HL Deb 31 July 1919 vol 36 cc160-87

Order of the Day for the Second Reading read.

VISCOUNT PEEL

My Lords, this Bill which I present to your Lordships for Second Reading is largely brought forward in the redemption of the pledge that has been given on various occasions by the Government to provide a settlement on the land of their country for the soldiers who fought for it. Among those to whom preference is to be given under this Bill are included women who worked for at least six months on the land during the war. I do not wish to base the Bill merely on the claims of ex-Service men, because among those who will enjoy the facilities, although they will not get a preference, are others, and the Bill is therefore wider than the Bill for fulfilling this particular pledge, but is a part of the general reconstruction scheme of rural England.

The Bill, therefore, must not really be considered alone. We must take also into our consideration other measures of the Government, such as the Housing Bill, the Transport Bill, and also the Acquisition of Land Bill, with which your Lordships will be dealing in a few minutes. The aim of the Bill generally is to increase the number of small-holders and allotment-holders in this country. I should like to give your Lordships some figures showing the number of small-holders there are in this country. At the present time there are 275,000 cultivators of the soil with holdings of less than fifty acres—that is to say, no less than 65 per cent of all the cultivators in this county. Those, of course, are the figures for numbers. When you take acreage the percentage is very much lower. It represents 18 per cent. of the acreage of the cultivated area. Of those 275,000 cultivators no fewer than 18,000 have been created by the results of the Act of 1908, and I think it is a great tribute to the way in which the County Councils have worked that Act and the skill with which they selected the cultivators that there have only been some 2 per cent. of failures among all those who have been so selected.

As regards allotments, before the war there were something like 1,000,000 in England and Wales; there are now 1,800,000, of which 400,000 have been provided by the Board of Agriculture under the Defence of the Realm Act. This increase in allotments is very remarkable. Under the stress of patriotism a great number of people have found that they can cultivate land in small parcels and enjoy doing so; and they prefer their own domestic home-grown cabbage to the more shop-soiled article. Not only that, but a great many people have made all sorts of discoveries in their gardens and have found that it really is a great enhancement to the beauty of an herbaceous border to plant a few adjoining beds either of Brussels sprouts or of cabbage.

The Government recognise of course to the full, the difficulties that there are in the way of smallholders, and they do not minimise at all the hard work that lies before these cultivators. They recognise that these people will have very little leisure and very little time in which to smoke their pipes and contemplate the landscape, or even to study the book of my noble friend, Lord Ernle, on the history of farming. I should like to say here how very much I regret that my noble friend, through indisposition, is not here to move the Second Reading of this Bill, which is his own, and I am sure the House regrets it also. Further, the Government recognise that much skill must be required for developing and working these small-holdings and that trailing must be given to many of these men who, in some cases, are going into agriculture for the first time. They appreciate, too, the fact that capital is essential, as your Lordships well know, for the cultivation of your thirty, forty or fifty acres of land, and provision is made in the Bill for assisting these small hollers with capital. A scheme is arranged by which, I understand, there will be advances by the local authorities to the smallholders, sovereign for sovereign, on any sums they are able to put up themselves.

LORD SHEFFIELD

At what rate of interest?

VISCOUNT PEEL

That will be settled by the Treasury, of course. It has not been decided.

THE MARQUESS OF SALISBURY

And what security?

VISCOUNT PEEL

I believe the scheme is not yet fully formulated.

THE MARQUESS OF SALISBURY

It is not in the Bill?

VISCOUNT PEEL

There is a statement that it will be done, but the Rules are not yet fully drawn up. The next difficulty, with which your Lordships are extremely familiar, as chairmen and members of county councils, is that in this country, unlike more fortunate lands, there are not large territories of good, unsettled land on which soldiers can be placed. It is the intention of the Government, and it will be "up to" the county councils, to apply the Act with the least possible disturbance to sitting tenants. They propose, therefore, to deal rather with such cases as multiple farms—that is, where several farms are held by one man—or with land (of which there is a considerable amount) which has been acquired by the War Office, the Air Force and other bodies, which can be let, or with that lard which has not been farmed in the best way and with which, as your Lordships know, agricultural executive committees have had to deal.

The main changes that are introduced into this Bill—and this Bill, I should say, must be read with the parent Bill of 1908—deals with two points. One is the hastening up of procedure in order that arrangements may be made for these small holders as rapidly as possible, and the second point is in connection with finance. The main changes in procedure will be found in Clauses 1 and 2 of the Bill. Orders for taking land—and this provision operates for three years—will, during that period of three years, not be confirmed by the Board of Agriculture. That is to say, the county councils will have full power, without the assent or confirmation of the Order by the Board of Agriculture, but they will be subject to financial control in order to see that the land is not bought at an excessive price.

THE MARQUESS OF SALISBURY

What is the object of that provision?

VISCOUNT PEEL

I was going to explain that. The object of the provision is this. The Government are very much impressed with the necessity of dealing with the situation as rapidly as possible. They find that, on the average, something like three months is—I was going to say wasted, but, anyhow, is spent before these Orders can be confirmed, and they think that three months is a very valuable time and they wish, at any rate during the transition period of three years, that it may be saved. The next point may strike your Lordships as drastic. In fact, the proposal is, I think, a drastic one. It is that when the Order has been made the local authority, the county council, will be able to enter upon the land after giving a notice of fourteen days. I am advised that at present, under the Land Clauses Act, where the power to take land has been granted them if the money compensation is deposited, they can enter on the land at once. Therefore, the legal position is not much altered, although, I believe, that particular provision has not been acted upon.

