HL Deb 04 June 1894 vol 25 cc274-81

*THE EARL OF BELMORE asked Her Majesty's Government, with respect to the Irish Church Fund Account, whether their attention had been called to the allegation which had been made that, owing to an alteration made in the Committee of the House of Commons whilst the Irish Church Act, 1869, was passing through that House, a miscalculation was made of the term of years in which the annuities representing tithe-rent charges would have repaid the principal sums commuted, with interest; and whether such full repayment would not have been made at the end of 46, instead of 52, years from the date of commutation in each case? He stated, in explanation, that when Mr. Gladstone, in 1869, introduced the Irish Church Bill he expressed the opinion that it was very desirable to take every opportunity of facilitating and quickening the winding up of these matters: and ho thought it well to encourage those who had paid the tithe-rent charge up to that time to the clergy of the Established Church to commute those annual payments for a fixed sum. This Should be done in one of two ways: either that the person to be paid the rent-charge—generally known as "the landlord "—should buy up the tithe rent at 25 years' purchase; or, thinking possibly that Irish landlords were generally impecunious people, another plan (which had been more largely availed of) was put forward by Mr. Gladstone in his speech. Speaking of the tithe rent-charge, he said— First of all, I will proceed to explain what I fear some of my hearers will think ought to be placed in the category of financial puzzles. It relates to the important subject of tithe rent-charge in Ireland. I attach great importance to the merging of the tithe rent-charge, and the Irish Land Commission will step into possession of it immediately after the passing of the Act.' Then he went on to say that the price would be fixed at 22½ years' purchase, not of the original full £100, but at £75 a year. Mr. Gladstone was alluding there to the commutation which had taken place some years before. The difference between the £75 and the gross £100 was supposed to represent the cost of collection and bad debts. That offer was made because it was thought there might be landlords in Ireland who would be disposed to make that arrangement. Then he went on to say there was another alternative of compulsory sale for those who were not disposed to buy at 22½ years' purchase; they would be charged with £2,250 for every nett £100 a-year of tithe rent-charge at 4½ per cent., and then a loan of equal amount would be granted them at 3½ per cent., the loan to be paid off by instalments. In that way a Sinking Fund of 1 per cent, would remain to absorb the principal. The individual would not be called upon to make any addition whatever to his annual payments to which he would be liable for a term of 45 years. For some reason or other, which did not appear to be stated in Hansard, when the Bill came into Committee, Mr. Gladstone or the Treasury had thought it well to make some alteration in the scheme. They provided an optional instead of a compulsory sale for those who did not wish to buy out-and-out, and the term was altered from 45 to 52 years for the repayment of the money. A slight alteration was also made in the rate of interest on the capital sum, i.e., it was altered from £4 10s. to £4 9s. per annum. When the Bill was in Com- mittee, on the 3rd of May, Mr. Gladstone in opposing an Amendment proposed by the late Mr. Herbert, who had been Chief Secretary to the former Liberal Government, altering the rate from 22½ to 18 years' purchase, at which lay-tithes as a rule we're sold, said the calculation had been made on a given term of years, which it had been proposed should be fixed at 52—he did not say why it had been so fixed. Clause 32 of the Irish Church Act relating to this matter provided that the Commissioners might sell the rentcharges and charge the owners thereof with a sum equal to 22½ times the amount of them; and later on in the same clause the term of 52 years was fixed, with annual payments calculated at the rate of £4 9s. per cent, on the purchase-money. So the matter stood. As time went on some persons had taken the trouble to test those calculations, and had discovered that a mistake had been made in the change from 45 to 52 years. It did not make much difference yet, in the payment of the instalments; but it would turn out, some time in the next century, when these terminable annuities were approaching the period at which they would expire, if a mistake had been really made, that the Treasury would be able to claim six years' more tithe rent-charge in the repayment of every £100 taken at the rate of 3½ per cent, than would suffice to repay capital and interest. But the question sometimes even now arises in this way: when land sales were made under these Acts the Commissioners always pressed the vendors, though they could not insist upon it, to redeem the tithe rent-charge. The capital charge had then to be calculated, and if the Treasury were proceeding upon inaccurate tables people were of course paying more than they ought to pay. Last year he had given notice to move for a Select Committee to inquire into this and other matters, but was not for some time furnished with the necessary figures. Later on, the Irish Land Commission in their Report of last year stated that the total rents receivable, being under £500,000, were exceeded by the liabilities of the Fund to the extent of about £49,000 a year for the period under review. The Commissioners had apparently overstepped their income by that amount. These matters were very complicated because a Sinking Fund was involved. The Government Bill with regard to evicted tenants was now pending, and a farther charge was proposed to be made upon the Irish Church Fund, which had last year appeared to any ordinary mind to be insolvent. It was necessary to show that that was not the case, and therefore the Treasury had in April last issued a Minute showing by a manipulation of the figures that, so far from being £49,000 a year to the bad, they were about £90,000 a year to the good. He found that the explanation of that transformation was given at page 3 of the document referred to. From that it appeared that all income which came into their hands from redemptions and sales of property had been lumped and applied in payment of the annual charges. In the circumstances, it had appeared to be useless last year to ask their Lordships to do anything, but now it appeared that the balance was the other way, and they were now entitled to ask, if any mistake had been made, that the matter should be looked into and set right. Referring to Mr. Gladstone's statement with regard to the redemption of the tithe rent-charges, it appeared that the amount was ascertained originally to be £404,000 a year, but subsequently other items were brought into account one way and another, and on 31st March, 1891, the total amounted to £410,000, an addition of £6,000. Out of that large sum the gross annual sales for cash were only £27,000, and at that date the gross annual amount of tithe rent-charges converted into terminable annuities was £204,100. That was three years ago. Since that time it appeared from another Paper that the amount had been reduced by about £40,000 a year, and probably that had occurred in consequence of the Irish Land Purchase Commissioners' plan of pressing people, generally with success, to buy up the amount of tithe rent-charge allotted on every farm sold. The net result was that on 26th April last, according to the Paper, the tithe rent-charge which had not been redeemed in any way amounted to £170,634 a year, and the annuities were almost exactly the same—£170,030. So that in point of fact about half the original tithe rent-charge not extinguished remained to be paid in perpetuity, and the remainder was being extinguished at the rate of £4 9s. per cent, per annum. It was evident that a mistake had been made and that the calculations were inaccurate. Their Lordships were justified in asking Her Majesty's Government whether the Treasury intended to look into the matter and set it right. It was not merely a matter for the landlords, but the total amount of the Irish Church Fund would be seriously affected in the end. He hoped the noble Earl would be able to give the House a satisfactory answer upon this important question involving a considerable sum of money.

THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (The Earl of KIMBEKLEY)

The noble Lord has explained with great clearness the point to which he wishes to draw the attention of the Government. He argues from a statement made by Mr. Gladstone in the course of the discussion on the Irish Church Bill, that there is some miscalculation of the amount which ought to be paid by the landlords for the abolition of the tithe. But the Land Commission is necessarily guided by the Act of Parliament alone, and the Act of Parliament, as the noble Lord correctly quoted it, shows that there is no miscalculation as to the term of years in which the principal of the loan will have been repaid, because no rate of interest is prescribed in the Act, and there can consequently be no calculation. The provisions of the Act are precise—namely, an annual payment for 52 years of £4 9s. for each £100 of the capital value of the rent-charge to be redeemed. The tithepayer is thus enabled to get rid of his liability by paying for 52 years the same sum as he was previously liable to pay in perpetuity. It is for him to accept this offer or not as he pleases; and there is no power, as the law now stands, either to reduce the rate of the annuity or to curtail its term. As to whether these conditions laid down expressly by the Act of Parliament involve hardship, I am not prepared to discuss now. My answer to the noble Lord is, that there is no miscalculation, because the payment now required is founded upon the express terms of the Act. The landlords, of course, in accepting that can only accept that which the Act enables the Land Commission to give them. I think, in the circumstances, the noble Lord will forgive me for not following him into the other matters, which in the actual position of things at present it is not possible for me to deal with.

