LOCAL GOVERNMENT BILL.

HC Deb 27 November 1928 vol 223 cc265-388

Order react for resuming Adjourned Debate on Amendment to Question [26th November], That the Bill be now read a Second time, which Amendment was, 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, house- holders, and other ratepayers."—[Mr. A. Greenwood.]

Question again proposed, "That the words proposed to be left out stand part of the Question."

Lieut.-Colonel FREMANTLE

With diffidence I would ask the House to allow me to complete the survey of the public health aspect of local government, which was interrupted by the Adjournment of the House last night. In contrast to the denunciations of it in the Amendment before the House, the Bill opens up opportunities in regard to public health, for co-ordination of hospital services, including fever and smallpox hospitals, complete ambulance services and big county medical and nursing services; an avenue of progress and efficiency which hitherto has been beyond imagination. There are possibilities of co-ordination in regard to institutions dealing with mental disease and deficiency at all stages. There is also the possibility of co-ordination in matters pertaining to motherhood and childhood by co-ordinating the Acts which deal with midwives, notification of births, maternity and child welfare and school medical services, which are at present administered by different authorites.

A caveat was entered with respect to special consideration, for which I pleaded, for the maternity and child welfare services in their tender stage of development. This movement only started during the War, in 1915, and the services are rendered largely by voluntary associations and by women. I suggested last night the possibility that they might be given one five years' relief for the first quinquennium from inclusion in the block grants. One further reservation in regard to this co-ordination relates to a much debated subject in this House, the local supervising authority under the Midwives Act. That is a difficult subject. Obviously, it would be better, theoretically, if the Midwives Acts were administered by the same authority that administers the Maternity and Child Welfare Act, and other Acts. The difficulty is that the midwives and those associated with them feel strongly that the only authority capable of securing proper experience and proper inspection of midwives is the county authority. There are, of course, minor exceptions. It is hoped that in regard to that aspect of midwife services, the responsibility which is given by this Bill to the Minister of Health to approve or not to approve the transfer of these services may be most carefully used.

The reform committee of the British Medical Association approve the Bill in its attempt to secure unification of the medical services of the country. In regard to that, however, there are two reservations that should be mentioned, reservations which are capable of adjustment, I hope, in Committee. The first reservation is in regard to the distribution of Poor Law functions in Clause 4. That Clause provides that these Poor Law functions in regard to health services may be distributed to the committees of the county councils and the county borough councils which deal already with the Education Act, the Public Health Acts, the Maternity and Child Welfare Act, and so forth. The Clause, however, says "may." Therefore, it still gives them the option of transferring all the funcl5ions in respect of health, maternity and child welfare, education and so on, now under the Poor Law, to these new guardians' sub-committees. That would make confusion worse confounded or, rather, it would perpetuate the present position, which would be against the report of the Poor Law Commission, which this Bill practically proposes to carry out.

4.0 p.m.

Those of us on all sides of the House who have been keen on public health development have been anxious for the proper distribution of health functions; the British Medical Association and medical officers of health, have combined in saying that we want each committee of the county and county borough councils, that already deals with health services, to be responsible for the whole sphere of those services, regardless of the separate classes of individuals with which they are dealing either derived from the Poor Law or not. There is a further reservation with regard to hospitals—a most difficult and thorny subject which we are con stantly touching in this House. There is, naturally, a great sensitiveness amongst all those who are keen on voluntary hospitals with regard to the competition that may be set up with voluntary hospitals by municipal hospitals. A really proper arrangement for overcoming this difficulty is by mutual understanding and co-operation, and it is strongly suggested by the British Medical Association—and I should wish to back it up—that county and county borough councils should be required to set up hospital sub-committees to include persons experienced in the management of hospitals who will be able to advise them both with regard to the efficiency and management of hospitals and effective co-operation with voluntary hospitals. May I express some regret that the Lunacy Acts are left out of Clause 4? Why should not visiting committees of county councils be included in those amongst whom the functions of the present Poor Law should be distributed? The answer is to be found in Command Paper 3220, from which it appears that it is the intention to deal separately with the Lunacy Acts "in pursuance of the Report of the Royal Commission on Lunacy Law and Administration." We have pressed that for a long time, and I hope that that will eventuate in the next Parliament when the Minister of Health and his colleagues will be able to pursue their career to the advantage of public health.

We have learnt with great satisfaction of the co-ordination of the services of Medical Officers of Health and the step in the direction of increasing the number of whole-time Medical Officers of Health, whether by co-ordination of districts or by uniting the services of county Medical Officers of health. But there is a caveat to be entered, and here, I am afraid, I am at loggerheads with the Minister and his Department, because in rural areas I still maintain that you cannot say that one system is ideal rather than another, and the suggestion that the only way to deal with rural areas is by whole-time medical officers of health not engaged in private practice is, to my mind, wrong. What is wanted in rural areas is the man of best character and best opportunity to carry out the work. In rural areas, I still maintain, it is often the very best arrangement that can possibly be made or be devised, that a man in general private practice should also be the medical officer of health. There are obvious exceptions, and they are the exceptions to the rule, but latitude must be allowed, and in this Bill it seems to be intended that the whole service of the country should be carried out by whole-time officers.

I would like to add a word as to the strong approval of those concerned in public health of Part VII, that is, the transference of births' and deaths' registration to the county authority; of Part VIII, which gives the county council equal responsibilities, rights and duties with regard to town planning; and, perhaps most important, the review at once and periodically, not less than every ten years, of areas within the county, and between county and county borough and between county and county. It can be carried out in a process which, I hope, from now will become a regular process, in order that we may get a readjustment from time to time. There is one reservation I would like to make in connection with the question of town planning. I am not at all clear that the financial proposals of this Bill make proper provision for the assistance of those experiments that are largely helped by Government, that are forwarded by the Minister himself as being essential to the develop- ment of some areas, namely, the rapidly developing industrial and residential areas, such as Welwyn or Letchworth Garden City, where you have rapidly developing services. I feel there is liable to be hardship under this Bill both with regard to the high percentage of derateable hereditaments at the initial stage of the new scheme and with the constant future development of new factories and populations—in other words with regard to de-centralisation. I hope that this matter will be further considered.

I hope that further progress will be made in separating the treatment of health from the treatment of relief. That has been the cardinal policy of the medical profession all along. We have felt, that we want to work in that direction by degrees, so that health service should be provided independently of questions of relief. It is a, very difficult subject. I still feel that those who are able to pay ought to pay, and the public services should not be abused. On the other hand, we have the precedent of the Infectious Diseases Act, under which powers of recovery are retained, though, as a matter of fact, they are a dead letter, and I cannot help hoping that by degrees, as municipal services develop under new arrangements, so the recovery for strictly speaking purely health services, in the case, anyhow, of the poor, may be considered an extra matter, and not one of relief. It is a difficult question, but I have to express the general tendency of those engaged in the medical profession.

Lastly, is this Bill against democracy? I have seen a great deal of the working of local governments from different points of view, and one has felt all too strongly the difficulties of the difference of individuality of the districts area and councils which make up local government. One realises those differences: yet those differences are the very life of the people. But can the guardians, elected by 30 or 35 per cent. votes very often, he considered representatives of the people? I feel strongly, as other people do, the objections to co-opted members of committees, but I feel equally strongly that many of these bodies that are elected in apathy are just as unrepresentative of the people as are co-opted members. I would suggest that you are not withdrawing from democracy by abolishing such unrepresentative bodies as the local guardians so often are. We want to increase and arouse interest in local government. That is really the greatest service this Local Government Bill will render. Hitherto people's interest in local government has been scattered, has been dissipated, because of the multitude of authorities, and because there has been so little responsibility laid upon the local government bodies for the carrying out of their tasks. By concentrating the different authorities in one, by giving them the responsibility, to a large extent, for their expenditure, by enabling them to make mistakes even in the most vital things of maternity and child welfare, is the only way in which you can make the electorate interested in local government and take a part in local government which will ensure getting the proper people elected. The great agitation to exclude the most important matters in local government is the very thing that is preventing local governments from growing up. It is like a boy who has got to the age of 21, and whose parents are afraid to give him an allowance, or, if they do, they insist on his showing accounts for every sixpence spent. That is not they way to make him grow up with the feeling that he is a man. He should be given powers and allowed to make mistakes within certain limits. The same with regard to local government.

I will give one last challenge to the parties on the other side, to those who deny the value of this Bill for public health. The future of this Bill must depend upon the country backing it before it gets through, while it gets through and after it gets through. For that purpose, we want the help of everybody concerned, and we want publicity above all things. The best way to secure publicity for this Bill is through the British Broadcasting Corporation. [HON. MEMBERS: "Hear, hear!"] I am glad I have support from the other side. I hope hon. Members opposite will put that support into practice by uniting in a request to the Government that they shall arrange with the British Broadcasting Corporation for one speech to be made on this Bill through the Broadcast, and one speech from each of the other parties. That is a fair offer, and I believe the country would be immensely enlightened as to the enormous value of this Bill for the improvement of public health. It affords a great chance to the women to come forward and give their services. The Bill may rightly be called the Magna Carta of public health and local government.

Colonel WEDGWOOD

I am afraid that this afternoon I look at this Bill from a point of view which is, perhaps, peculiar to myself. It seems to me that this is one more Measure of centralisation. We have in this Measure throughout what I may call a bureaucrats' paradise. The small local authorities are deprived of powers which are passed on to the larger authorities, and the larger authorities pass on powers to the Ministry of Health. La fact, in looking through this Bill, you will find repeated over and over again at the beginning of most paragraphs, but in all, that the Minister "may." It would be better, I think, if the Minister "shall," because the Bill leaves always the definite power of controlling local authorities more permanently in the hands of the Ministry in London. There are, of course, enormous advantages in centralisation. You do very often get far more efficiency than you can get at the present time. But I would put it to this House that only too often efficiency and democracy must be opposed one to the other. You cannot always get efficiency, and, at the same time, secure for the people of the country in each particular district control over their own affairs. The tendency, of course, in the last 30 years at least in Parliament, has been to increase the s power of the central authority and diminish the power of the locality. It has always been our view that that change was in the interest of efficiency, and the speech to which we have just listened shows one side in which efficiency may be improved by this Measure. Indeed, anyone who listened to the eloquent speech of the Minister of Health yesterday must have appreciated not only how much more efficiently the country could be managed from Westminster but also what a large measure of leeway there is to make up.

I put in one last plea, however, for local authorities. If you leave to the parish councils, rural district councils and urban district councils more opportunity to manage their own affairs—they may not do it so well—you get the people on the spot, who know the roads and the properties which are to be acquired. They are the people who are most subject to the direct influence of those who are being governed, and every step we take away from local control towards central control, although it may mean greater efficiency, means, on the other hand, less contact with the people themselves and less satisfaction to the people who are being governed.

Nearly all the changes proposed are not only for greater central control but also for greater bureaucratic control. The elected representatives on the various boards are being reduced, there is a far larger proportion of co-opted members on the new boards of guardians than there were on the old. You are getting away from the direct representation of the people and getting instead, more and more, the co-opted expert, who will not be answerable to public opinion. It would have been infinitely more useful if reform of local government had begun by increasing the powers of the smaller authorities, the parish councils and the rural district councils, rather than taking away from them powers which they now possess and transferring them to a more central authority. I have served on the county council of my own county for some years and I know how difficult it is to get representatives of all parties on these bodies. The Labour party is always badly handicapped in its representation on county councils, and you get a lack of direct interest in the problems which come before these councils by the members themselves with the result that the permanent officials control the actions of county councils far more than the representatives of the people on them. For that reason we ought to consider carefully whether we should put more powers on county councils and take powers from the small authorities, or whether we should not operate in the reverse direction.

We can pay too big a price for efficiency. It is to be regretted that by this Bill, and many others, we are creating a class of sociological experts who are going to be as powerful in directing men's minds and controlling men's bodies as the old priesthood. We are creating a new set of dogmatic experts. This House ought to be looking rather at the democratic side than the expert side and should be very critical of a Measure such as this. I hope, when the Bill is before Committee, that we shall have an opportunity of raising the question as to whether we are right in transferring these powers to the central authority; whether we are right in reducing the elected element on these councils, and whether we are right in increasing the co-opted element.

The Minister of Health yesterday referred to the enormous advantages which would accrue to trade and industry in this country by the remission of rates on agricultural land and industrial improvements. It was an echo of the speech he made when we remitted part of the rates on machinery. No one is more anxious to see the rates taken off industry than I am, but the right hon. Gentleman yesterday combined the removal of rates on agricultural land and the removal of rates on industrial improvements. No one knows better than the right hon. Gentleman that rates on agriculture and rates on factories are two diametrically opposite matters so far as economics are concerned. If we reduce the rates on factories we thereby reduce the overhead charges on industry. Rates are an overhead charge, they add to the cost of production, just as advertising expenses or the expenses of an unnecessarily inflated board of directors. Although the factory owner signs the cheque for the rates we all know perfectly well that in the long run they are paid by the consumer who buys the goods, the rates are passed on, and, therefore, a reduction in the rates paid by factories is in truth a reduction of the taxation on industry and relieves the burden on the consumer who pays for the goods.

That this is perfectly true has been recognised by all sides of the House when we reduced the rates on machinery, and I only ask the Minister of Health to extend his very accurate diagnosis a little further and not merely take off three-quarters of the rates on factories but take them off altogether. He might surely extend it not merely to factories in which the workers work but also to the houses in which they live; the same principle is involved. The serious expense of housing the working classes is a burden on industry and ought to be removed in the interests of the expansion of trade. We want people not merely employed in factories making goods but employed in building houses for all classes, and the removal of this burden of rates can be advocated as strongly, and on absolutely the same ground, as the de-rating of machinery or factories. Therefore, with that side of the de-rating proposal everybody in this House will agree, but we do not agree that you really improve the position of industry, facilitate employment and develope trade, if you take off the burden from industry with one hand and impose an additional burden upon such a thing as petrol, which is an essential raw material for all industry with the other. In fact, by this system you are not really benefiting industry. You are relieving them of the burden of rates and adding to the cost of one of the raw materials of transport.

So far as the de-rating of industry and machinery is concerned we are all agreed, we are on sound ground for agreement, but when it comes to de-rating agricultural land the position is completely different. If we are de-rating agricultural improvements—agricultural buildings, for instance, are de-ratedgood; but when it comes to de-rating agricultural land how is that going to benefit agriculture? I must confess that I am a landlord. I own land in many counties, and looking at it from the purely personal point of view I am indeed grateful to the Minister of Health and the Chancellor of the Exchequer. If I called myself an agriculturist I should say I was grateful; but I am really grateful as a landlord. What is my position? I will take one farm, I will not say where it is, which at present I let. The rates on that farm which henceforth are not to be paid by me or anybody else amount to £16 a year. It is true that my tenant for the present will get the benefit of that £16 a year, but I think lion. Members will agree that he is able to pay £16 a year more rent. [An HON. MEMBER: "He will not agree…"] I hope to see it. But I am confident of this, that as I have a prospect of selling that farm I shall be able to sell at a much better price. £16 a year at 20 years' purchase, a moderate estimate, means £320 has been put into my pocket. Thank you very much. It is just as well that we should recognise that the Government does stand by cer- tain classes in this country. £320 put in my pocket; I have done very well.

How is that going to benefit agriculture? A new tenant will come in and he will pay more; he will be able to pay more. A new purchaser will come in and buy my farm at a higher price for the opportunity of getting at the land in order to work it. In a generation even the best of landlords will somehow or other manage to absorb the advantages of the abolition of rates on agricultural land. Who more eloquent on this subject than the right hon. Gentleman for Carnarvon Boroughs (Mr. Lloyd George). I sat at his feet; where is he now? This process has been going on for nearly 30 years. First a quarter of the rates were to be paid by other people, then half, then three-quarters, and now they have got the lot. But hon. Members must not believe that this is the end. Oh, no. When you have removed all the rates, when you have freed agricultural land, agriculture will still be hungry, believe me. The next step will be the necessary subsidies to keep the agricultural industry going and incidentally to raise the value of agricultural land.

I wish I could make this House see the problem as I see it. I am sure that hon. Members would like to if they could. The problem that I am thinking of is the problem of unemployment. To-day you have the unemployed man on one side of a brick wall, and on the other side of the wall is the raw material with which alone he can start work. It is a wall representing not the value of land, but the price of land, and every time that you add to the price of land, to the price that the owner can demand from anyone who wants to use that land, every time you raise that wall you make it more difficult for the unemployed man to get a job. You say that here you are helping agriculture and helping trade. Do let us clear our minds of cant. You are adding to the Price of land and making it more difficult for a man to get a small holding, an allotment or a farm. You are making it more easy for a man to be compulsorily unemployed.

The Minister of Transport, in an eloquent supplementary reply to a ques- tion to-day, said that everyone in this country was going to benefit from this Bill. No. The people who will nut benefit are the people who want to use land. They will have more to pay. The people who will not benefit are those who are still unemployed because they cannot get a bit of land—the building trade, the agricultural trade, the brickmaking trade, the quarrying trade. All those people will find it more difficult to start work, and the whole community will suffer because those who might be employed in making useful things will be unemployed. I feel certain that this Bill in the long run will be of no advantage to trade and industry. You are taking the rates of factories and putting not a precisely similar but a larger sum upon industry in the form of a tax on petrol. Therefore industry cannot prosper. In addition to that you are taking the rates off agricultural land and forcing everyone to pay a higher price for the land that they have to use. You are still further fettering real self-government in our small units, the parish and the rural district. You are driving out self-government and establishing bureaucracy. And although the working class may, by this Measure, be better looked after by the experts—it may be; the cattle are always well kept—vet they will he less able to find work, less able to secure that which every Englishman should have—freedom to use the land of England.

The MINISTER of TRANSPORT (Colonel Ashley)

Before I deal more particularly with the form of highway administration which must be the principal theme of my speech, I wish to say a few words about Clause 113 and the Eleventh Schedule, which form a not unimportant part of the Government proposals. Those proposals are, of course, for a drastic reduction in freight charges on the basic industries of coal, iron and steel and agriculture, and in my considered opinion they will be a great help to the general de-rating scheme and assist industry where it most needs that something should be done for it. But as we had a whole day's Debate last week on the temporary scheme, and it was not criticised and no fault found with it successfully on its main purpose, it is only needful for me to point out how the permanent scheme embodied in Clause 113 differs from the temporary scheme. The permanent scheme is simply the temporary scheme adapted to permanent conditions. There is one omission on page 139 of the Bill which some hon. Members may have noticed. This permanent scheme, differing from the temporary scheme, leaves out coal carried coastwise from the benefits of the rebates. This omission it is proposed to rectify in the Committee stage of the Bill. The reason why it was not put in at the time when the Bill was introduced is that, though we hoped, we were not quite sure that it would be possible to devise machinery for bringing this particular class of traffic into the ambit of the scheme.

Mr. WALLHEAD

Does coastwise agricultural produce come into the scheme?

Colonel ASHLEY

No, coal only, coal for export, coal for bunkers and for fishing vessels. In the permanent as in the temporary scheme, the proportion which the selected traffics are to take out of the fund are similar. Coal is to take out of the fund 70 per cent., agriculture 20 per cent., and industrials 10 per cent. But the machinery is different. In the temporary scheme we had to devise machinery for deciding various important points which would have to be gone into, but in the permanent scheme, so as to get continuity and remove all suspicion of any interference on the part of the Government of the day, we have brought in that experienced body called the Railway Bates Tribunal which, having heard evidence and having had a scheme put up to it by the railway companies, will decide what rebates are to be given and what generally is to be the portion which each traffic is to receive. There are only two things that the Tribunal must not touch, as will be seen in the Bill. It may riot vary the selected traffics and the respective shares which each group of selected traffics is to enjoy out of the available total. Subject to that, the permanent scheme is on all fours with the temporary scheme. I therefore commend it to the House, and I propose to say nothing more because last week we had a whole day's discussion on the scheme as a whole.

A subject which I think interests the House, namely, highway administration, is one with which my Department is more particularly connected. On the general argument that reform of administration and of finance is needed in the highways, I could not if I tried improve upon the overwhelming case that the Minister of Health put forward yesterday. He proved without fear of contradiction that all was not well with our Poor Law administration, and the arguments which he adduced are equally applicable, with local variations, of course, to highway administration. That a widening of the area of highway administration and finance is necessary, seems to me to be absolutely incontrovertible. But even if on general considerations of economy and efficiency no change was necessary—it is—the de-rating proposals of the Government when they come into effect will so diminish the resources of the local authorities—

Miss LAWRENCE

Hear, hear.

Colonel ASHLEY

It is going to be made up to them and more than made up to them. As far as highways are concerned, it will be much more than made up. The resources of the local authorities, as far as de-rating is concerned, will be so diminished that they could not carry on without the help that the Government is going to give them. As far as highways are concerned, we have travelled a very long way during the last 20 or 30 years. Twenty or 30 years ago mechanically-propelled vehicles were practically unknown on our highways. If they did appear, they had to go at a funereal pace with a man carrying a red flag in front. Year by year since then an increasing fleet of these vehicles is coming on our roads, and the administration and the machinery which could cope with the needs of the roads of those days are obviously inapplicable and inefficient in many cases to deal with the road maintenance and improvement called for in the present day.

Just consider the increasing numbers of these mechanically-propelled vehicles in the last few years. In 1921 there were 874,000 motor vehicles registered in this country. Last year there were nearly 1,900,000 registered. That is an increase of more than double in the last six years. This large increase in numbers has obviously made it necessary to treat the highways quite differently from the way in which they were treated 10 or 15 years ago. Twenty years ago a macadam service was sufficient for a highway, and a local authority with small resources could quite easily deal with the repair and improvement of such roads, and no great skill was required from the start. But to-clay, with the weight and speed of the traffic, it is a skilled man's job, a highly-paid man's job, and it is impossible for local authorities to be able to pay sufficiently highly for men who can carry out the work efficiently.

It is no slur on the smaller local authorities that their financial position is such that they are not able to pay these men. It is the logic of the situation as we see it to-day, and, unless something is done to widen the areas, I do not see how they can possibly carry on. Then take highway expenditure. The increase is enormous. In the year 1910–1911 highway expenditure of all sorts was £17,000,000 approximately. What was it in the last year for which we have the actual figures, namely, 1925–1926? It was no less than £60,000,000 approximately. The problems of 10 years ago and of 20 years ago are absolutely different from the problems of to-day, and we must adapt our machinery and the size of our local authorities to the problems with which we have to deal

Mr. MacLAREN

Does that £60,000,000 include all road expenditure?

Colonel ASHLEY

It includes all money which was spent on roads in that year 1925–1926.

Mr. SNOWDEN

Including all roads?

Colonel ASHLEY

All sorts of roads, Let us consider for a moment the multitude of highway authorities in England and Wales, remembering that we are dealing in this Bill only with England and Wales and not with Scotland. There are 1,856 independent highway authorities in England and Wales at the present time. Apart from politics, I think we must all agree that that is too large a number for efficiency and economy. Now take the mileage of roads maintained by individual authorities. I am taking extremes, but the fact that such extremes should exist is ludicrous. We have at one end of the scale a quarter of a mile of road maintained in the rural district of St. Neots, and a third of a mile in the borough of Cowbridge; and, on the other hand, we have 1,400 miles to be looked after by the county of Norfolk. Can that make for sound administration? Can it make for efficiency or economy?

Then let us take what is even more important from the taxpayers' point of view, namely, finance and the ratepayer. Of these 1,856 authorities there are nearly 500 with populations of less than 5,000, and in 35 districts a penny rate produces less than £20. What can an independent highway authority do with £20? In 430 districts a penny rate produces less than £100. That is the position to-day, and, of course, with de-rating their financial resources will be very substantially decreased. I need not press that point any further, but I wish the House to be seized of it because it is of great importance. Not only are there great inequalities between one district and another, but gross inequalities exist between one district and another within the same county and even between districts which march with each other—so that the intervention of a few fields between two districts may make a difference of many pounds in the highway rate which an individual farmer may have to pay in that county.

My right hon. Friend the Minister of Health in one of his speeches during the last few days said that he, sitting in Whitehall, was able to take a birds-eye view of the troubles which beset the local authorities and of the problems which had grown up in late years. I, sitting in Whitehall, also have the melancholy privilege week by week of receiving deputations from the smaller local authorities, chiefly rural, pointing out that under present conditions they could not possibly carry on and that unless they got greater assistance from the Road Fund, they would have to allow the standard of maintenance and improvement of their roads to deteriorate. Indeed in some cases they have definitely stated that they would have to give up the duty imposed upon them by law of looking after the highways, not because they were unwilling to do it, but because the finances at their command were entirely and absolutely inadequate to keep the highways in proper condition. These representations especially came from the Eastern counties and the more remote rural districts of England and Wales.

