§ The MINISTER of HEALTH (Mr. Chamberlain)I beg to move, in page 58, line 1, to leave out the word "quinquennium," and to insert instead thereof the words "fixed grant period."
§ This Amendment is consequential.
§ Mr. ERNEST BROWNSurely before this Amendment is passed, the Committee is entitled to some statement as to its real meaning, because under the Guillotine we have been unable to discuss the full bearings of these arrangements. I understand the intention of the right hon. Gentleman to be that, instead of having successive quinquennia, we are to have a seven-year period and then quinquennia, but surely we are entitled to have some statement from him 366 as to the exact working out of this arrangement. I am told that there was a statement made yesterday, but though I went very carefully through the OFFICIAL REPORT—I was fortunate enough to be in Scotland yesterday, but unfortunate enough to miss the Debate—I did not observe any discussion of what I consider to be the most important issue, namely, what the effect of this arrangement is going to be upon the rating authorities in respect of the loss of yield of a penny rate in their areas. The Committee has already decided to change the present system by de-rating, which means narrowing the basis of assessment in every area. We have had no statement from the Treasury bench or any statements in the four White Papers to show us precisely how this will work out as between one area and another, and I submit that we are entitled to have from 367 the Minister, before this goes through, some statement as to what the Minister of Health thinks will be the effect of rearranging the grants on the basis of seven years and then five years in succession.
I put to the right hon. Gentleman a question shortly before the House rose in December as to loss of rates in various areas, and the figures I got did not reassure me as to the statements that have been made by the Parliamentary Secretary in the country and elsewhere as to there being no loss of rates under this new system in various areas. I believe the statement to be at least dubious. I will read the answer sent to me by the Minister:
As the estimated loss of rates for every county district in the country has not yet been ascertained"—Surely this Committee ought not to pass this Amendment carrying the whole Clause with it, when the Minister admits, in answer to a question, that they have not considered this aspect of the question in the county districts. The answer continues:it is not possible to pick out the actual extremes as desired by the hon. Member. It is, of course, possible to select cases which must be very near the extremes, and the undermentioned table gives examples on such information as is available. These estimates are based on the same-assumption as the estimates given in the White Papers Cmd. 3134 and 3227. In the case of county districts the loss is given for the rates raised for purely local purposes.With regard to counties, I would like the right hon. Gentleman to notice that Durham is estimated to lose 267d. per head.
§ Mr. CHAMBERLAINOn a point of Order. May I ask you, Captain Bourne, to give a ruling as to whether it is in order on this particular Amendment to discuss a matter which has already been settled on a previous occasion? I would draw your attention to the fact that this Clause deals with the additional Exchequer grants to counties, and the substitution of the words I have put on the Paper has nothing whatever to do with the point the hon. Member is raising. If the word "quinquennium" were left in here, for the first time in the Bill, as far as I can see the only effect would be to deprive the counties of the guarantee for the first two periods.
The DEPUTY-CHAIRMANOn that point of Order. I must admit I find it a little difficult to understand how the hon. Member makes out his argument for this particular Amendment, because as far as I can see, if the Amendment is defeated, and the word "quinquennium" stands, it will result in the additional Exchequer grant and the general Exchequer grant being administered for a different period, but it would not affect the incidence of either grant. It would seem to me that if the hon. Member wishes to raise that point, it would come better when I put the Question, "That the Clause stand part," or when we come to the new Government Amendment, when the hon. Member can discuss the whole position of the Exchequer grant, but this appears to be. not the proper place to do so.
§ Mr. BROWNI am obliged by that Ruling, but it has been very difficult to decide just when one could speak in order on this particular point, as we have never had any discussion with the Minister in the House or any information in the White Papers as to the effect of this arrangement. We have no figures except those which I will proceed to give to the Committee. It is very difficult for Members to find out precisely when it will be in order to discuss these new arrangements in their bearing on the yield of a penny rate, which is a most important issue, and has not yet been discussed in this Committee. I bow to your Ruling, Captain Bourne, and I will try to make my observations when the Question "That the Clause stand part" is put.
§ Amendment agreed to.
The DEPUTY-CHAIRMANThe next two Amendments on the Order Paper in the name of the hon. Member for the University of Wales (Mr. E. Evans)—in page 58, line 2, after the second word "the," to insert the words "sum of the," and to leave out the word "apportionment" and to insert instead thereof the word"apportionments"—are consequential on the scheme not being accepted.
§ Further Amendment made:
§ In page 58, line 6, leave out the word "quinquennium" and insert instead thereof the words "fixed grant period."—[Mr. Chamberlain.]
§
The following Amendment stood on the Order Paper in the name of Mr.
369
CHAMBERLAIN: In page 58, leave out lines 9 to 40, and insert instead thereof the words:
(2) As respects each subsequent fixed grant period if in the case of any county the county apportionment falls short of the standard sum increased by the greater of the two following sums, that is to say—
there shall in respect of each year of the fixed grant period in question be paid out of moneys provided by Parliament to the council of the county a sum equal to the deficiency.(3) For the purposes of this section, the standard sum as respects any county shall be the amount of the loss on account of rates and grants of that county, so, how ever, that—
(4) In this section the expression.
The DEPUTY-CHAIRMANBefore? call on the Minister of Health to move the next Amendment, I wish to point out that the Amendment of the hon. Lady the Member for East Ham North (Miss Lawrence)—in page 58, line 17, to leave out the words "adjusted as regards unemployment"—and the Amendment in the name of the hon. Member for West Walthamstow (Mr. Crawfurd)—in page 58 to leave out from the word "county" in line 33 to the word "and" in line 40—will fall if this Amendment is carried, and, therefore, if they wish to preserve their Amendments, they must move them as Amendments to the Government Amendment. 370 If it is desired to do that, it will be necessary to leave out lines 9 to 40, and then we can discuss any Amendments on the proposed Amendment. Until those lines are taken out of the Bill, that is not possible. I do not know precisely what line the Committee will wish to take in this matter.
§ Miss LAWRENCEOn a point of Order. Will it be possible to discuss the whole of the Clause on the Amendment to leave out lines 9 to 40?
The DEPUTY-CHAIRMANThe Minister will move the Amendment as a whole. He will move to leave out in order to insert, and that will be the time to discuss the Amendments. If any hon. Members desire to move Amendments to the proposed Amendment, we must get rid of lines 9 to 40 before I can accept their Amendments.
§ Mr. E. BROWNThe Amendments cover two distinct questions: (1) the question of the weighted population and its adjustment with regard to unemployment, and (2) the sum which is designated as the standard sum. I am not quite sure, Mr. Deputy-Chairman, whether your Ruling covers both questions.
The DEPUTY-CHAIRMANThe hon. Gentleman has raised the question of the standard sum. It is not for me to point out exactly how it can be done, but it is quite obvious an Amendment will be in order to enable the hon. Member to take that point.
§ Mr. CHAMBERLAIN rose—
§ MR. BROWNOn a point of Order. Do I understand that if the Minister moves this Amendment, it will not be in order to move the omission of lines 9 to 40?
The DEPUTY-CHAIRMANThe right hon. Gentleman is moving to omit lines 9 to 40. Consequently, if this is carried—and it is part of the Minister's Amendment—it obviously means that every Amendment must come into line with it. The Amendments must be moved as Amendments to the words which the Minister proposes to insert.
§ Mr. WALLHEADIs it your intention, Mr. Deputy-Chairman, to put this as two questions—first to "leave out" and then "to insert"?
The DEPUTY-CHAIRMANThe question to leave out lines 9 to 40 will be the first upon which the Committee will have to come to a decision. If the Committee decide that those lines are to be left out of the Clause, the question will then arise as to what words shall be inserted in their place, and that will be the moment when hon. Members, if they so desire, can move Amendments to the words which the Minister proposes to insert.
§ Mr. CHAMBERLAINI beg to move, in page 58, to leave out lines 9 to 40, inclusive, and to insert instead thereof the words:
(2) As respects each subsequent fixed grant period if in the case of any county the county apportionment falls short of the standard sum increased by the greater of the two following sums, that is to say—there shall in respect of each year of the fixed grant period in question be paid out of moneys provided by Parliament to the council of the county a sum equal to the deficiency.
- (a) a sum equivalent to one shilling per head of the estimated population of the county for the appropriate year;
- (b) a sum equivalent to one-third of the excess of the county apportionment for the period in question over what would have been the county apportionment for the period in question had the General Exchequer Contribution for that period been the same as the General Exchequer Contribution for the first fixed grant period;
(3) For the purposes of this section, the standard sum as respects any county shall be the amount of the loss on account of rates and grants of that county, so, how ever, that—
- (a) if, for the fixed grant period in question the General Exchequer Contribution is less than the General Exchequer Contribution for the first fixed grant period, the standard sum shall be the said amount reduced proportionately to such diminution in the General Exchequer Contribution;
- (b) if for the fixed grant period in question the weighted population of the county is less than the weighted population of the county for the first fixed grant period adjusted as regards unemployment, the standard sum shall be the said amount reduced (or if a reduction therein has been made under paragraph (a) of this sub-section, that reduced amount further reduced) proportionately to such diminution in weighted population.
(4)In this section the expressionI gather from what has passed that some exception is taken in certain quarters to some parts of my Amendment. I propose to wait until I hear those objections 372 developed before I address myself to them. In the present instance I think I had better confine myself to explaining as shortly as possible what is the purpose of my Amendment. The Amendment arises out of conversations which I have had with the Associations of local authorities, and the words which are now to be found on the Paper represent the agreement which I came to with them and which, I think, will be a fair one. The whole Clause deals with what is called the additional Exchequer grants to counties, that is to say what is known otherwise as the guarantees in the case of counties. The Committee will remember that as the Bill is drafted there is a guarantee in the case of every county that in the first quinquennium there shall be at least a gain of one shilling per head of the population. The Amendment which is on the Paper extends that guarantee, and while the original Bill guarantees the counties against loss in subequent quinquennia the effect of the Amendment is to continue the guaranteed gain of one shilling not only for the first quinquennium but for all time.There arose then, another point which really only affected a very small number of local authorities. These authorities represented that, although it was likely, owing to the working of the ratio which is provided for in a previous Clause, that the total amount of the Exchequer contribution would increase in subequent grant periods, nevertheless their circumstances were such that they would not benefit by that increase in the general Exchequer contribution which would merely go to diminish the amount of their deficiency which was already covered by the shilling a head which has been guaranteed to them as gain. They represented that, although population might not increase and that although their conditions might not materially change, nevertheless the rise in the standards of the services which all local authorities are likely to give in the future would demand from them some additional expenditure. Therefore, they said: "Why can you not give us some share in any increase which may take place in subsequent grant periods in the general Exchequer contribution." After discussion with them, I agreed that they should have some share in this increased general Exchequer contribution 373 Consequently, the form in which we shall find the Clause, if my Amendment is accepted, will mean that in those areas as well as in other areas there will be given to these authorities a share in the new Exchequer money which will amount to one-third of the excess over the original apportionment. But there will always be the overriding guarantee of the shilling a head. If the third is more than a shilling, they will get more, and, if less, they will get the shilling. Therefore, they are amply protected and are satisfied with the arrangement.
§ Miss LAWRENCEThe guarantee for the counties is that they shall receive, in the event of two very uncertain contingencies, a very small sum in excess of what they lost in 1928. The money value of the guarantee of one shilling per head of the population sounds a very good thing, but when who examine it with regard to the only districts which we now have before us—the county boroughs— we find that the guarantee of a shilling per head of the population sometimes represents just over a penny rate and sometimes rather more than a 2d. rate. We have no figures with regard to the counties, but the county boroughs may form some analogy. Speaking from memory of my own area, a shilling per head of the population is something in the neighbourhood of a penny rate. The amount guaranteed therefore is in itself quite small. The guarantee will not, I think, usually be more than the small sum of one shilling. There are absolutely no figures to go upon. We are in the region of hypothesis, but the general opinion is that the second guarantee gives little more than the first.
This is to be a guarantee on the sum lost in rates and grants in the year 1928, and it is a guarantee which is to apply for all time. I do not for a moment wonder why the Minister was willing to make this guarantee apply for all time when I consider the rises in rates and rateable value which have taken place even during the last ten or twelve years. I do not know whether the hon. Member for South West Bethnal Green (Mr. Harris) has any statistics of the increase in rateable value in his area due to the building of great commercial premises, but, if you take any expanding area, the rise in rateable value over a term of years amounts to a very big figure indeed, 374 To compensate for that there is to be a penny or twopence on the rates of 1928–29. The health grants, the road grants, and other grants due to a. natural expansion in a great many localities are, in themselves, sufficient to-account for another penny on the rates. To say that a penny or twopence on the rates will meet all the necessary health work and road work is to say something; which is absurd. For ever and ever the penny or twopence extra on the rates of 1928–29 is to be the sole guarantee. No wonder the Minister has extended the guarantee? It is a thing which is so small that it is of no particular use to a county and is not in the least commensurate with the loss of rateable value-and expanding rates.
