I find it rather difficult to see the real purpose behind this Land Bond Bill, 1975, the Second Stage of which the Minister moved this morning. I found it difficult to credit what I thought I heard. That was why I was so anxious to get a copy of the Second Reading speech the Minister made, when he almost created the precedent that a copy of his speech would not be circulated.
I never did hear a Minister for Lands introducing a Land Bond Bill. The Minister mentioned that we had had Land Bond Bills for quite a period and that we had the limit raised to £15 million in 1953—when I was not here—to £25 million in 1964 and to £40 million in 1969, when I was here. In fact, it was the first time I heard a Minister for Lands introducing a Land Bond Bill with due apology, indicating that he would much prefer not to introduce such a Bill and indicating also that he agreed fully with all of the people in the House who expressed the view that land should be paid for in cash rather than in bonds. Then he went on to say that while the view that land bonds should be abolished altogether was one with which he would not find it hard to sympathise:
we have to be realistic and recognise that until the Exchequer is in a position to provide sufficient funds to enable all purchases by the Land Commission to be for cash, land bonds will continue to play a part in the land settlement programme.
I sympathise with the Minister in that view. I fully accept that insufficiency of money from the Exchequer is his biggest problem, one which he indicated successive Ministers for Lands had experienced. One of the things I dislike in the presentation of this Bill, seeking that the limit be raised to £60 million, was that the Minister painted a picture of that amount being sufficient for a five-year period. In fact, the additional £15 million ceiling that was created in 1969 has been sufficient to buy the amount of land the Land Commission were able to acquire for the past six years. He is now looking for an extra £20 million to cover purchases for the next five years. I suppose that is reasonable in the context of inflation. He said in his speech that since the introduction of the system of cash purchases in 1950 to 31st December last, 57,500 acres had been purchased for £5,072,000. Roughly that would be a little less than £100 an acre for cash purchase. He goes on to say that the figures for the 12 months ended 31st December last were 5,700 acres and £1,092,000, which shows an average price of £200 per acre for cash purchase.
The Minister then talks about the land bonds and it would appear, peculiarly enough, that in one way land bonds are proving more expensive from the State's point of view. The Minister says that during the year ended 31st December last the total issues of land bonds amounted to around £4,500,000, which was the highest ever figure over any period of 12 months, and represented an intake of 13,000 acres. That means that the land bought through the land bond medium was at a price over £300 per acre, whereas when the Department of Lands were able to buy lands for cash, they were able to buy it, according to the Minister's statement, at £200 an acre.
Therefore, a Minister for Finance, in the long term, would be very well advised in the national interest to make cash available to the Land Commission to purchase the land for cash, because it would appear that if the Land Commission had cash available to them, they would be able to satisfy the seller and, at the same time, satisfy the Exchequer by being able to buy land at two-thirds of the price they have to pay for it in land bonds. It must be remembered that from 22nd January the land bond has to be backed and, if you like, the Minister for Finance has entered into an internal national debt at the rate of £16 per £100.
The Minister talks about the success of the retirement scheme, and this arises from our joining the EEC. There is a very complicated arrangement under the scheme whereby the farmer is paid cash and in addition to that gets a pension. This scheme operates for, say, the 56- to 65-year-old farmer. I am wondering if the retired farmer could be given the choice of cash or bonds. In taking up the offer he is paid £10,000 for his farm. Suppose that farmer is the ordinary run of cute, hardworking farmer with his family reared and going away—that is the reason he is handing over his farm, that he has no son coming after him to continue with the work—and he gets £10,000 in cash for his farm and his pension in addition. He will search for a long time before he will get some place to put that £10,000 that will give him the 16 per cent return the land bonds give. Therefore, he might opt for land bonds.
On the other hand, the Land Commission, under the arrangement we have had, may move in on a son of some big farmer with 200 or 300 acres. He is more of a gadabout, a Fairyhouse or Curragh man, than a farmer. He sets the land and goes ahead to sow his wild oats. The adjacent smallholders call to their public representatives and suggest the Land Commission should acquire it for distribution among deserving smallholders. The result is that the Land Commission move in, and rightly so, on the land that is not being worked. They pay this young man in land bonds. At this stage he has accumulated a fair share of debt; the horses do not run fast enough and he gets tips from the wrong people. He gets £50,000 or £60,000 or maybe gets into the wealth tax bracket; but the Minister for Finance can get after him there. He goes to a solicitor and after about five years, probate having been taken out, and all the other matters that cause delay dealt with, his affairs are straightened out. The land bonds have been lodged to his credit and interest is accruing. However, at the stage that he can go about realising the land bonds, some Minister for Lands has introduced a new set of land bonds at 16 per cent, while his land bonds are at 10½ per cent or 11 per cent. They are worth only £60 in £100 at that stage, and instead of the land appreciating arising from inflation, the bond has deflated to a great extent, and he finishes up with only 50 per cent of what he had five years ago, which means a net amount of 25 per cent of what he had originally.
