§ (1) If it appears to the Local Government Board that the carrying out by a local authority, or by a county council to whom the powers of a local authority have been transferred under this Act, of any scheme approved under Section one of this Act, or the carrying out of a re-housing scheme in connection with a scheme made under Part I. or Part II. of the principal Act, including the acquisition, clearance, and development of land included in the re-housing scheme, or the carrying out of any scheme approved by the Board for the provision of houses for persons in the employment of or paid by a county council, has resulted or is likely to result in a loss, the Board shall, if the scheme is carried out within such period as may be specified by the Board with the consent of the Treasury, pay or undertake to pay to the local authority or county council out of moneys provided by "Parliament such part of the loss as may be determined to be so payable under Regulations made by the Board with the approval of the Treasury," subject to such conditions as may be prescribed by those Regulations.
- (a) in the case of a scheme carried out by a local authority, be determined on the basis of the estimated annual loss resulting from the carrying out of any scheme or schemes to which this Section applies, subject to the deduction there from of a sum not exceeding the estimated annual produce of a rate of one penny in the pound levied in the area chargeable with the expenses of such scheme or schemes; and
- (b) in the case of a scheme for the provision of houses for persons in the employment of or paid by a county council, be an amount equivalent to thirty per centum of the annual loan charges as calculated in accordance with the Regulations on the total capital expenditure incurred by the county council for the purposes of the scheme:
§ Provided that the Regulations shall include provisions—
- (i) for the reduction of the amount of the annual payment in the event of a failure on the part of the local authority or county council to secure due economy in the carrying out of a scheme or otherwise to comply with the conditions prescribed by the Regulations;
- (ii) for the determination of the manner in which the produce of a rate of one penny in the pound shall be estimated; and
- (iii) for any adjustment which may be necessary in consequence of any difference between the estimated annual produce and the actual produce of the said rate of one penny in the pound;
- (iv) every Regulation so made shall be laid before both Houses of Parliament as soon as may be after it is made, and if an address is presented by either House, within twenty-one days from the date on which that House has sat next after any such Regulation is laid before it, praying that the Regulation may be annulled, His Majesty in Council may annul the Regulation, but without prejudice to the validity of anything previously done there under.
§ The PARLIAMENTARY SECRETARY to the LOCAL GOVERNMENT BOARD (Major Astor)
I beg to move, in Subsection (1), to leave out the word "rehousing" ["included in the rehousing-scheme"], and to insert instead thereof the words "last mentioned."
In explaining the object of this Amendment I would at the same time explain the next Amendment which stands on the Paper as consequential. In Committee upstairs my right hon. Friend was asked whether the financial assistance to be given would include the acquisition of land needed for rehousing, and the clearing away of slums. He always intended that the financial assistance should be available for these purposes. In view, however, of the doubt expressed these words are proposed. It is only one addition, but a very important one which my right hon. Friend proposes, and that is that the financial assistance shall only be given if the acquisition of 905 land for the clearance of slums embodied in a scheme under Part I. or II. is accompanied by rehousing, whether on the site itself or on another site. It is very important that that should be borne in mind. The Government will give financial assistance for those schemes under Parts I. and II., provided that the people displaced are rehoused whether on the actual site or on another site. There will be general agreement with the intention and policy of the Government in proposing this, I think.
§ Amendment agreed to.
Further Amendment made: In Sub-section (1), after he word "scheme" ["in the rehousing scheme"], insert the words
and whether the rehousing will be effected on the area included in that scheme or elsewhere."—[Dr. A. Dixon.]
I have a manuscript Amendment here in the name of the hon. Member for Ladywood (Mr. N. Chamberlain) to alter Sub-section (1). I desire to ask him if his proposal, as I understand it to do, will involve any charge upon the Exchequer?
§ Major ASTOR
I beg to move, in Subsection (1), after the word "period," to insert the wordsafter the passing of this Act.6.0 P.M.
