QUESTION. (Hansard, 11 February 1875)

MR. SULLIVAN
asked the Chief Secretary for Ireland, If there be any objection to his stating upon what grounds the deputy matron of Mount joy Female Prison has been called upon to retire from the Irish Convict Service; and, whether it is true that the deputy matron in question was at first called upon to resign on medical grounds, and informed that the medical officers would examine her for the necessary report in such case, but that on the medical officers' report declaring her "fit for the full and efficient discharge of her office," a new ground of action was taken against her, and notification made of her absolute removal, without investigation or appeal, for not having more frequently made reports and complaints against her subordinates?

§ SIR MICHAEL HICKS-BEACH
In August and September last, there were very serious disturbances among the convicts in Mountjoy Female Prison, for which not a single convict was reported; and; upon inquiry, much laxity 217 was discovered to exist among the discipline officers, and it appeared that the deputy matron, from her position and duty, must have been specially culpable in previously neglecting to report circumstances which must have come under her notice. For these reasons, to put a stop to a state of things which may be described as one of open insubordination, it was considered necessary that the deputy matron should be replaced by an active and efficient prison officer. She was not called upon to resign upon medical grounds, but it was desired to treat her with all possible consideration, on account of her length of service; and the medical officers examined her that she might receive the benefit of any doubt which might exist as to her being unable from natural causes to perform her duty.

MR. SULLIVAN
intimated that he would move for correspondence on the subject.

§ THE CHANCELLOR OF THE EXCHEQUER
Sir, I have given Notice that I intend to ask for leave to introduce two Bills, the one to consolidate the Acts relating to Loans for Public Works, and the other to amend the same Acts. With regard to the first of these Bills, which is simply a Consolidation Bill, it is quite ready, and if the House should give me leave to introduce it, it can be circulated almost immediately. But with respect to the second, or the amending Bill, although the main principles on which it is to proceed are settled, and the Bill itself is in type, yet there are one or two points in it which still require consideration, and I shall not be able to put it in circulation immediately. It might, therefore, have seemed more proper that I should have waited a short time before moving for leave to introduce it. But I am induced to take the earliest opportunity of bringing it under the notice of the House, for this, among other reasons—that it is one of the measures to which my right hon. Friend at the head of the Government referred in the discussion on the Address, as measures which touch the question of local taxation; and, as being also rather important 218 as laying the foundation for measures connected with local taxation. I therefore think it desirable the Bill should be brought under the notice of the House as early as possible. An impression appears to have got abroad in some quarters that, because no mention was made in the Speech from the Throne of the subject of local taxation, the Government have somewhat lost sight of that great question, and that their former zeal in respect to it has grown cold. But such an impression would be entirely unfounded. It is simply impossible that we can lose sight of this question, because it is a question which we run against in almost every one of the measures that we have to consider, and which we propose to introduce for improving administration of any kind in the country. We cannot bring forward a Bill for dealing with such a question as artizans dwellings, or for the consolidation of the sanitary laws, or any other Bill involving questions of social improvement, without in some shape or other having to consider how the measures proposed to be introduced affect, and are affected by, our system of local taxation. But we are taunted in some quarters with not coming forward and proposing some very large measure for the reconstruction of the local administration of the country. Now, with regard to that, I would say that I am not aware that any Member of Her Majesty's Government has at any time ever expressed any intention of proposing any such measure, or has expressed himself in favour of dealing with the question upon those principles. I am quite aware that the late Government, when they were pressed on questions of local taxation, were generally ready to come forward with this answer—"You must wait—before we can do anything for the improvement of local taxation—until you have recast and improved your system of local administration." That was their doctrine, and I am not disposed to enter into any discussion as to their right to put it forward; but it has never been a doctrine advocated by us, and I frankly say it is a doctrine that we do not adopt. It has appeared to us that if we were to come forward with professions that we were about to introduce some great scheme for reorganizing the whole of the local constitution of the country, although we might create some sensation, 219 and perhaps obtain credit for ingenuity in the scheme we proposed, we should not be furthering, but rather hindering, the great objects which we have in view; because we believe that, however you might lay down principles for a new constitution, you would find it very difficult indeed to bring about a scheme which would be passed by Parliament, or which, if passed by Parliament, would be found workable in the country. There