§ Mr. LANSBURYI beg to move,
That leave be given to bring in a Bill to amend the law with respect to the powers of District Auditors to disallow and surcharge parts of items upon the audits of the accounts of receipts and expenditure of a local authority.This is a short Bill, but it contains a matter of very vital importance to every municipal and other local authority throughout the country. Until about a year ago it was understood by local authorities that wages paid and contracts made were matters for their own discretion, and matters over which auditors and the Ministry of Health had no control 518 whatever. Only on one occasion that I can remember has a similar question to the one this Bill proposes to deal with ever been raised, and that was on the occasion when the Auditor of the then Local Government Board surcharged the Westminster Council because it accepted a tender for a contract at a figure rather above the lowest. The Courts then decided that the council had the right to choose whatever contractor they cared to. The Auditor on that occasion did not think it worth while to appeal against the decision of the lower court. Later on the same Auditor, investigating the accounts of the Poplar Borough Council, found that they had fixed a minimum rate of wages and surcharged on the basis that the Council had no right to pay over the Trade Union rate or the rate fixed by the Joint Industrial Council plus certain allowances which, in the Auditor's discretion, he considered wise The Council cook the case to one Court and lost. They took it to the first Appeal Court and won. Then the Auditor took it to the House of Lords, which upheld the decision of the Auditor. The decision of the House of Lords, however much may be said for it from the legal point of view, from the point of view of practice is absolutely impracticable. Up to the present this House has never laid down that local authorities must pay the Trade Union rate. They have never laid down that local authorities must pay the Joint Industrial Council rate. I can quite understand that, if this House decided, it might say to every Local Authority, "Here is a minimum or a maximum rate of pay that you may pay your mployés," but the Auditor says that he has the power to decide what is a fair rate of wages and what a Council or a Board of Guardians may pay.It seems to me that if that decision holds, no board of guardians and no town borough or urban district council will know from one year to the other what wages they may pay, because already this is what has happened. The first surcharge, so far as the board of guardians is concerned, took place on 30th September, 1922, and I beg any hon. Members, who are giving me any attention at all—they may, of course, think it of no importance whether the rights of local authorities are maintained or not—but I will challenge any one of them to go down to any town council in the dis- 519 trict he represents and defend the principle that I am seeking to repeal. To show the absurdity and the contradictory position in which we find ourselves in the East End of London. the board of guardians' auditor, responsible to the Ministry of Health, told us in 1922 that he must surcharge the £4 minimum, and he put the basis of his surcharge down. He takes the 1914 rate of £1 13s.—he puts the rise in the cost of living at 71 per cent.—£1 3s. 6d.—then he allows the guardians a discretion of 15s., making a basic rate of pay of £3 11s. 6d. The auditor admits that the guardians have some discretion, but he fixes it at the arbitrary sum of 15s. That is what the board of guardians' auditor has done. The borough council auditor has done this. In the first year he took the pre-War wages plus the average cost of living—not a fixed rate but the average—and then he allowed the council in the same district £1 a week as their discretion. The auditor for the guardians fixes the discretion at 15s. The auditor for the borough council in the same district fixes it at 20s. That is not all. The same auditor for the borough council the next year drops altogether the arbitrary figure and fixed an arbitrary percentage of 20 as the amount allowable to the discretion of the council.
I want to ask any sane persons in this House who can get their minds clear of any prejudice about Poplar how two local authorities in the same district can know what rate of wages they will be allowed to pay. Next year or the year after a new auditor may come along, and, although the Council or the guardians are paying on the basis that the previous auditor said was fair, say that he considers that a lower percentage ought to be paid. The Bill is a one Clause Bill, and it simply provides that the auditor shall not have the power which the House of Lords has said he has. In conclusion, I want to say that, if a Council like that of Westminster may have the right to accept a tender at whatever price it chooses and be responsible only to its electors, then a borough in the East End of London ought to have the same legal right to pay the wages which they consider fair. The effect of this, and I beg that Members will realise it is to say to a working-class district: You shall have the 520 power to elect your council and your guardians, but you shall not have the power to fix wages and conditions, and, if this power be allowed to remain, then it is perfectly certain that there will be a great revolt by the workers both against trusting to political and administrative action.
