HC Deb 13 March 1933 vol 275 cc1749-58

Motion made, and Question proposed, "That this House do now adjourn."— [Captain Margesson.]

Mr. J. P. MORRIS

I make no apology for raising, on the Motion for the Adjournment, the question of the equalisation over the country of the rate charges for public assistance. So clamant has been the demand for an equalisation of this public assistance charge, that on Thursday last a conference to discuss this question was summoned in Manchester by the Lord Mayor of that city and was attended by the mayors and civic heads of 20 county boroughs in Lancashire and Yorkshire. No Government can ignore the demand for an alteration of the conditions which brought about that conference. Nor can a Government ignore that a majority of hon. Members represent constituencies in which the burden of expenditure for public assistance is abnormal.

Last Thursday I put down a question to the Minister of Health asking if he was prepared, in view of the alarming increase in the public expenditure, to introduce legislation immediately with the object of equalising the burden over the whole of the country. The answer that I received was that the answer was in the negative. I cannot possibly understand the attitude of the Minister of Health, more particularly having regard to the Final Report of the Royal Commission on Unemployment Insurance. There is a paragraph in that report wherein is enshrined the principle of the equalisation of the burden of public assistance. This is what the report says: The Associations of Local Authorities have unanimously pressed upon us the view that the cost of unemployment should be a national and not a local charge. We have much sympathy with this view. The causation of unemployment is a difficult and complex subject, but it will be agreed that widespread dislocations which give rise to the most severe part of the problem are likely to be due to national rather than to local conditions. Often enough, indeed, they are due to world-wide causes, which are beyond the control even of the national authority.

It being Eleven of the Clock, the Motion for the Adjournment of the House lapsed, without Question put.

Motion made, and Question proposed, "That this House do now adjourn."— [Commander Southby.]

Mr. MORRIS

It goes on: National policies, as, for example, in foreign, fiscal and monetary questions, have a more direct bearing on the course of employment than the action which is within the competence of any locality. And, in so far as unemployment is the result of extranational causes, it is reasonable that, so tar as possible, the burden of it should be spread over the larger unit of the nation rather than fall upon the particular areas which may happen to be particularly affected. I would like my hon. Friend to pay particular attention to the next few sentences: There is, moreover, the practical consideration that the policy of leaving to local areas a large part of the cost of their own unemployment would be calculated to intensify the depression in these areas and to diminish the prospect of their recovery. An increase in local rates is a deterrent to the starting of new industries, so that—as is happening at the present time—new industries tend to establish themselves in the relatively prosperous areas, where at heavy public expense all the necessary local services have to be provided anew, rather than in the areas where those services are already in existence, and where there is a population waiting to be employed. In April of last year a copy of a scheme for the equalisation of these charges was submitted to the Minister of Health by the Salford City Council, and, in view of the fairness of that scheme, and the fact that every possible objection that was raised against the scheme was answered by the scheme, I thought that the Minister of Health would have incorporated the scheme in its entirety in an Act of Parliament. But I suppose that the circumambulatory itinerary of the scheme through the various offices of the Minister's Department is not yet completed.

This scheme is now generally known throughout the country as the Emery scheme, because the person who first formulated it was Councillor Emery, of Salford, now the Mayor of Salford. Just as emery paper is used for the removal of rust and dirt, so I maintain that, if the Emery scheme were adopted by the Government, it would remove the anachronisms and insecurities which are inherent in the public assistance administration of this country. It is now generally admitted that the cost of public assistance should be a national charge, but, in view of the state of the finances of the country at the present moment, it is not considered to be practical politics. One of the main principles of the Local Government Act, 1929, was that the cost of public assistance, or, as it was then called, Poor Law relief, should be spread over a wider area, and, as a result of that Act, 585 areas were merged, for the purposes of public assistance, into 145; that is, into 83 county boroughs and 62 administrative counties. The Emery scheme proposes that, for the purpose of public assistance, those 145 areas should be merged into one. May I point to the pooling arrangements that obtain in the London County Council area as the result of the 1929 Act. Before that, in the rate of poor relief in the Metropolitan board of guardian areas great differences obtained. There was a charge of 4s. 10d. in Poplar and in Westminster of 2s. 3d. Under the pooling arrangement the unified charge is now 3s. 7d.

The equalisation of public assistance burdens could be accomplished by the establishment of an equalisation fund into which payment would be made by public assistance authorities of sums equivalent to a rate poundage which, based on the aggregate production of a penny rate on all public assistance authorities, would meet the entire cost of public assistance over England and Wales. Payment into that fund would also be made out of the general Exchequer contributions of the amount represented by the unemployment weighting of the population of England and Wales, but of the fund payments, would be made to the various public assistance authorities of the amounts required for their respective public assistance charges, subject to compliance with scales of relief and standards of destitutions to be fixed by a national board which would operate through a series of regional committees. The national board would exercise all the control that was necessary to prevent extravagant expenditure by any particular local authority. The county councils and county borough councils would operate under the supervision of the regional committees and the control exercised over those authorities by the regional committees and the national board would provide sufficient safeguards in respect of any weakening in the incentive to limitation of expenditure which might otherwise arise. This control also would meet the objection of those local authorities whose public assistance charge is small to the principle of providing moneys for expenditure over which they have no control. It is suggested that the national board and the regional committees should consist of representatives of the local authorities.

