"Section sixteen of the principal Act, which deals with the procedure in arbitrations, shall be amended by the omission of the words 'sheep stocks' in subsection (5) and by the addition of the following subsection:—
'(6) After the passing of this Act all valuations of sheep stocks tied to the ground and bound under a lease to be taken over from the outgoing tenant at the termination of a tenancy by the landlord or incoming tenant shall, unless the outgoing tenant and the landlord or incoming tenant otherwise agree, be made by an arbiter selected by the Department out of a panel of arbiters appointed specially for that purpose by the Lord President of the Court of Session after consultation with the Department.'
§ Sir J. GILMOUR
I should like at the outset to say that we have not divided on the whole of these Clauses, but that must not be taken that we do not strongly support the Amendments which have come down from another place. We are now going to discuss a problem which has caused a great deal of controversy in Scotland on the question of the valuation of the sheep stock. There may be differences of opinion as to what is the best solution for a problem of this kind, but I think it is beyond dispute, and those who have followed closely during the past few years what has been going on in the valuation of sheep stock will agree with me, that there has been a considerable number of cases in which a highly fictitious value has been placed on the sheep stock. It is clear that the existing system which, of course, quite properly takes cognisance of acclimatisation value, ought to recognise the fact that sheep stock, from association with certain lands and farms, acquire a peculiar value because of those circumstances, and that they acquire also a health value from the acclimatisation point of view. But the system which has gradually grown up under which there are three individuals—in the first case, one on the side of the proprietor, then one on the side of the tenant, and finally an oversman—and by which that valuation has been arrived at has ceased in existing conditions, in many cases, to take into account at all the kind of real market value of the sheep and has placed it as if it were a thing of no account, and fixed the acclimatisation value out of all proportion to the real value. Whatever we may say about the method of solution of this problem, it is beyond dispute that these are facts well known to the farming community.
I have seen it stated on behalf of the Black Face Sheep Stock Breeders' Association that there is no real ground of complaint. While I was in charge of the Scottish Office, in cases where this has affected the Government and the public taxpayer, there were instances of gross over-valuation. The House knows quite well that this may sometimes be a valuation in favour of the landlord, on the one hand; or, on the other hand, in favour of the tenant; or it may be a case between one tenant and another tenant. All I say about this subject is that there 1449 ought to be some method arrived at in the public interest, in the farming interest, in the interest of the tenant farmer and all concerned, to find some better solution. The other House has suggested that, instead of continuing a system of three arbiters in these cases, it should be a single arbiter. I do not know that the mere fact that you take a single arbiter is going in every circumstance to make so great an alteration as to give a fair and proper valuation. One of the great difficulties—let us be quite frank—that has arisen is that, where you have local arbiters who are closely associated with the peculiar circumstances, brought in, in the great majority of cases they look at it not so much from the real honest valuation point of view. I would only say that I am not myself in favour of breaking existing leases. I would like to see it limited to future leases, but, whether one is going to achieve this break, one thing, I hope, will come out of the discussion, and that is that public opinion in the valuation world in Scotland will realise that there is grave and honest criticism of the circumstances that have been going on in recent years, and, in the judgment of those qualified to judge, and in the judgment of many Members of this House, it shall be said that this system must find some break, and, whether by the method suggested In this Amendment or otherwise, it is high time that these conditions should be no longer continued.
§ Mr. MACPHERSON
I am glad that the Government have taken the attitude that they have taken in regard to this matter. I quite agree with a good deal that the right hon. Member who has just spoken has said. There is no doubt that there have been excessive valuations in recent years. But I am glad to think that, on the whole, these have been the exception. I believe, myself, that the general opinion among agriculturists in Scotland is in favour of maintaining the present system. I think, on the whole, one is justified in arguing that the judgment of three men is generally better than the judgment of one man. The custom has been in the past to employ very practical men. You must remember that all these valuations took place between the outgoing tenant and the incoming tenant and that the outgoing tenant 1450 chooses his arbiter and the incoming tenant chooses his arbiter, and there is still the oversman. If there is a dispute between them, they are at liberty to go, at the present time, to the sheriff of the county. The real trouble has been acclimatisation and its value. But the fact remains that, unless you had acclimatisation stock in the Western parts of Scotland, the land would be quite un-lettable. I have no doubt that the Government have considered this matter very carefully. I have done so myself, and I have come to the conclusion that the Government are taking a wise step, on the whole, in resisting the Amendment.
