LOCAL GOVERNMENT BILL.

HC Deb 26 November 1928 vol 223 cc65-194

Order for Second Reading read.

The MINISTER or HEALTH (Mr. Chamberlain)

I beg to move, "That the Bill be now read a Second time."

This afternoon the House comes face to face with the most important Measure of the Session, and before it leaves ibis place many days will have to be spent in the examination of its Clauses and the discussion of its provisions. I understand that in some quarters that is regarded as a most formidable task, and indeed I think that description is not without justification. In mere bulk, this Bill far transcends the proportions of any ordinary Bill. When you consider the magnitude of the changes which it proposes, the variety of the interests that are affected and its possible results upon the prosperity of the country, and indeed the social welfare of the whole people, I think it must be reckoned among the greatest Measures which have been presented to any Parliament for many years. I am told it is not a Bill that is easily understood. I am told it contains traps for the unwary, and indeed I believe some of those traps have already found their tenants.

Mr. T. SHAW

One at Cheltenham.

Mr. CHAMBERLAIN

I am free to admit that there are passages in it which a person of even more than ordinary intelligence might peruse twice or thrice before being quite certain that he had mastered their implications, and, if it were possible to conceive any being so base and lost to any sense of decency as to desire to misrepresent the intentions of a beneficent Government, this Bill might provide for him a happy hunting ground. In these circumstances, the House will agree that it is no easy task to present to it an adequate explanation of the provisions of the Bill within a reasonable compass of time, and I shall, I am afraid, have to trespass upon the patience of hon. Members rather longer than I am accustomed to do. Nevertheless, I hope I shall not indulge in any unnecessary prolixity, and if I cannot be entertaining, at any rate I shall try to be intelligible.

I often hear this Bill described as a de-rating Bill, and of course it is true that it contains the final and completing stage of that great measure of rating reform, the earlier stages of which we have already discussed in the Finance Bill and in the Rating and Valuation (Apportionment) Act of last Session, which we owe to the genius and the courage and the imagination of my right hon. Friend the Chancellor of the Exchequer. But this is much more than a de-rating Bill. It is, I think, more properly described in its short title as a Local Government Bill, and it is to the problems of local government that I desire to direct the attention of the House this afternoon. Like most of our national institutions, local government has been the product of the processes of evolution. Its progress has been fitful and irregular. There have been moments of expansion and development, and then there have been long intervals when it seemed to fall almost into a condition of somnolence. Every one of these movements, if it is examined, will be found to have been a movement in the direction of the further expansion of the functions of local government and of their adaptation to the changing needs of the people as the public conscience demanded that the standards of life should be raised and as the community assumed further responsibility in respect of the health or the education or the security of its members.

If we look back over the history of the last hundred years we see standing out a succession of great Measures which are, as it were, the crests which in turn we have surmounted as we have progressed on the upward wave. Each of these Measures represents the accumulated experience of the preceding years and shows how it was necessary to adapt the conditions of local government to the altered conditions of the locality. That has been the history of local government. The first great. Measure to which I want to refer was the Poor Law Act, 1834. Before that Act the unit of Poor Law administration was the parish, and the administration itself was divided between the overseers and the justices. The old Poor Law was full of inequalities. Its administration was fraught with numerous scandals. It has been fittingly described in the classical work upon the history of the English Poor Law which we owe to the right hon. Gentleman the Member for Seaham (Mr. Webb). and Mrs. Webb. There is one passage which I have come across in that work which seems to me peculiarly apposite to this discussion, because it calls attention to evils which arose out of the small area of the administration of Poor Law relief, and were dealt with in a Measure which in some respects resembles the remedies which we are trying to bring forth to-day: The incidence"—say the authors—"of the financial burden of the relief of destitution became, with the development of manufactures and commerce, so grotesquely unequal and so flagrantly unfair to most of the 15,000 separate parishes and townships as positively to tempt their officers to the evasion of pushing the vagrant or the incomer across the parish boundary. That was dealt with in the Act of 1834 by the expansion of the area of charge, by the creation of the union, and by the setting up of the boards of guardians which have come down to us to-day practically unaltered in their constitution. After 1834, followed the Municipal Corporations Act of 1835, and then nothing much happened for a good many years until in 1872 the whole country from one end to the other was divided up into urban and rural sanitary districts. The urban districts included the boroughs, the rural districts being those parts of the existing unions which were not comprised in the urban sanitary districts. The same Act was responsible for the origin of medical officers of health whose appointment was the statutory duty of those sanitary districts, and it is interesting as showing how public opinion was progressing in the recognition of the necessity of measures of public health.

Sixteen years after that came the great Local Government Act of the Conservative Government, the Act of 1888. That Act created the county councils, and clothed them with powers of an extensive character similar to those already possessed by the municipal corporations. They had power to borrow money, to acquire land, to levy rates, and they were made responsible for the maintenance and repair of the main roads. In the original draft of that Act, there was provision for the creation of the urban and rural district councils, but in the course of the passage of the Measure that provision was dropped and was only revived six years afterwards in the Act of 1894.

4.0 p.m.

Since those two Acts, passed respectively 40 and 34 years ago, there has been no serious or radical attempt. to reform local government. Yet consider what gigantic changes have taken place since then! The population of England and Wales has increased from 29,000,000 to 39,000,000, and its distribution has altered very considerably. New industries have sprung into existence, and older industries, some of which seemed the most stable and permanent that we had in this country, have withered and decayed. New services have been developed, and the expenditure of local authorities has gone up from about £36,000,000 in 1891 to nearly £250,000,000. The means of communication have been enormously facilitated by the development of the telephone; and by the invention of the internal combustion engine, its perfection, and its adaptation to motor vehicles, the means of transit and transport have been so revolutionised that distances which in the old days took a whole day to traverse may now be done in the course of an hour. All these things have profoundly modified local conditions throughout the country, yet there are the same local authorities, the same areas practically as there were, all unaltered and unchanged. It would be a miracle if it were not found that this stereotyping of the old conditions of government had not resulted in a widespread friction, in a widespread loss of efficiency and inability to perform the functions which were given to them in such different circumstances.

I cannot imagine that there is any Member of this House who has a greater belief in or admiration for our system of local government than I have. Local government comes so much nearer to the homes, and therefore to the hearts of the people, than any national government can. To them it is something friendly, something familiar, something accessible. It is all that to them and yet it is above them. They regard it as standing as a guardian angel between them and ill-health or injustice, and they look upon it, too, as something in the nature of a benefactor and a teacher in want. They come to it for advice. They feel confidence in its integrity. They look to it because it has ideals which they understand, and which they approve, and because it is always helping and teaching them to rise to higher things.

I do not know whether any hon. Members may think that I have overdrawn this picture, or that the relations between the people and local authorities are not always what I have sketched out. It is not everybody who has had the advantage of being born and bred up in a town such as I have, a town commanding great resources, governed for many years by men who have been brought up in high and enlightened traditions, and by officials of exceptional capacity, judgment and experience. But it is just because I have seen for myself what local government can do, what I think it ought to do, because I know how many places there are in the country where it does not reach to those ideals, but where I would like to see it come up to them, and because to my mind local government reform means social reform, that I rejoice that to-day the opportunity has been given to me to bring forward this Measure which will, I believe, effect great reforms in bringing up the standard of the backward authorities somewhat nearer to what they ought to be.

During the four years that I have sat in the chair of the old Presidents of the Local Government Board it has been dawning upon me with ever-increasing force that, splendid as is our system of local government, it is to-day in many respects obsolete and out-of-date. Sitting there at the centre of things, I can sec the cracks and the flaws in the machinery; I can hear its creaks and groans. I can note how in one place the load has been growing and growing, until it has become far greater than the shaft that was originally designed can hoist. In another place I can see remnants of old gears designed long ago which now only serve to weaken and to hamper the working of the more modern plant. It seems to me that local government to-day cries aloud for reform, and in this Measure which I am presenting to the House this afternoon we have a great scheme which is divided into various parts, some of which, perhaps, may seem to have little reference to one another, yet they are all parts of a whole, and in their turn each of them will do something to oil the wheels, to ease the way and to bring up the output of the machine both in quantity and quality to something far superior to what we are able to get to-day.

This Measure will have to be thoroughly and critically examined, but before we can examine the remedy it is necessary to diagnose the disease, and I would like, before I begin my examination of the Bill, to lay before the House what seem to me after the experience—the almost unique experience—I have had in my present office, to be the main defects from which local government in this country is suffering to-day. I would ask the House to consider this under five main heads. First of all, I put the continued existence of the guardians among other local authorities with functions that overlap one another, and presiding over areas the boundaries of which cross the boundaries of the other local authorities, giving rise to confusion, to waste and to inefficiency. Secondly, I would put the onerous charges which are fastened today upon county districts, and particularly the rural districts, in respect of the construction and maintenance of the modern type of roads, which more and more are coming to be used for traffic which is of no direct benefit to the immediate locality, but which is passing through it on its way from one place to another. Thirdly, I would put the want of elasticity, the want of power readily and cheaply to alter the boundaries of the districts themselves as their conditions and the nature of the authority which administers them change. Fourthly, I put the inequitable system of rates which, under modern conditions, has been subjecting our agriculture and industry to a slow process of strangulation. Fifthly, and lastly, I would point to the present chaotic conditions of the relations between national and local expenditure, the system which too frequently means that national contributions to local needs are given in largest measure to those who have least need, while those who cannot afford to maintain their own services get the smallest contribution from national resources.

Let me now begin with the Poor Law, and see how this Bill proposes to deal in turn with that and the other defects to which I have alluded. The trouble with the Poor Law is the same to-day as it was in 1834 in respect of the fact that the charges for Poor Law, which fluctuate violently from time to time and which are largely beyond the control of the authorities who have to meet them, fall upon areas so small that the burden is apt to become suddenly and completely crushing. To show the House how unequal the charges in respect of Poor Law are, I have taken out a few figures of the extreme cases. I find among the county boroughs that the charge for Poor Law is 5d. in the £ in Blackpool, and 10s. 5d. in Gateshead. Among rural unions, in Howden the rate is 2½d. in Pontardawe 5s. 4½d. And here is a county within the limits of which there is this astonishing difference. In the county of Brecon the charge for the able-bodied unemployed is 11¼d. in the £ for the Brecon Union and 7s. 0½d. in Crickhowell. I ask whether the local circumstances would justify such enormous inequalities as that.

Of course, it will be obvious to the House that those inequalities are not going to be diminished but increased by the proposals of the Government for derating, which will abstract from those authorities a. large part of their rateable value, and leave only a diminishing portion of it to bear any fluctuating charges which remain. That is not the only anomaly. There is, again, the point that I have already made, that the boundaries of the unions cut across the boundaries of the counties and county boroughs, so that a council will have to take account in its expenses of two different charges in two different parts of its area, according to the expense of the particular union in which each area happens to lie and surely it is altogether indefensible that, say, in the area of a county borough the finance committee of the council, which ought to be the sole authority for the public finances of that borough, has to take account of an expenditure over which it has no control whatsoever, the expenditure of a body separately elected at elections at which only a very trifling proportion of the ratepayers can be induced to vote, an expenditure which may, and often does, amount to 10 per cent. or more of the total expenditure of the town.

Lastly, there is the question of the overlapping. From time to time Parliament has entrusted to the major local authorities a responsibility for the prevention or the treatment of various diseases. There is tuberculosis. There is the charge of lunatics and mental deficients. There are the great maternity and child welfare services. And yet every one of those things has to he dealt with also by the guardians in the discharge of their duties, and we have this remarkable and paradoxial circumstance, that the question of whether a person shall receive treatment at the hands of the county borough or the county council, or whether he shall receive it under the Poor Law from the guardians, depends not upon the nature or need of his infirmities, but merely upon whether he is destitute or not. Hon. Members who are not familiar with the history of this subject might almost suppose, from some of the criticisms that have been made in the country, that a proposal to abolish the board of guardians and transfer their functions to the councils of counties and county boroughs was some invention of the present Minister of Health. I cannot claim the authorship of any such idea as that, but I may say this. I have inherited it, because I have been interested to discover, and perhaps it might interest the House to know also, that in the year 1888, when the Local Government Bill was under discussion, Mr. Joseph Chamberlain called the attention of the House to the omission from the Bill of any proposal to hand ever to the county council the functions of the guardians. Speaking on the Second Reading, on the 16th April, he said: I think there is a great deal to he said for the inclusion of Poor Law administration in the work to be given to the new county councils; otherwise, you will have a state of things anomalous in a high degree, which no one can look upon as permanent. You will have, on the one hand, thoroughly representative popular councils dealing with local government, sanitation, and other important matters, and their work would constantly increase—for, of course, there will be a tendency to throw all new work on the councils"— That is exactly what has happened— and, on the other hand, you will have a body, elected by an antiquated process, dealing with a considerable expenditure and an important branch of local administration. Therefore, very shortly after the passing of this Bill, I think there will be an overwhelming demand for greater simplicity and unification. I should have been very glad had the Government seen their way to include the administration of the Poor Law in the Bill. I would that Conservative Governments had lent a more ready ear to the counsels of my forbear. It would have saved his, son a world of trouble, and it would have saved this House a good many Debates which have certainly been trying to the temper and have been singularly futile in results. Mr. Joseph Chamberlain was not the only man who took the view that I have just mentioned. In 1909, we had the Report of the Royal Commission on the Poor Law, a report which so far as it recommended alterations in the administrative machinery was rendered sterile by the fact that there was a difference of opinion, and a majority and minority report, but the notable fact was that both the majority and the minority—of whom, of course, the hon. Member for Bow and Bromley (Mr. Lansbury) was one—concurred in this one point, that the time had come to abolish the boards of guardians and to hand over their functions to the county councils and the county borough councils. Later, there was the report of the Maclean Committee in 1918, a Committee which was set up to see if it would not be possible to reconcile the opposing views of the majority and minority reports of the Poor Law Commission. The Maclean Committee again unanimously concurred in this one recommendation to do away with the guardians and to transfer their functions to more modern bodies. I notice that in the latest production of the Liberal party there is the same idea mentioned with approval in the Yellow Book.

Therefore, the House will see that the Government have behind them an overwhelming weight of authority in making this proposal to-day. Whilst I think everybody will feel a considerable amount of sympathy with the men and women who have given long years of devoted voluntary service to the work of hoards of guardians, and who, naturally, will feel regret at seeing the boards broken up, and the possibility that they may have to give up that work, I do not believe that from any responsible quarter in this House there will come any serious challenge to the proposal which we find in the first part of the Bill.

The case does not depend merely upon the easing of the financial burdens, strong as it may be on that ground; it opens up a wide field for the improvement of our health services. The whole trend of practice in modern medicine and surgery is towards the treatment of many cases in institutions, where there can be accumulated the specialised equipment and specialised skill which are not always available in private homes. When this Bill becomes law we shall have a position in which there will be one single health authority in each area whose duty and function it will be to survey the whole institutional needs of that area. They will have at their disposal all the institutions which are now in the hands of the guardians; in many of which the accommodation is not fully occupied. They will have an opportunity of reclassifying their institutions, of closing such as are no longer suitable for modern requirements at all, of altering and adapting others and using one for one purpose and another for another purpose. Even to-day, there is a certain amount of classification attempted in many of the institutions of the guardians, particularly in the large areas, but I think it must be clear to everybody that, with the small numbers that are to be found of each particular kind of case in any particular institution, it is quite impossible either to get the sort of classification that you want or to bring to it that equipment and that specially skilled staff and nursing which is essential if you are to get the best results.

I have taken out the particulars and the nature of the persons who happened to be in one particular institution on one night this month. I chose the institution at random, except that it is one in a rural area. Perhaps, the House would like to hear the result of my investigation. This institution contained seven acutely sick persons, 55 infirm and senile, six epileptics, eight certified lunatics, 18 certified mental deficients, nine uncertified mental deficients, one able-bodied man, and three healthy infants.

Dr. VERNON DAVIES

How many beds?

Mr. CHAMBERLAIN

That I am not able to tell the hon. Member. Nobody can consider that it is a satisfactory state of things when you get brought together in a single institution so many cases which, obviously, require treatment so diverse. I think it is clear that it is only a general review over comparatively large areas and a general re-adaptation of buildings that will suffice, if we are to get a satisfactory solution of this problem.

I see a certain amount of criticism directed to the point that, as it is said, we are not in this Bill breaking up the Poor Law. That is to say, I presume, that we are leaving the county councils and the county borough councils to deal with all destitute persons in future under the Poor Law, as they have been dealt with in the past. That is a mistake. That is not what the Bill does. If hon. Members will turn to Clause 4, they will see that in that Clause we have given power to these councils to treat persons either under the Poor Law or under a number of special Acts, and, if they adopt these special Acts for the purpose, then persons treated thereunder will be separated out and treated by other committees, according to the nature of their ailments.

Hon. Members may say: "It is only permissive. Why do not you make it mandatory?" I understand the point that is being put, and I am disposed to think that some day it should be made mandatory, but we are up against two difficulties. In the first place, the local authorities themselves are very jealous of their independence. When the Maclean Committee reported, as it did report, in favour of a mandatory system, two of their members at once protested, Sir William Curtis and Mr. Harry Pritchard, the well-known secretary of the Association of Municipal Corporations. Mr. Pritchard's objection was supported absolutely by the Law Committee of that very important and influential body. Generally speaking, it will be found that local authorities take the strongest exception to having inserted in an Act of Parliament not merely what they are to do but also how they are to do it. There is a second and, perhaps, even greater difficulty to overcome, and that is that in many cases the councils have not sufficient institutions to be able to break up the Poor Law. That will come in the future, and I have no doubt that this Bill will help it to come: but for us to say that Clause 4 must be mandatory would be to put upon them duties which they are not to-day capable of carrying out.

How are these transferred functions to be dealt with? Of course, it is essential that the body which provides the money should retain financial control. At the same time, I have been extremely anxious, and I have taken some trouble to provide that we should not, so far as possible, lose in any degree that local knowledge, that local interest and that local experience that has been so valuable in the past, and in Clauses 3 to 7 there are provisions set out which show how we are going to try to combine central financial control with the fullest possible use of this local knowledge. It will be the duty of every county council and county borough council to prepare an administrative scheme. It is laid down that in this administrative scheme they are to appoint a Public Assistance Committee—that is the name that is given to it in the Bill. It need not necessarily be a new committee; it may be one of the existing committees of the council. To that committee, in the first instance, the council will refer these transferred functions, and it will receive the recommendations of the committee as to how they are to be dealt with. Of that committee there must be two-thirds members of the council. The remaining one-third may be co-opted. We have taken pains to insert in the Bill a provision that among the co-opted members must also be women.

I am counting very largely upon the assistance of women to help in carrying out the new functions which will devolve upon county councils and county borough councils in the future. The work in connection with the Poor Law is work for which women seem to me to be peculiarly fitted. There are substantial numbers of them who have not only the ability but also the leisure to deal with it, and I believe that many of them will be only too glad to give their services. Some of them, no doubt, will stand for election and become elected members of these bodies. Others may not care, at any rate in the first place, to face the turmoil of election. In such cases, they may have their opportunity of being co-opted, and I dare say it will be found, as it has been found in the past, that many of those who begin by being co-opted members will afterwards, when they become more accustomed to the work and the publicity, be prepared to take their share of the work and to stand for election. Their work will be particularly valuable upon the Public Assistance Committee, which is going to be an important body, because it will be seen that to it may be delegated any of the transferred functions of the council, except the power of borrowing or levying a rate. Whilst the council can, of course, impose upon it such conditions and restrictions as it may think fit, there can be no doubt that this committee will rank among the most important appointed by the council.

Up to this point the procedure in the case of county boroughs and county councils is alike, but here they begin to diverge. First, I will take the provisions which have relation to counties. It is set out in Clause 6 that each county must, under its scheme, divide up its area into a number of smaller areas, each area comprising one or more county districts, and in each of these areas there is to be set up a sub-committee of the Public Assistance Committee, to whose name and constitution I want to draw particular attention, because it has been specially designed to carry on, as far as possible, the duties of the old boards of guardians where it is compatible with the new financial arrangements. The sub-committees are to be called the Guardians' Committee, and it is hoped that members of them will continue to call themselves, and be called by other people, guardians. I attach considerable importance to that. It may he thought a concession to sentiment, but, after all, sentiment is a very powerful factor in human affairs, and anyone who neglects or flouts it is taking a very rash course. As to their constitution, two-thirds of these guardians' committees will be elected members, and they will be either elected members of the county council for the electoral districts comprised in the area nominated by the county council or members of one of the county district councils which are included in the area nominated by the district council hut, since the members of rural district councils are ex-officio guardians the fact that they are to have substantial representation on the guardians' committees means that there will be a considerable number of actual members of the old boards who will become members of the new guardians' committees. There will remain also the co-opted members. They must again include women, but they may, and I have no doubt will, include also ex-guardians as people who have the greatest knowledge and experience of the work. which these committees will have to do.

The Clause goes on to prescribe what are to be the duties of these committees. They include the examination of applications for relief and the determination not only of the amount but also of the nature of the relief. They will determine, therefore, whether the applicant shall or shall not be admitted to an institution. It will be seen a little later that they are not excluded from the duties of visiting, inspecting, and even managing any Poor Law institution, if the Public Assistance Committee thinks that that would be a convenient method of controlling the institution. Therefore, it may be said that in fact the work that is going to be carried on by guardians' committees will in nearly all its essentials closely resemble and continue the traditions of the old boards of guardians. In order that adequate presentation of their case may be made to the county councils, we have given them power to appoint their representative, it may be the chairman or any other member of the committee whom the committee thinks best suited to put their views, who will have the right to attend the meetings of the Public Assistance Committee whenever the affairs of that particular area are being discussed.

When you come to the county boroughs the area will be smaller, and it is possible to be much less elaborate. In that case, we have merely given to them power to appoint sub-committees, and to delegate to these sub-committees such functions as they think fit. We recognise there also the principle of co-option, but we provide in that case that there shall be a majority of the members of the council on all the sub-committees. As for the co-opted members, they must include women, and regard is to be had to the desirability of appointing persons who have had special experience as guardians or in Poor Law work. Finally, when these schemes are made they have to be submitted for approval to the Minister, and, after considering the scheme and hearing such parties as have the right to appear before him and make representations, the Minister is given power to approve the scheme with or without modifications.

There are two other Clauses in the first part of the Bill on which I want to say a word. First, there is Clause 13 which provides for the recovery of expenses. The reason for inserting that Clause is this. Under the existing law, it is the duty of guardians to recover either the whole or part of the cost of relief from any person who is maintained in an institution. It is not the law that a local authority must do it, although as a matter of fact some of them frequently do, and in the ease of maternity homes I think that they always do, but, obviously, if you are to transfer the functions of the guardians to the council you must not have a situation in which one person who happens to be destitute will have the cost of relief demanded from him and another person who is not destitute but goes into an institution of his own accord is to be let off. You must have One rule for both, and for that reason we have provided that in future the local authority will have the duty imposed upon it of recovering such part of the cost of maintenance in an institution as any inmate can afford, but we except in that provision the case of the infectious hospital, where persons go in for the good of the community and that also includes the case of the tuberculosis sanatorium.

I see from the Amendment Paper that this is taken as involving some danger to the maternity services. At present, I do not see how that can be the case. It is the general practice of local authorities to make charges for relief given in an institution, and, seeing that the woman who has her confinement in an institution is relieved from the cost of doctor or midwife, and that she has in most cases the maternity benefit secured to her, it is difficult to understand why she should not be asked to make some contribution to the cost of her maintenance in the institution. I only say this: I have an open mind on the subject. I am anxious that nothing should be done that would in any way hamper or check the development of the maternity services, to which I attach the utmost im- portance, and, if I can be convinced in Committee that the provision here would have that effect, or that any Amendment could usefully be inserted which would still further protect the maternity services, I shall receive any such suggestion with respectful consideration.

Clause 15 applies to London the provisions which apply to the counties in general, with such adaptations as are necessary. The Metropolitan Asylum Board and the Metropolitan Common Poor Fund disappear. The functions of boards of guardians are handed over to the London County Council, and the London County Council is left to make its own arrangements for the administration of the law through sub-committees. That is an arrangement which commends itself to the London County Council, and as far as I know no objection is raised by the Metropolitan Boroughs, and I think, therefore, it may be taken as a non-controversial Clause.

I must make a very brief digression on the subject of Part 2. Part 2 deals with the registration service. The guardians have certain duties in connection with registrars, certain appointments to make, and when the guardians disappear it becomes necessary to say to what bodies its functions shall be handed. Under this part of the Bill, they are handed over to the counties and county boroughs. I might have stopped there, but if I had I should have left the registration service in the same state of chaos as it is to-day. Last Session my hon. Friend the Member for Thornbury (Captain Gunston) introduced a Bill which was designed to put registrars on a salary basis instead of on a basis of being paid by fees, and that proposal was received with a great deal of sympathy by hon. Members in all parts of the House. It was recognised that registrars had just grievances and that they had suffered for a long time with great patience very considerable hardship and injustice. The Bill, in fact, passed through all its stages in this House only to perish in another place in the rush of the last hours of the Session. Bearing that in mind, and recollecting the very natural and deep disappointment of the registrars at their Bill being frustrated at the last moment, I thought I might venture to insert these Clauses, suitably adapted to the changed conditions, in this Bill. I frankly admit that these Clauses are not consequential upon the great scheme of reform of the Government and that they might be omitted from the Bill without damaging the rest of it, but I thought perhaps that hon. Members would feel that the registration service need not on this occasion be made a matter of controversy and that perhaps they would be glad to lend their aid towards putting it on a basis which will be more satisfactory and which will give us a better service in the future. Hoping that that view may find favour in the eyes of lion. Members, I do not propose at this stage to say anything more about this Clause, but, if there is any matter on which hon. Members desire further information, my right hon. Friend the Parliamentary Secretary will be able, to answer when he comes to reply.

