Commons Sitting of 24 February 1937

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Lancashire Electric Power Bill,
Liverpool Exchange Bill,
As amended, considered; to be read the Third time.
Newquay and District Water Bill (by Order),
Second Reading deferred till Tuesday next.
Greenock Burgh Extension, Etc., Order Confirmation Bill [Lords],
Considered; to be read the Third time To-morrow.

ORAL ANSWERS TO QUESTIONS.
  LEAGUE OF NATIONS.

    DANZIG.
    Mr. A. Jenkinsasked the Secretary of State for Foreign Affairs whether his attention has been drawn to the arrest of leaders of the political opposition in the city of Danzig; whether the retiring League Commissioner has asked for explanations from the Senate; and whether any action has been taken as the result of his representations?
    The Secretary of State for Foreign Affairs (Mr. Eden): The answer to the first part of the question is, "Yes, Sir." With regard to the second and third parts, I have no information.
    Mr. Manderasked the Secretary of State for Foreign Affairs whether any appointment as League of Nations High Commissioner for Danzig has now been made; and what steps are being taken to restore to their liberties and rights the Conservatives, Socialists, and Catholics imprisoned contrary to the Constitution?
    Mr. Eden: Professor Carl Burckhardt, Professor at the University of Zurich, was
    1968
    appointed League of Nations High Commissioner in Danzig on 18th February for a period of three years. It will be for the new High Commissioner, on taking up his appointment, to take into consideration, on the basis of the report adopted by the Council on 27th January, all matters affecting the maintenance of the Constitution.

    INTERNATIONAL DISPUTES.
    Mr. J. J. Davidsonasked the Secretary of State for Foreign Affairs the total number of international disputes settled by agreement at the League of Nations between the years 1920 and 1930; and the number of international disputes settled by the League of Nations since 1931?
    Mr. Eden: Between 1920 and 1930 the Council of the League disposed of 24 disputes of a political character. Since 1931 the Council has disposed of 10 such disputes.

    BRITISH REARMAMENT POLICY.
    Mr. Davidsonasked the Secretary of State for Foreign Affairs whether any statement has been made, or will be made, to the League of Nations regarding the new armaments policy of Great Britain?
    Mr. Eden: A statement regarding the rearmament policy of His Majesty's Government was contained in the speech which I made no behalf of His Majesty's Government at the Assembly of the League of Nations on 25th September last.
    Mr. Davidson: After that speech, have any representations been made by the smaller Powers of the world on this question?
    Mr. Eden: Certainly no representations against our re-arming have been made.

    RAW MATERIALS.
    Mr. Graham Whiteasked the Secretary of State for Foreign Affairs whether the League of Nations' committee on sources of supply and distribution of raw materials is now fully constituted, and when it will hold its first meeting?
    Mr. Eden: So far as I am aware, the committee will be substantially the same as that outlined in the report of the Polish

    1969
    representative to the Council, a copy of which is available in the Library. I understand that it has not, however, as yet been finally constituted. The committee will meet at Geneva on 8th March.

    EGYPT (CAPITULATIONS).
    Mr. Manderasked the Secretary of State for Foreign Affairs the arrangements made for the conference at Montreux on the Egyptian Capitulations; what progress has been made in recent discussions in Cairo; what countries will attend the conference; and who will represent the British Government?
    Mr. Eden: As regards the first part of the question, the arrangements for the conference are in the hands of the Egyptian Government. As regards the second -part, I would refer the hon. Member to the reply given by my Noble Friend on 9th February to the hon. Member for Carmarthen (Mr. Hopkin). As regards the third part, so far as I am aware, the countries to be invited to the conference will be all those entitled to capitulatory rights under capitulatory treaties. The matter referred to in the last part of the question is still under consideration.
    Sir John Wardlaw-Milneasked the Secretary of State for Foreign Affairs whether the Note of the Egyptian Government to the Capitulatory Powers, published on 3rd February last, in any way expresses an agreement arrived at between the Egyptian authorities and the representative of the British Government who has recently visited Egypt to discuss legal matters connected with the treaty; and, if not, whether the Government will make it clear that it is in no way bound by the terms of this document?
    Mr. Eden: The Egyptian Government's Note of 3rd February to the Capitulatory Powers in no way expresses an agreement between His Majesty's Government and the Egyptian Government. In this connection I would refer my hon. Friend to the very full reply given on this subject by my Noble Friend to the hon. Member for Carmarthen (Mr. Hopkin) on 9th February, in which the position of His Majesty's Government with regard to this Note has already been stated.