Yet with all these changes I want the House to realise that the highway authorities now existing are the highway authorities set up under the Acts of 1888 and 1894 when mechanically propelled vehicles were unknown, and when they had only to deal with horse-drawn traffic. I am sure that the only remedy is that the responsibility for highway maintenance should go to larger administrative units of local government. It may be said that while in theory we have made out a case, we should have some facts to go upon which will enable the House to judge, not by prophecy, but by what has happened, that the general proposals of the Government regarding highways are sound and that they will achieve what we anticipate. We have facts and very illuminating they are. There are the counties of Bedfordshire, Hertfordshire, Huntingdonshire, and the Isle of Wight, whose policy has been, with the consent of the smaller local authorities, to concentrate administration and finance in the county council as far as possible and thereby widen the charge of rates and strengthen the central administration.

I shall not weary the House with a detailed examination of the accounts of each of these progressive counties, but I should like to take the case of Bedfordshire as that of a typical rural county with no large cities. Bedfordshire has for a large number of years adopted a centralising policy. For some time past all Class I and Class II roads in the county have been main roads, that is to say have been a county-at-large charge. Taking the mileage of roads in the county as a whole, more than three-quarters consist of main roads and are therefore a county-at-large charge. In certain adjacent counties as against the proportion of 78 per cent. of main roads in Bedfordshire we have proportions as low as 28 per cent., 31 per cent. and 22 per cent. I may give the names of these counties. There is no slur on them except that they have not adopted this policy. The 28 per cent. is Bucks, the 31 per cent. Cambridgeshire and the 22 per cent. Essex. What is interesting is to study the rate burden of Bedfordshire compared with those three contiguous counties. In Bedford- shire the combined county highway rate and rural district highway rate varies between 2s. 6¼d. and 3s. 2½d.—a very low variation. In the other three counties the variations are as follows: Bucks, 3s. 11d to 4s. 10¼ Cambridgeshire, 3s. 11½. to 5s. 1d.; Essex, 3s. 2d. to 8s. 7½d. I am sure the standard of the roads in Bedfordshire is as good as the standard of roads in any county in this country.

Therefore, if we are to rely on facts and experience it seems to me that, not only from the theoretical point of view, but from the practical point of view this concentration, as far as possible—one must not go too far of course—of the finance and administration in the county council is sound, and, taking Bedfordshire as an illustration, it has proved there to be of great benefit to efficiency and, above all, to the local ratepayers over the whole county. As I say, a similar policy is being pursued in Huntingdonshire, Hertfordshire and the Isle of Wight. What do the highway proposals of the Government really mean? That there should be concentration of finance and direction in larger administrative units. In short they mean more unified control of expenditure, with a maximum decentralisation of work, consistent with the ultimate control being vested in the central authority both for finance and direction of work.

5.0 p.m.

What are these highway proposals generally? The proposals of the Government, generally, follow the recommendations contained in the interim report of the Royal Commission published only a few weeks ago. As far as county boroughs and metropolitan boroughs are concerned, they carry on as heretofore. There is no change in regard to them. Rural district councils cease to be highway authorities and the county councils become the highway authorities in their place but—and this is an important "but"—the rural district council may within three months of the passing of the Act apply to the county council for the delegation to them, as agents (1) of some or all of the classified roads, (2) of all unclassified roads. As to the first the classified roads, the county council is to have power to grant or refuse delegation to the rural district council, as agents, entirely at their own discretion; but, as regards unclassified roads, smaller roads, scheduled roads, the county council is required to grant the delegation unless satisfied, having regard to the best means of promoting economy and efficiency of highway administration throughout the county, and the particular circumstances of the district, that the delegation should not be granted. The ultimate decision is not left in the hands of the county council. If delegation of these unclassified roads is refused, the rural district council can apply to the Minister of Transport, who would then have to decide, taking this formula into consideration, whether the county council was or was not justified in refusing. One does not know what would happen. Each case would have to be decided on its merits, but naturally one would wish to do what one could to allow local endeavour and local direction to have the very fullest play.

Sir HENRY CAUTLEY

If the roads are delegated, is the rural authority to spend what it likes and give the county council the bill?

Colonel ASHLEY

I was just going to deal with that very important point. The district council would exercise its functions as agent of the county council. The works to be executed and the expenditure to be incurred would be subject to the approval of the county council, and the work would have to be completed to their satisfaction.

Sir H. CAUTLEY

That does not quite answer my question. Before the work was started, would it be approved by the county council?

Colonel ASHLEY

Naturally, the agents always work to the specifications of the people who have control and who find the money. I have dealt with county boroughs and London boroughs. As to urban authorities outside London and county boroughs, their councils will continue to be responsible for the unclassified roads they now look after. There is no change there. Whatever unclassified roads they now look after they will continue to look after as heretofore, but the county councils will assume responsibility and become the highway authorities for Class I and Class II roads. We have differentiated here between urban areas, of more than 20,000 inhabitants and urban areas of less than 20,000 inhabitants. In the case of urban authorities over 20,000, they may claim to exercise the functions of maintenance, repair and improvement of any county road, and the county council shall make payments accordingly. I do not think that offers any difficulty, and it gives these authorities practically a free hand in this matter, subject to the condition that unreasonable expenditure shall not be incurred. But urban authorities under 20,000 are in the same position as rural district councils in respect to classified roads; that is to say, they can ask to act as agents for the county council for the classified roads, but the county council is to be perfectly free to grant or refuse that request.

The last point with which I want to deal—and in some ways, from the local authorities' point of view, it is the most important—is finance, and I think it would be for the convenience of the House if I first of all enumerated the grants which are to be discontinued and then went over the grants which are to continue as heretofore. The following grants from the Road Fund are to be discontinued and merged in the block grant. There are only two of them, hut they are important. The first are classification grants for Class I and Class II roads in London boroughs and in county boroughs, and the second are maintenance grants for unclassified scheduled roads in country districts. The following Ii cad Fund grants are to be continued: First, classification grants on a percentage basis for Class I and Class II roads outside London boroughs and county boroughs; secondly, percentage grants towards the cost of construction of new roads and bridges, and of major improvements on all Class I and Class II roads in all parts of the country, that is, including London and county boroughs; and, thirdly, percentage grants towards the cost of improvement of unclassified roads; that is to say, though maintenance of unclassified roads goes into the block grant, the improvement remains under the percentage grant as under the present administration.

The first thing that, I imagine, the House would like to know, especially those who are interested in the bigger towns and in the country distrcts, is, What sum of money, based on the standard year 1928–9, is represented as a loss to local authorities by discontinuing these two grants, namely, the classification grants in county and metropolitan boroughs and the grants to unclassified roads for their maintenance? The sum total is £2,790,000, made up as follows: Classification grants in London and county boroughs are estimated this year at £1,215,000, and the unclassified roads in country districts will get this year £1,575,000, making, as I say, a total loss to the local authorities of £2,790,000. They lose this sum which they are now getting as a direct grant from the Road Fund, but what do they gain? They gain through the block grant, as compensation,£2,790,000 from the Road Fund—they are making up the money which they lose, first of all—and then they gain the very substantial sum indeed of 80/91sts of £3,000,000. I must point out that this Bill does not include Scotland, but only England and Wales, and that is why it is not £3,000,000. They receive 80/91sts of £3,000,000, namely, £2,637,000, from the Road Fund, making in all a total contribution of £5,427,000.

Therefore, they receive on balance £2,637,000 to be provided out of the Road Fund towards the total cost of the block grant. This £2,637,000 is not an ungenerous contribution, as an annual extra sum, over the period of five years. What it means is this, that at the present moment for those two services, grants for unclassified roads in country districts and classification grants for Class I and Class II roads in London and county boroughs, they are getting 2,790,000.

Mr. R. RICHARDSON

Is that counted in the £5,000,000 of new money put into the pool?

Colonel ASHLEY

I am not dealing here, and I do not think it is within my province to deal, with the £5,000,000 or the £7,000,000 put into the pool. That is a matter for the Chancellor of the Exchequer or the Financial Secretary to the Treasury to deal with; all I am endeavouring to point out, as far as highways are concerned, is how we are dealing with the loss of grants and the new money which we are putting in.

Mr. HARRIS

It is important that the House should know if that money is calculated in the £5,000,000 new money.

Colonel ASHLEY

Of course, any additional money that I put into the block grant is part of the new money, whatever that amount may be.

Mr. OLIVER STANLEY

Is not this included in the £16,000,000 which goes into the general exchequer contribution to make up losses of grants?

Colonel ASHLEY

This money is included in the block grant and is part of the fresh money. The local authorities, which lose £2,790,000 of existing grants, are going to get from the Road Fund towards the block grant which covers highway and road expenditure no less a sum than £2,637,000; that is, we are practically doubling the amount of money, for the next five years, which local authorities are now getting from the Road Fund.

Sir H. CAUTLEY

Is not that the normal increase of the Road Fund grants?

Colonel ASHLEY

No, it is certainly more than the normal increase of expenditure on these roads. Now may I say a word as regards the Road Fund itself? The Road Fund share of the new money is not £2,637,000, but that sum less £537,000, which makes it 22,100,000. If the right hon. Member for Colne Valley (Mr. Snowden) will turn to page 8 of the Financial Memorandum, he will see, under Section 18, the following paragraph: Under the existing arrangements a fixed annual sum of £537,000 out of the proceeds of the Motor Licence Duty is withheld from the issue out of the Consolidated Fund from the Road Fund and paid into the Local Taxation Account. It is proposed, under Sub-section II of this Memorandum, that this sum should no longer be diverted from the Road Fund, namely, that the proceeds of the Motor Licence Duties should be paid to the Road Fund in full. What it means is that, though the local authorities are going to get £2,637,000, yet £537,000 of that is found by the Exchequer and not by the Road Fund. Therefore, my right hon. Friend the Chancellor of the Exchequer has been in this matter a fairy godmother to me. This very large increase of money can be fully justified. All those who live in country districts must know that the large amount of motor traffic which is using the smaller roads every day to a greater extent is putting a terrible strain upon the resources of the local authorities, and I submit that this widening of administration will enable them to meet those difficulties, that this large sum of extra money which the Road Fund is providing will enable the new authorities to deal with their roads in an efficient and economical manner, and that generally the road proposals fit and dovetail in with the general proposals of the Government.

Miss LAWRENCE

I do not think that it has escaped the notice of hon. Members that this is a very long and complicated business, and I propose to deal with only one aspect of it, namely, the question of finance which has been so interestingly illuminated by the Minister, and the question of areas and functions as far as they can be connected with finance. I do not propose to deal again at any length with the question of de-rating. Hon. Members know quite well the attitude which we take with regard to the de-rating proposals. We say that it would be better for the depressed businesses in the depressed areas to be relieved of the burden of the maintenance of the able-bodied poor, and that capricious burdens on particular firms should be cut out. If we want to deal with industry as a whole, as I think we do, we should deal with it in the way proposed by us before the Blanesburgh Committee by taking special taxes off industry and remitting them. I do not propose to argue that, because I am a Parliamentary realist. I know that the House intends to pass Part V of the Bill. The Government will have their de-rating and I approach the matter on that basis.

Granted that we shall have the measure of de-rating which the Government foreshadowed in the Budget, what next? The first point which I want to make is that, if you choose, you can have a de-rating operation without affecting in the slightest degree the finances, functions or areas of any local authorities. You can do it if you choose, and no one knows that better than the occupants of the Treasury Bench, and for a very honourable reason. It is because they did precisely that very thing in 1923, and although I disapprove of the operation of de-rating, and although I do not think it is likely to do the patient any good. I do say that no one ever performed the operation more successfully and efficiently than the Government of 1923. I will remind the House what was done in 1923, when we relieved agricultural land of a quarter of its rates. It was laid down in Sections 2 and 3 of the Agricultural Rates Act, 1923, that every year there shall be paid to the authorities a deficiency grant, and that the Minister shall from time to time estimate, as respects each authority, the deficiency which will arise in each half-year by reason of the de-rating. He is to estimate the losses in that way, and pay back the whole of the sum directly to each spending authority. That was how the de-rating was done in 1923, and the first point I wish to make is that, if you de-rate, you can leave local government altogether alone, or you can, if you choose, bring in any scheme of local government reform with regard to areas, duties and functions which you think expedient; therefore the provisions of finance in this Bill can be judged by themselves, and should be judged on the ground of their inherent fitness, beauty and simplicity.

I now come to the very difficult provisions with regard to finance, which carry with them very great reforms in areas. The financial operations divide themselves into three heads. The first is the estimation and repayment of the total amount lost to the local authorities as a whole, that is the question of the general Exchequer contribution and the discontinued grant, etc.; secondly, the manner and amount of the repayment made to the major local authorities, the formula with its child the additional exchequer contributions to the major local authorities; thirdly, the manner and the amount of the distribution to the minor local authorities, and its offspring the special Exchequer contribution. All these operations proceed on entirely different principles, and that is what makes the Bill so very difficult to consider. The general Exchequer contribution is fixed at the sum of £45,000,000. That is all right; it is quite clear in the first year. What is the general Exchequer contribution to be in succeeding years? Then I come into rather deep waters, because we plunge into para- graph 14 on page vii of the Financial Memorandum, and Clause 69 (1) (c) of the Bill. Both are not very easy. In 1935 the amount of the general Exchequer contribution will depend upon the total rate-borne expenditure of 1933–4. In 1940 the total Exchequer contribution will depend upon the rate-borne expenditure of 1938 which we do not know and on the first quinquennium which is difficult to foresee. The Exchequer contribution in 1940 will depend upon the rate-borne expenditure of 1938 and 1913, and that for 1945 will similarly depend upon the rate-borne expenditure of 1944, 1938 and 1933, and the final general exchequer contribution will depend upon the total rate-borne expenditure of 1948, 1944, 1938 and 1933. That is an outline of the paragraph to which I have referred.

These several sums are calculated by a very complicated equation, and I shall ask the Minister later on if he will translate them back into the simple, intelligible language of mathematics. At the moment, I want to say a passing word on the nature of the estimate. The long table of figures on page xix proceeds on the assumption that the total rate-borne expenditure will increase by £2,000,000 every quinquennium. It is very unlike the quinquenniums that we have known. The rate-borne expenditure has not increased by £2,000,000 during the last ten years. It rose to a high peak in 1921. It ran down, it turned a corner, and it went up again, and if we were here ten years ago no one could have determined or foreseen the amount of rate-borne expenditure in the years through which we have passed. So that this estimate is the stuff of which fairy tales are made; it means nothing at all.

Let me turn from the somewhat fantastic manner in which the general Exchequer contribution is estimated to the way in which it is intended 'to be paid. Here we have, first of all, the sum of £24,000,000. Is the sum so estimated likely to cover the loss of income to the local authorities from the de-rating, from the loss from the new industrial businesses which will spring up in their districts, and the appreciation which may occur in the rateable value of old businesses We have in the Financial Memorandum some instructive figures which throw a certain amount of light on the question, and show the experience of local authorities under the Agricultural Rates Acts of 1896 and 1923. If hon. Members will look at page iii of the Financial Memorandum, they will see that in 1896 half of agricultural land was de-rated, and the local authorities were compensated by a fixed grant based on the rates of that year amounting to £1,320,000. In 1923 another quarter of the burden of rates on agricultural land was taken off, and the Government paid by half-yearly ascertainments exactly what the local authorities lost, amounting to £3,400,000. There is the difference between compensation for de-rating by a fixed sum, and by the actual amount lost. If we were compensating for the de-rating of half the agricultural land on the basis of what the local authorities lost, we should now be paying £6,400,000, with a little deduction, with regard to the question of whether the poor rates come in.

The local authorities estimate that they lost in income £5,000,000 a year by the decision of the Agricultural Rates Act, 1896, and they are actually spreading that amount over the other classes of inhabitants in their district. That is being done now. In this loss of income due to de-rating we are dealing with the most stable property possible, namely, agricultural land. If you compare the rise in the value of agricultural land with that of all other property, you will see that other properties have risen much more steeply. It is common knowledge that of all property which rises steeply in value, industrial hereditaments rise the steepest. The Government now propose to de-rate to the extent of £24,000,000. We have before our eyes the extraordinary loss involved, when you de-rate agricultural land and compensate at the existing value.

Is there any reasonable hope that the additions to the general Exchequer fund, related in a somewhat fantastic manner to the total rate-borne expenditure, will equal that sum? That is the major difficulty which is filling all local authorities with anxiety. I just point out in passing that the total rate-borne expenditure is not in the least related to the loss—not in the least. The rise in the total rate-borne expenditure in 1921 was caused by the rise in prices. It fell after that, mainly through falling prices, which was due to the gold standard and other circumstances. The rise which afterwards followed was due to unemployment catching up that relief and raising the rates. Those are three great national factors which have nothing to do with the loss which occurred on rate-borne expenditure. Another factor is whether the authorities will or will not undertake new services.

Let me make this point clear. I do not want to waste any words, but let me take the instance of South Wales. In South Wales some of the collieries have de-rated themselves through having gone out of work, while at the same time, the expenses of the districts have risen monstrously as an outcome of the unemployment. If we left them alone, and happy times returned, the expenses of those districts would go down with a run and the rateable value would go up with a rush, but the consequences of de-rating on a sum which is almost a fixed sum will be that if happy times come back the expenditure will go down and whereas, otherwise, they would have been able to reduce their rates their field will he so narrowed by the de-rating at the bottom of the slump that they will have very little money. That concludes the first part of the question. The great point is, Are we going to get back our money lost through de-rating? Every local authority without exception is asking that the dc-rating money shall be kept separate from all the rest, and that they shall have full compensation for de-rating, or, if this Parliament will not give them compensation, at any rate they ask that the accounts shall be kept separate and that each loss on, de-rating shall be returned to the local authority which suffers it. There are two things they ask, first, that the pool should be swollen by the full amount lost by derating—the full amount, as under the 1923 Act; and the second thing is that separate accounts shall be kept and, if possible, the money shall be returned to each spending authority.

Now I come to the system of grants in relief. Never have I seen such a hotchpotch as is this £16,000,000 arrangement, First of all, there are the assigned revenues. I heartily agree with the Minister that nobody could possibly ad- minister the assigned revenues more absurdly than they are administered now. [Laughter.] I mean that. Every local government committee has pointed the finger of scorn at that ridiculous little remnant of that old tussle between the local authorities and the Exchequer. We add the grants under the Agricultural Rates Act, 1896, which is now a fixed grant, and then the Agricultural Rates Act, 1923 grant, which was compensation for loss. Everybody knows the Government could never have got that Bill through if the local authorities had not been satisfied and not raised a finger against it. That little innocent Bill, which took no time in 1923, would otherwise have occupied a great deal of Parliamentary time. Then there are the health grants. Strong pressure is being brought to bear on the Minister to take the health grants out of the pool. I am not going to labour that point. It stands by itself, and the Minister made certain advances towards the concession. I am only saying this about it, that we gave grants up to three-quarters of the amount of the expenditure on venereal disease because we wanted to deal seriously with the question and give a stimulus to the new service. If the Minister wants another stimulus, there is an easy way, the way we have always taken with optional services when they have attained a certain degree of stability, and that is to make those services compulsory and to give a grant.

I pass on to the Road Fund, and here I must deal with what the Minister of Transport said. [HON. MEMBERS: "Where is the Minister?"] I know every spending Department will do the same thing. The Minister of Health himself did it. He said," I am taking away 4d.—I think it was—"from Merthyr Tydvil maternity grant and giving 26d." [Interruption.] Oh, it was a much larger sum. Well, I will say give 1,000 pence, because the figure does not matter to my argument. He spoke as if the whole of the money would be available for the expansion of those services, as if the greater part of it were not in repayment for debt, and a very inadequate repayment at that. The Minister of Transport said the same thing. He said, "We are going to give them 81/90ths of £3,000,000 new money out of the Road Fund." He said,"Do not worry about the roads. Just think we are giving 81/90ths of 3,000,000 new money out of the Road Fund, and there will be no difficulty about the roads at all." Over and over again he said that this was new money.

But he made another little blunder. He said "The Chancellor of the Exchequer has given me, the Road Fund, £500,000 new money." Yes, but the Chancellor is taking away that money from the local authorities. He appealed to Section 18, and said a fixed annual sum out of the proceeds of the motor licences was to be withheld from the Road Fund and paid into the local taxation account. That money is at present paid into the local taxation account pocket and given out to the local authorities. It is to be paid now into the Road Fund and from the Road Fund it is to be given to the local authorities. But so innocent is the Minister of Transport that he talked about that as new money from the Chancellor of the Exchequer! I could not have believed that a, Minister of the Crown would have stood up and talked about new money when it was money taken from the local taxation account and given by another channel to the Road Fund. The Minister of Health said nobody had misunderstood the Bill who was not either lazy or stupid. I will leave him to settle that matter with his colleague. That deals with the financial side of the proposals which are unsatisfactory in so far as they leave doubt about the repayment and dissatisfaction with regard to the mixing up of the accounts.

Now I come to the repayment to the major local authorities; that is, I come to the formula, and to the additional Exchequer contributions, which I call the child of the formula. The Minister said they had to consider the needs of the authorities. If a local authority is poor it has difficulty in discharging its duties; if there are a lot of children to be educated that is a great expense, and if there are a great many unemployed that means an expense too; and the sparsity of population also comes into the question. He claimed that if all these things were taken into consideration in the formula it would be a scientific formula. Will it? The whole problem of making a formula of this kind depends upon the weighting on the mutiple and on the different proportions which are selected. If you divide out the percentage of money under the different heads, as the actuaries have done, you will find that the population figure accounts for 37 per cent., the children for 28 per cent., the low rateable value for 16 per cent., unemployment for 2.8 per cent. and as for the density, it is either nought in some places or 14.8 where it applies. You have most unlike factors. You attach to them absolutely capricious weights. You attach a certain figure to the children. Why that figure and not any other? When you are making a scientific formula, you must be able to give an account of the weights, and I ask why that particular weight was attached to the children. The unemployment figure is an arbitrary figure of 10, an appropriate figure during the first year, but then the multiple varies with the amount of the general Exchequer contribution, which depends upon the rateable expenditure over a certain period. Really and truly, I give that up. I am not idle, but I may be stupid over that.

I cannot see any scientific reason for the weights, or for the fact that you weight weighted population instead of weighting the original population, but I can see a historic reason, dimly outlined in the Clauses in the financial memorandum. The Minister told his officials to find a formula, and they sat down, took one thing which looked reasonable, ratable value, and put in a percentage, and then tried it on different towns. It did not fit, and so they said, "We must have something else." They put in the percentage for children and tried it again. Again it did not fit. So they said, "We must have another try." [Laughter.] This is how it was done! Then they put in unemployment and tried that, but once more it did not fit. Then they put in the density, and still it did not fit. Then some particularly bright young man said, "Let us multiply instead of adding," and that operation is described in the formula as an accumulative operation.

Sir H. CAUTLEY

And if it does fit, why is it not right?

Miss LAWRENCE

I am coming to that. Then they went to the Minister and because it still did not fit he gave £2,500,000 of new money in order to mitigate the difficulty. £2,500,000 of that £5,000,000 was given to prevent the formula hitting anybody too severely. Then he arranged that the formula should come into operation by instalments, but there was such an uproar among the local authorities that he had to break the full ravages of the formula in its successive years. So we have the additional Exchequer grant. This is not the formula coming in gradually. You increase the compensation for every successive quinquennial until you come to the end of the period and then you let them all down with a bump. Where is the result of the formula for which every hon. Member has been asking? We have been doing our sums and wondering at the result. We have asked a good many questions, but we have got very little information. People who are our betters in these matters like the accountants and borough treasurers are wondering too. I will give their words: We were impelled to lay stress on the fact that it was the ultimate destination of Government grants, when wholly distributed according to the formula, which was the vital consideration to the members of the Association, rather than the effect of a partial application of the formula. …We had expected, on intimating our desire to apply this test, that the Ministry would forthwith he able to assist us with prepared tables of their own. covering this ground, but, while the replies to our questions on the point were not quite clear, we were certainly left with the impression that Government tables of that kind had not been prepared, and in any case they were not produced. Is it true that the Government have not got tables showing the effect of the formula, because that is a shocking accusation? If it is true, then the Government have gone into this thing in the dark, and, if these tables cannot be prepared, then they do not know in the least how the formula will work out when the counties are exposed to its full ravages. I hope the Minister of Health will be able, later on, to answer that question for the credit of the Government and the credit of Parliament. Have the Government prepared a statement showing what will be the effect of this proposal based on the rates of 1926–1927 in regard to the distribution of the whole of the present pool? They regret that wealthy, comfortable, prosperous places will gain and the industrial towns of the North will suffer. I will give some instances which have been prepared by their actuaries on the basis of a pool of £43,000,000 instead of £45,000,000. The Minister has used the assigned revenue, and he has put taxes into the Bill which are not assigned revenue, and he has taken out something which is assigned revenue. Here are some figures which show what is the real effect of distributing the pool, on the basis of the 1926–27 rates. Reduction of rates will be as follows: Blackpool 2d., Bournemouth 2d., Eastbourne 2d., Oxford 2d., Southend-on-Sea 1s. There will he increases in the following towns: Blackburn 5d., Bolton 7d., Bootle 10d., Bury 8d., Dewsbury 11d., Halifax 2s. 6d., Huddersfield 1s. 2d., Leeds 2d., Manchester ld., Oldham 7d., Rochdale 1s. 8d., Rotherham 4d., Salford 4d., West Ham 6d. Those are the estimated effects of distributing the pool according to the formula.

