§ *(4.20.) MR. A. J. BALFOUR
I rise to move for leave to bring in a Bill to provide further facilities for the purchase of land in Ireland; for the improvement of the condition of the poorer and more congested districts; and for the constitution of a Land Department. I shall have, I am afraid, in the introduction of this Bill, to tax so severely the patience and attention of the House that I shall not waste any unnecessary time in arguing the point as to whether it is or is not a desirable policy to increase the number of occupying owners in Ireland. The truth is that on that question every Party in this House, every statesman of eminence, and the public generally have long made up their minds. Twenty-one years ago, at the time of the disestablishment of the Irish Church, the first practical effort was made to carry out this policy—a policy which was continued by the Act of 1870; it formed part of the special Land League programme of 1879, and it was aimed at by one at least of the clauses of the Act of 1881. I recollect that a Resolution urging the blouse to give further facilities on the subject was brought forward in 1883 by 1697 my noble Friend, now First Lord of the Admiralty, and was seconded on that occasion by myself, then sitting below the Gangway. That was followed soon after by an abortive attempt at legislation on the part of the right hon. Member for the Bridgeton Division (Sir G. Trevelyan) in 1884. The first Ashbourne Act was passed in 1885; the second Ashbourne Act was passed with general consent in 1889. We have, therefore, opinions expressed by individuals, and sanctioned by Parliament, extending over 20 years in favour of some measure of the kind which I now propose to introduce. I think there are on both sides men who view with some disfavour any policy which might remove from rural social life the landlord class. I myself have great sympathy with their views. I believe that in England and Scotland the landlord class are not only a valuable social element, but that they contribute materially to the well-being of two other classes of the community engaged in the cultivation of the-soil. I believe without the landlord class it would not be possible for the labourers through the mere competition of the market to be so well housed, so well paid, or so well provided with allotments; and I do not believe that the farming class would be so prosperous had they been obliged not merely to provide the working capital for farming their land, but to do that which in England and Scotland is done invariably by the landlord, namely, to provide the fixed capital also. But these three functions of the landlord class are fulfilled far less effectually in Ireland than in England It has not been the practice in Ireland for the landlords to supply either permanent improvements or dwellings for agricultural labourers to any large extent, and in regard to those social duties to which I have alluded they have been absolutely deprived in many parts of Ireland by political events, to which I need not further refer, from exercising the beneficial influence in their neighbourhood which is happily exercised by their brethren in England. Well, for this and other reasons it is eminently and specially desirable that we should endeavour to increase the number of occupying owners in Ireland. It is fortunate for us that, difficult as that problem is, it is far easier for two reasons 1698 than it would be in the case of England or Scotland. These two reasons are that the price of land in Ireland is, and has been, far lower than in this island. Therefore, it is possible to give far greater advantages to the purchasing tenants than it would be here; and the second reason is that the security of an Irish holding is almost sure to be relatively better than the security of an English or Scotch holding, because it includes not merely what the landlord has to sell to the tenant, but upon the tenant right, which the tenant already possesses; while in England and Scotland, as the landlord is the owner of all the improvements, there is no tenant's interest to serve as a collateral security. With these short preliminary observations, I will come at once to the Bill, premising that if I do not make its provisions clear to hon. Gentlemen it is, in part at least, because we have to deal with a land system the most difficult and complicated in the world. In Ireland, I believe, you have tenures unknown in any other part of the world, for example the cases alluded to in the debate the other night, in which agricultural land is held at a full rent in perpetuity. You have in Ireland cases in which as many as five separate persons are concerned in the ownership of the land, beginning at the bottom with the tenant and ending five removes off with the head landlord. You have a condition of things in which many estates are encumbered almost hopelessly; and as if this was not enough, you have besides the chronic difficulty presented by the congested districts. In explaining the Bill it may be convenient to begin with its last part, namely, the constitution of the Body by whom the measure will be administered. Some members of this House familiar with the present condition of Irish land legislation may be aware that there are no fewer than five Public Bodies at this moment in Ireland concerned with the valuation of land, the sale of hind, or the lending of money on land. You have the Landed Estates Court, the Commissioners under the Act of 1881, the Commissioners under the Act of 1885, the Commissioners of Valuation; and, finally, the Board of Works, one of the multifarious duties of which is that of lending on the 1699 security of land money advanced for improvements and of collecting the instalments from the borrowers. We propose in this Bill to amalgamate all those various Departments in one Department, called the Land Department, and to this Body we shall entrust the administration of the Act, employing as its first members those who have so ably fulfilled their respective functions in the various Departments which I have just enumerated. I shall not delay further with that part of the Bill; it will be fully discussed afterwards. It will be enough for the House at this stage to understand that part of our proposal is to effect the amalgamation of the different Bodies which are side by side carrying on without mutual knowledge similar functions, in itself a reform of no small magnitude. Having explained that in a few words, let me now come to the main body and substance of the Act itself. Perhaps I best approach the consideration of this difficult subject by stating the main problems we have to solve, and giving our general solution of them before I attempt to explain the particular method by which that solution is to be carried into effect. The first question, therefore, is, ought the Land Bill to be compulsory? The House is aware from what has been said elsewhere that the answer we give to that question is in the negative. In our opinion, the Land Bill ought not to be compulsory. And I can give reasons to the House, which I think will convince them, that the conclusion we have arrived at is the right conclusion. In the first place, it will be admitted that compulsion should be used very sparingly for any purpose. Nothing but necessity justifies it; though no doubt where necessity exists it should always be applied. In the second place, I think it will be admitted that the compulsion cannot be one-sided. You cannot oblige the landlord to sell without at the same time obliging the tenant to buy. To compel the landlord to sell would in many cases produce a sense of injustice in the landlord; and to compel the tenant to buy might be used by the tenant at a subsequent stage as an excuse for not paying the instalments, the payment of which he could represent himself as having been forced against his will to undertake. The third reason is that, if you have a compulsory sale, you must have a 1700 system of compulsory valuation as between buyer and seller, tenant and landlord, and neither one party nor the other will be content to accept the decision of the tribunal you will be obliged to establish. The seller will invariably think that he is made to sell at too low a price, and the buyer that he is made to buy at too high a price. The fourth reason which I give for not making the Bill compulsory is, I think, more conclusive than any of the others. You cannot make the Bill compulsory without making it applicable to all Ireland; and if you are going to do that, you must have funds at your disposal sufficient to buy the whole