§ 4.49 p.m.
§ Second Reading debate resumed.
§ The Earl of Kintore
My Lords, I also thank the noble Earl for introducing this Bill so clearly. What is proposed is certainly a way forward for the crofting estates, but there can be no universal solution. Each area, possibly broken down as in Annex A of the Scottish Office consultation paper, will require its own solution. I note that if the Bill receives a Second Reading it will be committed to a Scottish Select Committee. That committee will be required, among other matters, to look into the viability of each transfer; the relationship of each crofter to the crofting trust and whether all crofters in an area will have to become members of the crofting trust. I see that at Assynt 130 of a potential 140 crofters are members of that trust. It would interesting to know the status of the other 10 crofters.
Crofters must be no worse off after transfer to a trust than they were before. It would be interesting to know what protection an individual crofter has if his trust fails for, say, financial reasons. Are the trusts to provide annual accounts for any period when they continue to receive financial support from the Scottish Office? Is there a time limit for the transfer? What is to happen if a whole area rather than an individual crofter does not want to be transferred into a trust? I imagine that the Secretary of State for Scotland is regarded as a pretty good landlord.
It is right that mineral rights follow the land that they are on or under, but as any mining would probably be opencast there would be a vast hole somewhere on the land, and noise and dust, before any great wealth was produced. Some sporting rights are probably under current leases which will need to be honoured or renegotiated but then should revert to the land they are on. Sporting rights, if properly managed, are a valuable asset. The Scottish Secretary at present receives almost half as much rent again from the sporting rights on 18 estates as he receives for the crofting lets on 55 estates.
The crofters in three townships on the Armadale estate in Sutherland are to pilot a government scheme to transfer state-owned crofting estates into community-led trusts to see whether the trusts can go it alone. I hope that they can. I hope that we give the Bill a Second Reading this evening.
§ 4.53 p.m.
Lord Campbell of Croy
My Lords, I thank my noble friend Lord Lindsay for his clear introduction of the Bill. The intentions in the Bill are highly commendable. I wish it well. I hope that it will lead to a substantial transfer of the Secretary of State's estate. I venture to speak (briefly) because I have been associated with some of the past proposals and changes in the crofting system. The most recent was the piloting 895 through this House in 1991 of a Private Member's Bill which became the Crofter Forestry (Scotland) Act. It enabled crofters to plant and manage trees on their land.
My home is 10 miles from Inverness but is not in the crofting area of the Highlands. I would remind your Lordships that crofting tenure is unique and operates only in what were the crofting counties in the Highlands. In areas where land is not fertile or easy to cultivate, small communities can, and have for years, had their special arrangements. The crofters are usually engaged in more than one occupation, dividing their time between them. One man, for example, may be a part-time farmer, with a few sheep or cattle, and a part-time sea fisherman, probably fishing for lobsters, other crustaceans or shellfish with a small boat in one of the firths or sea inlets.
In recent years the crofter has also often offered tourist accommodation facilities and sold the products of local crafts and materials. As a versatile all-rounder, the crofter can make a living, though not a rich one, from land which would not support normal agriculture or the same number of people otherwise engaged.
Twenty five years ago, during the four years when I was Secretary of State for Scotland, I made what I think were the first moves in planning to transfer crofting land owned by the Government to the crofters themselves. I learnt that, as Secretary of State, I was the largest landowner (in area of land) in the whole of the UK. I was very ready to part with some of it in a manner which would be acceptable to all concerned and beneficial to the public interest. Of course, I must make it clear that in my private capacity I am only a small landowner in northern Scotland—the land around my home.
My recollection is that it was difficult to produce a scheme about which crofters' representatives felt happy. Crofting tenure had traditionally become familiar to them and ingrained in their way of life. They seemed to sense insecurity and uncertainty in any proposed major changes or in a new system. That is why I congratulate my noble friend Lord Lindsay and my right honourable friend the Secretary of State for Scotland, Mr. Michael Forsyth.
What I was able to do in 1972 and 1973 was to reach general agreement on reforms to the crofting system. I introduced in the other place a Bill which had a Second Reading just before the February 1974 general election. At least one Scottish Labour MP, now a Liberal Democrat, made an intemperate, polemical speech, claiming that that Bill would be grossly damaging to the crofting communities. That surprised everyone, including his colleagues and the Scottish Office.
