these holdings, they would become cheaper, because one dwelling house is required whether the holding is 25 acres or 75 acres, and it must not be assumed, that because you have doubled the size of holdings you have doubled the cost of creating them. Then it is assumed that if you increase the maximum size of holdings, every holding that is made in future must be of the maximum size. Everyone knows that in the past all holdings set up have not been of the size of 50 acres. I regret very much, indeed, that the hon. Gentleman has not seen fit to look more kindly on this Clause. It is going right in the teeth of the policy which they have preached, and I am sorry that they should desert their policy to-day. We, at any rate, on these benches are not going to desert this policy. It has been the cornerstone, or rather one of the main planks in our agricultural platform for many years, and we are determined to divide the House if the hon. Gentleman cannot hold out some hope that he will give some extension, say, to 75 acres, which would be better than nothing. Unless we can get some promise of that kind, we are going to divide the House.

My hon. Friends must have been studying the story of Bruce and the Spider, because they have brought forward this question on many occasions, both last year on the earlier Bill and on various stages of this Bill. There is considerable inconsistency in their action. They say that the benefits of the Act are so considerable that there is a great demand all over Scotland for an extension. They say, on the other hand, that they do not think that the drain on the Exchequer because of loans for buildings will be considerable, because there will not be a considerable demand. Which way is it to be? Is there to be a great demand or not? If the demand does exist to the extent they imagine, I fancy that there will be, as the Under-Secretary of State visualises, a considerable drain on the resources of the Exchequer for loans.

It is quite possible to have an extension of holdings of this kind without a penny of cost to the Exchequer.

I realise that there might be some who take holdings and not apply for loans, and that the Government are not bound to give loans if they are applied for, but if you open the door and make these loans available—

You do not make them available.

You give authority to people to apply for loans, and, if you open the door, you cannot refuse them unreasonably, and you will have to treat those who apply with equality and fairness. I oppose this proposed Clause because it would put an unjustifiable drain on the resources of the country. This is a complicated Bill which has been thrashed out carefully, and we have made adjustments in the Schedule which make great changes in the landholding law in Scotland. It is wrong at the end of the day to try and tack on a Clause which completely alters it. I also oppose the proposed Clause for the general reason held by my Friends on these benches, that an extension of this form of tenure is not called for. When evidence is produced that there is a demand in the Lowlands of Scotland for an extension of this tenure, I shall be more convinced, but I am certain that many agricultural bodies and tenants do not hold the view that there is need for an extension. When any burning question is before the House, we are usually inundated by postcards and messages in support, but I have not had that experience with reference to this proposed Clause. In all the circumstances, it should be resisted.

I strongly urge the Government to accept this proposed Clause. The hon. and gallant Member for North Midlothian (Major Colville) has stated that there is no demand for this type of holding in the south of Scotland. It is difficult, I agree, to produce evidence, but even under the present depressed conditions of agriculture, you can get 20 or 30 offers for the larger farms in the Lowlands, which would indicate that there is a demand for this type of holding. There is, too, a demand from the higher grades of agricultural workers who are really likely to make good. I urge my right hon. Friend the Secretary of State to consider the question of justice to the Lowlands. There has been a great deal of legislation in the last 50 years dealing with smallholdings in Scotland, but the major benefit that has been derived from it has undoubtedly gone to the Highlands. The bulk of the population of Scotland and the largest contribution to the Treasury come from the Lowlands, and to increase the size of the holding from£50 or 50 acres to£100 or 100 acres would rectify what has always been an injustice in this respect to the Lowlands. It is unfortunate that this proposed Clause does not apply to land that is purchased by the Department, because there is a great deal of land, in the south of Scotland especially, that could be purchased to-day at a very low rate and turned into larger smallholdings on very economic conditions.

I am afraid that my hon. Friends on these benches have under-estimated the cost of loans to the Treasury, but in the present condition of agriculture, it is essential that we should get a larger volume of interest in the agricultural industry; and we can only get that as a permanent condition by having a larger number of holdings. If this proposed Clause were inserted in the Bill, there would be a very large number of applicants of the best possible class for holdings of the larger type. At a time when we need to get the highest economic returns from our land, we should en- courage by all means those agricultural workers who have made good in their own particular line, who are not prepared to go into the smallholdings because they do not believe that they are a sound proposition, but who are anxious to get farms. I hope that, for the sake of Scottish agriculture and for the benefit of Scottish agricultural workers, the Secretary of State will accept this new Clause, which is called for by all kinds of agricultural workers, by organisations like the National Farmers Union, and by a large body of Scottish agricultural opinion.

I would like again to draw the attention of the House to the Nairne Report. We are dealing here with a form of land tenure in Scotland which has been reported upon by the Committee, and they have quite definitely stated that they do not recommend the extension of it. Hon, Members below the Gangway have told us that the Farmers' Union are very much in favour of this system. The Farmers' Union have sent us a Memorandum on this Bill, and with regard to Part I of the Bill, with which we are now dealing, they state in their Memorandum that it was unanimously agreed to support the principle embodied in it. They made certain suggestions and proposed certain Amendments to Part II. If they had been so keen that the Bill should have proposed the raising of the 50 acres and£50 to 100 acres and£100 surely they would have said so in their Memorandum; and therefore I fail to see any ground for the statement that there is an enormous demand for it on the part of the Farmers' Union. It is admitted by many authorities on agriculture in Scotland that the raising of the 50 acres to 100 acres and the£50 to£100 will be bad for agriculture. We have in Scotland 75,812 agricultural holdings, and there are 50,346 holdings under 50 acres or under£50. If we raise this limit we shall add 10,166 to that number of holdings, and that means that out of the 75,000 holdings more than 60,400 will be holdings a under a system which is ad-admitted by the Nairne Committee to be a bad system, and which is not asked for by the Farmers' Union.

The hon. and gallant Member for Banff (Major M. Wood) said this had been one of the planks in his party's platform for years, and I agree that that is so, but they seem to have forgotten that things advance and improve. He evidently did not listen to one word of what the Under Secretary said about the altered position. His party ought to come up to date and remember that there have been alterations in the form of land tenure. As to the question of security of tenure, I am astonished that my hon. Friend the Member for Aberdeen and Kincardine (Mr. Scott) should make such extraordinary statements about voicing the opinion of his constituents. I am a neighbour of his, and I read the newspaper which is published in his constituency and my own. He has made various suggestions about agriculture in that part of the world, and after the letters against his proposals which appear in the paper it is extraordinary that he should get up and say that he is voicing the feelings of the agriculturalists in his constituency. The average farmer at the present time does not regard the question of security of tenure as one of his difficulties, as being a difficulty which is holding agriculture down. To increase the number of these small holdings in Scotland in face of the opinion of a large body of those who are really well up in agriculture, and at a time when the agricultural industry is in so bad a condition, seems perfect madness.

