§ [SECOND READING.]
§ Order of the Day for the Second Reading read.
§ THE EARL OF DUNMORE
My Lords, this Bill which I am going to ask your Lordships to read a second time is one which I trust will meet with some measure of support, as it deals with a problem in which many of your Lordships are deeply interested. The Bill, I may say, is promoted by the Small Ownership Committee, of which Sir Gilbert Parker is chairman. Both Parties are agreed that land should be more widely distributed in this country among the people. The depopulation of the land and the congestion of the towns form a very serious national problem; but although both Parties are agreed on the terms of the problem, they part company on the question of tenure.
It is now some three years since the present Government passed the Small Holdings and Allotments Act. At that time we were told that there was a great desire on the part of the people to gain access to the land. How far that desire was based on ignorance of the real conditions attached to the life of the small cultivator it is difficult to say, but I myself believe that there are men to-day who would gladly face those conditions if they could be given the additional incentive of ownership. The Government have based their policy on a system of tenancy. That policy has been conscientiously supported and carried out by the county councils throughout the country. I think the noble Earl opposite, the President of the Board of Agriculture, will support me in that statement. I have nothing against the system of tenancy, against the Government policy, which I know the noble Earl has worked so hard to make a success, provided you can get the people on to the land and provided you can make it worth while their remaining there.
The Report which was issued by the Board of Agriculture last July fully justifies the experiment of splitting up land in this country into small holdings, and shows that under certain conditions the small cultivator can make a living out of it. But there are two dangers in the Government system. One is that county 73 councils, under pressure of the Board of Agriculture, can be forced into buying or renting land under conditions unsuitable for subsequent small holdings. The other danger is the natural and inevitable outcome of the first, and consists in the very high rent which is subsequently charged to the small holder. I could, if the noble Earl wished, give instances showing how very high this rent is—in fact, in many cases it is higher than the annuity which would be paid under an instalment purchase system. But I think the noble Earl has admitted that the small holder will, under the Government's Act, pay more for his land than the tenant would pay to an individual landlord. My own opinion—I give it with all due respect—is that the relative difference between the cost of renting and the cost of purchase, by which a small holder pays for his land in rent as much as, or more than he would pay under an instalment purchase system, is absurd, and I think that under the latter system an owner would get a great deal more for his money.
One cannot blame the county councils. They have to administer the Act. They have to purchase or rent land in districts which may be economically unsuitable for small holdings. If they do nothing, the Board of Agriculture comes down upon them. But anyhow the result for these county council tenants is that they pay very high rents, and the very fact that they are able to pay these high rents is, I think, a happy augury of what they would do under the Unionist policy of freehold tenure. The results of the Government Act during the last three years are very disappointing as regards the number of small holdings which have been taken up. This may be explained by looking at the Small Holdings Report which was issued last July. I will, with your Lordships' permission, read one or two sentences which I think explain this. It says—It has been found that a considerable number of the applicants who have been provisionally approved in the first instance are inclined to withdraw when a definite offer of land is made to them.And it goes on—In many cases the rents which councils are bound to ask to recoup their outlay on the acquisition and adaptation of the land are higher than the applicants expected or were willing to pay, and many applications have been withdrawn in consequence.74 It seems that the Government's conditions are hardly so alluring as we were led to believe three years ago. At any rate, the would-be small holders when they come to close quarters with those proposals are in some instances inclined to fight shy of them. And yet there is a great deal of land in the market to-day, and a great many people who would like to own it working it. In fact, we have got the land and we have got the people; all we have to do is to bring them together. I believe that a desirable result depends on three things—ownership, easy access to capital at a low rate of interest, and co-operation. It is in accordance with these three principles that I venture to produce this Bill for your Lordships' consideration.
I will deal first with the provisions in the Bill to facilitate ownership. As the county councils in England—and this Bill applies only to England—are already concerned in the provision of small agricultural holdings both under the Unionist Act of 1902 and under the Radical Act of 1907, which Acts have been consolidated in the Act of 1908, so we in this Bill have got the county councils as a medium for bringing together the man who has land to sell and the man who is anxious to buy. It is provided in the Bill that the county council shall keep a register of all agricultural land in the county available for sale for the purposes of the Bill, and on this register will be entered full particulars as regards price and details of building expenses, &c. It would also be the duty of the county council to communicate from time to time with owners of agricultural land, inviting them to place their land on the register for sale. Recognising that it is desirable to encourage large owners to put their land on the register, we propose to relieve all land so entered from the Land Value Duties imposed by the Budget of 1909 and from all future duties which may be imposed. But this privilege is subject to two restrictions—first, that the price of the land so entered must be subject to the approval of the Board of Agriculture, who would, no doubt, be advised by the county councils; and, secondly, that the land should be entered in parcels not exceeding 50 acres. In return for this privilege of relief from the Land Value Duties an owner will be under compulsion to sell his land at the registered price. But I would like to make it quite clear to your Lordships that this compulsion only arises 75 on the offer to purchase, as prior to any such offer an owner will be at liberty to withdraw his land from the register.
The Unionist Party have always been in favour of doing all that they can to facilitate the transfer of land—a policy for which at one time our opponents expressed much affection; but as regards the Radical Party it must be taken that they have abandoned their former policy, since the Chancellor of the Exchequer by his Budget of 1909 clogged the machinery of transfer by doubling the former Stamp Duties. In order to facilitate transactions under this Bill we propose to give power to the Treasury to remit half the Stamp Duties—a proposal which will result to the benefit of the would-be small owner, as it is always on the purchaser that the cost of Stamp Duty falls. These, my Lords, are the provisions in the Bill for bringing together the man who has land to sell and the man who is willing to buy.
The problem which has next to be faced is how to provide the necessary capital at a low rate of interest in order to enable the would-be small owner to purchase his land, and, if necessary, provide the buildings and equipment. It is not an easy problem to face. In Ireland the solution has been sought by a direct advance from the Imperial Exchequer; but I fear that here, with the ever-increasing claims on the Imperial Exchequer, any system of direct State advances might prove to be an insuperable burden on the finances of the country and might lead to a postponement of the operation of this scheme. Therefore those who have promoted this Bill have provided in it for a Land Bank, whose duty it will be to make the necessary advances to purchasers of land under the Bill. This Land Bank will be a commercial bank, with a suggested capital of £5,000,000 and an authorised debenture issue of five times the capital. It is in respect of this debenture issue that the Bill invokes the aid of the State. Obviously the Bank must obtain the bulk of its working capital at a low rate of interest, as its charge for advances for land purchase is limited to 4 per cent., of which ½ per cent. is allocated to the sinking fund to provide for the redemption of the loan. The debentures, therefore, will bear interest at a rate not exceeding 3½per cent., which will be guaranteed by the Government. But, of course, the bank, being a commercial affair, 76 will endeavour to obtain its money as cheaply as possible; certainly at a lower rate than 3½ per cent., otherwise there would be no margin for profit between the rate it borrowed at and the rate it lent at. In view of the Government guarantee, the Treasury will appoint two out of the seven members of the board of directors.
I have no doubt that certain of your Lordships who possess far greater knowledge of finance than I can pretend to will presently rise from both sides of the House and criticise the financial part of this Bill. You may deprecate the giving of power to raise what you may, perhaps, describe as another Government loan. But, my Lords, this is not a Government loan. It is a contingency liability which, under proper businesslike management, the country will never be called upon to meet. The debentures which are guaranteed by the Government are secured on valuable assets—mainly on land and buildings. But I would ask your Lordships to consider for a minute for what purpose this guarantee is to be given. You are not asked, as is usually the case, to throw a great burden on the finances of the country in order to enable a large number of people to live on the State. You are not asked to remove the responsibility from earning his own living from a single individual to the State. On the contrary, a contingent liability is to be assumed by the State in order to enable a large number of individuals not only to earn their own living, but in doing so to greatly add to the wealth and prosperity of the country.
I would also ask your Lordships to consider the alternative. Under the Small Holdings and Allotments Act, if small holdings prove to be an economic failure the whole of the loss, whatever loss there may be, will fall on the county councils—that is, on the ratepayers. We must remember that both Parties are committed to this policy of small holdings, of trying to get people on to the land. If that policy should prove to be a failure, if for some reason or other an Englishman is not fitted to undergo the hardships, we will say, of agricultural life, perhaps owing to his education—if that is the case, and if there is any loss, does it make such a vast difference whether it falls on the ratepayer or on the taxpayer? I should have thought that the latter would be the best fitted to 77 pay; but the very fact that we provide in this Bill that this policy should be carried out by a commercial undertaking on businesslike lines is, I think, the greatest safeguard we can provide against any loss, against rash speculations in land, against taking up land under conditions which are economically unsuited for small holdings.