    EASTERN PACT.
    Mr. A. Hendersonasked the Secretary of State for Foreign Affairs whether, in the view of His Majesty's Government, the elimination of friction and suspicion between the various countries of Eastern Europe, which is one of the cardinal factors in the field of progress, can best be effected by the conclusion of an eastern pact between Poland, Russia, Germany, Czechoslovakia, the Baltic States, and Finland?
    Mr. Eden: I have nothing to add to the very full reply which my Noble Friend gave to a question on this subject asked by the hon. Member on 8th February.
    Mr. Henderson: Is the Foreign Secretary aware that on 1st August, 1935, the First Lord of the Admiralty stated that the conclusion of an Eastern Pact was a cardinal factor in the general European situation, and that in a recent reply the Under-Secretary of State confined his statement to saying that the removal of friction and suspicion among the various countries was the cardinal factor; and are we to understand from those two replies that there has been a change in the policy of His Majesty's Government?
    Mr. Eden: I do not think there is any inconsistency. The greater includes the less.
    Mr. Henderson: May we have a definite reply? Is it the policy and the view of His Majesty's Government to-day that the conclusion of an Eastern Pact is a cardinal factor in the settlement of those outstanding European problems?
    Mr. Eden: We would welcome any arrangement, either in Eastern Europe or anywhere else, if it would assist to remove friction and suspicion.
    Mr. Henderson: May we have a straight answer?

    RUSSIA (BRITISH NATIONALS).
    Mr. Marcus Samuelasked the Secretary of State for Foreign Affairs whether, now that the draft proposals of a new Soviet Constitution guaranteeing the right to hold political demonstrations, freedom of speech, and security from arbitrary arrest have been ratified, he will inquire whether British nationals desirous of lecturing or speaking in the Union of Soviet Socialist Republics upon

    1971
    the respective advantages of different systems of government and forms of industrial organisation will be permitted to do so and to enter and leave the country without restriction?
    Mr. Eden: I am aware of the provisions of the new Soviet Constitution to which my hon. Friend refers; but I would point out that these relate only to Soviet citizens. I do not think that any useful purpose would be served by addressing an inquiry to the Soviet Government on the lines suggested.

