§ Considered in Committee, under Standing Order No. 71A
§ [Mr. ROBERT YOUNG in the Chair.]
Motion made, and Question proposed,
That it is expedient to authorise the Treasury to guarantee the payment of the principal of and the interest on any loan issued by the Government of the Irish Free State for the purposes of land purchase in the Irish Free State, so that the securities so guaranteed do not in the aggregate exceed thirty million pounds sterling in nominal amount, and to charge on the Consolidated Fund any moneys required to fulfil any such guarantee."—[King's Recommendation Signified.]
§ The FINANCIAL SECRETARY to the TREASURY (Mr. William Graham)
This is, in many respects, one of the most interesting Financial Resolutions which can come before the House, but as it is very largely a matter of agreement among hon. Members in that it completes the task of land purchase in Ireland, I do not propose to do more than give a very brief summary of the provisions of the Resolution which appears on the Paper. The problem has, of course, a political and a financial side, The Colonial Secretary will, if necessary, deal later in the Debate with any political points which are put. My sole object in rising at this time is to explain the financial scheme of the Resolution, which will be, for all practical purposes, simply the Bill which will follow.
The Committee will recall that there was in 1918 an agreement regarding land purchase, and then, after the Irish Free State had been set up, there was introduced in the Parliament of the Irish Free State a Land Purchase Bill. Under that 1849 Bill, which became law in 1923, the Free State set out to complete land purchase in Ireland by buying out the landlords in what we call the tenanted districts, dealing also with the untenanted and congested areas. The broad principle followed is not to pay the landlords cash at all for the land transferred to the tenant-farmers, but to give them bonds bearing interest at 4½ per cent., redeemable over a long period, and guaranteed, as we are now proposing, by the Government of this country. That was an obligation which was undertaken by our predecessors in office. To-night I am simply proposing the Financial Resolution which represents our efforts to carry that obligation into effect.
The first point I must try to make clear to the Committee is the manner in which the £30,000,000 guaranteed is made up. As regards the tenanted land, there cannot be any particular difficulty because of the system which has obtained fixing rents. It has been ascertained that the total rental is approximately £1,200,000 per annum, and 15 years' purchase of that represents the sum of about £18,000,000. Then as regards the untenanted areas, the difficulty here is greater, but it is estimated that to deal with land within those areas the purchase of 500,000 or 600,000 acres at a price approximately of £20 per acre is required. This will involve in round figures about £12,000,000. That added to the £18,000,000 gives us the £30,000,000, which is incorporated by way of total guarantee in this Resolution.
Let me make it perfectly plain that the figures are not so precise as I have given to the Committee, but include some charges under other heads, or minor points. The Committee is familiar with the Measures which will be adopted by the Government of the Irish Free State, namely, to issue these Four and a Half Per Cent. Bonds and to carry out the other obligations into which they have entered. Reference has been made to the prolonged period of 80 years which is covered by this guarantee. The Committee will recognise that if the tenant farmer is to meet that annuity in a sum which is within his power year by year, some long period will necessarily be involved, operating, in effect, over 67 years for the redemption of the Bonds by way of a sinking fund for a quarter, 1850 that is, 5s. per sent., for which in due course provision will be made.
In the arrangements as regards congested districts particularly there will be an interval of five years before the bonds are issued, and then it is estimated that in order to cover the untenanted area a period of about eight years may be involved. Roughly put, we arrive at the period of 80 years which, in our judgment, this guarantee should cover. As regards the guarantee of the interest and principal of these bonds which are to be issued by the Irish Free State Government we, of course, are really in the third place by way of providing security. The first line of security is the annuity payable by the tenant farmer under the Free State Land Purchase Act, 1923. The second line is the central fund of the Irish Free State itself. In the third place, there is the final guarantee resting upon the British Exchequer for £30,000,000 involved in this Resolution. The Bill, when presented, will contain the safeguards which are attached to all guarantees, namely, that the money raised shall be devoted to this object, with clue provision for the sinking fund which I have described. There will be certain priority to this country as regards any calls which may be made on the British Exchequer, and provision will be made in the Bill for those points. I do not think I need say more, and with that brief explanation I commend this Resolution to the Committee.