This Amendment is to make it quite clear that financial assistance will be given only to the schemes which are carried out within a reasonable period after the passing of this Bill. This money will be available for schemes which are submitted within a limited time after the passing of this Bill.
§ Amendment agreed to
§ Rear-Admiral ADAIR
I beg to move, in Sub-section (1), after the word "Board" ["such period as may be specified by the Board"], to insert the wordsand if the rents to be charged have been approved by the Board.It appears to me that there is no provision made as to definite responsibility for the fixing of the rent. In such a case where the State is going to incur probably an enormous loss, I think there should be some very definite statement in 906 the Bill as to who is responsible for fixing the initial rents for two reasons. Firstly, for the protection of the State and the tax payer; and secondly, for the protection of the tenant who is going to inhabit the house. It is quite true that in Clause 1, Sub-section (3), the Local Government Board has to approve the scheme as to its adequacy, but I do not know whether that provision is intended to cover approval of the rent, but if it is it is only an approval based on an estimate, and of course the rent to be a just one should be based upon the actual cost which can only be known when the scheme is complete. In the course of building next year there may be a great change in the cost, which may go up or down, and each would affect the rent. Seeing that we are bound to have an enormous loss which has got to be paid by the State, and that this loss depends wholly on the rent charged, it seems to me that the State, for its own protection, should decide what is to be the rent, and my Amendment provides for that. We have to remember in this House that we arc responsible for meeting all the loss, and we should have in the Bill something to ensure that our executive officer, the President of the Local Government Board, has the means of ultimately deciding what the rent is to be.
As regards my second reason, the protection of the tenant, I noticed in the "Times" the other day that in Manchester the corporation were proposing to put up houses and to charge the working classes rent 100 per cent. in excess of those they are now paying. I think such an increase is quite indefensible, and I do not suppose that any working man is prepared to pay 100 per cent. more than he is doing at the present time. Therefore, I say that the fixing of the rent must be very care-fully supervised, even in the interests of the working man. In the statement as to the financial assistance to local authorities, the President of the Local Government Board has laid down that the local authority first fixing the rents may have regard to the rents obtaining in the locality, and to the operation of the Increased Rent Restrictions Act and any Act amending it, and they are to have regard also to any superiority in the condition of the houses to be let.
I should like to take a small example to ascertain what that will amount to. For instance, if a man is to-day paying £20 a year for his house, when the Rent Restric- 907 tions Act lapses that will become £22, because the landlords are allowed an additional 10 per cent. Supposing that man goes into a house 20 per cent. better than the one he is living in now, which is really the object of the Bill. It is only fair to suppose the rent will advance in the same proportion, and that means that his rent becomes £22, plus £4 8s.—that is, £26 8s. per annum. Is the working man prepared to go even to that extent? That is a matter which the Local Government Board ought to be able to determine, and even that is only about half the real economic rent, and therefore I suggest that a fair and reasonable rent for a house 20 per cent. better than the one the man is now living in will, in a year's time, be about £27, or an increase of 35 per cent. I should be glad if the Government would express some opinion as to whether they think that is a reasonable or just rent for the working man to pay. I think it is most essential that the Local Government Board should decide this point, otherwise we might have a 100 per cent. rise put on every house in Manchester, and that is quite out of the question. I think this House should really fix the responsibility on the President of the Local Government Board of ultimately deciding what the rent shall be.
§ Major ASTOR
I am sorry that the hon. and gallant Member did not let me have a copy of this Amendment, which has not been put down on the Paper.
§ Major ASTOR
But this Bill has been printed for many days, and if my hon. Friend had put down his Amendment it would have enabled the Government to deal with it more satisfactorily. I am only trying to explain my difficulty in dealing with an Amendment which I have not seen before. I am not certain whether the hon. Member desires to have a flat rate for the whole of the country.
§ Major ASTOR
Does he mean that the rent to be charged for each individual house is to be approved by the Local Government Board?
