§ 9.0 p.m.
§ Mr. Alfred MorrisI beg to move Amendment No. 54, in page 14, line 39, leave out 'five' and insert 'eight'.
I have a consequential Amendment—No. 36—to increase the total guarantee fund to £20 million.
In Standing Committee we argued that the amounts specified in several parts of 1069 the Bill had been invalidated by inflation. There has been much more inflation since the completion of the Committee stage. Such has been the fall in the value of money that the right hon. Gentleman must re-consider his arithmetic. It should not be necessary for this side of the House to press the need for a revision of the figure in the Clause.
The debate provides us with a timely opportunity to pay a well-deserved tribute to the Agricultural Mortgage Corporation Ltd. I was with some of its leaders recently and was deeply impressed by the work they are doing for the industry. As the right hon. Gentleman knows, with rising values many farms are now under-mortgaged. It is essential to the future of the industry as a whole that the AMC should have sufficient advances. My right hon. and hon. Friends hope that the Government will see the need for an upward revision of the figure of £17 million.
§ Mr. Peter MillsThe hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) has again had his little say about inflation.
We join the hon. Gentleman in the tribute he paid to the Agricultural Mortgage Corporation Limited. The AMC does a very good job. The recent changes made by it have been very helpful.
The hon. Gentleman proposes that the limit on total Government advances to the AMC be raised from £17 million to £20 million. The effect of the Amendment would be to enable the AMC to continue operating on the present funding basis for about a further five years rather than about three years. However, the difference between the two proposals is not of great significance. We believe that cover for three years would be adequate in the circumstances. I emphasise "in the circumstances", because in that time we shall be able to assess more precisely the amount and type of credit arrangements which will be best to suit the agricultural industry in the longer term. They need to be assessed and examined carefully.
When we came to power my right hon. Friend took the initiative in considering the industry's capital requirements and set up the committee under Professor Wilson to look into the whole matter of capital credit in agriculture. This was a 1070 wise step, and we await with great interest the report of the committee.
Our going into Europe will have an effect on the situation. Therefore, we do not want to look too far ahead. It is right that we should be fairly conservative and careful—not too rigid—for there will be great changes in the years ahead and it is important to wait and see. We believe that we have got it about right.
The accounts for the AMC for the year ending 31st March which have just been published show an increase in reserves of £1.5 million. This will provide additional backing, and further debentures of at least £20 million could now be issued without the need for further Government help. In effect, it is expected that, at the present rate of demand, a £5 million increase is likely to be sufficient to meet the demand for rather more than four years. So the gap between us has narrowed considerably. It was three years, and now because of these reserves it is only four years.
§ Mr. Alfred MorrisThis sounds more like a Treasury brief.
§ Mr. MillsThe hon. Member may have his fun. It is not a Treasury brief, I can assure him. It is a brief from the Ministry of Agriculture. It is right that he should look at this fairly carefully, particularly at future requirements and the effect of the Wilson Report. I hope that hon. and right hon. Gentlemen opposite will not take this matter further in view of what I have said.
§ Amendment negatived.