HC Deb 12 April 1878 vol 239 cc1251-7

Order read, for resuming Adjourned Debate on Question [4th April], "That the Bill be now read a second time."

Question again proposed.

Debate resumed.


said, he hoped the Chancellor of the Exchequer would consider the case of small burghs which were distant from London, and especially of such small Scotch burghs as those which he represented. Those burghs would have great difficulty in getting loans for local improvements, and that difficulty would not be got rid of until the existing system was remodelled and improved in such a way that the demands of local bodies for loans for public improvements might be checked, tested, and regulated. He had put a Motion on the Paper to the effect— That it is expedient that arrangements should be made for providing information regarding local indebtedness and other local affairs in Scotland in a form similar to that furnished in regard to England. He did not intend to persevere in his intention of putting that Motion, but he might make one r two remarks on the subject to which it referred. It might have been noticed—he, at all events, had noticed—that when the President of the Local Government Board recently made his Statement, there was not a word or a figure mentioned in relation to Scotland. He was far from blaming the right hon. Gentleman. No doubt, he had not the statistics before him, which would have enabled him to do so. It was his misfortune that Returns on this subject as applicable to Scotland were not collected by someone and placed before the House in the same manner as the Returns which referred to England and Ireland. The Home Secretary had held out a hope that some remedy would be applied, but none had yet been forthcoming, and the result was that in the statement of the President of the Local Government Board no reference had been made to Scotland in regard to one of the most important questions affecting that country. He had been particularly struck by that omission from the assertion of the right hon. Gentleman that the figures which he adduced referred to the 10 principal towns in the United Kingdom. London was the first city in the country, but he had always understood that Glasgow was the second. Yet no mention had been made of Glasgow. When the Home Secretary and other Members of the Government wished to be educated on the question of education, or on the subject of local taxation, they went to Scotland—they visited Glasgow and Edinburgh, and if the right hon. Gentleman the President of the Local Government Board had taken Scotland into account before making his Statement, he would have found that those cities had afforded the earliest and most successful examples of efforts in the direction of local improvements. If this question as to local statistics and indebtedness was to be satisfactorily settled, it appeared to him that it could only be solved in one of three ways. They must either turn the Scotch Poor Law Board into a Local Board of Works, extend the jurisdiction of the President of the Local Government Board, or make the proposed new Secretary Minister for Public Works in Scotland. He was one of those who were very much in favour of what he might call Federal Home Rule. At the same time, he was free to admit that in Scotland they were not very fond of what were called Edinburgh Boards—and there were some subjects, especially those of education and the expenditure of public money, in regard to which he thought it advisable that the affairs of Scotland should be administered in London rather than in Edinburgh. Whether the duty of providing such information as he desiderated was to be entrusted to the new Secretary for Scotland or to the President of the Local Government Board—and he might remind his hon. Friends that they had not yet got the new Secretary, though he hoped they would, as well as some other things for Scotland which the avocations and duties of the Lord Advocate prevented their having at present—he hoped that the function would be entrusted to a public officer, who would be paid from the Imperial Revenue, and not from local sources of income.


said, he was one of those who thought that the vice of borrowing was not confined to individuals or to municipalities, but extended very greatly to nations. He regarded borrowing as one of the signs of civilization. All civilized nations had a good large Debt, and when a barbarous nation became civilized, the first thing that it did was to proceed to borrow money. He was of opinion, that when Parliament insisted upon schools being built and great sanitary measures undertaken by local authorities, the latter should be allowed reasonable access to the public money, even at the risk of slight loss to the Treasury. But, on the other hand, he earnestly protested against the borrowing of money by some municipalities and local authorities, not merely for necessary purposes, but for ornamental purposes, and even for luxuries, He suggested that the President of the Local Government Board should make a statement of the full indebtedness of the municipalities and local authorities of the country. The building of the Manchester Town Hall, for instance, had cost a sum which would prove a heavy mortgage on the rates of the city for ever; and Birmingham had a debt amounting to about 3½ years' rateable value of all the property in the town.


thought the hon. Member for South Norfolk (Mr. Clare Read) had raised a very important question; but, at the same time, had laid down what he considered a very dangerous principle—namely, that whenever Parliament directed local improvements of an important character to be undertaken, it should be bound to find the money for them. The advance of public money, especially for long periods of time, was very objectionable; but it was the fault of Parliament itself, which had sanctioned and encouraged it. If advantage were taken, by those who desired to borrow money for public works, of a cheap rate of money, to borrow money repayable in a period of, say 50 years, the Chancellor of the Exchequer, on behalf of the nation, should consider at what rates he would be likely to be able to borrow money himself during that period. If that were not done, great confusion might arise, and great losses be entailed upon the State. It was a most serious matter for the Government to borrow money—say, on Exchequer Bills or on any other securities for short periods, perhaps, repayable in a few months—and to lend that money for a long period, say, perhaps, 20 or 30 years, and, probably, even for 50 years. He was also of opinion that the House ought not to sanction schemes for the improvement of towns where it was certain that the cost of making such improvements would have to be defrayed by loans of public money.