This man may be described as one of the idle rich that no parliamentary party represents. There is nobody to care about him, but he has not been treated fairly or equally as a citizen of the State. If he had enough money left to take the matter to the High or Supreme Court to find out whether it was constitutionally correct to deprive him of his means of livelihood and compensate him eventually to the extent of only about 25 per cent of what the estate was worth, I wonder might some learned judge not decide in his favour at some time and create an enormous problem from the State's point of view.
The Minister spoke about the recent issue of land bonds and expressed the hope that the latest series of land bonds created, which bear interest at 16 per cent, would prove very acceptable to landowners. Obviously, they will prove to be no more acceptable than land bonds of previous issues. They are a disaster from the point of view of the man at present who is endeavouring to administer for his estate to qualify for the previous land bonds in which he was paid and which overnight would have dropped in value quite considerably. I heard Deputy Hegarty compliment the Minister, while saying that he did not like land bonds. I noticed in a speech the Deputy made last year on the Estimate for Lands— through the courtesy of my colleague Deputy Tunney—on 4th July in Volume 267 of the Official Report Deputy Hegarty also complimented the Minister as he did today, and said he was very glad we were adopting a more realistic approach to the acquisition of land in that we were now prepared to pay the market value and prepared to pay cash. I went through the Minister's introductory speech on that Estimate and do not know how Deputy Hegarty got that impression, that the Minister said they would pay cash and that we would have no more of these annoying land bonds. Possibly he was assuming that with the introduction of the farmers' retirement scheme we would have an overall payment to all farmers in cash rather than bonds.
I see Deputy Esmonde here and I was also interested in reading his contribution last year on 3rd July in Volume 267 of the Official Report, column 140. I could be accused of taking Deputy Esmonde out of context, since he made a sizeable contribution, but he said that when the decision to acquire land was made it was very wrong that the people should be paid in land bonds which have shown, over a considerable time, a chronic tendency to depreciate. He said that if people's lands were being acquired they should be compensated in such a manner that they could put the compensation they received into something else and could keep pace with inflation and the depreciation of money.
The Minister's answer to that is to come here today, having introduced the last £1 million issue by order of the Minister for Finance on 22nd January creating an amount of £1 million bonds, bringing the amount created to date under all land bonds since 1934 to £40 million, and provide that the series bear interest at 16 per cent. I suppose Deputy Esmonde can say that the Minister has kept pace with inflation and depreciation in money if the recipient was in a position to hold on to the land bonds. The glorious thing about land bonds is that they are not redeemable. I often wonder if it would not be wiser for the Minister for Finance to float land bonds somewhat like the national loan and invite insurance companies and other investors to put money into them at 16 per cent interest and transfer the money so obtained to the Land Commission. But those land bonds are never redeemable.
This morning Deputy Callanan suggested that the Minister should seriously consider building into this Bill a new section guaranteeing that the land bonds would be redeemable. The Deputy mentioned five years; I should like to stretch it another three years because of my knowledge of the slowness at the legal end in trying to get farmers straightened out. Those bonds should be redeemable and if it is necessary—if we cannot do away with them altogether—that the State should have £20 million for the purchase of land through this medium over the next five years, some such guarantee should be introduced.
Deputy Hegarty spoke of the great value in the Irish soil and I fully agree with him on that. I find it hard to understand why a Minister for Finance would not be able to provide £4 million per year over the five-year period to make up that £20 million for the straightforward cash purchase of land. I am not creating figures but simply going on the figures the Minister presented to the House this morning. Could the Minister for Lands prevail on the Minister for Finance to provide, instead of £20 million over five years in land bonds, a guarantee that out of the huge amount of capital that has to be found now especially when we are moving into a situation of such over-spending that we have anything from £130 million to £160 million being spent this year not being met from taxation this year, sums of £4 million per annum would be available over the next five years to purchase land? As the Minister himself showed this morning this would enable the Land Commission to buy the land at 6.6 per cent of the price he is paying at present in land bonds and he is also building up a national debt of £60 million.
Irrespective of what former Ministers have done, in view of the enormous 16 per cent interest that has to be paid on land bonds in order to prevail on landowners and convince them when they are ceding land to the Land Commission that there is some justice in land bonds, I am putting to the Minister for Lands, to the Minister for Finance and the Government the urgent necessity of providing this £4 million per annum for the Land Commission. It is only right to put on record that in my 14 years' experience as a member of this House the Land Commission is a much maligned organisation and is constantly up against the problem of becoming more unpopular with our farmers, whereas the local Land Commission inspector or agent should be the most welcome person around a farmer's place because he is calling on him with a view to improving his situation. Admittedly, he is bad news from the point of view of the man who is setting his land or not working it sufficiently but the Land Commission come in for a lot of ridicule from politicians and from small farmers who have hoped down through the years for an addition to their land. I come from a rural constituency covering the centre of the country, the Counties of Laois and Offaly. My experience is that the officials of the Land Commission are continuously doing their best to improve the lot of the small farmer and could do much more if they had the "readies" to do business with the very often not reluctant farmer.
