HC Deb 21 February 1933 vol 274 cc1617-81

Considered in Committee under Standing Order No. 71A.

[Sir DENNIS HERBERT in the Chair.]

Motion made, and Question proposed, That, in respect of each year in the second fixed grant period—

  1. (a) the amounts to be included in the General Exchequer Contribution for England, under paragraph (c) of Sub-section (3) of Section eighty-six of the Local Government Act, 1929, and in the General Exchequer Contribution for Scotland under paragraph (c) of Sub-section (3) of Section fifty-three of the Local Government (Scotland) Act, 1929, shall be respectively the sum of five million three hundred and fifty thousand pounds and the sum of eight hundred and fifty thousand pounds; and
  2. (b) the amounts to be paid under paragraph (b) of Sub-section (1) of Section eighty-seven of the Local Government Act, 1929, and under paragraph (b) of Sub-section (1) of Section fifty-four of the Local Government (Scotland) Act, 1929, respectively, out of the Road Fund towards the contributions aforesaid shall be the same as were payable in respect of each year in the first fixed grant period."—(King's Recommendation signified).—[Mr. Shakespeare.]


Mr. Shakespeare!


Before the hon. Member proceeds, may I ask whether we may have a rather wide range of Debate, instead of being closely confined to the Financial Resolution which we are now about to discuss?


It is not in my power to allow a wider Debate than is permitted by the ordinary Rules of Procedure. I have gone very carefully into the effect of the Resolution with a view to making up my mind as clearly as I can the lines on which discussion should be permitted. I was under the impression that I was going to be asked a question on the point after the hon. Member had introduced the Resolution, and I think perhaps that would be a more convenient time for dealing with such a question.

4.3 p.m.


The Committee will remember that four years ago there was a long and fierce controversy on the Measure which ultimately became the Local Government Act, 1929. There are a large number of Members who will recollect the great skill and patience with which my right hon. Friend the Member for Edgbaston (Mr. Chamberlain), with the help of my right hon. Friend the Member for West Woolwich (Sir K. Wood), piloted that rather cumbrous vessel through the shoals and shallows of Parliamentary criticism until it reached the harbour of the Statute Book. To many hon. Members these are matters of tradition only; but to a large number they are matters of personal recollection.

The object of this Resolution is to enable that ship of 1929 to cruise again for a period of four years. We are seeking sanction in this Financial Resolution to introduce a Bill, and we seek sanction to determine the financial basis of that Bill in respect of two amounts. If Members will turn to the White Paper which was issued—Local Government (General Exchequer Contributions), Command Paper 4252—they will see that we are asking the Committee to determine two matters, first of all, what shall be the amount of the new money to be provided under Section 86 of the Local Government Act, and we are asking that amount to be fixed at £5,350,000 in respect of England and Wales; and, under Section 53 of the Local Government (Scotland) Act, at £850,000 in respect of Scotland. That is the first matter for which we seek sanction.

The second point is to determine the variable element in the annual contribution from the Road Fund towards the General Exchequer Contribution, and the Committee will see that in the Resolution that amount is to be for the second grant period what it was for the first grant period, namely, £3,000,000.

Having said that, I have done my duty, but, in case the Committee would like to have more illumination in their gloom, I will give a short historical background which will make it clear to the Committee why we come at this period and ask for this amount of money. The Committee will remember that the Local Government Act, 1929, introduced very far-reaching and, indeed, revolutionary changes in the whole structure of local government. It recast the financial relationship between the Exchequer and the local authorities. That Act, roughly, did three things. It deprived local authorities of a large amount of revenue through its derating provisions to the extent of £22,250,000. It changed the basis of grants; it stopped the percentage grants in respect of certain services, the assigned revenues and the grants made under the Agricultural Rates Acts; it discontinued a total amount of grants of £16,250,000, and it further provided what was called an amount of new money which was fixed at £5,000,000. These three items—the loss of rates, the loss of grants and the new money—made up what was called the General Exchequer Contribution, which was a consolidated block grant paid annually; and, moreover, that grant was fixed for what was called the first grant period, that was, for three years. The scheme operated as from 1st April, 1930, in England and Wales and from 16th May, 1930, in Scotland. The first grant period in respect of this General Exchequer Contribution was to last for three years, which will terminate on 31st March next. After that, on 1st April, we embark upon a second grant period to last four years, and thereafter each grant period will be five years. As we are commencing the second grant period on 1st April, we have to decide what should be the amount of the General Exchequer Contribution composed of the three items I have mentioned in respect of the second grant period.

The Committee will notice that the amount in respect of loss of rates and the amount in respect of loss of grants is a standard figure for all time, as long as the world remains. That is fixed according to the standard year 1928–1929, and the loss of grants and rates in that year is a matter of ascertained fact. That amounted to £38,580,000 of the total block grant during the first grant period. The total amount of the new money in the first period was £5,000,000 which, together with the loss of rates and grants made the sum of the General Exchequer Contribution equal to £43,580,000. Having got to that, we now have to decide how the General Exchequer Contribution in respect of the second grant period shall be determined, and the method of determination was laid down in the Local Government Act, 1929. It is there laid down that the General Exchequer Contribution in respect of a grant period must bear a relation to the rate- and grant-borne expenditure of the penultimate year of the previous grant period. That means this: Obviously you have got to relate a General Exchequer Contribution to something, and the only thing to which you can relate it is the rate- and grant-borne expenditure of a past year, and, as you cannot get the figures for the last year of a grant period in time, the nearest practicable year is the penultimate year of the previous grant period. Rate and grant-borne expenditure means what it ought to mean—expenditure which is borne out of rates or falls to be borne out of the General Exchequer Contribution. All expenditure met by grants outside the General Exchequer Contribution —police and education, for example—does not come within that definition.

Having got the relationship between the General Exchequer Contribution and the expenditure in the penultimate year in the first grant period, Parliament laid down in the Act that there must always be a minimum proportion which is a little difficult to explain, but it is this: The relation of a General Exchequer Contribution to the rate- and grant-borne expenditure of the penultimate year must never be less than the proportion which the original General Exchequer Contribution bore to the rate- and grant-borne expenditure of the first year of the scheme. We have called for statistics from all the local authorities, and if I give some figures the Committee will see how this little sum works out for England and Wales. The General Exchequer Contribution for each year of the first period of the scheme, that is the years 1930–31 to 1932–3, was, as I have said, £43,580,000. The amount of expenditure borne on rates and grants of the first year of the scheme, 1930–31, was, £188,000,000. The equivalent amount for the penultimate year of the first grant period, that is, 1931–32, was, as the Committee will see in the White Paper, £189,500,000.

Now we are in a position to do a simple proportion sum. Calling the new General Exchequer Contribution "X," "X" is to £189,500,000 what £43,500,000 is to £188,000,000. Having done that proportion sum and deducted the fixed element in the grant corresponding to the loss on account of discontinued rates and grants, the Committee will see that the answer is the amount for which we are seeking Parliamentary sanction in the new Bill or nearly so. The answer is £5,348,000 and we are asking for a round figure of £5,350,000. The equivalent amount of new money for Scotland will be £850,000; that is, £500 above the minimum figure. That is the amount of new money for the second grant period and the total Exchequer Contribution for the second grant period will therefore be the equivalent of the loss of rates and grant plus this new sum of money or £43,930,000 for England and Wales. I hope I have made that as clear as it can be.

During the discussion I have no doubt that hon. Members will take opposite views. Some will argue that this amount is too high in view of the financial stress of the country. There is an Amendment to that effect on the Paper. Others, on the other hand, representing depressed areas, like my hon. Friend the Member for West Middlesbrough (Mr. K. Griffith) will be tempted to argue that this amount of new money is too low. There was a famous Lord Chief Justice at the close of the last century who was asked his opinion as to how often a man who was a criminal and ought to have been hanged was acquitted and he replied, "No doubt it sometimes happens that a man who should be hanged is acquitted, but then, on the other hand, it sometimes happens that a man who is innocent gets hanged," and he added that on the average justice was done. Against the two contrary pressures from these two groups I think the Government are entitled to argue that in adhering to the minimum proportion laid down in the Local Government Act justice is done, and I have no doubt that each group of protagonists will be able to answer the other far more effectively than I can answer either.

Let me very shortly mention to the Committee the chief reasons which influenced the Government in coming to the decision to adhere to the minimum proportion laid down in the Act. I mentioned the fact that the Local Government Act carried out reforms of a revolutionary nature and that is not an exaggeration. Those reforms were only made possible as the result of long and anxious negotiations with local authorities and a long and fierce battle in this House and at every stage, naturally assurances were asked for and assurances were given, and the Act as a result was a network of compromise and concession. One of the main safeguards that the local authorities sought was to the effect that there should always be this equilibrium between the General Exchequer contribution at the start of a grant period and the rate borne and grant borne expenditure of the penultimate year of the previous period. That was granted.

Moreover, the Committee will remember that after the lapse of 17 years the whole of the General Exchequer contribution is to be paid out according to a famous formula, which is roughly determined, by weighting population for given factors, where the need most lies. Only at the end of the 17 years will the whole of the General Exchequer contribution, whatever it may be then, be allocated according to the need of particular areas, but at the end of each future grant period within those 17 years less is allocated to loss of rates and grants and more according to the formula. For the first grant period only £15,000,000 of the £43,600,000 was allocated according to the formula; for the second grant period an identical amount of £15,000,000 will be so allocated; but thereafter more and more will be allocated according to the need and less and less according to the loss of rates and grants, until at the end of the 17 years, as I say, the whole of this vast consolidated block grant is given according to need.

The reforms embodied in that Act have not yet been carried out. They involve, as hon. Members know, the transference of powers from small authorities to county authorities and the reorganisation of local government areas. There is a sort of reconditioning going on the whole time within the counties to prevent overlapping of services and to promote efficiency, and if almost at the start of this 17 years period, when we are undertaking to help local authorities to re-organise their areas and services we break faith with them and at the end of three years reduce the General Exchequer contribution below the minimum proportion laid down in the Act, it is easy to see that the achievement of the ultimate object might be jeopardised. If that is an exaggeration, one can at least say that the whole structure of the Local Government Act might well be strained. That is the first consideration.

The second consideration is this: As I have pointed out, during these first and second grant periods a sum of only £15,000,000 is allocated in respect of what is called the need determined by factors which weight the population. If all those factors remain constant in the second grant period, the money will go as it did during the first grant period. About 8 per cent, of the £15,000,000 went in respect of the unemployment factor. I dc not want to go into the formula again, but I can sum it up for those who do not remember it by saying that the need of any area is roughly determined by a combination of factors expressing population, rate-able value, the proportion of children under five, the local unemployment, and in county areas the sparsity of population per mile of road. Those five factors roughly govern the direction in which that £15,000,000 will flow. The chief factor that has changed since the scheme operated is, of course, the unemployment factor.


And population.


Population certainly, and children under five, but the main change is in the increased unemployment, and it will mean that for the second grant period, instead of that factor's attracting 8 per cent, of the £15,000,000, 20 per cent. of the £15,000,000 will go to those areas where unemployment is more severe than it was before. That being so, if we are to reduce the amount of this new money, £5,350,000, it is obvious that a relatively more severe reduction will take place in those areas whose financial circumstances are strained by virtue of unemployment, and more prosperous areas with little or no unemployment where there has been no change of population,, will receive very little reduction in their allocation of this new money. For those two reasons, because we did not wish to break faith with the local authorities at the start of this wide embracing scheme, and because a reduction in the amount would hit hardest those areas where unemployment is worst, the Government have decided to adhere to the minimum proportion.

My right hon. Friend promised in this House some months ago that he would inquire into the operation of this formula to see whether in fact the various factors were operating wisely. That inquiry is still being conducted, and anything we do under this Resolution and the Bill which is based upon it is without prejudice to any recommendation made or adopted as a result of that inquiry. I ought to make that perfectly plain. As far as this Resolution and the Bill which it helps to promote are concerned, the factors in the formula are unchanged, except, as I say, that the accentuation of any one factor naturally means that more money will flow in that direction. I think I have exhausted my task. I am sorry to have let loose all those figures, but I thought an explanation of the complications of this Local Government Act might enable us to judge and might promote discussion.

There is only one other point that I want to mention. The Committee will see that in the Resolution, under (b), authorisation is sought for an annual contribution from the Road Fund under Section 87 (1) (b) of the Local Government Act as regards England and Wales and under Section 54 (1) (b) of the Scottish Act as regards Scotland. The amount for the first grant period was £3,000,000, and the amount for the second grant period for which we are seeking authorisation is £3,000,000 also. That sum will be allocated as between England and Wales on the one hand and Scotland on the other according to the famous Goschen formula, that is, eighty ninety-firsts go to England and Wales and eleven ninety-firsts go to Scotland and the total contribution from the Road Fund remains for the second period what it was for the first period, namely, £3,000,000. I hope that the Committee will by passing this Resolution, enable the ship of the Local Government Act to put to sea for the second grant period of four years.

