Mr. GREENWOODI beg to move, in page 59, line 13, to leave out from the word "district" in line 13 to the end of line 20 and to insert instead thereof the words, "the total losses on account of rates."
The purpose of the Amendment is to secure to the councils of districts the actual losses which they incur as a result of the de-rating of particular hereditaments. Let us look at this question from the point of view of the local authorities. They regard this de-rating proposal in itself as a deal between the Government and industry. It has nothing whatever to do with the local authorities. The Government in their wisdom, for what that wisdom may be worth, say: "It would be a very good thing to de-rate industrial enterprises. That would stimulate industry. We will, therefore, de-rate mines, factories, workshops, docks and railways." That was an intelligible and reasonable proposal; it was in the nature of a treaty between the Government and industry. The local authorities had nothing whatever to do with it. It did not concern them, except that they lost a certain amount of rateable value. The reasonable thing to do is to go to all these non-county borough, urban district and rural district councils within a county, and say to them: "Because of our national policy we are de-rating certain hereditaments. We think you ought not to suffer; we will, therefore, recompense you for the loss which you have sustained in each area." That would have been reasonable and fair. As I understand it, that is the attitude that has always been taken by the local authorities. They say: "We are not concerned about de-rating, as such, if the Government like to de-rate people, that" is their lookout, provided they will recompense us just exactly what we have lost."
The effect of the Government's scheme is, that they have measured the total amount of de-rating as, say, £24,000,000, and have put that into a pool, to distribute, not to each county district and local authority in proportion to its loss, but they have put it into a pool with some other money, to distribute that total pool in a way which has no reference 428 whatever to what any particular local authority has lost. The result of the operation of the apportionment as it stands in the Bill is to give greater advantage to some authorities than to others, not because of any difference in their circumstances, but largely because of the difference in the extent to which de-rating has gone in particular areas. That is one of the reasons why the results of the scheme work out so fantastically from area to area.
You cannot explain the difference in the assistance alleged to be given under the scheme to different local authorities by the difference in their needs or their circumstances. The difference arises very largely because some county districts have been do-rated far more than other county districts and they are not getting due recompense because of that excessive de-rating, as compared with other districts. It. seems reasonable, therefore, to suggest that when you are distributing the money you should, at least, see that the districts are compensated for de-rating loss. That has nothing whatever to do either with health grants or road grants.
What is the proposal in the Clause? It is a distribution within the district. In Part IV of the Fourth Schedule, you will find the rules for calculating the sums to be allocated to districts on the basis of population. There are three rules:
1. The number of pence produced by dividing one-half of the total amount of the county apportionments to counties other than London by the aggregate of the estimated populations of those counties in the appropriate year shall be ascertained to the nearest penny.2. The amount to be allocated to an urban district shall be the number of pence ascertained under Rule I contained in this Part of this Schedule multiplied by the estimated population of the district in the appropriate year.3. The amount to be allocated to a rural district shall be one-fifth of the number of pence ascertained under Rule I contained in this Part of this Schedule multiplied by the estimated population of the district in the appropriate year.What does that mean? It means, in effect, that the method by which county districts are going to get their share of these Government grants is based purely on population, not on what they have lost in rateable value. What is more extraordinary is the differentiation as 429 between urban districts, whether they are urban district councils or non-county boroughs, and rural districts. In one case it is estimated on population and in the other on one-fifth of the population, presumably the reason being that urban districts have larger powers than rural districts, and therefore do not need as much in the way of State grant. Why it should have been worked out to one-fifth I cannot understand. There is a difference between the way county districts are going to get their share and the way in which counties and county boroughs are to get theirs. In the case of the latter authorities the Government grant is to be allocated on the basis of the formula, which starts with population as its basis, and proceeds to weight that population by different varying factors on the ground that, so far as counties and county boroughs are concerned, a pure population basis would inflict injustice as between one area and another.But when the Government comes to the case of the non-county boroughs and urban districts, many of them as large as county boroughs, the allocation is to be made in a different way. No longer are these various factors to be allowed to weight the population basis, but the grant is to be allocated on a pure population basis without regard to any other consideration whatever. In the case of rural district councils, although the rule calls it one-fifth of the number of pence given under Rule 1, they are to get the grant virtually on one-fifth of the population. It is difficult to justify this extraordinary elaborate and unscientific way of allocating the grants, and there is nothing we can do effectively to improve the Clause. The only thing we can do is to ensure that county districts shall receive according to the sacrifices they have made to help the Government out of their difficulties. They are the people who are giving up rateable value, who are giving up their resources, in order to help industry, and they ought to be recompensed according to the sacrifices they have made in that respect. The object of this Amendment is to set aside the form of distribution of the county grants in the Bill and substitute for it one based on loss of rates and the sacrifices county districts have made.
§ Mr. E. BROWNIf the result of the scheme is important to a county it is infinitely more important as regards an urban district, a non-county borough inside the county. At least there is an attempt by an arbitrary formula to apportion the moneys in the General Exchequer Contribution according to the need. I should like to ask the Parliamentary Secretary to give us the reasons that weighed with the Government. Grant, for a moment, that the scheme of the formula is sound and scientific. If it is sound and scientific for the county and county boroughs, why does it become unscientific when it is applied to non-county boroughs, urban districts and rural districts? That puzzle has been exercising the minds of a good many hon. Members and also a good many local administrators outside, as the Parliamentary Secretary well knows. If these county districts were smaller in population than counties and county boroughs one could quite understand that the factor weighing with the Government would have been—size. The Government say that as they have de-rated areas and narrowed the assessment basis, only the larger authorities will carry other services outside these arrangements, but, as the Parliamentary Secretary knows there are rural district councils four times as large as some county boroughs.
I have in mind a rural district council with a population of 113,000. Canterbury is a county borough with 24,000 population. Rutland is a county with 14,800 population, and gets an apportionment based according to the formula on the weighted population, a so-called scientific formula, but this rural district with over 100,000 population and five urban districts with over 100,000 population, including Ilford, are not to have control over their services or the apportionment of these moneys according to the formula but only according to the arbitrary calculation of their population. There is to be no recognition of their needs at first hand. I agree that the primary apportionment must affect the secondary apportionment; that is to say, that if the weighted population works out well over a county as a whole the apportionment is likely to work out well for most of the areas inside the county, but if the apportionment works out badly, as the Parliamentary Secretary said it would but for the guarantee, it will work out badly in the case of all 431 county boroughs inside a county which loses heavily by de-rating. We ask for a lucid statement as to what really moved the Government to do this. The yield of a penny rate, while very important in the case of a county, becomes supreme in the case of the rating authority.
The three considerations which I desire to urge on the Parliamentary Secretary are these. First, has the Government given due weight to the fact that population itself is no test of expenditure on the one hand or loss of rates on the other? Secondly, has the Government realised that by applying this apportionment to county districts, on the basis of actual population, they are going to differentiate between one county district and another? Some county districts will lose little by de-rating whilst others will lose heavily, inside a county area. Thirdly, the figures I have already given this evening prove that there are great discrepancies as between one county district and another, whether it is a non-county borough, an urban district, or a rural district, and the yield of a penny rate thus becomes of supreme importance in the case of rural districts. Yesterday, I was given the case of a parish, a large parish, purely agricultural, and the results of de-rating there. The result is that a penny rate in future will only raise £4. Spread over a purely rural area, with only shopkeepers and houses to meet the rate burdens, and the effect is to absolutely destroy in the case of such county districts the whole basis of rating. You may give moneys at second-hand, according to the formula, to the county, you may take 50 per cent. of that and then apply the test of actual population, but the fact is that the scheme takes no account of actual expenditure incurred, or any increase of expenditure by the expansion of the ordinary services to be incurred, or any account of the actual loss of rates in any one of these county areas.
Let me ask the Parliamentary Secretary this question. He said that the Government had come to an agreement with local authorities. Does it include the Rural District Councils Association and the Urban District Councils Association? The financial effect of these proposals on these small authorities, where de-rating is large in amount and where there may be an increased expenditure 432 after five years, will be such as to shatter the whole rating basis. The Committee before it passes this Clause and this particular apportionment should make quite sure that each rating authority whether rural, district or urban district or non-county borough, shall have made up to it the actual amount of rates lost because of the Government scheme of de-rating in that particular area.
§ 8.0 p.m.
§ Mr. T. WILLIAMSI should like to ask the Parliamentary Secretary one or two questions on this matter, and particularly as to the effect this is going to have upon certain rural areas in the country. I have grave doubts about the equity of this policy as applied to certain areas. Let me draw the attention of my hon. Friend to a typical case; an area where new mines are being developed. It is the case of Thorne, a rural council area, where the major portion of their rates will be drawn from two new mines which are being developed. The social needs of the district until recently have been comparatively small. Their expenditure, therefore, would he small in the year for which the figures were obtained when the Minister was compiling White Paper No. 2327. On the 1926–27 estimates it is indicated that in this particular case an advantage would be derived by that particular authority. But it seems to me that the figures for that year have no relation to what the figures will be five years ahead. The mines are developing rapidly; houses are being erected by the hundred every year. A new population is coming to the district and social services of every description will have to be provided in the near future. The past expenditure has no relation to what future expenditure will be.
The needs of an area like this will be far and away beyond the ordinary needs of a district which has developed normally over a considerable period of time. Therefore, it seems to me that the first effect of de-rating will be pretty well to shatter the finances of a rural council of that description. Not only will de-rating of the collieries affect the finances seriously, but the de-rating of all agricultural land and buildings in the same area will have a very serious effect. The Fourth Schedule and the arrangement there as to one-fifth will scarcely be adequate to 433 meet a case of that description. I rather suspect that the Minister, when preparing this formula, this method of recouping local authorities, had in mind the long straggling rural area where the population is very thin and where de-rating cannot by any stretch of imagination have the same effect as in a rural area where you have two or three new mines and where the local authority will be called upon to provide all sorts of services for a new population.
It must be noted that year after year, for the next 10 years or more, the local authority will be hard put to it to meet the elementary needs of the local population, and its expenditure will continue to increase year by year unless the right hon. Gentleman can assure us that the normal expenditure in the standard year, or something beyond that expenditure, is provided for in the Fourth Schedule. It is obvious, then, that a rural district council of this description will have its rates increased far beyond the rate increase in one of the areas where the normal social services for a fairly static population have been provided in years past. I ask whether particular attention has been paid to cases of this description. The Parliamentary Secretary may say that this is one of the border-line eases which should not be provided for in a great national scheme. If that should be the reply of the right hon. Gentleman, we are at least entitled to ask that, so long as the Government recognise that in certain cases injustices are bound to accrue through the preparation of a great national scheme, special provision ought to be made so that social services will not be denied to the local residents, and that the health services will in no way be impaired because of this Bill.
This one-fifth of the local rates, based on population, is a further fact which will affect local people in the case quoted, since population will be increasing at an alarming rate until the colliery is fully developed, and there is a full, normal staff employed. It is our experience that, once a colliery begins to develop, the influx of new residents is fairly rapid —500 or 1,000 a year. The right hon. Gentleman will see that large sums of money are required to meet the normal services. I feel that this specially reduced rate to rural areas in certain cases will not meet the situation. I should be 434 pleased, therefore, if the right hon. Gentleman will tell us whether, in building up the table for this scheme, the Government gave special consideration to cases of this kind.