    SPAIN.
    Mr. Jenkinsasked the Secretary of State for Foreign Affairs whether the Non-Intervention Committee have now reached an agreement to prevent men and munitions of war from entry to Spain; whether the countries parties to the agreement have been allotted sections of the sea coast or frontiers of Spain for surveillance; and, if so, will he indicate the section placed in the charge of each country?
    Mr. Eden: The International Committee agreed on 16th February to extend the Non-Intervention Agreement to prohibit the entry into Spain of persons proposing to take service in the war in addition to prohibiting the export to that country of arms and war material. The prohibition was to take effect as from 20th February, and I understand that all the Governments concerned took the necessary measures on that date. As regards the remainder of the question, the final details regarding the proposed plan of supervision are now under discussion between the Governments concerned, and it is hoped that a definite agreement on this subject will be reached within the next few days.
    Mr. Bellenger: Are any negotiations going on upon the Non-Intervention Committee for the withdrawal of those foreign nationals now in Spain?
    Mr. Eden: I do not think that the Committee have begun on that yet.
    Mr. Bellenger: Is there any hope of the matter being discussed at an early date?
    Mr. Eden: I would rather like to have that question on the Paper.
    Sir Patrick Hannonasked the Secretary of State for Foreign Affairs whether he can make a statement on the latest arrangements which have been approved by the Non-Intervention Committee for the supervision of the Portuguese frontier?
    Mr. Eden: An arrangement has been reached between His Majesty's Government and the Portuguese Government by which 130 British officials will observe the application of the Non-Intervention Agreement on the Spanish-Portuguese frontier. This arrangement has been communicated to the Non-Intervention Committee. The committee have approved the principle of a special AngloPortuguese arrangement, but the final details of the scheme have not yet been submitted to them.
    Sir William Davisonasked the Secretary of State for Foreign Affairs whether he is aware that the Communist organisation in Great Britain is recruiting British unemployed workers for the Spanish Government by promises of work at £6 a week behind the lines in Spain and that, on their arrival, such men are at once put into the fighting line without preliminary military training, so that considerable numbers have lost their lives; and whether the Government will take immediate steps to prevent the exploitation of the unemployed in the manner referred to, and will arrange for the repatriation of all British citizens who have been enlisted in the forces of the Spanish Government in the manner described?
    Mr. Eden: I have no information on this point other than that which has appeared in the Press. As regards the second part of the question, the Governments concerned have agreed to extend the Non-Intervention Agreement to cover the recruitment in, the transit through, or the departure from, their respective countries of persons of non-Spanish nationality intending to proceed to Spain or the Spanish Dependencies for the purpose of taking part in the civil war, and this prohibition became effective as from midnight 20th-2Ist February. As regards the last part, consular officers are authorised under standing instructions to repatriate on application any deserving British subject who may be without means. These general instructions would cover those cases referred to by my hon. Friend. Instructions are, however, being

    1973
    issued not to defray without special authority the cost of return journey to this country of any person who left the United Kingdom for the purpose indicated above on or after 11th January, the date on which attention was drawn by His Majesty's Government to the provisions of the Foreign Enlistment Act in relation to Spain. Consular officers are being instructed to refer to His Majesty's Government any cases falling within the above category which may appear to deserve special consideration.
    Sir W. Davison: Is my right hon. Friend aware that some 40 of these unfortunate unemployed men, who were enlisted as described and who were recently captured by General Franco's forces, made a solemn declaration to the effect stated in the question; and is it not desirable that the Government should take steps to stamp out an organisation which is enlisting these unfortunate unemployed men and which consists of the very people who are doing their best to prevent recruitment for the British Army in this country?
    Mr. Shinwell: If repatriation of British citizens is not applied, can the withdrawal of volunteers be made effective?
    Mr. Eden: That is another question. In reply to my hon. Friend the Member for South Kensington (Sir W. Davison), I deprecate as much as anybody else enlistment here contrary to law, but any action in this country is not a matter for me.
    Mr. A. Henderson: In the event of action being taken covering the persons referred to in the question, would it cover also persons who had volunteered to serve in General Franco's army, or are we to understand that no British citizens have thought fit to volunteer for General Franco?
    Mr. Gallacher: Is the Minister aware that the basis of the original question is a lying campaign being conducted in the "Daily Mail"?
    Mr. W. Robertsasked the Secretary of State for Foreign Affairs what complaints he has received from representatives of British businesses in Spain regarding treatment of such business interests by the Government of General Franco; what businesses have made such complaints; and whether he has made
    1974
    successful representations to the Government of General Franco regarding them?
    Mr. Eden: Certain British undertakings with interests in Spain have approached His Majesty's Government regarding the difficulties which they are experiencing as a result of action taken by General Franco's administration. Representations have been made to General Franco's administration, and, in view of the prejudice caused to British interests, the matter is under the urgent consideration of His Majesty's Government.
    Mr. Manderasked the First Lord of the Admiralty whether it is proposed to attach British naval officers to the German and Italian naval forces operating off the coast of Spain?
    The First Lord of the Admiralty (Sir Samuel Hoare): No, Sir.
    Mr. Mander: Would it not be very useful and important to observe these naval forces in action?
    Sir S. Hoare: That seems to me to be essentially a question for the Non-Intervention Committee.
    Mr. Davidson: Does the right hon. Gentleman's reply indicate his complete trust in his own particular friends?

