PUBLIC WORKS LOANS BILL (No. 365.) (Hansard, 24 August 1889)

§ MR. T. M. HEALY
I wish now to ask the Chancellor of the Exchequer for the redemption of his promise, or, at any rate, for some assurance in regard to this question of interest on loans, which we raised some time ago. This Bill proposes a reduction to Irish landlords of the drainage charges, and I do not object to that reduction; only I do not see why the only reduction should be made in favour of this class. It is quite right that the Chancellor of the Exchequer should make the reduction; it is the natural corollary of the financial measures of last year for the reduction of interest on the National Debt, but I think that we might fairly expect that a reduction made to the richest class in Ireland should also be extended to labourers. I understand that for this to be done it is not necessary to have a Bill at all, and I think now we may expect some assurance on this point. I understand that the money borrowed for artisans' dwellings is obtained at a lower rate of interest than labourers can get it for the erection of their cottages, and I think the least we can expect is that these classes of loans should be put upon an equality. The Chancellor of the Exchequer may raise an objection on the ground of the difference in time of repayment, but I think something may be urged for the humbler and more necessitous class. I would point out, too, that the reduction to labourers 430 would also mean a benefit to landlords, because landlords pay rates on rents under £4, and half over £4. Still, I know the substantial reduction would be for the advantage of the labourers.

§ MR. A. SUTHERLAND
I should like to ask what is the explanation of the difference proposed in the money to be given to the Scotch Fishery Board this year from the amount last year?

§ SIR J. SWINBURNE
I really do not see why the Irish landlords should have the interest on the loans they have obtained from the Crown reduced when, they did not reduce their rents in proportion to the depression in agriculture.

THE CHAIRMAN
Order, order!

§ MR. MURPHY (Dublin, St. Patrick's)
On the Second Reading of the Bill we raised the question of loans for labourers' cottages, and the Chancellor of the Exchequer said he would have to consider this question in connection with loans for artisans' dwellings and other loans. I have since ascertained that loans for artisans' dwellings in England are made at 3⅜ per cent, but in Ireland for loans of the same class the rate exacted is 4 per cent.

§ MR. SEXTON
The interest exacted by the Irish Board of Works has had a very prejudicial effect on the erection of houses for National School teachers in Ireland. There are 9,000 of these National School teachers in Ireland, but as yet only about 600 dwellings have been erected. It is sad to see that men, and women too, have to walk in all weathers a distance of four miles or more twice a day between their homes and the school. A reduction of interest on loans for the erection of these buildings would greatly stimulate the work, and there is no class which more deserves all facilities that could be extended to them.

§ MR. JORDAN (Clare, W.)
I think it is only fair that in Ireland we should have at least as advantageous terms as those extended for artisans' dwellings. Surely these advances for healthy, clean cottages for labourers are in the nature of loans for sanitary purposes. If the Secretary to the Treasury will consider the question, I think he will come to the conclusion that these loans might very well be made at a lower rate than 4 per cent. I think we ought to get them at 3 per cent. We should be able to get the money for this purpose at the lowest 431 possible rate so as to cover the Treasury from loss; and considering the rate at which the Government obtain money and the security offered, I think 3 per cent would do that.

§ THE CHANCELLOR OF THE EXCHEQUER (Mr. GOSCHEN,) St. George's, Hanover Square
Several points have been raised, not all, I think, relevant to the clause before us; but there is one point which has scarcely been noticed fey hon. Gentlemen, and that is that in lending money the Government must look to the security as well as to the needs of the borrowers. It does not follow that poorer classes should pay a lower interest unless they can give a better security.

An hon. MEMBER
They want less money.