This is to be subject to two conditions. First of all, the locality is to get nothing-unless the general expenditure of the-country as a whole has gone up, and, secondly, the local locality is to get nothing if the weighted population has, changed within a certain time. I comeback to a point which I have often urged, namely, that this is the worst and most cruel time to stereotype the income of local authorities. If we were back in the-old days when we had prosperous times-throughout the whole of England and Wales this particular point I wish to make now would not be a point of any importance. We see to-day some local; authorities prospering, with their rateable value going up, while other localities, the depressed localities, are sinking lower and lower. Supposing prosperity comes to certain parts of England, leaving, some districts and trades still in an unhappy condition, it might very well be that the rate expenditure of the country as a whole might go down by the removal of the frightful burden of the Poor Law. Supposing that England and Wales, generally speaking, became prosperous again and we were-able to do away with the enormous cost. of the poor and the domiciliary poor, the rateable expenditure would almost certainly, on the whole, go down. Hence you might quite well have left some districts, miserable islands in a sea of prosperity, where the expenditure on these matters will have gone up. Ten, 15 or 20 years ago that would have seemed fantastic, but it is not fantastic to-day. That is the injustice of making the 375 guarantee to these authorities depend upon the general expenditure.
The second point is one to which I shall refer more fully on my subsequent Amendment, namely, the decrease in the weighted population. A little later on we shall find that the weighted population of a place may come down even if its circumstances remain the same, on account of the reduction in the multiple? of the unemployment factor. The weighted population will change, and change very violently, even in places where the whole circumstances remain the same. I will speak on that matter in detail in connection with the Amendment which I have on the Paper. Therefore, you may have a weighted population less, but the demand the same. You cannot form any forecast of what the weighted population is going to be in future years, when you have altered the weights on which that population depends. Therefore, by imposing this second consideration, you make the guarantee so small a thing, so uncertain a thing that it is of no value at all. The local authorities have not even this guarantee. The only thing which they have got, and I think it is important, is that the operation of the formula shall be postponed for seven years instead of five years. That is a great gain.
I am glad that the Minister of Health is present, because I would like to ask him whether he can reconcile his statement with a statement made by the Parliamentary Secretary. The Minister of Health told us how he was giving money with both hands to the local authorities, to make them happy and contented, while on the other hand the Parliamentary Secretary has said that the local authorities have fought against having the full blessings of the Minister's scheme. There seems a certain discrepancy between those two statements. I should like the Minister of Health to tell us why he said that he was making every authority happy and giving them more money, more guarantees, more money in respect of the roads, while the Parliamentary Secretary tells us how strongly they fought against the establishment of the scheme, and how very pleased they were that they had been allowed to escape some of its blessings. This scheme is not scientifically estimated. It relates to two 376 guarantees which are of so hypothetical a nature that they make it a matter of uncertainty for any particular authority whether or not the guarantees will operate.
§ Mr. E. BROWNThis is rather a difficult subject to follow, and I should like to come back to the point which I have been making, but from another angle. We are now proposing to arrange for a guarantee based upon a ratio. It works out in this way. If there be an increase in the total rate-borne expenditure, the arrangement is that the ratio shall not be less than it would have been in the standard year 1928–29. It works out in actual figures that the ratio will be 25 per cent. of the total increase. If, say, the increase was £1,200,000, the Exchequer would find £300,000 and the local authorities would find the £900,000. That is very important from the point of view of the local authorities who will lose heavily in the yield of a penny rate. First of all, we have grants which are percentage grants now, secondly, we have grants which will remain percentage under this arrangement, and, thirdly, we have grants that are percentage grants now which will merge into formula grants under this arrangement. Then we have the ratio which now appears to be 25 per cent. of the total, and the guarantee that the ratio shall never be lower in subsequent years.
Seeing that we have these two kinds of expenditure now, expenditure inside the formula and expenditure outside the formula, that may work out very well in areas where the loss on the rates has been small, and the disturbance of the yield of a penny rate has also been small. What I want to know is, what is likely to be the effect of this guarantee in areas where two things happen—fir3t of all, where there is a great disturbance in the yield of a penny rate, so that it comes down. I have in mind the case of a small borough where the yield of a penny rate comes down by £489. That is an enormously heavy decrease in the yield, through de-rating, in a very small borough. Suppose, first of all, you get this heavy loss in the area and there should be also a great increase of total expenditure, due to causes not now foreseen, I want to find out what the effect of the ratio will be in that particular area. By the admission of the Minister's 377 own Memorandum the ratio will only work out at 25 per cent. of the total increase. If that be so, and you have three-fourths of the increased expenditure under this new system coming down on the area, will it not mean an excessively heavy burden in every case where the yield of the penny rate has been decreased heavily?
I read last week a new book on Edinburgh, and I found therein a story which seems appropriate. Baillie Smith, in 1795, was elected to the Edinburgh Corporation. Being a banker and financier, the first thing that struck him was the magnitude of the financial operations. He asked his fellow councillors whether any books were kept. They said that they did not know, except that once a week the city chamberlain—an appropriate name at the present moment—the city treasurer, put his cash-book on the table. When he had examined it, he said: "I went into it, but I confess that I never understood it," and I think he said that the city chamberlain never meant it to be understood by the corporation. It strikes me that this scheme in the Bill is not meant to be understood by members of local councils, or by Members of Parliament, and I include myself among the number. I am making my inquiries to-day on behalf of authorities which will lose heavily.
The Minister has given me certain figures. In regard to the counties, the county which will lose most on the rates is Durham, with 267d. per head, or £1,108,000. Surrey comes lowest among the counties, with a loss of 58d. per head, equivalent to £188,300. Of the county boroughs, Burton-on-Trent loses most heavily, to the extent of 316d. per head, amounting to £64,000. South end loses the least with 18d. per head, equivalent to £7,800. Of the non-county boroughs, Middleton, in Lancashire, loses most with 220d. per head, amounting to £26,000, while Richmond, in Yorkshire, comes lowest with 15d. per head amounting to £254. Of the urban districts, Greasborough ranks the highest with a loss of 308d. per head, amounting to £13,200, while Wanstead is lowest with a loss of 1d. per head, totalling £80. In the rural districts, Rotherham comes highest with 56d. per head, amounting to £s,700, and Stockbridge lowest with 1d. per head, amounting to £20. In Durham, 378 the estimated loss on the yield of a penny rate is £4,080, while in Surrey it is, £1,750. I can imagine the Minister saying that owing to the arrangement which we are discussing, and the new formula based on weighted population, plus the guarantee, Durham will not merely lose by loss of rates, but will gain by the new arrangement, and therefore may be better off. My point is that inside the county of Durham there will be districts not getting the general county guarantee but getting a distribution according to a, secondary distribution, not on weighted population but on actual population.
I have consulted people who are connected with the smaller authorities, who, have not had the opportunities of discussing with the Minister that the larger authorities have had, and I find that there is intense anxiety amongst these smaller authorities as to what this artificial new arrangement, plus the guarantee, which they say they do not clearly understand, will mean. We want a clear statement on the point. First of all, what does this new guarantee mean in terms of an area not gaining; by the formula, losing in terms off application by the actual population, if that area also loses heavily in terms of de-rating? I can assure the Minister that there are a great many people, local administrators, who are intensely worried: because they fear that, despite the guarantee and the maintenance of the ratio on the basis of a standard year, where they lose heavily on the yield of a penny rate they fear that any increased; expenditure not met by the guarantee will fall very heavily on the remainder of the ratepayers in the area.
§ Mr. ARTHUR GREENWOODThe Minister's explanation was all too brief, more especially as he did not refer to. Subsection (3), which is a little obscure; and in regard to which we should have welcomed a rather fuller explanation of the new Amendment. This Amendment is one to make provision for an illusory guarantee which the right hon. Gentleman has given to the local authorities. There is a quite sincere belief in many quarters that this overriding guarantee and the modified guarantee are substantially guarantees which may be of value to the local authorities. I am not sure that that will be so. Every reference to this matter always refers to the 379 increase of rates within the scheme, but even within the scheme it does not seem to me that this new guarantee is going to ensure county authorities against possible increases of rates.
After all, a diminution in the rateable value of local authorities is part of the scheme, and it is going to put those local authorities whose needs are greatest in the greatest difficulty. It is those areas which are highly industrialised which are losing the greater proportion of their rateable value. The hon. Member for Leith (Mr. E. Brown) has pointed out that the County of Durham will lose something over £1,000,000 in rateable value, while the County of Surrey will lose quite a small sum, the difference being due to the fact that in the County of Durham there are a larger number of hereditaments which are to be de-rated under the scheme. The County of Durham is going to lose something like one-quarter of its rateable value. That will mean, for the ordinary ratepayer who has not had his rates reduced, that to expend the same amount of money as to-day, a 4d. rate will be necessary instead of a 3d. rate; and this will be the case for all expenditure whether it arises from expenditure on health services or other services. It will affect also expenditure outside the scheme.
The Government have published innumerable figures, all of them of a hypothetical character, none of them worth anything at all, and the right hon. Gentleman has had to apologise for them. I do not blame him, because they are the best figures he could give in the circumstances. In the nature of things the ultimate financial effect of the scheme lies in the future, and he cannot calculate it now.
We have had masses of these figures showing the gains which were coming to county authorities. Whether those gains will accrue or not nobody knows; nobody knows whether they will accrue within the scheme. I am going to suggest that they will not; and for this reason. If you take the areas which are losing most in rateable value, the industrial areas, you have there just those areas where local expenditure is higher than elsewhere; at any rate, the social needs are more pressing than they are elsewhere. In a county like Durham, 380 with its large industrial population, with its need for schools and all forms of public provision, the expenditure is bound to be more considerable than in more fortunately circumstanced areas, and yet this area is one which is going to lose more than many other county areas because of the mining industry and other enterprises situated there. It loses 25 per cent. of its rateable value. It is going to have an increase of its rate poundage by one-third for all expenditure in the future. To raise £50,000 in the County of Durham in the future will obviously need a higher rate than is necessary to-day for every item of expenditure, whether it is for roads or health services, or for services outside the scheme, or for services helped by State grants or for services which do not get one penny of State grant. The money will have to be raised at the cost of extra rate poundage.
What we want to be assured about is that the alleged gains under the scheme and the guaranteed profits under the scheme will be sufficient to protect county authorities from an actual increase in rate poundage. I am not saying that they need spend any more money, but if a county spends the same amount of money as it does now, I do not see that the guarantee is going to ensure it against an actual increase in the amount of rate poundage. That is what the ordinary householder and the ordinary un-derated taxpayer has to consider. It would be useful if we could have an assurance that the gains per head of population, the alleged gains, are going to be sufficient to cover this diminished rateable value for expenditure inside the scheme and also the diminishaed rateable value for expenditure outside the scheme. Many local authorities are under the impression that they are going to be guaranteed against an increase of rates. The Minister of Health has never said that.
§ Mr. CHAMBERLAINRates due to the scheme.
§ Mr. GREENWOODThat is the whole snag in this Bill. That is where, quite unwittingly, the public of this country are being misled, and that is what I am trying to point out. I am going to say this further, that even within the scheme we have no certainty that rates 381 are not going to be increased. Certainly no statement has ever been made to the effect that rates are going to be stabilised, although the impression one would gather from the newspapers and the speeches of hon. Members opposite outside this House is that there is something in this scheme which is going to stabilise the rate level. Nothing could be further from the truth, and the Minister of Health, to do him justice, has never suggested any such thing. But the inference has been there. What is specially important for many local authorities is this; that the guarantee should work in such a way that the whole expenditure should not be borne on the increased rate poundage. There is nothing in this scheme which secures that this will take place. What will happen is this. Suppose you have a local authority, a large county council, spending about £100,000 a year on education; its rateable value is diminished by a quarter. In that case the £100,000 is going to entail a higher rate upon the ordinary ratepayers of the county and the guarantee is going to be quite ineffective to deal with that problem at all.
We cannot argue, on the general figures, the gains and losses because they are hypothetical, but my own view is that where there are alleged gains within the scheme those gains are going to disappear into the air when the full expenditure of a county authority is taken into account. The expenditure of a county authority outside the scheme is as important as its expenditure inside the scheme and this has been recognised by the Minister of Health. He has said: "rates are £150,000,000; I am going to give you 25 per cent. of that this year and to ensure you 25 per cent. of that amount always." He has recognised the total expenditure of local authorities outside the scheme as well as inside the scheme. And local authorities must clearly have regard to that. This guarantee in itself is nothing. Even if it is likely to bevreal it is only in a minority of cases that it is likely to be effective. How large is it? It is a guarantee of a 2d. rate; that is to say, if they do not gain the Government will at least ensure them a gain equivalent to a 2d. rate on that expenditure within the scheme. If the Government believed that most counties were going to get a 382 substantial gain they could have afforded to have given a much higher guarantee than a 2d. rate. This guarantee is the measure of what they believe a county authority is going to get out of the scheme.
If it is argued that most local authorities are going to get substantial gains from the scheme then clearly the Government ought to be in a position to put all county authorities in the same position and they would have submitted a guarantee which in itself which be comparable with the gains which the county authorities were going to make. The sum of 1s. per head is the measure of what the Government thinks local authorities are likely to get out of the scheme. I should like the right hon. Gentleman to deal with this particular question. I have been wanting to raise the question of expenditure within the scheme for a long time past and I want it to be made quite clear to the House and the country that this so-called guarantee in respect of rates only applies to expenditure which can be brought within the scheme. It does not apply to any expenditure outside the scheme, such as education, and it does not necessarily mean that the guarantee will be effective, because within the scheme rate poundage is going to be affected through the reduced rateable value, which will be the greatest in those areas that need local services most.