I might, perhaps, be allowed to say a word about the rate of interest which is charged to the small owner. I have seen it compared with the rate of interest charged under the Irish Land Act. I need not point out the difference which exists between the position in Ireland at that time and the position in England to-day. We were called upon in Ireland practically only to finance the sitting tenant, to enable the man who was already in occupation of his land to become the owner. In this country we have got to bring new people on to the land. In fact, we have to colonise the land, and there is an additional expense of administration. But I would also point out to your Lordships that the Government have to pay a great deal more for their money to-day than they had to pay a few years ago, and I venture to predict that future Governments will have to continue paving a good deal more for their money than they were able to get it in the past, and that no Government in the future will be able to advance money for land purchase at a lower rate than 3½ per cent. if any of the cost of administration is to be included in that rate. Under this Bill we advance money for land purchase at 3½ per cent., and on 80 per cent. of the purchase price we charge ½ per cent. in addition to provide for the redemption of the loan, and on the remaining 20 per cent. we charge 1½ per cent. to provide for the redemption of the loan. It works out in this way. A man who can find 20 per cent. of the purchase money himself will pay a total rate on the money he borrows of 4 per cent. A man who can find no part but has to raise the whole of the purchase price will have to pay a total rate of interest of 4 guineas per cent. until he has paid off the loan to the county council, when the rate of interest would be reduced to 4 per cent.
To illustrate the method by which this advance of capital will be made, I will assume that an agriculturist desiring to purchase land, but lacking the means to 78 provide any part of the purchase money, has by means of the county council register found a suitable holding. He would apply to the Land Bank, who, after due inquiries and after consultation with the county council, would, if those inquiries were satisfactory, advance 80 per cent.—that is, four-fifths of the purchase price. The county council would advance the remaining fifth at a rate of interest not exceeding 5 per cent., of which not less than 1½ per cent. would be allocated to the sinking fund to provide for the redemption of the loan. The county council would be under an obligation to advance this balance unless, considering the security to be insufficient, they appealed to the Local Government Board and were relieved of their responsibility either in whole or in part. I would remind your Lordships that under the Government's Act the responsibility for the whole of the purchase price rests on the shoulders of the county council whenever they buy land for small holdings. Under this Bill only one-fifth part of that responsibility would rest on their shoulders. And I would also ask your Lordships to note that every payment that the small owner makes reduces the responsibility of the county council at a rate just three times as fast as that at which the responsibility of the bank is reduced.
I see that my noble friend Lord Belper is going to raise an objection to that part of the Bill which puts part of the financial responsibility on to the shoulders of the county council. I am not prepared to say that the noble Lord's objections are without weight. I would rather point out to the noble Lord that this part of the Bill, putting the last 20 per cent., the second mortgage, as it were, on to the shoulders of the county council, is not an essential part of the Bill: it is not vital to the Bill itself. There are many other alternatives. It might be put on to the shoulders of the Board of Agriculture, or it might follow the precedent in the Ashbourne Act. But I think noble Lords will agree with me when I say that if the would-be small owner is to be called upon to find any part of the purchase price himself, it Will prevent many otherwise suitable candidates coming forward to take up land. This is essentially a point to be thrashed out in Committee, and I trust that the noble Lord will not take this detail of the Bill as an argument against the scheme as a whole.
79 There now only remain to be dealt with the opportunities for co-operation as provided for in the Bill. Clause 11 provides that the Board of Agriculture shall make regulations for the formation or extension of agricultural credit societies or village banks on a co-operative basis, having for their objects—(1) the profitable working of agricultural holdings purchased under this Bill by making advances for the provision of buildings, drainage, water supply, fences, and other improvements of the holding; (2) the benefit of all agricultural holdings by making advances, or by otherwise affording facilities for credit banking and insurance and for the purchase of requisites, the sale and distribution of produce, and for such other purposes as the Board by regulations prescribe.
I need not detain your Lordships by entering on the obvious advantages of co-operation to the agriculturist. Most of your Lordships are well acquainted with the great results achieved in Ireland mainly through the efforts of Sir Horace Plunkett. Any economic disadvantage that there may be in splitting up a large farm into small holdings ought to be overcome by a sound system of co-operation. Mr. Hill, the American economist, has shown by remarkable figures how very much more productive small farms are than large. Co-operation enables the small farmer to grade his produce, to make large contracts, and to obtain more favourable railway rates, and, in addition, it gives to the small farmer the financial strength and credit of the large farmer. In fact, co-operation is absolutely necessary to any scheme of this sort in order to provide that security which each individual by himself can hardly be said to possess. The liability of these agricultural credit societies is unlimited. It is a practical application of the principle, Each for all, all for each; and it is the system which exists and is working very well at the present moment in Italy, in Austria-Hungary, in Belgium, and in Germany.
I have explained the details of the Bill. I do not ask your Lordships to support all the details but I do ask you to support the broad principles which lie behind those details. In advocating the system of ownership, backed by co-operation and a land bank, I hesitate to adopt the obvious argument which one might produce in support of such a system. In Germany, 80 in France, in Denmark, and in many other countries we find the land studded by small holders who have succeeded by the means I propose. In all of these countries ownership and prosperity have gone hand in hand. It might be said that the success of these small owners is due to a better climate and a different fiscal system. Of course, tariffs are both directly and indirectly of great assistance to small owners, but I do not think that either of these factors is really essential to the success of these small holders. If we look at Denmark, for instance, we find it has a more rigorous climate than ours, and none of their tariffs are really of direct assistance as regards the produce of small holders except a tariff on cheese, and in Belgium there are no tariffs on cereals except a tariff on oats. I think those who argue merely on economic grounds against the splitting up of land into small holdings fail to take into account one factor which will go a long way to ensuring success, and that is the capital value of the energy and extra work which will be forthcoming from the individual stimulated by the magic spell of ownership.
Anyhow one thing is certain—that all the arguments which can be brought to bear against the system of ownership can be brought to bear with greater effect against the system of tenancy. Under the Government's Act a man not only pays the rent of his land but a proportion of the sinking fund to repay to the county council the cost of the land. In other words, he purchases and pays for the land by instalments spread over eighty years, and at the end of that time does not own his land. Under that system all the work that he puts into his land goes as unearned income to the county council. Even his improvements go to the county council unless they were made with their consent. I think that is a very fair summary of the working of the Government's Act. But the question we are concerned with is, Has that Act proved to be a success? I see that, in answer to a Question put to him on March 22 as regards small holdings of fifty acres and under, the Parliamentary Secretary to the Board of Agriculture informed the House of Commons that the number of small holdings in 1910 was 288,802, whereas in 1907, before the passing of that Act, the number was 289,093. There are, therefore, 291 fewer small holdings to-day than there were 81 three years ago. It seems to me that a system of tenancy requires no further criticism. It is a system which has been condemned by all the great agricultural countries, with the exception, perhaps, of Belgium, where, owing to intensive culture, the price of land is almost prohibitive; but even in Belgium the people pay high prices to own land, and over one-third of the land is already held in ownership.
I feel certain that in this country if small holdings are to succeed it will be under the Unionist policy of freehold tenure, under which a man will receive the full benefit of all the work he puts into his land and full benefit of all his energy and enterprise. Therefore I bring this Bill forward in order to get an opportunity for discussion by Parliament of a question which is admitted by both Parties to be of the utmost importance. I do not ask your Lordships to pass the Bill as it stands. I have brought it forward on behalf of the Small Ownership Committee in order that its provisions may be criticised and examined. I hope that both Houses of Parliament, having regard to the importance of the subject, will submit these proposals to a careful investigation. With this end in view I propose, if your Lordships are good enough to give a Second Reading to the Bill, to move that it be referred to a Joint Committee of both Houses of Parliament.
§ Moved, That the Bill be now read 2a.—(The Earl of Dunmore.)
§ LORD BELPER
had given notice, on the Motion for the Second Reading, to move to resolve, "That this House, whilst approving of the principle of extending the small ownership of land, is unwilling to proceed further with a measure which places on county councils duties and obligations which are alien to the objects for which they exist, and which would impose on them financial schemes of a novel and doubtful character, involving considerable risks to the ratepayers."
The noble Lord said: My Lords, in rising to move the Resolution of which I have given notice, I think I may congratulate my noble friend who has brought this Bill to the notice of the House upon having explained its provisions and touched upon the various points to which he wishes specially to call attention with his 82 usual clearness. But I did not find that he touched upon the objections which I have raised to the Bill except in one small point, to which I shall refer later. I think that he and other members of your Lordships' House who are conversant with local government affairs will not be at all surprised to find that I have put down this Motion in the terms in which it stands. Let me say at once in moving this Resolution I am not acting on my own initiative. This Bill came before the County Councils Association during the course of the last two or three weeks. A report was brought up to the Executive Council from two of the most important committees of that Association—the Parliamentary Committee and the Committee which deals, amongst other things, with small holdings—and on the recommendation of both those Committees a large and important meeting of the Executive Council of the Association unanimously came to the conclusion that it was their duty to oppose this Bill.
Let me call attention to the wording of my Resolution. It states, in the first instance, that this House, whilst approving of the principle of extending the small ownership of land, is unwilling to proceed further with a measure which places on county councils duties and obligations which are alien to the objects for which they exist. Everybody who has been conversant with the course of local government during the last few years will have noticed how many occasions there have been when county councils have had to make some protest against the extended duties and powers which were given them in many cases under Government Bills. Those cases were the natural extension of local government, the desire to have more detailed provisions with regard to matters with which county councils already had to deal. Let me say that although we have had to make protests we have always been willing cheerfully to undertake any duties which should naturally fall upon county councils in the development of local government, and if we have had objections to make it is because, whilst these extended duties were constantly being cast upon us, no funds were found by the central Government to relieve the county councils from the extra expense put upon them of administration.
