LOCAL GOVERNMENT (GENERAL EXCHEQUER CONTRIBUTIONS) BILL.

HC Deb 07 March 1933 vol 275 cc1007-97

Order for Second Reading read.

3.48 p.m.

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare)

I beg to move, "That the Bill be now read a Second time."

I do not think it will be necessary for me to go into great detail as I did when the Financial Resolution was before the House. Under this Bill we are asking for an amount of new money of £5,350,000 in respect of England and Wales, which is the amount of new money for the second grant period. That figure shows an increase of £350,000 over and above the amount of £5,000,000 which was fixed for the first grant period. As regards Scotland, the amount of new money for which we ask is £850,000, which is an increase of £100,000 over the amount of new money in the first grant period. This is really a routine machinery Bill to give effect to the provisions of the Local Government Act, 1929. I need not go into any elaborate explanation but for the benefit of hon. Members who were not present on the last occasion or who have forgotten perhaps I may be allowed in a few sentences to say why the Bill is necessary.

Under the 1929 Act a system of consolidated block grants for the general Exchequer Contribution was made payable each year in respect of a grant period lasting in the first instance for three years. That general Exchequer Contribution was made up of three items: first, the amount of loss under the derating provisions of the Act; secondly, the loss of grants, and, thirdly, an amount of new money then fixed at £5,000,000 which would allow for the normal expansion of local government services during the first fixed grant period. The equivalent amount of the losses of rates and of grants was £38,580,000 and that as I have explained before was fixed for all time according to the facts ascertained in the year 1928–29. The amount of new money falls to be determined at the start of each grant period. On 1st April as regards England and Wales, and on 16th May as regards Scotland, we shall be entering the second fixed grant period, one of four years. Therefore, according to the 1929 Act, we have to fix the amount of new money which shall be part of the general Exchequer Contribution to be paid annually as a block grant for the next four years.

I need not go into the elaborate method of calculating what is to be the general Exchequer contribution at the start of a grant period. The House will remember that in the 1929 Act there is a minimum proportion, and, in asking the House to fix the amount of the new money for England and Wales at £5,350,000, we are asking the House to accept the machinery of the 1929 Act and to fix the amount of new money approximately in accordance with the minimum proportion. Three courses were open to us: We might have increased it or decreased it, or we might have kept it on the minimum proportion basis. As regards an increase, I should find it very difficult to stand here in these times of generally straitened financial circumstances and ask the House for any further increase in a grant which is already £350,000 over and above the £5,000,000. As regards a decrease, that would be breaking faith with the local authorities, breaking a bargain made with them three years ago, and would put a strain on their financial resources. Therefore, we have adopted what we think to be the wise and middle course, and therefore we submit that the £5,350,000 is about the right figure for England and Wales and £850,000 for Scotland. With that short explanation perhaps the House will understand what this Bill is about. Under paragraph (b) of Clause 1 we ask for a contribution of £3,000,000 from the Road Fund in respect of the second grant period. On the Order Paper there is an Amendment for the rejection of the Bill, in the name of the right hon. Member for Wakefield (Mr. Greenwood), with which I need not deal at length. The right hon. Gentleman had better develop his own case, but I think I can say briefly that that Amendment takes no account of three considerations. It takes no account of the fact that in 1929, when £5,000,000 of new money was granted to local authorities as part of the general Exchequer contribution, that was considered a very generous concession by the then Chancellor of the Exchequer. If it was generous in 1929 to provide a new sum of £5,000,000 for the expansion of local services, it cannot be less generous now in these hard times to increase the £5,000,000 by £350,000.

The second consideration is this: The Amendment for the rejection of the Bill calls particular attention to the condition of distressed areas, but I do not think it takes account of the way in which the general Exchequer contribution will normally be distributed under the operation of the famous formula. The House will remember that of the £43,000,000 of general Exchequer contributions paid annually, roughly one-third, or nearly £15,000,000, is distributed according to need, and the need is determined by taking the population of a given area and weighting that population to allow for certain factors. Weighting really means increasing the actual population by a percentage in respect of rateable value, unemployment and other factors.

I. pointed out on the Financial Resolution that if any one factor was accentuated under the normal operation of the formula more money would be attracted by it. That has in fact happened. During the first grant period only S per cent. of that £15,000,000 was attracted by the unemployment factor. During the second grant period, which we shall enter on 1st April, 20 per cent. of the £15,000,000 will be attracted by the unemployment factor. As regards the increase in the amount of new money, that. is the £350,000 additional to the £5,000,000, the House might be interested to know how that goes. No less than £145,000 of it. goes to 20 county boroughs and three counties in which unemployment is the severest. In other words three-sevenths of the increase goes to those counties and county boroughs which are what we call necessitous areas. Therefore it is idle to pretend that even under the operation of this formula the increase of £350,000, plus the normal operation of the formula, will not substantially help many areas where unemployment is high. That is the second consideration.

The third consideration is this: It would be inappropriate to ask the House to increase the pool to help those who are saddled with a heavy expenditure on outdoor relief when, as everyone knows, the Government are still considering the report of the Royal Commission on Unemployment Insurance. I notice that in the last part of the Amendment of the right hon. Member for Wakefield he seeks to arraign the whole principle of the Local Government Act, the whole principle of de-rating. I am not going to enter into that controversy and I very much doubt whether J should be in order in doing so. But I want to say that if he now feels about it as strongly as he appears to do he had ample opportunity, when a. Member of the Government in 1929 and when indeed he was Minister of Health, to change the principle on which de-rating was granted by giving effect. to what was called differentiation between industries. The right hon. Gentleman had two years of tranquillity and prosperity compared with the hard times in which we now live.

Mr. GREENWOOD

Not with the same majority.

Mr. SHAKESPEARE

Truth remains the truth whatever the majority, and if de-rating was so iniquitous then it is amazing to find that the right hon. Gentleman did not alter it. I will give an even stronger reason. When the financial crisis fell upon this country towards the end of 1931 and we were confronted with the need for bringing in a second Budget, when we were faced with a deficit of £70,000,000 in the current year and £170,000,000 in the subsequent year, it was never even then suggested.

Mr. GREENWOOD

That is not so; it was considered.

Mr. SHAKESPEARE

It might have been considered, but it was never accepted by the right hon. Gentleman as part of those economies that he did, in fact, accept before he quitted his post, that there should be any change in the de-rating part of the Local Government Act. If in times of acute financial stringency, with a deficit of nearly £70,000,000 in sight, no change was suggested, I think that we are on strong ground in asking the House in these times that we should still keep faith with local authorities, stick to our bargain and grant them this amount of new money which will allow them to go on and make up their budgets year by year.

Having said that, one thing only remains for me to say. The Local Government Act has worked smoothly, and without friction. I think we can say for it that it has achieved the hopes of its architects. I very much doubt whether there is any desire anywhere in the country as far as the local authorities are concerned to go back to the old system that obtained before the Local Government Act, 1929. Therefore, I hope that the House will give a Second Reading to this Bill, which is simply a matter of routine and machinery for which some Parliamentary Secretary or Minister of Health may ask sanction at the start of every grant period, and I ask the House to give us permission to determine this amount of new money without raising any fresh controversy, without stirring up the embers of past controversies, and without prejudice to any future help that the Government in their wisdom may determine is necessary for the distressed areas.

4.3 p.m.

Mr. CHARLES BROWN

I beg to move, to leave out from the word "That" to the end of the Question, and to add instead thereof the words: this House cannot assent to the Second Reading of a Bill which merely provides the statutory minimum amount of financial aid to local authorities at a time when additional assistance from the national Exchequer is urgently needed by many of them who are suffering excessively from the present economic conditions whilst those in necessitous areas are practically bankrupt, takes no account of the largely increased expenditure on poor relief thrust upon the local authorities by the National Economy Act, 1931, and fails to amend the law under which industrial and freight transport undertakings and land are largely or entirely relieved from the payment of rates. We have listened to the explanation of the Parliamentary Secretary to the Ministry of Health as to the reasons why the House is asked to give a Second Reading to this Bill to-day. He has characterised the Bill as a routine machinery Bill. I should like to say that it is too much of a routine machinery Bill in the sense that His Majesty's Government, apparently, have not looked out on the wider problem that needs to be faced in connection with the issues raised by this Bill, and have merely confined themselves to introducing what the Parlia- mentary Secretary has called a routine machinery Bill. He has asked us, incidentally, to admire the generosity of the Government. He has told us that several alternatives were open to them. They could either increase the amount of this new money, or, alternatively, they could decrease the amount; but, instead of doing either of those two things, they have strictly carried out the letter of the law, and they have merely given, so far as new money is concerned, what the law requires, and the sum of £350,000 to which he referred is, indeed, a negligible sum.

I do not think that anyone in the House will gainsay the fact that to-day the local authorities in many parts of the country are in a very difficult position indeed. When I say so, probably I shall be told that the country as a whole is in a very difficult position. I refrain at this stage from making any comment upon that, because I want, first of all, to say a few things about the difficult position in which the local authorities find themselves, and to do that I would like to call the attention of the House to a few figures, because this Bill is a Bill directly arising out of the Local Government Act, 1929. That Act, as we all know, and as the Parliamentary Secretary has reminded us, has brought quite a considerable number of changes in the country in regard to local government, and, incidentally, the subsequent policies of the Government have thrown new burdens on local authorities, as I will try to show in a little while. But first of all, I want to quote some figures to the House to show in what circumstances some local authorities find themselves at this moment. I will give only one or two illustrations.

Take, for instance, the case of the county borough of Bootle, where the public assistance and assessment committees' rate in 1931–32 was 4s. 2½., whereas the rate for 1932–3½ is 5s. 3½d. In the case of Lincoln, the rate was 5s. 6d. in 1931–32, and it is 5s. 8d. in 1932–33. If we take the case of Manchester, the rate in 1931–32 was 2s. 4¾d., and in 1932–33 it is 3s. 9¼d. I could quote a number of other cases, but I will refer only to one, Merthyr Tydvil, where the public assistance rate in 1931–32 was 12s. 7⅝d., and in 1932–33, 13s. 10⅞d. Taking the larger areas I will quote the cases of Durham County and Glamorgan County. In the county of Durham the charge on the rates for public assistance will be £1,312,815, an increase of £100,000 in the last 12 months, and of £400,000 for the last three years. I am merely giving these figures to show the extraordinarily difficult position in which many local authorities are finding themselves. In the county of Glamorgan, £1,038,000 has to be found for public assistance, equal to a rate of 8s. id. in the pound. I could give other illustrations, but I do not want to weary the House with too many figures. I am only quoting figures to show how difficult the position is for many local authorities in various parts of the country.

May I now make a reference to Manchester? During 1932–33 the over-spending of the public assistance committee which had to be financed out of the 1933–34 rate amounted to £100,369, and the additional requirements for 1933–34 were estimated at £106,816, making altogether a total of £207,185. Since the Manchester Corporation assumed responsibility for public assistance the annual rate charge has increased by no less than £275,000—from £365,000 for 1929–30 to £639,000 provided for in the present estimates. I notice that at a meeting of the Manchester City Council on 15th February, Alderman J. H. Birley, deputy-chairman of the finance committee, said: While this charge continued to grow he saw little prospect that they would be able to reduce the rate unless they received additional assistance from the National Exchequer. He went on to talk about the report of the Royal Commission on Unemployrnent, which the Parliamentary Secretary has used to-day as one of the reasons why at this stage His Majesty's Government should not do anything particular in regard to those areas to which I have called attention. Mr. Birley said: The report of the Royal Commission on Unemployment contained recommendations designed to alleviate the burden of able-bodied unemployment upon the rates, but until the Government's scheme was announced, it was impossible to say what relief might he derived from it. It was not even clear that certain proposals in the Commission's report would not add further charges to the rates. And there is in some circles a fear of even that taking place. Here is another statement of a similar kind from a Conservative and former Mayor of Manchester, Alderman J. H. Swales: The time has come when the big cities should no longer have to bear the brunt of this burden. The weekly cost of relief in Manchester went up to £14,460 last week, an increase of £2,710 on the cost in the corresponding week last year. The amount for one week is now equal to the yield of a halfpenny in the pound on the rates. That is taken from the "Times" of 22nd February. I could go on to call attention to places like Merthyr Tydvil, Newcastle-on-Tyne, Sunderland and other places, but I think I have said enough to show that, as far as the local authorities are concerned, we are certainly in the midst of steadily deteriorating conditions, and we are entitled to-day to ask ourselves to what those steadily deteriorating conditions are due.

So far as the additional charges for public assistance are concerned, perhaps two factors are primarily responsible. One is the operation of transitional payments. I know that transitional payments, in the main, are a charge on the National Exchequer. They are provided by the Ministry of Labour. Anyone who knows anything at all about the administration of transitional payments, knows quite well that all kinds of devices are employed to get men off the live registers of the exchanges, and they are steadily passing increasing numbers on to Poor Law relief. I think that there is no doubt that, as long as the present system operates, that will be a tendency to which we shall have to pay attention. The other factor which may be largely responsible for the increased burden of public assistance is the actual increase in unemployment and poverty throughout the country. I may be reminded, when I mention that fact, that the increase in unemployment and poverty is not due in any way to the policy of the Government. I shall probably be told that it is due to causes over which the Government have no very direct control. I do not know whether they would use that argument to suggest that they should not in any way more than is suggested in this Bill come to the assistance of the public authorities in the dire difficulties in which they find themselves.

I shall not argue as to who is primarily responsible for the ever-increasing unemployment and poverty which we find to- day. I do not know how far we should be in order on this occasion in dealing with the operation of the Local Government Act of 1929 and all that has followed in its train, but this Bill arises out of that Act and makes it necessary for the Government to ask the House for £5,350,000. I take it therefore that it will be possible to say something about the operation of the 1929 Act in certain directions and especially its effect in casting increased burdens on some sections of the community while relieving others of burdens which they could, perhaps, quite easily have carried. I do not think anybody in the House will disagree with me when I say that the incidence of rating in the last three or four years has changed considerably. It is now falling increasingly on the householder, the shopkeeper, and the professional classes. Where there are increases of rates under the present system it is obvious that they will fall most upon the three classes I have named.

So, when I call the attention of the House to the increasing difficulties of local authorities I stress, at the same time, the fact that we are placing to a greater extent on the shoulders of the ordinary 'householder, the shopkeeper and the person of the professional class, the burden of dealing with the poverty and distress which is prevalent in so many of our towns and cities. I do not think that I would be in order in arguing as to the rights or wrongs of the de-rating. I might quote figures to show how certain industries have been relieved although judged by their present position they ought to be asked to carry a far greater share of the burden than they are now carrying. I shall not weary the House, 'however, with details about certain types of undertakings which have all the benefits of de-rating and which according to the returns of their profits and dividends, might be asked to carry a larger share of the burden. If I am asked for those details I can give them.

4.20 p.m.

Mr. SPEAKER

As the hon. Member has raised the question of what is in order in this discussion I may point out to him that were it not for the Amendment which he is now moving, the Debate on the Bill itself would be confined to very narrow limits. All the Bill does is to fix the amount which is to be paid in the form of block grants to local authorities. The Amendment, however, seeks to bring in all sorts of matters which are really outside the Bill and as far as I can see the only connection between the Amendment and the Bill is that those questions are covered by the Local Government Act of 1929. While I have allowed the Amendment to be moved, I do not think that it would be in order on this occasion to enter into a detailed discussion of the merits of the de-rating part of the 1929 Act. The hon. Member might be in order in referring to it but he would not be in order in going into any parts of the Act of 1929, except those which are directly affected by this Bill. I think there are only two sections of the Act of 1929 referred to in the Bill. One is Section 86, Sub-section (3) and the other is Section 54, Sub-section (1). It would be in order to discuss those Sections which are referred to in the Bill but it would not be in order to discuss, to any extent, the other parts of the Act of 1929 which are only dragged in by the Amendment.

4.22 p.m.

Mr. BROWN

I am obliged to you, Mr. Speaker, for your Ruling, and, as far as possible, I shall try to keep within its terms and not discuss the de-rating provisions of the Act in more than general terms and by way of passing reference. One aspect of de-rating is that agriculture, for instance, was entirely de-rated, and the saving to agriculture is said to be somewhere in the region of £4,000,000 a year. The Government are pursuing 'a policy which they imagine will restore agricultural prosperity to this country. If that policy succeeded, surely there would be ground for maintaining that revived and prosperous industries ought to be asked to bear greater burdens than they are now bearing, having regard to the general poverty of the country, especially in those areas which I have mentioned. I have already referred to the present incidence of rating. I have suggested that there are certain industries which could bear more than they are bearing now in view of the profits they are making and the dividends which they are paying.

We are bound to look at this Bill in the light of the general policy of the Government. The Parliamentary Secretary said that he would not be justified in present economic conditions in asking the House to agree to more new money than the £350,000 to which he referred. He said he did not think that anyone in his position could ask the House at present for more money for expansion of the social services. We are bound to judge that statement in relation to the general policy of the Government. We know that within a few days—even in the present economic condition of the country—a Minister will be asking the House of Commons for more money for the Army, and another Minister will be asking for more money for the Navy. Surely the Parliamentary Secretary, having regard to that fact, cannot find any satisfactory excuse for saying that in present economic conditions he does not feel justified in asking more for the social services.

There seems to be a contradiction in the Government's policy. If they are so much perturbed about the general economic condition of the country as is suggested, they would not ask for any more money for any purpose. If they are going to ask the House to vote any more money, then, we say that that money ought to be for the social services rather than for the Army and Navy. About a week or a fortnight ago the Chancellor of the Exchequer told the House of the change which had come over the situation since the National Government assumed office. He spoke of restored confidence, but he went on to say that confidence was not sufficiently restored to set in motion and put to use the dormant capital lying in the banks. His argument seemed to suggest that the present situation, in the minds of some Ministers, raises psychological rather than economic questions. One cannot help thinking that some of His Majesty's Ministers must be trying to qualify for diplomas in psychology instead of addressing themselves to the economic question which is primarily their concern.

The Parliamentary Secretary deprecates asking more money for social services under existing conditions. I suppose he thinks—remembering those who sit behind him and around him—that if he did so he would be greeted with a howl of execration. On the other hand the Lord President of the Council told us the other night that there were to be no further cuts in social services. That was a very admirable statement. I notice that an hon. Member on the back benches opposite shakes his head. Probably back-benchers opposite know more about what is going to happen to the social services than those on the Front Bench. I cannot say. I have no inside knowledge of the workings of the Conservative party. But the Lord President of the Council spoke of the undesirability of further cuts in the social services. In this Bill we have an indication of the policy of the Government in regard to social services. I think it is obvious that that policy is more or less a standstill policy. The full measure of what they propose to do is this £350,000. That is an indication of their view. But in these matters one cannot stand still. One must either be progressive or reactionary.

Mr. HERBERT WILLIAMS

Or sensible.

Mr. BROWN

As to what is sensible and what is nonsensical in national policy there is a difference of opinion, but I should say that the policy advocated by the hon. Member for Croydon (Mr. H. Williams) is not very sensible if we take the larger view of national life and national development. I should describe that policy, generally speaking, as rather reactionary. In conclusion, I want to put this to the House. During a recent period, in regard to which I will not for the moment fix dates, there has been going on in this country an ameliorative process which has humanised large stretches of our social life. Everyone will be prepared to pay a tribute to the beneficial effects of that process in one direction or another. We, on these benches, feel very strongly that His Majesty's Government are calling a halt to that ameliorative process.