§ Rear-Admiral ADAIR
I think every scheme should bear upon it the rent proposed upon the estimate, and when the scheme is completed an amended rent, if necessary, should be put forward by the Local Government Board, and the onus of deciding the rent should lie with that Board.
§ Major ASTOR
Perhaps the easiest way to deal with this Amendment would be by reminding the House of the general principle upon which the Government propose to give assistance to local authorities. We have taken into consideration the very difficult and vexed question as to what rent should be charged at the initiation, and what should be charged during different years for the houses which are going to be provided by the local authority. The reason the Government have come to the assistance of the local authorities is duo to the very high cost of building on account of the War. It is quite obvious it would be impossible to ask the occupiers of the half a million new houses which it is proposed to erect to pay an economic rent based on the present cost of production, and what we are trying to do is to have an economic rent based on the cost of erecting houses in 1927, charged as from that date. Very briefly, that is what we are aiming at. The period will finish by 1927, and that will be seven years, and we have based our authority on the principle that there is to be a provisional estimate made now and a provisional balance sheet, and the Treasury subsidy for the next seven years will be fixed on that basis.
If rents go up during this provisional period from now to 1927, the local authorities will get the advantage of that increase in rent. There will be another balance-sheet made in 1927. I need not go into all the circumstances and all the details that have to be taken into consideration, such as the amount based upon an economic rent and based on the then cost of building a suitable house. We anticipate that there will be a deficit in 1927 when you make up this balance-sheet, and that deficiency will be the amount of the Treasury subsidy to the rest of the loan period. In the opinion of the Treasury that is the best way of dealing with this very difficult situation. We do not know what the rents are going to be twenty or thirty years hence. In the opinion of the Local Government Board and of the Treasury—and I think, on the whole, that opinion is shared by the local authorities— 909 it would be a good thing to make a final balance-sheet in 1927, and to arrange once and for all the amount of the Treasury subsidy. That subsidy then would be constant for the remainder of the loan period. That is what we are aiming at. We are aiming at having an economic rate based upon the cost of building working-class houses in 1927.
The Mover of the Amendment raised the question as to what is to happen between now and then. The amount of the Government assistance, or the fact that the Government gives any assistance whatever, depends upon true economy in erection, upon good management, and upon fair and reasonable rents being charged. If the hon. and gallant Member will read through the very full, the detailed, and somewhat complicated Regulations which have been issued as a White Paper, setting out very clearly the financial assistance to local authorities which the Government are proposing to give, he will find that the Government expect the local authorities to manage their housing schemes in a business like manner in the national interest, showing due economy and proper management. Reference to these Regulations was put in this Clause, Sub-section (1), in Committee upstairs, to meet the very natural desire of many hon. Members that the House should have an opportunity of agreeing to the main points that should be contained in the Regulations which the Local Government Board were going to issue hon. Members will find, according to the first proviso,That the Regulations shall include provisions (i) for the reduction of the amount of the annual payment in the event of a failure on the part of the local authority or county council to secure due economy in the carrying out of a scheme or otherwise to comply with the conditions prescribed by the Regulations.The Committee upstairs agreed with the contention of the Government that it would be unwise to try and put into the Act everything contained in the Regulations—there are something like twelve pages of Regulations—and that Parliamentary control would be adequately safeguarded if this proviso of Sub-section(1) of Clause 7 were included in the Bill, setting out the sort of points that ought to be contained in the Regulations, and yet giving the Department a certain scope to carry out what everybody agreed should be carried out. It would be inconsistent with the Government policy to accept the Amendment, which, as I have said, I have 910 not had an opportunity of seeing, but which I think I understand. I think that all the hon. Member desires is contained in our Regulations. We mean to keep a very close eye upon the balance-sheets of the local authorities, upon the cost of production, upon the cost of management, upon the amount allowed for depreciation, and upon the amount to be charged for rents. Hon. Members know that there is not to be a flat rent all through the country. There is to be a certain amount of variety. We must keep in close touch with the local authorities to stimulate them to charge a reasonable rent. You cannot base it upon the present cost of building, but we want them to work up to an economic rent in 1927, and we believe that the Regulations which we set out as the policy of the Board will enable the local authorities to carry out what I believe is the intention of the hon. Member and what is certainly the intention of the Government.