But, my Lords, this Bill stands in a wholly different category. This is a 83 measure which is not brought forward by the Government. It is, at all events for the moment, the measure of a private member of your Lordships' House. It contains provisions of a most novel and far-reaching character, and many of the provisions of the Bill may be said not only to be novel but very doubtful in their character. It is a Bill which will put large and onerous duties upon county councils, and it seemed to us that it was our duty to take the very first opportunity that we could of protesting against these duties and obligations being put upon us, and for that reason I have placed this Resolution on the Paper. We have avoided dealing with important parts of the Bill which my noble friend has explained to the House. We are quite willing to admit that it may be very desirable to extend the small ownership of land, and we wish at the same time—and I might have put it in the Resolution if it had been in order—to give every opportunity for a reasonable and fair development of the system of small holdings which has been brought into existence by the present Government. We do not wish to take any Party view of this Bill. Personally I should look with the greatest favour on any reasonable measure which would bring back to us the state of things which existed thirty-five or forty or fifty years ago, and would again bring into existence, on satisfactory terms, those yeomen of England who were of such great advantage to this country—men of stability, men of independence, who were squeezed out in the first instance, I think, by the very high prices that land was fetching, and later by a series of years of agricultural depression.
My noble friend referred to the fact that the administration of this Bill had been given to county councils as they already had powers with regard to small holdings, and I notice that in the Memorandum prefixed to the Bill it is also stated that the county council machinery for doing the administrative work is already in existence, and that therefore it was very convenient to utilise the vast deal of voluntary effort which they were capable of giving. I must say I rather resent the idea of putting this work on county councils as if they had not enough work to do already. If it is thought that the administrative work of county councils will admit of their doing more work it is a great mistake. Only the other day I was informed, in connection 84 with my own county council, that it was impossible to do the existing work with the present staff. The duties of the county council have been constantly increasing and it was found necessary to have extra clerks, and it was only in response to an appeal not to make a larger charge at the present moment for clerical assistance that as a makeshift some temporary help was arranged for. And if it is thought that any part of the present staffs of county councils could do any of the work put upon them by this Bill it is a great mistake.
The provisions of the Bill point at this not being a small extension of the system of small holdings. The provisions evidently aim at setting up a very large and important system, not only of registration of land, but also of land agents for small ownership. Take one or two of the clauses. Every county council is to keep a register of agricultural land within the county available for sale under the Act, showing every sort of particular with regard to the land, including price, acreage, and encumbrances. The register is to be open daily at the offices of the county council, and no person is to pay any fee for taking copies or extracts from the register. Then it is to be the duty of the county council to provide, for the carrying into effect of the Bill, such a number of persons skilled in the valuation of agricultural land as the Board of Agriculture think necessary. In the next clause it is laid down that not less often than once in every year communications are to be made from the county council to the owners of agricultural land in the county, requesting them to enter upon the register their land for sale in the manner prescribed in the Bill. All this points at not a small extension of the present system of small holdings, but to a large office which will have to be equipped very fully with a large number of clerks, and which, if this system of setting up small holdings is successful, will increase as time goes on. As far as I can see, no provision is made in the Bill for the initial expense of setting up these large offices. It is quite true there is a certain payment to be made with regard to land agents, but that percentage would not cover the expense of setting up these offices, which expense seems wholly unprovided for in the Bill.
Take the financial side of this question. I do not wish to go very fully into it, or into any details connected with the question of land banks. It is quite clear, as far as 85 these banks are concerned, that owing to the conditions which would obtain they would be able to raise money. But the question is what will be the position of the would-be small holders who have to borrow money from these banks. The noble Earl pointed out that the banks are to lend up to 80 per cent. of the value of the land. I have had some little experience myself of banking and of country banks, and certainly in past years a great deal was done in the way of lending money to those employed in agricultural pursuits. I venture to say, however, that there is no sound bank, however much accustomed to this sort of work, who would lend up to 80 per cent. of the supposed value of the land unless there was some collateral security or some good reason to know that the person who wished to borrow was a man of stability. But what is the case when it comes to the unfortunate county council? The land banks, at all events, are secure enough. They are supported by the Government. Though the noble Earl did not stick very closely by the clause with regard to county councils—for he gave it away by saying that it was not a necessary part of the Bill—I must refer to it because it is evidently part of the scheme; and if my noble friend does not think very much of it, at all events those who drew up this Bill included it as a substantial part of the scheme. What is the proposal with regard to county councils? The proposal is this, that where 80 per cent. has been lent as a first mortgage it shall be the duty—not the discretion, but the duty—of the council of the county in which the land is situated to advance upon the security of the land, as a second charge, the other 20 per cent. That is to say, the money is to be lent right up to the hilt of the supposed value of the land. It might be supposed that if the county council are to be given these duties they might have discretion put into their hands with regard to whether or not it is desirable to lend this last 20 per cent. But that is not the case at all, because the clause goes on to say—Provided that if the county council object to make such advance the council may submit the question to the Local Government Board, and if the Local Government Board are of opinion that the security for the second land charge is insufficient to protect the county council against the probability of loss, the Local Government Board may make an order relieving the county council from the liability to make such advance, or such portion thereof, as the Board may determine.86 Therefore what it comes to is this, that the Local Government Board is to be the arbiter in the case of land which is in the neighbourhood of the county council and with which the county council are fully conversant, and if they do not relieve the county council then the county council are forced, against their will and against their own discretion, to use the money of the ratepayers in making this advance.
Let me take two cases. Many of the members of your Lordships' House will remember the state of things thirty or forty years ago when there was great land pressure. Supposing an Act of this sort had been in force at that time and money had been lent up to the hilt on the full value of the land. There is not a single county in England where not only the whole of the money advanced by the county council would have been lost on those terms, but also a great part of the money advanced by the national bank, because land has deteriorated in counties within my own cognisance from a minimum of 30 per cent. in value to as much as 50 per cent. or even more. What has happened once may happen again. Take another case. Supposing a small tenant who wished to become a small landowner, tempted by these liberal terms of lending, consented to take a small holding, out of which he thought he was going to make a good profit. It may turn out that he could not make a living out of the land. Supposing it turned out also that he was neither industrious nor competent? It would be extremely easy for the whole of the advance of the county council to be lost in two or three years; and if the land had to be sold, it would be extremely likely that the mismanagement of the two or three years would have reduced the capital value by at least 20 to 25 per cent. I only make this point because it seems to me obvious that provisions of this sort are not such as should be imposed upon county councils, who would be compelled to work the Act against their will. And in that respect they would be placed in a most disagreeable position as regards the ratepayers, because they would have to tell the ratepayers that the money had been lost, not by their own fault or mismanagement, but because the representatives of the Local Government Board knew nothing about the land, and had allowed the last 20 per cent. to be borrowed in the manner proposed.
87 I do not wish to dwell at any length on the provisions of this Bill. There are provisions with regard to regulations to be imposed by the Board of Agriculture under the Bill which I think they might not care about having to pass any more than the county councils would care about having these duties imposed upon them. There is no question which has given rise to more soreness in Parliament than this with regard to regulations imposed by Government offices without consultation with the county councils themselves, and I am rather surprised that we should not find in this Bill even the usual power given to Parliament to object if it desires to do so. I am aware that I am at some disadvantage in moving a Resolution objecting to this Bill on the Second Reading when I am only dealing with particular parts of the measure, because naturally I have not been able to address my remarks to some of the important parts of the Bill on which no doubt other members of the House will speak later. My only excuse for that is that it was thought by the County Councils Association that they would stand on much stronger ground if they confined their objections to matters on which they could speak with confidence and knowledge.
Let me say, when I am asked why I desire to reject the Bill and not amend it at a future stage, that one great objection to the latter course is that the county councils take up so large a part of the Bill that were they struck out altogether the Bill would have to be practically redrafted. But the noble Earl has taken care that there shall be no opportunity to amend the Bill at a future stage. If he carries his proposal that the Bill should be referred to a Joint Committee of both Houses, the Bill having been read a second time would be taken away from the cognisance of the House. On many occasions it has been convenient to refer Bills to Joint Committees, but I do not believe there is any precedent for so referring a Bill if it is novel and contains totally new proposals of a very contentious character. Where Bills of late have been referred to a Joint Committee of both Houses they have been diligently threshed out, if not in both Houses, at least in one House. These Joint Committees facilitate the solution of details which have given rise to differences of opinion in both Houses. If this Bill were to be going through its usual course in this House it might not have been neces- 88 sary for me to move its rejection by a Resolution of this sort, for we should at all events have then attempted to amend it in Committee by striking out the parts which refer to county councils. But as the Bill stands, if it is given a Second Reading and the proposal to send it to a Joint Committee carried, we shall be precluded from taking any action after the Joint Committee has discussed the Bill. The Bill will go from this House as if not only its principle was approved, but also its machinery. I hope that, whatever course may be taken with regard to the Second Reading of this Bill, noble Lords who are interested in the local government of this country will support us in making a strong protest against having provisions of this particular sort imposed upon county councils.
Amendment moved, To leave out all the words after ("That") for the purpose of inserting the following Resolution, viz.: "This House, whilst approving of the principle of extending the small ownership of land, is unwilling to proceed further with a measure which places on County Councils duties and obligations which are alien to the objects for which they exist, and which would impose on them financial schemes of a novel and doubtful character, involving considerable risks to the ratepayers."—(Lord Belper.)