One of the problems is that when notice is issued by the Land Commission to a farmer of their intention to acquire land the Land Commission cannot then pay in cash. When the Land Commission approach a landowner with a view to acquiring his land and institute compulsory acquisition proceedings, the resistance comes under two headings: (i) he does not want to give up his land and (ii) he certainly does not want to give up his land for land bonds. The Land Commission put a notice in Iris Oifigiúil and follow it up. The case must go before the Commissioners to confirm that the Land Commission are to get the land. Then a price must be agreed and if it is not they must go to the courts again for a judgement. I have no doubt that nine out of ten disagreements would be avoided if the Land Commission could deal in cash.
I accept that it may not be possible at the later stage of negotiation but at the initial stage, when notice is served on the solicitor or on the land owner, if a price could be agreed in cash much of the proceedings would be done away with. The landowner's principal objection is the fact that he will be paid in land bonds. Nobody denies he will be paid the full market value for his land but when he eventually lays his hands on the bonds they have depreciated in value. I imagine the new land bonds at 16 per cent will stay near par for quite a time but when this Bill is passed and we launch the next issue of land bonds at a higher rate of interest, by the end of this year, because I do not expect this £1 million will last very long and I take it the Minister wants this Bill as quickly as possible, the value of the present bonds will depreciate. I am surprised at the unimaginativeness of the Minister for Lands. I am surprised that he has not been able to come in with a more comprehensive Bill than a copy of a Bill introduced in 1953, a replica of a 1964 Bill and a 1969 Bill, with his knowledge of the difficulty the Land Commission have had with bonds over the period.
The Minister departed from the subject of land bonds in his introductory remarks and lauded his retirement scheme. He said that one of the tremendous advantages of it was that all lands purchased will be paid for in cash. In claiming credit for this he is condemning the Bill he brought in today and accepting the fact that the system of land bonds is basically a wash-out. He said:
In launching the scheme I drew attention to the fact that the incentives which it offered were very generous, indeed liberal, in relation to our national resources, much higher than the EEC guideline amounts and up to the highest level on offer in any member state. I expressed confidence that there would be a substantial response to the scheme which was designed to enable a farmer, if he so desired, to retire with dignity and financial security after a lifetime of hard work.
The Minister is a very sensible man, a man who has made sensible contributions in this House down through the years, on both sides. I am sure he would like to be in a position to come in here with his next Estimate and announce that he has at last prevailed upon the Minister for Finance to provide sufficient money, say £4 million to £5 million a year, to enable the Land Commission to go ahead and really get down to the job with which they have been struggling for years, due to the handicap of land bonds. The Minister said in referring to previous measures which raised the limit:
I may say that the foregoing amending measures proved non-contentious and got speedy passage through both Houses.
The Minister came in with a replica of an earlier Bill, just replacing 40 with 60. The Land Commission have been doing good work but they have been doing that good work with their hands tied behind their backs. I was influenced by the contributions which I heard coming from spokesmen of the Opposition when I was in Government. Land has always interested me. I was very interested in the contributions made by the Opposition in 1964 and in 1969 on the question of land bonds and how unsatisfactory they were. I appreciated the problems of successive Ministers for Finance in making that type of money available to the Land Commission. Now, when we have a new type of Government, when we are budgeting for a deficit of £130 million to £150 million, and when we find it necessary to hand out millions of pounds every day to subsidise organisations like CIE, and so on, why is it not possible for the Government and the Minister for Finance to make available annually a miserly £4 million to buy £6 million worth of land? Over a five-year period, with £20 million in cash one could buy the equivalent of £36 million worth of land with a saving of £16 million at 16 per cent. That would be quite an important saving from the State's point of view.
I would ask the Minister between now and Committee Stage to have another chat with his colleague the Minister for Finance. I have spoken before of the length of time it takes from the acquisition of land to its reallocation among small uneconomic holders. When a constituent calls to me in 1975 and says that Joe Murphy's farm was taken over in 1971 and asks when it will be divided, I have to tell him that Joe Murphy's farm was actually taken over by the Land Commission last year. He does not believe me because he read in the papers that Deputy O.J. Flanagan was having it taken over in 1971. I have to write to the Land Commission and get a letter back saying that the compulsory acquisition proceedings had to be gone through and the land was actually acquired on 31st March last. I send it on to my constituent who is rather surprised because he was promised it about two years ago. Deputy Hegarty said land is held for far too long by the Land Commission.