are abundant constitutions which have been improvised. The public Press, the speeches of hon. Members of this House, and various other repositories of information teem with them as the bureaux of Abbé Sieyès teemed with constitutions for the French Republic. But if, in the present complicated state of the local institutions of this country, you were to bring forward and try to enforce a cut-and-dry new constitution, you would find that you had raised up an enormous host of difficulties which you would have to contend with, and you would really be retarding, not advancing, the great cause of local reform. While, however, I say that, let me add that we are conscious as anybody can be of the need of reforms in local administration and local taxation; that we do not abandon the hope that we may be able to introduce such reforms, but that we think the best and most advantageous way of introducing them is to do so gradually, by endeavouring to amend the system we have, by endeavouring to cure the defects we observe in it, and, above all, by endeavouring to let in as much light as possible into the inconveniences with which it abounds. We believe that if by degrees we can bring before the notice of the country in a practical and tangible form—if we can bring both before Parliament and the local constituencies themselves—the inconveniences and abuses which attach to the present system, we shall find that by degrees, and not by very slow degrees, we shall effect important modifications and improvements of that system. Now, one of the very first means which we think might be adopted with advantage to bring about those reforms would be the introduction of something in the nature of an annual local budget. We are strongly convinced that the attention of the country is not sufficiently drawn to the administration of local finance. The attention of Parliament itself, and that of the various 220 local bodies which administer the local finances of the country, is not sufficiently drawn to the progress of rating, the progress of expenditure, and, above all, I may say, the progress of the contraction of debt. With reference to this point, I observed in a very able pamphlet, or rather in the reproduction of some letters published in the course of the autumn by the hon. Member for Liverpool (Mr. Rathbone)—whom I am sorry not to see in his place opposite—a passage on this subject which I will read to the House, and which, I venture to think, confirms the statement I have made. The hon. Gentleman says— While the attention of the nation is annually concentrated on the total amount and on the items of Imperial taxation, the particulars of local finance are known only to a few statisticians. The vast amounts expended and the extent of the loans contracted by these various local bodies throughout the country could not otherwise have escaped notice. The fact is that, while the future resources of the country are being heavily mortgaged for these debts, the attention given by men of property and of business to the manner and limits of this immense expenditure is constantly diminishing. I believe that these are very true observations, and that they point to an evil with which we ought to attempt to grapple. I do not intend to trouble the House with any great amount of statistics on this matter. The Returns some years ago moved for by the right hon. Gentleman the Member for the City of London (Mr. Goschen) threw a great deal of light on the subject; and other Returns are in course of preparation, and will shortly be presented, which will throw still further light upon it, because they will give us the total indebtedness of all the local bodies throughout the country, and they will show not only what is the amount of their indebtedness, but for what periods it has been contracted, from whom the money has been borrowed, and at what rate of interest it has been advanced, with other particulars. But I may mention generally that I believe it will be found that the amount of local indebtedness at the present time is somewhere about £72,000,000, and that it is advancing, on the whole, at the rate of something like £3,000,000 a-year. That large local indebtedness is going on with very little control on the part of anybody. Some bodies are borrowing, it may be, for sanitary purposes, while others in the same locality 221 are borrowing for other purposes, such as building, highway purposes, &c.; and, in fact, numerous loans are contracted by different local bodies which are really independent the one of the other. These loans, I repeat, are effected without the consent or control, and often even the knowledge, of the various local constituencies concerned; the attention of the ratepayers whose property is being burdened is not called to the amount of the charge which is thus being imposed upon it. Then there is very little central control. There is, indeed, a certain power vested in the Treasury, in some oases, of exercising a control over the sums borrowed by mortgaging the property, or by mortgaging the rates of corporations or municipal bodies. But control is by no means exercised in every case; it cannot be exercised very effectively; and it is constantly defeated by the passing of personal or private Acts, which give these bodies the power of borrowing without coming under the notice of the Treasury at all. There certainly are some powers given to the Local Government Board, but those powers are by no means effective; and as to the notice taken by Parliament on the subject, it really amounts to next to nothing. If it were not for the energy and the scrupulous fidelity with which Lord Redesdale in the other House watches private Bills, probably a great deal more would be done in the way of creating local charges upon property than is