§ LORD FABER
My Lords, may I say that I look upon this matter solely from the point of view of national finance. As regards the first portion of the Bill I have very little to say, and I say that little because I happen to have sat just lately for two years on a Royal Commission which had to deal with the very difficult question of land transfer. I notice that Clause 8 of this Bill provides that where any land shall have been purchased under this Bill, the purchaser shall apply to be registered as proprietor thereof under the Land Transfer Acts, 1875 and 1897, and may be registered as proprietor of the land with any title authorised by those Acts. That, of course, is quite right, but you do not attach any penalty to non-registration. That seems to me to be an omission, for there should, of course, be a penalty if the land is not registered. There is so much publicity in the anterior stages of this Bill—the county councils have to enter the particulars of the land on their registers and so forth—that I think the registrar on an 89 occasion of this sort would be willing to grant an absolute title to the land, say, in six months, if the title was, of course, in order and other things apparently straight-forward. It would be an innovation, but I know the opinion of the Royal Commission was that we should take every opportunity that we could of making titles absolute. That is the only clause I have to allude to in the first portion of the Bill.
But when we come to the second portion of the Bill, I have to object to those clauses which relate to the so-called National Land Bank. I do not object at all to banks. Far from it. However many banks there may be I hope I shall hold out the hand of fellowship to them, but this is a very different sort of bank from any with which I am acquainted. The noble Earl who introduced this Bill is rather sanguine in thinking that he will easily raise £5,000,000 of capital in £1 shares. I think he will find some difficulty. But let that pass. I object most strongly to Clause 14. Noble Lords will see that this clause deals with the power given to the National Land Bank to issue no less than £25,000,000 sterling of debentures on which the Treasury is to guarantee 3½ per cent. Now, I take it at once that this is a National Land Bank, and not a commercial bank, because were you dealing with an ordinary commercial bank you would not be willing to find £25,000,000 of the national money as capital for that bank. If it is a National Land Bank, were I a director of that bank I should say, Should I be able if I had £25,000,000, or any part of it, to make 3½ per cent. on that? I should not like to have to do it, and retain the capital intact. In addition to that, there would be all the salaries and expenses connected with the bank and I very much doubt if the National Land Bank could make the necessary interest.
Noble Lords will remember that if the National Land Bank does not meet the interest on this £25,000,000, or any portion of it, the taxpayers will have to find that interest, and that will be an addition to the already very heavy taxes. But supposing for a moment that I am wrong, and that the bank could make their expenses and pay 3½ per cent. What will the farmer have to pay? As the noble Lord below me said just now, we must take care in dealing with land in this country that we do not fall into the mistake that 90 the late Government made in the case of the Irish land-purchase scheme. The late Government never allowed sufficient margin between the amount of interest they had to pay for the money and the amount of interest they were getting from the Irish tenants. I think they were six or seven years ago going to borrow at 2¾ per cent. and lend to the tenants at 3¼ per cent. Obviously, if everything had gone right that was not nearly margin enough. It should have been much nearer 1½ per cent. than ½ per cent. to put it on a commercial basis. Now as regards this bank, if it has to pay 3½ per cent. and in addition has certain expenses, what will the farmer have to pay on his money? In estimating what the farmer will have to pay the question of bad debts must not be forgotten. In a paper the other day I saw this paragraph which has a bearing on the point—At Thurles Quarter Sessions yesterday, County Court Judge Xerr granted decrees against fifty tenants for non-payment of instalments due to the Irish Land Commission. The practical failure of last year's harvest is said to be responsible for the inability of the tenants to meet these payments.So that in addition to the Land Bank having to pay 3½ per cent. interest and the expenses of working, it may have to meet some bad debts. The farmer, therefore, will have to pay from 4½ per cent. to 5 per cent. at least, and will be worse off as a landowner than he was as a tenant.
For the last thirty years, ever since 1880, landlords have borne the immense losses which have occurred in the pursuit of agriculture. They have stood between the tenants and ruin over and over again, and when one remembers what landlords have done for tenants in keeping farms in repair and in coming to the help of the tenants when seasons were bad, one wonders whether there is any magic in becoming an owner of land. I should have thought the tenants were very much better off as tenants. The landlord never got 4½ per cent., nor anything like it. During the last thirty years 2½ per cent. is more like the figure. Yet we are told that the tenants will be better off. I cannot agree. I do not think there is any magic in the mere ownership of land. It ought to be a great commercial pursuit. Can you make money out of the land, or can you not? Can you make money out of agriculture? At this moment I do not think you can. As your Lordships know quite well, we in this country have decided—I do not say we have decided wrongly— 91 that the people, especially the people in the big towns, shall have the cheapest food that can be given to them. Very well then. We do not start on the same basis that other countries start on. In America, of course, they have the virgin soil, and pay very little rent. I saw the other day an advertisement of the sale of land in Western Australia at fourpence an acre. We have to compete with that. France is protected to the extent of ten shillings a quarter on wheat. Germany is also protected to the extent of twelve shillings. In these circumstances I doubt very much whether agriculture in this country can be made to pay at present. It can be made to pay in those other countries, but these particular circumstances that apply there do not apply in this country at the present time.
I am inclined to think we shall have to leave the question of agriculture to supply and demand. I know, of course, that in days to come agriculture will be a paying trade in this country, for every day, every month, and every year that we live the population increases by leaps and bounds; but, of course, the land is a fixed quantity. Naturally, in a very short time in the life of a nation agriculture will become a paying industry in this country. At present I do not think it is paying. I think if we indulge in banks of this kind it will result in a loss, not only to the bank, but to the Government which provides part of the money of the bank. The taxes that we have to pay are heavy enough, and, if I may, I should like to allude for three or four minutes to the very interesting state in which we find ourselves with regard to the national finance and the national taxes of this country.
I have always understood that the law of the Exchequer and the law of the country was this, that every year should stand on its own financial basis—that it should be, so to speak, in a water-tight compartment; and so that there should be no inducement to any Chancellor of the Exchequer to budget for more money than he wanted it was decided that if there was any surplus in any single year, it was to go to the old Sinking Fund and to be used for the purchase of Consols, and that was to go in reduction of the National Debt. But we find that, although that may be the law, it has not been carried out. What are the facts to-day? The 92 Super-Tax between April, 1909, and April, 1910, has not been dealt with yet. The assessment papers for that Super-Tax were sent out in the first week in January this year. Many of those papers had the particulars filled up and were sent in to the authorities within three days of their receipt. That would be the second week in January. A good many of us have heard nothing more of them. Of course, that Super-Tax belongs to last year. It does not belong to 1911 or 1912.
Then there is another question we have heard debated in the other House, and it is an interesting one. I have here a letter from the secretary of one of the largest companies, if not the largest company, in this country, and this is what occurred. In the middle of March, in accordance with the usual practice, the Income Tax officer called on this company, and the officer of the company handed the Income Tax officer a cheque for £157,000. That was in one cheque for Income Tax. Was it accepted? No. It was handed back to the official of the company with a request that he would not pay it in until April. That is contrary to the law. In point of fact we are in this position, that the Chancellor of the Exchequer has taken from the taxpayers of this country some millions in taxes more than he ought to have done. He budgeted for more than he wanted, and the surplus ought to have gone to the reduction of the National Debt.
The City has always been in the habit of knowing what the condition of the taxes were at the end of March. They generally know that the taxes have been collected by that date, and therefore money will become easier, and they can lay their plans accordingly. This year we find it all entirely different. We all expected cheap money as usual at the beginning of April, but there has not been cheap money, because taxes are still being collected. The moneys in the hands of the Government at the Bank of England are not less than £10,000,000 more than last year, and still many taxes are being collected. It is hardly fair on the commercial community that there should be this great uncertainty as to taxes. After all, I conclude that the duty of the Chancellor of the Exchequer is to obey the law of the country, and this has not been done. The Chancellor of the Exchequer was good enough to say the other day that he did not want to be too 93 hard in the collection of the Super-Tax, that he wanted to have some feeling for the Super-Tax payer. All that is very good; but I wish he had had a little more feeling for them when he put the tax on them in the first instance. Mr. Hobhouse said in the House of Commons the other day that he thought it was the fault of the officials of the Income Tax Department. I do not want to allude to this, because I hardly think your Lordships take that view. That is all I have to say about the national finance. I must apologise for this digression, but one does not often get an opportunity in this House of alluding to financial matters, and perhaps in the future we may have fewer opportunities than we have now. As regards the Bill, I think this calling in of the help of the Government to the extent of many millions to give a guarantee to the proposed National Land Bank is such a source of danger that if the noble Earl insists upon leaving that clause in I shall be obliged to vote against the measure.
THE EARL OF SHAFTESBURY
My Lords, I do not wish to question the action of the Chancellor of the Exchequer during the last few weeks, but inasmuch as the noble Earl has invited criticism upon the provisions of his Bill, I do wish to make one or two observations with regard to the machinery that he sets up for providing for small ownership as against tenancy. I am entirely in agreement with the noble Earl when he advocates ownership as against tenancy, but there are criticisms with regard to the machinery that he proposes to set up in this Bill which I want to make. To begin with, my small experience of local government leads me to think that the weight of argument on the question of the county council scheme in this Bill lies with the noble Lord who has moved the rejection of the Bill; but what I really want to draw the attention of the House to is Clause 11, which deals with the question of co-operation.
