§ VISCOUNT GALWAY rose to call attention to the colonies established by the Board of Agriculture under the Act of 1916, and to move for a Return showing the number of soldiers established on them, the profit and loss account of those farms, and separate account of the capital expenditure on cottages, buildings, roads, etc.
§ The noble Viscount said: My Lords, the object of the Return for which I am asking is to carry out what really was in the Act of 1916—namely, that Parliament was to be presented with an annual statement showing how these colonies were working and how they were paying. It is only fair to the taxpayers of the country that they should know the success or otherwise of the colonies. That is all the more necessary seeing that last year the sum of money spent on these colonies was increased. As will be remembered by many of your Lordships, I asked last year for a Return showing how the colonies were going on It is true that a sort of statement was produced in this House, but even the President and those who represented the Board of Agriculture in this House then were obliged to confess that the figures were such that it was impossible to derive from them any conclusion. I therefore hope that now His Majesty's Government, and the noble Lord the President of the Board of Agriculture, who I see below me, will consent to this Return so that we may be given full information concerning these colonies.
§ Last year the suggestion was made that a Return should be presented relating to one colony. That was in respect of the colony that I take great interest in. The Return was to be from April, 1917, till Michaelmas, 1918. That date is very curious, because it would have included two harvests, and one would have been purely problematical. I must say in regard to one colony in the East Riding—Patrington Colony—that I do not see why we should not now be able to have a Return concerning it for practically two years working. Objection was taken by the Board of Agriculture to give a Return from Lady-day to Lady-day. Why they should object to that I cannot understand, because the large majority of the tenants of the East Riding, and certainly the large majority in Lincolnshire and Nottinghamshire, have Lady-day tenancies, and it seems to me that it would only be carrying out what is 647 the custom in the country if a Return were given from Lady-day to Lady-day. If that were done farmers and others interested would be better able to judge of the success or otherwise of these colonies. Perhaps the noble Lord will be able to tell us to-night why the Board of Agriculture objects to giving a Return from Lady-day to Lady-day.
§ I should like to add a little to the Motion. I have stated that I think the House would like to know how many soldiers have been established on the colonies which have been running for two years, or for a year and a half, so that we may be able to judge whether the returned soldier has a fancy to live on these colonies when they are put in proper places. We should also like to know the profit and loss of the farms, and I think we ought to have a separate account of capital expenditure on cottages, buildings, and roads; and, if the noble Lords will allow me to supplement my Motion to that extent, the amounts spent in the purchase of land. Not all these colonies have been purchased. Some are on lease. In regard to those that have been purchased I hope that their accounts will be put separately. I think that we ought to know what is the capital charge on the various colonies, and I hope the noble Lord will consent to give the Returu that I ask for. I beg to move.
§ Moved, That there be laid before this House a Return showing the number of soldiers on the colonies established by the Board of Agriculture under the Act of 1916, the profit and loss account of those farms, and separate account of the capital expenditure on cottages, buildings, roads, purchase of land, &c.—(Viscount Galway.)
§ THE PRESIDENT OF THE BOARD OF AGRICULTURE AND FISHERIES (LORD ERNLE)
My Lords, I most decidedly agree to the Motion, and as I have some little explanation to offer I gladly avail myself of the opportunity. I am afraid that the Board of Agriculture has been very much under-staffed and over-worked in the last two years. If we present accounts they ought to be, I think, in such a form as will be more or less of a model. We hope, in the accounts which we shall present to the House in some ten days time, to give every detail as to the working of two of the colonies. The other two which were acquired under the Small Holding Colonies Act have not yet advanced to a 648 sufficient stage of development when we can really present any account. One of them we only entered into possession of at Michaelmas last. Though we have been a year in nominal possession of the other we have not been able to obtain possession of the cottages which are necessary for its proper working, nor have we, in the great stress and demand for labour and building materials, yet been able to build cottages to supplement their number.