In asking the House to give a Second Reading to this Bill to-day, the Government had an opportunity, had they so desired, considerably to assist the local authorities, which are in very great difficulties, by putting in new money. The Government are refraining from doing that, and we feel that we are doing them no injustice when we speak of what they are doing in this matter as being reactionary and as, in a way, playing up to those who have made the most clamant demands in all sorts of ways for the curtailment of our social services. We feel, in spite of what the Parliamentary Secretary has said about the need of economy, that the money spent on our social ser- vices, taking the long-time view, is actual economy. If you take the view that the lives of our people, their health and their general wellbeing are our greatest assets, then the money you spend on the social services is real economy. Let us remember, when we talk about gold in the Bank of England, about financial transactions, and about the world's financial system tumbling to pieces that, although these things are important, our real assets as a nation are healthy human beings able to live decent human lives. In so far as the Government pursue a policy which makes that more and more difficult, we are bound to criticise them.

4.33 p.m.

Mr. LOGAN

I beg to second the Amendment.

I wish to call attention to one or two particular points. I shall not deal with ancient history in the Tudor days but with the needs of local rating in regard to the Poor Law, and compare questions of Poor Law and rating to-day. There was an agrarian movement then, and to-day there is a mechanised movement, which surely calls for better treatment. I am convinced that the extra grant given under the Bill, although the Government may think that it is going to give relief will, from the point of view of many of the distressed areas, be infinitesimal. The sum of money allocated is inadequate. I should have thought that in putting this matter to the House the Minister would have been prepared to ask for something more liberal, and in fact would have gone on an entirely different system, because 1929 and 1933 differ very materially. Every hon. Member must understand that so far as trade depression is concerned extraordinary remedies must be found to deal with the distressed areas. We cannot wait much longer, and the proposal of the Government to-day is no solution of the problem.

I know that on this occasion I cannot go into this matter very deeply, but I will give reasons in one or two instances why I think a different system should have been introduced and the question of rating dealt with on different lines. The distressed areas are burdened to-day up and down the country. I will take the City of Liverpool as being typical of many of those areas. The Merseyside is badly suffering from unemployment, and much of the distress is in consequence of the transitional period. Many of these men, having been refused transitional payment, have now come on the rates, and locally we have to bear the burden. In the City of Liverpool the increase this year is estimated approximately to be nearly £200,000. In 1931–32, £1,517,705 was paid out in relief; our estimate for this year is £1,710,798. We are having a rate for public assistance alone equal to 5s. 11⅜d. We are a seaport, and we have many returned migrants from Canada. This extra burden is being thrown on the shoulders of the citizens of Liverpool while neighbouring seaside boroughs are able to get along with a much cheaper rate. Therefore, we ought to get a much bigger grant than we are being offered. From. the point of view of economy, and in justice to the area which I represent, I am bound to put this matter forward and to point out that what is applicable to the great seaport town of Liverpool is also applicable to other areas.

Let us take the question of London. We find in these great seaports that there is ingress and egress of people moving to and fro. In bad times the people do not flock out but stay there, and, as a result, these seaports have to carry what is not a local but a national burden. When you come to deal with Liverpool and London, two great seaports, you are dealing with the two most important arteries of Great Britain. The trade of England is dependent mostly on the shipping interests of London and Liverpool, which are performing not a local work but one of national importance. If we do not ask for preferential treatment, we have at least a right, equal to that of other districts, to come here and put forward the case of these areas, distressed through no fault of their own, which ought to get increased assistance to carry on this work of national importance. If you take 100 per cent. as your standard; if you realise that 25 per cent. of the carrying trade of England is done by London and 25 by Liverpool, and that the remaining 50 per cent. is distributed among the other ports in a smaller degree, you will see how very important this question is to the seaport towns from the point of view of trade depression; and it will not be thought ungenerous or uncharitable that a Member representing a depressed seaport town should ask, equally with the repre- sentative of a factory town or a mining area, for due consideration of its pressing claims.

We are burdened to this extent, because we are performing national work, and therefore, when we are doing that work and taking the responsibility from the Government for which we never asked, the cost should not be thrown on the Poor Law or the local rates. 1 have a right, when the burden of national expenditure is cast on local districts, to ask the House to be more generous. Equalisation in the distribution of rates should have been a corollary to the bad effects from which we are suffering to-day, but if we cannot get that it is no good talking about economy and only giving the smallest grant that can be allowed. Unless the Government are generous and take the full burden of national responsibility, we shall have nothing but misery, squalor and bankruptcy in the distressed areas, and it is difficult to see how these large areas, with this great burden, will be able to carry on. The tradesmen in the big cities cannot meet their accounts, and, with the middle classes, are being so badly hit that every city is on the brink of bankruptcy to-day.

The Government have a majority in this House unparalleled in its history. I expected that they would have risen to this great occasion of national responsibility, and every town and borough was expecting the Government to assist generously. We can hand out loans to a depressed country, and we want to bring stability to other nations. My firm impression is that stability ought first to be secured at home. If you wish to be generous, come to the aid of the distressed areas and give public contributions to those who can get the wheels of industry going again. You should revive those municipalities which are anxious to bear the burden, but which lack the means at present to meet the situation. I am convinced that, although the National Government may consider this grant to be generous, it does not meet the requirements of any of the distressed areas. I appeal to Members of the Government, whether they be composite Liberal or one hundred per cent. National Tory Members, to raise their voices and ask that this Bill shall be rejected, and that the Minister and the Government shall rise to the occasion and face the responsibility. Every municipality is demanding from their representatives here that they should voice their opinion and ask for strong action from the Government. The Government are only playing with the situation. It is because I feel that we cannot locally stand this great strain, and because I feel that if ever there was an important matter before the House this is one, that I second the rejection of the Bill. That is not to say that I am not anxious to aid the Minister in any proper way to give relief, but because I think his effort at present is inadequate to meet the situation.

4.44 p.m.

Lord EUSTACE PERCY

I must apologise to the House for troubling it again on this question, but I hope not to trouble it for long. I do so because I do not think that any more important Bill has been or will be before this House for some time. It is quite possible and very arguable that this Bill represents the right policy, but I confess I should like, if I may ask for it, for a clearer statement from the Government of their policy. We cannot but be alarmed to see this Bill, important as I believe it to be, introduced as a purely routine Measure. My right hon. Friend the Minister of Health, in the Debate on the Financial Resolution, assured me that the introduction of a Bill of this kind a, month or six weeks before the Budget was quite normal. The Parliamentary Secretary has informed us that this is a purely routine piece of mechanism. He comes into the House apparently glorying in being: A being that moves In predestinate grooves, Not a 'bus, not a 'bus, but a tram. But surely we cannot treat this Bill in this way. Not unusually Governments, in the second year of their office, Borne-what heedlessly engage themselves in Measures which tie their hands and determine their whole policy by limiting their finance for the rest of the life of that Parliament. I could quote an instance where that happened to a previous Government in 1926, but I will not go into ancient history. What are the Government doing here? The Chancellor of the Exchequer told us, in the Debate which took place just before the Summer Adjournment, that quite clearly any hope of economy, of reducing Government ex- penditure, depended mainly on the possibility of reducing grants to local authorities. The Private Members' Economy Committee came to precisely the same conclusion, as would be natural. It would be out of order for me to go in detail into the recommendations of that committee, but, if the House will allow me to say so, the only object of Private Members concerning themselves with actual proposals for economy is that, after they have done it, they will henceforward refrain from merely general adjurations to the Government for economy, but will concentrate on those conclusions which they themselves have arrived at. The conclusion at which that committee did arrive, obviously, was that the only chance for major reductions of expenditure lay in reductions of grants to local authorities; and by far the greater part of the reductions which that committee suggested were not reductions in education expenditure, which is covered by percentage grants, but reductions of expenditure which is covered by main block grants.

The Government come before us and say: "Before we have introduced our Budget, before we have announced any policy for future finance and taxation, we are going to tie our bands by resigning any hope whatever of securing reductions in expenditure for the national taxpayer. Any reductions in expenditure which may be effected by local authorities as the result of the report of the committee presided over by my hon. Friend the Member for Richmond (Sir W. Ray), are to go to the ratepayers and not to the taxpayers." That may be sound policy, but observe the position in which we are living. In every quarter of the House there is a desire to see the Government have in their hands some margin of finance. Some hon. Members desire to see the Government obtain that margin in order to reduce national taxation. Some desire to see it in order to stimulate works of capital development and for the purpose of contributing something towards a return of prosperity. A third section, as we heard in the Debate the other day, would desire to use any such margin for the purpose of increasing payments to the unemployed. But whatever may be the opinion of hon. Members in various quarters of the House as to the way in which they wish that margin to be used, this at any rate is clear, that, if the Government cannot secure any such margin, their activities, their policy for the whole of the remainder of their life, will be confined by the continual preoccupation of barely making both ends meet. That is a, prospect which every enthusiastic supporter of the Government like myself, if not for every hon. Member opposite, is a very dismal prospect; but even for hon. Members opposite, who, however much they dislike the Government, do desire in the national emergency to have a Government strong enough to act in some direction or another, must view with considerable apprehension the prospect of the Government losing all power to build up a margin which will enable them to take positive action.

Mr. EDWARD WILLIAMS

The noble Lord said they never had it.

Lord E. PERCY

They have never had it during the last 18 months, and it is the continual preoccupation of making both ends meet that is clogging the actions of this Government. The Minister, in reply to my hon. Friend the Member for South Croydon (Mr. H. Williams) in the previous Debate, said quite justly that he did not think that it was fair to attack the local authorities for extravagance, because they had statutory duties and, their expenditure was governed by statutory obligations from which they could not escape. That is true, but observe what has happened. For what object was the Local Authorities Economy Committee, presided over by my hon. Friend the Member for Richmond, appointed? It was appointed precisely in order that local authorities might tell the Government and the House in what respect their statutory obligations interfered with their proper administration of social services, tied their hands, and withdrew from them the freedom that administrators of social services should have. They were asked in what direction the Statutes of this House were too onerous for them. While the Ray Committee recommended many economies in detail, it recommended practically no alteration in those statutory obligations. They did not go to the Minister and say: "We are bound to spend this and hound to be slightly extravagant because of the onerous nature of our statutory obligations"; their report showed that the local authorities hugged their chains and would not part with any of their powers.

That means one of two things. Either it means that local authorities will not be able to economise at all, or, under the policy inaugurated by this Bill, that all economies made in local administration will go in aid of the rates and none of them in aid of the taxes. Apart from the problem of the distressed areas, which is a separate and restricted problem, great though it be, we all know that local authorities are making economies in the administration of their services which are not seriously, or indeed at all, affecting the efficiency of those services. Although they may be creating a certain amount of unemployment, they are certainly reducing expenditure. The House has only to look at the Education Estimate, the totals of which have already been laid before the House. The reductions in the Education Estimate mean, so far as I can calculate, a reduction of at least £2,500,000 a year in the expenditure of local authorities, other than expenditure on teachers' pensions. That indicates a tendency to very large reductions in local expenditure, and the Government are here, in advance of the Budget, resigning any interest in those economies, any share in the results of those economies except economies in education—a somewhat ominous attitude for those who, like the hon. Member for Aberavon (Mr. Cove), take a great interest—

Mr. COVE

Is not the Noble Lord arguing now against the block grants?

Lord E. PERCY

I have always told local authorities that they would enjoy very much greater security under a block grant. It would be out of order for me to go into the general question of block grants, but I am arguing now that the block grant is right. It is sound to give the local authorities the whole benefit of their economies in ordinary times, and it may be, as I have said, that the Government policy is perfectly sound in this matter. If they will say, "We agree that the Government must have a financial margin on which they can act, but in our judgment that which is most important in order to restore prosperity is the action of local authorities. 'We wish to give local authorities that margin of finance, that extra credit on which they can engage in capital works or a margin which they can translate into a reduction of rates which may well encourage local enterprise." If they say that, if that is the main ledge on which the Government intend to stand, it is an intelligible policy, but let it be stated clearly.

I would implore the Minister to reply on this Debate in its relation to the Budget with which the House is bound to be faced in the future. The Government are taking a most important step. They are asking the House to enter into a most important commitment, a commitment of the whole of their financial policy for the next four years. As such, surely it deserves a fuller statement of policy than has yet been made by the Government. The hon. Member who moved the Amendment spoke a great deal about social services. That is a phrase I sometimes feel that I should like to eliminate from the political dictionary. According to the hon. Member's argument, it is a social service to give more transitional payment to unemployed men and women without giving them any work to do in exchange, but it is not a social service to vote money for the Army which it spends in making roads and in the development of camps on a large scale on Salisbury Plain. Such is the confusion of thought into which this talk about social services is apt to lead.

The great problem of the social services in the future is this: If the anticipations of most of us are right, and if the policy which has always been pursued and is desired by hon. Members opposite turns out to be successful, then inevitably the social services will have to be financed more and more out of the pockets of the householder, the small shopkeeper and the professional man, and less and less out of Income Tax. The capitalist accumulations of wealth which the Income Tax taps are now dwindling, and, if our anticipations are right, will never be restored to their former total, and more and more the whole development of the social services will depend upon their being so reorganised that they can be financed out of the pockets of the million rather than out of the pockets of the few. It is because I attach such importance to the social services that I think it is vital to assure ourselves that they are so organised that in the future they can be financed in that way. I do not think we could have foreseen it in 1921 when we passed this Act, but I am absolutely sure that in days to come it will become impossible to finance health or education or any of the social services out of Income Tax to the extent represented by the present scale of grants. That is the real danger of the future, and that is a final reason why I think the Government ought to offer to us very much more serious arguments before they invite us to commit ourselves for four years ahead to grants at the present rate.

5.2 p.m.

Mr. McGOVERN

The Noble Lord the Member for Hastings (Lord E. Percy) commented at the outset of his speech on the fact that the Government were inclined to treat this Bill as of rather a routine character, and to give scant consideration to the desires of the House, but I regard that as rather a reflection on the back bench supporters of the Government in this House, and I would congratulate the Government and the party Whips on having reduced their back benchers almost to absolute silence on Government policy. It is a grave reflection on the Members of this House that they should allow the Government to treat them with so little consideration. I do not blame the Government, but blame the ordinary Members, who are very brave in their constituencies and in their week-end political speeches in telling the people how they will go to the House and defend the interests of the depressed areas and see that the Government pay heed to them. I want to associate myself with the Amendment put down by the official Opposition. We feel that the Government are inclined to go on with these small grants, in the spirit in which the Prime Minister suggested the granting of small sums of money to local charitable organisations in the hope that they would be able to carry on the ordinary business of the country but with no desire or determination to face up to the difficulties which surround many local authorities.

Since the National Government came into power their policy has placed a large number of people on the unemployed register; their application of the needs test and the shortening of the period of ordinary unemployment benefit have tended to throw more and more of the working class on to the rates; and with the growth of unemployment and the "cuts" the people who pay rates are incapable of bearing those additional burdens. We are entitled to expect larger grants to be given to the local authorities to enable them to meet the needs of the local areas. In Glasgow, which is not one of the worst areas in the country, although there are something over 100,000 persons there who are unemployed, we find that since the National Government came into office there has been a gradual alteration in the matter of public assistance. A Glasgow authority have stated that the amount of money they are compelled to pay from week to week has risen by from 210,000 to 212,000 since the beginning of this year. If that be true, and it is so according to statements made locally by the budget committees and public assistance officers. and if the Government, according to the statements of their official spokesmen, do not expect any serious alteration in the numbers of the unemployed during the next 10 years, then the Government arc failing in their duty to get down to this business seriously and devise a plan for bringing some measure of relief to local authorities. Many areas are in a tragic position. Even with the best will in the world they are quite unable to keep their poor. The poor are being expected to maintain the poor, although having themselves suffered "cuts" and reductions of a serious character.

Do the Government seriously think they can continue with this policy? In cities like Glasgow there arc businesses which have been de-rated, although they have made tremendous profits. We may take the tobacco trade as an example. With the increase in cigarette smoking by the female sex profits have grown tremendously. Any reduction in demand on the part of the male part of the population has been made up by the female part. Yet the Government came along and said to them, "Here, you poor fellows in the tobacco trade. We must relieve you of a portion of your rates. We must see that you do not suffer in any shape or form." In many cases a man and a woman with 23s. 3d. a week has to bear a share of the cost of de-rating these large industrial concerns. I say that such action is detrimental to the interests of any civilised State, and that no one can believe the Government to be seriously in favour of equality of sacrifice while they pursue such a policy. I meet people every day who are appealing for relief from rates. They have been driven to the door, they are in the eviction courts, they have been driven to desperation, and yet they are compelled to contribute their quota towards the rates. If the Government were desirous of bringing about equality o sacrifice, even of securing a reasonable application of that term from the capitalist point of view, they ought to begin the de-rating of the unemployed and the lower-paid wage earners. Grants ought be set aside by this House for the relief of those who are on the bottom rung of the social ladder, struggling with adversity and despair.

I am not inclined to treat the efforts of the Government to deal with this matter as being very serious. They go on in a mechanical, robot fashion, bringing in ordinary Bills, giving ordinary sums. They do not realise that they are living in a world which is crumbling under their feet. All over the world we see a collapse of prices which will eventually land us in catastrophe, yet they make no provision for the future. There are often sneers in this House at the efforts of Soviet Russia to plan for five years ahead. Our Government would be well advised to plan ahead for five or 10 years in their efforts to meet our growing unemployment and growing poverty, instead of sitting down comfortably with the expectation that the great mass of the working class will bear for all time the sacrifices they are compelled to suffer during these days of adversity. I ask the Government whether they have any plan to give to the House. Last week we had some discussion with the Prime Minister on whether the Government were going to submit schemes to the House which would give local authorities the power to deal with unemployment if they as a Government were not prepared to undertake the task. The Noble Lord the Member for Hastings talked about the reduction in social services and discussed what really were the social services, speaking or transitional payments in that connection. In industrial areas local authorities who desire to expand the provision made for dealing with the poor, their diseases and their ills, have attempted to plan for extensions of hospital accommodation, the extension of welfare schemes, the extension of many activities that might bring a ray of comfort and hope to the common people, but they have been compelled to cut them down drastically, because of their inability to raise money, and the Government have not attempted to come to their aid in any shape or form.

I say the Government are failing criminally in their duty by their failure to provide larger grants. I do not look upon the Government differently from how I should regard an ordinary person who refused to provide money for local needs and in that way make himself guilty of a serious crime. If I brought a child into this institution and dashed its brains out at that Table there would be a cry of revulsion from every Member in the House, independent of party; but that is what the Government are doing in effect. They do not dramatically cut away a life by a single blow, but they do the same thing by their refusal to provide financial aid. They deprive children who are entitled to succour and nourishment of the essentials of life, and just as though they were to put them into a chamber in an attempt to crush out their lives, so they are successful in depriving large numbers of children of the opportunity to live. I repeat that the Government are failing in their duty. But let them go on. They sit there comfortably, believing that everything is right because they themselves are comfortable and well-fed. I can only repeat, as we have so often said in this House, that one day they will be awakened from their slumbers by the working class of the country and of the world, by financial catastrophe, by economic crisis, by the poverty and despair of the common people. They will be roused from their slumber by the working class knocking at the chambers of this House, taking control of the economic means of life, and restoring prosperity and the real economic foundations of society by instituting a system of common ownership of the means of life in place of the dying system of capitalism.

5.15 p.m.