of the land of Ireland, and there is, in my opinion, no possibility of providing at once for such an enormous transaction as the transfer of the whole of the land of Ireland for the existing owners to the existing occupiers without straining British credit to a degree which neither the House nor the country would tolerate. The second preliminary problem we have to solve is this: ought we or ought we not to throw any risk upon the British taxpayer? On that question I again give the answer, No. I lay down the general principle that it is not only inexpedient but impossible to ask the British taxpayer to risk anything in order to carry out the great object of increasing the occupying owners in Ireland. I think we must all admit, however right or desirable such a course might be in the abstract, at the present stage of the controversy it is impracticable. I cannot suggest—I cannot take upon myself the responsibility of suggesting—any proposal which would throw any burden upon the taxpayers of the country. Well, Sir, the third question which I put to myself is this: Is British credit—by which I mean the power of the British Exchequer to borrow in the market—is that to be used to carry out our object or not? As I have answered the two previous questions in the negative, I must answer this question in the affirmative. I will explain to the House at a later stage how this third condition may be made entirely harmonious with the second condition; but in the meanwhile let me say that without the use of British credit it will be impossible by any system of land purchase to give that immediate advantage to the Irish tenants which they have 1701 hitherto received from the schemes from time in time sanctioned by this House. Neither do I see my way to provide, under such conditions, any fair method of paying' the landlord. In the third place, if that is not done, your scheme will be so much waste paper, for, unless you give fair payment to the landlord when he sells, he will refuse to sell; and unless you give some inducement to the tenant to buy, he will refuse to buy, and thus the whole labour of the House in trying to contrive a scheme of land purchase would be thrown away. I pass now to my fourth problem: Are the congested districts to be dealt with in the Bill or are they not? We answer that question in the affirmative. They are to be dealt with. We admit that the congested districts present the most difficult of all the problems connected with Irish land and Irish society. But while they are the most difficult, they are also the most important. If we do not deal with it, we would be guilty of omitting that problem which, of all others, requires to be dealt with. The fifth problem I have to state is this: If the congested districts are to be dealt with, are they to be dealt with precisely in the same way as the rest of Ireland? To that question I answer, No. The congested districts have special difficulties and needs of their own. The Bill, therefore, will require modifications and additions before it can be made appropriate to the treatment of the particular evils under which they suffer. The sixth and last problem which I need mention now is: Are we, in providing advances to the tenants for the purchase of their holdings, to adopt the plan that was adopted in all the earlier schemes—in the Bright Clauses of 1870, in the Land Act of 1880, and in the Bill of the Member for Bridgeton in 1884—namely, that of advancing to the tenant of only a fixed proportion of the price of his holding? We have decided that we will not adopt it It is not adopted in the Ashbourne Act, and we see no reason for adopting' it now. But we do adopt another plan. We do not think it necessary to advance towards acquiring any holding more than 20 years' purchase of its net rent Where it is sold for more than 20 years' purchase, in Such cases we think we have done enough in contributing 20 years' purchase towards the total price, 1702 and that it is no hardship on tenants who have a tenant-right probably at least equal in value to the property of the landlord to find by other means the additional years' purchase which may be required to buy their holdings. I may, perhaps, with advantage, take this opportunity of explaining the meaning of the expression "net rent"—a term which I, shall have to use frequently. It is the more necessary to explain it because we do not use it in the same sense in which the Member for Mid Lothian used it in his Bill in 1886. He there defined net rent as the rent after all the landlord's outgoings were deducted. By net rent we mean the rent from which has been deducted that share of the local rates now paid by the landlord, and which, after purchase, must be paid by the tenant. That is the only deduction we make. I define net rent, therefore, as merely the gross rent minus that part of the rates and taxes which, hitherto has been paid by the landlord, but will henceforth been paid by the purchasing tenant. Let me take now, for the purpose of illustrating the procedure under our Bill, the has of a holding of which the gross rent is £107 and the net rent £100, and on which there is a year's arrears due to the landlord. The landlord and tenant under our Bill are permitted—indeed, they are encouraged—to meet together and bargain as to what the price of that holding shall be. I will suppose for the sake of argument that they agree that all the holding shall be sold and all debts between the landlord and tenant wiped out for the price of £1,700, which is 17 years' purchase of the net rental. If they fail to agree they may, if they please, but only if they please, refer the question of price to the Land Department. But the Land Department, in fixing this price, of course must not do what the parties might legitimately do in making their own bargain, namely, take into account the year's arrears. The Land Department are instructed in the Bill that in fixing the price they are to consider the value of the holding, or rather the landlord's share of the holding, and this alone; but if the landlord and the tenant wish it they may represent to the Land Department that they agree to add arrears, up to but not beyond two years, to the 1703 price, and the Land Department may if they please sanction the arrangement. In this case we will suppose, in order to carry on my illustration, that instead of agreeing voluntarily to fix the price at £1,700, the parties go to the Land Department; and the Department say, "We think £1,600 is the value of the landlord's interest in the holding, hut if you desire that the year's arrears should be added on, you may do so; in that case the advance we are prepared to make towards the purchase of the holding will be £1,700, or 17 years' purchase." The Land Department is in no case to advance for any purchase beyond 20 years; so if you take the I case of a farm in which there was an agreement through the Court (as we term it in the Bill) for 20 years' purchase nothing in that case could be added on for arrears. Whether an arrangement Is not made through the Court or is made through the Court, the Land Department are bound to satisfy themselves that various conditions are fulfilled before they sanction an advance. I will only mention the most important. They must satisfy themselves that it is a bonâ fide transaction, and that there is no collusion between a landlord who, owing to the encumbered condition of his estate, is but a nominal owner and his tenants. They must satisfy themselves that the holding is an adequate security for the advance made upon it; and they must satisfy themselves that not more than 20 years' purchase is to be advanced for it. When they have done all those things the Land Department then at once make a vesting order, and as soon as they have made the vesting order the tenant at once and without further delay becomes owner of his holding, subject only to the annuity charged on it. All arrears and debts to the landlord are wiped out; all head rents are abolished; and the man is made proprietor of a holding to which no pecuniary obligation of any kind is attached except only the necessity of paying the annuity of 4 per cent, upon the money advanced. I think everyone who is practically acquainted with the actual working of the Ashbourne Acts from 1885 to the present day is aware that this plan would constitute an enormous reform of procedure. Under the existing system it is practically 1704 necessary, before the sale is completed, to do two things, both of which may involve great delay and great cost. One is the determination of title; the other is the consent