As another Member from the South of Scotland I feel surprised at the contentions advanced by the hon. and gallant Member for Galloway (Major Dudgeon) that this change would be to the advantage of the Lowlands. I am all in favour of farms of between 50 acres and 100 acres or of£50 and£100 rentals, and there are a large number of these farms in the south of Scotland under the ordinary tenure of landlord and tenant, which is a system much more popular and suitable to the south of Scotland, and I am all in favour of encouraging it in preference to converting those holdings into a tenure which is not suitable to the south of Scotland. The speeches of hon. Members on the Liberal benches only confirm my view that their main reason for putting forward this Clause is a political one rather than an agricultural one. There is much in this Bill that is desirable for the smallholder and tenant farmer and I regret that the Liberal party continue to bring forward amendments which are extremely contentious and which, although they may suit one class of tenants, are most unfair to other people and a great handicap to them in the management of their land.

I would assure the House that on agricultural grounds there are great disadvantages in this proposal, and I would appeal to Liberal Members to exclude it from their policy and cease to bring it forward in the future. It would create further cases of dual ownership such as have been shown to be not only most unfair to owners but extremely unsatisfactory to tenants; and in the case of the larger holdings which would come under this proposal the result would be far worse. If there were any benefit it might go to the less progressive tenants and to the less efficient landowners. Where the farms are not well equipped it might entail considerable expenditure upon the Department of Agriculture. The Government oppose this Clause because of the relief it would give to landlords at the expense of the State, and then financial and economic reasons are very sound. There are other reasons of great importance in addition. In the first place, I cannot understand the extraordinary statement from the Liberal party that there is a widespread demand for this system of tenure in Scotland. There has been no demand for it from tenant farmers. Any extension of the landholding system has been strongly opposed by the Scottish Chamber of Agriculture, and with most convincing arguments. That is a representative organisation which can be relied upon for sound and moderate views, and if the Liberal party are not satisfied with their opinion, I would refer them to the National Farmers' Union, which has branches in different parts of Scotland. I have received no representations from the National Farmers' Union in Scotland in favour of this proposal, although the branches of the Union in my constituency are very strong.

I can say emphatically, as one in constant touch with the views of tenant farmers and those engaged in the management of land, that not only is there no demand for this, but that it would bring about considerably increased difficulties. There are many ways in which it would be unfair to landlords and entail considerable loss upon them, and add considerably to their work in the management of their land. I will not refer in detail to the disadvantages, as they have been mentioned in Committee upstairs, but no answer has yet been given to the various points which have been brought forward and which I do not think can be disputed. We can take it that there will be a revision and a reduction of rent for reasons that I will give. This is one of the objects which has been claimed for the Clause. I would like to ask the Liberal party what they have to say about the valuation roll entries if this new Clause is carried. When the annual value of the buildings and equipment is separated from the total we can take it that there will be a revision and a reduction of rents.

Let us take the case of a holding with a rental of£90. In that case, would the rent require to be examined and fixed by the Land Court? Suppose that the rent is£45 for the buildings and£45 for the land. In that case, the landlord would not only have the buildings confiscated and presented to the tenant, but the rent would also be halved and the valuation roll entry would also be halved. Is that the proposal, and, if not, will the members of the Liberal party say in exact figures what they are expecting. Beyond that, there will be no obligation on the tenant to spend the reduction of rent on the upkeep of the building, and the general likelihood would be a serious deterioration of buildings and equipment.

I also suggest, apart from the loss to the owner, that the difficulties of management will be greatly increased by this new Clause. The complications are already difficult enough, and the tenant farmers in Scotland do not wish to increase their difficulties and responsibilities in regard to the upkeep of buildings. Liberals say that they are opposed to nationalisation, but many of these proposals would make the landlord and tenant system so impossible that they are really keeping on nationalisation. The owners of agricultural land at the present time are paying very considerable attention to the management of their farms. I think it is generally agreed that the larger estates are being worked for the benefit of farming and the country. Capital has been provided at a very low rate of interest, and, with the existing high taxation, there is literally no return at all. In other words, both capital and equipment are now provided for the farms, and they are worked far more economically than could be done by the State. On large estates the organisation is generally much easier and more efficient than on small estates, and this is shown by the desire to obtain farms on large estates. This new Clause seems to take away from the owners and the tenants the control and responsibility for future upkeep of buildings and equipment. The proposal would be very inconvenient and most discouraging to those people who have conscientiously, through difficult times, looked after them for the occupiers. There can be no confidence or inducement in the future for those people to spend more capital upon buildings and equipment if such a system of confiscation is allowed to be carried out. It is for these reasons that I ask the Liberal party to remove this proposal from their policy.

There are numerous other complications, but I will mention only one other, and that is in regard to insurance. Previously, the owner has been responsible for insuring the buildings. I want to know what is going to happen and whether the landowner is going to pay the insurance premium, or will the tenant be responsible? If the tenant is responsible, or even if he is not responsible, and the buildings are not insured and are destroyed by fire, there is nobody to rebuild them and make good, and it would be impossible for the tenant to replace the buildings. There are many cases of

I beg to move, "That the Clause be read a Second time."

This Clause deals with a rather intricate subject, and one which raises very sharp and important issues. I would ask the indulgence of the House while I give a short explanation. An equipped rent is a rent which a tenant of a small holding pays for the land plus the buildings, as a completely equipped holding. Until a few years ago, these equipped rents were practically unknown in connection with smallholdings. The established policy in connection with small holdings was that the smallholder paid the rent for the land, and that, as regards the buildings, he obtained a loan from the State to enable him to acquire a pecuniary interest in the buildings on the holding, and paid an annuity, which, of course, included both capital and interest, over a period of perhaps 50 or 80 years; and, if he renounced the holding or died, he or his representatives had a claim for full compensation to the extent to which he had acquired an interest in the buildings.

There was some dispute in Committee as to whether or not this, as I have stated it, was the established practice of the Department. There can be no real question about that. I have the leaflets which were in the habit of being distributed to smallholders and intending smallholders clearly setting forth that policy.

