PUBLIC WORKS LOANS BILL. (Hansard, 29 September 1931)

§ THE EARL OF LUCAN

My Lords, before moving that the House resolve itself into Committee on this Bill I should like to answer one or two questions which were put to me by the noble Lord, Lord Marley, during the discussion on Second Reading. The noble Lord drew attention to the fact that principal as well as interest appeared to be written off the loans under the Agricultural Credits Act, and he asked whether the losses were not particularly heavy. I can assure him that the losses are not unusually heavy. The loans are £20,000,000 annually, but the losses are as usual very small in relation to the size of the business. As regards the writing off of the principal as 163 well as the interest, under Section 15 (1) of the National Debt and Local Loans Act, 1887, any principal which is not likely to be recovered is directed by Parliament to be written off the assets of the Local Loans Fund and is ultimately made good to that Fund by a Parliamentary Vote. I may point out to the noble Lord that the principal outstanding still remains a debt due by the borrower and if at any future time there is any chance of getting the money the borrower is proceeded against; but the money when it is recovered is paid into the Exchequer and not the Local Loans Fund.

The noble Lord also made some remarks about the Public Works Loan Commissioners. It is well known that they are a body of very disinterested and able men who possess the confidence of the public and of the borrowers themselves. I do not think the noble Lord need attribute any of the heavy borrowings to their bad administration. The losses under the Agricultural Holdings Act, 1923, which, it is regretted, have been an annual feature recently, are due not to the Board but to the deliberate action of Parliament under the Agricultural Credits Act, 1923, and to the depression in the farming industry. That Act allowed loans to be made up to 75 per cent. of the value and experience has shown that this percentage is too high for adequate security. If there is any further question the noble Lord would like to ask me I shall be glad to reply to him. I beg to move that the House do now resolve itself into Committee.

§ LORD MARLEY

My Lords, I should like to thank the noble Earl for the reply he has given to me. I can quite see the difficulties of dealing with this matter and I can understand that the Public Works Loan Commissioners had the confidence of the borrowers, who feel that if they cannot pay back the loans, either principal or interest, they will be very kindly written off by Parliament. But that is not a satisfactory arrangement, I should have thought. It is doubtful too, as I pointed out, whether the Public Works Loan Commissioners really can have the entire confidence of the country not in their disinterestedness—no one is going to suggest anything personal of that 164 kind—but purely as regards their ability to deal with the difficult financial position in which the country finds itself. I quite see the difficulty, however, and I wish to thank the noble Earl very much for his courtesy.