SMALL HOLDINGS. (Hansard, 29 October 1908)

LORD MONK-BRETTON
My Lords, I rise to ask His Majesty's Government what is the period of years which the Local Government Board, under the powers given to them by Section 14 of the Small Holdings Act of 1907, are prepared to authorise for the repayment of loans incurred for the following purposes respectively; Purchase of freehold land; construction of buildings on freehold land; adaptation of freehold land for small holdings; payment of tenant 427 rights; construction of buildings on leasehold land; adaptation of leasehold land for small holdings.
This question is one of some importance to local authorities who have to administer the Small Holdings Act, and as His Majesty's Government have preferred that it should be deferred until to-day, I hope they will be able to give me a direct answer to the Question. It is important to local authorities because they have to recoup out of the rent which they are to charge for small holdings the expense of the equipment of them, and local authorities are unable to fix a rent because they do not know what are the terms for the repayment of these loans. Until they are able to fix the rent they cannot expect applicants to agree to take the holdings, and until they can get the applicants to agree to take the holdings it is a waste of money for the local authority to equip them. Therefore the whole of the administration of the Act is hung up by the fact that the periods for the repayment of these loans are not known.
I notice, from another Question on the Paper, in the name of the Earl of Kimberley, that one county council, at any rate, has rushed in with its scheme before it knew exactly what was going to be the answer to my Question, and is now regretting its precipitancy. I belong to a county council which has been more cautious. That local authority wrote to the Local Government Board and asked practically the questions which I have placed on the Paper. The Local Government Board, in their reply, said that as regards freehold land the term of repayment was to be eighty years, and that as regards loans for the payment of tenant right valuation it was also to be eighty years. They then proceeded— The Board are unable to say what periods would be allowed for the repayment of loans in respect to the value of existing buildings on the land to be purchased, or the alteration of such buildings or the erection of new buildings, in the absence of full information as to the age and condition of the buildings, the nature of the works to be carried out, and the buildings to be erected. They further stated, with regard to the question of leasehold land and buildings on leasehold land— It would not accord with the Board's usual practice to allow for the repayment of loans for 428 works on leasehold land a longer period than the unexpired term of the lease. I should like to ask if this is a final answer, for, if it is, it will not make the Small Holdings Act very easy to carry out.
I will first deal with the statement of the Local Government Board, with regard to buildings on freehold land, that they will require full information in regard to every one of those buildings. The local authorities cannot fix the rent until they know what the period for the repayment of these loans is to be, and now, on the top of that, they have to submit, I take it, every building, cottage, and pigsty to the Local Government Board for that authority to say for what period they will lend money on those particular buildings. If every local authority has to do that the applicants for small holdings will be dead before the small holdings are equipped Then I come to the statement of the Local Government Board that the term for the repayment in respect of leasehold land is to be the same as the term of the lease. In that case these small holders will have to pay such a rent as will recoup to the county councils, not only the interest on the money expended on the lease, but also the interest on the buildings within the term of thirty-five years. The result will be that the rent will be too high, and the leasehold part of the Act will become practically a dead latter. Therefore county councils will be driven from leasing to purchase.
A great many of these applicants for small holdings are applying for land close to towns. That land generally has a prospective building value, and therefore it would be much more economical if the county councils could lease it than if they are, as they will be under this regulation of the Local Government Board, forced to purchase; and, if they are forced to purchase, Clause 33 of the Act becomes nugatory. There is one other point upon which I should like some information. The Local Government Board, in the letter which I have quoted, say that for tenant right valuation the term for repayment is to be eighty years, which seems to be a very liberal term. Why is it so liberal? For how long will these county councils be 429 out of pocket in respect of this matter? Merely for the period between the departure of the outgoing farmer and the arrival of the incoming farmer. That will be a period of six months or a year, and it seems most unnecessary that that loan should be extended over a period of eighty years, unless, of course, His Majesty's Government mean something quite different. What I would ask the noble Lord who represents the Local Government Board to tell me is this: Do they intend by that regulation that small holders are not to pay valuation upon their small holdings when they come in? That will make a very considerable difference to the security of the rates out of which failures have to be recouped.
I hope the noble Earl will be able to give a straightforward answer—I beg his pardon, I mean a direct answer—because it is very hard that local authorities should not know which way to turn in this matter. Since this letter arrived the local authority concerned has had a visit from one of His Majesty's Commissioners, to whom the letter was shown. He had never seen it, and he gave us a good deal of advice, but asked us to treat that advice as private. Therefore I am not authorised to quote it in your Lordships' House, but what fell from His Majesty's Commissioner differed altogether from the letter of the Local Government Board which I have quoted.

