I beg to move the Second Reading of this Bill. The purpose of it is to give legislative effect to Articles 3 and 4 of the Agreement of December last amending the Treaty. The Bill provides, in the first place, for the payment of the ten per cent. addition to the awards given under the Damage to Property (Compensation) Act of 1923. It was provided in the Agreement that those increases should be made by means of 5 per cent. stock. A considerable amount of thought has been given to the question of whether it was worth while issuing a new five per cent. stock, or whether payment should preferably be made by issues of the existing compensation stock. It was felt undesirable to issue new stock for small amounts. From the point of view of the position of our Government securities on the market it is desirable not to have a variety of securities, but only a few varieties of securities which will in consequence be easily marketable and easily disposed of and easy to buy for those who want to buy Government securities.
Having come to the decision that we should, so far as we were issuing stock, issue what would be the existing stock, we did not see that it would be possible to make any alteration in the amounts in which the stock would be issued. The present stock is issued in multiples of £50. Even if we had decided to issue new stock we would certainly not have issued any multiples less than £10, because the issue of quantities of stock in very small amounts involves a good deal of bookkeeping and a good deal of expense in management that is not worth while. We decided, therefore, to pay these increases by issuing compensation stock and paying broken amounts under £50 in cash.
The cost of this ten per cent. addition will really not be very much because the ten per cent. increase will not apply to the whole of the post-truce compensation payments. In the first place, compensation for railway damage was excluded from the scope of the Damage to Property (Compensation) Act, 1923. That was provided for by agreement with the Railway Companies and the provision for ten per cent. increase does not apply there. Compensation for personal injuries is not affected by the agreement. The ten per cent. increase does not apply to them. Then there are certain other cases which are excluded. For instance, where R.I.C. barracks were burned down the owner was entitled to compensation, but the Gárdaí authorities wanted new barracks as quickly as possible. Perhaps the owner might have been slow to build, so that what happened was that the Board of Works acquired the site from the owner with the right of compensation attached. In certain cases compensation was simply paid out of the Vote to the Board of Works for the erection of the new barracks. In such cases, naturally, ten per cent. additional will not be paid over to the Board of Works. The result of these deductions from the total amount of compensation payable is that not more than between £350,000 and £400,000 would have to be found. That will be the amount that will be required for the ten per cent. additional. Of that sum, roughly half will have to be provided in cash as we are issuing compensation stock in multiples of £50 and about half will be paid by the issue of stock. Of course the cash portion of this amount is a capital charge, which naturally the Government will borrow to meet. That is, we will not include this £200,000 or £175,000 in the moneys that have to be found in the coming year by taxation.
The Bill provides that in respect of report cases, just as in respect of decrees, the amount shall be increased by ten per cent. In the case of a decree ten per cent. of an increase must be paid but in the case of a report it does not follow that the ten per cent. will be paid. In certain cases people got reports but no payment was made and, of course, the ten per cent. will not be paid in these cases. In some cases a person got a report say for £200—£100 in respect of one particular item and £100 in respect of another particular item, but on examination in the Department of Finance one item may have been disallowed and the other item paid for, so that only £100 was paid. In that case the ten per cent. would only be paid in respect of the item allowed. Although the report was for £200 and this Bill will give us power to pay £20 extra, we will not pay the £20 extra. We will simply pay ten per cent. on the amount allowed by the Department of Finance.
It is not proposed to attach any reinstatement condition in the case of awards to the additional sum. If a man had built a house for, say, £1,500 and was entitled to get £150 extra, it would be, we feel, unfair to insist that he should do something else to the house costing £150. I think in the great majority of cases, it will be found that the person rebuilding has had to provide money in addition to the amount allowed by the court. I suppose in all cases such persons have had to raise money by loan in addition to the money they received from the court in order to carry out reconstruction. The terms of the Act made that necessary, because the difference in value between the new building and the old building is allowed for in assessing the amounts. Consequently, the general position is that people will have spent more on reinstatement than they actually receive in their awards, and the amounts payable under this Bill will, perhaps, only replace in part, the money which these people had to find. It would be, we believe, utterly impracticable to insist that further work should be done for the ten per cent. Then in the small cases, the cost of inspection and of seeing that the work was done, would be disproportionate.
Section V. provides that the judges shall continue to assess the compensation on the principles that have guided them hitherto, and that the addition shall simply be made afterwards.
Section VI. provides for the annuity to the British Government. This annuity represents a sum of, roughly, £4,900,000, the interest figure being 4¾ per cent. That 4¾ per cent. is appreciably lower than we could borrow for. We certainly could not borrow at less than the figure which we borrowed at when the National Loan was issued—5¼ per cent. plus a certain fraction—so that there is a gain of ½ per cent. I do not say that that advantage of ½ per cent. will continue over the whole period of 60 years, but I do think that it is a distinct advantage to pay an annuity rather than cash at present. It would be undesirable when we will have to raise other loans, that we should have to go to the market for this sum of nearly £5,000,000. It is a distinct advantage for us now to settle on an annuity basis, rather than a cash basis. Even if some time before the expiry of 60 years interest sinks to less than 4¾ per cent., at any rate, that is not going to happen for a considerable time, and, on the balance over the period, I do not think it will be found, even in the long run, that there is a disadvantage in paying an annuity for such a long period as 60 years at this rate of interest, and there is, as I said, a definite advantage at present.