§ Mr. GERALD HURSTI rise to oppose the Bill. I do ask the House to think well before giving a First Reading to a Bill of this character. I have no doubt whatever that the motives and intentions of the Bill are beyond all criticism, but I believe, and I am sure, if they would only give their serious consideration to the question, that hon. Members opposite will also believe that the Bill really is based upon a fallacy. The powers of the auditors which this Bill seeks to subvert are powers which have been in the possession of district auditors since 1875.
§ Mr. J. JONESOn a point of Order. I would like to ask the hon. and learned Member if he will give us chapter and verse for that statement as to the power of borough auditors.
§ Mr. HURSTCertainly. It is under the Public Health Act, 1875, that these auditors have the powers of which the hon. Member complains.
§ Mr. JONESOn a point of Order again. [HON. MEMBERS: "Order!"] I have a right to rise to a point of Order if I cannot speak. Will the hon. and learned Member tell us what are the limitations upon an auditor? He can summon the members before him, but he cannot charge them.
§ Mr. SPEAKERThat is not a point of Order.
§ Mr. HURSTThe powers of which the hon. Member complains are powers exercisable only in two circumstances. The power to disallow expenditure is a power which the auditor has only where the expenditure is contrary to the law. The power of surcharge which the auditor has under the Act of 1875 is only to surcharge the person making illegal payments.
§ Mr. HURSTIf this Bill be sanctioned by Parliament, it means that you will deprive the ratepayers who pay the rates to these various local authorities of one 521 of their best safeguards against the squandering of their rates on illegal expenditure. If the auditor be deprived of these powers it means that if a local authority chooses to spend the funds at its disposal on any sort of extravagance—on banquets, on bonfires, and on sending missions to Moscow or on any other extravagance—there will be no safeguard. The object of the safeguard is to prevent illegality, to prevent extravagance for which there is no warrant, and it is quite obvious that that safeguard is based on sound principle. We have a similar safeguard here in Parliament. No Cabinet can spend money on items of expenditure which have not had the specific approval of the House of Commons.
§ Mr. HURSTIn the same way, unless local authorities can show that their items of expenditure are legal, the auditor will not pass them. It is the worst type of Private Bill legislation to bring in a Measure like this appealing to vague sentiment with regard to the salaries paid by the Poplar guardians and using that vague sentiment as an instrument for
§ the removal of one of the most useful protections and safeguards so far as the ratepayers are concerned. If we remove this check against illegality, it means that we are placing the ratepayers of a poor borough at the mercy of a local authority. No one can suggest that the squandering of rates is going to help any borough, even in the East End of London. One of the reasons those boroughs are so distressed and miserable at the present time is the high rates. No fresh industries will be set up in a district where rates are already so ridiculously high. I do therefore ask the House to maintain what has proved to be a useful safeguard To the ratepayers of this country for the last 50 years and not to be led away by vague and loose sentiment to give their sanction to a Measure which is based purely on sentiment and which is against all sound traditions of local self government.
§
Question put
That leave be given to bring in a Bill to amend the Law with respect to the powers of District Auditors to disallow and surcharge parts of items upon the audit of the accounts of receipts and expenditure of a local authority.
§ The House divided: Ayes, 113; Noes, 215.