Mr. H. WILLIAMS

The situation in respect of this Bill is rather unusual, because every hon. Member who has spoken up to now has criticised it; I am going to do the same. The grounds of our criticism are not identical. The Minister says: "As nobody agrees with me, I must be right." That was the line of argument he took when we were discussing the Financial Resolution. The Parliamentary Secretary, in an admirable speech, defended the Bill on grounds that we must keep faith with local authorities. That implies that this Bill is a contract. The obligation is a statutory one and not a contractual one, and therefore no breach of faith is involved. My own view is not that Government grants should be reduced so that local rates should be increased; the circumstances are such that both grants and rates ought to be reduced.

I would point out to the Parliamentary Secretary that since 1928, when the original Bill was introduced, we have had a, financial crisis, and that we are still in a financial crisis. The financial crisis of the Autumn of 1931 still continues, but since the Bill was introduced, the cost of living, as measured by the Ministry of Labour index number, has declined, but we take no account of that. We ignore the fact that the aggregate income of the people of this country is, I suppose, at least one-quarter less, measured in pounds, than it was when the Local Government Act was passed into law. We are going forward on the assumption that we can afford these things. There was not the faintest recognition on the part of the hon. Gentlemen opposite, in their eloquent speeches, that the things for which they asked would have to be paid for. I have never thought that the government of the country differed in principle from the government of a household. If my income is diminished, I have to cut down in some direction or another. There is hardly a single grant of public expenditure which at the present time ought not to be reduced.

Mr. MORGAN JONES

What about the Army and the Navy?

Mr. WILLIAMS

May I give an example? I think it was the hon. Member for Mansfield (Mr. C. Brown) who made a contrast between the proposal to cut social services and the fact that the Army Estimates are up by, I think it is, £1,500,000, consisting to a large extent of replacements of stores and the reestablishment of the annual training of Territorials, without which the force would come to an end. The alternatives are either wipe out the Territorials entirely, or restore their camp. Let us examine the Defence Estimates, and see what contrast they make over a substan- tial period of time. Let us take a period of 10 years, at the beginning of which the Defence Estimates were roughly the same as they are to-day. What has happened to the Civil Service Estimates, of which the Local Government Services are a very large part? They have risen from £226,000,000 to about £350,000,000. I have to say "about," because we do not know the final Estimate for the Ministry of Labour, and I have made my own estimate that the additional sum will be about £25,000,000. In place of that increase, it is absurd to institute any comparison between the Defence Services and the social services.

Mr. COVE

Are the unemployed in that figure?

Mr. WILLIAMS

Certainly. Where else would the hon. Member expect to find them? Very largely, the unemployed are in that figure because our taxation is excessive. That is why they are there. [Interruption.] Well, let us look at it. Under the auspices of hon. and right hon. Gentlemen opposite, every conceivable encouragement was given to local authorities to spend more money on every conceivable device for the creation of work. What was the result? Complete, absolute and colossal failure. You had a contemporaneous increase in unemployment when you had the largest schemes of relief work ever undertaken. I am one of those who would never inaugurate one penny piece of expenditure on the abstract ground of the artificial manufacture of work. That is a policy that has always failed in the past and will always fail in the future.

The hon. Member for Mansfield complained of the increased burden falling upon many local authorities owing to the growth of public assistance, because of the fact that a certain number of people are receiving public assistance who otherwise might not receive it. I am not going to argue the merits of that. if you have greater expenditure in one direction, that is all the more reason why you should economise in another. Why cannot other local authorities follow the example of the London County Council? The social services are better run in London than in any other part of the United Kingdom. There is a higher standard and a greater measure of efficiency, while there is a smaller increase in expenditure compared with pre-War days, than is the case with any other municipality, despite the fact that in London, as everybody knows, everything is rather more expensive. At this moment, despite the fact that the London County Council are under pressure because they are providing for an increase in public assistance, they are reducing their rates, and they are doing so at a time when they know that, as a result of the application of the formula in the Bill, they are to have their Government grant reduced. Authorities who find that their expenditure is increasing, ought to take steps to reduce it, as every private citizen has to do.

It is not as if all this expenditure produced a beneficial result. The plain truth of the matter is that there is great waste in the administration of the social services. Will anyone say, at a time when our engineering efficiency is highest, that the cost of collection and disposal of house refuse in this country could not be reduced It has risen from a figure of £2,687,000 in 1913–14, to £7,141,000 in 1930; why should it be nearly two and a-half times as great?

Mr. LOGAN

Despite the fact that the National Government were elected to clear up the mess?

Mr. WILLIAMS

If the National Govment were to sweep out the rubbish which is on the opposite benches it might he necessary to introduce a special supplementary estimate for the purpose. I merely mentioned the subject of house refuse as an example. Any hon. Member who goes to the Vote Office and studies the analysis of the expenditure of local authorities in England and Wales for 1913–14 and for 1929–30, the latest year for which the analysis is given, will be able to see the figures for themselves. The Paper is Command Paper 4233, the Statistical Abstract for the United Kingdom, and the page is 192. There hon. Members will see example after example of great increases in cost for which there cannot have been any comparable advantage to the public. I am not saying by that that all the increases have not led to advantage. I am contending what is obvious to any hon. Member, that a great many of the services could be rendered at higher efficiency and at less cost.

That is perfectly obvious when you study what happens in certain authorities, when one or two competent people take charge of a thing and produce higher efficiency at lower cost. Other authorities merely drift along, and the Minister, as is his duty, defends all his fellow-conspirators up and down the country. He is duty bound to say how self-sacrificing local authorities are. They are, but that does not prove that they do their job well. Because a man is virtuous it does not make him wise.

Mr. LOGAN

The hon. Gentleman dare not mention in this House any particular place in the country.

Mr. PIKE

Sheffield, during the last Government.

Mr. WILLIAMS

I have not had the slightest hesitation when speaking in certain areas, to criticise the local government of those areas when I thought it necessary. I do not want in this House to be invidious, or to pick out one when the real thing to do would be to pick them nearly all out. The hon. Member for Mansfield, in dealing with public assistance, says that we are taking people off the live register and putting them on to the Poor Law. That statement is not true. A man may be disallowed benefit, but that does not take him off the live register. If a man is in receipt of public assistance on the ground of unemployment, in practically every case he is required to maintain registration at the Employment Exchange. That mistake has been made so often in this House, and I have contradicted it so often, that whenever it is made I regard it as part of my duty to contradict it.

There is collaboration between the public assistance committees and the Employment Exchange authorities. If hon. Gentlemen will study the quarterly returns issued by the Ministry of Health dealing with the Poor Law, they will find therein the number of persons in receipt of Poor Law relief from public assistance committees on the ground of unemployment, and who are simultaneously registered at the Employment Exchanges. They will find that the number of people who are receiving relief and who are not so registered is very small indeed.

Mr. LAWSON

Is the hon. Gentleman aware that the conditions do not prevail as they existed before 1931 when local authorities did insist upon registration as a condition of Poor Law relief They do not do it now for the simple reason that the same people are getting benefit as transitional payment.

Mr. WILLIAMS

The quarterly returns of the Ministry of Labour, I regret to say, are not published as a Parliamentary Paper but as a Stationery Office Paper, which can only be got if you fill in one of the green slips. It is not automatically available to all of us. If hon. Gentlemen will get one of those documents they will see that my statement is substantially true. The Minister, when he was discussing the Financial Resolution, said that there had been economies of £20,000,000 on the basis of 1929–30. I could not understand that statement, and I asked him a series of questions, but I am still not quite clear about it. The information in my possession shows that the expenditure in 1930–31 was, roughly speaking, £20,000,000 more than in 1929–30 and the difference was borne partly out of the rates and partly out of grants. According to the Ray Report, economies were effected, broadly speaking, on the basis of the expenditure in the Autumn of 1931, aggregating about £l220,000,000; which means that, roughly speaking, we are now back to the expenditure of 1929–30, and not £20,000,000 below the expenditure of 1929–30.

Merely to have got back to 1929–30, when meantime the cost of living has fallen in the way that it has—it is now down by 12 per cent.—and the nation as a whole is very hard up, does not represent a satisfactory degree of progress. A substantial part of those economies were not economies in current expenditure, but were reductions in capital expenditure on road-making and other things. Hon. Members opposite speak all the time about social services. The best social service of all is the social service that a man can buy for himself because he has got a job. A very large proportion of our social services consists of maintaining unemployed people, or people who are distressed in one way or another because trade is not very good. My main object in urging economy is to restore people to employment. I believe that I am right, and, as my method has not been tried in recent years, and every other device has been tried, it might be worth while, even on experimental grounds, to try a bit of economy. Up to now we have not had a large measure of economy. We have had just enough to irritate people, but not enough to reduce taxation. The hon. Member for the Scotland Division (Mr. Logan) made a very eloquent speech, which was full of humanity, but which gave no indication of how all these things were going to be financed.

Mr. LOGAN

May I ask the hon. Member whether he has not been sitting in the National Government for 18 months?

Mr. WILLIAMS

I have not sat in it at all up to the present. That may be one of the things that is wrong with it.

Mr. LOGAN

In case my point is not clear to the hon. Member, may I ask him how it is that he has been so silent, and has not given to Members of the Government the benefit of his advice?

Mr. DEPUTY-SPEAKER (Sir Dennis Herbert)

I must remind hon. Members that they must not address questions directly to other hon. Members.

Mr. LOGAN

I beg pardon.

Mr. WILLIAMS

I am sorry the hon. Member thinks that I have been unduly silent. Sometimes, when the Debate is over and we are refreshing ourselves in another part of the building, I am criticised by my friends on the ground that I take an unfair share of the time of the House. As a rule I try not to be too long when I speak, but I like to join in often. My sole reason for taking part in the Debate to-day is that I believe that we have allowed our local government expenditure to get quite out of control. I gave the figures in the Debate on the Financial Resolution. We have passed from spending roughly 7 per cent. of the whole income of our people on local government services, so far as they are borne by rates and Parliamentary grants, to spending something over 10 per cent., as far as I can make the calculation, in four years. The hon. Member for Aberavon (Mr. Cove) shakes his head, but he will not deny that at the present moment in Great Britain our local authorities are spending, roughly speaking, £300,000,000, partly out of rates and partly out of Parliamentary grants, excluding all their trading services. I am speaking of those services which are borne directly on the people's backs. I do not think that anyone to-day would estimate the aggregate income of the people of this country at more than £3,000,000,000. I think that that is a fair estimate. In 1929 the total was in the neighbourhood of £4,200,000,000 or £4,300,090,000. It the meantime, local government expenditure has increased, while our national income has diminished. We are sapping the foundations of our whole future prosperity.

I believe that we can restore our people to employment if we only give some encouragement to those who alone, in the long run, provide employment. It is employers, and not governments, who in the long run provide employment, and, so long as those who are responsible for the conduct of industry are working under existing conditions, every kind of enterprise is checked. If we had a Socialist system, and if private enterprise were abolished, other arguments might be applicable, but, so long as we are under a system of individualism or capitalism, whichever it may be called, we must permit it to have an opportunity to function. If its freedom to function is entirely destroyed, naturally the result is unemployment and widespread distress. It is because I believe it to be possible for the local authorities to render necessary services at a far lower cost, and because I think that a reduction in the cost both of the rates and of Parliamentary grants will react on our national taxation, that I express profound regret that His Majesty's Government have not given a decisive lead to the local authorities of the country.

I have met members of local authorities who have said to me, "How can we be expected to take action in this matter when the Government encourage our colleagues to go on spending at the same rate, because they are going to give us grants on the old basis, or on one slightly higher?" There is no impulse towards economy in local government, and I believe that that is vital. I believe that local government could be run much better without entailing suffering on our people. We want to provide all the necessary and essential services. We are providing a great many trimmings, and we are administering those trimmings at a very heavy overhead charge. It will be found that these administrative costs have risen in a manner which I think is not justifiable. It is only necessary to go round' any borough and examine the details of expenditure and consult the annual accounts to find a great many items which could be cut out because they are not essential or vital, and nobody's well-being depends upon their continuance. There is no need to go into the precise details; everybody is familiar with examples of them. I hope that a large number of my colleagues in the House of Commons will continue to press upon Ministers the vital necessity of economy, and will guarantee them their unhesitating support in all the measures of economy which they adopt.

5.37 p.m.

Mr. KINGSLEY GRIFFITH

It is surprising, and almost alarming, to find what a large variety of texts this small Measure has provided in the course of the Debate. The hon. Member for Shettleston (Mr. McGovern) finds in it a text for calling upon the working classes to come here and take over control of everything. They already do that, by the way, by their votes, although they are not always given wisely. The hon. Member for South Croydon (Mr. H. Williams), on the other hand, asks that this should be the occasion for a great demonstration on behalf of economy. I should have thought that this Bill provided as much economy as anyone could have wanted. The Government appear to have gone as far as they could in doing as little as possible. The hon. Member for South, Croydon makes a general attack on the social services. I do not mean that he wants to stop them all, but, when he regards the social services as expenditure upon which enormous new cutting is possible and desirable, I think he might reflect that, after all, these social services are in a large measure the foundation upon which not only the poorer people of this country, but he himself and his friends rest. If those services had not been provided in sufficiently ample measure, it is impossible to suppose that the people of this country would have gone through the difficult years during the War without our reaching some kind of violent convulsion which would have been far more expensive than anything which the hon. Member himself has contemplated.

Mr. H. WILLIAMS

The hon. Member says that we should not have gone through the War but for these social services—

Mr. GRIFFITH

The years after the War.

Mr. WILLIAMS

I would ask him, does he think we should have had to go through all these things if we had not been so wasteful?

Mr. GRIFFITH

The hon. Member's contention is that the unemployment from which we are suffering is due wholly, or in a large measure, to the large amount of expenditure. We are often told that this is the highest taxed country in the world, and a contrast is drawn with other countries which in that matter, according to the hon. Member, are more favourably situated. But, when we look at those countries, we find in point of fact that they have quite as bad unemployment as we have, and in some cases worse. [HON. MEMBERS "No !"] Undoubtedly, that is the case. Merely saying "No" does not get us any further. I would advise hon. Members to look at the comparative figures for themselves. I agree that we do not want wasteful expenditure; I do not know that anyone in this House is advocating wasteful expenditure; but when we are asked, after very heavy cuts, pretty nearly to the bone, to carry that painful operation still further, and when we can see in front of us the certainty of the sufferings that it will bring, for a purely speculative gain in the matter of employment, I ask His Majesty's Government not to be lured by the prospect which the hon. Member for South Croydon has put before them. He is just as much taking a risk in proposing his short cut to prosperity as anyone else is in the various schemes which have been put forward, and in my opinion his short cut—that is to say, cutting down further when the people are already strained almost to breaking point—is quite as dangerous and speculative as anything that could be put forward.

In the present Bill we are considering something a great deal smaller than that. Many of us disliked the original Local Government Act, and I myself, when it was before the House two Parliaments ago, fought it to the best of my ability Clause by Clause. That Act, however, represented a far-reaching change in our local government which, once having been made, cannot be merely pulled down and taken away at a moment's notice. Certainly I think it would be unreasonable to expect the Government to take this occasion for undoing the work that was done by the present Chancellor of the Exchequer and Postmaster-General in that previous Parliament. That being the case, we really ought to regard this Bill as a mere instrument for carrying an appointed stage further the Measure that was passed in 1929. The only thing one can say in that regard is that, being bound by that previous Act to do a certain amount, the present Government have taken very good care to do no more, except to the extent of a derisory sum of £2,000 in the one country and £500 in the other. From that aspect I regret the way in which the Bill has been brought in.

Circumstances have changed, and the changed circumstances since the previous Act was passed can be argued both ways. The hon. Member for South Croydon says that the financial crisis is so much more severe that we ought to cut down more. Hon. Members opposite would say, and I would say, that the needs of the people have become so much more acute that in this matter some kind of expansion is necessary. The Government have their choice between deciding either to stay where they are or to contract further, but I do not think that that process can be carried on. I believe that a wise Government must find a time, when it is over its immediate crisis, to expand a little, because otherwise nothing will ever get moving. From that point of view I would rather see a more generous treatment given than a provision of the bare amounts which the previous Act requires.

Certainly I should not advise, as far as my advice could carry any weight, anyone to vote against this Measure. It would appear to me to be idle, when we are being given this step, merely to vote against it and try to bring the machinery to a standstill. I suppose that, if no Bill were passed now, although the previous Act says that Parliament has to determine the amount for the second fixed grant period, in that case what would happen would be that the amount laid down for the first fixed grant period would go on, although that period had expired. I am not quite sure what would happen in such an event. It is idle to try to express on this occasion all our root-and-branch objections to the machinery of the Local Government Act, which is there, with its block grants and many other things which I dislike, for good or for ill. We can only consider it on the comparatively narrow basis on which this Bill presents it to-day, and from that point of view, although I much regret that the Bill has not been couched in a more generous spirit, I think it is one which canont be voted against for any good reason.

5.44 p.m.

Mr. BANFIELD

I rise to support the Amendment. I was interested by the speech of the bon. Member for South Croydon (Mr. H. Williams), and its general attack upon local authorities on the ground that they were spending far too much money and were not getting sufficient efficiency or return for it. I was particularly interested to hear the hon. Member's statement that he believed that the administration of the local authorities in London was very much superior to that in other parts of the country. He made a special point of a reduction of 3d. in the in the rates of the London County Council. If the assessments in the other parts of the country were on the level of the assessments in London, you would get a very material drop indeed in the rates in the other constituencies. If there is one thing more than another on which so many people go wrong, and on which there is so much misunderstanding, it is in this comparison of rates as between one area and another.

Mr. H. WILLIAMS

; If we compare with the year 1913–14, the amount spent in London has gone up 50 per cent. and the amount spent by the other county councils has gone up 150 per cent.

Mr. BANFIELD

There, again, one sees how easy it is to fall into misunderstanding by comparison of figures. In London, as compared with the rest of the country, unemployment has been nowhere as severe. In other parts of the country it has been five or six times more than in this area.

Mr. WILLIAMS

This excludes the whole of the expenditure on the Poor Law, and the question of unemployment does not arise.

Mr. BANFIELD

The fact remains that the bearing of unemployment in the other areas and all the contingent expenses that fall upon local authorities have led to far more expenditure by local authorities in other areas than has happened in London. The Parliamentary Secretary said that, if the Government were as generous in 1933 as they were in 1929, he was of the opinion that they were doing the right thing. Circumstances have altered very considerably for the worse, so far as local authorities are concerned, in 1933 compared with what they were in 1929. The increasing burdens in the great industrial towns are becoming almost intolerable.

I want to call attention to what, I think, is a very important factor inasmuch as the effects of it will fall upon local authorities. In June next there will come into operation a very important change in the working of National Health Insurance. The effect will be that almost immediately some hundreds of thousands of men who have been unemployed for a considerable period will immediately fall out of national health benefit so far as actual cash benefit is concerned. But that will not be the end of it. Next year their position will be still worse, provided they are still unemployed, and a very high authority has stated in this House that there is very little possibility of at least 1,000,000 of those who are now unemployed getting back into industry. These persons in 1934 will be out of National Health Insurance altogether. They will only then be entitled to pension benefit but if, unfortunately, they are still out of employment in 1935 they will not only lose payment and medical benefit in case of sickness but they will also lose pension rights. This will inevitably create a very large charge ultimately to local authorities under the Poor Law. I am quite convinced that these people, already so poor, and punished in the way of losing National Health Insurance benefit, not through any fault of their own but simply because of their unemployment, not able even to claim a pension at 65, will become a very great charge indeed upon the Poor Law. Therefore, the provision made in this block grant is not sufficient, and is not likely to be sufficient, and it will prove a. burden upon the local authorities.

