HC Deb 01 August 1912 vol 41 cc2479-86

  1. (1) For the purpose of local loans, there may be issued by the National Debt Commissioners the following sums, namely:—
    1. (a) For the purpose of loans by the Public Works Loan Commissioners, any sum or sums not exceeding in the whole the sum of six million pounds:
    2. (b) For the purpose of loans by the Commissioners of Public Works in Ireland, any sum or sums not exceeding in the whole the sum of six hundred thousand pounds.
  2. (2) The sums so issued shall be issued during a period ending on the day on which a further Act granting money for the purposes of those loans comes into operation and in accordance with the provisions of the National Debt and Local Loans Act, 1887.


moved, in Sub-section (1), after the word "loans" ["local loans"], to insert the words "other than for the provision of small holdings."

My object in proposing this Amendment is to make the law conform, so far as possible, to what appears to be the practice. It is common knowledge that the Public Works Loans Commissioners are not wholly in accord with at least two public Departments—the Local Government Board and the Board of Agriculture—with regard to the systems of charging the sinking fund on loans for the purpose of small holdings upon the small holders themselves. A good many county councils, desiring to carry out what they are told by the President of the Board of Agriculture is the real meaning of the Small Holdings Act, have made application for loans for the purpose of small holdings to the Public Works Loans Commissioners. They have informed them that they are not prepared to make any loans for such purposes unless the whole of the sinking fund is charged upon the small holders, although, in fact, the small holders will never themselves be the owners of the property in respect of which they are being asked to pay the whole of the capital charge.

The time has now come when, in the opinion of those who represent the county councils in this House, it is desirable that it should be made perfectly clear, whether or not, under the existing law, it is permissible to charge the sinking fund upon the small holders, or alternatively, to charge it upon the ratepayers of the county whose property these small holdings will eventually become. That is the whole case, and we know that at the present time there is this absurd difference of opinion between what I might almost call the Department and the Government—because, after all, the Public Works Loans Commissioners, under a Bill such as this, are set up for a definite purpose—to provide loans to local authorities—and the heads of two Departments in the State announce publicly, in this House and elsewhere, that they do not approve of the terms upon which these Commissioners are prepared to make these loans. I suggest that when right hon. Gentlemen sitting on the Government Bench tell the county councils that they cannot get loans from the Public Works Loans Commissioners on the terms that they desire, and they must go elsewhere to get, it, the real function of the Commissioners, so far as the local authorities are concerned, becomes little more than a farce. For that reason I desire to move this Amendment in order to make perfectly clear what the anomalous position of the Public Works Loans Commissioners is as regards the local authorities throughout the country.


I gather that the hon. Gentleman is moving his Amendment rather as a demonstration than from any desire to press it, because it would have a result quite the opposite to what he desires. If you are going to forbid the Public Works Loans Commissioners to advance any sums for small holdings, you very much hamper the small holdings movement, which the hon. Gentleman has in his mind. As the hon. Gentleman knows, Parliament did, definitely and deliberately, in the Act of 1873, relieve the Local Loan Commissioners from the pressure of Parliament as to the granting of loans. It was not done casually or by mistake, but deliberately, as was the removal of the Development Commission from the granting of funds out of the Development Fund. It was in order that pressure should not be put on the Commissioners by various interests, to benefit particular localities or interests, in the granting of loans, that Parliament—except under certain very small conditions in the variation of the terms under which loans could be given—has left that discretion entirely to the Commissioners. The Commissioners are exercising that discretion untrammelled by any pressure that either the Treasury or any other Government Department may put upon them. It might be that there are public purposes desirable in the opinion of the majority of Members of both sides; but the Commissioners might not see their way to respond to the desire of Parliament, and it might be under those circumstances that legislation might be desirable. Certainly that could not be done under the conditions under which the Public Works Loans Bill is going through at the present time. There are negotiations and discussions going on on this very subject, and I certainly hope that any reasonable request which may be made by the local authorities, and especially those Members of Parliament on both sides interested in the Small Holdings' Commission, offering a fair and satisfactory security for the loan, may be granted by the Local Loans Commissioners, but I certainly am not prepared to make any forced change in the system which has worked for over thirty years.