§ MR. GOSCHEN
But the question of security is not affected by less money being required. I do not urge this as against Ireland particularly; but it would, I think, be impossible to reduce the rate to any considerable extent without serious prospect of loss. I hope we shall avoid controversy on the point as regards Ireland particularly. The proposal in the Bill does not rest on the reduction of the rate of interest on the National Debt, but on the fact that we think, in this matter, some concession is due to the landlords whose rents have been largely reduced by the action of the State. The landlords have a special claim, and I am glad that hon. Members from Ireland do not, at least strongly, object to that claim. In dealing with the labourers' claims they ought not to be compared with the landlords' claims, but with the cases of loans for similar objects elsewhere than in Ireland. Since the question was last raised, I have been engaged in examining the Artisans' Dwellings Act and other Acts of the kind to see what could be done with regard to advances for labourers' cottages in Ireland. But a problem of this kind cannot be settled in a day or two—busy days, too, as they have been since the point was raised. Each concession raises a number of claims for other concessions, and therefore it is necessary to consider the proposal in its bearing on other proposals, to which, if adopted, it might give rise. It is not necessary to have a clause in this Bill to effect the object hon. Members have in view, as 432 the Treasury have power to reduce the interest on the loans for labourers' cottages. With regard to artisans' dwellings loans, the interest is 3⅓ per cent only when the money is repaid in 20 years. The interest is 3¼ or 3½ per cent for a longer period. It is true that in the ease of loans for labourers' dwellings there is the security of the rates, but in the English Act it must be remembered that you have the security of the houses themselves as well as the rates. It is on that account that the Royal Commissioners recommend that the reduction should be made. I wish to approach this subject in a benevolent spirit, and if I can see my way, without injustice, to make some reduction, I shall be glad to give the matter my most favourable consideration. I cannot, however, make a promise in the matter offhand. I hope what I have said will be, in the main, satisfactory to hon. Members. I do not see that any reduction that is made should go straight into the pockets of the labourers. There are other people equally deserving of consideration; but, as I have said, I will undertake to consider the matter.

§ MR. MURPHY
The right hon. Gentleman has not touched on the point I raised, namely, the disparity between the rate of interest on loans for the erection of artisans' dwellings in England and for a similar purpose in Ireland. In England the rate is 3⅜ per cent, whilst in Ireland it is 4 per cent. I do not want any pledge from the right hon. Gentleman at this moment, but I ask him to look into this disparity. It should be borne in mind that not one single shilling has ever been lost in connection with these loans in Ireland.

§ MR. GOSCHEN
I will undertake to make inquiries on the point, and if there really is a grievance I will see whether it admits of remedy.

§ MR. A. SUTHERLAND
I would point out that in a former year the Fishery Board in Scotland granted £11,000 in loans to fishermen. The loans for next year are, however, estimated at £25,000. I wish to know what is the reason of this increase?

§ THE SECRETARY TO THE TREASURY (Mr. JACKSON,) Leeds, N.
I may explain that power will be given under the Bill to grant loans up to £25,000. The sum need not be expended unless circumstances re- 433 quire that the power should be exercised. Because £11,000 has only been spent in one year it does not follow that more may not be required in another.

§ SIR J. SWINBURNE
I think there is ground for complaint that in the case of English landlords the rate of interest charged on loans is not to be reduced. The argument of the Government is that the rate should be reduced for Irish landlords because their rents have been reduced judicially. But English landlords have reduced their rents voluntarily to an equal, if not greater, extent. Because of their' own motion they have done what is fair and just no favour is shown to them. Land in England is quite as good security as land in Ireland. [Crits of "Order!"] English landlords have reduced their rents by 20 per cent, yet the interest paid by them is not to be lowered. [Cries of "Question."]

THE CHAIRMAN
I must point out that the hon. Member cannot discuss the question of the rate of interest charged to English landlords, as the clause refers exclusively to the case of Ireland.

§ SIR J. SWINBURNE
The clause does not appear to apply altogether to Ireland.

THE CHAIRMAN
It refers to landed proprietors in Ireland alone.