I understand that the desire of the Board of Agriculture is not to turn out harshly the sitting tenants, but to enable the local authorities to enter rather on a part of the land in order to begin to build cottages, and so on, and to shape the land in that way as rapidly as possible for the smallholders. Your Lordships may see that there is a subsection in Clause 2 which, in the case of farm houses, limits the period to three months. That is to say, if any shorter notice is given than three months, there is an appeal to the Board. In connection with this I ought to say something about Clauses 3, 4, and 5, and I ought also to point out that it is not likely that the Board of Agriculture would permit these powers to be used harshly because, of course, it is obvious that would very largely increase the compensation to be paid the farmer for disturbance, crops, and so on, thus bringing up the money to be expended in the development of these particular small holdings to an excessive sum.

Under Clause 3 power is given to the Board of Agriculture itself. Your Lordships know that under the parent Act of 1908 there is a power for the Board of Agriculture to act in default of the local authority, but this power has been found to be a somewhat clumsy one and under this Bill the Board take power to act concurrently in the counties with the county councils. Under Clause 4 there is power for three years for the Board of Agriculture to acquire land for the purposes of reclamation and drainage. Under Clause 5 there is a period of two years from the passing of this Bill during which the Board can acquire land for the purposes of farm colonies, although the total amount of land which they may acquire for this purpose is not enlarged under this Bill.

I come now to what is the mast important part of the Bill, namely, that which deals with finance. The Government are fully aware that, owing to the increased price of land (although it has not increased in the same percentage as the price of commodities) and to the great cost of putting up buildings and work incidental to the development of small holdings, the rent, the economic rent, which would have to be charged to the small-holder would be so high, if it was to be the full economic rent, that it would be a mere mockery to pretend these soldiers were being settled on the land. The rule which obtains under the Act of 1908, under which the land is only to be let for a rent which fully recoups the council for its expenditure, will be swept away; and swept away for seven years.

LORD SHEFFIELD

What clause does that?

VISCOUNT PEEL

I think it is Clause 26. In another clause you will see that there is a reversion to the old state of things after seven years have elapsed. As the rents to be charged to these persons is to be a reasonable rent, having regard to the general state of the case and the productivity of the land, it is obvious there will be a deficit; and on whom will it fall? The Government decided that the deficit is to fall not on the local authority but on the general taxpayer, and each year during the seven years the bill will be made out and the deficit repaid to the local authorities by the State.

The next point is as to what, happens at the end of the seven years. At the end of that period a valuation is made of the then economic value of the land and holdings, which will be compared with the total cost and with the money that has been borrowed by the local authority for the purchase of the land and its development, and the surplus cost, if I may so call it, or that portion of the loan which is represented by that surplus, will be shouldered entirely by the State.

THE MARQUESS OF SAMSBUEY

That is, it will be written off.

VISCOUNT PEEL

You cannot write it off, but it will fall on the State, and not on the county council. At the end of the seven years the whole of the small holdings in a county will be transferred or left to the county council, who will then be responsible for the holdings without supervision.

LORD SHEFFIELD

The tenant will then pay an economic rent.

VISCOUNT PEEL

The tenant will pay what is called, a reasonable rent.

LORD SHEFFIELD

That is, a rent which will balance with what the Government take over as the extra loss.

VISCOUNT PEEL

Yes.

LORD PARMOOR

Does the noble Viscount mean that the rents will be put up at the end of seven years?

VISCOUNT PEEL

The rents will then be considered; I do not say they will be increased. There is one more financial proposal which I think I ought to mention, and it is that these loans will not be advanced for the present by the Public Works Loan Commissioners. There will be a separate fund, up to £20,000,000, set aside out of which they will be made. It is quite obvious, and the Government frankly face the position, that in this way a. charge will fall upon the State, but their view is that this position must be faced in view of the necessity of settling more persons on the land and repaying the debt we owe to these ex-Service men; and unless it is faced, and bearing in mind the high price of land and buildings, it will be a mere mockery to suggest that these persons could be settled on these small holdings.

LORD SHEFFIELD

Then £20,000,000 is the whole amount the Government propose to pay?

VISCOUNT PEEL

Yes, that is for the present. There are one or two changes in the definition of a small holding. Under the present Act a small holding is anything from one acre up to fifty acres, but under Clause 20 that, lower limit is reduced to half an acre, and between half an acre and one acre comes into the definition of a small holding. Your Lordships will see that an obvious relation is thus established between a small holding of that size, with a house upon it, and the Housing Act, and in this particular class of small holding to which I am referring, the house will be built and financed on the "Housing" terms. I do not think I need say much as to the types of small holdings which the Government aim at creating because your Lordships are very familiar with these matters. There is the small holding of from thirty to forty acres, and the type of holding which will not represent whole time work for the occupier, that is, a small holding of two or three acres with a house. Nor need I say anything about the development of farm colonies; another type of small holding with which Lord Bledisloe is familiar.

I come now to the question whether these small holdings so created shall be let or sold to the occupier. There is a provision in the Bill (Clause 11) that during the operation of the financial proposals, that is during seven years, these holdings shall only be sold to the occupier with the consent of the Board of Agriculture. This is a perfectly fair proposal because, as the Government are shouldering this portion of the expense during the seven years, it will be obviously undesirable that people should come in, take advantage of that finance, get hold of the holding, and acquire it at less than the economic value. That must be subject to the approval of the Board.