4.32 p.m.


May I now put the question which my hon. Friend asked as to the scope of the Debate?

The MINISTER of HEALTH (Sir Hilton Young)

It is not my desire in any way to limit the Committee's opportunities for Debate, but perhaps I may be of assistance if I point out that the purpose of the Money Resolution and the Bill upon which it is based is the single purpose of fixing an amount; and the manner in which that amount is to be fixed is determined by the Act of 1929 and is not raised by this Resolution.

4.33 p.m.


The point has, in my view, been quite correctly stated by the right hon. Gentleman. If I give an indication generally now of what would or would not be in order in the discussion of this Resolution, the Committee must take it as being nothing more than a general indication and not a Ruling which can be considered to be binding upon the Chair in regard to any points which may crop up in the course of the Debate. The Committee will notice that the Resolution is one to make certain financial provision which has to be made in pursuance of Sections 86 and 87 of the Local Government Act of 1929 and of the corresponding Sections of the Local Government (Scotland) Act, 1929. It is a Financial Resolution upon which a Bill is to be founded, and the Bill to be founded upon it must be confined within the limits of the Resolution to which the Bang's Recommendation has been signified. This will indicate to the Committee the limits within which the Debate on the Resolution must be confined, but I think, if I may put it in other words, that Debate will be in order on any question which can be raised on the particular Sections of the two Acts referred to, but it will not be in order to discuss matters which would involve legislation altering any statutory enactments outside those particular Sections. Therefore, it is clearly in order to argue that more or less money should be provided than is proposed in the Resolution; but it will not be in order to discuss proposals for altering the method in which that lump sum of money shall be distributed. That method of distribution is fixed by statutory enactment, the alteration of which is not a matter which is now before the Committee.


I take it that one would be entitled to criticise the Government for their action in pinching money from the Road Fund?


I think not; that is done beyond recall.


The Parliamentary Secretary, as a justification for the line which the Government have taken, argued about the formula. I do not wish to argue about the formula; I have done it before on many occasions; but it would be in order, I presume, for hon. Members to deal with the points which the Parliamentary Secretary raised in this speech if they did not transgress beyond the normal bounds of Debate?


With a desire to assist the Committee, I should point out that under your Ruling the nature of the formula—in other words, the basis upon which this amount is calculated—is not raised by the Sections to which you have referred. The Parliamentary Secretary naturally had to refer to many historical matters to make the Resolution clear.


I followed the Parliamentary Secretary's speech very carefully, and I do not think that anything that he said went beyond the limits which I can permit in this Debate. References to the formula, no doubt, will be necessary in considering the question generally as to the grant of a particular lump sum, but it will follow quite clearly from what I have said already that any suggestions for altering that formula or in any way interfering with the statutory enactments under which the money has to be distributed, would be out of order on this Resolution.


Would it be in order in discussing this question to raise the desirability of the extension or the curtailment of the services on which this money is spent, some of which are governed by Statute?


The hon. Member's last words make it easy for me to answer. If they are governed by Statute, they are statutory enactments which are not before the Committee, and we certainly cannot discuss their alteration.


I gather that it will be possible to discuss the extension or reduction of those parts of the expenditure which are not governed by Statute?


I am not sure what the hon. Member has in mind, and I think that that point had better be left to be dealt with when it arises.


Would it be in order to raise the issue mentioned by the Parliamentary Secretary? He stated that a committee was dealing with the question of readjustment, and that this Resolution, if passed, would provide money without prejudice that would be administered in accordance with the report of that committee. Therefore, would it be in order to criticise some of the anomalies that exist in administration so far as the formula is concerned?


I am afraid that I do not recall the particular passage in the Parliamentary Secretary's speech to which the hon. Gentleman refers.


The point taken by the Parliamentary Secretary was that this Measure deals with the total amount of money to be voted, but does not deal with or raise in any way the distribution of that money among individual authorities.


That is the very point with which I dealt in my Ruling, the effect of which is that the hon. Member cannot raise that question of the distribution of the lump sum.

4.40 p.m.


I shall try to keep my remarks within the bounds of Debate. Many of us in the Committee will remember the long struggles of 1928 and 1929 on this question. I am only too sorry that the Parliamentary Secretary was suffering then from a temporary absence from the House and did not take part in the Debates. Otherwise, his conscience would have pricked him in regard to some of the things he said about the Local Government Act. I fancy that some of his old colleagues will not agree with the favourable attitude he takes to this legislation. I am sure that had he been in the House when the Act was being discussed, he would have followed me into the Lobby on the large number of occasions when there were Divisions. The Parliamentary Secretary desired, as he said, to relieve the doubt and the gloom in the Committee. Doubt and gloom in the Committee is becoming its permanent condition now. After the speech we had last Thursday, I am not surprised that there should be doubt and gloom, and I am not certain that the hon. Gentleman has really removed them. He explained what this general Exchequer contribution is about. I am afraid that it is rather like the formula; it is unintelligible except to the fortunate people who took the trouble to go into it when the Bill was before the House.

We are faced now with a Resolution which is automatic in its character. It must be passed this year because the first grant period has now come to an end. For all time two of the elements in the general Exchequer contribution are fixed. One of the elements is the amount due to derating, which I strongly suspect was foisted upon an unwilling Minister of Health by a very greedy Chancellor of the Exchequer; and the second part is that dealing with the suspension of the percentage grants which had become a growing and ever-present problem with Members of the Conservative party. It was devised as a means of curbing the excessive zeal of certain local authorities. Being fixed for all time, it makes the continuance of this general Exchequer contribution more and more inequitable as time passes.

I am arguing this on the point of the extension of the £5,000,000 alterable grants. As time goes by, and as the rateable value of industrial and transport hereditaments increases, local authorities will be able to claim only one quarter of that. If the National Government's policy in regard to agriculture is so successful that there is a revival of this fundamental industry, then the local authorities, because of the complete derating of agricultural land and buildings, will not get a penny. Since this scheme started, they have been robbed of the gradually increasing rateable values of hereditaments which used to be rated in the same way as household premises, shops and warehouses still are to-day. The percentage grant for health services was devised deliberately to check this growing expenditure of the State arising out of the expansion of the social services. A block grant battening down the activities of local authorities makes the possibilities of expansion difficult for them as time goes on. The figures of percentage grant expenditure in 1928–29 are no measure of the size that these social services would have assumed to-day had the percentage grant system continued. Therefore, the local authorities are being penalised on that amount alone, because those two sums are fixed as long as the world remains.

The third point described by the Parliamentary Secretary concerned the variable sums originally fixed at £5,000,000. As I understand it, that £5,000,000 was a grant to provide during the first fixed grant period of three years something which would not completely damp down the normal expansion of those services which previously had received the percentage grant year by year instead of the block grant fixed for three years and now to be fixed for four years. We, and I believe the hon. Member for West Middlesbrough (Mr. K. Griffith), argued at the time that that sum was inadequate, that it would not represent the additional revenue which the local authorities would have received by the normal expansion of those services had the percentage grants still continued. Those social services are fundamental to the nation—maternity and welfare services, tuberculosis treatment and the rest. Those services, all included in the block grant, have not yet reached 75 per cent, of their development, let alone 100 per cent.; we are a long, long way behind.

The view which those of us who sit on these benches take was a view with which the noble Lord the Member for Hastings (Lord E. Percy) did not agree. He has taken a rather different line on this question of grants, one which is not, I believe, quite in accordance with the views of his party. The view we took was that until those services had been so developed that they were fulfilling completely the purpose for which they were started, the percentage grant system was the best way of encouraging their development. They get their £5,000,000. I am satisfied that but for the allocation of a definite sum—the additional sums will fall wholly on the rates, and, believe me, local authorities are in as desperate financial circumstances as is the Exchequer—those services would have been more highly developed.

Another point I wish to bring to the attention of the Committee is that when this Bill was originally introduced the fixed grant period was not three years but five years. There was to be the quinquennial review. Under pressure from the House, some of it from the Government benches as well as from the Opposition benches, the present Chancellor of the Exchequer, then Minister of Health, agreed to make the first period a shorter period of three years, the second one four years, and then, after seven years, would come the quinquennial reviews. The result of having a three years' period is this, under this mystic formula set out in the White Paper. The first year and the last year, on which the difference is calculated, are only one year apart; they were, in fact, succeeding years. For 1930–31 rate and grant-borne expenditure was £188,000,000, and for 1931–32, £189,500,000. If this had been a four years' period the rate and grant-borne expenditure would have been determined in 1932–33, had it been a five years' period it would have been determined in 1933–34. The lapse of time would have been larger and the increase in the amount of rate and grant-borne expenditure would have-been much larger, and that would have altered the answer of the proportion sum which the Parliamentary Secretary asked us to solve.

The formula, therefore, is working extraordinarily badly. It is a very cunningly devised formula. It is making permanent for all time the loss due to rates, the loss due to discontinuance of the percentage grant. In this short period of time during which the scheme has been in operation the factors are weighted against the local authorities. If hon. Members will look up the Act they will see that this formula is prescribed as a minimum. Never at any time, I think, during the long Debates on this question was it said that that minimum would be a maximum; indeed, there were hints to the contrary, though, of course, no pledges were given. Now we find that under the formula, which must operate unless the law is altered, a certain sum must be provided. The sum provided for England and Wales is £2,000 a year more than the legal minimum, not through any desire to encourage local authorities, but, as the Parliamentary Secretary explained, to get a good round figure. Scotland will rejoice in an increase of £500 per year over the absolute minimum. In effect, the Government are doing the least that is possible under the Local Government Act, 1929, notwithstanding the circumstances in which the local authorities find themselves.

This is part and parcel of the Government's economic policy, part and parcel of a policy of thrusting burdens from the Exchequer on to the backs of local authorities. This is not the only illustration we have had. Instead of encouraging local authorities to proceed with services which I believe to be vital to the health and well-being of the people, they are being discouraged. It is per- fectly true that the Minister has again "nobbled" the associations of local authorities, but it was easy to do that, because he had "doped" them 15 months ago. They are panic stricken, and are falling in with his views; but local administrators know that the operation of this scheme will postpone indefinitely many developments of health and allied services which are desirable and, indeed, essential. This Financial Resolution stabilises for the next four years, unless the law is altered, the assistance which is to be given to local authorities in respect of the services with which the Local Government Act, 1929, dealt, based upon a figure which had not had a chance to develop because there was an interval of only one year for the calculation, and it was a time of very considerable economic difficulty.

If it were true that this increased figure—an increase of £350,000, on the top of £5,000,000, to be spread amongst all the county boroughs and county councils—were adequate to meet the growing services of the local authorities during the first year of the next grant period it would be hopelessly inadequate in the last year of the period. The position of the local authorities is not an easy one; some of them are slowly becoming bankrupt. The difficulty they have in balancing their budgets is as great as the difficulty the Chancellor of the Exchequer may have in balancing his next Budget. Heavier burdens have been cast upon them during the last 16 months. Today Liverpool, Sheffield and Birmingham are groaning under the burden of Poor Law relief, a burden cast upon them by the Government, and when they might have had something more than this miserable addition of £350,000 they are to be denied it. This £350,000 is not a gift to the local authorities. It is the law of the land that they should have it, and they have earned it, but they are to have no encouragement beyond that execpt this microscopic sum of £2,000 a year.

When we consider the effect of the actual working of the formula, I am afraid the situation becomes even more grave for the local authorities. I do not want to argue it in detail, but the effect of the formula is going to be, shall we say, that for some areas there will be more money because the unemployment factor is larger, but, if that be so, the money will be coming from some other districts, because the sum is fixed. It will come from great centres like London, and the Metropolitan Boroughs in the East End of London will be penalised in order that a little more money, though not an adequate sum, shall go to distressed areas in other parts of the country. The contribution made in respect of roads remains the same, that is, it is determined by a consideration of what was spent in, I think, 1928–29. Four years, or nearly five years, have elapsed since then. Impoverished local authorities have had perforce to economise on the maintenance of their Class I and Class II roads, and in the counties on their unclassified roads. The state of many of those roads —I am not talking of the new roads to which special grants have been given— has grown steadily worse. I might remind the Committee that this sum is not determined by a formula, but is such sum as the Minister can squeeze out of the Treasury. After this period the sum which was thought right by reason of the expenditure in 1928–29 is to be re-established again for each of the next four years. In my view that sum is inadequate. The Parliamentary Secretary said there were those who thought the amount too high, the hon. Member for South Croydon (Mr. H. Williams) and his friends being among them. Some of us who sit on these benches think it is too low.


And others think it is quite right.