523| Division No. 164.] | AYES. | [4.8 p.m. |
| Adamson, Rt. Hon. W. (Fife, West) | Hall, F. (York, W. R., Normanton) | Pethick-Lawrence, F. W. |
| Adamson, W. M. (Staft., Cannock) | Hall, G. H. (Merthyr Tydvil) | Potts, John S. |
| Alexander, A. V. (Sheffield, Hillsbro') | Hardie, George D. | Richardson, R. (Houghton-le-Spring) |
| Ammon, Charles George | Hartshorn, Rt. Hon. Vernon | Riley, Ben |
| Attlee, Clement Richard | Hayday, Arthur | Ritson, J. |
| Baker, Walter | Hayes, John Henry | Robertson, J. (Lanark, Bothwell) |
| Barker, G. (Monmouth, Abertillery) | Henderson, Rt. Hon. A. (Burnley) | Robinson, W. C. (Yorks, W. R., Elland) |
| Barnes, A. | Henderson, T. (Glasgow) | Rose, Frank H. |
| Barr, J. | Hirst, G. H. | Salter, Dr. Alfred |
| Batey, Joseph | Hirst, W. (Bradford, South) | Scurr, John |
| Beckett, John (Gateshead) | Hudson, J. H. (Huddersfield) | Sexton, James |
| Buchanan, G. | Jenkins, W. (Glamorgan, Neath) | Shiels, Dr. Drummond |
| Cape, Thomas | John, William (Rhondda, West) | Sitch, Charles H. |
| Charleton, H. C. | Johnston, Thomas (Dundee) | Smillie, Robert |
| Clowes, S. | Jones, J. J. (West Ham, Silvertown) | Smith, Ben (Bermondsey, Rotherhithe) |
| Cluse, W. S. | Jones, Morgan (Caerphilly) | Smith, Rennie (Penistone) |
| Compton, Joseph | Jones, T. I. Mardy (Pontypridd) | Snell, Harry |
| Connolly, M. | Kelly, W. T | Snowden, Rt. Hon. Philip |
| Davies, Evan (Ebbw Vale) | Kennedy, T. | Stamford, T. W. |
| Davies, Rhys John (Westhoughton) | Kirkwood, D. | Stephen, Campbell |
| Day, Colonel Harry | Lawson, John James | Sutton, J. E. |
| Dennison, R. | Lowth, T. | Thorne, W. (West Ham, Plaistow) |
| Edwards, C. (Monmouth, Bedwellty) | Lunn, William | Thurtle, E. |
| Gibbins, Joseph | MacDonald, Rt. Hon. J. R. (Aberavon) | Tinker, John Joseph |
| Gillett, George M. | Mackinder, W. | Trevelyan, Rt. Hon. C. P. |
| Gosling, Harry | MacLaren, Andrew | Varley, Frank B. |
| Graham, D. M. (Lanark, Hamilton) | Maxton, James | Viant, S. P. |
| Graham, Rt. Hon. Wm. (Edin., Cent.) | Mitchell, E. Rosslyn (Paisley) | Wallhead, Richard C. |
| Greenall, T. | Montague, Frederick | Warne, G. H. |
| Greenwood, A. (Nelson and Colne) | Morrison, R. C. (Tottenham, N.) | Watts-Morgan, Lt.-Col. D. (Rhondda) |
| Grenfell, D. R. (Glamorgan) | Murnin, H. | Webb, Rt. hon. Sidney |
| Griffiths, T. (Monmouth, Pontypool) | Oliver, George Harold | Wedgwood, Rt. Hon. Josiah |
| Groves, T. | Palin, John Henry | Welsh, J. C. |
| Grundy, T. W. | Paling, W. | Westwood, J. |
| Guest, J. (York, Hemsworth) | Parkinson, John Allen (Wigan) | Wheatley, Rt. Hon. J. |
| Whiteley, W. | Wilson, C. H. (Sheffield, Attercliffe) | TELLERS FOR THE AYES.— |
| Williams, David (Swansea, East) | Wilson, R. J. (Jarrow) | Mr. Lansbury and Mr. March. |
| Williams, Dr. J. H. (Llanelly) | Windsor, Walter | |
| Williams, T. (York, Don Valley) | Wright, W. | |
| NOES. | ||
| Acland-Troyte, Lieut.-Colonel | Fanshawe, Commander G. D. | Morrison-Bell, Sir Arthur Clive |
| Agg-Gardner, Rt. Hon. Sir James T. | Fielden, E. B. | Murchison, C. K. |
