HL Deb 07 July 1943 vol 128 cc283-314

LORD CRANWORTH rose to call the attention of His Majesty's Government to the progressive deterioration of the capital equipment of agricultural land; and to ask what steps it is proposed to take to deal with the matter. The noble Lord said: My Lords, the question which I ask introduces a subject of some gravity, and I am bound to say that I have been somewhat diffident about raising it. I had hoped that someone of more weight in your Lordships' House would do so, and I had hoped even more that His Majesty's Government would make some announcement without the prod which is now being administered to them. It will be within the knowledge of your Lordships, as it is of everyone, that agriculture in this country has been very much on the upward grade. This is due in no small measure to the action of His Majesty's Government and to the policy which they have pursued, a policy in regard to which the noble Duke who is to reply has rendered such yeoman service. It is also due, no doubt, to the economic circumstances which are produced by that policy. I venture to think, however, that it is due most of all—and here I expect that your Lordships will agree with me—to the patriotic efforts of farmers and farm workers throughout the country. I do not think that those who do not live and work in the country have any idea of what we owe to the farm worker. He has been working throughout the summer for seventy hours a week day in and day out, and for that extra time which he has worked he has in many cases received almost no extra remuneration at all; the work which he has done has been to a great extent due to his patriotism. Whatever it has been due to, however, it is obvious that cultivation has been improved, production has been increased, and land drainage has been improved also.

There is, unfortunately, a reverse side to that picture of agricultural production. We are cashing out the fertility of the soil. The extent to which that is being done varies in different parts of the country and according to soil, climate and other conditions, but I do not think that anyone would deny that we are cashing out that fertility. There is, in fact, a capital levy on the land, and the effects of that capital levy will have to be met. I know that it is inevitable, and even desirable; and with due care—and by "due care" I mean more care than has hitherto been used—there is no reason why, during the war, production should not be not merely maintained but even increased. But the bill will have to be met, and it will have to be met by those who are responsible for the maintenance of the land and who, for lack of a better name, we call the owners, whether they be the Government, in the form of county councils, whether they be big corporations, or whether they be big or small landowners. It is on them that this capital levy will fall, and it is they who will have to foot the bill.

When, however, we turn to the capital equipment of the land—and by that I mean mainly cottages, farm buildings, farm houses, and also the smaller equipment such as gates, drains and so on—we find a very much sadder picture and a very much graver situation, because those assets are deteriorating, and deteriorating rapidly. I do not wish to exaggerate, and I know that conditions vary in different parts of the country. It is not possible to generalize about these things. Perhaps one of our mistakes in the past has been to generalize too much about agriculture, and to think that what is good for one part must necessarily be good for the other. But there is no doubt that the farm equipment is deteriorating. It has been deteriorating for a very long time—for at least twenty years—and the main cause of that deterioration has been the financial inability of the landowner to do the work. Of course, there have been bad landowners, and they should be heartily reprobated, but in the main the reason has been lack of financial ability. It has been calculated that the return on agricultural land in this country prior to the war was 1½ per cent. I do not quite know how that was, calculated: it must be a difficult calculation in view of the incidence of the Death Duties. But more to the point, I think, is the fact that from many estates, big and small (and possibly more so in the case of the small estates), there has not been sufficient money coming in to provide enough to keep the manor house, the cottages, the farm buildings and the farm equipment in maintenance condition, let alone provide that improvement which is the natural corollary of good farming.

Since the war began this sad process has been largely, and quickly, accelerated. In the first place, the landowner is one of the few people who is not only not better off to meet the increased cost of living but is in fact much worse off than he was before. The rates are almost entirely static and Income Tax, as your Lordships know, has been steeply raised. If he were unable to do it before he is still less able to do it now. And the cost of building has gone up. I do not know what it may be elsewhere, but in my part of the country 100 per cent. would not be an unreasonable figure for the difference. That is only a small side of the picture. The worst side—or a worse side—is this, that you cannot gel it done. If you had all the money in the world you cannot get it done: there are no builders. In the first place, of course, you have to get a licence to obtain the materials. I dare say some of your Lordships saw a letter by General Guy Dawnay in The Times some little while ago, in which he explained how it took almost innumerable forms and six months to get the materials. Well, I am sure many of your Lordships are aware that that is no exaggeration. My surprise is that he was fortunate enough to get them so quickly. But the fact of the matter is that, with the best will in the world, you simply cannot get these repairs done. This winter and spring we had some terrible gales. Hundreds of thousands of tiles were blown off, roofs were lifted, and even walls were knocked down. Those repairs have not been completed yet. Gates, in my part of the world, are almost non-existent. Some of your Lordships may say that that does not matter so very much, because in any case the military leave them open, but that would be an exaggeration. They do not always go through all the gates; sometimes they even shut them.

Now this position is continuing, so far as I can see, and it will not be any better when these new cottages of which we have heard so much really begin to be erected, There will be then even less chance of doing these repairs. And I may suggest —again I say "in some parts"—that in some parts of the country this is already beginning to have an effect on the war effort. You cannot expect agricultural workers to work with such a good heart when the rain is coming through their roofs, and you cannot expect cows to give the same amount of milk when they stand in wet and insanitary houses. It has become an increasingly dangerous and difficult position. In some parts of the country the only way in which you can get repairs done is by persuading your war agricultural committee to issue an order to do them. Then when you fail to carry it out, as you are bound to do, you persuade them to step in and carry it out by default. Well, something is done then. But it is a very dangerous precedent for the owner who adopts that proceeding, although he may be well advised to do so. Some of your Lordships may say, "Well, this is war. That you must accept, and you must wait until the war is over to put these repairs into operation." There will be no possibility of the landowner, as at present situated, putting these repairs into operation after the war, for the reason that he will have no money.

I would draw your Lordships' attention to this fact. When a landowner does his repairs on maintenance they go into his maintenance account, and on that money so expended, and rightly expended, he is charged no Income Tax. But if he is unable to do the repairs, and therefore does not spend that money, Income Tax and Super Tax arc chargeable on the work that he should have done and has been unable to do, Furthermore, unlike other people, he is unable to lay any money by. If you are a firm and pay Super Tax, as most firms do, you are enabled, or reputedly enabled, to earmark 20 per cent. of E.P.T. to be expended in replacement of buildings when the war is over. The landowner pays no E.P.T., so he cannot earmark any sum whereby those buildings may be repaired when the war is over.