I pass to my second category of defects, which concerns highways. Here, as in the case of the Poor Law, our principle difficulty is finance. The construction of roads, the cost of maintaining them under the pressure of modern traffic, have completely changed. During the last 25 years the average expenditure by local authorities per mile of road, after making allowance for the difference in the value of money, has risen from £60 to £160, a rise of 166 per cent. You may easily find in a small rural district to-day that the reconstruction of one single road may impose a burden on the ratepayers which is absolutely intolerable. In the County of Glamorganshire the combined county and rural district rate in respect of roads varies from 1s. 11d. in one part of the county to as much as 10s. 6d. in the £ in another. We have to remember here again, as in the case of the Poor Law, that the abstraction of rateable value from the purview of local authorities s going to increase these inequalities and make it more impossible than it was before for the smaller authorities to bear it. The obvious remedy is here, as in the case of the Poor Law, to spread the area of charge. And here fortune favours the brave. It is a brave Government that puts forward such a remedy—[Interruption]—because the burden occasioned by the Poor Law and the highways falls into opposite scales of the balance. The burden of the Poor Law lies chiefly on the urban area; the burden of the highways falls chiefly upon the rural. So if you spread both of them over a larger area the tendency is for one to cancel out the other.

Therefore the principal change which is to be found in Part III is that under Clause 28 the county council is in future to be responsible for all highways in rural districts and all classified roads in urban districts and non-county boroughs. I remember that when last June that change was first announced there was considerable anxiety manifested on the part of local authorities, particularly on the part of rural district councils. They expressed the fear that if all the roads of the county were handed over to the county council, the county council would devote its attention to those in which it had the greatest interest, namely, the main through roads, and would neglect the rural areas. That has not been, I believe, the experience of those counties where, under a voluntary arrangement, the roads have been taken over by the county council. The counties arc Hertfordshire and Bedfordshire. In any case I think that these fears must die down, because it will be seen that under the provisions of the Bill the Class I and Class II roads in counties are still going to attract from the Road Fund a percentage grant, and that the Road Fund will still be available for contributions towards the cost of improvement of rural roads, as apart from their maintenance and repair, and that there is a Clause towards the end of the Bill, which gives power to the Minister of Health to withhold a grant from any local authority of whom the Minister of Transport certifies that it is not keeping up its roads in proper condition.

There was another fear for which perhaps there was more substantial ground. That was that if the functions with respect to roads were taken away from the rural district councils there would be so little work left for them to do that they would tend to fall into decay, and that the best class of people would no longer come forward to serve on them. We have had the advantage of an interim report from the Royal Commission on Local Government, which was presided over by my Noble Friend Lord Onslow. On that Commission are represented all the various classes of local authorities. They have brought forward a series of unanimous recommendations upon this particular point, so that all we have had to do has been to follow very closely those recommendations. My right hon. Friend the Minister of Transport will be taking part in this Debate at a later stage, and he will have something to say upon the various provisions and the changes which are made.

Perhaps I might on this occasion content myself with a brief summary of what it is that we propose in regard to the administration of the roads. First with regard to urban districts, which in this case include non-county boroughs; those which have a population of over 20,000 will still retain the right given to them by the Act of 1888 to claim the maintenance and repair of the county roads. As regards the rural districts, any county district may apply to the county council to have delegated to it the maintenance and repair of any of the classified roads or of all of the unclassified roads. As regards the classified roads the county council is given an absolute discretion to say whether it will delegate or not. With regard to these unclassified roads, in accordance with the suggestion of the Onslow Commission, the onus is placed on the county council to show cause why it should not delegate; and unless in their opinion the general interests of the county require, for the purposes of economy and efficiency, that the county council should retain in their hands the maintenance and repair of unclassified roads, they must delegate that function to any county district which applies to them, and if they refuse there is then an appeal to the Minister of Transport.

I believe that these proposals will ensure that these rural district councils will have a full opportunity of maintaining the bulk of their functions in regard to roads. At the same time we shall effect our purpose by spreading the charge over a wider area, and shall effect a general standardisation of the construction of roads which could not be attained when those roads passed through localities with such different financial resources and upon whom the sole charge fell.

I will leave the rest of the Road Clauses to the Minister of Transport and pass to the question of town planning. Hon. Members will realise that the ques- tion of town planning is intimately bound up with the design and alignment of roads. I think, and many people think, that it was a mistake that the county councils were not given town planning powers when those powers were given to other authorities. But however that may be, it is quite certain that when you hand over to the county council extended powers with regard to roads, as in this Bill, the need for the extension of town planning powers becomes specially applicable. So in Clauses 33 to 38 provision is made for the inclusion of the county councils in joint town planning committees with other local authorities, for giving them the responsibility for the enforcement of schemes and the execution of works, and for replacement by the county council of the rural district councils as the responsible road authority in schemes that have already been approved before the appointed day.

Now I pass to my third category of defects which arise out of the rigidity of our areas of county districts and the inability of some of the smaller districts adequately to perform their functions. Here again we are fortunate in being able to refer to the investigations of Lord Onslow and his colleagues, and I think that we are indebted very much to those gentlemen not merely for the ability with which they have conducted their task but also for the rapidity with which they have come to conclusions, in time for me to embody their recommendations in this Bill. In the course of their investigations they found that many of the present districts were delimited as much as 50, 60 and even 70 years ago. They found that there were nearly 500 of them with populations of 5,000 or less, 27 of them with populations of under 1,000 people, and 430 in which the produce of a penny rate was less than £100 year. After hearing the evidence of various associations of local authorities, the Commission came to the unanimous conclusion that the present system was altogether too inelastic. They found that there were in fact a number of county districts which were unable to perform their duties because of the meagreness of their financial resources, and others which were really too small to justify their being maintained as separate areas. So they came to the conclusion that there was a need for reform. They unanimously brought forward a number of recommendations which will be found embodied in Part IV of this Bill.

If I may very briefly summarise what it is that they propose, I may say that their idea was that the county council should make a periodical review, in consultation with the other local authorities in their area, of the whole circumstances in the county; that they should consider whether there ought to be any alterations of districts, whether boundaries should be enlarged or the reverse, whether part of one district should be transferred to another area, whether two districts should be combined together, and whether a rural district should become an urban district or vice versa. They propose that the first of these reviews should take place within two years from the appointed day, that is before 1st April, 1932, and that subsequent reviews should also take place, there being an interval of not less than 10 years between any two of the reviews. After the review had taken place and the county council had come to their conclusions it would be their duty to submit them to the Minister who will give full opportunities to local authorities to submit their views to him. If any one of them objects to the proposal of the county council, the Minister will hold a local inquiry. Finally, when he has satisfied himself as to what ought to be done he will make an Order carrying out the conclusions of the county council with or without modifications as he thinks fair and necessary.

Then there follow a number of other Clauses, all of which are in accordance with the recommendations of the Royal Commission. Clause 44 is an important one for small districts. It provides that a rural district council shall have power to make contributions out of its district rate to the special expenses incurred by a parish or group of parishes which are not able really to bear the whole cost of this expense themselves. Clause 45 is somewhat similar to it, but provides that the county council may out of the county rates make a contribution towards the expenses of a rural district for the purpose of an improved sewerage or water supply.

Clause 48 is designed to bring together education authorities and maternity and child welfare services. Obviously it is desirable that there should be continuity in the life of the child and where, as is the case at present, you have one authority which has the maternity and child welfare service under its care, and other authorities which are education authorities who have no power to deal with maternity and child welfare, it is provided that the maternity and child welfare services may be handed over to the authority which is also the education authority so that continuous supervision may be exercised over the health of the child. Clause 50 provides in certain eases for the supervision of midwives; Clause 51 provides for a more satisfactory review of accommodation for infectious diseases in counties; and Clause 52 provides for the power, in London, to delegate in future certain functions from the London County Council to the Metropolitan Borough Councils. It may be possible to effect a certain amount of decentralisation and this may be necessary in view of the increased work winch the Bill will throw on the London County Council itself.

5.0 p.m.

I have now traversed half the Bill and before I ask the House to plunge into the thickets of the financial provision we may, perhaps, take breath for a moment and contemplate the smiling landscape provided by the part. headed "Relief from Rates." Some critics have spoken of rating relief as though it were merely a subsidy to industry and one which, therefore, ought to be confined to those who can prove that they cannot do without it. I think that those critics overlook the fact that you cannot benefit industry without increasing employment; that what the country wants more than anything else to-day is increased employment, and that, if any increase in employment were general throughout the country, inevitably the benefit of it must be felt by every member of the community, whether he be workman or householder or cottager or anybody else. The local government reformer has to take a wider view than that. He has to ask himself whether the existing system of rating agriculture and industry is sound. If it is not sound, he must ask himself what is going to be the effect of that unsoundness, not only upon industry but upon local government itself.

In the early days of rating there were no factories. Rates at that time were levied for services which comprised little more than the cost of the relief of the poor, certain costs in connection with assizes, and the repairs to the parish church. They were services which were common to the whole community and the rates were levied upon what was the most, obvious and visible sign of the ability of the ratepayer to pay. They were levied upon land and houses. But when the factory system came into existence you got a new kind of rateable hereditament—the factory itself—and, at once you got an anomaly, because the factory is not a measure of ability to pay at all. At the same time the services increased very much in extent. They went far beyond what had been deemed sufficient in the early days of rating. They extended to services of a personal nature which could not possibly be related directly to the needs of the farmer or manufacturer. Local expenditure went up from 8s. 9d. per head in 1841 to £6 10s. per head in 1920. That did not so much matter to the farmer or the industrialist when the farmer had the protection of the Corn Laws, and the manufacturer had a monopoly among all the nations of the world. It was easy enough, then, for him to pass his charges on to his customers; but when the customers turned into competitors the situation was completely changed. Those charges which they had been able safely to ignore, but which had been mounting up, decade by decade, became, at first irksome and then crushing.

To-day we are faced with this startling fact—that by the effect of this inequitable rating system, carried on under circumstances of modern competition, we have actually involved in ruin some of our greatest industries. In that ruin is comprised local government itself which is being dragged down into the abyss, and will perish miserably there if we do nothing to save it. If we look at the derating proposals in the light of that little piece of history, I think it will be seen that they do not constitute a charitable donation to some needy relative who has seen better days and that they are not to be taken as a bribe to the ratepayers to accept reforms which otherwise might be unpalatable. They are a long-delayed act of justice, based upon equity and independent entirely of the prosperity or otherwise of one industry or one class or another. They constitute a reform which has become absolutely necessary, if local government in that democratic shape in which we have known it, and of which we are so proud, is to survive at all.

We have discussed the de-rating proposals at great length already in this House. I do not propose now to go over the old arguments again. The way is even now being prepared for their completion, and on 1st October next, agricultural land and buildings will disappear for ever from the valuation lists, and industrial and freight transport hereditaments in future will be valued at one-quarter of the net annual value. At a stroke, £24,000,000 a year is going to be lifted from the hack of industry. It is safe to say that not less than three-quarters of that huge sum will go to those industries which are most depressed, which used to give the greatest employment, and which to-day are lying derelict and almost helpless. Then we shall see whether the claim of the right hon. Gentleman the Member for Colne Valley (Mr. Snowden), that rates in themselves are no burden, is well-founded. I am fully convinced that, this relief is twice blessed. It blesses not only him that takes but also him that gives, because, not only is it going by increasing employment to increase the earnings of the workers, but it is bound also to have the most profound effect upon the fortunes of all ratepayers by reducing the burden which now presses so heavily upon them of supporting their unfortunate fellows who cannot support themselves.

Let us now come to the fifth and last chapter—the relations of national and local finance. I believe that here there is a considerable extent of common ground between us all. [HON. MEMBERS: "No!"] Hon Members opposite had better wait. I believe it to be common ground that the national contribution to local expenditure is not enough. Perhaps hon. Members disagree with that? I believe it to be common ground that the national contribution is not now properly distributed. Do hon. Members disagree with that? Very well. After all, I have found some ground upon which hon. Members may stand with me. We have had in this House many discussions on the subject of necessitous areas, and every time we have had one of those discussions there has been a claim that the national contribution to those areas should be increased. But necessitous areas are really only an extreme illustration of the inequalities which are to be found everywhere if you look for them, and I feel confident that, if the true state of affairs were realised, if people understood the way in which our national contribution to local services was distributed now, we should have had far more pointed and general criticism than we have ever had in the past.

If hon. Members turn to page iii of the Financial Memorandum, they will see set out there the various Local Taxation grants, and it may be interesting if I recall to them how these grants are fixed and distributed. The first item is the Estate Duty grant, amounting to a net sum of £4,500,000. How is that distributed? It is distributed among local authorities on the basis of the amounts which they received in the year 1888, in lieu of certain grants which at that time had been discontinued, so that the basis on which these grants are being distributed is actually one which was fixed 40 years ago. Every body recognises how far conditions have changed since then. Take the items in the second paragraph. In those cases each county and county borough receives what it collects within its own boundary, but part of this sum is stereotyped on the amount which was collected in the year 1908–1909, so that there, part, at least, of that grant is based on something which was fixed 20 years ago. In the third item, again, part is stereotyped upon another basis. The Agricultural Rates Act, 1896, grants are stabilised on the basis of the loss of rates in the year 1895–1896–32 years ago. The last item—giants in respect of the Agricultural Rates Act, 1923—is based on losses of rates arising in any half-year. Can you imagine a greater hotch-potch than that, or greater confusion in the way in which these large sums of money are distributed? It is hardly surprising, after considering those facts, that the actual distribution of Exchequer grants to-day among local authorities shows the very widest discrepancies.

I have taken out some figures which illustrate those discrepancies and have expressed them as the number of pence per head of the population received by various local authorities to-day from the Exchequer. In Middlesbrough they receive 26d., and in Southport 63d.; Gateshead has only 35d., Burton-on-Trent has 96d.; Merthyr has 44d., but Oxford has 102d.; Sheffield has old., and Hastings has 109d.; the County of Middlesex has 31d., and the East Riding of Yorkshire has 244d.; Glamorgan has only 43d., but Montgomery has 284d. I need not pursue that matter with any further illustrations, but it is interesting to note this, that it is just those places which come out worst under the formula which are shown by these figures to have got more than their share to-day. Therefore, the fact that they come out badly under the formula is not a condemnation of the formula, but is rather an illustration of how the formula is going to correct the inequalities that now exist.

It is evident that the present arrangements are utterly indefensible, and the question therefore arises: What are we-to put in their place? Here, again, inevitably we are brought to consider the effects upon the situation of the de-rating proposals. In the standard year, the loss of rates due to de-rating will be, as I have said, £24,000,000. Of course, that sum has to be made up by the Exchequer, but is it not evident that if we can pray in aid this vast sum of money to enable us to adjust these inequalities between one locality and another, our operations are going to be infinitely more powerful and more effective than if we had to rely upon some trifling sum? I notice here what has rather surprised me, and that is the complaint of the Liberal party that we are unnecessarily mixing up the relief of burdens with local government reform. I say I am surprised at that complaint on the part of the Liberal party, because that was not always the opinion of the Leader of the Liberal party. [HON. MEMBERS: "Which one?"] The one that is not here. In 1912, the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) was Chancellor of the Exchequer, and he set up a Departmental Committee upon local taxation and the relations between local and Imperial taxation. Before they commenced their work, he wrote them a letter, in the course of which he gave them a fairly broad hint as to the lines on which they should proceed. After alluding to this question of the necessitous areas, he went on as follows: It is doubtful if any transfer of services from local to national bodies"— such, I suppose, as relief of the able-bodied unemployed— on the one hand, or any modification of the sources of municipal revenue on the other"— such as the taxation of land values— can remedy the injustice which is increasingly felt under the present system. It seems to me that this question of areas stands in the forefront of any question of legislation dealing with the relation of local and Imperial taxation. I see again in the Liberal Yellow Book, a, statement as follows: We are strongly of the opinion that a change that will have the effect of greatly reducing the aggregate of local burdens should he made the opportunity for carrying through a thorough-going reform of local government areas. We think it is preeminently a case where one reform should be made the opportunity for another. I am sorry the right hon. Gentleman is not here this afternoon to give us his account, his version, of what he wrote at that time. If he has changed his views now that he is in Opposition from what they were when he was in the Government, he will not be the first to have done that. All I will say, further, is that I notice that the House always takes a particular interest in the explanation of gyrations of that kind, and I hope, therefore, lie will not fail, when he returns to us, to give us a full account of his conversion.

I return to my question. What are we to put in the place of the present system of distributing national contributions? As far as I can see, there are three ways, and three ways only, that are open to us. The first one is to take certain services right out of the purview of the local authorities, to make them a national charge, and to put them under national administration. That is the course that was condemned by the right hon. Gentleman in 1912, and I think it is very possible that at that time he may have had in his mind some difficulties and objections which have become less vivid and more faint with the passage of time. Of course, to begin with, it means the apotheosis of bureaucracy. It means the creation of a new horde of officials from one end of the country to the other, whose duties would overlap and in some cases conflict with those of the local staffs. It would mean that it would really be impossible to separate the able-bodied unemployed from the ordinary person who is an applicant for poor relief, for one class constantly passes into the other. It would mean a serious embarrassment of the unemployment scheme, because, if you are going to make the relief of the able-bodied unemployed a national charge, on what scale are you going to pay them? Are you going to give them a scale materially lower than unemployment insurance benefit? I should not ask that question of hon. Members opposite. I should rather ask it of Members of the Liberal party, but hon. Members opposite would raise very strong objections to that.

On the other hand, if you are going to have a single counter, at one end of which you will have people giving and receiving unemployment benefit for which they have paid their contributions, and at the other end of which they are going to receive relief, of exactly the same amount, for which they have paid nothing at all, that is what I mean by saying that it is going to be a serious embarrassment to the unemployment scheme. Finally, there is the most fatal objection of all, and that is that a plan of that kind would utterly fail to solve our present problem. It takes no account of the relative wealth or poverty of different districts; it takes no account of the differing needs for different services or of differing costs of those services in different localities. You may have abundance of employment in a place where the needs are high and the rate-able value is low. It is obvious that this question of unemployment is only one of several facts which have to be taken into account.

Then there is the second course, which is to take the local expenditure as the basis for determining what should he received from the State. I turn that. down at once, because that is the very principle which, broadly speaking, is to be found in our present system of distribution. It is the very one which has brought about the necessitous areas—[Interruption]—the very one, in conjunction with other circumstances, which has brought about the necessitous areas. I say that that is not a possible solution of the problem that we have to face. There remains only the plan upon which we stand, the Government plan that national contributions to local services shall be distributed, not in accordance with what the local authorities spend, but with what are their needs. The needs, of course, must include relative ability to pay, and I submit to the House that that is not merely the only equitable solution, but it is the only one which is going to find a practical remedy for the ills from which local government is suffering today.

If the Government scheme is complicated, so is every Finance Bill, but the complications in the Government scheme arise from the fact that the changes which it would bring about are so great that they cannot be effected at a single step, and, therefore, we have had to introduce a great number of supplementary provisions in order that we may ease the transition from one condition to the other over a period of years. Those are the things which complicate a scheme, the main ideas, the main features, of which are comparatively simple. To start with this rating reform, we sweep away a large source of revenue of the local authorities which exists to-day, and we replace it with a larger sum, but that sum is to be, instead of a percentage grant, instead of a grant based upon something which was received 20, 30, or 40 years ago, based upon needs, which are to be reviewed from time to time. While the block grant is to be recalculated every five years, the amount of it is to be fixed for each year in any period of five years. The distribution among the counties and the county boroughs, first of all, is to be partly, and ultimately entirely, made according to a formula. The result, I anticipate, will be that each local authority will be secured resources which will be adequate, not merely to carry on the services as they are to-day, but to allow for a reasonable expansion during the five years' period for which they will last, in accordance with the public conscience and the demands which the increasing revenues of the country will permit.

I must say that I have been very much astonished at suggestions made in quarters, whose sincerity I do not for one moment doubt, that a system of block grants is going to injure or even sometimes, it is said, to starve the health services, and particularly the maternity and child welfare services. If I thought for a moment that that would be so, I never would allow it to go through, but I am convinced that those fears are utterly groundless. It is the greatest mistake in the world to think that a percentage system always results in achieving the ends which those who started it had in view. There are many cases today of localities which are comparatively wealthy, but which will not accept the bribe which is offered to them by the Government, because they do not want to put up their rates. There are other cases of authorities which would gladly extend their services, but which cannot, even with the aid of the 50 per cent. given by the Government, afford the money which is necessary. So again we get discrepancies between the different towns and localities which are not at all proportionate to their needs and which arise out of this percentage system.

Here are some figures showing what is happening to-day. Leaving out of account three or four wealthy towns which have an exceptionally high expenditure upon these particular services, the average grant received by the authorities throughout the country from the Government in respect of their maternity and child welfare services is about 5d. per head of the population. I take one or two towns which are under the average, and which are therefore not getting the average maternity and child welfare service. First there is Oxford, a comparatively wealthy place with nearly £8 10s. rateable value per head of the population. Its maternity and child welfare grant to-day is 4d. What will it gain under the scheme?

Mr. J. JONES

Ninepence!

Mr. CHAMBERLAIN

The hon. Member is 16 years out-of-date; we can do much better than that to-day. The gain in the first five-year period will be 26d., and the final gain when the full formula comes into operation, 31d. per head. I take an entirely different case, that of Merthyr, whose rateable value is only £2.6 per head. The maternity and child welfare grant is 4½d.; the gain in the first quinquennium will be 73d. per head, and when the final formula is in operation it will be 108d. Dudley has a rateable value of £3 5s. per head; its maternity and child welfare grant is only 2.3d. per head; in the first quinquennium it will gain 65d. per head, and in the final operation of the scheme, 124d. I take one more case, that of Tynemouth, where there is special need; the rateable value is £4.1, and the maternity and child welfare grant is 3.8d.; the gain on the first quinquennium will be 162d., and when the final scheme becomes fully operative, 206d. per head. With a comparison of these figures of the gain per head with the amount that is being spent on maternity and child welfare services to-day, which on the average for the whole country is 5d. per head, is it not perfectly clear that the formula will give ample resources to every locality to deal with these services, and to multiply then, many times? There cannot be any question about the adequacy of the amount of money for these services. After all, this is not: an expensive service, and it does not take much money to produce considerable results. I have taken a good deal of trouble to protect these services in the Bill.

In Clause 75 it is provided that in the case of county districts, voluntary associations will get, in addition to the population grant, an increased grant in order to enable them to carry on that service. Again, under Clause 83, the voluntary associations are protected, because the scheme which has to be prepared by the local authorities showing the amount of contribution which will be given to them, has to receive the approval of the Minister, and he has the final say as to what the amount of the contribution may be. Then it may be said: "It is true that you are going to give these ample resources to the local authorities, and that they will have little excuse for neglecting that service, but, unfortunately, some local authorities are backward, they may be interested in other things, and they may not care to spend money upon this service which so many of us think so vital."

I ask people who take that view to look at Clause 86, where they will see that the Minister has power, such as he has never had before, to take away the grant, or that portion of the grant which he may think right, from any local authority which is not keeping up this service to an adequate extent. When you compare that power with the power which I have now not to give a grant where local authorities refuse to carry out the service, you will see that the powers given under this Clause are really more effective, and will enable me to exercise far more influence to see that these services are kept up to the mark, than I have ever had before. I will only say further on that point that here, again, if in the course of the Committee discussions any good reason can be shown to me why the Clause, as drafted, gives insufficient protection to local authorities, or rather to this particular service, I am ready to consider any Amendments which may be put forward. There is no service to which I personally attach more importance, and in which I take a greater interest, than maternity and child welfare, and I am not going to allow any consideration to interfere with the fullest possible development being afforded to it.

How do we propose to measure these needs, in accordance with which the national contributions will be distributed? The ingenious and carefully worked out formula which is to be found in the Fourth Schedule, and which is to be the automatic distributor of the national contributions, has been received with a good deal of cheap satire. Of course, it is very easy to present any mathematical formula in such a way as to seem ridiculous to those who have never had an opportunity of learning algebra. At any rate, the principles on which the formula is based are not difficult for anybody to understand. What, after all, is really the principal factor which governs the need of a locality? Obviously, it is population. Population is the main basis of the formula, but, of course, population is not itself the entire measure of the need. We have also to take into account the relative wealth and poverty of different districts, and so the next two factors are taken together, namely, rate-able value per head and number of children under five. They are used to weight the population, to increase it in proportion as these two factors are taken into account.

A certain amount of criticism and inquiry has been directed to that part of the formula which concerns the children under five. It is thought that probably too much consideration has been given to it, and it is suggested that the needs which are brought into being because of the existence of a number of children under five arc not sufficient to allow for the great weight which has been attached to it in the formula. That criticism is based on a misunderstanding. We have not only to have regard to the actual needs created by the presence in a population of a number of children, but we find that we can safely take that as a measure of the relative wealth and poverty of a population. It is a fact that you will find a larger proportion of children in the poorer districts, and it would not do to rely only on rateable value as a measure of relative wealth and poverty, for a number of reasons, one of which is that we have not yet arrived at absolute uniformity of valuation throughout the country, although we have taken a long step towards it. Therefore, we must take these two factors, rateable value and number of children together. Applied together to weight the population, they will be found to indicate a general index, both of the needs and of the relative wealth and poverty of the district.

There remain two other factors which come into operation only in abnormal circumstances. One has reference to abnormal unemployment, and I do not think that that is a factor which anybody would doubt. The other has relation to the sparsity of population in certain rural areas. It must be fairly obvious that, where you have the population scattered over wide distances, the same services must necessarily be more costly than if the population were concentrated in small areas. Therefore, each of these factors plays its part in the formula. I do not pretend that this formula is perfect; I do not think that it would be possible to find any formula which would work out with mathematical accuracy in every case, even if you discovered what mathematical accuracy was. A great deal of care has been taken in testing out the formula in many instances in my Department, and I observe that, although some very clever experts have tried their hand at improving it, they have not succeeded in convincing any local authorities that their improvements are any better than ours. With regard to the financial proposals of the Government as a whole, after discussing them very fully with members of the most important associations of local authorities, I find that very little difference of opinion is now left between us, and that I have every prospect of arriving shortly at a settlement with them, which will be equally satisfactory to them and to me.