On the basis, no doubt, of the story told by the Parliamentary Secretary of the Judge who thought that if innocent men are sometimes hanged while scoundrels get off that, on the whole, that is rough justice. I should call it very rough justice. Perhaps I may tell a story which has just come into my mind. Some workpeople went to a house to do some internal repairs and decorations, and the foreman was told that they could help themselves to the beer in the cellar. In the evening when he returned he asked the foreman how he liked it. The foreman said that it was just right. The occupier of the house said: "What do you mean?" The foreman replied: "Well, if it had been any better you would not have given it to us, and if it had been any worse we could not have drunk it. So that it was just right." I believe that that is more appropriate than the story told by the Parliamentary Secretary. "Just right" means that it is not good enough but is not absolutely poisonous. That is the most that can be claimed for it. The Parliamentary Secretary attempted to justify the minimum amount which he is giving. In my opinion he did not justify it. The arguments were against the Government breaking the law and giving Jess than the minimum. They were against the hon. Member for South Croydon; they were not arguments against me.

The first of the arguments was that if we were to break faith with local authorities that would be a very bad thing. I would be the last person to suggest that you should break faith in that way. Indeed, it would be impossible to break faith with them without special legislation. I do not want an answer to the question why the Government have carried out the law, because I assume that Governments will carry out the law. I do not ask why they have carried out the law, and the minimum at that, but why they have not done better. The Parliamentary Secretary referred to the question of the finances of the country. I would ask him to look at—I think it is—the Second Schedule of the Local Government Act, 1929, which sets out the services in respect of which percentage grants are being discontinued. They are maternity and child-welfare services, with minor exceptions; the treatment of venereal disease, the treatment of tuberculosis, and the treatment of mental defectives. These deal with fundamental social problems. We all know that there is hardly a town in the country—I think I can say that there is not a town—where maternity and child-welfare services are as highly developed as, in the national interests, they ought to be. That applies certainly to the treatment of tuberculous people. We have not yet done for tuberculous people as much as we ought to have done in the interests of the nation.

I come back to the point that I made on a previous day, which is that during a time of exceptional and long-continued difficulty, money matters less than men. Nobody believes, least of all after the strictures of last Thursday, that there is to be an early lightening of the clouds. We are now looking forward to a period of very considerable difficulty. Whether we come through that storm does not depend upon how much you have saved for the Exchequer—


Oh, does it not?


I am putting this very simple point, which was true from 1914 to 1918, that men matter more than material and more than money, and that during these times, instead of taking action which discourages local authorities from developing social services which would improve the quality of the men—


Keep them out of employment.


That is quite irrelevant. I am trying to put the simple point that during times of national difficulty men matter more than money. That is a fact which cannot be disputed. Perhaps the hon. Member for Aylesbury (Mr. M. Beaumont) will disagree with this, that, so long as there is unnecessary luxury, those vital services which go to men-making and women-making in this country ought not to be crippled, as they are being crippled to-day. That is the simple case which is argued by us on broad public grounds. Our indictment of the Government respecting this Financial Resolution is because of their meanness. They have now penalised for 16 months the local authorities; they have held a bludgeon over local authorities for 18 months, and there is another bludgeon still over their heads in the shape of the Ray Report. The Government have bludgeoned the local authorities at a time when, whatever may be said about certain national services, local government services ought to be pressed forward because of their enormous permanent value to the nation during the coming hard years.

It would have been a mere gesture of generosity on their part, and an encouragement to the local authorities, if the Government had done something above the minimum. They have done nothing above the minimum, except £2,000, and even that sum is not offered as a sop. The local authorities have been insulted by being told that that sum is offered in order to get a round figure. I am sorry that the Government have not yet seen the light upon this. I have no doubt that their supporters will press them even further in the direction of economy. I hope that those hon. Members will have the courage to vote for their views. If they do so, let me say this: they are digging their own graves.


And digging them deep, too.


Not only that, but they are helping to dig the grave of the nation, for, believe me, in these days the most important asset that our nation has is represented by the social services which mean so much in the life of the working class. Those services are a big contribution to their well-being. I cannot pretend to hope that the Committee will go into the Lobby against this Resolution, but so far as we are concerned we express our strongest hostility to it and our contempt for its meanness, and we express also our hope that soon this Government will pass away and will give place to another with a better sense of human values.

5.8 p.m.


; Listening to the speech of the right hon. Gentleman the Member for Wakefield (Mr. Greenwood) took me back to those days when we were fighting together for the provisions of the Act under which this Resolution arises. The only difference is that he has not by his side Miss Susan Lawrence and that I have not by my side the hon. Member for Leith (Mr. E. Brown). One has gone out and the other has gone up. The Minister for Mines, if he were with me now, could use some of the language he used in those days when we had the most eloquent presentment of the inadequacy of these proposals that it would be possible to find anywhere.

I have a certain embarrassment in dealing with the case so admirably presented by the Parliamentary Secretary, because I know that my real objection lies against his first sentence. He said: "Give us assistance in guiding this ship safely into harbour." What I want to do with this ship is to scrap it and to build a new and a better one. Quite properly, that ambition cannot come within the confines of this discussion. We are in the ship, and we have to do what we can with it. It is of no use to imagine that we can rebuild it more in accordance with our heart's desire. I must repeat, follow- ing the right hon. Gentleman the Member for Wakefield, that the vices that are shown here in the inadequacy of this Resolution, are vices which are really inherent in the Act itself. It is an Act which inevitably operates in the closing down of essential services, and it is not surprising that, when all the formulas which were so ingeniously devised, and which I think must have come from the cunning brain of the present Postmaster-General, have been worked out, they yield a very unsatisfactory result.

When one has read this very ingenious White Paper, so far as one can make sense of it, one finds that this Committee is only discussing the sum of £2,500. That is what it comes to. There are a lot of figures and a lot of verbiage. It is no good the Financial Secretary or the Parliamentary Secretary or anybody else taking credit for not breaking the law. So much the Government were bound to do. It is giving now £2,000 to England and Wales and £500 to Scotland. What generosity. What largesse and expansive-ness. The Government must have been reading a letter from Professor Pigou in the "Times" newspaper to-day, and they realise that the time for contraction of expenditure has gone by and that now we must expand. So, here is £500 for Scotland—an "awfu' heap of siller." We must make the most of it.

The right hon. Gentleman the Member for Wakefield was saying, I think quite correctly, that the Government were doing as little as it possibly could under these formulas. Instead of that observation being greeted with indignant denial, it was greeted with applause from the Benches of the Government's supporters. They were glad that the Government were doing as little as possible. So far from wanting their own Act, supported in such flowery language as "the foundation of the nation's prosperity," worked for all it is worth, they want to work it as little as possible. When that spirit is shown on the back benches, I suppose it is idle to expect that Ministers, who are in even closer contact with the Chancellor of the Exchequer, are going to show a more generous mood. Therefore one cannot hope for very much.

It is rather difficult to gather from a mere perusal of this White Paper what the ultimate policy of the Government is intended to be. The White Paper con- tains one example of an even more ancient formula than the one in the Act. I find a sum worked out as follows: First you have to take the rate and grant-borne expenditure for 1931 and 1932, and then you have to divide it by the rate and grant-borne expenditure for 1930 and 1931. You have to multiply the result by the General Exchequer Contribution of the first fixed-grant period. Then, actually in terms, you have to take away the number you first thought of, because the White Paper says: "Deduct total of losses on account of rates and grants," which is the very first figure which is given here. This remarkable result leaves one in the end with only £348,000, which the Government have generously increased to £350,000. That is a most lamentable result. As has been pointed out, the strictly compensatory part of the grant, which is fixed, the Parliamentary Secretays says, for all time, was regarded even by the supporters of this Act, when it was first operated, as being too rigid and having too little elasticity. There must be some elasticity somewhere. I think that the sum was arranged to be £6,000,000 for the first fixed-grant period and thereafter was expressly made elastic. You have that minimum, but you have no maximum. It was anticipated that, as the population grew and as circumstances altered, there would be growing demands.

The Government at that time had, I imagine, no reason to look forward to such hard times as those which we are passing through. They could not have had present to their imaginations the conditions under which great cities like Liverpool, and great county boroughs like Middlesbrough, are labouring at the present time. Now that the test has come, now that the occasion which was envisaged is here, the Government will make practically no increase at all. That seems to me to be an example of the whole spirit in which they are tackling the situation. I want to record my hearty protest against the niggardly spirit which is shown in this Resolution. I do not suppose that, as a matter of voting against the Resolution, the votes on either these benches or the benches opposite will really matter. We are being given something, and nobody wants these grants to stop altogether. But I think we are entitled to say that, while we have listened with interest to the delightfully clear and lucid statement of the Parliamentary Secretary, from its very lucidity it is quite evident that the Government are even ready to plume themselves on fulfilling no more than the very letter of their bond which was actually demanded from them by the law, and that for any kind of imagination in regard to meeting the needs of the time it is quite hopeless in this, and, I am afraid, in other matters, to look to them.

5.18 p.m.


I think that my hon. Friend the Member for West Middlesbrough (Mr. K Griffith) is confusing in this matter two different questions. We are not now considering capital expansion; we are considering an annual Revenue charge; and, after all, the hon. Member and I, whatever may have been our subsequent differences, were quite certain 18 months ago about asking the country for full powers to balance the Budget. Even after the unfortunate differences of opinion which have intervened between us, I should have thought that he might still have taken that fact into consideration. The right hon. Gentleman the Member for Wakefield (Mr. Greenwood) made a very curious speech. The one argument which was required to make it effective was to demonstrate that this £5,000,000 of new money which was given to local authorities in 1930 had now been exhausted. The right hon. Gentleman seems to have forgotten that that was new money in relief of rates, to be available for expansion of services. He did not say a word in his speech to the effect that the local authorities had exhausted that new money, and, therefore, could not go in for any further expansion of services; and, in the absence of any such statement, the whole of his argument fell to the ground.

My reason for rising is to point out that this Motion puts the Committee in a very serious difficulty. The right hon. Gentleman the Member for Wakefield reminded me that I was inclined to take a view of block grants which perhaps was in advance of—or in retrogression from—that of my party. My main reason for believing in the system of block grants is that, under a system of percentage grants, the House of Commons cannot, in practice, exercise any control over the taxation which it levies on the taxpayer. That view may be right or it may be wrong, but it is my view. We are being asked here—I do not say that it is the fault of the Government; it may be the fault of the Act—two months before the Budget, to commit ourselves to an expenditure for the next three years with no sort of knowledge of what the outturn of the present financial year will be, or what will be the nature of the Estimates to be laid before us in the Budget. Is it possible that the House of Commons should be able to stand before the country and say that it is exercising control over the nation's finances when, two months before the introduction of the Budget, we predetermine the amount of expenditure as regards a very substantial part of that Budget? That seems to me to be a piece of procedure which reduces the financial control of the House of Commons to ridicule. I regret very much that the Government, acting under the scheme worked out in 1929, have decided to run along these predestined tram-lines in 1933, and to follow precisely this procedure. After all, as was pointed out by the hon. Member for West Middlesbrough, in 1929 we did not anticipate any crisis of this kind, and surely, if there is one thing that is essential at the present day, it is that, in facing the very grave financial position of the future, both national and local, we should keep in our own hands our powers to direct financial policy, instead of committing ourselves in advance in the way that we are at the present time.

5.23 p.m.


I rise to suggest very seriously that this resolution is a further attack on the development of our local services, and I am sure that the local authorities of the country, when they read this Debate to-morrow morning, will be disappointed. When the old percentage grants were replaced by these block grants, the position of the Government was such, that they could have brought in a resolution for more money than this to meet the normal developments which have taken place since the Act was passed. The suggestion of the Noble Lord the Member for Hastings (Lord E. Percy) is that the money implicated in the Bill of 1929 was new money for the local authorities for development purposes, but it did not work out in that way. It did not represent new money, but only the replacement of money which the local authorities had lost, owing to de-rating on the one hand, and the reversal of grants to local authorities for local purposes on the other. In 1928, in many mining areas, whose rateable value is largely ascertained on the basis of colliery output, new collieries were being sunk, which then had no potential output, and the result was that, on the readjustment of the grants, the rates in many of these districts were increased.

I have in mind a colliery town in my own constituency which, owing to the operation of the formula in the way that it did, had no spending capacity in 1928. The colliery output there did not commence until 1929. Then came the Derating Act, which reduced the rates of the colliery by 75 per cent. Nevertheless, although the local authority in that district had very little spending capacity before the colliery was sunk, they have had to develop a new mining district, with housing, drainage, schools, sanitation, child welfare, and so on, with the result that their rates are now nearly 20s. in the £. We are now negotiating with the Minister regarding a water scheme for this newly developed mining district, where the rates are so high as a consequence of the administration of the formula, and we are now in the difficulty that the Minister says that this water scheme will be so expensive that he cannot at the moment approve of it. At the moment we have not a proper clean water supply in that area.


May I ask the hon. Member, for my own information, whether he is referring to a scheme to be financed with loan capital, or out of revenue?