I am making no appeal for sympathy on behalf of the landowner. I have no mandate to do so and he would not thank me if I did. I do not think the landowner in this war has got a record of which he need be ashamed. I do not think there are many classes who have made greater sacrifices in blood or money. I do not think that there is another class which has suffered such a complete reversal of the life it led and of the amenities it enjoyed. He is proud that it should be so. He makes no complaint; he appreciates that in the past his life has lain in pleasant places, and he is glad now that he is called upon to make greater sacrifice. I would only say one thing, and that is that the love of fair play in this country is the prerogative of no class or section of the community.

What I wish to make a plea for is a national asset. The standing capital equipment of farms is a national asset. In 1925 it was estimated to be worth £815,000,000, which had fallen in 1931 to £654,000,000. These figures back up the statement I made regarding the progressive deterioration. But the replacement value to-day would be infinitely more than either of these figures. Figures do not mean very much, but I would say this, that there are tens of thousands of farms in this country where the value of buildings, cottages, and standing equipment is worth much more than the land—nay, the value of the buildings alone is worth more than the land and the equipment together. Let me just give a typical instance—an arable farm of 250 acres with six cottages. These six cottages would cost at least £3,600 to build, the farmhouse at least £1,500, the farm buildings at least £2,000, and the rest of the equipment at least £400, making a total of £7,500. The farm with the farm buildings at the present enhanced prices to-day would be sold at somewhere between £5,000 and £6,000. That is a conservative statement. I believe I have placed the price of the farm too high and the replacement value of the buildings too low. I suggest that these are assets we cannot afford to have ruined.

I want to put another point of view before your Lordships. There has been a spate of agricultural policies placed before the country. Some of these have received the official or unofficial backing of the Government—perhaps "praise" of the Government would be a fairer term. Nearly all of these policies, notably those approved by the Government, include a suggestion that it shall be the duty of the landowner to maintain the buildings in a proper state, and if he does not so maintain them the land and buildings shall be taken away from him. That is inherent in nearly all these policies. I, like others of your Lordships, have many friends who believe in the State owning all the land; I have some friends who believe they should take the land without paying for it; but I have never yet met a single person who thought the right way of so doing was to say that it was the duty of the owner to keep his property in repair, to render it absolutely impossible for him to do so, and then to take it away from him because he had not done it. I am sure that cannot be the intention of the Government and I am waiting to hear how they are going to prevent it.

I should like to suggest two remedies, one for the present time and one as a longer policy. The first is the use of Italian prisoners of war for building. We have got quite a few Italian prisoners now, and a large proportion of them, I believe, are admirable workers in the building trade. Many of them are skilled craftsmen. I do not mean that they work very hard necessarily—some of them do not— but I believe their skill goes without saying. Might it not be possible to make use of some of these people to supply the place of the very many apprentices and builders' artisans who have been called up? I expect nearly every one of us knows of a small builder who formerly employed four or five men but who has now only got a boy or is all by himself. I know there are difficulties in the way— employers' federations, trade unions, and that sort of thing—but, after all, the Ministry has dictatorial powers now, and surely the adjustment of these things must be well within these powers.

The other suggestion I wish to make, and I know it cannot be answered here, is that the landowner should be allowed to earmark a certain proportion of his income which he would have spent on the maintenance of his property—that he should be allowed to earmark that without interest, if you will, but without taxation, to be spent when builders and building materials are once again available. The people are fed by the land. They live there, they have their amenities there. In nearly every sense of the word the land does belong to the people. It would be the height of folly to let the maintenance of the equipment of that land, by which alone production can be maintained, to fall into ruin and disrepair. It will have been noticed that I do not ask for Papers in this matter, and for two reasons. In the first place I cannot conceive that there can be any Papers, and, secondly, I would not have it thought by anyone that I wish in any way to cast any aspersion, or move anything approaching a vote of censure, on a Government and Ministry who have done so much for production and agriculture in this country.


My Lords, I am very grateful to my noble friend for having this Motion on the Paper of your Lordships House. The subject he has raised is one which, in the national interest, ought to be brought to the notice of both authority and the public. If later on these chickens come home to roost, and we have not given our warning, it might be said and said with justice, "Why did you refrain from putting at the public disposal the knowledge which you then possessed?" The situation really has reached so serious a stage that it should at least be understood, even if no action should result from the knowledge. The situation is one which affects two classes of the agricultural community in slightly different ways. One is the owner or, if I may use the apt phrase of my noble friend, he who, "for lack of a better name," is called the owner. The other is the occupier and of course, betwixt and between and sharing the troubles of both, is the owner-occupier.

What is the situation in a nutshell? It is this: agricultural buildings are tumbling down. They cannot be kept in repair, and there is no provision being made for their eventual repair because the money that should be put aside for that purpose is going year by year in taxation. That is really the whole situation in a nutshell. Only the Treasury and the Inland Revenue realize the amount of money which is annually spent in excess of the statutory allowances on the repair of agricultural properties, and when it is realized that none, or practically none, of that money has been spent for the last three and a half years, or can be spent, then the condition into which buildings are getting will be appreciated.

How are we to deal with the situation? First I ought perhaps to deal in some more detail with how it was dealt with when it could be dealt with. The great majority of your Lordships will know that many years ago landowners in their organization, the Central Landowners' Association, represented to the Treasury that the statutory allowances which are made from the gross assessments of property were inadequate to maintain the property assessed. There are certain allowances which all forms of property, house or agricultural land, are allowed by way of maintenance, but the Treasury and the Inland Revenue realized that those allowances were inadequate and advised that the maintenance claim be embodied in the Budget of that year, and since it has been a part of the tax law. The maintenance claim is of this nature. Over an average of five years the moneys spent on the average in excess of the statutory allowances are not taxable— that is to say, the money has to be spent and then, when it has been proved to the Inland Revenue that it has been spent on legitimate purposes, it is included in the maintenance. Then the average of the five back years is taken and that average is allowed for on taxation for Income Tax, and Surtax follows Income Tax in this respect. There is also a rebate of Surtax.

That particular tax provision has really spelt salvation to the agricultural industry on its financial side for a great many years. If it had not been for that particular provision the subject which we are discussing now could not have been discussed; it would have been outdated because every agricultural building left since then would have tumbled down by to-day. For some years past, and during the years of war, in the majority of cases it has not been possible to spend the money upon essential repair work, partly because of shortage of labour, partly because of shortage of material, the shortage in both respects becoming more acute every day. That is brought home to the agricultural public with extreme force when such cataclysms occur as the one last spring, notably one in April, which did more damage in a few hours than could be done by a panzer or an armoured division in a week-end—and they can do quite a lot of damage.