said, he agreed with the hon. Member for South Norfolk, until he said it was the duty of Government to provide funds for local purposes, even at a loss to the Exchequer. In that he could not agree. There could be no doubt that the principle of prolonging the period of repayment of a loan over 50 years or so was one of great risk and danger. Long before that period had elapsed, the purposes for which the money had been given might have been worn out. At the same time, he could not see that there was anything wrong in principle in granting loans to certain districts in order to enable them to comply with statutory obligations. It was not a matter of great difficulty for towns like Manchester and Birmingham to borrow money in the market; and, if it were the case that they could do so on terms equally as favourable as if they applied to the Public Works Loan Commissioners, he thought the latter body should have power entirely to disregard applications for loans in such cases. He desired, however, to put in a plea for the smaller places and the rural districts, where obligations existed which had only recently been created by statute, and where there was great difficulty in finding the means which were necessary to carry those obligations into effect.


was of opinion that the Government were raising money too freely, and lending it for purposes for which it ought not to be lent. Now that the House was asked to sanction a further expenditure of upwards of £6,000,000, they ought to look into the facts; and, if they did so, they would see for what an immense variety of local purposes public money had been lent. Among them were county and borough rates, poor rates, Metropolitan Board of Works rates, urban sanitary and rural sanitary rates, sewers companies, drainage, embarking, school boards, burial boards, churchwardens, and several others. He did not see what the churchwardens could want, to be borrowers for the public. Among these sums, he found that £70,672,159 had been borrowed on the security of the rates, and a further large sum on the security of tolls and dues. The localities that required money to effect local improvements ought, as a rule, to go to the market rather than to the Government. He did not think that advances on the security of tolls and dues were open to the same objection as those made on the security of rates—as, in the latter case, there was danger of its being lost, or, in the case of default being made, of the State being placed in an invidious position. He admitted that there might be cases in which it was very desirable that, for the purpose of effecting improvements, advances should be made by the State; but some check should be put on these advances, and he should be very glad if the House would make a declaration to that effect.


observed, that the Local Government Board did not lend money on the security of tangible property, upon which they could enter, or which they could realize or convert into money, as in the case of ordinary mortgages; but they lent money to local authorities simply upon the power of those authorities to levy rates. If the local authorities refused to levy rates, the Local Government Board would be compelled to apply to the Court for a mandamus. But, even if a mandamus were granted, it might be that the Local Government Board had gained nothing by that step. Mandamuses had been granted against local authorities who had no power to do what the mandamuses required them to do.


expressed his concurrence in the observations of the hon. Member for Peterborough (Mr. Thomson Hankey) and, subject to their being no loss to the Exchequer, he did not see that there should be any hesitation on the part of the Government in lending money for local improvements, when provision was made for the repayment of the principal along with the interest. Some amendment of the manner in which the money was raised was advisable, however.


approved loans for certain purposes; but, in addition to the other dangers which had been pointed out in connection with the system, warned the House against the very serious evil of divided responsibility which now existed in regard to the supervision of those advances. He held that the President of the Local Government Board ought to be charged with the sole duty and responsibility of looking after the appropriation of those moneys, and that the Public Works Loans Commissioners should be placed in direct communication with that right hon. Gentleman. He also complained of the deficiency of information regarding loans for Scotch works of improvement. He also wished more information in regard to the loans made in England and Ireland. The Wigan loan had been in force since 1853, and he believed that no Member of the House knew anything of the matter. If they desired to have accuracy, and avoid favouritism, they ought to make known what loans were in force, and those which were proposed. More explicit information in regard to the losses under this system was also desirable. In the absence of such information, it was impossible to secure that due and adequate control over that system of borrowing which was essential to guard against abuse. He hoped the Government would consent to the insertion of the clause by which all the transactions of the Commissioners might be brought under the inspection of the Controller and Auditor General.


, in reply, said, with regard to the money borrowed, that the greater part of it was owing, not to the Loans Commissioners, but to private persons, and was neither raised by the authority of the Bill nor of any Public Department. Parliament, in its wisdom, permitted the borrowing of this money, and permitted the time for repayment to be spread over many years. The Public Departments could always limit the number of years for which a sum of money was to be borrowed according to the character of the works proposed to be carried out under that loan. The Commissioners, in order to prevent loss to the Treasury, had the power to charge higher interest for loans over 30 years; but there was nothing to prevent Parliament from requiring the local authority to borrow in the open market, and permitting the extension of the repayment over any period of time. In some cases 80 years had been allowed. The large sum of money which appeared to be owing by the Metropolis was composed of loans in the Consolidated Stock of the Metropolitan Board of Works, with which the Public Works Loan Commissioners had nothing to do. The hon. Member for East Sussex had been mistaken in supposing that there was no power at law of recovering money lent upon the rates. Provision had been made for doing so; but, as far as he knew, there had been no cases of default, while there were constant repayments of principal.

Question put, and agreed to.

Bill read a second time, and committed for Monday next.