HL Deb 17 July 1923 vol 54 cc1104-11

Order of the Day for the House to be put into Committee read.

Moved, That the House do now resolve itself into Committee.—(The Earl of Ancaster.)

On Question, Motion agreed to.

House in Committee accordingly:


Clause 1:

Power to Public Works Loan Commissioners to lend money to associations for the purpose of making advances upon certain mortgages.

(5) For the purposes of this Act "approved association" means an association which is approved by the Treasury for the purposes of this Act, and which does not trade for profit or by its constitution or otherwise is restricted in relation to the rate of interest on loan capital and the distribution of profits amongst its members so as to comply with regulations made in that behalf by the Treasury.

THE PARLIAMENTARY SECRETARY OF THE MINISTRY OF AGRICULTURE AND FISHERIES (THE EARL OF ANCASTER) moved, in subsection (5) to leave out "Act" and insert "section the expression," and at end to insert "and the expression 'person' in the definition of borrower shall, without prejudice to the effect of section nineteen of the Interpretation Act, 1889, include an association registered under the Industrial and Provident Societies Acts, 1893 to 1913, and having for its object, or one of its objects, the provision of small holdings or allotments." The noble Earl said: These are substantially drafting Amendments to remove a doubt as to the effect of Clause 1. The Interpretation Act, 1889, provides that the expression "person" includes a corporation "unless the contrary intention appears." It has been suggested that there are words in paragraph (a) which might possibly be construed as indicating a contrary intention. It is understood that there are cases in which land was bought for cultivation not directly by the cultivators but through a small holdings or allotments association, and to remove any doubt as to the eligibility of such associations for receiving advances, these Amendments are proposed. I hope they will be agreed to.

Amendments moved— Page 3, line 1, leave out ("Act") and insert ("section the expression") Page 3, line 8, at end insert the proposed words.—(The Earl of Ancaster.)


Perhaps I may be allowed to say one word upon these Amendments. Will the noble Earl be good enough to consider the question of adding after "allotments" "allotment gardens "? It is a question whether they are included in the phrasing of these Amendments. I do not ask for an answer now, but will the noble Earl be good enough to think the matter over? He can either communicate a reply by letter or put down an Amendment on Report. I wish to meet his convenience.


I will certainly consider the point.

On Question. Amendments agreed to.

Clause 1, as amended, agreed to.

Clause 2:

Organisation of agricultural credit societies.

2.—(1) The Minister of Agriculture and Fisheries (hereinafter referred to as the Minister) shall take such steps as are practicable, to promote the formation or extension of agricultural credit societies, that is to say, societies approved by the Minister and registered under the Industrial and Provident Societies Act, 1893, having for their object or one of their objects the making of advances to members of the society repayable within a period not exceeding five years for such agricultural purposes as may be approved by the Minister.

(2) The Minister at any time within three years after the passing of this Act or during such further period as the Treasury may prescribe, may, subject to the provisions of any regulations made by the Treasury, make advances to any such society, but so that the total sum advanced to a society shall not exceed an amount equal to one pound for every one pound share held by members of the society on which a sum of five shillings has been paid.

LORD O'HAGAN moved, after subsection (2), to insert the following subsection:— (3) The Minister at any time within three years after the passing of this Act or during such further period as the Treasury may prescribe may, subject to the provisions of any regulations made by the Treasury, make advances to any bank approved by the Treasury for the purpose of facilitating advances by the bank to farmers (hereinafter referred to as "assisted advances") made after the passing of this Act, provided that—

  1. (i) the total amount at any time outstanding on nil the advances of the Minister under this subsection shall not exceed such sum as may be prescribed by the Treasury;
  2. (ii) the total amount at any time outstanding on the advances of the Minister to any particular bank under this subsection shall not exceed seventy-five per centum of the total sum then outstanding (including interest) on the assisted advances made by that bank to farmers;
  3. (iii) any assisted advance by the bank to a farmer shall ho made subject to the following conditions:
    1. (a) The assisted advance must be made for such agricultural purposes as may be approved by the Minister;
    2. (b) The assisted advance must be repayable within twelve months, but may be renewable with the approval of the Minister for such further period or periods as he may determine;
    3. (c) The interest on the assisted advance shall not exceed such sum as may from time to time be determined by the Treasury in consultation with the Minister, the banks approved as aforesaid, and the National Farmers' Union;
  4. (iv) an account shall be kept by each bank of every assisted advance to a farmer separate from any 1107 other account of the bank with the same farmer, and any sums from time to time received by the bank to the credit of that farmer shall be appropriate to such separate account and any other accounts of the farmer with the bank in accordance with regulations to be made by the Treasury."