That is the situation. How are we to get over it? It would not of course alleviate the situation at the moment, but if it were possible to earmark money which would normally have been spent if material and labour were available and put it into a pool which could be drawn upon after the war, that at least would offer some prospect of getting these repairs done some day. What is actually happening is that money is being paid away in taxation year by year, and as my noble friend pointed out, the money not having been spent on maintenance, it is quite obvious you cannot claim from the Inland Revenue a rebate in respect of taxation upon it. In consequence, it goes into the maw of the Treasury, so that not only are no repairs being done because they cannot be done, but there will be no money to do them after the war because the money has been paid away in taxation. It is as well to realize that situation in its entirety. It cannot be in the national interest to allow farm equipment to tumble into dereliction and know that it can never be brought back out of its dereliction except at the expense of the general taxpayer. That it will be brought back one day by somebody is inevitable, but why not have it paid out of its own resources rather than out of the resources of the general taxpayer? That does not seem to be a businesslike or proper way in which to deal with the matter.

The average of the last five years preceding the war—from 1939 five years backward—would be a very fair average to take, provided always that some percentage allowance was taken into consideration so that the excessive costs of to-day and to-morrow could be met. If the average of maintenance over and above the statutory allowances pre-war was, say, £1,000—that, for want of any other figure, will do—then that £1,000 before the war will be, not £2,000, but more than £2,000 to-day and after the war. My noble friend said he believed the cost of building had risen by 100 per cent. The last figure which I saw and had access to was exactly 112 per cent., and the costs are constantly rising. With a pool created out of pre-war averages you would not in fact meet the whole cost of that, but you would go a long way towards meeting it.

It may be said, and I think justly said, that this House is not a body that can legislate in these matters. That is quite true. This is one of those matters which would have to be embodied in tax law and included in the Budget for the year, but it is a necessary preliminary to getting any alteration in tax law that the subject should be properly ventilated, and in which House of Parliament it is ventilated does not seem to me to be of much import provided it is ventilated so that the public understand the necessity for the change in the law. We are trying to-day to make it understood that unless some change is made then the public generally and the nation as a whole must be prepared to see farm equipment go into dereliction with no prospect of having it ever put into repair except at their own expense, which is what we want to avoid.

There is another aspect of the matter, also a tax one, which affects the occupier and the occupier only. Excess Profits Tax, as most of your Lordships know, is paid upon a pre-war average profit basis —that is, better than on a pre-war average profit of £1,500—but in 99 cases out of 100 pre-war average profits were not profits at all but losses. It therefore follows that today in the vast majority of cases £1,500 is the maximum figure which the occupier of the soil is allowed to keep as profit, but that £1,500 is subject to ordinary Income Tax at the rate of 10s. in the pound and therefore finds itself reduced to £750. Just a word on the curious inequity of this particular provision. A small farmer, farming, we will say, one hundred acres, and making a profit of £1,500 is allowed to keep it. Even if he pays the full rate of taxation, which he hardly would do, there would still be £750 and he would have a profit of £7 10s. per acre upon it. But take the case of the farmer farming 500 acres who is also making a profit of £1,500. To him that is a profit of only £3 an acre reduced to 30s. No man in the world can maintain himself and his family and also maintain the equipment of his farm on a profit of 30s. per acre. It cannot be done. Machinery is getting out of order and all manner of farm equipment needs replacement, particularly when it is being worked to capacity as it is to-day, and farmers quite literally have not the means with which to replace their essential equipment.

This matter of maintenance claims is one which is causing the landowner the greatest anxiety. The Excess Profits Tax is one which is going to restrict the farmer, the occupier of the soil, in his production policy and is, going to react, not to-morrow or next cay or immediately, upon the nation as a whole in a reduced production from the soil. That is quite inevitable. I think all of us realize, whatever our political outlook may be, that the richer the occupier of the soil can be the better it is for the nation as a whole. It is a fact. None but the most short-sighted person will fail to realize that it must be a fact, because the well-to-do farmer is enabled to pay a reasonable rent and a reasonable rent enables the landowners to keep buildings in a reasonable state of repair. A prosperous farmer is also enabled to pay a reasonable wage to his labour, and if labour is paid a reasonable wage it works better and remains on the land and has no temptation to go elsewhere. Subject also to reasonable and proper restrictions and compulsions if necessary in the matter of cultivation, the well-to-do farmer is an asset to the country as a whole. The present taxation policy has reduced him to practical penury, and it is a foolish policy because it must in the end affect the unfortunate owner-occupier. The owneroccupier gets it both ways. He is unable to put in his maintenance claim for repairs which he would wish to do in his own farming interest, and he is also unable to get out of his farming profits a sufficient profit to keep his implements and farm equipment up-to-date. He gets it both ways.

But it is better to divide the requirements of the situation into two clear-cut ones. The first is an alteration in tax as it affects maintenance claims to enable the owner to put into a pool the money which he would have probably spent and cannot now spend, of course subject to the proper restrictions and the proper compulsions later on, to see that he does spend it if it is put into the pool. That goes without saying. On the other hand, an alteration in tax law is needed in the direction of the remission of Excess Profits Tax upon farmers so that they may be enabled to maintain the equipment of their farms. There are subsidiary aspects of the question, of course. There are such questions as economic rents. Economic rents in themselves would provide a larger flow of cash through—not into, but through—the landowner's pocket out of which he could make a better contribution than the one he does make, or has ever been able to make, for the repair and maintenance of farm premises and more notably of cottages. The question of economic rents is one which ought to be considered in relation to any post-war agricultural policy, because at the present moment it bears enormously not only on the owner himself but much more on the bigger national question of not only maintaining but raising the standard of rural housing throughout Great Britain.

I think I have said all that really requires to be said upon the subject except just this, that I do not think any responsible landowner to-day would be other than ashamed if he were to approach this question from any personal standpoint, and I am perfectly convinced that the agricultural community as a whole would equally be ashamed. We want to approach it solely from the standpoint of national advantage. Is it better that to-day provision should be made enabling the agricultural industry to stand upon its own feet after the war and to continue during the war to make its fullest contribution, or that it should be reduced to the position of a mendicant going hat in hand to an over-burdened State after the war, telling that over-burdened State that if it does not do so-and-so and such-and-such, and produce the great sums of money which are necessary, it will get nothing to eat, because the industry has been so reduced that unless money comes out of the pockets of the taxpayer farmers will have to go bankrupt? That really is not an exaggeration.

We want to take thought for to-morrow and to take it to-day. The proper thought to take is to ensure, if we can, that agriculture shall be placed at once in a position to create such reserves out of its present relative prosperity that, at the end of the war, it will not be a mendicant and will be able to make the contribution to world's necessities which will probably be as necessary for four or five years after the war, if not longer, as it is to-day. I will close by thanking my noble friend for having put upon this question the Paper, and for having given an opportunity to the House to debate a subject of real importance. Let us hope that as a result of the debate action will be taken before it is too late.