There are under the Act four estates acquired. The first is the Patrington Estate near Hull, 2,363 acres, acquired from the Crown on a ninety-nine years lease at an annual rental of£3,277. Another of these estates is Holbeach, in the Holland Division of Lincolnshire, 1,000 acres, acquired from the Crown on a ninety-nine years lease at a rental of£1,623. The third one is Heath Hill, in Shropshire, 1,150 acres, bought (at a price of something under£36 an acre) for£40,000. It was particularly well equipped with cottages, there being something like thirty on the estate. The fourth is Pembrey in Carmarthenshire, 1,345 acres, bought (at a price of something like£22 an acre)for£30,000.
Now, to turn to Patrington, the estate which we have had longest in oar possession, I will give you the accounts. Of course, we ought to have an estate account, a trading account, a profit and loss account, and also a balance sheet. The estate account is, I think, very interesting. It shows what, I am afraid, is your Lordships' experience—it shows what is the fate of a landowner who attempts to improve his estate by building cottages and making roads. We obtained from the Treasury a loan of£24,000 (if your Lordships will forgive me, I will give the figures in round numbers). We have already built thirty-four cottages, and two are approaching completion. We repaired certain other cottages, and we have made certain roads. We have to pay interest to the Treasury on the total sum borrowed, and when the account is made up it shows this net result—I am now looking at it from the landlord's point of view—that with the payment of the interest for one and a-half years, and taking in all our rentals from the cottages, we make a loss of£700. That is, I should say, a very common, almost universal, experience of landowners who set out to improve their estate. There is, of course, no item to set off against that, in our case, 649 of rent, but even supposing you had a rent, supposing we were the landlords to the extent that we might set off against that item the rent that we pay to the Crown for the estate as if it had come into our own possession, there still remains the fact that of that rent probably not more than a third represents the value of the land; the rest of it has gone in the making of the land. Therefore from the landlord's point of view we show a loss in the year and a-half of something like£700.
Before the noble Lord passes to another colony, may I ask if that includes interest on the borrowed money?
§ LORD ERNLE
I was going to explain that. We are fortunate in this, that we are not the owners, and we do not pay tithe or land tax; therefore in the case of an ordinary owner the position would be even worse than I have here described. We have also obtained from the Treasury a loan of£33,000 for farming capital. Taking into account all the outgoings of the farm we show on the one and a half years—and I will meet the noble Lord's point about that in a minute, if I may—a profit. We set off, of course, the rent for the one and a half years which comes to£5,060, the rates and taxes, the salary of our management, depreciation and renewal, postage, travelling expenses, and so on.
We take on the other side the profits of the trading account. Your Lordships are familiar probably with home farms, and you all know how the bailiff possibly tells you that you are doing remarkably well. But you go on ladling out the money, and the only thing you have to show for it is a valuation which has gone up. Of course the valuation is the keynote to the whole of the account. We have made our valuation of the stock that we possess, to use the ordinary phrase, on a most conservative basis, but I think that we have done so on really very strict lines. For instance, we have put up the value of nothing; we have put it all down. We have bought, we will say, a binder; we ask what is the life of that machine, say ten years, and we write£5 off against it each year. We ask what the working life of a horse is; we say ten years, and whereas in ordinary practice 650 you write up the value of the horse from the moment he comes into work for two or three years, we have not done it. From the first we have set off the depreciation on such a scale that we shall lose nothing on the horse. And taking the valuation on that basis and bringing into account our sales, after laying the interest on our loans, the wages, the rates and taxes, the rent, and every other expense, we show a profit of£11,500 on the one and a half years.
THE MARQUESS OF CREWE
May I ask whether either the buildings, or the stock, or any portion of the stock are insured? Or does the Department adopt the usual Government method of dispensing with insurance altogether?
§ LORD ERNLE
There is no expense for insurance. We are our own insurers. I believe that to be the case, though I am sorry to say that in these accounts there is that usual item of "sundries," which is considerable, and before I left the Office I had not the time to analyse it; but I fancy that we do not insure.