With loan capital. We say that the alteration proposed in the percentage grants as regards population and unemployment is not sufficient to meet the necessities of our distressed mining areas. Since the Act was passed, there have been great changes in the district, and, although the percentage has been increased as far as unemployment is concerned, it will still leave thousands of men dependent on the Poor Law, which is a direct charge on the local authority. We say that there was any amount of room for seeing the difficulties that have arisen in the adminis- tration of block grants, and that, in fairness to local authorities, the formula ought to have been readjusted. I should like to ask the Minister a question. The mining district to which I have referred, which had no rateable value from the colliery until after the Act started to operate, and of which the expenditure in the year 1928–29, when the colliery was being sunk, was very small, now has a tremendously increased special rate, on which it gets no grant, while it gets only 25 per cent, of the rates from the colliery. I should like to know whether it is in the mind of the Minister to make any adjustment in the case of districts that are in this position?


I am afraid that that is a matter which cannot be discussed now. It would involve an alteration in the formula.


The only thing that I want to suggest is that the £2,500 for which, as a matter of absolute necessity, the Government were bound to make provision, will not help this district very much, and I was wondering whether there was any hope of the formula being altered to meet that situation. We on these benches say definitely that, at a time like this, when the local public services are so important, it behoved the Government, and we claim that they could have afforded it, to bring in a more generous Resolution than this to help developments in some of these districts, and to take away from the local ratepayers some of the burden which they are now bearing in connection with unemployment. We say that unemployment ought to be a national burden. In this Resolution, however, no provision is made for progress in any of these directions. The Government are carrying out what has been their policy ever since they took office, namely, to browbeat the local authorities and stop social progress; and apparently it is not their intention even now, in face of the fact that, as the Chancellor of the Exchequer told us, for 10 years unemployment is to be with us, to make that unemployment a national responsibility. This Resolution is a fair indication that they are going to continue their past policy of placing the responsibility for dealing with unemployment to a large extent on the local ratepayers. It is on these grounds that we criticise the Resolution. Although, as has already been said, we know that it is bound to be passed, and we could not support the Amendment, which suggests a reduction, nevertheless we think that the Government are not carrying out their duty and obligation in bringing a Resolution of this type before the House.

5.30 p.m.


The point of view that I wish to express is entirely divorced from that which we have heard from the hon. Member opposite and from the hon. Member for West Middlesbrough (Mr. K. Griffith). I put down an Amendment which is out of order. It would have been in order if I had proposed a reduction of £1,000, but it is out of order to propose a reduction of £5,000, because that is in conflict with the provisions of the 1929 Act. But that is no reason why I should not express the views that I should have expressed if I had been able to move my Amendment. I think local government is grossly extravagant at the present time. I think this country is so over-taxed that until we reduce the burden we shall not restore large numbers of people to employment. That is the fundamental stand that I take. The hon. Member opposite wants to improve the social services. The hon. Member behind him wants to relieve the unemployed. I want to see the unemployed put back into normal employment, and my whole purpose is to support a policy of economy, because I believe that by economy alone in existing circumstances are you going to bring about a large reduction in unemployment. The importance of economy is not merely that it is a transfer of expenditure. It will mean a complete change in the psychological outlook of every person engaged in business.

People speak as if there had been a serious attempt at economy. The last Parliament, of which I was not a Member, in its last few days passed an Economy Act which had some effect on local government. The economies were not very large. They have always been overstated, because there was included among them the increased contributions in connection with unemployment insurance, which are really an additional form of taxation. The economies have been roughly £60,000,000, and the new taxes £90,000,000. We are to-day suffering from an increase of unemploy- ment because of the new burdens imposed upon the people on top of the existing burdens, which were already much too heavy. The only remedy that we have not tried for dealing with unemployment is economy. We have tried extravagance, and the result was complete failure. It might be worth while to try economy. The increase in the cost of local government in recent years is frankly appalling. In pre-War days in Great Britain the cost of local government borne on rates and grants was £105,000,000 taking the nearest round figure, and in the year ending 31st March last it was £319,000,000. They did not have to fight a war as such. They had no War Debt and no War pensions to pay, but there has been that gigantic increase. The cost is three times as great, although there has been no corresponding advance in the cost of living and, if every allowance is made for the increase in population, there has been a gigantic increase in the burden.

That increase has been growing in recent years. In 1922–23 it was just under £261,000,000. In 1928–29, the last year before the Local Government Act commenced to operate, it had grown to £294,000,000, and last year to £319,000,000. The figure for the present year we do not know, but I imagine it will show some reduction as the result of some of the economies that have been imposed. The increase in the last 10 years has been 22 per cent, and since 1928–29 8 per cent. During that period everything has been becoming cheaper. The retail index cost-of-living figure and the Board of Trade wholesale index figure, which is a fairer measure of much of the expenditure of local authorities than the retail price index number, both show a heavy drop The real change in the value of money from their point of view is a compromise between the wholesale and retail price figures. In the last 10 years there has been a drop of 30 per cent, in the index number and, in the last four years, of 21 per cent. If you apply the change in the value of money as well as the increase in the cost of local government expenditure, local authorities are spending to-day in real values 75 per cent, more than they were spending 10 years ago. People cannot afford to go on spending these large sums. Innumerable trades are slack and idle because the ordinary person is unable to continue his normal habit of living. The nation is overburdened largely because of this extravagance, which to an abnormal extent is financed by the central authorities.

The amount of rates raised has roughly doubled as compared with pre-War. The amount of the Parliamentary grant has increased six times. The point that we are now discussing is the unallocated grant. It is used for several purposes. It relieves the burden which would otherwise fall on the ratepayers in respect of all the other services. It is a general grant-in-aid for all purposes. I think it is much too large. I should like to see it cut. We are not voting £5,300,000, but some £43,000,000. [HON. MEMBERS: "No! "] Certainly we are. We are in effect voting £43,928,000 so far as England and Wales are concerned. That is the sum that we are really discussing. That is the sum that is going to be distributed under the formula. We are actually determining how much we are to add to the discontinued grant. We are actually spending that large sum, and I should be very glad to see it reduced, not by £5,000, but by something in the neighbourhood of £5,000,000, and under the condition that it was not followed by an increase but by a decrease in rates collected. The truth of the matter is that local government is becoming very extravagant indeed. There is a rise under every conceivable head. It is rather interesting to compare an analysis which I have taken partly from the statistical abstract and partly from the Thirteenth Annual Report of the Ministry of Health. I find that, when you have left out education, the health services and all the general specified services, there is left as "other overhead charges not specifically allotted," in 1913–14, £4,974,000. In 1929–30 it had grown to £20,004,000.

I see no reason why, when you have defrayed your health services, your education, highways, public lighting and police, the general overheads are four times as great as they were pre-war. It is due to the fact that there has grown up a general system of extravagance in local government. I do not know whether people realise that the main extravagance in government to-day is not national but local government. If you analyse our Budget and deduct from our present expenditure that part which represents War Debt, War pensions and these increased grants to local authorities, what is left shows a relatively small percentage increase if you take every fact into account. The greatest item of general extravagance in our national accounts is this enormous increase in giants to local authorities from £25,000,000 to £154,000,000 last year. I take the view that somehow we have to take steps to reduce it. It is a little difficult for anyone to make an estimate of the income of all the people in the nation, but estimates are made with a considerable degree of accuracy and, on the basis of those estimates, I calculate that in the year before the Local Government Act came into operation about 7 per cent. of the aggregate income of all the people in the land was being spent by the local authorities either through the rates or through Parliamentary grants. Seven per cent. of the national income is being spent by the local authorities. Partly as the result of the increase in expenditure and partly because the general level in prices has reduced the nominal values of the income of the nation, we are now spending over 10 per cent. There has been a 50 per cent. increase in the burden of local government expenditure in the last four years in relation to our capacity to bear it. It is an intolerable increase, and unless it is checked we shall come to disaster. In many districts local government is verging on disaster.

It is very interesting to contrast what has happened in different areas. In the area of the London County Council we have the most efficient local government in the country. It is efficient because it is conducted on proper principles. I have here a table showing the rates as collected by the London County Council in one group, the metropolitan boroughs, county boroughs, municipal boroughs and urban districts—there is a general grouping according to classification of authorities. The London County Council show a relatively moderate increase in the amount they are raising by rates and spending. You find that some of the groups are spending three times as much as they did pre-war. What is the difference? Are our services inefficient in London? No. They are probably more efficient than in any town in the country. You have a council which has a policy. The policy of the ordinary municipal authority does not exist. It is an accident. You have various chairmen of various committees pursuing an entirely independent policy, drifting along casually, no long view taken, no leadership, no cabinet system to produce a co-ordinated policy, and in most cases you find waste. The less numerous the councillors the better the policy. Very large bodies become difficult unless you impose upon them some form of cabinet system to control policy. Municipal government is drifting to disaster. It is over-burdened with work, although a great deal of it exists in the councillors arguing with each other. It is becoming steadily more difficult to get suitable and competent people to serve on the authorities, and I think municipal government is threatened with disaster.

We in this Chamber are responsible to some extent for the extravagance. We have imposed new burden after new burden on them. We cannot go on. We cannot afford it. We are spending money that we have not got. People are being compelled to dispose of their savings to pay their taxes. It cannot go on. It must come to an end. Some of the municipalities which have been grossly extravagant are on the verge of disaster, and it is conceivable that the House may have to make exceptional provision for some areas where literally the whole machine will come to an end and there will be no one left to pay the rates. The more these bodies have been influenced or controlled by members of the party opposite the nearer they are to disaster. We have to rescue them by taking up a strong line. We have to say to the public, "You cannot afford this; the nation cannot afford this." We have to try to rescue the country from disaster. I feel more strongly on this subject than on any other. I want to see my countrymen restored to employment and my country restored to prosperity.

Ever since the end of the War we have been pursuing a false policy. Improvements in trade and declines in unemployment in any period since the end of the War have been in those years which followed a substantial cut in the Income Tax. If the Chancellor of the Exchequer were in a position to make a substantial cut in the Income Tax nine weeks to-day, as I understand it will be, he would take more people from the queues outside Employment Exchanges than by anything else he could do. This Parliament was elected for economy, and a great tribute was paid to it by the hon. Gentleman opposite, who said that it will go on economising. I realise all the pressure at the moment from the necessitous areas to spend money on creating useless work in order to put the people to doing something. When you are creating things which may be amenities you are imposing permanent charges which in a sense are useless. There is an insistent demand upon the Government from every necessitous area to do things which, if done, will plunge us deeper into the mire. We have to do what we can to resist the hon. Member for West Middlesbrough who wants to pursue a policy which will plunge his constituents into permanent unemployment.


It is not my policy but the policy of the councils and municipalities of the Tees-side.


It may be, but that does not make it any the wiser. It does not matter what are their politics. If we learn from the leader of the party to which he is presumed to belong that peace, retrenchment and reform is the policy of the party, there is not a Liberal to-day preaching economy. They preach extravagance. The hon. Gentleman is preaching extravagance because it is popular among his constituents. What do they say? "Let us go south where they are better off." And he says: "Let us distribute some of their money among the people of Middlesbrough." The whole policy was practised in Sherwood Forest many years ago. It will not lead to the permanent prosperity of Middlesbrough or any other distressed area. In the interests of the distressed areas, we have to resist the extravagance which they themselves are urging. I hope that Members of the Committee will realise the vital necessity of economy. I wish that the Debate were taking place nine weeks from to-day, on Budget day. That is the real test. The tragedy is that we separate our policy. We have one period in the year when we vote Supplies and another when we impose taxation. I wish that the Finance Bill were also a Supply Bill. The hon. Member opposite suggested that it is a mean proposal, and asked why we cannot have a lot more money. Because we do not know where we are going to find it on Budget Day, or even how to find what we are already spending. That is the answer. Members of the Committee must have the courage to stand up before their constituents and say "No." A resolution was passed unanimously by my town council asking me to support a programme of relief work, and I sent them three pages of explanation why I would not do what they had unanimously decided. Let the hon. Member for West Middlesbrough stand up to his town council. Let him resist.


I agree with them.


You agree with them? Then they have the Member they deserve. My conception of the duty of a Member of Parliament is that he should not follow his constituents but should lead them. They elect us because they think that we are not as bad as we really are. I am sorry I have taken up more than a fair share of the time of the Committee, but this is the first opportunity I have had of raising the general question of economy in municipal government and its reactions on economy in the National Government. I am convinced that, though many disagree with me at this moment, in the long run, they will be forced to conclude that, unless we economise and reduce taxation, we shall not rescue our people from their terrible plight.

5.49 p.m.


I did not propose to rise to take part in this Debate but for the speech of the hon. Member for South Croydon (Mr. H. Williams). From the Ruling given at the commencement of the Debate, I wondered whether it would be possible for it to have taken such an enormous width but, from the speech we have just heard, apparently, anything may be said. It is really an insult to a very substantial number of eminent public men in this country that a speech of that kind should be delivered in the House of Commons. I have on my side a man who has been a leader in public affairs in Glamorgan for over 20 years, and I am certain that if my hon. Friend the Member for South Croydon had been representing South Wales and not South Croydon such a speech would not have been delivered.