I must say I am glad to hear the declaration of the right hon. Gentleman. I was afraid it might be in a different sense. On the actual merits of the question as to who should pay the Sinking Fund, I am at present in agreement with my hon. Friend and in disagreement with the policy of the Commissioners; but the Commissioners were, as the right hon. Gentleman has said, created as an independent body in whom was vested a discretion which they were to exercise, and it would be certainly quite contrary to the practice of the past and to intentions in the creation of that body if a Government Department were to be able, or encouraged, to overrule it. If the policy of the Commissioners at any time diverges from the policy of Parliament, then I think it is for Parliament by a considered Act of legislation to give an express direction to the Commission; but I should be sorry to see anything done which took away the general discretion of the Commissioners which has been exercised undoubtedly to the great advantage of the public. They are a body of unpaid public servants. They are not members of the ordinary Civil Service, but a body of gentlemen who give their services freely to the country for that purpose. They have done so with great advantage, and it would be a disastrous thing if the administration of these local loans now in the hands of the Commissioners should be transferred from them to a Government Department which is open to all kinds of pressure to which the right hon. Gentleman has alluded.


I must say I am rather sorry the Government have pressed this Order to-night, because I understand that at Question Time, in reply to the hon. Member for Barkston Ash (Mr. Lane-Fox), the Prime Minister indicated that he would not take this Order to-night. My hon. Friend must also have taken the Prime Minister's answer in that sense, or else he would have been here. In his absence I should like to say that it is all very well for the Government to take up this attitude of respecting the decision of the Commissioners and so forth, and not proposing to do anything, but there is a very practical difficulty at present, because I understand from my hon. Friend, who is a member of the West Biding County Council, that that council is finding itself in great difficulty now with the Commission. They are one of the few counties in England who have decided not to charge the small holder for payment of sinking fund for the purchase of land, and now that they desire to borrow money, the Commissioners decline to advance it so long as they persist in this policy. It is for the Government to find some way out, and I do not think the question is at all dealt with by the very airy answer of the Secretary to the Treasury. I think it is quite right that small holders should not be charged for the sinking fund. I agree it may be legitimate to charge the interest for the erection of the building, but I think by far the best way out would be for the Government to bring in a small amending Act to the Small Holdings Act, so that if the small holder is charged for sinking fund, the small holding would be vested in him. I do not think it could be said that this would be any hardship. It must be borne in mind that the credit is long, and that the sinking fund is spread over a great many years, and, therefore, it is not so much a matter of actual burden to the small holder as a point of justice, and it is obviously unfair to charge the small holder for the land when the land is ultimately going to be vested in the county council. What I suggest should be done is that the land should be vested in the small holder, and he should continue to make the same sinking fund payment as at present. That is the best way out of the difficulty, and it would solve the problem to a great extent. That is better than to take up a non possumus attitude and say we have no control over the Commission.


I do not in the least take up a non possumus attitude. We realise this is a serious matter and that it must be considered seriously. But this Bill, which must go through before the Recess, is not the occasion on which it should be done, because we are doing our best not to take controversial legislation in the remaining days of the Session.


It is all very well for the right hon. Gentleman to say it needs consideration, but this is the only opportunity we have of raising it, and, moreover, the question was raised early in the Session. I raised it and so, I believe, did the hon. Member for Wiltshire (Mr. Charles Bathurst), and the Government have had the whole of the spring and summer, and yet have done nothing in the matter. We have got to a crucial point, and they have no policy on the matter.

Captain CLIVE

While the Government are considering the whole question of small holdings the matter is hung up in three counties. There is the anomalous position that a number of small holders get their farms at a comparatively low rent and others have to pay a comparatively high rent, with the result that there is discontent.

