HC Deb 15 April 1878 vol 239 cc1351-6

Order for Committee read.

GENERAL SIR GEORGE BALFOUR

complained that the Act of 1875 had not been complied with. The House was entirely ignorant whether there was any just cause for the large extent of these loans, and he maintained that the Government were bound to give some explanation. The next point he had to complain of was that the same Act required the publication of the accounts and the laying of the same before the House. At present, the Local Government Board admitted that that portion of the Act had not been complied with. The Report of the Public Works Loan Commissioners had been kept back so long that the House was not in the possession of information which it ought to possess in time to discuss the Report. Another point he had to complain of was this. Last year the Public Works Loan Commissioners received in excess no less than £30,000, and that remained outstanding until the 31st of March. That was an evil which ought to be remedied. The Audit Act required that all sums of money for any local authority should be submitted to examination. In the case of the Public Works Loan Commissioners, that had not been done; and, therefore, he did earnestly hope that the statements he made, which were well-founded, would be investigated. A sum of £18,000,000 was directly involved; and he maintained, therefore, that the complaints which he made ought to lead to inquiry.

MR. SCLATER-BOOTH

said, that the attention of the Public Works Loan Commissioners would be drawn to the statements of the hon. and gallant Gentleman. There was an elaborate Report published last year of the transactions of previous years. It was not so full, perhaps, as it might be; but if it was necessary to go back into previous years, no doubt, that would be attended to on another occasion. Not only would these demands be laid on the Table of the House, but an Estimate, founded on the demands made, should be presented to Parliament in order to found a Bill.

Bill considered, in Committee.

(In the Committee.)

Clauses 1 to 3, inclusive, agreed to.

Clause 5 (Cancellation of debt due in respect of Wigan Church).

MR. RYLANDS

asked for some further information respecting the loan which was advanced for the purpose of building or restoring the parish church at Wigan. The point he wished to raise was, that there seemed to have been a delay of several years, during which period the Public Works Loan Commissioners took no steps in order to enforce the payment of a sum of public money from the churchwardens of Wigan.

SIR HENRY SELWIN-IBBETSON

said, he would state in a few words what happened in the case of the Wigan loan. The amount of the original loan was about £4,540, of which three instalments had been paid. After the third instalment, it seemed that the parish authorities ceased to make any further payments, and a correspondence passed between the Public Works Loan Commissioners and the parish authorities, the latter asserting that their area of rating, having been diminished, owing to the creation of district parishes and separate townships, they were, or ought not to be, held liable for the amount that had been lent to a very different district. This correspondence seemed to have gone on for a considerable period, for it was not until 1867 that legal proceedings were first taken against the parish with a view to the recovery of the outstanding debt. The case was first tried in the Court of Queen's Bench, and the defendants, through their counsel, argued upon the facts which they had previously set out in their correspondence with the Public Works Loan Commissioners. They argued, also, that the period for which the loan had originally been granted had lapsed, and that, consequently they were no longer liable. Judgment was given against the parish authorities, but they carried their appeal from that decision to the Court of Exchequer. The appeal was heard in 1874, and the judgment of the Queen's Bench was reversed. The case was then carried to the House of Lords, who confirmed the reversal of the decision of the Court of Queen's Bench. The effect of that final decision was to make it impossible to recover any of the money, and hence the necessity for the clause introduced into the Bill of the present year.

GENERAL SIR GEORGE BALFOUR

said, the question had not been properly stated. It was a fact, that from 1857 to 1863, nothing was done with regard to this loan. At the time it was granted, the Treasury was made responsible for the collection of all loans. The question which the Committee had to consider was this—that they were losing very considerable sums of money. He might say that they had struck off £1,000,000 or £2,000,000 as dead loss on account of those loans, from first to last, and they had no security that these losses were not going on at the present time. He had looked very carefully into the matter, and he wished to draw the attention of the Committee to the fact that the amount of interest outstanding upon loans in the last three years had been gradually increasing. In the year 1875, the amount of outstanding interest was £311,000; in 1876, it was £338,000; and, in 1877, it was £354,000. He did not mean to say that was all bad interest; on the contrary, a portion of it might be got; but, as far as the House was concerned, they were involved in millions, and they had nothing but a bit of paper to show them whether the Treasury was looking after the funds or not. He contended that many of these loans must be in bad order. It was impossible for the rate of interest to go on increasing from £311,000 to £354,000 in three years, without some of them being in a bad state; and he submitted, that the Act of Parliament required that they should be made acquainted with the whole of the circumstances in connection with these loans, in order that they might judge how they stood with regard to them. [Sir WILLIAM EDMONSTONE: Oh, oh!] The hon. and gallant Admiral cried Oh, oh!" but he (Sir George Balfour) would remind him that a sum of £18,000,000 was directly involved, and recommended him not to accept, as well-founded, the statement that the loan to which attention had been called was the only one in bad order.

