Clause 4.—(REMISSION OF BALANCE OF PRINCIPAL AND INTEREST OF CERTAIN LOCAL LOANS.) (Hansard, 19 November 1952)

§ Mr. Mitchison
I think the matters set out in the first and second Schedules, which we are now asked to consider under this Clause, present a most remarkable story, and I hope the Financial Secretary is going to give us some further explanation of what all this means. If I understand this story aright—and I am looking at page iii of the Financial Memorandum—a total of £4¾ million was advanced to farmers under the Agricultural Credits Act, 1923, and, since it expired in 1928, over a period of about five years. Out of that considerable amount there are outstanding amounts, if my figures are correct, amounting to nearly £1½ million.
I do not know what has happened or what check Parliament has had on this matter. I may be quite wrong and I may have overlooked some other Parliamentary control, but this appears to me to be a report which concerns the writing off of these loans which actually began in 1934 and continued steadily until at any rate after the war. Am I right in supposing that this is the first time that Parliament has ever had the opportunity of considering, not the mere accounting—these are a great deal more than accounting points—of the loans, but the fact that a very large proportion has had to be written off in this way?
I do not doubt for one moment the competence of the Commissioners in these matters, but it is literally impossible 1940 now to get the money back. My hon. Friend the Member for Wednesbury (Mr. S. N. Evans) has been heard to talk about the farmers and feather beds, but in this particular instance it does not look to me as if the feather bed were provided until the farmer had fallen remarkably hard on the floor. One would want to know in what circumstances all these advances were made with such an immensely high proportion of them proving to be irrecoverable.
In the figures of this comparatively cold statement one sees most vividly the appalling difficulties through which British agriculture passed during the twenties. The fact that a public body of this sort, making these advances by way of agricultural credits to farmers, was compelled to write off out of this public money the very high proportion of over one-third of what was advanced simply because the money could not be recovered, throws a lurid light on the policy, or lack of policy, that was shown towards agriculture during all those years.
I know how much more has been done for farmers and for agriculture since the end of the war, and that should be compared with the state of affairs disclosed by these figures. I wonder why the farmers are not sometimes a bit more grateful than they appear to be. I leave it to the Financial Secretary to make what political jest he can out of that same odd conclusion. I want to know not merely the position of agriculture—that is selfevident—but whether it is really the case that, except by some special and careful hunting through large volumes of figures, the broad facts of the extent and the long duration of these transactions has never been reported to the House of Commons or been subject to public control in any form during all these years. The matter has lain from 1934 up till now, without the necessary steps being taken for writing off and to make the books look right—if I may take the Financial Secretary's metaphor.
If that is the case—and I am not talking about the merits of the matter between one Government and another, because Governments of various colours have been in office during this long period—the whole question of reporting these matters and of a much prompter dealing with them is a matter of constitutional and financial propriety and of giving the 1941 House of Commons effective control. I know how voluminous the papers are about financial matters, and I am quite prepared to be told that if I had looked at a 300-page volume of estimates I might have found all this dealt with at the bottom of page 153, so to speak.
The broad point is that these outstanding debts amount to a disquietingly large volume and they have continued to be written off ever since 1934. The facts of the high proportion of debts written off and the long duration of the writing off process have never been brought to the attention of this House. The legislative process of tidying up the books has been delayed for so long that we now have to go back as far as 1934.

§ Mr. Boyd-Carpenter
When I first had a look at the papers in this case, my reaction was similar to that of the hon. and learned Member for Kettering (Mr. Mitchison). I can in considerable degree reassure him. I understand that we are discussing Clause 4, and the hon. and learned Gentleman has found it necessary, in order to make his argument coherent, to refer to the case of Kenfig Homes, Limited. I suppose I must be allowed to do the same.
Clause 4 deals with the later stages of the writing off procedure. The earlier procedure in writing off the account by the Board must have been taken at some previous time, otherwise that first stage would not have delivered us now to the second stage. So far as Kenfig Homes are concerned, stage one is the writing off by the Board and stage two is the writing off by the Exchequer. The bulk of the items in the Schedule relate to stage two. I find it a little conspicuous that the right hon. and learned Gentlemen who might have cleared up this matter are not for the moment on the Front Bench opposite.

§ Mr. E. Fletcher
If the Financial Secretary will look at the fourth column of the Schedule, he will see references to the particular Acts in which the first stage was taken.

§ Mr. Mitchison
My point is that the first stage of the matter was begun in 1934. Indeed, it is so stated in the Table to which I was referring. Why has the second stage been so long delayed?

§ Mr. Boyd-Carpenter
That is a difficult question to answer. The facts, according 1942 to my inquiries, differ from case to case. The substance of the position is that the Exchequer are not inclined to write off assets until they are convinced that there is no chance of recovery. Between stage one, the writing off by the Board, and stage two, the writing off by the Exchequer, the gap may vary from case to case according to whether a faint glimmer of hope remains that the public funds may recover some portion of the assets owing.
As I said, my own reaction on seeing the papers in this matter was almost entirely that of the hon. and learned Gentleman. Some of these matters appear to go back a considerable time, but they have not been neglected, as the hon. Member for Islington, East (Mr. E. Fletcher) was good enough to point out. The stage one position is recorded in the Schedule and the matters have not been neglected in the interim. It is merely a question in each particular case of whether it was reasonable to hope that it might be possible to salve something from the wreck.
If the hon. and learned Gentleman is interested in any particular individual case, and likes to proceed by way of a Parliamentary Question, I should no doubt be able to get the facts though it is not particularly convenient or perhaps appropriate to bring out the facts in individual cases, because it means disclosure of the affairs of some individual. Ex hypothesi they must be the affairs of individuals who have suffered from some misfortune.
On the general case, the hon. and learned Gentleman took the point that a large number of the advances under the Agricultural Credits Act, 1923, are irrecoverable. It depends, as Dr. Joad would put it, on what you mean by "large." The total figure not recovered is £132,000, while the total of the sums advanced was £4,766,119. While I am not saying that it is a satisfactory thing that money owing to the public is irrecoverable—no one who holds my office can ever take that view—there must be some proportion in this matter, and perhaps £132,000 out of £4¾ million, though not a satisfactory proportion is inaccurately described as "a high proportion."

§ Mr. Mitchison
I am sorry to interrupt again, but I want to get this clear. If the hon. Gentleman looks at page iii, to which 1943 I have already referred him, he will see that the facts appear to be that of a total of £4,700,000 odd, certain loans totalling £3,400,000 odd have been repaid without loss. I quite agree that on the figures it is obvious that there has not been a total loss, but am I not right in saying that on £1,200,000 there has been irrecoverable default, total or partial?

§ Mr. Boyd-Carpenter
The position is this. I will put the total advances at £4,750,000 to save odd figures. The total amounts that we are seeking to write off are, in round figures, £132,000. Very nearly £3,500,000 has already been repaid. A certain amount, of course, is outstanding as some of these loans are long-term loans and are not yet due for repayment. The hon. and learned Member need not be too perturbed, although I share his concern when even one penny of public money is lost.
Once again, this is a matter of the final stages of accountancy. Each case has been considered from the angle I have suggested. It has been considered for quite a time, but once we are convinced that the money cannot be recovered, the realist, practical and tidy thing is to put the books right, and that is what the Clause and the Schedule seek to do.