A few years ago a change was made with regard to this policy, and an equipped rent system was brought into operation. The incoming tenant was, of course, technically a non-statutory successor. He was not a member of the same family as the preceding tenant. The Conservative Government were legally advised that an incoming tenant of that character could not ask the Department, and the Department could not give to such a person a loan. The Department took upon itself, without any statutory authority whatever, no doubt sanctioned by the Secretary of State of the day, to make a departure in policy by refusing to continue these building loans and letting the holdings at equipped rents. This meant that the Department was treating the pecuniary interests in the buildings as if they belonged to the Department. They are doing so now, and they are compelling these incoming tenants to pay one rent for the land and buildings, an amount which is equal to or more than the amount of the old land rent plus the annuity, but with the unfortunate result for the holder that he never becomes the owner of the buildings. He never attains a complete pecuniary interest in them, That is a point that is prejudicial to the smallholder. I should like to read two sentences from the Annual Report of the Scottish Land Court for 1928 in which they pillory the Department in connection with this matter. They say:

"A new development in the practice followed by the Board of Agriculture in dealing with the method under which we are asked to fix rent on properties of which they are proprietors has rendered it necessary for us to add a new table to those hitherto appended to our reports. This new practice signalises a departure from the normal conception of a landholder, which has been embodied in the Statutes as being a tenant who has acquired a pecuniary interest in the permanent improvements on the holding on which he is not rented and for which he is entitled to claim compensation at outgo."

That is the view of the Land Court upon it, not only in this Annual Report, but, in various decisions which the Land Court have issued, they have pointed out the grave departure that the Department has made from established principles of policy. The result has been to force holdings outside the Act altogether. I understand that the Department—it must be by courtesy—call these equipped landholders landholders, but as a matter of fact they do not possess the characteristics of land holders at all.

I should like to ask how the State stands in regard to the matter. Parliament has voted certain moneys to be applied for the establishment of smallholdings, and has said that part of the money is to be used for the provision of loans to holders who are taking up these holdings, but the money, by the Department's decision, is being permanently sunk in the buildings. That is to say, the loans cease to be repaid by the holders, and so the money is lost to the State. It does not come in and it is not available to the Department to go out for new loans. I want to give a statement on the finance of this matter because it affects the Treasury as well as the Department of Agriculture. I am going to quote an authority that cannot be controverted. My authority says:

"The position in general will be that the outgoing landholder will have a claim to compensation for permanent improvements assessed by the Land Court. Where the outstanding balance of any loan is not greater than the compensation awarded by the Land Court, the outstanding liability on the loan account is satisfied out of the compensation money."

That is to say, in a case, which I maintain very seldom occurs, in which the State gets back the total amount of the loan which they have given to the holder.

"In the converse case, where the compensation assessed by the Land Court is not sufficient to cover the outstanding balance on the loan account, the sum awarded by the Court is set off against the loan, and the difference as a general rule will probably have to be written off."

That is the general case. This method of equipped rents is losing money to the State. That is to say that in the majority of cases the Treasury does not recover the balance of the loans which have been given out to these holders. More than that, the sums will be collected by the Department, to the loss of the smallholders, whereas these payments ought to cease, and would normally have ceased, at the end of 50 years. The Department, on the new basis, is making these smallholders pay equipped rents for all time without getting finally a pecuniary interest in the buildings.

There is another matter that I want to deal with in this connection. Under the Bill, the Department have taken power to continue loans to incoming tenants, that is to say, whereas before they said, we have no power to continue the loans, if this Bill becomes law it will have power to continue them. Therefore, as a direct result, I say it is proper that the Clause should be added to the Bill. There will be no reason in future for having any equipped rents at all. The ordinary tenure of smallholdings with loans ought to become the regular course of procedure of the Department. When this matter was discussed in Committee the Under-Secretary made this statement.

"Tenants on the Department's estates, for one reason, are appealing to us to let them have their holdings on equipped rents. I have in my hand now from The Lawrence Kirk estate—in a division represented by an hon. Member in this Committee"—

That was mine—

"a string of 17 applications from smallholders asking to be put on equipped rents. I am not for a moment arguing the merits of the case. It might quite well be that there are serious objections to it. What I am putting to the Committee at the moment is that the clause on the Order Paper will not do and, if it is desired to substitute for it an amended Clause, I submit that it should be done on the Report stage."—[Official Report (Standing Committee on Scottish Bills) 17th February, 1931, col. 405.]

I am sure the hon. Gentleman did not set out, in saying that, to educate me with regard to the position of many of my constituents. More than a year ago I had a meeting with all these smallholders at Lawrence Kirk, and I can well imagine that they had reached such a state of desperation that they have written letters to the Department of Agriculture beseeching them to put them on any tenure they like so long as their unenviable position is relieved. They find themselves saddled with enormous liabilities to the Department. They are complaining of the state of their land, being waterlogged and so on. In order to correct this impression that the hon. Gentleman has, I will give him the true position which, as it happens, came into my hands by accident two days ago from one of these very smallholders, who writes to me:

"I noticed that Mr. Johnston brought forward a list of 17 names from this estate in support of this equipped rent stunt. I am not one of the 17 and you can take it from me that a good few of that 17 do not wish to alter their conditions now that they see through the system properly. The Department are taking over buildings here with 10 and 12 years of the bond paid up and letting them as equipped holdings. It looks a bit like fraud."

If my hon. Friend puts against me 17 cases from my own constituency which, he says, support his view, I am entitled to give him the most up-to-date information which I posses in regard to the same matter. This is a growing custom of the Department. In 1928 they began with five, in 1929 they increased to 46, and, I believe, during the past year there must have been anything between 100 and 130 of such equipped rent applications which came to the Land Court. I wish to show how these small holders are greatly prejudiced by the system. They are paying higher rents than they need to do. Although they are paying higher rents than they did under the previous system, they never become the owners of buildings. They are liable for repairs and the upkeep of buildings, and they are paying higher rents than they ought to be called upon to pay. On those grounds I say that the smallholders are, under the present system, being prejudiced. I would be willing to exculpate the present Government from any responsibility in connection with this matter, leaving the blame entirely upon their predecessors in office who began the system, but we have reached the point where, as the faults of the system have been so clearly pointed out to the Government again and again, they will become accomplices in a system which, we maintain, ought to cease.

I beg to second the Motion.

The hon. Gentleman who has moved this Clause has used some rather harsh language, including the word "fraud."

No. My hon. Friend should not say that. I quoted from a letter which I am prepared to show him. The words I used are not mine.