Now, that shows, I think, in a very marked and striking way the position in which in many cases to-day the landowner and the farmer stand. As I have explained, the estate account shows an actual loss. We are in the fortunate position of being both landowner in one sense and farmer in another. When we come to be farmers we show a net profit on the farm for those eighteen months—which as the noble Lord properly points out includes two harvests—of£11,685. We have started at Patrington a settlement on the profit-sharing system; and obviously, if we had had on the farm a considerable number of men who had complied with the necessity of fulfilling their probationary period, there would be a considerable amount of profit to divide. The participators would be, Capital—that is, the Treasury, who have advanced£33,786 for farming capital and who have already got interest at 5 per cent, included; the manager—who I may say was appointed without any promise of profit-sharing, but for whom I think we shall try to obtain a bonus based on these profits; and there is labour. We propose to form an insurance fund; because, of course, the profits of one year are no guarantee of the profits of the next; and where you have wage-earners paid a weekly wage and sharing the profits, it is desirable as far as possible that they shall not have lean years in which they get 651 nothing. Therefore we very much hope that the profit which we have earned for the Treasury will be set aside in some such way that, after satisfying the claims of the working of the farm (the three participators), we shall be allowed to set it aside for the purpose of creating an insurance fund. All these figures will be placed before the House within, I hope, the next ten days, and with them I trust we shall also be able to submit accounts showing the actual cost of production of all that we have grown on the estate.
I should add that at Patrington we found that the land, which was warp land, was warp land of a rather peculiar kind. I think the noble Lord, Lord Bledisloe, and I were on the Small Holdings Committee which had something to say to the choosing of the land. The land is heavy warp land specially suited for the growing of corn crops. Corn crops, however, are not suited to small-holders because the margin of profit per acre is generally too small for a man to live upon a piece of land devoted to that purpose. Therefore when we came to examine the land closely we determined that we would run it as a big farm on the system that we have adopted, which has shown so far good results.
Holbeach is different. Holbeach is in the Holland Division of Lincolnshire. It is very fine land; therefore we are fitting out the small-holder with a self-supporting holding. On land like that he can live off ten acres, and we hope that we shall have a promising and successful settlement of men there. The profit of£8,000 that we have earned there is calculated on a similar method to that adopted at Patrington and has been earned off the land which we have cultivated as a central farm. The moment the small-bolder settles on a self-supporting holding he will, of course, depend upon himself for his own livelihood. I shall be very glad to try and arrange the accounts from April to April. I recognise the force of what the noble Viscount has said—namely, that it would be more satisfactory for purposes of comparison, in a district where the holding are Lady-day holdings, that our accounts should be comparable with those kept in that district. I will endeavour to meet the noble Viscount in that respect.
With regard to a point which I think was made when this subject was last discussed, I may say that the Inland Revenue have met the Board in a very generous 652 fashion over the question of accounts. Whatever was the ordinary period when a farmer balanced his books, provided they showed a year's working of the farm the Inland Revenue were content to take that period; and it is a point that, if a farmer makes up his books to Christmas, provided that it comes within the year ending April 5, it will be accepted by the Board of Inland Revenue for purposes of taxation.
The Small-Holdings at Heath Hill in Shropshire, which has admirable railway facilities, is well suited for dairying and market-gardening, and we hope to lay it out on those lines. But we have not yet advanced to such a point in developing the property that I shall be able to include the accounts in the Return we propose to make. The same applies even more strongly to Pembery, where we entered into occupation only last Michaelmas. There are two other largish estates which we have since acquired, but, as we entered into possession only last April, it is plain that I could not give any accounts. One of those is an estate in Nottinghamshire called Rolleston, 2,769 acres, for which we paid£47,750; and an estate at Amesbury in Wiltshire, 2,377 acres, for which we paid£7,500 in cash and an annual rentcharge of£1,300. There is also an estate, Bosbury in Herefordshire, which was presented to the Board as a free gift by a Mr. Buchanan and which is to be developed as a colony for officers. The total acreage held by the Board is therefore 11,761 acres at the present moment.
As to the numbers of men already placed upon the land, there are at Patring ton thirty-three soldiers, ex-Service men, who have been accepted as settlers. At Holbeach there are fifty-seven men who, like the Patrington men, are either on probation or approved as settlers. At Heath Hill there are sixteen soldiers approved and ten on probation. There are on those three colonies therefore seventy-seven approved settlers and sixty-five on probation. We insist upon a period of probation for ex-Service men, because we found from our early experience that the men came on to the land, entered into occupation of a cottage, and then grew tired of the work and threw it up. Probation is a very useful thing, although I think we are going to shorten the period. It stood at one time at a year, and I think probably six months is sufficient. If there is any point which I have omitted I shall be very glad to supply it.