§ Mr. MORRISIt has already been pointed out that this scheme falls into two parts. There are the percentage grants and the grants within the scheme itself. It must be remembered that the losses which will fall ON some areas will not only affect industrial areas, but agricultural areas as well. Take a county which is almost entirely agricultural, but where there is one substantial urban town in one corner of it. That is the case in my own division. I have one university town with a fair population, but the whole of the remaining area is agricultural. Under the Bill, as far as agricultural land and buildings are concerned, that area, will be entirely de-rated. Obviously, that will add to the burden of urban ratepayers. In considering this Amendment we have to take into account the standard sum. All calculations and 383 guarantees are to be based on the standard sum, which is defined as:
The amount of the loss on account of rates and grants of that county.That is, the loss on account of rates and grants provided for by the Bill. In the case of agricultural authorities it becomes perfectly clear that all the losses in respect of the Act of 1896 and all the losses in respect of agricultural buildings are not provided for at all by the guarantee and will not be affected by it, and that sum therefore will fall all the heavier on the area if the expenditure outside the scheme is increased. It will add to the burden of the losses on agricultural buildings and land within the county and will fall on a smaller number of ratepayers. The formula does not touch the position in agricultural areas at all unless the Government amend the Bill, and I hope the Minister will amend it, and deal with the losses under the Act of 1896 and the losses on agricultural buildings.
§ 5.0 p.m.
§ Mr. COVEBefore the Parliamentary Secretary replies, I would like to refer to a point which I raised last night. It has been mentioned by my hon. Friend the Member for Nelson and Colne (Mr. A. Greenwood). It has already been said that this guarantee does not apply to services outside the scheme. As a matter of fact the operation of the scheme is such that, as the guarantee does not apply to a service like education, which is outside the scheme, the effect will be to cause a great increase in the rate poundage in the case of that particular service. Last night I gave the particular case of Glamorganshire. There the scheme has been subject to very careful examination on the figures of the year 1926–27. I find that there the operation of the scheme is such that the education rate will be raised by a sum of about 1s. 10d. in the £. I ask the Parliamentary Secretary to tell us whether that statement is not correct. Will he tell us whether it is true to say that the guarantee, as we assert, does not cover a special service like the education service, and that the education service will be strictly limited by the present Board of Education grants?
The position is 6uch that it is quite possible even to have a general reduction of rates for other services, whereas 384 the particular services of education and the police, for instance, not being covered by the guarantee, will call for a drastic raising of the rate poundage in order that those services may be carried on. It must be remembered that the rate poundage will not only be raised by any new and additional burden on account of education, by any new duties imposed by any Act of Parliament, but will be raised automatically by the natural development of the existing service. A scheme such as this, even from that point of view alone, can be truthfully described as a scheme which gives a fictitious guarantee to the ratepayer. The guarantee has no relationship at all to the contribution of individual ratepayers throughout the county. If the guarantee were to apply to individual ratepayers, it is quite obvious that the flat rate distribution to the urban district and rural district councils would have to be amended. That fact alone destroys the guarantee as a substantial guarantee to the individual ratepayer.
Then I think we can look at it from another angle. It is all very well to-come along and say that the Government guarantee the ratepayers in the county a shilling, but what about the losses that they will have sustained? As a matter of fact, if one examines the scheme as a whole, it will be found that the existing financial arrangements would have benefited the ratepayers throughout the area by a sum of £22,000,000 more in five years than this scheme provides. I find, for instance, that you are to take away the sum of £21,000,000 in grant. You are going to take away a sum of £26,000,000 in rates that are now accruing to the authorities up and down the country. In place of the £47,000,000 you are going to give a new sum of money, over a period of five years, of about £25,000,000. Therefore, taking the country as a whole, it stands to lose no less than £22,000,000. Again the guarantee under these circumstances is an unreal one. What I am saying is quite correct. You are taking away the present grant income, which is an expanding income. You are taking away the present rate income, up to £24,000,000, which is an expanding income; and you are subsituting for that a fixed block grant with this fictitious guarantee, which is no guarantee under the circumstances.
385 The relevant and pertinent thing that we have to remember is that the guarantee applies only within the scheme, and that it has nothing to do with expenditure outside the scheme. Outside the scheme you have the tremendous expenditure on education and the high expenditure on police. Those millions are entirely outside the scope of this guarantee. Then what is its worth, especially when you remember that when the scheme comes into operation these services outside the guarantee will have to be continued on a rate value which has been restricted by the de-rating of industry and of agriculture? I see that the President of the Board of Education is present. I would like to tell him that there is great anxiety about the service for which he is particularly responsible. Education authorities are exceedingly anxious about education, as he ought to know from the expression in their official organs. Is it intended—I believe it is intended—that the harassed ratepayers, so far as education is concerned, shall be the missionaries for drastic economies in education?
The whole scheme, so far as these services outside the guarantee are concerned will mean rates leaping up immediately and drastically. We shall find that the result of the scheme will be to raise the anger of the ratepayers against social services such as education. The guarantee therefore is worthless. The financial scheme as a whole is a snare and a delusion. The authorities will not benefit. Increasing social expenditure will be increasingly borne by a few ratepayers, the householders and shopkeepers throughout the country. Therefore I shall oppose the scheme for all I am worth, knowing that it will involve drastic economies in education, unless we can turn this Government out and substitute a better scheme for that which is before us.
§ The PRESIDENT of the BOARD of EDUCATION (Lord Eustace Percy)The hon. Member for Wellingborough (Mr. Cove) has repeated certain remarks which he made last night. I was not present then, but I have read the report of his speech. I will not deal with the general trend of the criticism on this Amendment, but I should like to deal very briefly with the educational point. I am much obliged to the hon. Member for telling me that there is grave anxiety 386 among local education authorities. I think I know exactly what the feeling among them is. Two days ago I had a conference with the Local Authorities Committee on Grants, representing all types of local education authorities, and I found no difficulty, in three-quarters of an hour of discussion, in removing all misunderstanding, and I think practically all apprehension on the subject. No member of that Committee indulged in the kind of remark that the hon. Member for Wellingborough has indulged in to-day. He will forgive me if I say that I really think he has been indulging in a piece of almost deliberate mystification. There are two quite simple points that the hon. Member raised, so far as education is concerned. One is the fact—this is the point stripped of all mystification—that the Government grant under this Bill, while it is a grant which covers the loss of rates on all services, education just as much as any other service, is paid into the general county account, and therefore it goes in relief of the general county rate—
§ Lord E. PERCYThat is one thing. Therefore the general county rate will appear to be greatly reduced while the education rate may be higher in poundage than it is now.
§ Lord E. PERCYThen the hon. Member's point, which he thought justified him in making all these attacks about the Government stabilising expenditure on education and arresting educational development and so on, comes down to this—that while the ratepayer will have to pay, say in Glamorganshire, 5s. or 6s. in the £ less rates than in 1926–27, and while the amount of rates that he would pay on the general county rate will be more than 5s. or 6s. less, as against that he may see his nominal poundage on the education rate go up a little, say by 1s. 10d. So that he still remains a net gainer of 5s. or more under this Bill. That is the fact. Therefore, the only point that the hon. Member has got is this: that this grant while it is an adequate compensation, is paid into a particular local account, and therefore he thinks that the local ratepayer, being a very stupid person, will say, "Oh, look! The general county rate has 387 gone down by 5s., 6s., 7s. in the £. but the education rate has gone up by 1s. 10d. in the £. How extravagant the Education Committee must be—
§ Lord E. PERCYThey will then say: "We must immediately start trying to cut down educational expenditure." That is the point. I do not think that the ratepayers are quite as stupid as that. Therefore I do not think the point has great force. But still it is a point, and I recognise that. for what it is worth, it ought to be dealt with. What I told the local authorities the other day was that that point, I thought, could be dealt with in the form of the rate demand note. The Minister of Health has to prescribe a form of rate demand note. It would be perfectly easy to devise a form of demand note which would show the ratepayers what are the facts of the case, and forestall any possible ill-informed and misinformed criticism as to the cost of education.
The other point is that a certain number of Part III authorities, being non-county boroughs or urban districts, will not get the guarantee of the extra shilling, but will get only the guarantee of the actual amount of their losses. Rhondda is not amongst them; it has been unable to undertake any urgent educational work for years past, and the effect of this Bill will be for the first time to put the Rhondda in the position, if it wishes, to spend a little extra on education. That is the opinion of the Rhondda education authority, as the hon. Member knows perfectly well. A certain number of Part III authorities will probably be in that position.
It is impossible to give accurate figures at present as to what the position of those authorities will be, but, on that, I told the local authorities, and I repeat it now, that if it is found that some of these Part III authorities, owing to the reduction in their rateable value are in a real difficulty in meeting the needs of the education service in their areas, then the Board of Education will certainly have to consider what variations or amendments can be made in the percentage grant to meet the needs of those 388 localities. Under the system of percentage grants for education, the Board has full power under Statute to vary the formula in order to meet the needs of different areas as they arise, and the Board of Education will certainly take that situation into consideration when it arises. But all these wild prognostications as to what will be the position of particular Part III authorities are based on pure guesswork. None of the figures which have been given about particular Part III authorities has any solid foundation, and it is useless to guess on this subject at present.
§ Mr. RENNIE SMITHA certain amount of mystery has attached to the Debates on the finances of this proposal. We are getting a great deal of fun out of the discussions but not much information. I was exceedingly glad to hear the hon. Member for Nelson and Colne (Mr. Greenwood) put the main central difficulty in such a plain, blunt way. During an earlier stage of these discussions I gave the Parliamentary Secretary the example of my own constituency in order that he might try to formulate a specific answer in place of the very vague general principles which we have been discussing now for several weeks. I have in my constituency 13 urban district councils and two rural district councils and in regard to them I would like an answer to the question which the hon. Member for Nelson and Colne has put to the right hon. Gentleman.
§ The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood)On a point of Order. As the Committee are aware, I do not wish to curtail discussion, but I would point out to the Chair and to the Committee that this Amendment simply deals with the guarantee to counties. If we are to have a general financial discussion so be it, but I submit that we are now travelling rather a long way from the Amendment.
§ Mr. E. BROWNSurely we cannot discuss the general financial guarantee to the county without recognising its effects on the districts inside the county. It is impossible to disentangle the discussion on the one question from all the other consideration involved. Seeing that the Committee have had no chance of a general financial discussion we ought 389 to be able, on a proposition of this kind affecting the whole finance of the scheme, to discuss all the points at issue.
§ Sir K. WOODI must point out, first, that the hon. Gentleman himself is now seeking for a general financial discussion and, secondly, that he is seeking to bring into this discussion the question of county districts. That as he knows is dealt with in a Clause which I hope we shall reach shortly. All the observations which the hon. Gentleman himself has been making deal entirely with the county districts and have nothing to do with this Amendment.
§ Mr. BROWNI must ask the Parliamentary Secretary to refresh his memory, and he will find that I quoted figures given by the Minister. The first set of figures dealt with counties—Durham and Surrey—and with county boroughs. The point at issue as regards the effect on the yield of a penny rate is the same, whether it is a county district or a county which is concerned. The fact of the matter is that neither the Minister nor the Parliamentary Secretary have ever given Parliament or the country a clear statement and they have no adequate tables of figures with which to back up their statements.
§ Mr. COVEMay I submit that the President of the Board of Education in his reply dealt with Part III authorities? We have something further to say about that matter which is of great interest, and since the Noble Lord roamed over the whole field, is it not right that we also should have the privilege of roaming over the whole field?
§ Mr. MORRISIt is very difficult to omit these matters from consideration altogether in discussing this Amendment which really deals with the question of the guarantee and the standard sum. There is the further difficulty that we are discussing the operation of this Amendment very largely in the dark. I have myself as the Parliamentary Secretary knows put down questions asking as to the effect of this proposal in my own Division and I have not yet had a reply. Therefore I am compelled to discuss this matter in the dark, and I, certainly, 390 should like some information in regard to the financial part of the proposals.
The DEPUTY - CHAIRMANThe Amendment which has been moved by the Minister as I understand it, is intended to provide that, so far as counties are concerned, there should not be a loss due to the introduction of the scheme proposed in the Bill. I think it is relevant to the argument as to whether or not a loss will arise, to deal to some extent with the effect of de-rating in a particular case as showing a possible loss and indeed it is only in that way that we can say whether or not the new scheme does in fact involve a loss. It would not be in order on this Clause to argue the question of county boroughs because that is dealt with separately; but I do not think I ought to prevent some discussion on that matter because it seems to me that it is impossible otherwise to argue whether or not this proposed Amendment carries out the intentions of the Government.
§ Mr. RENNIE SMITHI am grateful to you, Captain Bourne, for your ruling. If the Parliamentary Secretary looks at pages 51 and 54 of the White Paper he will get the ease to which I would draw his attention. There he will find an analysis showing how the proposals of the Government would have affected the administrative county of Yorkshire prior to the further Amendment which has been moved this afternoon. I have taken the trouble to go in some detail into the figures concerning the areas which come within my constituency in order to make the case a little simpler for the right hon. Gentleman's consideration. In my constituency there are 13 urban district councils and two rural district councils. Comparing the poundage rates for 1926–27 with the estimated poundage under the scheme, before the payment of the supplementary Exchequer grant, and then taking the figures in the third column set out in the White Paper, I find that my local authorities would be in rather a bad way as a result of the operation of the scheme. In the column showing the estimated poundage rate under the scheme, before the payment of the supplementary Exchequer grant I find that these 15 local authorities are going to lose something like 4s. 9d. in the £ taken collectively and some of them will lose 391 as much as 2s. It is true that when the supplementary Exchequer grant is paid there is a rough balancing out of these losses.