Having ascertained the estimated amounts required for the purpose of public assistance from all public assistance authorities certified by the responsible official of each authority as to compliance with regulations to be issued by the national board, it would then be easy to calculate the rate in the pound required to be levied over the whole of England and Wales. When the necessary-calculations have been made and returns furnished of the estimated requirements, precepts would then be served by the national board upon local authorities whose equalised rate poundage products exceeded their estimated requirements for public assistance purposes. The amount of the precept, therefore, would be the difference between the two amounts. The national board would then make payments out of the account to those local authorities whose approved estimated expenditure requirements were greater than the equalised rate poundage product. I have here figures taken out for the working of this scheme based on the conditions obtaining in 1931. In that year the aggregate product of a penny rate amounted to £1,871,000. The total public assistance expenditure, less the general Exchequer contribution, amounted to £35,627,000, so the average rate poundage over the whole of the country amounted to 3s. in the pound. Let me see what effect this has on various local authorities.

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

Was that Poor Law expenditure?

Mr. MORRIS

The total public assistance expenditure, including transferred Poor Law services. Eastbourne would pay into the fund a precept of 1s. 6d. in the pound, Southend 1s. 7d., Oxford 2s., Bournemouth 2s. 1d., and Blackpool 2s. 6d., while the town of Merthyr Tydvil would receive an equivalent rate poundage amounting to 10s. in the pound, and my own city of Salford an equivalent of 3s. 5d. in the pound. Such is the scheme I submit for the consideration of this House. It remains for me to put forward reasons which would justify such a change. I maintain that the figures I have given are a complete justification for some change in the present system.

Can any hon. Member in these circumstances say that for the same charge one area should pay 13s. in the pound, while another should only pay 6d. in the pound? These inequalities exist throughout the whole of the country, and even if hon. Members do not agree with the suggested alteration, I cannot conceive any hon. Member supporting the present unfair system. I ask, is it right that the ratepayers in Merthyr Tydvil should pay 13s. and ratepayers in Blackpool only 6d.? Is there any reason why one should pay more than the other? Is the ratepayer in Blackpool any more industrious than the ratepayer in Merthyr Tydvil? The ratepayer of Merthyr Tydvil has no responsibility for the poverty in his town. Indeed, the poverty may be caused by circumstances over which he has no control, or in circumstances over which the Government of his country have no control. I therefore ask the House, is it rational to say that a ratepayer in Merthyr Tydvil, for the same services, should have to pay 26 times more than a ratepayer in Blackpool, 15 times more than a ratepayer in Oxford, and nine times more than a ratepayer in Southend or Eastbourne?

I am convinced that every hon. Member will have little hesitation in denouncing the present system as unfair and unjust. During the last two years there has been a tremendous increase in the number of people who have to be supported by the local authorities. In some districts the numbers have more than doubled. Is there to be an incessant piling up of the burdens on the shoulders of those authorities which are already crippled with taxation? I trust the House will say that in these days of depression the burden should be spread out over the whole area of the country, and that the comparatively prosperous municipalities should face up to their responsibilities and offer to help their poorer neighbours. I hope that the more fortunate municipalities will not adopt an attitude of smug self complacency and say they have no responsibility towards the poor areas of the country. The prosperity of one town is indissolubly bound up with the prosperity of another. It is impossible for the country to be prosperous unless all the towns in the country are prosperous. The numbers of persons requiring public assistance are obviously larger in industrial centres than elsewhere, yet these are the centres where poverty is most prevalent, where they find the money to foot the national bill, and where they find work for many thousands of people. The present depression has hit them badly, and yet these are the most important centres of the country. That they should receive no support from centres which live on the trade and industry of the country is un-English and unfair. Can it be said that seaside resorts, where the toilers of trade and industry spend their hard-earned money have no responsibility towards the industrial areas? Where would the seaside resorts be were it not for the industrial centres? It is impossible to develop that argument in the short space of time at disposal. I hope that the House will consider this question, divorced from any petty view or bias, and that hon. Members take no notice of the views pressed upon them by their own constituents, if they represent prosperous areas. If hon. Members will judge the question on its merits, they will come to one conclusion, namely, that the present system is denounced and condemned as unfair, dishonest and unjust.

11.19 p.m.