of the mortgagees to the retention of the landlord's fifth in the hands of the Land Department; and principally owing to the necessity of going through, those operations before the sale is concluded, it is frequently not brought to a final determination, the money paid over, and the relation between landlord and tenant absolutely severed, for one, two, and in some cases three years, after the agreement has been sanctioned. That is not the fault of the able gentlemen who administer the Act of 1885; it is the fault of the system; and we think we shall be able radically to reform it by the provisions of this Bill which I am explaining to the House. By it all the claims which formerly existed in reference to the tenancy are transferred to the money which has been paid for the tenancy; and the landlord's fifth is compulsorily retained without going through the form of asking the consent of the mortgagees. AH questions of title are, therefore, deferred until the stage after the tenant has become owner; and I believe that while no injustice can possibly be done in those circumstances to the encumbrancer, the mortgagee, or the landlord, an enormous boon will be conferred on the tenant and every other party to the transaction. Now I come to the question of the annuity which the tenant has to pay. I have told the House that this annuity is at the rate of 4 per cent, on the amount advanced; but, though strictly true, that statement must be further explained and qualified. In the case of the holding that I am considering the price is £1,700, and the annuity at 4 per cent, is therefore £68. We call this the normal annuity, but during the first five years of the purchasing tenant's occupancy we require that he shall pay not the normal annuity but 80 per cent, of his net rent, which is, of course, less than 80 per cent, of the gross rent, though how much less will depend on the particular district in which the holding is situated. In other words, in the particular case I have chosen instead I of making him pay £68 for the first five 1705 years we make him pay £80. I think that a great many excellent objects are attained by that provision. In the first place, we think that a reduction from £107 gross to £80 is a large and substantial reduction, of which the tenant will have no reason to complain. In the second place, we think that so large and sharp a reduction as from £107 to £68 may produce, and, we think, will produce, considerable difficulty on adjoining estates where purchase may not have taken place. For recollect what we are doing is this. We are giving to the tenant an immense advantage which the landlord could not, from the nature of the case, give him. The contrast between the position of a tenant who has purchased and a tenant who has not is so sharp, if you give the full reduction all at once, that we think the temptation to put undue pressure on the landlord to induce him to sell, or the discontent which will ensue if he does not sell, are sufficient reasons for making this charge from the rent which the man has paid to his landlord and to the annuity which he will ultimately have to pay to the State as gradual as possible. Although I think those reasons are of themselves of sufficient weight to commend this arrangement to the House, I have yet another reason, to which we attach still greater value. If yon consider the particular case presented in my illustration you will see that if a tenant pays £80 for five years ho is paying for thus.' five years £12 annually above his normal annuity, which is £68. Five times that difference makes £60; and that £60 we propose to retain as a kind of tenants' insurance against periods of special distress. It is not to be used if the tenant fails to pay his instalments through any art or fault of his own, but only if, in the opinion of the Land Department, failure to pay instalments is due, not to his own act, but to some misfortune for which he is in no sense responsible. In such a case it is in the power of the Land Department to draw upon this insurance fund of £60 should the tenant fall into arrear. If this is done, and if an inroad is thereby made into the Insurance Fund, then it is the duty of the Department to raise the fund to its original amount by again increasing the annuity beyond the normal level. 1706 So that, if after the first five years a time of distress comes, and it is found necessary to draw on the Insurance Fund to the extent of £40, the annuity will again have to be raised above £68 until the fund once more reaches the full sum of £60. The House will notice that this scheme of insurance operates most powerfully exactly where it is most wanted. In the worst districts of Ireland the tenant will, of course, pay a smaller number of years' purchase for his holding; I presume in the congested districts 13, 14, or 15 years will not b3 an uncommon price, or even less, for a certain class of holding. In those cases the amount of the insurance will be very large indeed. If we assume 14 years' purchase to be given for a holding in one of the poor districts of Ireland, the 14 years' normal annuity will be £56, which differs from £80 by £24; so that five times £24 or £120 is put by as the Insurance fund on that particular holding, which is more than twice the whole normal annuity. In other words, more two years' purchase of the normal annuity is laid aside to protect the tenant from expulsion from his holding on account of non-payment caused by undeserved misfortune. So far the Bill I have been describing is an improved Ashbourne Act, and nothing else. It is improved because it has been made cheaper and more rapid, and becaus3 of the establishment of this Tenants' Insurance Fund by which it has been made safer and same other in the working. Of course, this Insurance Fund is not for ever withheld from the tenant, but in the later years it will be returned to him. If now we turn our thoughts to the consideration of what further securities may be brought forward to protect the State which lends the tenant funds to purchase his holding, I think we may say, speaking broadly, that there are only two plans worthy of consideration. The first takes, as its additional security, funds raised by local and general taxation in Ireland. The second takes funds contributed to Ireland by the Imperial Exchequer. The first is the plan advocated, among others, by Mr. Arnold Poster, who has given great attention to this subject. It also formed the basis of the scheme of the Member for Mid Lothian in 1886, and was part basis of the scheme of the Member for the Bridgeton Division in 1884. The second is the plan 1707 adopted in the Bill. It will be observed that to Ireland the two schemes are exactly the same. So long as the contribution in lieu of default falls upon the Irish community, it matters not to them whether they have got to raise it by local or general taxation, or whether it is raised by withholding from them funds which they would otherwise have received; but though it does not matter to Ireland, it matters seriously to the Exchequer. If you have to depend for your security upon what you get by taxation from Ireland, it is not absolutely impossible to conceive contingencies in which, under even the best contrived system, your security may not be forthcoming. But if the Exchequer is already in possession of full security for its own loan, this cannot be paid away without the consent of Parliament, and therefore, so far as the Imperial Exchequer is concerned, the plan of the Bill is better than the other plan I have mentioned. In selecting what contributions from the Exchequer we should take as security, we have determined to confirm ourselves to those which are given for local purposes; and that carries with it the corollary that only localities will be responsible for default. I think there is a great deal to be said in favour of this course. In the first place, it an open question whether you ought to ask towns like Dublin and Belfast to incur very heavy responsibilities for the conceivable default of agricultural tenants in remote counties; and it is also very much open to doubt whether you ought to ask Antrim to pay a default which might occur in Galway, or to ask Leinster to pay a default which might occur in Munster. We have, therefore, taken as the unit of area the county. Only counties will have to meet a, default; and only contributions within a county will be taken as ultimate security that the default will be met. Now, lot me describe the method in which the repayment will be secured. In the first place we establish a Guarantee Fund.