The noble Earl never said a wiser thing than when he said that the success of the small holder depended upon his coming into the general co-operative movement which is now being established in this country. My experience in Ireland has shown me the advantages that the farmer can derive from organisation and co-operation; and in England the co-operative movement is spreading, not as fast 94 as I should like to see it, but it is undoubtedly making great progress. But the very life-spring of co-operation depends upon a purely voluntary movement on the part of the farmers concerned, their willingness to come together and combine for the purposes of organisation, and any provision in an Act of Parliament that offers State interference or State advocacy of the co-operative movement will, to my mind, hinder rather than help its progress. In Clause 11 your Lordships will see that the Board of Agriculture are given certain powers. The clause runs—The Board shall, as soon as may be after the passing of this Act, make regulations for the formation or extension of agricultural credit societies or village banks on a co-operative basis having for their objects—I believe the effect of a provision of that sort would be to kill the co-operative movement. The farmer is suspicious enough as it is of any combination of this sort, and if a public Department comes along and endeavours to, if I may use the word, dragoon the farmers into co-operation or combination, it will have the effect of making the co-operative movement a dead letter altogether. That is a criticism I wish to offer the noble Earl with regard to co-operation, which he has in his mind as a necessity for the welfare of his small ownership scheme, and I hope that, whatever the result of this debate may be, Clause 11 will be dropped out of the Bill.
- (1) the profitable working of agricultural holdings purchased under this Act by making advances for the provision of buildings, drainage, water supply, fences, and other improvements of the holding;
- (2) the benefit of all agricultural holdings by making advances, or by otherwise affording facilities for credit banking and insurance and for the purchase of requisites, the sale and distribution of produce, and for such other purposes as the Board by regulations prescribe."
§ LORD CLINTON
My Lords, I wish very much that I could support the Bill of the noble Earl, because I cordially agree with the objects of the measure, and particularly any extension of the system of land ownership. I cannot say that I agree in every way with the remarks which fell from the noble Lord, Lord Faber, who took such a pessimistic view of agriculture in this country. I am afraid he must have had a very unfortunate agricultural life, a very unfortunate agricultural district, because my experience is very much the opposite to his own. I believe not only that agri- 95 culture can pay, but that it is paying better now than it has done before, and that it will continue to pay better. But I must support the amendment of Lord Belper, partly for the reasons he has stated, but chiefly because this seems to me an exceedingly inopportune moment to bring in this Bill. It is brought in at a time when there is a very much larger scheme before the country—a scheme which is taken up by farmers all over the country, and which has already had a Second Reading. As recently as last month the Central Chamber of Agriculture, of which I have the honour to be chairman, passed a resolution, with I think only one dissentient, in favour of that Bill. It has been supported by resolutions from the affiliated Chambers throughout the country, and I think it would be a matter of real regret that a scheme like this, touching really only a minor point, should now be brought into competition with that Bill.
As to the scheme of this Bill, I do not wish to criticise it in any detail. Financially it has been found fault with. It does seem to me that many of its provisions are financially doubtful, and I do not think that in a scheme of State-aided purchase—and it is a scheme of State-aided purchase although called a guarantee—we should have any commercial undertaking between the State and the parties concerned. If you do, it is quite clear there must be increased expenses. There must be a certain amount of profit from the undertaking, and these expenses and that profit will absolutely and inevitably come out of the farmers' pockets. In order to carry out any scheme of purchase, the farmer must get his money at the lowest rate possible. I do not believe the lowest rate can be obtained except by direct aid from the State. But it is chiefly because I think the time is not ripe for bringing this Bill in that I shall oppose it. Supposing the larger Bill failed, your Lordships might then have an opportunity for trying the smaller scheme, but until the larger scheme has been thoroughly discussed I hope your Lordships will not agree to pass this Bill.
§ LORD CLIFFORD OF CHUDLEIGH
My Lords, I only wish to say a few words on Lord Belper's Resolution. As regards the position of the county councils in these days, it is most necessary that they should protest vehemently against the extension of their duties which is perpetually being 96 made. County councils were established to take over those county duties which were originally performed by the magistrates. They were duties of an obvious nature, and such as could only be well carried out by a body situated in the localities themselves. To those duties was added very large and important work connected with local education, and that was quite enough to fill up such spare time and spare organisation which the county councils had. But in addition to all that, there is a tendency to thrust upon county councils many duties which are not in their nature purely local, though the advantages of a well-organised local administration are, no doubt, very tempting bait to those who wish to bring some scheme immediately into operation without the trouble and the difficulty of forming an organisation to carry it out.
Work of national importance has from time to time been placed upon county councils, who have, I admit, evinced a certain willingness to take it over. Yet at the same time there has been a lamentable forgetfulness to provide the funds wherewith those duties should be carried out. The reason of this, I think, is not far to seek. It is that the central Departments find it easier to impose upon the silent representatives of county councils the duty of providing the money without the difficulties which the Treasury places in the way of their doing so. There is a very good instance of this in the Bill which is at present before us. The county councils are requested to go into a financial business, and to find a second mortgage covering the entire value of the property—a transaction that no trustee would be allowed to look at for a minute. They are requested to do this, and if they object the Local Government Board can step in and practically compel them to do so. There might be something to be said for their compulsion if the Exchequer supported the doubtful second mortgage in the same way that they do the more secure first one; but I notice that that provision is obviously not in the Bill.
Such a business as this is not one that ought to be entrusted to county councils. It is beyond the scope of the purposes for which they were constituted. It is beyond the scope of that possible enlargement which their administration and constitution might seem to offer. It is a work so national in its character, and so little 97 confined to any county or locality, that it should be undertaken wholly and entirely by the Imperial Government. A county council is a body which is supposed to be under the control of those who elect its members, but there is a growing tendency to convert that body into a means of raising money which is entirely beyond the control of those who have elected its members. Yet the county council is compelled to find the money which ought to be found from other sources. I hope, therefore, that whatever form the proposals in this Bill may take the onerous duties which are cast upon the county councils may be removed.
§ THE PRESIDENT OF THE BOARD OF AGRICULTURE AND FISHERIES (EARL CARRINGTON)
My Lords, before saying a few words on this Bill I hope I may be forgiven one word on a remark that fell from the noble Earl who introduced the Bill. He said that the Small Holdings Act for which I am responsible is a failure. Well, I do not want to blow my own trumpet, but I do honestly think that that criticism is a little severe, and hardly justified. The Act has been in existence for three years. The first year was, of course, spent in preparing the ground and planting the seed, and in the two years in which we have been really at work I think it is enormously to the credit of the two excellent Commissioners—Mr. Cheney and Mr. Baines—whom I entrusted with the beginning of the work, that they have been able, with the assistance they have had in the office, to obtain more than 100,000 acres of land for small holders. If there has been a failure of the Act, it is from the success of it; because there is so great a demand for land under the present conditions that I have obtained permission from the Government to have six additional Commissioners in order to cope with the number of unsatisfied demands on the part of men who have been unable to get land. I think that in a year or two we shall be able to show such an advanced record even on the good work we have already done as will satisfy even the most exacting of our critics.
As to the Bill before the House, I think I ought first to compliment the noble and gallant Earl who introduced the Bill for the clear and excellent way in which he put his proposals before your Lordships. During the whole of his speech his pro- 98 posals seemed to be to some extent attractive, and really looked as if they had something in them. I hoped that some noble Lord on that side of the House—I am speaking under correction, but I believe there was a whip sent out for this Bill—would get up and support him, but, unfortunately for him but very fortunately for me as it makes my task much easier, up to the present moment I do not think there has been one noble Lord opposite who has been able to give the Bill his whole-hearted support. But I think I may congratulate myself on the fact that in the noble and gallant Earl we have another recruit, and a most valuable recruit, to our side as regards the policy of small holdings, which some years ago was in such low water in this country. He is evidently also another recruit to our policy of the desirability of breaking up huge estates, which at one time were supposed to be the glory and the safety of this country.
It is only four years ago that the noble Marquess, Lord Lansdowne, whom we so very much regret not to see in his place to-night and still more the reason that keeps him away, stated his fear that the demand which we maintained existed for small holdings was only "local and sporadic," and was "not general at all." And some people—I won't mention names—went further still, and said that the desire for small holdings was a "dishonest cry," and they quoted against small holdings some correspondent who had been attached in days gone by to the Board of Agriculture. They never lost an opportunity of running the idea down, and trying to make people believe that there was quite enough land to meet any demand that existed. But now I am glad to say we are all supporters of small holdings. We are all agreed that it is absolutely necessary for the good of this country that the land should be broken up; that there should be more people put upon the land. I may adapt one of Disraeli's famous sayings about the christianising of the Franks. The Tory Party has been converted to the small holdings idea in platoons, and they are now being baptised in battalions. The landlords of England are taking up the idea not only in theory, but in practice.