I come to what, perhaps, is the hardest part of my task, and that is to explain the working of the financial provisions. I realise that to those who, like myself, are not gifted with mathematical minds, this question does require a most intense application and the closest study. I hope that in the Second Reading Debate we shall avoid the danger of becoming too parochial. After all, we may at a later stage have to enter the wood and examine the individual trees, but I think that at this period what would be most valuable would be that the House should address itself to the broad principles of our scheme, that they should consider their application to the nation as a whole, and that they should not be too particular to find out—I say at this stage—whether one local authority half a generation hence will be a little better or a little worse off by reason of the factors. If hon. Members will look at Clause 69, they will see that the aggregate of all the block grants to be given to counties and county boroughs is to be called the general exchequer contribution. That contribution in the first period is to be composed of the loss of rates and the loss of grants in the standard year, to which is to be added a sum of £5,000,000 a year.

That loss of rates and grants in the standard year remains a constant quantity over all succeeding 5-year periods, but the sum of £5,000,000, the new money which is to be put into the first period, is to be varied hereafter in subsequent periods as Parliament may determine, but subject always to the first of the several guarantees contained in the Bill. That first guarantee is contained in paragraph (c) of Subsection (1) of Clause 69, and as it is perhaps a little tricky in its wording I had better try to explain its implications. The purpose of the guarantee as originally proposed in the White Paper issued last June was to maintain over any quinquennial period the same ratio between the total Exchequer grants and the total rate-borne expenditure of the country as had prevailed at the beginning of the preceding 5-year period. The purpose of that was, of course, to ensure that if during the 5-year period preceding the local expenditure had gone up, that would attract a larger Exchequer contribution in the succeeding 5-year period.

But the guarantee which is given in this paragraph is even more favourable to the local authorities. It is so for this reason. The total Exchequer grants over the country include not only the block grant, but also certain percentage grants which will still be paid in respect of education, police, housing and some other services. Broadly speaking, the percentage of the Exchequer contribution to those specifically-aided services is 50 per cent., but the proportion of the block grant to the other local services is less than 50 per cent., being only about 40 per cent. Therefore, if in any 5-year period the expenditure on education and police were to go up out of proportion to the rest, that would mean that a larger proportion of the total Exchequer grant was at the rate of 50 per cent., and if the general ratio over the whole were going to be kept the same, that would mean that the 40 per cent, might go down. Therefore, in our new calculations we are leaving the Exchequer contribution to the percentage-aided services out of account altogether, and the effect of the guarantee as drawn and as it appears in this paragraph is that an increased expenditure on education, police or those other specially-aided services will not only attract its own relative 50 per cent. but will also mean that there will be increases, too, in the block grant from the Exchequer.

I will pass over the provisions which are contained in Sub-section (2) of the Clause and a later Clause, No. 112, which provides for the amount of the county and county borough apportionments being composed partly of losses on rates and partly of the sum to be distributed on the formula, that part beginning with 25 per cent. and gradually rising in 5-year periods until the whole of the grants are distributed on that basis. I do not think these provisions offer any difficulty.

I will come, then, to the next set of guarantees, which are to be found in Clauses 72 and 78, and which apply to county councils and county borough councils. There are two guarantees, relating to different periods. The first says that in the first period of five years not only shall no county and no county borough suffer any loss by reason of the change, but that they shall actually be guaranteed a gain of not less than 1s. per head of the population. The second guarantee is that in the second five-year period and in any five-year period after that every county and every county borough shall be guaranteed against any loss of rates and grants as calculated in the standard year. Those guarantees are subject only to two qualifying conditions. One is that if in a subsequent period the weighted population of the county or county borough has gone down, which would mean, of course, that its needs have gone down, this guarantee will go down in proportion. The other condition, which is not very likely to come into operation, applies in the case where the total Exchequer contribution to the whole country has gone down, which it would do if the local expenditure went down. In that case also the guarantee of the minimum would go down in proportion.

I will pass to another difficult point, and that is the distribution of the grants within the counties. It will be seen that it is proposed to make a direct block grant to each county district, and the way in which that block grant is to be calculated is set out in the Fourth Schedule. All the county apportionments of the country outside London are to be added together and are to be divided by the sum of the population of those counties. The result would be to give an average rate per head of the population of the county apportionments, which is estimated, at the beginning, to be somewhere in the neighbourhood of 300 pence per head. Then half of that rate, multiplied by the population of every urban district, would be the block grant which is to be given to that district; and one-tenth of the rate, multiplied by the population, of each rural district would be the grant to be given to that rural district.

I have had three questions put to me in respect of this arrangement, the whole implications of which are not, perhaps, very obvious on the face of it. As these questions may occur to hon. Members, I would propose to state them and to give the answers. The first question is: "Why do you take a uniform grant for these county districts all over the country?" What is the alternative? The alternative would be to take a grant which varied according to the apportionment in each county, but what we have to compare in these cases is like with like, that is to say, we have to compare a district in one county with a like district in another county, and it would be very unfair if, because a county were rich, a poor district were to get less than an equally poor district in another county which happened to be poor. Therefore, the only way of getting fairness and equality between districts with like conditions is to make a uniform grant throughout the country.

Mr. ARTHUR GREENWOOD

May I put this point? I think the right hon. Gentleman has made a slip in his figure. Instead of one-tenth, it should be one-fifth.

Mr. CHAMBERLAIN

No, one-tenth is quite right. The rural district is a fifth of the urban district. Urban districts are one-half, and rural districts are one-fifth of a half. The next question is: "Why do you give the same grant to two districts with the same population but having different wealth?" The answer to that is that a grant given as we give this grant, on a population basis, has the effect of equalising the rates. Supposing there is 50s. to be given; 50s. would be 1s. in the £ on a rateable value of £50, but it would be 2s. 6d. in the £ on a rateable value of £20. Therefore, the lower the relative wealth of a district the higher the rate in the £ which is the equivalent in the population grant given to it, and, as hon. Members will remember, as these county districts are subject to a county rate which is levied at the same rate in the £ all over the county, the effect of the population grant is to give the poorer districts more help towards meeting county rates than the richer districts.

The third question is: "Why are the rural districts only given one-fifth of what is given to the urban districts?" The answer to that lies in the different charges which will now fall upon the two kinds of authorities. When you have taken away the charge for the highways from the rural districts, there is very little left for them to levy rates for. On the other hand, the urban districts will still have their own streets to maintain, they have charges for sewerage and for disposal of refuse which are much heavier than in rural districts, and, of course, finally, they will have to bear their share of the charges of the roads in the rural areas. Therefore, we have found, taking these proportions, which certainly are arbitrary, and working them out in various instances throughout the country, that on the whole they appear to us to give a fair and equitable share as between the two kinds of authorities. It is pointed out in a very interesting chapter on rating reform in the Yellow Book that it is extremely difficult to obtain redistribution of rating areas, because under any such scheme some areas must lose, as in equity they should, in order that other areas may gain. The Government's scheme does not escape that criticism, but it mitigates it.

Under Clause 76 you find a still further guarantee which is designed to ease the passage from the one state of things to the other, not entirely at the expense of the local authorities but with the aid of the National Exchequer. Where, owing to this redistribution of the charges for Poor Law and highways there are areas in a county which gain and others which lose, we guarantee to the losing areas that the whole of their loss shall be made up to them in the first year. Half of the deficiency is going to fall upon the Exchequer and the other half will come from the areas which gain in proportion to their gain, and that sum which is made up to them in the first year and which prevents their having any loss in that year, will be gradually diminished by one-fifteenth during each of the succeeding 14 years, so that at the end of 15 years it will have disappeared completely. Bearing in mind how many circumstances and factors there are which affect the rates in any particular area, bearing in mind that we are going to have these periodical reviews of the boundaries of various county districts by counties under one part of this Bill, I think we may safely prophesy that the changes in rates which are so diminished by the spreading of them over this long period of years will practically be swamped by other changes due to other circumstances, and that to the ratepayers themselves they will become practically imperceptible.

6.0 p.m.

There are similar provisions easing the burdens which are applicable to county boroughs. I will add this in relation to county boroughs, that there is one circumstance in which they differ widely from the circumstances of the counties. In the counties we are spreading the Poor Law charge over a wider area. In some of the county boroughs we are going to narrow it, because to-day you have unions which extend over the whole or a part of the county borough, and also extend beyond it. Since the charges for Poor Law arise mostly within the county boroughs, that means that the areas outside are to-day bearing part of the charge for Poor Law relief belonging to the county borough. Under this proposal in the future the county borough will have to bear the whole cost of its own poor. The effect may be that you will have certain county boroughs losing by the contraction of the area of the Poor Law and it is that provision with which we are dealing here. We make our guarantee of a gain of one shilling per head in the first quinquennial period and against any loss they may incur in any subsequent period; and we make it apply in the case of the county boroughs after the changes in respect of the Poor Law have taken place. So that even if the county boroughs themselves lose by having this area contracted, it is made up by the guarantee. Each County Borough is bound to gain in the first five-year period, and it cannot lose in any subsequent period on the calculations of the standard year.

I think I have dealt with most of the outstanding provisions, but I should like to make one general observation. Some of the critics of the Bill have devoted so much attention to the comparatively small number of areas which stand to lose under the formula, but they have lost sight of the vast majority of areas which gain, and in consequence they have got a wrong perspective in regard to the general effect of these provisions. I will give to the House the figures which will present rather a truer picture than some of those which have hitherto been drawn. When the scheme is in full operation it is estimated on the figures in the Financial Memorandum that out of 62 counties 55 will gain, and only seven will have to apply for the minimum grant. That, of course, does not mean that they will loose, but out of the 62 counties 55 will actually gain. In the case of county boroughs the proportion is not quite so good on account of those changes in the Poor Law to which I have referred. Out of 82 county boroughs it is estimated that no less than 71 will gain, and only 11 will require to ask for the minimum grant. Furthermore, taking the separate rating areas in which the general ratepayers gain in the first quinquennial period, they contain over 70 per cent. of the population of the country, so that one may say that more than seven ratepayers out of 10 will be definitely better off in that period of the first quinquennium. After the first five years' period most of those seven will continue to gain and gain more, and none of them can lose. As for the three that remain, they lose nothing in the first year, and if, owing to the spreading of the charges for Poor Law and highways there may be some slight increase in their burden, it will be spread over 15 years. One must not forget that the de-rating proposals are to come into force at once, and therefore we may expect a general increase in the prosperity of the country, and a general lowering of the burden of unemployment.

Mr. ERNEST BROWN

Will the right hon. Gentleman tell me whether these figures are based on the 1926–1927 calculations or the standard year?

Mr. CHAMBERLAIN

We cannot base them on the standard year, because we have not the data of the standard year yet; therefore they are based on the 1926–1927 calculations, and to that extent they are like all figures, to a certain extent hypothetical. One of the advantages of the block grant system as compared with the present system of percentage grants is that it will enable us to give a larger discretion to local authorities in the conduct of their business. With every increased expenditure, even if it be of the smallest kind, it carries with it a corresponding increase in the amount to be taken from the Exchequer, and it is inevitable that there should be the most precise and meticulous examination of the accounts by the central authority. That will be no longer necessary under the block grant system. We can then simply hand over the grant to each local authority, and as long as they maintain a reasonable minimum standard of service we can withdrawn all those irritating examinations of small details and give them the opportunity of that independence and initiative which I think they value above all things. I anticipate, not only that that will be exceedingly popular among local authorities on that account, but that it will enable us to achieve some economy at Whitehall, where we shall be relieved of some of the staff now engaged upon trifling and absurd details.

The system carries with it the danger that if you are not careful you may find here and there a locality which neglects some particular service, or which allows its whole system of administration to fall into a certain amount of decay. Therefore, it is necessary to provide some safeguard so that the authority which is going to hand out the money of the taxpayer may see that that money is properly expended. This will be found in Clause 86, where the Minister is given power, if he is satisfied that the local authority is letting down the health services, if he is satisfied that thereby the health of the inhabitants or some of them is in danger, or likely to be in danger, to withhold such part of the grant as he may think just. The Minister has also to take into account the case where an authority indulges in gross extravagance and expenditure upon needless services. I do not imagine that it will be necessary to use those powers very often, if at all. I think the fact that they are held in reserve will probably be sufficient to enable the Department to exercise a necessary influence over the locality. There is also a safeguard against any abuse by the Minister of his powers, and it is provided that he shall not use them without at the same time laying a report before Parliament and getting Parliament to agree to it.

I have little else to say about the Bill. Part VII deals with the transfer of the property and liabilities of guardians to the county councils and the transfer and compensation of officers. I would also call attention to Clause 94, which deals with the case of certain boards of guardians who now have outstanding debts of a very considerable amount. If we are to ask the county councils to take over these outstanding debts for which they themselves have not been responsible, it is only reasonable that we should do something to mitigate that liability before we ask them to take over that extra burden. So it is provided here that as an extra charge on the Exchequer redemption of the principal of these debts is extended to a period of 15 years instead of 10, during which all interest will be remitted, and if the repayment of the principal itself exceeds the rate of 1s. in the £, the authority will be relieved altogether of the excess over 1s. That is a generous provision, and I think the councils will find no difficulty in shouldering that burden. Part VIII contains a number of general provisions and Clause 113, which, must be read in connection with the Eleventh Schedule, directs the application of the relief given in respect of freight-transport hereditaments to traffics which are selected as being those which will give assistance where it is most needed.

It only remains for me to express my thanks to Members of the House for the extraordinary patience with which they have listened to a long, and, I am afraid, a very tedious account. I have not thought it desirable to spend very much time upon the Amendments which are on the Paper, but when I looked at those Amendments I could not help thinking of the tale of a certain city which was summoned by the King to deliver up its keys. When the King came before the city there came out to him a deputation of burghers who sought his permission to lay before him eighteen reasons why they should not deliver up the keys. The first reason was that there were no keys, whereupon His Majesty graciously allowed them to dispense with the other reasons. I have counted up the reasons for the rejection of the Bill contained in these two Amendments and I make them 19, one better than the burghers in my tale. I cannot help making the reflection to myself that if the two Oppositions had found one good reason all the rest would have been superfluous. I venture now to make one prophecy, and it is that this scheme of Government reform, although it may well be altered in its details in its passage through this House, yet in its main outlines it holds the field, and that in the fullness of time it will take its place on the Statute Book as a courageous, comprehensive and successful attempt to remove anomalies and injustices which have too long been allowed to impair the magnificent structure of our local government.

Mr. A. GREENWOOD

I beg to move, to leave out from the word "That" to the end of the Question, and to add instead thereof the words: This House declines to assent to the Second Reading of a Bill which, whilst amending the Law relating to poor relief, perpetuates the evils of the Poor Law system and extends the vicious practice of unrepresentative persons being nominated to membership of elected bodies, makes no provision for the prevention of destitution, fails to make unemployment a national responsibility, and 'will not appreciably relieve the financial position of necessitous areas; will arrest the normal and steady development of local health services by the establishment of fixed block grants from the Exchequer and the imposition of a charge for treatment in hospitals, especially maternity hospitals, a proposal calculated to increase the already high mortality amongst mothers; inaugurates a system of rating relief that will be unfair in its incidence; and, by failing adequately to reimburse local authorities for loss of revenue, will add to the burdens of shopkeepers, householders, and other ratepayers. All Members of the House, I think, appreciate the extraordinarily heavy strain which has fallen upon the Minister in making his statement on this Bill, and I, for one, who, perhaps, disagree with him as much as anyone in the House, would like to say that I congratulate him on the way in which he has stated his case. We are all accustomed to expect from the Minister of Health a lucid statement of his Measures, and we have received such a statement, as lucid as his statements always are, this afternoon; and with much that he said I find myself in agreement. With what he said about the iniquities of the Poor Law, and the general mixed workhouses, we all agree, and I assume that that part of his speech was intended for the enlightenment of his own party.

Having said so much, I am bound to say now that I disagree with the rest of the right hon. Gentleman's speech. He started and finished his speech with the words "local government," and it is claimed that this is a Local Government Bill. It is no such thing. This Bill would never have been heard of if the Government had not been forced to deal with the problem of local rating, and I will attempt to show in a moment that the fact that this is a Local Government Bill now is a mere accident—that the Government at the start set out to deal with the problem of local rates. I may say at the outset that I am a strong opponent of the Bill. What is good in it is so small relatively to what is vicious that I hope to vote against it in all its stages. This Bill was born in sin and conceived in iniquity; it is the offspring of a demoralised and reckless father and a reluctant mother. The Chancellor of the Exchequer appears to be a little ashamed of his own child. His absence during the Debates on the Rating and Valuation Bill, and his absence from the Debate on the Second Reading of this Bill, provide us with grounds for thinking that he would like to deny paternity in this case, and the Minister of Health is left with all the hard work to do. It is a project of their combined minds, and it is well for the House to understand how this policy originated.

It originated out of the present state of trade; it originated out of the unemployment problem. Unemployment remained a stubborn fact; the situation, indeed, became worse, largely because of the Government's own sins of omission and commission. For that situation the Government had a remedy, which they had been applying since 1924. During 1925, 1926 and 1927, the remedy which they had for dealing with the economic situation of the country was the remedy of Safeguarding. No word in those years was uttered of this wonderful Bill which is now going to mean a great revolution and which is going to stand as a great achievement of the Minister of Health. At the end of 1925 or the beginning of 1926, the Minister of Health published his Poor Law proposals. No hint was there then that this was part of a great scheme for the regeneration of local government, no hint that these Poor Law proposals were an instalment of a general policy for the revival of trade; and when, in the following year, owing to the opposition of the Tory party itself, those Poor Law proposals were allowed to fall into the background, the Minister did not rise indignantly and say, "You are ruining the greatest Measure of modern times, which I have in my mind." At that stage this Bill was not in anybody's mind. During the year 1927 this scheme was not in anybody's mind. It was only in 1928, when unemployment was becoming more menacing, and when—and this supplies me with the reason for the Bill—the grisly spectre of the General Election was coming nearer and nearer, that the Government was roused from its stupor and had to do something to deal with the situation.

That is the history of the genesis of this Measure. The real explanation for it lies in the Government's uneasy conscience. They knew that they had been false to their stewardship; they remembered the words of the Prime Minister in 1924, at the General Election: The Unionist party would be unfaithful to its principles and to its duty if it did not treat the task of grappling with the unemployment of our people and with the serious condition of industry as a primary obligation. That was the statement in 1924. In 1928, the Government were driven to do something to deal with the situation which they had neglected. After their fine promises and feeble performances, something had to be done which would revive the flagging hopes of Members of the Conservative party, and, the more clear to the Government its peril became, the more panic-stricken it became. The result was this serial publication, already issued in several numbers, and probably not yet completed, which is regarded as the Government's great contribution to dealing with the unemployment problem and the problem of trade. I submit that to call this Bill a Local Government Bill, and to regard it as a great Measure of local government reform, is wrong, because the real origin of the Bill arises out of the state of trade, and the success or failure of the Bill has to be judged by its effect on the unemployment situation.

This scheme, it is quite clear, has not been long in the consideration of the Government. It has never been part of the Conservative party's policy. It is not something that the Government has kept up its sleeve until its last year of life in order to produce good results in the constituencies. Indeed, the whole idea of de-rating and of relieving people from rates is foreign to the Chancellor of the Exchequer's policy. From 1925 onwards his policy was deliberately directed to pushing more and more burdens on the ratepayer in order to save the Exchequer. This idea about helping necessitous areas is a new idea in the mind of the Conservative party. Every time in this Parliament that the question of necessitous areas has been raised, a speech of mine in 1924—to which I adhere and which I hope the Minister of Health will do me the honour of reading again—has been trotted out in reply to the case made on these benches that something should be done for necessitous areas. The Minister's case as late as June of this year, when the Rating and Valuation (Apportionment) Bill was before the House, was that you cannot deal with necessitous areas as such; but the Government within the last month or two have had to bow to the pressure of public opinion, and are now making a virtue out of necessity, because the fact is that they have been driven to do something on the lines of assistance to specially depressed areas.

The Bill is an eleventh-hour invention to get the Government out of a difficulty. The germ of it, as has been admitted to-day by the Minister, was born in the fertile but feverish brain of the Chancellor of the Exchequer. It has been hammered into a scheme, the scheme now before us, by the Minister of Health. What does it purport to do? It will be within the recollection of Members of the House that, when the House had risen after the end of last Session, the Prime Minister sent a letter to the Chief Whip. That letter was for the particular benefit of Conservative Members, but it was regarded as being of such public interest that it was issued generally to the Press. I will not read, because it would not be fair to remind hon. Members opposite of it, the reference in the first paragraph to the confusion of thought among Unionist Members, but the part to which I desire to draw attention is this: It will he well for our friends to remember that the main policy of the Government for the permanent relief of pro- ductive industry is the great scheme of de-rating which was initiated in the Session now closed. That is a declaration of policy on the part of the Government, and for the Minister to put himself in the line of descent of the great local government reformers, after that, is a device on his part to draw attention away from the real motive of this Bill and the things that the Bill ought to do.

Let us see how the scheme developed once the principle was established of doing something. The Chancellor of the Exchequer stole a page out of the book of people on this side of the House. He said, "These people have been talking about rating relief for a long time; let us do it. Let us steal their thunder and use it for our own purposes; we shall do it much more cleverly than they will, because at the end it will not be real and we shall get all the gain." That would be his view as Chancellor of the Exchequer. This idea of de-rating, when it was applied, was applied in such a way as was bound to lead the Government into very serious difficulty.

The Government chose to relieve the rates of selected persons through selected hereditaments. Once they did that, their troubles began. They reduced the amount of money forthcoming in rates to local authorities from the various occupiers of premises in their areas by a very substantial sum; and they not merely did that, but they reduced very substantially the rateable value of the various local authorities in the country. The Government, therefore, had to fill up two holes; they had to fill up the hole due to loss of rates because of the de-rating of certain kinds of hereditaments, and they had to fill up the hole due to loss of rateable value and to the fact that a penny rate in no area would go as far or raise as much as it had done before. Therefore, new grants had to be devised to deal with that situation, and this is where the sinister figure of the Treasury first appears. For many years the Treasury has had an anxious eye upon percentage grants. For many years it has desired to destroy percentage grants. It saw here an opportunity for almost entirely destroying them in two services, and the Chancellor of the Exchequer had his way and his block grant was introduced though that did not end their difficulties.

Then the Government said: "We must appear to be doing something for necessitous areas." How could they do something for necessitous areas? They said: "We can use a formula and we can widen the area." In doing those two things, and particularly in spreading the burden, they were involved in alterations of the powers of the areas and the functions of local authorities and so, ultimately, at the very end of all this series of moves, we arrive at the local government changes. The local government changes are not the beginning. They are the very end of the scheme, and the position is that, after all this series of more or less logical steps, we arrive at a scheme under which the whole fabric of local government is to be shaken to its foundations, the relations between the State and local authorities revolutionised and the best interests of local government sacrificed merely to save the Government's skin, to provide it with something it can hold up to the country as being an attempt to deal with the state of trade. No one is going to regard this Bill as a serious contribution to the solution of our local government problems. It is a Bill to cover up the Government's own cynical neglect of the unemployment problem for four years. It is a Tory Government (Salvation) Bill. Like many Bills, it will fail in its purpose, but there is no doubt about the intentions of the Government. I say that in order to put in what I regard as the right perspective, the evolution of this Measure. As for the Measure itself, I do not propose to cover its proposals in any detail, at least not tonight, nor am I going to say much about the de-rating proposals, on which many of us said a great deal last Session. But I must take objection to the Minister's statement that £24,000,000 is to be taken off the back of industry. That is not a fair way of putting it. Is £400,000 off breweries and distilleries taking it off the back of industry? When the right hon. Gentleman speaks of taking it off the back of industry, he means taking a burden off. There is no burden where profits are now being made. [Interruption.] If hon. Members will explain to me the burden from which breweries to-day are suffering I shall be very glad. There is no burden where firms are making large profits. There is no guarantee that the derating that they get will inure in any way at all to the general advantage of industry. There is every reason to believe that rating relief will merely swell profits. If you go to to the other end of the scale, the relief given is so little that it will not save the industries that are the worst hit and as far as the coal industry is concerned, it is going to make the situation worse and not better. To argue that the whole of the £24,000,000 is going to be taken off the back of industry in a way that suggests that that £24,000,000 is going to be productively used in industry is to suggest what is not true.

I should like to say something about the block grant. We have heard a most astonishing criticism of the percentage grant system from the Minister, so astonishing that I really must read it before I would venture to reply to it. I do not think he means all he says, or says all he means, about the percentage grant system. Let me recall a Committee that was appointed, I think in 1921, by the then Chancellor of the Exchequer, the right hon. Member for Hillhead (Sir R. Horne), over which Lord Meston presided. Whether it was like the Committee of the Prime Minister to which the Minister has referred, whether the Chancellor of the Exchequer gave a broad hint to Lord Meston or not, I am not in a position to say, but that Committee was appointed to examine this question of percentage grants. It was the most authoritative body that has ever examined this question. It received evidence from all kinds of official, national and local sources and unofficial sources. The Report of that Committee has never been seen. Suppose that Committee had arrived at conclusions that were favourable to the block grant, the Report and the evidence would have been published and we should have had the Report dangled under our noses as real authoritative evidence that we had to take into account in deciding the nature of the grants to be given to local authorities, just as to-day when the Royal Commission on Local Government agrees with the right hon. Gentleman he accepts their proposals. The Meston Committee never did report, because the bulk of the evidence given to it was against the conclusions the Chairman would have liked to make. That Committee has been killed by the present Chancellor of the Exchequer, because he knew perfectly well that a Report based on the evidence would have made a scheme like this utterly impossible. If that is not true, I challenge the Government to print the evidence, because there is no denying that the bulk of that evidence was in favour of the percentage grant system. It happened to be inconvenient. It was allowed to die and now, in face of that expert evidence, the Government commits itself to the policy of block grants.