Mr. SHAKESPEARE

The hon. Member for North Salford (Mr. Morris) has raised a subject of great interest. I congratulate him on having continued the conference which originated at Manchester. I can only touch the fundamental points. His idea is a very simple, straightforward and ingenious one. So far as I can gather, it amounts to this, that the watering places of the country should pay for the distressed areas. Before I commit the Government to that policy, I should like a small talk with the hon. and gallant Member for Bournemouth (Sir H. Croft). The claim that unemployment and public assistance should be a national charge is not a new one. It is an ideal towards which every Government is working. One sees it in the recognition of State responsibility for Unemployment Insurance, and the transitional benefit scheme, but, as the hon. Member pointed out, to adopt it in its entirety would put such a strain on any Government as to make the whole scheme impracticable. The hon. Member read from the report of the Royal Commission on Unemployment Insurance, but he stopped short.

In the next paragraph they say: At the same time we cannot contemplate a continuance of the present system whereby local authorities make assessments in the result of which they have no financial interest at all. There is a fundamental principle involved, and that is that those who spend money should have some share in raising it; in other words, that the area of charge should be coincident with the area of administration. The hon. Member referred to the 1929 Act and to the reduction in the number of Poor Law areas, and pointed out how these areas were reduced to 145. That is so, but in every single case, whether it is a county borough or a non-county borough, the area of charge corresponds with the area of administration. So that you get what is vital in all these cases—a certain measure of local responsibility. He also mentioned the Metropolitan Common Poor Fund, which has operated since 1867. Down to 1921 it provided the means whereby local authorities might improve their institutional relief for the mentally and physically sick by a charge being spread over a much wider area. But no point of principle was in the main involved, at any rate no point of principle which might lead to considerable variations of expenditure of these various local authorities. In 1921, however, the Metropolitan Common Poor Fund was made responsible not only for institutional treatment but for out relief, and from that time onwards we saw the operation of what must be a dangerous principle, that is having an authority which spends money and does not have to raise it. If the hon. Members will look into history they will find that this has always led to extravagance. It must do so unless they can reconcile the area of charge with the area of administration. In 1929, the principle by which one authority spent another area's money was stopped, and the whole of the Poor Law administration was taken over by the London County Council, a single administration with a single area. That is an entirely different thing. Let me indicate one point to show how difficult the problem is—

Mr. MORRIS

I stated that this scheme would be controlled by a national board working through a series of regional committees.

Mr. SHAKESPEARE

I realise that, but that destroys all sense of local responsibility, which is the whole principle upon which the administration of this country is conducted, and if you have a rate of 3s. all round, and collect money from Blackpool and Bournemouth to be spent by Merthyr Tydvil, Liverpool and Manchester, all direct incentive to good administration will be lost. The hon. Member wanted to know the Government's attitude towards his scheme. At this time of night it would be most improper for a junior Minister to make a sensational pronouncement. He will remember that my right hon. Friend the Minister of Health referred to a promise he made earlier in the year, or the latter part of last year, whereby he would anticipate or advance the date of reconsideration of the redistribution of the block grant which falls due at the end of the second grant period. He promised to advance it. That has been done. Not only that, but consultations have been on foot with representatives of local authorities to see how far the famous formula has operated and whether in any degree it needs modification to take account of the change in circumstances since the formula was originally adopted, so that my right hon. Friend has carried out his promise to ante-date inquiry as to the formula, and consultations are taking place with the associations of local authorities.

Mr. McKEAG

Has it now been definitely decided to increase the block grant, so far as these distressed areas are concerned?

Mr. SHAKESPEARE

No, it is not an increase of the block grant but a redistribution of the available money to see that more goes towards those areas where the charge is heaviest. On top of that the Government are considering this very complex problem of unemployment insurance. My hon. Friend will readily see that any decision arrived at as a result of this may cut right across any decision arrived at as a result of negotiations with the local authorities. I cannot say more than that, except to assure him that the Government are alive to the urgency as well as the difficulty of the problem, that the points he has raised will be borne in mind, that the Government realise the difficulties of distressed areas and are anxious by some means or other to see that help is forthcoming. In what way I cannot say. But perhaps my hon. Friend will be able at a later stage to ask a question when the Government have made up their minds. In the meantime I congratulate him on having put forward with great lucidity the claims of his own constituency.

Mr. MORRIS

My hon. Friend has stated that the Minister has ante-dated consideration of that part of the general Exchequer contribution dependent upon the unemployment weighting of the population of England and Wales.

Mr. SHAKESPEARE

Ante-dated the whole thing.

Mr. MORRIS

What I wish to know is, will this new legislation to' which the hon. Gentleman has referred be brought into effect before the period of transitional payment ends on 30th June? There are rumours—I will give them no stronger name—that it will be impossible to expect any possible legislation affecting local authorities, in so far as public assistance is concerned, until after 30th June.

Mr. SHAKESPEARE

I am afraid I cannot answer that question. Perhaps my hon. Friend will put a question to my right hon. Friend.

Question put, and agreed to.

Adjourned accordingly at Twenty-nine Minutes after Eleven o' Clock.