§ Rear-Admiral ADAIR
The hon. and gallant Member is travelling rather wide of my point. I want to fix the responsibility for fixing the initial rent on the Local Government Board as a protection to the State and also to the working man.
§ Major ASTOR
In so far as the Local Government Board have to approve of the schemes, they will have responsibility, but I do not think it would be advisable or good management to expect the Local Government Board to fix exactly the initial rent in every case. Therefore, I am afraid that I cannot accept the Amendment.
§ Mr. LAMBERT
Will my hon. and gallan Friend kindly inform me how the rents are to be fixed? Are they to be fixed by the local authority in conjunction with the Local Government Board, or how are they to be fixed? It is a matter of supreme importance. Obviously, it will be quite impossible within the next few years to charge an economic rent, but the process of estimating an economic rent and what is to be charged during this transitional period will be extremely difficult, and I would like the hon. and gallant Gentleman or the President of the Local Government Board to inform the House, and therefore the public, what authority will fix the rent, and upon what basis it will be fixed, in the next seven years.
§ Sir TUDOR WALTERS
I should like to submit one or two principles, which I hope the right hon. Gentleman will bear in mind in connection with this question of fixing the rent. I can illustrate my case better by taking the finances of the public utility societies, because there we have definite figures. If a public utility society gets to work, it will receive 75 per cent. loan and an annual contribution for the period of the loan representing 30 per. cent. of the entire interest and sinking fund charges. That means that a public utility society that builds houses within the next two years will receive a present of one-third of the cost of building. Why does the State do that? It is because it clearly recognises that one-third must be written off as a wasting asset. That leaves the society with the necessity to charge interest and sinking fund on two-thirds of the expenditure and not on the entire expenditure. We now come a step nearer to it. The people who promote this public utility society have to find 25 per cent. of the money, and they must recognise, at any rate for the next seven years, that they will get practically no return on that 25 per cent. If they get 2 per cent. or 2½ per cent. they will be very fortunate. When may they hope to get interest on their capital? They cannot expect to get any interest at first, because of the present high rate of money. It is no use talking about an economic rent if you are going to lend money at 5½per cent. You will only have an economic rent when you get your money down to 4 per cent. That is the real element that fixes the date. When the public utility society gets its money down from 5½ to 4 per cent., it will then begin to get a modest return upon the 25 per cent. of the capital which it finds. During the seven years, presumably, there will be some modest and fair increase of rents in the country generally and that increase of vent, plus the saving by the fall of interest charge from 5½per cent. to 4 per cent., should bring the public utility society to a 4 per cent. return on their money. When you have written off one-third of your expenditure as waste of assets, when you have got your general rate of interest in the country down to 4 per cent., and when you have reasonably and slightly increased your rent, then you will get to an economic rent of about 4 per cent. upon two-thirds of your total expenditure.
The local authorities must reason on the same principles, and the Local Government Board, in approving the rent, should 912 look at it in the same way. You start practically with the rent as fixed by the Rents Restriction Act, plus the extra value of the house that is now provided compared with the accommodation of an old house, you have to write off at least one-third of the cost of building, and you recognise that you cannot hope to pay more than about 4 per cent. on the balance that is left out of the rent which you receive. You may expect during the seven years to get your rent so increased as to finally arrive at something like 4 per cent. upon two-thirds of the expenditure. On lines something like that the rents will have to be fixed, and finally an economic rent will be secure. May I utter one word of warning. I hope the right hon. Gentleman will eliminate altogether this idea of charging the rent with sinking fund. When fixing the rent that a man should pay, you may take the interest on the cost of the house, but you have no right to take the sinking fund. If you charge a man in his rent both interest and sinking fund, he ought to own the house at the end of the period. The only basis on which local authorities can reckon the rent that they are to charge, is the interest on the cost of the building and not the sinking fund. They start with that, they write off one-third of the cost at once, they aim at a return which represents about 4 per cent. and then ultimately, within the space of seven years, with a cheaper rate of money and a slight increase of rent, they ought to get at an economic rent based upon two-thirds of the cost.