I understand that the hon. Member does not adopt those words.

Certainly not.

I withdraw that statement, but at least I understood the hon. Member to say, in his concluding sentence, that we were accomplices.

You would be.

I deny that absolutely. I am perfectly certain, from what I have been able to discover in this connection, that the hon. Gentleman has got hold of a mirage, if anyone can get hold of it. I will deal with his last point first. He said quite truly that in Committee upstairs I quoted from a letter received by the Department of Agriculture from 17 small landholders, men holding a landholder's tenure in his own area, asking that they should be placed upon equipped rent tenure. That is a statement of fact. The fact that some other holder in his division does not desire to have an equipped rent tenure and sends him a letter accordingly, does not in any way invalidate the request from the 17 landholders to whom I have referred. I put the point upstairs that there were at least some landholders who did not desire to have it made impossible for them to become holders on an equipped rent basis. I put it no higher than that. I am not seeking to compel anyone, but I do say, on a statement of fact from his own division, and from other divisions, that there are landholders in Scotland today who most definitely desire to be placed upon an equipped rent tenure.

What is this equipped rent tenure that all the bother is about? The holder previously had his land and his buildings on a separate basis. He was a landholder, but he never acquired the buildings. He never acquired a pecuniary interest in the buildings. The two things were entirely separate. The whole code of the Landholders Act is on the basis that the buildings remain the property of the landlord who is due, of course, to give compensation for improvements and all the rest of it. But the buildings remain the property of the landlord, and the tenant never acquires the ownership or a pecuniary right.

I am sure that the hon. Gentleman does not wish to misrepresent the position in any way. As a matter of title he is correct in saying that the buildings belong to the landholder, but he knows quite well that the tenant may acquire a complete pecuniary interest in those buildings, so as to have a full compensation claim for their value.

That is precisely the point. Obviously the hon. Gentleman was not listening to what I was saying, and I think the observation is quite unnecessary.

I am sorry.

The hon. Gentleman by this proposed Clause seeks to make it obligatory upon the Department of Agriculture that under no circumstances are they to let holdings on an equipped rent basis. It means that the Department, for example, may let a holding and charge an inclusive rent not only for the land but for the buildings on the land. It is quite true that under the equipped rent system the holder never acquires the buildings. He never acquires ownership or a pecuniary interest in the buildings. He never acquired it anyhow; he kept on paying an annuity. Where he bought property, the property was his. All that this equipped rent system means, as I understand it, is that the Department shall have an option, not in every case, but where they think it desirable, to let a holding on all inclusive basis. The hon. Gentleman says that the rents which are now charged are very much higher than the rents charged for the annuity on land and buildings combined. That is what I understood him to say.

I said that they were higher.

I am advised—I cannot give chapter and verse for it at the moment—that the old annuity system was on a non-actuarial basis; that it was an insufficient payment. But be that as it may, if in any case of an equipped rent charged by the Department it can be shown or argued that the all inclusive rent is too high, there is a remedy. The all inclusive rent can be reduced. We are in this position, that we simply ask for power in certain eases to let a holding upon an all inclusive basis. That is desired by some holders—I gave instances, and I can give others—but it may not be desired by all. There are certain instances where it is necessary. It is necessary, for example, inside the city of Edinburgh, where you cannot let land on the old landholders' tenures. I know that these things are extraordinarily complex; at least, I find them so. I would ask the attention of the House, and particularly the attention of the right hon. and learned Member for Ross and Cromarty (Mr. Macpherson) to the wording of the new Clause:

"It shall not be lawful for the Department to let new holdings, either on land belonging to the Department or on land belonging to other parties."

Where is the third party? Land must either belong to the Department or to other parties. Where is the third category? If there is no third category, why insert these words in the Clause? I find it impossible to understand. There are other parts of the Clause which I find it impossible to understand. The general principle which the hon. Member seeks to establish is to make it impossible for the Department to let a holding for an equipped rent. Under no circumstances are they to let a holding on the basis that the tenant shall pay an all-inclusive rent. The hon. Member says that that ought not to be possible for the Department to do. We say that it ought to be possible for the Department to have the option. There are cases where that is desirable, and we ask the House not to accept the new Clause.

We support the Government in resisting the Clause. It would be wrong to pass a provision which would make it unlawful for the Department to let holdings as equipped holdings. I have some sympathy for the hon. Member who moved the new Clause. He quoted a passage from the Report of the Land Court in 1928, which deals with this matter. This question of landholding tenure is extraordinarily complex. The buildings remain throughout the property of the landlord. The hon. Member for Aberdeen and Kincardine (Mr. Scott) was perfectly right when he said that under the landholding tenure as ordinarily understood the landholder acquires a pecuniary interest in the buildings, for which he is entitled to compensation on outgo. The Land Court in their 1928 Report say that that is so. They point out that the equipped rent system does abolish distinctive characteristics which had marked landholding up to that time, and that under the equipped rent system the tenant has no pecuniary interest in the permanent improvements on the holding, and no incentive to maintain the improvements.

The normal conception of a landowner is that of a tenant who has acquired a pecuniary interest in the buildings, but the Department have found that there are tenants who do not wish to acquire a pecuniary interest in the buildings. This landholding system requires a certain amount of capital and imposes obligations, and there are people who say that they do not wish to have loans and to acquire a pecuniary interest in the buildings. They say that they wish to have the holdings on the equipped rent system. At one time that was thought to be unlawful. It was thought that the landholding system meant that the landholder must necessarily acquire a pecuniary interest in the buildings and that the equipped rent system was not lawful, but the matter went to the courts, and the courts held that the equipped rent system is lawful.

2.0 p.m.

There is a good deal that is unsatisfactory in the equipped rent system, both as regards the landholder and the landlord. It is unsatisfactory so far as the landholder is concerned in regard to the buildings, as he never acquires a pecuniary interest in them. It is unsatisfactory to the landlord because he has his buildings taken from him, he is deprived of control of them and they are handed over to the landholder, who has not to pay anything for them, and he, in his turn, has no incentive to keep them up. The rent is fixed by the Department without appeal. The landlord may have his land taken from him for small holdings, he has no choice in the selection of tenants, he loses control of the buildings and he has no appeal against the Department. Therefore, there are drawbacks to this system on both sides. This shows the difficulties of landholding tenure. There are these inherent difficulties, and the Department are faced with a very practical point. Landholders say that they do not wish to be burdened with loans for the buildings. They say: "We find it an intolerable burden and we wish to sit like ordinary agricultural tenants, paying an inclusive rent." Are the Department going to say that they will not consider such proposals. That would be unreasonable and would make land settlement in Scotland more difficult than ever. The new Clause is an illustration of the difficulties which are inseparable from this form of tenure. The hon. Member could not have chosen a better illustration of the reasonableness of our attitude on an earlier new Clause. For these reasons we cannot support the Amendment and the desire of the hon. Member that the Department shall not be allowed to let holdings at equipped rents.