done. But still considerable charges of this character are frequently, being imposed on corporate and municipal property, practically without any control on the part of anyone. What the Government desire, therefore, to do, is to bring under the notice of Parliament the progress of this local indebtedness, and in such a way as to give Parliament some real interest in the matter, and induce them to take effective steps with regard to it. We propose to take steps for the introduction of something in the nature of what I have called a local budget; but we do not think it should be a local budget like the Indian Budget, which is merely laid before the House as a matter of information upon which nothing is to be done, and which attracts comparatively little notice when introduced towards the end of the Session. What we wish is, to see whether we can devise some system by 222 which the attention of Parliament may necessarily be directed to the practical end in view—to the progress of local income, expenditure, and indebtedness at a reasonable time. Important as the matter is already, it is becoming more and more important every day; because as we go further in the direction of calling on local bodies to undertake this or that great measure, greater burdens are imposed upon them, and they are necessarily driven to incur a greater amount of debt. Those new Acts which we pass with regard to sanitary improvements, such Bills as that of my right hon. Friend the Secretary for the Home Department with reference to the dwellings of our artizans, measures dealing with education and other subjects, all tend in the same direction. And now, before I pursue that branch of the question further, I wish to draw the attention of the House to another subject which is closely connected with it, and which ought to be taken into consideration from an Imperial and also from a Treasury point of view—I allude to the way in which we deal with what is called the Public Works Loan und. The House is, no doubt, generally acquainted with the character of that fund, though I must confess I find a good deal of ignorance prevails with reference to it in quarters which ought to be better informed. The state of the ease is this—There has been in existence now for between 50 and 60 years a system of some kind for the advance through the agency of Commissioners of public money to local bodies. I will not go back so far as 1792, when the first system of public loans began, but only to the period when the present system and its immediate predecessor sprang into being, which was in 1817. At that time the system was inaugurated of issuing, through the agency of Commissioners, Exchequer bills for the purposes of the prosecution of public works. That system went on until 1842, when it was modified, the system of granting Exchequer bills abandoned, and the system substituted for it of making advances directly from the Exchequer. The amount which by law the Public Works Loan Commissioners were authorized to draw from the Exchequer for that purpose was fixed at £300,000 a-year for the United Kingdom and £60,000 for Ireland. For the 30 223 years which have elapsed since that system was adopted, advances have been made under the authority and with the assistance of gentlemen to whom the country is most deeply indebted for the ability and self-sacrifice with which, without any reward or salary, they have given up their time to the discharge of their irksome and, at the same time, very important duties. My right hon. Friend the Member for the City of London (Mr. Hubbard), whose absence, I am sure, we all deeply regret to-night, my hon. Friend the Member for Peterborough (Mr. Hankey), and others have for many years given their time to the regulation of this fund, and have exercised the most commendable vigilance in the various advances which they have made. Through their hands a large sum of money has passed, and although it must be admitted there have been some losses incurred in connection with the advances which have been made to local bodies, yet very few, if any, are attributable to neglect or want of vigilance on the part of the Commissioners. The cases in which the least profitable loans have been made, and in which most losses have been incurred, have been those in which Parliament has for some reason or another itself interfered, and ordered money to be lent, overruling the discretion of these gentlemen. In many of those cases, the money advanced has not been repaid in full; but, nevertheless, the system has, on the whole, in most respects worked well. I know there is an impression in some quarters that it has worked well, not only for the borrowers, but also for the lenders—that it is a system which has, in fact, been twice blessed, and that we have made a good thing by lending to public bodies at a lower rate than they could borrow in the public market. I am afraid, however, that is not the case, and that on looking carefully into the accounts we shall find the net result of our operations is very far from being a financial success. Taking the whole period from 1792 into review, I believe I am very near the truth when I say that we have advanced a sum of £70,000,000 altogether, and of that we have received back or have owing to us as good debts about £67,000,000, so that there is a loss of £3,000,000, These repayments also include interest, so that we have lent £70,000,000 with-out receiving one farthing of interest, 224 and are still £3,000,000 out of pocket by the transaction. That statement spreads over the whole period of the public loans, and does not refer only to the advances by the Public Works Loan Commissioners, but includes advances directly made to Ireland, to the colonies, and all kinds of loans. Still, I think it will be found that