My Lords, I for my part endorse everything that has been so admirably stated by my two noble friends, and more particularly the last few sentences of the speech of my noble friend Lord Hastings, who put the case from a national point of view. It seems to me that the time has come for the Government to make up their minds whether or not the capital equipment of agricultural estates, solely from the standpoint of the output of food, is going to be maintained or not. I hope that I shall not be regarded as showing any undue political prejudice when I suggest that the main trouble to-day, so far at any rate as concerns those who have some capital available for maintaining the equipment of their estates, is the utter lack of a sense of security on the part of the agricultural landowner as to what his future is going to be. I rather wish that my noble friend Lord Addison had spoken before me, for I should have liked to hear what he has to say on this subject. It seems to me that the Government, if they have it in mind now or in the early future to nationalize agricultural land, ought, in the highest interests of the public, to say so.

You cannot have it both ways. I ventured to point out on the Third Reading of the Agricultural (Miscellaneous Provisions) Bill that to-day there is such a feeling of insecurity on the part of those whose business it is to provide the capital equipment for the purposes of agriculture as to what is going to be the future of agricultural estates, that such maintenance of the essential equipment is not taking place. The present Government is constituted in part of those who have in the past advocated the nationalization of all agricultural land. I am inclined to think that some of them at any rate have varied their views, but if there is going to be a majority for the nationalization of agricultural land then in the interests of the public there ought to be a public announcement in the early future that the whole burden of providing and maintaining the capital equipment for the purpose of agriculture will be found by the taxpayers of the country—a very large bill it will involve—or, alternatively, landowners ought to be told that if they do their job and carry out their duty as efficient landowners, then in a period of, let us say, the next twenty years, they will be treated with reasonable fairness whether in the matter of Death Duties, taxation or otherwise, so that they can get on with their proper job, which is, as landowners, to maintain their properties in proper condition to provide the nation's food.

Well, as I say, you cannot have it both ways. I, for one, rather deprecate the fortunes of agriculture, so far as the ownership of land is concerned, resting entirely, as they seem likely to do, with prosperous industrialists who have made fortunes in other vocational directions. I do not hesitate to say that I belong, and that my family for many generations has belonged, to the country squire class. And I am not ashamed of it. But it is the country squire class that is gradually disappearing in this country. Gradually, through economic necessity, it is being snuffed out as an important factor in the body politic, although the country squire knows far more about the potentialities of the land that he and his ancestors have owned than anyone else can possibly know. If only that unfortunate individual were given a gleam of hope that at any rate he was not going to be nationalized, and that he would be treated at least as fairly as the owner of industrial capital, there would be a very much happier prospect before the agricultural community, and the rural community generally, in this country.

Reference has been made to the occupying owner. Your Lordships may not be aware that on behalf of the Central Landowners' Association—I am the sole surviving founder—some of us went to immense trouble to find out what during and following the last war was the relative change in the ownership of agricultural land. We found that whereas in former days the occupying owner represented something like one sixth or less of the whole of the owners of agricultural land, that particular class has come to represent no less than one third at the present time. I think it is unfortunate, for what happened, in a large number of cases after the last war, was that relatively poor farmers who had barely enough capital for the purposes of their business invested their capital in the purchase of their land, and later, in many instances, and particularly during the present war, a larger amount of capital outlay became necessary because so much pasture land has been ploughed up involving a much larger amount of capital expenditure per acre on the part of the occupier. These men have not had sufficient capital. They, or their forbears, have, as I say, expended the greater part of what they had in the purchase of their farms. The result is that not only have they not had enough capital equipment to carry on effectively, but what equipment they have has got into a state of most serious deterioration. In some instances this has led to men being turned off their farms on the ground of alleged inefficiency. This is a process that is absolutely inevitable hereafter unless, at least in the case of the smaller and non- prosperous owner, a far happier outlook is foreshadowed by the Government in the matter of capital equipment.

There is just one other matter to which I wish to refer. Lord Cranworth has spoken of Italian prisoners. There are quite a considerable number of Italian prisoners in this country to-day, and I should like to see them put on to what should be their optimum occupation. Everyone knows, or ought to know, that during the last twenty years in Italy magnificent work has been carried out in the drainage of land. No finer drainage work has been done anywhere in Europe. I suggest, therefore, that all those men among the Italian prisoners who are efficient drainers ought, particularly, to be turned on to work of land drainage. We all know, and I who was Chairman of the Land Drainage Royal Commission can testify, that something like one-fifth at least of the potentially most fertile land in this country is badly water-logged and can never produce its maximum output until it is effectively drained. There must be many experts amongst these Italian prisoners who are well fitted to carry out such work. In the part of England in which I live, I find Italian prisoners being turned on to felling timber, shaping pit-props and work of that description which I cannot believe, as compared to land drainage, is the task for which they are best fitted. I do not know anything about their capacity for building, but after all many of us were taught in our early days that "Balbus built a wall." Surely there must be some Balbi among the Italian prisoners who are capable of building as well as of drainage work.


My Lords, I expect that I shall make a very bald statement, and, therefore, not a very long one. I think that your Lordships must be already convinced by what Lord Cranworth has said, and by the picture which Lord Hastings has drawn of himself chasing the roof of his Dutch barn across country in the great gale, that this is really a formidable problem which at present is falling with all possible weight it can on the private landowner. But not only is it falling on the private landowner, it is also falling on the State, in so far as the State indulges in agricultural pursuits, which it does on a large scale, and on corporations. I do not think it is necessary for me to labour the unfortunate position in which the provider of fixed capital equipment now stands.

I should like to thank one who I believe has had very little connexion with agriculture but has a very great reputation in industry, Sir Lynden Macassey, whose letter to The Times you may have read a short time ago. In that letter he pointed out that you could not have social security (on the Beveridge standard shall we say?) unless you had proper capital equipment with which your labour was to be supplied. If you had not this capital equipment you could never maintain your standards. That, after all, is tolerably clear when you come to think it out. In my opinion we may think of these matters entirely divorced from any considerations as to who owns the land. It is a national problem, and it is the nation in the end who will suffer or gain. That being so, I should like to ask your Lordships' agreement to my next point, and that is that after the war we shall continue to demand of farming a fuller use of the land than we were accustomed to before the war. We are not, I hope, going to drop back to the condition in which we found agriculture in 1938. If we are to get a fuller use of the land, that necessarily involves greater capital equipment, and I do not see how it is possible to escape from that difficulty except by making it possible to have the capital equipment required.