I would ask the hon. Members on the Liberal benches to try to deal with rather more modern conditions. In this new Clause they are handicapping the Department and also making it far more difficult for the small man to give up any land. Cannot they see their way to do the graceful thing and withdraw the Clause? We do not want to place these handicaps in the way of land settlement in Scotland. This Clause would make the complicated proceedings in regard to land in Scotland even more complex. Therefore, the supporters of the Amendment are not really acting in the interests of the people whom they desire to help. I am sure that the Clause was put down under some mental delusion and with no understanding of the position that was being taken. I am sure that the hon. Members try their best, but if they would follow the advice they get from the benches above the Gangway on this and other occasions they would be in a very much happier position.

I beg to move, "That the Clause be read a Second time."

The reason for this New Clause is this. New holders after the war were saddled by the Department of Agriculture with the total expense which the Department had incurred in forming and establishing the holdings and, accordingly, the rents the men were asked to pay were so heavy that a storm of protest arose, particularly from ex-service men who were most hardly hit, the men declaring that they could not continue the holdings upon the basis arranged by the Department. The Department, with the consent of the Treasury, made an arrangement under which certain of the holdings were revalued, and the holdings which were selected for revaluation were those established between Michaelmas, 1918, and Michaelmas, 1922. The principle for which I am contending in this Amendment was therefore conceded by the Department in regard to holdings established between these two dates, and there is no reason why revaluation should not be made in regard to holdings established prior to 1918 or subsequent to 1922. The necessity for revaluation is this. When a man enters upon his holding he has to sign a bond for an amount which will cover the expenses to which the Department has been put in forming the holding, and when the buildings have been completed he finds that their value is nothing like the amount stated in the bond.

Some of the bondholders in my constituency went to the Land Court for revaluation and the result in one case, which is typical of many others, was that where a man had signed a bond to the Department for£1,250 the value of the buildings as ascertained by the Land Court was something like£600. The result was that he found himself in a debt due to the Department of Agriculture of over£600, for which the Department say they have no power to give him a discharge. That is not the worst of it. In ascertaining this sum of£600 as the value of the buildings on the holding now the Land Court have estimated the value of improvements at£70. This is a state of matters which cannot continue, and the Department should take power to have all holdings revalued and new bonds taken from the holders for amounts which are really due from them and not for purely fictitious amounts. In Committee the Under-Secretary of State suggested that Departmental administration would meet the difficulty, but with the utmost respect for the Department I say that the smallholders are somewhat sceptical of the Department's generosity, and, indeed, they do not wish to be treated generously but justly. It is upon justice that this new Clause is founded.

I beg to second the Motion.

I am very sorry that the hon. Member has moved this new Clause. By Clause 12 of the Bill this difficulty is provided for, so far as the future is concerned, as the Department takes power, so far as dwelling houses or other buildings are concerned to provide assistance by way of gift. As for the past, it has been found exceedingly difficult to deal with this matter by legislation. Circumstances vary in every case. We have had this rather long new Clause very carefully examined and we are advised that it would end in an enormous amount of legal trouble. The first sentence is:

"In all cases where a new holder has acquired or shall acquire a pecuniary interest in buildings."

Those words open up the prospect of much legal trouble. While it is very difficult to find words which will deal satisfactorily with the position and enable the Department to proceed on the best lines I assure the hon. Member that we will deal with the matter administratively. I gather that hon. Members opposite take the view that cases such as those mentioned by the hon. Member for Kincardine (Mr. Scott) have to be met and that all parties are agreed that these loans have to be scaled down to present realities. It is possible for the Department to meet the difficulty caused by these old swollen loans administratively, and the Treasury have agreed to this policy. I understood that hon. Members below the gangway took the view that this was a matter which could be dealt with most easily by administrative action, and as I gave a pledge to that effect in Committee I regret that the hon. Member has put down a new Clause which we cannot possibly accept and which will only make confusion worse confounded.

The Under-Secretary of State is undoubtedly right in his recollection. We on this side considered that administrative action is the only way by which the situation can be tackled. It is true that smallholders have found themselves burdened with an amount of debt which does not correspond to any real estate, and, therefore, the book asset has to be written down to correspond with the real asset. I think that administrative action, together with Clause 12, is the best way of dealing with the matter, as it gives the Department full power to carry out the process of scaling down or writing off these book debts. I feel a little uneasy about any new Clauses brought forward by the hon. Member for Aberdeen and Kincardine (Mr. Scott), not because they are of evil intent, but because owing to my lack of legal knowledge I am unable to discover that they have any intent whatever. I trust the hon. Member personally, but it seems to me that he considers this Bill the appropriate opportunity for inserting in the Statute Book of Scotland every minority report which was ever drawn up, and for all I know this new Clause may be one of them. We must leave the responsibility with the Department. There is a grievance in regard to a man who has this huge debt hanging over his head, which it is impossible for him to pay off. The Department has, after all, to consider the matter from a commercial point of view, and it is not in the Department's interest to saddle a man permanently with a load of debt which breaks his heart at the outset. It is clear that the writing off of about 50 per cent. of the values of these smallholdings is not enough, and that we shall have to write off even more than 50 per cent.

The hon. and gallant Gentleman knows that this writing off is due to War values. After the War many men were hurriedly placed on land which was bought at very high value. It is hardly fair to suggest that the extraordinary burdens which the small holdings have had to bear because of the War, are any normal criticism of the small holding system.

I wish I could be sure that the fall of capital value, compared with the time immediately after the War, was not being repeated now. The index figure for wholesale prices has fallen as much as 10 per cent. in the last few months. I should be glad if I could feel that there was no likelihood of any repetition of that huge shrinkage of values. I quite agree that administrative discretion must be given to the Department. We have an indication here that many of the calculations upon which these things are based are not tenable, in view of the drop in the value of primary products that is going on.

The Under-Secretary of State mentioned that many of these holdings had been unsuccessful because just after the War it was necessary to place ex-soldiers on the land. Many of them were so placed against the advice of people on our side. I hope the Under-Secretary will remember what he has said when he comes to deal with the Agricultural Land (Utilisation) Bill, on which it seems likely that we shall have the same cases occurring again.