Then there is an important provision to which I ought to refer, and that is in Clause 16, which removes that absolute protection which existed before from taking for the purpose of small holdings a portion of existing small holdings, or of land which forms part of any park or home farm. As regards the question of small holdings, it has been found that there have been divisions nominally into small holdings just for the purpose of taking advantage of this particular provision, and in some cases it is essential for the development of other small holdings that portions of existing small holdings should be taken. As regards the question of the parks and home farms, your Lordships will see that that provision is carefully guarded, and that they can be taken only if the land is not required for the amenity or convenience of the mansion house. Moreover, there is no power in the local authority to take this land by their own order. That is excepted from the general provision which I have stated, that during the first three years their own order shall be final. Any order which infringes upon an area either of existing small holdings, or park or home farm, must be confirmed by the Board of Agriculture.

There are one or two minor provisions which, I think, I ought to mention. One is in Clause 17, which deals with the power of county councils to acquire land for letting to parish councils for the purpose of allotments. Then there is a power for borough councils and others to buy fruit trees, plants, and other things, and implements, and to sell them to the allotment holders. There is also in Clause 23 an important provision which it is hoped will encourage the provision of allotments, and that is that the landlord is relieved from paying compensation under the Acts to those allotment holders so created. Your Lordships are fully aware that a good deal of difficulty is bound to arise in the near future owing to the creation of a large number of allotments in the vicinity of towns. Many of these allotments will be required for the purpose of housing; and it is considered that it would be very unfortunate if these allotment holders were not able to get fresh allotments to cultivate. Therefore this provision in Clause 23 is introduced for the purpose of substituting, where possible, other land for the land taken away for building purposes.

I have dealt as briefly as I can, considering the width and importance of the subject, with the provisions of the Bill. Of course one can only present a Bill of this kind to your Lordships with the view that necessity does require a drastic alteration in the rules in order to expedite the provision of these small holdings for soldiers and others; and that, again, the financial provision and the assistance given by the State for this period of seven years can only be defended upon the necessity of providing for these men. I hope your Lordships will give something in the nature of a welcome to this Bill, on the ground that in this way we can repay some portion of the debt which we owe to the serving men. This Bill is required further in order to meet those new conditions, growing up in the countryside, with which your Lordships are very familiar and on which I need say no further word.

Moved, That the Bill be now read 2a.(Viscount Peel.)

LORD BLEDISLOE

My Lords, I should like for my part to offer a warm welcome to this Bill, because in my judgment the scheme that it embodies is one which public opinion demands and strongly demands, and which ex-Service men deserve. Personally, I very much regret the absence to-day of the President of the Board of Agriculture, although my noble friend who has introduced the Bill has dealt most dexterously and clearly with it I regret the absence of the President of the Board because, in my judgment, this Bill adumbrates a veritable revolution in agricultural practice, and, if I may so word it, in rural personnel. In my judgment this scheme of largely increasing the occupiers of agricultural land at the expense, to a large extent, of sitting-tenants, is industrially and economically unsound; but at the same time it is in my opinion from a social and political point of view absolutely essential; and I think that the social and political considerations are, more than enough to justify its industrial and economic defects.

May I explain more fully what I mean? The whole trend of our industries at the present time, and this applies very particularly to agriculture, is to conduct them on a, large scale, with every sort of labour-saving appliance and the employment of large amounts of capital. The tendency is, so far as other industries are concerned, to aggregate existing small enterprises in order to achieve their more economic conduct as the result of such aggregation. Here you are deliberately bringing into existence a scheme of an entirely different character, contrary to the whole economic trend of British industry. At the same time in my judgment it can be justified. Not only do we owe this scheme, or a scheme of this description, as a debt to those men who have been fighting for us by sea and land during the last four and a-half years, and who have been led to believe that they would have a chance of at least occupying, if not owning, some portion of the land of this country for which they have, fought, but, from a, wider standpoint still, in my judgment if we are to attain a feeling of contentment in the countryside, and indeed throughout the whole population, we must have a very much larger number of persons both owning and occupying agricultural land than exists at the present time.

I am not at all satisfied that this Bill will sufficiently meet the legitimate aspirations of our ex-Service men. It has been repeatedly represented to them, and it was emphasised during the General Election last winter, that they would have an opportunity of becoming the owners of the land that they would occupy. I think the Prime Minister himself, in somewhat general language which is certainly interpreted in that way, referred to what happened in the case of Augustus and other Roman Emperors. When they achieved great victories they took the opportunity of celebrating them by making grants, or, in other words, giving what we should now call a freehold interest in agricultural land to the soldiers who had so faithfully served the Empire. That, at any rate, is the impression which was left on the minds of a very large number of ex-Service men throughout this country, and that is in fact the process which has been facilitated to a very great extent in our Overseas Dominions. There is no provision in this Bill that I can discover which improves the position of the small-holder in this respect beyond what the existing Small Holding Act contains. Under that no less than 20 per cent. of the purchase price has at once to be provided, and even if that percentage is provided by the intending freeholder it is at the option of the county councils to deny to him a freehold interest. This Bill perpetuates that liberty on the part of the county councils to deny even to an ex-Service holder the privilege of a freehold proprietary settlement. I hope that your Lordships will support an Amendment which I understand will be moved in order to carry out in effect what many ex-Service men regard as having been an undertaking on the part of the Prime Minister and others during the course of the last General Election.