I asked the Parliamentary Secretary before the Amendment was moved would he undertake to say that these 15 local authorities would be just as well off, from the point of view of rates, after the Act came into operation as before? The right hon. Gentleman did not give me an answer and these local authorities are still pestering me just as they are pestering him with the same question. It is the question which the hon. Member for Nelson and Colne (Mr. Greenwood) has put in regard to the country as a whole. What is to be the incidence of these financial proposals upon particular local authorities in counties? That is the real point at issue. I would like the right hon. Gentleman to answer that question. I think it will be of the greatest possible value for the purposes of the next General Election if the Parliamentary Secretary will now say, "Standing at this Box, after all this mystery talk, I hereby declare that these 15 local authorities as representing the country can be assured in advance that their rating position will not be one penny the worse over the next 19 years, after this Amendment." I cannot remember that once in the last four years the Parliamentary Secretary has given a plain, straight answer to a plain question. I want the right hon. Gentleman to redeem his character this afternoon and put an end to this mystery by giving us a plain answer.
§ Sir JOHN MARRIOTTIt is desirable that some words should be said from the back benches on this side in reference to the Amendment because I think it must be obvious that it is of the highest possible significance. No one could have listened to the speeches of the hon. Member for Leith (Mr. E. Brown) or the hon. Member for Nelson and Colne (Mr. Greenwood) without seeing that questions which are exercising the country as a whole, without distinction of party, are being raised by the Amendment. I am not going to enter upon the point at issue between the hon. Member for Wellingborough (Mr. Cove) and the President of the Board of Education. I need hardly say that I do not desire to 392 associate myself with the violent language of the hon. Member for. Wellingborough. I am not going to talk about snares and delusions in connection with this Amendment. But I wish to associate myself with the very moderate and closely reasoned speech of the hon. Member for Nelson and Colne. I am willing to assume and I do assume that there will be an explicit answer to that speech from the Parliamentary Secretary. I only wish to say that anxiety in regard to the questions which have been raised in this Debate is not confined to Members on the other side. I know from personal experience that these questions are arousing considerable anxiety among local authorities in all parts of the country. I am a cordial supporter of this Bill and on that account I hope that the temperate, closely-reasoned speech of the hon. Member for Nelson and Colne will receive from the Parliamentary Secretary an unqualified and explicit reply.
§ Mr. TOMLINSONI wish to ask the Parliamentary Secretary why the general Exchequer grant is to be distributed to the counties and county boroughs on the basis of weighted population and distributed within the counties on the basis of actual population.
§ Sir K. WOODIf I can only earn the commendations of the hon. Member for Nelson and Colne (Mr. A. Greenwood), I shall indeed feel very grateful, and think that I have not spent this day in vain. May I, for a moment, before dealing with some of the points that have been put to me, recall to the attention of the Committee this Clause and this Amendment, because, after all, they are our first consideration. The Clause with which we are now dealing is one which provides for the payment of additional Exchequer grants; in the case of those counties where the county apportionment falls short of a certain amount, and such counties will, of course, be in the minority. I may at once tell the Committee that, so far as this particular Clause and this Amendment are concerned, they affect only seven counties out of 62. That, I think, is some tribute to the financial arrangements of the rest of the Bill.
§ Mr. E. BROWNMay I ask—
§ Sir K. WOODNo.
§ Sir K. WOODI have listened with courtesy and silence to the hon. Member.
§ Sir K. WOODI will give way in a minute, but I want to pursue this matter, because I think it is worth while to emphasise that in fact this Amendment and this Clause affect only seven counties out of 62. When the hon. Member for York (Sir J. Marriott), who has now left the Chamber, says there is anxiety up and down the country, I am afraid that he evidently does not know that at any rate, so far as the vast majority of counties are concerned, there is to be no question at all as to giving them any additional contribution or guarantee under this scheme, and so far as the counties in question are concerned, there are only seven out of 62 affected. That is my first point which I think is very relevant having regard to the statements that have been made concerning the great anxiety of many counties in this connection.
In our original proposals, as many hon. Members know, we undertook to give a guarantee for the first five years of a minimum gain of one shilling per head of population. The object of this Amendment this afternoon is to complete the agreement which we have made with the representative associations of local authorities, who have, as hon. Members have repeatedly told us in the course of these debates, given great consideration to this matter in the light of expert advice. Following my right hon. Friend's negotiations with them we have now come to a certain agreement, and that portion of the agreement which affects the guarantee to counties is embodied in my right hon. Friend's Amendment. Instead of the guarantee of the shilling being only for a limited period as in our first proposals, that guarantee is now going to be given for all time.
Secondly, it, was pointed out to us by the local authorities that that shilling would in certain events not fully meet their case, even if it was given. It might not secure any contribution from any further new money added to the general 394 Exchequer contribution for future grant periods. Therefore, in order to meet that further point, we have embodied in our Amendment an alternative, which is to the advantage of the local authorities, because we say that if this comes on to the Statute Book they shall have whatever is the better for them, either the extra shilling or their fair share, as detailed in the Amendment, of the general Exchequer contribution. That Amendment has been arrived at by agreement with the local authorities concerned, and it translates into legislative form the undertaking which we gave to them when we came to an agreement. My answer to the statements made this afternoon is, first, that this Amendment only affects a very few of the counties, and, secondly, that it is the agreement which we have arrived at with the authorities concerned.
We are now confronted by observations and suggestions by hon. Members opposite, who know better than the local authorities themselves and who say that this arrangement is not a satisfactory one and that all sorts of difficulties and troubles may ensue. The hon. Member for East Ham North (Miss Lawrence) described this as a small amount. Whatever amount had been fixed, that is a criticism which could be offered by any Opposition. Secondly, she said that the alternative, that portion which would entitle the councils in certain events to get some share of the new money, is not likely to be of any use at all. The answer to that is that, if that were so, why did the authorities ask for it and why are they in agreement with it? As a matter of fact, that was one of the important points that was advanced to us by the local authorities in connection with their guarantee under this Bill. Therefore, for anyone to get up, without any knowledge, and say that this is worth nothing is directly opposite to what the local authorities themselves desired and asked for.
Then I am confronted with a series of questions as to what will be the ultimate result of these guarantees, and I am invited to give answers in regard to county districts and county boroughs in individual cases, not only as to what would be the result of this guarantee, but as to what would be the result of the whole scheme. The hon. Member for Nelson and Colne asked if I would give a 395 guarantee that under all circumstances rates would not go up. That is really what it came to. Who would possibly give a guarantee of that kind? Who would guarantee that Poplar's rates would not go up? Why, even the hon. Member for Bow and Bromley (Mr. Lansbury) would not give that guarantee, careful as he is about the finances of the municipalities. Obviously, no one could give a guarantee of that kind, but what we Gave done, both in the White Paper and in the speeches of my right hon. Friend, is to give the figures and the calculations, based on the best advice and data we have had at our disposal, and for the years we have mentioned, showing what we consider, subject to the conditions set out in the White Paper, will be the results of this scheme. I have been told this afternoon that Durham would be in a dreadful position as a result of this scheme.
§ Mr. E. BROWNNobody said anything of the kind.
§ Sir K. WOODI happen to have the figures on the basis—
§ Mr. BROWNWill the right hon. Gentleman allow me to intervene now? I expressly said two things about Durham. I gave the figures for loss of rates which he gave me, and then I went on to say that it was true that by the working of the scheme Durham would also gain. My point was not that at all. The excess, of course, according to the formula is greater than the loss of rates in Durham. The point is that when all this sum is distributed in Durham there still remains the point which the right hon. Gentleman will not meet, namely, that upon the distribution of this sum depends what the other authorities inside the county will get. We can get no figures about that, and if they lose heavily and increase their services they are in jeopardy.
§ Sir K. WOODI think the hon. Member has made a very good intervention on that point. Let me now make my observations and say, in the first place, if I am permitted to do so, that as far as the districts within a county are concerned not only in Durham but in other counties under the Amendments which we shall be discussing later, which are really more appropriate to this matter, 396 we shall be guaranteeing to every district within a county as a result of this scheme—obviously we cannot go further than that—that for five years no district will lose; and, further, we say this, that the inter-county arrangement, can only proceed for a further period of two years, after which, under another Amendment, there will be a full inquiry into the whole of the operations of that financial scheme in conjunction with the local authorities.
Therefore, my broad reply is this, that whatever anxieties, difficulties, or apprehensions you may have as to the working of any new scheme, which you must naturally have when you are making big alterations of this kind in local government the fact is that we have met the local authorities by saying that at any rate—I am not now using technical language—so far as counties are concerned they have got this guarantee, as far as county boroughs are concerned they have their guarantee, and as far as the districts within a county are concerned, they have the guarantee against loss for the first five years. Secondly, even the inter-county arrangements will continue only for a further period of two years, when there will be a general inquiry into the whole of the operation of the scheme in conjunction with the local authorities concerned. As the local authorities are in agreement with us on the matter, that really gives the greatest assurance that we can have in making an alteration of this kind in the scheme. I will not state the advantages that will follow—hon. Gentlemen know that for themselves—but I would like to give concrete figures, not as regards apprehensions or fears, but on the basis that was presented in the White Paper, and subject to all the reservations made in the White Paper. When I hear people saying that as a result of this scheme rates are going up and local authorities will be bankrupt, and suggestions of that kind, I reply that that is not what the local authorities are saying. Hon. Gentlemen may say that local authorities nave forced us into this arrangement, but, at any rate, this is the agreement that has been arrived at. Take a county like Durham. It is only fair to refer in a case like that to the very considerable relief which industry will receive— £1,100,000 a year.
§ Mr. GREENWOODThat is not the actual relief to the coal industry?
§ Sir K. WOODNo, to the administrative county, and in respect of the relief to the productive industries. I am entitled to bring that forward as the first measure of relief to the county in view of the statements which have been made this afternoon. Hon. Members may argue, and it will be for the country to decide, whether in fact that portion of the relief is good for Durham or not. That is a matter which, obviously, the electorate can decide for themselves. When you come to the relief of the ordinary ratepayers of Durham, in the case of the administrative county, on the same basis as I have indicated, the relief will be equivalent to a sum of £236,000 a year. I say again that that is not an inconsiderable sum. As a matter of fact, in regard to the County of Durham, there is a matter which has not been mentioned in these debates, and it ought to be mentioned. There is a considerable relief in addition which Durham will be receiving through our proposals for dealing with what we call the Goschen loans.
Therefore, if you take all these things together, I am not surprised that the local authorities should have come to an agreement in this matter, and, as a first consequence, we are moving this Amendment. When I hear hasty and ill-considered suggestions that large sums of money of this kind should be regarded as of no assistance, and that the local authorities are objecting, I must confess that I cannot understand it. Take a matter about which I thought everyone was in agreement, that is, the fact that the national Exchequer ought to bear a. larger share of the total burden. Again, in relation to Durham, the contribution from the national Exchequer is raised from 38 per cent. to 60 per cent. Figures like that, which have authority behind them, should do away with the fears and apprehensions that have been mentioned. At any rate, as far as this Amendment is concerned, it will be very foolish for the Government to deviate from it, inasmuch as they have now come to an agreement with the local authorities. I commend it to the Committee as meeting the desires and wishes of the local authorities, and because I believe that it will give added strength and added guarantees to the local authorities, and 398 will mitigate those difficulties and doubts which have naturally arisen in connection with an important and far-reaching scheme of this kind.
§ Mr. GREENWOODIs not the right hon. Gentleman going to make an attempt to reply to the speech which I made? Surely we are entitled to a reply. If the right hon. Gentleman is not going to reply, I must proceed to put my point again. I am glad that the President of the Board of Education is present, because he has confirmed what I said. I do not quite agree with my hon. Friend the Member for Penistone (Mr. Rennie Smith) that we have learnt nothing. We have learnt a great deal, and valuable admissions have been made this afternoon, and misconceptions have been removed; but we have not had a reply to the part of the case that I made, and, as far as I am concerned, we shall not leave this question until we have had a reply. The President of the Board of Education made the admission that there would be a higher rate poundage for education. That is precisely what I said. He altered it later and called it a nominal rate poundage, but he knows that there is no such thing. A rate poundage is a rate poundage. Then he proceeded to argue that Glamorgan will gain 5s. or 6s. in the £, and that, although it will lose 2s. because the education rate will go up that amount, the net gain will be 4s.
§ Lord E. PERCYI did not say that. I took a particular district as being shown in the White Paper as gaining 6s. in the £ We will assume that that calculation is correct, and that the calculation of the hon. Member for Wellingborough (Mr. Cove) that the education rate is going up by 1s. 10d. is correct. Ignore for a moment that that 6s. gain is made up of various rural district council rates as well as the county rates, and take the county rate only. The effect would be simply that the general county rate would be shown as going down not by 6s. but by 7s. 10d., the net gain remaining precisely what it is in the White Paper, 6s.
§ Lord E. PERCYFor the purposes of argument.
§ Mr. COVEIf the Noble Lord accepts that figure for the purposes of argument, he must accept the other figure for the purposes of argument, that is, that the gain to the general county rate is not 4s., 5B., or 6s., hut exactly 1s. 10¼d. If the right hon. Gentleman accepts one figure he must accept the other figure worked on the 1926–1927 basis.
§ Mr. GREENWOODWhat the Noble Lord did convey was that in any area you like there will be a reduction of rates as the result of this scheme, that there will be an increase of the education rate, and that, even though it were true that the education rate increased, there would still be a net gain to the ratepayers. That was the argument used by the President of the Board of Education.