I do not know if your Lordships have seen The Times to-day. There is a full- 99 page covered with advertisements of land for sale from one firm alone, and that firm advertises 265,000 acres of land as being in the market. It shows that landlords are unloading surplus land on to a grateful and obliged public. I believe they are doing that for two reasons. One reason I believe is that there is a boom in land, and that people who unfortunately have mortgages on their estates—and even in the case of estates which are perfectly free—see that they may increase their income at a very small cost to themselves, and, as Lord Onslow said, in some instances a landlord who sells will have pounds to dispose of where he formerly had shillings. It is not, therefore, much to be wondered at that they put their estates on the market. On the other hand, I am told there is no boom in land, that no one wants to buy land. It is the greatest rubbish that ever was. Land is being sold from a sense of duty, a sense of duty to our successors and to our country. We are not afraid of the present Government. Far from it. We know that no additional taxation of any sort or kind has been put on purely agricultural land. We know that large sums have been given to the agricultural interest under the Development Fund and otherwise, and that practically speaking the two words "Lloyd George" are really Welsh for liberality towards English landowners. But landlords say that they are apprehensive of a Socialist Government. They say, "We are not afraid of Mr. Asquith's Government in the least, but we are afraid of what may subsequently happen, and we had better get rid of our land. We think that perhaps a Government might come in that would think it right to tax the food of the people, and if they thought that was right they would not very likely think it wrong to tax the land that grows the food of the people, and therefore we had better clear out while the sun shines, and do the best we can."
As I said before, I compliment the noble and gallant Earl on the way in which he introduced his Bill, but I am afraid I cannot go much further with him. I will save the time of the House by not repeating in any way what has been so well said by Lord Belper, who has forgotten more about county councils than most of us ever knew or will know. Something was said about the register of the agricultural land, and that it would be valuable. But still it has to be kept up by the county 100 council, and I would like to point out this. The county councils are to be asked to write to the owners of agricultural land asking them to enter their land on the register, and besides that they would have to write once a year to gentlemen who own land. What does that mean in plain English? It means that the county councils are to go round touting for business, and take the business out of the hands of the ordinary land agents. I have had a great deal to do with land agents, and I know them to be an honourable, industrious, and worthy lot of men, but I am also aware that most of them are warm supporters of the Party opposite. Therefore I would submit to the leaders of that Party whether it would be wise to take the bread out of their supporters' mouths, and whether that part of the noble Earl's Bill ought not to come out.
The noble Earl said he did not insist on all the details of his Bill. Quite so. Perhaps that is very lucky. If you look at Clause 5 you will see that land can be sold with the reservation of sporting rights. If there is a possibility of upsetting tenant farmers it is through game being let. Under this clause the unfortunate purchaser would be subject to the perpetual inroads of the proprietors of the sporting rights, who could enter on his farm for the purpose of shooting game, which under the section means hares, rabbits, partridges, and so on. I shall be told, no doubt, that this is in my own Act—the Small Holdings Act. That is perfectly true. I say in the strictest confidence I did not like it at all, but I allowed it to go through because I thought it would facilitate the passage of the Bill through your Lordships' House. And I was in great hopes that the county councils would not avail themselves of this power, but they have done so in some instances, and I am sorry to say that we have had a bother with the Kesteven County Council, who made a mistake in thinking that they were doing a kindness to their tenants by taking the sporting rights from them, because they thought in that way they would reduce the rents.
I come to Clause 9. Your Lordships will see from subsection (1) that a tenant shall not hold more than seventy-five acres, except in a special case. Under the Bill he may hold up to seventy-five acres; that is to be the acknowledged size of his holding, and if he becomes entitled to any more land by descent, devise, gift, purchase, 101 or otherwise, he shall, under subsection (2), enter the excess for sale. If he fails in this, then under the third subsection the county council can do this for him, and sell at such a price as the Board of Agriculture shall approve. I would ask your Lordships to consider this for one moment. The Marquess of Carabas sees an opportunity of increasing his income by selling a large portion of land, say, 10,000 acres. He puts it on the market and gives everybody notice to quit—the villagers, small and big farmers, and everybody else. Then in order to appease his conscience he will release, under the noble Earl's Bill, some of this land and sell it to some of his hard-working tenants. He would sell it to two, perhaps, or twenty, or thirty or thirty-five hard-working agricultural toilers. Suppose he sells to William Barleycorn and John Barleycorn. Well, they have this property, and neither of them unfortunately lives to be one hundred years old. They both die before they reach the century, and what happens? John Barleycorn leaves his properly to John Barleycorn, junior. William Barleycorn dies intestate, without issue, and so John Barleycorn, junior, becomes the proprietor. What is that unfortunate man to do? He must enter the excess of the land that he owns on this register, and if he fails the county council may do this for him, and sell it at such a price as the Board of Agriculture may approve. Can your Lordships imagine anything more absolutely certain to infuriate John Barleycorn, junior, or to exasperate the county councils who are already worked off their legs and do not know where to turn, or to make the President of the Board of Agriculture even more unpopular than he is at present.
The question of the National Land Bank has been so well dealt with by the noble Lord opposite, Lord Faber, that I need not trouble you with any observations of my own on that subject. But I should like to bring before your Lordships an opinion about this proposal from a very old friend of mine whose opinion is very valuable in agricultural circles—I mean my right hon. friend, Mr. Jesse Collings. Now, Mr. Jesse Collings is frightened out of his wits at this Bill, and he writes from his country house at Birmingham to his leader, Lord Lansdowne, at Bowood, in the following terms—My dear Lord Lansdowne,—It is to be fervently hoped that the Unionist Party at least will not adopt the policy contained in Lord Dunmore's Bill.102 I can assure Mr. Collings that the Liberal Party will not adopt it, whatever the Party opposite may do. He goes on—Such a land bank as Lord Dunmore proposes is an entirely new departure for which there is no precedent, and the county councils are not likely to give up their position of comparative security under the Act of 1908 for such a scheme as this. The instalments for repayment would be too heavy and prohibitive for a new owner to buy his farm with any advantage to himself. The measure would be of no use to a large number of farmers on estates which are likely to come into the market.And he recommends an alternative. Now my right hon. friend Mr. Jesse Collings is a very astute and clever man, and he recommends as his alternative his own Bill. He is exactly like those Irish horse dealers that you see at the Dublin Horse Show, who, when you are looking at a horse, come up and tap you on the shoulder and say, "Oh, Colonel, I have a nice little horse round the corner that will suit you down to the ground. Come and look at it with me." Mr. Jesse Collings recommends his own Land Purchase Bill which will be brought in to-morrow by the noble Earl, Lord Malmesbury, and submitted to your Lordships' House, and perhaps some of our friends on this side of the House may have something to say upon it.
There is only one other matter to which I should like to call the attention of the House—namely, Clause 11—which provides that regulations shall as soon as possible be made for the formation of agricultural credit societies. But that has been done already. We do not want to wait for the passing of this Bill for that. This is one of the most important parts of the Government's agricultural programme. The noble Earl, Lord Shaftesbury, who is the pioneer and originator of the whole scheme in your Lordships' House, has very wisely shown the great dangers of the proposal in this clause, so that I need not any longer detain your Lordships upon it. Last summer I promised, with the permission of the Prime Minister and the approval of my colleagues, that the Government would bring in a Bill to deal with this great question of credit societies. And here I should like to make a public acknowledgment of the great courtesy that I have received from all the representatives of the great country banks with whom I have been in consultation during the winter and the spring, and also from the noble Lords who formed the Select Committee which produced that 103 excellent Report on Lord Shaftesbury's Bill. I can only say that this Credit Societies Bill would have been in your Lordships' hands had it not been for the fact that the Government draftsman, like so many people during the last winter, has been seriously indisposed, but it is ready now and I hope very shortly to be able to submit it to the House. That Bill has been framed and drawn up with great care. Had we not better wait and see what there is in that Bill before we enter upon such an enormous enterprise as this Land Bank, with the £25,000,000 proposed to be guaranteed by His Majesty's Government?
Seriously speaking, is this a Bill winch ought to be introduced into this House at all? That, I think, is a very great and grave question. Men of all sections and descriptions consider that the duty of this House is to revise and amend, and, under proper safeguards, to delay. But what does Lord Dunmore ask us to do? To give a Second Reading to this Bill with its gigantic proposal and then refer the Bill to a Joint Committee of both Houses. Would you get the House of Commons to join in a Joint Committee? It is very improbable. If the Bill before the House is given a Second Reading and its principle thus affirmed, I have a very shrewd suspicion that there would be a great many hard-headed and successful men on the Unionist side who would say, "Thank God, there is a House of Commons." I hope the noble Earl will not think I am objecting to his Bill in a factious or partisan spirit. No one would welcome more than myself any practical suggestion to further the one great object I have had at heart for the last forty or fifty years—the acquisition of small holdings for the poor, and putting a population of working men on the land. But I agree with the noble Lord who said that this proposal is going the wrong way to work, that it would put the clock back and in no way help the object that we all have in view. Having taken advice from those who have practical experience, from those on whose opinion I invariably rely, I most respectfully beg to say that we on this side of the House agree with the proposition which has been so ably put before your Lordships by my noble friend Lord Belper, and if the noble Earl, Lord Dunmore, insists upon going to a Division, we as a body shall most certainly vote with Lord Belper.
LORD CURZON OF KEDLESTON
My Lords, the noble Earl the President of the Board of Agriculture, in the genial and discursive speech which he has just delivered, raised the question whether this is a class of Bill which ought to be introduced into your Lordships' House. I hope that your Lordships will not accept the definition of the functions of this House which was placed before us by the noble Earl. I cannot imagine anything more desirable in the public interest than that the noble Earl, Lord Dunmore, should devote himself, in the comparative leisure which we experience in this House, to examining a great question like this, to putting his scheme into legislative form, and soliciting the opinion of your Lordships upon it. And the mere fact that he ended his speech by a Motion to refer the Bill to a Joint Committee ought surely not to disable him from introducing the Bill at all or from receiving that attention from your Lordships' House which the intrinsic importance of the subject deserves.