§ Mr. SKELTON
I do not seek to say anything offensive when I say that the Government are discussing a matter that makes it unfortunate that this debate is taking place so late in the Parliamentary session. What has already been said would be very useful if it were widely known throughout Scotland. But speeches made at this hour of the night are not very fully reported. [Interruption.] These wild beast cries really do not help the rather serious topic which, of course, is purely Scottish, and therefore quite unknown to urban English Members. I should think that if an urban English Member were asked to describe acclimatisation value, he would be very hard put to it. I rise, not to answer what has been said by my right hon. Friend. He admitted that there were duties connected with it, and he then proceeded to whittle down those duties so that at the end of the day he had convinced himself that the present situation was a perfect one. I do not believe, with the Secretary of State, that the right hon. Gentleman's early opposition gradually disappeared. It changed into the dawn of approval, so far as I know.
I am not surprised that this Amendment has not been accepted by the Government. I definitely associate myself with the right hon. Gentleman in believing that the provision which is in the Amendment, and which would seek to alter the whole of the existing leases, is not one to be recommended to Parliament. I hope very much that we shall not pass from this topic without the Secretary of State, or some of his hon. Friends, saying a word or two on it. It is of immense importance that Scotland 1451 should realise that, in this matter, the three parties are all aware of the fact that things are not entirely as they should be, regarding this type of valuation. Though none of us particularly like the suggested solution in the Amendment which the Government is not going to accept, we all realise that it is a matter for study and that it is of public importance. It is one to which the Government ought to devote attention. I venture to make the suggestion again that we should not pass from this without a word or two from the right hon. Gentleman.
I would like to respond to the appeal that has been made by the hon. Member for Perth (Mr. Skelton). In doing so, I want to point out that we have gathered agricultural opinion in Scotland, and that agricultural opinion should count most in matters like these. Whatever the opinions of hon. Members, they will agree with me when I say that they have not the qualifications to judge of the disability imposed by a proposal of this kind upon the sheep farmer, as have the agriculturists themselves. So far as I can gather, agricultural opinion in Scotland is opposed to the Clause. The Scottish Chamber of Agriculture is opposed to it, because they think that it is light that a sheep farmer, whose whole capital may be involved, should have a share in the apportionment of the valuation. The Black Faced Sheep Farmers' Association are also opposed to the Clause, and the National Farmers' Union are in agreement with the other two associations that the existing system should be maintained.
Those hon. Members representing Scottish constituencies know that a few years ago the system was changed. That was in 1908. Such an agitation broke out in Scotland among the agriculturists regarding the change that Parliament had to change the system again within two years. It may be perfectly true, as has been pointed out by the former Secretary of State for Scotland, that excessive prices have been paid. What does that lead to? Undoubtedly, the fact that the sheep were tied to the ground in quite a number of instances. If one is to change a system of that kind, one will have to take very great care that existing contracts have run 1452 out. There are men who have come in and have paid excessive prices, and, if this Amendment were given effect to, those men, on going out, would not be compensated for the excessive prices that they paid. You would be breaking contracts in a large number of cases. I think the House would be well-advised to disagree with the Lords.
§ Mr. MILLAR
This Amendment is not like those that have just been discussed in the House, because the question was raised for the first time in the other House, and I think the House of Commons is entitled to give this matter full consideration, although at this unfortunate hour of the morning we are not in the position to have a very full discussion upon matters that affect very vitally the agriculturists in Scotland. This discussion is not on party lines, but is purely directed towards securing the best possible form of arbitration that will give a fair valuation. Reference has been made to the fact that originally, under the Act of 1908, one single arbitrator was appointed to deal with all arbitrations, including sheep stock and farm crops. That undoubtedly was the system which was then adopted, although there happened to be at the time an agreement between the various parties as to three arbitrators. The system which was brought into effect in 1908, according to the words of the Statute so provided—Notwithstanding any agreement in the leases, or otherwise, providing for a different method of arbitration.So that Parliament at that time felt perfectly free to say that it thought that a better system required to be introduced, notwithstanding the existing leases. I agree that it is undesirable to break existing agreements, but one has to keep in view that the purpose here is to secure a fair valuation. The parties have agreed to a valuation. We wish to secure the fairest form of arbitration that will afford security to all parties who are interested in the matter, and to enable them to get justice at the hands of the arbitrator.