§ MR. W. E. GLADSTONE (Edinburgh, Mid Lothian)
Will you state the amount of the fund which will be available?
§ * MB. A. J. BALFOUR
I will come to that later. We establish, in the first place, a Guarantee Fund, which is to consist of two portions—a cash portion and a contingent portion. The cash 1708 portion will consist—(1) of a contribution of £40,000 a year, which Ireland has never yet got, but which she has a right to get, as a set off against the advantage which England and Scotland have recently derived from the Licence Dutieshanded over to those countries; (2) the Probate Duty Grant, which for the future we estimate at £200,000 a year: (3)¼ per cent, on the annuity payable by the tenant, who is expected to pay 4 per cent. That 4 per. cent, let me here observe, is made up in the following manner—2¾ per cent, interest, £1 for Sinking Fund, leaving unappropriated 5s., or the ¼ per cent., to which I have just alluded. That ¼ per cent, we call the Local Percentage Fund, because, after it has passed through the Guarantee Fund, it will be paid over to the Local Authorities for purposes to be afterwards described. The contingent portion will consist of rates on Government property and Imperial contributions for Poor Law, education, and other similar purposes. The total advance authorised in the Bill is not to exceed the capitalised value of those two portions of the Guarantee Fund together, and capitalised 4 per cent. they will, I believe, amount to about £33,000,000. This security is itself complete; but do not let the House suppose that is the only security provided by the Bill. In addition we have throe collateral securities—(1) the landlords' one-fifth, which remains, as under the Ashbourne Act, in the hands of the Land Department; (2) the tenants' insurance; and (3) £200,000 of accumulated reserve, the origin of which I will explain. The £40,000 of New Exchequer grant we propose to accumulate for five years, or until it reaches a sum of £200,000. That sum will remain in the hands of the Treasury, and will afterwards be allocated in precisely the same fashion as the £200,000 Probate Duty. This £200,000 Reserve Fund we propose to use for the community in precisely the same way as we use the Tenants' Insurance Fund for the individual—to meet cases of exceptional distress; and when that fund is drawn upon we shall refill it exactly as we refilled the Tenants' Insurance Fund— by stopping the £40,000 until the level of £200,000 is again reached. Now, as I have told the House, we take as final 1709 security for the advance, not merely the cash portion of the Guarantee Fund, which consists of contributions from the Imperial Exchequer, none of which, I may say in passing, have been payable for more than two years; but we also take the contingent portion voted for Poor Law, educational, and other purposes.
§ * MR. A. J. BALFOUR
It is constituted solely by contributions for local purposes. Take the Education Vote for Ireland. A certain amount is intended for the Central Office and organisation in Dublin. We do not touch that at all; what we propose to do is to take as a possible guarantee the contribution to each county separately, yet though we take it a possible guarantee there is in our opinion no danger of either education or Poor Law being interfered with. Before the contingent portion of the fund is touched the Grand Jury are by compulsory presentment compelled to raise from the locality a tax equal to the amount which it is proposed to withhold. My right hon. Friend the Chancellor of the Exchequer reminds me that the Contingent Fund is not approached until the landlords' fifth is taken, until the tenants' reserve is taken, and until the accumulated reserve is taken, and until, in addition, the whole cash portion of the Guarantee Fund is taken. We may therefore, I think, safely assume that there is no human possibility of this contingent portion of the Guarantee Fund being' touched in any conceivable circumstances except a general political strike against the payment of annuities—a contingency which I decline to contemplate. Let mo develop the arguments in favour of this position a little further. In the first place, we have experience on our side. Land purchase in Ireland has now been going on for a considerable period. It began in 1869; the number of purchasers was increased in 1870, again in 1880, and very largely increased in 1885 and 1888. Now, the experience of these 20 years—20 years of varying agricultural prosperity, years of political quiet and years of political turmoil, years of plenty and of dearth—the general result is that practically there has been no loss at all on the State advances. I believe 1710 if our accounts were carefully made out it would be found that the irrecoverable debts under instalments of all kinds from all purchasers is less than 2 per cent, of the total annual instalments which ought to have been paid. Now, under one Bill you can go as far as an annual loss of 6 per cent, without touching anything at all except the ¼ per cent, which we give to the localities. Without touching the landlords' fifth, without touching the Reserve Fund, without touching the cash Guarantee Fund or the Contingent Guarantee Fund, or the tenants' insurance, you can undergo a loss of three times as much as you have undergone, and yet continue to pay interest and Sinking Fund to the Exchequer. I think that that is a strong—indeed, an overwhelming—argument in favour of the safety of our scheme. Now, consider another argument, not this time taken from experience. Let me assume, for the sake of argument, that an advance of £30,000,000 has been made under the Act for the purchase of Irish land, and let me take as the average value at which sales have taken place 17 years' purchase, which I believe is somewhere about the value given under the Ashbourne Act, Very well; instalments at 4 per cent, on an advance of £30,000,000 amounts to £1,200,000 a year; let me suppose that in one year—the hypothesis is an impossibly unfavourable one—not a single sixpence of annuity was paid, what funds would there be at the disposal of the Treasury and of the Land Commission to meet the deficiency? I will tell the House. We shall have, first, the £200,000 Reserve Fund; secondly, there would be the £200,000 annual Probate Grant; and, thirdly, £40,000 of the new Exchequer contribution and £75,000, being the ¼ per cent local percentage on £1,200,000, and there would be, besides that, if we accept the hypothesis of 17 years' purchase, £1,118,000 of tenants' reserve; so that, without touching the £5,000,000, which is the landlords' fifth, and without touching a sixpence of the Contingent portion of the Guarantee Fund, you have £1,633,000 to meet a call of £1,200,000 on the extreme and absurd hypothesis of not one sixpence of annuity being paid during the year in question.
