§ Order for Second Reading read.
§ Motion made, and Question proposed, "That the Bill be now read a Second time."
§ Mr. HARDIEI understand—
§ Mr. DEPUTY-SPEAKER (Mr. James Hope)Does the hon. Gentleman rise to a point of Order?
§ Mr. HARDIEYes. I wish to make an explanation. I was just railed out on other business. I understand a statement has been made regarding myself, and I want to put the point right.
§ Mr. DEPUTY-SPEAKERThe Question is "That the Bill be now read a Second time."
§ Mr. HARDIECan I make the statement now?
§ Mr. DEPUTY-SPEAKERI am afraid not. There will be an opportunity on the Motion for the Adjournment of the House.
Mr. GUINNESSThe object of this Bill is to amend the provision regarding valuations which were contained in the Land Settlement Act, 1919, so that the arrangements then made with the local authorities may be carried out. It was laid down in that Bill of 1919, that on 1st April next, the valuation would take place which, in the words of Sir Arthur Boscawen, would enable the Government to hand over to I he county councils the whole of the holdings on a self-supporting basis. There was no doubt as to the arrangement between the Government and the county councils, because Sir Arthur Boscawen also said he quite realised "that we have to hand over those holdings at the end of the septennial period on a strictly self-supporting basis; in other words, that they ought not to incur any loss. The valuation provisions in the original Bill were very obscurely framed. The State was only to be responsible for the loan charges on the difference between the present day capital value of the land as let for small holdings or allotments and the total capital liabilities of the scheme.
This basis would leave local authorities with the duty of financing the difference 838 between the loan charges on their share of the capital valuation and the actual revenue which is now receivable in the form of rents from small holdings. It was never intended to throw such a responsibility on local authorities. We propose to amend this provision and to base the valuation on the annual value of both assets and liabilities, leaving the State to bear the difference between those annual values. Apart from securing that the original understanding with the county councils shall be carried out, this system has the advantage of automatically decreasing the State's contribution as the short term loans run off. There will be a gradually falling sum due from the, State. We also propose to make an economy in the method of valuation. Instead of the figures being arrived at by independent valuers, we propose that the valuation shall be made by agreement between the State and the local authorities, and that we shall only have the costly method of calling in an outside valuer to arbitrate in those cases where differences may arise.
§ Sir FREDRIC WISEWhat is the amount to be paid?
Mr. GUINNESSI will come to that in a moment. At the present time we are settling with the local authorities in arrears on the basis of actual loss. When the new valuation is complete it is contemplated that we shall make payments during the year as payments fall due, but obviously in the year when we change over we shall be charged with a double burden for one year. There is nothing definite in the Act of 1919, but it was always believed that the State would change over to the new system next financial year. We propose to postpone that change over to the financial year 1929-30; and the reason for that is the very heavy charge which has been thrown on the Estimates of the Ministry of Agriculture by the remarkable success of the sugar-beet industry. So great is the development that, next year, we expect to pay subsidies amounting to about £3,000,000. In 1929–30, which will be the fifth season of the operation of the subsidy scheme, the subsidy will be automatically reduced by one-third, and that will be a favourable occasion for taking this exceptional burden upon the Estimates of the Ministry.
839 11.0 P.M.
The hon. Member for the Hillsborough Division (Mr. A. V. Alexander) asked me the other night if I could give any estimate as to the difference in the amount paid by the State now and under this new system, and I told him at the time that it was quite impossible. The reason for that is that the basis laid down in the Act of 1919 is so obscure as to be practically unascertainable, and only by the wildest shot could we foretell what figure might be arrived at by all these independent valuations. The hon. Member would probably like to know what we think will be the result of the valuations on the basis we wish to lay down. At the present time we are paying, on the basis of ascertained loss, about £875,000 a year. If the House will allow this new basis to come into force, we estimate that the payments will be reduced to about £750,000, that is, an approximate saving of £125,000 a year, but I must give this figure under reserve, because it is obviously only an estimate, and I cannot foretell how far it will be possible to realise it. I must also say that in the first year of transfer to the new basis the figure will be much lower than the £750,000, it is estimated at £560,000, for this reason, that now that we are paying on the basis of ascertained loss some of the interest charges which we pay for the previous year are not really made by the local authorities until the subsequent period. When we change over we shall get credit for that in the year in which the change is made. This Bill is the result of long negotiations with the local authorities. We are now engaged upon collecting the material for this valuation, and it is most important that at the earliest possible moment they should get definite instructions as to how this valuation should be made. It is for these reasons at this late period of the Session that we bring forward this Bill and ask the House to pass it.
§ Mr. A. V. ALEXANDERI am sure the House is pleased with the very careful and lucid explanation which the right hon. Gentleman has given of this Bill, and so far as my hon. Friends on these benches are concerned we welcome this Measure, and we recognise that it is necessary not only in the interests of the financial arrangements of local 840 authorities, but also in order to redeem the pledge given in 1919. Although we may have one or two questions which I am sure the Government will be willing to answer, I want to point out that our attitude on these benches will be to facilitate the early passage into law of this Measure.