It may well be asked, "Has the system worked out well?" I venture to suggest, from some experience and knowledge of the subject, that it has not worked out always fairly, for the reason that no man nowadays is really entitled to be appointed as a judge in a matter in 1453 which he has a personal interest. If this system is to be worked purely through the appointment of sheep farmers who are to settle finally the values that are to be fixed, I say that it is not fair that they should judge matters in which they have a personal interest. I am not attacking the arbitrators, under the system by which they are now called upon to exercise their duties, but merely pointing out that one would never think of appointing a judge to deal with a matter in which he was personally concerned in maintaining a high valuation. There is frequently a very high fictitious value attaching to acclimatisation.
My right hon. Friend in front of me said it was an exception. I have studied the figures carefully, and I have found, in recent years particularly, that they have risen to peak figures or to very high figures, and that it has been a very ordinary course to attach a very high value for acclimatisation purposes to sheep stock. What is the result? It is not in the public interest that this system should continue for this reason. Owing to the uncertainty which has been created by these highly inflated values, the difficulties of getting incoming tenants to take over sheep at these figures are very great. Surely that is a reason why this system should be altered if you cannot to-day get the incoming tenant to take over the sheep at these figures. It is not in the interest of the country that the proprietors should be restricted in the use of their land through the fact that they are unable to meet these values, that they have to sell off part of their stock and in some cases find it impossible to relet their land for the purpose for which it is best suited.
As taxpayers we are also interested in this matter. What is the view of the Department of Agriculture for Scotland on this matter? What is the view of the Forestry Commission? We have had to deal in recent times with a number of transactions that have resulted in enormous loss to the country. I would remind the House of the famous Erriboll case which was discussed in this House on a number of occasions and which resulted in the Government losing £34,000 for the sheep stock taken over in that case owing to the valuation. There is a distinct interest here not only on the part of 1454 the landlord but on the part of the public generally in securing that these valuations shall be fixed on a fair basis. That is all that the Amendment seeks to do. It may be that the right hon. Gentleman finds it difficult to accept it in the form in which it is drawn, but the principle of it is that we should get down to a fair basis of valuation, that we should get impartial arbitrators, and that we should get a basis of valuation fixed which will enable us to standardise the elements of value so that they bear some relation to market prices. It will need some elasticity in different districts to apply your standards to different market conditions.
This question is one of simple justice, of fair play, of securing a better system of valuation which will result in advantage to the whole industry. I do not accept the view that the only expression of opinion which the House is entitled to obtain is that of the Sheep Breeders' Association or of any specific organisation, and I have in my hands letters from some of the leaders of agricultural opinion in Scotland on this very subject. One of them points out that, while it is true that sheep farmers as a matter of self interest are interested in maintaining these valuations, there is a growing feeling that there should be some change. He refers to the many statements which appeared in the Scottish farming press pointing out the abuses to which this system had led, and pointing out that there is a strong body of opinion in the country to-day which would favour a more equitable system of valuation. I could refer the right hon. Gentleman to many other cases, including that of a Farmers' Union which only a few weeks ago criticised the effect of the existing system of valuation and stated how desirable it was that the figures should be made public in certain notorious cases so that the public should realise the facts. It is a very difficult thing to justify valuations, which may fix an average of something like 100s. or more per ewe and lamb at Whit Sunday when at a later period in the autumn the same stock will only fetch 50s. or 60s., though in the interval they ought to have increased in value.
I am quoting facts and the noble Lord who dealt with the matter in another place quoted a number of facts and figures which are capable of being sub- 1455 stantiated. I want no element of exaggeration to enter into this matter, but I say that there is a distinct feeling of dissatisfaction in Scotland to-day about the present system of sheep valuations. I hope that the right hon. Gentleman, whatever his view in this matter may be, will give us some undertaking that it will be further considered by the Department of Agriculture, the Forestry Commissioners, and all the other bodies interested so as to secure a better system of valuation.
§ Mr. KINLEY
I do not want to pose as an expert on sheep farming, but I want to thank the right hon. Gentleman on behalf of the back benchers on his own side for resisting this Amendment. I also want to congratulate the hon. Member for East Fife (Mr. Millar), who is drifting in the right direction. He has been stating the interests of those responsible for moving the Amendment in another place. He is not addressing the House as a Liberal, but as a landlord.
