HC Deb 13 July 1932 vol 268 cc1344-74

I desire to raise the question of the distressed areas, as chairman of a group of Members who have been giving this matter very considerable attention as representing those areas. Time is going and other hon. Members wish to speak. Therefore I will content myself by reading a resolution which was passed by the Newcastle City Council, and forwarded to me yesterday. It states: That this council, being of opinion that the growing burden of Poor Law services, accentuated as it is by the alarming increase in Poor Law relief due to unemployment, is becoming a menace to the industrial life of certain areas, urges the Minister of Health to institute without delay an inquiry into the working of Parts I and II of the Fourth Schedule and Section 98 (1, b,) of the Local Government Act, 1929, and to present a report thereon to Parliament, with a view to the more adequate weighting of the unemplayment factor in the calculation of the block grant under this Act. That resolution sets forth exactly and precisely what our contentions are. Unfortunately, during the last few weeks when the Minister of Health was kind enough to receive 50 or so Members of Parliament, who went to him as a deputation, he was not able to give a definite view. He promised to consider the matter very carefully. I put a question last week asking the Minister if he had had time further to consider the question, and the answer was indefinite. We rise to-day for three months, and shortly after that the House will probably adjourn for another two or three months. The position of these areas is desperate. It is becoming gradually worse, and I do entreat the Minister to-day to give us some hope and encouragement that something practical will be done during the Recess, even if we cannot now give a definite reply.


I wish to support the plea put forward by the hon. Member who has just spoken. There are few among the important questions which have occupied the attention of this House that are more serious in their effect on some areas of this country, and that can exceed in importance that which has just been introduced. The position with regard to these areas in which the basic trades of our country are situated is such that there is an ever-increasing burden and an ever-increasing incapacity to bear it. These areas are being crushed between the upper and the nether millstone. On the one hand, there is a growing burden which is crippling the whole life of the community, and on the other there is no proper capacity to withstand the burden.

To indicate the nature of the problem, it is perhaps easiest to show exactly the extent to which this burden has increased. Taking the north-east coast, one of the most important areas from the point of view of the basic trades, and for the purposes of illustration taking the capital of that area, one finds that over the last two years there has been an increase in expenditure on ordinary relief of 20 per cent., amounting to no less than £30,000 a year. In able-bodied poor relief, over the same period, there has been an increase of no less than 160 per cent., the amount falling on Newcastle per annum being £85,000, and the burden of the two thus being £115,000 a year more than two years ago. That is the nature of the problem, and when one has regard to the facts that there is the deepest depression in these areas and that we have unparalleled unemployment there, one sees how hopeless it is for these areas to carry these vast additional burdens. In fact, the problem is to a large extent the problem of unemployment, and that problem as reflected in poor relief statistics. It is suggested very often that local authorities ought to put their houses in order, and ought to cut down their expenditure and enable themselves to get rid of some of the burdens which at present oppress them. There is no possibility of any relief from any of these burdens in the distressed areas.

There are four main factors in the circumstances which have resulted in an increase in the numbers of able-bodied persons, many of them up to comparatively recent days engaged in insurable trades, who are now cast on to the Poor Law. The first is a matter partly of administration and partly of the construction of the Unemployment Insurance Acts. Large numbers of men who have never done a day's work in any but insurable occupations are now cast out- side the ambit of unemployment insurance purely on a ruling of an umpire that a man who has not done any insurable work for a certain period, the normal period being fixed at five years, is no longer regarded as a person who is normally engaged in insurable employment. In ordinary circumstances that may be a fairly reasonable working guide, but you must keep in mind the fact that in many of these areas the figures of unemployment are such that there is no chance for the majority of men to get any insurable employment at all.

Taking the staple trade of my own area, shipbuilding, there are 75 per cent. of the men out of work, and the shipbuilding yards, which at one time were hives of industry, are now destitute of any signs of activity, just as though a dead hand had been put on them, with no chance of any revival in sight. How hopeless it is to suggest that arty man in that trade is not normally engaged in insurable work because he has not had any work for a certain period of years! The numbers of such men are increasing, with the result that there are thousands of men in these depressed areas who are flung outside the area of unemployment insurance and who come on to the Poor Law because the conditions of employment are so had that there is no possibility of the majority of them getting any work at all.

In the second category are men who have always been engaged in insurable work, but strike a had spell of unemployment. After a time they may try to engage in some other work in order to provide some maintenance for themselves and their families, particularly if they have some little savings, and they engage either in a small shop or possibly in some hawking or commission business. The more energetic they are, and the more successful they may be for a time in that work, the worse their position becomes from the point of view of unemployment insurance. As soon as they strike a had patch and have to cease their little venture, they have to go off unemployment insurance because they are no longer normally engaged in insurable work. In both these directions you find large numbers of men who should be provided for by the State but who now have to come as a burden on to the local authority.

The third category consists of men who have not the requisite number of stamps to qualify for unemployment insurance benefit or transitional payments. That number is constantly increasing. While eight or ten stamps does not seem to be a great number, in these areas where three men out of every four are out of work the vast majority have no chance whatever to get even this small number of stamps. The fourth category consists of those who have been caught by the Anomalies Act, such as the persons engaged in seasonal work, and who over either the whole year or part of the year are not in receipt of any wages or benefit, and in turn come on to the Poor Law.

These four categories appear to be the root of the problem. They have their reflexes, because the persons who come off unemployment benefit in turn are less able to contribute to the maintenance of their relatives. So are the people who are hit by the means test, and so are those who are not able to earn the same wages as before. They are all less able to maintain their old folks, and possibly other relatives. The people in the North-East area are always anxious to do all they can to help their relatives and keep them off the Poor Law, but they are not able to do this to the same extent as previously, and, as a consequence, others come on to the Poor Law. Then you find, as part of the same problem of unemployment, that the drain is such that many of the leading unions have had to cut down their superannuation benefits, with the result that to that extent these people have to come on to the Poor Law. That is how these added burdens come on local areas without any possibility of the areas avoiding them. It is impossible for them to contract or reduce the expenditure which is piled up in this way. You also find new classes of persons coming on to the Poor Law. Largely due to the reduced income of the working classes there is less money going into the shops, and, as a consequence, you have a new class of shopkeeper coming on to the Poor Law. Thus you get an ever increasing burden resting on these authorities.