The noble Lord said: I wish at the outset to say how much I associate myself with those who have welcomed the introduction of this measure. I recognise the benefit it may be to agriculture, and the Amendment which I propose is merely an endeavour to make the operation of the Bill more rapid and effective. I recognise that in bringing this Bill forward the Government are discharging a pledge which they gave to the agricultural industry in respect of credits which are so badly needed by the industry. With regard to Clause 2, may I say how much I welcome the encouragement that the Government is giving to the further creation of co-operative credit societies?—a movement which, I think, is welcomed and has been encouraged for years by all those who have the interests of agriculture at heart. But I think it is clear that, in the effort to increase the number of these societies, and so establish the channel for conveying short credits to farmers, some time must elapse, and a considerable amount of propaganda must be necessary in order to remove some of that prejudice which, unfortunately, exists in the agricultural community with regard to societies of this nature, partly founded, of course, on ignorance of the benefits obtainable from them.

This Amendment is largely prompted by a sense of the urgency of the question. I am sure the noble Earl in charge of the Bill will agree that time is of the essence of this matter, and that the need for obtaining credits is very urgent at the present moment among many farmers and small holders. I suggest that the banks be brought into the scheme of this Bill, because, after all, I think it is acknowledged that they have already been enormously helpful to the agricultural industry during the very distressful times through which it has recently been going. The farmers are accustomed to using the banks, and in that respect have become more familiar with the system than they were in the past. So far as the bankers themselves have been consulted in this matter they offer no objection to the suggestion contained in this Amendment, and they are willing to enter into discussion of the details with the Treasury. After all, these banks are spread all over the country, they are ready to hand for this purpose, they have already the organisation, with the wide distribution of their branches, and therefore they are, I suggest, in a better position, for the immediate needs of the moment, to distribute these credits which the Government desire to give to those who so much require them. It is on these lines that I commend the Amendment to the Government, as I and those with whom I act believe that it will enable the Government to achieve its object more rapidly and more effectively. The need is an immediate and a growing one. I trust, therefore, that the House will agree to this Amendment.

Amendment moved— Page 3, line 27, after subsection (2) insert the said subsection.—(Lord O'Hagan.)


My Lords, I thoroughly sympathise with the object, that the noble Lord has in view. He says he wishes that these credit facilities should be brought as speedily and as easily as possible to the farmers and cultivators of the land who require them I think he is right when he states that these credit societies will undoubtedly take a certain time to be formed and to come into operation. But I do not think that the Amendment will really do very much good. Its object is to authorise State funds to be advanced to banks, to enable them to grant agricultural credit to farmers. The noble Lord is right when he states that the most convenient and the most usual way for farmers to obtain credit is through the banks, and he is also right in stating (as was observed in the Report of the Commission which inquired into this matter) that the hanks have, on the whole, behaved in a wise and liberal spirit, and that, to most agriculturists who have any credit behind them, the banks have been willing to lend money. I do not quite understand whether the noble Lord thinks that, if the State advances money to the banks, the banks will then be in a position to advance money to more people. We have no evidence before us, and I do not think we have ever had any evidence, that the banks require this assistance. From all we can ascertain I believe the banks have plenty of money to lend, provided the security is good enough.

I do not know that there has been any demand from the banks that the State should lend them money to enable them to lend it again to the farmers. I am not at the Treasury, so I cannot give a definite opinion upon that, though I think that in the past few years the Treasury has sometimes had to borrow from the banks rather than the banks from the Treasury. And that really is the process which I think the noble Lord's Amendment would bring about. The object that we have had in this Bill is to try to create credit where the banks are unwilling to lend, where they think they do not know enough of the borrower, or do not think ho is sound enough.