Reference is made in this Bill to small holding colonies. For my part I welcome the extension of the small holdings colony system, where it can be achieved, without removing the men too far from their own home surroundings. I doubt very much whether the small holdings colony scheme is going to be particularly popular throughout the country, because my experience leads me to believe that the majority of men who have served in the war prefer to remain in their own districts if suitable small holdings can be provided for them. The great advantage of the colony system undoubtedly is that it does enable co-operative methods to be developed and extended to a maximum, to a greater extent in fact than under any other system, and what I want to appeal to the Government to do—bearing in mind that they are, as I said, contrary to the present economic trend of the industry putting small men upon small parcels of land, many of them with- out the necessary amount of experience, a considerable number without the necessary capital—is that they should not leave these unfortunate people to their fate, but that they should bring into existence and at once such co-operative machinery in the several localities in which the holdings are provided as will put them upon a securer economic basis than they can possibly be on if left as separate industrial entities. The county councils have not proceeded very far in this connection, and I doubt very much, without some stimulus from the Government, whether in many parts of the country these co-operative developments in connection with small holdings will in fact take place. The Agricultural Organisation Society is doing magnificent work in this connection, but we are still slower in adopting or in applying co-operative methods to our agricultural industry than any other country in Europe, with the possible exception of Russia. In all these countries where small holdings have been an undoubted success, particularly in Denmark and Belgium, their success has been due almost exclusively, but not exclusively, to the sound co-operative basis upon which they have been erected.

I welcome the provision in the Bill for what is popularly called cottage holdings, because I fancy this particular type of holding, between half an acre and an acre, will provide for the requirements of a considerable number of men who do not want or expect to depend upon their holdings for their living. Many of these men no doubt will be disabled soldiers in receipt of an Army pension, who can supplement their pension by working intensively a small plot of land which will adjoin their cottages. I think that is a far less risky process of small settlements than holdings of from 20 to 100 acres in cases where there is but little capital or experience. What I am surprised to note in the public Press is that so far so small a demand appears to be made by ex-Service men for this class of holding. At first sight the displacement of sitting tenants at no more than fourteen days' notice sounds a little drastic, and I cannot help thinking that the period might have been somewhat extended without in any way retarding the process of putting this Bill into operation.

I rather regret that it is deemed necessary, although from what the noble Viscount has suggested I can appreciate the reason, for obtaining beforehand the consent of the Board of Agriculture before any land is purchased during the next seven years by County Councils for the purpose of these holdings, because that will be a retarding factor at a time when County Councils are very anxious to get on with this work, and, if possible, to take advantage of the numerous auction sales which are now going on throughout the country to buy, not with the knowledge that the public purse is going to provide money—or in other words that a public authority is in the market—but to take advantage of the facilities which the public auction provides of obtaining holdings at the lowest market value. This seems to be an impossible or very difficult process if the consent of the Board of Agriculture is a condition precedent to any purchase, and I assume in that connection that the actual purchase price will have to be agreed before any bid can be made on behalf of the county council at an auction sale.

I notice an entirely new provision in connection with small holdings in the provision of loans to county councils to provide live-stock, seeds, fertilisers, and other raw materials of the agricultural industry, and that this provision is to be made to extend to parish councils—an entirely new departure—who are going to be allowed to purchase these requisites assuming that they are satisfied that co-operative facilities in the district are not adequate for the purpose. I do not much believe in trading on the part of local authorities, and it is rather difficult to see where this particular process may lead us if unduly developed, but I do foresee in the case of parish councils—bearing in mind that on those councils in many cases there are a large number of small shopkeepers—a considerable prejudice against the process being carried on by the parish council, and also very little desire on the part of the members of such a council to develop co-operative enterprise which is deemed to be contrary to their commercial interests.

There is no part of this Bill—which is in many senses an omnibus Bill, because it deals with many other matters besides small holdings—that I more warmly welcome than Clause 4, which relates to reclamation and draining. Throughout the whole of this country to-day there is an enormous need for improved drainage of agricultural land, and there are very few landowners who are in a position to undertake this work with their somewhat attenuated resources. And even if they did undertake- it, they would fail in many cases in undertaking it efficiently unless a more comprehensive scheme extending over a larger area than they control is put in hand.

I venture to say that a great deal of land which was inefficiently drained some fifty or sixty years ago is to-day producing far less agricultural produce than it is capable of producing, and germination upon it is undoubtedly seriously retarded owing to its waterlogged or semi-waterlogged condition, as a result of the drains being choked or, in many cases, of their having been laid too far apart, or at too great a depth below the surface. I am sure there is no matter in which the Board of Agriculture can do more uselful work than improving, with the help of Government funds, the drainage of agricultural land throughout the country.

This, of course, applies with at least as much force to reclamation of land. There are large areas of most admirable lard, or potentially fertile land, close to our seashore and on the banks of our estuaries to-day which certainly could, by scientific reclamation methods, be converted into extremely valuable and productive farm land. I have some doubt as to whether the prospects of reclaiming a large amount of down and moor land are going to meet with the success which the Board of Agriculture seems to anticipate. Much of that land, I should have thought, could much more usefully be put under timber than reclaimed with a view to its being agricultural land. There are many cases—one jumps to my mind at this moment, that of Hollesley Bay, Suffolk—where reclamation of this character has been undertaken at very great cost, with no proportionate return for the expenditure involved in that attempted reclamation.

I should like to express the hope that a small provision in Clause 21 which relates to Stamp Duty will extend the benefit of exemption from Stamp Duty not merely to prospective allotment holders, but to allotment holders' societies, which are being constituted in various parts of the country, and which have rendered the cultivation of allotments a more economically sound venture than they would in many cases otherwise have been. In this connection I should like to say that I, for my part—and I doubt whether I shall altogether carry your Lordships with me— warmly welcome the continuation of the allotments policy which has been such a success during the years of war. The more you bring our great industrial population in contact with mother earth, the more they will appreciate the difficulties that agriculturists have to. face, and the more contented, in my judgment, will they become, and, I may also add, to a greater extent will they be carrying out what I believe to be a natural function in which all men should take part.