§ Sir K. WOODThe matter that we are conisdering is the General Exchequer Grant to districts, and in Clause 73 we provide that a certain sum is to be set on one side out of the county apportionment for the payment of councils of districts, and we make a further provision in the Fourth Schedule as to how that sum is to be calculated. The hon. Member who moved the Amendment desires to provide that, instead of the method proposed by the Government, the county districts should receive their direct loss, in respect of rates, arising from the Measure. I need hardly tell the Committee that this matter has been a subject of serious consideration by the Government. The hon. Member for Leith (Mr. E. Brown) has considerable knowledge of the Bill, and I tell him at once that obviously the first consideration has been to make a satisfactory arrangement which will do justice to the great majority of the districts, and if justice is not done under the general rule which we may adopt, to make some supplementary provision which will meet the oases of the minorities that may be affected.
If the hon. Member for Leith ever has as I hope he may in time to come, the responsibility of framing any new method of that kind, I think that that would be the manner in which he would approach his task. We too often forget, in discussing the present arrangement, the anomalies which exist and which we are seeking to remove. In any consideration of a scheme of this kind, we must always keep that fact before us, because, whatever our views may be on the Government scheme, there will be very few who will be prepared to defend the injustices and anomalies that exist to-day. That is really the basis of the Government's proposals. In the first place, speaking broadly, you make a general rule, and then you make a provision to meet those cases which may require further consideration as a result of that general rule.
In this particular case it is asked, "Why do you give to a rural district 435 council only one-fifth, on the basis of population, of the amount given to a borough or an urban district council in the same county?" The broad reply is that, of course, after the cost of the rural highways has been transferred from the rural district councils to the county as a whole, very little will remain as a charge on the rural district rates. On the rates of the several urban districts, on the other hand, there will remain the charge for their own district highways and the expenses of other services, sewerage and so forth, incurred more frequently in urban than in rural districts, and the amount in the £ of the district rates will consequently be much higher in urban than in rural districts. That matter has been fully explained to the local authorities, and, broadly speaking, that is why the differentiation has been made.
More than one speaker has raised the point that the needs of urban district councils within a county are obviously very diverse, and that the grant to each should not be uniform per head of population. I am speaking now in terms of the great majority of cases which will be affected by this particular proposal. Obviously in a very large number of cases, owing to the small number of the population, it would be almost impossible to apply the formula basis which you could apply to a much bigger population where the various factors which compose our formula basis come into play. That is obvious to anyone. I put it to the hon. Member or Leith, who has studied this matter, that at any rate the giving of the grant on this population basis will operate to bring about one of the results aimed at by this scheme, and that is the further equalisation of rates in so far as it will give to the population of urban areas on a low rateable value much more in terms of amount in the £ than it will give to urban areas of an equal population on a high rateable value.
Let me give an illustration. Assume grants of 100 pence per head of a population of 12,000 in urban district A where the rateable value is £3 per head, is equivalent to the produce of a rate of 33⅓ pence per pound of rateable value, and so it will operate towards reducing the local rate by that amount; while 436 a grant of 100 pence per head of a population of 12,000 in urban district B, where the rateable value is £6 per head, is equivalent to the produce of a rate of only 16⅔ pence per £, and so will operate towards reducing the local rate by that amount. It follows that so far as A and B are concerned, they have to bear the charge common to both, that is the county rate, at a uniform amount in the £, or again a charge like that for unclassified urban roads does not vary widely in different districts. The distribution of the grant on the basis of population will tend to put the poorer area A in a relatively better position than the richer area B to bear the charges common to both. Since it would reduce the poundage of the poorer area more than that of the wealthier area it would tend to lessen the disparity between the respective total rates in the £.
That illustration has gone a long way to alter the opinions of a good many members of local authorities who, at first sight, thought that this proposal might operate against the poorer areas in favour of the wealthier areas. As I think the Committee will have seen from that illustration, the argument is the other way. Turning to the Amendment itself the hon. Member for Nelson and Colne (Mr. Greenwood) said that this flat rate ought to be removed from the Clause but he has overlooked the fact that, as a consequence, there would also have to be removed a provision as to the deduction of another sum relating to those authorities which undertake maternity and child welfare services. I think the hon. Member has also overlooked the fact that as regards rural districts, in parts of which there are special or parish rates, we have provided that a sum is to be deducted in respect of rates in that connection. The Amendment would delete those matters and would provide that each county district should only receive the total loss on account of rates. Even with that, on the Amendment itself I suggest to the Committee that the resulting distribution of the grant inside the county itself would be unfair.
The hon. Member for Caerphilly (Mr. Morgan Jones) has occupied a responsible position in connection with education, and has always been, as he is today, interested in that matter. He will see that if this were done it would be 437 unfair as between local authorities which are autonomous for elementary education and those which are not. The loss of local rates in the case of the autonomous authority would be increased, because the local rate itself would be increased by the rate for educational purposes; and the non-autonomous authority for education, although it has to pay the education rate on a county precept, would receive no credit for its loss on this rate. The method proposed by the Amendment would, therefore, effect an unfair distribution of the grant received by local authorities in favour of those authorities which are responsible for their own education services. I know that the intention of hon. Members opposite is simply to raise these points, and I do not think it will be desired to press the Amendment further. Even if adjustments were made to remedy this unfairness, the method of distribution would, usually, I can assure the Committee, be less favourable to the whole of the poorer areas than the method proposed in the Bill. While the Amendment undoubtedly has served a useful purpose in raising these points, I do not think anyone would desire to persist in it, owing to the undoubted disadvantages which would arise if its actual terms were incorporated in the Bill.
§ Mr. T. WILLIAMSWill the right hon. Gentleman reply to the case which I submitted?
§ Sir K. WOODThe hon. Member knows that it is almost impossible for me to deal with individual cases, but I promise him that I will look at the particulars of the case which he has raised and study it in the OFFICIAL REPORT and see if I can furnish him with a reply on the particular matter raised. I am dealing with this Amendment on general grounds, and I do not desire to give my opinion on an individual case without first giving it very careful consideration. Other matters may be involved in it which are not apparent to me at the present moment.
§ Mr. WILLIAMSYes, but the right hon. Gentleman does not think that when a case is submitted on behalf of a particular authority or area that that is the only authority or area of the kind in the country. He must know, for instance, that every new colliery is sunk 438 in the area of a rural council. Those are cases which are bound to be adversely affected unless this scheme of allocating grants is a perfect one. I thought the right hon. Gentleman would at least be able to say that in arranging this matter they had taken such cases into consideration, and that there were certain reasons which satisfied them that justice would be done in such cases. When the right hon. Gentleman says that once roads are taken out of the expenses of the rural councils there is little or nothing left, he forgets that that is not quite the whole of the case. Some rural areas may have a comparatively small mileage of roads and yet their parish expenses may be abnormal. All these circumstances justify one in asking if the Minister took into consideration the special cases of developing areas, particularly those where new mines are being sunk.
§ Sir K. WOODI am sorry if I did not answer the hon. Member's question as fully as I might have. Obviously we gave considerable consideration to this matter of the allocation and while I do not want to minimise unduly the points raised by the hon. Member I think, speaking broadly, the allocation which has been made is a fair one. Speaking generally, and without regard to any particular case, I would say that one of the advantages of the arrangement under the scheme is this. As a factory starting in a district attracts population in the course of time, so, as the population comes into that particular district, it attracts so much per head of population under the scheme. That is a great advantage compared with the present position because very often we find a state of affairs in which a local authority has to bear a burden without receiving any assistance at all from the fact that new population is being attracted into the area. Whatever we may have against the scheme, one of its advantages is that as population conies into an area that area attracts so much per head of population on that account. Broadly, that is one of the answers to the hon. Member. I will certainly look into the particular case he mentioned and see if there is anything further which I can put to him on that case.
§ Mr. G. HALLThe right hon. Gentleman did not reply to the question put to him by the hon. Member for Leith 439 (Mr. E. Brown) as to whether there has been agreement between the Government and the Urban District Councils' Association on this question.
§ Sir K. WOODThe two authorities with whom we have been in agreement are the County Councils Association and the Association of Municipal Corporations.
§ Mr. HALLThen that means that there is no agreement between the Government and the Urban District Councils Association, and one can quite understand it, because I think the latter have a real grievance in connection with this question of payment. The right hon. Gentleman said he thought a number of the poorer districts would benefit as a result of these proposals. I speak as representing a very poor district, where the rates have been very high for the last three or four years. I know it is true, as the right hon. Gentleman said, that it is almost impossible to have a formula that will satisfy all the difficulties that are likely to arise, but I think something ought to be done for those local authorities which are losing a large amount of rateable value as a result of these proposals, and not in any way to make their position more difficult than it is now. I know the Attorney-General would say that as far as a number of districts are concerned, the Government will see that for five years, at any rate, they will be no worse off, because of the supplementary grant, but what they are doing is almost perpetuating a rate which is a very high rate and which is in operation in the basic year 1928–9. The right hon. Gentleman referred—
§ Sir K. WOODI made a slight mistake in my answer just now. I understand that the Urban District Councils Association have communicated with the Ministry generally accepting the scheme. I think there are one or two matters outstanding on points not of great importance, but I think I ought to correct my statement that only the other two Associations had come to an agreement.
§ Mr. HALLI thank the right hon. Gentleman. May I give as an example, the district which I represent, because there is this to be said about this 440 scheme, that the larger the amount of industrial hereditaments in de-rate property, the greater the loss to these urban district councils. In the division which I have the honour to represent, there is an urban district council, called the Mountain Ash Urban District Council, with 40 per cent. of its rateable value made up of industrial hereditaments, or colliery property. The total rateable value of that area is about £170,000. They have industrial hereditaments of a rateable value of something like £80,000, and they are losing through these de-rating proposals a rateable value of something like £60,000. With rates at 28s. in the £, as they are at the present time, you can see that they are losing rates, as a result of these proposals, amounting to about £80,000, and all that they will receive from this block grant of 150d. per head, is approximately £30,000. There you have a very serious loss. I know it can be argued with some force that for the first five years the Government, by their supplementary grant, will maintain the rate as it is now, but I want to follow up the point put by my hon. Friend the Member for Don Valley (Mr. T. Williams).
In almost all our coal areas in South Wales at the present time, you have a number of collieries which are closed down and are not producing any rateable value at all, and that fact will be taken into consideration in the basic year 1928–29. We are hoping that a number of those collieries will come into production, say, in the year 1930–31. Instead of these districts getting the full advantage of the loss of rateable value by these collieries coming back into production in 1930–31, they will only have the advantage of something like 25 per cent. of the rateable value, and full expenditure in those areas. That is the point about which urban districts, especially in the mining areas, are very concerned. There is another factor too which should be taken into account by the Government. The Rating and Revaluation Act comes into operation on the 1st April of this year, and in almost every district the rateable value of cottages and business premises will be increased by 10 or 15 per cent., and up to 20 per cent. in some instances.
We have, in some of the South Wales districts, very large compounding allowances 441 given both from the general district rate and from the poor rate. In the district of Mountain Ash there is a compounding allowance from the general district rate of 50 per cent. and from the poor rate of 30 per cent. There again, as a result of the Rating and Revaluation Act coming into operation, these compounding allowances are being reduced to 15 per cent. Almost all the ratepayers in that district were of the opinion that with the increased rateable value of cottage and business premises the reduction in compounding allowances must have meant a considerable reduction in the rates in the £, but instead of that, the rates will be stabilised at something like 23s. in the £, not only for the first year or the first five years, but, with this terrible loss of rateable value brought about by these de-rating proposals, it is going to mean, really, a rate of 28s. in the £ in perpetuity.