§ Mr. LORDEN
I am almost obsessed with the difficulties of assessing the amount of rent that is to be charged. I cannot see any daylight at all. We have heard from the last speaker that there are going to be further difficulties, and he suggests that you must not put the sinking fund on to the rent. If that is so, then in 1927 there is going to be an enormous increase to the liability of the Treasury. The Mover of this Amendment suggested that there is going to be an increase of 10 per cent. according to the Rents Restriction Act, and 20 percent. for the advantage of the new house. That is only 30 per cent. The public utility societies are only to have a present, or are only going to write off 30 per cent., and the houses are going to cost 120 per cent. more to build. I am very much alarmed at the amount of money that has to be found and the wasteful nature of the 913 scheme. You do not bring the local authorities or the public utility societies into partnership. You let them go on in their own way, and, after they have brought in a 1d. rate, the Treasury has to find the whole of the balance. That is a very wasteful way of dealing with the matter. It is impossible at present for anybody to say what rents can be levied. It depends very largely upon the wages that are paid, and the tendency is not to go down. It is still rising. The output is very much smaller than in prewar days, and that is where the great increase is coming in. It is not the rise in wages, but it is the reduction in the amount of output, which is only about 25 per cent. of what it was before the War. The hon. Gentleman opposite, therefore, who brought up this Amendment has raised a point which requires a great deal of consideration. It is, in fact, the crux of the whole matter. What rents are you going to fix? What is the amount that the Government or the Treasury have to find? I am alarmed at the idea, and I was alarmed about it when we were in Committee. Since then I have had time to study the matter further, and I am of opinion that we have got into a most extraordinary position. The Treasury have said that they are ready to come in on certain conditions, and it is clear that the loss will fall upon the Treasury. I would seriously suggest to the President of the Local Government Board that he is up against a most awkward position. I quite admit my question cannot be answered at once, but the position is one which will have to be faced sooner or later.
§ Major ASTOR
I think it gives a fuller explanation of the financial assistance which the Local Government Board proposes to give to the authorities, and the hon. and gallant Member will find that it sets out a perfectly sound principle.
§ Major ASTOR
I suggest that the principle on which the Government propose to deal with this matter is clearly set out in the White Paper. The local authority, 914 in first fixing the rent under the scheme, is to have regard to the rent obtaining in the locality for working-class houses and to the mortgage interest. Provision is there made, too, for the fact that the House will probably be a better house, and that the rents will vary in different areas. The local authority will have to submit a balance-sheet showing the rents which they propose to charge, and that, I think, meats the point which my hon. and gallant Friend has in his mind.
Has the Local Government Board power to approve the rent to be charged by the local authorities?
§ Major ASTOR
The local authorities must produce a balance-sheet. That will obviously show the amounts to be received in the way of rents, and it therefore really means that the Local Government Board will have to approve the rent.
§ Amendment negatived.
§ Mr. SPEAKER
The next two Amendments I do not quite understand. How can you have an estimated and an actual loss?
There is a charge on the Exchequer under the Bill as it stands. It is a quite unknown charge, and my Amendment is devoted to trying to make the loss to the Exchequer less.
§ Mr. SPEAKER
The hon. Members Amendment is to leave out the word "annual" and to insert the words "in each year." What I would like to know is, what is the difference?
I think I can explain it. Instead of the word "annual" I want in the first place to put in the word "actual." Then there is a consequential Amendment later on to put in the words "in each year." I think I have made the object quite clear.