My own experience in this connection as a Poor Law guardian in days gone by is that not a single man who has a good garden or allotment, and knows how to cultivate it, will ever go into the workhouse, because he always has a reserve upon which he can fall back to provide himself with food to a large extent, and, in ways such as these, possibly to put something upon the market to help out his domestic resources. For my part I trust that your Lordships will warmly receive this Bill as an instalment of a new agricultural policy, with the hope that the Government will not discourage what some of us regard as legitimate Amendments of their scheme.

I should only, in conclusion, like to add that I regret that the noble Viscount who has expounded this Bill to us has made no reference whatever to the particular authority which is going to be the chief Government agent in carrying out the provisions of this Bill—namely, the new County Agricultural Committees, which were referred to in the original Bill, as it was introduced in the House of Commons, and for which, as I understand, provision is now going to be made in an entirely new Bill, the Board of Agriculture Bill, under which these authorities will come to be set up, and which, in fact, while being statutory Committees of the County Councils, will at the same time be branches of the Board of Agriculture and agents for them in carrying out this work of rural reconstruction.

LOAD WITTENHAM

My Lords, I for my part, in common with the rest of your Lordships no doubt, must very warmly welcome a Bill of this kind. Promises have been made to our soldiers and sailors, the men who have fought, and so many of whom have come back mutilated, and those promises have to be fulfilled. I am not going to follow my noble friend into the details of this complicated matter, which he knows so very much better than I do, but there is one subject on which I do claim to have some slight knowledge, and that is the financial aspects of this case.

I hope that some noble Lord will mention this whenever a Bi[...]l is brought forward in this House. We have to remember that before the war we were a very rich country; to-day we are a very, very poor country. It is easy enough—anybody can do it—to pull a string, so to speak, and tell the people that a shower of gold will drop down—from the heavens, I suppose, because that is what the people think: you pull the string, and the money has to come out of the pocket of the taxpayer. It is no good crying for "Economy, economy, economy," if, whenever a matter is brought forward (and it may be necessary—we are between the devil and the deep sea there)—it is no good with one side of the mouth crying out "Economy, economy, economy," and with the other "Spend, spend, spend." Wherever we twin it is "subsidy," and somebody must speak for the taxpayer: bread, £40,000,000 to £50,000,000 a year; the providing of houses, Heaven knows how many millions a year! coal—on the edge of a subsidy; and so on through everything everywhere. Here again the noble Viscount below me made it clear, as indeed it had already become apparent, that Clause 26 meant that the country was going to be involved in a loss, and probably a very serious one, for many years to come.

Let us understand. It has to be done, but do not let us do it with any doubt in our mind as to the result. For the next seven or eight years, both annually and at the end of the eight years, capitally there is going to be a large loss. Why? Because the authority will have to borrow money at, perhaps, a high rate. The bank-rate will not remain at 3 per cent.; the moment it is let loose it wil go higher. The soldier and the sailor, I assert without fear of contradiction, cannot possibly pay an economic rent, whether you take the cost of the land, or of the buildings, or of the equipment. Therefore year by year there will be a deficit, and probably at the end of eight years there will be a large capital loss to be made good. It may be necessary in the common weal; but there comes a point when the nation, like an individual, has to say, "I would give anything to do this; I know it is the right thing to do; but my purse does not allow it." We all know that we are living in a false world; you are not facing the realities. We know that the nation cannot afford half-a-dozen of the schemes which are being brought forward one by one.

What I am going to say now is said in no Party sense. I have no Party. I can speak only what I think. There must be a halt somewhere. I may be wrong (I hope I am) but in Clause 26 (2)—this may be a Committee point; I think it is a Second Reading point—it appears that the draftsman of the Bill has not been satisfied with recoupment for losses which may be incurred by putting our soldiers and sailors on the land, because the subsection seems to be retrospective, unless there is a misprint. Ought this to be tucked in a patriotic Bill? Because it is patriotism to which you are appealing; we should not think of passing this if it were not for the sake of patriotism. Subsection (2) of Clause 26 says— The Board shall on the passing of this Act pay to a council of the county the loss, if any, which may be shown to the satisfaction of the Board to have been reasonably or necessarily incurred by the council in the exercise of their powers under the principal Act during the period from the first day of January, 1908, to the thirty-first day of March, 1919. Have we been running at a loss and the confession has never been made, and row, under camouflage, are you going to ask the taxpayer to pay back the losses from 1908 onwards, if there have been any? It is a serious matter to ask this House to do that. It is difficult enough to meet our future liabilities; are you going to sweep up past liabilities and tuck them into this measure? I am sure that the noble Viscount who introduced this Bill will have a satisfactory explanation to offer for a course of this kind.

I venture with all humility to end on the note on which I began—namely, that you will have to call a financial halt somewhere, and some day soon, or it is as certain as possible that this country must go into bankruptcy. I said two and a-half years ago in the House of Commons that the whole of Europe would be bankrupt. The House of Commons laughed, and the financial papers laughed. Are they laughing to-day? No; because we all see that it is a fact. Facilis descensus when one gets on the edge of the slippery slope; and no one dare face it. I agree with what Lord Buckmaster said; and I told Lord Milner last night, when he said he did not agree with the £800,000,000 Budget for next year, that I felt tolerably certain that it was going to be an £800,000,000 Budget. And all this kind of thing helps. This thing has to be done; you have promised it to the country and you must do it; but do not forget that you are doing it with a purse which is full of holes, and most of the money you have left is slipping away as fast as it can.