I must read what is said in the Report of the Committee: The essential difficulty in devising any sound scheme for affording additional credit facilities for agriculture "— That is, in addition to what is provided by the banks for merchants and others— lies in the fact that, unless means can be devised which will enhance the intrinsic status of borrowers, the risk involved may be serious. The most effective way of increasing a farmer's credit status is by inducing him to link up his credit with that of his sellers. This is the principle of cooperative credits which has been successfully applied to the case of farmers in other countries, and we are convinced that it is in this direction that the solution of the short-term credit problems of agriculture in this country should be sought. Later on they say: The proposal to encourage, by State assistance, the formation of co-operative credit societies possesses the further advantage that it will afford means, indeed the only means, by which agricultural labour will directly benefit by any measure of State credit for the farming industry. That is to say, that quite small men, by forming a co-operative society, would be able to borrow, and collectively to give that credit which, individually, they could not obtain from a bank—where, probably, they have not a banking account. Those are the lines followed by this Bill with regard to short-term credits, and I therefore hope that the noble Lord will not press his Amendment.


I do not suggest for a moment that the bankers are anxious to borrow from the Treasury. What I desired was to secure the interests of those who are seeking to obtain credit, namely, the small farmers and other farmers. I appreciate what the noble Earl said and I will not press this Amendment; though I confess that I am not altogether satisfied, because it seems to me that by restricting the operation of the Bill to the machinery which has been set up you are ignoring one source of the distribution of credit which will inevitably delay that distribution when it comes.


The banks can go on lending now.

Amendment, by leave, withdrawn.

Clause 2, agreed to.

Clause 3:

Amendment of Land Improvement Acts.

3.—(1) Notwithstanding any provision in the Improvement of Land Act, 1864, which limits the rate of interest payable under a charge created under such Act, the rate of interest under such a charge may be such as the Minister may from time to time authorise.

(5) Section eighteen of the Improvement of Land Act, 1864, in so far as it prohibits without an order of the Court of Session the making of any provisional or other order sanctioning the improvement of land where the landowner or the husband of the landowner is an heir of entail in possession or a life renter and is the father of the next heir, or heirs, or of a succeeding life renter or life renters or of the fiar or fiars, and such heir succeeding life renter or fiar, or one or more of such heirs succeeding life renters or fiars, is in minority shall cease to have effect.

VISCOUNT NOVAR moved, in subsection (5), to leave out "or the husband of the landowner is an heir of entail in possession or a life renter and is," and insert "is an heir of entail in posesssion or a life renter, and where such landowner or the husband of such landowner." The noble Viscount said: This is a drafting Amendment to give effect to the intention of the subsection.

Amendment moved— Page 5, line 17, leave out from the first ("landowner") to ("is") in line 18, and insert the said new words.—(Viscount Novar.)

On Question, Amendment agreed to.

Clause 3, as amended, agreed to.

Clause 4 agreed to.

Clause 5:

Application to Scotland.

5. This Act shall apply to Scotland, subject to the following modifications:— (a) The Board of Agriculture for Scotland shall be substituted for the Minister of Agriculture and Fisheries; the Agricultural Credits (Scotland) Account shall be substituted for the Agricultural Credits Account: "freehold or copyhold land "shall mean" land held in fee simple"; "mortgage" shall mean "heritable security": "devisee" shall include "legatee";

VISCOUNT NOVAR moved, at the end of paragraph (a), to insert "incumbrance shall not include a burden or charge incident to tenure." The noble Viscount said: This is a purely drafting Amendment which has the object of making it perfectly clear that the word "incumbrance" does not include feu duty or other charges.

Amendment moved— Page 5, line 37, at end insert ("incumbrance shall not include a burden or charge incident to tenure").—(Viscount Novar.)

On Question, Amendment agreed to.

Clause 5, as amended, agreed to.

Remaining clause agreed to.

Schedule agreed to.