Under the Regulations the loss is estimated at the beginning of a certain long period, and that loss is a stereotyped loss. It is supposed to hold good for the rest of the period in each year. My Amendment is directed to doing away with the stereotyped loss and to make it vary each year, according to the excess of the expenditure 915 over the actual receipts. There is, I submit, a great difference between the two.
§ Mr. SPEAKER
I am advised that this will increase the charge. Perhaps the hon. Member will devote his observations to that point.
I beg to move, in Sub-section (1, a), to leave out the word "annual" ["estimated annual loss"], and to insert instead thereof the word "actual."
I submit that it will not increase the charge at all. My Amendment is really directed to decreasing the loss to the Exchequer. The amount of that loss is not known under the Bill as it stands. I agree that nobody can tell exactly what the loss will be under my Amendment, but in all probability it will be much less than under the Bill. We were told by the Parliamentary Secretary just now that the Regulations are very complicated. I quite agree with him. I think they are the most complicated Regulations I have ever read. It is really a vicious system of legislation under which, when Bills are brought in. the whole machinery of the Bill and the whole essence of the Bill—the financial provisions—are put into Regulations and not into the body of the Bill. I am not going to be guilty of reading the Regulations to the House—I have been guilty of many things, I admit. Still, without reading those Regulations, it is almost impossible to explain what the financial provisions are. But I will try and give the gist of them. Until 1920 we are to have a transitional period, and at the beginning of that transitional period the loss which the Exchequer is going to pay by way of subsidy is the excess of expenditure over revenue plus the produce of a 1d. rate. That is not going to change year by year. The loss is going to be estimated at the beginning of the transitional period. It will be exactly the same stereotyped loss until 1927, and when that has arrived the same principle is to be carried on until 2000 A.D. In 1927 the new Estimate will come out, and the loss which the Exchequer is going to bear under Regulations is to be the excess of the local authority's expenditure over the revenue plus the produce of a 1d. rate in the first year of the Estimate, and the loss is to be stereotyped and to be paid year after 916 year for a period of seventy-three years until 2000 A.D. Suppose the expenditure over revenue was estimated at £16,000, and the 1d, rate brought in £5,000. The. actual loss which the Exchequer would have to meet would be £10,000 in the first year, and until 2000 A.D. £10,000 will have to be paid to the local authority, although, as a matter of fact, the actual loss to the local authority might in the long run only amount to £50 a year. I challenge the Government to deny that statement. Surely it would be much better that the local authority should know what it is going to receive. It may lose. Its loss may be larger than the estimated loss in the first year of the period, but, on the other hand, the Exchequer may lose because the local authority's loss may be much less than the estimated loss in the first year. Surely it would be much better for the taxpayers to know what their liabilities are going to be, and much better for the local authority to know what their liabilities will be. It is an absolutely rotten system of finance. Nobody knows what it really means, and I believe that if the Government had put this proposal into the body of their Bill it would never have had a chance of getting through Committee, and it would have had a much smaller chance of passing this House
§ Mr. SPEAKER
I think the House will agree, after hearing the hon. Member himself, that he has confessed there may be a very considerable difference between the estimated loss and the actual loss. Who is going to bear that? Is it not the Government?
§ Major ASTOR
My hon. Friend raised this point upstairs, and my recollection is that the. majority of the Committee agreed with the policy of the Government, and therefore my hon. Friend did not press his Amendment. He has now raised the same point again. I am quite aware he states that it is probable he will reduce the Treasury Grant. That, no doubt, is his intention and hope, but it may not work out as he proposes, and it may result in an increased charge on the Treasury. He hopes it may be to the advantage of the Treasury, but it may operate in a contrary 917 direction, and then, if it does involve an increased charge, I assume the Amendment would be out of order. Perhaps I may be allowed to deal very briefly with one or two of the points if the Amendment is not ruled out of order.