4.0 A.M.


I wish to point out that, although the Government may have no control over these Commissioners, it is quite clear the Houses of Parliament have. It is quite clear we have; and it is now in our discretion to deal with this £6,000,000, and if we are dissatisfied with the conduct of the Government we can decline to pass the first Clause of the Bill. I do not think there can be two opinions either on the Treasury Bench or in any other part of the House that it is distinctly wrong to make a small holder pay something towards the capital value of the land, which he does in the sinking fund, although he has got no right or interest in the ownership of the land. Suppose he goes on for twenty or thirty years, not only paying interest, but paying sinking fund, it is obvious that at the end of that time he has nearly paid back not only the interest but the capital value of the land, and yet in the existing state of affairs he is to have no interest in respect to that sinking fund or any title or right of claim. It is distinctly unfair, and we did hope and expect that there would have been a short Clause in this Bill or something in the way of a proviso with regard to this money, that the Commissioners should exercise a reasonable discretion on the point, who they should lend money to and for what purpose. I suggest we should be in a position to tell the Commissioners to do what is right, and I think the Amendment is an exceptionally valuable one. I am quite convinced by the argument of the hon. Member who moved it that if we passed it it would carry out what we all evidently now intend.


My object in bringing this matter before the House through the medium of this Amendment was to call attention to the extremely anomalous position in which the county councils find themselves owing to the different attitudes taken up by the Government on the one side and the Commissioners on the other. I do not want to find fault with the Commissioners in any way. I think the Commissioners have only done their duty, and that they have adopted the only possible interpretation of the Act of Parliament which up to six months ago was only interpreted in one way, and the only way in which lawyers could interpret it. It is the Government who have created this difficulty, and it is their business to remove it, and not to leave the local authorities in the anomalous position they now occupy in working the Small Holdings Acts. Having stated their views, I beg to ask the House for leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Question proposed, "That the Clause stand part of the Bill."


I have had a great deal of correspondence with the Commissioners, and I have got very little satisfaction. The Commissioners are a statutory body. They consist of seventeen gentlemen, fourteen of whom are bankers of the City of London and two landlords from the Government side of the House. But they are practically a conservative body, over whom the House has no control whatever. They have to deal with matters of great magnitude, yet they represent no one but the bankers, neither industrial interests or commercial classes of other kinds. We vote this money to be administered by these gentlemen. They have control of public loans for buildings, works and houses, but this Bill, once passed, is practically a dead letter. In Ireland, owing to pressure from hon. Gentlemen opposite who take an intelligent interest in all that affects their own country, they are able to get whatever money they wish. I do not know how many millions they have got for small holdings in Ireland. They have got six or seven millions for cottages.


No, no; not in this way.


I am talking of the Public Works Loans Commissioners. I am not talking of the money for the purchase of land. In that case they get the full value of the holdings advanced, and we can only get 50 per cent. at a rate of interest which yields a profit to the Treasury. I wanted money for the Public Works Loans Commissioners for the purpose of housing working men. I am unable to get that money, and it makes a difference to these people of 9d. per week on their rents. The Commissioners say, "We are the sole judges of who to and upon what we shall advance the money," and Parliament is absolutely powerless. They are a body who conduct their correspondence in a most extraordinary way. If anyone complains they say, "We are responsible to Parliament." When we come to Parliament, the Minister's answer is, "We have no power over these gentlemen; they are a statutory body."

Nothing could be more unsatisfactory than the position of this House with regard to the matter. They take an arbitrary line and refuse to discuss matters in the case of some business; they refuse some and accept others as satisfactory. They are afraid that public money cannot be advanced for some business, yet the same business can get the money from the banks. I am not saying that they act in a dual capacity, but there is a strange coincidence. They say that certain business is not in the public interest, that they cannot lend money for certain purposes. I say it is not for the Commissioners, it is for this House, to say whether or not it is in the public interest to advance money for the housing of the working classes. It is not for them to take action in certain directions, and I do not think they are legally justified in preventing loans except they can object to the security which is offered to them. Their refusal is not on the ground of security, but on the ground that a certain scheme is not in the public interest I hope to deal with this question fully on the Third Reading, but I felt bound to make this brief protest.