    JAPAN (BRITISH SAILORS' TREATMENT).
    Sir Charles Cayzerasked the Secretary of State for Foreign Affairs whether further to their interim reply, the Japanese Government have now rendered full satisfaction to His Majesty's Government for-the ill-treatment inflicted upon the three British sailors by Japanese officials at Keelung?
    Mr. Eden: No, Sir. The matter is, however, being actively discussed with the Japanese Government and I still hope that it will be found possible to reach a satisfactory settlement.

    GERMANY (BRITISH NATIONALS).
    Mr. Thurtleasked the Secretary of State for Foreign Affairs whether he is in a position to say whether British nationals desirous of lecturing or speaking in Germany upon the respective advantages of different systems of government and

    1975
    forms of industrial organisation will be permitted to do so, and to enter and leave the country without restriction?
    Mr. Eden: No, Sir.

    NAVAL AGREEMENTS (NEGOTIATIONS).
    Mr. George Hallasked the Secretary of State for Foreign Affairs whether any progress is being made in the discussions of agreements on qualitative naval disarmament which are now proceeding with various countries?
    Mr. Eden: Negotiations are at present taking place between His Majesty's Government and the German, Soviet, Polish, Turkish, Norwegian, Swedish, Finnish and Danish Governments for the purpose of concluding naval agreements providing for qualitative limitation on the basis of the London Naval Treaty, 1936. As regards the negotiations at present proceeding with the German and Soviet Governments, I would refer my hon. Friend to the reply given by my Noble Friend to the hon. Member for Kingswinford (Mr. A. Henderson) on 17th February. The negotiations between His Majesty's Government and the other Governments concerned are similarly making satisfactory progress.
    Mr. Thorne: Is it not a fact that the Government's decision to increase the Navy will give Germany the right to increase pro rata?
    Mr. Eden: Perhaps the hon. Member had better put that question down.

  ROYAL NAVY.

    ENGINE-ROOM ARTIFICERS.
    Sir Robert Youngasked the First Lord of the Admiralty the number of engine-room artificers who appeared before the Fleet selection boards and the final selection board for sub-lieutenant (E), and the numbers awarded commissions in the years 1933 to 1936, respectively?
    Sir S. Hoare: I would refer the hon. Member to the reply which I gave to the hon. Member for Romford (Mr. Parker) on 9th December, 1936.
    Sir R. Youngasked the First Lord of the Admiralty the number of engine-room artificers who passed the education test for sub-lieutenant (E) in the years 1933, 1934, 1935 and 1936, respectively, and the number who are now qualified educationally; also the number who passed the professional test in those years and the number who are now qualified professionally?
    Sir S. Hoare: The professional and educational tests for these officers are combined in one examination. The numbers of engine-room artificers who passed the examination in question in the years 1933, 1934, 1935 and 1936 were 21, 6, 6 and II, respectively. Of this total of 44, 13 have been promoted to commissioned or warrant rank and 17 are now over age for promotion to commissioned rank. At the present time, therefore, there are 14 engine-room artificers who are qualified educationally and professionally and who are consequently eligible for recommendation to a selection committee if and when they have had sufficient experience and provided that they are considered suitable in other respects.

    CONTRACTORS (BEDEAUX AND TAYLOR SYSTEMS).
    Mr. G. Hardieasked the First Lord of the Admiralty whether the Bedeaux system or the Taylor system is employed in any of the works or factories receiving contracts from his Department?
    Sir S. Hoare: The Admiralty do not require their contractors to adopt any particular method of calculating earnings, and are consequently not concerned whether a firm employs the Bedeaux or the Taylor system for this purpose, provided always that the fair wages clause, which is included in all contracts, is observed.
    Mr. Hardie: If the right hon. Gentleman has no knowledge of the systems mentioned, would he, in order to get a more humane attitude towards the workers, go and work for a week, a fortnight, or a month in one of these factories, and so gain experience of the destruction of the nervous system that takes place?