even since the introduction of the improved system, our loans have not been so profitable as some suppose, and that, in fact, interest at the rate of 3½ per cent is not only not profitable, but will land us in a loss. I observe there is a growing tendency in all directions to come to the Commissioners for advances from the fund. Of late years a good many special Acts of Parliament have been passed, and advantage has been taken of the Public Works loan system for the purpose of meeting particular demands which arise from time to time. Such demands are those which have been created by the Harbours and Passing Tolls Act, the recent Education Act, and the recent Sanitary Act, under which the Exchequer has been obliged to make advances of considerable amount at a rate of interest so low as to be on the whole unremunerative. In the case, indeed, of one body after another there is, I find, a general willingness to profit by it. The system has another disadvantage, which is a serious one in a departmental point of view. As I said just now, the law gives the Commissioners the right to draw on the Exchequer each year to the extent of £300,000 for the United Kingdom; but no funds are provided by any Vote of Parliament to meet that demand, it being presumed that the Exchequer will be able to bear the issue of that amount when called upon. It has, however, happened very often that the whole of the £300,000 thus issued is not used within the year, and whereas in every other branch of expenditure where a grant is made, as in the case of the Army and Navy, and the sum is not expended, the balance is not available for the next year, but a new grant has to be made over again, in the case of the Public Works Loan Commissioners, on the contrary, if in any year only £200,000 happens to be spent out of the £300,000 advanced, the result would be that they would have the next year a credit of £400,000 with the Exchequer, instead of only 225 £300,000, so that the credit goes on accumulating until, as I found last year when I came to inquire into the state of balances in the Exchequer, the Commissioners had an unexhausted credit against the Exchequer of no less than £800,000. Besides this unexhausted credit, the operation of the various Acts that from time to time have been passed, and to which I have referred, also exposes us to heavy demands being made upon us suddenly for advances to the Commissioners, and a very large amount might at any moment be required. When I say "might be required at any moment," I am almost literally within the facts, because, although it takes some time after the application has been made by the local body to get an advance from the Exchequer, and although time is taken for examining whether the local body has power to borrow, and whether its object is a good one, its security a good one, and so forth, all these inquiries take place at the office of the Local Government Board, or at that of the Public Works Loan Commissioners them-selves, without any notice whatever being given to the Treasury; and therefore it frequently happens that an application for £100,000 or £150,000 comes in and has to be paid out of the Exchequer, however inconvenient the operation may be, in the course of 48 hours. I need not point out to those who consider the matter that such a proceeding is exceedingly inconvenient to the administration of the finances of the country and to the Money Market as well; because the result is that the Chancellor of the Exchequer can never tell what amount of balance he ought to keep ready against these possible emergencies. He can never tell when he may be called upon for money; and when a certain call is made upon him, and he has no funds in the Exchequer to meet it, he has no other means of supplying the demand than to go to the Money Market and raise the amount there at, perhaps, a highly inconvenient time, when the Bank-rate is 7 or 8, or even 10 per cent. Now, for the Chancellor of the Exchequer to go thus into the market is not only disagreeable to him, but may even be exceedingly detrimental to the interests of the country; and therefore it is quite clear that if this system is to go on, and continue growing, as 226 it seems likely to do, you must take some measures to bring about better regulations and have more timely notice given to the Department concerned of the calls likely to be made upon it. Well, I am sorry to detain the House by going into these dry matters; but I think it will be seen that it is a matter of really great importance, and I will now very briefly describe what are the objects of the Bill which we intend to introduce for the amendment of the system. The objects will be, in fact, three-fold—to give what I have called timely notice; to put an end to the system of carrying on unexhausted credit from one year's end to another; and to consolidate as far as possible the different loans that have to be demanded within each year. Well, these being the objects which we have in view, looking at this question from the financial side, the House will perceive that they tally very well with the objects which, as I said in the opening part of my remarks, we have in view looking at the question from the local taxation side, and that both objects will be served by the same process—that is to say, by bringing before the House at a convenient time of the year a statement of the amount that is likely to be required during the coming year for advances to the Public Works Loan Fund. We do not propose in any way to put an end to that fund; on the contrary, we hope to make it a more vigorous and more useful machine than it has hitherto been. We hope, by bringing the matter more immediately under the cognizance of Parliament, to relieve the gentlemen concerned in the administration of