§ * MR. A. J. BALFOUR
I believe that is so. The hon. Gentleman has clearly followed my explanation. That can only take place after the five years have passed; but I am assuming that tenants who are allowed to have their holdings at 20 per cent, less than the net fair rent would not be likely to fail to pay up the instalments within that period.
§ Mr. T. W. RUSSELL (Tyrone, South)
Does the right hon. Gentleman contemplate advancing the £30,000,000 all at once?
§ * MR. A. J. BALFOUR
No, of course the whole hypothesis is imaginary; I was merely giving an illustration to show how very strong the Exchequer were without going near the contingent portion of the Guarantee Fund, which is the ultimate security. I take a period which is the length of the lease for which hon. Gentlemen opposite now recommend fair rents should be fixed—namely, seven years; I assume that the whole £30,000,000 are advanced at once (which, of course, is impossible), and I assume that the Insurance Funds are all filled up to the brim. You would then have at the disposal of the Treasury £200,000 Reserve Fund; £200,000 annual Probate Grant; £40,000 Exchequer contribution;£ 1,118,000Tenants' Insurance Fund, and £75,000, the ¼ per cent.; in all, £1,633,000, to meet the supposed liability of £1,200,000. But that is not all that must happen before you touch this fund. You must assume that tenants who are holding at a sum at least 20 per cent.—probably more, since on the hypothesis of 17 years' purchase it would be at least 32 per cent.—less than the fair annual rent, are prepared to surrender their holdings and be evicted, although besides holding on these favourable terms they would have repaid a not inconsiderable portion of the loan, which would also be sacrificed. You must assume that no new purchasers are ready to come forward and take the farms from which the defaulters have been evicted. You have got to assume that the insurance, amounting to close upon a year's normal annuity, has proved insufficient; you have got to assume that the landlords' fifth is insufficient; that the cash portion of the Reserve Fund of £200,000 is insufficient; and that the cash portion of the Guarantee Fund is insufficient; and, finally, you have got to 1712 assume that there has been a strike against the payment of a rate which it was found possible to enforce even in the worse times of 1881–2–3. If any one will take the trouble to go over the whole catalogue of fences which you will have to jump before the guarantee is arrived at, you will see that it never can be arrived at at all. We are here dealing with three degrees of impossibility. It is, in my opinion, absolutely impossible, unless there was a second edition of the great calamity of 1845 and 1846, that the contingent portion of the Guarantee Fund shall ever be approached, and nothing that has occurred in the last 20 years gives the slightest shadow of countenance to such a supposition. The second degree of impossibility is that if the contingent portion of the Guarantee Fund were approached it would be found impossible to raise the local rate, which would prevent loss being sustained either in respect of Poor Law or education. The third degree of impossibility—which I may describe as a demonstrable or mathematical impossibility—is that the Treasury, which not only is precluded from advancing money beyond the capitalised value of the Guarantee Fund, but which has also, in addition, the collateral guarantees of which I have already spoken, should in any conceivable circumstances be one penny the worse. I hope I made these deductions clear to the House. Some of these points may be open to argument, though I think not: but that it is mathematically impossible for the Treasury to suffer, this is not open to argument. Now, Mr. Speaker, before going into that part of the Bill which deals with the congested districts, I ought to make one or two supplementary explanations. In the first place, I ought to say that, while the total advance to Ireland generally is limited by the capitalised value of the Imperial contribution for local purposes, so the advance to each county is limited by the capitalised value of the advances to each county. The second explanation is that selling landlords are to be repaid in Government Stock, bearing 2¾ per cent, interest, for 30 years. This part of the Bill will be explained more fully by my right hon. Friend the Chancellor of the Exchequer; but he tells me that, in his opinion, that Stock is at least as good as 1713 Consols, and if any landlord is foolish enough to take a different view, there is a provision in the Bill which obliges the National Debt Commissioners to exchange Consols for the guaranteed Land Stock should the owner so desire. The third supplementary explanation? ought to give is that where the Land Department are of opinion that a better security would be obtained by making the landlord deposit less than one fifth of the purchase-money on consideration of making his deposit available not merely for the particular holding in respect of which it was deposited, but every holding on the estate, they are at liberty to adopt that plan. The third supplementary point to which I have to call attention is that we have introduced a clause into the Bill which I hope will do something to settle the difficult question of turbary. At this moment the claims of tenants to turbary are habitually settled by the landlords or their agents. We remove the landlord and the agent, and it therefore appears to be absolutely necessary that the Land Department should step into their place, and for this we give them the requisite powers. There is also a clause which attempts to carry out the plan which I ventured to adumbrate to the House last Wednesday with regard to leaseholders whose leases are for more than 99 years. There is another clause which will enable Irish landlords who desire to sell to invest the proceeds of sale in securities paying a larger interest than their settlements would enable them to do. We do that in order to facilitate purchase, because all my information goes to show that one of the obstacles which sale has to encounter is that selling landlords are compelled by their settlements to invest in securities not bearing more than 3 or 4 per cent, interest. Now, of course, we do not wish to put any obstacle in the way of landlords selling. Irish land may, I suppose, be considered, generally speaking, to be an investment which bears interest of not less than 5, and sometimes 6 or 7 per cent. We have framed a clause which, without endangering the interests of the remainderman, will, we think, enable Irish landlords to sell without so great a diminution of their income as they would have to undergo without that clause. One word about the question of 1714 local percentage. The local percentage, the House recollects, is the 5s. which is still to spare after interest and sinking fund has been provided out of the I per cent, annuity to be paid by the tenants. That 5s. per cent, we propose should be given to