    DIESEL ENGINES.
    Mr. Chorltonasked the First Lord of the Admiralty what vessels in the new programme will be propelled by Diesel engines?
    Sir S. Hoare: Eight submarines and four auxiliary craft of the 1936 Programme will be propelled by Diesel engines. I am not at present able to make any statement with regard to the 1937 Programme.
    Mr. Bellenger: Will the new capital ships that are to be laid down be driven by oil?
    Sir S. Hoare: I think the hon. Member had better await the Navy Estimates.

    SOUND FILM EQUIPMENT.
    Mr. Day: asked the First Lord of the Admiralty the number of ships in His Majesty's Navy that are fitted with talking cinema apparatus; whether it is proposed to install same in all new ships that are being built; and what arrangements are made for a constant change of cinematograph films when ships are visiting, or are in foreign stations?
    Sir S. Hoare: Twenty-three ships have up to the present been supplied with sound film equipment under the scheme described in the answer given; to the hon. Member by the Parliamentary Secretary to the Admiralty on 6th May last. As was then stated, other ships, of which no particulars are available, have acquired sound film equipment privately. The scheme to which I have referred also provides for the supply of sound films on hire, which are sent to the various stations as occasion demands. The provision of sound film equipment in new construction is at present under consideration; but no decision has yet been reached.
    Mr. Day: Will the right hon. Gentleman see, when a decision is reached, that only British machines are installed?

    SINGAPORE BASE (OIL FUEL TANKS).
    Mr. Lambertasked the First Lord of the Admiralty whether the oil fuel tanks installed at the Singapore base are above ground, and therefore subject to destruction by aeroplane attack?
    Sir S. Hoare: The answer is in the affirmative, but with regard to the assumption at the end of the question, I would point out that the active and passive defence against air attack of oil fuel installations above ground is being closely investigated.
    Mr. Lambert: Would not damage to or destruction of these oil tanks absolutely paralyse our ships at Singapore?
    Sir S. Hoare: I can assure my right hon. Friend that we are looking very urgently into the question of the underground storage of oil.

    PROMOTIONS (LOWER DECK).
    Mr. Parkerasked the First Lord of the Admiralty the nature of the investigations into the reasons for the small number of ratings promoted to commissioned rank, the officials taking part in the investigation, and where the investigation is to be held; whether inquiries will be made into the capabilities of boys on leaving the shore-training establishments and the difficulties of continuous educational and professional training afloat; and whether evidence will be taken from the several candidates who have qualified in various parts of the examinations and yet been unable to attain commissioned rank?
    Sir S. Hoare: Reports have been called for from the various commands and establishments. Until I have received them, I cannot say what further action may be necessary.
    Mr. Paling: May I ask the right hon. Gentleman, with reference to the answer which he gave a few minutes ago, whether he thinks it a satisfactory state of affairs that, while 44 passed the examination, only 13 got commissions, 17 had to wait so long that they were over age, and 14 do not know whether they are to get commissions or not?
    Sir S. Hoare: I have informed more than one hon. Member that I am myself looking into the whole question of promotion from the lower deck. It is essential that I should have this information from the commands and establishments before I come to a decision.
    Mr. Paling: Will the right hon. Gentleman mention that particular case, seeing that, of 44 who qualified, presumably after working very hard, 13 is a very small proportion to receive commissions?
    Sir S. Hoare: The case is much more complicated than the hon. Member imagines. If he is interested I could send him other information on the subject, from which he will see that he cannot draw these conclusions from the figures.
    Mr. Parkerasked the First Lord of the Admiralty the numbers each year since the introduction of the new sublieutenant scheme of promotion in 1933 who have been reported on the special form from the shore-training establishments and from other establishments and ships is likely to make suitable commissioned officers; whether these forms are so confidential that the necessary officers do not see them; and why the number of ratings qualified professionally for sublieutenants cannot be obtained, observing that this only requires a signal to be made from the Admiralty to all commands, and that such a signal has been made on previous occasions for similar information?
    Sir S. Hoare: As the answer to the first part of the question involves a table of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT. The answer to the second part of the question is in the negative. With regard to the last part of the question,

    Numbers of confidential reports on ratings of the Seaman and Communications Branches in the years 1931–1937.