The Minister of Health has made a special Exchequer grant by which every county which loses according to the county formula will have its loss made up. If any county loses when it receives the amount according to the formula, the Exchequer is to be called upon for the additional Exchequer grant to make up the county proportion. The second estimate for additional Exchequer grant is still more engaging than the first, and is based on the assumption that there is no change in the distribution of the weighted population. I leave those two estimates to the prayerful consideration of anyone who thinks he is going to be Chancellor of the Exchequer. The formula has to be bolstered up by additional money of an unknown quantity. Under these circumstances, what remains of the formula as a rational instrument for distributing the money? All this change is not being introduced gradually, but it is going to be bolstered up as more money is found, and in 1950 the whole thing is to come down suddenly with a bump. In the case of towns which are not county boroughs, the money they receive is to be paid with a certain addition out of the money which the counties receive, and it is paid on the basis of actual population.

All this will have no relation whatever to the sum which the individual counties receive. The amount which the boroughs and urban districts will receive is to be calculated on the total amount allocated to all counties in a lump, and they are to receive a proportion according to their population. The effect of this is that the amount they receive is calculated, not on what their particular county receives, hut on what all the counties receive, and they are to have on that a flat rate according to population. If that does not work, there is to be an additional bolstering up in the shape of a supplementary Exchequer grant. Supposing a district loses, under the formula, half of its loss will come from the supplementary Exchequer grant and the remaining half of the loss is to be taken out of the gains of other districts of the county. That will apply to the County of London and the Metropolitan Boroughs, and let me show how it will work out. In London, the poorer boroughs will gain a great deal. Poplar will gain a great deal, and Westminster will lose under the scheme. The Exchequer will pay sixpence to meet the loss of Westminster and the remaining sixpence is to be taken out of the gains of Poplar, Bermondsey, and the rest of the Metropolitan Boroughs. Could you possibly have a more flat abandonment of a principle? I am trying on this matter to be intelligible, but this Bill is full of traps, and it extremely difficult to understand. Under these circumstances, I ask what has become of the principle of the formula, and what has become of the principle of the flat rate because both these principles were said to be good and sound? What the Minister of Health is really saying is: "If any district gets too little, I will make it up, but, if any district gets too much, I will take away as much as is necessary." If any district gets too much, there will be taken away from it what is necessary to make up half the loss, and the rest comes out of the supplementary Exchequer grant.

6.0 p.m.

I want to point out the extraordinary change which is going to be made in the areas. We cannot even debate the Bill intelligibly as far as it deals with the various areas until we have dealt with Part VI. It is perfectly true, of course, that there are some districts which are not too poor and too small to discharge their functions, but the Minister is creating a class of new poor. I will consider, first of all, the case of the towns. The Minister of Health told us that he was a local government man, but he does not seem to understand the needs of small towns. I want to point out what will happen in one or two towns under the provisions of Clause 1. I will take, first of all, two towns which are perhaps more generally known to hon. Members opposite, the town of Cambridge and the town of Oxford. Those two places are as distinctly marked off in the surrounding country as it is possible to conceive. Both of those towns hold a special historic position of their own, and, with regard to local government and Poor Law administration, they have the most peculiar problems to deal with by the gush of employment which comes when the men come up. Oxford is a county borough, and, under the formula, Oxford will gain two-pence. On the other hand, Cambridge will lose twopence. That would not matter very much in money, but Oxford will keep its Poor Law work and in Cambridge the Poor Law functions will go over to the Cambridge county which is entirely rural and knows nothing whatever about the Poor Law problems of Cambridge. That is a bad thing. The Minister will hear a great deal about the local pride of Scottish towns, but I do say that nothing will exceed the anger of that university town.

Now I will give some instances, drawn from the White Paper, of the amounts which towns will lose when the special Exchequer contribution is withdrawn. These are the amounts that they will get before the special grant is applied. In the case of Rugby, the poundage will be raised from 12s. 5d. to 13s. 11½d., showing, therefore, a loss of 1s. 6½d. In the case of Berwick the present figure of 11s. 8d. will be raised to 14s. 4d. In the case of Keighley, 19s. 6d. will become 20s. 10d.; in the case of Heywood 13s. 3d. will become 15s. 10d. In Barking Town, where the rates are now 17s. 8d.—quite high enough—when the Government scheme comes they will be raised to 19s. 8id., without the special Exchequer grant. In the case of Hebburn they will be raised from 20s. 5d. to 23s. 2½d., while in the case of Batley the present poundage of 16s. 4d. will be raised to 18s. 3d. This weakening of the resources of towns has, as I have said, the necessary consequence, first of all, of preventing them from doing their own Poor Law work, and, secondly, necessitating a general amalgamation, which I say is a had thing.

It is a bad thing to cut and carve local government in accordance with the exigencies of this fantastic financial scheme. When you are determining areas, you have to consider whether the functions can be best performed by a small or by a large area, whether the community is a homogenous one, and also the question of finance. But, under this scheme, every consideration will be entirely subordinate to the financial considerations which the Minister himself has created. I want to ask hon. Members opposite who have spent their lives in dealing with business matters and great sums of money, whether they think that this fantastic financial edifice, with tier after tier of question marks, is a proper way to administer 45,000,000 or £50,000,000 of the nation's money? I know that they mean to have their de-rating, and I will not argue about that, but cannot they take their de-rating scheme, and cannot we have a temporary Measure to carry us over for a year, and send this thing back for consultation? You could give the £24,000,000 this year, as you have given the money under the Agricultural Rates grant. You could leave the Health grants alone. You may, if you like, play with the assigned revenue; no one minds that; and you can give the £5,000,000 of new money, if you like, to meet the necessities of special districts. You could have a, very short interim Act, and you could send all this back for consultation as estimates, to get something which will less impair the fabric of our local government.

I do not suppose for a moment that that will be done, but, if it were done, I think a sigh of relief would go up from the party opposite. The Minister, however, has long wanted this scheme. He projected it in 1925, but it was so unpopular that it had to be dropped. He has a much more unpopular Bill now, and it is fastened on to the Budget. It is a much bigger and more unpopular Bill even than that which was considered so unpopular in 1925. Now he has his chance. We have learned to know him as an extremely adroit and careful workman in the matter of small Bills. I have always paid homage to the workmanship of those Bills, even when I hated their principle, but usually I have said that it seemed to me that the Minister had no real grasp of principles. He has his way now. He has the chance he wanted. He will not go down to posterity as a reformer of local government, but as a man who tried to break up the fabric of local government and left the work of repair to others.

Brigadier-General WRIGHT

I believe that, when a Member rises for the first time, it is the custom for him to seek the indulgence of the House, and I hope that that indulgence will be meted out to me in full measure to-night. Representing, as I do, an agricultural constituency, and since continued attempts are made to minimise the effect of the Government's efforts to reduce overhead charges on our producing industries, I felt that I would like to take the first opportunity of expressing to the Government my appreciation of the assistance to agriculture that is promised under their de-rating scheme. I can assure the Government, in spite of statements to the contrary, that in my constituency those engaged in agriculture do appreciate and are grateful for the endeavours of past and present Governments to relieve them of at least a part of the burdens under which their backs are breaking. I do not mean to infer for a moment that that assistance is going to cure all the ills from which the industry is suffering, but I take a diametrically opposite view to that of the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood), who spoke a short time ago. I suggest that this assistance will go a long way towards providing a solid foundation upon which the industry, with or without the help of the Government, will have a reasonable chance of building upwards to reach a state of prosperity greater than that which exists to-day.

When I speak of the prosperity of agriculture, I do not mean only the farmers. One is sometimes accused of only thinking of the farmer, but I think also of the farm labourer, whose wages depend upon the capacity of the farmer to pay them; and also of that large body of small retailers who live in towns and villages in rural districts, and whose prosperity depends upon the amount of money that agriculturists as a whole can pass over their counters. When such a large number of people are affected, it is necessary for us to make sure that rate relief will go to those for whom it is intended, and, therefore, I would like to refer to what I have always called an insinuation, but which to-day has been mentioned by the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme as his opinion, that is to say, to the statement or belief that rate relief must automatically find its way into the landlord's pocket.

In the first place, I think it is sometimes forgotten that a considerable proportion—I believe something like onethird—of our farmers own their own farms, and, therefore, are their own landlords. Secondly, we have actual experience that, as regards tenant farmers, rate relief in the past has not tended to increase rents. It is common knowledge, or ought to be now, that when, in 1896, a Conservative Government passed the first Agricultural Rates Act, by which a 50 per cent. exemption from rates was granted, rents, so far from increasing, tended to decrease. I know that, if this were not my maiden speech, someone would immediately say to me, "Oh, but there were other causes at work which brought about that desirable state of affairs, and brought it about, not because of this Act, but in spite of it." I would, however, say that it is a curious coincidence that when, some 27 years later, in 1923, another Conservative Government brought in a second Agricultural Rates Act giving further relief from rates, the increase in rents in the years following the passage of that Act was infinitesimal compared with the increase in the level of agricultural prices. Therefore, we have actual experience, spread over a period of years, that rate relief has not resulted in landlords raising rents.

We have this further experience, that, on a change of tenancy, applicants for farms have not been prepared to pay more for a farm that has been subject to rate relief than they otherwise would have paid, and the reason for that is, I think, abundantly clear. Agricultural rents are very seldom raised to a sitting tenant, and that tends to preserve a standard of rent in a locality; and the prevailing standard of rent, together with the quality of the land, is, in my opinion, more calculated to influence an applicant for a farm than anything else. We on this side of the House must, however, beware of the suggestion, made, perhaps, for special reasons, that, even if in the past landlords have not raised rents, they will be tempted to do so when land and buildings have been completely de-rated. I would point out in that connection that a landlord cannot raise a sitting tenant's rent without going to arbitration, and if, rather than go to arbitration, he gives his tenant notice to quit, that tenant can not only claim payment for crops on the ground and for the unexhausted value of manures, but also a lump sum amounting to at least one year's rent. [Interruption.] Someone reminds me that it may be two years' rent, but I said "at least one." I think that that should deter even the most grasping of landlords from yielding to the temptation to try and divert into his own pocket some of the rate relief.

Again, we have had the persistent demand over a period of years by the whole farming community that their raw material, the land, should be completely de-rated, and I cannot believe that they have taken all that trouble and have been so persistent in order that the results of that de-rating should go into the pockets of the landlords. Finally, we have the almost daily pressure that is brought to bear on the Government that the date on which this relief is going to be given should be advanced to an earlier period, instead of its being given on the date at present proposed; and that pressure is being brought to bear, not only by farmers themselves, but by the farmers' representative body, the National Farmers' Union. No one, therefore, will make me believe that that pressure, so continual and persistent, is only applied in order that the landlords' pockets may be filed sooner rather than later. Taken from that point of view, the suggestion that the landlords' pockets are going to be filled as the result of de-rating rests upon a somewhat, if I may say so, boggy foundation.

Let me turn to the question of the reform of local government, which I saw described the other day as the essential complement of the Government's de-rating scheme, essential, no doubt, because of the great difficulty of putting the scheme into effect without a re- adjustment of existing areas and an alteration of the methods of charge. Many of us are well aware that advantage is being taken of that de-rating scheme and the introduction of the readjustments I have referred to to make the less well-to-do sections of the electors believe that this great effort on the part of the Government to decrease unemployment and help industry will eventually have to be paid for by them, but when I hear this Bill being discussed, more often than not I feel that two areas only are being considered. One is the depressed area where there is much unemployment and poverty, and the other the area that is prosperous, where new industries are springing up. But those two areas do not cover the whole country.

There is a third area, which is neither depressed nor prosperous, but which is highly rated and which could not bear, and ought not to be asked to bear, someone else's burden but even requires help itself, and there has been a natural fear in an area of that description—I mean my own constituency, which is mainly agricultural, which is served by two railways, which has a few industries, such as china clay working—which has been played upon by a certain amount of misrepresentation or by exaggerated statements by misinformed people, that the rates which will come off the land and the industries to which I have referred will eventually fall upon the farmers dwelling house, the cottager's cottage, and the small householder. If that were to be the case it would be most unfortunate. Then there is the suggestion that the rural areas will have to bear the cost of urban Poor Law relief and, if that was to happen, it would cause keen disappointment in an area such as I am describing and the population would suffer under a keen sense of injustice. I listened to the speech of the Minister of Health last night with a feeling of considerable satisfaction because I believed it would dissipate the fears I have expressed and would cut the ground from under the individuals who are spreading those statements and, in fact, would prove that they rested on a very flimsy ground.

I am specially interested in one point the right hon. Gentleman made. He informed us that a majority of the mem- bers of the new guardians' committees would be taken from elected authorities, and that the minority would be co-opted or nominated members—two-thirds would be members of elected authorities and one-third co-opted or nominated. If he is determined to stick to that proportion, I hope that as many as possible of the best of our existing guardians may be amongst that two-thirds elected, and that even amongst those who are co-opted there will be as many as possible of the present members, even if they are not district councillors. This refers especially to women who, in the neighbourhood I am talking about, have done extremely valuable work. Then we should feel that the poor will be cared for, as they are at present, by the people amongst whom they live and who, of course, understand their requirements infinitely better than any stranger could hope to do.

In connection with the administration of highways, I understand, from what the Minister said yesterday, that the onus now will be thrown on the county councils to show why authority should not be delegated to district councils in connection with the roads in rural areas. I gather from that that if the district council is efficient and has, for example, a competent surveyor, the county council will be obliged to delegate authority to it in connection with at least the unclassified roads in rural areas. I feel that that point should be made clear, because I have heard of certain complaints expressing disappointment with the working of another Act which also gives power to county councils to delegate authority and also gives power to district councils to appeal to the Minister of Health over the heads of the county council. I refer to the Housing (Rural Workers) Act, 1926. I believe from what I have heard that district councils expected they would have power delegated to them generally in connection with that Act, but I am informed that the power was somewhat grudgingly given by the county councils, and, on appealing, they did not get much satisfaction from the Minister of Health. I have been informed several times that that is one of the reasons why that Act did not develop in the way so many of us had desired it should. Although it is impossible not to realise that criticism of details will still continue after the passage of the Bill, I honestly believe that, as time goes on, the people of the country will thoroughly appreciate the liberal and broad-minded way in which the Minister of Health has met the objections to his original proposal. I am convinced that the nation as a whole will recognise, and appreciate the courageous manner in which the Government has faced an infinitely difficult problem which no previous Government has had the courage to face up to.

Mr. ERNEST EVANS

I am sure I am voicing the opinion of Members in all parts of the House when I felicitate the hon. and gallant Gentleman the Member for Tavistock (Brigadier-General Wright) on the very happy manner in which he has discharged his task. We shall look forward to further contributions from him. I listened yesterday with great admiration to the speech of the Minister of Health and I was impressed, as I think everyone must have been, by his exemplary lucidity and his obvious earnestness and sincerity. But I cannot suppress a feeling of disappointment that those excellent qualities were not devoted to a more worthy cause. In a speech a short time ago the right hon. Gentleman seemed to suggest that failure to understand the Bill and appreciate its advantages was due to the stupidity of its critics. If that is so, I can only adapt a very famous phrase and say the Almighty must be very fond of stupid people for he seems to have created a lot of them. The stupid people in connection with this Bill include representatives of local authorities up and down the country who are engaged daily in the problems of local government. They include the officials of those bodies, who hitherto have the reputation of being able men and certainly have some considerable experience, and I am afraid, after the speech of the Minister of Transport to-day, they also include the Minister of Transport, because in one part of his speech he was effusively thanking the Chancellor of the Exchequer for certain new money which he said the Chancellor would provide for roads which, as far as I can see, was a complete travesty of the proposals of the Bill. The stupid people also include the very persons who under the Bill are being given wide powers and are being charged with great responsibilities.

A great part of the attention which the Bill has commanded has been directed to the financial provisions, and that is natural, but I feel that that should not be allowed to deflect us from the appreciation of what is contained in Part I of the Bill, which deals more especially with the problems of local government. The Minister yesterday gave a list of five great defects which he said he saw in existing local government. One of them was the overlapping of the areas of boards of guardians, and another was the want of elasticity in regard to the alteration of boundaries. I agree that the Bill may do a good deal to meet those two defects. It abolishes boards of guardians, so they cannot overlap any more. But, even in regard to that part of the Bill, I would suggest that the legitimate pride the right hon. Gentleman takes in connection with his work in local government in Birmingham is really to some extent responsible for what I consider to be one of the defects of the Bill. It has been drafted to meet problems of local government as they affect a large city like Birmingham, while ignoring the problems that exist in country districts, and particularly in small rural areas.

One of the other defects he mentioned was the burden of the maintenance of roads in rural districts. Does he really think he has met that defect? Let us look at it from two points of view. Look at it, in the first place, from the point of view of the authorities that are to control the roads in rural areas. You first of all make the county council the highway authority. Then there is to be a separate provision for urban districts with a population of over 20,000. There is another separate provision for urban districts which have a population of less than 20,000. When you come to rural districts you divide up their authority in regard to classified roads and in regard to unclassified roads. There is very little difference between telling the county councils that in the one case the onus of not conferring powers is upon them and in the other case, especially of rural councils, that it is for the county council to say whether powers shall be delegated or not. Even in regard to unclassified roads, even if the county councils agree to delegation, which is permissive under the Bill, the rural dis- trict councils are described as agents, and they will really have no effective power. The real effective power will still remain in the county councils. The majority of county council representatives will be more interested in the main roads and the roads serving the towns, and the roads in purely rural areas will have very little chance of deriving any benefit from this change in the organisation of highway administration, and certainly not from those wonderful sums of money which the Minister of Transport was able to see but which ordinary people cannot find in the Bill at all.

The next defect the right hon. Gentleman mentioned was the inequalities of the rating system. Everyone is acquainted with those, hut would he say he is going to get rid of them? It seems to me that in many cases what he is doing is to substitute one form of inequality for another. He himself gave the county of Brecon as one illustration and pointed to the fact that the rate for maintaining unemployed persons in one part of the county was Hid, and in another union it amounted to 7s. 1d. How is he going to deal with that? The point is that in the county of Brecon there is one very small part in which there are mines which to-day are practically derelict, and that is what is responsible for the high rates in that particular area. That is a very small part of the county. The rest of Breconshire is almost entirely agricultural. How is the right hon. Gentleman going to do away with what he calls the inequality of the rating system? He is merely going to distribute the burden of that seven shilling and a halfpenny over the rest of the county. Who is going to pay it? The people who will have to pay it are the occupiers of houses, offices, agricultural labourers' cottages, and even farm houses, the farmers themselves, and shops. There is no more reason why they should pay it than there is that the people of Birmingham should pay it except the purely artificial and accidental fact that they happen to live within the confines of one of the administrative counties. The result is, that you are distributing the burden among the very classes who are dependent upon agriculture, which is another depressed industry it was necessary for the Government to help by de-rating. The people in those areas may find that any benefit which they may get from the de-rating of agricultural land will be reduced if not wiped out by the additional burden which may be involved in this particular part of the Bill.

This is an illustration of the fallacy of the Bill to apply the principle of coordination, to which the right hon. Gentleman attaches so much importance, in the one direction where co-ordination is necessary, because this inequality to which he has referred in Brecon-shire, like so many inequalities, arises from the burdens involved in the unemployment prevailing in the country at the present time. Here, indeed, is room for co-ordination. It is the lack of co-ordination, it is the distribution of powers and authority to Employment Exchanges dealing with unemployment insurance and to boards of guardians granting relief—it is that distribution which has done so much to cripple and to handicap the efforts of both and to handicap all State efforts of a scientific character to deal with the problem of unemployment. If the Government would only regard unemployment as being a national problem and treat it in a national way, they would be able to introduce the principle of co-ordination into that aspect of our life in which it is most sorely needed at the present time. The Government wish to perpetuate anomalies, and do not deal with the real problem at all. So much for the inequality point of view.

The last point mentioned by the hon. Member for East Ham North (Miss Lawrence) was what she called the "chaotic relations between local and national expenditure." Is she sure that she is not going to substitute one form of chaos for another? It is not difficult to imagine circumstances arising in the near future in regard to health services because of the substitution of the block grant for the percentage grant which will lead to deplorable reaction if not to chaos, and I am not sure whether reaction is not worse than chaos as far as public health services are concerned. I am only going to take one illustration of this, and it is the illustration to which the right hon. Gentleman referred yesterday when he talked of the great maternity and child welfare services. He claimed with perfect justification that these are services in which he took considerable interest and which he was very anxious to promote, and I do not think anyone will deny that. But the point is that these services are, after all, comparatively new services. There are still a good many people who require to be more firmly convinced than they are at the moment of their value. New services like new ideas take some time in some cases to penetrate into the minds of people. Everybody who has been watching the way in which local authorities act have realised, particularly in regard to new services, and even in regard to old services, that many people who have certain doubts and even suspicions as to particular items of expenditure which they are asked to sanction find their difficulties considerably removed by the knowledge that if they spend some money they will get, if not a corresponding, at least a substantial grant from the Government in order to meet their expenditure. Local authorities seem to love the idea of getting something out, of the Chancellor of the Exchequer, and there is no doubt that that percentage grant has been a great stimulus to expenditure on social services in the past. Under this Bill that stimulus will be checked.

The right hon. Gentleman yesterday compared the grants which are now paid to local authorities in respect of maternity and child welfare services with the amounts which districts will get when this scheme comes into full operation, but with due respect that is no answer at all. There is no security, as far as I can see, in this Bill—I should like to be corrected if I am wrong—that a single penny of what be called the gains which are going to these districts shall be spent on maternity and child welfare services. It is included in the bulk and the local authorities can do as they like. The result may be that you may find that services of this character are being curtailed in the very districts where their maintenance is essential and their expansion is desirable by reason of the distress which prevails in those districts; and Chat very distress may prevent that expansion taking place. If you come to Brecon again, I can quite conceive that in the course of a very short time the bulk of the ratepayers of Breconshire will find a great and sudden increase in the burdens of their rates and that they may be very loth—I hope they will not—to sanction any additional expenditure for the provision of services in districts where acute distress prevails at the present time. Indeed, if it were not for the fact that this system of percentage grants is recognised as a great safeguard and a great stimulant there would not have occurred what did occur a few years ago. When it was suggested in regard to education that a block grant should be substituted for a percentage grant, there was an immediate outcry throughout the country on the part of all people who had the interests of education at heart, and it was because of this very reason, a realisation of the fact that the substitution of a, block grant might imperil the education services, that the suggestion was dropped. I think the same thing will happen with regard to its application to health services.

The only other word I want to utter is one of suspicion in regard to the powers which the Minister is taking unto himself or unto his Department under this Bill. They were referred to yesterday by my hon. Friend the Member for Leith (Mr. E. Brown). Under this Bill, the Minister, by order, by the necessity of his sanction to schemes, by regulations and by other devices, is really assuming for the Ministry of Health the functions which properly belong to this House and to the other House. They can by the exercise of these powers, in effect, introduce any legislation into this country without the authority of Parliament. This is a thing which has been growing up in recent years, and I think it ought to be checked in order to maintain the authority of this House as representing the electorate of this country in regard to all matters of legislation. It is a difficult thing to bring within the compass of a, few minutes all that one would like to say about a Bill of this character. It is said to be a complicated Bill. That, in itself, is not of necessity a condemnation. Sometimes even a simple Bill leads to complicated results, and sometimes an apparently complicated Bill leads to simplification. I am afraid that this sill will prove to be complicated, not only in its nature, but in consequences.