It is often said that the means test is responsible for these added burdens. There is no doubt that the means test is operating most harshly in all these areas on the individual. It is having two effects. First, it is preventing many men from maintaining their strength sufficient to do their work properly, even if opportunities of employment did arise, and, secondly, it is preventing them from maintaining their dependents in a reasonable way, especially as rates all along the Tyne are extremely high; and are a first charge. At the same time one has to acknowledge that, so far as regards the burden on local authorities are concerned, which is reflected in rates, a reduction in unemployment insurance benefit and transitional payments has not added to that burden to a large extent; at any rate not so far as the area with which I am associated is concerned. In figures given to me by the public assistance committee I find that the number of persons added by the operations of the Economy Act to the number of those receiving poor relief is 146 at one time in a population in Newcastle of 280,000. It is the other matters which I have mentioned which are chiefly concerned in adding to the burdens of local authorities.

These burdens are operating in two ways. In the first place, they are preventing persons engaged in trade and business carrying on, because they are reflected in their rents. In the second place, these added burdens, which are felt first in the rates, are im- 2.30 p.m. mediately reflected in rents; and of the rents the vast proportion in Newcastle-on-Tyne is provided by poor people. The result is this, that in one of these fearfully depressed areas, with high rents and no possibility of the poor getting into cheaper houses, because there is no such thing as one vacant room in the whole of the Tyne area, a great part of these added burdens comes on those people who are Living on unemployment benefit or on transitional payments. In other words, it is a question of the poor maintaining the poor. That is the real problem. All the economy measures which have been carried, or which are contemplated, place an added burden on all depressed areas. Take the Health Insurance Act, passed a short time ago, which cuts down health insurance benefits in certain cases, and which at some future time in a year or two is likely to take away old age pensions from the poorest individuals. It simply means that the money which is cut off in that way is added to the local rates and has to be borne in the way I have indicated.

Great international measures like disarmament affect a shipbuilding area in the most direct way. At one time the building of warships was one of our stable trades, and a reduction in naval expenditure immediately meant a large amount of unemployment in our area. I am merely indicating to the House that all measures of reform and economy are having a direct effect in areas most particularly affected. With regard to the Economy Act, although as I have said the direct effects have not been great on the figures of expenditure in local areas, the indirect effects are vast, because all the millions that are saved by what are called cuts do not go any longer through the shops in the areas, there is no longer the same expenditure in commodities, and the same amount of money is not disseminated throughout the area. To that extent you have to offset, against any economies of that nature, the great unemployment which results from the fact that all those millions less are being disseminated in the community.

There is the problem. What is the remedy? There are many remedies which can be suggested. The radical remedy which those who represent these areas have advocated for many years, is the broad principle that the maintenance of the able-bodied poor should be a charge on the State and not on the locality, particularly in times of great national and world crisis, the result of which is the large army of poor, a result not due to any cause which is peculiar to an area but is due to a cause common to the whole nation. Another remedy is, of course, to increase the Exchequer grants. At present it is impossible, certainly in a short space of time, to ask for either of those remedies. The third remedy is to equalise the poor rates throughout the country. One finds, for instance, that Bournemouth has a poor rate of 10d. as against Merthyr Tydvil with a poor rate fifteen times as much. The one is able to bear a heavy burden far easier than the other. But that remedy, again, would take time.

As my hon. Friend has mentioned, the matter is not only serious but urgent. Therefore the recommendation of the group representing the industrial areas which has been giving special consideration to this matter, put forward the proposal with regard to an alteration of the weighting of population for the purpose of calculating Exchequer grants. I would like to add as an individual opinion that it would be of immense value to these local authorities if an Amendment could be made in the Unemployment Insurance Act in the direction I have indicated, by providing what I am certain was the intention of the framers of the Act, that men should not be forced off unemployment benefit merely because they have been unemployed for a long period, when the circumstances are such that there is more than a certain percentage of unemployment in a particular area, and that men who are independent enough and brave enough to risk their savings and to strike out a line for themselves, ought not, if they fail, to be driven off the Unemployment Fund.

Lastly, in particular, in these times, when it is absolutely impossible for the majority of men to get work of any kind, the present provision insisting on a minimum number of stamps in order that men might maintain their position on the fund, either the Unemployment Insurance Fund or the Exchequer Fund, ought not to operate, and men ought not to be driven off as long as existing conditions continue. I beg to press upon the Minister and the Government the consideration of these points, and I would remind them that it is the work done in these basic areas which in the days gone by has made the industrial position of this country. The wealth which they made has been disseminated throughout the country and has largely left those areas, but since they have now come to their unfortunate days the time has arrived when the nation as a whole should redeem its obligation by shouldering a reasonable portion of the burden.


I am very anxious to add a few remarks to those which have been made by the hon. Member for East Newcastle (Sir R. Aske). As he has drawn such an admirable picture of the condition of unemployment on Tyneside, there is very little need for me to say much more. I am aware that other industrial areas of the country are in a similar position to my own. The particular matter that I wish to put to the House is that we are endeavouring to press, as far as is possible, the Ministers responsible to institute at the earliest possible moment an inquiry into the allocations of the block grants under Section 110 of the Local Government Act. I desire to pay a real tribute to the relief which has been obtained by industry under that Act. When the Act was designed and placed on the Statute Book the industrial depression in this country was in no way comparable with that of to-day. One of the most annoying features—in this I find myself rather in disagreement with the hon. Member for East Newcastle—is the fact that local authorities are facing an expenditure very greatly in excess of their estimates.

At the time of the passing of the Local Government Act, to instance Newcastle alone, the unemployment figures there were, roughly, 20,000, but to-day there are 30,000 unemployed in the city. Take my own borough of Wallsend, where is the world-famed shipyard of Swan Hunter, Wigham Richardson. In 1929 that firm employed 7,000 men; to-day it employs only 400. The tonnage of ships launched in 1929 was 100,000; to-day only one small boat of about 3,000 tons is under construction. In the engineering world the North Eastern Marine is illustrative of firms of engineering fame the world over. In 1929 it was employing 1,300 men; to-day it employs only 578. I could go on giving these pitiable records ad infinitum. But I have the faith to believe that the policy of the National Government will restore prosperity to those industries. I suggest that in the meantime it is of the most vital importance not to transfer certain responsibilities of the State on to those areas which can least afford to bear them.