Let me give your Lordships a few figures. Mr. Lloyd George, to whom we are eternally grateful for this particular reform, as for many others, was the father, I think I may say, of the maintenance claim, and the maintenance claim, as your Lordships know, and as Lord Hastings has recently pointed out, has been the great prop of the provider of capital equipment. At the time that Mr. Lloyd George introduced this very valuable provision, I think I am right in saying that the average run of expenditure on repairs was something like 25 per cent. of the rent, if as much. It may interest your Lordships to know that for the last three years before the war the Central Landowners' Association made a survey, covering 100 estates, and found that the proportion of the rent which then went in the maintenance and repair of farm buildings and houses amounted to 47 per cent. To that must be added the tithe, which the landowner has to pay, and which in England and Wales is now on an average 2s. 3d. an acre, but which, on the kind of land about which the noble Lords, Lord Cranworth and Lord Hastings, are talking is more like 6s. 8d., or even 12s. an acre. Both those items— repair and tithe—must be found out of the rent payable. To that it is necessary to add a small sum for management and a small sum for insurance. In my part of the world, when you have made that calculation you will find that 1.8 per cent. of the rent remains to the landowner. That points to the crux of the problem: who is going to invest capital for a return of 1.8 per cent.? Even the Chancellor of the Exchequer cannot obtain his money at much less than that.

I should like to emphasize that in speaking about this subject I am thinking of post-war conditions as well as of present conditions. I fully admit that it is a very difficult situation in which the Government find themselves. I believe that they cannot fail to recognize that the landowner, or whoever pays for the fixed capital equipment, is in a very serious position, and it is uncommonly difficult to get him out of it. There is, however, one direction in which we might profitably look at the present time, and that is the direction of the provision of credit facilities. As your Lordships may remember, in January, 1929—a very bad year in which to begin borrowing money, interest rates in ordinary business being then about 6 per cent. and the Government rate 5 per cent.—the Agricultural Mortgage Corporation began business. In some four years it lent £10,000,000, against which, so to speak, were issued debentures of £10,500,000. Very shortly afterwards interest rates began to drop, and to drop with great emphasis, and finally the Corporation found itself forced to reduce its rate to 4¼ per cent. It lost money, because it had borrowed at 5 per cent.

That, however, was not the end of its troubles. When the war began, and money began to flow into the pockets of the occupiers, if not into the pockets of the owners, the withdrawals from the scheme increased in number and in importance, and the position now is that more is being drawn out of the fund than is being put into it, so that the situation is steadily worsening. That is a state of affairs which is no good to anybody, including the State. It would be far better, I suggest, at once to reduce the rate of interest both of the Lands Improvement Company and of the Agricultural Mortgage Corporation to some figure nearer 3 per cent. or, let us say, the figure at which Public Works Loan Board interest is now fixed. I make that as a practical suggestion to the noble Duke, who I understand is going to reply, and I hope that he will at any rate be able to assure me that he will give this point very careful consideration.

I do not think that I need detain your Lordships much longer, but I cannot sit down without urging one other longoverdue reform. I shall not call that reform making legal the inclusion of improvements in the maintenance claim; I will put it in another way altogether and call it power being given to the landowner to include in his maintenance claim an improvement which is certified by the county agricultural committee to be necessary for the proper working of the farm. We have all, including the inspector of taxes, found the utmost difficulty in deciding what is an improvement and what is not, but now we have a series of local bodies with an independent standpoint and concerned with agriculture, and we can refer that question, as we do the question of cottages, to these committees. If they certify that the expenditure is neces- sary for the proper working of the farm, then it should be possible to include it in the maintenance claim. I venture to think that that is also a reform which could be put in hand quite soon, and which would meet with very little objection. The expenditure would go very largely on such things as making cow houses sanitary, a long-overdue reform which is being only very slowly pushed forward.

One final remark—and it is only a remark. You will never get the finance of the agricultural industry into completely proper order until you deal on a fresh footing with Death Duties. That is really a stupid point, because it is so obvious. Agriculture is an industry which depends on individual ownership, action and vigour. Although it may be difficult to justify the statement by reference to conditions in industry, the fact is that agriculture does depend on the individual to a degree that no other kind of industry does. I cannot ask my noble friend the Duke of Norfolk to knock off Death Duties at one stroke, but I may confidently, I hope, look forward to their gradual abolition.


My Lords, I am sure that we are indebted to the noble Lord, Lord Cranworth, for initiating a discussion upon a matter which is of first-class importance in the agricultural industry. Anyone who is familiar with the facts will agree that he has not in the least overstated the urgency of the case. As a matter of fact, some years ago, when I myself was Minister of Agriculture, I made inquiry into the stats of the equipment of our farms, and received at that time an estimate of the cost of putting the farm equipment on a minimum scale into repair. It was a prodigious figure. The figure given to me at that time as a provisional estimate for minimum requirements to enable the farms to be properly farmed was £250,000,000. I should think that that is a long way below the mark now, because everyone will agree who has any first-hand knowledge of it that the revelations of the surveys which have had to be conducted during the war have revealed a state of things which, certainly so far as I am concerned, is much worse than I anticipated. We shall have a discussion before long in this House upon the necessity of the provision of clean milk. I am quite sure that what the noble Lord, Lord Phillimore said, or indicated, is true. It is a physical impossibility on large numbers of farms to obtain clean milk under existing conditions, because of the lack of adequate water supplies and adequate buildings, properly drained.

What applies to many types of farm buildings—I have been mentioning only cowsheds—applies even more to farm roads. The importance of convenient transport for modern farming cannot be exaggerated, and the number of farms where you find adequate and firm, usable farm roads is, I am sorry to say, a very small proportion. If you have not seen them you will not find it easy to imagine the difficulties which the occupier is confronted with every day. And it is an expensive business making a road, it costs so much a yard. Therefore I am quite sure that the noble Lord, Lord Cranworth, has in fact understated very much the urgency of the case from the point of view of competent farming and of proper food production. The noble Viscount, Lord Bledisloe, mentioned drainage. Well, we are all equally familiar with that and, although a great deal of money is being spent on it now, I know that in the county with which I am particularly concerned, at this moment, notwithstanding all that has been done—and many Italian prisoners are being used on drainage work in that part of the world—there are many hundreds of miles of farm ditches which have never been touched for twenty years. You cannot get proper drainage unless you clean the ditches out.

The noble Viscount, Lord Bledisloe, stated that the old landowner who understood his business and was able financially to do his duty by farm equipment, had, unfortunately, in many parts of the world disappeared. That is true. And I think he was right too when he said that the state of equipment of the farms run by owner-occupiers was, on the whole, on a lower standard than the others. Because they bought their farms and put what bit of money they had into them, in addition to what they could raise on mortgage, in buying the farms, and left themselves with very little working capital at a time of high prices. They faced after that several years of depression, so that they have never been able to spend any money on repairs, and the state of repairs is very bad.