I wish it had been possible for the right hon. Gentleman to reconsider the whole question of de-rating, upon which this grant is fixed. It would not be unreasonable to have some kind of means test so far as de-rating is concerned and those great industrialists who are paying profits up to 50 per cent., scores of them 25 per cent. and who are getting 75 per cent. of their rates excused.

The MINISTER of HEALTH (Sir Hilton Young)

I am not concerned in the amount of grant in respect of de-rating at all. The Bill does not affect the amount of the grant in respect of de-rating.

Mr. BANFIELD

This is a block grant paid to local authorities. Our complaint against it is that it does not make sufficient provision for the needs of local authorities in view of their special circumstances at this time. With all the will in the world, it will be impossible for cities like Liverpool, great as they are, powerful and rich as they have been, to continue without some assistance from the national Exchequer. The hon. Member for Croydon has argued that the Government policy should be to cut off all block grants of this nature altogether. What the effect of that would be I leave to the imagination of the House, but there is a feeling in many parts of the House that in some way or other Exchequer grants made to local authorities lead to extravagance and waste. I have been a member of a local authority for the greater part of my life. I have served on local councils and local guardians and bodies of that kind. Everyone in the House who has served on a local authority must be conscious, as I am, that the first thing in their minds is the question of expenditure, and that they have a very real desire not to tax their ratepayers more than they can possibly help.

I have been astonished to hear general charges of extravagance and wastefulness cast at local authorities. The vast majority of them are composed of men who subscribe to the doctrines of Conservatism, and have a desire for economy in all directions. They never go out of their way to pander to the poor, as they call it, but have always been careful not to be extravagant in that direction. I wonder what some of them will think about the speech of the hon. Member for Croydon, and not that speech alone but the fact that it represents a considerable volume of back bench influence in this House. I hope some of the big municipalities, like Manchester and Liverpool, will take notice that while, on the one hand, they are at their wits end to keep down local expenditure, they are charged on the Floor of the House with being extravagant and not caring about the way their expenditure grows.

That is the case that we have against this Bill. The hon. Member for West Middlesbrough (Mr. Griffith) said he did not see very well how they could vote against it because, if the money were not granted, something or other terrible would happen. I do not think he need worry very much about that. He can vote against the Bill with a good conscience. This House is like a stamp that stamps automatically everything that Ministers want to do. If by any means we defeated the Bill, we should have brought definitely to a head the very important question as to what should be done for the local authorities in view of the distress in their areas, and in view of the tremendous increase of expenditure under the Poor Law, an increase which must inevitably continue according to the expert authority that we have in the House. I wish it had been possible for the Minister to be far more generous to local authorities because, whether he likes it or not, he will sooner or later have to find money to help many of the distressed areas.

5.58 p.m.

Sir JOHN SANDEMAN ALLEN

The Parliamentary Secretary said that this Bill, as far as the bulk of the amount in question was concerned, was merely carrying out obligations to which we are already committed. At the same time, there is a small addition—one regrets that it is so small—of which I wish to speak. We heard my hon. Friend the Member for South Croydon (Mr. Williams) speak very airily and brightly, but not brotherly altogether, about the large municipalities some of whom are at their wits' end to know how to make ends meet, and do not know what is going to happen in the near future. They have had to practise economy at every turn. We live in. hopes that the Minister knows how serious the condition is in distressed areas and how they are suffering in that very matter of Government regulations in regard to transitional benefit placing upon them an increasing burden which they are quite unable to bear. The matter is of desperate seriousness, and I am convinced that the Minister knows of it. I want, however, to bring the question more forcibly before the House. There have been some hon. Members in the House to-day who would get up and preach economy. Economy is a most vital and important matter, but when economy in one direction can cause immense losses in other directions, it is not a question of economy; it is nothing but folly.

I think it is time that the economy stunt was brought to a proper state in relation to what is going on in the country as a whole. There is the very serious problem of distressed areas which really must be faced, and I am not altogether convinced that the Government are facing it. There has been a recognition in the Bill of what, I believe, will have to be done a little later on. It is because the Government realise these difficulties and the certainty that the Minister knows our troubles that I support the Bill. To throw out those people would be to dishonour our neighbouring municipalities throughout the country. However small is the extra relief, it is worth while. We can only support the Bill and count upon the continued interest and understanding of the Minister so that the House and the country generally may realise that these troubles are no longer local, that it is absurd to keep them in local quarters, and that they must become a national burden and responsibility if we are to deal with this great issue in a proper way as a National Government should.

6.3 p.m.

Mr. BATEY

The major portion of the speech of the hon. Member for West Derby (Sir J. Sandeman Allen) was an inspiration to many of us. We were glad to hear one of the supporters of the Government coming from one of the large cities urging upon the Minister that the Bill was not sufficient and that something else should be done. As long as he merely does that he can express his discontent as much as he likes; the Government will go on in an easy way penalising the distressed areas and the big cities. I come from one of the most distressed areas in the country, and I listened very carefully to the speech delivered to-day by the Parliamentry Secretary, because I wanted to know whether there would be anything in the Bill which would benefit that area. After he had sat down, I was bound to confess that there was nothing at all in the Bill that would be of the least help to that distressed area. He told us that out of the £350,000 of new money, £145,000 would go to three counties and to several county boroughs. If there is only to be £145,000 of new money distributed among three counties and several county boroughs, then God help the distressed areas, especially the county areas.

I wish to take a line altogether different from what has been taken in this House for a long time. We have frequently debated that something should be done for the unemployed. To-night one is pleading that something should be done for the householders and the shopkeepers in the distressed areas. As I look at the Bill which has been brought forward by the Minister, I see no hope of any relief for either the householders or the shopkeepers in the distressed areas. I would like the Minister, when he comes to reply, to tell us how much of the £145,000 a distressed area like that of Durham will receive. It would be a piece of very useful information to us. In my opinion, the amount will be extremely small. In 1929 de-rating was an experiment, and the pool of £47,000 which was formed was an experiment. No one knew how it would work out. The money allocated to the various districts was an experiment. The Minister has missed a golden opportunity presented to him in the Bill because he has had an experience of four years to go upon. But he came before us to-day and said that the Bill deals merely with the second grant period. The Bill decides the grant, not for one or two years, but for four years, and year after year the expenditure of local authorities is increasing. Nobody can tell to-day how much the expenditure of local authorities will have increased by next year. To come after four years' experience for the second grant period and decide the amount of money to he given to local authorities for another four years is a huge blunder.

As far as one can see, there is no sign of the expenditure of local authorities decreasing. If one could see any sign of the expenditure decreasing there might be some justification for the action of the Minister, but all the signs are that the expenditure of local authorities will increase, and, as I have said, to decide to-day what shall be the grant for a full four years is a huge blunder. The grant provided for to-day ought not to have been for more than two years. In fact the grant ought to be annual, as it would give the House a chance of reviewing the situation at the end of each year. The past four years ought to have taught the Minister that local authorities need to have some new sources of revenue. The sources of revenue in distressed areas are decreasing. In my own county, since the last grant period was decided in 1929, a large number of collieries have closed, and the revenue from those collieries has been lost to the local authorities. Seeing that there is a tendency especially in the distressed areas, for revenue to decrease, the Minister ought to have taken this opportunity of considering some new sources of revenue or of re-establishing some of the old sources of revenue.

The Noble Lord the Member for Hastings (Lord E. Percy) said that he believed in block grants. The experience of the area from which I come is that block grants are not good, but dangerous. An authority who has spent all his life in local government has assured me that the block grant has been tried before and has failed. It is failing on this occasion, especially in the distressed areas. Block grants, as a matter of fact, have a tendency to put far more of the cost of the semi-national services upon the rates and to relieve the taxes. We believe that part of the policy of the Government is to relieve taxes at the expense of the rates. The effect of the block grant has simply been to throw the cost of semi-national services more and more upon the rates. I mean by semi-national services education, roads, police, public assistance and some of the health services.

Lord E. PERCY

Police and education are not on block grants.

Mr. BATEY

I am speaking at the moment of the tendency of relieving the taxpayer at the expense of the rates, and they all seem to me to be semi-national services. The tendency seems to be to relieve the taxes of those semi-national services, and to throw more and more of the burden upon the rates.

Mr. DEPUTY-SPEAKER

I think that shows that the hon. Member is getting a little beyond the scope of the Bill at the moment.

Mr. BATEY

I rather gleaned from the discussions which have taken place that we were allowed rather a wide latitude and that we were not confined strictly to the wording of the Bill. If you pin me there I have only to obey, and will obey, your Ruling.

Mr. DEPUTY-SPEAKER

Mr. Speaker, has, I believe, already intimated to the House the lines of the Debate and has given considerable latitude under the wording of the Amendment. I was only reminding the hon. Member that in discussing general questions of taxation he was going beyond its scope.

Mr. BATEY

I did not intend to do so, and I will leave the matter there. In 1929 when the De-rating Bill was passed a Government communication was sent to local authorities which said: The aim has been so to adjust the distribution as to make the assistance vary with the need for local government services in any area in relation to the ability of the area to meet the cost. I have not the slightest doubt that in 1929 the objective was to assist the area in relation to its ability to meet the cost, but since then there have been enormous changes, and the ability of the area to meet the cost in 1929 does not apply to the same extent to-day. Therefore, the Government should have gone further than is the case in the Bill. They should have provided far more new money. After the allocation in 1929 the county of Durham was said to have gained £270,000, but the grievance of that area is that the gain which it was supposed to have received has been swallowed up by the increase in the cost of relief. To-day the increased cost of relief in Durham County, compared with three years ago, is over £400,000. That increased expenditure compares pith three years ago. If in 1929 we were supposed to have gained £270,000 by allocations under the De-rating Act and that has been swallowed up by increased expenditure of £400,000 during the last three years, the Minister will see that we have a case for far more money than he is proposing to give.

The rateable value per head is extremely low in the distressed areas. In Durham last year the figure was £3 11s., in Surrey £9 9s. 7d., in Bournemouth £13 4s. and in Blackpool £12 19s. The rates in Durham last year were 13s. 6d. in the pound, in Surrey 5s. 5½d., in Bournemouth 7s. and in Blackpool 7s. 6d. This year there is to be an increase in the Durham rates. In consequence of the increased expenditure on Poor Law relief the Durham rate this year will be 14s. 6d. in the pound. The Minister ought to have taken the opportunity to get more revenue for the distressed areas, so that the rateable value per head might have been increased. It is unfair for one part of the country to have a rateable value of £13 4s. per head while an industrial area has a rateable value of only £3 11s. The district with a rateable value with only £3 11s. 10d. per head cannot, with the same rate, raise anything like the same amount of revenue as the district with a rateable value of £13 4s.

Seeing that the distressed areas are in this serious position, the Minister should not have been content to continue what has been happening during the last four years, because that means continuing to all intents and purposes the present condition of affairs. One authority says that if each district bore an equal share of the demand for roads, education, police and the relief of the poor, at least £700,000 would accrue to Durham County. That shows the very serious disadvantage that we are in. If the Minister does not agree, and it is clear from the Bill that he does not agree, to making the grants for less than four years, we can make out a case for an annual grant for unemployment. Unemployment is so serious and is rising so rapidly that the grant for unemployment ought to be annual, and not fixed for four years. In 1929 the Bill opened up a very wide field which the Minister would have been wise to explore. I am not sure that we have not come to the time when we ought to consider whether industry should not again contribute to the rates. I base that suggestion on the ground that industry to-day is in a different position from that in which industry found itself—I am thinking more of the basic industries—in 1929.

In most industries to-day machinery has supplanted men to an enormous extent. Seeing the important part that machinery is playing in industry—

Sir H. YOUNG

On a point of Order. Shall I be in order in replying on the subject of de-rating?

Mr. SPEAKER

I have listened very carefully, and it seems to me that the subject is outside the scope of the Bill and of the Amendment.

Mr. BATEY

I know that we cannot discuss the Act of 1929, which provided for de-rating, but I think that on a discussion like this when we have to consider the extremely small sum of new money, £350,000, for the local authorities, we might be entitled to suggest to the Minister that he should give consideration to some of these proposals.

Mr. SPEAKER

The hon. Member has made suggestions to the Minister that the contribution from the Exchequer is not enough, but I do not think he can suggest that he should amend the other parts of the 1929 Act.

Mr. LAWSON

May I point out that the latter part of the Amendment reads: and fails to amend the law under which industrial and freight transport undertakings and land are largely or entirely relieved from the payment of rates.

Mr. SPEAKER

The hon. Member could not have been in the House when I gave my previous Ruling. I drew special attention to the last few lines of the Amendment, and said that I doubted whether those lines were in order.

Mr. BATEY

It seems to me that the Bill is not sufficient. All that it provides for is for a second grant period for four years, and it only provides for £350,000. I want the Minister to consider other sources of revenue in order to help the local authorities, in addition to this new money.

Mr. SPEAKER

The hon. Member cannot do that on this Bill.

Mr. BATEY

There were other suggestions which I intended to put to the Minister, and I shall have to take some other occasion to do that. We cannot leave this question where it is, because the condition of the local authorities is so serious that there is every prospect of many of them getting into such a position that they will not be able to carry on. If we cannot discuss these matters now we shall have to take some other opportunity of doing so. For some months past I have thought the Government would take this opportunity of doing something to help the distressed areas. I remember reading in the northern Press that the northern Members of Parliament had been approaching the Minister and asking him to do something to help the distressed areas, and one got the impression that this was going to be the occasion when the Minister would help the distressed areas. If all that he is going to do to help the distressed areas is to find this paltry sum of £350,000, God help the distressed areas ! Expenditure is bound to increase.

My colleague reminded the Minister that the National Health Insurance Act will tend to increase the cost of Poor Law relief. The Minister was responsible for the National Health Insurance Act in the middle of last year. At the end of this year when a man has been unemployed for two years he will lose his medical benefit and there will be only the Poor Law doctor when the man can no longer go to his panel doctor. Therefore, in that respect as well as in other directions, that Act will tend to increase the expenditure on Poor Law relief. Does the Minister intend to do something for the distressed areas beyond this Bill? Is this the final word and the last effort, or have the Government something else in mind in order to help the distressed areas? Unless they do something more the distressed areas will continue in a deplorable condition and no one can say what will be the end of them.

6.27 p.m.

Mr. CHARLES WILLIAMS

Earlier in the afternoon we had two very interesting speeches from hon. Members for the Liverpool area and, curiously enough, as so often happens in this House, we saw two hon. Members who, by their politics are very wide apart making a common and joint appeal in the best Scottish and Irish fashion to bleed the general taxpayers for the benefit of Liverpool. The hon. Member for the Scotland Division (Mr. Logan), in his eloquent speech, said one thing with which I thoroughly agreed, and that was that every town and borough want help from the Government at the present time. I realise that every town and borough want help not only in relief of their rates but in relief of taxation. Once one accepts the position that local authorities want help because of the badness of their trade, I should like to make it perfectly clear that the extra concessions that are being asked for are not in the best interests of the country. I do not say that this or that area is not distressed. Everyone knows that they are and that the needs of some areas are very much higher than others, but that is dealt with in the weighting Clause in the original Act.

If I may say so with great respect, the noble Lord the right hon. Member for Hastings (Lord E. Percy) did the House a very great service in bringing back the mind of the House to the fact that the work of the Government is so to reorganise its finances, that it has a surplus either for the relief of taxation or for some other purpose. The quarrel I have with the Bill, and I think it is the same quarrel that the noble Lord has, is that it means a small increase in taxation. If I understood the noble Lord correctly, I think he is right in supposing that every small Bill of this kind which distracts the attention of the Government and of the House of Commons from the main guiding factor is really doing a disservice to the Government. I have always regarded the Minister of Health as sound financially, and I am shocked that he should be bringing in a Bill which increases the amount which the taxpayer has to find. He might have kept it on the old basis, not increased the amount, and when I look into the figures and remember that the right hon. Gentleman sits for an English constituency I am still more shocked. The bleeding of English constituencies by Scotland has been carried to a terrible excess in this respect.

Mr. KIRKWOOD

Oh!

Mr. WILLIAMS

The hon. Member for Dumbarton Burghs (Mr. Kirkwood) may dislike my exposition of this fact, but he must remember that he gets away with the cash, and I never knew a Scotsman who objected to walking away with English money. In this Bill the actual increase for Scotland is £100,000, and for England £350,000. The original basis for estimating the proportions of Scotland and England is, I believe, eleven-eightieths, and, although the formula which governs this Bill is slightly different, I am not aware of anything which lays it down that a Scotsman should have two additional pounds for every seven pounds which an Englishman is to get. 'Phe amount of additional money which is to go to Scotland is grossly over-estimated in this Bill. It is simply another instance of this Government, which is dominated by a Scotsman, bleeding the English authorities on every hand, and it is about time someone representing an English constituency, or a Welsh constituency if Welsh Members ever attend, protested strongly against the Government using an occasion of this kind to make a, far higher grant in proportion to the people over the Border. No attempt was made by the Parliamentary Secretary in his excellent and interesting speech to prove why this excess payment should be given to Scotland.

Mr. KI RKWOOD

But surely we are not getting too much?

Mr. WILLIAMS

If the hon. Member will read the Bill he will find these words: shall be respectively the sum of £5,350,000 and the sum of £850,000. If the hon. Member had listened to the excellent speech of the Parliamentary Secretary in moving the Second Reading, he would have heard that ale additional money which goes to Scotland is £100,000 and to England £350,000. The conscience of the hon. Member for Dumbarton Burghs may be moved. As a matter of fact, about £44,000 or £46,000 would be the right proportion for Scotland to get. As long as this kind of thing occurs in a Government Bill, I shall see whether it is possible to get it altered. I am not going to walk into the Lobby for a half-baked thing like the Amendment, but I am not going perpetually to vote for Government Bills which propose to take more money out of England and give to Scotland more than is her proper proportion. I do not like the way in which the Government have used this occasion for over-balancing the sum. After all, the Government were returned to cut down expenditure, and I do not suppose that any hon. Member in his election address mentioned the additional guarantees which are being given, or intimated that we were going to alter the whole balance in favour of Scotland. It would not have been popular.

Mr. KIRKWOOD

Ah, but it would.

Mr. WILLIAMS

It would have been. popular with the hon. Member, but I cannot always spend my time in being. popular with him. It is about time that someone representing England and Wales protested against the perpetual way in which we are being bled for our very worthy and highly esteemed Northern neighbour.

Mr. LOGAN

Will the hon. Member tell us the condition of his depressed area?

Mr. WILLIAMS

I certainly should not be in order in going into that matter, but we have a considerable amount of unemployment due to the fact that for some years we have been taking men from South Wales and other places and giving them employment. But I do not put it on that basis. I recognise the difficulties of depressed areas, of places like Liverpool, but it is not right that we should be continually asked by the Government to vote for Bills of this kind. They should have kept to the old formula, which would not have given the offence which this proposal has given to many hon. Members.

6.38 p.m.

Sir ROBERT ASKE

I must associate myself with those hon. Members who have expressed a strong sense of disappointment that in this Bill no substantial extra assistance is being given to depressed areas. We have been led to believe that something of a substantial character would be done in this Bill. Last July representatives of depressed areas, Members from all parties in the House, met the Minister of Health and laid before him the position of these areas.. As a result, the Minister indicated that he would institute an inquiry as to how the formula provided by the 1929 Act might be altered, particularly the weight in respect of unemployment, and we felt confident that as a result of that inquiry something of a more drastic character would have been done in this Bill, and particularly because since July the position of depressed areas has grown immeasurably worse. It was bad enough then when every one in a depressed area was being faced with an enormously increased expenditure, but since then the increase has been far beyond what anyone anticipated at the time when the Minister gave his promise. In Newcastle alone we are faced with an increased expenditure of over £70,000 in one year. That expenditure has somehow to be found, and the way it has been found, to a great extent, is by increases in the rates of the poorest of the people, thousands of whom are actually unemployed.