    Year.

    Number started.

    Number terminated.

    Number of ratings concerned promoted.

    Number of reports continuing at end of year.

    1931–32

    …

    …

    67

    2

    2

    63

    1933

    …

    …

    45

    28

    5

    75

    1934

    …

    …

    32

    33

    4

    70

    1935

    …

    …

    37

    27

    3

    77

    1936

    …

    …

    51

    23

    4

    101

    1937 (to date)

    …

    …

    2

    4

    —

    99

    MALTA (COAL SUPPLIES).
    Mr. H. G. Williamsasked the Secretary of State for the Colonies the reasons which led the Government of Malta to buy the cargo of Westphalian coal which arrived in Malta on 3rd February on the steamship "Fintra"?
    The Secretary of State for the Colonies (Mr. Ormsby-Gore): On 6th November last the Government of Malta invited tenders locally for the supply of 3,000 tons of Welsh washed sized coal for use in the Government Electricity Department. No offers were received by 18th December when the tenders fell due, and the Crown Agents for the Colonies were asked to assist by obtaining if possible smaller successive consignments from South Wales
    I think the hon. Member is under a misapprehension. In my reply to him on Wednesday, 17th February, I did not say that the information could not be obtained, but that it would be of doubtful value for the reasons which I gave in my reply, and that the only method of obtaining it would be to call for reports from all commands and establishments. I am at present obtaining information of the number of ratings who have been reported on the special form and who are qualified to be recommended, and, if the hon. Member wishes, I will supply these figures to him when they have been received and collated. I think this information would be of more value to him than that for which he is now asking.
    Mr. Shinwell: When does the right hon. Gentleman expect to reach a final conclusion on this matter?
    Sir S. Hoare: I could not possibly say until I have the data.
    Following is the table:
    or elsewhere. They failed, however, to obtain any offer of coal of the kind necessary for the purpose in question. The Government of Malta was thus compelled to accept the offer of Westphalian coal to which the hon. Member refers.
    Mr. Williams: While thanking my right hon. Friend for his very clear and frank reply, may I ask him whether he will be good enough to communicate the substance of it to the coal organisations in this country and to the Commissioner for the Special Areas?
    Mr. Ormsby-Gore: I agree. This is the second time that this has happened. Malta requires about 14,000 tons of Welsh coal a year, and last time the same

    1981
    thing happened. Tenders were invited for Welsh coal, but no offer was made by any of the Welsh firms.
    Sir Archibald Sinclair: Does it not mean that the quota system ought to be revised?
    Mr. Ormsby-Gore: I am sure it has nothing to do with the quota system.
    Mr. G. Hall: Will the right hon. Gentleman communicate with the committee in South Wales concerning this very important matter?
    Mr. Ormsby-Gore: I think that public attention will be drawn to it by this question.

    MUI-TSAI (COMMISSION'S REPORT).
    Mr. Lunnasked the Secretary of State for the Colonies whether or not the report of the commission on mui-tsai is to be published, and when it will be available for Members of this House?
    Mr. Ormsby-Gore: The report will be published on 1st March; copies will be placed in the Library of the House and hon. Members will be able to obtain copies for themselves in the usual way through the Vote Office.

