LOCAL GOVERNMENT (GENERAL EXCHEQUER CONTRIBUTIONS) BILL. (Hansard, 16 March 1933)

§ Mr. BATEY
Surely this Bill is not going through without a protest. I am sorry to speak at such a late hour, but it means so much to some of us in the distressed areas that we are bound to make a protest before the Bill goes through. It will not help the distressed areas in the least. To-night the House has spent its time in granting an increase of £3,000,000 to the Navy, and it is shameful that the Minister should give us only £350,000 for the second grant period. A better case can be made out for a larger sum of money for the distressed areas than can be made out for a larger sum for the Navy. When we know that three county councils and 20 2264 county boroughs are to have divided among them only £145,000, it means that some of our distressed areas will really get nothing and they will be in a serious condition with the cost of Poor Law jumping up as it is. The estimate for public assistance expenditure in Durham has increased enormously during the last three years. In 1931 the expenditure for public assistance was £920,000. This year the estimate is £1,376,000. As we are to get only £145,000 to be divided among three county councils and 20 county boroughs, we are entitled to protest against the very small amount which the Minister is offering for distressed areas.
The Minister surely cannot realise how the numbers of those in receipt of Poor Law relief are increasing. As a matter of fact, the increase per week for Poor Law relief in Durham is £1,499. That entitles us to far more generous treatment from the Government than we are receiving. When an hon. Member, not of our party, but of the party opposite, raised the question of the distressed areas the other day, I understood from the Parliamentary Secretary that the Minister was considering some alteration in the second grant period, and that the period which we were deciding in this Bill would not operate for the four years. I understood that it might operate for two or three years, but not for as long as four years. Even a second grant period of two years will leave us for this year and next year in a very critical position. Before this Bill goes through the Minister should tell us what he means to do for the distressed areas to help them in their very serious position, just what he is thinking of doing, and when we may expect some financial help for the distressed areas in order to assist them to meet this increasing cost of Poor Law relief. Unless the Minister can do that I think we are entitled to object to the Third Reading of this Bill.

§ Mr. GREENWOOD
This Bill is now leaving the House without having gained the strong approval of any Members. The Government can claim no credit for it. They are merely implementing an Act passed three Governments ago, by the Conservative Government in 1929. The right hon. Gentleman has been unfortunate in his legislation. He had to bring forward this Bill, he could not help 2265 it and I am not blaming him for that. He has done, as has been explained on more than one occasion, the minimum which the law allows. As the Parliamentary Secretary explained, this is a routine Bill, and it has to be passed very rapidly through all its stages in this House during a time of very severe economic depression when local authorities, obedient to the will of the National Government, have for 18 months economised because they believed that that was the right policy. Now it is quite clear that many Members of this House believe that that policy is a mistaken one, and many local authorities, having done their best to meet the wishes of His Majesty's Government, are to-day faced with a situation which is more difficult on the whole than that of the Imperial Government.
Since the Bill was introduced great cities, cities which are not in the hands of Members of my own party, but under the control of what may be called "national majorities," Conservative or Liberal, have felt the increasing burden of responsibility placed upon them by the National Government to be so serious that even they have revolted. Whatever may be the truth about the formula under which the Minister has, in this Bill, acted like a robot, the fact is that when that formula was devised nobody could foresee the situation which would obtain in 1933. The situation is this, that because of a world-wide depression, because of an enormous volume of unemployment, because of the deliberate policy of the Government in having forced people off national funds on to local funds, our local authorities are faced with an increasing local burden which is beyond their power to bear. This Bill leaves the House without any gesture of help to local authorities who are helping to bear the national burden. A great city like Liverpool is virtually bankrupt. I was criticised by the Minister for using that term. I used it advisedly. I quoted the words of a member of his own party in the city of Liverpool. This great city, one of the greatest in the Empire, a city which has always been prepared to bear its responsibilities, has had to revolt. It has taken its part in economising under the policy of the Government, but, faced with a Poor Law bill of more than £1,500,000 for the coming year, a burden due not to Liverpool, but to broad economic forces, 2266 which did not originate in Liverpool and which cannot be cured in Liverpool, that city to-day is a stricken city. The term "distressed area" with which we have become accustomed in this House during the last ten years, was a term which used to apply to mining or shipbuilding areas, but to-day there are distressed areas that were unknown in this country at that time. Until after 1929, Liverpool would have been ashamed to describe itself as a distressed area. To-day it is distressed.
The major criticism which can be brought against the Government is that when they had the opportunity, after local authorities had come to their assistance and carried out the policy of economy, of coming to the assistance of local authorities, by doing a little more than the minimum required under the Local Government Act, they did only the minimum. The local authorities, not merely those which had been distressed for 10 years but those which have become distressed during the past two years, might have been given some greater assistance under the 1929 Act. They are given the letter of the law. Only this week there have been appeals from the local authorities to which the right hon. Gentleman the Minister of Health has not responded. However hard the burden may be upon the taxpayer, during these days of increasing numbers of people on the Poor Law the burden of the rates is much heavier than the burden which falls upon the taxpayer.
Though this Bill does what is equivalent to what was done in 1929, it does nothing to help the ratepayers, who today are sorely stricken, or the local authorities who are desirous of carrying out their responsibilities. It does nothing to assist those town councils and county councils which to-day are suffering from an enormous burden of unemployment. We have been told that, because of the automatic operation of another formula, certain moneys will go to distressed areas as defined by the formula of the Local Government Act. As much money as goes to those areas will be withdrawn from areas which to-day are becoming as distressed as the areas which have been helped. The operation of the unemployment formula does not help. The enormous mass of unemployment is so large to-day—it is much larger than was contemplated by the Chancellor of the 2267 Exchequer when he introduced the Local Government Bill—that the operation of the formula by taking money from one authority and giving it to another does not assist.
Our case against the Bill is that, in these times with unemployment higher than ever it has been in the history of our country and with burdens falling on local authorities larger than have ever fallen on them before, the Government which might have come to their assistance have failed to do so. I am aware that nothing I can say will alter the decision of the House to-night. The Bill will get its Third Reading, but I desire to make our final protest against the niggardliness of the Government when, after all this cajolery, bullying, and, indeed, misleading of the local authorities, they might have come to their assistance, they have failed to do so. The Government will get their Bill, but the local authorities and all those who are concerned with local government know that His Majesty's Government are imposing on local authorities a burden which it is impossible for them to bear. I should have thought that the Government might have done something to assist them in their difficulty, but they have done no more than an Act passed four years ago prescribes. Their policy has put upon them burdens which are intolerable.