Mr. O. STANLEY

It is a large question which the House is now discussing. The passage of this Bill will no doubt last for many months and will take many hours of our Parliamentary time. It is a prospect which one may or may not contemplate with pleasure, but at least it is one which excuses one from entering into details at this stage. I make no apology, therefore, for confining my remarks to short generalities which I hope will at least bring down the average length of speeches in this Debate. The right hon. Gentleman, in moving the Second Reading of the Bill yesterday in a brilliant speech, which all parties joined in admiring, described as five in number the parts into which the Bill fell. If I may venture to disagree with him, I should say that in the popular imagination, and as far as popular interest is concerned, it falls into three: into de-rating proper, into the question of the transfer of functions from one local authority to another, and into the alteration of Exchequer grants.

On these three subjects, I should like to say a few words. First of all, with regard to the question of de-rating, I was fortunate enough, during the course of the Budget Debate, to catch the eye of your predecessor in the Chair, Mr. Speaker, and, as I supported the principle of de-rating then, so I support it now, as I believe all other hon. Members on this side of the House do, undeterred by the gyrations of the weather-cock Press and unshaken by the arguments of hon. Gentlemen oposite. Take, for instance, the case of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), whose absence we so deplore. He has probably been the most active, as he has certainly, from our point of view, been the most helpful opponent, of this Measure. He has spoken in a great many parts of the country against it. He has denounced the Bill and has airily touched on various alternatives, which by mere coincidence happened to be particularly favourable to the district in which he was speaking. In the course of these addresses throughout the country there flashed through his mind such alternatives as the assumption by the Exchequer of the maintenance of the able-bodied unemployed, of relief by depressed industries, of relief by necessitous areas.

Let us imagine what would happen if we could put back the clock and if, by some stroke of magic, the Minister of Health could have been induced to accept any of these alternatives as a proper principle and had to-day been standing in this House defending them. Imagine to what heights of eloquence the right hon. Gentleman would have risen! Take, first of all, the maintenance of the able-bodied unemployed. What would he have said if the hon. Gentleman the Member for Leith (Mr. E. Brown) had not reminded him that his hands were already a little tied by the Yellow Book? He would have denounced it as a Castles Relief Bill. He would have pointed to the general relief of rates in one district. He would have shown how the duke in his mansion gained more than the draper at his gates; and, finally, when he was speaking in an agricultural district, he would have shown what was the effect in a district where unemployment, perhaps, amounted to 1 per cent. of the insured population of the relief of able-bodied employed. He would have asked the farmers if this was the treatment that they expected from those who claimed to be the friends of agriculture. Or, take the case of the depressed industry. He might, with justice, have contrasted the cases of cotton and artificial silk—the one an old, decayed, decadent industry, and the other new, virile, progressive. The history of the past; the hope of the future! He might have pointed to those cotton firms who still, with all their difficulties, manage to make a profit. He might have pointed to those new silk concerns striving with the adversities of a new venture. One would be helped; the other would get nothing. In his peroration, he would have pointed out how but for the obscurantism of an unimaginative Government the glitter of the Lancashire viscose might brighten the eyes of equatorial Africa, and the rustle of Derbyshire celanese gladden the ears of far Cathay.

Take the case of the necessitous areas. What an opportunity for the right hon. Gentleman to bring in once more the name of that Noble Lord whom he once watched with the pride and affection of an elder brother, and whom he now pursues with the bitterness of a deserted wife. He might take the case of Imperial Chemical Industries, that great concern which so closely followed up the recommendations of the Yellow Book, and then spoilt it all by making a profit. He would point to Billingham, in Durham, where the great new factory of this prosperous industrial octopus is going to receive rating relief. He would point to the prosperous area of Kent, where the depressed coal mines would receive nothing. The fruits of his oratory might seem to the casual observer rare and refreshing, but they come from the Dead Sea.

If there is a lesson to be learnt from these arguments, it is this, that if you are going to look for anomalies in this or in any other scheme, you will find them. If you are going to set out under this scheme or any other scheme to excite the jealousies of districts and of individuals against other districts and individuals who will receive more than they, you can do it. But that is not statesmanship. The principle which the Government have adopted is one which I support, because it is, I believe, based on the only fundamental basis which is also constant. The burden of the maintenance of the unemployed may diminish or its incidence alter; depressed industry may become prosperous; necessitous areas may revive, but a dividing line drawn between hereditaments used for productive industries and others remaining constant. I believe this is the correct principle on which to base the de-rating scheme.

Let me turn to the transfer of the functions of local authorities. I will leave the question of roads. That is an important question, but it is not one in which in any sense has a personal contact with the people of this country, and, moreover, I believe that the safeguards which the Minister has introduced meet to a large extent the objections which have been raised. The question of the boards of guardians rests upon a different footing. The Minister of Health stated in moving terms that the boards of guardians are institutions with which the people of this country come into personal contact, that they have learned to trust them, and that they have built up traditions which in most parts of the country have been loyally and honourably observed. In approaching this question we have to put aside the very natural sympathy which we feel for those men and women who have worked so hard in connection with the boards of guardians and who now see the system which they have done their best to work, put upon the scrap heap. We have to remember, however, that no system for the administration of Poor Law relief is in itself sacrosanct. The people who are now defending their position owe that position to the failure 94 years ago of the very arguments which they are bringing forward to-day. The chairman of a board of guardians for a particular union would not be there to-day if the arguments against centralisation had not been defeated in 1834.

The real thing to remember is that the great points of value in regard to boards of guardians, the things which we have to preserve are (1) the types of men you get especially in an area like mine, a rural district area; and (2) the close contact which they have with and the knowledge which they possess of local affairs. It seems to me that under the Government's scheme as it is now propounded, so far as Parliament is concerned, every opportunity is given for the present administration of Poor Law relief to continue on the same lines and be governed by the same principles as at present. Whether in fact it will be, depends, not upon Parliament, but upon those people who are now engaged in the administration of the Poor Law. I believe an opportunity will be offered for those people to continue in that service. It depends upon them to put love of their work before their natural feeling of injured pride, their interest in the people they have served before their own interest, and, if they do that, as I believe they will, we need not be afraid that the traditions of Poor Law relief in this country will not be carried on as well under the new administration as in the past.

With regard to the alteration in the Exchequer grants, let me deal, first, with the point of its complexity. A touching picture has been drawn in some of the newspapers of the tired ratepayer hurrying home after the day's work, and after solving the crossword 'puzzle by Torquemada, sitting down with paper and pencil before him and trying to work out, like uncle Joseph, the appropriate losses and gains of five districts in England and Wales, and his disappointment at finding that he is unable to do so. I agree that probably he will not be able to do it. If that is the grievance, it is not a new grievance. It is a grievance which existed just as much under the percentage system which hon. Members opposite lament to-day as under block grants. I have here the statutory rules of the grants governing higher education Perhaps hon. Members will allow me to quote a case: The grant payable to each non-providing authority will accordingly be reduced by a sum equal to a fraction of the total reduction, which fraction will be ascertained by taking half the sum of the following fractions:

1. (i) The average attendance for the year 1926–27 in public elementary schools (not being special schools) maintained by the authority and by any local education authorities for elementary education within its area, divided by the sum of the like average attendances for the areas of all the non-providing authorities: and
2. (ii) The rateable value of the area of the authority as on 1st April, 1927 (ascertained in the case of a county according to the county rate basis) together with the annual value of any Government property on which a contribution in lieu of rates is made, divided by the sum of the like values for the areas of all the non-providing authorities."

We may take it that the complexity of grant regulation has been a feature of local government in the past, and that under any system it is likely to remain so in the future. So long as it is understood by the various officials concerned on the two sides, I do not think it is a matter which really need trouble the average ratepayer.

Let me pass to the more general question in regard to the alteration in the Exchequer grants. I think we are on common ground as to the method of distribution when I say that hon. Members opposite agree with hon. Members on this side that some attempt should be made to distribute the assistance which the Exchequer gives to the local authorities more in accord with their special needs. I believe therefore that the difference between us is not so much a difference of principle as a difference of detail. Take, for instance, the block grant. Hon. Members opposite have expressed themselves very strongly against the block grant. Really, the objections to the block grant are only that the block is not big enough. Nobody is going to object to a block grant if it is sufficiently large. With regard to the fears which are expressed as to the deadening effect of the substitution, it is interesting to ob serve that the amount of money involved in the change from percentage grant to block grant is £6,600,000 and the new money given by the Exchequer to the local authoriites is £5,000,000 so that if the whole of this new money were to be used for these services there will be room for a 75 per cent. expansion. Then comes the question of the weighted population. That is a matter of detail. That is a thing which has to be threshed out in Committee.

Prima facie, I think that hon. Members will agree that rateable value, weight of unemployment and sparsity of population are three factors that must contribute to the needs of the locality. There is a fourth factor, that of the children. I was impressed by what the Minister of Health said yesterday on that subject, and I could not help feeling that some anomalies may have arisen from the fact that the child factor is not an entirely reliable one. It strikes me that not only in poor districts, but in a district which is a dormitory the child factor must be very high. The dormitory districts are occupied to a large extent by those people who are still engaged in work, and therefore those people who are most likely to have children under five years of age. The tendency of older people when they retire from industry or from work in the city is to retire to a district beyond the limits of the dormitory areas, and I cannot help thinking that the large gains in the districts round London may to some extent be due to that.

A further point is the quinquennial period. That, again, is a matter of detail, and it is one on which the right hon. Gentleman ought to be prepared possibly to meet opposition. The question is whether five years is not too long a period to take and to say that the needs of the area will not change in that period. When the Noble Lord the President of the Board of Education was asking for educational programmes from the local education authorities, he fixed a period of three years as the maximum amount of time for which you could expect the local authority to look forward and to make provision, knowing that there would be no striking change in its circumstances during that period. There is also the question of safeguards. The whole basis of the Government's scheme is the gain in the future. This Bill is not being brought in by the right hon. Gentleman just because he likes to pilot through Parliament, a Bill with 100 Clauses and 15 Schedules. It is not supported by hon. Members on this side of the House for the fun of irritating certain people who have hitherto been their best supporters. It is clone because we believe that by increasing prosperity, by increasing efficiency, this Bill will really do good and will lower the burdens of the ratepayers. If that be so why not alter the safeguarding of a county district. Instead of one year's guarantee, why not make the guarantee period longer? Why not make it three years, even if thereafter the guarantees could be reduced by much and less gradual stages. Give them a chance. Say to the districts, "See where you are going to get economy, see where you are going to get increased prosperity and remember that during that time you get a guarantee." Then at the end of three years or five years when we know that the desired result is going to be achieved, the guarantee could be allowed to descend at a steeper pace.

7.0 p.m.

One word to hon. Members opposite from an entirely different point of view. It is felt by hon. Members opposite and even by others that this scheme, good as it may be, is not enough to revive employment. They feel that rationalisation, that blessed word which in the lexicon of my hon. Friend the Member for East Aberdeen (Mr. Boothby) has replaced Mesopotamia, is a drastic cure. It leaves the patient in a low condition and it may require a very powerful tonic to revive him. During the Debate on the Gracious Speech interesting suggestions were thrown out. The hon. Baronet the Member for Smethwick (Sir O. Mosley), leaving for once the mien of proletarian denunciator and adopting the more natural role of parlour Socialist, spoke of an increase of bank credits, amounting as I took it, not to inflation, but to some lessening of that rigid stabilisation of credit which, with changed circumstances, increasing population and more men coming into industry, may amount to severe deflation. The right hon. Member for Carnarvon Boroughs was trying to get to the same place in a different way. He advocated the use of Government credit for a Government loan to be devoted to increasing and developing the primary productive capacity of this country or among our non-competitive customers.

We must remember that we in this country are in a very peculiar position. We are largely dependent upon certain foreign countries for the import of certain necessary raw materials. These methods which have been suggested are methods of artificially increasing our home demands. The immediate result in our country is to increase the home consumption of certain imports from abroad, certain raw materials such as food, copper, tin, etc. Therefore, you cannot resort to artificially increasing your home demands unless at the same time you do something to increase the competitive power of your exports which have to pay for the increased quantity of imports for your home demand. I do recommend to hon. Members opposite that, before any of those schemes can be put into operation artificially to increase our demand, you must have as a condition precedent some Measure, such as this, which will at the same time stimulate and increase the competitive power of our exports abroad.

Finally, may I say that this is a Measure which co-operation may improve, but which opposition cannot defeat. I hope that hon. Members opposite, when at the close of to-morrow's Debate they register, as they must, their formal protest against any Government except a Socialist Government doing any good to the country, will then busy themselves in trying to improve, trying to round out this Bill, and will thus enable themselves to share some of the credit which I believe that future generations are going to give to the Parliament which passes this Bill.

Mr. PETHICK-LAWRENCE

The Minister, in introducing the Bill yesterday, asked us not to be led away by mere parochial considerations, but to take a wide view of the Bill as a whole. I agree with that sentiment, and it is because we on these benches take a wide view of the Bill as a whole and of its effects that I cannot respond to the invitation made by the hon. Gentleman who has just resumed his seat to co-operate and not to oppose this Measure. We see in the main principles of this Bill certain very serious effects injurious to local government and injurious to some of the services which are most important to the preservation of the life and health of the people. This is a very large question, and many of the speakers have dealt with it from different points of view, in particular my hon. Friend for East Ham, North (Miss Lawrence), who, in that very admirable speech to which we have listened recently, dealt exhaustively with large sections of the Bill. Therefore, like the hon. Member who has just sat down, I propose to confine myself to dealing with two issues and two issues alone. The first issue is one to which he himself referred, the fixation for a whole quinquennial period of a block grant. That is not merely the fixation of the amount, but the fixation of the character of the distribution. The other point is the effect of the Bill upon women generally.

First of all, with regard to the quinquennial period, at the present time our grants for local services are decided year by year and the amount paid by the Exchequer is related to the current expenditure out of rates by the local authority. If this Bill is carried into law, there will always be a time lag in relating the amount paid by the Exchequer to the amount paid out of rates. In the first year of the quinquennial period there will be a time lag of two years, in the last year there will be a time lag of six years in the relation between the two forms of outlay. Consider what this means. Suppose, for argument, that the formula in the Bill is in itself an excellent formula, suppose that the measure of unemployment is adequate and suitable, on what principle then are we, according to this Bill, to give grants to local authorities on account of unemployment? Are they to be related to the current unemployment? Not at all, they are to be related to the unemployment in the three years preceding the beginning of the quinquennial period.

Take the present unhappy plight in the coal mines. Supposing this Bill had been in operation during all the last years. It must be remembered that 1918, 1919, 1920 were halcyon years for the coal trade. For six years from that time onwards the grant in respect of unemployment would have been given to districts on account of 1918, 1919, 1920; so that in the years 1924, 1925, and 1926 you would have had no real account taken of the unemployment in those years because the distribution of your grant would have been entirely governed by the condition of 1918, 1919 and 1920. That surely shows the ineptitude of the fixation of this quinquennial period. Let us suppose the reverse tendency to take place. Suppose you fix the grant to be paid to districts where there is grave unemployment today. Anybody acquainted with the vicissitudes of employment knows quite well that, before six years have elapsed, employment in these very areas may be particularly good. Yet this precious quinquennial principle is to work cut so that, at a time when certain areas are particularly well favoured, they are to receive a specially large grant because, at some period before that quinquennium began, they were in a particularly unfortunate period in respect to unemployment.

Now I come to the gravamen of our objection to this Bill. The hon. Member for Westmorland (Mr. O. Stanley) assumed that ours was a merely fractious opposition based on details whereas it is in fact an opposition based on fundamental principles. Our great objection to this Bill is that it will starve the vital services relating to the human needs of the people. The Minister in his speech put his hand to his heart and said that he would not do anything to starve the health services and particularly the services for maternity and child welfare. Of course, when he says that, we must believe in his sincerity, but I cannot help thinking that, if his sincerity be above suspicion, the acumen with which he regards these questions must on this occasion have been entirely lacking. Suppose, as an example, that a local authority is spending at the present time £10,000 a year upon maternity and child welfare services and that half of that is being paid out of the National Exchequer. Let us suppose that, copying more progressive authorities, they decide to increase the amount spent on these services until it reaches £30,000 a year. Under our present system the Exchequer grant would increase in the same proportion and therefore the amount that would fall upon the rates from the three-fold expenditure would also lie three-fold what it was before.

See what happens under this Bill. If the total expenditure is going to increase from £10,000 to £30,000, the local authority had previously to find £5,000 of that, but now it will have to find £25,000 or five times as much. £20,000 of new expenditure will fall upon the local authority so that the increase due to their determination to increase these services will multiply by five the expenditure from rates for these services. That is not all. Under the de-rating scheme the rates on all the argricultural and industrial hereditaments will be cut out or reduced so that you may expect a fall of 20 or 30 per cent. in the yield of a penny rate. As a result not only will the amount that the authority have to find be increased five times but the rates measured in pence to the pound will have to be increased some seven times to cover that sum. This has to be compared with the threefold increase under the percentage grant. Some may say that that may be true if it all happens in a quinquennium but that, when that quinquennium ends, all that will be altered and the local authority will be in as good a position as before. There is no evidence whatsoever that because one particular authority increases the money spent upon some particular service, it will get a larger grant—

Major SALMON

Does the hon. Member suggest that at the present time it is possible for a local authority to increase their health service and obtain a grant from the Ministry without first getting the approval of the Ministry?

Mr. PETHICK-LAWRENCE

Certainly the Ministry will give the grant only after considering the matter. But the point is that at the present time the Minister will increase the grant when the service is increased, after approval of course. Under this Bill, however much the Minister may approve and wish the authority to undertake the services, he gives no increased grant in consequence of the extension of child welfare and maternity work. In consequence of that, what I said was perfectly true that the whole of the additional expense falls upon the local authority and surely it is absurd to suggest that the change over from the present state of affairs to that contemplated in the Bill will not discourage local authorities taking on additional work of this kind. Moreover, not only will this Bill discourage progressive expenditure but it will encourage local authorities to spend little on these services.

Viscountess ASTO R

Oh no.

Mr. PETHICK-LAWR ENCE

The Noble Lady says "no," but I think I can show clearly that it does. If a local authority refrains from keeping pace with the country as a whole to that extent it will have more money from the Exchequer grant available in relief of its own rates.

Viscountess ASTOR

Look at Clause 86.

Mr. PETHICK-LAWRENCE

I am coming to Clause 86, but the Noble Lady must be a little patient. If a local authority does not keep pace with the rest of the country to that extent it has more money to go to the relief of the rates; just to the extent that it lags behind it will benefit the ratepayers of its own district. Now I come Clause 86. It is true that in exceptional cases the Minister has power to drive hopelessly lagging authorities, but his whip will only be applied to those who have fallen right out of the ranks and where some distinctly injurious results have followed.

Dr. VERNON DAVIES

It says "a reasonable standard of efficiency."

Mr. PETHICK-LAWRENCE

The Minister must be satisfied in the first place: That the council have failed to achieve or maintain a reasonable standard of efficiency, and, in the second place: That the health of the inhabitants of the area of the council or some of them has been or is likely to be thereby endangered. It is absurd for the hon. Member and the Noble Lady to pretend that this obviously exceptional Clause is going to be used in a large number of cases in order to bring everybody up to the average. That is a suggestion which has only to be stated to carry its own refutation. It is only to be used in very exceptional cases and, therefore, this form of fixed grant, extending for five years at a time, will have the effect of discouraging local authorities from embarking on comprehensive schemes; it will encourage them to retard the advance of their services. I hope the Minister will find it possible to take these services out of the block grant system.

Viscountess ASTOR

Hear, hear.

Mr. PETHICK LAWRENCE

I am glad the Noble Lady agrees with me in that. Now I come to the other developments. Under the present rating system with the percentage grant any district that is rapidly developing owing to the coming of new industries, is very hard hit. The rates are inclined to go up because, even with the present rates from industrial hereditaments, the cost of building new houses, making new roads, putting in new sanitation, and providing educational facilities, is such that it invariably puts a heavy charge upon the rates. Under this Bill that difficulty will be very much increased because the local authority is losing three-quarters of that which would otherwise come from industrial hereditaments and, in those circumstances, you will make it increasingly difficult for districts which are expanding to pay their way.

There is another grave evil in this system; it takes no account whatever of changes in the purchasing power of money. Supposing the scheme had been in operation during the last 35 years, let us see how it would have worked. Suppose you had fixed the amount of the Exchequer grant for five years from 1915–1916 by the circumstances of the year 1914; then for the period 1915 to 1920 you would have had the Exchequer grant fixed in an amount of pounds at a time when prices were changing so rapidly that the pound sterling only bought at the end one-third of what it would have bought at the beginning of the period. You would have had a position in which local authorities could not have carried on owing to the immense diminution of their resources.

Take the next quinquennial period. You would have had a block grant fixed in relation to the year 1919, a period when prices were extraordinarily high, and you would have had during the following years, when prices tumbled, the contributions of the Exchequer to local authorities based on circumstances which had long since disappeared and which rendered the amount excessive to meet the circumstances of the actual time. We do not expect, of course, to go through again the enormous price changes of the last 15 years, but it is quite a mistake for hon. Members to think that price changes have come to an end. Unfortunately there is no machinery by which price changes are kept within narrow limits, and a fall of 20 per cent. might render the block grant advantageous to local authorities while an increase of 20 per cent. in prices would render the block grant absolutely inadequate. Let me remind hon. Members that in the last five years there has been a fall in wholesale prices of not far short of 20 per cent. I think I have shown that the quinquennial system is thoroughly unsound because there is a time lag, it is injurious to the health services and takes no account of the changed value of money.

I pass now to an entirely different aspect of the case; the effect of the Bill upon women. The person who drafted this Bill seems to me to have a particular spite against women. I think the Noble Lady the Member for Plymouth (Viscountess Astor) will see that this is the case when she examines the Bill, and the most amazing example of it is in the matter of unemployment. The degree of unemployment is to be taken into account arid used for weighting the population, but when the word "unemployment" is used, we discover to our amazement that it is only the unemployment of men that is to be taken into consideration, the unemployment of women is to have no part at all in determining the weighting. To many hon. Members that is an extraordinary proposition; and see the result! In the Counties of Lancashire and West Riding, where above all others women are largely employed and where at the present time there is considerable unemployment among women, this formula works out worse than in any other part of the country. If the Minister instead of adopting this ridiculous plan of only counting the number of men unemployed had included women, as is natural and obvious, Lancashire and the West Riding would not have come out in the wrong way they do under the formula at present. That is a point to which I can see no adequate answer whatever.

The next point is the grave effects of the way in which the system of our Poor Law is being changed so as to deprive localities of the services of women. I can see the Parliamentary Secretary frowning at me for saying that and suggesting that so far from that being the case the Bill makes special provision to have women as co-opted members. That is perfectly true, but women as co-opted members are entirely different from women as elected members. The Poor Law at present is administered in a large measure by women who are elected and chosen for the purpose by those who can trust them, and this Bill suggests that their services will be equally valuable when they are co-opted. I do not think so. Co-opted persons have not the same authority as elected representatives. They do not represent the people in the same way as those who are elected.

Viscountess ASTOR

Is there anything in the Bill against women being elected? The Bill does not do anything to prevent women being elected.

Mr. PETHICK-LAWRENCE

The Noble Lady asks me, and it is a perfectly fair question, whether the Bill does anything to prevent women being elected? The first answer is that women were elected to the boards of guardians and the boards of guardians disappear under this Bill. Therefore, in order for women to be elected now they must be elected to county councils.

Dr. DAVIES

District councils.

Mr. PETHICK-LAWRENCE

Yes, but mainly to the county councils. There are certain cases where they can be elected to rural district councils, but in the main they must be elected to the county councils. The main avenue for w omen to be elected to control relief is through the county councils in counties and borough councils in county boroughs, although there are some subordinate bodies to which women can also be elected. The result will be that many fewer women will be able to share in the control of the Poor Law system.

Viscountess ASTOR

No.

Mr. PETHICK-LAWRENCE

I do not want to take up the time of the House by arguing the matter, but if the Noble Lady will consult women's organisations in the country she will find that that is their case.