I should not have intervened at this moment had it not been that I thought the Under-Secretary of State was rather ungenerous to my hon. Friend who moved the Second Reading of this Clause. My hon. Friend takes a very deep interest in this Bill and knows it inside out. He has to-day been generous in agreeing to accept Clause after Clause which has been moved by the Government—Clauses which embody principles upon which we feel very deeply. What is it that the Under-Secretary said? He said he was exceedingly sorry that my hon. Friend had moved this new Clause. But my hon. Friend never gave any pledge in the Standing Committee that he would not move the Clause on Report. On the contrary he made it plain that on Report he would raise this matter again. What are the facts? The Under-Secretary's only justification is that the Department has made a sort of confession to deal administratively with this problem. Admittedly the problem is a difficult one. That is admitted by the Under-Secretary and by the hon. and gallant Member for Kelvingrove (Major Elliot). But can the Secretary of State deal with the problem administratively? I have in my hand a letter from his Department, dated 11th December, 1930. It deals with this very point, and one sentence is as follows:

"The Department have at present no authority to make a settlement with your clients other than that stated above."

If the Department had no authority in December last, how can they have authority without a Statute in March, 1931? Unless they accept this Clause they will be in the same difficulty when this Bill is passed as they were in last year. The Under-Secretary mentioned Clause 12. I am astonished that at this time the Government should ride off on Clause 12, which has no bearing upon the subject. Clause 12 deals with future tenants and future loans; it has no retrospective influence at any time. The gravamen of the charge made against the Government in connection with this particular Clause was that it did not deal with the very hard cases which were brought into existence by high values and high prices immediately after the War, when, as the Under-Secretary stated, ex-service men without any knowledge of agriculture, were placed upon the land. They may or may not have had much knowledge of agriculture. Some of them had a great deal of knowledge. The fact is that they were placed on the land at a time when prices were excessively high, when the price of land, of stock and of implements was high, and it became exceedingly difficult for these ex-service men to make a living in after years when values decreased. That was the point made by the hon. and gallant Member for Kelvingrove (Major Elliot), and it is a point which we are making now. The real difficulty is with those who were placed on the land under conditions of that kind, and Clause 12 has nothing to do with those cases.

I said as clearly as possible that Clause 12 dealt with future cases, but I also said that the Department, after consultation with the Treasury, would be able to deal administratively with the point that has been raised on this new Clause.

Has the Department authority from the Treasury to deal with cases retrospectively?

I said as clearly as words permit, that if both Houses of Parliament approve of the principle of Clause 12, we will deal with past cases administratively.

I understand that if Clause 12, which deals with future cases, becomes law, the Department of State will, with the sanction of the Treasury, be in a position to deal with hard cases retrospectively? If that is so, I say frankly that an attempt has been made to meet us.

I did most distinctly say that in the Committee.

I accept that statement, but it is not my recollection of what was said in Committee. However, I am glad to hear on the Floor of the House that the decision now is quite clearly that, with the sanction of the Treasury, the Secretary of State has power to deal with hard cases retrospectively. That being so, I will ask my hon. Friend to withdraw his proposed Clause.

I think we have a most monstrous position here in reference to this proposal. Here we have a small group of 20 Members from Scotland agreeing to a most extraordinary proposal. We have been told by the Under Secretary both here and in the Committee—and I can bear him out in that respect—that he has been able to persuade the Treasury, if a Clause is passed in this Bill for the purpose of dealing with cer- tain future cases, to allow him to deal administratively with past cases and to reduce the amounts of the loans. I am not discussing at the moment whether it is right or wrong that this should be done, but the fact remains that these people went into these holdings on stated terms which were considered fair and just at the time. The change in conditions which has come about is one which affects every section of the British community, but now it is proposed to take this action in regard to these particular cases, by an administrative order which cannot be checked in Parliament and under which we shall have no means of knowing how much is being given away in this respect.

I am not denying that there are hard cases, but, from a purely constitutional point of view, having entered into an agreement, having passed certain legislation, we ought not to seek to change the whole course of that legislation by administration. At a time like the present, when Parliament passes a law, that law ought to be carried out, and we ought not to seek to alter it in this way. I am not in any way impugning the present Secretary of State for Scotland or his predecessors, but it is not right or just, nor is it in the best interests of the House of Commons, to adopt this course. It is not right that the Department should have power granted to it by the Treasury to override an Act of Parliament. As far as I am concerned, I am quite willing that these cases should be examined individually on their merits, but where Government money is being used it is not right to go behind legislation which this House has passed, and by means of what is, simply, collusion between the Secretary of State and the Treasury, to try to override the provisions of an Act of Parliament.

I and some of my hon. Friends have for a long time been very suspicious about these matters. A great many things of this kind have been going on, and there has been very lax administration, and I am glad of the opportunity to point out to the House what is going on, and to indicate the necessity for watching these matters very carefully. I do not for a moment suggest that I would not deal with these cases, but I would do so in an entirely different way. I do not say that these people have not suffered by the fall in prices, but that matter has affected every section of the community. If this matter was being dealt with by legislation, I would be prepared to give it fair consideration, but I resent the way in which it is proposed to deal with it.

If I may, with the leave of the House, speak again, I should like to remove from the mind of the hon. Member for Torquay (Mr. C. Williams) the impression which he seems to have gathered as to what the position is. First, may I say that I did give a very definite assurance on this matter in Committee, and it will be found in the OFFICIAL REPORT of the Standing Committee on Scottish Bills, 17th February, 1931, col. 418. As regards the point of the hon. Member for Torquay (Mr. C. Williams), it has always been within the power of the Treasury to scale down values on property which had become bogus values. Indeed, it is their duty to do so. All we are saying is that once Parliament approves of the principle that we should ensure that these loans have some basis in actuality, then the Department should have power to deal, administratively, with some of the gross cases indicated by hon. Members who have spoken. I am certain that the hon. Member for Torquay could find no other way of dealing with these extraordinary cases of ex-service men—as almost all of them are—whose holdings were created immediately after the War when prices were sky-high. I am sure that he would be the first to agree that the only way of dealing with those cases is to scale down these bogus values.

How is it that this kind of arrangement can be carried out in Scotland, but never in any circumstances can we get such a thing done in the case, for instance, of a fishing harbour in England.

If the hon. Gentleman makes the point that what is good in Scotland is necessarily and inevitably good in England—

No.