§ Mr. HANNON
I had no intention of speaking in this Debate, but as no other hon. Member connected with Ireland has risen, I do not think this Resolution ought to be passed without some observations. I hope we shall unanimously pass this Resolution, because it is really fulfilling an obligation which attaches to this country in regard to the great work of land purchase in Ireland. Nothing has been more successful in Ireland than the great scheme which was devised to carry out land purchase on a large and generous scale, and the Secretary for the Colonies has succeeded to a great heritage which was created for him by a right hon. Gentleman on the Opposition side of the House. The one comment I wish to make is that I think the interest on these bonds provided is a little too small.
§ Mr. HANNON
I know my hon. Friend who interrupts me is a constant guardian of the British Exchequer, and he does not think this interest is too low. I would like to point out there has been a considerable change in the value of money since the original scheme of Irish land purchase was carried out, and I think it would be to the advantage of this country, and it would be a gesture to the people of Ireland, if the interest in this Financial Resolution was a little more generous than 4½ per cent. In this House it has always been the tradition amongst Irishmen that they try to extract all they can from the English for the benefit of Ireland. We are not in that position now, although I think everybody would like to see every step that is possible taken to bring to an end the unhappy regime which has continued in Ireland up to the present moment. I think the adoption of this Resolution, which is the final completion of the great social work of land purchase in Ireland, will not be without its effect upon the minds of the Irish people.
I am quite certain that land purchase, although it has not always been fair to the Irish landlords, has had a marvellous effect in transforming Ireland, and has produced a great industrial effort in regard to the land, and has given an impetus to the interest taken by the people of Ireland in the higher forms of agriculture. I am glad to have had the opportunity of saying a word in support of this final effort on the part of the British Government to assist the completion of this great scheme of land purchase in Ireland. I think when we are passing this final resolution we ought to remember the wonderful work which was done in this connection by the late Mr. George Wyndham during his regime, because what he did revolutionised the whole system in Ireland, and what was accomplished was due to his foresight and his genius, and we should not forget that he was responsible for the origin of the whole scheme.
§ Mr. RATHBONE
The Financial Secretary has told us that arrangements have been made for the sinking fund, but he did not give us to understand who was to provide it or when it was to operate. The hon. Member who has just sat down paid a eulogy to the late Mr. Wyndham, but surely we are now dealing with a totally different state of things. At that 1852 time Ireland was a part of the United Kingdom, and now it is an independent Dominion.
§ Mr. RAWLINSON
I do not oppose this Resolution in any way, and I simply want to know if the Financial Secretary can tell us what is really the financial position between the Irish Free State and this country at the present time, and also state when the position between the two countries is likely to be adjusted? May I point out that a large amount of goods was handed over to the Free State, which at the time had not been valued, such as arms, ammunition, and various other matters. It was stated at the time that they were to be valued and taken into account, and I would like to know if any steps have been taken in that direction, and will the Financial Secretary tell us, approximately, the indebtedness of the Irish Free State to Great Britain in this respect, or it may be the indebtedness of Great Britain to the Irish Free State?
The SECRETARY of STATE for the COLONIES (Mr. Thomas)
We cannot determine that until the final adjustment is made as to the boundary, and most of these things are subject to that adjustment.
§ Mr. RAWLINSON
Can the right hon. Gentleman say whether the ammunition and the various other things have been valued, because every year makes it harder and harder to keep a list of the large amount of these articles sold. Have any steps been taker from time to time to keep an account these things?
Certain accounts of these things are being kept. There were negotiations only last week in regard to a very important matter in regard to adjusting these things.
§ Mr. GRAHAM
In reply to the question of the hon. Member for Wavertree (Mr. Rathbone) about the Sinking Fund, the rate of interest on the bonds is to be 4½ per cent., whilst the tenant pays 4¾ per cent., the difference, ¼ per cent., providing the Sinking Fund.
§ Question put, and agreed to.
§ Resolution to be reported To-morrow.