Now I come to the question of the block grant for maternity and child welfare. I have already shown how injuriously this Bill affects those services. It is perfectly plain that localities will not be encouraged as they have been hitherto to expand these services. The Minister of Health says that they are very dear to his heart, but it is very unfortunate, that being so, that he has adopted a method which cannot fail to have the opposite effect to that to which he says he is devoted. The general tendency of the quinquennial period and the fixation of the grant is to make local authorities less willing to expend money on them than they were before. The educational authorities prevented the Noble Lord the President of the Board of Education from adopting the block grant system because they realised that it would be bad for education, and I hope there will be considerable opposition if the Government persist in putting the services of maternity and child welfare on the block grant system.

Finally, in Clause 13 the Minister makes it obligatory on local authorities to raise from the patients or their relatives the money which is expended on their behalf in maternity homes. If persons are suffering from infectious disease or venereal disease they are to be treated free. If they are mothers serving the nation by bringing children into the world the cost of the attention that is to be given to them is to be recouped from them and their families. The question of maternal mortality is a very serious one indeed. We realise the grave loss of life that is due to industrial accidents. Every year there is a terrible toll of life in the mines. There are those who lose their lives on the railways, as we have been unfortunately reminded recently. There are those who are victims of other industrial accidents. But when you add those altogether the total is less than the number of women who lose their lives in childbirth every year. Any step which will make it less easy or less advantageous to extend the service for maternity, and will make it more difficult for people to avail themselves of this service, is a step to be deplored.

It seems to me that the Minister and the Government have been very ill-advised, even from a narrow point of view, to choose this time for making an attack upon women. The Prime Minister has brought in and carried his Bill for the enfranchisement of women. That this Local Government Bill in all the respects to which I have referred should act to the disadvantage of women, seems not only wrong in itself, but an extraordinary and amazing piece of ineptitude from the political point of view of the Government, and I can only assume that it is an illustration of the proverb which we know so well:

Quem Deus vult perdere prius dementat.

Sir THOMAS DAVIES

I do not propose to deal with any of the questions relating to towns and municipalities, because I am simply a common and garden Member representing an agricultural Division. I would like to bring before the House the opinion, as far as I can gather it, of the agriculturists in my particular district. Please do not run away with the idea, as so many people do, that an agriculturist is bound to be a farmer. In my own Division I suppose there are more market gardeners than farmers. On the Cotswold Hills the farms are very large but few and Tar between, and in the vales most of the land is either in smallholdings or market gardens; we have 14,000 acres under smallholdings and many hundreds of acres in allotments. The Bill will apply to all these. When I speak about the agricultural districts I am speaking as much of market gardens and smallholdings as of large farms. I say very frankly that at the first blush we did not like at all the look of this Bill. I want to be perfectly honest about it. Take first of all the question of the guardians. The idea was that all the work that has been done hitherto by the local guardians was to be transferred to the county council meeting in the county town, and people actually thought that many of those who wanted relief would have to find their way for perhaps 60 miles to the county town.

The other reason for objection was that they were told that there was to be no grant from the Government, and that the rates that came off the land would be put on the houses. That naturally upset people very much. I am glad to say that those of us who have had a good deal to do with local government—I have had a good share, having been 22 years on the county council—and have attended meetings of boards of guardians and rural district councils and that kind of thing, have almost brought them to think that the Bill is not the bad thing that they thought it was. As time goes on I believe they will think that the Bill is really a good thing in itself, but it will take a bit of doing to make them think it. Then as to the guardians. Even now people think that the Public Assistance Committee is going to decide the relief both indoors and out. As a matter of fact we know that the Ministry of Health discourages any idea of a fixed amount of Poor Law relief. A second point is that the administration of Poor Law relief to a very large extent will in future be carried out by the same people as carry it out now. That concession from the Ministry has to a very large extent wiped away the great objections that many people have to the Bill. I live amongst these people and they say something like this, "If we do want any help we want our case to be decided by the people on the spot who know us." Two people may live side by side and both get the same wage. If they both come upon the Poor Law one may be entitled to double as much as the other in relief, and the guardians under this Bill will be able to decide every case upon its merits and will not be tied by any hard-and-fast rule which prescribes so much for a man with five children, so much for another with two children, and so forth. Under the Bill there will be absolute discretion just as there is now.

Mr. LANSBURY

No.

Sir T. DAVIES

That is so. I have an undertaking that it will be so.

Sir H. CAUTLEY

How can my hon. Friend make that statement, having regard to paragraph (c) of Clause 6 of the Bill? There the powers discharged by the guardians 'are "subject to such general or special restrictions or conditions as the county council may from time to time impose."

Sir T. DAVIES

I do not see that that touches the point in the slightest degree. What happens is simply that the Public Assistance Committee sitting at the county town says: "You carry on very much on the lines on which you have carried on in the past. The only difference will be that we shall collect the rates instead of you, but we do give discretion to you.' Take my own county as an illustration. All round Bristol there are lots of people who get their living by working in Bristol, although they live in the suburbs. It is absolutely ridiculous to say that the county council is to lay down the rule that there must be the same outdoor relief for the man living in the suburbs with a rent of 16s. a week to pay, and for the man living on the Cotswolds with only 3s. a week rent to pay. I cannot imagine any county council setting up a committee that would try to level the outdoor relief. It is asking too much to suggest that I should expect them to do so. The local guardians will have the authority and the power and the ability to decide every case upon its merits.

With regard to the interruption of my hon. Friend, it is true that if it is found time after time that the local boards of guardians are overstepping the constable and probably doing things out of order, they can be pulled up in the same way as they are now pulled up by the Ministry of Health. I would rather be pulled up by my own county than by people living in London. The other point about which some of my constituents were concerned was as to the size of the districts. Many, both county councillors and district councillors, thought that the county would be cut up into five or six large districts. I understand from the Ministry that if the county Assistance Committee chooses it can allow the present areas to remain as they are, no matter how small they are. I cannot imagine any county council being so foolish as to make any difference in the areas without first of all consulting the people on the spot and getting their consent. After all, members of county councils are elected, and if they act against the views of their electors they have a very good chance of being turned out of office.

The next point is this: Many people do not like the idea of one-third of these bodies being co-opted. The proposal is most unpopular. I hope and believe that the Ministry will alter the proportion from one-third to one-fourth or one-fifth. That suggestion has been made to me from many districts. Then there is the question of the rural districts and the roads. The first idea was that the roads were to be taken over absolutely by the county councils, and that the rural districts would have nothing further to do with them. It was a foolish idea. I believe in giving every opportunity possible to local people under certain conditions. Parochial patriotism is just as important as Imperial patriotism. The idea now is that there shall be an option on the part of the county council and the rural district council in this way: If the rural district councils say, "We would like to manage our own roads, for we have a competent surveyor and all the material, and our own steam-rollers and that kind of thing," unless the county council can turn them down upon the ground of inefficiency the county council has to agree to the suggestion. If it does not agree there is an appeal to the Minister, whose decision is final.

There are two distinct schools of thought in country districts. One says that as soon as all the roads are put under the control of the county councils and the money is put practically into a pool, the county councils will stint the rural district roads on purpose to have the best first-class roads. Then there is exactly the opposite school, which says that the county council will put up the unclassified roads in rural districts to the high standard of the first-class roads, and that that will cost a lot of money. Again, I say that if you have a county council elected by the people you must give them credit for having some common sense. In my own Division I have three rural district councils in the northern end of Gloucestershire, not one of which has a workhouse. One lot has to go to Warwickshire and the other two to Worcestershire. None of those three rural districts can afford to have a competent surveyor or even a steam-roller, nor can it afford to have improvements made. In those cases the county council would be well justified in saying, "Considering what you have done in the past and how inefficient your management has been, and how bad your roads are, we will take over the roads and manage them ourselves. If you do not like it you can appeal to the Minister." If the Minister finds that the county council has been unreasonable, he can let the rural district council manage the roads. The other point about the option is that the county council may be asked by the rural district councils to delegate to them the maintenance of first and second class roads I do not believe that a county council will give way in this matter once in 100 times. The county councils know what the cost will be, and in the majority of cases will not let go the first and second class roads. Here again, however, they have absolute discretion. I think we can Trust them and that the decision in this matter ought to rest absolutely with the county council.

Many of us fear that the five year period proposed in the Bill is too long. It is suggested that the quinquennial period ought to be made a triennial period, at the beginning at any rate. Even should our apprehensions on this point prove to be misapprehensions it would be wise for the Government, during the transition period, to try three years instead of five. It may be found that lots of little mistakes have been made and little amendments which we cannot now foresee may become necessary. It is only by actual practice that we can learn how the Bill will work and while later on the five years might be adopted it would be a good thing to have it three years at first and at the end of the first three years it will be possible to see how the formula is working. There is another reason for this view connected with education. I was chairman for years of our county Education Committee—and we were told by the Board of Education on two occasions that we were one of the foremost counties in England with regard to secondary education. Now we all approve of the Hadow Report and I, myself, am a warm supporter of it. That report proposes that in future, as and when it can be put into force, a clean cut shall be made in education at the age of eleven. The children up to eleven are all to attend the elementary school. In passing may I say that I should like to see the children of the squire and the parson attend the elementary school, just as is done in America where they have one public elementary school for all classes. Then at the age of eleven a trial is to he given to a good secondary education, and that cannot be done in five minutes. But here is the snag. In many rural coun- ties three schools out of four are church schools—voluntary and non-provided schools. If you are going to give this secondary education you must either enlarge existing buildings or put up new buildings.

If you want to enlarge voluntary denominational schools you cannot spend one penny piece of rates or taxes on them. It is one of the conditions of being able to give denominational religious instruction that the people concerned should provide and maintain the building. In my own county at any rate, most of these people are very poor and when they have paid for their voluntary schools, and, in addition, have paid rates for the other schools, you cannot ask them to enlarge their schools and bring those schools up to the required standard. They have not the money to do so. Consequently, if you want enlarged schools or new buildings you will have to go to the county council. Nobody to-day can foretell what will be the cost of such buildings in five years time. It may be said that education is being kept altogether apart from this scheme but you cannot get rid of the problem altogether in that way. The present grants to education may he unchanged, but, when you come to build new schools where are you going to raise the rates? You have got rid to a large extent of the rateable value. Only a half the rateable value, roughly speaking, remains. How are you going to charge the county or a particular parish with the cost of putting up new buildings? I want them to be good buildings, and not barns or sheds, for I do not see why even the poorest of the poor should not have the best in this respect. To ask the people in the parishes of an agricultural county to provide those buildings under the present system is asking too much, and is putting a sprag into the wheel of the Hadow port. That is another reason why we should have three years at the start, so that we may get some idea of the cost, of the new schools and of these new education proposals.

My division is one of the poorest, if not the poorest in England. [HON. MEMBERS: "Oh !"] Certainly its representative is one of the poorest fellows in England—there is little doubt about that. With regard to the suggestion that in helping the rates a subsidy is being given to agriculture I want hon. Members to consider another side of the question. I believe I could prove to the satisfaction of most reasonable people that, for several years past, the farming community has been giving a subsidy to the rest of the country by supplying goods under cost price. There is no question about the fact that the cost of production in agriculture has not been met by the price of the produce in the market.

May I give two cases to show the depression which exists in agricultural districts? I live seven miles from the Cowley Estate and a farm of 900 acres there, with first-class buildings, close to a big main road, seven miles from Cirencester, the same distance from Cheltenham, and nine miles from Gloucester, was recently put up for auction. The highest bid was less than £6 an acre. Why was that? Because the farm could not be made to pay in existing circumstances. It may be said that I am picking and choosing my cases, but I am not doing so. The farm to which I have just referred is seven miles to the north of where I live; and six miles to the south is one of the largest farms of the Co-operative Wholesale Society—over 4,000 acres in extent. That was put up for sale and was not sold. The Cooperative Society people have found by bitter experience that, although they had no rent to pay, and no middle men, although they had a ready sale for their produce without any intermediaries, they could not make it pay. How then do they expect our people who have to meet these charges and who cannot sell direct to the consumer to make farming pay? You impose upon the agricultural part of the community the Agricultural Wages Act of 1924. I am not going to say that the agricultural labourer's wages should he reduced. I would fight against such a proposal to the bitter end, because I know the agricultural labourers very well. The ordinary wage is about 30 shillings. That is not quite all, because there are times when a man may get extra money—in the harvest and so forth—and he gets a cottage at 3 shillings a week corresponding to the cottage which in an urban district would cost anything from nine shillings to 16 shillings. But what our farming friends say is, "When you imposed the Agricultural Wages Act on us we think at the same time you should have put it into our power to get the necessary money to pay those wages."

How you are going to do it, I frankly confess I do not know, but to say that this relief of rates is a subsidy is wrong. You are only paying back, in part, to the agricultural community the subsidy which they have been giving for many years past by supplying goods under cost price. If that is not the case then why is the Co-operative Wholesale Society giving up farming? The return to the agriculture is not enough to meet the cost of production of the food that is consumed by the people. I notice that even Ministers themselves have fallen into one mistake. They have said that up to now, 75 per cent. of the rates on agriculture have been borne by the Imperial Exchequer. They reckon that under the 1896 Act 50 per cent. of the rates were paid and that under the 1923 Act a quarter of the rates were paid and that accounts they say for three-quarters of the rates. But that grossly unfair to the farmer. He has never had anything like that amount of his rates met from the Imperial Exchequer and the reason is simple. We do not like the slur to be put upon us that we have not been doing our level best and that we have been relieved of three-quarters of our rates.

When the 1896 Act was passed the land was valued and it was found that the rates upon land came to about £2,600,000 a year. Under the Act it was provided that the Exchequer was to pay half, or about £1,320,000, and that was paid down to 1923. That amount, however, was fixed and never varied however the rates went up. They did go up, and in 19253 the situation was that, instead of paying 10s. in the £ the Government were only paying 2s. in the £—instead of 50 per cent., it was only 10 per cent. When in spite of this fact the statement is constantly thrown in our face that we were relieved of 50 per cent., then it is a little hard to stand.

In 1923, I was one of a deputation who discussed the matter with Mr. Bonar Law and he said to me point blank, just what the farmers have said often, namely, that the only real remedy was better prices. T asked him how better prices could be obtained when five people out of every six lived in the urban dis- tricts and would not agree to pay any more for their food than they could help. He said then that the Exchequer was in such a state that it could not afford to pay much more, but that they would pay the quarter. The arrangement, however, was on a different principle from the 1896 arrangement. The 1923 plan provided that if the rates went up the Exchequer contribution went up, and if the rates went down the Exchequer contribution went down, and I think that is a good principle. We are told that if this Bill goes through, agricultural land will not be rated at all, but I ask hon. Members not to run away with the idea that the farmers believe that as soon as you take off the rates, it is going to help agriculture to prosperity. It is only a partial remedy, but we are thankful for small mercies. We are looking out for larger ones and we hope the Lord will give them.

8.0 p.m.

Mr. J. BECKETT

I am sure that by now the Government are regretting the unprecedented action on their part of urging their Back Benchers to take part in the Debate, because never has a Bill been so faintly praised as this Bill has been in this Chamber to-day. Even the hon. Member for Westmorland (Mr. O. Stanley), who, judging by his speech, was doing his best to live down a rumour among his own party that he was a progressive, found very little in the Bill that he could praise. In regard to his argument about the child and the dormitory suburbs, I think one of the greatest condemnations of the Minister's formula is the fact that not only are children to be found in large numbers in dormitory suburbs, but that at the same time those are the very places that suffer hardly at all from de-rating. The one thing that all Conservative speakers have found to praise in the Bill is the great blessing it will be to our hard-working agriculturists. One hon. Member told us it was absurd to suggest that landlords would pass the rates on to their tenants, although when my right hon. Friend the Member for Colne Valley (Mr. Snowden) said that that was what would happen, that the landlords would get all this benefit, the chief Conservative paper, the "Morning Post," came out with an exultant headline, "Why not?" We suggest that it is not good enough to leave it to the decency of the landlord to prevent rates being raised in spite of the remission of taxes.

The right hon. Gentleman the Minister of Agriculture, whom we all respect and who, I am sure, if he was a landlord, would be a very good landlord, has not been in this House for this Debate, and I do not think he is either lazy or foolish enough not to understand the Bill, yet we find him only three weeks ago sending a circular to the Sutton Bridge, Lincolnshire, District Council—[Interruption.] It is good to keep stories like this in the public memory. The Ministry of Agriculture intimated to that district council that the rent of 19 ½ acres of land held from it by the council had been raised from £55 to £76 a year—very unpalatable, not very old, and certainly deserving of repetition. Then the Ministry of Agriculture hastened to assure their unfortunate tenant, so that he should make no mistake as to why his rent was being raised in this way, that in fixing this rent the Ministry had taken into consideration the fact that next year no rates would be payable in respect of agricultural land.

Sir H. CAUTLEY

Why does not the hon. Member give the explanation of that, and why is he deliberately misleading this House? He knows it perfectly well.

Mr. BECKETT

I am certainly not deliberately misleading this House, and if I had seen, heard, or knew of a satisfactory explanation which removed suspicion from my mind in regard to that letter, I would not have quoted it. If any subsequent speaker can give an explanation clearing that letter right away, I shall certainly be very pleased to hear it and to make all the necessary withdrawals, but the fact remains that, although I have seen attempts to explain it away, I have seen no explanation which would lead me to think that I am misleading the House; and because it is a knife in the ribs of this Bill, placed there by a member of His Majesty's Government, that seems to be no reason why it should be misleading on the part of the Opposition to quote it.

What I wanted to deal with more particularly were the broad financial provisions of the scheme. We have to take it, unfortunately, as my hon. Friend the Member for East Ham North (Miss Lawrence), in her excellent speech earlier in the evening pointed out, that the Government will force these de-rating proposals through the House by means of their large majority, but that should not prevent some of us devoting a short time to dealing with the fallacy underlying these proposals. The general method in debating this subject is to talk about £5,000,000 of new money being introduced. That is the correct way of talking about it when you are discussing it from the point of view of the local authorities who are to receive it, but when you are discussing the Bill from the point of view of Parliament, the fact remains that it is not £5,000,000 of the taxpayers' money that we are to pay, but, according to the original scheme, £29,000,000, and now, with the Minister's concessions already granted, £31,500,000 of new money to be raised from the taxpayer; and I think the Parliamentary Secretary would hardly like to rise to contradict me if I said that before they get this Bill through the House they will have committed the Government to spending at least £35,000,000 of the taxpayers' money on this scheme.

Therefore, it is as well to examine what is going to be done with this vast sum. If we had come to the House of Commons with a proposal to raise £3,000,000, let alone £33,000,000, from the taxpayers in order to build houses, or for education, or to assist the unemployed, we should have been told, in terms grave and dictatorial, from the other side that it was quite impossible for us to raise the money. Therefore, let us find out exactly what the Government propose to do with this huge sum of £33,000,000 or £34,000,000 which they are spreading over the shoulders of the whole of the taxpayers. The total rates levied in England and Wales in 1926–27 were a little over £173,000,000, of which 70 per cent., or £122,000,000, was paid upon dwelling houses, shops and offices. Those 70 per cent. are to get no relief at all. Public undertakings, gas, electricity, etc., amount to 11 per cent., making a, total of 81 per cent. of the public who are to get no benefit at all from this fresh expenditure of probably £35,000,000. The group that is to receive all the relief pays in rates some £32,275,000, or only 18 per cent. of the total, so we are to raise £33,000,000 at least, spread over the shoulders of the whole of the taxpayers, rich and poor, to benefit 18 per cent. of the total number.

How are we going to spend it? The sum of £34,000,000 is one which, used judiciously by the nation, could probably go a very long way towards putting any one of our seriously affected heavy industries on its feet. It is probable that, used in. conjunction with a wise process of national co-operation and national rationalisation, £34,000,000 could give us back our shipbuilding trade, or our engineering trade, or even revive our sadly distressed coal industry. But the Government do not propose to do anything like that with this enormous sum which they are going to raise from the already overburdened taxpayer. They propose to spend £3,000,000 to ease the transition. That was their first proposal, but they are now engaged in frantically rushing around and planking down a few thousands here and few thousands there in order to prevent their scheme being criticised too badly. They are then going to give £4,750,000 to agriculture, as they say, but more probably to the landlords, as we say, and £4,250,000 to the railways, making £12,000,000 out of their total to start with. If they had gone on with their original budget of £29,000,000, which they have seriously increased, they would have had the sum of £17,000,000 left to do all this tremendous industrial revival which they have prophesied for the Bill, but they are not even going to spend this £17,000,000 on reviving industries that need reviving. They are going to scatter it like rain upon the just and the unjust alike.

According to a grouping worked out very carefully in the "Manchester Guardian," we find that the flourishing industries of building, timber, leather, chemicals, food, textiles, paper, drink, tobacco, pottery, are going to get £6,000,000 of the £17,000,000, and so we find that, after all this, they are expecting the country to believe that they are taking on the task of reviving all the depressed industries of this country, of curing unemployment, of stimulating trade, and of performing the historic mission of the Conservative party, with a sum of round about £10,000,000. The right hon. Member opposite who was accused, I think perhaps a little unjustly, of having pressed this Measure upon the Minister of Health, said in a recent speech that in the bleaching and dyeing industry 56 per cent. of the relief would go to those firms making 85 per cent. of the profits, and that 44 per cent. of the relief would go to those firms making 15 per cent. of the profits, so we find that out of this much boosted scheme, which is going to cost the taxpayers at least £33,000,000 of fresh money a year, we have got something like £10,000,000 to help the distressed industries.

How do me find that it works out in actual detail, in the area from which I come, where the distress and the lack of ability to hold our own in shipbuilding has reduced us almost to a famine area? When we realise the tremendous distress prevailing in all the shipbuilding yards of the country, and when we realise, as I am sure hon. Members opposite realise, if half their Imperialist professions are correct, the enormous importance to this country of the shipbuilding industry, it is rather a blow to learn that this great measure of social reform is going to give only £392,000 in relief to the shipbuilding industry, as against £413,000 to the brewers. I suggest, with all the moderation that I can command, that it is the most cruel and callous way of treating the country, for the Government, after four years of miserable failure and inaction, sitting here steadily with a majority somewhere in the precincts of the Chamber, at the last moment to come to them with a suggestion of this sort.

It is not correct to describe this as a great measure of social reform. It is a Bill to provide £34,000,000 from the general taxpayer for a few favoured industrialists and landlords. Following up the policy which the Conservative Government have pursued for the last four years, it means giving 3d. to the beggar with a great deal of noise, and slipping 9d. to the rich man in secrecy amid the trumpets and fanfares that accompany the philanthropic gift. They are giving 3d. to the beggar in the form of necessitous areas, and 9d. to the prosperous and flourishing industries, industrialists and landlords, who do not need it at all. The formula has been abandoned, as it would obviously have had to be. It is too naked and unashamed in its class references to be allowed to work. Even Conservative municipal authorities all over the country have had more conscience about the people whom they are elected to protect than the Government and the Minister of Health. The Minister of Health told us, when he brought in his Boards of Guardians (Default) Act, that for guardians to give heavy measures of relief to the unemployed was tantamount to bribery and buying votes. I say that this Bill, especially after hearing the Minister running off the extra pennies per head which certain localities would get this year—nothing was said about following years—is a flagrant act of election bribery, and worse than that, it is bribery in the form of a post-dated cheque which the unfortunate Chancellor of the Exchequer in five, 10 and 15 years' time will have to meet.

Viscountess ASTOR

I am sorry that the Minister could not be here to hear the last speech, for I think that it would have helped and encouraged him.

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

I will report it to him.

Viscountess ASTOR

Unlike hon. Members opposite, I am here to praise Caesar, not to bury him. I congratulate the Government on the way they have steadfastly stepped in where the angels of the Opposition have feared to tread. Much of the venom which comes from the Opposition arises from the fact that once more the Conservative Government have brought in a great Measure of social reform—[HON. MEMBERS: "What about the brewers?"] Will hon. Members give me the same hearing that we gave to the hon. Member for East Ham, North (Miss Lawrence)? I envied the hon. Member because she was able to speak in complete silence, which is something we on this side seldom get. Although hon. Members opposite may deplore our stupidity, they must admire our manners. It is a strange thing that while the other parties start hares, the Conservative party generally catches them. I have listened for two days to this Debate, and I have been amused by some of the phrases used by hon. Members opposite. The hon. Member for Nelson and Nine (Mr. A. Greenwood) said that this was a Bill for the salvation of the Tory party. I agree with him. Then the hon. Member for Consett (Mr. Dunnico) said that as a textbook of the Tory promised land, this Bill puts the Book of Exodus into the shade. I am glad that he compares it with the Book of Exodus, for I would ask the Douse to remember that the Book of Exodus is the story of the Israelite people being led by a great leader out of bondage and into freedom.