the localities, and we have introduced a clause which will have, I hope, the effect of causing the localities to which the produce of that 5s. is given to employ it in the first instance in the erection of labourers' cottages under the Labourers' Cottages Act, should labourers' cottages be required in the unions of the counties to which the 5s. is given. Many Acts have been passed for the benefit of the Irish tenants. I believe this is a method by which something material may be done for the housing of the Irish labourers, not only without increasing the burdens of the locality, but by relieving them of some of the burdens which, under existing Acts, they are, perhaps, bound to impose upon themselves. The only other remark I have to make before going to the congested district portion of the Bill is that I further propose that, unless Parliament should otherwise direct, when the £33,000,000 under this Act is exhausted, the repayments of that £33,000,000, as well as the repayments of the £10,000,000 under the Ashbourne Act, shall be re-advanced, so that there will be a perpetual fund from which future purchases by tenants may be effected. That cannot come into operation without the sanction of Parliament; but I believe that by that time it will have been conclusively proved by experience that these re-advances can be safely made. I hope, therefore, we have established not only a very large scheme of immediate purchase, but provided a permanent scheme by which further land purchase may be effected. I am not sure whether I mentioned it; but I will do so now, that the annuity payable by the tenant of 4 per cent, is for 49 years, as it is under the Ashbourne Act. Now I pass to the portion of the Bill which deals specially with congested districts. I am aware that many of those most interested in ameliorating the condition of the congested districts are of opinion that a system of land purchase is the very worst possible way of effecting that object. These particular observers have 1715 held that to enable tenants in congested districts to purchase would have the effect of what is called "rooting them in the soil." Though I admit that the question is not free from difficulty or doubt, I have distinctly come to the opinion—and I am glad to be supported in that opinion by a man whose authority no one will dispute, Mr. Tuke, that purchase will not have the effect which these particular critics of land purchase schemes seem to think. After all, if rooting these people in the soil be an evil, the evil is done already. The whole object of the Act of 1870—I do not say an illegitimate object—and of the Act of 1881 was to root the tenants in the soil. Even before those Acts came into operation, and when in theory, the landlord had absolute power to evict if lie pleased every tenant on his estate, it must be admitted that nothing was done by the landlords, so far as I know, in these congested districts to diminish the pressure of population on their estates. If that be so, I do not see why sales should not be as useful in congested districts as elsewhere—why it should not have the same healing effect upon those social diseases connected with the Irish land system, which are the curse and the plague of Ireland. I am not at all disposed to think that the fact that a man is the owner of his holding, free to stay or go as he pleases, may not prove an aid rather than a hindrance, if he feels moved to seek under more favourable conditions that livelihood which he has to struggle so hard to obtain in the bleak districts of the West of Ireland. But while I think we ought not to withhold the privileges of purchase from the congested districts, there are difficulties in applying to those districts the whole Bill without modification. Two difficulties I may mention which we have attempted to meet, but which personally I regard rather as sentimental than substantial. The first of these difficulties is this: Under the general provisions of our Bill the area of charge in case of default is the county, and in those counties were a large proportion of the area is congested, and where it may therefore be thought that the security is less good, it might seem hard on the uncongested portion of the county to render it liable for payment in consequence of default in the congested part of the county. In 1716 order to meet that difficulty we adopt the following plan:—We take the definition of a congested area found in the Arrears Act of 1882, as marked out by the Lord Lieutenant and the Local Government Board, and in every case where the area so marked exceeds 25 per cent, of the size of the county in which it is situated we constitute it a separate county for the purpose of this Act. These congested counties, of course, are neither liable to be called on to pay the debts of other counties; nor can other counties be called on to liquidate the debts which congested counties have contracted. The second difficulty is the fear lest the interests of education should be trenched upon by the general provisions of the Bill. Though I hope I have convinced the House that that is quite illusory as regards Ireland as a whole, it may be said that, as regards the congested districts where the security is less, that danger is real and substantial. In order to meet that objection we have withdrawn the Education Vote of these districts from the Contingent portion of their Guarantee Fund, and we have substituted for it £1,500,000 from the Church surplus. I have told the House at great length why I regard these difficulties as illusory as regards Ireland generally; let me very shortly say why I regard them as not less illusory in the congested districts. The Tenants' Insurance Fund, as the House will recollect, increases in magnitude as the price of the holdings which contribute to it diminishes. Now, I presume that in the congested districts I have just marked out, the price of a holding will not, on the average, be more than 14 years' purchase: I daresay it will be less in some cases. Let us assume for the sake of argument that it is 14 years' purchase; the amount the tenant will pay during the first five years will be £80; his normal annuity will be £56. In five years, therefore, the tenant's insurance will amount to £120, which is more than two years' purchase of his whole annuity. If we take the price in these very poor districts at 13 years' purchase, then the normal annuity will be £50, and the amount accumulated in the five years will be £140, which is nearly three years' purchase of the annuity. My belief is that no distress which has occurred since the 1717 famine, or which is likely to occur in future, will put a strain upon this Insurance Fund which it will not be able to bear, supplemented as it is by the landlords' contribution and by cash from the Guarantee Fund. I have now explained the modifications in the general land purchase scheme which are required to meet the peculiar circumstances of the congested districts, and so far the administration of the congested districts, for