the fund of a good deal of embarrassment to which they ought not to be subjected. I will just mention one instance of what I mean. Under the Sanitary Act power is given to local bodies to borrow money from the Public Works Loan Fund for such objects as may be allowed by the Local Government Board. Well, when any local body wishes to borrow, it makes its application to the President of the Local Government Board, and if the Local Government Board certify that the object is a proper one, the local body go to the Public Works Loan Commissioners and ask for the money. But there have been many cases in which the Public Works Loan Commissioners have disputed the construction 227 put upon the Sanitary Act by the President of the Local Government Board. They have said—" This Act empowers you to give authority for loans for such and such purposes, but the purpose for which these gentlemen are coming, and which you have approved, does not seem to us to come within the range of the Act, and we think you have exceeded your authority." Then the Treasury is applied to; they say they have no authority in the matter. Nobody, in fact, can decide the point, and it is really a question between the firmness and the good nature of the gentlemen who act as Public Works Loan Commissioners. They, I am bound to say, are firm enough, and, having the command of the purse, they have generally got their own way; but they have done so with difficulty, and after battles which I think they ought not to have been called upon to fight. It will be better, therefore, that these matters should be settled by Parliament. We propose to include in these Bills certain regulations which, when passed by Parliament, will relieve the Public Works Loan Commissioners of the difficulty I have indicated. There is another administrative difficulty in the present state of things which I think is detrimental, or may be detrimental, to the public service, and it is this—the Public Works Loan Commissioners will sometimes make a loan at a high, or comparatively high rate of interest. There exists in certain cases, but not in all, power on the part of the Treasury to reduce that rate of interest. Now, very often there are gentlemen who come to the Treasury with very excellent objects, and say—" Will you request the Public Works Loan Commissioners to issue us a loan at 3½ per cent? "We say—" We have no power to do that; that rests entirely with the Commissioners." They go to the Commissioners; they get their loan, it may be at 5 per cent. and come to the Treasury and say—"We have got the loan at 5 per cent. but you have power to reduce the rate of interest. Will you do so?" Now, that is a power which it is not always expedient to exercise, and what I would point out is that there may be frequent cases during political crises and at other times when that power is capable of being abused. I do not say that it has ever been abused, but it is obviously capable 228 of being abused, and therefore it ought not to exist. In these matters I think we should as far as possible restrict the discretion of the Treasury, and lay down rules by the authority of Parliament, leaving the application of these rules to the gentlemen who have already shown themselves so capable of managing the Public Works Loan Fund. What, therefore, we propose to do is to call upon all public bodies who expect to have to borrow to send in to the Department concerned, at some convenient time beforehand, a statement of the amount of money they will require in the coming year. Generally speaking, it would be to the Local Government Board, but there will be some cases in which they will send to the Board of Trade or some other Department, and we should expect that in the early part of the Session such Departments should lay before the Treasury an estimate, like the estimates of the War Department or the Admiralty, of the sums likely to be required in the course of the coining year, and that the Chancellor of the Exchequer or the President of the Local Government Board, whichever it might be, should come before Parliament once a year to present that estimate, and to ask Parliament to pass a Bill for the year authorizing the advance of the money required for the purposes stated. That would afford opportunity for a statement in the nature of a local budget being made on the introduction of the Bill, and, in fact, Parliament would naturally expect and require that when a Minister came forward and stated that such and such sums were to be authorized to be advanced in the course of the next 12 months for such and such purposes, he should both state what had been done with the money granted the previous year, and what had been the general progress of the indebtedness of the different Departments. In this way he would be able to give interesting and valuable information upon the progress of the expenditure, and the increase or decrease that had taken place in the course of the year in different localities. He would also be afforded a very fair opportunity of bringing under the notice of the House any proposals he might have to make for improving the system of giving assistance to localities, or for economizing in any way the advances or the expenditure 229 under certain heads. By that means I believe that, besides introducing a very valuable and almost essential reform in the financial system of the country, we should lay the foundation of measures which ultimately, and perhaps at no very distant day, would lead to a great improvement in our local system of administration. The right hon. Gentleman concluded by moving for leave to introduce the first of the Bills he had referred to.

§ THE CHANCELLOR OF THE EXCHEQUER
then moved for leave to introduce a Bill to amend the Act relating to Loans for Public Works.