The block grant is really a Treasury device for saving the money of the taxpayer. If it does not do that, it fails in its purpose. That is its motive, and it is not any use submitting long tables of figures showing what the local authorities are going to get. Unless the block grant saves money for the Government it has failed. The right hon. Gentleman at the end of his speech told us how he believed a larger discretion to local authorities was good, and how it would lead to economy at Whitehall. Economy at Whitehall means the spending of less money, directly or indirectly, on our local Government services. That is the object of the block grant system, and no manipulation of a formula, no publication of long tables of figures about pence per head gained or poundage rates and so on will ever get me to believe that the motive behind this is not the limitation of Treasury expenditure. Now we are told there is to be some new money found. That would look as though the Chancellor of the Exchequer is being generous, but we know him too well. Part of the £5,000,000 he steals from a fund which he has raided before. The rest of it is a very tardy measure of justice for the impositions he has placed on local authorities since he became Chancellor of the Exchequer, and if the £5,000,000 were £15,000,000 the local authorities would have no cause to thank the present Government. The question of block grants is a very difficult one. It is often misunderstood. If it means the bringing together of cognate and allied services there may be something to be said for it. I do not know; I am not saying definitely. But where it consists in bringing together services which have absolutely no relation to one another at all, the results are bound to be absurd, and to combine in a block grant roads and public health would seem bound to lead to absurdity. There is nothing in common between them.

As a matter of fact, the Government have not really combined the health services and the road services. It only shows how complicated this business is. They have been driven, whether they like it or not, for certain roads and certain health services to keep to the percentage grant. That shows the complication of it. Now we are going to have certain roads and health services lumped together in a block grant and certain others are still to come under the percentage grant system which the Prime Minister himself thought was an advantage in the circumstances. But I would ask this. If it is right to bring into one grant roads and health, why not education? Why not police?—Why not education?—Because the President of the Board of Education three years ago had to pick the chestnuts out of the fire for the Chancellor of the Exchequer. He tried it on. He would have loved to do it, but he was unable to do it, and that is the reason why education is not in the block grant. There may be reasons why the police are not to be included in the block grant, but it is a most extraordinary thing that the Government should have chosen just roads and health for the block grant system. In view of the wonderful advantages claimed for it by the Minister the Government are doing wrong in not bringing everything under the block grant system, but they know they cannot and they know it would be unwise to try. They know if they did try it would probably ruin the scheme. They know they are having the utmost difficulty in the world in forcing the block grant for roads and health services down the throats of the local authorities.

The Minister would have us believe that the operation of the block grant will be beneficent and that it is not going to retard the expenditure of local authorities on their social services. I believe if you stabilise the grant for five years you cannot help but impede the development of health services. It is no good telling them what you are going to do in the fourth year of the quinquennium. It is no good telling them you are going to maintain a fixed proportion of expenditure. They have four years to live until the first year before any grant comes along. It means either that the additional expenditure will have to be borne entirely out of the rates, or that that additional expenditure will not be undertaken and the service will not be developed. The right hon. Gentleman says that if he thought that this scheme would injure the health service he would withdraw it. It cannot but injure it. The five years stabilised grant means relative stagnation. It means either stable expenditure or stable services. Developing services will mean developing rates. Faced, as many local authorities will be, with that choice, is it not obvious that the health service is bound to suffer? Therefore, I hope that, having given this pledge, the right hon. Gentleman will proceed to withdraw his scheme.

Then, on the question of the necessitous areas, the Government regard themselves as having satisfied their claim. Nothing could be further from the truth. The right hon. Gentleman quoted the case of Pontardawe where we were told that there was an expenditure of 7s. 0½d. per head in respect of the maintenance of the able-bodied unemployed alone. Poundage on rates 1926–27, 15s.; poundage on rates under the scheme before the payment of the supplementary grant, 15s. 10d.; estimated poundage on rates under the scheme after the payment of the supplementary grant, 15s. Net result nothing. You cannot, where you have a basis which does not necessarily bear any close relation to need, take a formula like that based upon population and drag in at the end of it a qualifying factor for unemployment, and so on, and get any results which will yield approximate justice for necessitous areas as compared with non-necessitous areas. All these figures are useful as showing what are the disparities. None of these figures will work out like this. If you compare these tables you will find that there seems to be no apparent relation between the amount of help that local authorities get out of this scheme and the necessities of their case. There cannot be. I have worked through these tables, up and down. I have made tables of comparison of my own and the results are perfectly ludicrous. [HON. MEMBERS: "Oh!"] Of course they are. They are your figures; they are not mine. I hope that my mathematics are as good as those of the Minister and those who have been helping him. If you will work them out and make comparisons between types and kinds of districts in order to see the results of the operation of this scheme, you will see no correspondence between wealth and poverty, necessity and prosperity, and the effect of the scheme upon the rates of any given locality.

Therefore, the scheme breaks down on that point. That is bound to be so. I do not believe in these fancy formulas. I realise that you cannot have a simple, straightforward, general formula, but the result of a formula based on population with weighting factors of different kinds cannot but yield fantastic results. Those results become even more fantastic when for the distribution of grants in the county areas you use only the single factor of population, because in the larger municipalities, non-county boroughs, the larger urban districts, the very factors that ought to be taken into account, and which are taken into account in the case of county boroughs, are omitted, and the mere division is on the basis of population unqualified by any other factors. The result of weighting, and the result of this method of allocation within the counties, is to yield these extraordinarily curious results, which only go to show that the Government are not achieving in this scheme the purposes which they set out to achieve. I would draw the attention of the House to the 15 years' programme. Why have the Government to ease the blow? Because, had the formula applied fully in 1928–29 there would have been a revolution amongst local governing bodies. They have had to ease the transition to the worse days which are coming later. Of course, the present Government do not care about what is to happen to local government 15 years from now. There may be no Tory party. It is clear that where you have to use additional devices to provide additional money to satisfy the local authorities, you may be sure that at the end of that time local government in this country is going to be in a sorry plight when the block grant is fully in operation.

With regard to the general question of local government, since 1909, when the Royal Commission on the Poor Law reported, this party has been pledged to the abolition of the board of guardians and the Poor Law system as we know it. We are prepared for that, though when. I consider the method that is being adopted by the Government, and the implications of their own proposals, I am not at all certain whether we should not be wiser to keep the board of guardians as they are, bad as they are. I will explain why. The Poor Law system remains as firmly established as ever. The Minister means to keep up the Poor Law system. He says in Clause 4: "I am giving local authorities the power to break up the Poor Law. I am not going to impose it on them because they would not like it." Then he leaves for his son's son the kind of job which the right hon. Gentleman's father left for him. In 1888, if the counties had taken over the Poor Law, the right hon. Gentleman would not have been introducing his Bill. If he only had the courage under Clause 4 to make a clean break of the Poor Law system, somebody else later would not have the difficult job of taking on that responsibility.

The system remains the same. It is just the same old board of guardians' system as it was before. It is still a deterrent Poor Law system which discourages people in their trouble from going to the Poor Law authorities. It does not want to see them. It wants to be rid of them. That is the way the Poor Law system is working to-day. That is the way that the Minister of Health intends that it shall work in the future. He calls his committees guardians' committees. He is going to use the guardians, the guardians whom he has steadily taught during the last four years to reduce their scales of relief, and to refuse out-relief to able-bodied poor. These are the people who are to come in and run the Poor Law system because they are the people who are experienced. They have done it before. That proportion of non-elected people who know the ropes who are experienced, are the persons who are going to run the guardians' committee and not the directly elected representatives from the county councils or from the county district areas. We are still, then, shackled with the Poor Law system. What is even worse is the fact that the Minister of Health quite deliberately is allowing the spirit of the Poor Law to pervade the whole of local government.

7.0 p.m.

Take this question of the disqualification of members of boards of guardians. In future a member of a county council or a county borough council, whether he is a member of the public assistance committee or not, who receives poor relief is to be disqualified. I know that the right hon. Gentleman, if he could, would deprive such a man of his vote. We know that that is in his mind. Why should a man be disqualified from office because he has to go for help to the community any more than if he rents a subsidy house or sends his children to a subsidised school or takes advantage of the subsidised health services? What difference is there between disqualifying him and disqualifying Lord Birkenhead from sitting in the House of Lords? If Lord Birkenhead is to have a temporary dole while he is seeking work to maintain himself in that standard of life to which it has pleased Lord Birkenhead to call himself, if he is to be given a temporary dole of £5,000 a year which he is prepared to relinquish when he gets work, if the wages are high enough, why is it not right for the man who may receive a small measure of out-relief to carry on his public duties. It is bumbledom over again, and the Government deliberately mean to extend it. I look with apprehension also on the district auditor and the Poor Law system of the future. I look with even greater apprehension on this new proposal about compulsory powers being exercised by local authorities to demand payment in respect of certain health services. The right hon. Gentleman's argument is this: If a man is a pauper we can get money from him. We can charge him up. We can make it a loan. Why should a person who is not a pauper get the same service? You cannot have two methods of dealing with it. He does not say: "Let us abolish this silly system of relief by loan." He says "No, let us charge the other people the same." The right hon. Gentleman says in one of his latest memoranda: While the protection of the public health requires that a person suffering from an infectious disease should be given every inducement to seek hospital treatment, it is no less necessary that there should be no temptation to persons who can afford to pay the whole or part of the cost to look to public funds for free treatment or maintenance whenever they are ill. He says that in the case of infectious diseases it is very necessary that persons suffering from them should be taken into hospitals dealing with those diseases. It is equally necessary for the good of the community that the expectant mother should receive treatment, that the women with cancer should have the radiological treatment, which the right hon. Gentleman writes about in his Memorandum, without necessarily having to make payment.

The right hon. Gentleman, in a very moving passage of his speech, spoke of the friendly, familiar, accessible local authority, the guardian angel of the poor, the benefactor of mankind. "The are our local authorities," he said. "Have I overdrawn the picture?" He had not overdrawn the picture. Now, as regards our health services, he is going to substitute for that a cash nexus. He is going to substitute for this friendly, familiar, accessible authority, the guardian angel of the poor, a man with a notebook, and a whole series of Nosey Parkers who are going to go round into every cottage harassing the expectant mothers before they go into a hospital in order to raise some money from them. He is carrying the principle of the Poor Law into the health services, and, so far from his doing anything to destroy the Poor Law system, he is fastening it more securely upon the local government system. In doing so, he is going to injure the health services of the country and to put our local authorities in the position of having to inquire and collect money and make ascertainments when they ought to be rooting out diseases and their causes. He is going to divert the energies of our public health services and our medical officers of health from their right job to the job of a debt collector. What a reform of the health service! Yet the right hon. Gentleman believes that under this scheme the health service is going to flourish. Now the Prime Minister, speaking at Glasgow last Thursday, said: I believe that the passage of this Bill will afford a new jumping off ground and that we shall be able to take a great step forward in the conversion of our C.3 people to A.1 people. That is precisely what the Bill will not do. That movement will be impeded by this Bill. What it will do is possibly to convert some of our A.1 local services into C.3 local services to the national detriment; but it is not going to do anything to raise the general standard of physical well-being among the people of this country. The right hon. Gentleman professed a certain solicitude for our minor local authorities. I wish he would think over the wisdom of refusing the large non-county boroughs, the large centres of population, a right to handle the Poor Law system. This Bill is going to make serious inroads into the powers and into the independence of our local governing bodies. The Minister says that he knows the spirit of independence of these bodies, but he is going to undermine it in this Bill. I am not going to say that every little local authority with 2,000 population can conduct a health service; it probably cannot. That is not the point. The point is that, by this concentration of powers in the hands of counties and county boroughs, the Government are delivering a smashing blow against all the non-county boroughs, the large urban districts, which are efficiently administered to-day, and whose powers might well have been extended.

Whether you look at this Bill from the point of view of finance or from the point of view of local government, it fails to meet the present situation. Only the other day, the Prime Minister said: This is no time for those who are incompetent. It might well be applied to his Government. I must repeat again that this Bill is not a local government Bill. That is not its origin; it professed to set out to deal with trade and other employment. The Prime Minister gave more advice. There is much in this speech that will bear quotation, and I do not think he has heard the last of it. He said: The inefficient will have to make room for the efficient, and by that rule alone can British industry go through times such as the present, in which she is struggling for her existence. That may well apply to the Government, because the whole of this scheme, elaborate as it is, is based upon a very incomplete diagnosis of one part of the problem. They are trying to work out what they regard as a complete programme, a complete policy for dealing with the economic situation, on a foundation like that. If that is not incompetence, I should like to know what is. The problem of trade is one that goes far beyond dealing with local rating. We have always said that the problem of rates was a serious problem, and I am not nor are my friends on these benches against dealing with the rating problem. But we have never pretended that that was the one way out of the Government's present economic difficulties. It is true to say there are a number of industries in this country to-day which, if they were excused the payment of rates entirely, could not bridge the gap between cost of production and the prices which they can get for their products. If that is so, then this is not a complete scheme. It may be part of the Government's complete scheme, but so far we have heard of no other contributions to a complete scheme except the transference of miners.

The biggest problem which faces the Government to-day is the question of unemployment. That is a problem which they have neglected and which this Bill will not touch. It is because it will not touch that problem that we have put down our Amendment which I have moved. The Minister says that the two Amendments contain 19 reasons against the Bill. That does not mean that there is not one good reason among them; it may mean that there are 19 good ones against the Bill, and 19 reasons do not exhaust the number of reasons against it. The Amendment which we have put forward is the Amendment of a body of people who have seen this problem in its true perspective, who have never pretended that by a local government Bill and de-rating you can cope with the present state of industry. The Minister believes that this Bill is going to receive a wide measure of support in the country. Hon. Members opposite profess to be optimistic, but are they so optimistic about this Measure? Is it not true that party loyalty is being strained in order to overcome the natural repugnance of many Members opposite to it? In every party in this House, including the party opposite, there are men who know that this Measure will not achieve what the Minister and the Prime Minister claim for it. There are men outside, men of wide experience in public affairs and in local government, men who are as familiar with this problem as the Minister himself, who know that this Bill is a fraud if it pretends to be any solution of our economic difficulties.

This Bill is the last desperate attempt of the Government to save its skin before it faces the people. We are prepared to take up the challenge. I move this Amendment in the sure and certain hope that public opinion will be with us on it. More and more as its provisions become known will public opinion turn against the Bill. It will be a boomerang which will react against the Government. The extravagant claims which they have made for it will be falsified. The Bill as it goes through the House will be riddled with criticism, not merely by people in this House, but by people outside the House. We are proposing this Amendment tonight, because we believe that it represents what the public are thinking to-day. We believe that once the Government go to meet the people on this Bill, on the earlier Bill, and on the whole scheme, we are almost certain that they will meet the fate which they deserve. This Bill will prove to be the last kick which will send them into a well-deserved oblivion.

Mr. DUNNICO

I beg to second the Amendment.

My hon. Friend has stated clearly, concisely, and convincingly the burden of our case against the Measure now before the House. He has indicated our line of attack and has clearly pointed out that that attack will be continued Clause by Clause and line by line until the end of this Bill. I should like to associate myself with him in congratulating the right hon. Gentleman upon the way in which he dealt with a most difficult task. The right hon. Gentleman himself would not dare to suggest that some parts of his task were rather uncongenial, unpleasant, and distasteful to him. He has had a long and distinguished career in the arena of local government, and I cannot persuade myself that in his heart of hearts he does not feel that there are some proposals in this Bill, some Clauses which are unfair and unjust in their operation and are really subversive of responsible democratic local government. There are not only 19 reasons against the Bill, but 101 reasons. To-night one can only speak in a general sort of way, and make a few general observations.

The difficulty in which we stand is that the avowed objects of this Bill are not the real objects of it. Underneath the nominal and avowed objects there are deeper and more sinister objects in view. This Bill, as a text book of the Tory promised land, puts the Book of Exodus in the shade. It contains 155 pages, 115 Clauses, 12 Schedules, three explanatory memoranda, and it seeks to repeal either wholly or in part 85 Acts of Parliament. It is easier for a camel to go through the eye of a needle than for even an intelligent public representative to grasp the full significance and meaning of this contradictory and conflicting Measure. My hon. Friend has put forward a suggestion which we must emphasise again and again from these benches, and that is that we have to look at and to survey the events which have led up to the introduction of this Measure.

Four years ago, the party opposite, through the mouths of their responsible leaders and through their official publications, definitely pledged themselves to deal with the urgent problem of unemployment. Four years have passed away, unemployment is more acute, industries are more depressed, local areas, notwithstanding high rates and extensive borrowings, are in a worse condition, and the party opposite faced with the shadow of a General Election, feel that they must do something, and in a kind of panic this Bill is introduced. I submit that had the problem of necessitous areas and industrial depression been submitted to a number of common-sensed, plain, simple men they would have faced certain facts. The first fact that they would have faced would have been this, that where you have a depressed industry there you have the larger number of unemployed. The second fact they would have faced would have been this, Chat where you have the larger number of unemployed there you have the largest amount of money paid out in Poor Law relief, and where you have the largest amount of money paid out in Poor Law relief there you have the highest rates.

One would naturally have thought that, if high rates are a handicap upon industry and unduly penalise particular local areas, the Government would have set themselves in a simple straight, forward way to assist depressed industry and necessitous areas. I cannot for the life of me understand why if the. Government desired to assist depressed industries that they should have introduced a scheme which actually gives more money to prosperous industries than to industries which are depressed and require assistance. One would naturally have thought that as the maintenance of the able-bodied unemployed is the great factor which raises the rates in many of these hardly-hit industrial areas, the most sensible thing to have done would have been to relieve those areas of the maintenance of the able-bodied unemployed by making the unemployed a national charge, not a local charge, thereby spreading it over the whole country. To achieve these ends, which in themselves are clear-cut, plain ends, by throwing the whole of our local government into the melting pot is to make confusion worse confounded.

I admit without hesitation that a good case can be made out for the reform of local government, but there are two things about the reform of local government which I would submit to the House. In the first place, reform of the local government system ought not to be a party measure but a national measure. If the Government desired to reform the local government system it should have attempted to get some kind of agreement on the methods of reform but, as a matter of fact, the Government have not achieved agreement on the matter even among their own followers. In the second place, if local government reform is necessary, and I believe it is necessary, it ought not to have been mixed up with a Bill dealing with abnormal conditions of industrial depression and unemployment.

Let me deal with the proposed transference of powers to county councils. I speak as one who has been for 20 years connected with boards of guardians, county councils and town councils, and I must confess that I view with misgiving the transfer of these greater powers from other authorities into the hands of the county councils. I believe in such a thing as civic pride and civic patriotism and I believe that by taking away from local authorities certain powers and handing them over to a remote county council, you are going to weaken if you do not destroy that civic patriotism and civic pride which is so desirable. It is a very difficult thing to work up any enthusiasm in a man who is a member of a sub-committee of a sub-committee belonging to an authority of which he is not a member. That will be the case under this Bill.

A further objection I have is that county councils, speaking generally, are bodies of which it is difficult for a working man to become a member. I was a member of a county council for nine years. The meetings are held in the county town, and the cost of travelling to and fro is prohibitive to the average working man. There is this further factor, that the meetings of the council and the meetings of the committees are held in the daytime, and in addition to the expense involved in travelling to and fro there is also the difficulty of getting sufficient time off from one's employment to attend these meetings. A third objection is that as a member of a county council able, fortunately, to arrange one's duties to attend the county council, I found that for years two full days a week were occupied in doing the onerous duties of a county councillor Some years ago, I was a member of the West Derby Board of Guardians in Liverpool, one of the foremost Poor Law authorities in the country. In connection with that authority I spent at least two days a week in fulfilling my ordinary duties. In this Bill you are to some extent going to combine these dual powers and to expect one authority to carry out and be responsible for the whole of the work. There is only one logical thing to do if the Government insist upon placing these powers in the hands of the county councils, if they want to act justly and fairly, if they believe in democratic government and if they want the workers to be represented, and that is to provide for the payment of expenses in order that working men may become members of county councils and do their duties.

With respect to the question of grants, I am willing to concede that where there are Government grants there must be some degree of Government control. If that Government control is to be good control, it should encourage and not impede the most progressive and the most advanced and enlightened public authorities. The very purpose of the block grant is to penalise the most progressive and the most enlightened public authorities. My hon. Friend rightly said that there is no other purpose in it. I would like to emphasise two points in this connection. Almost all the progress that we have made in raising the standard of local government has been due to the initiative of individual progressive local authorities going beyond the minimum demanded from them by Parliament. I believe that the municipalities of this country owe a greater debt to the city of Bradford than they have yet realised. It was the city of Bradford which was the pioneer in maternity and child welfare work, in open air schools and in many other things that have now become part and parcel of the whole system of local government throughout the country. I believe the effect of this block grant will be to destroy initiative and to prevent advanced local authorities from undertaking work which under normal conditions they will gladly do.

I will give one simple illustration from my own experience. Eleven years ago I commenced to take a great interest in maternity and child welfare work. At that time we had a voluntary centre attended by a few mothers every week. After the passing of the Maternity and Child Welfare Act in 1918 the local authority took over that work, and the work has grown from one centre with a few mothers to 10 centres with something like 1,400 mothers in attendance. In addition to that, we opened an ante-natal clinic, and a few years ago I was able to get built a magnificent maternity home with the most modern appliance and equipment. The Minister of Health will admit that that scheme is one of the best in the country. The home has become a model for other homes, not only in this country, but on the Continent. If the block grant had been in existence seven or eight years ago it would have crippled that scheme, because the reason we were able to get it passed by the council was that we were able to plead that if the Ministry of Health approved we should get 50 per cent. of the expenditure in grants from the Exchequer. The block grant is going to kill schemes of that kind.

Yesterday afternoon I took the opportunity to read the last two Reports of the Annual Congresses upon Maternity and Child Welfare. In one Report there was a speech of the Minister of Health, and in the other a speech by the Parliamentary Secretary. Both right hon. Gentlemen pointed out that since this scheme was initiated thousands of mothers and scores of thousands of lives of babies had been saved. It is only yet in its infancy compared with what it should be in the future, but the block grant will kill and stop its development. I do not want to say much about Clause 13 because I believe that the Minister of Health has repented. When I read his speech yesterday and then read Clause 13 I could not believe that the man who made that speech could be the author of Clause 13. I am glad that he has decided to reconsider it; a death-bed repentance is better than no repentance at all. Local authorities have not been too exacting in their demands in connection with maternity hospitals. They have dealt with the matter in a fair and kindly way but now that a new duty is imposed upon them by this Bill they may be more exacting and mothers who live in homes where there are no facilities for confinement may be debarred from entering these homes and being confined under conditions to which they are justly entitled. After all this is in the best interests of the nation. I did not want to raise this question but I think the attention of the House should be drawn to it. Under this Clause you are making it compulsory on local authorities to sue in the County Court mothers who have gone into maternity homes, yet in the same Clause you excuse infectious and venereal disease. A man, whatever his means, who by illicit and immoral acts contracts a foul and loathsome disease is exempt from legal proceedings for costs of the services rendered to him, but the virtuous woman, who fulfils the sacred duties of motherhood, is to be penalised by being sued in the County Court if she is not able to meet the demand. I hope this is an objection which will weigh with the Minister of Health and that he will strike this obnoxious Clause out of the Bill.

I view with grave concern the powers given in this Bill to the Minister to issue final orders which are binding. I am perfectly certain that no Minister of a great Department is able to deal with such details himself, and the effect will be that these quasi-legislative powers will be handed over to permanent officials and we shall thus get the worst form of bureaucratic government. My second objection is that under this Bill the Minister has power to perpetuate the old Poor Law system until 1935 in those areas where, under the Guardians' Default Act, he has placed his own representatives. We shall fight these powers to the utmost. The future of this Bill will be like the progress of the tired ploughman. It will wend its weary way through Committee; conflicting and contradictory amendments will be moved, some may be accepted. Ultimately, the Closure will be applied, and when the Closure has failed the brutal Guillotine will be brought into operation. Vital parts of his Bill will be passed by this House without either criticism or discussion. A docile Upper House will pass the Bill, and then it will be imposed upon the country by a dying and decaying Parliament and a discredited and disgruntled Government. It is a shame and an outrage against public decency that a decaying, dying and discredited Government should introduce a Measure of such magnitude, force it through this House by the guillotine and impose it upon the electors. We shall fight it at every stage, and while we cannot hope to get a verdict in this House we shall get the verdict of the country when we appeal to it at the next General Election.

Mr. ROBERT HUDSON

We have listened now to three speeches on this Bill. It would be presumption on my part, a mere back-bencher, to praise the first, but the reception which the right hon. Gentleman got when he sat down was only a just tribute to one of the clearest and most fascinating expositions of a complicated and involved subject that this House has heard, or is likely to hear. Of the speech of the hon. Member for Nelson and Collie (Mr. A. Greenwood) it is enough to say that we on these benches have watched with great interest his growth in stature as a parliamentarian, but the speech which he has just delivered will add in no way to his reputation, and when he reads it in the OFFICIAL REPORT he will regret many of the passages he has delivered. I imagine he will blame, and with some justice, the terms of the Amendment to which he was speaking, because they seem to me to have but the very remotest connection with the subject of the Bill. He committed himself to the statement that rates are no burden provided profits are being made. How he reconciles such a statement as that with the present position of British railways who, although they are making profits, are still burdened by very exceptionally high rates, with a resultant increase in the cost of production all round, I fail to realise.