I would ask that in such cases as those of the urban district councils of Mountain Ash, Aberdare, and other districts in South Wales, they should be met out of special consideration. The President of the Board of Education referred to the fact that in the case of some Part III authorities a case could be made out in the course of two or three years for special consideration. May I ask that the same should be done with regard to these urban district councils which are losing a very large amount of their rateable value because of these de-rating proposals. One can safely say that where there is a loss of more than 25 or 30 per cent. of the rateable value as a result of these de-rating proposals, in every ease these urban district councils are going to lose a considerable amount, and I ask that this ease may be taken into consideration for special circumstances by the Government.
§ Mr. POTTSI hope the Minister will not press his point, but accept the Amendment. It seems to me rather singular that I am going to oppose the Minister, having regard to the fact that the county borough which I have the honour to represent will gain out of this business. We happen to be one of the few. So far as my county borough is concerned, taking the formula, the estimated loss of grant and rates, expressed in pence per head of actual population, is 148d. The total grant in pence per head of actual population when worked out is 219d., or, in 442 other words, we shall gain 71d. That is an enormous gain for the borough, but let us look at another point. I always try to have regard to other people as well as myself. Taking the whole area of the Poor Law union as it is now situated, ending last March, a 1d. rate produced £1,993. In the borough when separated from the remainder of the union it produces £975, against £1,018 outside. Next March, ending March, 1929, the total will be £2,095. In Barnsley Borough it is estimated that it will be £1,035, and the rest outside will raise £1,060. Barnsley, when this Bill comes into operation, will be cut off the outside, and in borrowing money for relief purposes, while two-thirds go outside so far as recipients are concerned, when it comes to repayment Barnsley Borough itself has to pay just inside 50 per cent. of the money back again.
One of the main points with which I want to deal is a statement made by the Minister in connection with de-rating. On 26th November last, the Minister of Health said that this Bill is not only
by increasing employment going to increase the earnings of the workers, but it is bound also to have the most profound effect upon the fortunes of all ratepayers."—[OFFICIAL REPORT, 26th November, 1928; col. 88, Vol. 223.]Let me endeavour to show what the Minister is going to pay in respect to the rates, having regard to the present and possible future position, because for years I can see no prospect of the coal trade altering its present position materially. I have been looking into the figures. The Minister, in reply to an hon. Member, said that he could not deal with an individual case of a colliery; he wanted to deal with the thing generally. I want to deal with the whole county of York, and to show what money the Minister actually sends into the county in the relief of the collieries. I will take last year up to the end of November; and, basing the calculation on those figures, I find that what will be paid in actual rates for each calendar month is £62,194 12s. The rates which the Minister will pay under his formula, if things remain constant, in respect to the whole of the collieries of Yorkshire, is £46,645 per calendar month.When that reaches the collieries it will not go towards alleviating the industry at all; neither the workmen nor the industry will profit at all, because during the year the collieries were £6,000,000 443 to the bad. When the employer receives that amount of money in rate relief, therefore, it will go straight into his pockets. All that this relief does is to reduce the losses in the mining industry in Yorkshire at the rate of £46,645 per calendar month. It will not help the industry at all. I hope, therefore, that the Minister will begin to see that this Bill will in no way assist the industry. It seems that it has been designed to assist the employers, and nobody else. These figures prove it. I hope the Minister will look into this matter, and, if he is a wise man, he will withdraw the whole Bill.
§ Mr. RENNIE SMITHI support this Amendment, because the plain effect of it, notwithstanding the observations of the Parliamentary Secretary, is to guarantee the urban and rural district authorities against the loss of the operation of this scheme. It is more necessary now than at any stage in the discussion of this Bill that we should have a plain assertion of principle along these lines. The Debate has made it very clear that there are so many conditions attached to the operation of the financial Clauses of this Bill, that the local authorities are in danger of definite losses. The fact that the calculations are based on the standard year is a matter which places the local authorities in definite jeopardy under the scheme. I appreciate that under the Amendment which has been put forward by the Government each local authority will be guaranteed against an increase of rate poundage, not for one year, as was originally proposed, but for five years based on the calculation of the standard year. The effect of our Amendment is to go much beyond that. It is to establish the points of view that have been brought forward by the Urban District Councils Association and the Rural District Councils Association that they should have a guarantee against loss, not for one year or for five years, but during the permanent operation of this Measure.
Let me give the grounds for the anxiety which the urban district authorities entertain, and I will quote the position of five of the authorities in my own constituency as being illustrative. In the case of the urban district council of Clayton West, the standard year 444 poundage is 13s. 4d., and the estimated poundage under this scheme before the payment of the supplementary Exchequer grant is 14s. 2d.; that is to say, Clayton West starts with the situation loaded against it to the extent of 10d. in the £. Take Ingbirchworth District Council: the poundage under the standard year is 9s. 9d., and the estimated poundage before the payment of the supplementary Exchequer grant is 10s. 10d., which is 1s. 1d. to the bad. In the case of Penistone, the town which gives the name to my constituency, the standard year poundage is 10s. 3d., but under the scheme, before the payment of the supplementary Exchequer grant, the rates will rise to 12s. 10d., so that the scheme is loaded against it to the extent of 2s. 7d. in the £. Shepley has a standard year rate of 10s. and its position under the estimate is 12s. 4d., a loss of 2s. 4d. in the £. Then the urban district of Thurlstone has a poundage under the standard year of 11s. 3d. and an estimated poundage before the payment of the supplementary Exchequer grant under this scheme of 12s. 8d., which is again a setback to the extent of 1s. 5d. in the £.
I know the Parliamentary Secretary says that in all these cases, under the Amendment which the Government have proposed, they will be guaranteed for five years against loss, but what we are asking—and I think that it is not an unreasonable request—is a guarantee after the expiry of the five years. We are asking for a guarantee with regard to the permanent operation of this Measure. The reasonable expectation of all the local authorities, when this great local government reform Measure was proposed, was that every one of them would get on balance a definite advantage from the central Exchequer fund. I assume we are proceeding with this reform from the point of view that the local authorities have a well-established claim for a redistribution of payments as between the National Exchequer and the local rates. Therefore it is not unreasonable to put forward the view that each one of the authorities should not only be guaranteed against loss "within the scheme"—which appears to be the perilous snag in this whole matter—but should have a permanent guarantee that they are not going to be involved in any losses.
445 Let me remind the Parliamentary Secretary of the situation of some of these urban districts with regard to future rating. I will quote the case of Stocks-bridge, which is representative. The rateable value of Stocks-bridge is, roughly, £51,000. The land and agricultural buildings which will come within this scheme of de-rating amount to a little over £2,000, and the productive undertakings—so far as the figure has been worked out—amount to well over £19,000. Out of a rateable value of £51,000 more than £20,000 comes within the scope of de-rating. That is representative of at least three of the urban districts in my own constituency. One-third of the rateable value is reduced or cancelled altogether under the Bill, and in those circumstances, and having regard to the developments which can take place outside the scheme, and having regard to the fact that the whole scheme is based on the standard year, 1926–27, I submit that the urban and rural district councils are entitled to ask in principle that they should be guaranteed against any losses over the permanent operation of this Bill.
I should have thought that was an extraordinary modest position to take up in view of all the claims the Government have made for this Bill, and I should have thought the Parliamentary Secretary would be in quite a hurry to accept that position. All the possibilities of evil falling upon the local authorities would be definitely ruled out if that simple assertion could be made. The Parliamentary Secretary knows that earlier in the evening I tried to get him to give a plain answer to a plain question, but, in his delightful way, he preferred to go his own course. The plain and simple assertion which I have indicated to him would gratify every Conservative in every urban or rural district in the country, and I once again invite the Parliamentary Secretary to turn aside from the devious ways of poetry and mysticism and make a plain, scientific statement on an issue which is of the greatest possible importance to the local authorities.
§ Mr. E. BROWNI do not think the statement of the Parliamentary Secretary meets the point or shows that the Government have really given sufficient attention to the effect of the loss of rates in 446 various areas through the diminished yield of a penny rate. It is perfectly true, as the Parliamentary Secretary says, that there are two clear gains. Where a county as a whole gains by the application of the formula, the districts inside that particular county are likely to gain. That, however, is not true in the counties where the formula works badly; that is to say, when the scheme comes into operation on its full basis, and after all, what we have to consider is not merely the period of five years for which these districts are guaranteed, but we must have regard to the actual basis of the scheme It is also true that the case of the county district is not quite on all fours with that of the county and county borough, because of the transfer of the Poor Law and other services from the smaller districts to larger areas in some cases. It is not true, as the right hon. Gentleman suggested in his answer, that there is a difference between all rural and all urban areas in the services they provide. There are rural districts providing a more varied set of services than are to be found in some urban districts. That I may have authority for my statement I will quote from the Rural District Councils Association. They say:
It is, of course, true that some urban authorities may provide more services than rural districts, hut there are very many rural districts which provide just as many services as urban authorities, so that this justification for the differentiation in grants between urban and rural districts again affords ground for objecting to the scheme, of distribution.That, of course, is true; and it is also true that there is a great variation in rating in urban and rural districts. Some urban districts in the same county have a great variation of rates, and if the yield is badly affected by de-rating the consequences are very important to the smaller districts. I will take a few figures from the White Paper. Take the county of Chester. In Alsager the rate is 14s. 4d., and in Compstall is 8s. 4d.—that is for this year 1927–28 and not 1926–27. In Cornwall we find Camborne 20s., and Padstow 11s. 8d. In Lancashire, Ashton in Makerfield, 18s., and Kirkham, 9s. Therefore, it is no wonder that those of us who take an interest in the smaller local authorities should begin to feel gravely perturbed, because while the Government have transferred various services and want a wider area of charge, 447 they have preferred to take the population as the sole test for the final distribution.This is the point on which I wish to say my final word. I do not believe this arrangement will work out well, and in areas where the county as a whole is, under the formula, guaranteed against loss, certain county districts inside that county will find themselves losing very heavily. The guarantee is against loss for five years, but, after all, the position seems to be summed up in the words of the old song "Clementine," which was so popular among the troops:
Now she's lost and gone for ever.That is true with regard to the rates. If rates are taken away from a particular rural district or urban district, they are lost and gone for ever. The scheme of the Government may or may not work out well. I may be wrong in my contention, or they may be wrong in their contention, but one thing cannot be denied, that when de-rating operates and you have applied it to the agricultural land and the various industries in any district, so much of the power of rating is gone for ever. It is because the effect of this appears so markedly in the diminution of the yield of a penny rate that I wish the Minister had seen his way to meet the ease put up for making the scheme one in which the Treasury would make up to each local authority the actual amount of rates lost by de-rating, and then apply his scheme of grants, or a larger scheme of grants, according to this or any other formula.
§ Mr. MORGAN JONESI want to add ray word to what has fallen from this side of the House by way of protest against this particular formula being applied in the way which is now proposed. The Parliamentary Secretary pointed out quite rightly that one of the benefits of the grant fixed upon the basis of population is that the coming of a new factory to any particular area will bring about an increase in the population, and that, ipso facto, there will be an increased grant in respect of that increased population. That is perfectly true, but there is another aspect of the question which has to be kept in mind in relation to that point, and it is that when a new factory comes to an area it 448 brings with it added burdens in respect of certain public services. The new population brought to such a district requires to be housed and now sewers and roads have to be constructed. There are certain burdens imposed upon areas by the coming of a new population, and I think that ought to be kept in view as a counterpoise to the point which has been made by the Parliamentary Secretary.