I am not going to express any opinion on the points so ably presented by the noble Lord, Lord Hastings, as to the alterations in the law in regard to allowances, but I should like to express my hearty agreement with Lord Bledisloe in his view that it is high time the national policy on this matter was declared. It is, I think, of first-class importance that people should know where they are. I am sure that is right, and I hope that the noble Duke who is going to reply will represent to his Ministry that there is on all sides an anxiety for Government policy on this matter to be determined and stated with sufficient clearness. I am quite sure that in order to get what we ought to get out of our land, whoever pays for it, these expenses will have to be incurred. There is no doubt at all about it. You cannot get clean milk, and you cannot use the land properly unless you have a reasonable standard of equipment. Somebody has got to pay for it, and it will either be the owner or the State. That is inevitable. I am myself quite sure that there are some landowners—a great many landowners—who would do the job well if given a chance. But there are also a great many who are quite incapable of undertaking it, and particularly in the smaller class—those who own bits of land. I should think that there is room for a recognition of the fact.

I think that what Lord Phillimore suggested is right—that if the county war agriculture executive or some other body with trusted advisers were to prescribe what should be the minimum equipment of a particular holding in the interest of its being farmed properly, it would be possible to devise expedients whereby, under the conditions which I have mentioned, the owner might be authorized to borrow the money on condition that he did the job. Lord Hastings and Lord Phillimore might say, "That is all very well, but where is he to get the money from?" And there I should like to turn to the point that Lord Phillimore raised as to the provision of cheap capital. There would have in any case to be a Land Commission—Lord Beaverbrook is here, and I dare not call it a Committee—a Land Commission which would serve the Minister of Agriculture, which would receive reports from county war executives, which would enable cheap money to be available either for the owners under an approved scheme or for the State itself.

I do not think the Agricultural Mortgage Corporation as at present constituted is the body to do it. The £10,000,000 which the Agricultural Mortgage Corporation advanced was very largely in liquidation of debts to banks incurred on farm purchases. It was not on improvements, it was on purchases of land, and what the noble Lord, Lord Cranworth, is really bringing up is the urgent necessity of money being spent on improvements, on equipment. A very small proportion of the £10,000,000 advanced by the Agricultural Mortgage Corporation was in respect of improvements. In this connexion £10,000,000 is a bagatelle. When we consider the amount required to equip our farms properly we are not thinking in terms of £10,000,000. That figure has no relation to the expenditure required. Therefore you must have machinery for the provision of cheap credit whether for the owner on an approved scheme or for the State itself.

It would be right and fair, if there is ultimately reached an arrangement whereby the owner who can, and will, do the work has cheap money made available, that you should have some tribunal for the determination of fair rents. That would be demanded as an inevitable concomitant of cheap capital. It has been suggested in one quarter that if money is advanced and made available to owners at a very low rate of interest, the increased rent charged by the owner to recoup him for his expenditure should be at a prescribed rate in relation to the loan that has been made. That is not an unreasonable suggestion. At all events, whatever may be the form which this takes, it is inevitable, if the State is going to make it possible for cheap capital to be provided for this purpose, that it should be accompanied by a control of the rent which would be charged as the result of that increased expenditure. There would be room for compromise on these lines.

I wish I were in the place of the noble Duke. It should be possible to have an agreed agricultural policy negotiated—it ought to be possible without long delay. At all events, it is absolutely necessary that such a policy should be determined, and whatever the policy is, if we are going to use our land properly it must be properly equipped. It will cost an immense sum of money, and we are indebted to the noble Lord, Lord Cran- worth, for calling our attention to this urgent matter.


My Lords, noble Lords on this side will be very pleased that the noble Lord who has just spoken, with his up-to-date knowledge as Chairman of an agricultural committee, should be in complete agreement with earlier speakers in this debate. There is in Scotland very great anxiety among a large number of the smaller lairds and owners of larger estates, and I am sure they will readily respond to all demands to look after the upkeep of the equipment of their farms if the opportunity is given to them to do so. It has been clearly shown during this debate that the accumulation of deferred repairs, maintenance, improvements, new types of buildings, additional buildings to house new equipment, and all the other forms of expenditure on estates—fencing, hedging, and planting on a very large scale—will require considerable sums of money being put to reserve

These matters affect agricultural land and its management far more than they affect industries in the cities, and I do hope there will be a response to the appeal made by the noble Lord, Lord Hastings, to make it possible for landowners to put to reserve sums which may be coming to them in much larger amounts than usual from the sale of capital assets, which are incidentally subject to ordinary taxation. I hope also the appeal that has been made to-day will be listened to by the Government, particularly by the Chancellor of the Exchequer, and that he will see his way to instruct the Inland Revenue, which I am sure has men with practical knowledge of estate management, to go more thoroughly into the question of taxation both as regards maintenance and also Death Duties, and perhaps try and link up the system of assessment for Death Duties with allowances for capital expenditure.

I should like to add one or two words about farm cottages. Landowners, almost alone among employers, have the sole responsibility for housing all the employees on their land. Whilst the Minister of Health and the Secretary of State for Scotland are making an effort to provide additional new houses at the present time, there is in many districts a far greater need for the improvement of existing cot- tages, particularly in out-of-the-way places in the wilder districts where no repairs have been possible to farm cottages or shepherds' cottages in Scotland, and no doubt in England, too. There is an overdue necessity for attention being given to them now. In some districts there arc still empty houses, and no families are available to go into them. It is important to get attention for these cottages which are in such a condition now. I hope some attention will be paid to the suggestion that Italian prisoners of war should be used. Many of them in the camps in my district are joiners by trade. And some of those joiners who have been employed on constructional work at camps and aerodromes might be returned to agriculture for this purpose. I may say in conclusion that a somewhat gloomy picture has been painted, but landowners have endeavoured to render service in the past, and they are prepared to do so in the future, not in the expectation of any return to themselves, but with advantage to the people and a great saving to the nation.


My Lords, if the agricultural industry of this country under some future Government stumbles into ruin, there will rise up against that Government all the many wise and well-informed speeches which have been made on this subject in your Lordships' House. I have very little to contribute to the debate this afternoon, but I have a few facts. About ten years ago I bought for somebody else a farm at a price of £517. That was the average price of such farms at the time. When I looked into the business I found that the buildings were insured for £2,000, and they were well worth it. Agriculture is a partnership, the fixed capital being provided by one man and the working capital and industry by another. The return which was given to the owner on that £2,ooo of invested capital purchase price was £517. Another case concerned an estate I know valued at £20,000 or thereabouts. The insurance value of the buildings on the estate on which very bad reports were made was something over £100,000. The reason that such an estate and such a capital is worth so little is, in the first place, that there is such a small return, and, in the second place, that there is immense trouble in managing it. I need hardly say to your Lordships that if the buildings on an estate arc bad the land also will be so. It has not been mentioned this afternoon that one of the reasons of such a low price for an immense original capital outlay is the vexatious restrictions on managing it and the tremendous increase in overhead costs.