§ MR. PENROSE FITZGERALD (Cambridge)
I desire to point out that I think it is somewhat hard that landlords who have borrowed money after the year 1881 should be excluded from the proposed benefits of the Bill. Immediately after the passing of the Land Act of 1881 hundreds of landlords in Ireland borrowed money in times of great distress with the object of doing the best they could for their small tenants and labourers. So far as I can see, you exclude those landlords. If this class of borrowers are not permitted to share the benefits to be conferred by the measure, I think great injustice will be done to a body of men who deserve better treatment. I would ask the Secretary to the Treasury whether the words of the clause are or are not intended to exclude a class of loans of a 434 particular kind? If they are not, I shall raise no further objection.

§ MR. JACKSON
The hon. Gentleman is right in assuming that the clause is intended to limit the Bill to loans not which were made before 1881, but which were sanctioned before December 31, 1881. The Bill will, therefore, apply practically to the cases of loans granted during the next two or three years, because, as the hon. Member no doubt is aware, loans are sanctioned some considerable time before they are granted.

§ MR. GOSCHEN
I move to omit Clause 5, in order that it may be re-cast and made to apply to future loans only. It has happened that loans made to tenants upon their personal security only have been lost. This has happened when tenants have been evicted, or have left their holdings, the State having no right to redress from the landlords. The object of the Government is to attach liability to the landlord in such cases. The principle of the clause when enacted will be that the State shall not fall between two stools.

§ MR. MAURICE HEALY
I do not understand the distinction the Chancellor of the Exchequer draws between existing loans and future loans. In the case of a future loan, as I understand it, it will be competent for the tenant without any privity on the landlord's part to give up the property, and, therefore, the landlord may or may not become liable for the loan. I do not think there is any difference in principle between the past and the present in this matter; The Chancellor of the Exchequer says that in future the landlord shall have notice of a loan before it is made to a tenant. I presume he does not mean that the landlord shall have the power to veto a loan.

MR. PENROSE EITZGERALD
I hold that it would not be fair to saddle the holder in fee with an obligation that may have been contracted by a tenant without the landlord's sanction or knowledge. The clause as it stands is an attempt to reverse a decision of the Court of Appeal in Ireland, and I am 435 therefore in favour of leaving it out of the Bill.

§ MR. T. M. HEALY
It seems to me that we have got into very shallow water. A wide question has been opened up by the Chancellor of the Exchequer. I examined the Paper this morning to see if there was any proposal on it by the Government for the alteration of the Bill. There was none; but now it seems the landlords are to be able by evicting the tenants to grab all their improvements. ["No, no!"] Yes, that is so. My suggestion is this—the loan is granted in the dual interest of the landlord and tenant. ["No, no!"] Well, assume that the tenant is granted a loan on his own security. The State think that they should have the security of the landlord, too. Now it is proposed that if the landlord evicts his tenant, the State is to be at an entire loss and the landlord at an entire gain.

§ MR. GOSCHEN
The omission of the clause will leave the law precisely as it stood before.

§ MR. T. M. HEALY
Yes, but that is the very thing we object to. The tenant borrows, say, £500, and builds a house with it; the tenant is evicted; the landlord becomes the owner of a house for which he has never paid a farthing, and the State loses its money. This is a defect in the law which this clause has been proposed to remedy, and I cannot conceive that it is inequitable to say that if the landlord takes over the property, he should also take over the liability to pay for it. The decision the hon. Member opposite has referred to is not material—it is the principle which is material. The point is that at present the landlords, by evicting the tenants, thereby become possessed of the property which has been created by State money, and that without the State having any lien upon it. The Chancellor of the Exchequer admits that, and he admits that there should be some change in the law which will make a distinction between what he calls present and future contracts. He says that the principle of this clause should only apply to future loans. I say that that is a distinction which cannot be defended. Why should the provisions of this clause apply to future loans, and not to past loans? Future loans as well as past loans will be made solely to 436 tenants; they will, therefore, be made without the landlord's privity and consent. The Chancellor of the Exchequer says they will only be made after notice to the landlord; but what is the good of notice to a landlord if the State cannot interfere? Does the right hon. Gentleman say that in the future no loan shall be granted to a tenant without first giving notice to the landlord, and giving him a veto in the matter?