The point I wish to make is that it is perfectly true that a grant based upon population is attended by somewhat fantastic results. Unfortunately it has those fantastic results in these very areas which I understand it is the object of the new scheme to assist. Take the county of Glamorgan about which we have heard so much. In that county there are 17 urban district councils. In all those 17 areas there were in 1926–27 only two where the rates were below 20s. in the £. Under this scheme of those 17 urban district councils only five will be brought down below the 20s. in the £ level, and the variation in the rates before the scheme is applied would be between 31s. 10d. in the highest and 15s. 4d. in the lowest. If this scheme had been applied in 1926–27 the variation would have been between 15s. 4d. and 28s.
9.0 p.m.
The point I am making is that this happens in one of the areas which the Chancellor of the Exchequer and the Minister of Health claimed were going to be substantially helped by the scheme. When the Chancellor outlined his scheme he said that no one would think of going to an area like the one I have mentioned to found a new business because the rates are so heavy that no one would dream of such a project. I understand that when this scheme comes into operation there will be a great change, but I do not think that would be the effect of these proposals. So far from substantially stimulating the return of industry to those areas, I submit that this new scheme will have very little effect in that direction. I admit that there will be an advantage in some areas, but it will not be enough to transform those areas from de pressed areas into areas where we can hop? to see the coming of new industries. That is my main objection to this Measure. May I put another point. Let me deal with one area in my own 449 constituency. Often there are variations in urban districts in character, just as there are variations in character between county and county. One urban district may be a very compact and closely knit geographically. Its population may be very dense and the geographical area may be very small. The neighbouring area may be very much larger and the social services may be much less concentrated in that section. In the first case the density of population is greater and consequently they get a greater advantage than the second case. I think that is a valid objection to the population basis of grant under the scheme.
May I again point out the result of this scheme in urban districts which were intended to receive the greatest assistance under this scheme. Among the urban district councils to which I have referred is one which I represent in this House, and it happened, in the last half-year, to be the heaviest rated urban district area in the whole country. Its rates were 18s. 1d. in the £ for the half-year, that is 32s. 2d. in the £ for the full year. Will it be believed that the percentage of benefits given to this heaviest rated area is a good deal less than the percentage of benefit given to any one of the neighbouring urban district areas. That is one of the very fantastic results of the Government's scheme.
Let me take the comparison further. Take the case of Aberdare. That urban district council in 1926–27 had a rate of 24s. 2d. in the £, and if this scheme had been in operation then it would have got a benefit of 6.9 per cent. In Gellygaer the rates were 26s. 1d. in the £ and if this new scheme had been in operation it would have had 1.6 per cent. benefit. Since then in this very area, not merely on account of the closing of collieries but because of events
§ which happened during the War and since the War, its rates have gone up by 10s. in the £, and the scheme of the Government will actually prevent this area from getting assistance to meet that increased poundage in its rates. The point that I want to make is that the result of the scheme inevitably becomes fantastic when the grant is calculated upon the population basis.
§ I should like to say one other word on a point which has been referred to already, and which must be emphasised and re-emphasised in this House, namely, the taking of the year 1928–29 as the standard year. That, really, is a most important matter, especially in regard to the mining areas. The Parliamentary Secretary knows as well as I do that the year 1928–29, which has been chosen by the Government as the standard year, is the most unfavourable year that they could take as regards mining areas. The contribution to local rates by collieries is based upon the output of coal, and the year 1928–29 is from that point of view the most unfavourable year for us that could possibly be taken. It means that, in the case of these urban districts, which are going to be limited to a fixed grant per head of population, their resources are going to be very materially limited thereby, and I should like, if I can, to induce the right hon. Gentleman to consider in what way it would be possible to give some extra advantage to those areas, in addition to the benefit that may accrue from the population grant.
§ Question put, "That the words proposed to be left out, to the word 'quinquennium' in line 14, stand part of the Clause."
§ The Committee divided: Ayes, 163; Noes, 106.
451| Division No. 119.] | AYES. | [9.8 p.m. |
| Acland-Troyte, Lieut.-Colonel | Boothby, R. J. G. | Christie, J. A. |
| Albery, Irving James | Bowyer, Capt. G. E. W. | Cobb, Sir Cyril |
| Alexander, E. E. (Leyton) | Briggs, J. Harold | Cochrane, Commander Hon. A. D. |
| Alexander, Sir Wm. (Glasgow, Cent'l) | Briscoe, Richard George | Cohen, Major J. Brunei |
| Applin, Colonel R. V. K. | Brittain, Sir Harry | Colfox, Major Wm. Phillips |
| Atkinson, C. | Brocklebank, C. E. R. | Cowan, Sir Wm. Henry (Islington, N.) |
| Balfour, George (Hampstead) | Brooke, Brigadier-General C. R. I. | Craig, Sir Ernest (Chester, Crewe) |
| Barnett, Major Sir Richard | Buckingham, Sir H, | Cunliffe, Sir Herbert |
| Beamish, Rear-Admiral T. P. H. | Bullock, Captain M. | Dalkeith, Earl of |
| Benn, Sir A. S. (Plymouth, Drake) | Burman, J. B. | Davies, Sir Thomas (Cirencester) |
| Bennett, A. J. | Campbell, E T. | Davies, Dr. Vernon |
| Berry, Sir George | Cassels, J. D. | Davison, Sir W H. (Kensington, S.) |
| Bethel, A. | Cazalet, Captain Victor A. | Dean, Arthur Wellesley |
| Birchall, Major J. Dearman | Chamberlain, Rt. Hon. N. (Ladywood) | Edmondson, Major A. J. |
| Bird, E. R. (Yorks, W, R. Skipton) | Chapman, Sir S. | Edwards, J. Hugh (Accrington) |
| Ellis, R. G. | Kindersley, Major G. M. | Roberts Sir Samuel (Hereford) |
| Erskine, Lord (Somerset, Weston-s.-M) | King, Commodore Henry Douglas | Ropner, Major L. |
| Erskine, James Malcolm Monteith | Lamb, J. Q. | Ruggles-Brise, Lieut.-Colonel E. A. |
| Everard, w. Lindsay | Lloyd, Cyril E. (Dudley) | Sandeman, N. Stewart |
| Faile, Sir Bertram G. | Loder, J. de V. | Sanders, Sir Robert A. |
| Fanshawe, Captain G. D. | Lougher, Lewis | Sandon, Lord |
| Forestler-walker, Sir L. | Lucas- Tooth, Sir Hugh Vere | Shaw, Lt.-Col. A. D. Mol. (Renfrew, W.) |
| Forrest, W. | Luce, Maj.-Gen. Sir Richard Harman | Sinclair, Col. T. (Queen's Univ., Belfast) |
| Fremantle, Lieut-Colonel Francis E | Lumley, L. R. | Smith, Louis W. (Sheffield, Hallam) |
| Galbraith, J. F. W. | MacAndrew, Major Charles Glen | Smith, R. W. (Aberd'n & Kinc'dine, C.) |
| Ganzoni, Sir John | McLean, Major A. | Southby, Commander A. R. J. |
| Gates, Percy | Macquisten, F. A. | Spender-Clay, Colonel H. |
| Glyn, Major R. G. C. | Maitland, A. (Kent, Faversham) | Stanley. Lieut.-Colonel Rt. Hon. G. F. |
| Gower, Sir Robert | Makins, Brigadier-General E | Stanley, Hon. O. F. G. (Westm'eland) |
| Graham, Fergus (Cumberland, N.) | Manningham-Buller, Sir Mervyn | Steel, Major Samuel Strang |
| Grant, Sir J. A. | Marriott, Sir J. A. R. | Storry-Deans, R. |
| Greene, w. P. Crawford | Meller, R. J. | Stott, Lieut.-Colonel W. H. |
| Grenfell, Edward C. (City of London) | Merriman, Sir F. Boyd | Streatfeild, Captain S. R. |
| Gunston, Captain D. W. | Milne, J. S. Wardlaw- | Stuart, Hon. J. (Moray and Nairn) |
| Hacking, Douglas H. | Monsell, Eyres, Com. Rt. Hon. B. M. | Sueter, Rear-Admiral Murray Fraser |
| Hamilton, Sir George | Morrison-Bell, Sir Arthur Clive | Sugden, Sir Wilfrid |
| Harrison, G. J. C. | Nall, Colonel Sir Joseph | Thorn, Lt.-Col. J. G. (Dumbarton) |
| Hartington, Marquess of | Neville, Sir Reginald J. | Thomson, F. C. (Aberdeen, South) |
| Harvey, Major S. E. (Devon, Totnes) | Newman, Sir R. H. S. D. L. (Exeter) | Tinne, J. A. |
| Henderson, Capt. R. R.(Oxf'd, Henley) | Newton, Sir D. G. C. (Cambridge) | Titchfield, Major the Marquess of |
| Henderson, Lieut. Col. Sir Vivian | O'Neill, Major Rt. Hon. Hugh | Tryon, Rt. Hon. George Clement |
| Heneage, Lieut.-Colonel Arthur P. | Oman. Sir Charles William C. | Vaughan-Morgan, Cot. K. P. |
| Hennessy, Major Sir G. R. J. | Ormsby-Gore, Rt. Hon. William | Waddington, R. |
| Hills, Major John Waller | Penny, Frederick George | Ward, Lt.-Col. A.L.(Kingston-on-Hull) |
| Hilton, Cecil | Percy, Lord Eustace (Hastings) | Waterhouse, Captain Charles |
| Hoare, Lt.-Col. Rt. Hon. Sir S. J. G. | Perkins, Colonel E. K. | Watson, Rt. Hon. W. (Carlisle) |
| Holbrook, Sir Arthur Richard | Peto, G. (Somerset, Frome) | Watts, Sir Thomas |
| Hopkins, J. W. W. | Pilcher, G. | Wayland, Sir William A. |
| Hopkinson, A. (Lancaster, Mossley) | Radford, E. A, | Winby, Colonel L P. |
| Horilck, Lieut.-Colonel J. N. | Rawson, Sir Cooper | Winterton, Rt. Hon. Earl |
| Howard-Bury, Colonel C, K. | Rees, Sir Beddoe | Womersley, W. J. |
| Hurst, Gerald B. | Reid, Capt. Cunningham (Warrington) | Wood, Rt. Hon. Sir Kingsley |
| Inskip, Sir Thomas Walker H. | Reid, D. D. (County Down) | |
| Iveagh, Countess of | Remer, J. R. | TELLERS FOR THE AYES.— |
| James, Lieut-Colonel Hon. Cuthbert | Richardson. Sir P. W. (Sur'y, Ch'ts'y) | Major Sir William Cope and Captain |
| Margesson. | ||
| NOES. | ||
| Adamson, Rt. Hon. W. (Fife, West) | Hamilton, Sir R. (Orkney & Shetland) | Roberts, Rt. Hon. F. O. (W. Bromwich) |
| Adamson, W. M. (Staff Cannock) | Hardle, George D | Robinson, W. C. (Yorks, W.R.,Elland) |
| Alexander, A. V. (Sheffield, Hillsbro') | Harris, Percy A. | Salter, Dr. Alfred |
| Baker, J. (Wolverhampton, Bllston) | Hayday, Arthur | Scrymgeour, E. |
| Barker, G. (Monmouth, Abertillery) | Hayes, John Henry | Scurr, John |
| Batey, Joseph | Henderson, T. (Glasgow) | Sexton, James |
| Bellamy, A. | Hirst, G. H. | Shinwell, E. |
| Bowerman, Rt. Hon. Charles W. | Hirst, W. (Bradford, South) | Short, Alfred (Wednesbury) |
| Broad, F. A. | Hudson, J. H. (Huddersfield) | Sitch, Charles H. |
| Bromfield, William | Hutchison, Sir Robert (Montrose) | Smith, Ben (Bermondsey, Rotherhithe) |
| Bromley, J. | Jenkins, W. (Glamorgan, Neath) | Smith, Rennie (Penistone) |
| Brown, Ernest (Leith) | Jones, Morgan (Caerphilly) | Snowden, Rt. Hon. Philip |
| Buchanan, G. | Jones, T. I. Mardy (Pontypridd) | Stamford, T. W. |
| Cape, Thomas | Kelly, W. T. | Stephen. Campbell |
| Charleton, H. C. | Kennedy, T. | Stewart, J. (St. Rollox) |
| Cluse, W. S. | Lansbury, Gtorge | Strauss, E. A. |
| Clynes, Rt. Hon. John R. | Lawrence, Susan | Sullivan, J. |
| Connolly, M. | Lindley, F. W. | Sutton, J. E. |
| Cove, W. G. | Longbottom, A. W. | Taylor, R. A. |
| Cowan, D. M. (Scottish Universities) | Lowth, T. | Thorne, W. (West Him, Plaistow) |
| Davies, David (Montgomery) | Lunn, William | Tinker, John Joseph |
| Dennison, R. | MacDonald, Rt. Hon. J. R.(Aberavon) | Tomlinson, R. P. |
| Evans, Capt. Ernest (Welsh Univer.) | Maclean, Nell (Glasgow, Govan) | Townend, A. E. |
| Gardner, J. P. | MacNeill-Welr, L. | Trevelyan, Rt. Hon. Sir Charles |
| Gibbins, Joseph | Malone, C. L'Estrange (N'thampton) | Viant, S. P. |
| Gillett, George M. | Morrison, R. C. (Tottenham, N.) | Wallhead, Richard C. |
| Graham, Rt. Hon. Wm. (Edin., Cent.) | Mosley, Sir Oswald | Watts-Morgan, Lt.-Col. D. (Rhondda) |
| Greenall, T. | Naylor, T. E. | Wellock, Wilfred |
| Greenwood, A. (Nelson and Colne) | Oliver, George Harold | Williams, T. (York, Don Valley) |
| Grenfell, D. R. (Glamorgan) | Owen, Major G. | Wilson, C. H. (Sheffield, Attercliffe) |
| Griffith, F. Kingsley | Palin, John Henry | Wilson, R. J. (Jarrow) |
| Griffiths, T. (Monmouth, Pontypool) | Parkinson, John Allen (Wigan) | Windsor, Walter |
| Groves, T. | Ponsonby, Arthur | Wright, W. |
| Grundy, T. W. | Potts. John S. | Young, Robert (Lancaster, Newton) |
| Hall, F. (York. W. R, Normanton) | Purcell, A. A. | |
| Hall, G. H. (Merthyr Tydvil) | Richardson, R. (Houghton-le-spring) | TELLERS FOR THE NOES.— |
| Mr. Charles Edwards and Mr. Paling. |
§ Consequential Amendment made.