Mr. E. BROWN

But he did not get there!

Viscountess ASTOR

That is like all great leaders; they do not do these things for themselves. That is why I am so pleased that the Government have had the vision and the courage to bring forward so great and constructive a Bill; and, because I so heartily back them up I am going to take the privilege of criticising what, I think, is one rather weak point in it. I have the privilege of belonging to a party of which the Members on the back benches dare criticise the Front Bench. I hope later to move an Amendment to take the maternity and child welfare services from the block grant, and to keep them as they are now under the percentage grant. I think that that is a little Measure which—[Interruption.] It is very difficult to deal with these technical matters when there is constant interruption; I have been sitting here waiting for four hours in order to speak. My Amendment will enable the maternity and child welfare services to be continued on the percentage basis for the first five years, and will specify that after the first five years, the Minister shall take into consideration the adequacy, not the efficiency, of the maternity services, when he decides whether he ought to reduce the block grant to any authority. If the Minister were to accept this, he would improve what is a very splendid Measure of social reform. I am not surprised that there should be one slight flaw in so perfect a Bill, and I am sure that if we can convince the Minister of the reasons why we want the services taken from the block grant system, he will not stand on any false pride and dignity, because he said yesterday that, if there were any way of improving the Bill, he would be pleased to do it.

As I understand it, the services which, under the Bill, are to be transferred from the basis of percentage grants to the basis of block grants, will be assisted at the beginning by the Treasury chiefly on the basis of their present development and expenditure. I know that there will be some new money, but what we fear is that this new money, not being specified, will be used by some local authorities, who have rather neglected this particular branch of service, on other services, and that the new money will not get where the Minister wants it to go. There is no authority under the Bill to force this new money to be spent on maternity and infant welfare work. I realise that under Clause 86 the Minister has power to reduce grants to the authorities who have failed to maintain a reasonable standard of efficiency. That is very good, but under my Amendment he would have power to reduce the grants on consideration of the adequacy of the services, not the efficiency. We think this is very important. If these services were adequate, no one would fear a block grant, but it is quite obvious that there are local authorities which have not provided adequate services even under the 50–50 arrangement.

It may be that the Bill provides enough money to pay for the expansion of maternity services, but the difficulty is that the money is pooled in the block grant, and the Minister has no power to compel any local authority to use any particular sum for maternity services. The case is different under a percentage grant, because there the money is earmarked and can only be spent on the special services. We want a guarantee that the money shall be spent on increasing maternity services. We should only be justified in removing these services from the percentage grant to the block grant basis if the services were all that they ought to be, because everybody who is interested knows that these services have been built up mainly through the stimulus which has come from the central authority. It is not the local authorities but the central authority which has pressed for them, and, so long as they are new service, we feel that it would be far better that they should continue subject to some stimulus from the central authority. Over and over again the Minister has said that the percentage grants have enabled the Ministry to stimulate backward authorities, and we feel that the country cannot afford to lose this stimulus.

The maternity services vary in different areas. Only 18 months ago the Minister said that the amount of the work done and the need for it varied considerably amongst local authorities. Variety indicates that some authorities are not doing what they ought to do. The most recent facts concerning this problem were given at a conference in London this autumn on maternal mortality. The statements there have never been challenged. There are 79 county boroughs, and they all do something, but only 45 out of the 79 do a half or more than half of what they might do. Just think of that! Then 34 out of the 79 do less than half of what they could do for maternity services and infant welfare. This is the situation at a time when the Government have been offering to assist on a 50–50 basis. The position is even worse in the case of the county councils. There are 48 county councils. All counties have some sort of service, but whereas some councils use most of their powers, others use only a half. Only about 16 out of the 48 are putting into force half or more of the provisions in respect of which they can receive a grant-in-aid, and 32 out of the 48 are doing less than half of what they might do.

Mr. TAYLOR

Which counties?

Viscountess ASTOR

I have not got the names here. It is obvious that these vital services are not yet established, and it is clear that under the block grant system it will be more difficult to develop them. If the Minister of Health were to accept this Amendment which I propose to put forward it would not cost the country very much. As he said yesterday in his very remarkable speech, the new infant welfare and maternity centres have not cost the country a great deal. Ten years ago the Treasury grant amounted to about £200,000, and it has taken 10 years to increase that amount to about £800,000. If in 10 years the extra cost has been only £600,000, it is not likely that in the next five years the Chancellor will have to increase the Government grant by more than a few hundred thousand. That is comparatively a very small amount; just about the cost of a submarine.

I wish the House to recall what these services have accomplished. Since 1915, when they were started, we have reduced infant mortality from 110 per 1,000 to 70 per 1,000, and the reduction is continuing steadily. The tragedy is that the position has been stationary with regard to maternity matters, for the last 20 years I think; 3,000 women a year die under those circumstances. Nobody in the country is more interested in this subject than the present Minister of Health. He has set up two Committees to deal with it, and I am sure he realises that their recommendations, whatever they may be, will cost money to put into force. We shall have to have more antenatal clinics, more maternity homes, more beds in hospitals and extended midwifery services.

Mr. MacLAREN

Anything but justice!

Mr. MONTAGUE

Do anything for the poor, but get off their backs!

Viscountess ASTOR

It is really rather unkind of hon. Members to interrupt. I wish they would get a better sense of cricket, and then they would find that they would have a, bigger following. What we fear is that money for increasing these services will not be available so easily out of the block grant as it would be out of the percentage grant; and, quite frankly, I am afraid that if the block grant system be substituted for the percentage grant there will be a tendency for the claims of maternity and child welfare work to be put into the background by some local authorities. I have already tried to show the House that some of them are very much behindhand as it is, and unless the block grant system carries with it the power to force local authorities to undertake these services we are afraid they will not, do their duty. The House should remember that local authorities are composed chiefly of men. It is true that the Committees dealing with this maternity and child welfare work are made up of women, but they are women who are co-opted on to the committee, and there is no power to spend money. All they can. do is to make recommendations, which have to go to the finance committee, and that is entirely composed of men. Could not we have these young services kept under the percentage grant system for the next five years, with the threat that afterwards the grant would be given on the basis of the amount of development which they had undertaken during that period?

I hope the Minister will accept this Amendment, because I feel he would save a great many of us a great deal of trouble. I know what opposition he is going to get to this Bill, not reasoned opposition and not really honest opposition. [Interruption.] I say that from the bottom of my heart. I will give the House a case which came to my notice the other day. A young man joined the Labour party because he felt that they were the ones who at the bottom of their hearts wanted to help the great mass of the workers. He went to their meetings and heard them talking about rating reform, and unjust taxation and about the reform of the Poor Law. He thought they meant what they said, and so when the Government brought in this Bill he welcomed it; but he was astonished to hear that they were going to fight it tooth and nail. What did he do? He left them. Politicians may like sham fights, but the country does not like them. An hon. Member opposite said that this Bill was against the women. I take off my hat to the hon. Member for West Leicester (Mr. Pethick-Lawrence) for all the work he has done in the interests of women. I think certain sections of the women are working up opposition to this Bill, and their opposition is to this particular Clause. It is for that reason that I am asking the Minister to take this matter up.

Mr. PETHICK-LAWRENCE

Another point I raised was the exclusion of unemployed women from the formula.

Viscountess ASTOR

I have not that faith in my ability to explain this Bill that some hon. Members opposite have. I say frankly that I do not understand one-quarter of it, but neither does anyone else. I do not understand electricity, but I derive a benefit from it. I do not understand wireless, but I get the benefit of it, and I am certain that hon. Members opposite do not understand this Bill. I do understand that we are dealing with a great Measure, and I have complete faith in the Minister of Health and the Government. The one desire of the Government is for reform and to help the country as a whole. It is for these reasons that I feel perfectly certain, when the Bill is put fairly before the country, and we can take away the only Clause which excites the women at all, we can go to the country and get the support of thousands of women who are no more Socialists than the wives of hon. Members opposite.

I ask the Minister of Health to accept my Amendment, and give us a chance of appealing to the country. Then we shall not only work for the Bill but fight for it. The more I see of the opposition to this Bill the more I am convinced that the opposition is not sincere. It is like the case of the Queen of Sheba; after the speech of the Minister the spirit went out of them just as it did with her when she saw King Solomon. I never saw an Opposition so thoroughly squashed in their faith, and I shall go to the country and work and fight for this Bill. I am pround of the Minister of Health for having the courage to think not only of the next election but of the progress of the country in many years to come.

Mr. LONGBOTTOM

I rise with some diffidence to intervene in this Debate, although I feel that I shall have the same courtesy extended to me which always characterises this House when it listens to a new Member making his maiden effort. I have listened to the Debate for the last few days, but I have not yet heard from any hon. Member any suggestion which has any bearing on a matter which is agitating my mind. I have been a member of a municipal council for 16 years. The Noble Lady the Member for the Sutton Division of Plymouth (Viscountess Astor) has rightly anticipated that there will be some opposition to this Bill, and I quite agree with her in that respect. I find that throughout the length and breadth of the land my opposition to this Measure is shared by a majority of members of every local authority with which I have been associated. The Municipal Corporations Association, the County Councils Association, and boards of guardians all over the country are to-day offering violent opposition to the proposals which are outlined in the Local Government Bill.

The first question that occupies my mind is to find the reason why the Government propose giving rate relief to the extent of 75 per cent. My mind travels back over many years when I first entered local government work. We had at that time to meet a most concentrated effort made by Chambers of Commerce, who even 20 years ago were demanding that all industries should be freed from the incidence of local rates. That agitation developed, and we arrived at a position in which the Government agreed to relieve industry from the rates on certain parts of machinery. I want to suggest that the Associated Chambers of Commerce and the Federation of British Industries were so overwhelmed with their success in regard to the rating of machinery that they immediately pressed forward and demanded from the Government total exemption from local rating. The Conservative party have now come forward with a proposal that productive industry shall be relieved of its rates to the extent of 75 per cent. If it is right to relieve productive industry to the extent of 75 per cent. of its local rates, it is just as right that productive industry should be freed entirely from local rates. If productive industry is to be so relieved, one asks oneself the question: Why should industry be given this relief? The excuse that the Government are advancing is that to relieve industry, whether it be prosperous or depressed, will bring prosperity to industry as a whole, and will do some little towards relieving the unemployment problem. I want to examine that for a moment. I am told that in Lancashire, a county noted for its cotton cloth production, the incidence of local rating on every 100 yards of cotton cloth produced amounts to 10.58d. If we divide 100 into 10.58, we arrive at a sum which in Yorkshire we know as the infinitesimal atom. Here we have the infinitesimal atom, we give them 75 per cent. of that, we wave the magician's wand and shout "Hey, presto!" and the Lancashire cloth industry is prosperous again. How the Government can expect intelligent men to believe that there is any merit in giving prosperity to industry by relief from rates is beyond my conception, at all events.

The same case can be made out in regard to the coal industry. A right hon. Gentleman on the Front Bench opposite admitted this afternoon that the whole cost of local rating in the West Riding of Yorkshire on coal actually sold amounted to only 4d. per ton. Is it suggested for a moment that to give relief to the amount of 75 per cent, of 4d. is going to do anything towards bringing the coal industry to prosperity again? I know I shall be told that the rebate which the railway company is going to hand on to the colliery people will also do something towards making the coal industry prosperous once more. I would point out, however, that the rebate which the collieries will get from the railway companies is purely on export coal, and that ordinary household coal and ordinary steam coal, which are used throughout the whole of this country, will only benefit from rate relief to the extent of 3d. per ton. I suggest that 3d. per ton on coal is absolutely infinitesimal, and has no bearing on the question of prosperity in that industry.

We are told that to relieve industry from rating will go a long way towards dealing with the tragic problem of unemployment. One would think that there might be some merit in that contention, but when we remember that this subsidy is to be given to industry whether industry is prosperous or depressed, I say again that I fail to see that any case can he made for that. If the Government want to do something to relieve the unemployment problem, I suggest that they should take over the responsibility for unemployment in a national sense. If they would only do that, they would be relieving those necessitous areas which to-day are living under the heavy burden of Poor Law administration and increased Poor rate, which is keeping industry from becoming prosperous. The suggestion that brewers, distillers, artificial silk manufacturers, and firms like that of Messrs. Coats of Paisley, should be given all this relief from rates, simply proves to me that the £5,000,000 which the Government are supposed to be putting into the pool is going to be more than counter-balanced by the increased taxation that the Chancellor of the Exchequer will get from profits which will be swollen by this rate relief.

Why should industry be de-rated? We have been told time and again that Socialism wherever it has been practised has been a commercial failure. Industry, however, has been at all times prepared to accept Socialism so far as municipalised effort is concerned. Local authori- ties to-day are actually subsidising industry. In one town that I know, industry is getting electrical energy at ¾d. a unit, while the householder and the shopkeepers are being charged 7d. Industry is getting gas at 1s. 3d. per 1,000 cubic feet, while the householder is paying 3s. 11d. Industry is getting 1,000 gallons of water for 1s., while, if you have a bath in your house, it runs, in the case of a £12 house, into £2 15s. a year for the ordinary householder. Then, when the industrialist has used this water in his works, he turns it into the sewers, and the general ratepayers—the householders and the shopkeepers—have to pay £30,000 a year in rates to purify that water which the manufacturer has used, before it can he put into the stream. And then we are asked, why should not industry be de-rated? Do we not give to industry just as much of the social services, if not more, than we give to the common people? Do we not provide huge watersheds for giving industry a plentiful supply of water I Do we not make roads and footpaths and keep them in repair, so that the transport of industry can get about unfettered? Do we not give public lighting to industry? Do we not provide policemen for industry? Do we not lay down sewers at a cost of thousands of pounds for industry? Why, then, should industry be let off scot free from the incidence of rating?

Industry is being subsidised by the ordinary ratepayer at the present moment, and I want to submit with all the emphasis that I have that to de-rate industry is doing a wrong thing, that it is taking the burden off the backs of those who can afford to pay, and placing it on the hacks of those who are already overburdened with local rates. Whatever the Government think about this de-rating part of the Local Government Bill, I would urge this upon them, that they have no mandate from the country to introduce this Bill, they have no mandate from the common people to say that the common people will accept financial responsibility for subsidising industry any further; and, since they have not that mandate, and since the time between now and the General Election in May or June of next year is not so very long, I would urge the Government to withdraw this Bill and to fight in the country on the Bill. If they will do that, Members on these benches will gladly go into the fray, and I am absolutely convinced that, if the Tory party pin their faith to the de-rating of industry, they will not be in occupation of those benches in the next Parliament.

Captain CAZALET

I am not a very old Member of the House, but I hope the hon. Member who has just sat down will allow me, on behalf of Members in all parts of the House, to offer him our very sincere congratulations on the very clear and well-informed speech which he has just delivered. I am certain the House will always look forward to any further contributions which he may make to our debates. I should like, first of all, to associate myself with the remarks of the hon. Member for the Sutton Division of Plymouth (Viscountess Astor) in regard to percentage grants and maternity welfare. It is obvious that the hon. Member is an expert upon those subjects, and, if the question as to whether the Minister meets us in this matter depends upon the energy and the importunity she brings to bear upon the Ministry, I am certain that our case is already won.

May I refer to the speech of the hon. Member for East Ham, North (Miss Lawrence). No one in the House enjoyed that speech more than I did. I think we must agree that both lady Members have given us much enjoyment, much instruction, and much entertainment. I should like to attempt to answer one or two of the more simple points she made in her most interesting and well-instructed speech. First of all, she said: "Let us return to simple mathematics." I have never been able to understand the agitation in regard to the formula. I do not pretend to be a mathematician, but I have discussed the formula with people who are eminent in that science, and they assure me that it is a simple linear equation, quite easily understandable by any mathematician.

I understand there are various other factors which might have been brought into the formula. For instance, I should like to have seen the factor of the number of people in each district who pay Income Tax and Super-tax brought in as as additional factor, but I understand, if that had been so, the simple linear equa- tion might have been considerably extended. A certain mathematician once published a book. When he was asked whether he expected to sell many copies, he said, "There are only four people in the world who will understand it, and I am one of them." This formula is the result of the study and application of the best brains in the country on the problem for two or three years and I, for one, am prepared to accept it. If hon. Members opposite can prove that by changing any of the factors that go to make up the formula more equitable results to the country as a whole can be achieved, I am certain the Minister will accept any suggestion along those lines.

9.0 p.m.

The hon. Member for East Ham, North took the example of Cambridge. I quite understand that the dignity of Cambridge has been hurt by the fact that Oxford is a county borough and Cambridge is not, but Cambridge is an exception. It should, of course, be a county borough, but a few years ago an Act of Parliament was passed making it impossible for any town to become a county borough unless it had a population of 75,000. The population of Cambridge is somewhere about 60,000 and it cannot, therefore, become a county borough. But Cambridge is an exceptional case and must be dealt with in an exceptional way, and must not be taken as an example of what will happen under the Bill.

Then the hon. Member referred to Clause 14 of the Financial Memorandum, which deals with the ratio between the total Exchequer grant and the total amount of rate and grant-borne expenditure. If she turns to paragraph 16 she will find that it is not so complicated or difficult to understand. It will be seen that the ratio between the total Exchequer grant and the total rate and grant-borne expenditure remains the same. This year it is taken at £180,000,000 on the one hand and £45,000,000 on the other, namely 25 per cent. In future if the £180,000,000 increases—and we may include in the increase local expenditure on police and education—to a sum let us say of £200,000,000, the total Exchequer grant remains at 25 per cent. of the £200,000,000 and it is calculated, not upon a very complicated basis, as I think the hon. Member suggested, but upon the fourth year of each quinquennium. For example, the basis for the quinquennium 1935–1940 is the expenditure for the year 1934.

Miss LAWRENCE

That is perfectly true, but, if the hon. and gallant Gentleman looks at paragraph 14, the ratio that remains unchanged is the ratio of the annual general Exchequer contribution to the total amount of rate and grant-borne expenditure of the fourth year of the preceding quinquennium. In the third quinquennium the ratio that the Exchequer grant bears to the total rate-borne expenditure of two years previously, that is to say to the rate-borne expenditure of the previous year, applies to the Exchequer contributions of that year, so that the Exchequer contribution for one quinquennium is governed by the amount of the Exchequer contribution for the preceding quinquennium. The fourth is governed by the third, the third by the second, and the second by the first.

Captain CAZALET

It is only a very bold man who would venture to contradict the hon. Lady. I am prepared to confess that, no doubt, she is perfectly correct, but I also like to believe that I was perfectly correct in the statement I made. It only remains for the Minister to say who is right and to explain the situation accurately to the House. I am afraid that that is a point which I can never understand, but obviously there are various opinions.

There is only one other observation I want to make about the speeches that have been made to-day, and it has regard to certain statements made by my right hon. and gallant Friend the Minister of Transport. I dare say that it was my fault again, but I do not understand what he said in regard to the grants which would be made to the total Exchequer grant out of the Road Fund. I think the facts are—and I hope the Minister will correct me if I am wrong—that the £2,700,000, to which he referred, comes in the £16,000,000 and has nothing whatever to do with the £5,000,000, but the £3,000,000, to which he also alluded and as to which he claimed, if I may say so, some credit for having gone to the Chancellor of the Exchequer, comes out of the Road Fund and is included in the £5,000,000. [An HON. MEMBER: "It is not for roads."] I frankly admit that. It is included in the £5,000,000 of new money. We are grateful for anything, but I think that it is a little unfair to expect us to be extra grateful, because, after all, if the:£3,000,000 remains in the Road Fund, it will be given to the roads in the ordinary course of procedure. Therefore, it is like thanking us for our own money. It may be that there, again, I am wrong, and I shall welcome an explanation on that point.

No one can deny that this is a most comprehensive and complicated Measure, and I do not intend to go into any further details this evening. I should like to make a few observations on the general principles which underlie the Measure. Some of the general principles, I think, command support from all parts of the House, and they do seem to me to be both clear and simple. They are, first, to assist the producer in this country, agricultural and industrial, by relieving him either, in the one case, altogether, or in the other case, of three-quarters of his rates, and to make good that loss of money to the local authorities by a grant from the Exchequer; and secondly, to add to that grant some £5,000,000 or £8,000,000 of new money and to distribute the whole contribution calculated on the basis of the formula with the object, (1) of assisting the necessitous area, and (2) of giving to each county council and county borough a sum of money which is both adequate and appropriate for the particular needs of each particular area. In order that these grants may be given in the most efficacious and satisfactory manner possible, certain changes are required in local government, and I hope to show why in a minute. If we regard these changes in local government by themselves, I think that there is a good case to be made out against them, but I contend that they are the necessary and essential consequence of the Government's de-rating proposals. In other words, the changes that have taken place in local government are the inevitable corollary to the Government's attempt to help the producer.

In the original scheme, the two main proposals which have been dealt with this afternoon are the abolition of the boards of guardians and the transference of their functions and the functions of the rural district councils in regard to maintenance of unclassified roads to the county council. There '.vas much opposition in regard to these changes, and I frankly admit that I regarded them, and I still regard them, from a rural basis and from a rural bias not merely because I happen to represent a rural constituency, but also because I have the most unqualified admiration for the work which has been done in the past both by the guardians and by the rural district councils. Dr. Johnson was once dilating on a favourite theme of his, namely, the difference between the English and the Scot, and, I regret to say, to the detriment of those who live North of the Tweed. He concluded his observations by remarking that even with regard to oats, it was the food of men in Scotland, but of horses in England, to which Boswell, ever ready to record a witty saying of his own, replied, "And where, Sir, will you find such horses or such men?" Humble even as the work of the guardians and the rural district councils may be, where, I ask, in the Whole world will you find such a standard of efficiency in administering to the needs of the poor and in the administration of rural roads as among the local authorities of our country? Unpaid, unrewarded, many of them have given the best years of their life to the services of local government.

It may be asked: "Why change if you hold these views so strongly?" The reasons for that change, I think, have already been stated to-day. We know that the charges both for Poor Law and for the upkeep of rural roads are very heavy. They vary greatly throughout the country. They vary even in an individual county from 2s. in one area to 10s. in another, and it is perfectly obvious that these heavy charges must continue in the future. They will not only continue to be heavy, but they are bound also to fluctuate from, one degree to another. Both these services have been dealt with before by the local authorities within their own local areas, and the money has been raised from the narrow area of the union or the rural district council. Under the Government's present scheme you are diminishing the valuable hereditaments, you are reducing the rateable value in these particular areas in some oases even to the extent of 00 per- cent. It is obvious, therefore, that any increase in the burden of rates in these areas would fall in increasing degree upon the remaining ratepayers. The burden which is already great, if increased by 20, 30, 40 or 50 per cent., would become not only intolerable, but unbearable and I believe that the whole fabric and foundation of local government might break down. It is proposed therefore to widen the rateable area from the union or rural district to the county as a whole.

My own rural district council were very much upset when these proposals were first put forward, but there have been many concessions, and important concessions, made since the policy was first advocated in the White Paper, and I do not think that the full significance of these concessions has yet been realised. Take, for instance, the appointment of the guardians committee. I hope that the guardians committee at the start will be composed of those same individuals who are acting and working as guardians to-day. The county council, will, I believe, give them a reasonable degree of latitude in administering relief. Therefore we may take it that under this scheme, as far as the relief of the poor is concerned, the same people will administer the same kind of relief at the same places and at the same time as they have done in the past.

On the question of roads, the Government have followed the Report of the Royal Commission. As I understand it, the rural district councils will be elected and maintained as they are to-day, and the onus of refusing them the managing and maintaining of their own unclassified roads will be upon the county council. In other words, they will precept upon the county council for that sum of money which they think is necessary to maintain their own particular roads. I think we require here an additional guarantee that the rural district councils will not be starved in the amount of money which the county council allows them. Also, I should like to see some permanent link established between the rural district councils and the highway committee, or whatever the committee may be called, of the county council. In the relationship between the guardians committee and the public assistance committee it has been laid down that a representative of the guardians committee must be present at the public assistance committee when the affairs of that particular guardians committee are being discussed. I should like to see some similar link definitely established between the rural district councils and the committee of the county council which deals with their particular roads.