Lord Campbell of Croy
My Lords, I shall spare his blushes, but it would be fairly easy to guess and Hansard can be looked up. He had to eat his words later when my successor, the late Lord Ross of Marnock, sensibly reintroduced the Bill unchanged. It went through Parliament with general support and became the 896 Crofting Reform (Scotland) Act 1976. I am sure that the noble Lord, Lord Sewel, will remember that even before 1974 that Act was introduced as a Bill by me from the Conservative Front Bench in the other place.
I should like to make a comment or two about some strange and, at times misleading, terms used in crofting tenure. For example, there is "congested areas". They are not congested in the modern understanding of that word, in very underpopulated areas. There is then the word "township". That can mislead. A township may be no more than half a dozen scattered habitations and their simple farm buildings.
I applaud what the Government propose. I support the Bill, subject to safeguards, to some of which the noble Lord, Lord Sewel, referred. I applaud also the fact that the crofters' representatives seem prepared to consider the proposals. I understand fully their past reluctance and hesitation. Their families have been used to the system of crofting tenure for generations. They include a number of Campbells—fellow clansmen. I urge them to consider positively the advantages and responsibilities of the ownership now on offer, and to take up the chance of having more of a stake in the land upon which they and their families have lived and worked for countless years.
§ 5 p.m.
§ Lord Sanderson of Bowden
My Lords, I rise to support my noble friend the Minister in moving the Second Reading of the Bill. I strongly approve of the Select Committee procedure that is to follow; I believe that it is the right procedure for this Bill.
The measure is an important initiative on the part of the Government and follows much debate on the subject, particularly in recent years when the Government have sought views on devolving to the crofters themselves through trusts or any other suitable arrangements their own lands which are at present held by the Secretary of State for Scotland.
In the late 1980s I was involved in many discussions on the subject, particularly with the Scottish Crofters Union. At that time a discussion paper was produced relating to the experiment of moving the Skye and Raasay estates from the powers of the Secretary of State into the hands of the crofters. Sadly, that did not meet with crofter approval. I am glad to see that times have moved on and those land holdings in the crofting counties are now the subject of the Bill. They are very extensive.
The Secretary of State is the biggest landlord in the crofting counties by a long way. I must say straight away that their administration by the Scottish Agriculture Department has been exemplary. Nevertheless, if one studies the extent of this land holding it is right to bring about now true devolution and see these estates owned and run by those who live and work in Skye or Harris, in Barra or Caithness. The crofters themselves must take the responsibility, and I believe that they are now able and willing so to do.
The noble Viscount, Lord Thurso, made an important point when he asked for details of profitability of the estates. The noble Lord, Lord Sewel, indicated that 897 different solutions for different estates was the right way to go about it. My recollection is that, as economic units, the estates vary tremendously. The key to success must be to treat each individual estate on its merits. It is absolutely vital that on transfer nothing should stand in the way of the new bodies achieving the best results for an estate. This means that in no way should rights—be they sporting, fishing or mineral—be withheld from incoming crofter trusts unless a very special case is made.
In commenting on the remark made by the noble Lord, Lord Sewel, about passing on an estate—that is, getting a quick buck for the selling of an estate—I am sure that that must be covered by Clause 2(1)(b). If it is not, it certainly should be.
I do not wish to be unkind to the noble Lord, Lord Sewel, or to his party, but Dr. Jim Hunter, the expert in crofting affairs, in his book The Making of the Crofting Community published in 1976, was not all that complimentary about Labour Governments of the 20th century and their failure to deal with issues such as the one we are debating today. Perhaps I may remind the noble Lord that there is all the difference in the world between a willing seller and confiscation. I am content that this Conservative administration is bringing forward this Bill today.
For a moment I should like to look at the scene now and the importance of understanding the real world of living in the crofting counties. It is not an easy life. If through BSE or some other agricultural crisis mainland Scotland or England catches a cold, crofting communities get flu or worse. If some environmental policy is pursued in the United Kingdom in general, we have to beware of its effects on the crofting counties. Brigadoon was a theatrical performance; it is not what I and many others want to see for the crofting communities. The new Scottish Environmental Protection Agency and Scottish Natural Heritage must be aware of the fragile balance that must be struck to enable the quality of life there to be really worth while—hence, I believe, the demise of the Nature Conservancy Council in Scotland.