§ Lord E. PERCYAll I am anxious to get clear is that when the White Paper shows a gain for a particular area, that gain is an actual net gain after taking into account any increase in the rates, education or police, which are outside the general county rate, and that, therefore, all this talk about the education rate going up does not affect the truth of the statement in the White Paper that in such and such an area the net gain will be a certain amount in the £.
§ Mr. GREENWOODI will put it more simply. Let us assume that a county council is spending £100,000 on education this year. Let us assume that it will spend precisely that sum next year and in succeeding years. The education rate will increase because, as a result of de-rating, in no county of the country will a penny rate bring in what it did before. Is that or is that not right?
§ Lord E. PERCYEven that is not right, because the hon. Member has left out of calculation the fact that the Board's grant is partly based upon a calculation of the yield of a sevenpenny rate. There are cases where the reduction in the assessable value, and the consequent increase in the poundage of the education rate, may be off-set by the fact that the yield of a sevenpenny rate is deducted from the Board's grant, and that that deduction will be smaller in future than it has been in the past. That must be taken into account.
§ Mr. GREENWOODThe sevenpenny rate calculation is relatively unimportant 400 to-day, and the right hon. Gentleman cannot get away from this general truth, that if you de-rate hereditaments in a county area, as a result of this scheme a penny rate will not bring in as much as it would otherwise. I think most hon. Members accept that. Then it does mean that with an equal expenditure each year the education rate is going to rise.
§ Lord E. PERCYWhy speak of the education rate only?
§ 6.0 p.m.
§ Mr. GREENWOODI am coming to the other point—that what applies to education applies with even more force to the police. If you spend the same amount of money next year as you have spent in the standard year, the rate for the police is going to be higher, because of the elementary fact that each penny of rate will not then bring in what it used to bring in. I wish I could get this into the minds of hon. Members. I come now to the question of roads, which are partly inside and partly outside the scheme. Those roads may involve exactly the same expenditure in future years, but the rate poundage to meet the cost will be higher than it is this year. And that will be so whether the expenditure is, within or outside the scheme. I wish to know whether calculations have been made—even within the scheme—and have taken into account the inevitable increase in rate poundage as a result of de-rating? I should then like to ask whether the Government have ever made any attempt to make it clear that their scheme does not protect local authorities as regards any item of expenditure except certain of the health services and certain of the road services? They never have made it clear.
Is it not fair to say that the guarantee embodied in this Amendment is no guarantee at all? The right hon. Gentleman says: "Of course it is, within the scheme," but as there is pretty well as much expenditure outside the scheme as inside the scheme, and as the important thing to the ratepayers is the rate per pound which they have to pay, I press for some answer to my original question. Even within the scheme, is it not a fact that rates may go up, and is it not almost certain, taking the aggregate expenditure of local authorities, including the expenditure outside the scheme, that even though that expenditure 401 may not have increased the rate poundage will increase, and the rank and file of ratepayers will be worse off? That is a perfectly fair question, and it is really the question which the hon. Member for York (Sir J. Marriott) wants answered. It is the question to which we have had no answer from the Parliamentary Secretary. He says that this Amendment affects only seven out of 62 counties. Even if it did affect only seven out of 62 counties, that is one-ninth of the counties—an important share. Then he said: "We have had an agreement. We have met the local authorities and we have come to an agreement." It is rather like the agreement which is reached between the highwayman and the man on the road. The highwayman says "Your money or your life," and the money is passed over. This agreement is of precisely the same kind.
The Parliamentary Secretary cannot say that local authorities are satisfied with this scheme. Their attitude is not one of gratitude to the Government. They have accepted this compromise because they had to, but it is not one with which they are satisfied. For the right hon. Gentleman to say: "We have reached an agreement with the local authorities"—as if that ended all discussion—is equivalent to running away from the real argument. Then he referred to Poplar. Poplar has always been a word which has enabled hon. Members opposite to cloud discussion. Nobody asked whether Poplar's rates are going to be raised. I have not even raised the question of commitments entered into with State departments before this scheme came into operation. I have only asked whether it is not the fact that. if expenditure remains stable, there will be an increase in the rate poundage, and that in most cases it will swallow up the advantages of the scheme, and certainly the guarantee?
I put this further point to show how useless is the guarantee, certainly within the next three years. From now onwards, local authorities will be very reluctant to enter into commitments with Government Departments. Already some have entered into commitments, but have not incurred any great expenditure upon them. The main expenditure will not come into the standard year. Their commitments will only begin to operate next 402 year and the year after. How is the guarantee going to meet a situation like that? It will not do anything. The whole of that new expenditure, to which they are committed by agreements, and for which all the necessary arrangements have been made, will fall upon local rates. In the next three years there will be a substantial number of cases of that kind up and down the country. This miserable guarantee of 1s. per head will not meet it. It is all very well to say that 55 out of 62 counties gain. So the figures say; but nobody believes there is any basis for the figures. They are the best the Government can do; it may be more will gain, and it may be that many of the gains will come down. The new commitments of local authorities may wash out all advantage to be derived from the scheme itself and from the guarantee.
The right hon. Gentleman said that Durham county would benefit to the extent of £1,100,000 a year. That is perfectly true; but it is only another way of saying that Durham County Council loses £1,100,000 worth of rateable value every year, which is a quarter of its rateable value. The right hon. Gentleman says that the relief to the county is going to be £236,000 a year, but that does not deal with the situation. A 4d. rate will be necessary in Durham wherever a 3d. rate will do now. Will the right hon. Gentleman contradict that? Is it or is it not true that in the future Durham County Council will have to raise a 4d. rate where a 3d. rate will do now? We want an answer to that. Multiply that 3d. to 4d. ratio by the rates which are levied in that county, and what becomes of your £236,000? What becomes of that gift of the Government? It is swallowed up. Only one-quarter of that excess poundage will be paid by industrialists, but the whole of it will have to be paid by householders. What we want to know is: Does this scheme offer to the householder, the shopkeeper, the professional man, the trader, all people who have not been de-rated, any guarantee whatever of a reduction of rates on the present basis of expenditure? Is it not the case, whatever the figures which have been produced may show, that this diminution in rateable value is going to lead to an increase in rate poundage, which means an increase in the rate burden on the ordinary ratepayer? I ask for an answer to that question.
Captain CROOKSHANKI have listened to every word of this discussion, and I agree with my hon. Friend the Member for York (Sir J. Marriott). There is one point upon which a definite answer is required. It certainly is a point on which I want an answer. I think I can boil down the point which the Opposition have been trying to put into these words. We have it from the Minister and from the Parliamentary Secretary that this guarantee is such that no county will lose as a result of the scheme. I think what we want to know is what is meant by "as a result of the scheme." Does it mean merely that the guarantee is to cover the services which come within the ambit of the Bill, or when it is said that the counties are not going to lose as a result of the scheme, does it mean that, as the President of the Board of Education has hinted, account has been taken of all services, whether within the ambit of the Bill or without?
§ Sir K. WOODYes, certainly.
Captain CROOKSHANKDoes that mean that the guarantee now given is that in spite of the loss of rateable value, on which education, police and other rates have got to be raised, there will be no loss to the counties either on the services mentioned in the Bill—Poor Law and the rest of them—or on the other services—the education and police services?
§ Sir K. WOODThe answer to that is, yes, on the standard year.
§ Mr. T. WILLIAMSThe right hon. Gentleman has just repeated a statement which he made several times during his speech. The net result of his reply is that no guarantees at all are given against an increase as the result of the passing of this Bill. The Parliamentary Secretary himself is unwilling to reply to the question which has been put to him, because there is in it an element of uncertainty, but surely the safest guide to hon. and right hon. Gentlemen opposite is to realise that when the right hon. Gentleman referred to the effect of the de-rating proposals in Durham he was skating on very thin ice, and he refused to face the facts which have been put before him. The Parliamentary Secretary has stated on numerous occasions that under the existing scheme, with all the reservations laid down in the various 404 publications from the Ministry of Health, he does not think that the local authorities are likely to suffer. Command Paper 3227 gives at the commencement certain figures showing sound reasons why no notice should be taken of all the estimates which have been provided.
We have already been told that little or no reliability can be placed upon the estimates which have been given, and yet the Parliamentary Secretary comes no nearer to answering the plain question whether local authorities are likely to lose or gain under the de-rating proposals than merely telling the Committee that under this scheme, with all the reservations which have been laid down, he does not think that the local authorities are going to lose. There is no guarantee given under the proposed scheme providing that local authorities are not going to lose. The President of the Board of Education spoke of the net gain which is to be received by various counties, but if the right hon. Gentleman accepts that statement, then he must accept the alternative that certain counties are going to lose a considerable sum of money. While I think the Parliamentary Secretary made the best possible effort to reply to the discussion during the first seven or eight days of the Committee stage, he failed to satisfy the Committee that the local authorities and the average ratepayers will not lose money even in spite of the new ministerial Amendment.
The Parliamentary Secretary has constantly referred to the County of Durham and he has told us that Durham will receive a considerable sum under the Government scheme through de-rating by a reduction of the rates. The right hon. Gentleman told us that Durham would receive £236,000 per annum and he emphasised this fact by referring to the advantages which that county would receive under the Goschen loan. May I refer the Parliamentary Secretary once again to one of the most industrialised counties in the country, that is, the West Riding of Yorkshire, where trade depression is as real as in any other part of the country? There we have the most industrialised county in the country faced with a loss of £227,000 per annum under this Measure. Why does the right hon. Gentleman not give to Members representing certain 405 parts of the West Riding of Yorkshire some encouragement to believe that the ratepayers in those. areas are not going to lose under the Government scheme?
It is not sufficient constantly to make references to one particular county which may or may not be the recipient of financial gains as the result of the application of this scheme, when other counties are known to be very large losers, even on the figures supplied by the Government, notwithstanding the industrial depression in those counties. I told the Minister of Health yesterday what has been stated so frequently, but which, up to the present, has received no reply, that this very curious result-is obtained inside a scheme which is supposed to be bordering upon the scientific. The result to which I allude is that-one of the most industrialised parts of the country where it is supposed that the need is the greatest will not only receive the least amount of assistance, but will actually lose £227,000 per annum in hard cash. Will the Parliamentary Secretary tell us what guarantees there are for the West Riding of Yorkshire? Unless the right hon. Gentleman gives us some better explanations than he has so far given, we shall be obliged to conclude that the West Riding of Yorkshire and many other counties—certainly the six counties which are allied with Yorkshire—will have no sort of guarantee at all that the rates of the average cottage tenant and other sections of the community are not going to be increased as a result of this scheme. Simply to say that only seven counties out of 63 are referred to in this Amendment, and that this Amendment is intended to safeguard those seven authorities is to make the confession that in the first place, before any sort of guarantees are provided, there is an acknowledgment that the rates in those counties will have to be increased to meet existing services before any improvement can take place in the years to come.
This Amendment has been moved in order to give certain guarantees to those counties, and the right hon. Gentleman ought to give a plain answer, "yes," or "no," as to whether, if this Amendment be not embodied in the Clause, those counties will be safeguarded or not. It seems to me that the shilling per head merely means that the only 406 guarantee in the future will be that the counties will receive slightly less than their expenditure for 1928 and slightly more than 1928–29. That is not a sufficient guarantee, and I hope if the right hon. Gentleman is going to reply to the statement made by the hon. Member for Nelson and Colne (Mr. Greenwood) he will tell us frankly whether or not we are being given a real or a fictitious guarantee.
We have been told that certain authorities are in some doubt as to what the ultimate result of this Bill will be, and we hear that certain changes are going to be made which will remove their anxiety. We want to know, and I think we are entitled to know, first of all, whether the Government recognise the doubts, fears and anxieties of certain local authorities; and we also want to know whether the Government are willing to meet those anxieties and make the necessary changes, so that the guarantee that the President of the Board of Education himself desires to sec established can be given. I hope a definite statement will be made to the effect that any change which is necessary to provide the assurances and guarantees which we are all entitled to see established will be made. I hope the Parliamentary Secretary will reply to the case which has been submitted relating to the West Riding of Yorkshire, and I trust the right hon. Gentleman will not ride off on the Durham case.
§ Sir K. WOODThe guarantee is that so long as the expenditure of the standard year remains unchanged, there can be no increase of rates in any area for the first five years of the scheme.
§ Mr. E. BROWNI think the Parliamentary Secretary will agree with me when I state that those who have raised this discussion have performed a public service. I do not think that the Ministry of Health have from the beginning appreciated to the full the case put originally by the local authorities. I would like to say now, after having read the latest document issued by the municipal corporations, that while in actual words the Parliamentary Secretary may be correct-in saying that there is agreement, he cannot say that it is a hearty agreement. I could read out a passage from a document which the municipal corporations have issued showing that they are still 407 dubious as to whether you can logically apply under one and the same formula and one and the same sum of money two entirely different things, namely, the losses of rates originating in the locality and the losses of grants originating in the Treasury. It is because I think the Government have not really given enough attention to this point that I wish to say a few words on this occasion. I agree that the Government Amendment is a valuable one.
I would like to give an illustration. It is the case in which the finances of a particular city on the original ratio worked out that in 1945, at the end of the third quinquennium, they would have lost £4,000, and under the new guarantee they will gain £6,000, or a difference of £10,000 between increasing or decreasing the rates. Nevertheless, the point remains that this guarantee is one that the ratio of the Exchequer grant we are discussing to the total rate-borne and grant-borne expenditure shall not decrease from the basis of the standard year. Everything depends on the standard sum in the standard year. When the Parliamentary Secretary says that only seven counties will lose, he means seven counties on the calculation made in 1927–28, and this is based on the assumption contained in the White Paper.