I lost my seat in Reading because I opposed certain proposals of the Liberals. I knew that when I made a certain speech I was turning away certain Liberal votes. I never hesitate to say what I think. I say what I think, and I take the consequences.


I did not make reference to Reading, but to South Wales.


I know.


I am inclined to believe that the hon. Member largely represents geography and not humanity. There are some things which he said with which I agree. It is true that local government in this country needs a great deal of reformation. There is no shadow of doubt about that, but to infer that unemployment in this country is attributable to extravagance by local authorities is certainly not true. It is sheer humbug.


It is sheer nonsense, and he knows it.


To say that prosperity can return to this country by practising economy is sheer absurdity. We had a Debate last week on unemployment. Economy has taken place. Enormous sums, of money have been saved by the Government, but unemployment has increased by more than 400,000 during the last 12 months, when economy has been practised, both locally and nationally, to a greater extent than for many years past. In the month of January, as compared with the month of December, there was an increase of practically 180,000 in the unemployment register. To assume that, if there had been greater economy practised either nationally or by local authorities during that time, we should have been able to reduce the number of unemployed, or to increase substantially prosperity, is really ridiculous in the light of our experience. Unemployment, after all, is not a national matter. It is really an international problem. Have we to assume that 15,000,000 people are idle in the United States owing to the extravagance of local authorities, that 5,000,000 in Germany are idle owing to the extravagance of local authorities, and that the increase in unemployment during the last three or four years in France, from almost an infinitesimal number to the figure at which it stands to-day, is attributable to the extravagance of local authorities?

When will the hon. Member for South Croydon realise that he is not a walking encyclopoedia and that he does not possess all the prevision and omniscience to advise all local authorities in the country as to when they should spend this, that or the other upon what they consider to be fit and proper for their people? It is sheer impertinence to assume that good public men who have given their services—after all, business men—are extravagant. Is Liverpool in its present plight owing to Labour legislation or a majority of Labour members upon the council? Has it threatened default because of extravagance? Is Birmingham which, after all, is the place where the present Chancellor of the Exchequer has given most of his life in public work, in its present plight because business men have done nothing in the affairs of local government? It is really time that the hon. Member should come down to earth and apologise to public authorities, and particularly to public men who have spent an enormous amount of time in trying to put their local authorities into something like a relatively good position as business authorities.

I am certainly dissatisfied with the Resolution before the Committee. I realise, like the right hon. Member for Wakefield (Mr. Greenwood), that it is impossible for us to amend it. We are substantially tied to the Act of 1929, and it is difficult, in the light of the facts as we know them, to suggest anything to the Minister which would help to improve particularly distressed areas like South Wales, Durham, the Tyne and the West of Scotland. I put this consideration to the Minister for (his reflection. It was certainly impossible for the House, when the Debate was taking place which ultimately resulted in the Act of 1929 being placed upon the Statute Book, to have been able to visualise precisely what has occurred in places like South Wales. It was practically impossible for Members fully to have appreciated in 1928, when the discussion was taking place, that more than 60 per cent, of the normal complement of men engaged in the mining industry in Glamorgan would have been rendered idle at this time, and that one of the factors, namely, the decline in population, would have seriously prejudiced our block grant, if not for the incoming grant period, certainly for the quinquennial period, which is the next five years. We know that the population is being reduced by migration not only in Glamorgan but in the whole of South Wales. That is a factor which could not have been fully appreciated by the House when the present Act, which gives rise to the Resolution, was being placed upon the Statute Book.

I wonder whether it will be possible for the Minister, in his reply, to give some indication that Glamorgan or South Wales can have further consideration, if not in regard to this matter, in regard to the deputation which came before him on Friday last in connection with a loan and things of that kind. I place that before him because I have great difficulty in arguing against the Resolution strictly in accordance with the Rules of Order. We charge the Government with meanness in sticking to the bare minimum and merely advancing some £2,500 beyond what we are allowed by Statute. We charge them with positive meanness in not trying at least to reach the maximum rather than keep to the bare minimum. At the same time, we cannot possible move an increase, and certainly we shall not be prepared to advance, even by argument or by deed, anything which implies a decrease. I would ask the Minister, when replying on the Financial Resolution, whether he has really given us his last word with regard to what can be done for depressed areas like Glamorgan, Durham, the West of Scotland, and particularly the Tyneside, and the Liverpool area? Is it not possible for Members of this House to hear something from him that indicates that he fully appreciates the terrible plight through which we are passing in the distressed areas? I do not desire to place before the House evidence of the enormous distress that prevails. I do not desire to advance any figures, because they are all to hand. The Minister is well advised by his Department, from statistics that are periodically obtained, as to what is happening in South Wales. In Glamorgan we are faced with a rate for Poor Law purposes of 8s. 1¾d. In Monmouthshire we are faced with a rate of 6s. 8d. In Merthyr the rate is 13s. for Poor Law purposes only. The rate for Poor Law and general district purposes amounts to 27s.

I want the hon. Member for South Croydon to realise that that is not due to extravagance, but to the fact that we have so many vacant businesses that are paying no rates, that the Derating Act could not have contemplated what has happened in South Wales, and that the weight of population could not have been fully considered in the light of anticipated or known facts. All these factors are the cause of the enormous distress in South Wales, and we say that as a matter of bare justice something ought to be done by the Government to give necessary assistance to those areas that have been responsible mainly for producing the wealth of Great Britain and have made Great Britain what it is—the great coal-bearing, steel-producing, ship-producing areas of Britain. The richer areas of the South, the richer boroughs of London, areas that can really afford it, ought willingly to do something in order to help to carry the heavy burden that is thrust upon the weak shoulders of the distressed areas.

The burden of the Poor Law should be a national charge and not a local responsibility. Areas that are merely paying 9d. in the pound Poor Law rate ought certainly to bear a substantial proportion of the burden that is now being borne by places like Glamorgan, where the rate is 8s. 1d. As a matter of bare equity the areas that are purely residential, health resorts and the like, ought to carry some responsibility for the areas that have mainly been responsible for creating the wealth which the residential areas enjoy. We oppose this Resolution because of its utter meanness, and I trust that the Minister, in reply, will give some encouragement to the distressed areas, and some indication of what he is prepared to do to help them out of their plight.

6.3 p.m.


The earlier part of the speech of the hon. Member for Ogmore (Mr. E. Williams) in reply to the hon. Member for South Croydon (Mr. H. Williams) leads one to paraphrase a well-known quotation: "When Williams meets Williams, then comes the tug-of-war." The hon. Member for Ogmore has attempted to reply to the wholly admirable speech of the hon. Member for South Croydon by a number of assertions for which he produces no evidence what- soever. As one who has spent most of a short life in local government work, I wish to endorse every word that fell from the lips of the hon. Member for South Croydon. I say quite definitely that my belief is—although I do not hold my own opinions in very great esteem, they are at least as valuable as those of the hon. Member for Ogmore—that local authorities have been in the past and at this moment are grossly extravagant, and that local and national extravagance on various services is a very large contributory cause of unemployment.


indicated dissent.


The hon. Member for Ogmore disagrees. I did not expect him to do anything else, but his disagreement does not alter my opinion. We have to face up to the fact that the only thing that has not been tried in this country is economy. The hon. Member for Ogmore said that we have been economising for the last 15 months. The reason why we welcome the smallness of the present Vote, and we wish that it was smaller, is because the value of it is the return of money to the people in reduced taxes and rates. The hon. Member referred to Liverpool and asked us whether the plight of Liverpool was a question of Socialist administration.


That was the assertion made by the hon. Member for South Croydon.


What my hon. Friend the Member for South Croydon said was that where the party opposite had had influence over local authorities extravagance was increased.


That is not true.


Broadly, I think it is true. You will always find that councils with a Socialist majority indulge in the highest expenditure and are to be found among those who waste most money. That is not to say that there are not a large number of grossly extravagant councils with Conservative majorities, or with entirely Conservative constitutions.


The hon. Member has charged me with not adducing more facts in substantiation of my argument. Will he mention one authority administered under a Socialist régime that is more extravagant because of that?


Yes, the Durham County Council, of which I know something, and there are many others.


If the hon. Member deducts from the general rate of the Durham County Council the enormous expenditure on Poor Law, does he then assume that it is more extravagant than others?


Certainly, and I should be pleased to discuss it with the hon. Member afterwards and give him facts and figures for my belief. The fundamental difference between the hon. Member for South Croydon, myself and those who think with us and the right hon. Member for Wakefield (Mr. Greenwood) and those who agree with him is that they believe that these services should be carried on and expanded at all costs. We believe that the first essential is the reduction of public expenditure. We believe with the right hon. Member for Wakefield that men are more important than money, but our view is that it is more important to get money into the pockets of the men through the usual and normal channels than to spend money on services which are always extravagant, often inefficient and sometimes of very questionable value.

Like the hon. Member for South Croydon, I would have moved a reduction of the Vote had it been possible to do so. I am grateful to the Ministry that they have not been led away into an expansion of these services. Whatever may be said of the policy of capital expenditure on public works, I am still of opinion that it is a doubtful policy. This money comes directly from the pockets of the taxpayers and ratepayers and, as the national income is shriking, the sources from which the money comes are considerably smaller. I do not know whether the hon. Member for Ogmore has visited Vienna. If not, I would advise him to do so. For 14 years Vienna has concentrated on its social services, but the poverty one sees there is worse than anything in South Wales.




Because the money of the people has been wasted on social services.




Yes, wasted.


Does the hon. Member mean that?


I repeat the assertion. I know what the hon. Baronet is thinking. I do not mean that all the money spent on social services is of necessity wasted, but I say that if you take money, as we are doing now, which would be better used in development of trade and you use it in public expenditure through wasteful means—moneys given to local authorities is less efficiently expended than private money—I do not think anyone will seriously question that statement—


I do.


I am sorry if the hon. Member questions it.


I certainly do.


I say that, in those circumstances, much of the money is wasted. The hon. Member for Ogmore questioned whether the unemployment all over the world is to be attributed to the extravagance of local authorities. A great deal of the world situation is attributable to the absurd ideas of public expenditure which have been in the minds of people ever since the War, all over the world.


Does the hon. Member mean waste or abuse? Is it waste to keep the unemployed alive in a constituency like mine?


That is not waste, but it is wasteful to give money in the form of benefit that might be spent in giving them work.




I hope the hon. Member will allow me to make my speech in my own way. If we believe, as we do, that the policy of expenditure is having a serious effect in the country as a whole, and that the only way to prosperity is to bring about a reduction in public and local expenditure, we must be extremely grateful that the Government have not seen fit to increase the present advance, but only to round it off, and we must express the hope that they will in future by every means in their power do what they can to reduce expenditure—and not be led away by hon. Members below the Gangway on this side of the House and hon. Members opposite—to pursue the policy of economy and to obtain full benefit from it.

6.14 p.m.


I was surprised to hear the opinions put forward by the hon. Member for Aylesbury (Mr. M. Beaumont). He talked about extravagance. I have had considerable experience of local authorities. When he says that the Socialists are more extravagant than any other party, he is making a great mistake. I have had experience of his party and of other parties controlling local authorities before the Socialist party became strong enough to control itself. Let me give him one instance of his own party controlling in the county of Glamorgan. When they were controlling local authorities in the county of Glamorgan the average price paid for land was over £700 per acre, but since the Socialist party came in the average has been reduced to less than £300.


What was the land used for?


For schools and things of that nature. It is no use the hon. Member talking about Socialist extravagance. We know something about Conservative extravagance. Given the same facilities and opportunities, the Socialist party is quite equal to any party in the State in the matter of controlling local government.


I am delighted to hear what the hon. Member tells me, but is it not the case that the Socialist party in Glamorganshire have launched out on a great many developments and new schemes which never occurred when the older party was in power? I am not saying that we are not extravagant; I am saying that you are.


We have endeavoured to find employment for the men in the county as economically as possible. We have given work to discharged soldiers, and done everything we can to assist men during these difficult times. When hon. Members opposite charge depressed industrial areas with extravagance it must be remembered that the country owes a debt of gratitude to the men from these areas. Men who had volunteered had to be sent back from the front to work the mines in Glamorganshire. They were very anxious to defend their country. What is the condition of men in the mining areas to-day? I was delighted that the Minister of Health came down to Glamorganshire. I accompanied him through a number of our distressed areas. We went through the Rhondda Valley, and the impression conveyed to the Minister of Health was one of real distress on the part of the people. We travelled through the valleys and found shops closed and barricaded, houses derelict, indeed, the whole area looked derelict. I am talking about the mining industry because I know more about it than I do of any other industry. The coal is still there, but the men are unemployed. This Government and previous Governments have been using something other than coal. They ought to use more coal in order to give employment to our miners.