To sum up, no crofting legislation was ever easy. But that does not mean that we should not act. There is a desire, particularly among the younger generation, to move to owner occupation. Yes, there will be different solutions, but I now see how crofters, through these new arrangements, can provide the security which banks require. It will thus do something to give them the initiative which is denied them by being solely crofting tenants. If this Bill helps to achieve the goal of owner occupation, I for one will be delighted.
§ Baroness Carnegy of Lour
My Lords, with the leave of the House, perhaps I may ask my noble friend a question. I should be grateful if he would reply in winding up the debate. The Long Title refers to the Secretary of State disposing,of his crofting estates and certain other property of his in the crofting counties".898 Clause 1(3)(c) appears to include non-crofting property. Will my noble friend clarify why it is appropriate for the Bill to refer to non-crofting property when its purpose is to dispose of land to a body representative of the crofting community with an interest in the land?
That question has been put to me, and may have been put to other noble Lords, by the Law Society of Scotland and it would be helpful if at this stage my noble friend could clarify the point.
§ 5.6 p.m.
§ The Earl of Mar and Kellie
My Lords, the Bill has already been welcomed from these Benches and continues to be so. There is no doubt that it has caused a great deal of insecurity among the Secretary of State's crofting and other tenants. That was mentioned by the noble Lord, Lord Campbell of Croy, and I wish to reflect upon it.
It is unusual that a landlord should want to divest himself of estates, particularly without prompting from his tenants or other purchasers. The laird wants out and the tenants do not believe that they have done anything wrong to deserve it. My analogy goes on. During the Clearances the crofters became an endangered species. The Napier Commission led to their becoming protected species. Now the Secretary of State is preparing to release them back into the wild. As the Secretary of State has been a popular, kindly and not too pro-active laird, his tenants are surprised by his new found boldness and concerned about how all this will work out. Certainly, their rights as crofting tenants will be maintained and protected but the estate management, whether within local crofting trusts or perhaps a pan-Highland trust, will have a substantially reduced income by comparison with that of the Secretary of State.
The likelihood of long-term success—and, indeed, the likelihood of a successful transfer of these lands—will depend upon the willingness of the Secretary of State and the Treasury to transfer not just the croft land and the other lands mentioned but also the assets of the sporting, mineral and foreshore rights, and then to show a further willingness to retain or to transfer elsewhere the burdens upon the estates. Public road bridges and coastal erosion work could be retained. Drainage and march fencing could be invested in before transfer. A commitment to sort out all outstanding estate problems prior to transfer would be beneficial.
While debating the principle of the Bill, it must be recognised that the measure is designed to save a considerable amount of taxpayers' money. It fits into an agenda of privatisation and, concurrently, into an agenda of devolving the ownership of land to local level. I suspect that after a protracted period of supporting start-up costs for trusts and the associated fees it will show a reduction in government expenditure. But is it really helpful? No one pretends that crofting constitutes the highest level of UK farm production, but probably it is not meant to. It has become a population measure—part of the policy to keep the remoter parts of Scotland inhabited—and in consequence of its part-time nature always looking for something extra to do. Certainly, 899 croft incomes rely heavily on the auxiliary occupations permitted by the crofting Acts and on part-time jobs secured locally.
I should like to ask about the complete inventory of the Secretary of State's estate. While the Bill is specific about the croft land held under the 1993 Act and about the fishermen's dwellings and holdings held under the 1897 Act, it is not clear what is the extent of the lands referred to under Clause 1(3)(c). The noble Baroness, Lady Carnegy of Lour, has already mentioned the matter. I presume that some of the land was acquired under the 1919 Act. I wonder whether there is any other land which may have been acquired by the MoD, the old Post Office and other central government agencies. I hope that the noble Earl can tell us about them, if they exist, as they may hold the key to the successful funding of local or pan-Highland trusts.
It is ironic, when reading Section 1 of the Land Settlement (Scotland) Act 1919, to think of apoplectic landowners learning to live with the words,with the consent of the Secretary for Scotland and the Treasury, land may be compulsorily acquired by the Board of Agriculture for Scotland".Today's Bill is not phrased in those terms but it reverses the thrust of the 1919 Act. I suppose that I should ask whether the Secretary of State retains any land outwith the seven crofting counties and, if so, whether he has any plans for that land.