I would like to point out to your Lordships that in many ways that also militates against the preservation of the land in good heart. I will give one instance, a case that I know of a landowner who is now trying to reclaim a comparatively large farm. Had he been able to apply pressure at the right time he would have been able to get the tenant of the farm out of it into a smaller farm which the tenant could manage. The land has gone down because the man who was in the farm was an old man and unable to cultivate it properly. Everybody who owns land knows how difficult it is to move a man from a home which he has been in for a very long time, and what tremendous trouble proprietors take to make the new place that the tenant is going into a happy and welcoming place to him. All farmers like to get into places that they can manage. Owing to vexatious restrictions in managing land the proprietor in this particular case could not manœuvre the tenant out and the land gradually went down. In consequence the nation to-day is suffering from a shortage of food so far as that farm is concerned, owing to the position in which the proprietor found himself. In one sense I do care, but in another sense I do not care, who gets the land in the end provided you let me get on with the job and manage the land properly and see that it is kept in good heart. That is the feeling of farm servants, farmers and proprietors. There is no difference between them on that point. You get that feeling just as strongly in the farm servant as you do in the farmer and the proprietor. The noble Duke who has just spoken will agree with me entirely in saying that.

I have said that something must be done to encourage proprietors. Something also must be done to encourage farmers. A long time ago I told His Majesty's Government that farmers' sons were not going into the industry. It was about six years ago. I pointed out that of the farmers' sons being educated at Gordon College, Aberdeen, only very few were going into agriculture. A vast number of farmers I know will not put their sons into the industry because they say it is a losing game and a dying industry. If you ask them when the industry began to die you will find that it began to die just about the time that landed proprietors became a political target. That is a very interesting point. The noble Lord, Lord Addison, and the noble Viscount, Lord Bledisloe, have talked about owner-occupiers and there is one point about owner-occupiers that I should like to put. It is this, that once a man has bought a farm, he may be a good farmer or he may be a bad farmer but he remains there. I know a farmer who bought a farm and a good farm and a fine thing he made of it. He doubled his capital in a very short time. Then, like all good farmers, he wanted to increase his work and he tried to get a distant farm, a very much bigger farm. Although he could have bought the farm or leased it, he was unable to do so because he could find nobody to buy his farm.

When you have tenant farmers every pound of capital they accumulate goes back into the land and back into their industry, and they grow to bigger men much more rapidly than owner-occupiers. I am not in the least against owner-occupiers. I think there are splendid men amongst them and I would hate to see a country without plenty of farmers holding their own land; but if the agriculture of this country is to be put on a sound basis I think the most practical method of getting the most out of the land and having the happiest country population is to try and aim at landed estates of a definite economic size, not too large and not too small, interspersed with what I think in England would be called yeoman owner-occupiers.

While on this subject I would like to acknowledge the magnificent work the agricultural committees are doing in this war. I think that the Government are to some extent losing something by not making more use of individual proprietors because the individual has what no committee ever has: an eye for character. Your Lordships must agree with me that that is true, when you consider that most landed proprietors who have been long in the countryside and who have been long in their homes, have been in positions where for generations they have done an enormous amount of public work. They have always been in the hands of people who do most of the management for them, and they were in the position that in the case of any single generation of these men trusting a man not deserving of trust their family was ruined. You do inherit an eye for character and you do use it. I had the good fortune to marry an Englishwoman and I obtained access to some ancient English documents and one of them would, I think, be of interest to your Lordships. It was the letter of an old Lincolnshire landowner to his tenants. It was written in 1797 and it stated that Sir William So-and-so had learnt that the people of Stamford—I think it was Stamford—were finding great difficulty in purchasing bread because of its high price. "It is my desire," wrote the writer of the letter, "that you bring your farm produce immediately into the market place of Stamford and sell it at current rates of the day." The writer went on to say that if this were done obedience to his wishes would be remembered, and thus by a single turn of the hand in that district the shortage of wheat and the dearness of bread were obviated.

In conclusion I would like to say a word about rural housing. Scottish rural housing has occupied attention in this House on many occasions and I myself have moved many Amendments to Scottish Housing Bills. I would like to say that I think the best is sometimes the enemy of the good. We all want to see rural houses improved and we all want to see them made as good and roomy and comfortable as possible, but owing to the fact that it is impossible, and has been impossible for many years, for proprietors to build good enough houses at economic rents, you have got, whether people like it or not, a dreadful trade going on in condemned houses or con-demnable houses. That is a very bad thing. I do not want to go into details about it now. The whole question of rural housing wants going into by a Committee which has both knowledge and sympathy. It should not be too big, but a Committee of, say, about seven members which can do some work.


My Lords, as you will, unfortunately, have to listen to me on one or two Amendments to the Bill which is to be considered after this debate, I will only occupy your time now for three or four minutes. I was glad to hear the noble Lord, Lord Addison, ex- press certain opinions on the matter because I well remember that two years ago he expressed the same opinion when I had the honour of introducing a Motion to your Lordships' House on a long-term policy for agriculture. We had a reply then which did not get us very much further. I hope with the noble Lord, Lord Addison, that one of these days this long-term policy will be announced. The Forestry Commission Report has recently been published and forestry and agriculture go together. I hope the long-term policy for agriculture will emerge.

There are only two points I wish to mention. One has reference to maintenance claims and the other to the difficulty of getting work done. I hope that nobody will think that in the matter of maintenance claims landowners are in any more favourable position than any other industry. The right to make a maintenance claim only gives to landowners benefits which other industries had before. In other words, if you have a certain income from rents and certain expenditure going out, you do not have to pay more in tax than you really should pay. This is not a concession to landowners as such and it is a great mistake if anyone thinks it is a concession. One point which emerges in connexion with maintenance claims is that during the few years before the war, when expenditure was higher than it can possibly be now, the five years' average was taken into account. Certain landowners are now paying on the preceding five years ending on the last April 5. If the war lasts five years from 1939 and after the war money is required for expenditure on landowners' estates, they will be paying on the very small average that they have been able to spend during the war. Therefore they will be paying more in tax just at the time when it will be absolutely necessary for them to get hold of all their liquid financial resources in order to put properties in repair.