When the Minister of Health was in the area we pointed out to him what could be done. There has been a considerable increase in the number of unemployed in the county on account of collieries and steel works closing down. There is, I admit, a slight improvement in the tin works. The average rate of public assistance at the moment is 8s. 1.75d., but the total amount may be increased because for the month of January last we had 1,400 more men coming to the public assistance committee than we had in January of last year. They will be an additional charge. What are we going to do? A large number of these miners who are being thrown out of employment will, through the means test, be transferred to the local rates. We are paying them. The increased payment for the last two weeks is at the rate of £100 per week, upon a present charge of £13,330 per week, and I am afraid that we shall have to continue to pay this amount because collieries are still closing down. There is a colliery in the Rhondda Valley where about 600 men are at present under notice, and they will come upon the local authority for some financial assistance.

I hope that some other way will be found to deal with this problem. I was looking at the returns of the coalowners the other day. The audit shows a loss in the mining industry of 4d. per ton. The local rates are 1.44d., but when I look at the royalties and rents they work out at 7.87d. per ton. Surely something could be done in that direction. If the royalties were not charged—

The DEPUTY-CHAIRMAN (Captain Bourne)

The hon. Member is now getting away from the Resolution.


I was pointing out the effect this had upon local rates. The Minister of Health came down and saw the conditions for himself. We took him wherever he wanted to go, and I am satisfied that he will give us some assistance. There are several ways in which it could be done. Here is an opportunity, when the right hon. Gentleman is distributing this new money, this £5,000,000. The additional grant to the county of Glamorgan is totally inadequate to meet the position, and I hope he will be able to give more than the £348,000. At the moment we have to repay something to the Ministry of Health, something which was overpaid in the year 1930. It was not our fault, but I hope the Minister of Health will be able to relieve us of that payment, which would be equal to a 2½d. rate. If he cannot do that, then I hope some other way will be found, by deferring payment, in the hope that things may be better later on. The additional cost of maternity and child welfare in the county of Glamorgan is considerable, and the cost of tuberculosis is increasing. The number of blind persons in the county is the highest for the whole of the country. We have to give assistance to these unfortunate people, many of whom are now blind through working in the mines. It is all very well for the hon. Member for London to be grinning and laughing; he knows nothing about the mining industry—


Is the hon. Member referring to me?


Yes. You know nothing about—

Sir W. RAY

I must protest—


The hon. Member cannot speak; the hon. Member for Neath (Sir W. Jenkins) has not given way.

Sir W. RAY

May I protest against the statement of the hon. Member for Neath? I was not laughing, and I should be the last person in the world to laugh at any time at distress. I hope the hon. Member will apologise.


I was referring to the number of blind people—

Sir W. RAY

May I ask the hon. Member to apologise?


And while we have such a large number in the area we have to give them financial assistance. I ask the Minister of Health whether it is possible for him to increase the amount of the block grant given to the county of Glamorgan so that we may continue to assist these people? Another call upon us is the cost of the mentally defective. They are increasing in number and we have to meet that expenditure, which is very heavy indeed. I hope the Minister will be able to give us some financial assistance. We need it now. We do not want to increase the rates this year, if it is possible, because the wages of the people who are at present employed are low, £2 5s. to £2 10s., and we cannot add anything to the rates. I appeal to the right hon. Gentleman to try to find some solution in order that we may receive a greater contribution to the needs of the county this year.

6.27 p.m.


I am sorry that the hon. Member for Neath (Sir W. Jenkins) did not see his way to withdraw the unwarranted attack on my hon. Friend the Member for Richmond (Sir W. Ray). My hon. Friend was not smiling and is the last man to smile at distress. It is rather a pity that this Debate has got into personalities and into charges made by one party against the other, because it does not help towards a solution of the problem. The question as to whether the Socialist party are extravagant does not really help the situation. Although I should support the hon. Member for Aylesbury (Mr. M. Beaumont) and the hon. Member for South Croydon (Mr. H. Williams) who have been waging this fight, I do not agree with them as to the ground upon which they are fighting it. It is an unfortunate Vote upon which to fight that battle. I am certain, however, that we must have more economy. Everyone will agree that the higher the taxation and the higher the rates the less employment you will get. There is no getting away from that fact; and it should be the duty of everyone to try to reduce taxation and the rates.


We never had any trouble in this country about high taxation and. high rates when productivity was on a high level and people were employed. How can we solve unemployment by economy?


During the War and after we were running heavily into debt and we have to pay sooner or later. We want to see taxation and rates reduced; and that is the reason why we want to see local expenditure reduced. We know the difficulties of local authorities and there is no reason for general accusation of extravagance. We have had a most excellent report from a committee of representatives of local authorities, headed by the hon. Member for Richmond (Sir W. Ray) which went closely into local expenditure. They recommend great economies, and I hope that we are going to be told by the Government what action they are going to take on that report. It is a valuable document prepared by local authorities themselves, and I am sure that the whole country is anxious to know what action will be taken in regard to it. I cannot, however, agree with my hon. Friends that this is a good opportunity to suggest a reduction in the amount of money granted to local authorities. This sum is in accordance with a pact made definitely by the Government of the day in 1929, and we assured local authorities, when we were substituting a block grant for a percentage grant, that though we were anxious that the change should lead to economy, their services were not going to lose by it. Particularly do I remember addressing various meetings of women who were very anxious that women's social services should not be reduced when they lost the percentage grant, and we gave very definite assurances on that point. So I do not call it a very auspicious occasion on which to advocate a reduction of grants from the central Government to the local authorities. I do not think we ought to recommend the central Government to do any such thing.


No one has suggested that they should. The hon. Member is apparently accusing the hon. Member for South Croydon (Mr. H. Williams) and myself of suggesting that the sum should be cut down. We realise fully that it could not be cut down, and I do not think anyone has recommended that it should be cut down.


The hon. Member for South Croydon expressed regret that he was not able to move his Amendment. If it had been in his power to cut down the amount he would have cut it down, apparently, and I thought that the hon. Member for Aylesbury was supporting him in that. Let us pass this Resolution certainly. I do not see that we can ask the central Government to grant a larger sum to local authorities, as certain hon. Members have urged. The hon. Member for Ogmore (Mr. E. Williams) and others opposite have spoken of the difficulties of the distressed areas, with which one cannot help sympathising. The question is really one of the redistribution among local authorities of the moneys available. A formula was worked out under the 1929 Act for the weighting of unemployment, by which the more depressed areas drew more money at the expense of the richer areas. Subject to correction, I believe that that formula comes up for revision every three or four years, and no doubt in the light of experience the formula needs reconsideration. That would help the distressed areas considerably. But do not let us urge the central Government to increase their general grant. I support the plea for economy, but I urge the Government not to cut down the promises they made under the 1929 Act.

6.34 p.m.


It seems to me that the discussion is beginning to pivot round a rather academic question, as to what is wise and what is not wise expenditure. While I agree with those who object to unnecessary expenditure at a time of financial stringency, I repudiate the charge that all expenditure on social services is waste. When I travel through the derelict valleys of South Wales I realise the enormous waste of human life and of capital assets that is going on. It is easy to say, as has been said frequently, that the "dole" is waste. After all, the money which has been distributed in this way has been used in buying commodities, and there are scores of small traders who long ago would have had to go out of business had it not been for this purchasing power. But my point is this: the Minister of Health ought to have regard to the fact that many new factors have emerged since his formula was framed. The situation has changed, unexpected elements have appeared, and I feel certain that the block grants which have now been announced are not going to ease the situation. I know that rates have been mounting in Glamorganshire and Monmouthshire and other places, and I do not see how the Government are going to make any contribution to the solution of this problem by lopping off the block grant from an area like Carmarthenshire or Breconshire in order to increase it in Glamorgan and Monmouth. I have gone to some trouble in ascertaining the position.


May I intervene in order to avoid disappointment? I shall not be in order in dealing with the general distribution of grants. Therefore, it will not be in my power to reply as fully as I would like to the question which the hon. Member has raised.


I thank the right hon. Gentleman, but I hope he will keep in mind the fact that nothing is really solved by robbing impoverished Peter to pay more impoverished Paul. The position in South Wales is one which does require very close attention. I do not for a moment impugn the sympathy of the Minister or his Parliamentary Secretary, for I feel certain that they are anxious to do all they can, but I would like to present them and the Committee with certain figures, because the vast increase in the rates in these areas cannot possibly be assigned to extravagance. Here and there there may be unwise expenditure, but the desperate rate situation in South Wales is not the result of extravagance, whatever may be determined by committees sitting in London. Those who live in South Wales know something of the situation there. Take Glamorgan and its steadily worsening position. When the administration of the Poor Law was taken over by public assistance committees from the guardians, the number of cases dealt with in the administrative area of Glamorgan was 16,882. That involved a weekly expenditure of £9,928. Note the steadily worsening position: On 5th April, 1931, the 16,882 had gone up to 19,779, in the corresponding week of 1932 it had risen to 20,402, and on 11th February last to 22,632. Year by year the weekly expendi- ture has gone up, from £9,928 to £12,851, then to £12,819 and last week to £13,863.

Take the case of Monmouthshire. £2,470 was paid per week in public assistance in April, 1930. That became £3,593 in 1931, £3,733 in 1932, and on 11th February it was £4,375. Go to Merthyr and to the Rhondda Valley and other areas, and you find the weekly burden increasing. What is to happen? I feel sometimes that public administration will break down under the strain if this sort of thing is to last for a period of 10 years, as was adumbrated last week. It might be said, and has been said very cogently, that this burden should be placed on a broader basis, that the wealthier communities should be made to sustain something of the burden. I agree, so long as you make your basis wide enough. I am one of those who believe that the maintenance of the poor should be an Imperial charge rather than a local charge. The National Exchequer receives its funds out of Income Tax and Super-tax. I am no believer in high taxation for high taxation's sake, but unless there is an income there is no tax. In the case of local taxation, whether a business is paying or not it has to pay rates, and the payment of rates has no relation to capacity to pay. That is why the steadily increasing burden of local taxation is becoming so onerous. I say therefore make the basis wide enough and the charge a national, not a local one.

I suggest that as far as South Wales is concerned the agricultural areas are gradually getting into difficulties. In Carmarthenshire and Breconshire, two typical agricultural areas with certain industrial spots on the periphery, you find public assistance charges mounting up, though not as rapidly as in the industrial areas. What I fear is that the kind of redistribution which will be undertaken by the Minister will be the lopping off of the block grant to the agricultural areas in order to assist the industrial areas. I gather that already in Carmarthenshire a reduced block grant is to mean an increase of 6d. in the rates. If the present depression is to continue, if responsibility for maintaining the unemployed is to be regarded as a public charge, something will have to be done. We cannot allow things to drift. While I shall vote for this resolution it will not be because I am satisfied with it.

I want to point out another reason for the increase in local rates, in a large number of areas. It is due to the fact that arrears are mounting up under the Small Dwellings (Acquisition) Act. In some cases rates in aid have had to be raised in order to make up the deficiency between what is collected from the mortgagors and what has to be paid to the Public Works Loans Board. It is becoming a desperately serious question in a large number of areas. I appeal to the Minister to take a wider view of this question. I know that the resolution we are discussing is largely automatic, and is the natural consequence of the Act of 1929. But I tell the Minister that these authorities simply must be helped; otherwise local administration will break down under the strain.

6.44 p.m.


Like my hon. Friend the Member for Bilston (Mr. G. Peto) I am in a middle position in this discussion. I do not agree with the strictures of the hon. Member for South Croydon (Mr. H. Williams), and I cannot agree with all that was said by the hon. Member for Ogmore (Mr. E. Williams). I would remind the hon. Member for South, Croydon of the very great advantage, from the point of view of economy, of the good accounting that we gained from the Act of 1929. The block grant system does define the State liability and enables the House of Commons to have a voice in regard to the expenditure of this money, whereas under the percentage grant system we really had to pay money which we did not want to vote. The last speaker has appealed to the Minister for additional assistance. I think he understands that the sum of £5,348,000 alluded to in the Memorandum is a minimum sum. It is the sum that is to be paid in aid of rates and the Minister quite rightly said that he could not tell the hon. and gallant Member who has just addressed the Committee anything about the distribution of that sum. Of course the distribution has two bearings because the needy authorities in the distressed areas will probably require more of the amount available and that will come out of the pockets of the, shall I say, more economical or more prosperous areas.

The point which I wish to make to the Committee, however, is that we have now regained a power which we had given up, namely, the definite power of saying exactly how far we shall assist any area that wants assistance. It is now entirely a matter for the Government and the House of Commons. If the Minister of Health in his discretion thinks that certain extra assistance should be given it is quite open to him to propose it here. If on the other hand he thinks that the state of the country is such that no extra assistance should be given then, equally, the power is his to refrain from taking such action. The only regret that I have about the Act of 1929, which I supported, is that it does not go further. I would like to see all services put on the block grant system, but I think the Committee ought to realise the great power that we now have both of spending money and of refraining from spending money. For the first time we know exactly where we are. Somebody has to decide these big questions and I am perfectly certain that we cannot do better than leave such a question as this to the House of Commons under the guidance of the Government. They have the power to say whether the amount is sufficient, and, if it ought to be increased, by what sum it ought to be increased. There is also of course the much more invidious and difficult question of how this sum ought to be distributed. The fact that we have that power now is a result of that most beneficent Act of 1929.