The existing crofting trusts of Assynt, Borve and Annishader may act as lighthouses in this storm. Comparisons of their viability with the other estates will be useful. We must recognise the difficulty in the leadership of a crofting trust being mainly in volunteer time. The income of a local crofting trust is unlikely to support anything other than expenses unless there are hidden assets or special management grants planned for those trusts.
I should also like to ask about the nature of the bodies to which those estates may be transferred. The Bill reads quite tightly in Clause 2 but I ask how much dilution of the criteria will be allowed, particularly if commendable bodies are not forthcoming? What happens in the event of no body coming forward? The speed of transfer is a question which is causing mild panic in the form of the question, "Who will come in as laird if a local crofting trust does not emerge immediately?" I look forward to reassurance that it will be a long-term process and that agencies such as the Crofting Trusts Advisory Service and the Scottish Crofters Union will be allowed time to do the necessary development work, with willing rather than panicking volunteers. I hope that the noble Earl can confirm that this matter will be approached in a manner likely to be sustainable. The failure of a crofting trust due to over-hasty establishment will be quite counter-productive.
In conclusion, my financial appraisal is that the Secretary of State will save £200,000 a year eventually and that the new landowning bodies will generally have inadequate income to invest in and develop their estates. My economic appraisal is that a few estates will do well due to inherent assets currently under-exploited but that most will be struggling. I believe also that there will be an increase in owner-occupation of crofts.
900 My social appraisal is that local leadership will emerge where there is a good chance of some real benefit but that most estates will have no "interesting project" for volunteer managers to develop on an altruistic basis. Where owner-occupation increases, so the sense of community will decrease. Conversely, where positive leadership emerges, the benefit of increased community participation may be forthcoming. As the demand for crofting property and tenancies is already high, few extra people will be attracted to the more remote areas. I am sure that the noble Earl has the answer to all those points. I look forward to hearing from him.
§ 5.15 p.m.
§ Lord Macaulay of Bragar
My Lords, I was told that this was a very simple Bill and that there would be no problems. I asked a Member from the other side of your Lordships' House whether he was coming in to debate this Bill and he said, "No, it is quite a simple Bill". Having listened to the contributions of noble Lords, it is quite clear that the Bill is a legal minefield.
Crofting is simple. Perhaps I may ask one question: what is a croft? Nobody seems to tell us what a croft is within the terms of the Bill. It talks about "crofting communities" and "crofting" this and "crofting" that. A croft is something which belongs to a family and has belonged to it over many years. Over the years, the croft passes as a piece of land which belongs to the oldest son of the family. That has never changed over the years.
What is this Bill trying to do? It is the Transfer of Crofting Estates (Scotland) Bill. I have no doubt that if the Secretary of State fell over a croft, he would not recognise it. What is a croft?
I know from experience that when a European grant was given to the outer islands and the islanders had to produce a programme to justify the European input, I saw places where people were out hammering in fences to enclose nothing and that was called a croft. They were doing that because they were getting a gift from the European Community.
In terms of this Bill, we must look at where we are going in relation to crofting because there are no cows and very few sheep in the islands and I presume that the object of this Bill is to establish some sort of community behind the crofting counties. Indeed, the Long Title of the Bill states that it is:An Act to enable the Secretary of State to dispose of his crofting estates and certain other property of his in the crofting counties to approved crofting bodies".We have heard various contributions from Members of your Lordships' House and I have no doubt that they will be taken into account in due course. I do not intend to go through them at all. But this is not a simple Bill. I believe that the Members of the Select Committee are to go to Inverness and Skye, but that may not be right. However, I give notice to your Lordships that in Committee we shall have quite a fight about this Bill. At this stage, I merely thank those noble Lords who have contributed to the debate. We cannot talk sensibly about the Bill until we have been to see what a croft is, and in Committee we shall be able to discuss the whole 901 matter in depth. On this side of the House we accept the Bill in principle, but we shall await its later stages to examine the various qualities of the legislation.
§ 5.20 p.m.