May I ask my hon. Friend one question? I take it he does not deny that the loss is stereotyped in the first year, and that it is to run in a stereotyped fashion for seventy-three years.
§ Major ASTOR
I explained very carefully to my hon. Friend upstairs that the Government subsidy was to be fixed on two occasions, firstly, at the beginning of the period, and once again in 1927, at the beginning of the remaining period. If this Amendment were carried there would be a variation, which my hon. Friend thinks would operate in favour of the Treasury. But it might not operate in that direction, and so I should like to know, Mr. Speaker, whether we are now to discuss the merits of the case?
§ Mr. SPEAKER
After hearing what has been said, and with the little knowledge that I have, it seems to me that the loss might fall on the Exchequer or it might not. There seems to be a possibility that it may, and if that is so, that would increase the charge, and therefore the matter could not be raised on Report.
§ Mr. R. McNEILL
May I ask a question, Mr. Speaker, for the information of Members of the House? If the Government bring in a scheme of finance which is criticised, and if they show that a proposal made by a Member of this House could conceivably under some possible contingency result ultimately in increasing the charge, does that mean that in those circumstances such an Amendment would be out of order? Is it not necessary to show that at all events there is at least a reasonable probability that such an increase will result? Otherwise, would not such a ruling operate to prevent criticism of almost any financial scheme that the Government could introduce?
§ Mr. SPEAKER
These matters cannot be discussed on Report. That is the important point. All financial matters must be discussed in Committee. In Committee it is open to hon. Members to move any Amendments they like dealing with financial matters, provided that they do not exceed the limit of the Financial Resolution; but when it comes to the Report 918 stage, which is taken by the House as a whole, the House does not discuss and cannot discuss questions of finance except for the purpose of limiting the expenditure. It cannot under any circumstances increase it.
§ Mr. McNEILL
Is it necessary that that rule should obtain in all its stringency under the new Rules of Procedure? Under those Rules a great majority of Members of the House have no opportunity of hearing any expression of opinion in the Committee rooms upstairs, and this Report stage is really the only opportunity which the great majority of the House have of representing the views of their constituents on these Bills. Under these circumstances, would it not be possible, Mr. Speaker, for you to exercise a certain latitude in the administration of the rule, to enable those who have not been in the Committee upstairs to represent what views they may hold on these questions?
§ Mr. SPEAKER
I am not disposed to accept any relaxation of any rule which would lead to greater expenditure. The Rules of the House are designed for purposes of economy, and I am sure that at the present moment economy is more essential than it has ever been before. Therefore, it is more necessary than ever, it seems to me, to guard the rule now.
§ Mr. LORDEN
If the local authorities are limited to 1d. rate, may I ask, Mr. Speaker, how is it possible to increase the Treasury contribution?
I entirely submit to your ruling. Could I move my Amendment if I add at the end a proviso making it quite clear that the loss to the Exchequer should not be greater than it would be under the Bill?
I should like to move a consequential Amendment at the end of paragraph (a) of Sub-section (1), providing that in no case shall the Treasury have to pay more than the statutory rate estimated at the commencement of the transitional period. I think that would cover the point.
§ Mr. SPEAKER
It would not do to insert a proviso of that sort at the end. The House might accept the hon. Member's first Amendment and reject the second, and we should then be in a worse state than ever.
§ Mr. McNEILL
Would it be in order for my hon. Friend or some other hon. Member to vary the Amendment so that it would read:On the basis of the estimated annual loss or the actual loss in any given year, whichever is the smaller sum in any year.
§ Dr. ADDISON
On a point of Order. I do not intervene in any way for the purpose of restricting discussion. I think that the more discussion there is the better. But so far as I can appreciate my hon. Friend's point, it is to secure by some machinery or other that something which in the nature of the case is variable shall be fixed.