At the present time Newcastle is paying £1,000 a week in Poor Law relief in excess of their estimate. I wish to examine briefly the position of the Northumberland County Council within whose area the Parliamentary Borough of Wallsend is included. As the result of a conference between the Minister of Labour and the North East Coast Public Assistance Committees I am glad to learn that the Northumberland County Council has been recommended to raise its scale of relief. I am very pleased that this has occurred because it justifies the many representations which have been made by me and by my colleagues in that area to the effect that under the operation of the means test certain very acute injustices have occurred as between one area and another. I very much hope that the Northumberland County Council will accept the recommendation which has been made to them. But though I welcome these concessions I do not lose sight of the fact that additional money has to be found out of the rates in order to put right what is obviously a very great hardship as between one area and another.

I do not wish to take up much time in this Debate, because I know that many Members are anxious to speak. I confine my remarks to suggesting that if the Minister will take steps, as he is empowered to do, to inquire into the position in the industrial areas throughout the country, those of us who come from those districts in which the local authorities are most worried and alarmed would be able to go away from the House to-day feeling a little less anxious as to the future. A study of the figures of unemployment and the amount expended in rates bears out the statement made by the hon. Member for East Newcastle (Sir R. Aske) that the higher the rates the greater the unemployment. Hon. Members may be aware that the association known as the British Travel and Industrial Development Association which has done valiant work the world over in advertising Great Britain, has been pressed, owing to its close connection with a Government Department, to advertise the industrial areas in order to attract new industries from abroad into this country. There is very little point in advertising the advantages of those areas, where we need work more than anything else, if they are rendered almost derelict by the heavy burden of rates placed upon them. I feel certain that any inquiry instituted by the Minister will result in an increase of the appropriate multiple for calculating the weighted population under Part IV of the Third Schedule to the Local Government Act. Whether that be so or not, I beg of the Minister, with all the power at my command, not to lose the opportunity of inquiring into the condition of our distressed areas but to retrieve them from their terrible situation before it is too late and place them again in a position to compete against the rest of the world.


The case for the necessitious areas has been so graphically put by the hon. Member for East Newcastle (Sir R. Aske) and the hon. Lady the Member for Wallsend (Miss Ward) that I do not propose to occupy much time. The conditions in various parts of the country other than South Wales are certainly deplorable but I think it is recognised by most Members that South Wales has had quite a harsh time in the last five or six years. We have had to maintain a substantial number of our population, particularly our children, by means of sympathetic appeals made to what may be described as the more prosperous cities of the country. Winter after winter for the last five years we have had, from London, and from cities on the South Coast, large subscriptions to help to maintain our children, particularly by the provision of boots and clothing. For quite a Long time we were prepared to take relief from other parts of the country in the form of cast-off wearing apparel from the comparatively well-to-do members of the population.

That tale commenced five years ago. The facts are well known to hon. Members and that state of things having lasted for five years, it does not require a great imagination to be able, to appreciate how things are at the moment. The Secretary for Mines last week in reply to a question said that 68 pits had closed since October last, and that 13,000 wage earners had been employed in those pits. That kind of thing is tending to increase week by week. I have no desire to stress the points so cogently put by the hon. Member for East Newcastle in connection with this problem except to draw attention to one suggestion which the made for remedying the situation. I have before me a statement supplied by the secretary for the necessitous areas. It deals not only with public assistance but with the question of education, and that statement is a substantiation of the points made by the hon. Member for Fast Newcastle and the hon. Member for Wallsend.

We find that in Glamorgan, for instance, the rate for public assistance is 8s. 1¾d. in the pound, and the total rate of the county is 14s. 10d. in the pound. The product of a penny rate per 1,000 of population is £13 0s. 11d. To take a very extreme case on the other side. I give the corresponding figures for Surrey. Surrey has a rate for public assistance of 1s. 4d. in the pound. Its total rate for all purposes is 5s. 5½d. in the pound, and the product of a penny rate per 1,000 of the population is £39 9s. 11d. Glamorganshire is under the Burnham scale, Part 3, and its rate in the pound of net expenditure for 1930–31, is 5s. 10½d.; the product of a penny rate per unit of average attendance is 20d.; and the net cost per child based on average attendance is £14 3s. 10d. Surrey is also under Part 3 of the Burnham scale, and its rate of net expenditure for 1930–31 is 1s. 3d.: its product of a penny rate per unit of average attendance is 103d., as compared with 20d. in Glamorgan; and the net cost per child based on average attendance is £12 17s. 8d.


The hon. Member referred to the secretary for the distressed areas. Whom did he mean? Would he mind giving us his authority for those figures?


The figures have been supplied to me by Mr. B. J. Jones, clerk of the Rhondda Urban District Council, who is the secretary for the South Wales and Monmouthshire Necessitous Areas Committee, and these figures are, I think, drawn from the journal that has been referred to by the hon. Member opposite, the "County Councils Association Gazette." I think I have seen them there. However, without stressing this subject any further, I hope that the aspect of the problem that has been placed before the Minister in the figures which I have quoted, in substantiation of the statements that were made by the hon. Member for East Newcastle, will be considered by him. I sincerely trust that his Department will appreciate that that is the only means by which we are able to bring substantial alleviation to the distressed areas.

Really, we do not know what will happen in South Wales during the coming winter. On Saturday next the school managers for a very large area, known as the Bridgend area, which takes in quite a number of urban authorities, have decided to hold a flag day to found a fund with which, to purchase boots for children. We are obtaining the co-operation of all the churches and of public-spirited people. We have to stoop in these days to do things like that in order to help these children. We have already taken a census of the number of children who require boots in that area, but at the moment, because the weather is fine, we are not proposing, when the fund is established, to purchase the boots directly. We look upon the problem in the winter time as being so grave that we intend suspending any expenditure in that direction until winter comes along. That really is the serious side of this problem, and I am sure that the Minister, the Department, and all hon. Members, in their heart of hearts, will desire to do something to help the down-trodden people in these necessitous areas.


