HL Deb 17 December 1925 vol 62 cc1627-32

Brought from the Commons, and read 1a.


My Lords, in moving now that the Bill be read a second time, may I remind your Lordships that this Bill is not certified as a Money Bill, although it provides for the financial adjustment between the local authorities and the national Exchequer in respect of the land settlement of ex-Service men. In effect it repeals Section 27 of the Land Settlement (Facilities) Act of 1919, and substitutes for it the method of financial adjustment which is set out in this one-clause Bill. I may remind your Lordships that the Act of 1919 provided for the settlement of these ex-Service men upon small holdings, and the Government of the day, during the passage of the Bill through the House, announced that the cost of the scheme would fall, not upon the local authorities, but upon the Exchequer. With this end in view Section 26 of that Act provided that the actual loss incurred by the county councils and the borough councils each year up to March 31, 1926, should be repaid by the Ministry of Agriculture, and this has, in fact, been done daring the last six years.

But Section 27, which this Bill is intended to repeal, provided that as at April 1, 1926, the value of each council's small holding estate on the one hand, and its capital liabilities in respect thereof on the other, should be ascertained, and that the Ministry's payments from that date should be "proportionate," as the Bill expresses it—no one seems quite to know what that term means—to the excess of the liabilities over the assets as ascertained by such valuation. Putting the matter shortly, it was intended that each small holding estate, as held by these local authorities, should after this fixed elate in the spring of next year be self-supporting, that is to say, balancing the loan charges and the cost of maintenance on the one hand against the rents received from the small holders and the Ministry's contributions on the other.

It has now become clear that if the valuation is carried out strictly in accordance with Section 27 of that Act it will be impossible to give effect to the pledge that as from April 1 next each county council or borough council shall be left with an estate which it ought to be able to manage without making either a profit or a loss. The difficulty arises owing to the changing values of money, and the interest percentage consequently charged upon loans which have been made from time to time in respect of land which has been acquired by the councils for the purposes of these small holding schemes. The valuation in Section 27 has to be expressed under the Act as a capital sum, and although this method might be justifiable if the valuation in each case were made at a time when the interest rates corresponded roughly to the rates at which the capital was raised, it is obviously unfair when, in fact, the estates are being valued at a time when the rate of interest on loans advanced by the Public Works Loans Board is, or will be, say 4¾ per cent., whereas the capital was expended when the rate was 6 or 6½ per cent. In fact, most of these purchases were made between 1920 and 1922, when the average rate of interest for loans was 6¼ per cent. Both the interest and the cost of building and equipment were at that time abnormally high, but about 80 per cent., I am given to understand, of these purchases went through at the time when these onerous conditions prevailed.

The effect, therefore, of the valuation on a capital basis as provided by the principal Act would be that, while the capital value has materially depreciated, the council would be left to pay the high interest charges on that capital value without any assistance in that respect from the Exchequer. This Bill proposes to overcome this difficulty in regard to the rate of interest on loans by providing that the valuation of both assets and liabilities shall be made on an annual, instead of on a capital basis. By this means the proper weight will be given to the varying rates of interest payable on the various loans that have been raised for the acquisition of these properties. Moreover, it is proposed to base the Ministry's payments each year on the difference, as ascertained on the 1926 valuation, between the annual liabilities and the annual net income of the council instead of adopting the so-called proportional basis—whatever that may mean—required by Section 27. To be frank, the main reason for this Bill is that the Act of 1919 is not quite intelligible in the language which is used. In fact, if matters were allowed to proceed undoubtedly a ease would have to go before the High Court for the interpretation of this word "proportional."

The liability of the Exchequer is no greater under this Bill than was intended under the terms of Section 27 of the Act which is note being repealed. It is difficult to say exactly what amount the Exchequer may have to write off in connection with this settlement scheme. £16,000,000 have, in fact, been expended in settling ex-Service men under the Act of 1919, and it is possible that the proportion to be written down may prove to be as much as 50 per cent. of the total expenditure, owing to the heavy cost of building and the high rate of interest on loans to which I have referred. Therefore, the Exchequer contribution to be paid to councils as a result of the valuation will be a series of annual payments which will probably be equivalent to about one-half of the loan charges incurred under the land settlement scheme of 1919.

There is one other matter to which reference has been made in another place and in regard to which I ought incidentally to mention that the dates of the Ministry's payments have to be somewhat altered in view of the present financial situation. The payments under Section 26 of the Act have to be made and are in fact made a year later than the time when the expenditure is incurred. Under Section 27 the payment comes to be made at the time when the balance sheet, so to speak, is made out and the balance is struck as at April 1 next. The result is that in the ordinary course two payments would come to be made next year. In the present state of the national finances and in view of the heavy expenditure which is being incurred under the Sugar Beet (Subsidy) Act, while striking the balance at the agreed date it is not thought advisable to make this double payment in the early future but to postpone it for the next three years.

Finally, I ought, perhaps, to mention that the procedure adopted in this Bill is the result of discussions which have taken plume between the County Councils' Association together with representatives of the borough councils and the representatives of the Ministry of Agriculture. It therefore comes before your Lordships as what may be called an agreed measure—agreed, that is to say, between the representatives of the local authorities and the representatives of the Government. In view of the observations which fell yesterday from the noble Marquess, Lord Lincolnshire, who, I am sorry to see, is not at the moment in his place, it is only fair to say, I think, that this scheme for settling ex-Service men upon the land has been in no way a. failure. To fact it is rather surprising, in view of the adverse seasons we have experienced and the varying prices for agricultural produce, that these men have made so good a show as they have when settled upon agricultural land in this country. Only about 10 to 12 per cent. of them have fallen out of line and have been failures in any sense. Considering the sort of human material of which many of these settlers were made it is really remarkable that owing to their indomitable pluck most of them have been satisfactorily settled upon the land and, in all probability, will succeed in the future.

I think it is only fair to say this especially as the Government intend, so far as it is possible, to extend the small holdings scheme to provide for the requirements of men other than ex-Service men in the future, and to give the much. talked-of ladder which is greatly desired in many parts of our agricultural areas to promising skilled workers to enable them to become successful occupiers of small holdings such as those I have described. I beg to move.

Moved, That the Bill be now read 2a.—(Lord Bledisloe.)


My Lords, I do not rise to oppose the Bill but to ask whether the noble Lord in charge of the measure would be good enough to put the subsequent proceedings in the Paper for Monday. My noble friend, Lord Lincolnshire, is anxious to say something on the subject. I do not think there is anything he wishes to say that is at all likely to imperil the passage of this measure into law and, therefore, I do not think it will in any way interfere with the programme of business which is in the mind of His, Majesty's Government if they accede to this request.


Would the noble Earl prefer that it should be put down for Monday rather than to-morrow?


For Monday rather than to-morrow, unless there is some reason of convenience why that should not he done.


In the ordinary procedure it would he put down for Committee to-morrow and for Third Reading on Monday.


That would be an excellent proceeding, but not altogether necessary because, I think, the Committee stage could be negatived to-day.


No. It would be quite irregular to negative the Committee stage.

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