I am sure the hon. Member realises that it is inevitable that we must deal with these ex-service men's cases in the way which I have indicated, and if he says that the principle that we are adopting in this matter ought to be adopted in other Departments of the State, then I shall be very glad indeed to assent.

I beg to move in page 3, line 5, at the end, to insert the words:

(2) A landlord shall be entitled to recover from the Department any expenses reasonably incurred by him in complying with a requisition under the foregoing subsection.

This Amendment meets an undertaking which was given in Committee, and its object is to secure that if a landlord is put to any expense in supplying information to the Department then the Department shall reimburse him.

This is a reasonable Amendment, and we thank the right hon. Gentleman for putting it down.

I beg to move, to leave out the Clause.

This point is now covered by the new Clause with regard to the removal of landholders for breach of statutory conditions.

I beg to move, in page 3, line 27, to leave out from the word "Department" to the word "to," in line 29, and to insert instead thereof the words:

"or of the landlord, and after giving the Department, the landlord, and the landholder an opportunity of being heard."

This is in furtherance of a pledge that we gave to hon. Members opposite in the Committee upstairs.

I beg to move, in page 4, line 23, at the end, to insert the words:

"and sub-section three of section thirty-two of the Act of 1911 shall be amended by adding at the end thereof the following words 'and shall not, without the like sanction, be let otherwise than on the tenure of a statutory small tenant or of a new holder,'"

The intention of this Clause is to prevent landholders dropping out of the Acts, but I think the Government have overlooked the fact that statutory small tenants may drop out of the Acts unless words such as I have indicated in the Amendment are added, and it is for the purpose of assisting the Department to make Clause 6 watertight with regard to statutory small tenants as well as landholders that I move this Amendment.

I beg to second the Amendment.

We considered this point very carefully indeed, but we came to the conclusion that, inasmuch as the House of Commons has now agreed to give every statutory small tenant who fears he might be unjustly treated the option to become a landowner, this Amendment is not required.

I beg to move, in page 4, line 36, to leave out Sub-section (1).

This is the Clause dealing with the resumption of holdings, and we suggest that Sub-section (1) should be left out, the effect of which would be that the law with regard to resumption would be restored to what it was between 1886 and 1911. Section 19 of the Act of 1911 said that occupation by a landlord, for the purpose of personally residing thereon, of a holding being his only landed estate, shall be deemed to be a reasonable purpose for resumption. That gave the Land Court no discretion. If a man came forward and asked for resumption of a holding being his only landed estate, the Land Court was bound to give it to him. It has been argued that that went rather far, and we think it is fair to go back to the law as it was between 1886 and 1911 and leave the matter entirely to the discretion of the Land Court, as it is under Section 2 of the Act of 1886. The Government apparently desire that it shall be made mandatory on the Land Court that occupation for personal residence shall not be a reasonable purpose for resumption. They want to have it so that the Land Court shall have no discretion but shall he bound to refuse outright, to a man who comes forward and asks for resumption on the ground of personal residence. They are not quite satisfied with the wording of their Clause, and I notice that they have an Amendment on the Paper which proposes to leave out the words "deemed to be." The Lord Advocate rather admitted in Committee that if these words remained in, all that happened was that there was no presumption in favour of resumption, but that the matter was still left at the discretion of the Land Court. Therefore, they did not think the words "deemed to be" were satisfactory, and they now propose to leave them out. The Clause as they desire to have it would simply read:

"The occupation by a landlord, for the purpose of personally residing thereon, of a holding being his only landed estate, shall not be a reasonable purpose,"

and so on. We think that that is going too far, and that it is reasonable to restore the law to what it was between 1886 and 1911. My hon. Friends below the gangway have introduced a Bill on more than one occasion to deal with this matter. They have wanted to get back to the law prevailing between 1886 and 1911, and that is what we also suggest, but now the Government propose to go further and to require the Land Court to say "No" to a man who asks for resumption on the ground of personal residence. There is a point that has been made before, that it is rather absurd that if a man has a second landed estate, of whatever size, the Land Court should still have a discretion, and that it is only where he has no other landed estate that the Land Court should have no discretion. That is rather an absurd state of affairs. There is really no very pressing grievance in this matter, because I notice that in the past 18 years, since 1912, there have only been 151 cases on this ground.

Only!

That is over 18 years. I admit that there were as many as 26 eases in one of the years after the War, but I would ask the Liberal party to come up to date and to take note of the fact that in 1927 there were only six such cases that came before the Land Court, in 1928 nine, and last year only three, so that the matter is not one of very pressing moment from their point of view. Anything that would make it quite impossible for the Land Court to allow resumption in the case, say, of the winding-up of a trust estate or where money was required to be raised for death duties, is, we think, mistaken, and to put this embargo on the Court is going too far. Leave it to the discretion of the Land Court. It is unreasonable for this House to lay it down that the Land Court ought to be bound to say "No" to any man, however good his case may be, who asks for resumption. Under the 1886 Act the Land Court is bound to take into consideration all reasons for resumption which are concerned with the good of the holding or the estate. We say that that is right and proper, and, in order to effect that object, we ask the House to leave out Sub-section (1).

I beg to second the Amendment.

The Clause goes further than is necessary. It seems rather unreasonable that an owner, who may be no better off than his tenant, should be unable to get possession of the holding, or to sell it if he desires to do so. There is the Clause for the furtherance of occupying ownership, and, I may add, it is hoped soon to have the provision of long-term credits in Scotland, which would also be of assistance to the tenant if this Amendment were accepted.

If this Amendment were carried, it would literally destroy what we are attempting to do in this Bill. This has been a long-standing grievance, and while it may be true that the numbers in question are not large, even supposing there were only 100, why should that 100 be permitted to do this? If the Land Courts are given an intimation that they may exercice their discretion in the matter, because that is what it amounts to, this week-end holiday resort business will be perpetuated. Why should a man whose life-work, whose living, is in the cultivation of the holding, suddenly find that his holding is taken away from him, and sold to someone else who only desires it as a week-end health resort? The thing is grotesque and impossible. The Amendment would perpetuate that system, and I hope that we shall vote upon it at once.

It was only after a good deal of consideration that the Government arrived at the final form of their own Clause, and we were all staggered in the Scottish Standing Committee to find the Lord Advocate and the Secretary of State at loggerheads upon a Clause which, after months of consideration and careful drafting, was put on the Paper. It shows how intricate these questions are, and the need for some sort of discretion. If the Secretary of State with all his administrative experience, the Lord Advocate with all his legal experience, and the Under-Secretary with his careful scrutiny of the facts, were not able to produce a satisfactory Clause when the Bill came to the Scottish Standing Committee, what proof have we that we have a satisfactory Clause now?