After the very full and able way in which the case has been brought before this House, especially by the hon. Member for East Newcastle (Sir R. Aske), I do not propose to take more than two or three minutes of the time of the House, but I would like to point out that, while the able explanation given by the hon. Member for East Newcastle no doubt covers certain parts of the country, it by no means deals with others, and the fact is that there are very different causes in other parts of the country 3.0 p.m. which have produced similar results. It may surprise the House that any hon. Member from Liverpool should speak as representing a distressed area. It is quite true that two years ago we were not in that category, and that the type of distressed areas of which Liverpool is to-day an example is not the same as those smaller places which are practically at the moment deprived of any possible hope of development. At the same time, Liverpool has to-day the greatest number of unemployed in the country, though proportionately perhaps we are about fourth or fifth, but it is a striking fact that a place like Liverpool should be in that condition.

The hon. Member for East Newcastle talked of a general increase of relief and a general tendency to lean more upon relief than there was before, largely no doubt due to the development of social assistance in certain quarters and the fact that other quarters that have not received it feeling that they are entitled to claim more than they did before. Generally speaking, the tendency has been to lean more on the State. That is quite true, but, as far as we are concerned, the figures of our rapid progress are recent. The accumulated amount, in the last 18 months or two years, of unemployment relief of able-bodied people in. Liverpool is about £500,000, but what we are more afraid of is what is so rapidly looming ahead for the future. Take the question of transitional payment. We have 60,000 odd on that list to-day, and if the industrial conditions have not amended, it is possible, judging by the way things are going, that some 40,000 or 50,000 of those people will be off the list before long. That means that Liverpool will then have an addition of from £1,000,000 to £2,000,000 a year to pay.

These things are very serious, and things are drifting on. I know that the Minister is very alive to the position, and the important thing for us is to bring it to his notice. There has been a lot of talk about remedies. One remedy suggested is nationalisation of the whole situation, but that would be very unfair. It would mean a distribution of the burden which would not be fair. Then there is the proposal for equalisation, but I cannot help feeling that those who are wanting relief would strongly support equalisation and that those who had to pay for it would be disposed to oppose it. Such is human nature, and it is a very difficult question as to how far it is right and how far it is wrong. These are matters for the Government to study with the closest care, and all the points that have been brought up to-day emphasise the fact that the matter calls for further and immediate attention by the Government.

We can only call attention to it in Parliament, but we know that we have the sympathy of the Minister, and that we can count on him to act promptly in the matter and to take it into the most serious consideration from a broad, national point of view. Much wants to be argued and explained, but it is too late to-day to do it, and I am sure that the Minister is well seized of the situation. I want strongly to support what was so well said by the hon. Member for Wallsend (Miss Ward). Many of these points call for consideration. After all that has been said, little more is needed than to hear from the Minister something which will enable us to go back to our constituencies with some peace of mind. These areas are suffering bitterly; families are in great anxieties, and they are looking to this House for something to help them.


I desire to reinforce what has already been said by other speakers as to the necessity of special attention being given to the depressed areas. I represent a division of Durham, one of the most depressed areas in the whole of the United Kingdom. The position there, as I have endeavoured to emphasise on a number of occasions in this House, is really tragic. One cannot pick up a newspaper without reading the gloomy tidings of another colliery closing down, of another bankruptcy, of another liquidation, and of another factory going on short time. The dismal process is being repeated until the people are beginning to be hopelessly resigned to the fate which surely awaits them unless the Government take immediate and resolute action. Already in the county of Durham there is pauperisation on a wholesale scale. It is really heartrending to see men, honest decent men, whom one has known all one's life, unemployed for almost a decade and being reduced to the depths of degradation and despair.

I have no desire to dwell on the harrowing picture which is presented by the north-east, but sometimes I doubt if the House as a whole fully appreciates the reality of the terrible plight in the depressed industrial areas. There is one vitally important consideration which is frequently lost sight of. It is that owing to prolonged unemployment there are vast numbers of young men who have never worked in their lives. That is important, because there is in consequence no recruitment of those skilled workers whose craftsmanship has won fame and renown for British manufacturers, and upon whose skill much of our former industrial prosperity was built up. It is a problem which demands immediate attention. It will not wait until it has been aggravated by the ravages of the coming winter, and unless the Government act they will reap what has been sown and the, harvest will be really tragic and ghastly. The need is great, the cry is urgent, and I join in the call on the Government to pay heed.


The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), speaking in the House yesterday, told the Government that a policy of "wait and see" in the present great crisis was a most dangerous one. If it is a dangerous one for the country, it is a ranch more dangerous one for the depressed areas in the North and in Wales. I do not think that many people in the South realise the grim fight that the North and parts of Wales are making, the dour struggle to keep their heads above water until something happens which will bring back better times. It is not the fault of the depressed areas that they are in their present state. My constituency of Sunderland is typical of many others. In the past Sunderland built more ships than any other town in the whole world; engineering of many types flourished there; it had subsidiary industries, including glass making, paper making, pottery and rope making. Now there is not a ship being built on the river, and many of the shipyards will never open again; engineering is languishing; and many of the subsidiary industries have disappeared, sacrificed on the altar of a suicidal fiscal policy.

If it is not the fault of the depressed areas I cannot see why they should bear the whole brunt of the trouble which has come to them. It does not seem fair for those who live in the pleasanter parts of this country not to help the distressed areas to bear their burden. It is not economical, either. If we want to revive industry, surely we ought to revive industry where industry already is, surely we should revive industry where the factories are and where an industrial population is already settled. If we do not, we must face up to the fact that we shall have to undertake a big policy of industrial transference, which will means vast new capital expenditure and a waste of the great capital expenditure already incurred.

One step which we cars take is to equalise the burdens of the depressed areas over the whole country. I see that a conference called by the Ministry of Health has been considering the bringing about of uniformity in administration in the North of England. Their proposals, I am told, will cost about £11,000 in Newcastle, about £6,000 in Gateshead and about £5,000 in Sunderland. Surely it would be better to spend more time in equalising the burden that has to be borne than in seeking uniformity of administration. The right hon. Gentleman will probably tell me that that would make it more difficult to establish industry and agriculture in other parts, but surely a policy which makes it easier to provide industry and agriculture by, shall we say, the manufacture of silk purses out of sows' ears at Sevenoaks, is not one to be considered when it is a case of building up the staple industries of this country. We should do everything we can, some- thing immediate and definite, to assist the staple industries in the North and in other distressed parts of the country. The North has been basing its hopes, up to the present, upon science to find a new outlet for its coal, and upon fiscal policy to enable it to sell more coal to manufacturing concerns in this country, or upon finding new markets abroad for its coal. It is looking also to drastic national economy to lower the burden of the rates and taxes upon industry. It asks that the country as a whole should bear the burden of the present distress, and should not leave it to be borne alone by the part of the country which is feeling the brunt.