The Earl of Lindsay
My Lords, we have had a most interesting and constructive debate. I am grateful to all noble Lords who have taken part for the positive approach that they have taken and, indeed, for the welcome they have given to the general principles of the Bill. I also welcome the fact that this House will be able to apply its close and expert scrutiny not only within the Chamber itself but also through the evidence-taking in Scotland. The noble Lord, Lord Sewel, my noble friend Lord Sanderson, and other speakers have welcomed the fact that we shall be in the right part of Scotland. We shall be in one of the crofting counties, taking evidence from those crofters and crofting organisations who want to submit evidence. That can only help the general scrutiny and enhance any of the improvements which may be engineered into the Bill.
I shall address some of the concerns that have been expressed and see to what extent I can reassure those noble Lords who have raised queries. The noble Lord, Lord Sewel, mocked the amount of time that it has taken to get to the point where we now find ourselves. However, I believe that the contributions from my noble friends Lord Campbell of Croy and Lord Sanderson indicate just how far Scottish Office Ministers of all parties have worked over the years to bring forward reforms relevant to the Secretary of State's crofting estates. The pace of progress may have disappointed some. That has rarely been because Ministers were not enthusiastic to press ahead; it has been the need for consensus with the crofters which has been the vital determinant of the speed that has been set.
We especially welcome the Second Reading of this Bill because it indicates the extent to which consultation has begun to build consensus around the general principles which lie behind the Bill. Only a lawyer would call the Bill a legal minefield. To a lawyer, a legal minefield is, of course, a dream. Therefore, I was not surprised to hear the noble Lord, Lord Macaulay, rush to give the Bill such a label. No doubt his profession will be looking forward, if his description is true, to a vastly more prosperous future. I do not believe that there is any justice in that remark whatever.
A better analysis was given by the noble Lord, Lord Sewel, and other noble Lords when they described the challenge which the Bill addresses full in the face. We cannot achieve a single blueprint—nor should we try to—through the Bill. We are seeking to address circumstances which differ from township to township, from district to district and from estate to estate. The Bill will enable a mechanism to be sensitive to those varying circumstances. I, for one, can assure the House that we are not setting out to devise a legal minefield. I hope that that does not come as a disappointment to the noble Lord, Lord Macaulay.
Various general points have been made with which I shall deal before addressing the exact text that has attracted attention. The noble Lord, Lord Sewel, was 902 perhaps disappointed that the powers vested in the Bill only relate to the Secretary of State. I remind the noble Lord that all crofters already have the right to buy. Therefore, they already have the right to exercise voluntarily a change over their own land tenure status. I also remind the noble Lord that there are private landlords who have worked with their crofting communities to allow them either to buy or simply to take, at no consideration at all, the freehold of their own areas. In addition, the local rural partnerships, of which the noble Lord is aware, are part of another initiative we have in those areas which is available to crofters and which can deliver a level of enhanced opportunity. It should always be pointed out—I am sure all noble Lords are aware of this—that not all crofters are anxious to take on or to seize their own freeholds. Indeed, some are most content with the status quo. We fully respect that fact.
The contribution made by my noble fried Lord Campbell of Croy was especially important because of his involvement over the years in crofting legislation. My noble friend described the energies that he put into the crofters' forestry Act in this House. I was delighted that my noble friend drew attention to that fact, because I was involved last year in the launch of one of the initiatives which that Act enabled with crofters on Lewis. The Act has led to an interesting range of opportunities for crofters working with forestry. The efforts which were made in the 1970s, first, by my noble friend and then by the party opposite, helped bring forward improvements at that time. However, we now realise that we must go much further.
As regards Clause 1, my noble friend Lady Carnegy and the noble Earl, Lord Mar and Kellie, queried the reference to other properties and other lands. I remind them of the reference I made in my opening remarks to those non-crofting holdings of the Secretary of State which have come about through various land holdings Acts. They are managed in a similar way to crofting estates and can, in many ways, be treated in a similar fashion to crofting holdings. As I said, the land in question was acquired under the various land holdings Acts. In a sense, it is only historical accident that it is not, strictly speaking, labelled as crofting land. Therefore, we believe that it makes sense to have the necessary power to transfer those lands to community trusts or to crofting trusts. I mentioned specifically the fishermen's holdings in Lewis. In addition, I mentioned the other small areas of grazing which are connected with townships or communities but which may not have earned the label of "crofting grazing".