| Allen, J. Sandeman (L'pool, W. Derby) | Fisher, Rt. Hon. Herbert A. L. | Neville, R. J. |
| Applin, Colonel R. V. K. | Fleming, D. P. | Nicholson, O. (Westminster) |
| Balniel, Lord | Ford, P. J. | Nicholson, Col. Rt. Hn. W. G.(Ptrsf'ld.) |
| Barclay-Harvey, C. M. | Fremantle, Lt.-Col. Francis E. | Nield, Rt. Hen. Sir Herbert |
| Barnett, Major Sir Richard | Ganzoni, Sir John | O'Neill, Major Rt. Hon. Hugh |
| Barnston, Major Sir Harry | Gee, Captain R. | Owen, Major G. |
| Beamish, Captain T. P. H. | Gibbs, Col. Rt. Hon. George Abraham | Penny, Frederick George |
| Bellairs, Commander Carlyon W. | Gilmour, Lt.-Col. Rt. Hon. Sir John | Percy, Lord Eustace (Hastings) |
| Benn, Sir A. S. (Plymouth, Drake) | Glyn, Major R. G. C. | Peto, G. (Somerset, Frome) |
| Bennett, A. J. | Goff, Sir Park | Pielou, D. P. |
| Bentinck, Lord Henry Cavendish- | Greene, W. P. Crawford | Pitcher, G. |
| Berry, Sir George | Greenwood, Rt. Hn. Sir H. (W'th's'w, E) | Pilditch, Sir Philip |
| Betterton, Henry B. | Grotrian, H. Brent | Power, Sir John Cecil |
| Bird, Sir R. B. (Wolverhampton, W.) | Guinness, Rt. Hon. Walter E. | Pownall, Lieut.-Colonel Assheton |
| Blades, Sir George Rowland | Gunston, Captain D. W. | Radford, E. A. |
| Blundell, F. N. | Hacking, Captain Douglas H. | Ramsden, E. |
| Boothby, R. J. G. | Hammersley, S. S. | Rawlinson, Rt. Hon. John Fredk. Peel |
| Bourne, Captain Robert Croft | Harrison, G. J. C. | Rawson, Alfred Cooper |
| Boyd-Carpenter, Major A. | Haslam, Henry C. | Rees, Sir Beddoe |
| Brass, Captain W. | Hawke, John Anthony | Remer, J. R. |
| Brassey, Sir Leonard | Headlam, Lieut.-Colonel C. M. | Remnant, Sir James |
| Bridgeman, Rt. Hon. William Clive | Heneage, Lieut.-Col. Arthur P. | Rhys, Hon. C. A. U. |
| Briscoe, Richard George | Henn, Sir Sydney H. | Ruggles-Brise, Major E. A. |
| Brittain, Sir Harry | Hennessy, Major J. R. G. | Russell, Alexander West (Tynemouth) |
| Brocklebank, C. E. R. | Henniker-Hughan, Vice-Adm. Sir A. | Samuel, A. M. (Surrey, Farnham) |
| Brooke, Brigadier-General C. R. I. | Herbert, Dennis (Hertford, Watford) | Sandeman, A. Stewart |
| Brown, Brig.-Gen. H. C.(Berks, Newb'y) | Herbert, S.(York, N. R., Scar. & Wh'by) | Sandon, Lord |
| Burman, J. B. | Hilton, Cecil | Sassoon, Sir Philip Albert Gustave D. |
| Burton, Colonel H. W. | Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. | Shepperson, E. W. |
| Campbell, E. T. | Hogg, Rt. Hon. Sir D. (St. Marylebone) | Simms, Dr. John M. (Co. Down) |
| Cautley, Sir Henry S. | Holland, Sir Arthur | Skelton, A. N. |
| Cazalet, Captain Victor A. | Hope, Sir Harry (Forfar) | Slaney, Major P. Kenyon |
| Cecil, Rt. Hon. Sir Evelyn (Aston) | Hopkins, J. W. W. | Smith, R. W. (Aberd'n & Kinc'dine, C.) |
| Chadwick, Sir Robert Burton | Hopkinson, A. (Lancaster, Mossley) | Smith-Carington, Neville W. |
| Chamberlain, Rt. Hon. N. (Ladywood) | Horne, Rt. Hon. Sir Robert S. | Somerville, A. A. (Windsor) |
| Chapman, Sir S. | Howard, Capt. Hon. D. (Cumb., N.) | Sprot, Sir Alexander |