When one realises the fact that this increase of expenditure is largely due to the shifting of a burden which should have fallen on the shoulders of the Exchequer on to the depressed local authorities, one feels a sense of injustice at the present situation. This increased expenditure is due almost entirely to public assistance. Large numbers of people have gone off the receipt of standard benefit or transitional payment, either because they are no longer normally engaged in an insurable occupation, within the decision of the Umpires, or they have failed to qualify by holding the requisite number of stamps. Therefore, these depressed areas have to maintain an ever-increasing number of able-bodied unemployed and their dependants. That burden should fall on the shoulders of the State. Another direction in which expenditure has been increased is by the attitude of the Treasury, combined with the Minister of Health, in cutting down expenditure on local works. In these depressed times this has always been a source of great advantage, because it has enabled a large number of our people to be given some employment. This has been cut down, with the result that the Exchequer has saved money in this way, but it has simply fallen back on to the shoulders of the depressed areas.

It comes to this. The more depressed an area, because of the greater unemployment, the greater the burden on that locality. Areas which are least able to bear the burdens are having to bear the heaviest burdens. That is entirely illogical; and I want to put it to the Minister that the existing policy should be reversed. Depressed areas have a right to the utmost consideration from the Government. If the Minister of Health had seen his way to alter the weighting formula it would have been of great advantage to us. I should like to ask him whether he has given up all thought of altering the unemployment formula under the 1929 Act, and also whether we are to take it that he sees no hope for our local authorities, who will have to go on bearing the ever-increasing burden which is resting upon us at the present time? I must confess that I had hoped that the Government would have seen their way to adopt a bolder policy in this matter. The depressed areas throughout the country, so far as I can ascertain, feel that the attitude of the Government towards them is entirely unsympathetic. I hope that that is not the case. I trust that the Minister will try to give us some fresh hope when he comes to make his reply.

Mr. KIRKWOOD

I would not have entered this Debate at this moment had it not been for the hon. Member for Torquay (Mr. C. Williams) It is not usual for him to make personal attacks. He was not just personal this time, but he attacked Scotland, and it ill becomes him to attack Scotland in this fashion. The only explanation that I can give for it—I can scarcely credit that he would be so mean—is that Scotland, 'when things were going well with trade, sent hundreds of Scottish folk to Torquay for their holidays, but that now, because trade is bad in Scotland, the Scots people are no longer able to go to Torquay and to spend their hard-earned cash there. These are the thanks that we get to-day. I do not say that it is the attitude of the usual Englishman. It is the attitude of an Englishman who has run riot and does not know what is wrong with him; who is trying to find some way out of the difficulty and trying to show that Scotland is getting more than her share. On this occasion Scotland is getting just what is her usual share. There is a formula in all these things that Scotland is to get 11/80ths of any sum, and that is what we are getting now.

The hon. Member for Torquay and the Noble Lord the Member for Hastings (Lord E. Percy) represent two watering places that may be all right as health resorts, but for producing wealth and for producing men and women they are not to be compared with Scotland. Unemployment and the misfortune which have resulted from the conditions which prevail to-day, are hitting the industrial centres. They are conditions over which we have absolutely no control. It is not our fault that men are unemployed. It is not our fault that my country is a distressful country at the moment—more distressful than the South of England. Glasgow and the West of Scotland are more distressful than Hastings or Torquay. That is not the fault of the inhabitants of Western Scotland. We have rendered yeoman service not only to the Empire but to civilisation in general.

I speak particularly for the West of Scotland and for my own industry of shipbuilding and engineering. During the War we surrendered every privilege we had. We gave up all trade rights even against my advice, because I held at that time that those trade rights were ours to defend, not ours to surrender, But it was done, and the whole of the shipbuilding and engineering trade was transferred from peace work to war work. All our heavy industries to-day are shattered. Then when we come to consider what is to be done for them we get speeches like that of the hon. Member for Torquay. These are the thanks that the working-class constituencies get from aristocratic constituencies. It is not what the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) promised, and I am saying that in his presence. It is not what the right hon. Gentleman promised when he came to the Clyde, when he asked me to use my influence with these men, which I did at his behest because he said, "When the War is over you can take it from me, Kirkwood, that conditions will never be the same as they were before. We are going to make this a land fit for heroes to live in." There is the right hon. Gentleman and here is the land. What is it? A land in which only heroes can live. Now we are being twitted by individuals who are high and dry, who represent those who are not being hard hit.

Surely the Government Bill will yet reconsider the attitude of mind they have adopted, and not demand that all this poverty be borne locally when it should be borne nationally. As I said on the housing question, the Government are making the poor carry the poor. They are making the industrial centres that are heavily hit at the moment bear the burden locally instead of distributing that burden over the whole of the country. Take my own centres of Clydebank and Dumbarton. There you have an essentially working-class constituency. That is where the wealth is produced and everything is all right when they are all working. To-day over 60 per cent. are unemployed. They are right up against it. No finer type of men and women can be found in the world, and they are in poverty. They do not know what another day will bring forth. They gave of their best when they were working, when it was demanded of them; they made this great Empire possible, they played their part, and now they are unemployed. Dumbarton and Clydebank have to maintain the unemployed of Dumbarton and Clydebank, whereas just outside my constituency there are two middle-class townships, which are better off and which escape from the rates imposed on Clydebank and Dumbarton.

That sort of thing is going on all over the country, and it is most unfair. It is not statesmanship to act in such a way. It would be statesmanlike to take a broad view and to make this distress a national charge. The load has become so burdensome that local authorities are becoming bankrupt. Then along come the Government with this Bill to ease the situation, but the ease they give is so infinitesimal that it is a disgrace. Other generations will laugh at this great country and this powerful Government, this all-powerful Government. There never was a Government, not even that of the right hon. Member for Carnarvon Boroughs when he had the mob behind him during the War, which has had the same power. If the Government were in earnest, if their courage was as great as their capacity, all would be better than well. But the present Cabinet have not the courage to face the situation like men. They are always hoping for something to turn up, something round the corner. They say better days are in store. Spring is with us, and the voice of the turtle is heard in our land.

Mr. C. WILLIAMS

What is that?

Mr. KIRKWOOD

If the hon. Member would read his Bible he would know what the turtle is. It is not for me to expatiate on it. The hon. Member is supposed to be a learned Englishman according to the lecture that he gave the House a few minutes ago. Has he never heard of the turtle dove? [Laughter.] He that laughs last laughs longest. The people of the country are watching what the Government are doing to-day. If the Government think that they can continue in the willy-nilly fashion that they have adopted this year, they are mistaken. There never was such a "dud" House in all my experience—" dud," and nothing doing. This House is dull. Nobody makes an effort to get this country out of the Slough of Despond in which it is at this moment. In the midst of all that is going on, the Minister of Health comes with his Housing Bill, this little two-penny-halfpenny Bill. It is a standing disgrace to a man who claims, as the Minister of Health can do, that he has not only a national, but an international reputation as a financier. Why cannot we get the benefit of his services? I want to ask, in all sincerity, where is all the ingenuity of this Cabinet? Tell me what they have done to justify their existence? What has this Cabinet, including the right hon. Member for Derby (Mr. J. H. Thomas) done to justify the great trust the British electorate reposed in them when they sent them to this House? Was it to bring in a Bill such as this? Certainly not. They should be ashamed of themselves. It is all right for Members who are well-fed and well-clad, but it is quite a different thing when one goes to one's constituency. There is no smiling when you see men up against it just now—men who are starving. Poverty rampant in Britain!

Fear has got hold of the entire working class to-day in a manner such as never existed before. The Government think they can go on "kidding," doing nothing, and that folk will just allow them to meander. The Prime Minister said that to meander was a nicer phrase, and more classic language, than to say "pegging away." If they think they are going to keep the even tenour of their way in this fashion, they never made a bigger mistake. Not only in Scotland, not only in industrial areas, but all over the country, not only simple, ordinary members of the working classes, but the thinking section of the community are to-day getting heartily sick of the Government, and the manner in which they are handling this poverty problem. It is a problem which is engulfing millions of our people. I hope that when the Under-Secretary of State for Scotland makes his reply, he will be able to tell us that, so far as the Scottish Office is concerned—and this has never yet happened with regard to the Scottish Office—both he and his chief are going to keep harassing the Cabinet and that dead, cold individual called the Chancellor of the Exchequer, until they agree to give Scotland far more in the immediate future than they have conceded to us in the past.

7.5 p.m.

Mr. NEIL MACLEAN

Now that the hon. Member for Dumbarton Burghs (Mr. Kirkwood) has broken the ice on behalf of Scotland, it may be as well to have the Scottish part of this Debate grouped, rather than have speeches at intervals. I want to ask one or two questions of the Under-Secretary of State for Scotland. I thought Scotland was not to have any share in this Debate because there was no reference to Scotland, nor was there any appearance of a Scottish Minister on the Front Bench. Will the Under-Secretary tell the House exactly how much extra Scotland is going to receive in the next period of four years? I would like to ask him, further, whether there is any possibility, in the event of matters becoming worse in Scotland than they are at present—and they are bad enough—of Scotland receiving, in order to meet that worsened period, a higher contribution than that stated in the Bill—whether there is a possibility of the Secretary of State for Scotland, and his lieutenant, introducing a Bill to endeavour to obtain for us a higher contribution than we get in the Bill now before the House?

Another point to which I would like the Under-Secretary to reply is, how does he intend to allocate the sum mentioned in this Bill? It is mentioned here as a lump sum. I take it that he is going to allocate it to the various districts in Scotland. I know, of course, that it may be somewhat difficult at present for the Under-Secretary to give us definite details for all areas, since we have a different financial period from that obtaining in England. He might, however, give tie an approximate idea of how the distribution of this grant is going to effect the areas in Glasgow to which it has got to be given. I want to point out, for his consideration, when he is going over the areas in Scotland and finding out how much he is likely to allocate, that there are various districts in Scotland which are harder hit than other districts. There are districts of Scotland which might be looked upon in the same manner and from the same point of view, as the Member for Dumbarton Burghs looked upon Hastings and Torquay. There are industrial areas, and there are districts that have not felt the industrial blizzard which has struck this country and brought into being so many distressed areas in England, Wales and Scotland. I would like to know how the Under-Secretary intends to dispose of this sum when allocating it to the distressed areas in particular.

The hon. Member for Dumbarton Burghs mentioned the areas of the Clyde — Dumbarton, Glasgow, Renfrew, Greenock, Port Glasgow, and the Lanarkshire mining and steel areas. It stands on record, in spite of the laughter which sometimes is raised in this House when the Clyde is mentioned, that the reputation of the Clyde for work is second to none throughout the world. The ships which have been laundhed on the Clyde, and which have been designated "Clyde-built" have been held to be standards of efficiency on every sea throughout the world. A "Clyde-built" ship is considered to be synonymous with A.1 at Lloyds. A "Clyde-built" ship is looked upon as the highest standard of shipbuilding. From the first shipbuilding yard at Glasgow, right down to the lowest in Greenock, every shipbuilding yard has been struck by the depression in trade. The shipbuilding workers, of all trades, have a higher percentage of unemployment in the Clyde area than in any other part of the country. That unemployment has been going on for several years now, and even with the slight orders that have been coming their way during the past few months the diminution in the numbers of unemployed has not amounted to very much. Towns like Glasgow, Dumbarton, Clydebank, Greenock and Port Glasgow are affected severely by unemployment because, owing to the methods adopted by transitional committees and Ministry of Labour officials in putting people on to the local authorities for public assistance, practically the bulk of the unemployment in the Clyde area is being borne by the local authorities. The grant mentioned in the Bill is insufficient to meet the needs of the people in the adequate manner they should be met.

Even the allocation to those distressed areas that may be made by the Secretary of State for Scotland and the Under-Secretary, although they may be more generous to depressed areas than other areas, will not be sufficient to meet the needs, and higher rating will be required by the local authorities to give to the unemployed, who are not receiving unemployment pay or transitional benefits, assistance through the public assistance committee. If this Government in its Derating Act intended that local authorities should be relieved, out of grants and by various taxes as compensation for the loss of rates due to that Act, then, surely, these authorities have a right to expect from the Government a sufficient amount to be given by means of the present Bill to compensate them for the loss they have already suffered through the De-rating Act. Surely it is not too much to ask that this Government which passed the Derating Act, and can bring in any Measure it chooses and pass it through by the majority behind it, should render justice to those authorities which have been suffering loss in their revenue due to the large measure of unemployment.

It is not merely the shipyards which have not been rated. In every shipbuilding area throughout Lanarkshire, and in every one of the industrial towns, we see streets which were once thronged with people to do business in the shops. Now because there is no trade for them—because the workers and their wives have not the necessary money to buy the goods these shops formerly exposed for sale—the shops are closed, and there are no rates. There are no rates being taken from them or from the workshops, now closed, which housed trades ancillary to shipbuilding. I suggest to Members that the Bill, so far as Scotland is concerned, is not going to meet the situation. The amount mentioned in the Bill will certainly not meet the situation in Scotland. It is perhaps too much to ask the Under-Secretary for Scotland for a definite statement of the exact amount, but I want to know, and I am certain the people of Scotland want to know how we are to meet the poverty existing in our country, particularly in the industrial areas, with the small sum mentioned in this Bill.

I know that there is a formula—the Goschen formula. Some Members laughed when the hon. Member for Dumbarton Burghs spoke of the formula and the amount which Scotland is supposed to get out of Government grants in relation to the amounts received by England and Wales. It is an old formula which ought to be known to every Member of Parliament, and the fact that mention of it was received with laughter shows that some Members have yet something to learn about the workshop into which they have entered to perform the duty of law-making for the country. Even though the formula be 11/80ths, even though it be, according to one part of this Bill, 11 /90ths, it is not going to help if it is insufficient to provide starving people with food. These formulas ought to be dropped. These grants ought to be allocated having regard to the necessities of the areas concerned. Instead of saying to the different districts, "This is your share and that is your share," we ought to find out the amount of poverty existing in an area and give that area the proportion which is considered most likely to meet its situation and satisfy the needs of the starving people in that area.

That, to my mind, would be a statesmanlike approach to this question, rather than this distributive method of so much to one part of the country and so much to another based upon a formula made many years ago. I hope we shall have some explanation of the way in which it is proposed to deal with these matters in Scotland and, if we consider that the explanation of the Under-Secretary does not meet the situation, as we think it ought to be met, I hope we shall have opportunities in Committee of endeavouring to bring these matters a little more into line with what we consider ought to be done in Scotland under this Bill.

7.19 p.m.

The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Skelton)

My colleagues from Scotland will, I am sure, acquit me of any disrespect to our native country in not intervening earlier in this Debate but I was anxious to hear the speeches of the Scottish Members before I rose in order that I should be able to make as comprehensive reply as possible to the questions raised. My hon. Friend the Member for Govan (Mr. Maclean) suggested that I had not been in the House during the whole of this Debate but as a matter of fact I was here during the whole of his speech as well as during the speech of the hon. Member for Dumbarton Burghs (Mr. Kirkwood). The speech of the hon. Member for Dumbarton has fortunately made it unnecessary for me to engage into an international feud with my hon. Friend the Member for Torquay (Mr. C. Williams). I do not think I ever remember having heard a. Scotsman in this House stand up for himself and his country to better purpose than the hon. Member for Dumbarton and I leave my hon. Friend the Member for Torquay entirely to his tender mercies.

I proceed to deal with the questions very clearly and very rightly put by the hon. Member for Govan. First, with regard to the extra sum of money which is to be found for Scotland, that is £100,000, and that depends upon the amount which local government cost in Scotland during the year 1930–31. The hon. Member for Torquay drew attention to the fact that Scotland is taking proportionately a larger increase than England. That, of course, in turn depends upon the increased charges, broadly speaking, of local administration in Scotland in the past year and those charges are to a considerble extent due to the unemployment prevalent in Scotland. Let me take the opportunity of recalling the fact to which many Scottish Members in various contexts and in various Debates have drawn attention, namely, that our industries in Scotland are largely the heavy industries, such as coal, steel and shipbuilding. Those industries during the depression from 1921 onwards, have suffered most and suffered longest and are consequently the industries in connection with which the burden of the support of the unemployed is more and more falling on the local authorities. That is one of the main causes of the relatively greater increase of Scottish local administration compared with that of England in the relevant year and that is the broad reason why the money to be found for the second period is proportionately greater in Scotland than in England.

Mr. C. WILLIAMS

Is that an excuse for making the proportion as much as 2/7ths or 2/9ths?

Mr. SKELTON

It is not a question of excuse or want of excuse, but a question of following out the provisions of the 1929 Act which laid down the methods by which these grants are to be fixed in each succeeding period.

Mr. WILLIAMS

Is this an exact figure?

Mr. SKELTON

Within, £500. So much for the new money. The hon. Member for Govan asked me how, as between various local authorities, the grants would be allocated in 'a new period. I am sorry that I am not yet in a position to do so. The figures have not been worked out and I should be loth to give anything like experimental figures to the House on this topic. But I can give the hon. Member and the House this assurance, that before the first period of payment for local authorities come, and before the date when local authorities examine their financial situation and make up their budgets for the forthcoming year—generally speaking, in Scotland, about the month of July—they will have exact figures, or figures as exact as possible, of the grant which they will receive. I, myself, would like the House to be in early possession of those figures, and I will take the opportunity of telling the hon. Member for Govan, or some other hon. Member interested in the matter, the earliest possible moment at which a question addressed to us would elicit the definite reply for which he seeks.

Mr. MACLEAN

While we are on this point may I ask the hon. Gentleman about the depressed areas which are being heavily hit? Is there any method by which they can receive more generous treatment during the next period than they have received during the period which has just elapsed?

Mr. SKELTON

I am obliged to the hon. Member for recalling that point to my mind. The answer to the question as he puts it is "no." The grant is distributed in accordance with the formula with which we are all familiar and which was the subject of so much discussion in 1929. But I think I may safely say, without raising false hopes or giving false impressions, that, because one of the factors in the formula is unemployment and because unemployment has seriously increased in the shipbuilding and coal industries in many parts, since 1929 or 1930, the hon. Member and the House would be safe in saying that the seriously depressed districts will get to some extent an allocation which will deal with the problem in which they are vitally concerned. I cannot say more because there are other factors which may be at work in rural districts and which may to some extent counteract that.

Mr. MACLEAN

With regard to those large tracts of Scotland which the hon. Gentleman and I know, which are devoted to deer forests and the like, can we be assured that they shall not take away a larger proportion of the grant than is absolutely necessary for them having regard to the population which they have?

Mr. SKELTON

I follow what the hon. Member has in mind but I can only reiterate that the actual allocation depends on the working of the formula. I cannot say more than that, except that the fact that one of the vital factors in the formula is the amount of unemployment gives, I think, reasonable hope that those heavily-hit areas will in the new allocation have their misfortunes represented in a larger proportion of the grant.

Mr. WALLHEAD

Does that apply to England and Wales as well?

Mr. SKELTON

The hon. Member must put that question to my right hon. Friend the Minister. I am not going to be led into matters which are sacrosanct to him. The hon. Member for Govan seemed to be under the impression that in the allocation of Exchequer grants for the purposes of both England and Scotland the Goschen figure was taken.