THE MARQUESS OF LINCOLNSHIRE

My Lords, I should not presume to say a word as a financier; I have not the smallest conception whether England is or is not heading straight to bankruptcy. I hope to God it is not; that's all. But I really do not see that we are going headlong to bankruptcy because we are going to extend the system of small holdings. I have been a believer in small holdings all my life. One-fourth of my estate—I have nothing except land upon which to live—is under small holdings, and I have had no difficulty in getting the rents, though I have had the estate for fifty years. In fact in Lincolnshire, where there are three farms let to a Small Holdings Association—they have had it for twenty-five years—they have never asked for one reduction in the rent, and at the present moment the tenants are paying £1 an acre less than they would pay if they were taking up allotments now.

I am very proud to be able to supplement in my humble way the welcome that Lord Bledisloe has given to this Bill. One hardly knows whether one is on one's head or on one's heels in this House. When one remembers ten or twelve years ago the reception that any person got who was insane enough to advocate small holdings and then to listen to the most satisfactory speeches that have been heard this afternoon, one is forced to the conclusion that things have indeed changed. Your Lordships will remember that, in what is called the principal Act of 1908, the county councils were the persons who were told to administer the Act. For the first year very little was done; we had to get into working order. As far as I remember, there were 170,000 acres of land obtained, and then, in the three years after that, somehow it tailed off and only 30,000 acres more were got.

Then came the war, and of course small holdings and allotments were put on one side. Afterwards came the difficulty about getting food for the country, and in 1917 the Government brought forward their agriculture proposals which, as I have said before in this House, did more in twenty minutes for the agricultural population than we agricultural reformers have been: able to do in half a century. In 1918 the agricultural home production increased enormously. A great deal of land was ploughed up and a lot of corn was put in. I am speaking under correction, but I believe something like 1,000,000 small holdings and allotments were added in that year. What was the result? We were told in the old days that the agricultural industry—the oldest industry in this country—was within measureable distance of great if not supreme disaster. We were told then that we could only produce fourteen weeks' supply of home grown food in England. In 1918 what was the result? I believe it is practically accurate that there were forty-two weeks' supply of food grown in this country. The matter really speaks for itself.

I do not think for one moment that we need be at all apprehensive if there is any small loss consequent on this great movement. From the bottom of my heart I congratulate His Majesty's Government on the splendid work that they have done, and I hope will continue to do, as regards agriculture. I congratulate them inasmuch as in this Bill they have done away with a. great number of those so-called safeguards and crippling conditions which were put into the principal Act. I hope they will by their policy be able to fulfil to some extent their promises to the men who fought and bled for this country, and be able to put not only them, but also a large number of practical and deserving agriculturists, on the land of this country.

THE MARQUESS OF SALISBURY

My Lords, I should like to join the noble Viscount who has moved the Second Reading this evening in his expression of regret at the absence of Lord Ernle from his place on that bench. I understand he is absent through indisposition, and we are very sorry to hear that is so. I confess I thought his absence was probably clue to another cause, for I understood that his continuance in the office which he has filled with such distinction was a matter of very short duration; but it is very gratifying to those of us who are interested in agriculture to reflect that Lord Ernle is responsible up to date, at any rate, for the agricultural policy of the Government. I share with others the satisfaction which has been expressed at the introduction of this Bill, because the Bill is the fulfilment of a pledge given publicly on the highest authority and repeated upon every hustings in the country at the late General Election. We all share the wish that those who have given such tremendous services and made such sacrifices for the country should receive any provision of land which they desire to occupy in so far as it is in our power to give it to them.

It is not a question of what may be economically sound so much as what natural patriotic gratitude demands, and we are only too glad to extend whatever powers we can with advantage to these who were members of our forces by sea and land who wish to have small holdings. I am prepared to go a step further and to say that there are others, too, who are entitled to preferential treatment, such as the women who have worked upon the land. I do not pretend to have considered the matter, but I can conceive that that would be very appropriate. I confess, however, I regret that the Government have extended the Bill beyond those limits. Upon the arguments of the noble Viscount—there may be other arguments which he would be able to advance—I do not see why, because we have engaged in a great war in which our soldiers and sailors have conferred upon us immense services and in the course of which many of the women of the country have with great self-sacrifice and public spirit worked on the land, we should extend to everybody else the very special financial provisions which are contained in this Bill. There may be a good reason for it, but I did not find it out when I listened, as I tried to do with the greatest care, to what fell from the noble Viscount.

Like all your Lordships I am familiar, as a member of a county council, with the working of the Small Holdings Act. I do not pretend to be an enthusiastic admirer of the system. I believe it to be a good system as far as it goes, but its value can be very easily exaggerated. Broadly speaking, I do not believe it is the best method in most counties of producing the highest result in the cultivation of the soil. It does no doubt confer upon the country certain political and social services which are of value; but looked at broadly as an industrial and agricultural proposition, in most counties it is not the best way of cultivating the land, and those of us who are very anxious to see the greatest product from the land possible would not like the ordinary process of agriculture—I mean the cultivation of land as we have known it all our lives—to be interfered with so as to injure the result which comes from that system. Up to a point, however, small holdings are a very good thing, and I am very glad to hear from the noble Viscount that every chance is to be given under this Bill for the success of small holdings.

There are provisions, I understand from him, for the encouragement of better agricultural training and, I think he said, better agricultural co-operation. Both those things are not only good, but essential, in my humble judgment, to any wide extension of the small holdings system. It is no manner of use to put people on the land who have no knowledge of agriculture; that only leads to failure. It does not matter whether they are heroes or not; they will not be able to make it pay unless they have some knowledge of the system. It is no kindness to them, but a cruelty to put them on the land. Therefore if you are to increase to a widespread extent the number of soldiers upon the land it is necessary that you should provide some sort of agricultural training for them, and, I may add, some sort of agricultural co-operation, for co-operation of that kind is the only way in which you will get rid of the undue advantage which the large holding system would have over the small holding system. These two things are essential. Even so, the Government are well aware that on the present prices these small holdings cannot be made to pay. Therefore, they provide a system under which, for the next—is it six or seven years?