§ LORD BLEDISLOE
My Lords, I should like to be allowed to congratulate the noble Lord on the surprisingly satisfactory statement that he has been able to make to us in relation to these colonies. As he truly said, he and I both had something to do with the selection of -the particular land which he first mentioned, in what used to be called Sunk Island, in the Holderness District of Yorkshire, one difficulty in connection with which was that owing to the stiffness of the land it was found unsuitable for growing potatoes, which of course is a very important crop to small-holders. It affords me personally no small sense of relief to find that he has been able to develop a particular type of colony of a very satisfactory and instructive character, if only as showing what can be done in the nature of profit-sharing, which is likely to prove an economic success. It was rather interesting, and to some of us who are land-owners perhaps a little alarming, to find that in separating two parts of his accounts he showed that under present and possibly prospective economic conditions ownership of land appears to be a somewhat unattractive business, whereas the conduct of agricultural operations appears under his able supervision to be a source of considerable profit.
It is rather an indication to some of us in what direction we may usefully apply our energies, by becoming occupiers of larger portions of our own land, possibly introducing some system of profit-sharing by giving the agent or bailiff a reasonable commission on the profits obtained, and possibly also allowing the workers on the land similarly to participate. I should like to ask the noble Lord whether it is his intention to extend this colony system under his Department very much further than he has already gone, because there is no doubt whatever that there is a strong feeling in the country with regard to this colony system, that although it has the great advantage of enabling the development of the co-operative principle, both in buying and selling and transport, it is not attractive to most ex-Service men to go far away from their own homes and settle down in a state of segregation in some distant colony. If, on the other hand, the noble Lord is prepared to encourage county agricultural authorities to set up smaller colonies perhaps on a similar scale within their own administrative areas, it seems to me they would become far more popular and justify themselves to a far greater 654 extent than some of these ultra-extensive areas formed into colonies by the Board of Agriculture.
It is to me a welcome and surprising announcement that the balance sheet has proved to be so satisfactory. I think, if I may say so, that the noble Lord will be wise not to count upon the same commercial returns, upon which he justly prides himself upon having been obtained from Patrington and Holbeach colonies, as necessarily flowing from them year after year; and if he is able to arrange some system by which, instead of sharing out all the profits, a due proportion could be carried forward to meet the requirements of lean years, I fancy the workers will enjoy a greater degree of contentment than if next year or the year after they found themselves with a very much smaller proportion of profit than they had anticipated. It may interest your Lordships to know that I had the experience of sitting as chairman of a House of Commons Committee to enquire into the whole question of profit-sharing and co-partnership in connection with Agriculture, and that we found to our great regret that over a period of 200 years many experiments had been made, but not a single one of them had survived for a period of more than fifteen to twenty years, because when the lean years came the workers repudiated the original arrangement as being not satisfactory from a financial point of view. However, under the scheme which the noble Lord has explained to us this afternoon it looks as if that difficulty might conceivably be overcome.
THE MARQUESS OF CREWE
May I ask one question arising out of what has been said by my noble friend behind me. He spoke of the possible adaptation of the colony system to the work of local authorities. Can my noble friend (Lord Ernle) tell me whether in the manning of these colonies regard has been had to the domicile or origin of the soldiers who have been placed there. Are the Yorkshire colonists, for example, men either of Yorkshire birth or who have served in Yorkshire regiments, or has the allocation of the men been purely haphazard?
I was interested to note what the noble Lord said of the purchase of a considerable block of land in South Wiltshire. That, I think, will be an interesting experiment, because the quality of the land in the two 655 colonies of which my noble friend has given particulars, although completely different—in one case being strong land peculiarly fitted for wheat-growing, and in the other fine Lincolnshire land suitable for small holdings—is unusually good. I take it that in the Wiltshire case which the noble Lord mentioned the land is of a quite ordinary character, not by any means first rate, and it will undoubtedly be interesting to see how the colony system develops on average moderate land of that sort.