Having said that, I want to ask one or two questions with a view to assisting the right hon. Gentleman in charge of the Bill. In the first place he has referred to a statement which appears in the White Paper in which it states that the local authorities have fully considered this Bill before it was introduced. I accept the very great importance of the opinion of the County Councils Association in this matter because it is a. very powerful body, and if they are satisfied with this Measure it is not necessary for us to inquire too closely into the questions affecting county areas. I would like to point out, however, that county boroughs are also interested.
I notice that the White Paper states that the Government have consulted some of the representatives of the county boroughs. Some of my hon. Friends are anxious about this matter, and perhaps they have not been directly concerned in the negotiations. It there is any county which feels that it has not been consulted, I hope the Government will be willing to meet their representatives as soon as possible and endeavour to settle any differences which they may have in regard to procedure, so that they will feel that they have the same protection as has been secured by the County Councils' Association. Whilst I understand clearly the point made by the right hon. Gentleman in charge of this Bill as to how the charges will vary for the first few years, I am not quite clear as to the exact effect of the beet-sugar subsidies.
It would be out of order to go into the old controversy about the sugar beet subsidy, nor do I desire to delay the House by doing so, but some of us did say, at the time when that Measure was passing through the House, that it would have a very considerable effect upon the rental values of land, and we should no doubt see the harvest some time. Long before we expected that, in a Bill dealing with land which is to be handed over to the county councils as was promised, we see provision made for 841 the variation of rental values. I think that that is very important, having regard to the fact that the right hon. Gentleman tells us with glee, if I may say so, that the sugar beet subsidy scheme is so successful that he expects the Government will have to pay £3,000,000 in subsidy next year. That is going to have a very considerable effect on rental values. I am not quarrelling with the arrangement as outlined for the first three or four years, but what is the position of the local authority going to be after the reduction of the subsidy, which will come automatically under the Sugar Beet Subsidy Act?
I take it that the future relationship between the State and the local authorities will depend upon one valuation made in April, 1926, and each year afterwards the sum paid by the Government will be a matter for adjustment according to the discrepancy between the rental value and the amount of the local charges and so on. When the sugar beet subsidy is reduced—I am a little doubtful, sometimes, as to whether it ever will be reduced, looking at the sugar market—what is going to be the position? Do the Government intend that fresh legislation for a new valuation shall be introduced, or are they going to make arrangements, in the valuation, as set out in this Bill, in April, 1926, for meeting all the eventualities in connection with the sugar beet subsidy? I think that that is a matter of importance upon which we might ask for some further information from the Government, and if the right hon. Gentleman could tell us something about that to-night, I think it might facilitate matters during the Committee stage, because, as I have already said, we are not anxious to delay the Bill. We think if is a necessary Bill in the interests of settlement schemes and the finance of local authorities, and, if the right hon. Gentleman will help us in that direction, we shall be glad.
§ Mr. RUNCIMANI only rise for the single object of saying that, even granting the premises from which the Minister starts, I share with my hon. Friend the Member for Hillsborough (Mr. A. V. Alexander) some apprehension as to the enormous growth of the Sugar Beet Subsidy, and that the conditions that are likely to occur as a result of the growth of that subsidy will require our careful 842 scrutiny from time to time. While we do not oppose the Second Reading of the Bill, there will be some points that we shall have to raise in Committee. We shall raise them, of course, in the most helpful spirit possible, but I hope it will not be thought that we agree exactly with the premises which the right hon. Gentleman as outlined to-night without feeling some misgivings in our minds and, possibly, taking steps to curtail this rapidly growing subsidy in the future.
Mr. GUINNESSI think, from the remarks of the hon. Member for Hills-borough (Mr. A. V. Alexander), that I cannot have made myself quite clear in reference to the Sugar Beet Subsidy. I know of no effect whatever that it can have upon the valuation. The valuation is made once for all on 1st April next and merely for the purpose of ascertaining the sums due annually, and, when the sugar subsidy is reduced from 19s. 6d to 13s., it will be much easier to deal with the exceptional double charge due to changing over from payments in arrears to payments during the current year. It does not affect the smallholder; it is only for the sake of financial convenience that we propose the arrangement set out in the Bill.
§ Mr. ALEXANDERDoes the right hon. Gentleman really suggest that the payment of the Sugar Beet Subsidy, in areas where there are small holdings, and where beet may be grown on some of these small holdings, it is not going to affect the rental values?
Mr. GUINNESSI do not think it will appreciably affect them by the 1st April, 1926. There are many small holdings in my constituency, and as the House will appreciate, I have been round a lot of them within the last few days.
Mr. GUINNESSCertainly. If there be any of the county boroughs who have not been consulted I shall be glad to consult them.
§ Bill committed to a Committee of the Whole House for To-morrow.—[Commander Eyres Monsell.]