I would like to make a suggestion for serious consideration by the Treasury. I have made it before, but I should like to repeat it. There is a Treasury concession that where an owner buys a new property or farm where there has been no maintenance claim in existence before, he can take his first five years' expenditure year by year against a five years' rent. I suggest that owners should be given the option after the war of taking their expenditure and rent into account year by year instead of taking the average of five years. That would mean that in the five years after the war the owner would not pay more in tax than was actually received in the way of rent minus expenditure. That is quite a simple way of dealing with it, and I believe it could be done without legislation as a Treasury concession.

My other point is a short one. A great amount of repair is wanted now and I would like to appeal to the Minister of Labour and National Service, as I have appealed before, not unnecessarily to call up members of estate repair staffs. They are being called up all over the country and it is almost impossible to get repairs done. I would like also to make an appeal that members of staffs of small building firms in the country should not be treated quite so hardly as in the last few years in the matter of calling up. It is almost impossible to get any little firm of builders, on whom some estates depended very largely before the war, to do any work now. The reconditioning of cottages has been referred to by several noble Lords. Cottages all over the country are getting into an appalling condition and, although on April 5 the Ministry of Health sent round to local authorities advice that they should help owners to recondition cottages, and if necessary give grants to that end, it is very difficult to get the work done. The cost is very high. I hope that the Government will look into that question as speedily as possible, for it is no good leaving everything till the end of the war when agricultural equipment, as my noble friends Lord Cranworth and Lord Hastings and other noble Lords have said, is deteriorating very rapidly.


My Lords, at the outset I should like to make it quite clear to my noble friends from Scotland that I have read the Order Paper and will not detain the House longer than I can help, though I must remind them that this is only my first of two appearances during this sitting. I would like to thank my noble friend Lord Cranworth for giving the opportunity for one of the most valuable debates on the agricultural in- dustry that we have had in this House. We have had before various debates on long-term policy and now we have had one confined mainly to capital equipment, but it is really impossible to divide the one from the other. My noble friend Lord Cranworth has given us the benefit of his experience and has brought with him a tremendous amount of support, and there has been a universal cry this afternoon from noble Lords on all sides that the agricultural equipment of this country shall be rendered suitable for the work it has to carry out. I have no definite proposals to make to-day and therefore I do not want anyone to think that I am trying, in the few remarks which will follow, to draw anything across the eyes of noble Lords. I am a landowner myself; I know what the land needs, and I thoroughly endorse everything that has been said. As regards the specific points put by Lord Phillimore, Lord Addison and Lord Brocket, I will certainly bring them to the notice of my right honourable friend.

When we are told that equipment and cottages are deteriorating very badly, I would remind your Lordships that that is not confined to the agricultural industry. The ravages of war are having an effect on all forms of equipment and houses. As we all know, we have not got the necessary labour or material to carry out all the work which is needed, but so far as they become available everything will be done to spare more for the industry. There are two ways in which repairs may be carried out in the country. My right honourable friend the Minister, under Regulation 51, has certain powers which he has conditionally handed over to war agricultural executive committees, whreby if the situation of any land has deteriorated to such a degree that the production of food is likely to be affected, they may take over that land, and the committee concerned will provide a certain amount of material and labour to put the place in order so that food production may not suffer. The private owner, if he is not able to find materials from his own estate, may also apply to the war agricultural executive committee and after inspection they may give him a permit under which he may also carry out repairs. I fully recognize that we have not to-day either the labour or the materials that we desire, and I will reiterate that, so far as is possible, when they are forthcoming we will put them where they are most needed.

My noble friend Lord Cranworth referred to the employment of Italian prisoners for building. As he is no doubt aware, a certain percentage of the prisoners in this country are allocated to my Department for the production of food and the carrying out of land drainage. I would like to assure my noble friend Viscount Bledisloe that an enormous number of these prisoners are put to work on land drainage; in fact I think I may say that it is one of the primary tasks on which they are employed. If they are to be considered for building work as well I would ask my noble friend to refer his suggestions to the Minister of Works.

Now I come to the question of taxation. In its effect on the maintenance of farm property, taxation raises general issues of policy in regard to Income Tax which are matters for the Chancellor of the Exchequer. For example, it would be contrary to Income Tax principles to allow a deduction for an amount reserved to meet an expenditure which is anticipated but which has not actually been incurred. Regard can be had under our Income Tax law only to expenditure as and when it is actually incurred. To allow, in the case of ownership of the land, a departure from this principle would involve a decision of policy, and would not be justified within the principles of the present law. There is a difference between what is done for Income Tax and what is done for Excess Profits Tax purposes in relation to repairs. Where repairs attributable to an accounting period for which Excess Profits Tax is chargeable are proved to have been deferred by reason of the war, payment of a part of the Excess Profits Tax liability is allowed to remain in abeyance pending the carrying out of the repairs. If and when it is established that the repairs have, in fact, been carried out the tax so held in abeyance will be discharged. The reason why no similar arrangement exists for Income Tax purposes is that the two taxes are different in character. The Excess Profits Tax is only a temporary tax, and if no provision for a current relief from that tax were made it is possible that in many cases no relief would ever be given, for the expenditure might well be actually incurred only after Excess Profits Tax had ceased to be chargeable. Income Tax, however, is a permanent tax, and expenditure can be taken into account in relation to the year or years in which it is actually incurred.

Those are points which I have been given by the Board of Inland Revenue on the very vexed question which so many of your Lordships have raised to-day. I will only add that I fully appreciate what the situation is, and I will do everything, in conjunction with my right honourable friend, to see that when a long-term policy for agriculture is introduced the matters referred to and so ably brought forward by my noble friend to-day are not forgotten.


My Lords, with the leave of your Lordships—which I have to ask as I did not move for Papers—I should like to express my thanks to the noble Duke for the answer which he has given, and for the fact that he has made quite clear, what your Lordships, of course, knew before, that his sympathies are not only with agriculture as a whole but with those who are responsible for the maintenance of the standing equipment. I venture to hope, and I believe that your Lordships will also do so, that for several years to come the noble Duke will find himself the holder of the same office, for I am quite certain that he will do his best to help not only the landowner but all branches of agriculture. I was, if I may say so, just a little bit disappointed with his answer in relation to the matter of the Italian prisoners. I have good reason to believe that the Minister of Agriculture has already interested himself in this particular matter, and I had hoped that the noble Duke would have been able to tell us that some further attention was to be paid to it. But he has not been able to give us any information in that respect. I should also like to express my gratitude to the noble Duke for his illuminating answer on other points regarding maintenance claims, Income Tax and Super Tax, and I thank him very much for the courtesy of his reply.