It almost appeared to us when the question was first mooted, and when Lord Selborne first brought up the idea of starting colonies, that there would be some risk that the system would only be tried in picked circumstances where it was almost bound to be a financial success, and that, on the other hand, if its adoption was to become at all general, land of a somewhat inferior calibre must necessarily be tried as well. Therefore I think we shall all watch with great interest the progress of the further experiments. It is quite clear that on the worst land the financial results cannot be expected to be as brilliant as they are on the highest quality land, but if there is to be anything like a large adoption of the system in different parts of England it is quite clear that average land must be brought into play as well.
My Lords, I gave such an ominous warning to the Department when Lord Selborne introduced the proposal that I think it only just to say I shall be the first to express my congratulations to the noble Lord if the results of the experiment are as successful as he has indicated to-day. I take it that there is some qualification owing to the fact that in the case of Patrington, at any rate, there have been two harvests. Therefore the profit has to be halved and spread over, I think, 2,300 acres, so it is not quite so much as it sounded. But I am sure that the noble Lord, with his great experience, has taken care that every legitimate charge has been put in, and that the valuation will be made on its proper basis; that is to say, that it will be made good at the beginning of each year. If this is the method in which the accounts have been made out, I can assure the noble Lord that I shall be the first to acknowledge my mistake in warning the Department that there was not much chance of success.
I should like to ask the noble Lord one question. I did not quite gather the position of the thirty odd men at the Patrington colony Are they now receiving standard wages, and are they paying rent for these houses? What is their absolute position? I understand they are going to have some share of the profits.
§ LORD ERNLE
If I may deal with the questions that have been asked me, I should like to say that we do not anticipate such profits on average land, nor do we expect such profits when current prices drop. These are, it must be remembered, war years, and that is a warning applicable to the accounts which I have given. There is no reason why county councils should not apply the principle, but I would point out to the noble Lord who raised this question that the reason why we have large areas is that unless you have a large area you cannot afford to pay the salary that a really first-rate man will require. To some extent, of course, in the counties they can supply the place of a special manager by means of their agricultural organiser; but there is a great deal of difference between the man who lives absolutely in the middle of the farm and who has it in his eye from morning to night, and the man who drops in on a large round to give his occasional supervision. That is the reason of the large areas.
I think that when we speak of these group settlements we should try to get out of the way of calling them colonies. My own experience of countrymen is that they think a colony means a collection of epileptics or some sort of penal settlement, and one part of the unpopularity of the movement is, I think, due to the name. Another part, of course, is due to the fact that the man has to sacrifice, to some extent, his own independence. The South Wilts property is a very interesting experiment. There are, as there generally are in most Wiltshire properties, little pockets of good land—of good grass and good arable land—and the main portion of the land requires pretty skilful farming to make it pay. We have bought this estate in South Wilts partly because it is close to one of our biggest military camps. We have a good market, so to speak, at our very door. We have had in past years enormous supplies of manure derived from the camp, and, if we can make South Wilts farming pay on the lower slopes of the Downs 657 anywhere, I think we can make it pay here. It is a very interesting experiment. I am perfectly convinced that the men will not lose by it, and it may turn out a great success for the future development of agriculture.
In these settlements we have not followed the county basis, and for this reason. The county authorities themselves are supposed to confine their holdings to men who were born in the county or who have served in the county regiment. That leaves a great number of men outside. We think we shall best cater for the largest number if we do not lay particular stress on the men belonging to the county where these settlements are grouped. But we do not pedantically hold to that rule. If a Yorkshireman comes forward and says he would like to settle at Patrington, if there was a place there I think we should be inclined to give him a slight preference, especially if he was not able to be placed by the county authority. The men at Patrington are renting a cottage and a small acreage of ground—I think it is in most cases half an acre of their own. For that they pay a rent based on the rents of the neighbourhood. They receive the wages of the district and they share the profits, if there are any. Wherever we establish these settlements these are the principles upon which we work. The men pay a proper rent for their houses and garden; they receive the wages of the district, and the profits, if there are any, are divided between the three participators—capital, management, and labour.
§ On Question, Motion agreed to.