§ Mr. MILLAR
I hope the hon. Member will not do me the injustice of repeating the remarks he has made. I argued this case right through purely because I regarded it as a case of affording justice to all parties.
§ 4.0 a.m.
§ Mr. KINLEY
My personal feeling about the whole proceedings is that the sheep farmers who are affected had the courtesy to send a deputation to this House to interview the parties, but those responsible for the Amendment in another place, have been nameless so far. The Amendment was supported by the landlords simply because the valuation has been operating against the landed proprietors. The machinery has been operating against them. Here we have protests against three arbiters determining what the value is to be. At least one of the three is an honest person, while there are no sheep farmers in my constituency, I want to protest against the insinuation that those who act as valuers on the part of the incoming and outgoing tenants are dishonest and place fictitious values on the subjects they are called upon to value. I hope the Noble Lord the Member for Roxburgh and Selkirk (Earl of Dalkeith), when he 1456 speaks again, will be good enough to tell us that he is speaking on behalf of the landed proprietors of Scotland and not try to camouflage the position.
§ Major DUDGEON
On general lines, I agree with what has been said by the hon. Member for East Fife (Mr. Millar) that there is room for a certain amount of improvement in the present system, but I do not think it is fair and just, as a general rule, to state that fictitious values have been placed on sheep stocks in Scotland. To bring in a system to upset the valuer coming in to place an acclimatisation value upon any particular sheep farm would be disastrous. It is absolutely essential that those valuing sheep stock should have an intimate knowledge, not only of the class of stock, but of the traditions and history of the holding. That is the only possible way in which you can arrive at a true acclimatisation value. If I might be permitted to make a suggestion, there should be some method of having a fixed acclimatisation value. It might be fixed at 50, 60 or 75 per cent., with, in addition, the current value of the sheep stock. If such a system was arrived at, it would overcome a great deal of the difficulties and criticisms we hear now of fictitious values. If careful inquiries were made as to the history of each valuation, an acclimatisation value might be fixed for all time, and then valuers would arrive at a valuation of the sheep stock on current values plus the acclimatisation value.
The system in Scotland has on the whole worked well enough. You have three valuers—one for the incoming tenant, one for the outgoing tenant, and the oversman who has to adjust their valuation in the last case. I think in the great majority of sheep stock valuations a fair market value has been arrived at. I have seen a number of these valuations, and great care has been taken, not only in fixing the market value, but in deducting from the sum the expenses of marketing the sheep. The most careful inquiries have been made as to the history of the particular holding—the death-rate which has taken place from time to time and, in the case of re-stocking at any time, the death-rate after re-stocking. I think the language of general criticisms is very unfair with regard to the system of valuation which has obtained in Scotland for 1457 a long time and the valuers, for in the great majority of case they have well and earnestly done their work.
Earl of DALKEITH
The last two speeches show clearly how important it is that this subject should be fully discussed. I hardly expected the Government would accept the new Clause. I regret that we have not had an opportunity to go into the matter more completely and bring out certain questions on which there has been cause for grievance. We also want to avoid the hardship which has arisen during the last 12 years. This is not a question which arises in the South of Scotland. There most cases are settled satisfactorily without any trouble. There is no doubt several individual owners have been badly hit by the sums they have been obliged to pay, and have had heavy losses which have been unavoidable. The same is true of the Forestry Commission and the Department of Agriculture. It is very important that the matter should be fully thrashed out and given publicity.
The hon. Member for Partick (Mr. McKinlay) seemed to think that I was going to speak for the landlords and push this matter before the House. I intend to support the sheep societies and the National Farmers' Union in Scotland, and not oppose them on this point, because they have expressed their views about it. I still think it is a question that deserves every consideration. I appreciate the friendly attitude of the deputation from the sheep breeding societies and the representatives of the tenant farmers and the way in which they expressed their views on this subject, as well as the statement that they themselves thought the valuers had no intention or desire to overcharge owners to the advantage of their tenants. I think the assurance on this point is very valuable. I also think their suggestion that any future action or change should be by agreement, and that there should be a meeting between the tenants and proprietors in Scotland, is a very sound one. I hope it will be carried out. After all, the owners and tenants of agricultural land in Scotland have, in most cases, great political and economic difficulties, and it is far better they should get together in cases of this kind and settle their difficulties, where possible, 1458 without Parliamentary action. For these reasons, I do not intend to press the Amendment.