His other alternative was that the relief is so small as to be negligible. Surely he cannot reconcile the two. I doubt whether this relief is so small as to be negligible. Let me quote to the House the case of the present burden of rates on a basic industry in my own constituency. I happen to have an iron ore mine in my division. It is modern, well equipped and well-managed. If the rates in the particular rural district in which the mine is situated continue at the same figure this year as last year, the mine will be paying 22s. 8d. per week for every man and boy employed; and they number several hundreds. How the hon. Member for Nelson and Collie can say that 22s. 8d. per week for every man and boy employed is a light burden, that it is not adding to the cost of production, that it is not a great handicap on the production of British iron and steel in competition with foreign iron and steel, I cannot understand.

Mr. CONNOLLY

How many men are there?

Mr. HUDSON

Several hundreds. The last time I was there I think there were about 565; no small mine, well-equipped and with a large production. Turn to agriculture. The rates paid by agriculture at present amount to about £5,000,000. The number of persons regularly employed for hire in agricultural work is about 750,000, according to the latest Return. A simple sum in arithmetic shows that the rates on agriculture over the whole county amount to £7 a year for every man, woman, boy and girl employed. Is that a burden which represents nothing in the way of increased cost of production; is the relief of that burden going to be nothing to the hard-pressed farmers of this country?

Mr. WALLHEAD

Can you guarantee that the landlord will not get the remission?

Mr. HUDSON

The terms of the Amendment seem to me to be entirely unreal; and if they are unreal what are we to say of the terms of the Liberal Amendment? The right hon. Gentleman the Minister of Health quoted one or two sentences from the Liberal Industrial Report, but I think the Bill which we are considering to-day is singularly fortunate because one can show, and I hope the House will allow me to show, that in its two essentials—namely, reform of local government and relief of productive industry from the burden of rates, it can be defended, as has been already foreshadowed by my right hon. Friend, from the Liberal Industrial Report. I do not know whether hon. Members have read that Industrial Report. It is one well worthy study, and one of its main characteristics is the immense difference between the portions which are purely historic and descriptive and the portions which suggest remedies; the portions written by experts and the portions written by politicians. The foundations are sound, but the superstructure is flimsy. The diagnosis is correct, but the prescription would lead to the early decease of the patient. Let me quote from the chapter dealing with rating reform, because it sets forth the essential conditions under which industry is labouring to-day. It is Chapter 31, and it say: Rates are a heavy ad valorem duty on houses, factories, buildings and fixed capital generally. We exact contributions from our industries not in proportion to the profits they make but in proportion to the fixed capital they employ. This is an extraordinary vicious principle. It puts a premium on doing things in ways which require only a small plant to the detriment of ways which require a large one. It penalises enterprise and capital development. Quite so. Could you make out a stronger case for reform? Could you find a fact which points more inexorably to what you should do? What do the Liberals suggest The expert describes the condition. He talks about the burden on pro- ductive industry. Certain instances are quoted of the burden of rates, but not instances so striking, I think, as the one I have already mentioned as applying to my own constituency. Then the expert stops and the politician steps in. The politician thinks not of productive industry but of the general ratepayer, the potential recruit to the Liberal party, a possible supporter of one of the famous 500 candidates. And there is adumbrated a scheme which would admittedly, first of all, take many years to bring into operation, and would cost far more—

Mr. MacLAREN

What is it?

Mr. HUDSON

I would recommend the hon. Member to spend half a crown on the Yellow Book and see. The scheme would take many years to bring into operation. It would, I admit, result in the mine of which I have spoken being relieved of a shilling or two of its rates, but that would be but a very small contribution towards removing the difficulties under which that mine is labouring now. It is quite true that the ordinary ratepayer in the necessitous areas would get a few more pence in the pound off his rates than he would under our scheme, but he would get them at the melancholy cost of realising that his chances of getting employment again are as remote as ever. The same thing is true if you examine the position as regards the other essential of our Bill—the reform of local government. There again the expert puts his finger on the spot. The right hon. Member the Minister of Health quoted one or two sentences of the Yellow Book. If the House will permit me, I would supplement them, because I do not think my right hon. Friend quoted the most telling passage. Still in the same chapter I find this: At present our local government is a mass of anomalies and intricacies due to long-past historic origin. Mere local jealousies and local interests are so strong that it is exceedingly difficult to secure the needed reforms and rearrangements, particularly because in any redistribution certain areas are bound to lose, as probably in equity they ought, in order that others may gain. We think that this is pre-eminently a case where one reform can be made the opportunity of another. That is again putting the finger on the sore spot. Now look at the politician taking the next step and read the first sentence of the Liberal Amendment on the Paper: That this House refuses its assent to a Bill which, by confusing unnecessarily the relief of industry from the burden of local taxation with the reorganisation of local government, prejudices the impartial consideration of both. I suggest that the thing that is prejudicing the impartial consideration of this Bill is the appeal which both the Liberal and Labour parties are making to those very local jealousies that the Yellow Book so impartially condemned, and the assistance which it is rendering to those very vested interests against a measure of reform which the Yellow Book confessed to be necessary and long overdue. When we are talking of misrepresentation I do not think that we can blame the Liberal party alone. I can conceive of nothing more dishonest than the statement in the Labour Amendment that one of the effects of this Bill would be to increase maternal mortality. I have always thought that there is something peculiarly odious in making use, for political purposes, of the sufferings of women at the time of childbirth. I can conceive nothing more inhuman than to suggest to the people of the country that the result of this Bill would be to increase maternal mortality. By such a suggestion they will increase the mental anguish of the woman, of her husband and her children, and of all her relations. It is not only inhuman but dishonest.

If there is one thing that the Bill is calculated to do, it is to decrease maternal mortality by making available to women all over the country accommodation in institutions under the control and care of the county councils—accommodation which has hitherto been reserved exclusively for the destitute poor, and therefore but meagrely taken advantage of. In my own constituency I can show Members a maternity ward in a Poor Law institution, beautifully equipped with fully trained nurses available and every convenience. It is capable of treating between 50 and 60 cases a year. It will, I hope, under the scheme of this Bill, treat 50 or 60 cases a year, but to-day it is treating an average of five or six only. Such cases could be multiplied all over the country. We have heard a lot about the drawbacks of the block grant and the vice of the percentage grant, but on this question of maternal mortality the percentage grant has not been as successful as many people may imagine. We have had it for a number of years, and in my own county maternal mortality, far from decreasing, has increased. It is idle to say that the percentage grant is a necessary solution of the problems with which we are faced. On the contrary, when institutions are dealt with as is proposed in the Bill, it will be possible for the county council for the first time seriously to tackle the disquieting increase in the rate of maternal mortality.

There is nothing in the Labour or the Liberal Amendments about the improvement in medical services likely to result from the employment of whole-time instead of part-time officers; nothing about tuberculosis services, the care of mental defectives or the institution of a national cancer service. Yet every one is implicit in this Bill. No doubt the Bill is susceptible of amendment in detail and will be improved. Let me tell of my own experience as a result of speaking at meetings in various parts of the country. If that experience is any guide, once the man in the street realises the essentials of the Bill he finds it a sound Measure and one to which he can give his approval. I think that, far from the Bill proving a boomerang to the Government it is the misrepresentations of the parties opposite that will prove boomerangs to them. I believe that the Bill in its essentials will remain on the Statute Book long after many of us here have passed to our graves, and that the name of the right hon. Gentleman the Minister of Health for his part in this Measure will retain an honoured place in the history of local government in England.

Mr. E. BROWN

No doubt the Committee that drew up the Yellow Book will be interested when they find that quotations have been used by the Minister of Health and the hon. Gentleman who has just spoken. The House always listens to the contributions of the last speaker with great interest. Personally, I must disclaim his diagnosis of the Yellow Book and of the constitution of the Committee that drew it up. The very Committee which drew up the chapters which the hon. Member mentioned gave its early consideration to the question of how to deal with the rating problem, and considered a suggestion precisely similar to that which is contained in this Bill, namely, by way of a direct subsidy to industry, and after long and anxious consideration threw the suggestion over because of the mass of anomalies involved in its application through the local government channels of the country. It is one thing for the hon. Member for Whitehaven (Mr. R. Hudson) for the purpose of a party speech on a platform addressing those people to say that the Liberal expert is magnificent at diagnosis but becomes a politician when he prescribes treatment, but it is another thing to make that tally with the facts, because the very experts to whom the hon. Member paid a tribute would be themselves the last to admit that they did not carry their expert knowledge over into the constructive and creative part of that book.

Mr. R. HUDSON

Jekyll and Hyde?

Mr. BROWN

The interruption of the hon. Member is a very unfortunate one, for the root vice of this Bill is that it is Dr. Jekyll and Mr. Hyde: The spectacular instincts of the Chancellor of the Exchequer have overcome the sound administrative instincts of the Minister of Health. That is the root vice of the Bill. I do not think that the House or the Government or the country realised, when there was mention in the King's Speech of a scheme for the relief of rates and nothing was mentioned about local government, that a portentious Bill of this kind would be forthcoming. It is true that the Chancellor of the Exchequer in his first speech did refer to a Bill ranking with the great Bills of past years, especially the Bill of 1888, but I do not think that he or the Government realised the mass of material that would be found inside the Measure. My own feelings cannot be expressed by the hon. Member for Nelson and Colne (Mr. A. Greenwood), and I do not think that any fair-minded man can approach this Bill merely in terms of invective. I will express my own feeling as a modest backbencher, and I will tell a story. There was a benevolent old gentleman who in a Marylebone street came in contact with a small child outside a big elementary school. The child was crying, and the old gentleman asked: "What is the matter, my dear?" "Please, sir, I want to go to school." Thinking the child was a boy, the old gentleman said: "There is the boys' entrance; go in there." The child answered: "Please, sir, I am not a boy." Thinking that by all the laws of biology the child must be a girl, the old gentleman pointed to the girls' entrance and said: "Well, go in there." The child still cried. "What is the matter?" he asked again. "Please, sir, I am not a girl." "Then what are you?" he asked. "Please, sir, I am a mixed infant."

My feeling about this Bill is that it is a mixed infant. I am sure that all Members who have done their best to understand the implications of this mixed infant will be sorry that the Minister, in his magnificent and lucid exposition of the Bill, did not call attention to two things in it—Clause 111, which gives him power to remove difficulties—I am sure he will need those powers under the Clause—and Schedule 5, which provides him with rules to determine gains and losses; for I am sure that the figures he has so far given us as illustrations in the two White Papers, and in his own speech to-day, will give the country no idea of the arbitrary and erratic way in which the application of his formula will work out between one rating authority and another in the course of the next 15 years.

8.0 p.m.

Nevertheless the Chancellor of the Exchequer is a fortunate man. He has set himself up as the Moses who is to lead the needy industries of this country to the Promised Land and he is a happy man in this, that just as the original Moses needed two able assistants Aaron and Hur to hold up his arms in the course of the long struggle with the Amalekites in the valley, so he has to-day to do the Teal work of combating the Amalekites, an Aaron and a Hur—the two ablest men, as a team, in our judgment in the Government to-day. [HON. MEMBERS: "Which is Aaron?"] Aaron, of course, is the senior. As I read the avowed intentions of the Bill, it seeks to transfer the function of the Poor Law authorities, but not to break up the Poor Law. It seeks to give power to alter the boundaries of local government areas and to centralise the control of certain road and health services—which to me is the real issue. It seeks to implement the de-rating proposals of last Session, and it introduces the block-grant method, instead of the percentage system over a wide field of vital services. It seeks to transfer some £51,000,000 from the national Exchequer to local exchequers, according to a formula based on weighted population, and, finally, it seeks to readjust the relations between national and local finance.

It is a big scheme and an arbitrary scheme. It is based on a special formula and there is a great difference between the scheme foreshadowed in Command Paper 3134 and the scheme outlined in the Bill to-day. I call the attention of the House to the changes which have been made in the scheme during the Autumn. Those who have been following the controversy from afar, without any inside or expert knowledge, have watched with great interest the various deputations that have approached the right hon. Gentleman and his colleague the Secretary of State for Scotland—who will have his own troubles with a more drastic Bill later on. We have noticed the attitudes of mind adopted by different local authorities. The Minister must have known that the various local authorities were bound to differ in their attitude towards the Bill and to view these changes from different points of view. He naturally has taken the old sound military and political rule "Divide and conquer," in the hope of getting the Bill through with the minimum of trouble. The difficulty in regard to the administrative changes is that you get conflicting resolutions from conflicting authorities because they represent conflicting points of view. For instance, the big city and the big county, and, especially, the official of the big city and the big county, will naturally use the old Pauline motto: I magnify my office. The counties and the cities are naturally glad to see their powers extended and their influence aggrandised. The non-county borough and the urban districts are rather perturbed and in some cases badly perturbed; and the rural districts, as far as their administrators are concerned, have been up in arms. So the Autumn changes have been designed to induce a rather closer equation between the points of view of these three types of authorities and the changes in administration have all gone in one way. They have all gone against the trend of the Bill itself. The whole structure of the original White Paper was in favour of concentration and centralisation. All the changes which the Minister has so admirably outlined, are in favour of decentralisation and of the delegation of powers from the county councils to the smaller bodies. So far, the objections in the Liberal Amendment are 'borne out by the very changes which have taken place during the Autumn.

May I turn now to the financial side of the Bill? Here we get a clue to the essential unsoundness of the arrangement which the Government undertook by which they gave a direct subsidy to industry and agriculture, by remitting rates and then refused to make up to the local authorities, whose assessment basis was thereby narrowed, the actual amounts lost to each authority by the remission of those rates. In the course of the discussions on the Rating and Valuation (Apportionment) Act, we pointed out that the trouble would be to harmonise the loss of rates to the local authorities with a real adequate attempt to provide the necessitous areas with the funds proposed. I have analysed the changes which have been made in that respect, but I need not trouble the House with them, as the Minister's statement has been so ample, adequate and clear. May I draw my own conclusion, however, from these changes. The changes in the financial structure of the Bill are all in the direction of masking the formula, of mitigating it, of admitting that it cannot be applied on its merits in this scheme.

We have now in the Bill four things with regard to finance. We have the major formula, which is to be applied, in the primary distribution, to the county borough and the county. The autumn changes attach a rider to that formula in favour of a wider ratio between the national Exchequer grant and the rate-borne expenditure of the county or county borough. We have also the minor formula and the interesting thing is that, although the Minister defends the formula as a method of adjusting national and local finance, the moment he comes to his secondary distribution, he drops his formula. He drops every attempt to make a weighted population for the non-county borough and the urban and rural district councils and he places their demands upon the narrow basis of actual and not weighted population. In his attempt to meet the rural district councils, the Minister has been compelled to mask even that, and has been compelled to attach a special rider to the minor formula, which gives him power to make grants where rural district councils have to rate for special purposes.

These are the first general considerations which I would urge. It will have been noted that there has been formed a school for Conservative Members. Conservative Members must not mind if there are a few blunders on this side of the House in analysing the details and complicated provisions of the Bill, because we have not had the advantage of the private school either of the Minister, or of the Parliamentary Secretary. I observe by a Press report that 30 questions were put at one of these gatherings. We have not been able to do that; but I propose to address to the Minister some questions which occur to me as necessary, if a real understanding of the far-reaching implications of this Measure is to be reached. Here are one or two general questions which I, as a scholar, have put to myself, which I venture to put to the Minister, and which I would ask the House seriously to put to itself.

First, taking the aims of the Bill as stated, does it fulfil its own intention to give us more efficient, more simple and more economical local government and a more just allocation of national and local finances? The answer to that question is fundamental to a judgment for or against the Bill and as at present advised, my answer to it must be "No." The second question is: does the Bill propose the best solution of our health and Poor Law and road problems. I am bound to answer in the negative. I cannot understand the Minister defending the block grant as an efficient way of financing health services. Behind this I can see a great idealistic conception only hinted at by the Minister. I was surprised that he did not state it as his sixth reason for the Bill. It is the idealistic conception that has pervaded the various reports of the permanent medical officer to the Ministry. We have had in a series of great reports, and in one or two great speeches outside his own department, in the last 20 years, the conception of a far more widely spread national medical services and a far greater concentration of the public health services, under one roof and one control. I would say in passing, that one of my reasons for objecting to the Bill is that I cannot see how you can combine the idealistic conception of a great extension of medical services under one control, with the reactionary and retrogressive financial scheme of block grants or how you can provide for that expansion. May I quote the permanent medical officer of the Ministry in my favour and against the Minister. The report of Sir George Newman on the state of public health in 1927 —only published a month ago—contains this passage; which is very germane to the Minister's speech: There can be no doubt that the percentage Exchequer grants in aid of health have been of the highest possible value and incentive during the last 15 years, in getting special medical services in operation and in guiding their direction. I think that is a complete answer to the Minister. With a stereotyped block grant for health services you will not help the needy areas, but what you will do is, to cause a lag in the progressive areas. What has happened in the last 25 years during which we have had so great an expansion of medical services has been a double movement—the initiation by progressive local authorities of services not designed by the Ministry and the central urge by legislation from the Ministry through various Acts of Parliament. It is incontrovertible that, had the block grant system prevailed in the last 25 years, instead of the "fifty-fifty" system, there would have been a far smaller extension in those services than there has been.

With regard to the road problem, I regret that the Minister has been so timid. He knows, or if he does not know, the Minister of Transport knows, that it is quite impossible adequately to deal with the road system either on the parish or rural district basis or on the county basis. There are only two ways of dealing with the roads, if we really mean to cope with the need for expansion—first, that the great trunk roads of the country shall come under national control, and second, that the secondary main roads shall come under the control of regional authorities co-ordinating the needs of the various areas. There, I think, the Minister's claim for the Bill will fall before the criticism of all the road experts in the land. When that, again, is linked with the block grant in the service and, in addition, when of the £5,000,000 of new money, which the Chancellor of the Exchequer boasts so much about having added to the pool in order to aid transference, £3,000,000 is taken from the Road Fund, I think little more need be said about that point. I ask myself does this Bill, in its march to centralisation, sufficiently allow for the immense variety and complexity of local conditions? Again I am bound to answer "No."

Let me in passing refer to the boards of guardians. Much has been said against them, but the case for the boards of guardians was never adequately put before the Royal Commission of 1909 and. certainly, it was not adequately put before the Maclean Committee because they had no evidence and only analysed the evidence given to the Royal Commission of 1909. I call the attention of the House to a quotation from one who was I think respected in all parts of this House, the late Lord Oxford. He was Prime Minister when the majority and minority Poor Law Reports were considered, and he made this statement: On some points on which they are agreed, I am not sure it will be altogether practicable to carry out their recommendations. They have with one voice pronounced sentence of death. Let us assume they are right. You will find that boards of guardians will die hard. They are very powerful bodies. With all their defects and shortcomings, they represent, after all, a very large amount of gratuitous public spirit and service rendered by men and women over a long course of years—who do not live in the glare of publicity, who receive few of the rewards that fall to those occupying more prominent positions in local and Imperial administration, and whose services in many cases we could ill spare from the sphere of local administration. Speaking as an old-fashioned individual, and entirely for myself, I look with some amount of doubt and uncertainty upon the substitution of a centralised authority as regards many of the aspects of the problems of Poor Law administration for those who, with spontaneity of impulses, large local experience, and considerable elasticity in the application of principles to the varying circumstances of different cases, have hitherto discharged this duty. There is a good deal to be said for that point of view.

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood)

Do I understand that the Liberal party are for or against the boards of guardians?

Mr. BROWN

The point of view of the Liberal party is that there is a great case against the boards of guardians to be made out in many of the great cities, but that we regard the problem of the boards of guardians in the urban and rural districts as a very different problem, and I would like to say that one of the things that invalidates the conclusions of the Maclean Report is contained in a hint by Sir James Curtis, in the appendix to that Report, in which he points out that, having joined the Committee late, had he been there before he would not have assented to the general conclusion to abolish the boards of guardians. There can be no doubt whatever what the gain by abolishing the boards of guardians in the rural and urban districts of our counties would be if you were going to, put an elected body of a better character, covering a wider area in charge, and with a. fairer distribution of union areas than you have got now. The Liberal party is not like the party above the Gangway. It is not officially bound to the abolition of the boards of guardians, but it does realise that there is a very great difference between the problem as it has been presented to us in recent years in London and the great cities and the problem in the scattered and widely distant parts of our country.

Sir K. WOOD

Then do I understand that the Liberal party are in favour of the abolition of the boards of guardians in urban areas and not in rural areas?

Mr. BROWN

All I call say to the right hon. Gentleman is this, that in the course of the Debate the whole position of the Liberal party about that will be made clear. I understand that that was why there is to, be a three days' Debate, and I desire to make it perfectly clear that the sentence of death cannot be assumed. The Minister of Health assumed that everybody was in favour of the abolition of the boards of guardians over the whole field, but that is not so, and it never has been so, as the quotation that I have given from the late Lord Oxford, who was Prime Minister at the time when the Poor Law Report was pub- lished, made quite clear; and certainly, if the authority to be put in their place for the handling of able-bodied poor relief is to be an authority derived at three removes from an elected body, then we can only characterise that as being utterly undemocratic in its origin.

I ask myself one or two other questions. [Laughter.] The Parliamentary Secretary smiles, but I asked a question this afternoon that was rather inconvenient to the Minister, for there is no way of getting a view of the main principles of this Bill except by asking questions, and not by asking questions once, but by asking questions many times. The Parliamentary Secretary knows very well that when I ask a question as to what would be the figures of the actual weighted population, I am told that I cannot be told, for the reason that the Ministry itself does not know; and that is the fundamental objection to passing this scheme, because all the figures that have been given are really illustrations based on the present rating year, 1926–27. They take no account of what may happen by the new assessments under the 1925 Rating Act, which are, now coming into force, neither do they give us any hint as to what may happen in the areas in that vital standard year, 1929. So the country will have to ask, if we do not, Is the finance of this Bill on a sound, economic, and equitable basis? The country might very well ask itself also if the county councils and the borough councils, who are to take over enormous powers given them by this Measure, have any conception of the mass of detailed work involved in the transference of the work of the boards of guardians and of road administration to the central office of the county councils.

About the Poor Law, I will only say this, that the scheme, in my judgment, does not propose to carry out an efficient distribution of Poor Law duties, that the appointed bodies proposed will not function as well as the elected bodies whom they supersede, and that the wealth of our talent for administration by women will find no adequate outlet as it has through the boards of guardians. It has been through the boards of guardians that the majority of women on elected bodies have found their way into public life. In 1926 there were 3,313 women on public bodies in this country, of whom 4 per cent. were on the county and urban district councils, 11 per cent. on the borough and rural district councils, and 70 per cent. on the boards of guardians. Of the 62 county councils, 17 had no women members, and more than half the urban district councils of the land had no women. It must, therefore, be obvious, when you have a tripartite system of committees, partly appointed from the county council, partly from the urban and rural district councils, and partly co-opted and appointed, that only a very small proportion of these able women, as well as the able men, able from long experience of the boards of guardians, can find their way on to these new tripartite committees.

This is not to be regarded merely from the centralised point of view of the big city or of London, or even of the non-county borough inside a county; it must be regarded from the point of view of that very vital thing in local government, the problem that comes into every one of our problems of local government, namely, the problem of the distance between one small village or little town and the county town, which will be the source of all the machinery which will operate the powers under this Measure. I would like to ask another question about the Poor Law, and that is whether any calculation has been made of the cost of transferring the functions of existing institutions and of compensating the displaced officials. There are some 30,000 of them, as there are some 20,000 members of boards of guardians, and surely, before the House passes the Second Reading of this Bill, we ought at least to have some financial statement which will let the country know who is to meet the obligation and what the cost is likely to be of the transference and of the compensation.

The whole of the controversy on the Measure may be summed up in Parts I and VI of the Bill, about the transference of Poor Law duties on the one hand and the financial Clauses on the other. It has been claimed for Part I that it will mean the co-ordination of the health services, that it will prevent overlapping, and that it will bring about a break-up of the Poor Law by treating the various causes of destitution separately and scientifically. If this is so, it is in line with Liberal policy, for in the last 20 years Liberal policy has been towards draining the morass of destitution by old age pensions, by sickness insurance, by institutions for the mentally deficient and home treatment, by childhood education, by medical school services, and by the provision of meals. All of these were due to Liberal inspiration in the great time before the War, but unfortunately, after taking all these things into account, there always must remain, as there does remain, a residuum of cases that cannot come under the general laws of the land. It is that residuum of special cases that should be dealt with locally and with personal knowledge by people who have responsibility. The vice of the proposal for this tripartite non-elected committee is that it will contain men and women who will not have responsibility, nor control of the officials who advise them.

I attended a section of a board of guardians in Yorkshire three weeks ago; it was a committee drawn from a wide area; and I listened to an official giving his view of two different cases. In one case, that of a man, his report turned the man down; in the other case, that of a woman, he agreed that she should have benefit. Both the decisions of the official were turned down by the men and women of that committee, who represented the area, and who happened to have local knowledge with which to supplement the researches of the official. It is true that the Bill attempts to meet these cases by the provision of these bodies, but the vice is that one-third of them will he co-opted, and the others will not have been elected for this specific purpose, and the officials will be paid and controlled by the county council, which will be 50, 60, and in some cases nearly 100 miles away from the locality where the sub-Committee of the Public Assistance Committee will operate.

The gravest of all the difficulties in Part I of the Bill is that it shirks the issue of the able-bodied poor. All quotations from the speeches of 1912 are irrelevant; all arguments based on the reports of the Poor Law Commission of pre-War days are irrelevant, if they leave out of account this problem, which in magnitude is entirely a new problem; it is a problem of men able and willing to work, but for whom no work has been found, in many cases during the last eight years. This Bill fails completely to deal with the problem by merely trans- ferring the functions of the boards of guardians to the complicated committees run from the county capital. Failure to deal with this problem, which has brought many areas to break-down both of the Unemployment Insurance Act and of the Poor Law system, will vitiate any attempt of any Government to deal with the Poor Law problem, no matter how it may select its evidence from past Royal Commissions, or from reports signed at the time of prosperity at the end of the War. The Bill, therefore, fails to bring about a co-ordination and the prevention of the overlapping and the waste that it attempts to do; and when it widens the area of charge to ease the burden for the distressed areas, it will be only partially successful, for in many county boroughs where the distress is greatest, the proposals of the Bill, as the Minister himself knows, will make very little difference indeed.