Mr. MACLEAN

No, my point was that when the hon. Member for Dumbarton Burghs (Mr. Kirkwood) referred to the formula some hon. Members laughed. I wished to draw attention to the fact that that formula had been established long before any of us here had come to the House.

Mr. SKELTON

Then I need not pursue that subject further. I could not imagine that the hon. Member was suggesting that the Goschen formula dominated this matter. I regret that I am not able to give an estimate of the allocation of this grant with regard to Scotland but in the absence of detailed figures there is little more that I can say. I hope bon. Members will keep in mind that I am anxious that the House should be in possession of the allocation figures as soon as possible and I shall take the necessary steps to that end.

Mr. KIRKWOOD

Before the hon. Gentleman sits down, will he reply to the speech that I made?

Mr. SKELTON

I did, at the beginning of my remarks.

Mr. KIRKWOOD

I beg pardon, but I wish to ask whether the allocation which we have now got is simply according to the eleven-eightieths formula, or whether we are getting special consideration because of the terrible conditions of the heavy industries in our country.

Mr. SKELTON

The Exchequer grant given to Scotland, the origin of which is the 1929 Act, has no connection with the Goschen formula at all. It is based upon various factors, which I will not go into further than to say that, if I remember rightly, it is made up of three things. The first is the loss of rates owing to the de-rating scheme, the second is the loss of grant owing to the abandonment in 1929 of the fifty-fifty principle, and the third factor, with which we are vitally concerned, is the new money. With none of those three elements does the Goschen formula have anything to do, except in one very small matter with, regard to roads. The principle on which Exchequer contributions are brought to the assistance of local authorities is exactly the same in England and Scotland and depends on the main factors which I have described.

7.32 p.m.

Mr. CURRY

The Bill is somewhat of a disappointment to me. Like the hon. Member for East Newcastle (Sir R. Aske), I remember distinctly discussions in this House last summer with the Minister of Health with regard to the condition of the depressed areas, and we were led to believe that an inquiry would be set up with a view to ascertaining if it were not possible to give some extra weight to the factor for unemployment in this formula. If that extra weight is not given in this Bill, I do not see how we are going to get relief for the depressed areas during the second grant period. That is a very serious and important matter for the distressed areas, because the condition is even worse now than it was last summer, and it is going to get worse as the weeks go by. The cost of our poor rates is increasing from various factors, but mainly from the factor that unemployed insured men and women are being passed out of the scheme through the "not normally insured" section, with the result that you have an increasing burden of poor rates in those areas. Because we were led to hope that this relief would be given, the Bill which is now before us becomes an even greater disappointment.

In the county of Durham, from which I come, the rates have increased by tad in the pound, and we have had during the last three months a lowering of the average of transitional payments through the administration of the Commissioners. We have in the county of Durham this dual operation of a depression of the people's income and an increase of the burden of rates. That burden of rates is very largely recovered through the increase of rents, through adding to the rents the proportion of the increased rates. We in these districts cannot contemplate the immediate future without serious misgivings, and I would implore the Minister to give us some hope as to the method by which the distressed areas are going to be given the relief, not for which we are asking, but without which we cannot go on and lead our normal lives. We are not here pleading for the sake of pleading.

The hon. Member for Torquay (Mr. C. Williams)—I am sorry he is not in his place at the moment—talked about the injustice of Scotland getting more than England. I think, if he went into the figures in detail, he would find that the North of England is getting the same proportion, compared with the South, as Scotland is compared with England, but that is merely an indication of the increased poverty in the North of England and Scotland as compared with the South of England. I implore hon. Members representing constituencies in the South and South Eastern parts of England to come up into these depressed areas. I could take them through my constituency, through villages that are nearly towns, wherein they would find whole populations who have been out of work, not months, but years. I could take them into what were once prosperous towns, where the shopkeepers and business men would tell them that their turn-over is going down week by week, because the out-relief and the transitional payments are being reduced on account of the situation.

I want to make a serious appeal to the Government, not to go on with this Bill as if it were an automatic piece of machinery, but to tell us quite distinctly in what way, if not through this Bill, they hope in the immediate future to give us some relief. Particularly would I like to ask whoever is going to reply to tell us what amount of block grant the county of Durham is going to get in the second grant period, and how that compares with the grant which we have received in the past. My final word is that I want to impress upon hon. Members in the more prosperous parts of England to believe that those of us who represent depressed areas, and in many cases people amongst whom we have lived our lives and for whom we have a great regard, do not wish to be regarded as appealing for them out of sentiment, but to believe that we carry before our mental vision—and I think this is true of every representative of a depressed area, to whatever party he belongs—the picture of a mass population which is going down and down in its standard of life and which has no immediate hope, other than the hope of some relief through the adjustment of the formula which was started in 1929, when no man could foresee the terrible depression through which we are now passing.

7.39 p.m.

Mr. E. WILLIAMS

I was very interested in the speech of the Noble Lord the Member for Hastings (Lord E. Percy). If I interpreted his remarks correctly, he said that we had reached a stage at which we could not possibly find any further help from the Income Tax payers for the distressed areas.

Lord E. PERCY

indicated dissent.

Mr. WILLIAMS

Well, I want the Noble Lord to appreciate that the means of rectifying these things are at hand, and that it is easily possible to produce a greater capital accumulation, for, after all, increased taxation and increased rates throughout the whole country are attributable to unemployment. I think the speech delivered by the hon. Member for Aberavon (Mr. Cove) last week, on a private Member's Motion, conclusively proved—it certainly has not yet been answered in this House—that increased taxation is attributable to unemployment, and not as hon. Members opposite would have us believe.

We heard a very interesting speech from the hon. Member for South Croydon (Mr. H. Williams), who certainly has an old grey mare, and one appreciates that apparently it is his job to trot this old grey mare before the House every time he rises to speak. It is that all local authorities are in their present plight owing to extravagance. If he had been in the House, he would have heard an effective reply from the hon. Member for the West Derby division of Liverpool (Sir J. Sandeman Allen), one of his own colleagues, who reprimanded him pretty severely when he said that the hon. Member could not possibly have appreciated the position in Liverpool and other distressed areas, otherwise he would never have made such a statement.

I welcome the stress that has been laid in this Debate upon the importance of the Minister doing something of a very radical nature in order to help the grave situation with which we are faced in the distressed areas. South Wales is the worst. Glamorgan, for Poor Law purposes alone—and I wonder whether it is possible for hon. and right hon. Members fully to appreciate what this figure means —is faced with a rate of 8s. 1d. in the pound. For 1933–4 the estimate has increased by £43,750. That is the position in the county of Glamorgan. I shall leave a part of the geographical county to my hon. Friend the Member for Merthyr Tydvil (Mr. Wallhead), who will be able to stress the alarming position with which that portion of the geographical county is faced. I am speaking of the administrative county when I refer to the figure of 8s. 1d. In the neighbouring county we are faced with a figure of 6s. 8d. in the pound, while you have the figures adduced by my hon. Friend the Member for Spennymoor (Mr. Batey) indicating that the rate for Poor Law purposes in Blackpool—and, I suppose, for the constituency represented by the Noble Lord opposite, although I do not know what the exact figure is—is somewhere about ninepence, and there are many of the larger towns in the South of England where, for Poor Law purposes, the rate is not more than about 1s. in the pound.

In addition to that the determinations per head are dead set against the distressed areas. Last year we had a full-dress Debate in which Members of all parties representing distressed areas explained the position with which they were faced. Figures were placed before the House showing the amount of rates in the pound paid by most of the towns and cities of the South of England. They ranged from as low as 8d. to 1s.11d., while Durham was 7s. 6d., Monmouthshire 6s. 8d. and Glamorganshire 8s. 1¾d. These enormous burdens are carried in areas which for more than 50 years have been mainly responsible for producing the wealth enjoyed by people who are living in the South of England and in residential areas. It is difficult for me to appreciate how any Member can possibly object to the spreading of that burden over a whole nation. I try to examine the remarks that are made from time to time by Members representing the more prosperous areas, and I am sure that, if they were representing constituencies such as my constituency in the centre of Glamorganshire, they would be very fluent in their advocacy of throwing this burden off their shoulders on to the rest of the nation.

Lord E. PERCY

If the hon. Gentleman is addressing his remarks to me, may I tell him that the whole point of my speech was that by distributing such a vast sum of money on a general grant formula you dissipate resources which you need, to give special help, for instance, to depressed areas.

Mr. WILLIAMS

I am obliged to the Noble Lord for that correction. I was not, however, addressing my remarks to him in particular, but to the observations we have had from time to time from hon. Members representing areas which are not faced with these heavy burdens. I should like to emphasise what I have said about South Wales by giving a few figures. During the 1926 stoppage in South Wales and prior to the Local Government Act of 1929, large sums of money were borrowed in order to feed the population. They are designated as coming within the category of the Goschen loans. In Glamorgan we are faced with a debt burden arising from the old Poor Law unions that were then in existence, which have now come under the purview of the Glamorgan Public Assistance Committee, of £1,701,000. It is to the credit of the Ministry that we pay no interest, but we have to repay that debt over 15 years at the rate of more than £35,000 a year. During the last fortnight my colleagues took a deputation from the Glamorgan County Council to the Minister's Department to ascertain whether it would be possible to be relieved of that burden. I know that the Minister will reply that it is conditional upon an Act of Parliament, but surely, when a county is faced with such heavy burdens, and those burdens are becoming greater each year, most hon. Members will agree that such a distressed area should be relieved, and the Minister, I think, could easily obtain powers to help Glamorgan to be relieved of that annual payment.

It is expected of Glamorgan, of course, that that amount should be repaid, but it is practically impossible to contemplate that the people who borrowed the money can ever hope to repay it. From £15,000 to £16,000 was collected last year. Collectors are engaged and sometimes money is deducted from the colliery office and handed to the collectors, but the amount is so infinitesimal that the county cannot hope to repay from collections alone the enormous amount that was borrowed It is certainly unfair to the county itself in that the very badly distressed areas within the county owe more than £250,000 of that substantial figure, while other parts of the county where distress was less have managed to pay the whole of the Goschen loans that they had borrowed. In 1929, when the administration of Poor Law relief was placed upon the county council, a portion of Merthyr Tydvil came within the administrative area of the county, and the other portions of the county that had actually paid the Goschen loans are again faced with the problem of having to pay part of the loan of Merthyr Tydvil and such like towns which they were owing prior to their absorption. The county of Glamorgan is doing what we should like the whole nation to do. It is carrying on its back the heavily distressed areas such as Merthyr Tydvil which were obliged to borrow prior to 1929 owing to the very adverse economic conditions with which they were faced.

The Ministry in this regard is as mean as it can possibly be. Why it should do what it has done, that is, merely carry out the minimum in accordance with the Statute, realising, as it must, the terrible plight of the distressed areas, passes my comprehension. It was impossible for this House to have fully appreciated prior to 1929 the terrible economic consequences of international and national depression that have expressed themselves so virulently in South Wales. Surely the time has come when the formula should be revised. I have a document that has been sent to my colleagues and myself by the clerk of Glamorgan County Council. He says that the produce of a penny rate in Glamorgan is now £10,000. Prior to 1929 it was £15,000. The estimated public assistance gross expenditure for the year ended 31st March, 1932, was £1,020,790, and for the year ended 31st March, 1933, £1,053,145, or a rate of 8s. 8d., against 8s. 5d. For 1933–34, the estimate is £43,730 above the current year for out-relief only, and in the absence of easement this means a further increased rate of 4½d. for the current year. We have an increased estimated education rate of 3d., and an increased public health rate of ld. Consequently, we are faced with an increased rate of 8½he average public assistance rate for Wales is 4s. 8d. Glamorgan has the highest county public assistance rate in England and Wales at 8s. 1.

The clerk to the county council states that the incidence of destitution in Monmouthshire and Glamorganshire is the same, whether helped through unemployment insurance benefit or public assistance. He adds: Glamorgan's position is a reflection of the greater weight of destitution to be borne—due to failure of formula to take into account the effects of economic collapse, coupled with the disproportionate effect of de-rating on these collapsed revenue-producing sources. The formula visualises a universally proportionately equal effect from the same causes. But the effect of the economic collapse in Glamorgan, which operated before 1929, but which did not come into rate-able calculation until after that date, had required a loosening of the bonds of administration of public assistance as far back as 1922. There is a difference in kind created. It is impossible to treat with derelict and bankrupt areas as with areas which have even small resources. A vicious circle of destitution, needing higher relief costs, which enforces higher rates, which in turn raises the destitution level, has been going on since 1922. One could elaborate that at length. I quote it because it is from the chief administrator of the county, and it certainly should have much weight with the Minister and with the House. We have received a letter from the insurance committee for the county of Glamorgan, which has passed the following resolution: That this committee view with great concern the effect of the National Health Insurance Act, 1932, upon the provision of medical and sickness benefit to unemployed insured persons and implore the Government to make' provision whereby health insured and pension rights will not be forfeited owing to inability to continue contributions through unemployment. No doubt hon. Members have seen in the Press to-day that the chairman of the Approved Societies has made a computation which shows that this year more than 80,000 persons will be affected by last year's Act. It can be appreciated how that will hit us in Glamorgan, for we have 174,000 persons totally idle; 58 per cent. of that number are on transitional payments. Those figures apply only to the county and not to the boroughs. Hon. Members will appreciate what that resolution means in those circumstances.

Really the House cannot be quiescent about this matter, but must realise its grave responsibilities. It cannot be said that the South Wales coal trade has been affected by anything done in the South Wales area. In the policies which have been advocated in this House, whether tariffs, the question of the Gold Standard, or the currency question, all that has been said has had a bearing on the coal trade, and particularly on the export coal trade, and in South Wales practically 60 per cent. of the coal produced is, normally, exported. Collieries have been going into liquidation at an ever-increasing rate year by year. A colleague has told us of the large number of colliery concerns rendered idle in his constituency, and it is precisely the same in my constituency. Is it not possible for the Minister instead of fixing this grant period at four years, to arrange to analyse the question annually? Then it would come before the House each year, and we could explain the position in our particular areas. The whole of South Wales is speedily becoming derelict. Shutters are on the business premises, more than half the grocers' shops in our valleys are closed, and, being closed, are paying no rates. With the collieries which are going into liquidation and those on short time, the coal output is becoming almost infinitesimal. With so little employment, with the unemployed getting only 15s. 3d. and with the application of the means test, we are faced with almost absolute penury in our mining valleys. I appeal to the Minister and the supporters of the Government to give heed to the position with which the distressed areas are confronted. The time has come for us to put aside academics and rhetoric and realise that we are fighting for our lives in an existence which is becoming almost intolerable.

8.4 p.m.

Mr. McKEAG

I want to add mine to those voices from all parts of the House which have supported the demand that additional assistance should be given to the depressed areas, and that the growing and intolerable burden of rates caused by unemployment should become more of a national charge rather than be left to be borne by the hard-pressed areas. The Parliamentary Secretary, in introducing this Bill, spoke of it in almost eulogistic terms. He explained the marvellous generosity of the Government in increasing the grants to the extent of £350,000. I find it, difficult to understand his conception of generosity. To what extent will this additional sum relieve the distresesd areas? The hon. Member for Dumbarton Burghs (Mr. Kirkwood) referred to this Bill as a. two-penny-halfpenny effort, and with that view I find myself in hearty accord. This Bill is a very poor response to the representations made by Members representing the depressed areas over a period of 18 months. Last year we were promised by the right hon. Gentleman the Minister of Health that some assist- ance would be given by means of some alteration in the system of calculating block grants.

Sir H. YOUNG

May I ask the hon. Member to refer me to the words of the promise of which he is speaking?

Mr. McKEAG

In any case it is quite clear that the assistance which is being given is entirely insufficient for hard-pressed areas such as Durham County, and we are entitled to ask when the State will really come—and when I say "really" I mean in the true sense—to the rescue of 'these hard-pressed industrial areas. Durham County, like other industrial districts, has borne the stress and storm of trade depression in its most acute form for many years. Industries are crippled by high rates and poverty is rampant. Some time ago the Minister of Health chose to characterise as an exaggeration the picture which I was then endeavouring to paint of the terrible plight of Durham County. I wonder whether he still thinks it was an exaggeration? Our Debates on the means test and on unemployment should have removed any lingering doubt which may have been in his mind as to the difficulties of those areas. So much has been said during recent weeks about their hardships and difficulties that it is unnecessary for me to take up time by recalling them. The right hon. Gentleman cannot any longer plead ignorance of their plight.

What are the Government doing to assist? Only a few days ago I called the attention of the right hon. Gentleman, by means of a question, to the fact that the charge on the rates for public assistance in Durham County was estimated to amount to no less than £1,312,815 for 1933, an increase of £100,000 in the last 12 months and £400,000 in the last three years. After pointing this out to him I asked what steps it was proposed to take to relieve this burden falling on the local ratepayers. I was politely referred to an answer which had been given to the hon. Member for Carnarvonshire (Major Owen) on the 28th February. I looked up that question and answer and found that the hon. Member for Carnarvonshire had asked the right hon. Gentleman if he would state what proposals the Government had in contemplation for relieving the increasing burden imposed upon local authorities due to additional demands for public assistance. The answer which was vouchsafed to him was that nothing could be added to the statement made by the right hon. Gentleman in the course of the Debate on the Financial Resolution introduced for the purposes of the Local Government (General Exchequer Contribution) Bill. The hon. Member for Carnarvonshire persisted in his point, however, and drew attention to the rate increases in his district, and he was then informed by the Parliamentary Secretary that these increases were being considered by the Government in connection with the whole survey of the question. What indication is there in this Bill that the Government intend to come to the aid of these districts in any real sense? Are we to go back to our people and say that there is no hope of the Government doing anything? Perhaps we may have a real answer to that question to-night. In any case I hope the Government will not fob us off once more as we have been fobbed off time and time again in the past.

8.12 p.m.

Mr. GREENWOOD

The Minister of Health is again, unfortunately for him, on the rack. He travels down the valley of desolation day by day. I do not remember since the War a Minister who has had a more unfortunate experience. So far as I can recollect, up to now he has as Minister of Health contributed nothing to the welfare of his countrymen. In his Health Insurance Bill he deprived them of things, in his Housing Bill he has butchered the housing programmes of the country, and in this Bill there is nothing whatever to his credit. We have had from him and from the Parliamentary Secretary promises. The truth is that the authentic voice of the majority of this House is that of the hon. Member for South Croydon (Mr. H. Williams). He believes in private enterprise. He honestly thinks, in spite of the undoubted influence he has had on this Government, that there is no impulse to economy from the Government. He talked of the social services as trimmings, and when challenged as to what the trimmings were he rode off from the point, but there, behind the Treasury Bench, are the forces which believe that economy is the only way to save the country.

Mr. PIKE

In the absence of the hon. Member for South Croydon (Mr. H. Williams) I think it is fair to say that he did not ride off when challenged on the question of trimmings. I am in the recollection of the House. He said that many economies in the administration of local affairs could be effected.