§ The MINISTER of HEALTH (Sir Hilton Young)
Both of the speakers who have opposed the Third Reading of this Bill have given a very wide sweep to their arguments, and, in so doing, they have followed the same course of action which commended itself to them both on the Financial Resolution and on the Second Reading. If I do not follow them to-night, it is because, on both of those occasions, the House has had already a very full discussion on these points. I will content myself rather, in the first place, with pointing out to the House what is the actual purpose and effect of the Measure which is now proceeding to a Third Reading. I cannot really find better words in which to do it than those used by the right hon. Gentleman. the Member for Wakefield (Mr. Greenwood) himself on the Second Reading of the Bill. Referring to the principal Clause, the Clause relating to the increase of new money, he said: 2268 The £350,000 is almost exactly what the formula invented by the right hon. Gentleman the present Chancellor of the Exchequer required. As a matter of fact, it is £2,000 more. In other words, we are doing the sensible thing—we are carrying out the line of action which we laid down at that time, and which was laid down for the purpose of providing certainty and security for local authorities in their difficulties. We are fulfilling the guarantee which we gave. The right hon. Gentleman proceeded to complete a perfectly satisfactory account of the situation by the following words: It is difficult in these times to increase that minimum amount."—[OFFICIAL REPORT, 7th March, 1933; col. 1083, Vol. 275.] It is, indeed, difficult. It is difficult in these times, when, as we know, the resources of the nation have so many calls upon them, to increase that amount beyond what is necessary and essential for the local authorities to carry out the services with which they are charged.
There are two words which I would say in reference to what the right hon. Gentleman said, and I say them just in order that it may not be supposed that by silence the authority responsible gives assent. He repeated the statement that a great city in this country was bankrupt. I know of no fact and no circumstance which would justify that statement, and I desire that, when any such statement is made in this House, it should be accompanied by as emphatic an official contradiction as can be given. The hon. Member who spoke first used words belittling the effect of the Measure which we are now passing in regard to its assistance to the distressed areas. There, again, the words used by the hon. Member do not give a full and fair account of the position. It is right that the House should be in possession of what that position is before it passes the Bill. Under it we are distributing not £350,000 but £15,000,000 in such a manner as to give a preference to distressed areas. The direct effect of the wording of the formula that we are now enforcing is that, whereas in the first grant period the unemployment factor attracted £1,250,000, in the second grant period it will attract a much larger sum for the benefit of the distressed areas. The additional sum of £350,000 which we are now 2269 voting in order to fulfil our guarantee to the local authorities and to keep the spirit and the letter of the pledge given to them will also be distributed in a manner which I have demonstrated on two previous occasions will give a preference to the distressed areas.
Finally, objection was taken to the Bill as not revealing the Government's programme in regard to larger matters. Of course, it does not do so. It is not an innovating Bill. It is a Bill to carry on certain arrangements in the interests of the local authorities themselves. That we have succeeded in doing, and it is really a feather in the cap of the Government to have succeeded in these arrangements in spite of the great difficulties of the times. On two previous occasions we have had a very full oppor- 2270 tunity of discussing the Bill and I trust, now that there is substantial agreement that it is necessary, the House will now give it a Third Reading.