§ Order for Second Reading read.
§ Mr. McNEILLI beg to move, "That the Bill be now read a Second time."
This is one of those annual Bills, unexciting, but nevertheless useful. It provides the machinery by which the 1328 Public Works Loan Commissioners lend money to local authorities. The amount which is included in this annual Bill varies more or less from time to time. The present Bill we are asking the House to give a Second Reading to contains the figure of £35,000,000. The advances are not restricted by statute to local authorities, but the advances to local authorities are a most important part of the procedure. The right hon. Gentleman the Member for Central Edinburgh (Mr. W. Graham), when this Bill was before the House last year made a criticism, I find, that the facilities of the Measure were too much given to the larger and wealthier local authorities, that these facilities were not given 1329 as much as desirable to the smaller and poorer local authorities. I do not think that that criticism is on the whole justified. Some discrimination has to be used because there has to be conservation of credit, and not indiscriminate granting of loans. In this discrimination the rule which has been applied, not rigidly, but laid down in regard to these loans ever since 1908—I think that is the date—has been that they should be restricted to those local authorities whose rateable value did not exceed £200,000 in England and £250,000 in Scotland, where there is a different valuation system. Therefore, the scheme broadly requires that loans, so far as possible, shall be restricted to local authorities which could not otherwise finance themselves, because their rates do not offer a sufficiently large security in the market.
There is one other exception in the scheme, and that is that, without regard to the rateable value, it is open to the Commissioners to make advances to the local authorities up to the value of one-half of the gross proceeds received from War Savings Certificates in their area during the preceding year. In 1922 a Committee, presided over by the late Mr. E. S. Montagu, recommended that this same assistance should be given in The case of county councils, but the difficulty of putting that into force is that there may be two areas which overlap and come under two rating authorities, so that there might be two distinct loans depending on the same Savings Certificates.
It has, however, been arranged that assistance, so far as possible, should be extended in the direction indicated, and the county councils may borrow from the local loans fund the balance not borrowed in the previous year by other authorities within the county council area. At the present time the loans are required mostly for housing, although that is not by any means their sole destination. Part of the loans are used for agricultural credits, and other minor objects. Speaking broadly, however, the loans are for the purposes of housing, and they are necessary and are employed because of the enormous growth in the requirements for housing during the period since the War. The fund is the chief source by which the local authorities who are building finance their housing schemes. I do not think there is any more to add, and 1330 I hope, without undue delay, the House will give this Bill a Second Reading.
§ Mr. WILLIAM GRAHAMThere is one passage in the speech of the Financial Secretary to the Treasury to which I would like to refer. It is quite true that a Committee presided over by the late Mr. E. S. Montagu did examine the question and recommended that 50 per cent. of the proceeds of the sale of War Savings Certificates should be allocated by the Treasury to Housing Schemes in the different localities. If I remember the result of our deliberations it was that the grants generally and the allocar-tions should be continued, while as regards the sum over and above what was required for the satisfaction of the needs of the district, the Treasury was to have the free use of it. But I do not, however, press that point unduly to-night, because we can go into that in greater detail in the Committee stage.
The other point is that last year there was some criticism of this Act, as we all know, to the effect that the grants under then existing conditions were not being used to the same extent as they might be for the assistance of the local authorities in rather difficult circumstances. As the rules are now drawn, the larger local authorities, of course, are excluded, because they are over the valuation limit, and in any case they can borrow more cheaply in the open market. But very small local authorities come to be excluded from the difficulty of putting up the necessary security for a loan under the Public Works Loans Act. Our criticism was to this effect: that authorities who tender to be helped were the people in the intermediate position, who often suffered the same hardship as the smaller people, with whose difficulties both the Financial Secretary and the Minister of Health are at the present time familiar. I want to know whether we cannot with perfect safety amend the procedure under this legislation to provide a larger assistance to these smaller rural authorities, and give them the benefit of these loans on the easiest possible terms. After all, there is the security of the local rates behind; and I think the House will generally agree that these authorities are not likely to get into default. They are the kind of people who in many cases ought to be assisted. 1331 However, this also we might deal with in the Committee stage, and I give notice to the Financial Secretary, because I have no doubt between now and the Committee stage he may be able to get some specific information for us on the point.
§ Lieut.-Commander KENWORTHYI do not desire to make this an exciting Debate in response to the appeal of the right hon. Gentleman who does not wish to excite us on this occasion, because there is a certain amount of business to be got through to-night. There are one or two points, however, to which I should like to refer. This is practically another version of the Trade Facilities Bill applied for the benefit of local authorities. In regard to the city one of whose divisions I have the honour to represent, may I say that we think we have not been too well treated in regard to assistance urgently required for public work. I am going really to touch upon recent history for a moment or two. We have had two deputations wait upon the Government for the purpose of asking assistance for the construction of a tunnel under the Humber. It is quite an urgent matter, as urgent as others. In fact, the Humber is more difficult to navigate on the surface than is the Mersey. The tides are very high, and there are many accidents to shipping. There is need for communication between Hull on the northern bank of the Humber and New Holland on the south, and the very rich County of Lincoln, with the iron-fields of Scunthorpe ready for development. The Lincolnshire side of the river is rather shallow, only ferry boats of a very small size can be used, and when it comes to a matter of getting motor cars across and road transport generally—
§ Mr. SPEAKERI think the hon. and gallant Gentleman is making a speech on the Trade Facilities Bill. This is the Public Works Loans Bill.
§ Lieut.-Commander KENWORTHYI appreciate that point, Mr. Speaker. I was only referring to such schemes as have already been discussed. I do not want to go into the details of the scheme, except to say that we have not been received very sympathetically by the Government, who have put all kinds of difficulties in the way. For example, they have said the railway company must 1332 put the work in hand; we have not been encouraged to do it ourselves, on the ground that it is not a commercial proposition, that there is no immediate cash interest to be made out of this great work of public utility. But that is not the point. The point is that it is one of the needs of the locality, and also one of the needs of the whole country. Why cannot the use of part of this sum of £35,000,000 for a project such as this be considered. The right hon. Gentleman knows all about it, because we have been to the Treasury, and it has been raised on the Floor of the House and been the subject of correspondence, and leading citizens have come from Hull more than once to see the authorities here, but we have not go further forward. What would be our chances under this Bill?
Further, may I ask how the calculation is made that the sum required will be £35,000,000? Is that figure guess work, or do the Government go on any basis of calculation? Are they thinking of the number of applications for loans they have in the Treasury, or what is the basis? I think we are entitled to be told that, and also what happens if the sum of £35,000,000 be not sufficient. In that case a Supplementary Estimate is presented, I suppose; and if all the money is not spent the balance goes to the Sinking Fund. If I might have a word on these two points from the right hon. Gentleman, or whoever will reply for the Government, I do not wish to oppose the Second Reading of this Bill, which, as far as I know, is as excellent a Measure as the right hon. Gentleman discovered it to be.