MR. DILLWYN

would like to know whether there were many more loans like that in question? [General Sir GEORGE BALFOUR: Oh, many.] Because it appeared to him that they had been sustaining considerable loss, and that loans were given rather indiscriminately. He should like to know on what principle the Exchequer Loan Commissioners acted in making advances of public money. It might be well to grant loans for drainage or harbour works; but he did not think that they ought to be granted except for works of public necessity—not, at all events, on the security of the rates.

MR. SCLATER-BOOTH

said, that the great bulk of the loans now advanced were under the Sanitary Acts, the Artizans and Labourers Dwellings Act, and the Education Act, at low rates of interest. There were also the Harbour loans, which were advanced under a previous Act, at a small rate of interest. Besides these—in former days—the Exchequer Loan Commissioners, who were a different body from the Public Works Loan Commissioners, were empowered to make advances generally for public works; and there was no doubt that, in a great many instances, loans were formerly advanced on the security of the church rates. On the abolition of those rates, no doubt, difficulties arose in many quarters; and, although a power was reserved to the Government, in respect of the recovery of loans which had been advanced on the security of those rates, it was found extremely difficult, where the inhabitants meant to plead the abolition of the rates, to take advantage of that provision of the law. He was not aware that there were any bad debts outstanding at the present time. No doubt, a good many had been struck off, from time to time, by the authority of Parliament; but cases similar to the present could not occur again. There were other advances, which the Public Works Loan Commissioners were in the habit of making, especially advances for the building of workhouses; but all these loans were raised at 5 per cent interest, and had been a profitable investment to the public. No doubt, it would be desirable, before another year came round, to consider whether there ought not to be further restrictions in regard to future loans; but he would point out that, in the event of any restriction upon the issues of the Public Works Loan Commissioners being introduced into this Act, or one of a similar character, it would be doing very little more than the Commissioners themselves did by their own authority, and at the instance of the Treasury, at the present time. What was really required was the adoption, by the House, of something in the shape of a Standing Order, with a view of imparting uniformity to the action of Select Committees in dealing with the money clauses of Private Bills.

GENERAL SIR GEORGE BALFOUR

thought that much of what the President of the Local Government Board had said was well worthy of the consideration of the House; but the right hon. Gentleman was under a mistake in saying that some of the sums now before them were the only ones dropped in 1875. In three years, no less than £20,000 had been struck off the loans which had been granted. He was totally ignorant of any authority having been given by the House for any such amount to be struck off; and, therefore, he would again urge that there should be a clean sweep made of all their bad debts. He by no means contended that they should cease to make advances for useful purposes, because they had acted foolishly in past times.

MR. THOMSON HANKEY

observed, that the Second Report of the Commissioners, which would be ready in the course of a few days, would give a list of all the amounts outstanding.

SIR ANDREW LUSK

wanted to know who was to be held responsible for the granting of these bad loans? In his opinion, any Government was wrong which became traders and lent money in this manner. The principle was bad altogether for a Government to enter into competition in the lending of money.

Clause agreed to.

MR. A. MOORE

proposed the insertion of a new clause to enable the Public Works Loan Commissioners to lend money for the purposes of industrial schools in Ireland. No doubt, everybody was complaining of the enormous amount of expenditure which was at present going on in connection with these loans; but he did not wish to add to their amount by this clause, but merely to include industrial schools amongst the objects for which the loans might be borrowed. He had brought the subject forward last year, when he thought the principle for which he contended was conceded; but such appeared not to be the case, though he must say if the Chancellor of the Exchequer would now consent to this proposal he would confer a very great boon indeed. The increase for educational purposes in England was £200,000 this year alone, as compared with £5,000 for Ireland, and £8,000 for Scotland. Under these circumstances, he thought the Government might well make this concession. Hitherto these schools had been built by private subscriptions, and he knew one instance in which £9,000 was expended. If the Government would consent to lend money for these institutions, it would be coping with pauperism in the best possible manner.

MR. SCLATER-BOOTH

sympathized with the object of the hon. Member, but he had made his proposal at a rather unfortunate moment. There would not be such security in connection with these industrial schools as the Commissioners obtained in respect of other public works to which they advanced money. The hon. Member must feel, after what had taken place, that at present it would not be desirable to add to the number of classes of public works to which these loans might be extended.

Clause negatived.

Preamble agreed to.

House resumed.

Bill reported, without Amendment; to be read the third time To-morrow, at Two of the clock.