I want to bring certain matters to the notice of the Minister of Labour in regard, in the first place, to the city of Liverpool, from which I come. There is no need for me to tell the tragic story of dockside and of how shipping is in a very deplorable condition, nor do I wish to go over all the points that have been raised by other hon. Members who come from depressed areas. I do not wish to add to the responsibility of the Minister in dealing with what must be a most difficult problem. I want to emphasise the view that was expressed at the meeting that was presided over by the hon. Member for North Newcastle-on-Tyne (Sir N. Grattan-Doyle), and which considered this problem. I think the House is truly grateful to him for having brought it forward. This matter touches every section of the community. It is passing strange that this problem is mostly met with in areas that were hives of industry and that are to-day most depressed, and that during the period of depression greater burdens are to be borne by them. That is inequitable. We feel that all those places that had the benefit of the operations of the areas to which I have referred should, when the time of depression comes, help them to bear the burdens. Some adjustment is absolutely necessary. I am not going to deal with the anomalies, or with any Act that has been passed, but in those areas of which I am speaking, Liverpool particularly, we never anticipated that we should have to deal with cases of transitional payment.

I do not think that it is outside the ambit of the Minister to give some preferential treatment to the distressed areas. I dare say that legislation would be required, and that would mean delay. There are three points that might be dealt with. There is, first, the burden of unemployment. I am convinced that we all agree that that should be borne nationally. [HON. MEMBERS: "No!"] That is a point upon which there might be a difference of opinion, but I do not want to spend time on that. The second point is the equalisation of rates. Thirdly, suppose that we say the other two are trivial points, there is the possibility of an agreement being arrived at that the depressed areas are suffering from no cause of their own, and that they ought to have a special State grant. It is quite possible, and, if they had a special State grant given to them on the merits of the case, the Minister would be able to deal with it, and satisfaction would certainly be given to those areas. Taking all the facts into consideration, this is a very important matter. The rates will continue to increase, shopkeepers will have more rates to pay, and the poor will not be able to bear the increased burden in connection with the rents of their houses. Therefore, these conditions will bear very harshly upon us. I would ask the Minister, in view of what has been stated to-day and of the representations which were made a few days ago, whether he will not consider this to be a matter in which he can give us some satisfaction and make some adjustment?


The House is indebted to the hon. Baronet who raised this matter on the eve of our adjournment for a Recess of a considerable period, if only for the reason that there is no section of the country which has a greater claim upon this National Government than that section which is represented by these depressed areas. Comment has been made over and over again by right hon. Gentlemen on the Front Bench on the fact that the greatest fortitude and courage in accepting cuts and facing up to the national situation was shown in those areas at the time of the recent election, and the most striking victories of the National Government was secured in those areas.

I want to say quite frankly, in this important Debate, that those of us who were returned by these suffering people in the distressed areas were not returned here to act as party men. If we were given one mandate more than another, it was this: "When you get to Westminster, pool your brains; if necessary, forget all your own shibboleths and doctrines; adopt any remedy you like to get us through our difficulties and towards better times." We are endeavouring to carry out that mandate, and, if even there was an opportunity of carrying it out, it is in connection with the action to be taken here and now to relieve the burden of these depressed areas. The official Opposition have advocated for years that the able-bodied unemployed should become a national charge. If I remember rightly, that has been a part of their doctrine ever since the War, and it would appear that they have obtained certain recruits during the present slump. If I understood correctly the speech of the hon. Member for East Newcastle (Sir B. Aske), he at least supported that point of view.


I was advocating it 30 years ago.


Then the hon. Member is not a recruit; it is possible that he has been advocating it even longer than certain hon. Members opposite; but at least a number of recruits have been obtained in the present slump to that point of view. I want to say at once quite frankly that I think that it is a complete fallacy, a mistaken point of view, and one into which we must not be led simply because times are bad. A question was put only to-day by the hon. Member for Broxtowe (Mr. Cocks)—I am sorry that he is not in his place at the moment—the burden of which was a complaint that the relief committee at Hucknall, I think it was, had suffered super-cession by the Nottinghamshire County Council, people not in touch with local circumstances, who might act harshly towards those who have to be dealt with in these difficult times. I sympathise with the hon. Member's question; I believe that to be a perfectly sound argument; but, if that be true of relief administered by a county council, how much more so is the administration of this matter likely to be carried out in a harsh and soulless manner if administered from Whitehall?

There is difference of opinion in this House as to the soundness, the justice, and, indeed, the necessity of what we call the means test. It has been raised already on the Motion for the Adjourn- ment to-day. But, whatever the merits or demerits of the means test may be, I think that hon. Members of this House would be inclined to agree with this general statement, that, taking the United Kingdom all over, the Public Assistance Committees administering the means test have carried out a task of the greatest possible difficulty with the greatest possible humanity. I believe the public assistance committees have carried out a difficult task with the greatest possible humanity and in a manner for which they have earned the gratitude of this House and, indeed, of those who have had to come before them. It 'would be a great mistake to transfer that particular work from localities where the people who deal with it know in most cases the circumstances of those who come before them to be administered in a harsh, bureaucratic and soulless manner by some Ministry in Whitehall.