453§ Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
§ Miss LAWRENCEWe have been furnished with eight reasons, occupying rather more than a page of paper, to explain why the figures the Minister has provided us with are not altogether satisfactory. It is pointed out, in the first place, that everything is thrown into confusion by the fact that the Eating and Valuation Act will be in force and the figures given us for the standard year are based on the circumstances prior to that year. They are based on a valuation in process of being superseded under the Hating and Valuation Act, 1925, and the Apportionment Act, 1928, so that there is a very considerable amount of doubt cast upon the accuracy of these figures for that reason only. The figures, which are the best available, are not dependable nor watertight, but they show districts relieved very largely and districts relieved not at all or very slightly, and we can trace no possible proportion in any case between the needs and the amount given.
I have for a long time marked down Monmouth as requiring some explanation. What will happen to Bedwellty when the period comes to an end? It will get a relief of 1s. 5d. in the £, its rates being now 22s. 3d. Rhymney Valley will go down from 20s. to 9s. 6½d. That is really a very curious thing when you have two districts so close together as Rhymney and Bedwellty. There are a good many other things in the Monmouth district that perplex me. There is a place beginning with an M in which occur 20 letters with only one vowel. It has a rate of 21s. and under the scheme the relief will be rather less than 1s., and there are other districts getting much more relief. These are very remarkable anomalies. It does not look as if the Minister's steam roller were smoothing out the discrepancies between one district and another. Houghton-le-Spring in Durham gets a very slight reduction, while Chester-le-Street and Bishop Auckland, whose rates are only a little higher, get them down by 4s. or 5s. Seaham Harbour, one of the highest rated districts, with the exception of Merthyr and one or two in Wales, gets hardly any remission at all. Seaham Harbour is rated at 23s. 10d., and it gets a remission 454 of 6d. That is an exceedingly remarkable case, and I cannot understand why, if this scheme is so excellent, places which are so cruelly rated should get so little remission while other places get a remission of 2s. or 3s. It is a very remarkable thing that in a scheme to smoothe out all inequalities a district so heavily rated as Seaham Harbour should get so little assistance.
That is why we say that this plan does appear to operate in the most haphazard why. It may be only appearance, but it certainly does appear so. The losses and gains are smoothed over, but that does not at all meet my point that the distribution out of the special grants does seem often to give to those who have and give very little indeed to those who need it. The cases of Bedwellty and Rhymney Valley and Seaham Harbour are cases which I have long wished to bring to the attention of the Minister and the House. That is our real objection to the scheme. We cannot estimate accurately what the position of affairs will be, for reasons set out. in the second White Paper. Nobody, not even the Minister, really knows how the scheme will work out. Is it any wonder that it should work out so strangely, or that a flat distribution on the ground of population should work out in. so strange a way with regard to the urban districts of the country? Their claims and their position's and needs are different, as also are the losses with regard to de-rating, which in some eases will be very large indeed and in some cases very little. Whatever their future losses or needs, they are to receive a flat rate.
The whole defence of the plan has been that it fitted the needs. In the counties and county boroughs everything was taken into account in a perfectly scientific form. Why do we depart from the formula in the case of boroughs and urban districts? What magic is there in being over the 75,000 level of population which made the formula fitting in one case, while there is to be a flat formula in others? What is the difference between Barking and West Ham East? Not very much. One has rather more duties, but they both have the same sort of conditions when you contrast them with similar districts. In some cases, the formula applies. In some cases we have one flat rate for all 455 services covered by the scheme and no attempt whatever to suit the needs of ail parts.
There is no attempt whatever to estimate the poverty of the districts as measured by the number of children or loss of rating. We have only these cast-iron uniform doctrines. It really looks as if the Minister was in despair when he came to the smaller allocations and has taken no trouble at all but has given them a flat rate and told them to take it and make the best of it. I suppose their position has been the most formidable of all. They have had the full force of the blow which has fallen on their heads. Perhaps the full force has not fallen even now. So much is this the case that of all the parts of the scheme I think the taking away of the powers and the finance of the smaller towns is the one which leads to the most difficulties. It needs a great deal more explanation than we have had. The Committee should have explained to it in greater detail than before why it is that this scheme provides such strange inequalities between one urban district and another and why it is that a formula intended to fit the needs of all is a thing to be departed from quite light-heartedly when once you cross certain boundaries of population.
§ Mr. DAVID GRENFELLI wish to support the view of the hon. Member for East Ham North (Miss Lawrence) and, if possible, to add some illustrations to show the injustice of this proposal. It is a puzzle to me why the Minister is departing from what he claims to be a very sound principle for the allocation of the whole of the national resources in the case of counties and county boroughs when he comes to smaller areas. If the principle is right as between county and county and if there should be some measure of equalisation between, say, counties in Wales and counties in the North of England, why should there not be the same principle of equality as between the urban districts within the same county? I am sure the Minister will find it very difficult to explain why he has departed from it and is allowing such striking discrepancies to be maintained. In the County of Glamorganshire there are places where the formula of 150 pence per head of the population will 456 leave an immense excess and advantage in some areas, but in neighbouring areas there will be a formidable deficiency when the same principle is applied. I do not think the Minister has paid as much regard as he should to the possibility of applying his formula to the smaller areas.
I do not know whether he has considered the possibility of more or less permanent unemployment in the urban areas within industrial counties, such as Durham, Monmouthshire and Glamorgan. We in Glamorgan do not see the end of unemployment, and, indeed, there is the possibility that we are not at the bottom of the depression yet. If the factor of unemployment is neglected and relief is to be given on the population basis, there will be no assistance given to us. The Minister must know that the loss of employment means loss of rates. Every man unemployed in the mining industry means a loss of rates of approximately 6d. per day. That means 3s. loss for every week's unemployment for every man employed in the mining industry, because the rates per ton of coal work out at approximately 6d., and the output of coal is about one ton for one day's work. In that coalfield there are altogether 100,000 men who are unemployed, and that means 100,000 sixpences less every day. When one takes into consideration the net loss of rates through unemployment, and the additional burden cast upon the rates owing to unemployment, one can see the absolute necessity for introducing a special weighting factor in order to do justice to those areas where unemployment is so extensive. The payment of 150d. per head of the population where 50 per cent. of the population is unemployed does not compare favourably with the payment of 130d. per head in a district where all the people are employed, and the ordinary income of the people is being maintained at its normal standard.
I have figures to show the striking discrepancy between area and area in the South Wales coalfield. In Barry, according to the formula in urban districts, the estimated loss to the district in rates and grants will work out at a rate of 236d. per head of the population. The grant to be made under the formula is 150d., and, therefore, Barry will lose 86d. per head of the population. In the case of 457 Mountain Ash the loss will be 236d., and there will be the same deficit of 86d. per head of the population on the application of this formula. I understand that the Minister's guarantee goes some way towards removing the deficiency, but the proposals in those two places work out very unfairly compared with places like Porthcawl and Port Talbot, where the loss is only 11d. per head of the population, and the surplus under the operation of the formula will be 139d. per head of the population. Porthcawl is without any industrial activity. It is a seaside resort whither people go after they have finished their life's work to live in retirement on pensions or on more or less comfortable incomes. These places will get under this formula 139d. more than they lose by de-rating, whereas places like Mountain Ash and Barry are going to lose 86d. per head of the population.
The same thing will apply in rural districts where very extraordinary anomalies will be created. There is one authority which will lose only 3d. per head through de-rating, but will have a surplus of 27d. per head to expend in any way it wishes, while another area which will lose 35d. through de-rating, will only have that loss made up to the extent of the 30d. laid down under the formula. These anomalies will continue for all time. There is nothing in the Clause which will remove them, and give each district an equal opportunity of meeting its liabilities, and the same chances of carrying on ordinary local government. There is nothing in this proposal to help these districts which will continue to be necessitous areas for some time to come, and which are already overwhelmed by the burden of their liabilities. This formula will give them no direct relief, but will perpetuate the burdens; and the anomalies which have brought about their poverty.
I would urge the Minister to meet these objections even at this stage of the Bill. I think the Bill can yet be made a workable Measure, and that the greater portion of the complaints of the local authorities can be met. I think that it is possible to devise a formula, especially with regard to the question of unemployment, which would make the Bill a workable Measure. As it is, it will give rise to fresh anomalies and inequalities between district and district, and. will cause growing resentment in those districts. It will be a constant source of grievance and 458 complaint. The Minister in forcing this Bill Clause by Clause through this House will not dispose of this problem. The greater his success in retaining this Bill in an unaltered state, the more will his difficulties become when it becomes an Act.