purposes of land purchase, will, of course, be in the same hands as that of the rest of Ireland, namely, in the hands of the Land Department. But, after all, the Land Department is a Department that is strictly tied up by administrative and judicial rules, and it is not fitted, nor could it fairly be required, to undertake duties which demand more elastic treatment. For those purposes, therefore, which I may describe as the philanthropic portions of the Bill, I think we want somewhat different machinery, and that different machinery will be found in the Congested Districts Hoard which it is proposed to establish under this Bill. This Board will consist of the Chief Secretary for the time being, or (in his absence) of the finder Secretary, of a Member of the Land Department, and, in so far as it deals with fishery questions, of a member of the Fishery Board. These will be the official Members of the Board; but I do not propose that they should be in a majority, and I intend that four or five other persons shall be asked to serve on the Board, persons who, though divorced from active participation in Party politics, will yet command the approval and respect of the people of the districts whose interests it is intended they should serve. Of course, long before the discussions on this Bill reach their termination I shall be prepared to state what unofficial names I propose to add to the official names which I have already given to the House. I propose that this Congested Districts Board should have at its command a contribution from the Church surplus and also the Irish Reproductive and Sea Coast Fisheries Fund; but they will not be allowed to use the Reproductive Fund in other counties than those to which it is already allocated by Act of Parliament. Mow let me shortly explain what are the duties which we propose to impose upon the Board. We 1718 propose, first, that it should deal with the special and characteristic disease of the congested districts. We propose that it shall have special duties thrown upon it in connection with the amalgamation of holdings. One of the difficulties of amalgamating holdings in congested districts is that the value of one holding made out of two holdings may not equal the value of these two holdings taken separately. Part of the value of a holding in these congested districts is the residence, and the privilege which residence gives. That, of course, is lost entirely in every case of amalgamation. Therefore, there cannot be amalgamation on a large scale in congested districts unless you are prepared to bear from some source or other the loss which inevitably falls on the purchaser or the seller when a holding in a congested district is sold and incorporated with another. This loss, which will amount to the occupation value of the house, we propose should be borne by the Congested Districts Board. We propose that when a tenant leaves or sells his holding it shall be in the power of the Board to pay him the value of the house on the holding if the holding is given up to a neighbouring or adjacent tenant who, in the nature of things, will have no use for the house. We propose, further, that the Board should have power to give special aid to tenants in congested districts who are prepared either to migrate or emigrate, on condition, of course, that their holdings are sold to tenants in the neighbourhood—and we think that when a tenant has bought under this Act and wishes to part with his holding he should be obliged to part with it either to a neighbouring tenant or purchaser, or to the Land Department, which will, of course, be obliged to give him the full market value of his tenancy. It a holding comes into the possession of the Land Department under those circumstances, it will be the duty of the Department, under the direction of the Congested Districts Board, to sell it, either in whole or part, to a neighbouring tenant. Then we propose that the Board shall have very general powers of aiding schemes of migration and emigration. This part of the Bill is drawn in very wide terms, and I trust that under it the Board may be able to frame some scheme, in 1719 furtherance of these objects, which will be free from any taint of pauperism, and which will commend itself to the good sense of the inhabitants of the congested districts. The second branch of what I may call the Board's philanthropic duties I may describe as industrial. We give them power in the Bill to sell for ready money, and for ready money only, seed potatoes of the proper quality to tenants at cost price. They may not make a profit by the transaction, neither may they themselves give in charity; but they may receive donations or gifts from charitable persona and use them as they think fit. I may say, parenthetically, that I am trying on my own account a small experiment of this kind on the coast of Donegal, and that I hope something may be learnt from it. The next business which the Board are permitted or directed to undertake is investigation into the localisation of fishing stations on the coast of Ireland. At present we are strangely ignorant with respect to the fishing resources of Ireland. The Chancellor of the Exchequer has been good enough to furnish me with funds which, with the assistance of the Royal Dublin Society, will, I hope, enable me to begin at once making investigations into the fishing re sources of the Irish coast But the Board which we hope to constitute under this Act is clearly the right Body to carry out works of this description, and they may, if they think fit, give instruction in fish-curing and aid in the improvement of stock and poultry, and they may promote local and other industries. I have now, I fear, exhausted the patience of the House, as I have my own strength. I hope I have made clear the main outlines of a measure which, at any rate, is long and complicated, if I may not describe it as great. It embraces a reform and re-constitution of all the Public Bodies that have to do with land in Ireland. To the congested districts, taken in connection with the Light Railways Bill of last year, it affords a measure of relief compared with which any other measure of relief ever given to those districts sinks into insignificance, and it gives this relief in a form in which too much of the relief has not been given—it gives it in a form which will not pauperise or demoralise those who receive it. To the tenants throughout Ireland, including the congested districts, 1720 it will give generous and substantial aid towards making them owners of the holdings they occupy. To this country it will give the repose which every approach to a settlement of the vexed and thorny question of the land in Ireland must foster; and that great end will be gained without any conceivable risk to the taxpayer. For no inclemency of Irish skies and, as far as I can see, no mutations of Irish politics can compel us through this Bill, whilst we are conferring a great boon upon the Irish tenant, to add one sixpence to the burdens of the Imperial Exchequer.