When the Association of Municipal Corporations first set their accountants to work in regard to the distribution of this money, what did they find? They found that when the full formula is working in 1945, not seven but 22 counties will lose on the standard sum plus the original guarantee. Now we are told that 22 counties have gone down to seven. We think that the Government have not given sufficient attention to the facts when they claim that the County of Durham would gain a sum of £1,108,000 a year by de-rating and that would mean that the assessable value of the County of Durham would be lowered by £1,108,000 a year. In making this calculation, the Government have not paid attention to the distribution of the money, and I think the Parliamentary Secretary has failed to meet the original case put by the great financial authorities connected with large corporations that the effect on the yield of a penny rate in county council divisions and the 408 areas inside those divisions will differ in every county area. As I understand the guarantee, it is that this Exchequer contribution will be in three parts—a part to make up for the loss of rates in the county, a part to make up for the loss of grants in the county, and a part composed of new money, part of which is to help over the dislocation of the early period, and part to carry out the guarantees. As I understand it, the sum composed of these three figures is to be based on the year 1928–29—that is to say, the present rating year, the figures for which neither we nor the Government have, so we are all working in the dark; and it is much more complicated in England and Wales, because this year we are applying for the first time the new-assessment values of the Rating and Valuation Act, 1925, which, as the right hon. Gentleman knows very well, will be an increasing sum.
This is not a matter of Poplarism, but of dubiety existing, not merely in my mind, but in the minds of many local administrators in every part of the country. As the ratio works out, what is to happen is this: If the total rate-borne and grant-borne expenditure of the country goes up by £8,000,000 after the first period, 25 per cent. of that will be the extra sum to be borne by the Exchequer, that is to say, £2,000,000. That means that, the increase being £8,000,000, and the guarantee amounting, so far as the national Exchequer is concerned, to £2,000,000, there will remain £6,000,000 of increased expenditure to be met by the local authorities. If the increase is £8,000,000, as it is in England and Wales according to the Government's own memorandum, or £1,200,000 as it is in Scotland, and if in Scotland the Exchequer finds £300,000 and the local authorities £900,000, while in England and Wales, out of £8,000,000, the Treasury only finds £2,000,000 and the local authorities will have to find £6,000,000, that is the whole point that was put by the hon. Member for Nelson and Colne (Mr. Greenwood), and is the point that I raised about the yield of a penny rate.
I regard this as a serious matter, and I do not think that the Government have faced it as they ought to have faced it. When you give money by way of de-rating, you give it to certain hereditaments. 409 When you take that money away from those hereditaments, you take it away from the rating authority in whose area the hereditaments are situated. You do not equally take the money, which in Durham amounts to £1,108,000 a year, all over the rating areas of Durham, but you make it a mass sum as coming from the whole country. This is the point that is worrying the smaller local authorities. Since the distribution in the counties, which we are now discussing, is based on this ratio and this standard sum, it will work out unequally in these two ways. As regards applying the grants which originate from the Treasury, it may work out fairly, and in some cases it may work out very well, but to imagine that you can apply logically one and the same formula to moneys originating from the Treasury for the assistance of the rate-borne services of local authorities, and also apply the same formula according to need to make up to the local authorities what they actually lose by the de-rating in their areas, is the whole fallacy.
This guarantee is valuable; it is an advance upon the original scheme in the Bill, and that itself was an advance upon the original White Paper No. 3134; but it does not meet these two crucial points. Firstly, it has no relation as regards the actual ratepayer paying rates to the rates paid; and, secondly, it has no relation to the actual total expenditure of the authorities concerned. I can only repeat that I regard this putting of these two forms of grant under one formula as logically bad, and I believe, as I said earlier, that the areas which are unhappy enough to lose very heavily by de-rating, if they have to incur increased expenditure outside the scheme in the future, will find, as is indeed the case in some agricultural parishes, that their rating basis will almost entirely disappear, because it is well known that there are parishes, where all agricultural land and buildings will be de-rated, which will only be able to raise by a penny rate a sum of £3 or £4 a year. That is the point that is worrying us, and I am sorry to say that the reply of the Parliamentary Secretary has only left me more dubious than I was before the Debate began.
§ Mr. GEOFFREY PETOThe speeches of the hon. Member for Leith (Mr. E. Brown) and the hon. Member for the Don Valley (Mr. T. Williams) show that they are seriously perturbed about the possibility of any local authorities ever making any loss owing to de-rating or to this Bill. They entirely ignore, to begin with, the justice or injustice of the present distribution of grants, but anyone who studies the figures can see that the present grants per head of population go very largely to the richer and not to the poorer portions of the country. Therefore, from that point of view, some redress is, surely, needed. The hon. Members also ignore the Government guarantee. In the case of the counties, they are not only guaranteed their loss by de-rating, but they are guaranteed for an indefinite period Is. per head over and above every possible loss.
§ Miss LAWRENCENo; that is on the standard year.
§ Mr. PETOOver and above their loss as compared with the standard year. New services will draw new grants. That has all been provided for in the Bill. It is based on the fourth year of the previous quinquennium. But the hon. Member for the Don Valley raised his old nightmare that, the West Riding of Yorkshire will lose some £200,000 in 17 years, and we have heard the same story with regard to Somerset, which will lose £80,000 in 17 years. But that ignores the whole purpose of the Bill, which is to relieve industry. [Interruption.] If the £24,000,000 which we are going to grant to relieve industry, and the £7,300,000 of new money, or £31,000,000 in all, is not going to be of material benefit to industry, I agree that we shall be very much disappointed in the Bill, but on this side of the House we believe that it will very materially increase the prosperity of both industry and agriculture.
Again, in 17 years time, not only will the £31,000,000 have come into full fruition, reducing unemployment and poor relief, and in that way reducing rates, but who is going to say what the Socialist party will do if they ever get into government? For anyone to be afraid to-day to vote for this Bill because their rates might go up in 1946, would be about as logical as for anyone to jump into the sea for fear that a shower of 411 rain might wet their coat in 1946. The party opposite are pledged to put up rates, and they know it, but the whole idea of this scheme—[Interruption.] They have said it again and again. We hold that we are going materially to improve industry and agriculture by these enormous grants of money, and that in-doing so we shall be reducing rates. In addition, there is the guarantee of 1s. per head for the counties, and I cannot see how it is possible to be on safer ground. The whole complication of the Bill is due to this very large number of guarantees which have been granted to every possible local authority. The hon. Member for Leith spoke about the Association of Municipal Corporations, but the Association of Municipal Corporations have themselves approved of the Bill, and are satisfied with the guarantees given. Nevertheless, hon. Members opposite, who are pledged to increase rates, have the effrontery to come here and plead for the municipal corporations.
§ Mr. COVEI am very glad that what I said at an earlier stage in the deliberations of the Committee has resulted in the President of the Board of Education coming here to give some sort of reply. It is rather remarkable that, on a scheme which it is now admitted, at this late hour, affects education vitally, we have not hitherto had from the Government, and from the President of the Board of Education in particular, any statement that would explain the effects of the scheme upon the education grants. We have had to drag the admission out of him, and even now that information is by no means complete. In the second place, it is, surely, the first time. in the history of the House of Commons, that the President of the Board of Education has in this Chamber actually delighted in the fact that a scheme propounded by the Government will immediately result in increased education rates. I always thought that a Minister of Education would regard with some measure of anxiety any financial scheme proposed by another Department which would have, as he admitted this afternoon would be the case, the direct and immediate effect of raising the education rate. It is quite evident that the Minister of Health is now also the Minister of Education. It is quite clear that the 412 Minister of Health will be the dictator as far as educational expenditure in the future is concerned.
I will take the case of Glamorganshire as a particular illustration of the point I want to make that, while it might be possible—I will concede that to the Minister—that under this scheme there may be a reduction in the general rates, it is quite clear and definite, and it has been admitted by the Minister himself this afternoon, that, even under those conditions, there might be a serious increase in the education rate. He says that he does not fear that; he says that he does not fear the objection of the ratepayers. I am rather afraid that it is a deliberate policy in order to stir up the ratepayers to see that there shall be increasing economy as far as education is concerned. Let us examine the effect of de-rating. Take a case where the education rate is 3s. in the £, and assume that the loss in rateable value is 20 per cent. In that case a 3s. 9d. rate will be needed to raise the same amount of money. If the loss is 25 per cent., the rate jumps up immediately to 4s., while if it is 30 per cent.—and we have cases of 30 per cent. de-rated—the rate will jump up to 4s. 3½d.; and yet the President of the Board of Education can come here this afternoon and complacently look forward to a state of affairs when the education rates might leap up by shillings in the pound, and yet not be concerned for the educational situation. Let me take again, as I have before, some places in Glamorganshire with regard to which we might have an answer. Barry will lose, on account of de-rating, 33 per cent., or a 1s. 7½d. rate; Port Talbot will lose a 1s. 2d. rate; Pontypridd will lose a 1s. 1¾d. rate. Does this guarantee cover those losses as far as education is concerned?
§ Lord E. PERCYYes.
§ Lord E. PERCYNo.
§ Lord E. PERCYNo.
§ Mr. COVEThe Minister will want to write a pamphlet to explain the financial effect of his own scheme. He has admitted clearly and definitely 413 to-day that the special service of education and the police service are outside the guarantee.
§ Lord E, PERCYNo.
§ Mr. COVELet us have the full? explanation of it, then. This is really a matter with which we want to get to grips. I have given the Noble Lord an opportunity, and he does not respond. I am afraid he does not understand the effects of the finance of the scheme upon his own service. What is going to happen in the future? We have this curious situation arising under the scheme, that increased expenditure upon education may attract, as I understand it, an increased grant into the general Exchequer pool, but none of that money will go in relief of the education service. The education service will be entirely and solely dependent upon the education grants. If educational expansion is to take place in a de-rated area, the poundage is bound to go up, because it is being levied upon a lower rateable value. Education will have to stand on its own feet, and merely get the grants for the education service. Obviously, the education rate is going to leap up. The real purpose of the Bill is not to relieve and revive industry, but to stabilise expenditure on the social services. It will stabilise expenditure on education. If it does not, what is going to happen? Every normal expansion of education will fall upon a smaller rateable value. It will result in an increased education rate having to be levied in order to get the same sum. The President of the Board of Education may be complacent about the attitude of the local authorities but they are seriously perturbed about the whole position of education. Even if the general county rate is reduced, we cannot stand idly by and see the education rate leap up as the direct result of this, because it will be an invitation to the harassed ratepayer to try to reduce it. The Noble Lord is the first Education Minister to view with supercilious hilarity the position that would arise when the education rate leaped up. He is the custodian of that service but he is in the hands of the Minister of Health, and he is doing a great disservice to education.
§ Commander WILLIAMSI think it is right that a guarantee against loss, apportioned between the counties and the smaller local authorities, is given by the Government to the smaller authorities for five years. The counties are guaranteed as a whole against loss indefinitely. I do not think hon. Members opposite have shown quite that Knowledge of figures and quickness that one might expect from them. I do not pretend to be able to unravel the financial side of the Bill, but it is not quite as difficult as they are finding it. Let us take the comparatively simple position of county Durham. Apparently they will lose £1,100,000 from de-rating property. Then they say, quite accurately as far as I understand it, that will mean that a penny rate will bring in less. Obviously, if you de-rate every form of property a penny rate will produce nothing at all, but that is entirely immaterial and has nothing whatever to do with the point. The point is that the Government definitely guarantee that that £1,100,000 will be repaid. Added to that £1,100,000 there will be a further £200,000 which will be given to the county, and it will gain that beyond its present position as far as the standard year is concerned, so that Durham will have to find in rates something like £1,300,000 less. There may be people who do not want Durham to know that. They do not want the workers in the district to realise it. At the same time, there is the fact and it is clear for all to see.
Let us come to the standard year. I have maintained, here and in other places, that during the next three or four years, owing to a great many things, it is quite possible that various local authorities may find themselves in a position of loss, but the counties as a whole are definitely guaranteed against that loss unless they deliberately put up their expenditure. But at the end of three yars, a comparativly short time, on the basis of population, etc., there will be an entire readjustment of the position. I would not have minded if those three years had been two but the whole thing remains, that for the first period there can be no loss unless they deliberately put up their expenditure. On the other hand, supposing they do put it up—supposing Durham inaugurates some service which will cost the county £50,000 415 or £100,000 more—the county will not be any the worse off than it is to-day, because it has this £200,000 additional grant beyond what it loses, which will mean that, if they choose, they can expend the money on increased facilities and better services. Far from local authorities being worse off with these various grants, they will be infinitely better off in the end, and I believe, if hon. Members opposite had seen exactly where they are, they could have found a very much better line on which to attack the Ministry.
Take the question of the education authorities. I can quite see that you might have not very creditable persons going up and down the county and saying the actual education rate may be rather higher. Only a comparatively unscrupulous person would use such an argument, because if the whole of the county rate is down because the county is better off owing to the fact that it has not got to find more money, I cannot for the life of me see what it matters if a certain rate goes up. I have never yet heard of a county which would mind if the education rate went up a little. There may be places where they would, but as far as the majority of counties are concerned, I do not think it would matter as long as you get the position under this Bill that, generally speaking, the whole of the local authorities will be better off, and there will not be any increase in the rates to be paid because of the Bill.
§ 7.0 p.m.