| Charteris, Brigadier-General J. | Hudson, Capt. A. U. M. (Hackney, N.) | Stanley, Hon. O. F. G.(Westm'eland) |
| Christie, J. A. | Hudson, R. S. (Cumberl'nd, Whiteh'n) | Stott, Lieut.-Colonel W. H. |
| Clarry, Reginald George | Huntingfield, Lord | Stuart, Hon. J. (Moray and Nairn) |
| Clayton, G. C. | Hutchison, G. A. Clark (Midl'n & P'bl's) | Styles, Captain H. Walter |
| Cochrane, Commander Hon. A. D. | Iliffe, Sir Edward M. | Sueter, Rear-Admiral Murray Fraser |
| Conway, Sir W. Martin | Jackson, Sir H. (Wandsworth, Cen'l) | Sugden, Sir Wilfrid |
| Cooper, A. Duff | James, Lieut.-Colonel Hon. Cuthbert | Tasker, Major R. Inigo |
| Cope, Major William | Jones, Henry Haydn (Merioneth) | Thomas, Sir Robert John (Anglesey) |
| Couper, J. B. | Kennedy, A. R. (Preston). | Thomson, F. C. (Aberdeen, South) |
| Cowan, Sir Wm. Henry (Islington, N.) | Kidd, J. (Linlithgow) | Tinne, J. A. |
| Craig, Ernest (Chester, Crewe) | Kindersley, Major Guy M. | Tryon, Rt. Hon. George Clement |
| Craik, Rt. Hon. Sir Henry | King, Captain Henry Douglas | Turton, Edmund Russborough |
| Crook, C. W. | Kinloch-Cooke, Sir Clement | Vaughan-Morgan, Col. K. P. |
| Crookshank, Cpt. H.(Lindsey, Gansbro) | Locker-Lampson, Com. O. (Handsw'th) | Waddington, R. |
| Curzon, Captain Viscount | Locler, J. de V. | Ward, Lt.-Col. A. L.(Kingston-on-Hull) |
| Dalkeith, Earl of | Lougher, L. | Warner, Brigadier-General W. W. |
| Davies, A. V. (Lancaster, Royton) | Lowe, Sir Francis William | Watson, Sir F. (Pudsey and Otley) |
| Davies, Sir Thomas (Cirencester) | Luce, Major-Gen. Sir Richard Harman | Watts, Dr. T. |
| Davison, Sir W. H. (Kensington, S.) | Lumley, L. R. | Wells, S. R. |
| Dean, Arthur Wellesley | McDonnell, Colonel Hon. Angus | Williams, Com. C. (Devon, Torquay) |
| Dixey, A. C. | Macintyre, Ian | Williams, C. P. (Denbigh, Wrexham) |
| Doyle, Sir N. Grattan | MacRobert, Alexander M. | Williams, Herbert G. (Reading) |
| Drewe, C. | Maitland, Sir Arthur D. Steel- | Windsor-Clive, Lieut.-Colonel George |
| Duckworth, John | Malone, Major P. B. | Wise, Sir Fredric |
| Eden, Captain Anthony | Manningham-Buller, Sir Mervyn | Wolmer, Viscount |
| Edwards, John H. (Accrington) | Margesson, Captain D. | Womersley, W. J. |
| Elliott, Captain Walter E. | Marriott, Sir J. A. R. | Wood, Rt. Hon. E. (York, W.R., Ripon) |
| Ellis, R. G. | Milne, J. S. Wardlaw- | Wood, E. (Chest'r, Stalyb'ge & Hyde) |
| England, Colonel A. | Mitchell, S. (Lanark, Lanark) | Wood, Sir Kingsley (Woolwich, W.). |
| Erskine, Lord (Somerset, Weston-s.-M.) | Mitchell, Sir W. Lane (Streatham) | Woodcock, Colonel H. C. |
| Erskine, James Malcolm Monteith | Moles, Thomas | Young, E. Hilton (Norwich) |
| Evans, Captain A. (Cardiff, South) | Monsell, Eyres, Com. Rt. Hon. B. M. | |
| Evans, Capt. Ernest (Welsh Univer.) | Moore, Lieut.-Colonel T. C. R. (Ayr) | TELLERS FOR THE NOES.— |
| Everard, W. Lindsay | Moore-Brabazon, Lieut.-Col. J. T. C. | Mr. Gerald Hurst and Lieut.-Colonel |
| Falle, Sir Bertram G. | Morrison, H. (Wilts, Salisbury) | Sir Joseph Nail. |