Sir K. WOOD

Is it still the policy of the Liberal party to transfer the relief of the, able-bodied poor to the State?

Mr. BROWN

I am flattered by these, inquiries after the policy of the Liberal party, for it shows how really the Debate Will go—not between the official Opposition and the Government, but between the Government and the Liberal benches. If the Government had quoted from the Yellow Book, not its diagnosis only but its constructive policy, we should have had a better Bill. This policy not merely transfers the able-bodied poor from local to national shoulders, but links that up with an immediate and determined attempt to find work for them, so that they may be relieved as early as possible from their position as able-bodied unemployed.

I want to say a word in passing about the Onslow Clauses. They were not foreshadowed in the White Paper. The Government had the advantage of a hurried interim report, and what has really happened is that inside the covers of this Bill has been spatchcocked everything that the Minster of Health and the Ministry have desired for the last 25 years. The difficulty here will be that while we have an outline which permits the alteration of boundaries, it is no solution, and we are fighting in the dark. I can conceive, for instance, great county boroughs and urban districts looking with delight upon the position that, if they care to amalgamate, they need not have to go to the expensive machinery of the Parliamentary Bar to get sanction.

I have taken the trouble to analyse this Bill, and I find that from cover to cover there are 134 references either to orders which have been made by the Minister, or to schemes prepared for his sanction, or to directions that he must make, or to regulations that he may draw up. This is going too far. This House in recent years has done a great disservice to the community by passing Acts of Parliament which contain machinery that enables the Minister— that is to say officials in rooms where nobody sees them, officials whom nobody knows—to make laws which the ordinary citizens have to obey and pay for; and of all the Bills we have had in recent years, this is the worst. There are 134 references—and I checked them carefully on a journey the night before last— and I do not think that the House, with all its regard for the Minister of Health, the Parliamentary Secretary find the permanent officials, will be willing to entrust them with the whole of these powers without a far more detailed discussion of the implications contained in the so-called Onslow Clauses. It affects 658 rural district councils, 785 urban district councils and 255 non-county boroughs. Four of the urban district councils and one of the non-county boroughs have populations of more than 100,000, and when you come to the question of registering boundaries, and combining one area with another, or exchanging an urban area for a rural area, or vice versa, the proposal to leave that to the sanction of the Minister—that is the officials of the Ministry of Health—is more than the House will be wise to do without qualification.

With regard to Clause 5, we do not withdraw one word which we said in our analysis of the de-rating Bill. As I said in the Debate on that Bill, if I had to choose between the negative policy of hon. Members above the Gangway and the relief given to industry through this Bill, I should prefer the relief, but our case against the de-rating scheme is that it takes vast sums of money from the local authority, and a good deal of this money—the Minister said a quarter but I should be inclined to say a half— is going to firms that do not need it. Some of them, indeed, do not want it, and I should like to ask the Parliamentary Secretary if the Minister really thinks that £24,000,000 will be the sum now. Is he not aware that many firms are not applying, and are they not afraid of the effect on Schedule D of Income Tax, and that the Chancellor may take with one hand what he professes to give with the other? After the examination of the claims of 16th October, do the Government see any cause to stick to their original estimate, or do they think that it will be exceeded, or will it be less? It will be very interesting to the House to know that. It is our case that a vast mass of this money is going to firms who do not need it, and will not employ one extra man because of it. How much more might have been done if the money-had been used to disentangle the services and rightly to handle the problem of the able-bodied poor, to increase the grants-in-aid on a percentage basis to the local authorities, so relieving industry by providing not merely that one half should go to the necessitous areas but by providing that automatically the majority of it should go to the areas where the need is greatest.

I must say one or two words about the financial Clauses, which are the crux and heart of the Bill. I am afraid I have already troubled the Parliamentary Secretary with a good many questions, but I must ask him this. Is the money, in the proposed pool sufficient to meet the expanding needs of the services? I will give an illustration. In Scotland before 1890 the police grant was on the percentage basis. After 1890 it was on a block basis. What was the result? After the War they had to go back to the percentage basis. In the City of Edinburgh, one of the divisions of which I have the honour to represent, it was found after 30 years' experience of the block grant as compared with the percentage grant that the city was bearing 76 per cent, of the whole cost of the police services. What had been a fifty-fifty arrangement up to 1890 had gradually altered until we had the position that the State was paying 24 per cent. only The root vice of this financial proposal is that it makes no attempt to make provision for new services and the expansion of old services. When you "block" this huge grant of £51,000,000 in 1945, at a time when the new money has gone, when the supplementary grant has gone, and put it purely on a formula basis, a basis which is arbitrary, and which it is proposed to employ because it is supposed to represent the characteristics and needs of the people, how will that block money be affected if there is a need for similar services of an expanding nature, to say nothing of the need of new areas and new industries which will need new services for which no provision has been made.

Is it possible fairly to apportion the £51,000,000 on a formula basis? I would respectfully say No, and in saying that I have high authority behind me. I would quote this extract from a supplementary memorandum to the Municipal Corporations Association by those eminent financial experts Mr. Arthur Collins and Messrs. R. Watson & Sons: We have already indicated our definite view that it is impossible to devise a satisfactory formula on the principles propounded by the Government, because the moneys to be distributed thereunder consist partly of grants in recoupment of losses sustained by the Government's policy of relieving industry from rates and partly of grants towards expenditure on public services. These two grants fall in our opinion into two entirely different categories, and we do not see how they can logically he distributed under one and the same formula. That puts in a nutshell the whole policy of trying to readjust the relations of the national and local finance. Does not the need for giving the additional money show the grave difficulties and vices inherent in the formula? The very fact that guarantees have had to be given about the ratio between national and local expenditure, and that guarantees have had to be given that extra money will be found, tapering off every year for 15 years, shows that in the beginning the Government have no confidence in the working of their formula as a fair method of distributing the money between one local authority and another. Take the formula itself. As it stands now it is inadequate and ill-balanced in its factors to meet the needs and characteristics of the various areas. How can a formula be fair which in its primary application to county boroughs leaves Brighton, Blackpool and Bournemouth with a gain at the end of 15 years, and Bradford, Blackburn, Halifax and Rochdale with a loss? I am talking now not of the extra money, but of the formula itself in its application to one area as compared with another. The House ought not to allow the nakedness of the formula to be masked by guarantees of extra money or of new money, because the thing that matters to local authorities is not what calculations or illustrations the Minister can give in a series of White Papers worked out by people who, as far as we can judge from the hon. Member for Cheltenham (Sir W. Preston), differ amongst themselves as to how the sums should be done.

The question that a local authority will have to ask itself is this, not what will happen in 1928–29, the standard year, but what will happen in 1946 when the whole of this vast sum of £51,000,000 has to be distributed without any mask and on the four factors in this formula? I have the whole facts of the case but I propose to trouble the House only with one instance. I asked the Minister of Health a question as to the estimates they had made for the distribution according to these factors, and he told me, as, of course, I knew, that he could not give me an estimate for the actual working because, until they knew what the standard year 1928–29 brought forth, no figure could be put forward by anybody which would be worth the paper on which it was printed. Nobody knows that better than the Minister. Take his own figures, which agree with the figures of the estimate by Mr. Arthur Collins in that Memorandum.

Take the case of unemployment; there are two vices there. First of all, unemployment is not directly applied to weight the actual population, it is only applied to an already weighted population, a population weighted for children and rateable value. When we come to analyse this vast sum of money, what do we find? The estimated total cost of the factor for unemployment, the factor which is supposed to meet the case of the necessitous areas, and the only relation which the formula has to Poor Law areas, is £1,200,000, and that is subject to graduation as the years go on. That factor of the formula ought at least to be revised. It takes no account of unemployed men not insured, and takes no account of unemployed women, insured or uninsured. That factor ought, at any rate if it remains as a secondary application to a weighted population, to be greatly enlarged, and, in my judgment, it shows how difficult it has been to construct what a kindly commentator called "this masterpiece of ingenuity" and to apply the formula to the needy areas.

I would like to say one other thing about the formula. It is interesting to see the figures we are getting about the working out of the actual formula. What is really proposed is this—the Chancellor of the Exchequer is going to number the people. Having numbered the people, he will be dissatisfied with the number, and wish to add to the people. He proposes to add a number of artificial or paper people to the real total, and to do it in four ways. How does it work out as between one town and another? As the weights work out, in town A every two persons will have one added on paper. I suppose we may call the added one an infant Churchill. In town B every single person in the town will have one person added—two infant Churchills! Town C will have two people added to every one, that is twins. The population will be 1,000,000, and every person there is to have twins under the Government scheme. Town D will have three paper people added; they are to have triplets. Town E will have added four or quadruples, and they will drop in for the King's bounty. The whole scheme is very erratic, and when you come to the distribution in the county boroughs the Government admit that the scheme fails.

Now I will deal with the secondary distribution. Oxford will get a full application of the scheme on the population basis. Cambridge which is a non-county borough, will not get the primary distribution of the formula which will go to the Cambridge County. Cambridge City will get its 50 per cent. of the total grant applied to its actual population. I was surprised when the Minister of Health used the illustration of Oxford he did not compare it with what would happen in Cambridge, because it would have been very interesting to see how it worked out. In my judgment the point put forward in our Amendment which we are not able to move are sound, and we shall develop them in the course of the Debate. The real criticism of this Bill is that it was not necessary to raise the issue in this way, and it has been raised in this way in order that a spectacular show might be made of the spectacular instincts of the Chancellor of the Exchequer which seem to have overcome and shackled the instincts of the Minister of Health. This Bill ought to be four Bills instead of one. Instead of working inside the iron frame of a formula we should have dealt with this subject in four Bills on the basis in each measure of a logical coherent and democratic scheme. This object could have been achieved within the limits of the Yellow Book and the claims of industry could have been met. Therefore I must go into the Lobby against this Bill.

Mr. GERALD HURST

This Bill presents to us many avenues of approach and the Minister of Health has approached the subject as a great master of local government history and local government generally. Several hon. Members have rather approached this subject as protagonists of various parties and policies. I approach it in a somewhat humbler role as one of the Members representing a great city in the centre of a great industrial population. It is because I believe that this Bill is going to be of enormous benefit to Manchester and Lancashire generally that it enlists my support. I wish to put forward certain points with a view to emphasising the very great benefits which this scheme is going to confer on the industrial North.

In my view the key of the Bill is Clause 55, which deals with the great principle of de-rating. This is going to confer great benefit not only upon distressed areas but upon all those engaged in industry. At the present moment, who can doubt that our rating system results in a great injustice to industry? The very method by which premises are assessed is on the face of it very unjust. A man may be making an enormous income in a small office and paying no rates, while next door to him there may be a great works earning no profits and yet suffering from the heavy burden of the rate. Why is there so much unemployment in a district like that? Why have we lost our foreign trade? Very largely because of the cost of production in districts like Manchester, where the people get higher wages, work shorter hours, and have better working and living conditions than our foreign rivals. In addition to all this, the standing charges which hear upon industry are higher in this country than the standing charges in foreign countries.

The one standing overhead charge which we can reduce is the rates. No one who realises the conditions now existing in an industrial community can doubt that the taking away of three-quarters of the burden of the rates is going to be of great benefit to industry. No less than £1,500,000 will be saved to cotton spinning and weaving under these proposals, and the relief will not be confined to the actual cotton industry which gets the benefit. It is like throwing a stone into a pool; the ripples carry very much further than the actual point of impact of the stone. If the textile manufactures benefit in this way, all the industries associated with textile manufactures will also benefit.

When people say that the shops will not benefit, I think they ignore two important facts. First of all, under this Bill the rates on shops are not increased and, secondly, the only effective way by which a retailer can meet the burden of the rates is to have good trade and a prosperous community all round him. The retail trader suffers most in those areas where his customers are hit the heaviest by unemployment. If the effect of reducing rates is to increase the prosperity of manufactures, then the people employed by them will have more money to spend in the shops.

Mr. KELLY

In view of the statement just made by the hon. Member that this Measure will make the cotton industry prosperous, can he suggest to me where there is anything in the Bill which provides that £1,500,000 is going to be devoted to the cotton industry to cheapen production or increase wages?

Mr. HURST

The great aim of this Clause is to lower the cost of production. I think the hon. Member for Rochdale (Mr. Kelly) will agree with me that in fixing the price of goods the cost of production is the all-important element, and the manufacturer in arriving at his profit has to fix the selling price by the cost of production. The cost of production is the expense of running his mill, and in that cost there is an important element in the shape of rates. We see in the Socialist Amendment on the Paper the following sentence: By failing adequately to reimburse local authorities for loss of revenue will add to the burdens of shopkeepers, householders, and other ratepayers. Who are the ratepayers other than those who will benefit from the relief of rates? It is obvious that in a constituency like that represented by the hon. Member for Rochdale a great majority of the householders are connected with the cotton trade, and, if that trade benefits by a reduction of the standing charges of production, the first to gain will be the householders in that particular district. If you make the general body of the community more prosperous, it follows that the retailers will also benefit.

There are in the country a great many misrepresentations in reference to this Bill, and I wish that one of the observations which the Minister of Health made —namely, that over. 70 per cent. of the population must gain by this reform, and that the remaining 30 per cent. cannot lose—were written in letters of gold over every platform at every public meeting on this subject. In that observation you have a guarantee that not only will a direct benefit in relief from rates go to the industries concerned, but that the rest of the population cannot and will not suffer in any way at all. In the speeches from the Opposition Benches so far, and I think I have heard them all, there has been no challenge at all against the virtue of the various factors which are reckoned with in the formula by which populations are weighted. No hon. Member has challenged the desirability of reckoning the number of children under five years of age as an important element in deciding on the needs and the relative wealth or poverty of a district. No hon. Member has challenged the importance of rateable value, or of the factor of abnormal unemployment. Therefore, although the hon. Member for Leith (Mr. E. Brown) made charges about the reactionary and retrogressive character of this Measure, we know that it is all rhetoric. When we get to the hard facts—

Mr. E. BROWN

Does the hon. and learned Member suggest that the passage which I read from Sir George Newman's own report on medical services, in favour of percentage grants, is all rhetoric?

Mr. HURST

No doubt that represented his opinion—

Mr. BROWN

And that of others, too.

Mr. HURST

I agree, but the hon. Member did not quote the whole passage.

Mr. BROWN

I am quite willing to do so.

HON. MEMBERS

No!

Mr. HURST

I was rather referring to the actual adjectives employed by the hon. Member and his friends, and to the many adjectives used in the Amendments which the Socialist party have moved and which the Liberal party would like to move, to show what I think is quite evident to everyone, namely, that there are far more oratory and dialectics in the expression of opinions on this Bill than actual criticism of the main elements of the Bill, such as the constitution of the formula. Who will challenge the desirability of making this great burden of unemployment, which at the present time weighs so partially upon certain areas only in this country, a national rather than a purely local burden, as it is at the present time?

9.0 p.m.

Let hon. Members imagine the state of life in a district which is either a necessitous area or bordering on a necessitous area in its conditions, that is to say, where unemployment is very rife, where the burden of rates is very high, and where there is an enormous volume of Poor Law relief. Take the case of an individual there who just manages to keep his head above water, but who is burdened beyond all moderation and almost to breaking point by having to meet the costs involved in living in an area of that sort. He may he in direct competition with a man of the same ability, the same capital, the same way of living, and in the same trade in another part of England where the conditions are prosperous. Is it fair that the whole burden of this community in which he lives should fall on the one man, while the man living in a happier part of the country should be entirely free from that pressure? It is obviously unfair, and this attempt to make the burden of meeting the special conditions of these necessitous areas a national burden instead of a local burden ought, I think, to appeal to anyone who realises the justice of the case. Besides being the just thing to do, it is, I submit, the politic thing to do. At the present time, owing to the cumulative effects of misery and unemployment in certain areas, a state of demoralisation is coining about in certain parts of the country which is a danger to the State. It is wonderful to see the patience and fortitude of people in these necessitous areas who have abstained from taking relief as long as they possibly can, who take it with the greatest repugnance, who very often refuse charity, and will do anything to avoid taking public relief.

I have been very much struck in my own constituency by corning across many people who are clerks by training, but who cannot get jobs, and have put on navvies' overalls and are doing very hard physical work to which they are entirely unaccustomed, and which involves a tremendous physical strain upon them, whenever they get a chance of obtaining such a job, rather than claiming relief or receiving charity. There is a very great strain upon people of that kind. At the present time there are, in various parts of the industrial North, whole districts where the chances of work are remote and where there is an enormous number of such cases. That is absolutely demoralising, not only to the North but to the whole of the State, and, if this burden of meeting this very great stress ceases to be a matter of purely local concern and is made a matter of national concern, it will be much fairer, and will also have the additional advantage of freeing the community from this canker of misery and dependence on others which is growing up in districts that formerly boasted independence, self-reliance and prosperity.

Another point on which I think this part of the Measure has a very important bearing is this. In order to have a well-balanced population, it is not only necessary that there should be a prosperous distributive element in the trade of a country, but also that there should be a prosperous element engaged in production. At the present time the tendency of England is to become more and more a nation engaged in handling and distributing goods and in acting as middlemen. That is a very great danger. The only historical justification for resisting Free Trade in the middle of the 19th century was the fear that we should have a depopulated countryside, that agriculture would perish, and that we should become entirely a nation of manufacturers. That fear was to a very large extent justified when, during the War, we realised what a disadvantage it was to have allowed our countryside to become depopulated by the immense exodus of people from the country into the towns. At the present stage in our history a new danger presents itself. In our trade and commerce there is a very great danger that we shall become a nation of middlemen and shopkeepers, instead of a nation partly of shopkeepers and partly of producers. Therefore, a Measure which, like this, tends to relieve the productive elements in the population, and to throw the special burdens now imposed upon them on a wider area in the community, makes for a better balance in the population, gives us greater security, and, in my submission, puts our economic and social conditions upon better and sounder foundations.

That is really all that I want to say about the fundamentals of this Bill, and I submit with respect that neither of the Oppositions, in spite of their eloquent and interesting speeches, has really got to grips with the main motive and principle underlying this Bill, which is to give to productive industry in this country a chance in its present very difficult and dangerous conditions. To that main point there are only two observations that I wish to add. One relates to certain extraordinary passages in the Amendment which is before the House and in the Amendment which the Liberal party has put down. The Socialist Amendment deplores what is called the vicious practice of non-representative persons being nominated to membership of elected bodies, and the Liberal Amendment talks about this Bill as doing violence to those democratic principles on which representative government in this country is based. That is what I mean by "rhetoric," the word to which the hon. Member for Leith objected. We know that that is a fact, because, after all, the non-representative element which this Bill seeks to add to the local authorities whose business it will he to administer Poor Law relief and the other functions vested in them by this Bill—that is to say, the people who are to be co-opted—are people who at the present time belong to the boards of guardians. To say that women, who have given many years' activity to the service of boards of guardians, are not people to be co-opted on to the local authority, seems to me an illogical and foolish proposal. Here is a chance for the Liberals. They may find it very hard to he elected to these bodies. We can co-opt them.

The other comment I wanted to make was on the speech of the hon. Member for Nelson and Colne (Mr. A. Greenwood). He has most extraordinary views, and I wondered if they are really the views of the Socialist party. He thinks it is a mistake that any fees are to collected from persons who have medical or maternity benefit under the scheme. He would like to see district auditors abolished altogether. He also said he would like to see the percentage grant expanded to an unlimited extent. That, he said, would solve the unemployment question. He also said he thought it a terrible thing that anyone should still regard the Poor Law system as a deterrent. What does all that mean? It means that he wishes to see absolutely undiscriminating outdoor Poor Law relief, unchecked by any principle, undisturbed by the fear of surcharge by any audit, entirely beyond the purview of any auditor or any Minister or any of those dreadful people whom Socialists describe as bureaucrats. If that is the Socialist idea of local government, it ought to bring home to any ratepayer, or any citizen who believes in independence and self reliance, what Socialism in practice may really involve. These, however, are merely comments on speeches which hon. Members opposite have made. So far as the main proposals of the Bill are concerned, I have heard as yet no criticism that goes to the root of the fundamental principle underlying the Bill. I have no doubt whatever that the more it is understood in the country, the more the cause which it embodies will carry all before it.

Mr. SCURR

I think my hon. Friend the Member for Nelson and Colne (Mr. A. Greenwood) will be rather gratified that he has not obtained the approved of the hon. Member for Whitehaven (Mr. R. Hudson) or the hon. Member for Leith (Mr. E. Brown) for his speech. The fact that both these hon. Mem- bers disagree with him has been a justification for his argument. I have been very interested to hear from the hon. Member for Leith of the great concern of the Liberal party for the unemployed and the fact that the Liberal party through the ages have been concerned with the unemployed problem. My mind goes back to 1893, when one man alone in this House raised the question of the unemployed. We did not find the Liberal party on that occasion rushing to support Mr. Keir Hardie's proposal. We found, on the contrary, that Mr. Gladstone dismissed with contumely the suggestion that a committee should be appointed. Later on the Government was compelled to give way even on that matter. I am also interested to hear that it is the Liberal party who were responsible for passing the laws that brought about the feeding of necessitous children in our schools. My memory may be at fault, but I certainly was under the impression that the Measure was promoted and carried through the House by the late Mr. Tyson Wilson. The Parliamentary Secretary has on two or three occasions tried to press the hon. Member for Leith as to what was the opinion of the Liberal party on this question. I expect to find the opinion of the Liberal party, as usual, when the Division takes place. We shall have a certain number of them going into the Lobby with us, a certain number with right hon. Gentlemen opposite, and a certain number will find it not worth their while to take part in the Division. We can leave the Liberal party in that position of suspended animation in which they always are, and we can ourselves turn to a consideration of the Measure.

It is described as a Local Government Bill, and I think I am not going out of the way in saying it may be divided into three main headings, first of all, what the Government conceives to be administrative reform, secondly, rating reform, and, thirdly, the reform of the distribution of Exchequer contributions. I want to take these three points, because the hon. Member for Moss-side (Mr. Hurst) accuses us of not concerning ourselves with the broad principles that underlie the Bill. We have never under any circumstances stood merely for the abolition of boards of guardians and their transfer to some other authority. We have always advocated the abolition of boards of guardians in conjunction with the breaking up of the Poor Law. The principles for which this party has stood were largely adumbrated in the Minority Report of the Royal Commission, and the thing with which we have been particularly concerned has not been the extension of the Poor Law, as we claim this Bill is, nor the extension of Poor Law principles into county administration. What we have been seeking for has been some means whereby we might prevent destitution. The prevention of destitution has been the keynote all the way through. If we look at the Measure in regard to the Poor Law, I contend that my hon. Friend the Member for Nelson and Colne is absolutely accurate, and our Amendment is absolutely accurate when it says it perpetuates the evils of the Poor Law system. There is no proposal made, except in that one Clause under which there is an alternative choice given to the new local authority as to whether they will give certain relief under this Act or under the Poor Law at all. The Minister of Health referred to the Maclean Report. That Report distinctly laid it down that it was not sufficient merely to transfer the functions, and that there might be a number of services which in themselves were so much similar that really there was no need to transfer Poor Law functions at all. Perhaps r may read the extracts from the Report: It is, however, not sufficient to aim at bringing under one local authority in each area all expenditure made from local rates in that area. It happens that the majority of the persons for whom provision has to be made at the expense of the local rates fall into one or other of three main categories, namely, the sick, the children, and persons suffering from physical or mental infirmity, each of which classes is already being dealt with, wholly or partly, by the county or county borough councils. The unification of these services would involve the establishment of no new committees, no transfer of specially Poor Law powers of the boards of guardians, but only some applications and extensions of the Public Health, Education, Lunacy and Mental Deficiency Acts. That shows us quite clearly that the Maclean Committee were not contemplating merely the abolition of boards of guardians, but instead of our present Poor Law service, with its overlapping, they were considering entirely the ques- tion of the extension of our public health services. One cause of complaint against what is proposed in this Measure particularly relates to the Clause which makes it compulsory upon the county borough and the county council to make charges on persons who are going to receive assistance under these particular Acts. What we are concerned with is public health, with the prevention of disease or the curing of disease if disease is already present. It should not depend upon the ability of a person to pay, but should depend all the time upon the question as to whether a patient does or does not need treatment. The Poor Law system is a system which ought to have been done away with a good many years ago. I hear hon. Members in this House talk about the devoted service of so many thousands of members of boards of guardians throughout the country. As a matter of fact, I quite understand that there are a good many people who are more anxious to serve on boards of guardians than they are to serve on other local government authorities, because there is that certain sense of patronage which pleases many people who serve on boards of guardians. You cannot be a patron when you are considering the question of rates. You cannot be a patron when you are considering the question of sewage disposal, or when anything of that kind is under consideration. But when you sit on a committee and can dole out to people who come to apply for relief a certain number of shillings, one can feel a glow of satisfaction that he is a patron and doing something which is charitable and something which is called devoted service.

I have had some experience, several years as a member of a board of guardians, and some years as chairman of an important board. I have sat on relief committees from nine o'clock in the morning until six, seven, eight and nine o'clock at night, right through the day. There is no reason why we should have to interview infirm applicants or sick applicants or parents. When I have had to interview able-bodied unemployed I have had men come before me and I have been compelled to ask them questions concerning what they were doing, what their means were, if they had any means, why they had no work, why they did not get work, every possible inquiry into their family circumstances. Really and truly the most impertinent and insolent questions had to be put by me, and I had to put them to men who were just as good as I am. I consider that the giving of relief under the present system of the Poor Law is demoralising to the recipient, but if it is demoralising to the recipient it is more demoralising to the person who has to dole it out as a member of the committee. It is because of that feeling arising from the experience of dealing with Poor Law relies' that I want to see the Poor Law system swept away, and not the transference of it to a county borough or a county council assisted by the guardians' committees proposed under this Bill.