§ Mr. T. GRIFFITHSThe Minister of Health has been absent during the greater part of the discussion and I do not know whether he takes any responsibility for the declarations made by the Parliamentary Secretary, but I was surprised at the hon. Gentleman's reply to my hon. Friend on the Front Bench. In fact he did not reply at all. He never touched the question put by my hon. Friend and the hon. Member opposite. He simply made the bald statement that no local authority or county council will suffer as the result of this 1s. a head that has been granted to the county council and the local authorities and that, with the 75 per cent. given to productive industries, everything in the garden will be lovely. What authority he has for making that declaration I cannot 416 say. He says the local authorities are perfectly satisfied with this arrangement. He knows quite well that that is untrue, because if the Minister of Health looks at his correspondence he will find that Abergavenny, Blaenavon, Abersychan, Pontypool, Panteg and Llanfrechfa are protesting on account of the liability that is going to be transferred to the county council and the £1,000,000 that is owing to the Minister of Health. That means that, according to the figures given by the hon. Member for East Ham North (Miss Lawrence), they are going to get this 1s. a head relief, which amounts in some instances to 2d. in the £. But the transference of this £1,000,000 from Bedwellty to the county council of Monmouthshire means 1s. a. head in the rates for the next 15 years. Therefore, instead of getting 9d. for 4d., they are going to give 10d. and receive 2d. That is the whole of the proposals as far as this 2d. and 1s. are concerned. I confess that the Minister has met the local authorities to the extent of 3d., but it still leaves 9d. I will discuss that on Clause 96. As far as the permanent officials are concerned, Sir Ernest Strohmenger has given every help and assistance to the experts in Monmouthshire and Glamorganshire in order to get these figures. Coming to the question of productive industry, the Minister will remember that on the Second Reading he stated that the object of the Bill was to relieve industry to the extent of 75 per cent. with a view to reducing costs and also prices. We who are connected with the Iron and Steel Trades Confederation took that matter up because, if prices were going to be reduced, we saw that the wages of our people who are working on a sliding scale would be reduced.
§ The CHAIRMAN (Mr. James Hope)How does the hon. Member connect this with the new arrangement for distributing the Exchequer grants?
§ Mr. GRIFFITHSI am replying to the Parliamentary Secretary. We have been discussing the scheme all the afternoon, and I am dealing with the whole scheme. On the advice of the Minister, we went to meet the iron and steel employers of the country, and the only reply we got from the employers was that, as far as de- 417 rating and the 75 per cent. relief were concerned, the only thing they could say was that they would be standing in a queue with their hat out for a share of the £26,000,000.
§ The CHAIRMANThe hon. Member was dealing with county apportionment, and the argument, as I understood it, was whether we could properly make up for the deficiency owing to de-rating. I do not see what the iron and steel industry have got to do with it.
§ Mr. GRIFFITHSIt is very unfortunate that you change seats there. One Deputy-Chairman has given the privilege and—
§ The CHAIRMANThe hon. Member cannot make these reflections upon my predecessor. The question is whether the grant will make up for the losses. If he can connect his argument with that, I shall be glad to hear him.
§ Mr. GRIFFITHSI am trying to connect it in such a way that I can reply to the Parliamentary Secretary, and I can do so only if you give me permission to reply to his arguments. I thought that, as he raised this question, this was the time to show that not only was the two-penny rate or 1s. per head of the population not satisfactory to the authorities, but that the other point of the 76 per cent. relief to industry was going to be a loss as well. I was going to develop that argument, because every speaker today has dealt with the whole scheme. I am very sorry if you say I am out of order, because then only a portion of what I was going to say will appear, and may be misconstrued and misunderstood all over the country.
§ The CHAIRMANI do not want to do the hon. Member an injustice. The whole point here is whether this additional grant will make up for the loss. If he can connect it with his own county or any other county, he will be perfectly in order, but I cannot see any connection between this and the effect on wages in the steel and iron industry.
§ Mr. GRIFFITHSI shall not pursue it any further. Perhaps the Minister of Health will tell us how this value of the twopenny rate or 1s. per head is going to repay for the responsibility that is going to be transferred to the county council as far as Monmouth is concerned. 418 I admit that he has met the local authorities by the 3d. On the other hand, I remind him that all the local authorities have protested against the other matter, because the value that they will receive as the result of de-rating will be nullified when this extra expenditure will be imposed upon them.
§ Miss LAWRENCEIn listening to the Debate I could not help wondering how it was that so many respectable householders opposite had never noticed what were the rates that they paid. If they had all been young men of 21, introduced for the first time to the responsibility of being ratepayers, I could have understood it. Local authorities are to be guaranteed at least 1d. or 2d. over the rates of 1928. I remember the time when the poor rate was 10 times smaller than it is to-day. In my own time the amount spent in outdoor relief has increased 10 times. Since I came into public affairs, the local burden of rates has increased by a great deal more than twice—nearly three times. Within the last few years the whole of the rate-borne expenditure has increased £6,000,000 in one or in two years. If hon. Members will remember the light, small, easy rates they used to pay before the War, and reflect upon the very heavy rates they have to pay now, they will see precisely what the local authorities are concerned with. We are living in more or less prosperous districts, but there are places where the rates have doubled, and a good deal more than doubled since the War.
That is the whole point of the question. Rates have risen ever since we have known them. They have risen very much during the time of the present Government. Look back at 1900, or 1905 to the bills paid for rates then. You will see how the rate-borne expenditure has gone up. What good would it be for us now if a guarantee had been given that we should receive not loss than 1d. over the rates of 1900? I ask hon. Members opposite to look back on the rates paid 10 or 20 years ago, and reflect how much good would a guarantee be to us of a penny over those rates. That is the whole point of the matter. With the increasing population and the expansion in services, rates will increase. Even in 1870 Mr. Forster said that the education rate would never be over 3d. If there had been an assurance 419 given in 1870 that an amount equivalent to an education rate of 6d. would be guaranteed to localities, what losers we would be! The householder will have to make up whatever difference in expenditure is brought about by the relief to the manufacturer. If you take off a quarter of the rateable value of the locality, then the householder and the shopkeeper will have to shoulder the whole of the burdens in excess of 1d. or 2d. above the standard rates. That is the thing that makes local authorities so alarmed.
To say that the districts are guaranteed against loss is to say something totally untrue. The Minister has never said he guarantees against loss, because he understands his subject. Innocent Conservative Members run about the country telling their constituents that they are guaranteed against loss. Chickens will come home to roost, and their constituents will see that the rates have gone up. I come back to the guarantee. If the guarantee was a firm guarantee that they should receive so much money, the equivalent of the difference between the rates in the future and now, that would be another matter, but it is not a firm guarantee. There is no guarantee after the first eight years to any individual place. The guarantee depends, first, upon the amount of the general Exchequer contribution, and it is perfectly possible that the general Exchequer contribution for the whole country will not move in proportion to the expenditure in particular places. It is conceivable that the general Exchequer contribution to the country as a whole may remain steady, and the expenditure and the rates in particular districts may go up. That is the first point which makes the guarantee as applied to any particular place not effective.
The second point is this, and it is an amusing and a technical point. It is that the guarantee fails if the weighted population of the country has been decreased. Those are the two conditions which allow the 1s. a head to be paid to the locality. If these two are not fulfilled the shilling per head is reduced. We have the certainty in a great number of places that the weighted population will go down even if circumstances remain the same. In some places 420 the weighted population must go down if all the circumstances remain the same, and the reason for that is the change in the weight attached to unemployment. The unemployment figure of 1.5 of the population is now to be multiplied by 10. That is one of the factors under which the weighted population is determined, and it is an important factor.
Two of the factors, the rateable value and the percentage, are multiplied by the weighted figure of unemployment. The multiple of the weighted figure of unemployment is to be reduced by gradual steps from ten to a little over three. If unemployment remains the same and you multiply it by 3.2 instead of by 10 and then multiply the rateable value and the number of children by the figure for unemployment, it is quite clear that, even if the children, rateable value, and the actual amount of unemployment remains the same, the weighted population will be less. That makes the whole business of weighted population a thing of extreme uncertainty. My short point is that the weighted population is determined, among other things, by the weight given to the unemployment factor. The weight given to the unemployment factor has to change in proportion to the amount contributed under the formula. The fact that the very important factor of the formula changes, and changes arbitrarily, will very much disturb the weighted population it seems to me, with the best study of the details I can make, that many of the districts at present affected by the weighted figure of unemployment will lose in weighted population when the prescribed period comes to an end.
§ Mr. CHAMBERLAINI regret that, owing to some other engagements which I could not possibly avoid, I have had to be absent from a good deal of the Debate this afternoon, and I have not, therefore, had the advantage of hearing all the difficulties which have been put forward by hon. Members opposite. I have been here for the last half-hour and I should like for one or two minutes to try and make the position a little clearer in regard to some of the difficulties which, I think, have been put forward under a misapprehension of the working of this scheme. I would like to say, in the first place, that it has appeared to me that hon. Members have largely confused 421 the situation in what the hon. Member for East Ham, North (Miss Lawrence) called individual places, that is, as I understand, in county districts, with the situation in the county borough or the county as a whole. These questions of guarantee with which we are dealing in the Amendment under discussion are questions which apply to the county as a whole. There will be other questions which arise when we come to deal with individual places, with the county districts or the non-county boroughs, and with these, of course, we shall deal under Clause 73. We are not now dealing with these places, but with the counties as a whole. We must not confuse, therefore, pledges and guarantees which apply to one class of local authority with those which apply to another.
The guarantee itself seems to provide a source of considerable difficulty. I do not think that all hon. Members quite understand what a guarantee is. When you say that you guarantee that a county as a whole shall gain not less than 1s. per head of population, you do not mean that every county is to have that particular gain and no other. It means that they are not to have less than that amount. That, I should have thought, would have been fairly obvious to the hon. Gentleman the Member for Pontypool (Mr. T. Griffiths) who, I regret, is not now present. He was talking to me about the position of Monmouth and asking me to explain how Monmouth was going to gain anything when, he said, they were only going to get 1s. a head gain for the county as a whole and at the same time would have to shoulder a burden equivalent to a rate of 1s. in the £. The answer is, that Monmouth is not one of the counties to which this guarantee will apply, for the simple reason that Monmouth will gain not 1s. per head of population but something over 78 pence per head of the population, after making an allowance for the transference of the liability of the Bedwellty Guardians to the county. The fact that I am amending the proposition and giving still more favourable terms by my Amendment in the case of these transferred debts than is provided under the Bill should further increase the gain to the county of Monmouth. As I said when I was moving the Amendment, hon. Members must remember that the guarantee we are talking 422 of here applies only to a very small minority of the counties. The greater number of the counties gain a great deal more than that, and, in fact, will have substantial additional resources at their disposal.
The hon. Member for East Ham, North has a difficulty about the question of the weighted population. She says that this guarantee, which, of course, applies to the standard sum, is no guarantee, because it is to be reduced if the weighted population goes down. She says that the weighted population may go down even though all the conditions remain the same. I say that that is impossible. The weighted population can only go down if the conditions change, because it is the conditions that give the weight to the population, and you cannot alter the weight of population unless those conditions, or some of them, change. Then she said that there is a different multiple in different quinquennia and that as you distribute from the pool more and more according to the formula so does the multiple, which is the way in which the unemployment factor is applied, come down. That is perfectly true. What we want to assure is that the unemployment factor shall have its fullest effect when the whole of the money is being distributed according to the formula. When only part is being distributed according to the formula we must raise that unemployment factor so that the unemployment factor may still have the same effect as if the whole of the money were distributed under the formula. If we do not make some special provision it is quite true that the reduction of the unemployment multiple would reduce this guarantee and make it of no avail. I am surprised that that difficulty should come from the hon. Member because she has evidently devoted a good deal of attention to this matter, and in regard to paragraph (b) of Sub-section (3) of this Clause she has an Amendment down. Therefore, she cannot have overlooked the fact that we suggest here that the unemployment factor should be adjusted. If she will read again Paragraph (b) of Sub-section (3) she will see that this particular objection has been anticipated, and, in fact, in applying the guarantee to future quinquennial periods, the multiple will be altered. We are going to have the same multiple in both cases.
423 It remains the case that under this guarantee no county can by reason of the scheme possibly lose anything.
Nobody is so silly as to suggest that we could guarantee, or that we should be likely to guarantee in any Measure, that the rates in all places, or in any places in the country, should be stabilised for all time. It is not the purpose of Parliament to lay down that rates should not go beyond a certain point in a certain locality. Obviously, that is impossible. If you are going to bring in a new scheme, a drastic change in local government, which is obviously going to affect the finances of local authorities in one way or another, it is a reasonable thing for local authorities to say to us: "Is this scheme of yours going to put us in a worse position?" The effect of our guarantee is to say to them: "You are still free to use your privileges as local government directors to raise your rates if you choose and to spend more money on your services, but we say that you shall not be any worse off by reason of the changes we are here proposing in this Bill." That is what we are giving the counties to understand when we say that they shall have a guarantee per head of the population. When we come to other guarantees in regard to these individual places, they are guarantees of a different kind, and I am not going to enter into them. They do
§ not seem to me to be at ail appropriate to this Clause, and we shall have plenty of opportunities on another Clause to discuss individual authorities. I am dealing only with guarantees which apply to counties and which have their analogue in a subsequent Clause as applied to county boroughs, and I hope that the explanation which I have given will do something to remove some of the difficulties of hon. Members.
§ Mr. GREENWOODI have a complaint to make. I think the right hon. Gentleman has not treated the matter with the seriousness which it deserves, but we have extracted this fact. We have a formula of words which has never been explained to us. If it means the best the Government can say of it, every penny of expenditure over the expenditure of this year, however abnormally low the expenditure of this year may be, will have to be paid for by the ratepayers out of reduced rateable value, and that will mean higher rates. That is what the explanation means, and there we leave it.