§ (6.0.) MR. W. E. GLADSTONE
I need hardly say that I do not rise for the purpose of delivering judgment upon the measure which has just been submitted to us. It is only fair to say that that measure is beyond all question a comprehensive measure, and that its preparation has evidently been the subject of great care and patience. It is a very large measure, and it imposes a very large liability on the taxpayers of this country, although the right hon. Gentleman has explained the elaborate provisions by which he proposes to secure that that liability shall not entail risk of actual cost. The right hon. Gentleman has laid before us a set of financial proposals which I think, taken altogether, are as complicated, perhaps more complicated, than those of any other scheme that I have ever known submitted to the House; and if in any quarter there has been any deficiency in obtaining a perfectly clear apprehension of their nature and effect, it is only just to the rigid hon. Gentleman to say that that failure is in no degree ascribable to any want either of ability or painstaking on his part. But it is obvious, independently of the difficulty of the proposals, that no judgment can be formed upon them, grave as they are and important as are the principles they involve, without having an opportunity of considering them carefully and deliberately in their bearings upon one another, as well as upon all the interests concerned. The right hon. Gentleman and the Government will feel that it is most material that the House should have every assistance that can be lent them in arriving at that clear comprehension: and, therefore, I shall express my con- 1721 fidence, in the first place, in a general form, and then I will specify one or two particulars—confidence that the Government will give us in a documentary shape all statements which may be material for the elucidation of the case and which can be conveniently presented in that form. Now, Sir, the House will, of course, examine with great care and some jealousy—naturally with some jealousy—the provisions which are intended to prevent the possibility, or more than possibility, the probability, of recourse to that which the right hon. Gentleman has called the credit part of the Guarantee Fund.—[Mr. A. J. BALFOUR: Contingent]—the contingent part of the Guarantee Fund. Consequently, I hope that he will exhibit to us in a written shape all the resources which form part of the cash portion of the Guarantee Fund, and likewise the other assets which are available, to prevent any possibility of having to fall back upon the credit portion of the Fund; because the House will feel that, supposing these intermediate resources to fail, we arrive at a very delicate ground, a very tender ground, indeed, and one which it may be very difficult in any circumstances to occupy, when the question arises as to an interference with the provisions made for the maintenance of local schools, the payment of poor rate, or any other essential local purposes. Therefore, I hope the right hon. Gentleman will show us in the clearest possible shape what are the resources which stand between us and a contingency of that kind. Again, I hope we shall have presented to us, what it is to the public interest and to that of the right hon. Gentleman to place in our hands as the prop of the present proposal, a clear account of the payments in arrear under advances already made, with respect to which he has made a Report which has the appearance of being of a very satisfactory character. The right hon. Gentleman gave us to understand that in the contemplation of the Government the sums which he now proposes to render available for the purchase of Irish laud—33 or 35 millions—
§ MR. W. E. GLADSTONE
Thirty-three millions in round numbers, together with the ten millions already ad- 1722 vanced, shall be constituted a sort of circulating fund, so that there may be, to the extent to which the fund applies, a continually recurring provision, for the purpose of meeting further transactions. I believe that the right hon. Gentleman said that the main issue of these moneys, under the idea of a circulating fund, was to be subject to the assent of Parliament. [Mr. A. J. BALFOUR nodded.] That I was not quite clear about. The right hon. Gentleman has proposed bold—and I think courage is a material part, a necessary instrument, of good legislation on this subject—he has proposed very bold, and, as might have been expected, very complicated provisions with respect to the congested districts. Some of those provisions, I apprehend, will raise very considerable differences of opinion. But he has looked the whole question in the face, and has done what in him lay to encounter its difficulties. One question of a financial character I wish to put. He expects that towards meeting the demands of these districts he will be able to command a fund of 1½ millions from the residue of the Church surplus. Well, Sir, I do not intend to express on that subject any hardened scepticism. I know that the resources of the Church surplus, which were estimated by me in 1869 upon a very moderate basis, have proved to be very much more considerable than was at that time anticipated. At the same time, the last time I heard officially anything about the Church surplus it was that it had arrived at a state of exhaustion. I am very glad, indeed, if it has revived. The right hon. Gentleman may be able to present to us figures in support of the statement which he has made. I do not wish to express disbelief or mistrust with regard to it. I know the surplus has done much better than was expected; and we shall be very glad indeed, apart from any committal of our judgment on this question, if it is still likely to yield considerable resources available for the benefit of Ireland, and for the benefit of Ireland at what we may call its weakest point. With regard to the amalgamation of holdings in the congested districts, I wish to know whether I understand the right hon. Gentleman rightly. I presume he would not prevent his Board from voluntary amalgamations where voluntary amalgamations might be practicable. It may 1723 be also compulsory in certain circumstances. But, if I understood him, those compulsory amalgamations are confined to cases where the State, through the Government, has been already put in motion by a transaction of purchase. [Mr. A. J. BALFOUR was understood to assent.] If that is so, it is very material that it should be understood. The right hon. Gentleman has met, in a very candid spirit, the two or three suggestions which I have ventured to make, and l will go no further in troubling him, after the arduous efforts he has made in the exposition of this most difficult subject. I thank him for the great pains he has taken. I do not disguise the gravity of the issue raised in a Bill of this kind. The right hon. Gentleman will recollect, as I have good reason to recollect, what took place in 1886. While retaining an absolute liberty of judgment, T will say that the provisions of a Bill of this kind, so far as public duty will permit, are entitled to be reviewed by us in a comprehensive spirit, and, so far as possible, to be severed from all those controversies of Party to which we in this House are accustomed.Bill to provide further facilities for the purchase of land in Ireland; for the improvement of the condition of the poorer and more congested districts; for the constitution of a Land Department; and for other purposes connected therewith, ordered to be brought in by Mr. Arthur Balfour, Mr. Chancellor of the Exchequer, and Mr. Attorney General for Ireland.Bill presented, and read first time [Bill 199], and ordered for Second Reading on April 14.
§ * MR. W. H. SMITH
We set it down pro formâ, but have no expectation of taking it on that day, for that day is fixed for the Budget statement.