HC Deb 30 April 1953 vol 514 cc2325-6
13. Lieut.-Colonel Lipton

asked the Minister of Agriculture whether he is aware of the decline in the amount of mortgages completed or approved by the Agricultural Mortgage Corporation during the past financial year; what information he has to show how far this decline is due to the raising of the interest rate from 5½ per cent. to 6 per cent.; and what action he is taking through the corporation or otherwise to encourage capital investment in agriculture.

Sir T. Dugdale

Yes, Sir. I am aware of this decline but it is not possible to assess how far it is due to the raising of the Corporation's lending rate since this is only one of the factors affecting the demand for mortgage loans. The amount of these loans is not, in any case, a reliable guide to the progress of capital development in agriculture. The Government is encouraging this development directly. There are the continued and extended production grants, the grants for drainage and other capital improvements, the general relaxation of licensing for building and houses, taxation reliefs and the restoration of initial allowances.

Lieut.-Colonel Lipton

Are not these advances, which are £2 million, or 30 per cent., down on the previous year, evidence of the declining enterprise and confidence being shown in agriculture, and of the harmful results of the absence of a long-term policy on the part of the present Government? Is the right hon. Gentleman aware that, as a member of the National Farmers Union, I am very disappointed with his conduct so far?

Sir T. Dugdale

I think that the hon. and gallant Member has got the figures wrong. The loans completed during 1952–53 amounted to just over £4,400,000. The loans completed the year before— 1951–52—were, I admit, £4,900,000, but that was a peak year, and in 1950–51 the loans completed were £4,100,000. So there is only a decline this year of 9 per cent.

Mr. Jay

Can the Minister tell us any good reason why interest rates for farmers should be raised at the present moment when agriculture is, by common consent, in need of new capital?

Sir T. Dugdale

The corporation's lending rate is determined largely by the terms on which it can borrow in the market by the issue of debentures.

Mr. Jay

Will the Minister consult with the Chancellor and with this corporation and seek to secure a reduction in the interest rates to farmers?