§ Amendment agreed to.
§ Consequential Amendments made.
§ Question put, "That the Clause, as amended, stand part of the Bill".
§ The Committee divided: Ayes, 204; Noes, 116.
425| Division No. 118.] | AYES. | [7.30 p.m. |
| Acland-Troyte, Lieut.-Colonel | Burman, J. B. | Erskine, James Malcolm Monteith |
| Albery, Irving James | Campbell, E. T. | Evans, Captain A. (Cardiff, South) |
| Alexander, E. E. (Leyton) | Carver, Major W. H. | Everard, W. Lindsay |
| Alexander, Sir Wm. (Glasgow, Cent'l) | Cassels, J. D. | Falle, Sir Bertram G. |
| Applin, Colonel B. V. K. | Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.) | Fanshawe, Captain G. D. |
| Ashley, Lt.-Col. Rt. Hon. Wilfrid W. | Cecil, Rt. Hon. Sir Evelyn (Aston) | Fermoy, Lord |
| Astor, Maj. Hn. John J.(Kent, Dover) | Chamberlain, Rt. Hon. N. (Ladywood) | Forestler-Walker, Sir L. |
| Atkinson, C. | Chapman, Sir S. | Forrest, W. |
| Baifour, George (Hampstead) | Christie, J. A. | Fremantle, Lieut.-Colonel Francis E. |
| Barnett, Major Sir Richard | Cobb, Sir Cyril | Galbraith, J. F. W. |
| Beamish, Rear-Admiral T. P. H. | Cochrane, Commander Hon. A. D. | Ganzonl, Sir John |
| Beckett, Sir Gervase (Leeds, N.) | Cohen, Major J. Brunei | Gates, Percy |
| Bellairs, Commander Carlyon | Colfox, Major Wm. Phillips | Gault, Lieut.-Col. Andrew Hamilton |
| Benn, Sir A. S. (Plymouth, Drake) | Colman, N. C. D. | Glyn, Major R. G. C. |
| Bennett, A. J. | Cooper, A. Duff | Goff, Sir Park |
| Sentinck, Lord Henry Cavendish- | Cope, Major Sir William | Gower, Sir Robert |
| Berry, Sir George | Courthope, Colonel Sir G. L. | Grant, Sir J. A. |
| Bethel, A. | Cowan, Sir Wm. Henry (Islington, N.) | Greene, W. P. Crawford |
| Birchall, Major J. Dearman | Craig, Sir Ernest (Chester, Crewe) | Grenfell, Edward C. (City of London) |
| Bird, E. R. (Yorks, W. R., Skipton) | Crookshank, Cpt.H. (Lindsey, Gainsbro) | Guinness. Rt. Hon. Walter E. |
| Bird, Sir R. B. (Wolverhampton, W.) | Cunlifle, Sir Herbert | Gunston, Captain D. W. |
| Boothby, R. J. G. | Dalkeith, Earl of | Hacking, Douglas H. |
| Bridgeman, Rt. Hon. William Clive | Davies, Sir Thomas (Cirencester) | Hamilton, Sir George |
| Briggs, J. Harold | Davies, Dr. Vernon | Harrison, G. J. C. |
| Briscoe, Richard George | Davison, Sir W. H. (Kensington, S.) | Hartington, Marquess of |
| Brittain, Sir Harry | Dean, Arthur Wellesley | Harvey, Major S. E. (Devon, Totnes) |
| Brocklebank, C. E. R. | Edmondson, Major A. J. | Henderson. Capt. R. R. (Oxf'd, Henley) |
| Brooke, Brigadier-General C. R. I. | Edwards, J. Hugh (Accrington) | Henderson, Lieut.-Col. Sir Vivian |
| Buckingham, Sir H. | Ellis, R. G. | Heneage, Lieut.-Colonel Arthur P. |
| Bullock, Captain M. | Erskine, Lord (Somerset, Weston-s.-M.) | Hennessy, Major Sir G. R. J. |
| Hills, Major John Waller | Merriman, Sir F. Boyd | Smith, R.W.(Aberd'n & Kinc'dlne, C.) |
| Hilton, Cecil | Milne, J. S. Wardlaw | Southby, Commander A. R. J. |
| Hoare. Lt.-Col. Rt. Hon. Sir S. J. G. | Monsell, Eyres, Com. Rt. Hon. B. M. | Spender-Clay, Colonel H. |
| Holbrook, Sir Arthur Richard | Moore, Sir Newton J. | Stanley, Lieut.-Colonel Rt. Hon, G. F. |
| Hope, Capt. A. O. J. (Warw'k, Nun-) | Moore-Brabazon, Lieut.-Col. J. T. C. | Stanley, Lord (Fylde) |
| Hopkins, J. W. W. | Morrison-Bell, Sir Arthur Clive | Stanley, Hon. O. F. G.(Westm'eland) |
| Hopkinson, Sir A. (Eng. Universities) | Nall, Colonel Sir Joseph | Steel, Major Samuel Strang |
| Hopkinson, A. (Lancaster, Mosslay) | Neville, Sir Reginald J. | Stott, Lieut.-Colonel W. H. |
| Horne, Rt. Hon. Sir Robert S. | Newman, Sir R. H. S. D. L. (Exeter) | Streatforld, Captain S. R. |
| Howard-Bury, Colonel C. K. | Newton, Sir D. G. C. (Cambridge) | Stuart, Crichton-, Lord C. |
| Hudson, R. S. (Cumberl'nd, Whiteh'n) | Nicholson, Col. Rt.Hon.W.G.(Ptrsf'ld-) | Stuart, Hon. J. (Moray and Nairn) |
| Hurst, Gerald B. | O'Connor, T. J. (Bedford Luton) | Sueter, Rear-Admiral Murray Fraser |
| Inskip, Sir Thomas Walker H. | O'Neill, Major Rt. Hon. Hugh | Sugden, Sir Wilfrld |
| Iveagh, Countess of | Oman, Sir Charles William C. | Tasker, R. Inigo. |
| James, Lieut-Colonel Hon. Cuthbert | Ormsby-Gore, Rt. Hon. William | Thorn, Lt.-Col. J. G. (Dumbarton) |
| Joynson-Hicks, Rt. Hon. Sir William | Penny, Frederick George | Thomson, F. C. (Aberdeen, South) |
| Kindersley, Major G. M. | Percy, Lord Eustace (Hastings) | Tinne, J. A. |
| King, Commodore Henry Douglas | Perkins, Colonel E. K. | Titchfield, Major the Marquess of |
| Kinloch-Cooke, Sir Clement | Peto, G. (Somerset, Frome) | Tomlinson, R. p. |
| Lamb, J. Q. | Pilcher, G. | Tryon, Rt. Hon. George Clement |
| Lloyd, Cyril E. (Dudley) | Pownall, Sir Assheton | Vaughan-Morgan, Col. K. P. |
| Loder, J. de V. | Radford, E. A. | Waddington, R. |
| Lougher, Lewis | Rawson, Sir Cooper | Wallace, Captain D. E. |
| Lucas-Tooth. Sir Hugh Vere | Rees, Sir Beddoe | Ward, Lt.-Col.A. L. (Kingston-on-Huff) |
| Luce, Maj.-Gen. Sir Richard Harman | Reid, Capt. Cunningham (Warrington) | Waterhouse, Captain Charles |
| Lumley, L. R. | Reid, D. D, (County Down) | Watson, Rt. Hon. W. (Carlisle) |
| MacAndrew, Major Charles Glen | Remer, J. R. | Watts, Sir Thomas |
| Macdonald, Sir Murdoch (Inverness) | Richardson. Sir P. W. (Sur'y, Ch'ts'y) | Wayland, Sir William A. |
| Macdonald, Capt. P. D. (I. of W.) | Roberts, Sir Samuel (Hereford) | Williams, A. M. (Cornwall, Northern) |
| McLean, Major A. | Ropner, Major L. | Williams, Com. C. (Devon, Torquay) |
| Macquisten, F, A. | Ruggles-Brise, Lieut.-Colonel E. A. | Winby, Colonel L. P. |
| Maitland, A. (Kent, Faversham) | Sandeman, N. Stewart | Winterton, Rt. Hon. Earl |
| Maitland, Sir Arthur D. Steel- | Sanders, Sir Robert A. | Womersley, W. J. |
| Makins, Brigadier-General E. | Sandon, Lord | Wood, Rt. Hon. Sir Kingsley |
| Malone, Major P. B. | Sassoon, Sir Philip Albert Gustave D. | Wood, Sir S. Hill- (High Peak) |
| Manningham-Buller, Sir Mervyn | Shaw, Lt.-Col.A. D. Mcl. (Renfrew, W.) | Worthington-Evans. Rt. Hon. Sir L. |
| Marriott, Sir J. A. R. | Sheffield, Sir Berkeley | |
| Mason, Colonel Glyn K. | Sinclair, Col. T. (Queen's Univ., Belfit) | TELLERS FOR THE AYES.— |
| Meller, R. J. | Smith, Louis W. (Sheffield, Hallam) | Captain Margesson and Captain |
| Bowyer. | ||
| NOES. | ||
| Adamson, Rt. Hon. W. (Fife, West) | Hirst, G. H. | Salter, Dr. Alfred |
| Adamson, W. M. (Staff., Cannock) | Hirst, W. (Bradford, South) | Scrymgeour, E. |
| Alexander, A. V. (Sheffield, Hillsbro') | Hore-Belisha, Leslie | Scurr, John |
| Baker, J. (Wolverhampton, Bllston) | Hudson, J. H. (Huddersfield) | Sexton, James |
| Barker, G. (Monmouth, Abertillery) | Hutchison, Sir Robert (Montrose) | Shinwell, E. |
| Batey, Joseph | Jenkins, W. (Glamorgan, Neath) | Short, Alfred (Wednesbury) |
| Bellamy, A. | Jones, Morgan (Caerphilly) | Sinclair, Major Sir A. (Caithness) |
| Bowerman, Rt. Hon. Charles W. | Jones, T. I. Mardy (Pontypridd) | Sitch, Charles H. |
| Broad, F. A. | Kelly, W. T. | Smith, Ben (Bermondsey, Rotherhithes) |
| Bromfield, William | Kennedy, T. | Smith, Rennie (Penistone) |
| Bromley, J. | Kenworthy, Lt.-Com. Hon. Joseph M. | Snowden, Rt. Hon. Philip |
| Brown, Ernest (Leith) | Lansbury, George | Stamford, T. W. |
| Buchanan, G. | Lawrence, Susan | Stephen, Campbell |
| Cape, Thomas | Lindley, F. W. | Stewart, J. (St. Rollox) |
| Charleton, H. C. | Livingstone, A. M. | Strauss, E. A. |
| Cluse, W. S. | Longbottom, A. W. | Sullivan, J, |
| Clynes, Rt. Hon. John R. | Lowth, T. | Sutton, J. E. |
| Collins, Sir Godfrey (Greenock) | Lunn, William | Taylor, R. A. |
| Connolly, M. | MacDonald, Rt. Hon.J. R.(Aberavos) | Thorne, W. (West Ham, Plalstow) |
| Cove, W. G. | Maclean, Nell (Glasgow, Govan) | Thurtle, Ernest |
| Cowan, D. M. (Scottish Universitlas) | MacNeill-Weir, L. | Tinker, John Joseph |
| Dennison, R. | Malone, C. L'Estrange (N'thampton) | Townend, A. E. |
| Gardner, J. P. | March, S. | Trevelyan, Rt. Hon. Sir Charles |
| Gibbins, Joseph | Morrison, R. C. (Tottenham, N.) | Viant, S. P. |
| Gillett, George M. | Mosley, Sir Oswald | Wallhead, Richard C. |
| Graham, Rt. Hon. Wm. (Edin., Cent.) | Naylor, T. E. | Watts-Morgan, Lt.-Col. D. (Rhondda) |
| Greenall, T. | Oliver, George Harold | Wedgwood, Rt. Hon. Joslah |
| Greenwood, A. (Nelson and Colne) | Owen, Major G. | Wellock, Wilfred |
| Grenfell, D. R. (Glamorgan) | Palin, John Henry | Wheatley, Rt. Hon. J. |
| Griffith, F. Kingsley | Paling, W. | Wilkinson, Ellen C. |
| Griffiths, T. (Monmouth, Pontypool) | Parkinson, John Allen (Wigan) | Williams, T. (York, Don Valley) |
| Groves, T. | Ponsonby, Arthur | Wilson, C. H. (Sheffield, Attercliffe) |
| Grundy, T. W. | Potts, John S. | Wilson, R. J. (Jarrow) |
| Hall, F. (York. W. R., Normanton) | Purcell, A. A. | Windsor, Walter |
| Hall, G. H (Merthyr Tydvil) | Richardson. R. (Houghton-le-Spring) | Wright, W. |
| Hamilton, Sir R. (Orkney & Shetland) | Roberts, Frederick O. (W. Bromwich) | Young, Robert (Lancaster, Newton) |
| Hardle, George D. | Robinson, W. C. (Yorks,W.R.,Elland) | |
| Harris, Percy A. | Runciman, Hilda (Cornwall, St. Ives) | TELLERS FOR THE NOES.— |
| Hayday, Arthur | Runciman, Rt. Hon. Walter | Mr. Charles Edwards and Mr. Hayes. |
| Henderson, T. (Glasgow) | Sakiatvala, Shapurji |