Mr. GREENWOOD

It is not within my recollection or that of my hon. Friends. When challenged for particulars he failed to give them. The right hon. Gentleman, having been driven into the position of practising economy, partly by election policies and partly by pressure from his back benchers, waves the olive branch of promises. He has been making promises ever since he took office. Yesterday he was making promises about the slums. The Parliamentary Secretary today wound up his speech by promises about the depressed areas. He told us that what he was saying was without prejudice to what the Government might do about depressed areas. Jam yesterday, jam to-morrow, never jam to-day. We are told that certain things cannot be considered until the Government have finished their deliberations on the Report of the Royal Commission on Unemployment Insurance. A great promise, there, that something may ultimately eventuate. I consider that the Minister is in a more unfortunate position to-day than he has been in before. As the Parliamentary Secretary said, this Bill is routine machinery. The hon. Gentleman who preceded me, corroborating what was said by my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood), said that this is a two-penny-halfpenny Bill. It is not even a two-penny-halfpenny Bill. What it will add to the resources of local authorities will certainly not work out at anything like 2½. per head of the ratepayers in England and Wales, without including Scotland.

The first argument which was used by the Parliamentary Secretary in opening the Debate was that it was very difficult, in these straitened financial circumstances, to defend an increase in expenditure. Let it be clear that the Government in this Bill are not adding anything that they could have avoided adding. In a sense it is true that the Bill is routine machinery. No credit is due to the Government from the fact that it is to increase the grant to local autho- rities by £350,000 per year. That was not settled by the Government. The Parliamentary Secretary speaks as though there were some credit due to the Government in carrying out the law. The Government said: "We could not give less than this." Of course, they could not; the law does not permit them to do so. They have done just what the law requires. They have carried out the letter of the law; the pound of flesh exactly, neither more nor less. The fact that they have not given any less is because they could not do it. They have given just what they were bound to give under existing legislation.

Mr. PIKE

They could have run away.

Mr. GREENWOOD

One of the chief characteristics of hon. Members opposite is their irrelevancy. The £350,000 is almost exactly what the formula invented by the right hon. Gentleman the present Chancellor of the Exchequer required. The Parliamentary Secretary says that it is difficult in these times to increase that minimum amount. It has been said from these benches to-day that it has been found possible to increase the expenditure on the Fighting Services for the coming financial year, but the vital social services are to have the minimum which the law demands. The Parliamentary Secretary bolsters up his case by saying that the arrangement in 1929 was generous. That was his word. The £5,000,000 per year as an addition, in order to meet the expanding social services, was generous. Let me remind him that the party to which he then belonged did not agree with him. It is within the recollection of many hon. Members that the party to which I belong, and the Liberal party, profoundly disagreed with the view that £5,000,000 was adequate.

Mr. CAMPBELL

That is what landed us in the cart.

Mr. GREENWOOD

What an Empire, that can be landed in the cart because of £5,000,000. I will give way to the hon. Member if he wishes to intervene.

Mr. CAMPBELL

I meant to stand up. There were many other extravagances which caused the debacle of a year ago.

HON. MEMBERS

Rub it in.

Mr. LANSBURY

Rubbish.

Mr. GREENWOOD

It was usual to believe, up to August, 1931, that the increasing economic difficulties of the world were due to the Labour Government, but I thought that the hon. Member for Bromley (Mr. Campbell) was now a loyal Member of the National Government, and that since August, 1931, those difficulties have been due to a world crisis. I am so sorry that he is now being disloyal to the speeches that have been made from his own Front Bench. Let me return to the £5,000,000 that is supposed to have broken the Empire. That was generous. We said then that it was not. The Parliamentary Secretary says that the £350,000 at issue is generous, because of the plight in which we are placed. As I have said, the Government would not have given this money if they could have helped it. They have given it because the law says that they must. How generous is it? This point, to which I got no reply when the Money Resolution was in Committee, is one of tremendous importance. Year by year the social services have expanded. When the Local Government Act of 1929 was introduced, it was contemplated that this £5,000,000 would be reconsidered every five years, but hon. Members who now sit on that side of the House were very uncomfortable about that new expenditure, and the present Chancellor of the Exchequer, who was then Minister of Health, said: "We will have a trial trip of three years, then we will have one of four years, and then we will come to the quinquennial basis." The formula on which the increase of grant is to be based was set out on the assumption that the fixed-grant period was for five years. During the first fixed-grant period of three years, the first and the last years on which the present addition to the £5,000,000 was based, were consecutive years. The first year was 1930–1931, when the rate and grant-borne expenditure was £188,000,000. The second year, the last year but one ending the fixed-grant period, was the immediately-following year, when the rate and grant-borne expenditure was £189,500,000. Suppose there had been a five-year period and that we are at the end of the five years; that £189,500,000 would be several millions more, because of the normal growth of the social services.

I say now what I said in 1929, that the three-year period is a swindle on local authorities, and, as regards the next four years, since the calculation is based upon two consecutive years instead of there being a. period of three years between them, the increase in the rate and grant-borne expenditure will be much smaller. Therefore, the £350,000, instead of being generous, is far less than it ought to be. I hope that we shall have some reply to the argument—this is the second time I have put it during these discussions— that the £350,000 is inadequate because the whole principle of the Bill has not yet been brought into play. For the first three experimental years we did not have an opportunity of getting that development over the three-year period between the first and the fourth year of the quinquennial period of the social services.

The Parliamentary Secretary spoke about the unemployment factor, and we have had one or two speeches about the famous formula. I strongly suspect that neither the Parliamentary Secretary nor the Under-Secretary of State for Scotland understands the formula, but they have made play with the fact that the unemployment factor will operate in a way to assist some of the most distressed areas. The Parliamentary Secretary said that, of this increase of £350,000 per year for the next four years, £145,000, or nearly one-half, will go to three counties and 20 county boroughs where unemployment is most severe. I did not raise the question of the unemployment factor, but I should like some kind of reply as regards the unemployment situation as it now exists.

I will quote some figures. I dislike quoting figures in the House, but these are figures which ought to be burnt into the minds of hon. Gentlemen opposite. Take the town of Barnsley. Between the end of September, 1931, when the National Government had been in office about a month, and the end of last year, in the county borough of Barnsley the number of people in receipt of Poor Law relief had more than doubled. In the city of Lincoln—an entirely different town—at the end of the same 15 months the number of people on poor relief was two and a-half times higher than it was at the beginning of that period. In the town of Lincoln one-seventh of the whole population was on poor relief. In the city of Liverpool, one-tenth of the popu- lation was on poor relief; in the 15 months from September, 1931, to the end of last year, there was an increase of 50 per cent. in the number of people on poor relief, sustained entirely out of local funds. Manchester showed an increase of 50 per cent.; in the city of Norwich the figure was nearly double, and in the city of Sheffield more than double. One-ninth of the population of one of the greatest cities in the country were on poor relief. In Cardiff, the increase in 15 months in the number of people on poor relief was two and a-half times, and, again, one in 10 of the population was on poor relief.

These towns have heavy unemployment. In Barnsley, one out of every three insured persons is out of work. In Birkenhead, nearly half the insured population are out of work. In Sheffield, one-third of the insured population are unemployed, and in Cardiff the figure is the same, while in Merthyr Tydvil two-thirds of the insured population are out of work. This sum of £350,000 per year more is regarded as generous, but it does not nearly meet the additional burden cast upon local authorities by the policy of the right hon. Gentleman. In the county of Durham, during the last 12 months, there has been an increase of £100,000 in the expenditure on poor relief. That swallows up nearly a third of the £350,000. In the West Riding of Yorkshire, the county council has had to submit revised estimates amounting to nearly £100,000 for poor relief— another third gone out of the £350,000. In the case of Liverpool, which was quoted by my hon. Friend, the estimates for public assistance during the coming year, when this new formula will begin to operate and when this enormous sum of £350,000 is to be distributed, is over £1,500,000—an increase during the coming year of 1s. 4d. in the pound. The amount which Liverpool estimates it will need in the coming year is nearly £393,000 more, and yet £350,000 is to be provided for the whole of Great Britain. I could continue quoting town after town.

If these sums are added together, the new burden falling on local authorities because of economic circumstances and because of the niggardly policy of the Government outstrips by hundreds of thousands of pounds the amount that is now going to the local authorities to assist them out of their difficulty. The London County Council—which is not a county council whose opinions I share— has made its budget for the next financial year. Two-thirds of all the money that it raises will go to public assistance, and not one penny of that comes from the Government. I claim that, because of the situation, because of the difficulties of local authorities, which are more hard-pressed even than the Imperial Exchequer in this matter, the giving of the bare minimum allowed by the Act of 1929 is utterly inadequate.

I turn to a further point. The Parliamentary Secretary referred to de-rating, and he chaffed me by saying that I had ample opportunity to alter it. I reminded him that he has a bigger majority behind him than I had. I might have reminded him that I had a good many other things to do as well. It is no argument to say to a Member of a minority Government, faced with problems of housing and town planning and pensions, that he did not deal with this. Why? Because under the Act of 1929 it was possible, without dealing with the matter of de-rating, under the formula that is now being discussed, to have given far more than the formula prescribed as a minimum. There is no reason whatever why it should have been £350,000. We should have been able, had the House agreed, to be a little more generous to local authorities, especially in view of the plight in which they find themselves at the present time.

The Parliamentary Secretary made a point about sticking to a bargain. He said that we must stick to the bargain. Of course, we must stick to the bargain. My case against the Government is that they have only just done it. There is not any margin. They have just stuck to the bargain. When the Parliementary Secretary goes on to say there is no feeling in the country among local authorities to go back to the days before the 1929 Act, let me assure him that he is entirely mistaken. He ought to have seen, and the Minister must have seen, a document which the Non-county Boroughs Association have sent him, and to which I understand they have had no reply. It proves conclusively, with facts and figures, that the operation of the 1929 Act is thoroughly unjust, has created enormous anomalies, has not done anything whatever to bring about a equalisation of rate burdens, but has accentuated the difficulties of local authorities, very largely because of the question of roads.

The Parliamentary Secretary did not say anything about roads, but, in addition to this £5,000,000 for what is regarded as the expansion of the social services, a sum was set aside in the 1929 Act for roads. That sum, based on arithmetical calculations, was fixed 'at £3,000,000. There is no formula here. That £3,000,000 could be increased if the Minister, with the approval of the Treasury, cared to do so. It is still to operate for the next four years, notwithstanding the fact that in the last four years local authorities have been driven to neglect the maintenance of roads, apart, of course, from the general road programme of development, with the result that in certain counties and in certain non-county boroughs the toll for highway rates is higher than that for the maintenance of the poor. In the case of Durham public assistance accounts for 7s. in the pound. In the case of Huntingdon, maintenance of roads amounts to 12s. 6d. in the pound. The effect of all this, as the Non-county Boroughs Association points out, is to impose increasing hardships on local authorities.

It is no use the Parliamentary Secretary saying that local authorities love the operation of the 1929 Act. They do not. For the second time I have to give the Minister credit for having succeeded in stupefying the local authorities. First, he drove them to hysteria, so that they rushed into economies. Now he has succeeded in stupefying them, and, if they are not making the progress that they ought to do, it is not because they have any love for him or his friends, but because they have been completely demoralised by the policy of the Government. I assume, though argument would not lead me to believe that it should be so, that the Government will get the Second Reading of this Bill. It is a Bill of the meanest possible kind. It holds out no hope to local authorities, who are going through a time of difficulty as great as that of the Government. It does nothing at all for them, indeed it stabilises their impecuniosity and their difficulties for four more years, all based on a false formula, and at the end of four years, as things are now, under the operation of the Bill we shall find that, because of the formula, the local services of the country have been seriously discouraged.

There is this final point. It is true that one cannot argue de-rating in detail tonight, but one effect of the De-rating Act has been to throw the whole burden of expansion of the social services on to the householder, the shopkeeper and the professional man. We have had again a speech about these derating provisions having been made for all time. That is true, but the point that the House has to consider is that, having deprived local authorities of a very large proportion of their means of revenue, that expansion falls upon those who pay the rates, and that now, when social services are being discouraged, when local authorities are in increasing difficulties because of economic circumstanes, when they are having trebled burdens cast on their shoulders deliberately by the Government, when they are having to face half their revenue going to the maintenance of the poor, if they are to keep their social services during the next four years they can only do it by increasing the burden upon the ordinary householder, the shopkeeper and the struggling professional man.

The Bill is wrong. The Noble Lord complains, as he did on the Financial Resolution, that it has been introduced before the Budget. The Minister would not have introduced it at all if he could have helped it. He had to do it before 31st March. He had to make legislative provision before the end of March, not because he wanted to do so, but because the present Chancellor of the Exchequer legislated in 1929. I agree with the Noble Lord that this is a problem that has to be considered in relation to the financial resources of the nation. He and I might not agree as to what the financial resources are, but this Bill has nothing whatever to do with the financial resources of the nation. It is, in the immortal words of the Parliamentary Secretary, a routine, machinery Bill, a Bill without a heart, a Bill without a soul, a Bill that gives no hope whatever to local authorities, a Bill that gives the least that it must give under the law of the land, and a Bill which will give, not merely to the old distressed areas but to those which are becoming distressed, no hope for the future. It will get its Second Reading. Unfortunately, I cannot help that. If I could prevent it I would. I am sorry, not because of any defeat of my hon. Friends in the House, but because of the discouragement that it will bring to struggling areas and because of the increasing burdens falling on their backs. They did at least hope, having rallied to the national cause 18 months ago, that the National Government would do something to assist them in their difficulties. There is no hope for them now apart from a change of Government.

8.44 p.m.

Sir H. YOUNG

The right hon. Gentleman began with some words which in intention were hard. It would be waste of time for me to reply in kind, because I believe him to be quite impregnable in the armour of his own self esteem. He seems to have erected an idol of his own imagination—the idol of his own tenure of office. He sits and worships in a temple of his imagination. We do not grudge him the innocent amusement, because in that temple he is the only worshipper. Let me test some of the logic and accuracy of the observations of the right hon. Gentleman because in the greater part of his speech he made use of an extremely familiar device. He described all the well-known and acknowledged evils of the country, and he said that the remedy was not to be found in the Bill. Nobody ever suggested that the remedy was to be found in the Bill. It is not a part of the mental make-up of the party of which I have the honour to be a member or of the Government to which I have the honour to belong to try and delude the country into believing that the remedy for all those evils can be found in a single Bill. The Bill is devoted to a minor and specific purpose. The very rhetorical effort on the part of the right hon. Gentleman was most misleading in the effect it might have upon the House, and it is an effect which I should like to try to remove. He was constantly referring in derision to the circumstance of the Government's making provision for only £350,000 for the distressed areas. Did he, in the vulgar phrase, expect to get away With that? He could only do so with someone who had not read the Bill and was quite unacquainted with the legislation within its province. The amount which will be distributed subject to the unemployment factor is £15,000,000, and the total amount which has been voted is over £44,000,000.

Mr. GREENWOOD

New money?

Sir H. YOUNG

The new money is £5,350,000.

Mr. GREENWOOD

No, the new money is £350,000.

Sir H. YOUNG

The right hon. Gentleman, in talking about new money, has forgotten what passed when he was administering the Measure.

Mr. GREENWOOD

The new money under the 1929 Act was £5,000,000 per year for the first three years. It is now to be £5,350,000 for another four years, an increase of £350,000. That is all that I have said.

Sir H. YOUNG

I am glad that I have induced the right hon. Gentleman to spring the amount up to £5,000,000, and if he gets upon his legs again I may be able to get him up to a completely accurate amount. I should like to refer to the argument of the right hon. Gentleman more in detail and clear it away, but I think that it is rather an example of the slow vision which I have observed at times in his observation. He protests that justice is not done in the recalculation of new money because of the shortness of the grant period and because 1930–31 and 1931–32 are only one year apart owing to the fact that the first grant period was only three years. If anyone makes a mistake in logic he is sure to be found out. The first mistake is that the sooner the recalculation takes place the sooner the distressed areas will benefit by an increase in the grant. Let me deal with the mistake in fact. The right hon. Gentleman has not informed himself—possibly he had not the means of informing himself of the fact—that the expenditure of local authorities is not increasing. If he were to wait any longer there is no reason to suppose that there would be any increase in the amount of this new money. Such are some of the errors, large and small, which, in logic and in fact, I detected during my careful attention to the observations of the right hon. Gentleman.

As was inevitable, the Debate has covered a wide ground, and I think that it is very desirable that it should have done so, because of the very wide considerations which underlie what is quite rightly described by the Parliamentary Secretary as a Measure small in scope and really routine in its operations in the sense that it has to come up at a certain time and also has to do things in a certain manner prescribed by the Act of 1929. As on the first occasion, and also very naturally, there were two currents of opinion, the current of opinion of those who wanted more scope, and the current of opinion of those who wanted less scope. It is very far from being my intention to take advantage of the course so kindly suggested to me by the hon. Member for South Croydon (Mr. H. Williams) and say that the one argument outbalanced the other and that I might be content to escape by walking off in the middle. Not at all. I should like to deal with both of those arguments to the best of my ability.

The speech of the hon. Member for Mansfield (Mr. C. Brown) was most agreeable in form but most dangerous in substance. It was, I think, a shining example of the essential fallacy of the Socialist party that all you need to do in order to improve matters is to spend more money regardless of how you spend it or what you spend it upon. The plea of the hon. Member was really nothing more than a plea for larger expenditure, and he measured the merits of the Bill by the amount of money it provided without regarding the objects of the expenditure. That, as is well known, is not the principle which we follow. The word "generosity" has been used very often in these Debates. I do not think that it is so much a matter of generosity which we have to have under consideration. We are simply thinking of the amount of public money which, in very hard times, it is necessary to devote to some essential purposes. We look at it from a commonsense and business point of view, and, I trust, free from some of the more emotional aspects introduced into the Debate to-day.

The chief contention, as I understood it, of those who complain of the inadequate provisions of the Bill was that new burdens had been cast upon the local authorities by the action of the Government, and so the Government ought to provide means to meet them. Let us get the situation into perspective. Broadly speaking, that is not true. Nobody disputes that there are heavy new burdens cast upon the local authorities. We know that to be the fact. Many of the figures which have been produced are perfectly accurate. But it is not the case that more than a very small portion of those new burdens is due to the action of the Government. It is due, in the first place, simply and solely to the fact that the country is passing through very bad times, and local authorities are feeling the pinch of those bad times just as much as the central Government. That is responsible for the greater part of the new burdens of which we have heard. The means test is not responsible for any of those burdens. There has been a certain amount of misapprehension about that, but I think that the position will have been made clear now. If, by reason of the means test, a man is not qualified for transitional payment he is not qualified for poor relief either, so that the means test has not had the effect of increasing the burdens at all.

It is said that the increase in the burden of the Poor Law is due to the disallowances of courts of referees, and there has been some such increase in the burden in the past. What we observe now is that one encouraging circumstance, from the point of view of Poor Law relief, is the rate at which the disallowances are being made. They have passed the peak and are now falling off. There is another influence which is at work, undoubtedly, in increasing the burden of poor relief at the present time, and it is simply the difficulty of maintaining high standards of administration under the pressure of the bad times. We have to look to the local authorities for assistance in the maintenance of high standards in order to assist the nation in its need. If it be, and I think it can be proved to be, that the burden of bad times causes these increasing difficulties, we are forced to the conclusion that the difficulties to be faced are on the same basis as these which have always faced the local authorities in the past. There has been no new call upon them although the call may be more severe in quantity than in the past, but actually, in quality and in nature it is on no more difficult a basis than it has been in the past.