VISCOUNT PEEL

Seven.

THE MARQUESS OF SALISBURY

—the loss upon small holdings will be borne by the taxpayer. That I believe to be shortly the system. I do not mean to say any loss which a small holding will incur but any loss which a local authority will incur by charging the only rent it can get in present circumstances. Any such loss from insufficient rents will be borne, under the Bill, by the taxpayer. I am not afraid of that so far as soldiers and sailors and preferential persons are concerned, because it is of limited duration. At the end of seven years it will come to an end. Even though it may involve a considerable loss, we can see the extent of the loss, or, at any rate, we know it will be limited, and I understand from the noble Viscount that at the end of that time ordinary economic conditions will be restored—he looks forward to that—and the small-holders will be charged a reasonable rent. If that is really done, economic causes will reassert themselves and, if the small-holding system is not a sound one economically, it will come to an end. That is to Fay, the small holding, being unable to compete in the market on economic terms, will gradually tend to disappear. The small-holders, like reasonable, prudent men, will, of course, sell their small-holdings to people who can cultivate them better; so the economic system will be stabilised, and no great harm will arise.

But that is upon the assumption—which I understand from the noble Viscount is the policy of the Government—that proper economic rents will be charged at the end of seven years. If that is carried out, as I say, we need not be very deeply concerned, but if it is not carried out, if, when the end of the seven years comes, it is found that a great many small holdings are not economically sound—what are the Government going to do? It will not be this Government, I presume. What will the then Government do? The noble Viscount is a comparatively young man and he may be I do not know what by that time. What does the noble Viscount contemplate that the Government of that day will do if the small-holdings do not pay? I should be rather happier if I saw a clause in the Bill—there may be one; I will not pretend to be a master of it like the noble Viscount—containing the mandatory provision that economic rents should be charged at the end of seven years.

If we are to go on with the uneconomic conditions there really is no end to it. There is no reason why, at the end of that period, the subsidies to small-holders should not become a precedent extended to any number of other persons at the expense of the State. If the noble Viscount says, "We are only anxious to do it in the case of soldiers and sailors," I have nothing more to say. By all means in the case of the soldiers and sailors who have fought for us I would be willing to dispense with the economic conditions, so long as that makes them happy. If it is to be extended to others, as the Bill contemplates, and if the uneconomic conditions are to be continued at the end of seven years to others, then I say there is no limit to the slippery slope upon which we are proceeding.

I say this with a certain amount of emphasis because I am quite familiar with the particular financial proposals which are made in the clauses of this Bill, and I will tell your Lordships why. I was, for my sins, about two or three years ago, a member of an Emergency Housing Committee, and the financial proposal which is contained in this Bill was precisely the one which we recommended in the case of emergency housing. It is not adopted in the Housing Bill which has just gone through this House—not exactly, although there are certain features which are similar—but the particular proposal in this Bill is precisely what we proposed with one exception—we laid it down that economic rents must be charged at the end of the provisional period. We made it as emphatic as we could that at the end of the provisional period, which corresponds to the seven years in this Bill, economic conditions should be restored, so far as possible. I cannot tell your Lordships with what emphasis we ventured to lay that down in the Report which we presented to the Minister of Reconstruction. I think that, in this respect, I have the singular virtue of consistency in urging upon your Lordships, and upon the Government, that they should put into the Bill some provision which shall make it quite clear and definite that these eleemosynary provisions, in so far as they extend at any rate to others than those who have served as soldiers and sailors in the war, shall come to an end at the end of the provisional period and that economic conditions shall be restored.

THE MARQUESS OF CREWE

My Lords, I merely desire to say one word on the point which the noble Marquess has developed in the closing passages of his speech. He stated that in his view His Majesty's Government were at the edge of a slippery slope in this matter of endowment from public funds of those who, some years hence, may not be able to satisfy economic conditions with regard to their holdings, and I understood him to urge that Your Lordships should insert a clause in the Bill which would make it clear that, at the end of this period of seven years—so far as Parliament can lay down any rule of that kind—economic rents must be charged and that no future subsidy will be given.

I am bound to say that I gravely doubt the wisdom of inserting any provision of such a kind in a Bill of this sort. When the time comes—the close of this period—either general agricultural and economic conditions will have so completely changed as to make it possible for these holdings to be carried on at an economic rent, or some such condition will exist as obtains at the present when, as we know, it cannot be done. In the latter case one of three things must happen. Either the State must continue its subsidy, or the local authority must be prepared to make good the deficit out of county funds, or—and this is the consummation to which the noble Marquess looked forward apparently without any great dismay—the whole system must come to an end and small holdings disappear altogether. I decline to contemplate the last possibility. I do not believe for a moment that public opinion, either here or in the country districts, would tolerate what would practically mean the eviction from the homes they have occupied for a certain number of years, not merely of soldiers and sailors, but of small-holders who have worked hard and done their best at considerable sacrifice of material. The effect would be to throw back into large farms, not requiring the same character of buildings or dwelling-houses, a certain number of small holdings; to produce, in fact, widespread disturbance of the rural conditions which will then exist.