Many people complain of this Measure and criticise it because of what is going to happen in 15 years time. Many things may happen in 15 years. Even the present Conservative Government may not be in office in 15 years time. In addition to that, and this is very important, Part IV of the Bill will have come into operation. Clause 39 deals with the rearrangement of boundaries. The rearrangement of local boundaries must affect to a very considerable degree the various calculations with regard to local areas. To-day you have rural districts with fewer than 10 parishes in their area and you have rural districts with over 30 parishes. There are 64 boroughs with a population of under 5,000. There are many urban districts which have a large number of rural roads to maintain. You have, on the other hand, many villages in rural districts which ought to become urban authorities. It is obvious that there must be many and various changes in regard to these local boundaries, and I hope that in these alterations the Minister will be very careful to maintain the local esprit de corps of the ancient boroughs. In my own constituency I have that most ancient borough of Malmesbury, which received a grant of 500 acres of agricultural land from King Athelstan himself in the year 924, upon which they have paid neither tax nor rate from that day to this. I am glad to see that the Government are going to extend to all agricultural land what King Athelstan extended to Malmesbury 1,004 years ago.

There is a further point in regard to the arbitrary ratio of five to one as between the urban districts and the rural districts. I cannot understand upon what basis the grant of five to one was fixed. There must be urban districts whose services are not five times as heavy as the services of a rural district area, and there must be other rural districts whose services require more money than the grant of 30 pence per head of the population. I would ask the Minister whether he cannot see his way to make the guarantee, which exists for the first year, extend to at least three years, for these reasons. By that time the rearrangement of boundaries under Part IV of the Act will have come into operation, secondly, the census of 1931 will have been completed and, thirdly, although I hesitate to put this reason forward, the concession would be very popular in rural districts.

The more I study the Bill and try to understand it the more I am impressed by it and the more appreciative I become both of its scope and the great good that it is going to bring to the people of this country. If we can by this Bill help the producer, if we can, to use the words of the Minister of Health, oil the wheels of industry and turn the tide of unemployment even by only a small degree, then I feel that the many hours we may have spent in studying the Bill and the many more hours that we shall certainly spend in discussing it will not have been wasted, and that when it becomes the law of the land we shall feel that we have passed a Measure for which the country as a whole will be grateful and of which this Government and the Conservative party may well be proud.

Mr. DEPUTY-SPEAKER (Mr. James Hope)

Mr. Grenfell.

Mr. DAVID GRENFELL rose—

Sir H. CAUTLEY

On a point of Order. May I ask: (1), is it in Order and within the spirit of the Rules of this House that only those Members catch your eye who have previously made some arrangement with Mr. Speaker; (2), if it is for the convenience of some Members of this House, can you inform the House whether any of the time left either to-day or to-morrow is open to Members who have not so made arrangements with Mr. Speaker?

Mr. DEPUTY-SPEAKER

I am afraid I do not understand the meaning of the hon. and learned Member's remarks. He has been for a long time a Member of this House. It is quite obvious that any hon. Member who rises has a chance of catching the eye of Mr. Speaker. No absolute promise ever is or can be given that any hon. Member will be called; it must depend upon the turn of the Debate. It is no doubt for the convenience of the House that intimation may be given that probably a certain speaker will be called, but certainly no such Rule or practice as that suggested by the hon. and learned Member exists.

Sir H. CAUTLEY

I am obliged to you. The reason I made the interposition was that I have sat here 52 hours without moving and have noticed that every speaker whose name has been called has been taken from a list which I know from years of experience is often arranged.

Mr. DEPUTY-SPEAKER

If it is any consolation to the hon. and learned Member, I may say that there are a great many Members whose names are on that list who have not been called upon.

Mr. GRENFELL

I have sat here all the afternoon from 3.30, and for the convenience of debate I understand that my time is to be limited. I thank you for the opportunity of saying a few words. The last speaker endeavoured successfully, in his usual good-tempered way, to maintain a relation between himself and the subject-matter of debate. It has not been so in all the speeches from his side of the House to-day. One hon. Member opposite began his speech by saying that when the Bill was first brought to the notice of his constituents it was very unpopular, but now the unpopularity was passing away, and he hoped that by the election he would have been able to convince people that it was a good Bill. I gathered from him, however, that there were many doubts in his mind, and, indeed, the trend of the Debate to-day, as far as speakers on the Government side are concerned, has been that they have given it only very faint praise.

There is one point to which I should like to address myself, and that is that while we 'are discussing the connection of this Bill with de-rating, we are not to-day discussing the De-rating Bill. I have said that I believed the De-rating Bill was conveived in the interests of industry. I doubted the efficacy of that Bill, but in principle' I stand for the absolute de-rating of industry. Let me explain my position by metaphor. I would not tax a man with a spade in his hand because he has a spade, but I would tax a man who carries golf clubs. Industry deserves to be encouraged, and not to have charges against it, though that is not the point of view of people who support the de-rating of industry on the ground that it is a subsidy to industry.

I now come to the first part of the Bill itself. I agree that the general objects are good, and I think it is more than time for an extension of the areas for the maintenance of the poor. There are small local areas with very, very slender resources, which have found themselves unable to maintain their poor in comfort and contentment, and which have rather economised at the expense of the very poorest and most deserving. The treatment of the poor in many districts has been a national scandal. This Bill will probably tend in the direction of giving more uniformity and more generous measure of relief to our poor people, but there are points in connection with the Bill to which I should like to call attention. We are to have a re-organisation and abolition of Poor Law guardians, and the substitution of county financial assistance committees to be set up by the counties. These are to have power to establish in each district district guardians committees, and it is in connection with the establishment and mode of appointment of these committees that I wish to say a few words. There is to he the introduction of an entirely new principle in regard to the guardianship of the poor. There is to be the handing over of very delicate and intimate functions performed by elected people who are subject to election, and might lose their authority if they did not carry out their business properly. Now, for the first time, we have power given to co-opt people to perform these very intimate functions, and to put very private questions to applicants for relief and to determine the merits.

That is an entirely new principle which should never have been started. By removing the principle of election we are directly inflicting harm on the representation of women or the local bodies. It is on the guardians that we find the largest number of women represented in public life. It is a duty that they can perform without leaving their homes, and it is essentially a duty of sympathy and understanding and can be dealt with very largely by women. Women serving on boards of guardians run to the number of 2,250 but women elected to county councils only number 235. It is no reply to the charge that you are excluding women by changing the basis of appointment, to say that the election of women to county councils can take the place of women who are elected to guardians. It will he a very great loss to the country and to the poor and to the system of Poor Law relief if you limit the elected principle and take away the opportunities for women to serve.

There was a resolution on this matter passed unanimously by the Guardians Poor Law Conference a week or so ago, which has been conveyed to the Minister, on the subject of co-option and the status of the old guardians. I shall not spend more time on that, because there will be plenty of opportunity in the Committee stages of the Bill to deal with the details of the Clauses. I want to come straight away to what are the main and fundamental matters in this Bill—the questions of finance. The method of financing local authorities will determine the value or merit of any proposal in the Bill. I come from a very distressed area where destitution is rampant and there is misery in the extreme. It is a very large area of over 1,000 square miles, and the people, are suffering ea masse—not merely individual cases, but the whole community are suffering privations that are hardly believable when one lives in London. You have those communities with great suffering and great poverty accentuated day by day by the closing down of more industrial concerns and pit after pit. They are great industries which were at one time prosperous in themselves and which added prosperity to the nation. There is no one thousand square miles anywhere in the world which has produced more wealth than that in which I reside, and whose conditions I know so well.

In that place there is already an almost complete breakdown of local government, and nothing in this Bill can obviate the consequences which we see coming upon us closer and closer every day. Those areas are so largely and decidedly what we call the necessitous areas, that I believe the Government are making a fundamental mistake at this time by bringing in this Bill, with all its cumbersome arrangement for the transfer of functions and finance, instead of bringing in direct relief to necessitous areas rather than the relief of industry. They could then have allowed time for the reconsideration of the reform of local government which many of us confess to be due. In this area there will be depressed districts which will not get any relief from this Bill, and I think I can convince the Minister that all that can be said on the financial proposals has not yet been said even by the most magnificent speaker in this House. I do not believe that this very complicated and intricate measure could be better expounded in a single speech than it was this afternoon.

We are told that the whole basis of finance is to be the forming of a national pool of £45,000,000. We know that the measure and volume of the flow into that pool is going to be fixed, and the £45,000,000 is going into that pool each year. We know that by the formula this £45,000,000 will flow out in proportions which are entirely new and untried, and which constitute an entirely new principle. That is where, T believe, the Government must recognise that their Bill as it stands does not fit the requirements of each and every case. Indeed, to begin with, the pool is not adequate for the needs of the whole country. I heard the Minister of Transport speak this afternoon and paid attention to what he said. He emphasised a thing that is often forgotten in connection with road transport. He told us that the bill for road making and road maintenance in the last six years had increased on the average by £3,000,000 per year. Now that this £45,000,000 is fixed, and there is no possibility of receiving more into the pool, the increase in that one item alone is likely to run on at the rate of £3,000,000, and by that sum and counting only that factor, the Minister will find a deficiency of £3,000,000 a year. The Minister of Health says: "Well, we are generous; we are giving a lot of new money; we are giving £5,000,000 of brand new money." This is not really new money. This £5,000,000, according to the information in the White Paper, is made up largely of £3,000,000 from the Road grant which was to be spent on the roads and is there to meet the average annual cost of the maintenance of roads. When I hear this described as new money it recalls to my memory an incident which occurred many years ago.

Colonel ASHLEY

I think the hon. Member is confusing the facts; the increase of £17,000,000 to £60,000,000 refers to all roads whereas the block grant only deals with a portion, and the smaller portion, of road administration and expenditure.

Mr. GRENFELL

I am not omitting that. I am trying to show how that item mounts up each year. The fact that this is called new money prompts me to tell a tale of two neighbours of mine, much older than I, one of whom was the owner of a donkey, not a very active donkey, not a very prepossessing donkey. It was not well looked after but the old man was very fond of the animal and was very pained and hurt when he lost it. He advertised his loss in the usual way, but nothing was heard of it for about a week or so. A friend of his, a wag, who had taken the donkey away had used it in the meantime for his own trade purposes. At the end of that time he clipped it, sheared it quite close, and took it back to the old man saying, "I am sorry you have lost your donkey but a few friends and I have subscribed together and bought you a new donkey; here it is." These £3,000,000 now in the Road Fund is the old donkey clipped and sheared and dressed up come back as the new donkey. This is playing tricks on the people of the country. The Minister of Health said something about looking a gift horse in the mouth. We are going to look at this gift donkey, and we shall find that it is the same old ugly donkey still.

There is not sufficient money in the pool. The channels of expenditure are being constantly extended. Take education. What man is there who does not expect that the school age will not be raised to 15 years? What man is there who does not expect an increase in the schools, and an improvement of the health services of the country? By confining expenditure to the amount given in the Bill the Government are actually restricting the progress which we expect to make in local government and social services of all kinds. Much has been said during this Debate about the per- centage system and the block grant system. Does the Minister deny that the expenditure by this arrangement will run in the proportion of 47 per cent. State money and 53 per cent. money collected by local authorities? We are reducing the ratio of State expenditure in the face of ever growing local needs. Does not the Minister realise that by limiting the percentage of the State contribution he is hampering local authorities, because this will be a constantly decreasing contribution. Under the percentage system we were able to get a fifty-fifty grant, now we are to get only 47 and 53, and unless more money is brought in than provided for in this Bill the need for expenditure will call for a greater volume of rate contribution by local authorities while the State percentage will be a smaller portion of the total.

I should like to criticise the formula a little, but my time is up. I believe, however, that there is a possibility of adjusting the formula with greater justice to the weight of population, the poorer districts where unemployment prevails, and to those districts where there is a very sparse population. By giving these four factors a different ratio, by giving fresh values to each of them I believe that a more equitable formula could be arrived at and also a more equitable distribution of the £45,000,000 in the pool. A formula has been suggested, I understand, and figures have been given. The ratio of weight to be added in respect of children is 28.4 per cent. of the total. The weight to be added in respect of the rateable value is 16.6; in respect of unemployment it is 2.8, and in respect of a sparse population it is 14.8. I understand that another formula has been suggested, and it seems to me that it is much more equitable than the one proposed in the Bill. It is that instead of allowing 28.8 per cent. for children we should substitute 25 per cent.; instead of 16.6 for rateable value we should substitute 20 per cent.; instead of 2.8 for unemployment, a ridiculously low percentage having regard to the amount of unemployment, we should substitute 10 per cent.; and instead of 14.8 for sparse population we should substitute 15 per cent.; and the total of 100 per cent. is reached in the same way as in the case of the other formula. I believe an examination by any impartial person or tribunal will show that by this proposed formula a much closer approach to justice as between district and district is arrived at. I am much obliged for the opportunity I have had of making these few remarks on this Measure.

Mr. WOMEASLEY

Like the last speaker I realise that my time is very limited, and perhaps I should have been wiser if I had waited until to-morrow. None the less I will do my best to compress what remarks I have to make into the time at my disposal. I listened with unusual interest to the speech of the hon. Member for East Ham, North (Miss Lawrence) because I happen to have been a member of a local authority for something like 18 years and, further, I am closely associated with an organisation known as the Association of Municipal Corporations. I was struck by the similarity between the arguments of the hon. Member for East Ham, North, and the arguments in the report of this association issued early in October dealing with many aspects of this Measure and also with its financial proposals. The figures she read out are contained in this document. I am glad that other hon. Members have been studying the documents issued by this association. But I suggest to the hon. Member that she is a little out of date with regard to the point that the town clerks and municipal treasurers are all opposed to this Measure. I have a letter here which I have received only this morning as regard the present position of this particular organisation. It says: The present position is, therefore, that although no agreement has yet been arrived at negotiations are proceeding which I trust may result in a satisfactory arrangement before the Committee Stage of the Bill is taken. On the general principle, particularly the principle of the transfer of the functions of Poor Law guardians to local authorities this Association is in agreement with the Minister's proposals. I have stated exactly what is contained in the letter, nothing less and nothing more. I have tried to regard this Bill not from a party standpoint at all, because when all is said and done my chief interest must naturally lie in the work with which I have been so closely connected for many years. I have examined the Bill from the point of view of those who have to administer local affairs. I hope that Members of all parties will try to regard the Measure in that way. I did expect, when the Bill was introduced, that it would be kept outside the ordinary party political factions. But that is not, to be. I find that the opposition to the Bill can be divided into three categories. I am not speaking of the Opposition in this House entirely. I am reminded of an Arabian proverb which says that mankind is divided into three sections, those who are immovable, those who are movable and those who move. In the first category I am not going to suggest that we have any Members in this House—those who are immovable on this question of reform of local government. But we have outside the House, members and supporters of my own party in the constituencies whom one could describe as almost immovable on this question of reform. And you find them in other parties as well.

That is the type of man who says, "Why don't you leave well alone? What do you want to bother about? Whether the present system is good or bad we have managed very well so long, so let us get on." Another type says "No, my friend, this is not vote-catching." I confess that if the Minister had his eye on the ballot box, he would probably have left this Bill on one side for a considerable time, not because it is not a good Measure but because it is open to a good deal of misrepresentation. I can assure the House that it is getting its full share of misrepresentation in the constituencies at any rate. The point is that you have that type of person to deal with, the man who does not want to move at all. He says: "What does it amount to? It means taking money out of one pocket and putting it into another." That is all right until you examine the Bill and then find that it is nothing of the kind. It is taking money possibly from a source which can afford to give it, and is helping another person who really does require help. I think we made a mistake in describing the first part of this reform as a de-rating Measure. A better name for it would have been the "Trade Relief Bill," or "Unemployment Relief Bill." That was indeed the object of the Measure that; we dealt with last Session. This Bill I should describe as the "Equalisation of Rates Bill" rather than the "Local Government Bill." That is the real object of it all. Then we come to the second category I have mentioned—those who are movable but will not get a move on. I include in that category hon. Members of the Socialist and Liberal parties. I am in the habit of studying my opponents' literature very carefully, and not merely to pick out debating points. If we really can find anything worth while in our opponents' arguments we—

HON. MEMBERS

Use it.

Mr. WOMERSLEY

Use it certainly, and use it in the right way. If I had time to-night I should probably emulate the example of other Members and read very long extracts from the Liberal Yellow Book. Indeed, I do recommend my hon. Friends to study the particular chapter that deals with rating reform, because if ever there was justification for a Minister bringing forward a Bill it is in that chapter. That is the type of person that I put in my second category—the men who talk about reform and say it is necessary and that industry wants relief from its burdens, but still are not prepared to make a move and do anything. That is the type of opponent who relies not on condemning the Measure as a whole, because they say it is necessary that something should be done for productive industry and distressed areas, but relies entirely on attacking, not the principles of this Bill but the mere technical details—a quarrel about the apportionment of relief—and relies on exciting jealousy among those people who feel that they are not to get a large amount of benefit from the scheme. It is easy to arouse jealousy when some get a little more and some get a little less.

I want to deal for a moment with that part of the Amendment which reads and by failing adequately to reimburse local authorities for loss of revenue will add to the burden of shopkeepers, householders and other ratepayers. I happen to be a shopkeeper, and I Know something about the position of shopkeepers and householders. I do not happen to be one of those who will bene- fit from the relief of productive industry. I say, however, to those who framed this Amendment: "What have they ever done to assist the shopkeeper in any way?" I do not know of anything. This sort of thing will not go down with the shopkeeping community of the country. We know who are our friends and who are our enemies. The position has been stated before in this House. The sensible shopkeeper knows very well that if productive industry is prospering he is going to get his share of that prosperity, and vice versa. As far as the rates are concerned, they may be a heavy burden—they are indeed on the man who is doing a little turnover, but not so much on the man who is in the position to command a good turnover because people are fully employed. It is hoped that this Measure will bring about a better state of affairs in industry. That is where the shopkeeper has to look for his reward. He is not worrying about a shilling or two off his rates; what he wants is better trade. This Amendment seeks to catch the shopkeeper, but I am sure it will not do so.

There are one or two little matters to which I ask the Minister to give careful consideration. I happen to represent not only a county borough council but an urban district council combined in one Parliamentary Division. The hon. Member for Leith (Mr. E. Brown) complained yesterday that the Minister had altered his Bill considerably since he put his first proposition forward.

Mr. ERNEST BROWN

No, no!

Mr. WOMERSLEY

The hon. Member made a little song about it anyhow, but we did not have the dance. I suggest that it is indeed commendable on the part of the Minister, for surely it is a wise thing to consult the very men who have spent their lifetime in this work before he finally brings his Bill before the House? That is one of the biz reasons why the Bill has not met with the great opposition from municipal authorities that otherwise would probably have been its fate. The Urban District Councils Association is somewhat afraid that, inasmuch as for most purposes they will be absorbed in the county areas, their position may be affected considerably. They ask the Minister to take into con- sideration the question of a re-distribution as far as the electoral areas for the county council are concerned, and to give the district councils adequate representation according to population. They fear that the agricultural interests on these county councils may outweigh the influence of the urban districts. It is suggested that this has been so in the past. I am not going to say whether it has been so or not, but in view of the added duties which the county councils will perform it is worth while taking the matter into consideration and doing something on the lines which I have indicated. If the Minister does so, I am certain he will have the support of many who are at the moment a little afraid on this point and who are members of urban district councils. I am sure, indeed, he will have their deepest gratitude. I am prepared to vote for the Second Reading of the Bill. I am satisfied that it general principles are right. There are certain details which will have to be dealt with during the Committee stage, but we know that the Minister is prepared to receive helpful criticism and to consider Amendments which are designed to strengthen and not to weaken the Bill.

Mr. WILLIAM GRAHAM

In his introductory speech yesterday afternoon, the Minister of Health appealed to Members in all parts of the House so far as the Second Reading Debate was concerned, to look to the broad features of the Government's plan and to reserve criticism of the multitude of details for the necessarily long Committee stage. With the permission of the House, I should like to adopt that advice and confine myself almost exclusively to one or two large problems in connection with the relationship of national and local finance which this Measure undoubtedly raises. Hon. Members will agree that unless that relationship is sound, a very large part of the benefit promised by the Government in this Measure, will never, in fact, be forthcoming. And it will probably be true that we shall only create, instead of the admitted anomalies and difficulties of the existing system, anomalies and difficulties which may well be greater.

Before I approach that subject, there is one preliminary consideration which I hope will find support in all parts of the House. The Minister of Health will be the first to agree that neither this scheme nor any other scheme for the improvement of local government is likely to succeed unless you get an efficient, well-remunerated and contented personnel in the local government service. That, I believe, to be essential to the success of the plan. Accordingly, I make an appeal to the Minister and the Government to reconsider a view which they have already expressed regarding the superannuation of a now limited section of local government officers. The position can be briefly and simply described. When a Measure dealing with the superannuation of local government and other officers was introduced by the right hon. and learned Member for Ealing (Sir H. Nield) in 1922, about 586,000 public officials in this country, including civil servants, were under superannuation. Confining myself for the moment to the local authorities, I would say that since that time nearly 600 local authorities have adopted the permissive superannuation schemes which that Measure rendered possible, and the number covered by superannuation is approximately 53,000 in local government service.

10.0 p.m.

There remain a small number of rather less than 17,000 men in that service not covered by superannuation. Under the plan of the Government which transfers considerable numbers of Poor Law officers to the county councils, those officers will carry with them all their rights as to superannuation under the 1896 Act, which applies to them, but they will work side by side with the members of this small body who remain under the reconstituted local authorities without those superannuation provisions. I suggest to the Minister that that will be an unhappy and undesirable state of affairs. We simply ask, in the interests of efficiency, that in any change which is introduced the Government should complete the structure which was so far permissively built up in 1922. And, as all these schemes rest upon a purely contributory basis, there can be little difficulty about any local contribution or burden which may be involved.

Having said so much on a preliminary point, I proceed to the problems in the relationship of national and local finance which are raised in this Bill. Our first duty is to try to put this Measure in proper proportion. I see it described in some quarters as a revolution in local government, and as a vast change in local rating which is going to lift a load from a considerable section of our industry. Statements of that kind cannot be substantiated. What we must recognise is that the aggregate burden in national taxation and local rates resting upon British industry and commerce is approximately £1,000,000,000 a year. Moreover, taking a line through our recent financial analyses in Committees of this House, and looking at the course of prices in this country and at what is likely to be the level of prices, no Member of any party will suggest that there is likely to be, in the near future, any substantial reduction of that aggregate load, and, if certain services were undertaken, there might very well be an increase. We must all recognise that there are large parts of our Budget which are virtually static in existing conditions and the static element is even more pronounced in many of the features of our local finance. The aggregate sum which is covered by this Bill in the pool is, after all, only £45,000,000, and, while I do not dispute for a moment that there will be indirect consequences of the Measure, we have only to relate that sum to the total burden even of local rates which is at the present time approximately £170,000,000 every year, and we see at once that at the best, and, as a fair statement of the position, it is only a corner of the field which is touched. Far be it from me to deny that important considerations are raised, but that is the proportion to the total burden, and accordingly we must be very careful in our statements.

I turn from that point to a plea which has been advanced by Members on this side of the House, and I think by a certain volume of criticism outside. It was never more powerfully stated than in the remarkable speech—for so it may be described—of my hon. Friend the Member for East Ham North (Miss Lawrence) this afternoon. We plead for a segregation of the de-rating part of this Bill. Why do we make that plea? Plainly, the House must admit that this is a new departure in the treatment of local rating in this country, if we exclude the history of the Agricultural Rates Acts. This is the first occasion on which, on any scale at all, we have drawn a distinction between productive and distributive industry, and, for the purpose of trying to relieve unemployment, as far as assisting export and other trades is concerned, have de-rated to the extent of 75 per cent. those mines, factories and workshops already defined in legislation. What Member of the House can dispute that that must be largely of the nature of an economic experiment in Great Britain?

After all, it is more than 150 years ago now since Adam Smith, one of many distinguished Scotsmen on economic problems, said that the act of production was not complete until the commodity was in the hands of the consumer, and at the distance of a century and a half the Government in their proposals appear to have gone back so far upon that elementary principle. But in any case I mention it to-night to recall that while you may have a case in certain heavy industries in this country for special action at the moment, it cannot be, or it may not be, of the nature of permanent practical politics. Who is there among us to-night who is prepared to dispute that the tendency in industry, in the future, might be to a prosperity in these industries and perhaps to a certain depression in the distributive trades? And at that date I have not the least doubt there would be a very strong call for a reconsideration of this plan, and probably any Government in office, of any persuasion, would be driven to recognise its force.