§ Dr. ADDISON
The matter stands related to the proceeds of a penny rate, but the proceeds of a penny rate may vary as the rateable value of the district may rise or fall. If the proceeds from a penny rate decline, then unless the scheme is to be bankrupt, somebody has to make up the balance, and that somebody, under the scheme before the House, is the Treasury. If the proceeds of a penny; rate increase, in consequence of an increase in the rateable value of the district, then the contribution of the Treasury, pro tanto, is so much less. That is part of the scheme. It appears to me, therefore, that unless the House is to discuss the financial provision ab initio, with the idea of providing a fixed sum—which it did not decide to do, and we discussed it at great length both on the Resolution and in Committee—unless we decided to lay down a fixed sum, it must be a sum that is variable, and if it is a sum that is variable, and the Treasury is a contributing party, it is just as likely that the Treasury may have to contribute more as less. That appears to me to be an essential accompaniment of what my hon. Friend is trying to achieve, and I suggest that he is trying to achieve what is impossible.
It is quite clear that some Members of the House, at any rate, are not in possession of the 920 gist of these Regulations. Would it be possible to re-commit the Bill in respect of this particular Clause, because my right hon. Friend, if I may say so with great respect, really missed my point? The produce of a penny rate is variable under the Regulations, but he has stereotyped the loss. That is my point.
§ Dr. ADDISON
No. I am sorry to interrupt, but that is exactly what we do not, do. The loss is stereotyped except as regards the proceeds of a penny rate, but that is the very point. The exception of the proceeds of the penny rate is the material point that varies, and our contribution is fixed except with regard to that.
Mr. LOCKER - LAMPSON
Supposing that the produce of the penny rate went up by £1,000, and supposing that the State subsidy was £10,000, it would only be reduced by £1,000; it would be, say, £9,000. But the excess of expenditure might have gone down to £50.
§ Dr. ADDISON
No; it would be the contribution to the loss. If there were no loss there would be no contribution.
I have it in, the right hon. Gentleman's own words in the Regulations. I do not know whether I am in order here, Mr. Speaker, but I think it would be most advisable to recommit the Bill. My right hon. Friend was not right in saying that we had a discussion on the Resolution. There was no discussion on the Resolution. The first time it was discussed was in Committee upstairs, and therefore the House has never discussed this financial point. I therefore beg to move that this financial Clause be recommitted.
§ Mr. SPEAKER
That cannot be done now. You cannot re-commit in the middle of a Bill, but must wait until the proper time comes. The next Amendment on the Paper, standing in the name of the hon. and gallant Member for Accrington also increases the charge—
At end of Sub-section (1, b), insert,(c) in the case of any scheme (other than a scheme under paragraph (b) of this Sub-section) carried out by the London County Council or by the council in conjunction with a Metropolitan borough council or with the Common Council of the City of London or in respect of any scheme under which expenses have been incurred by the council be an amount not less than seventy-five per cent. of the estimated annual loss incurred by such council in connection with any such scheme or schemes.
§ Major GRAY
Do I gather, Mr. Speaker, that you are quite clear that this does increase the charge? Of course, I accept your ruling without hesitation, but I understood that on the Second Reading the Government declared that the London County Council would be quite as well off under the one scheme as under the other. If that be the view held, then it seems to me that if that council prefers the one scheme, it is now open to the Treasury to modify their view and say that it will necessarily cost more. I would further submit that under the financial Clause as granted the charge upon the Treasury would be practically unlimited. Beyond the loss of the penny rate the Treasury bears the charge. There is no limit to that, and it seems, therefore, to me that any alternative scheme could not possibly increase that which was already unlimited.
§ Mr. SPEAKER
That would depend upon whether the amount of the penny rate was 25 per cent. or more. If the amount of the penny rate in London were always 26 per cent., and the State always had to pay the 75 per cent., there would be no change. But the hon. and gallant Member cannot say for certain whether whether the amount of a penny rate in London would be 25 per cent. or not. It may be more or it may be less, and in the latter ease there is a possibility of an increased charge coming upon the public.