One must get a true perspective of this matter and in order to get a true perspective let me glance at the other side of the picture and refer to certain helps that have been given recently through the action of the Central Government for the benefit of the local authorities. First, there was the new money itself, the £5,000,000 which came in 1929, the equivalent of a 5d. rate over the whole country. That is a very important aid. It must not be forgotten when we are thinking of what is the right distribution of burdens between the National and the local purse. Let me remind the House of the enormous step that was taken when we accepted the liability for the National purse that the whole of the transitional payments should be met by the Exchequer. That did not relieve the local authorities of any burden which had fallen on them before but it relieved them of an enormous apprehension for the future. It relieved them finally, once and for all of that charge and established the position that the liability for transitional payments rested on the Exchequer alone, a most important fortification of the financial position of the local authorities.

Finally, we come from the larger things to the smaller ones. There is the financial help given in this Bill. I have never suggested that it is a big help, because it is not. It is a comparatively small help, but it gives something substantial if you consider the distressed areas and that the new help of £350,000, under the Bill, owing to its being distributed on the basis of the formula, is particularly available for the distressed areas. I pointed out that it would give that assistance when we were dealing with the Financial Resolution. One town, West Hartlepool, stands to gain to the extent of a 7½d. rate from this new money and Sunderland will gain 6.2d., and so on in smaller amounts.

Mr. BATEY

What is the figure for Durham County?

Sir H, YOUNG

I have not the figure by me. I am afraid that nothing would satisfy those who have spoken for the distressed areas to-day. They have however got considerable assistance. Let me deal with, one case which has been put vigorously, the case of the County of Glamorgan and the position in respect of its old loans. I gave the only answer which it is possible for a responsible Minister to give when that matter came up on the Financial Resolution, but since the matter has been referred to again, in order to get it in true perspective I would remind the hon. Member for Ogmore (Mr. E. Williams) that, in respect of the mitigation of its outstanding loans, Glamorgan is already enjoying, under Section 114 of the Act of 1929, a benefit of a capitalised value of £176,000. One must have regard not only to what one would like to get in the future but what one has got in the past, and that applies all through, these calculations.

There is one phrase or word in the Amendment against which I most vigorously protest and that is the word "bankruptcy." It is not true and it is monstrous to use the word bankruptcy in connection with the cities and towns of this country. I am sure that it was an inadvertant phrase but let us see how far this reckless phraseology can be carried. I would refer to what was said by the hon. Member for the Scotland Division of Liverpool (Mr. Logan) today. He said that every city is on the brink of bankruptcy. That is not true and such a saying ought not to be allowed to go out from this House without the most effective and thorough protest. Our cities are financially sound and they are, entitled to the high credit which they enjoy in the world and it is doing a very false service to the cause of the country and the cause of the local government and the cause of the cities themselves, including the cities which the hon. Members concerned represent, to allow so complete a misrepresentation of their position to be circulated.

Mr. LOGAN

I definitely make the statement that so far as Liverpool is concerned on the figures that I have supplied that that is the position of Liverpool from the Tory point of view and not from the point of view of this bench. The right hon. Gentleman had better study the figures.

Sir H. YOUNG

The hon. Member's statement now does not cover the point. What I protest against is not any figures used in connection with Liverpool, which I have had no opportunity to check, but what I protest against is the statement that every city is on the brink of bankruptcy to-day.

Mr. LOGAN

I maintain it.

Sir H. YOUNG

I submit that it is not true.

Mr. LOGAN

If the Minister makes a statement in this House and says that when an hon. Member makes a statement in regard to accountancy figures that despite those figures, what he says is untrue, then I say that the figures I have given to-day prove that so far as the cities that have been quoted are concerned they are on the point of bankruptcy and I defy any Member of this House in regard to the figures I have produced, to prove otherwise.

Sir H. YOUNG

I desire to give such authority as I can to an emphatic and deliberate statement in this House that the use of the word "bankruptcy" in connection with any city in this country was unwarranted. Let me turn from that side of the argument to deal with the other side of the argument which has been presented by those who say that less money should be spent. That argument was led by the noble Lord the right hon. Member for Hastings (Lord E. Percy). Let me make it perfectly clear that the introduction, and I hope the passage, of this Bill will have no effect in checking or damping down any effort for reasoned, ordered and scientific economy in local administration which it is the task of this Government as it is that of every Government to perform. In that regard we have received valuable assistance from the inquiry made by capable persons under the chairmanship of my hon. Friend the Member for Richmond (Sir W. Ray) and full use will be made of their report by the Government and the Ministry of Health in particular in securing the highest possible standards of administration in all the matters referred to in the report.

The noble Lord complained that we are introducing a Bill to provide for a fixed sum over a period of years. That is the very basis of a system of block grants. Block grants were introduced in 1929, after the utmost deliberation by this House, for the express purpose of securing reasoned economy. The system of block grants was considered then, and should be considered now, as one of the most efficient methods of securing economy in local administration. He referred to the percentage grant system, which, I think, he really preferred. The block grant system has this great advantage, that it gives a stated income to local authorities over a period of years and enables them to make reasoned and ordered plans for expenditure. Both these things are absolutely vital to good financial administration, and I believe the Noble Lord, on reconsideration, will find that the system of a fixed block grant over a number of years is really the foundation stone of good and economical administration by local authorities. May I put to him this point that a fixed block grant over a period of years by no means prevents or hinders a continuous effort for economy. Such an effort ought to be part of the normal work of all local authorities and of every Minister of Health, and there is every motive for local authorities to make this effort under a block grant system. In order to finance local developments local authorities must economise in order to make the best use of the grant and, therefore, you have the strongest motives for economy under the block grant system.

The Noble Lord asked me to expound the policy of the Government in this Bill in relation to the Budget. The constitutional answer, which would apply to any expenditure proposed to the House of Commons at this time of the year, is that the expenditure provided for in this Bill will come up in due course in the Estimate to be presented to the House, and when it is presented there is the implied declaration of the Government that the expenditure proposed is essential for national purposes, and that in due course the Government will ask the House of Commons in Committee of Ways and Means to provide the finance to meet the expenditure. That is what is to be said of the Government's policy in regard to such expenditure when it comes forward in the preliminary stage of a Bill; when it comes forward as an Estimate the Estimate will contain the policy of the Government in relation to the expenditure.

Mr. LOGAN

In regard to the four years, suppose the Government find some difficulty, is there any possible chance of the policy being reconsidered?

Sir H. YOUNG

In the few remaining words I have to say the hon. Member will probably find that I shall cover that particular point. Let me turn to the subject of the depressed areas. Occasions such as this, which enable the great difficulties of these areas to be ventilated by those who are best informed about them, are of the greatest possible value to the Government. I have already pointed out that the Bill will bring some help to depressed areas and I have given figures in relation to one or two towns to illustrate the effect of the provision we are making. Let me point out again that we are not in this Bill dealing with the distribution of the money; we are only dealing with the total amount. The hon. Member for Newcastle-upon-Tyne, East (Sir R. Aske) asked several questions on this subject. Probably he was not present when I dealt with the Financial Resolution, because I answered his points on that occasion. Let me answer them again. An undertaking was given by me on behalf of the Government that we would advance the recalculation of the distribution of the block grant, and undertake it at once, in order to see how in the second block grant period it would work out as regards the depressed areas. I gave my undertaking then that when these calculations were finished I would enter into negotiations with the representatives of local authorities to discuss the basis of the distribution, as to whether it was working fairly or whether there should be some alteration of the basis in the interests of depressed areas. The fact that we do not deal with distribution in this Bill is without prejudice to these investigations and negotiations. I have said that they are in active progress, and I shall continue them until they are concluded.

I mentioned on a previous occasion, and I must mention it again, that a new circumstance has arisen in the Report of the Royal Commission on Unemployment Insurance. That report has made sweeping recommendations which go all over this region of financial responsibility, and I must point out to the House that any conclusions come to may be affected by the conclusions on the larger matters in the Report of the Royal Commission. The Debate has taken a wide sweep, and it is useful that it should have done so; but, on the other hand, the scope of the Bill is small. I believe the House will come to the conclusion that in acting as they have, and in following the strict letter of the guarantee given to local authorities in 1929, the Government have done what is demanded in justice to local authorities, on the one hand, not to break the guarantee, and in justice to the taxpayer and

ratepayer, on the other hand, not to increase the provision of public money at the present time beyond what is essential in the national interest.

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

The House divided: Ayes, 259; Noes, 45.

Division No. 71.]	AYES.	[9.14 p.m.
Acland-Troyte, Lieut.-Colonel	Foot, Dingle (Dundee)	MacDonald, Malcolm (Bassetlaw)
Adams, Samuel Vyvyan T. (Leeds.W.)	Ford, Sir Patrick J.	McEwen, Captain J. H. F.
Agnew, Lieut.-Com. P. G.	Forestler-Walker, Sir Leolln	McKeag, William
Allen, Sir J. Sandeman (L'pool, W.)	Fox, Sir Gifford	McKie, John Hamilton
Aske, Sir Robert William	Fuller, Captain A. G.	Maclay, Hon. Joseph Paton
Atholl, Duchess of	Ganzoni, Sir John	McLean, Major Sir Alan
Atkinson, Cyril	Gibson, Charles Granville	McLean, Dr. W. H. (Tradeston)
Baldwin, Bt. Hon. Stanley	Gillett, Sir George Masterman	Magnay, Thomas
Baldwin-Webb, Colonel J.	Gilmour, Lt.-Col. Rt. Hon. Sir John	Maitland, Adam
Balfour, George (Hampstead)	Glossop, C. W. H.	Makins, Brigadier-General Ernest
Balniel, Lord	Goff, Sir Park	Mallallew, Edward Lancelot
Barrie, Sir Charles Coupar	Gower, Sir Robert	Manningham-Buller, Lt.-Col. Sir M.
Bateman, A. L.	Graham, Sir F. Fergus (C'mb'rl'd, N.)	Margesson, Capt. Rt. Hon. H. D. R.
Beauchamp, Sir Brograve Campbell	Greaves-Lord, Sir Walter	Martin, Thomas B.
Beaumont, Hon. R. E. B.(Portsm'th,C.)	Greene, William P. C.	Mason, David M. (Edinburgh, E.)
Bird, Ernest Roy (Yorks., Sklpton)	Gretton, Colonel Rt. Hon. John	Mason, Col. Glyn K. (Croydon, N.)
Boulton, W. W.	Griffith, F. Kingsley (Middlesbro'.W.)	Mayhew, Lieut.-Colonel John
Bowyer, Capt. Sir George E. W.	Grimston, R. V.	Merriman, Sir F. Boyd
Braithwaite, Maj.A. N. (Yorks, E.R.)	Guinness, Thomas L. E. B.	Mills, Major J. D. (New Forest)
Braithwaite, J. G. (Hillsborough)	Guy, J. C. Morrison	Milne, Charles
Broadbent, Colonel John	Hales, Harold K.	Mitcheson, G. G.
Brockiebank, C. E. R.	Hanley, Dennis A.	Molson, A. Hugh Elsdale
Brown, Col. D. C. (N'th'l'd, Hexham)	Harbord, Arthur	Moore, Lt.-Col. Thomas C. R. (Ayr)
Brown, Ernest (Leith)	Hartland, George A.	Moreing, Adrian C.
Brown, Brig.-Gen. H.C.(Berks.,Newb'y)	Haslam, Sir John (Bolton)	Morgan, Robert H.
Buchan-Hepburn, P. G. T.	Hellgers, Captain F. F. A.	Morris-Jones, Dr. J. H. (Denbigh)
Burghley, Lord	Henderson, Sir Vivian L. (Chelmsf'd)	Morrison, William Shepherd
Burnett, John George	Hepworth, Joseph	Muirhead, Major A. J.
Butler, Richard Austen	Hills, Major Rt. Hon. John Waller	Munro, Patrick
Campbell, Edward Taswell (Bromley)	Hoare, Lt.-Col. Rt. Hon. Sir S. J. G	Nail, Sir Joseph
Campbell-Johnston, Malcolm	Holdsworth, Herbert	Nation, Brigadier-General J. J. H.
Caporn, Arthur Cecil	Hope, Capt. Hon. A. O. J. (Aston)	Nicholson, Godfrey (Morpeth)
Castle Stewart, Earl	Hopkinson, Austin	Nunn, William
Cautley, Sir Henry S.	Hore-Bellsha, Leslie	O'Donovan, Dr. William James
Cazalet, Thelma (Islington, E.)	Hornby, Frank	Oman, Sir Charles William C.
Christie, James Archibald	Horsbrugh, Florence	Patrick, Colin M.
Clarry, Reginald George	Howitt, Dr. Alfred B.	Pearson, William G.
Clayton, Dr. George C.	Hunter, Dr. Joseph (Dumfries)	Penny, Sir George
Cobb, Sir Cyril	Hurd, Sir Percy	Perkins, Walter R. D.
Conant. R. J. E.	Inskip, Rt. Hon. Sir Thomas W. H.	Peters, Dr. Sidney John
Cook, Thomas A.	Iveagh, Countess of	Peto, Geoffrey K.(W'verh'pt'n,Bilston)
Cooke, Douglas	Jamieson, Douglas	Pike, Cecil F.
Cooper, A. Duff	Janner, Barnett	Powell, Lieut.-Col. Evelyn G. H.
Copeland, Ida	Jennings, Roland	Procter, Major Henry Adam
Courtauld, Major John Sewell	Joel, Dudley J. Barnato	Ralkes, Henry V. A. M.
Craddock, Sir Reginald Henry	Johnston, J. W. (Clackmannan)	Ramsay, Alexander (W. Bromwich)
Craven-Ellis, William	Jones, Sir G. W. H. (Stoke New'gton)	Ramsay, Capt. A. H. M. (Midlothian)
Crooke, J. Smedley	Jones, Henry Haydn (Merioneth)	Ramsay. T. B. W. (Western Isles)
Crookshank, Capt. H. C. (Galnsb'ro)	Ker, J. Campbell	Ramsbotham, Herwald
Croom-Johnson, R. P.	Kerr, Lieut.-Col. Charles (Montrose)	Ramsden, Sir Eugene
Cross, R. H.	Kimball, Lawrence	Rankin, Robert
Cruddas, Lieut.-Colonel Bernard	Kirkpatrick, William M.	Ratcliffe, Arthur
Curry, A. C.	Knight, Holford	Ray, Sir William
Davies, Maj. Geo. F.(Somerset, Yeovil)	Latham, Sir Herbert Paul	Rea, Walter Russell
Dawson, Sir Philip	Leech, Dr. J. W.	Reed, Arthur C. (Exeter)
Denman, Hon. R. D.	Lees-Jones, John	Reid, William Allan (Derby)
Dickle, John P.	Leighton, Major B. E. P.	Remer, John R.
Drewe, Cedrie	Lennox-Boyd, A. T.	Rentoul, Sir Gervals S.
Duckworth, George A. V.	Levy, Thomas	Renwick, Major Gustav A.
Dunglass, Lord	Liddall, Walter S.	Roberts, Aled (Wrexham)
Eastwood, John Francis	Lindsay, Noel Ker	Ropner, Colonel L.
Ellis, Sir R. Geoffrey	Lister, Rt. Hon. Sir Philip Cunliffe-	Rosbotham, Sir Samuel
Elliston, Captain George Sampson	Liewellin, Major John J.	Ross, Ronald D.
Eimley, Viscount	Lockwood, John C. (Hackney, C.)	Runge, Norah Cecil
Emrys-Evans, P. V.	Lovat-Fraser, James Alexander	Russell, Albert (Kirkcaldy)
Ersklne, Lord (Wesfon-super-Mare)	MacAndrew, Lieut.-Col. C. G. (Partrick)	Russell, Richard John (Eddisbury)
Essenhigh, Reginald Clare	MacAndrew, Capt. J. O. (Ayr)	Rutherford, Sir John Hugo (Liverp'l)
Evans, David Owen (Cardigan)	McCorquodale, M. S.	Salmon, Sir Isidore
Salt, Edward W.	Stevenson, James	Wayland, Sir William A.
Samuel, Rt. Hon. Sir H. (Darwen)	Stones, James	Wedderburn, Henry James Serymgeour-
Samuel, Samuel (W'diworth, Putney)	Storey, Samuel	Wells, Sydney Richard
Sandeman, Sir A. N. Stewart	Stourton, Hon. John J.	Whiteslde, Borras Noel H.
Sanderson, Sir Frank Barnard	Strauss, Edward A.	Whyte, Jardine Bell
Selley, Harry R.	Sueter, Rear-Admiral Murray F.	Williams, Charles (Devon, Torquay)
Shakespeare, Geoffrey H.	Sutcliffe, Harold	Williams, Herbert G. (Croydon, S.)
Shaw, Helen B. (Lanark, Bothwell)	Templeton, William P.	Wills, Wilfrid D.
Shepperson, Sir Ernest W.	Thomas, Rt. Hon. J. H. (Derby)	Wilson, G. H. A. (Cambridge U.)
Skelton, Archibald Noel	Thomas, James P. L. (Hertford)	Windson-Clive, Lieut.-Colonel George
Smith, R. W. (Aberd'n & Kinc'dine.C.)	Thomson, Sir Frederick Charles	Winterton, Rt. Hon. Earl
Somervell, Donald Bradley	Thorp, Linton Theodore	Womeraley, Walter James
Somerville, Annesley A. (Windsor)	Todd, Capt. A. J. K. (B'wick-on-T.)	Wood, Sir Murdech McKenzie (Banff)
Somerville. D. G. (Willesden, East)	Touche, Gordon Cosmo	Worthington, Dr. John V.
Soper, Richard	Train, John	Young, Rt. Hon.Sir Hilton (S'v'noaks)
Sotheron-Estcourt, Captain T. E.	Wallace, Captain D. E. (Hornsey)
Southby, Commander Archibald R. J.	Ward, Lt.-Col. Sir A. L. (Hull)	TELLERS FOR THE AYES—
Spencer, Captain Richard A.	Ward, Irene Mary Bewick (Wallsend)	Captain Austin Hudson and Mr.
Stanley, Lord (Lancaster, Fylde)	Ward, Sarah Adelaide (Cannock)	Blindell.
Stanley, Hon. O. F. G. (Westmorland)	Warrender, Sir Victor A. G.
NOES.
Adams, D. M. (Poplar, South)	George, Major G. Lloyd (Pembroke)	Macdanald, Gordon (Ince)
Attlee, Clement Richard	Greenwood, Rt. Hon. Arthur	McEntee, Valentine L.
Banfield, John William	Grenfell, David Reel (Glamorgan)	McGovern, John
Batey, Joseph	Grundy, Thomas W.	Maxton, James
Bevan, Aneurin (Ebbw Vale)	Hall, F. (York, W.R., Normanton)	Milner, Major James
Brown, C. W. E. (Notts., Mansfield)	Hall, George H. (Merthyr Tydvil)	Parkinson, John Allan
Buchanan, George	Hicks, Ernest George	Price, Gabriel
Cape, Thomas	Hirst, George Henry	Tinker, John Joseph
Cove, William G.	Jones, Morgan (Caerphilly)	Wallhead, Richard C.
Cripps, Sir Stafford	Kirkwood, David	Williams, David (Swansea, East)
Dagger, George	Lansbury, Rt. Hon. George	Williams, Edward John (Ogmore)
Davies, David L. (Pontypridd)	Lawson, John James	Williams Dr. John H. (Llanelly)
Davies, Rhys John (Westhoughton)	Leonard, William	Williams, Thomas (York., Don Valley)
Dobble, William	Llewellyn-Jones, Frederick
Edwards, Charles	Logan, David Gilbert	TELLERS FOR THE NOES.—
Evans, R. T. (Carmarthen)	Lunn, William	Mr. Groves and Mr. D. Graham.

Question put, and agreed to.

Bill committed to a Committee of the Whole House for Thursday.—[Mr. Shakespeare.]