LORD ASHBOURNE

My Lords, nothing can possibly be clearer than what the noble Lord has said, but the difficulty is that he has given no answer to the point raised by my noble Friend. By the Irish Church. Act, 1869, the tithe rent-charge is dealt with in two ways. It is either commuted at a certain number of years' purchase, and about this there is no question; or, more generally, owing to the difficulty of people in Ireland not being able to make large ready-money payments, it is converted into annuities. There is no choice given—if a man is not in a position to pay up at the number of years' capital value, he has no choice. These annuities were first calculated at 45 years' purchase; but some miscalculation crept in, and the number of years' purchase was subsequently raised to 52. The answer given by the noble Earl, of course, is that the term of 52 years is in the Act and the £4 9s. is in the Act, and that he cannot consider anything else. But that is no answer whatever if those figures have been wrongly put in instead of 45 years and the amount appropriate to that term. If that was a miscalculation it is obvious that it can be readjusted by Act of Parliament; and it is not reasonable to ask the Irish landlords to go on paying largely in excess of what is required merely because of a mistake in an Act of Parliament. I hope the noble Earl will use all the influence he can bring to bear upon what may be supposed to stand in the place of a Treasury conscience to have the matter looked into, so that if a mistake has been made it may be remedied.

THE EARL OF KIMBERLEY

The Treasury do not admit that there has been any miscalculation. But whether the terms of the Act of Parliament involve any hardship is another thing, and I am not prepared to discuss it now.

LORD ASHBOURNE

Are we to understand clearly that the noble Earl is instructed by the Treasury to say that they have had the matter looked into by experts and have found no miscalculation?

THE EARL OF KIMBERLEY

I have stated exactly what the Treasury's view is, and I cannot add to the statement.

THE MARQUESS OF SALISBURY

Does the Treasury decline to confide in the noble Earl? If the Treasury would confide in him, and if he would confide in the House, what the state of the case is—perhaps the Treasury might write a letter—it would be much more satisfactory than this mere ipse dixit of the Treasury, which is not calculated to satisfy the House that these figures and none others are correct.

THE EARL OF KIMBERLEY

The Treasury do not admit that there is any calculation to be made, because the Act of Parliament explicitly states what is to be paid.

THE MARQUESS OF SALISBURY

Then the Act of Parliament must be changed if need be.

THE EARL OF KIMBERLEY

That is another matter. They can only act according to the Act of Parliament. The noble Lord in his speech referred to what was said by Mr. Gladstone during the discussion on the Irish Church Bill. That might be a very fair topic for arguing that there should be a new arrangement; but the present arrangement is in an Act of Parliament, which states that £4 9s. shall be paid for 52 years. That stands by itself, without any calculation.

THE MARQUESS OF SALISBURY

The point I wish to press upon the noble Earl is, what was the consideration on which the arrangement was accepted? The statement of Mr. Gladstone is part and parcel of the bargain, and it is not now open to the Treasury to say that they never heard of Mr. Gladstone's statement, and that all they care about are the precise words in the Act of Parliament. That Act arose out of Mr. Gladstone's statement, and what we want to know is, whether the statement of Mr. Gladstone does or does not support the calculation put into the Act of Parliament, and, if it does not, I think we have a right to ask that the wording of the Act of Parliament should be altered.

THE EARL OF BELMORE

said, he was aware the £4 9s. was an accurate calculation upon the section of the Act as drawn; but he had been commenting upon what Mr. Gladstone had offered. In the Irish Land Act of 1887 Parliament had recognised that the Irish landlords were being hardly treated, because one of the sections of that Act provided that the Land Commission might, if they thought it expedient, order the redemption of any tithe or quit rent-charge or any portion thereof at a price to be fixed by the Land Commission. The Land Commission thought 20 years' purchase would be enough. Their power to carry this out, was, however, qualified by the consent of the Treasury being required, and the Treasury had refused to give that consent.

[The subject then dropped.]