That being so, if I am right in believing that this is an impossible picture of the future, it will then be for the various county authorities to consider whether they are prepared to stand the loss, supposing a loss to be involved, or whether a fresh appeal will be made to Parliament—the then Government may be precisely of the same complexion as the present Government, or of an entirely different complexion—in order to make the country as a whole responsible for the balance of deficit. It is quite impossible at this moment to say what the results will be. By that time we may have advanced very much further on the road to collectivist management and collectivist responsibility. If we have, I have no doubt that the Government of that day will cheerfully shoulder the new responsibility, but in the complete uncertainty which now prevails I hope that your Lordships will not attempt to stereotype, as the noble Marquess desired, the rule that no advance from public funds must be made to meet the deficits that have accrued.

I have no desire to say anything about the Bill as a whole, but merely to add a word of welcome to its main provisions, and to congratulate His Majesty's Government upon having undertaken this further wing of the large structure which they are trying to erect for the benefit, not merely of those who have nobly done their duty in the war (many of whom have suffered for it) but for the benefit of a class, generally speaking, who have not in the past been admitted to a full share in our national prosperity. The Bill will, of course, by unanimous agreement be read a second time, and although some recommendations will undoubtedly be made for its amendment in Committee I am quite certain they will not touch the main principle which is involved in the Bill.

VISCOUNT PEEL

My Lords, I should like to say one word or two in reply to specific points of criticism which have been raised. Your Lordships have given a general welcome to the Bill, and it may interest you to know that it was welcomed in another place. In fact it had a most remarkable career there, in that there was no Division on any single stage of the Bill; Second Reading, Committee Stage, Report Stage, or Third Reading. I think that is without precedent in the case of a Bill of this importance. We cannot hope, unfortunately, for the same thing here, although I am glad to have the encouragement of the noble Marquess.

Two points were put to the Government by the Marquess of Salisbury. The first was on the financial position, and he said that we ought to know whether these State contributions are to continue after seven years, or whether they will come to an end; if we knew they would come to an end after seven years we should be greatly comforted. I can only state the intentions of the present Government and the provisions of the Bill itself. I cannot make any prophecies such as the noble Marquess was able to make. The position is that after seven years a valuation will be made, a capital valuation, of the farm on the basis of the economic rent at that time. On the other side will be set the total amount expended by the local authority in purchasing and, equipping; that is to say, the money that was borrowed by the local authority for the purpose of establishing these small holdings.

Let me take two figures. Suppose the whole business cost £10,000, and that the economic value of the small holding was £7,000; the difference, £3,000, will fall upon the State entirely. The small holding, and all the small holdings in the area of the county council, would be treated as one property and would be handed back to the county council presumably at that valuation. What then would the county council have to do They would have to charge an economic rent which would meet the difference—it may be £3,000, £4,000 or £5,000, or whatever the amount was. The noble Marquess, Lord Salisbury, asked whether there ought not to be a provision in the Bill that they should charge an economic rent? Surely their own self interest would make them do so; there is nobody else to pay for it. If there is a deficiency it will fall on the rates, and I think the ratepayers can look after themselves. As noble Lords know, at the present time under the Act of 1908 the State bears half the deficiency, but that will not obtain. After the seven years the county councils will be placed upon an entirely self-supporting basis. Therefore they will have to charge such economic rents as will meet the new valuation. I think that is the reply to the point raised by the noble Marquess.

There was only one other point raised by the noble Marquess. He said, We shall be quite ready, I think, to deal with this on a. basis of loss, if it be confined to serving men, and I think he included women who had been working on the land; but he said, Why should these privileges be extended more widely than that? I need not remind him, because I have just stated it, and he knows it perfectly well, that the change is from bearing half the loss to bearing the whole loss. Of course that is a far larger loss than is represented merely by that statement, because of the increased cost of land after the war and also the greater cost of equipping small holdings with buildings. Therefore it is considerable financial assistance, but the Government find it extremely difficult to draw a line between the ex-Service men and these women, and other persons. Your Lordships are very well aware how absolutely essential agriculture and other industries such as munitions were during the war; how under the Military Service Acts certain persons were told that they were to go to the war and others that they were not to go to the war, but that they were considered to be doing their duty, by doing this work at home, just as much as if they went to the war. Therefore the Government feel it difficult to exclude these other persons from these particular advantages; but I would point out this, that preference is given to the ex-Service man, and I think, considering the way those who want to share these advantages are coining in, that the county councils, and the Board of Agriculture if necessary, will be fully occupied for some time in dealing with the claims of these men who have the preference

There is only one technical point further to which I think I ought to reply. It was raised by my noble friend behind me. I always listen to his speeches, especially on finance, with great pleasure but with ever-deepening melancholy. I do not wish to follow him in his general exposition of the evil state of the finance of the country, because I think his statements on this particular occasion were based upon a rather small point. He had read his Bill with great care, and he had ascertained that not only the future liabilities but the past liabilities on these small holdings of the county councils from the year 1908 were to be shouldered upon the State, and he fears that we cannot meet the ever-growing responsibilities. I wish to examine what the weight of this responsibility is, because upon the size of it depends the whole argument of my noble friend. I think it is possible to give a pretty accurate figure as to what those financial responsibilities may be. I have already stated that half these losses are already borne by the State. The losses that are already borne amount to £3,000. If you add another £3,000 you make up £6,000. I am advised that £20,000 will be an absolutely outside figure and that £10,000 will probably be more like the actual figure.

I ask, Is the country going to be ruined by the payment of £10,000? As to the proprietary of these payments, what I have to say is this: It was part of a bargain made with the county councils, who in return for this and as part of their general duty have been content to act in this way as agents for the Board of Agriculture for the ensuing seven years. I think your Lordships will consider that vast as are the fresh responsibilities which will be thrown upon them by this Act, the sum which I have mentioned is not a very extravagant remuneration.

On Question, Bill read 2a, and committed to a Committee of the Whole House.