§ THE SOLICITOR GENERAL FOR IRELAND (Mr. MADDEN,) Dublin University
The enactment of this clause would not confer the slightest benefit on the tenants in Ireland, nor would its omission have the effect which hon. Gentlemen opposite anticipate. If it is omitted, the law will simply be left as it is. The objection to the clause is that it would interfere with existing contracts in such a way that when the attention of my right hon. Friend the Chancellor of the Exchequer was called to it he saw at once that it would be unfair to persons who were not parties to the original transaction.

§ MR. T. M. HEALY
The hon. and learned Gentleman's remarks remind one of the famous direction once given to a Solicitor General for Ireland, to speak for a quarter of an hour and say nothing. The hon. and learned Gentleman cannot defend the proposition of the Government. In the past landlords have been able to steal the improvements of the tenants and the money of the State, and the proposal now made is that they shall be allowed to remain in possession of their plunder. The Solicitor General for Ireland says the omission of the clause will leave the law as it is and will do no harm to the tenant. Does it not give the landlord a temptation to evict? Is it not an invitation to evict? I am surprised that without notice to anybody this attempt should be made to drop the clause, especially as the Second Reading of the Bill was practically passed sub silentio, the only speech delivered on it being one by myself. We will not stand by and see the State swindled in the interests of the landlords and see an additional incitement given to the landlords to evict. I am amazed that such a proposal should have emanated from the Government.

§ MR. SEXTON
I must say that this affair has an exceedingly ugly aspect. Whilst, on the one hand, the Government have stimulated evictions, in Ireland, on the other, if this clause be omitted, the landlord will be tempted to proceed with evictions because he will not be liable to repay to the State the advances expended in improving the holding. It appears to me quite clear that there is a conspiracy in progress. I never in my experience heard such a proposal made by the Chancellor of the Exchequer, who is supposed to be the guardian of the interests of the State. The whole proceeding has been exceedingly furtive. It was only by chance that the nature of this proposal was discovered, and I say this clause must remain in the Bill. If the State lends money to be spent on a holding and the tenant is evicted, the land should be liable for the repayment of the taxpayers' money which has been expended. I protest against this proposal, and, to begin with, I move, Sir, that you report Progress.

§ MR. GOSCHEN
Really, I think hon. Gentlemen opposite are making a mountain out of a mole-hill. If the clause be omitted, the whole matter will remain open for future legislation. The only objection I take to the section is that it is retrospective, and therefore it will be unfair. There is really nothing surreptitious in withdrawing a clause which is contrary to a principle which is generally accepted in this House, namely, that measures should not be of a retrospective character. I trust that hon. Members will not think that any bargain has been made between the Government and anybody else in the matter.

§ MR. T. M. HEALY
It is useless arguing with us. We will not give in on this point. I regard the proposal as one of the most monstrous that has ever been made. I say the tenants will suffer.

THE CHAIRMAN
Order, order! The hon. Member cannot discuss the merits of the clause on the Motion to report Progress.

§ MR. T. M. HEALY
I recognise that, Sir John Gorst, and, therefore, will not do so. Certainly, if ever a Motion was justified, it is a Motion to report Progress to enable the Government to bring forward alternative proposals. We have been kept here very late for several days. The Speaker has been kept here very late, and the officials of the House and everybody concerned are practically in a state of exhaustion. Under these circumstances, we have sprung upon us a proposal which we regard as striking a death-blow at the tenant's interests. I shall oppose it to the uttermost. I was going to leave for Ireland to-night, but I will stop here and give up my engagements in Ireland for next week rather than see the clause struck out of the Bill.

§ MR. GOSCHEN
If we can remedy the retrospective character of the clause that is all we desire. We will consent to report Progress, and I will endeavour on Monday to see whether we can deprive the section of its retrospective character.