6.50 p.m.

Viscountess ASTOR

I deeply regret that I have not been able to hear the whole of this Debate, but I understand that there has been an attack from certain portions of the Tory party on our social services. I am sure that the Government must resist all attacks on our social services. It is depressing to hear anybody speak in these days of the failure of our social services because our social services have, literally, saved England, and made her the great country which she is to-day. I have been this morning in one of the poorest parts of London and in view of what I saw there I earnestly beg of the Minister to remember that we trust the National Government to watch over the welfare and health of the people. It is truly staggering to see the sacrifices that many mothers are making at this time. I came across one case of a woman whose husband is a docker, working perhaps two days a week and earning about 18s. a week. She has four children. Her husband refuses now to go to the public assistance committee. The means test was so severely administered that his pride was moved and he refused to go again. That is not the fault of the Government. It is necessary to have a means test, but the Minister of Health must keep a strict eye on the manner in which it is being administered. A means test is wanted in order to find what the means of people are, but we do not want people to be cut down below the subsistence level. If they are, the whole country suffers and as the health of the people is involved it is a matter on which I hope the Minister of Health will keep watch. I do not agree with my hon. Friends who sit on the other side of the Gangway and who say that we ought not to have any means test at all.


The question of the means test cannot arise on this Resolution. The hon. Lady is quite entitled to argue, either that this amount should be granted, or that a larger amount should be granted, or that all the services concerned should be maintained, but the question of the means test cannot arise on this occasion.

Viscountess ASTOR

Then I leave it out. I am all for this grant, and I think we ought to give the Minister all he wants in this matter. If he needs more for the health services of the country then he ought to have it. I have recently been in the North where I have had the opportunity of seeing open-air nursery schools. Now there is something which the Government ought to encourage.


I am sorry to interrupt the Noble Lady again, but nursery schools come under the Vote for the Board of Education, and that service is not covered by the block grant.

Viscountess ASTOR

Nobody knows better than I do that they are under the Board of Education, but the Minister of Health has the opportunity of going round the country and seeing the condition of the children, and he can urge on the Government that the best way of dealing with the children is by means of these nursery schools. He has a chance which nobody else in the country has of seeing the general health of the children under five and it is his duty to look after the health of those children. It is alarming to see the conditions into which the parents of many of these children are getting. The Minister in looking after this matter will have the backing of the whole House of Commons with the exception of a few disgruntled, reactionary people who speak without authority and certainly without any comprehension of what our social services have done.

One of the great difficulties about the House of Commons is that there are a great many in it with the best hearts and wills in the world but they blindly trust the Government. Now I want them to trust the Government but I also want them to watch the Government particularly on this question of health. I do not join with some of my hon. Friends in saying that things are desperate and worse than they have ever been. But I know that everything cannot be put right in three weeks. The Parliamentary Secretary to the Ministry of Health in the Labour Government said that if a Labour Government got into office, in three weeks, by administrative action, everything would be put right, the bairns would get boots, the children would get milk and so forth. Well, the Labour Government got in, and the children had less milk and fewer boots. But we expect the National Government to do something and I implore the Minister to watch the health of the children under five years. After that age they have a chance of being fed at school but before five years is the time when children are most liable to diseases. The right hon. Gentleman knows that 30 per cent, of the children entering elementary schools are physically defective and not able to take the education which is offered to them. If through open-air nursery schools we—


There is nothing in this grant which would enable the Minister or the local authority to spend one farthing on nursery schools. That is a matter which should be raised on the Vote for the Board of Education.

Viscountess ASTOR

But can we not urge upon the Minister of Health the necessity of watching the health of children up to five years. If he does not do so, there is nobody else to do it. I beg of him to watch with a kind heart and a very keen eye over the interests of these children, because, once their health goes, we have lost something which we cannot get back. We may economise in other directions but we must; not economise at the expense of the health of the children. We trust the Minister implicitly but I hope he will bear in mind the importance of the considerations which I have been urging upon him.

6.55 p.m.


I find some difficulty in appreciating why the Committee is spending so much time in discussing this Resolution in view of the fact that we are not allowed to take into account the distribution of the money. But I would like to say a word or two in appreciation of the great services rendered by our local authorities. They shoulder huge responsibilities and undertake heavy duties, without pay, and are often rewarded only with complaints. I hold the view strongly that the greatness of our country depends to a large extent on the unpaid services so generously given by the local authorities. To-day we are discussing the application of an arithmetical calculation made in 1929, and I think that this Debate has been a great tribute to the work which was done in 1929. We then decided to substitute in respect of these services, block grants for the ad hoc grants which existed previously. At that time I held the view, which I still hold, that a sum of £5,000,000 was not sufficient to meet the demands for expanding services which would be made upon local authorities. At the same time, I understand from the White Paper that this Resolution is the result of considerable negotiation both with the Municipal Corporations' Association and the County Councils' Association, and that it is in agreement with their general outlook.

I venture to think that we embarked on a great experiment in 1929. Local government has not, perhaps, attained as much freedom from inspection and control as it expected as a result of the passing of that Act, or as much as it deserved. There is rather more supervision and, in some cases, some measure of meticulous interference. However, local authorities will agree that there are some black sheep to be found everywhere, and some machinery must be set up to deal with those black sheep. There are some councils which are all too extravagant and who think that anything which they fancy will not do them any harm, while there are others who are so economical as to be parsimonious. It is very difficult to draw the line between wise expenditure and wasteful expenditure, but our system has worked well. The formula has worked exceedingly well, and such difficulties as have arisen have been sometimes due to a lack of statesmanship, if I may use such a term, on the part of some of the permanent officials of the local authorities. Where there are permanent officials who understand the need for give-and-take, who try to smooth over difficulties, we find that the grants given under this proposal are considered adequate and are made to give a very fair return in the services on which they are expended. I support the Resolution, which I hope will meet with the approval of the Committee.

7 p.m.


I do not propose to enter into the acrimonious back-chat of the hon. Member for Aylesbury (Mr. M. Beaumont) and the hon. Member for Ogmore (Mr. E. Williams). I want to bring one fact to the notice of the Minister because a little time ago he was in the north, and Liverpool has been mentioned several times in the Debate. I want to bring to his notice the expenditure of the public assistance committee which this year was £l,200,000. For next year the estimate is £1,600,000, an increase of about 33⅓per cent. We really do not know where the money is to be found. The right hon. Gentleman's visit to the north, I am sure, brought this prominently to his mind. When this White Paper was first produced, we were bitterly disappointed, but on further thought, and taking into consideration the statement of the Prime Minister a little time ago as to the probability of the number of permanent unemployed, and what the Chancellor said last Thursday about the probability of the great length of time before we shall come to complete grips with this problem; taking into consideration also the fact that this really gives us no relief beyond a statutory relief, which the Minister is bound to give, we are hopeful, because before long we believe that the whole of this will be reviewed. We trust that the Ministry of Health in conjunction with the Ministry of Labour will be able to bring forward in the new Bill on unemployment insurance provisions which will give relief to distressed areas.

7.2 p.m.


I desire to support the protest which has been made from this side of the Committee against the amount contained in this Financial Resolution. We were somewhat alarmed at the speeches made by the hon. Member for South Croydon (Mr. H. Williams) and the hon. Member for Aylesbury (Mr. M. Beaumont), particularly that of the hon. Member for Aylesbury, who suggested that the grant should be smaller. The hon. Member for South Croydon made an attack upon the local authorities and complained that they were very extravagant. For some years I have been a member of a local authority. I was a member when the Independents or the anti-Labour members had a majority, and also when the Labour members or Socialists had a majority. I know that my hon. Friend would not accept my opinion as being unbiased, but, if I were asked, I should say that the work of the local authority of which I was a member was much more efficiently carried out when the Socialist party was in a majority than when the anti-Socialists were in power. I can understand the hon. Member for Aylesbury making the kind of speech that he has made seeing that he is a Member of an agricultural Division. He certainly would not make that kind of speech if he had represented an industrial Division. I can understand why he was not elected on the two occasions when he offered himself for an industrial Division if the speech which he made this evening was the kind of speech he made in the Division upon which he endeavoured to foist his services.


I have been nearer to it than anybody else.


But the hon. Member was not elected. He now represents a Division, like that of the hon. Member for South Croydon, which does not spend much money upon social services. I understand that he would further restrict the amount of money which is being spent, for the Financial Resolution really means that for the next grant period of four years the social services of the local authorities shall be stabilised.


As far as grants are concerned.


The right hon. and gallant Gentleman must understand that in those areas where social services are greatly needed the rates are so high owing to the depression that it is almost impossible to spend an additional penny out of the rates for the extension of those services. Let us look at the figures of the amount of money spent on social services in Buckinghamshire, in which the Division represented by the hon. Member for Aylesbury is situated. On the tuberculosis service the expenditure is £60 19s. 5d. per 10,000 of the population. In Cambridgeshire, which is almost next door to Buckinghamshire, where the population is smaller, the expenditure per 10,000 of the population is £94 7s. 3d. The hon. Member would not desire his county to emulate the county of Cambridge. He would be anxious that Cambridge should emulate the example of Buckingham. In an industrial area like Lancashire, where the population is 1,700,000, the expenditure on tuberculosis is £103 per 10,000 of the population. If you take the whole of the social services for which this money is voted, you find that in the county represented by the hon. Member for Aylesbury the expenditure is very much lower than in most other counties.


And you will find that the services are every bit as efficient.


I do not know that I should agree with that point, because I would not like to think that the services in Cambridgeshire are any less efficient than those in Buckinghamshire or in Lancashire, where there is not a Socialist majority. One is very tired of hearing all this talk of extravagance and of cutting down the social services. If all the money which is spent on social services were discontinued to-morrow and not a single penny spent on education, public health, the relief of persons suffering from tuberculosis, blind welfare, infant mortality and maternity, and if we simply budgeted a sum sufficient to pay interest and sinking fund, war pensions and the expenses of the Fighting Services, we should have to raise two and a-half times the amount of the Budget of 1913–14. The hon. Member for Aylesbury and the hon. Member for South Croydon are constantly attacking the social services which render such help to the poor people of this country, and which cost quite a small amount in comparison with the amount spent for the purposes which I have mentioned. On no occasion, however, has any protest been made by them on behalf of a reduction in the amount of interest upon War Debt, upon the amount set aside for Sinking Fund, and the amount which is spent on the Armed Forces, but there is a constant attack upon the social services from which so many people derive benefit.


The hon. Member is not quite just. Both the hon. Member for South Croydon (Mr. H. Williams) and I have on occasions attacked the question of the Sinking Fund and the money paid to it. We do not confine ourselves to attacks on the social services.


It must have been when I was absent, for I have never heard a protest from the hon. Member against the money which is spent in that way. One would imagine that the rates which are being paid to the local authorities did not come out of the pockets of the people. All the rates come out of the pockets of the ratepayers, and more and more since the passing of the Derating Act and the Local Government Act these rates are thrown upon the shoulders of the poor people. We protest against this sum being so small because the distressed areas will suffer more and more as a result of the operation of the block grant. Take some of the areas in the county of Glamorgan which has been referred to in the Debate. In that county an average of 44 per cent, to 45 per cent, of the male insured persons are unemployed. There is one area where no less than 94 per cent, are unemployed. It is in those areas where there should be an extension of the social services and where we can expect an extension of the scourge of tuberculosis. It is there that we want blind welfare to operate even more than it is operating now, where we look for an increase in infant mortality, and where we want a considerable more maternity work done. For that reason, we think that the amount asked for in the Financial Resolution is inadequate.

I agree with the Parliamentary Secretary to the Ministry of Health that the Act of 1929 was far-reaching and revolutionary. It completely changed the financial relationship between the Treasury and the local authorities. It did not remove the difficulties with which the distressed areas were confronted, and from the operation of the Act until the present time nothing has been done which has in any way relieved the difficulties with which a number of those areas were confronted. We hoped that it would be possible in this discussion for the Minister of Health to make some statement with regard to the position of those local authorities. The Parliamentary Secretary referred to the formula and the weight of population and unemployment and said there was to be some readjustment, so that in some areas where the percentage grant was something like 8 per cent, owing to unemployment there would be an increase to something like 20 per cent., but he did not refer to the fact that in a large number of those areas there will be a reduction in the capitation grant under the formula because of the decrease of population. Owing to migration, the county of Glamorgan and the urban districts will suffer considerably. In the Aberdare urban district there has been a loss of something like 11 per cent, in the population as compared with the estimate which was made for fixing the grant for the first grant period and the census of 1931.