The noble Earl opposite said one thing with which I entirely agree. He paid a compliment to Lord Dunmore for the clearness and reasonableness with which he introduced this measure and in a very short space of time contrived to give us a very good idea of its general provisions. But the noble Earl, Lord Carrington, went on to draw attention to the fact that the bulk of the speeches which have been delivered in this debate had been critical of Lord Dunmore's Bill. After all, is that surprising? Is it not natural and inevitable that those who object to particular provisions of a Bill should rise and say so? Is it to be expected that those who favour the general principle of the Bill, a principle which has for a long time been accepted by the Conservative Party, should think it necessary on the present occasion to reaffirm their adherence to that principle? Is it not rather more natural that my noble friend Lord Belper should express the views of the county councils; that a great banker like Lord Faber should state his views about the National Land Bank; and that we should hear from Lord Carrington opposite the accepted Government attitude towards the Bill? It would, I think, be most unjust if Lord Dunmore were to draw from the critical attitude that has been adopted in the speeches to which I have referred the inference that there is not in this House a great deal of 105 sympathy with a great deal of his Bill. And I think, moreover, it would be a great shame if, because there are certain provisions in the Bill which may fairly be criticised, this House were to adopt an openly antagonistic attitude towards it.
Is it not the case that there is much more common ground between us on this question of dealing with the land than on many of the other great controverted issues of the day? I agree with a great deal of what Earl Carrington said about that matter. The problem is a serious one. We approach it on both sides, I believe, without Party passion. Broadly speaking, we desire the same issue. We all agree that the system of agrarian tenure in this country is imperfect; that it is capable of great improvement; that the present system, with its threefold division into landowner and farmer and tenant, is one which does not give an adequate return to all three; that our system of cultivation is capable of improvement; that subdivision of the land very desirable. I am not aware that Lord Carrington is just in saying that this is a sudden discovery on the part of the Conservative Party. If it is a question of consistency, I agree with Lord Dunmore that it does not lie in the mouth of Lord Carrington to make that charge. We all agree that the greater division of the soil is an improvement which both parties ought to have in view, and I agree further with what the noble Earl said just now that the moment is singularly opportune for making a change in our system.
Nobody can pretend that there is any difficulty in obtaining land. You will see every day in the newspapers estates being offered for sale. The old system of great landed estates is rapidly breaking up. Whether it is due to economic or social influences, or whether it has been accelerated by the policy of the present Government, I need not pause to inquire. But there it is. Estates are in the market. I was speaking the other day to a great authority on the system of land tenure in England, and he told me that he believed that, with the exception of special sporting or residential estates, which he naturally excluded, as much as one-half of the soil of England at present is capable of being bought, provided the owner can obtain a return in proportion to the amount of money he has spent upon its development. That being the state of affairs, the two Parties in the State approach it from a rather different point of 106 view. The noble Earl opposite is the spokesman of the view that you ought to deal with this problem by creating a great system of leasehold tenure. He and his Party are apparently hostile to the ownership of the land. They look forward to the land of the country, if it changes hands, passing into the possession of the State or of local authorities, such as county councils and along with these general views they introduce a general, and, as I think, lamentable element of compulsion. I think that is regrettable, because compulsion carries a trail of unpopularity with it and is apt to mar the success of the scheme. However, that is one definite method of dealing with the question.
Noble Lords on this side of the House have rather different views. Most of us hold strongly that small ownership is the real solution of the problem. I venture respectfully to disagree somewhat with what Lord Faber said upon the matter. He seemed to doubt the rooted instinct in human nature to acquire land. I must confess I do not agree with him. I believe it is one of the most natural and universal instincts in the human mind. Again, we hold that the ownership of the land in fee simple would give a great stimulus to energy and thrift and self-sacrifice, and all those qualities that we desire to promote in our agricultural population. A man will always do better if he is dealing with that which belings to him, if he can benefit by his own labour, if he can sell himself what he owns, or if he can bequeath what he owns to those who come after him. Moreover, I think it can be demonstrated that the system of small ownership in the land will be on the whole more economical and profitable than the schemes which find favour with the noble Earl the President of the Board of Agriculture and his Party.
But I do not desire on the present occasion to argue the two systems. I am ready to admit there is room for both. It would be a most foolish and dangerous thing to dogmatise about agriculture in this country. There may well be parts of the country for which your system is the best. There may be others for which ours would be superior. What I believe to be the main contention of noble Lords on this side of the House is this, that where a desire to become the owner of property exists, and where property is in the market—and I contend that that is almost universal—then the Government should not stand in the 107 way of the realisation of that desire, but that every reasonable facility should be given to enable it to be satisfied.
There is one point to which no attention has been paid to-night. Is it not the case that there are two classes for whom we want to provide if we are to build up the agrarian system in this country? First, there is the tenant farmer who keeps a large farm, and who might wish to become the owner; secondly, there is the small man desirous of taking land, destitute of capital but at the same time very likely endowed with the intelligence and ambition which may make him wish to become the owner of the soil. I know it is often contended that there is no desire on the part of tenant farmers to become the owners of large properties. I can hardly think that is the case. You have only to read the transactions reported in the papers from day to day when great estates come into the market to see that the tenant farmers are the first who wish to become owners, and you have only to read the resolutions passed by the various associations and Chambers of Agriculture to see how strong a demand there is for the acquisition of the soil. I believe that as soon as you set up in this country adequate machinery for credit and co-operation, for finding the money on the one hand and for enabling farming to be conducted with greater economy and profit on the other, you will find a great forward movement in the desire for ownership of the soil.
What stands in the way? We all know that in the first place the man who wishes to purchase, be he a big man or a small man, requires capital; and in the second place he wants capital not merely for purchase but for development, working expenses, and stocking the farm, purchasing implements, carrying his produce to the markets—in other words, for carrying on his industry. It is to meet these needs that my noble friend puts his views into the form of a Bill. Is there anything so very extravagant about them? Is not his Bill to a large extent the embodiment of the successful experience of other countries? Does not his scheme of a Central Land Bank at the top and of associated or affiliated credit societies lower down exist in almost every European country great or small? Is it not admitted to be the main feature of the success of the agrarian systems in those countries? I thought that these were accepted axioms of political and social economy.
108 I remember my own experience in India, where we have an agrarian problem to deal with infinitely larger and more complex than anything which confronts us here. It is more difficult, of course, because the weight and the burden of the usurer is much greater, and because you are dealing with a much more helpless, hopeless, and improvident class of peasantry. We passed a scheme for introducing exactly the same sort of societies as Lord Dunmore proposes in this Bill, and in spite of the difficulty of starting anything new in India, or of getting any novel idea into the minds of that ignorant peasantry, if the Secretary of State for India were here to-night he would tell you that the scheme has been a success, that the number of the societies has increased and that they have grown in public confidence. Why is that? Because everywhere we interested the representatives of the people, because we thought it better to have as little Government management and control as possible, and limited Government intervention, as is also proposed here, to the guarantee of financial assistance, to exemption from taxation, and to other privileges. To that part of the Bill, at any rate, I am sure the noble Earl opposite is not opposed, because in his speech just now he took credit for the fact that he and his Party propose to give increased facilities for agricultural banks. He referred to a pronouncement he made in the autumn of last year, and he referred also to the Bill of Lord Shaftesbury. He made mention of these societies. The creation of these societies—and if they are to be successful there must be a land bank or some similar institution behind them—is, I believe, an object with which the noble Earl will agree.
I pass to the criticisms which have been made on this Bill. The point has not been taken, although I think it fairly might be, that the Bill applies only to the small owner. The noble Earl who introduced the Bill does not attempt to deal in his measure with the tenant farmer to whom I referred just now. I think seventy-five acres is the limit of the holding with which be proposes to deal, and his answer to that is, of course, that he has no wider ambitions in his Bill than those which I have indicated. Then I pass to the criticisms of Lord Belper and Lord Clifford of Chudleigh, which were echoed by Lord Carrington. Nobody in this House would dispute for a moment 109 the great weight with which Lord Belper speaks as representing, not only his own individual view, but the views of that important body, the County Councils Association. What were his objections to the Bill, or that part of the Bill which relates to county councils? That these are already over-weighted and over-burdened bodies; that my noble friend Lord Dunmore proposes to thrust upon them—and I inferred that the county councils would be most reluctant to accept them—new and onerous duties which they have neither the staff nor the inclination to perform. Then the noble Lord pointed out that in the Bill it was proposed that there should be constructed a large body of agents and officers to conduct these sales, and that altogether there was to be placed on county councils a vast additional volume of labour. I think that was a very powerful and probably a very just criticism, and I imagine it is a criticism to which due weight would be given by the promoters of this Bill. Then there was a further objection raised as to the financial proposals with regard to county councils. The Bill contains a suggestion that 20 per cent. of the purchase money should be found by the county councils, and more than one criticism has been made upon that proposal on the ground that it is placing undue financial risks upon the shoulders of county councils—
LORD CURZON OF KEDLESTON
I was coming to that in a moment. That again, I think, is a very pertinent criticism; and the noble Lord very justly drew attention to the fact that Lord Dunmore had admitted that this was a part of the Bill which was not essential to it, and it was one which the promoters of the Bill were quite willing to reconsider. Then I pass to the objections of Lord Faber. He spoke, of course, as a banker of great experience, and he objected to the institution of this National Land Bank. I understood him to say that in his view it was not a scheme that would earn the requisite interest, and that it would not be a particularly good investment for the debenture holders. Well, that is very important as coming from the noble Lord.