§ Mr. T. WILLIAMSOne did not expect the right hon. Gentleman, nor indeed would it be possible, to draft any formula which would apply to each locality fairly and equitably. But so many curious results will accrue as a result of the application of this scheme, according to the figures contained in Command Paper 3227, that there is ample justification for asking the right hon. Gentleman whether he cannot even at this late hour, re-examine the formula as it may or will apply to the various local authorities with a view to remedying many of the apparent injustices that will follow its full application. On several occasions I have referred particularly to the West Riding of Yorkshire, and may I recall to the mind of the right hon. Gentleman that of the rural councils in that area, something like 11 of them will, according to the figures in this Memorandum, be faced with an increased rate when the full formula is applied? It may be argued, as it has been argued on previous occasions, that, as long as authorities are not likely to encounter a great increase in one, two, three or even five years, and that as Parliament would on some future occasion be able to re-examine the whole scheme in the light of the experience gained. there is little or no need for local authorities to feel alarmed. That may be all very well, but in view of the fact that the West Riding of Yorkshire, which is peculiarly industrial, shows such extraordinary results—no fewer than 85 urban district councils, according to the Minister's figures, will find themselves, when the formula was fully applied with a rate increase on existing expenditure—all the supposed guarantees and the possibility of a Parliamentary re-examination of the whole business means little or nothing to those local authorities.
We are entitled to point out to the right hon. Gentleman, since these curious results do accrue, that it is worth his while to reconsider the position if he desires to carry local authorities with him. In this connection, I think, the right hon. Gentleman cannot say that he has yet secured the good will and 459 approval of the Rural District Councils' Association. Perhaps the right hon. Gentleman will tell us whether he has or has not, when he replies. Of all the authorities or associations of authorities who have not yet approved of the scheme, I think the rural district councils are the ones. It may be that there are real explanations of that. Certainly they are the last section of the community ready to enter into any change of this kind willingly. No rural authority which can visualise an increase in its rates will approve of any scheme propounded by this Ministry or any other Ministry. Apart from the West Riding of Yorkshire, there are a number of results, according to the White Paper issued by the Government, which show a tendency to an increase in rates here or a decrease there. Probably the Minister will tell us why these extraordinary results occur, not only in one district or one county but almost in every county in the country.
Take the county of Cumberland, where in Wigton the rates would be reduced from 10s. 8d. to 9s. 8d., while in the Penrith Rural Council's area they would be increased from 8s. 11d. to 11s. 11d. In the County of Durham, we find that the rates of the Borough of Durham would be decreased, approximately, by 3s. 1d., while in the rural area of Darlington the rates would increase by 5s. 6d. One wonders what the people of the rural area of Darlington think about this. In the County of Essex, the rates in the Tilbury Urban District Council area would be increased from 15s. 8d. to 18s. 3d., while in Woodford they would be reduced from 19s. 4d. to 12s. 10d. One could quote from Staffordshire, Lancashire and other counties, but I have quoted sufficient to indicate that extraordinary results will accrue in every county and in every part of a county. There are sound reasons why the Minister might very well reexamine the part of the formula as applied to rural district councils where developments are taking place very rapidly.
It is ostensibly the intention of the Minister of Health to help industrial undertakings and to assist industrial districts wherever he can, but unless we are very wary we shall find that in certain industrial areas developments will be retarded, if not stifled, in their normal development, because of the unfair incidence of this Clause. I suggest, with all 460 these variations and these very curious results—of course, I do not expect the present Minister of Health or any other Minister of Health to produce a perfect scheme—that it is possible to decrease the anomalies and apparent injustices in course of time, unless they are remedied now. The Minister might very well reconsider what can be done, in the light of known facts, before this Bill reaches its final stage. I would, therefore, urge upon the right hon. Gentleman not to look upon the opposition to this part or many other parts of the Bill as purely fractious, but to regard it as helpful opposition which might help him to make what he has described as a corner-stone in our local government life, which will go down to history as one of the big things that has been accomplished during this century. It might be made a real corner-stone in local government life if the Minister will agree to make it so. While he has done his best, he must realise that this is far away from being a perfect scheme and that there are chances still of very great improvements being made in the Bill.
Mr. CHAMBERLAINSome hon. Members opposite have not even yet really applied their minds in trying to understand what the scheme proposes to do. Time after time, hon. Members opposite set up a theoretical suggestion as to the aim of the scheme and then proceed to demolish it, whilst the real fact is that what they have represented as the object of the scheme is not the object. The hon. Member for East Ham North (Miss Lawrence) says that the object of the scheme is to roll out all the inequalities in rating in the country. No hon. or right hon. Member on this side has ever said that.
§ Miss LAWRENCEI said that one of the objects of the scheme was to reduce the inequalities.
Mr. CHAMBERLAINI should not have taken exception to that, if that had been the hon. Member's statement. Our object is to reduce inequalities, but the hon. Member said that the object was to roll out the inequalities. and she found fault with it because the inequalities were not entirely rolled out. That is an unreasonable proposition. There is the widest variation in rates, and there must be wide variations so 461 long as we have a system which leaves to each area a large measure of freedom in the services which it has to perform, and how it shall perform them. We cannot for a moment pretend, and we do not pretend, to undertake that the rates in each different rating area shall be the same. What we do say is that we are trying, and we believe we are succeeding, to deal with the distribution of the Exchequer grants in such a way that they will be much better disbursed amongst the different areas, more particularly the necessitous areas, than in the past.
We have heard the criticism made repeatedly about this Bill that there is a distinction in the method by which we treat county districts as against county boroughs and counties. The hon. Member for East Ham North asks why do we depart from the formula which we think is applicable to counties and county boroughs when we come to county districts. She says that the needs of the population are the same whether in an urban district, in a non-county borough. in a county borough or in a county. I did not expect that kind of remark from an hon. Member who has so much knowledge of the subject as the hon. Member for East Ham North. It is not a question of whether the needs are the same or different. The question is, are those needs met. The hon. Member must know perfectly well, if she gives a moment's thought to the subject, that the county boroughs are now to be responsible for the charge of their own poor, and that in a county district that is not so because it has become a county charge. Therefore, a formula which takes account not only of population but of unemployment, of rateable value, children, and the rest of it, is not applicable in cases where the charges for Poor Law and highways are no longer borne by line district but are carried either by the county or the county borough. That is why we have to apply a different formula in the ease of the county districts than we do in the case of the counties and the county boroughs. I should have thought that that was sufficiently obvious, even to a person who does not possess all the knowledge which the hon. Member for East Ham North claims to have.
462 There are hon. Members who say that there are very much larger rates in some county districts than in others. Of course, there are. The conditions are different, and you cannot roll out those differences, and make every district exactly like another district. Hon. Members do not always bear in mind, when considering the cases of county districts, that here we are dealing with a definite sum of money which has to be distributed amongst these county districts, and if we are to give an additional sum to certain districts we shall have to take something away from other districts in the county. The moment you try to do that, you will find that you are raising much more anomalous and indefensible differences than are to be found in the formula. That is exactly what happened when I was discussing this matter with some of the associations of local authorities. They began much in the same sort of way as some hon. Members have begun. They said: "This formula still leaves anomalies," and they suggested that it might be improved. They tried their hands at improving it, but they found that that was not possible. At any rate, they could not hit upon any formula which was better than the one which we have devised. Hon. Members opposite, although they may criticise the result? of the formula. would, I think, find it very difficult to draw up a better one or one less open to criticism. You may find here and there an area where the loss upon rates is very heavy, and where the gain is not great, but there are other areas—and I notice the hon. Member for Caerphilly (Mr. Morgan Jones) did not mention it—like Aberavon where the gain is very great.
§ Mr. MORGAN JONESI did not mention it because it is a non-county borough, and we were dealing with urban districts.
Mr. CHAMBERLAINI do not know why we should not discuss the case of non-county boroughs; is Aberavon to be denied its benefit because it happens to be a non county borough? I find that Aberavon with a poundage in rates in 1916–27 or 27s. in the £ is at 21s. 6d., a very great gain and advantage to that particular borough. If you are going to give more money to other districts in that area you will have to take it away 463 from Aberavon, and I imagine that they would have something to say about that. That is the kind of difficulty with which hon. Members are confronted the moment they propose to introduce a different solution. There is another point which I desire to point out to the Committee because it is very often left out of account altogether by some hon. Members opposite. They say that some of these county districts are not going to be any better off than they were before because they are going to lose so much by de-rating, a local authority is going to lose so much by de-rating, the general ratepayer is going to lose so much by de-rating. Surely they have forgotten that industry is going to gain, which will make up for the loss of local authorities. Some county districts will lose by de-rating, but some of them will gain by our scheme because the benefits of de-rating will bring industry to these areas.
§ Mr. D. GRENFELLI was dealing with unemployment.
Mr. CHAMBERLAINThe two are very closely connected. If you are going to take the burdens off the back of industry you are going to diminish unemployment. The hon. Member for Caerphilly said that the rates in Aberavon would be reduced from 31s. 10d. to 28s.
§ Mr. MORGAN JONESWhat I said was that in 1926–27 the variation in rates before the application of the scheme was 31s. 10d. and 15s. 4d. in the £, and after the application of the scheme the variation would be from 28s. to 15s. 4d.
§ 10.0 p.m.
Mr. CHAMBERLAINI do not think that affects the argument. As I understood him his argument was that the range by which the rates would come down was so small that there would be no inducement for industry to come to that district. Take a place like Aberavon where the rates are 31s. 10d. Under the scheme they will come down to 24s. 9d., but the manufacturer is only going to pay one-quarter of that, and his rates therefore will be 6s. 2d. What you have to compare when considering the prospects of industry is 31s. 10d. and 6s. 2d. That is going to make a great alteration in the outlook of the manufacturer who has to consider whether or not he is going to set up an industry in that particular area. That is a point which I 464 think hon. Members have left out of account altogether when considering whether this scheme is going to assist necessitous areas or not. In some of these distressed areas the rates are high throughout the county. You cannot expect that we can make any very great difference in the rates in that county, and what we rely upon chiefly in an area of that kind is that the relief we are going to give to industry through the rates is going to diminish unemployment and in time must bring down the rates. That must be considered quite independent of the relief to the general ratepayer given by the scheme.
There is another point which I desire to put before the Committee. It is not quite easy to grasp and I do not think hon. Members have quite assimilated it yet. It is this: When you have a direct grant, as you have in the scheme, to a county district which is based on population alone, it is a grant which automatically distinguishes between a poor area and a rich area. If you express that grant in the form of a rate in the £ it must, of course, be at a higher rate where the rateable value is low than when the rateable value is high, and seeing that each of these county districts has to provide not merely the expenditure in the district which is chargeable to local rates, but also has to bear the county rate, and that that county rate is a rate in the £ equal for all districts, the fact that you get a flat rate according to population means that the poorer area gets a greater contribution towards the cost of the flat county rate in the £ than the richer area. Although at first sight this formula of population appears to make no distinction between one area and another in actual working it does, and the poorer area gains at the cost of the richer area. There is that distinction: there is, therefore, something much more subtle in the application of the formula than may appear at first sight to be the case. This is one of the points which it is not very easy to assimilate, but if hon. Members will work it out they will find this to be the case and will see that the scheme really does help the poorer areas much more than they perhaps realise.
§ Mr. LANSBURYThe right hon. Gentleman and those who are supporting this Bill appear to me to be pinning their 465 faith to what is a false hope—namely, that this proposal for de-rating will really mean the starting of new industries in certain districts where at present they will not go because the rates are so high. The right hon. Gentleman said that one result of the de-rating proposals would be that new industries would be started in certain districts. Let me point out this very innocent fact, a fact which everybody realises, that there is no industry waiting to go into any district. The depression in industry is so great that nothing that this paltry measure of relief can do will stabilise them and put them on their feet. Therefore, the whole of that argument falls to the ground. I am free to admit that it has taken me a very long time owing to lack of the necessary education, to understand the formula and I am not sure that I understand it now. [An HON. MEMBER: "Hear, hear!"] Let me say that to understand the formula is not the height, the length, the breadth or the depth of wisdom, and the right hon. Gentleman in his speech just now said that the formula, which is supposed to be very scientific, is also very subtle and wants a lot of understanding.