I want to see the question of unemployment dealt with not through the local authorities but on a national basis. I believe that the right hon. Gentleman the Minister of Health thought when he wag introducing this Bill to the House this afternoon that he was putting a certain poser to us. He asked whether we were contemplating the position of having, on one hand, a man receiving unemployment benefit for which he had paid, and, on the other hand, a man receiving precisely the same amount through the Poor Law for which he had not paid. He was asking us whether that was a thing that we contemplated. It is not a thing that we are contemplating. As far as we are concerned, it is not a question of merely giving so many shillings a week to persons who are out of work. What we are concerned with all the way through is the provision of work for the unemployed, for the training of the unemployed, and this cannot in any circumstances be a local burden. It must in every sense of the word be a national responsibility, and the fact that the Bill does not provide for that is one of the reasons why we have tabled the Amendment which is under consideration at the present time. "But," says the right hon. Gentleman, "my proposals are really sound, practical proposals in regard to dealing with the question of unemployment, because of the relief to industry which I am giving by the de-rating system." As far as I have been able to follow the arguments of the right hon. Gentleman, the various White Papers and those who have spoken on the Government proposals, the idea seems to be that if you only reduce the rates by a very considerable sum on these particular industrial properties the immediate result will be that prosperity will begin for all the properties which are de-rated. I think that that is a proper and fair statement of the position. There has been going on in the country for some time a very considerable reduction. I find that during the middle of this year an address was delivered in a Committee Room of this House by an eminent rating expert, Mr. Michael Faraday. He drew attention to the fact that: Under the present rating laws, which seem to be misunderstood, the rent that a tenant would give for premises suitable for the purpose of carrying on any particular trade, although not exclusively assessed according to actual profits, is based fundamentally upon the ability to make profits by the occupation of such premises. In other words, when there was a boom in the cotton trade—the hon. and learned Member for Moss Side (Mr. G. Hurst) will be interested in this—mills increased in rental value and new mills were hurriedly built to absorb the surplus trade; whereas the slump has been followed by the closing down of certain mills, which thereby come into the market and are let, if at all, for comparatively small sums which affect the rental and rateable value of those mills which are continuing to work, the valuation of such depending inter alia upon comparison with those mills recently let. Mr. Faraday went on to give several specific instances of great reductions in rateable value. He gave, for example, the result of certain appeals in which he was successful on the Clyde in the year 1921, under which the assessments were reduced from £397,412 to £183,539, or a reduction of 52.56 per cent. That is a very substanial instance of de-rating. I could quote other figures, but one is very significant. Mr. Faraday says: In Poplar quite recently I succeeded on behalf of the Port of London Authority in obtaining a reduction in the assessment of the East and West India and Millwall Docks from £114,576 to £30,000 rateable value, entirely due to the falling off in profits in the docks. If all these reductions are made in rateable value, it obviously means that there is a very much smaller rate for those particular properties to pay. Yet we do not find under any circumstances that there is any improvement in industry at all. The idea seems to be that if you will only reduce rates all will be well. We hear rates constantly spoken of as being a burden on industry. I quite admit the phrase that is used not only on the other side of the House but sometimes on this side also. The Minister of Health this afternoon, in one of his historical reminiscences, pointed out that after the rates were first set going the factories brought in an industrial hereditament, which was really different altogether from the class of property which was rated before the factories existed.

I contend that practically the whole of the rates which are imposed in a locality benefit the factories just as much as the individual householders and shopkeepers. After all, if an employer of labour is going to carry on his industry, or shop, or mine, or whatever it is, successfully, two things are necessary: namely, that his supply of labour shall be efficient and healthy. If the supply of labour is to be efficient, then the public health services have to be conducted efficiently, and if labour is to be intelligent the workman must be educated. Therefore, I claim that the. education rate and the public health rate are as much the responsibility of the factory owner as they are of the individual dweller or shopkeeper. So far from being a burden on his industry, they are in every sense of the word a help to his industry. If in the districts in which this complaint is made, there were unhealthy people and unintelligent workmen who could not do the work they were called upon to perform, we should soon find a very great outcry indeed on the part of the proprietors of factories.

I go still further in regard to this question. It is coming round once more to the old fallacy that we have heard expressed over and over again in this House during the last few years—that what is necessary in order to improve our position is to reduce the costs of production. It is said that we must reduce them and everything will be happy, and we shall be on the road to prosperity. It is some years now since the rates on agricultural land were reduced by one half, and it is some years also since they were reduced by three-quarters, and yet we are constantly being told that the agricultural industry is one of the industries which is depressed. We have been told that the agricultural industry is to have the opportunity of appearing before the Safeguarding Committee in order that they may show that Safe-guarding Duties in certain other directions may injure the industry. We also have an outcry from many members of the agricultural community that the safe-guarding principle ought to be applied to their industry. It does not seem therefore as if the reductions in the cost of production effected by the de-rating of agricultural properties has conferred any benefit on that particular industry.

For some considerable time we have had the application of this principle in another way to an industry which has formed the subject of Debate very often in this House. We were told by the Prime Minister prior to 1926 that the one necessity for restoring prosperity to the coal trade and the mining industry was to reduce the costs of production, and that it was because of the high costs that we were not able to hold our own in the markets of the world. So certain were the Members of His Majesty's Government that they were right, that they came down to this House and actually increased the hours of labour in the industry in order that men might be able to work longer and so reduce the cost of production. Everyone knows to-day that the mining industry is in a worse and more parlous condition than it was before that Act of Parliament was passed. For some considerable time we have had this proposition put forward, that if we only reduced the rates in this way and lowered the cost of production, then prosperity would come along.

I submit that it is not a problem of production at all. As a matter of fact, in any one of our industries at the present time, it is not a question of not being able to produce enough. Take the cotton industry at the present time. It is working on short time and has been for a considerable number of years. It has the capacity to produce double and more than double what it is producing at the present time. We know that since the War the effective machinery of this country has increased by 16 per cent. or 17 per cent., compared with what it was before the War. The capacity to produce is there, and the whole question relates to other matters quite outside that aspect. I want to suggest to His Majesty's Government that, instead of troubling their heads about this complicated Measure which is before us to-day it would be much easier to say that the only way in which you are going to bring about prosperity in this country is to increase the purchasing power of the masses of the people. Whatever may be said in regard to the United States of America industrially, they saw very quickly that what they had to do was to stimulate their own market and to give a high purchasing power to their own workmen and so bring about by that means the growth and continuance of their industry. In this country, an opposite policy has been pursued by employers of labour. They have been doing their best to cut down wages, and the consequence is that by increasing hours and reducing wages they have decreased purchasing power, and so have not only affected the home trade of the country but the export trade also.

A considerable amount of nonsense is talked by all sorts of people about the capture of foreign markets. As a matter of fact, the export trade depends very largely upon your home trade. If your home trade is prosperous and your purchasing power is great, then your export trade will be great. It can be seen in a very simple way. For example, some years ago the people were drinking much more beer, but as time went on people got the desire for tea, and they obtained that tea from China, Java and India. Now exports have to be paid for by imports, and the result of that desire for tea has been that the Chinese, in exchange for tea we brought from them, have had to buy things from us, and so have the Indians and the Japanese. The more we increase the purchasing power of the masses the more will there be a demand from the people in this country, and the more their demand the greater will be our home trade and our export trade.

As a matter of fact, the relief which is supposed to come to industry under this Bill is not going to industry at all. We know very well where it is going, and that is into the pockets of the land-owners. Some people think that the Minister of Health and his Government were mad in putting forward these particular proposals. There is method in their madness. They describe this as a Local Government Bill. So far as I am concerned, I would describe it as the Friends of the Tory party (Grants-in-Aid) Bill. I think that is a far more accurate title than the one which we have on the Bill at present, because the de-rating of agricultural land is going to benefit the agricultural landowner in one or two ways. If he sells his land, he will get a higher price for it. That is only common sense, because, if any business man is going to buy land, he will want to know what are the possible charges on it, and, if he knows there are no charges on it and no rates at all, he will pay a higher price for it. The same thing will apply in reply to industrial hereditaments. Those factory owners who own the sites on which their factories are situated will benefit. Otherwise, the benefit will go into the pockets of the landowners all the way through. The right hon. Gentleman is benefiting his friends, as the Tory party always do. First of all, he benefits the agricultural landowner; secondly, the industrialist, and, thirdly, by the proposals of a complicated formula he is doing everything he can to destroy local government initiative and to destroy the efficiency of the health services of the community.

The right hon. Gentleman has been very jealous, and his friends have been very jealous of the progress of the Labour movement in local government during the past few years, and he has a political objective in this Bill as well as the local government objective which he has tried to describe to us. He has a political objective in trying to stop, if he possibly can, the progress of the Labour movement in local government. We have seen it in the Local Authorities (Audit) Act and in the Boards of Guardians (Default) Act, and the same policy is being carried a step forward in this Bill. Powers are being transferred to county councils, and we know that in most cases it is impossible in present circumstances for working men to sit on those authorities, although they may be anxious and willing to do so. I know that in regard to the county of Buckingham, of which I have some knowledge, in one particular district we always could have sent a Labour representative to the Buckingham County Council, but it was impossible to do so, because there was no one who could afford the money and the time to go to Aylesbury and perform the duties of a county councillor as they were then, or the greater ones as they will be, and the con- sequence was that a Tory was always returned.

In regard to the financial provisions of the Bill, one becomes more and more amused with the various calculations put forward. What we have come down to now by all the guarantees, to which the Minister so eloquently referred this afternoon, and all money which is to be given, is that the formula has gone altogether. What it is being used for one does not know, because the moment any local authority comes forward and says: "By the operation of this formula we are going to lose this or that," the Minister says, "I will guarantee you against loss for a number of years," and so on. So far as we on this side are concerned, we have always stood by the principle of the percentage grant system. The position in regard to the block grant is very interesting. It started in 1921, after the appointment of that very famous Committee, the Geddes Committee, which consisted of three gentleman who had little knowledge or experience in regard to local government in this country. They had to wield an axe, and in order to wield that axe they suggested the disappearance of the percentage grant system and the putting in its place of the block grant system.

A Departmental Committee was appointed to go into the matter, under the chairmanship of Lord Meston. The significant fact remains, that of the evidence given before that committee, whether given by local authorities or by Government Departments, 80 per cent. was in favour of the continuance of the percentage grant system. That committee was appointed by the then Chancellor of the Exchequer. We have been waiting for the committee's report, and we have pressed for the report. We have understood that there has been a draft report, which formed no relation whatever to the evidence tendered by the majority of those who gave evidence. Lord Meston, perhaps, is wise in his generation. He has not called the committee together, and he has left it to the Government to carry out the policy which is proposed in this Bill, by means of the block grant system, mixing up roads, Poor Law and public health services, mixing up weighted population and other factors, in order to try and disguise the one fact that they are doing all they possibly can to stop the advance of local authorities which has been going on in the direction of the principles for which our party stands. That is the whole and the sole object of this Bill.

So far as we on this side of the House are concerned, we shall fight the Bill through its Second Reading, and we stand by every word of our Amendment, which expresses exactly cur opinion. This is a bad Bill. It is a Bill entirely devised for the benefit of the friends of the Tory party, and when the country understands it, as they are understanding it, and as hon. Members opposite know they are understanding it, the result will be unfortunate for the Government. Hon. Members opposite may go as much as they please to the kindergartens which have been provided for them in this House—of course we know that those kindergartens are necessary—and they may go into the country and use loud speakers, but the fact will remain that the man and the woman in the street will know that this Bill is really devised in order to try and keep back the poor from getting their due, to keep the unemployed still within the meshes of the Poor Law, to give them relief as if it should be thrown at them with contempt instead of being, as it ought to be, their right to have either maintenance or work, for which we on this side have always stood. Hon. Members opposite know that the people of the country are realising these facts, and we shall find that more and more when the General Election comes.

Hon. Members opposite have a majority in this House at the present time, and they will carry the Bill, with one or two minor alterations, but there is a time of reckoning coming a few months hence, and when it comes the right hon. and hon. Members opposite will not smile as they are doing now. In their place a party will come into power who will be able to make an absolute change and reorganisation in our local government and the Poor Law system, which will make it decent for every man and woman in the country.

Sir FRANK MEYER

Perhaps I may be permitted to begin my remarks by asking the hon. Member who has just sat down whether in the event of his party coming into power, of which he seems very confident, they will repeal this Bill immediately, if by that time it is on the Statute Book? I do not expect him to answer that question, but perhaps the hon. Member who is going to speak later for the Opposition will answer. If the arguments which are to be advanced in the country against this Measure resemble in any way the arguments which the hon. Member has just advanced, I for one shall welcome a very large number of speakers from the party opposite in my constituency. [Interruption.] I am always delighted to listen to interruptions of a sensible character, and to answer them, but after the very patient hearing which the hon. Member opposite has had for the last 40 minutes I think I am not claiming more than my due when I express the hope that I shall be shown a little courtesy from hon. Members opposite in the ten minutes or quarter of an hour during which I shall occupy the time of the House.

The arguments which the hon. Member for Mile End (Mr. Scurr) has used are the kind which I should welcome with a great deal of pleasure in my own constituency. He says that it is no value whatever to this country, no solution to the problem of unemployment, to lower the costs of production; the idea that lowering the costs of production has any advantage is an absolute fallacy; it is all nonsense. I think I am right in my interpretation of the hon. Member's argument. Therefore, I take it that it is also his opinion that rationalisation, one object of which is to lower the costs of production by producing on a larger scale, is also futile? I take it that I am right? In that case the hon. Member has joined the school which is represented by the right hon. Member for Shettleston (Mr. Wheatley), who says that the only thing that matters is to increase the purchasing power of the people of this country and that to lower the costs of production is of no value whatever. To me, that has always been a fascinating argument, because if we pursue it to its logical conclusion where do we stop? Why say £4 or £5 per week; why not make the minimum wage £10 per week; it would solve the whole problem ! I wonder whether the latest recruit agrees with the policy enunciated by the right hon. Member for Shettleston. Let us go on and make it £20 a week; it is so easy. All you have to do is to increase the purchasing power of the nation and you will solve the problem of our export trade. Now we know what is the policy of a section of the Labour party. The hon. Member for Mile End is a follower of the right hon. Member for Shettleston in his policy to increase the purchasing power of the people, but I am interested in knowing whether he is also a follower of a very different financial expert in the Labour party—the ex-Chancellor of the Exchequer, in saying that rates as such are no burden on industry. On the contrary, he says that rates, far from being a burden on industry, are a great advantage to manufacturers and industrialists—

Mr. MORGAN JONES

He did not say that.

Sir F. MEYER

The hon. Member was not present when the hon. Member for Mile End was speaking.

Mr. JONES

I was questioning the hon. Member's remarks with regard to the right hon. Member for Colne Valley (Mr. Snowden).

Sir F. MEYER

No, I was saying that the hon. Member for Mile End says that rates are no burden but a positive advantage to manufacturers in that they bring in such countless advantages that they are more, than worth their while, and, therefore, like the other argument, the higher you raise them the better. He quoted a great expert, a gentleman whom I know very well, Mr. P. M. Faraday, who said that it had been proved that a reduction of rates was of no value to industry because under recent assessment many of the oppressed industries had already had their assessment reduced, and therefore their rates reduced, but it was of no value. The hon. Member did not stop to consider what the result is at the present time. At the present time, if the rates on any factory or works are reduced, if the assessment is reduced, it means that the rates on all the other ratepayers in that district have to go up; and the whole difference between that situation and the situation which will arise under this Bill is that under the Bill, when rates are reduced by three quarters on industrial hereditaments, it is to he made up from the Treasury, whereas at the present time it falls on all the other ratepayers, and the vicious circle goes on.

Mr. DUNCAN

Where does the money come from?

Sir F. MEYER

if the hon. Member wants an answer to any distinct question I will try and give him an answer.

Mr. DUNCAN

Can the hon. Member tell me where the money is to come from which the Treasury is going to put into this business? It will be very illuminating.

Sir F. MEYER

Exactly where the hon. Member and his friends intend to get it when they make unemployment a national charge—from the taxpayer. Unless the hon. Member intends to quarrel with his own party as he is quarrelling with the Government I cannot see the relevancy of his interruption. I am glad to see that hon. Members of the Liberal party have returned to the House because I am very anxious to ask them a few questions. All speeches in this House may be divided into two classes—those which give information and those which seek information. There is another class of speech which sometimes is more intended to go to the constituents of the hon. Member than to the ears of his fellow Members. My few words to-night are more in the nature of obtaining information. I have a genuine desire, from a perfectly selfish point of view, to get information from hon. Members of the Liberal party. The situation in my constituency is such that I am more interested in knowing the policy of the Liberal party than in knowing the policy of the Labour party and, therefore, I propose to ask hon. Members opposite whether they can answer a few questions with regard to their attitude on this Bill.

I do not want to know the attitude of the Leader of the Liberal party, nor do I want to have the opinion, although I greatly respect it, of the hon. and gallant Member for South Hackney (Captain Garro-Jones) because from a certain action that he took last week I gather that his spiritual home is rather on the back benches above the Gangway than on the Liberal Benches. Nor do I want the opinion of the right hon. Member for West Swansea (Mr. Runciman) whose opinions I always respect. What I want to get at is the opinion of that vast body of middle-Liberal opinion stretching from the Orkneys in the North to St. Ives in the South represented by hon. Members opposite and by that gallant band of 500 who I understand are shortly coming for- ward. My questions are very few and brief, and I hope that some time during this Debate I shall get an answer. Does the Liberal party agree that the present system of rating factories and industrial hereditaments is proper and just?

Mr. E. BROWN

Read the Yellow Book.

Sir F. MEYER

I do not want an answer immediately. I would much sooner wait and have a considered opinion. Do they agree that agriculture should be completely relieved of rates, or are they against the proposal in the Bill that rates on agriculture should be removed? Do they agree that railways and other transport should be relieved of rates and should pass the relief on to certain industries by way of reduced freights? There are three simple questions, to which no doubt an answer will be forthcoming. Do they agree with the widening of the areas for the purposes outlined in the Bill, for highways and the administration of the Poor Law And, finally, do they or do they not agree with the abolition of the guardians? I know that the hon. Member for Leith (Mr. E. Brown) has had questions put to him already by the Parliamentary Secretary, but the answers he gave were of the kind which can be described as "yes" and "no." We have had no definite reply. I do not think we shall ever get a definite answer. It was all very well for the hon. Gentleman to quote certain statements made by the late Lord Oxford about the guardians—statements made in 1912. All that they illustrate is that the breach between the late Lord Oxford and the present leader of the Liberal party, which afterwards developed, was already in being at the time, because the quotation which the Minister of Health gave to-day from a statement by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) conflicts absolutely with the statement which the hon. Gentleman made as coming from the late Lord Oxford.

The Liberal party never will give an answer for this reason: All their writings and speeches and policy and evidence in the past have been in favour of the abolition of the guardians. But now that they find it is a very good card to play for party purposes against the Government and the Conservative party, they back up the prejudices of the present guardians who, being human, naturally do not like being abolished. They are going to use it as an electoral card, but in doing so they are going against all their convictions and previous statements and are acting in a manner which is electorally entirely unscrupulous. There is one other point, and it applies to both Liberals and Socialists at the same time. It relates to the question of relieving prosperous industries. Assuming that the hon. Gentleman who spoke last is wrong, and that rates are a burden on industry, and assuming that it is the policy of both parties opposite that any relief that is given from rates should be given only to what they call depressed industries—

Mr. BROAD

Where it is wanted.

Sir F. MEYER

Does the hon. Member mean wanted or needed? What is the definition of "where it is needed"? How are you to define prosperous industries? In the country and in the Press the criticism made is that this relief is to go to prosperous industries and ought to go only to depressed industries. No one has yet defined exactly when an industry ceases to be prosperous and becomes depressed, just as no one can define what is a depressed area and what is not. Therefore all these suggestions about endeavouring to eliminate prosperous industries from the Measure are entirely futile, if we are to give any relief whatever from rates to industry. I notice that one of the proposals of the Liberals is that the money, instead of going to factories, should go to the ratepayers all round. Of course that is a very good electioneering card. It will procure the sympathy of the shopkeepers and the householders. What about the difference between the prosperous and the depressed areas if there is to be all-round relief to the extent of £50,000,000? Are the prosperous ones to share in it? Is Mr. Selfridge to share in it? We have had the right hon. Member for Carnarvon Boroughs holding up to approbrium and contempt Mr. Courtauld and other directors of vast industries which pay huge sums in Income Tax and undoubtedly make big profits. I have not noticed that when he is trying to elicit sympathy for the poor shopkeeper the right hon. Gentleman has said anything about not allowing Mr. Selfridge and other big and prosperous distributive stores to share in the money.

10.0 p.m.

The whole truth is that it is impossible in any national scheme of this kind to make a distinction between the prosperous and the un-prosperous. The only thing you can do is to try to arrive at some formula by which the greater amount of relief will go to depressed areas. To say that you can cut out prosperous industries and districts altogether by any arbitrary line is quite impracticable. In criticising this Bill from that point of view hon. Members should direct their attention to the question whether it is possible to give more to depressed areas and industries without drawing an arbitrary line to which it is impossible to adhere. If the House will direct itself to that question and can find a better formula, it will do something useful.

The attacks that have been made so far on the Bill by the Press, by the Leader of the Liberal party and by others who have gone about the country attacking the Bill very often before they knew what was in it, have been founded on two things—in the first place on misstatements and inaccurate information. That possibly can be remedied now that they have had the advantage of hearing the statement of the Minister. Secondly, the attacks have been founded on a desire to play on jealousy and fear and greed. This marvellous sympathy of the Liberal party and the Labour party for the householder and the shopkeeper is something quite new. We have always heard before of middlemen who were merely a burden on production. We have been told that production was the great thing—the productive industry that employs the man who works with his hands. The middleman we have been told, was a great burden, who took profit to which he was not entitled. But now that it suits the book of hon. Gentlemen opposite, they are anxious to do something for the poor shopkeeper. I think the country will judge them by their deeds in the past and by the policy they have put before the country, rather than by their crocodile tears.

Sir HENRY SLESSER

The House will agree that the present occasion is a very important one. We know that this Measure is going to take up the greater part of our time during the rest of this Session. We also know, or are told, that Government are going to go to the country primarily on the proposals in the Bill. Therefore, whatever else we may think about the Bill, we must regard it as a matter of extraordinary importance. If I were speaking merely as a politician, I should be delighted with this Measure. It may or may not be the case that other proposals which the Prime Minister has suggested in the past for relieving trade, such as Protection, would have been successful. At any rate, were Protection the issue, we should have been going to the country on a real big proposal—successful or unsuccessful—to deal with the terrible and gigantic dilemma of unemployment and destitution. In regard to this Bill, we must remember at the outset that the total rates paid in this country amount to not less than £173,000,000 and the suggested relief to rates at the outside, in this Measure, is only £24,000,000. Against that has to be set off at least some burden on industry inflicted by the Petrol Duty, so that probably on balance the gain would be more like £10,000,000, if there is to be any relief at all. When we see a possible net gain of £10,000,000 to industry, and consider that the present rates spread over the whole country amount to £173,000,000 and when we are seriously told by the hon. Member for Moss Side (Mr. Hurst) and others that the collapse of the coal industry, the cotton industry, the woollen industry and agriculture can all be arrested by distributing this small sum of £24,000,000 or £10,000,000 among certain occupiers and producers, many of whom are producing quite valueless commodities—then we must welcome the fact that the Government are going to the people on an utterly trivial and insufficient proposal, whether it be right or wrong.

Having said that, I wish to deal in some detail with the proposals before us. The Minister twitted us with having so many different "limbs"—as we say in the law—in our Amendment, and so many different reasons for objecting to the Bill. The right hon. Gentleman must realise that this Bill contains six ordinary Bills and he is asking for a number of objections when he puts forward so many proposals in the compass of one Measure. First, I shall confine myself to the point in our Amendment that the Bill perpetuates the evils of the Poor Law system. I confess I am disappointed at the way in which the Government have dealt with the question of the Poor Law. Knowing the right hon. Gentleman's interest in local government and social reform, I expected that before this Parliament dissolved we should have a real reform of the Poor Law system. But when at the Consolidation Committee of which I have the honour to be a member, the whole of the Poor Law dating from the time of Queen Elizabeth was brought up to be consolidated, I thought it a bad omen. I could not see why the right hon. Gentleman should be anxious to go to the labour of consolidating the existing Poor Law unless he meant to continue it, for some time at any rate. Notwithstanding that, I hoped when this Bill came to be drafted, we should have a real reform of the Poor Law.

I say with every respect that some of the right hon. Gentleman's observations in introducing the Bill seemed, I will not say calculated, but likely to have the result of confusing the public mind on this question. It is quite clear that, whatever else the Bill does, it does nothing at all to deal with the Poor Law. What is the problem of the Poor Law? I shall not be accused of riding a hobby horse when I point out that there was a happy time when people were relieved in this country regardless of the fact of whether they were destitute or not. That happy time, of course, was during the existence of the monasteries and the guilds, before those things were altered at the Reformation. However that may be, from the statutes of Henry VIII and Elizabeth down to the present time, the unholy idea got into the minds of the administrators of this country, and also on to the Statute Book, that people were only to be assisted out of the Poor Law if they were in a state of destitution. Such an idea was unknown in the comparatively civilised period of the Middle Ages, but it has existed during the last 200 or 300 years.