As a result now of the capitation grant being paid upon the population basis, there is going to be a loss to that local authority of something like £4,000 of grant in the next grant period. That loss will mean an increase of a 7d. rate in that area, not through any extravagance of the local authority, but owing to the fact that there has been a reduction in the population owing to the depression. The rates in that area at present are something like 20s. to 21s. in the pound, and the same thing applies to Mountain Ash. There will be a loss in the grant paid to Mountain Ash, again owing to a reduction in population, and a loss to the Rhondda Urban District Council equivalent to a 7d. rate. I know the right hon. Gentleman cannot deal with those points in his reply, but we would like him to give some indication as to whether the Government are still considering the question of doing something for the distressed areas of this country. We have an estimated poor rate in the county of Glamorgan for next year of no less than 8s. 8d. in the pound, and they have to provide no less than £1,053,000 simply for the purposes of dealing with public assistance. Local government in the county of Glamorgan, we can safely say, is almost on the verge of breakdown, and we would ask that, in consideration of the financial relationship between the Ministry of Health and the local authorities, the position of the distressed areas should constantly be kept in mind.

In conclusion, I wish to express my disappointment at the fact that the Government should have thought fit to keep the new money almost to the minimum provided for under the Act of Parliament. I think it is £2,000 more than they were compelled to pay by Act of Parliament. We would have liked the Government to take into account the difficulties with which the distressed areas are confronted and that more money should be provided to deal with those essential services which unfortunately, through the continued depression causing so much unemployment, there is need, not to retard, but to extend.

7.18 p.m.


Our Debate has certainly ranged over a very wide field—the value of social services, the basis of rating, the welfare of children, the true purpose of the sinking fund, and the bases of the Act of 1929. If I do not deal with all these high topics, I am sure the Committee will believe that it is not because I do not think they are important and well deserving attention, or because I have not great sympathy with much that has been said on these subjects, but that it is because I do not think they are strictly relevant to the purposes of this Resolution, which is indeed of a narrower nature.

Let me, in the first place, deal with the matter of procedure raised by my Noble Friend the right hon. Member for Hastings (Lord E. Percy). To his opinion on such matters the Committee will naturally attach great importance, but for once I cannot understand why it is that he is embarrassed by such an ordinary piece of procedure. He complained, if I understood his complaint, of so big a heading of expenditure being proposed in anticipation of the Budget, but on the occasion of the Budget we consider, not expenditure, but how to meet expenditure, and the expenditure to which the Committee and the House agree is determined during the preceding months. The expenditure which is provided for in the Financial Resolution today will in due course find its provision in an Estimate, like any other expenditure, and our procedure in giving statutory authority for it by the approaching Measure is one of the most ordinary in the procedure of the House.

My hon. Friend the Parliamentary Secretary certainly turned out a true prophet as to the course of the Debate. We have seen three schools of thought developed in the Debate—the school of thought which wanted more, the school of thought which wanted less, and, for an encouraging once, quite a solid body of opinion which thought the Government had taken the correct middle course. The school of thought which wanted more was principally represented, or at any rate led, by the right hon. Member for Wakefield (Mr. Greenwood), who attacked the whole basis of the Act of 1929 in so far as we are concerned with it to-day. He said the formula is working badly, but I should attach the more weight to his opinion on this matter if he had taken any steps to remedy it during the two years during which he had an opportunity of so doing; but really, after listening to the vehemence of his observations to-day, I cannot wholly acquit him of some inattention to what he seems to consider, now at any rate, to have been an important duty which he then neglected.

The school of thought which desired that less should be voted upon this occasion was started by a very able speech, if I may have the presumption to say so, from my hon. Friend the Member for South Croydon (Mr. H. Williams). With what he said upon the subject of the principles of economy I find myself in very substantial agreement, but I should say at the outset that there was another part of his speech with which, if I understood him aright, I could not agree. That was that part which seemed to my mind and, I think, to some other Members of the Committee to reflect upon the services of the local authorities. I am too well aware, even during my short experience of the office which I have the responsibility of holding, of the magnificent, assiduous, devoted service which is given to their country by members of local authorities of all types and shades of political opinion to allow myself to miss such an opportunity as this of vindicating those services in the presence of this Committee and the country as a whole.

Now let us turn to this question of economising by the local authorities. In the first place, the proposition must not be allowed to pass that the local authorities of the country as a whole have been inattentive to the need for a reasoned, systematic economy in our present financial conditions. On the contrary, they have applied themselves to that in a manner which is characteristic of that spirit of service to which I have already referred. I will not weary the Committee with further figures. I will but mention one figure in order to prove the truth of what I say, that good work for economy has been done, and that is that the total local expenditure from all sources is estimated to show a reduction of no less than £20,000,000 over the figure for the year 1929–30. I have not yet the figures for the whole of last year, but I have no doubt they will show a reduction and further economies too.


Does that include the Poor Law?


Yes, it includes everything. That is proof positive that a substantial effort has been made in that regard. Of course, the truth is that that economy, which I join with my hon. Friend the Member for South Croydon in seeking for the future, must depend far less upon the local authorities than upon this Committee and this House. For that great increase in the expenditure of the local authorities to which he has referred, is it the local authorities who are responsible? No, it is ourselves. It is we, by our considered—I have no doubt deeply considered—Resolutions from time to time who have forced these new objects of expenditure upon them, and it does not lie in our mouths to complain of the increase in the cost of the social services to the local authorities. We must accept responsibility for that.

In this regard we have had a very important, weighty, and authoritative report of late from the Committee presided over by my hon. Friend the Member for Richmond (Sir W. Ray), and, if I may say so, that report brings to the light of day many subjects which are claimants for attention. The question has, quite rightly, been put to me to-day, What action do you propose to take? As regards one of the most important subjects in that Report, namely, the housing policy of the Government, action has already been taken and is contained in the Bills which are before the House, and it is in accordance with the opinions and the advice in the Report.

As regards other matters, which I can say without derogation are minor matters, the course which we propose to take is this: I propose within the course of a very short period to address a Circular to the local authorities calling attention to the recommendations of the Report, emphasising such matters as, in the opinion of the Government, require emphasis, and recommending the performance by the local authorities of such of the recommendations of the Report as, in the opinion of the Government, are worthy of immediate adoption.

Let me return now to the general discussion and emphasise this single angle of the Motion that is before us, in order that the Committee may be in a position to form a final judgment in the matter. I would emphasise that this is a Motion which has nothing novel in it. It is the fulfilment of an agreement—I will even say a solemn agreement—come to with the local authorities at the time of the Act of 1929. It is the fulfilment of a guarantee, because it is nothing less than a guarantee, which was given by the House and the Government to the local authorities at the time the Act of 1929 was passed. I think it ought to be emphasised on this, the first, occasion that there was something in the nature of a positive guarantee to the local authorities at the time the Act of 1929 was passed, when their finances were wholly reformed by the Act, that what we have now learned to call the new money should not be less than was specified in the Act. The suggestion on the part of the economy party to-day, that we should cut down the Exchequer contribution, would be a breach of that guarantee.

It may be suggested that a guarantee needs to be supported by common sense. It has the strongest support, of common sense, for the arrangement we are maintaining is this: It is no good in financial legislation to establish systems which are absolutely cast-iron, with no sort of elasticity. This country is not a country which shows no growth, change, or development, and when you are establishing a system you must allow a reasonable amount of elasticity. It is just that little bit of elasticity which is in the resolution to-day. It allows for development in those social services on which stress has been laid in relation to the increase in population, and in relation to improving standards. I would remind the Committee that that acts both ways. On this occasion there is elasticity which allows for a small increase. On another occasion the use of the elasticity might be found in the direction of providing for a small decrease of expenditure.

What remains for me to say has relation to the difficulties that have been spoken of, with so much force and so much eloquence in some parts of the Committee, in relation to the distressed areas. In the first place, let me call the attention of the Committee to a circumstance, which, I think, has escaped attention hitherto, that is that the arrangements which we are proposing to make will themselves provide a substantial relief to the areas which are most distressed. I know it is not relief commensurate with what they would like. What I say is that it is a substantial relief. The reason is that what we are distributing to-day is that part of the block grant which goes in proportion to the distress, measured by unemployment and other variable factors. The more money we vote to-day the greater is the advantage to the distressed areas. What is the measure of that advantage? Let me give a few instances to show what measure of positive advantage distressed areas gain from the Resolution we are proposing to-day. I will take the constituency of the hon. Member for West Middlesbrough (Mr. K. Griffith). I would like to congratulate him because his town stands to gain more than any other town—namely, a rate of 8.3d., which is a substantial contribution. That is a new advantage, an additional advantage under the Bill. West Hartlepool stands to gain 7.6d. I have taken other distressed towns and I find Sunderland gains a rate of 6.2d., Dudley 5.6d., Barnsley 5.5d. and Barrow 5.2d.


Has the right hon. Gentleman the details of a Welsh area?


I can give the equivalent figures for Welsh cities or areas, but just at the moment I have not got them. I did not know that the case on behalf of Glamorgan was going to attract so much concentrated attention.


I rose some time ago to ask if the right hon. Gentleman would give us a typical Lancashire cotton town.


I will be happy to supply figures for any area in which the hon. Member is interested, but for the purposes of my speech I have chosen some of the most distressed and difficult areas. By the mere recalculation of the block grant for the second period, we do see positive gain to some of the most distressed areas. Let me deal with the case put on behalf of Glamorgan. I can refer to it, not only because so many hon. Members from that area spoke, but because it is a typical distressed area. I will say this, that the circumstances that hon. Members have been good enough to recognise are particularly well known to me. It has characteristics which are equally as difficult as those of any other area. As regards the particular measures which are suggested— I think by the hon. Member for Neath (Sir W. Jenkins)—I do not think it would be possible to give him more encouragement on this occasion than on past occasions because it would involve legislation. If I were to allow this area, or that particular area, not to repay the moneys legally due to the Exchequer I should have to pay the moneys myself, and I cannot afford it. Let me assure hon. Members that that matter is ever present in the minds of myself and those responsible—we recognise these difficulties; they are deserving of every consideration.


Will he take into consideration a postponement of payment?


Now the hon. Gentleman is cross-examining me unfairly on the details of a particular case. I can only say that any representations will receive my most careful consideration. As regards the general situation of the distressed areas need I say again what an anxious subject of thought and attention for the Government the administration of these is at the present time? I do not think there is any danger of a breakdown. With every means of knowledge, and with the most careful attention to those representations made to me, I do not see any danger. That does not mean, of course, that it does not need consideration. Those representations put forward to-day on behalf of those districts, weighty as they are, grave as they are, do need close attention.

The Bill to which this Resolution leads has been explained to the Committee. It does not deal with the matter of distribution between areas. The Committee will remember the undertaking on this subject. It was that, in view of the great difficulty of the distressed areas, we should anticipate what was the intention as to the date of the reconsideration of the working of the formulae of the Act of 1929, as to the distribution of the total grant between areas, particularly in relation to the weight given to unemployment. That was my undertaking. It was to push forward and undertake at once a reconsideration of that distribution. That undertaking is being fulfilled. The question has been addressed to me, "Is it abandoned?" The answer is, "No." It is being fulfilled. It has reached a stage when all the necessary calculations and arithmetical work have been completed. As I told the House, there is another very important stage. There is the consultation with the representatives of associations of the local authorities. It is a question of redistribution. As Members have pointed out, what one stands to gain another stands to lose. If that is so, you cannot put it through by consulting only those who are to gain. Consultation is actually in course now.

I confirm the summary observation, very justly expressed by my hon. Friend the Parliamentary Secretary, that what is done to-day in fixing the total is done without prejudice to the application of the results of the inquiry. Let me refer to one other circumstance in this connection. The Committee is aware that, since these matters to which I have just referred took place, the Royal Commission has reported on the future of the administration of unemployment insurance. The Committee is also aware that that report contains most sweeping recommendations as regards the financial basis of the cost of relief to the unemployed. I would say this, that the Government is at the present time considering that report. It is considering the recommendations of that report in relation to the basic finances of unemployment. It needs no special information from myself, or any great power of logical deduction for the Committee, to see that, in considering these matters, that consideration will sweep over such financial considerations affecting the distressed areas as we are discussing to-day.

It may be that decisions will be taken which will make this discussion, and this undertaking in relation to redistribution, obsolete. I rather imagine, in following the deliberations on this subject of the special and informal committee safeguarding the interests of distressed areas, that they are, in these circumstances, looking to some action being taken on the Report of the Royal Commission as the most satisfactory solution of the financial difficulties we have in hand. I refer only to the matter so that the Committee may be in full possession of the knowledge that decisions may be involved in this larger question which may cover the smaller adjustments of finances we have to-day under our consideration. I think the Committee will probably now be able to come to a decision in this matter. If I may say so, I have a suspicion that the champions in the Debate of extreme courses, on either side, really knew that the Government could take no other course than that which it has taken. We have had most interesting demonstrations in force on both sides. I hope the Committee will see its way to pass the Resolution.

Question put, and agreed to.

Resolution to be reported To-morrow.

The Orders of the Bay were read, and postponed.