I am a plain sort of person, without the sublety of the intelligence of hon. Members opposite. When we are challenged as to whether a scheme better than this could be produced, I bring the Minister back to something that can be easily understood. This scheme takes a certain sum of money and certain grants from the local authorities, and it adds to these amounts the proceeds of a tax on petrol and forms a kind of pool out of which certain payments are to be made. All the difficulties arise because very clever people have devised a formula by which they prevent the poorer districts getting back from the State the amount of money of which the State robs them. I challenge any of the subtle Gentlemen opposite to prove that every local authority will get back the full amount of the rates that it will not be able to collect because of the passing of this Bill. If what I have said were not correct, the Minister would not have told us last night that if the proposition were to give back to each local authority out of the Exchequer, the amount taken from it as rates—that is the amount the 466 authority is not allowed to collect as rates—we should knock the bottom out of the scheme.
No one has yet answered the point that the districts from which you take most under the de-rating Clauses are just those districts that can least afford the loss, because they are in the main the industrial districts, where unemployment and poverty and all the things that the Government profess to have so much at heart prevail. I do not admit the truth of the statement of the right hon. Gentleman and other subtle people opposite, that the de-rating scheme is going to make more employment. But suppose that I do admit it, and that de-rating will be of great benefit to trade and industry, I should have thought that the ordinary common-sense way of dealing with the matter would have been for the Government to have said to each local authority in whose area de-rating was to be put into operation: "For every pound of de-rating the Exchequer will pay you £l." That was done under the Agricultural Rates Act. Instead of doing it here the Government have mixed things up in this formula, and have created all the difficulties that the Minister and the Parliamentary Secretary have done their best to make more mysterious every time they have spoken. That is because they are so subtle. Subtle people can never make anything clear to an ordinary intelligence.
The further fact is that, having muddled up the arrangement in regard to de-rating, having dealt with it in a very subtle way, they have taken the money from poor districts and from well-to-do districts, and have treated it all as one fund. They say that they want by this scheme to deal in a more efficient manner with the grants for social services, to give more money to social services, and to see that the money was much better spent. For the life of me, I cannot see why the block grant could not have been made up. We are against the block grant, but let us admit that it was necessary to have it for the social services. Why that should have been mixed up with the amount of de-rated money, passes my comprehension. That is because I have not a subtle mind.
The CHAIRMANThis Clause does not deal with block grants or the money 467 given to counties or county boroughs, but merely with the apportionment, within the districts of a county, of the money apportioned to the county.
§ Mr. LANSBURYSurely it is the distribution of this hotch-potch Bill that the Government has created. I merely want to point out, because the right hon. Gentleman has told us that we want a very subtle mind to understand this business, that it would have been much simpler not to have been quite so subtle, but to have done the business in a common, ordinary, garden manner, and to have paid back to people the money of which you robbed them. That is the first proposition. The next proposition is that had it been necessary to create the pool out of which this money is to be distributed to the localities, I cannot see why the Government should not have laid down certain terms and conditions on which it could have been distributed. That would have saved a great deal of difficulty. What the right hon. Gentleman has done with his very subtle brain is to mix up reform of the Poor Law with this de-rating scheme.
The CHAIRMANThe hon. Member seems to be anticipating his speech on the Third Reading, This particular Clause deals only with the manner in which the grants to a county are to be distributed to the various districts within the county areas.
§ Mr. LANSBURYThe hon. Gentleman himself has a very subtle intellect, but I do not want to get out of order. I was tempted to trespass by the Minister's speech, because it was a challenge to us that we were very ignorant. Of course he did not say so directly. He told us he would try to make us understand this proposal but that it was so very subtle that we might not understand it. We are sorry to be so ignorant but I want the right hon. Gentleman to know that quite ordinary people might have produced a scheme which would not be subtle and which would not have taken hours and days to understand. Had the right hon. Gentleman been here earlier, he would have heard one of the most learned gentlemen 468 on his own side saying that he did not understand how this part of the Bill would work. The whole difficulty has arisen because of the frightful hotchpotch which is in this Bill. It attempts to do in one Bill a dozen different things and it does them all in exactly the wrong way. That is the subtle way.
§ Mr. E. BROWNI wish to call attention to the Minister's last statement. It is the first time I have heard it said, cither in the country or here, that the application of this method as to population will send the money where it is needed. I should be very pleased to put down a series of questions asking for the figures on which the Minister supports that statement. The hon. Member for Ilford (Sir G. Hamilton) sits for a district with a population of over 100,000. I shall be surprised to find that Ilford will gain by this proposition. I was reading the letters of Charles Kingsley the other night and I came across a quotation which should appeal to the hon. Member for Bow and Bromley (Mr. Lansbury). Writing about formulae Charles Kingsley says:
The men who only try to speak what they believe are naked men, fighting men, quilted sevenfold in formulae.That seems to be the position to-night. We are arguing here about subtleties and formulae and directly we begin to argue about this formula the Minister has us at a disadvantage because it is his scheme and not ours. We would desire a very different way. I shall be pleased to have verification by figures of the suggestion that by the application of this very arbitrary method of actual population to the county districts you Will really send the money to the places where it is wanted. With regard to the question of rating value, I cannot believe that that point is sound. Surely there are other factors to be taken into consideration when you are going to apply this money according to actual population. If you are going to measure need in terms of population you must express it, not in terms of assessable value alone, but in terms of the rating pressure per head of the population. No calculation can be sound that does not take into account variations, first in the rates in the £, and, second, in the levels of assessable values. One of the troubles which the Parliamentary Secretary had was with 469 the case of Cheltenham. Whereas Cheltenham loses very little by de-rating, neither does Brighton, yet, because Brighton is a county borough getting the original distribution and not the secondary distribution, Brighton is bound to gain on any formula of any kind expressing real needs. But Cheltenham, being a non-county borough, only gets its money after the weighted population grant has been made and the percentage has been fixed, and then the multiplication has been made by actual population. If the Minister goes into the matter he will find his subtlety is a little too subtle this time. The naked men fighting the man armed sevenfold by the formula are on this side, on the right side of soundness, while he is on the wrong side of subtlety.
§ Mr. RENNIE SMITHThe Minister began his reply by assuming that we were complaining because the weighted formula which it is proposed to apply to the counties was not going to be applied to the county districts. That is not our position at all. I think there is 100 per cent. agreement on this side that the application of this particular formula on one occasion is quite enough, and we do not want to see it spread any further, but it is quite a different thing to say that the only alternative in the field is this very rough and ready method of mere population. My hon. Friend the Member for East Ham North (Miss Lawrence) had all the weight of the Urban District Councils Association behind her in the position which she put forward. They have had the most expert authorities behind them, and they have given it as their considered judgment, after investigations which they have made into the effects of this proposal in the case of individual urban districts, that very grave injustice will be done if an attempt is made to stereotype the grants to urban district councils in this way, without regard to other circumstances than mere population.
Further on, they say that if the principle of the working out of a formula according to need is followed for county services, it ought to be followed for urban and rural district services. The Urban District Councils Association have never asked for the rigid and automatic application of the same formula, but they put forward, as do we, the consideration that 470 some nearer approach to the principle of need might be discovered than the one which the Minister has incorporated in this Bill. The Minister has admitted the principle that he wants to help the poorer distracts if he can. I am quite sure that if that is his primary intention, he can implement this formula in other ways that would help him to achieve that end.
I did not rise to criticise this particular formula so much as to emphasise once again the precarious condition in which the urban district councils, and especially those of lesser populations, are going to be placed under the vague considerations of this particular Clause. I gave to the Parliamentary Secretary the representative example of my own constituency, which shows that before the supplementary grants come into existence the 14 authorities in my constituency will have the scales weighted against them to the extent of about 4s. 9d. in the £. It is true that as a result of the struggle which the urban districts and the counties have put up, we got a five years' guarantee merely within the scheme, and that as a result of the fight they put up in the Departments concerned we got a guarantee that after seven years the whole finance of this matter will be reviewed by Parliament. What we are wanting still further in the interests of the urban district councils and of the good working of this Bill is that they should be guaranteed as individual authorities that they are not going to lose at all. We are asking for the establishment of this minimum principle, and I regret that the Minister of Health, who is setting up the ideal of helping local authorities, should reject what is a very moderate proposal.
Mr. GREENWOODThe Debates today have proved the difficulty of arguing this Bill under the guillotine. On this Clause we have not been able to raise many of the questions that could be raised, and we have not been able to probe the bottom of the subleties of this Clause. I have not time to deal with the Minister's speech as I should like, but there are two points in his defence of Clause 73 to which I should like to refer. The first is his introduction of the question of de-rating and its effect on unemployment. We are told that if the rates were 26s. in the £ in some 471 county districts, they are to be reduced by three-quarters, and that it will be advantageous to industry. The first reply obviously is that if you reduce the rates of industrial hereditaments by a quarter, you will leave the position precisely where it was, and there will be no inducement to anybody. The situation will be relatively what it was before, because presumably the firms in the 25s. area and the firms in the 6s. area have been able to compete on fairly equal terms in the past; otherwise the firms in the 25s. area would not exist. It is no reply to the case of the local authorities to say that you are seeking to help certain selected ratepayers. The only inference from the argument of the Minister on this Clause is that with more work the ordinary householder will be able to pay higher rates. That is the logic of his argument.
I want to deal with the question of population. We are told that population measured on a flat rate basis is, in effect, a means of assisting the poorer areas relatively to the richer. If that be so, why did not the right hon. Gentleman stick to the simple principle of population for counties and county boroughs? He has gone out of his way
§ to modify the population basis in the counties and county boroughs, and his argument for doing that was that it was necessary to bring in additional factors in order to help the poorer districts. In the county areas outside London a special weight is given to population in respect of sparsity of population. It is introduced in the case of counties because sparsity of population is an important factor in the expenditure of local authorities. If it be so for a county, it is so for the rural districts, and that element ought to have been taken into account. The flat basis of population does not discriminate fairly between the rich and poor areas. As a matter of fact, it places- a premium on the richer areas at the expense of the poorer areas, especially in the rural districts where poverty is due to sparsity of population.
§ It being half-past Ten of the Clock, the CHAIRMAN proceeded, pursuant to the Order of the House of 12th December, successively to put forthwith the Question already proposed from the Chair.
§ Question put, "That the Clause, as amended, stand part of the Bill."
§ The Committee divided: Ayes, 193; Noes, 102.