The Under-Secretary asked, why should a man's holding, which was his life-work, be taken away from him? He has left a great many things in the 1886 Act for which the holding can be taken away. The discretion is left to the land courts on a number of points. The owner can resume possession, not merely for a school, a church, planting and roads, but for the good of the estate. This is left to the landlord, naturally at the discretion of the Land Court. The Under-Secretary proposes to allow that to remain for the good of the estate, subject to the discretion of the Land Court, but he says it would be quite wrong to allow the Land Court discretion in the one case where a person may desire to resume possession in order to reside on the holding and to cultivate it for himself. Why should we assume that the Land Court would be more foolish than this House, and allow a man to resume possession merely for week-end purposes? Why not remove all discretion from the Act of 1886? The fact is that this has become erected into a sort of standard, a sort of flag of contention, like the ancient football and the ancient matches which were fought between two ends of a village, until at the end of the day many were left killed and injured and the ball was generally lost. The Government are taking up this attitude because of some point of honour between themselves land the Liberal party. We are bringing forward a practical suggestion that the question should be left to the discretion of the Court.

May I be allowed to say a few words in regard to this question, as it is one in which I have taken a great deal of interest during the last seven or eight years. I have made several ineffective attempts to get a Clause of this sort put on the Statute Book, and I am glad that at last there is a chance of security being given to the crofter. My hon. Friends above the Gangway have been arguing that we should restore the discretion as it was given by the Act of 1886, but may I point out that that discretion was taken from the Land Court by a discretion, considered of very doubtful value, but at any rate, a decision which bound the Land Court, and deprived them of the discretion which, otherwise, they would have been able to exercise. [Interruption.] I think, I am correct in what I am saying. It was a legal decision by which the Land Court considered themselves bound, and which, over and over again they said, took from them all discretion. [Interruption.] I am pointing out that there was nothing taken away by Act of Parliament, but, by a decision of the Court, there was taken away a discretion which the Land Court considered they had before and had exercised. They referred to the fact over and over again, and very often had to give decisions contrary to what they would have liked to have given had they had that discretion. This Clause, I hope, will succeed in putting it beyond any doubt that a tenant cannot be removed from his holding because the holding is being sold over his head. May I refer very shortly to a Debate which took place in this House in April, 1924, when the following Resolution was passed unanimously:

"That this House views with alarm the large number of evictions of smallholders in Scotland owing to the resumption of their holdings by purchasers, and calls upon the Government to take immediate steps to assure to smallholders to security of tenure which it was the object of the Small Landholders (Scotland) Acts to confer."

What does the hon. Member for Orkney and Shetland (Sir R. Hamilton) make of Section 19 of the Act of 1911, where it is quite definitely laid down that

"The occupation by a landlord for the purpose of personally residing thereon … shall be deemed a reasonable purpose as aforesaid."

We have been told that this right was taken away by a decision of the Court. The decision of the Court was the interpretation of the Act of 1911, not the interpretation of the Act of 1886. We have always said that under the Act of 1886 it is competent for a Land Court to decide whether resumption can be given on the grounds that a man desires to reside on the holding. We want the Act to decide that point, but by the Clause in this Bill the Court will not be able to take that into account as a reasonable ground for resumption. The argument of the hon. Member for Orkney and Shetland is no use, because the decision of the Court was an interpretation of the Act of 1911.

I beg to move, in page 4, line 38, to leave out the words "deemed to be."

This Amendment is much more important than the few words devoted to it by the Secretary of State would indicate. We are narrowing the law as it now stands, and making it worse. We are laying it down that a man who is actually the owner of a piece of land and who may wish to occupy that land himself shall not do so under any consideration. That is so retrogressive a step that I should think even hon. Members opposite must realise that it is thoroughly bad. In these days we ought not to lay down rules which are too strict. It is not a case merely of making the law clear; what we are doing affects the position of the Land Court. They have to come to a decision on these matters, and the omission of these two or three words, which allow them to take a rather wider outlook, is a definite injustice to the Land Court in the discharge of their duties. It indicates that the action of the Land Court in the past has not been satisfactory. From what I heard in the Scottish Committee upstairs that is not the case, and I feel that we can perfectly well leave these matters to the Land Court. They have carried out their duties with great honesty of purpose, and have done a great deal of good on the whole. By laying down rules and regulations too strictly you are doing a great injustice to the Land Court. I would like to ask the Secretary of State for Scotland whether it is not necessary from a legal point of view to keep these words in the Clause. We have had no reason given why they should be taken out, and there has been absolutely no argument put forward to show why the time of the House should be taken up in this way. A proposal of this kind does not make the Bill any better, and it is a definite slight on the Land Court. I am sure even hon. Members below the Gangway cannot defend this proposal.

I beg to move to leave out the Clause.

It is a Clause amending Section 8 of the Act of 1886 allowing provisionally the Land Court to determine the amount of compensation to the landholder on renunciation or removal. I hope that hon. Members opposite will not waste time discussing trivial matters as we wish to conclude the Report stage to-day.

I beg to move in page 8, line 21, after the word "consideration," to insert the words:

"the purposes for which the holding is equipped, the effect of such contravention on the permanent equipment of the holding, and the loss and inconvenience which the landlord or incoming tenant may incur in restoring the said arable lands to their usual rotation and."

The Clause provides that—

"The arbiter shall take into consideration any injury to, or deterioration of the holding due to such contravention, except insofar as the landlord shall have recovered damages in respect of such injury or deterioration."

My Amendment provides that the arbiter shall take into consideration the purposes for which the holding is equipped, and it also provides for the loss and inconvenience which the landlord or incoming tenant may incur in restoring arable lands to their usual rotation. I wish to be quite certain that all these considerations will be borne in mind by the arbiter, and it is because we are not quite sure that that will be so under the words of the Clause that I move this Amendment.

I beg to second the Amendment.

I am advised that the hon. and learned Gentleman may be quite satisfied that the point upon which he desires to be assured is covered in the Clause as it now stands. The arbiter is directed to take into consideration any injury to or deterioration of the holding, which appears to be a sufficiently wide provision. Further, the tenant is entitled to compensation in respect of pasture only in so far as the value of the holding is increased to an incoming tenant. I think that the point put by the hon. and learned Gentleman is met.