What is the validity of that argument in connection with this Bill? It is simply this, that the £24,000,000, which is the estimate and only an estimate of the loss from de-rating, becomes a fundamental element, so to speak, in this pool, and it is related to other sums, and upon that a very large part of the structure of die Measure is built. That may lead to some fantastic results. Accordingly, as this is of the nature of an experiment, and as you can easily segregate this effort, and as, in point of fact, in the national interests, financial and economic, we should so separate it, that is the burden of our plea in this part of the Bill. So far as you transfer to national taxation what is now carried by local rates, we have admitted frankly a concession to an argument regularly advanced from these benches, but do not let it be forgotten that you are only achieving this so far by the taxation of a part of transport, and an important part, in the yield of £18,000,000 to £20,000,000 or more imposed on petrol, and, therefore, what you achieve in the field of productive industry, you must assess in the field of domestic road motor transport.

There is another consideration. I put it to the Government to-night that they should not embark upon any plan of this kind unless they have considered the effect on certain aspects of national taxation, and in that connection I make a plea that it is of vital importance that there should be strict equality for all industries before the general fiscal system of this country. We began in 1896 to give concessions to agricultural land. That was extended in 1923. The structure of the Agricultural Rates Act is completed by this Bill to-night, and all local rates on agricultural property, excluding those on dwelling houses, disappear. There may be valid reasons for a departure of that kind, and we do not dispute that a considerable portion of agriculture is passing through a period of depression. But if we lift from agriculture the whole of the local rates, we should at least be entitled to say this, that we have put agriculture on the same terms in the presence of national taxation as are occupied by or are offered to all other industries in this country.

That introduces us to exactly what the Royal Commission on the Income Tax recommended unanimously in 1919–20, that the old basis of two times, as it was then, or now one time the annual valuation of agricultural property for Income Tax purposes in this country should disappear, that farmers should make returns like other business men and private individuals, and that they should pay taxation on the strict profits which they earn from year to year. What is the injustice in that plan? If there is no profit, there is no tax. On the other hand, it is a remarkable fact that, notwithstanding these years of agricultural depression, the option exercised to be assessed on an actual profits basis has been comparatively small, and the only deduction that can be made from that is that one time the annual valuation is practical politics. But in any case Parliament should know exactly how they stand, especially when the whole of local rates on agricultural property disappear. That I believe to be a fair and equitable proposition in the relations of national and local taxation, and I suggest to the Government that they cannot longer delay the application of the recommendation that was made by all parties, Conservative Members included, in the Royal Commission on the Income Tax in 1919.

Now let us turn—and this is by far the most important part of the subject—to the changes which the Government propose to introduce in the relationship of the National Exchequer to local rates. Perhaps the House will bear with me for a minute if I recall, quite shortly, the history of this controversy in Great Britain. It was part of our tragedy in local government up to the time of the War that, although we had had the Report of the Royal Commission in 1896 and the Report of the Departmental Committee on Local Taxation sitting from 1911, and reporting about 1914, no steps other than very limited steps had been taken to give effect to their proposals. Following the Departmental Committee in 1911, on the outbreak of war, a Bill had been prepared; that Bill embodied certain important proposals for reform, but the War obliterated them. National taxation largely increased, and the burden of local rates bounded up from about £80,000,000 pre-War to £160,000,000 or £170,000,000 after the War, in the time that we have now particularly in view.

So great was the increase, very largely attributable to the rise in prices, that the Geddes Committee in 1921 made what I have no hesitation in describing to-night as a blind rush at the problem, because no one who reads the Report of the Committee and is familiar with this question will dispute that many of the suggestions which were made by that Committee had little reference to the historical development of this case. In any event, they said that these percentage grants, which were 50 per cent. in the case of tuberculosis, education, and police, 75 per cent. in the treatment of venereal disease, and 100 per cent. in certain port sanitary services, should be replaced by some form of block contribution from the National Exchequer; and it was part of the case of the Geddes Committee that that would lead to an economy in localities, where they believed the extravagance began. That problem was passed on by the Coalition Government of the day to the Meston Committee, of which I happened to be a member. It is unfortunate that the evidence of that Committee is not accessible to this Chamber, and still more unfortunate that the Draft Report prepared by the chairman is not obtainable for this Debate. As one of my colleagues pointed out, the evidence and the Report supply the most emphatic criticism from some points of view of the plan which the Government Are proposing. I cannot understand why the Chancellor of the Exchequer, among all his varied and spectacular pursuits, has not insisted on obtaining this document.

Let us see what is now involved. Hon. Members have been told, both before and during these Debates that this introduction of block grants is entirely in the public interest, and will perhaps achieve certain economies, will not penalise the localities, and will preserve a better relationship in our national and local finance. But, after all, the Government touches only a very small part of the problem of the percentage grant scheme. We attach great importance to it on this side of the House, and I should like to believe that other Members in other parts of the House attach importance to it, because it so happens that it turns on health services, which are vital to a great deal of our social progress. The scheme propounded by the Government leaves untouched all the percentage grants in education, in police, and in port sanitary services. In other words, the plan of the Government while ostensibly aimed at the percentage grants, or aimed on the other hand at a block grant, really achieves nothing of the kind; and I suggest that if you set out to make a case against the percentage grants, you could if you wished, make a far stronger case in those other grants than you could as far as the health services are concerned. What was the burden of the evidence in the Meston Committee and other bodies which have considered this problem? The witnesses said over and over again that in police and in education, the local authorities have been so far bound by the decisions of national Committees.

There is the Desborough scale in police remuneration, the Burnham scale in teachers' salaries, and these great national scales were automatically applied. I am not criticising them; in fact we generally support them. But in any event they take away from the local authority any real power, and they become subject to a kind of national standard in a very large part of their outlay from year to year. That was the charge that was made. I do not think that they proved it before the Committee, but the House will realise that in that field you could get an argument of a kind, for you have a settled and ascertained service with in proportion not so much room for extension as you have where the public health services are concerned. Moreover, if hon. Members turn to this item of £16,000,000, they will find that even in this amount there is a very large element of the block grant at the present time. So my case against the Government is that it is altogether ridiculous to introduce a small regulation, but a dangerous one, in the field of public health services, and still more ridiculous when we have regard to the concession, or the prospect of concession, which the Minister held out on that point in the course of his introductory speech.

With what are we left? We are left with the de-rating contributions; the next stage is the obliteration of the assigned revenues—I have not a single word to say in their favour; they ought to have disappeared long ago—the third point is the small element of the public health services and then these contributions to the Road Fund, and the rest, all aided and abetted by a formula intricate in character of which I suppose we can treat when we pass to what I intend to refer to now, the alternative to the Government plan. I am saying nothing to-night about the administrative aspects of this Bill. I want to speak exclusively of the relationships of national and local finance.

Let us consider, first, the alternative to this Bill. I believe we shall find that alternative in an improved and a more efficient percentage grant system, and that is the line that we on this side of the House will consistently take. It is not denied that there is a certain amount of common ground between us in this Measure, or at all events in the finance of it. The Minister, with his long experience in debate, would, of course, be the very last to omit a point of that kind. The common ground is the measure of transition which you can make from a local rate to a national tax, and we will help any Government—I hope it may be our own Government after June of next year—along that road. But in what is being done I will show that in effect, although dangerously, you touch only a very small part of the percentage field. Our alternative is this: First of all, there is no validity in the argument that the State does not know and cannot determine its contribution to the local effort from year to year. Be it remembered that practically everything you do proceeds in terms of Act of Parliament passed by this House and, as the local authorities maintain, very often forced upon them—I think necessarily forced upon them in very many cases. In the next place you have very considerable departmental control; in fact, a frequent charge against the system is the meticulous Government control which certain of these grants involve. In the next place you have constant Treasury supervision—the watch over the Estimates, the review by the Estimate Committee of the House of Commons and the survey of the Appropriation Accounts by the Public Accounts Committee; and if all that machinery be not effective, there is something seriously wrong in the financial mechanism of this House. With all that control I think you can leave out of account the question of the State not knowing the call upon its resources from year to year, and in any event, as it is only a part of this field that is touched, it becomes an argument of small importance in the Government's case.

The next stage is to get the most efficient return for your contribution to the local government services. How can you do that? I think you can secure that by insisting upon a standard of efficiency, which you can do quite easily, apart from this scheme, by the grouping of areas, and which you can also do, apart from this scheme, by noting units of cost in those services and by a comparison between area and area or district and district on those lines. I dare not to-night go into the technical details of a plan of this description, for which there will be innumerable opportunities during the Committee stage, but it is betraying no secret when I indicate, as indeed has been publicly stated, that that would have been part of the plan which would have emerged if the Meston Committee had presented a formal report. I believe the majority of the Meston Committee would be against any alteration in the percentage grant system. But it might have recommended the working out of units of cost, the comparison of areas and the determination to get the best return for the Exchequer and local contribution.

If the House will bear with me in a statement without support in proof, because there is not time for that to be offered, I think what I have suggested can be done with comparative ease within the existing percentage grant system, especially when you are retaining the great bulk of that system under this Bill. Moreover you are now at a stage in the experience of these social services in Great Britain when you have been able to build up a considerable volume of experience and the country is settling down under post-War conditions. I will not pursue this argument further, but I suggest that that is an alternative way. You cannot meet this Bill with a blank negative; there must be reasoned amendment and alternative proposals. I believe that the system I suggest would be far more effective for our industry and commerce, and our social services than what the Government propose. While it may be contended that you will get some of these benefits under this Measure and under the formula, I would point out that it will not be fully effective until 15 years have passed; and it can only be applicable as a kind of patchwork over the general relationship of national and local finance. The plan I have outlined is an alternative; and it is an immediate plan. It is not a deferred formula but an immediate scheme for dealing with these vital social and other services upon which the welfare of millions of our fellow men so urgently depends.

The SOLICITOR-GENERAL (Sir Boyd Merriman)

All those who have listened to the speech of the right hon. Gentleman the Member for Central' Edinburgh (Mr. W. Graham) and the speeches which have been made in this Debate on the opposite side of the House must have been struck by the marked contrast between the tone of the Debate in this House and the way in which the opposition to this Bill has been conducted in the country. The aim of the opposition do the country appears to have been to lull people into a state of mental sloth by saying that this Bill is incomprehensible, and they had better not try to understand it, and then play upon their fears by misrepresenting its effects.

I propose to call attention to one or two instances of that sort. I propose to direct my remarks, firstly, to the effect of the de-rating part of this Bill. I do not want to embark on an and discussion as to whether or not rates are a burden on industry. The hon. Member for Nelson and Colne who moved the Amendment, committed himself to the statement that there is no burden where profits are being made. Do not let us quarrel about a phrase as to whether there is or is not a burden; let us say that rates are an item in the cost of production. I do not think that anyone will deny that. The right hon. and gallant, Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood), who spoke to-day, admitted it. Indeed, he admitted that rates were a burden on industry. His complaint was that we were only removing three-fourths of them, and not 100 per cent. He had, however, two other objections. He said that, although it was right to de-rate industry, yet we were putting the burden back on industry through the Petrol Duty. That is true in a sense, but we are substituting for the burden of rates a burden of which these three things are true, which are untrue of rates. We are substituting for rates a burden which bears evenly over industry—the same or any other industry—throughout the country as a whole. Bates do not. We are substituting a burden which bears a direct relation to the amount of production, and, therefore, to the profits, which rates do not; and we are substituting a burden which justly represents the contribution which industry should make to the problem created by the fact that it is tearing up with its commercial vehicles roads in distant parts of the country, for the upkeep of which it has no other responsibility.

The right hon. and gallant Gentleman the Member for Newcastle-under-Lyme also made a point that we were putting the burden back on to industry through the de-rating of agricultural land. In so far as the burden is thereby being put back on to agriculture—his point being that by de-rating the land the rents were going to be raised—it was convincingly and conclusively answered this afternoon in a very attractive maiden speech by the hon. and gallant Member for Tavistock (Brigadier-General Wright), who pointed out, perfectly truly, that neither the Act of 1896 nor the Act of 1923—one of which reduced the rates on agricultural land to one-half, and the other from one-half to onefourth—had had any appreciable effect on rents in fact, and that, so far as agricultural tenants were concerned, it VMS impossible for any landlord to raise rents on such a ground as that without facing the necessity for arbitration. That is in so far as it is said that the de-rating of agricultural land is putting the burden back on to that industry. The right hon. and gallant Gentleman indicated a further point which I must say astonished me. He said, as I understood him, that, if agricultural land became the site of industrial works, the price would go up. So it would, but that has nothing whatever to do with our present problem. It would not be the de-rating that would be responsible for that; it would be the industrialisation of the area. De-rating, obviously, would have nothing whatever to do with that, because the land, instead of being de-rated, would be re-rated to the extent of one-fourth.

Mr. E. BROWN

What about change of tenancy?

The SOLICITOR-GENERAL

Change of tenancy has nothing to do with it so far as that particular point is concerned. I come back again to the hon. Member for Nelson and Colne, who, pursuing the same line of argument, said this: If you go to the other end of the scale"— that is to say, the end of the scale which is not occupied by the brewers and other persons of that sort, to whom he had referred immediately before— the relief given is so little that it will not save the industries that are worst hit, and, as far as the coal industry is concerned, it is going to make the situation worse and not better."—[OFFICIAL, REPORT, 26th November, 1928; col. 113, Vol. 223.] I want to examine that for a few moments, and for this purpose A does not matter what particular finished product you take of those within the classes of heavy industry with which this de-rating is particularly intended to deal. To take finished steel, that is not an argument—[HON. MEMBERS: "Take coal!"] Coal is at the beginning of the story. It is not the finished article. I am talking of the finished articles of the heavy industries. Take any form of finished steel you like, Finished steel is the raw material, as we are constantly being reminded, of many other industries. In every ton of steel the local rates are reflected at least five times; the rates on the colliery, on the iron mines, on the limestone quarries, on the blast furnaces, and on the steel works itself. But, in addition to that, the rates paid by the railways are reflected in the freight charges for the pit props going to the mine, for the iron ore, and the limestone travelling to the blast furnaces, and the coal travelling at every stage of the manufacture.

Can it possibly be denied that the de-rating at all these stages, both in respect of local rates and in respect of the freight charges, must be reflected in the cost of production. It has been calculated—the figure has been stated in the House some months, and I have never heard it challenged—that the local rates, as distinct from the freight charges, on every ton of steel are about 4s. That means to say that the relief will be 3s. Taking the cost of a ton of finished steel at about 150s., that means that the relief in respect of local rates represents 2 per cent. of the cost of production. But, in addition, it is reckoned that the accumulation of the relief from freight charges represents something like 2s. or 2s. 3d. a ton; in other words, something over 5s. one way or another of local rates and freight relief in a ton of steel, or something like 3⅓ per cent.

I do not want to over-state it. I am perfectly well aware that, with regard to that, roughly, half of the steel trade which does not control its own sources of supplies of the raw material—coal, iron ore, and the rest—some of that 3 per cent. must necessarily be Absorbed on the way to the steel works. Here I want to take up something that was mentioned in the attractive maiden speech of the hon. Member for Halifax (Mr. Longbottom), who said that in respect of the cotton trade the relief of rates was infinitesimal in the finished piece of cloth. He was talking, and he said he was talking, only of the local rates. It has been calculated, and it is certainly generally reckoned to be the case in Lancashire, that in the finished piece of cloth some 3 per cent. represents, one way and another, the rates that are imposed, either in respect of local rates or freight charges, before the piece becomes the finished piece. Roughly speaking, then, in these two typical industries 3 per cent. in the cost of production is represented by rates. Can anyone seriously deny that if you relieve those industries and others of something like 3 per cent. in the cost of production you are enabling more goods to be sold? You may not be bridging the whole gap between them and their foreign competitors, but with every reduction in the cost of production more is sold, and with every increase in the amount sold the proportion of the overhead charges is reduced.

Mr. R. RICHARDSON

If the steel trade is going to pay the whole of the rates, what about the coal trade that gets nothing?

The SOLICITOR-GENERAL

I have only been allowed half-an-hour. I said perfectly fairly that in the case where the coal and the iron ore were not controlled by the owners of the steel works some of the relief from rates would be absorbed on the way. If that is so, does anybody deny that if you do increase production that that means that more time will be worked? [interruption]. Yes, if you increase production more time must be worked. If more time is worked, there is more money for the workers and more to spend in the shops and less unemployment, and a general reduction of the burden of rates on the ratepayers as a whole by reason of their not having to find relief for the poor arising out of unemployment. If that is so, and I suggest in spite of the interruptions of hon. Members opposite that that must be so, is it fair to represent this de-rating scheme in terms of the amount of relief which brewers are going to get? According to the figures given yesterday by the hon. Member for Nelson and Colne (Mr. A. Greenwood) the share that the brewers get is 400,000 out of the £24,000,000—one 60th to the brewers and distillers. [An HON. MEMBER: "Why should they have any?"] I am going to try to answer that point. But is it fair to represent this scheme in the terms in which the right hon. Gentleman the Leader of the Opposition represented it to an audience at Huddersfield on the 4th November. According to the "Yorkshire Post" report, he is stated to have said, and it is noted in inverted commas: A large manufacturer told me the other day that he was absolutely ashamed to accept it. His business is prospering, but in two or three ways he is going to have large sums of money put into his pocket"— Mark you, "large sums"— and the working-class mother is going to be left uncared for and untended, because there is going to he no money available for her.

Mr. RAMSAY MacDONALD

Hear, hear!

The SOLICITOR-GENERAL

The right hon. Gentleman says "Hear, hear!" Does he really say that it is a fair portrayal of our scheme to say that the poor woman is robbed of her maternity benefit, that poor shopkeepers are robbed of their earnings in order to put money into the hands either of an impenitent brewer—

Mr. MacDONALD

I did not say that.

The SOLICITOR-GENERAL

—or a penitent manufacturer.

Mr. MacDONALD

I did not say that. I said that there were two parallel facts—the fact of the manufacturer who did not want the assistance that was being forced upon him, and the fact that the public health service on account of the block grant was in danger of being reduced.

The SOLICITOR-GENERAL

Two parallel facts which were put into the same sentence—

Mr. MacDONALD

Certainly.

The SOLICITOR - GENERAL

—and intended —[Interruption.] You can ridicule any scheme by taking extreme instances of that sort and setting them side by side. You might just as well say that the system of the taxation of this country was appropriately represented by saying that you tax the tea of the poorest of the poor in order to pay the salaries of rich Members of Parliament on either side of the House. [Interruption.] I would remind hon. Members opposite that I was only allowed half-an-hour. I should like to be allowed to examine a little more closely the underlying idea of that sentence that I have just quoted, that prosperous industries should be excluded from this scheme. If that is true at the inception of the scheme, it must be true at every stage of it. If it is right that prosperous industries should be excluded at first, it must be wrong to allow depressed industries to continue to share in the benefits of de-rating if and when they have been converted into prosperous industries. The test, obviously, is the condition of any industry at any given moment. I would ask hon. Members to assume for one moment that de-rating as applied to the depressed industries does effect its purpose. What then? Are you going, suddenly, to re-rate industries which you have relieved of the burden of rates; are you, in other words, going to do that at any given moment when—to take the test adopted by the hon. Member for Nelson and Colne—an industry begins to pay a dividend and is therefore prosperous?

As soon as an iron and steel industry or a cotton mill or whatever it may be actually begins to pay a normal dividend again, are you suddenly to quadruple its rates, for that is what it would mean. You have reduced its rates to 25 per cent. and you would put them back to 100 per cent. on the ground that it has become a dividend-paying concern again? If you do that, the benefit that that industry has already received would avail it absolutely nothing. It would be living with the sword of Damocles hanging over its head; it would have no idea when the sword was going to fall, and it would be thrown back into a state of despair which would be more bitter than if it had never been relieved at all. That is not all. Some of the reductions in the actual cost of production as a result of rating relief will have been passed on to industries with which it is in trading relations. What about the consumers of cotton cloth, or the consumers of finished steel? How are the trades depending upon the textile trade or the trades depending upon the steel trades to arrange their business with regard to their own costs of production, or their own forward contracts, if at any moment they are liable to have the price of their raw materials increased because of the re-rating of some steel industry or some cotton industry which begins to pay a dividend again? Is it not obvious that it is inevitable that under such a law as that, forward contracts in all industries would have to contain a clause that, in the event of the return of rating, prices would be increased. I ask whether anybody can imagine a more deplorable state of things for industry than that, or anything more calculated to produce an effect absolutely fatal to the transaction of business?

I should like to invite hon. Members to consider the inclusion of prosperous industries from one other point of view and that is that this is a scheme to relieve industry of burdens and not to penalise the prosperous parts of industry. Why should we select productive industries, as distinct from distributive industries? For the very reason that productive industries necessarily imply that more manual workers are employed. Is it not true that, whether you are helping a depressed trade back to prosperity or are increasing the prosperity of a trade which is already prosperous, the tendency over industry as a whole of relief from burdens of this sort must be to enable industry to employ more workers or to pay better wages, or both? Is it not true that a return to prosperity in productive industries, whether they are already prosperous and their prosperity is increased, or they are now depressed and they return to prosperity, must show itself in an increase in the prosperity of the distributing trades which depend on productive industry—the shops would get direct benefit from the prosperity of both the distributive and the productive trades, and again the general body of taxpayers would benefit from the relief of the burden of maintaining the poor?

I want to pass for a moment to the distribution of the money according to the necessities of areas. In passing, may I just be allowed to say that it seems to me that both the Amendments do less than justice to our proposal for the administration of the Poor Law by the abolition of the guardians and the co-option of those who have experience of administration of the Poor Law. When it was thought that we were merely going to confine this reform to the substitution of the county councils for the guardians, we were told that we were substituting harsh administration by soulless officials in the offices of the county councils for the local and personal touch. The hon. Member for Nelson and Colne called it the substitution of the cash nexus for the personal touch. Now when we look at the Amendments and when our proposals are known, and we are providing for the co-operation of those who have local knowledge and a personal touch, we are told that we are introducing the vicious practice of unrepresentative persons being nominated to elected bodies—as if that were a new thing in local government—and that we are doing something, in the words of the Liberal Amendment which does violence to those democratic principles upon which representative government in this country is based. All I say is that hon. Members cannot have it both ways. I want to pass quickly to the question of the formula. I should hardly have thought it necessary to deal with the formula but for the fact that the right hon. Gentleman who leads the Opposition made another speech at Ipswich on the 16th November. He said—I imagine from his attitude it was intended to be amusing—that this was the formula of the Government: If you take the density of population of a district, divide by the children under 10, multiply by the number of widows in receipt of Poor Law relief, add that to your favourite number and divide by the number of children going to pre-natal clinics and welfare centres and add any four figures that first come into your mind, then you know how Ipswich is going to benefit by the Government's proposal. and, the report goes on with a magnificent gesture, he said: This is the scheme which is going to save the heavy industries and agriculture from ruin. I have looked at a longer report of that speech to see whether it was supplemented by anything further. Apparently it was not, and I say this, that for a right hon. Gentleman who has held the position of First Minister of the Crown to describe this scheme in that way to an intelligent audience is an abuse of words. I had intended if time had allowed to go through, quite shortly, the formula, but it is impossible. Let me say this quite generally, that the formula does take account of the main factors in the present inequalities, and it distributes the money in a proportion which increases as the years go by. There does not appear to be any dispute that the elements in the formula are rightly chosen, the question is whether the proportions are wrong. [HON. MEMBERS: "Oh, no!"]

I have listened carefully for two days to the Debate and the main criticism which has been directed to the proportions; that was certainly the burden of the criticism in the admirable speech from the hon. Member for East Ham North (Miss Lawrence). I am not going to embark on an argument with her but I think she will find when we come to, deal with it in detail that her two interesting lectures on the subject of the general Exchequer contribution did contain an error. She introduced a ratio upon a ratio; there is only a simple ratio between the two things. She said quite truly that everything depends on the weighting. She said that the weighting was capricious, though she seemed to resent the fact that the process of trial and error is going on. She said also that the unemployment factor in the calculations depends on the amount of the general Exchequer contribution. Without embarking on a controversy with the hon. Member may I say in one sentence that it does not. It depends upon the proportion of the general Exchequer contribution which falls to be distributed according to the formula in each successive quinquennia. It is said that this scheme is designed by the Conservative party to help its friends. It is, but not in the sense which hon. Members opposite suggest. We claim that the whole people of the country are our friends, are our concern, and we believe that this scheme is going to benefit not only industry but all who are dependent on industry, all the in- habitants of this country, and for that reason and in that sense we are legislating to help our friends.

Motion made, and Question, "That the Debate be now adjourned," put, and agreed to.—[Mr. Parkinson.]

Debate to be resumed To-morrow.

The remaining Orders were read, and postponed.