473| Division No. 120.] | AYES. | [10.30 p.m. |
| Acland-Troyte, Lieut.-Colonel | Cecll, Rt. Hon. Sir Evelyn (Aston) | Gaibraith, J. F. W. |
| Ainsworth, Lieut.-Col, Charles | Chamberlain, Rt. Hon. N. (Ladywood) | Ganzonl, Sir John. |
| Albery, Irving James | Chapman, sir S. | Gates, Percy |
| Alexander, E. E. (Leyton) | Christle, J. A. | Glyn, Major R. G. C. |
| Alexander, Sir Wm. (Glasgow, Cent'l) | Cobb, Sir Cyril | Goff, Sir Park |
| Applin, Colonel R. V. K. | Cochrane, Commander Hon. A. D | Gower, Sir Robert |
| Ashley, Lt.-Col. Rt. Hon. Wilfrid W. | Cohen, Major J. Brunel | Graham, Fergus (Cumberland, N.) |
| Astor, Maj. Hn. John J. (Kent, Dover) | Colfox, Major William Phillips | Grant, Sir J. A. |
| Astor, Viscountess | Colman, N. C. D. | Greene, W. P. Crawford |
| Atkinson, C. | Conway, Sir W. Martin | Grenfell, Edward C. (City of London) |
| Barnett, Major Sir Richard | Cope, Major Sir William | Guinness, Rt. Hon. Walter E. |
| Beamish, Rear-Admiral T. P. H. | Courthope, Colonel Sir G. L. | Gunston, Captain D. W. |
| Benn, Sir A. S. (Plymouth, Drake) | Cowan, Sir Wm. Henry (Islington, N.) | Hacking, Douglas H. |
| Bennett, A. J. | Craig, Sir Ernest (Chester, Crewe) | Hamilton, Sir George |
| Bethel, A. | Crookshank,Cpt.H.(Lindsey,Gainsbro) | Hammersiey, S. S. |
| Birchall, Major J. Dearman | Cunliffe, Sir Herbert | Hartington, Marquess of |
| Bird, E. R. (Yorks. W. R., Skipton) | Dalkeith, Earl of | Harvey, Major S E. (Devon, Totnes) |
| Bird, Sir R. B. (Wolverhampton, W.) | Davies, Dr. Vernon | Henderson, Capt. R. R.(Oxf'd, Henley) |
| Boothby, R. J. G. | Davison, Sir W. H. (Kensington, S.) | Henderson, Lieut.-Col. Sir Vivian |
| Bowyer, Captain G. E. W. | Dean, Arthur Wellesley | Heneage, Lieut.-Colonel Arthur P. |
| Bridgeman, Rt. Hon. William Cilve | Edmondson, Major A. J. | Hennessy, Major Sir G. R. J. |
| Briggs, J. Harold | Edwards, J. Hugh (Accrington) | Hills, Major John Waller |
| Briscoe, Richard George | Ellis, R. G. | Hilton, Cecil |
| Btittain, Sir Harry | Erskine, Lord (Somerset, Weston-s.-M.) | Hoare, Lt.-Col. Rt Hon. Sir S. J. G. |
| Brocklebank, C. E. R. | Erskine, James Matcom Monteith | Holbrook, Sir Arthur Richard |
| Brooke, Brigadier-General C. R. I. | Everard, W. Lindsay | Hopkins, J. W. W. |
| Buckingham, Sir H. | Fairfax, Captain J. G. | Hopkinson, A. (Lancaster, Mossley) |
| Bullock, Captain M. | Falle, Sir Bertram G. | Horllck, Lieut.Colonel J. N. |
| Burman, J. B. | Fanshawe, Captain G. D. | Howard-Bury, Colonel C. K. |
| Campbell, F. T. | Fermoy, Lord | Hudson, Capt. A. U. M (Hackney, N). |
| Carver, Major W. H. | Forestler-Walker, Sir L. | Herst, Gerald B. |
| Cassels, J. D. | Forrest, W. | Inskip, Sir Thomas Walker H. |
| Cayzer, Maj. Sir Herbt. R.(Prtsmth.S.) | Fremantie, Lieut.-Colonel Francls E. | Iveagh, Countess of |
| Jackson, Sir H. (Wandsworth, Cen'l) | Newman, Sir R. H. S. D. L. (Exeter) | Southby, Commander A. R. J. |
| James, Lieut.-Colonel Hon. Cuthbert | Newton, Sir D. G. C. (Cambridge) | Spender-Clay, Colonel H. |
| Kindersley, Major G. M. | Nicholson, Col. Rt.Hn.W.G.(Ptrsf'ld.) | Stanley, Lieut.-Colonel Rt. Hon. G. F. |
| King, Commodore Henry Douglas | O'Neill, Major Rt. Hon. Hugh | Stanley, Hon. O. F. G. (Westm'eland) |
| Lamb, J. O. | Oman, Sir Charles William C. | Steel, Major Samual Strang |
| Lloyd, Cyril E. (Dudley) | Ormsby-Gore, Rt. Hon. William | Storry-Deans, R. |
| Locker-Lampson, Rt. Hon. Godfrey | Percy, Lord Eustace (Hastings) | Stott, Lieut.-Colonel W. H. |
| Loder, J. de V. | Perkins, Colonel E. K. | Streatfelld, Captain S. R. |
| Lougher, Lewis | Peto, G. (Somerset, Frome) | Stuart, Hon J. (Moray and Nairn) |
| Lucas-Tooth, Sir Hugh Vera | Pllcher, G. | Sueter, Rear-Admiral Murray Fraser |
| Luce, Maj.-Gen. Sir Richard Harman | Pownall, Sir Assheton | Sugden, Sir Wilfrid |
| Lumley, L, R, | Radford, E. A. | Tasker, R. Inigo. |
| MacAndrsw, Ma|or Charles Glen | Rawson, Sir Cooper | Thom. Lt.-Col. J. G. (Dumbarton) |
| Macdonald, Capt. P. D. (I. of W.) | Rees, Sir Beddoe | Tinne, J. A. |
| Macdonald, R. (Glasgow, Cathcart) | Reid, Capt. Cunningham (Warrington) | Titchfield, Major the Marquess of |
| McLean, Major A. | Reid, D. D. (County Down) | Tryon, Rt. Hon. George Clement |
| Macquisten, F. A. | Remer, J. R. | Vaughan-Morgan, Col. K. P. |
| Maitland, A. (Kent, Faversham) | Rentoul, G. S. | Waddington, R. |
| Maitland, Sir Arthur D. Steel- | Richardson, Sir P. W. (Sur'y, Ch'ts'y) | Wallace, Captain D. E. |
| Makins, Brigadier-General E. | Roberts, Sir Samuel (Hereford) | Ward, Lt.-Col. A.L.(Kingston-on-Hall) |
| Manningham-Buller, Sir Mervyn | Ropner, Major L. | Waterhouse, Captain Charles |
| Margesson, Captain D | Ruggles-Brise, Lieut.-Colonel E. A. | Watson, Rt. Hon. W. (Carlisle) |
| Marriott, Sir J. A. R. | Sandeman, N. Stewart | Wayland, Sir William A. |
| Meller, R. J. | Sanders, Sir Robert A. | Wells, S. R. |
| Merriman, Sir F. Boyd | Sandon, Lord | Williams, Com. C. (Devon, Torquay) |
| Mllne, J. S. Wardlaw- | Sassoon, Sir Philip Albert Gustave D | Williams, Herbert G. (Reading) |
| Monsell, Eyres, Com. Rt. Hon. B. M. | Shaw, Lt.-Col. A. D. Mel. (Renfrew, W) | Winby, Colonel L. P. |
| Moore, Sir Newton J. | Sheffield, Sir Berkeley | Winterton, Rt Hon. Earl |
| Moore-Brabazon, Lieul.-Col. J. T. C. | Sinclair, Col. T.(Queen's Univ.,Belfast) | Womersley, W. J. |
| Morrison-Bell, Sir Arthur Clive | Smith, Louis W. (Sheffield, Hallam) | Wood, Rt. Hon. Sir Kingsley |
| Nall, Colonel Sir Joseph | Smith, R. W. (Aberd'n & Kinc'dine, C.) | |
| Neville, Sir Reginald J. | Smithers, Waldron | TELLERS FOR THE AYES.— |
| Mr. F. C. Thomson and Mr. Penny. | ||
| NOES. | ||
| Adamson, Rt. Hon. W. (Fife, West) | Hall, G. H. (Merthyr Tydvil) | Richardson, R. (Houghton-le-Sprlng) |
| Adamson, W. M. (Staff., Cannock) | Hardle, George D. | Roberts, Rt. Hon. F. O.(W.Bromwich) |
| Alexander, A. V. (Sheffield, Hillsbro') | Hayday, Arthur | Robinson, W. C. (Yorks,W.R.,Elland) |
| Baker, J. (Wolverhampton, Bllston) | Hayes, John Henry | Runciman, Hilda (Cornwall, St. Ives) |
| Batey, Joseph | Hirst, G. H. | Salter, Dr. Alfred |
| Beckett, John (Gateshead) | Hirst, W. (Bradford, South) | Scrymgeour, E. |
| Bellamy, A. | Hudson, J. H. (Huddersfield) | Seurr, John |
| Bowerman, Rt. Hon. Charles W. | Jenkins, W. (Glamorgan, Neath) | Sexton, James |
| Broad, F. A. | Jones, Morgan (Caerphilly) | Shinwell, E. |
| Bromfield, William | Jones, T. I. Mardy (Pontypridd) | Short, Alfred (Wednesbury) |
| Bromley, J. | Kelly, W. T. | Sitch, Charles H. |
| Brown, Ernest (Leith) | Kennedy, T. | Smith, Rennie (Penistone) |
| Buchanan, G. | Kenworthy, Lt.-Com. Hon. Joseph M. | Stamford, T. W. |
| Charleton, H. C. | Lansbury, George | Stephen, Campbell |
| Cluse, W. S. | Lawrence, Susan | Stewart, J. (St. Rollox) |
| Clynes, Rt. Hon. John R. | Lindley, F. W. | Strauss, E. A. |
| Connolly, M. | Longbottom, A. W. | Sullivan, J. |
| Cove, W. G. | Lowth, T. | Sutton, J. E. |
| Cowan, D. M. (Scottish Universities) | Lunn, William | Taylor, R. A. |
| Davies, David (Montgomery) | MacDonald, Rt. Hon.J. R.(Aberavon) | Tinker, John Joseph |
| Dinnison, R. | Maclean, Nell (Glasgow, Govan) | Tomlinson, R. P. |
| Duncan, C. | MaeNeill-Weir, L. | Townend, A. E. |
| Edwards, C. (Monmouth, Bedwellty) | Malone, C. L'Estrange (N'thampton) | Viant, S. P. |
| Evens, Capt. Ernest (Welsh Univer.) | March, S. | Watts-Morgan, Lt.-Col. D. (Rhondda) |
| Gardner, J. P. | Morrison, R. C. (Tottenham, N.) | Wedgwood, Rt. Hon Josiah |
| Gibbins, Joseph | Mosley, Sir Oswald | Wellock, Wilfred |
| Gillett, George M. | Naylor, T. E. | Wheatley, Rt. Hon. J. |
| Greenall, T. | Oliver, George Harold | Williams, T. (York, Don Valley) |
| Greenwood, A. (Nelson and Colne) | Owen, Major G. | Wilson, C. H. (Sheffield, Attercliffe) |
| Grenfell, D. R. (Glamorgan) | Palln, John Henry | Wilson, R. J. (Jarrow) |
| Griffith, F. Kingsley | Paling, W. | Windsor, Walter |
| Griffiths, T. (Monmouth, Pontypool) | Parkinson, John Allen (Wigan) | Young, Robert (Lancaster, Newton) |
| Groves, T. | Ponsonby, Arthur | |
| Grundy, T. W. | Potts, John S. | TELLERS FOR THE NOES.— |
| Hall, F. (York, W.R. Normanton) | Purcell, A. A. | Mr. B. Smith and Mr. T. Henderson. |
§ THE CHAIRMAN then proceeded to put forthwith the Questions on any Amendments moved by the Government of which notice had been given and the Question necessary to dispose of the business to be concluded at half-past Ten of the clock at this day's Sitting.