There has been another suggestion, that the time has come for equalisation. I noticed that that suggestion met with the greatest support from the Socialist benches, and one is not surprised. Once establish that thesis that equalisation is desirable, and every Socialist local authority in the country will immediately take the bit between its teeth and gallop away, relying on being relieved from the consequences of its own folly by local authorities who have carried out their administration in a sane, sober and economical manner. I do not think equalisation can be regarded as the best way to escape from our difficulties. I think the most practical suggestion that has come before us in this Debate, and one which, I have no doubt, will be carefully weighed by my right hon. Friend, is that the Local Government Act, 1929, gives us the machinery that we want to deal with this matter, at any rate for the time being. Before I had the opportunity of listening to Debates from these benches I used frequently to listen from the Strangers Gallery, and I followed with great interest the passage of that complicated Measure, with its 115 Clauses and I do not know how many Schedules. One of the most discussed parts of the Measure was the algebraic formula, far beyond me, explained lucidly by the then Minister of Health, a formula to which immense thought went, and which has been of the greatest assistance to the depressed areas in helping them through the difficult times. It was a formula worked out to deal with unemployment in the vicinity of a million persons, before the full weight of the present unemployment figures fell upon the country. This is not a matter that we can dismiss by the repetition of what is now becoming a rather threadbare formula, those two words "world causes," as if they explained everything. This is surely a domestic hatter which this Government and this House of Commons has to face up to at once.

The hon. Member for Wallsend (Miss Ward) said very truly that we believe the policy of the National Government will lead to a revival of trade, but we are passing through an exceedingly difficult time for the people of this country at an extremely difficult time for the supporters of the Government. We are now passing through that time lag, which the advocates of tariffs have always recognised was inevitable, between the imposition of duties and the working off of surplus stocks already in the country owing to intensified dumping and forestalling. It will be some months before such a thing as the 33⅓ per cent. duty on manufactured steel begins to show its effect in terms of employment, and it is that time lag that we ask the Government to assist us in tiding over.

3.30 p.m.

I am hopeful that there is already on the stocks at the Ministry of Health one very great contribution towards this problem. I hope it is a matter that we shall be dealing with very early next Session. I refer to a sweeping and progressive Measure to deal with the question of rents. We all know—I need not go into details—how under the Rent Restrictions Act 40 per cent. increase over pre-War rental can be charged, and the cost of repairs has fallen very much below 40 per cent. over pre-War. The time has come for the question to be faced courageously, because there is no rent legislation which has ever been introduced or ever will be introduced which does not inflict hardship in some quarters. It is a case of the greatest good of the greatest number, and there has to be introduced and urged a sweeping and drastic Measure for a reduction in working class rents.


The hon. Member is dealing with a subject which would require legislation.


I apologise. I was endeavouring to link the argument with the principle of help for the depressed areas, but I will not refer to it again. Whatever is done, whether it be under the Local Government Act formula—the 1929 Act—or from whatever quarter relief may come—this Debate will have missed its main object if we do not make some attempt to relate cause and effect. It is true that we are discussing remedial measures for certain depressed areas, but we shall err if we do not point out from this House just where those depressed areas are situated, and the one great cause of their depression. If you look at the map of the United Kingdom you will find for the most part that the areas for which we—new Members most of us—are speaking to-day are those areas in which the Socialists have control of local government, and have been allowed to have their way. We have heard frequently questions from hon. Members opposite asking what new factories are going to such areas as South Wales and Durham. Can they wonder that new factories do not come to areas in which the rates have been piled up to such an extent that no one outside a lunatic asylum would endeavour to start an industrial enterprise? I hope that if this Debate has served no other purpose, it will have served the purpose of pointing out to the country the necessity of restoring to local authorities a form of local government which will realise that the prosperity of an area is closely related to local administration and economy in local government.


I am sorry that the hon. Gentleman the Member for Hillsborough (Mr. Braithwaite) introduced a jarring note at the conclusion of his remarks, for I am sure that the group which has been working on this question comprises Members of all parties, and is looking at the question entirely from a non-political point of view. I can only say, speaking for my own area, that the hon. Member is quite wrong as far as we are concerned. The Socialists have not got the upper hand in our municipal area, and therefore we do not come under his lash in any way. The hon. Member will agree that the depressed areas themselves are not responsible in any way for the collapse of the world trade, but at the same time they are being called upon to bear a burden which wealthy and more prosper- ous areas escape. Until quite recently these areas have been the workshops not only of Great Britain but of the world, and now that foreign trade has, I hope only temporarily, collapsed, I feel that these depressed areas have a great claim in the direction of some equalisation of the burden of Poor Law relief, more especially when caused by unemployment all over the country.

Most of the hon. Members who have spoken this afternoon represent Northern areas, but I want to emphasise that the depressed areas are not confined to any one part of the country. The industrial Midlands in which I live, the East End of London and South Wales are equally in the same boat. Some appalling figures have been got out for me by the Town Clerk of Walsall on this question. They show that in England and Wales there are 113 towns with insured populations exceeding 5,000 where the unemployment is over 25 per cent. of the whole of the insured population. There are 17 Scottish burghs in the same position. The list ranges from Liverpool with 28.9 per cent to Tynemouth with 58.7 per cent. of unemployment among the insured population. There are nine counties with unemployment ranging from 37.7 in Northamptonshire to 39.6 in Durham. Therefore, a very wide area is included in the distressed areas on whose behalf we are speaking to-day.

The proposal that we have put before the Minister of Health is one that we think ought to be put into force as soon as possible. It seems to us the simplest method of helping these really distressed areas. I will only be a step, but it will certainly give some relief. I wonder if the Minister of Health realises the terrible struggle which the town councils in their depressed areas have had to carry on under the heavy load of Poor Law expenditure and the extra load caused by the reasons given by the hon. Member for Newcastle, East (Sir R. Aske). In many places they have almost reached the breaking point. The whole machinery of local government may break clown before very long, which would be a tragedy. I hope that we shall not be forced to the position which arose in 1926 when Poor Law guardians were compelled to borrow very large sums in order to carry on their work. It would be most unfortunate and a terrible situation if on account of the increased claims on public assistance, anything of that kind happened.

The present burden is spread most unfairly. For instance, the poor rate in West Ham in 1931–32 amounted to 8s. 4¾d., while in Blackpool the poor rate was only 6½d. In the county of Durham the poor rate in the same year was 7s. 9d. and in the county of Surrey only 1s. 4¾d. The whole question of equalisation will have to be tackled without much delay. Nothing less than a complete redistribution of burdens will be satisfactory. In the circumstances I would beg the Minister to see whether he cannot give us some early relief on the lines suggested by our group. All sections of the House realise the vital importance of economy in these very depressed and critical times, but there is a false economy which is very popular in certain quarters—to cut down national expenditure at all costs. "At all costs" generally means putting it on to the municipality. It is a very short-sighted policy simply to transfer expenditure from the National Exchequer and to put it upon the municipalities, many of whom are struggling on with rates far too high. That is not only uneconomical but folly of the worst kind. There is general agreement, I think, on the question that some relief is absolutely necessary for the depressed areas. Some assurance from the Minister with regard to our proposals will be most welcome. We should like very much to take to our constituents a message of encouragement and hope in the great battle in which they are engaged.