Now we show signs of reverting to a more civilised outlook. We have found during the last 20 or 30 years proposals by one Royal Commission after another for changing this state of affairs. We find, for example, in the Reports of the Poor Law Commission of 1909, that the majority, who could not be accused of Socialistic views, held, equally with the minority, that the Poor Law needed humanising and altering. My first criticism of this Measure is that it in no wise humanises or alters the existing Poor Law. The tests laid down in the Act of 1834, and perpetuated in all legislation since, remain at the present time, and a man is no more entitled to Poor Law relief under the law to-day than he was 50 years back. Nor will he be more entitled to relief under this Bill. The Minority Report of that Commission recommended the prevention of destitution, rather than waiting until destitution had arrived and making it the ground for giving people relief. The Maclean Report took the same view. The Government have not followed those proposals and the destitution tests and the deterrent test and all the tests which make the present Poor Law so unsatisfactory to all social reformers will remain under the present Measure just as they are at the present time.

It is a serious consideration for the right hon. Gentleman. It does not lie particularly with a Conservative Minister to take that attitude. I was interested to see that so long ago as 1841 the late Lord Beaconsfield attacked what the right hon. Gentleman and his friends now defend. They all now take the view of the plutocratic Manchester school of the Liberal party. There are no Conservatives left in this House at all. In taking the plutocratic, inhuman view, which really came from Manchester—I will not say from Birmingham—they are taking a view which is in no way essential to the old Conservative idea. Mr. Disraeli, as he then was, attacked the whole idea of the Poor Law reformers and the Poor Law Act of 1834 and the right hon. Gentleman will recall that one of the chief planks in the platform of the Young England movement—represented now, I suppose, by the hon. and gallant Member for Stockton-on-Tees (Captain Macmillan) and certain other hon. Members—was the abolition of the Poor Law test as laid down by the Whig Government of 1834. Disraeli attacked it, they all attacked it, yet here it is to-day.

Then I find, to come to more recent times, that in the discussion of a Bill which was introduced into this House in 1910, the Prevention of Destitution Bill, which incorporated the minority proposals of the Poor Law Report at that time, Mr. Balfour, as he then was, spoke most sympathetically of the idea of the prevention of destitution and accepted the principles of that Bill and at that time already supported the notion of the break-up of the Poor Law. In point of fact, if hon. Members below the Gangway would allow me the observation, Mr. Balfour was very much more sympathetic to that notion than was the late Lord Oxford and Asquith. Therefore, all through, for years now, there has been an increasing opinion that the whole Poor Law should go, should be broken up, should be abolished; and the notion of the destitution test as quite hopeless and always bad, has now become more inappropriate than ever.

Since the Royal Commission sat in 1833, since the Act of 1834, you have had one authority after another appointed by the State for the purpose of relieving the various distressed persons—the education authority, the health authority, the lunacy authority, the mental defective authority, the unemployment insurance authority, and many others—all these authorities set up for dealing with the very matters which used to be within the province of the old Poor Law, so that the continuation of the old Poor Law was on all sides, I thought, admitted to be unjustifiable, wasteful, cruel, and useless. Therefore, it was not too much to hope that when the right hon. Gentleman, who was so well known for his interest in these matters, came into office he would be the first to promote what all inquirers into this subject have regarded as essential to reform, yet what do we find? It cannot be made too clear to this House or to the country—this House realises it perfectly clearly; the country perhaps may not, but I hope it will before we have finished with this matter—that the mere proposal to transfer the authority of the guardians to the county or the county borough is in no sense an alteration or a breaking up of the Poor Law. In point of fact, I would go so far as to say that if the county or the county borough, through the appropriate committees, do not limit their activities to the four corners of the Poor Law Act, 1927, they will be breaking the law, and the right hon. Gentleman may possibly send down one of his Commissions to administer the county or county borough on its Poor Law side.

Therefore, let us make it quite clear that the transference of the Poor Law function to the county and the county borough, though it may be necessary for purely financial reasons in order to make certain adjustments in areas for raising money, has no relaiton whatever to any adjustment of the Poor Law as such. The right hon. Gentleman drew the attention of the House to Clause 4 of this Bill, and it is true that Clause 4, if it he not critically examined, does to some extent seem to do away with the old Poor Law notion; but when we come to examine Clause 4—I make nothing of the point that the administrative scheme is optional and not compulsory; I will assume against myself that the scheme is made, that the word "shall" appears in place of the word "may." It simply says that an administration scheme may declare that any assistance which could, after the appointed day, be provided either by way of poor relief or by virtue of what I may call the general public Acts there set out shall be provided exclusively by virtue of the appropriate Act and not by way of poor relief. What does that mean? It simply means that you have to-day—and it is an indication of the overlapping which now exists—these two authorities. You have the Public Health Act, 1875, authority, and you have the guardians exercising public health functions; similarly with the Mental Deficiency Act, the Blind Persons Act., the Public Health (Tuberculosis) Act and the Education Act, and when you have both these authorities now exercising these functions, the new authority, the county and the county borough, is to use these powers and not those of the Poor Law, but that leaves undisturbed all the functions of the Poor Law which are actually being overlapped by this particular method, and all sorts of legal difficulties, into which I do not want to go, immediately arise. For example, an authority may be exercising powers in general, and yet it may be that the individual person can only be re- lieved under the Poor Law Act, and the question of destitution may arise in his case when it would not arise in the case of the public authority. There arises yet another question. As I understand it, the relieving officer is not abolished under this Bill. One does not want to say anything harsh of individuals, but the relieving officer is a functionary who was condemned roundly by the whole of the Poor Law Commission. Their Report said that he was A sort of detective to keep out improper cases with the result that the refined poor are frightened, the weak sly and cringing and the strong or bad insolent and defiant. Despairing, tried by distrust and trickery on the one hand and afraid to act for the necessity of not giving if it can be helped. That is the description which the Poor Law Commission gave not of a particular officer, but of a person placed in that position. That officer, with the limitations of the Poor Law upon him, is not to be abolished under this Bill. The hon. Member for Yarmouth (Sir F. Meyer) asked me some questions, and did not stop to hear the answers, and I will reply in his absence. He asked as to the policy of this party, as I understand it, with regard to this question of the abolition of the guardians. The position we on this side of the House have always taken is that the Poor Law should be broken up and abolished altogether. In that process of the abolition of the notions of the destitution test, and all the notions enshrined in the legislation of the past century, we naturally also wish to abolish the guardians of the poor. That, however, is not the position which we are asked to consider here. We are asked to maintain the destitution test, and at the same time to abolish the guardians. I can see great dangers arising in that policy, one of which is this: for the first time in its existence, the great public municipal authorities and the county councils are to be given Poor Law functions; for certain purposes they are to be brought under the Poor Law Acts, and I am not at all sure that the great boast of the local authorities, that all the services which they maintain to-day are completely free, as they are free, from the Poor Law taint, can properly be said still to exist when the two authorities are mixed into one.

I am not at all sure that if you insist upon maintaining the Poor Law, there is not something to be said for isolating the disease within the area of the guardians, and not infecting the public authority with the Poor Law taint. It is a very arguable point. I see many dangers arising out of the continued maintenance of the Poor Law, and giving the limited Poor Law authority to the public authority. Be that as it may, what I wish to make clear, what my party wish to make clear, and what we shall make clear, is this, that this Bill does absolutely nothing to abolish the old Poor Law, and it will remain for a Labour Government to do what was recommended 20 years ago, to break up the Poor Law in its entirety. That is what we mean when we say that the Bill perpetuates the evils of the Poor Law system, and when we say that it extends its vicious practices.

Then, again, we come to the question of the non-representative nature of the local administrators of the Poor Law. We are asked to accept a considerable extension of the principle of co-option, a very considerable extension indeed, and great care will have to be given to this matter before the House will decide to entrust to so many persons who are not elected the administration of the relief of the poor. One hon. Member said: "It will be all right, because the existing guardians will go on sitting on these committees." But, in dealing with legislation of this magnitude, surely we are not to be influenced by a consideration of what is to happen next year or the year after. We are legislating, if not for all time, at any rate for some considerable period, and the question is not as to whether next year a few people who are now guardians may get on to these committees, but whether the principle of co-opting so large a proportion of members on these bodies, which will be the ones with which the actual poor will come face to face, is a sound one. It will not be the town clerk, or the county council, which meets perhaps once every three or four months, but these people in the area who will have to deal from day to day with the granting of relief. Even in the most harsh days of Poor Law administration the principle was that the persons responsible for granting relief should be immediately amenable to the electorate of the area. Now we are introducing a system under which a very large number of the persons who may sit on these committees may be co-opted. I do not know what the quorum will be. There may be days when two persons are sitting on the relief committee neither of whom has been elected by anybody, so that there will be no public control over them at all.

As regards the Poor Law, therefore, we say the Bill does nothing of value, and that what it does do is reactionary and detrimental. But in spite of the fact that the right hon. Gentleman says this is a local government Bill, and spoke about the great need for local government reform, we know that the provisions about the Poor Law have been introduced merely to facilitate the financial arrangements in the Bill. In spite of the right hon. Gentleman's objection to the statement, I think this is a de-rating Bill. This is a Bill dealing with finance, and not, in the true sense of the word a local government Bill. It does singularly little to deal with real local government reform. If it really were a local government reform Measure, nobody knows better than the right hon. Gentleman what a lot of matters ought to be dealt with which are not touched upon at all in this Measure. There is the whole question of the powers of the great urban districts which are not municipalities, and how far these should have the powers of municipalities. There is the problem of the small non-county boroughs, which nowadays are in such an anomalous position compared with county boroughs and for some purposes are still a part of the county. There is also the problem of the functions of the borough councils. None of these things is touched in the Bill. When we are able to study the Report of the Royal Commission on local government we shall find that only those parts of local government are dealt with in this Measure which are in some way essential to or integral parts of the financial scheme of de-rating. Therefore, it is idle for the right hon. Gentleman or the Government to pose as great reformers of local government. They may say that the relief of industry by de-rating is a good substitute for Protection, is an alternative cry for the next General Election. They may say, as the hon. Member for Moss Side (Mr. Hurst) seemed to say, that to distribute £24,000,000 over England is going to abolish unemployment in distressed areas, or practically to abolish it, but what they cannot say is that this is any scheme for the reform of local government. It is true that amongst the miscellaneous provisions there are a few odds and ends, dealing with the adjustment of boundaries, and matters of that sort, but substantially such parts of local government as are dealt with in this Bill are merely incidents of the wider proposals for the substitution of the block grant for the percentage grant and the scheme for de-rating.

May I say a word on the second part of our Amendment, which objects to the block grant? The right hon. Gentleman in proposing so considerable a change in our financial arrangements, made a very inadequate defence to the House. He spoke at great length, but of that I am sure nobody complained, because he spoke with extraordinary clarity, and we are much obliged for what he said. I think we all understood what he said. I am pointing out that, although the right hon. Gentleman dealt with many matters very quickly, it was remarkable how little he had to say for the substitution of the block grants for the percentage grants. I do not know what case there is at the present time for making this alteration. We hear of a Committee which took a good deal of evidence, and the great bulk of that evidence was against the proposed change. The Minister of Health did not refer to that Committee at all. The Meston Committee was mentioned, but we have not seen the Report. I know we have been told that the evidence taken by that Committee is against this proposed change. When a similar change was suggested in the case of our education authorities there was a great outcry against it. If it were not for the change which is now proposed, all the complicated means of ascertaining the title to the block grants would become unnecessary. If this part of the Bill were dropped, all these calculations in the Schedule would be quite unnecessary.

I want to say quite frankly that I cannot associate myself with that policy. It has been said that this is a complicated Bill. The reason for this complication is that it tries to deal with local government and rating reform at the same time. Of course, the complications do not arise in regard to local govern- ment, but they arise in the de-rating part of the Measure. I know you cannot deal with complicated questions like those dealt with in this Measure without some nicety of language and some care. Nevertheless, the trouble, as I see it, is not in regard to the mere wording of the Bill. If it were a question merely of skilful wording I would not object. I always have taken the view—I think the Solicitor-General will agree with me —that the more you attempt to put things in simple language the more you are likely to promote litigation.

What the country is nervous about and what the Ministry of Health is anxious about is the result of the carrying out of the formula. We know that in the notorious case of Cheltenham the right hon. Gentleman had the advice of his experts, and they gave him five different solutions. There seems to be a dispute in every town in England as to what the result of this Measure is going to be. When we object to the Bill on the score of its complications, it is because in our view the language used in the Bill does not produce the result claimed for it, and there is no certainty about it. Surely it is very important in this matter that the people should know for certain where they are.

There is another question connected with this giving of grants which rather disquiets me. The Minister of Health said he was sure that the House would be glad to hear that this Bill was doing nothing to strengthen bureaucracy or to interfere unduly with the local authorities—in fact, the right hon. Gentleman said it would give more freedom to the local authorities. When I look at Clause 85, I find it is provided that: The grants under this part of this Act shall be payable to the councils entitled thereto at such times and in such manner as the Treasury may direct. That seems to me, put in bald language, to give a very considerable power to the central authority and the Treasury. I am reminded of another Act in which a similar power was taken, namely, the Tithe Act. I remember opposing it with the late Mr. Rawlinson, who was then Member for Cambridge University. We both attacked the idea of taking away from the parson his tithe and giving it to Queen Anne's Bounty to give back to him. We opposed that on the ground, among other things, that the parson would find that, whereas he used to get his tithe almost immediately it was due, Queen Anne's Bounty had to administer a large number of cases, and he might have to wait a year or more to get his tithe. We have found, in fact, that those fears have been fully justified, and that the effect of centralising the tithe has been immensely to delay the payment back of the money to the parson. I merely mention that as an illustration.

This Bill admittedly deprives the local authority of considerable revenue in two ways. In the first place, by the de-rating proposals they are deprived of, I think, £24,000,000, and by the withdrawal of the percentage grants, there is a further deprivation. These have to be met by block grants on the one hand, and by the Treasury grant on the other, and both of these are to be given at times and in such manner as the Treasury may direct. It does not end there, because the next Clause says: The Minister may reduce the grant payable in respect of any year under this Part of the Act to any council by such amount as he thinks just— (a) if he is satisfied— (i) that the council have failed to achieve or maintain a reasonable standard of efficiency"— perhaps that is not so objectionable—or: (ii) that the expenditure of the council has been excessive and unreasonable. It may be excessive and unreasonable or it may not, but what I am pointing out to the House is that the person who is going to judge whether it is excessive and unreasonable is the Minister of Health, and the person who is going to reduce the grant is also the Minister of Health. Whether it be wise or whether it be unwise to entrust all these powers to the Minister of Health, the fact is that this Measure, which is taking away £24,000,000 from the local authorities, and will take away from them in addition the percentage grants, is going to give to the Minister of Health an unlimited power not to pay the money back again. Whatever else may be said of that proposal, I do not think anyone can say that it is increasing the freedom of the local authorities or that it does not tend in the direction of bureaucracy.

It seems to me that the local authorities must realise that, although admittedly they are presently going to sacrifice £24,000,000, whether they get it back or not will depend upon whether they satisfy the Minister of Health that they have behaved in every way reasonably. So far as we on this side of the House are concerned, the experiences which we have had of the attitude of the present Minister of Health in regard to guardians with whom he does not agree are such as to make us readily believe hat he may have an idea of excessive or unreasonable expenditure on the part of councils which may not necessarily be the idea either of the councils themselves, the people who elected them, or a very large number of other people as well. Take it the other way if you like, and assume a Labour Minister of Health. Assume that we have an unreasonably high standard in regard to what is efficient. We should certainly have a very high standard, and I do not think it would be unreasonable, but right hon. Gentlemen opposite might. Our Minister of Health, in the same position, would he able to refuse to hand hack this money to any rather sleepy authority, possibly dominated by a majority of Members opposite. In either case the effect is the same, and this is another thing that we wish the country to appreciate in explaining this Bill.

We are concerned to explain the meaning of this Bill as well as right hon. Gentlemen opposite, and we also would like to have schools of instruction in -order to see that the Bill is understood from every side, and not only from one. We want to make it quite clear that the right to the return of these grants is absolute. The limitation of the block grant might possibly be justified to some extent by the Minister, on the ground that he has now, I believe I am right in saying, certain powers of control with regard to percentage grants. But it applies to the whole reduction, whether the source of it be de-rating or whether it be block grants. In the matter of de-rating, the local authority is entitled to have the money back without condition. It is their own money. Parliament is going to take it way by this Bill, and there is no reason why the Minister should come into it at all. At any rate, the Minister must be careful before he says the Bill does anything to increase the authority of the local people.

Finally, the Amendment says it fails adequately to reimburse the local authorities for loss of revenue, so that it would burden shopkeepers, householders and other ratepayers. The hon. Member for Yarmouth (Sir F. Meyer) twitted us with not being interested in the affairs of shopkeepers, householders and ratepayers. As a matter of fact I suppose the great majority of those who return us to this House are ratepayers. Some of them may pay their rates on the compounding system, some may pay them direct, but very nearly all of them are ratepayers. Also, although hon. Members may not realise it, in poor areas in particular, the shopkeepers come in the same class and have the same interest as the working people and we are equally concerned to see that they are not oppressed. The right hon. Gentleman must know that if for one reason or another these factories, breweries, lipstick manufacturers or other productive industries are relieved of their rates and the actual equivalent is not forthcoming under these grants or in any particular case—and the right hon. Gentleman admits that there are some—there will not 'be enough money adequately to supply the falling off in the percentage grant on the block grant average, the total rateable revenue will fall and, if it falls, unless you are to reduce the services, the rates of the people who are still rateable must go up and, therefore, it is a very obvious result of this proposal that in all probability, and certainly in certain areas, on the right hon. Gentleman's own admission, because he admits that certain areas are going to be worse off because of the deprivation in changing to the block grant, the remaining ratepayers will have to pay more than they pay now.

Why is it that, if it is really such a good thing to relieve rates by putting a tax on petrol the right hon. Gentleman has limited it to what he calls productive industry? Surely equally you might de-rate a great many other industries, the distributive trades, which go quite as much into the question of the cost of production as the mere production of many things which are useless, though luxuries. There is no logic and sense in the thing at all. As a matter of fact, when we really come to look into it, we know what the Bill really Is. It is a Bill to defeat the Protectionists. Below the gangway sit the Protectionist party. This de-rating scheme is a last attempt to side-track these insistent gentlemen by presenting them with another method which will have the result of relieving industry. If this method succeeds right hon. Gentlemen below the gangway will fail. I can assure him that it will not succeed and, when a Labour Government is sitting on those Benches, he will be able to argue his Protective policy from this side without any embarrassment from this rating scheme at all.

Lieut.-Colonel FREMANTLE

There have been several remarks made on the opposite side that the gravamen of the case against this Bill was the injury that will be done to the health services. In both the Amendments of the two parties opposite we see this suggestion. The Amendment before us says the proposed Measure will arrest the normal and steady development of local health services and will increase the already high mortality amongst mothers. Inasmuch as they attack the Measure on the lines of the insincerity or the injustice of its proposals we challenge them to make good their definite statement. It is, I believe, as the Member for Whitehaven (Mr. R. Hudson) said, a disgraceful statement to have made, and one which could not have been made without any knowledge of the facts, but which was made with the knowledge of the facts, made deliberately, falsely, and meant and intended to deceive. It is a challenge which must be met. I have the greatest possible respect for the hon. Gentleman the Member for Nelson and Colne (Mr. A. Greenwood) in the attitude which he generally takes up with regard to the steady progress and development of the health services. When I read this Bill I felt that here was a Measure in regard to which we should have his general sympathy and the sympathy of those who work with him on the opposite side of the House for the improvement of the health services. Here was a Measure that was fulfilling a large number of the great objects which have been put forward in several Royal Commissions, and, above all, in the Royal Commission on the Poor Law. Here was a Measure, it seemed to me, in which we could gladly co-operate, at least in so far as the health service section was concerned, that we could gladly co-operate for the common cause and obtain amendments. We have had denunciations and fulminations from Members on the opposite side as if the Bill contained no measure of advance at all.

I want to call attention to the most authoritative announcement that has yet been made by the medical profession. It has only recently been put into my hand. I have had no share in preparing it. It is the considered statement of the British Medical Association Poor Law Relief Committee. The British Medical Association is a body comprising something like 25,000 to 30,000 medical men. The Poor Law Relief Committee sat for a long time on this subject. Here is their general conclusion on the matter: Resolved, that the council be recommended to express its approval of the Local Government Bill, 1928, in so far as it attempts to secure unification of the medical services of the country. The Bill was discussed under three main categories, the first, machinery of local administration; the second, the effect of the Bill on medical officers of health and Poor Law medical officers; and the third, the effect of the finances of the Bill on the health services. I have not put the Report before the House in full detail. After endorsing the Measure under these several heads in which they are particularly concerned, they proceed to suggest alleviations, modifications and amendments which can be produced in Committee, and which will be produced in due course. I hope that hon. Members in all parts of the House will combine with me in helping to get Amendments accepted in order further to improve the machinery of the Bill. In addition to calling attention to the opinion of the British Medical Association, representing general medical practitioners for the most part, and also working in co-operation with those who are special medical officers of health, I should like to state this, being myself a medical officer of health for a county area in which these matters were constantly to the fore, and who for a period of 12 or 14 years has had to consider and work and report upon the complications which this Measure hopes to simplify. In the course of these many years, the county medical officers of health have always, from first to last, felt the hopeless confusion of authority which existed between the different authorities dealing with health and that in every way the work of public health has been crippled because of this very complexity. We had absolute separation between the sanitary authorities and the Poor Law authorities.

The Poor Law authorities deal with a very large number of questions vital to health, and over these the sanitary authorities of the county council have had no concern and no control. You might have questions of families suffering from tuberculosis which largely came under the Poor Law, and it was only when they had gone too far that they came under the sanitary authorities. There was no relation between the Poor Law authoririties, whether in their relief services or institutional services, and the sanitary authorities. There was no real combination between the sanitary authorities on the one hand and the county authority on the other. The only powers that the county authority had over the sanitary authority was occasionally to report to the Local Government Board, as it then was, or to the Ministry of Health as it now is, cases in which the sanitary authority was in default and it appeared that the Ministry might take certain action. In addition to that, there were, of course, the insurance authorities, and other bodies dealing separately with health questions.

One of the most crying needs is for some kind of co-ordination among the different health authorities. How does this Bill meet that? To my mind it meets it in a way that exceeds any proposals that have ever been made hitherto, and the fact that has been alleged against it, that it is a combination of different Measures, is, from this point of view, clearly in its favour. It is taking the opportunity to bring together an enormous number of these different services, which are required at the same time, in order to get a big move and a big change and a big reform—indeed more than a reform, for it is an absolute revolution in local government. Whether that revolution is right or wrong, we differ on opposite sides of the House, but it is in its favour that it combines so many different factors.

One point on which obviously hon. Members on the opposite side must be agreed is that here is a Measure of coordination and correlation that is essential for the public health service. Look at the position we are in in the counties with regard to fever hospitals. You have fever hospitals started by one of the sanitary authorities, and other hospitals by larger authorities or combinations of authorities. You have some small authorities left outside existing organisations of sanitary authorities who never know where to find accommodation for their infectious sick because they are not big enough to start fever hospitals. You have also the small-pox system, with a separate set of hospitals or with no hospital in the county generally large enough to undertake the provision of proper small-pox accommodation. You have the county council with no real powers to co-ordinate these cases. Here by this Bill you give the powers, which are laid down, to the council authorities to make definite relations with the sanitary authorities which are running the hospitals, and at the same time to use the institutions of the Poor Law for combined purposes. Here we have the possibility of co-ordinating the whole of the fever hospital services in the county. It is a possibility of enormous advantage in regard to the cause of infection, and one which may lead to economy. At the same time, we may get much more efficient services and more efficient institutions for the patient.

Take another point which requires coordination, which has not been mentioned this evening, and which was not mentioned by the right hon. Gentleman in his opening speech—the question of mental hospitals and mental deficiency institutions, and the co-ordination that is required in that respect. A very large amount of work in regard to dementia is the concern of the Poor Law and the Poor Law institutions, and a large amount of work in regard to the question of mental asylums, mental hospitals, and mental deficiency comes under the heading of the county councils. Therefore, we have separate bodies dealing with these subjects. under this Bill, we have the possibility of co-ordinating the work, and by abolishing the Poor Law authority the county councils will be able to deal with mental ailments, dementia, and mental deficiency as one undivided authority for the whole county area.

We do not intend to give, and I certainly could not as a medical officer give, unstinted adherence to the Bill without suggesting the necessity of looking into the possibilities and the necessity of Amendments. I have listened with gravity and anxiety to the suggestions that have been made against the Bill from the point of view of those who are concerned with maternity and child welfare services. It is quite true that those are developing services and are a great essential need of the country. They are services that are administered very largely by voluntary efforts, by women and others who are not ordinarily concerned in battering their way through rules and regulations, and it is certain that a great number of those who are concerned with these services are seriously concerned as to the possibilities of danger from the operation of the block grant. We have to look into that. The Minister of Health has said that the last thing he intends to do is to hinder these maternity and child welfare services in any way. He has put into three Clauses definite provisions for easing the situation in regard to these services. I still hope that further security will be given than appears to be given at the present time.

I am not at all sure, although I believe in the block grant system in the long run for the sake of the eventual good to local government, that the time is ripe to apply it at once to the maternity and child welfare services, and I think it might be advisable and it might be possible to give a little longer time, say, for the first quinquennium period, to allow matters to go on under the present system while these voluntary associations are making the adjustments that are necessary to enable them to work the system proposed by the block grants. I hope that the House will look at the matter in the truest and broadest sense. In the different points of the Bill which affect the public health, with which I have not time to deal, we have to consider not merely the services as they are at the present time but we have to consider the building up of a stronger, more independent and more powerful local government system than we have had hitherto. Local government has been weakened because there has been this enormous diversity and independence of bodies doing this work, and there is no responsibility—

It being Eleven of the Clock the Debate stood adjourned.

Debate to be resumed To-morrow.