THE EARL OF KIMBERLEY
My Lords, it has been suggested that the noble Lord who will reply on behalf of the Local Government Board should answer at the same time the Question standing in my name on the Paper. I therefore beg to ask why the loans granted to the county council of Norfolk for the purchase of lands for small holdings are based, as regards the land, on a redemption of the loans in eighty years, but, as to the buildings on the lands, on a basis of redemption in fifteen years; also, if he is aware that this is entirely at variance with the schemes as sanctioned by the Board of Agriculture for the purchase of these lands, and that consequently on one estate purchased by the county of Norfolk the rent will 430 have to be increased by 10s. an acre, which is more than the tenants can be expected to pay, and that therefore the loss must be made up by the Imperial Exchequer and ratepayers.
The noble Lord opposite, Lord Monk-Bretton, stated that the Norfolk County Council had rushed into this matter and was now regretting its precipitancy. On 5th August we received a communication from Whitehall stating that, as a general rule, county councils would be able to acquire land much more easily if they were willing to purchase, and the Board hoped that county councils would not restrict their powers in any way by confining themselves to hiring. When we received that letter we endeavoured to carry out the ideas of the Board of Agriculture. It is, of course, much more satisfactory to buy land than to hire. No county council would ever dream of building, except in a small way, on hired land. Our grievance is this, that, having carried out the suggestions of the Board of Agriculture and had schemes passed on the basis of redemption in eight years, we were then told, on applying for the loan, that we could not have it on those terms. On one estate purchased by the county of Norfolk at a cost of £3,560, and which we calculated we could let at 50s. an acre, the effect of basing the loan in respect of buildings on redemption in fifteen years is that the rent should be increased by 10s. an acre, but of course it is quite impossible to ask for that amount. The buildings, with proper management, will last 50 or 100 years, and to require the loan to be repaid in fifteen years make sit absolutely impossible to administer the Act. Like all the other Acts passed for small holdings, this Act becomes a farce and a burlesque. We purchased another piece of land for £2,500, and unless the period of redemption is eighty years, or, at any rate, a very much longer period than fifteen years, for the buildings, we shall not be able to make it pay. Yet I would take the land off the county for £2,800—a profit of £300 on their bargain—and let out to tenant farmers and make a good profit. There is no difficulty with regard to tenant right. We pay for the tenant right at valuation on everything we take over and sell to the incoming tenant, and if the incoming 431 tenant does not want to purchase we sell it to somebody else. The Act of Parliament says we are to have schemes from the Board of Agriculture. We have carried out their schemes according to their own figures, and now we find ourselves in the unpleasant position I have described. It is a case of my Lord Carrington proposes and the Grand Seignior Burns disposes.

§ THE EARL OF HARROWBY
My Lords, I should like to ask whether the buildings referred to by the noble Earl are of timber and corrugated iron, or substantially built of brick with tiled roofs. An inspector from the Board of Agriculture visited my small holdings in Staffordshire, and expressed the hope that the Board would allow county councils to erect a cheaper form of buildings. Of course, if the buildings are cheap—that is to say, of timber and corrugated iron—eighty years would be too long a period over which to spread the repayment; but, on the other hand, if the buildings are substantially built, then I think they would, with care, last eighty years, and I daresay the county authorities would see that they were kept up.

THE EARL OF KIMBERLEY
We bought the whole farm with all the buildings. They are nothing more nor less than ordinary brick-built farm buildings, and I undertake to say they will last quite sixty or seventy years.

§ *LORD ALLENDALE
My Lords, I will, with the permission of your Lordships, answer together the two Questions that have been put to me. The Question standing in the name of Lord Kimberley is, as your Lordships will see, addressed to the President of the Board of Agriculture, but as the loans have to be sanctioned by the Local Government Board it may be convenient that I should reply to that Question also.
I will first answer the Question put by Lord Monk-Bretton. As your Lordships no doubt are aware, money can only be borrowed for the purposes of the Small Holdings and Allotments Act, 1907, with the sanction of the Local Government Board. The maximum periods of repayment of loans for these purposes are fixed by statute and are as follow: Where 432 money is borrowed for the purchase of land, eighty years, and for any other purpose, fifty years. The consent of the Local Government Board is necessary to the period of repayment in each case, but the period is, of course, subject to the statutory limits. The periods to which the Board are prepared to consent are: Loans for the purchase of freehold land, eighty years; for buildings, fifty years—although the usual period is for thirty years the Local Government Board are prepared to consent to loans for fifty years if the probable life of the building is not less than this; for other buildings or equipment, a less term proportionate to the probable life of the particular work. If land is held on lease with less than fifty years unexpired the period would not exceed the period of the lease, unless at the expiration of the lease compensation will be payable to the local authority in respect of the buildings, and the compensation will be applied in paying off the debt; in which case the period for the loan might be longer than the unexpired period of the lease. Compensation as a general rule would be so payable. Any payment for the tenant right which a small holder could not reasonably be expected to repay to the council would be treated as part of the purchase money. Of course, the circumstances of each case will have to be taken into account. The noble Lord suggested that if the details respecting every pigsty, and so on, had to be gone into, it would be a very lengthy process. Of course the Local Government Board will have to satisfy themselves as to the condition of the buildings, but I do not think it need take a very long time. They will consult the Board of Agriculture, who, of course, will have reports from their experts. I do not think there need be anything like the delay suggested by the noble Lord.
In reply to the Question put by Lord Kimberley, I have to say that one of these loans in the county of Norfolk was for fifteen years for buildings, some of which were old and dilapidated. Since, however, the sanction was given, the question of the periods to be allowed for loans under the Small Holdings and Allotments Act has been further considered, and it is intended in future to fix the periods in accordance with the 433 intimation I have just given in the Answer to Lord Monk-Bretton. The county council have asked the Board to reconsider the period of fifteen years referred to by Lord Kimberley, and this request will now be dealt with on the lines already indicated in that reply.

§ THE PRESIDENT OF THE BOARD OF AGRICULTURE AND FISHERIES (Earl CARRINGTON)
My Lords, I hope the House will be satisfied with the very clear statement which has been made by my noble friend. The periods are to be eighty years for land and fifty years for buildings. We are obliged to the two noble Lords for having brought the question forward. We can quite understand the anxiety of my noble friend behind me, Lord Kimberley, who has done such good work in the county to which he belongs in the cause of small holdings. But it should be remembered that the Act is in its infancy, and the Local Government Board have had to make a new departure. I may say that I am perfectly satisfied with the terms announced by my right hon. friend the President of the Local Government Board, and I think there is very little doubt, now that the matter is finally settled, that the Act will be able to work smoothly and quickly.