The MINISTER of HEALTH (Sir Hilton Young)

We have been dealing in this Debate with a problem which is inveterate, anxious and of a growing anxiety. There are, perhaps, four regions of our land which claim the especially sympathetic attention of their fellow-countrymen and of their Government at the present time—South Wales, the North-East Coast, Lancashire and Merseyside and the South-West of Scotland. These are the regions which are feeling with exceptional severity the burden of the general had times afflicting the country as a whole. Since the inception of the had times, something has been done in order to change the situation. There has been the de-rating of factories, the effect of which is to prevent the increase of rates any longer being a direct prevention of the establishment of fresh industries, and the acceptance of full liability on the part of the Exchequer for the transitional payments, which relieves those responsible for local finance from the burden of apprehension for the future.

I am anxious before coming to closer grips with the problem as presented to me, to put it into what may commend itself to the House as an absolutely fair light, and to get the factors into their due proportion. Let me say a word as to the anxiety and gravity of the situation to which I have referred. It is, in the minds of all of us, the slow accumulation of the adverse effects. Forces which can be borne for a short time become intolerable when they operate for a long time. I should like to say a word on the causes of the serious feature with which we are dealing. The feature itself is, of course, the growth of the expense of Poor Law relief owing to the increase of the numbers who require public assistance. The causes of this have been very carefully and accurately analysed in some of the speeches to which we have listened.

The hon. Member for Newcastle East (Sir R. Aske) was perfectly right in saying that the ultimate basic cause of this anxious situation is the prolonged continuation and growth of unemployment. With that there comes a gradual exhaustion of private resources, and not only that, but an exhaustion of all those auxiliary resources which are of so much importance in keeping people off public assistance. Trade union funds were mentioned; they become exhausted. In the line of defence behind them are all those resources of private benevolence of various sorts which gradually become exhausted, too. That is the true cause of the situation, the crisis as regards Poor Law relief with which we find ourselves confronted. The hon. Member for Newcastle East was perfectly right in saying, too, that recent changes as regards the organisation of unemployment insurance have little indeed to do with the matter. The proof of that is that the areas in which you find the increase of the cost of public assistance do not coincide with the areas in which the change regarding organisation of unemployment insurance has been most considerable.

Let me deal with another circumstance, to which it is my duty to refer in order to reduce these matters to their right proportions. It is true that depressed areas deserve the sympathy of the country and the close attention of the Government, but it is not the case that the circumstances in which these areas find themselves to-day are unexampled. I mention this fact in order to give them encouragement. As a matter of fact, the conditions to-day, on a statistical basis, are not more grave than they have been in the past. Let me give one or two figures which may be of interest to the House. These are the total figures of expenditure on outdoor relief, which is the best test as to the gravity of the Poor Law situation, in various years. In 1922–23, a bad year, the total expenditure on outdoor relief by local authorities was £18,000,000. In 1925–26 it was £16,000,000, and in the present crisis, for the year 1931–32, the expenditure is only £12,000,000. Therefore, the circumstances are not really worse than they have been; they are not as bad as they have been in the past. Let me give one other figure which will indicate the order of the gravity of the situation. In the year of the great coal strike, 1926–27, the general stoppage year, outdoor relief cost £24,000,000. There was no general breakdown of the system of administration and organisation in that year, and this year the expenditure on outdoor relief is only half the sum expended during 1926.

I do not mention these figures in order to advance the argument that there is no situation which requires attention, because I am as convinced as every hon. Member that there is a situation which does require attention and the most careful watching, and also requires measures for dealing with it. There is another circumstance which I must mention if we are to get the situation in its right perspective. I have followed the arguments put forward in this Debate and I noticed with the greatest interest that what has been said has been from the point of view of students of our national conditions and not from the point of view of party politicians. That has been perfectly clear throughout the Debate. Hon. Members, with a strong common sense on this matter, have dismissed from their minds sensational or unsound remedies. They have dismissed the equalisation of rates and the nationalisation of the Poor Law services. At least, if they have not completely dismissed them they have left them on one side. Some of these points have been well answered by the hon. Member for Hillsborough (Mr. Braithwaite) and, therefore, I will not deal with them myself at any length because, as I have said, they were not advanced, being outside the region of practical Debate.

What has been advanced is a proposal for the reconsideration of the unemployment factor in the determination of grants to depressed areas. The first circumstance I would mention is this. I want to make it clear what a very big effect the weight at present given to unemployment in the determination of public grants actually has. I want to make it clear that weight is given in our present formula to that feature of the conditions in the distressed areas which is particularly grave from their point of view, namely, unemployment, in determining the amount of assistance they are to receive from public grants. I want to make it clear that they have an advantage, derived from the present weight, in comparison with other areas.

I have one or two figures to show the relative advantage that the distressed areas, with their unemployment, get from the present weighting, compared with other areas. I shall give it in the form of the number of pence per head received by the inhabitants, by the local authorities, for the distressed areas in respect of their population, in comparison with the number of pence per head received by one or two undistressed areas in respect of the population. The figures refer to that part of the grant which is distributed on weighted population. Take the town referred to to-night—Gateshead. Gateshead gets 140 pence per head on the weighting factors, and Eastbourne only 40. The result of the weighting is to give Gateshead out of that portion of the grant which is distributable as weighted population three times per head as much as the undistressed area. Here are other figures: the county of Monmouth, 142 pence; Bournemouth, 40 pence; Durham, 138 pence; Merthyr Tydvil, 145 pence, and so on. Those figures are introduced by me to show that as a matter of fact there is a very substantial advantage afforded to distressed areas. Hon. Members' argument to-day has been on that basis, but they say that that is not enough. I know; that has been made perfectly clear. The argument is not to deny that there is that advantage, but to say that that advantage is not enough.