The noble Earl, Lord Mar and Kellie, asked about land outside crofting counties which belongs to the Secretary of State. Those holdings were acquired under the same land holdings Acts. Most have already been sold to sitting tenants. The rest are available for sale at discounted prices to those sitting tenants if they wish to purchase.
Clause 1 also deals with the sporting and mineral rights. The noble Viscount, Lord Thurso, and other speakers alluded to that part of the Bill. The noble Viscount is correct to say that the flexibility available with regard to the disposal of rights would allow the 903 Secretary of State to be fair to all parties in dealing with sporting rights and other rights, such as mineral rights. It would enable circumstances, such as those which relate to Strathy Point, to be carefully considered. There is no wisdom or sense in imposing a single solution on all such differing rights across the various estates. Each will be dealt with according to the circumstances of the case in which it arises.
The most interesting part of our debate revolved around Clause 2. I echo what the noble Viscount, Lord Thurso, said about the importance of the work that is done in fashioning the trusts that come forward and about how important it is that they should have a real prospect of achieving viability. Much advice has already been taken and advice remains available to all such townships, all crofters and all districts through the Crofting Trusts Advisory Service. The crofters who have approached the service have, I believe, considered matters most carefully. The CTAS allows potential trusts to gain advice from the best experts available, including those, for example, who were involved in the Assynt project. Therefore, just to take one example, both experience and formal advice are available through the CTAS.
The noble Lord, Lord Sewel, posed the interesting point about whether a specific level of local support should be demonstrated or proven before a transfer can take place. As with all other aspects of the detail of transfers, we want to retain flexibility for the sake of the crofters themselves as much as for anyone else. We do not feel it right that a specific percentage—be it 51 per cent. or 75 per cent.—should be laid down on the face of the legislation. It is better that the Crofters Commission studies an application put forward by any group, and that the Secretary of State then has the power to consider both the evidence that has been provided with the application and the advice of the Crofters Commission. He should then be able to make a judgment as to whether or not the interests of the crofters concerned will be best represented by a transfer to a particular trust. We see no merit—and we do not consider that there would be any incentive—in forcing trusts on to unwilling crofters. We believe that the power to object about a proposal to the Crofters Commission and the Secretary of State will enable the Secretary of State and the commission to take fully into consideration the feelings of those who consider that a proposal will not properly represent the interests of those involved.
The noble Earl, Lord Kintore, asked about the fate of a crofter in a crofting area which elects to become a trust who does not want to be a member of the trust. We believe that individual crofters cannot simply opt out, but they can always elect to buy their crofting freeholds. Therefore they have other options available to them if, for instance, they are unhappy with a change of landlord from the Secretary of State to a crofting trust. In a sense that matter relates to a point raised by the noble Lord, Lord Sewel. We would happily leave such matters to be finalised on a case by case basis by the Crofters Commission and the Secretary of State when he exercises his judgment.
904 The noble Earls, Lord Mar and Kellie and Lord Kintore, also asked if there was a time limit on transfers. That is not the case. Once this Bill becomes an Act a transfer will be able to take place at any time. A number of years may pass before a group of crofters decides on their application. They will receive help on establishment, as I made clear in my opening remarks. Certainly we do not seek to hurry them nor do we seek to force them down this route. The noble Earl, Lord Mar and Kellie, asked what would happen if no trust came forward. As I have said, there is no compulsion on crofters on the estates of the Secretary of State to opt for trust status. They may continue as they were hitherto.
The noble Viscount, Lord Thurso, suggested that the Secretary of State had been a reluctant landlord and that the crofters may have been reluctant tenants. That is not so in either case. It is because the Secretary of State has been a good landlord that efforts to empower crofters on his estates in the past have come to nought. The Secretary of State supports crofting both within and beyond his estates with a range of initiatives and a range of grant schemes. The extent of that support is hardly indicative of reluctance on his part as a landlord. I believe it was my noble friend Lord Sanderson who said that the Secretary of State had in general been a good landlord. I refer, of course, to successive Secretaries of State.