§ LORD FABER
May I interrupt for one moment? I did not say it would be a bad thing for the debenture holders. They obviously would be all right, because the nation would be behind them. I said it 110 would be a bad thing for the nation—for the taxpayer.
LORD CURZON OF KEDLESTON
I misunderstood the noble Lord. I think he is perfectly right. The criticism that may be made upon the proposal is that it is a good scheme for the capitalist and not a good enough scheme either for the taxpayer or for the purchaser, and I think in any reconsideration that is given to this Bill that point ought to be taken seriously in hand. There was another objection raised by the noble Earl, Lord Carrington, that the Bill would take business out of the hands of the existing body of land agents, to whom the noble Earl paid a well-deserved compliment. I do not think, after all, that that is a very serious objection. If there is going to be a great additional volume of land transactions, naturally the existing agents would like to have a finger in the pie. But I do not think any sore feelings would be entertained by others co-operating in that undertaking. There was another point taken by Lord Clinton, who objects to this Bill because he is in favour of an alternative method of dealing with the question. I understood him to say that his views are those of the Rural League and Mr. Jesse Collings, and he is trying to find a solution in the Bill which will be introduced to-morrow by Lord Malmesbury. That is the view entertained by many persons on our side. Mr. Jesse Collings and his friends do undoubtedly look to the assistance of the State in the most direct form for a solution of this difficulty. They look to carrying out in England the example successfully set by Mr. Wyndham in his Irish Land Act of 1903, and to placing the credit and resources of the State at the disposal of the would-be owner of the land.
It is a very fortunate thing, I should say, that on two successive days your Lordships will have the opportunity of discussing these alternative methods of dealing with the matter. The question remains, What is the best method for your Lordships to adopt with regard to this particular Bill? My noble friend Lord Dunmore concluded his speech with the proposal that it should be referred to a Joint Committee of both Houses, but I am bound to say I think conclusive reasons against that were given by Lord Belper. He said, Here is a measure introduced into this House, rightly or wrongly, which you propose to take out of the cognisance of this House and send 111 elsewhere, so that you practically lose control over it in its future stages. That is a just criticism to which Lord Dunmore will no doubt be willing to defer. The question is what ought we to do, not merely with regard to this Bill, but with regard to the one which will make its appearance to-morrow. The noble Marquess, Lord Lansdowne, had he been in the House, would have asked you to take this position. He would have asked you to give a Second Reading to both Bills—because there is much in the principle of both with which a large number, I venture to think myself a majority, of your Lordships' House will agree—and then send both Bills to a Select Committee of this House in order that all the powerful criticisms to which we have listened may be thoroughly investigated by a competent body and the alternative methods of dealing with the question sifted. Then when the Committee reports this House will be in a better position than they are now to advance to the further consideration of the matter. I hope that your Lordships will be inclined to adopt this advice, which it seems to me applies with equal force to both Bills, and which will be the course most helpful to your Lordships' House in the future discussion of this question.
§ VISCOUNT RIDLEY
My Lords, before a Division is taken, may I ask the noble Earl, Lord Dunmore, whether on behalf of the promoters of the Bill he has any real objection to its going to a Committee of this House and not to a Joint Committee. Speaking for myself, I confess that I shall find great difficulty in supporting the measure if it is to go out of this House. I am as enthusiastically in favour of its objects and principles as is the noble Earl, but so many objections have been raised to the Bill that if the noble Earl persists in his Motion to refer the Bill to a Joint Committee I shall have great difficulty in voting for the Second Reading.
§ VISCOUNT MILNER
My Lords, I hope the noble Earl will agree to the suggestion of the noble Viscount who has just sat down. I do not see how it is possible for us to ensure the Bill being considered by any Joint Committee, for it is extremely likely that the other House would take an unfavourable view of that proposal. Personally I feel considerable anxiety as to the possible outcome of this discussion and the one we are to have to-morrow night on another proposal for carrying out the same 112 object. I am a strong believer in the policy of multiplying the number of owners of land in this country. I think it absolutely vital to our social welfare and to our political future. I believe that is the feeling of the majority of the members of this House.
What is the position in which we are placed? There are two Bills before us for carrying out this object, the one introduced to-night and the other to be introduced to-morrow. The Government are opposed to both measures. Both are open to considerable criticism. Both have some excellent features. I hardly think that the Bill of the noble Earl has been quite fairly treated in the discussion to-night, especially the banking proposals. I think there is a great deal more to be said for those proposals than has been admitted, but I do not want to discuss that or to go into any question of detail. The point is this: There are two proposals for promoting increase of ownership in land. The Government are opposed to both. There are many critics on both sides of the House, and unless we are very careful what will happen will be that the Government, hostile to the principle, together with some noble Lords on the other side, who are critical of details, will defeat this measure to-day. The Government will then, with the aid of another set of critics, defeat the other measure to-morrow, and thus the result will be that an object which is dear to the hearts of many of us will be entirely frustrated as far as this House is concerned. I shall not discuss at all the misrepresentations to which we are likely to be exposed in the country if that were to take place. The only wise course seems to me to be that the critics should reserve their criticisms for the Select Committee which is proposed, and that the House as a whole should give its approval to both Bills, which are both in their way honest attempts to carry out a principle which I believe the majority of the House approve.
§ THE SECRETARY OF STATE FOR WAR (VISCOUNT HALDANE)
My Lords, the speech to which we have just listened from the noble Viscount puts the difficulties with which we are face to face very strongly. I listened with attention to the speech delivered by the noble Lord opposite, Lord Curzon, and with regard to the other speeches I am bound to say that hardly one word has been said in the course of this debate in favour of the Bill. A great deal 113 has been said in favour of the abstract principle—a very valuable principle, a most important principle, and one on which controversy arises. But some of us think, certainly I do myself, that you ought to go very cautiously into the business of multiplying small owners unless you have, in the general interests, some security for control over the way in which these small ownerships may be developed. But that is a large question on which I do not want to say more now.
What I do wish to say is that, on the plea that this Bill has a principle of some kind, the go-by has been given to the enormous difficulties which almost every clause in it involves. To my mind we are dealing with a situation in which there is a principle over which there may be controversy, and there are three or four different kinds of propositions for giving effect to it. We shall know of the details of the other Bill to-morrow; but you cannot, with a situation that is as vague as this is, take the course of reading a second time two Bills and referring them to a Select Committee without being involved in all the difficulties of which the noble Viscount, Lord Milner, has spoken. There is hardly a point of this Bill which will not come into conflict, so far as I can ascertain, with the views of the majority of the members of this House. In these circumstances, are we not laying ourselves a little open to criticism by voting for time Second Reading of a Bill which is attacked in the debate on every point of detail, and sending it on to a Committee on the ground that there is a principle?
I do not say anything of the financial proposals here, or of the criticisms that may be made on the proposition that the Treasury should be called upon, without more ado, to guarantee the interest on £25,000,000 of debentures, and that the county councils should be compulsorily called upon to find twenty per cent. of the purchase money. The Bill bristles with these points. It is for your Lordships to decide what course should be taken, but if the Bill goes to a Select Committee it must not be taken that the Government are not very much alive to the defects from which nearly every clause of the Bill suffers, and we must reserve to ourselves complete liberty of action when we come to that stage. At present it is for your Lordships to say whether it is desirable, in the interests of our reputation for efficiency, to pass the 114 Second Reading of a Bill which has received the volume of criticism on points of detail which this Bill has received.
§ LORD BELPER
My Lords, perhaps it is due to the House that I should say a few words with regard to the Resolution I have put on the Paper. Let me say that. I think the House would be placed in a considerable difficulty if my Resolution was put to the vote. I may say that I listened with interest to the speech made by the noble Lord, Lord Curzon, and I feel very strongly that the procedure which is now proposed with regard to the later stages of the Bill would put me in an infinitely better position than had the Bill been referred to a Joint Committee of both Houses. In that case, as I pointed out, I should have had no opportunity at any later stage of enforcing the arguments that I have made use of against putting this matter upon the county councils. If both Bills are sent to a Select Committee, both Bills will be accompanied to that Select Committee by the fact, which I do not think can be disputed, that the arguments which I used that this should not be administered by the county councils have hardly found an opponent in this House. I noticed the sympathetic tone in which Lord Curzon referred to those arguments, and I can assure him that in using them I was not expressing merely my own opinions but I believe I those of the whole of the county councils. I sincerely hope that if I withdraw this Resolution those who have not contested the arguments I have used to-night will at a later stage take care that some other machinery shall be found for carrying out any measure with regard to small holdings that it may be decided in the future to try. I have only to add that in these circumstances I should, perhaps, be consulting the convenience of the House if I withdraw my Resolution to-night.
§ THE EARL OF DUNMORE
My Lords, in view of what has been said this evening I ask leave to substitute "Select Committee" for "Joint Committee" in the Motion which I shall move if the Bill is read a second time.
§ Amendment, by leave, withdrawn. Then the original Motion agreed to: Bill read 2a accordingly, and referred to a Select Committee.
§ House adjourned at a quarter before Eight o'clock, till To-morrow, a quarter past Four o'clock.