There is another aspect of the question to which I desire to ask the close attention of the House and of those Members who are associated with distressed areas. Quite apart from any question of remedies, to which I shall refer later, let me say that the times are of admitted difficulty, and that the amount of public money available for essential purposes is admittedly inadequate. Under these conditions at the present time it is absolutely essential that everyone responsible for local administration should get full value out of every penny, shilling and pound of public money that is spent in public assistance. In order that we may find a solution of the difficulties of the distressed areas we must call upon the responsible local authorities to co-operate by a strenuous endeavour to eliminate everything in the way of lax administration. I do not make that call upon the co-operation of local authorities without good ground. There is ample evidence, particularly available to me, that there is administration which is lax and which calls for remedy, and to show the House that I do not speak without warrant I will give it concrete instances. A conference was recently held of the public assistance authorities of the north-eastern area. From that conference the county of Durham representatives withdrew because they would not agree to standards of public assistance in respect of out-door relief which all other members of that conference thought reasonable.

The standards which the other members of the conference thought reasonable, and which the representatives of Durham rejected, have since been criticised by others as too generous. I commend that instance to the attention of the hon. Member for Durham (Mr. McKeag) who spoke in this Debate and used expressions which seemed to me somewhat exaggerated. The second instance to which I would call attention is the instance of the county of Glamorgan where an impartial auditor has recently called attention to a serious amount of lax administration in respect of public assistance in particular. That matter is being brought to the attention of the county council. The third instance which I would give is that of a petition which has recently reached me from ratepayers of Merthyr Tydvil alleging extravagance and bad administration in respect of public assistance and in respect of other services as well, on the part of the local authority and asking for an inquiry. In that instance there is certainly a prima facie case which would justify some inquiry being made.

We must deal with this problem at both ends and although meeting a situation in which not enough funds are available, we must be perfectly certain that the local authorities are making the best use of such funds as they have. In the first place particular attention is needed for the circumstance that scales of relief are sometimes not sufficiently brought into relation with the cost of living. That is a matter which requires urgent attention in order to prevent discrepancies. In the second place—and all practical administrators know that this is at the very root of all good administration of public assistance—the greatest of all sources of lax administration, is the automatic and mechanical administration of scales without inquiring into individual cases. What is necessary to secure good public assistance administration is the perfection of the machinery for inquiring into particular cases so that the scale shall only be used as a guide and not as an excuse to save the local authority the trouble of making inquiries which ought to be made.

It is my duty to show the situation all round before I deal with the specific remedies which have been suggested to-day. Now I come to the arguments which have been advanced in favour of the reconsideration of the weight given to the unemployment factor in calculating grants to local authorities. The practical remedy put before me, is a demand for the immediate undertaking of a statutory investigation under Section 110 of the Local Government Act of 1929. I hope I have not misunderstood the practical nature of the request made to me this afternoon. It is a demand for an immediate beginning of such a re-investigation. As the basis of the case for such a demand it is said that the weight which was originally given to unemployment in that formula no longer practically holds good, because of the great increase of unemployment and that there is now a prima facie case for reconsideration. In my opinion that prima, facie case is established and a beginning ought to be I made with a re-investigation of that factor.

The situation can be put shortly in this way. The apprehensions of really serious difficulties in the depressed areas are so great that we must leave no stone unturned to make sure that we are doing the fair and square thing all round. For that reason this investigation ought not to be postponed, as was originally intended, to a future date, but we ought to go into the matter now. I know that that was not the original intention of Parliament. The original intention was to leave it to the end of the second grant period, but I think practical men recognise that circumstances have changed a great deal since 1929, and that reconsideration of the matter is now required.

4.0 p.m.

Let me now look at the present situation, because we must see what steps are now possible. For the fixed total grant for authorities for the second period of four years, legislation will be necessary before next April, but before that time we shall have to collect statistics in respect of population, of the numbers of children under five, rateable value, unemployment, road mileage, and of rate expenditure for the year ended 31st March, 1932. We have to collect these because they are all necessary for the revaluation of the familiar formula in the Act. What I propose is immediately to press ahead with the collection of those statistics, and let me make it clear to the House that we have to ascertain as a preliminary step what, under the existing formula, the grants for the second period would have worked out to be, because unless we ascertained exactly the basis for any readjustment, we should be making a complete leap in the dark, so we have to work out, £rst of all, what it would have been on the existing formula for the second grant period before we build upon that the investigation of what it ought to be in view of the changed circumstances.

There is one other circumstance to which I must call the special attention of the House as regards the preliminary steps which are necessary. This is a matter which does not only concern the distressed areas, because it concerns all the other areas as well. One has to make it clear that this is not a question of determining the allocation of fresh grants; it is a question of determining the re-allocation of old grants, and that means that what "A" gains "B" must stand to lose. You must take everyone into consideration and give everyone a fair hearing, and indeed I am bound to do so under the Statute, because by the terms of Section 110 of the Local Government Act I must make investigations in consultation with such associations of local authorities as appear to me to be concerned, and with any local authority with whom consultation appears to me to be desirable.

Accordingly, before I can give effect to what is requisite, I must approach the associations of local authorities and authorities in London, and ascertain what their views are; and those associations of authorities, we must remind ourselves, have not asked for an investigation, and, of course, I cannot say that it may not be to them a matter of surprise. Nevertheless, my own view in the matter is that which I have stated, and that is that the investigation should be now commenced and proceeded with That appears to me to be the appropriate remedy for the anxious situation with which we are confronted, that we should proceed now with the investigation of the figures and approach the associations of local authorities as in the undertaking of the earlier investigations. That, it is my intention to do.

I must utter a further word of caution to the House, and that is that towards the end of this year we know, we cannot but know, it may be necessary for the Government and for this House to give reconsideration to the general aspects of national and local finance. I am quite unable to say at present what measures may then be proposed to the House, dealing with general questions of finance both in its local and national aspects. I am quite unable to say, for instance, that the total measure of grants which might otherwise have been foreseen will be available. It is impossible to foresee the future, and my course must be this, that any result which may be achieved in this reinvestigation must be subject to the necessity of co-ordinating it with any general conclusions as to our national and local finances which may be dictated by our circumstances later in the year. The investigation will now be begun and will be continued till it is concluded, but when its conclusions are arrived at I cannot say what the general financial atmosphere may be at that time, and it will be necessary to relate the conclusions to whatever happens to be the overriding necessities of the financial position.