I believe my noble friend Lord Sanderson also referred to the interesting point made by the noble Lord, Lord Sewel, as regards what would happen if trusts proceeded to sell off the assets that they had gained through taking over the freehold from the Secretary of State. Essentially that would be a matter for the trusts themselves. Trusts will no doubt consider carefully the effect of selling or leasing land. The loss of land will need to be weighed against the possible benefits, for example the benefits of providing a source of money to undertake development projects in the interests of a local community, or to create new employment prospects for that local community. However, crofting legislation provides protection for the crofting interest as the land remains in crofting tenure unless the landowner—in this case that is the trust itself—successfully applies to the Scottish Land Court to have it resumed. That is an important safety net. In considering applications for resumption, the Scottish Land Court must be persuaded that the resumption is required for some reasonable purpose in relation to the good of a particular croft, the estate as a whole, or the public interest. There is already in existence a strong counterbalance which may well be sufficient to prevent foolish development being pursued.
The noble Earl, Lord Kintore, and the noble Earl, Lord Mar and Kellie, both asked about the circumstances which would ensue if a trust became bankrupt. First, we do not expect that to be a problem, certainly not immediately, because we and the Crofters Commission will seek to ensure that a proposed trust has a sound financial base before any land is transferred. We are not in the business of seeking to sell dodgy goods on the doorstep. We are anxious that any crofting community that seeks to exploit the opportunities of this legislation does so on the basis that the proposed trust 905 will be a viable trust. We and other advisers would seek to dissuade a community from pursuing a proposal which does not appear to be financially viable.
The noble Lord, Lord Sewel, was interested in the imbalance that he perceived between rights, such as sporting rights and mineral rights, which may be transferred and burdens, such as the maintenance of the fabric of certain estates, that will be transferred. The conditions of transfer of trusts and the transfer of rights and burdens will be negotiated and agreed in each individual instance. We have made clear that we wish to ensure that trusts are able to take advantage of the sources of income that are relevant to those areas. Similarly, in negotiating or agreeing a trust, we would not wish to impose burdens on any trust which would render it less than viable, or bankrupt, from the very start. We have given assurance after assurance that we do not want to see a trust becoming established and then heading straight for financial ruin. That is not the purpose of this policy. Each case will be considered individually and we hope that will ensure that viability will ensue.
I believe it was the noble Viscount, Lord Thurso, who asked about the costs that might arise from a claimant seeking compensation in the Scottish Land Court against the Secretary of State on, for example, the rights of pre-emption. I remind the noble Viscount that the Scottish Land Court has the power to award costs as it sees fit. In addition, as the noble Viscount knows, the Scottish Land Court is a low cost route to justice. Therefore I hope that the concern the noble Viscount may have on that matter will not be realised. The noble Viscount also asked about specific expenses accruing to the Secretary of State against the income of these estates. In general terms the Secretary of State's crofting estate costs something in excess of £200,000 per annum to maintain. There is a total expenditure of around £370,000 per annum and a total income of approximately £165,000 per annum.
As my noble friend Lord Sanderson stressed, the best way to approach the initiative is to see the estate broken down into separate townships or districts and to treat the viability of those townships or districts individually. That is the viability that we shall seek; it is the viability that the trusts will seek.
The noble Earl, Lord Mar and Kellie, said that one of the objectives is to save a considerable amount of taxpayers' money. The noble Earl is absolutely wrong. First, we are not saving a considerable sum of taxpayers' money. The funds required to help the trust become established will outweigh any savings in the early years. Secondly, public expenditure being what it is, a net cost of £200,000 is not a sufficient sum on which to build a policy to achieve substantial savings.
I hope that the concerns expressed have been met by some of the reassurances that I have given. I hope that the thinking underlying the Bill is somewhat clearer to those noble Lords who were uncertain prior to Second Reading. Following the debate, I shall make available notes on clauses. They will give further clarification on the details of the Bill. I look forward to the discussions that we shall have in Scotland, on taking 906 evidence, and in the House through the various stages of the Bill, in clarifying what will be best for the crofters. We wish to give the Scottish Office's crofting tenants an opportunity to take advantage of the benefits which ownership of land can bring. The Bill is designed to achieve that.
I thank all noble Lords who have taken part in the debate. I commend the Bill to the House.
On Question, Bill read a second time.
The Earl of Lindsay
My Lords, I beg to move that the Bill be committed to a Scottish Select Committee.
§ Moved, That the Bill be committed to a Scottish Select Committee.—(The Earl of Lindsay.)
§ On Question, Motion agreed to.