    THE CORONATION.
    Lieut.-Commander Fletcherasked the Secretary of State for the Colonies what invitations to the Coronation ceremonies have been or will be sent to representatives of Nyasaland?
    Mr. Ormsby-Gore: As in the case of other Colonial dependencies, the Government of Nyasaland has been invited to select two gentlemen to represent the general community at the Coronation of His Majesty. One, Mr. J. Marshall, the Mayor of Blantyre, has been invited and has accepted. I am not yet in a position to say who the second may be.
    Mr. Thorne: Do the replies from the Colonies come to the right hon. Gentleman, and, if so, has he received a reply from Abyssinia?
    Mr. Ormsby-Gore: Abyssinia is not a British Colony.
    Mr. McEnteeasked the Secretary of State for the Colonies (1) whether, with regard to the command sent to the Governor of the Seychelles
    1982
    that the island should send a representative to the Coronation, he is aware that the gentleman selected by the Governor fails to meet with the approval of the large majority of the people of the Colony; why the Legislative Council was not informed in advance of this decision since the Colony has to provide the funds for the visit; and whether he is satisfied that in all such cases the delegates chosen really are representatives of the Colonies which send them?
    (2) whether, in connection with the representation of the Colonies at the coming Coronation, he can state the terms of the circular sent to Governors as to the appointment of delegates, and whether this circular was identical in all cases?
    Mr. Ormsby-Gore: Following the precedent adopted at the Coronation of His late Majesty King George V, the Governors and High Commissioners of the Colonial dependencies were invited to nominate gentlemen to represent the general community of the territories under their administration. In the despatch addressed by me to all of them on the subject, which was in terms similar to those employed in 1911, I suggested that they should select representatives from persons who had identified themselves with local interests over a considerable period of years and had deserved the good will of their fellow citizens. I added that I assumed that it should be possible for them to make a choice from among the unofficial members or ex-members of councils, members of local public bodies, etc., which should meet with general approval throughout the territory. This same phraseology was used in all cases.
    With regard to the representative nominated by the Governor of Seychelles, who is a member of both the Executive and Legislative Councils and widely respected in the Colony, I am aware that the Governor's choice has created some jealousy, which is, however, by no means so universal as the hon. Member appears to suggest. I am fully satisfied that the gentleman selected is the best qualified in accordance with the terms of my despatch, and this observation applies to the representatives which have been selected by the Officers Administering the Governments of all other Colonial dependencies. I understand that the Seychelles Legislative Council was not

    1983
    consulted by the Governor before he made his choice, as he rightly considered that the matter was one for which he should assume personal responsibility.
    Mr. McEntee: Does not the right hon. Gentleman think that the word "jealous" is one that he ought not to use in this connection, considering that he must be aware of the protest made in the House against the selection made by the Governor? Does he not also think the Government's action was somewhat high-handed, and one which is not likely to lead to continued good relations between him and the Legislative Council and between himself and the population generally, who pay for the journey to this country?
    Mr. Ormsby-Gore: According to my information, though Mr. Bradley and his followers do not like the gentleman selected, the Governor has ample evidence that the bulk of the Colonists entirely support his decision. I regret that in a small place of this kind the feeling between Mr. Bradley and the gentleman chosen should be what it is.

    INTERNATIONAL SUGAR CONFERENCE.
    Lieut.-Colonel Sandeman Allenasked the Secretary of State for the Colonies whether, in connection with the coming International Sugar Conference in London, the Government have consulted the leaders of the Colonial sugar industry; and whether in that case he can state their names?
    Mr. Ormsby-Gore: My predecessors and I have kept in close contact with representatives of the Colonial sugar industry, both by correspondence through the Colonial Governments concerned and by personal interviews in London, throughout the course of negotiations which commenced at the World Economic Conference in 1933 and have now led to the summoning of the International Conference. It would be impossible to give a list of the many names of those who have been consulted from time to time.
    Mr. Bellenger: Who will represent His Majesty's Government at this conference?
    Mr. Ormsby-Gore: I think the hon. Member had better put that question
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    down. Obviously the United Kingdom will be represented, and I shall represent the Colonial Empire. The other parts of the Empire will also he represented.
    Mr. Leach: How many protests against our sugar beet policy are pigeon-holed in the Department?
    Mr. Ormsby-Gore: I have not had any. The assistance given by this House and the Government to the Colonial sugar industry is enormously appreciated.

    AFRICA (NATIVE TAXATION).
    Mr. Creech Jonesasked the Secretary of State for the Colonies whether, seeing that the Moyne formula for direct native services was an integral part of Lord Moyne's proposals for a betterment fund and a committee to administer the fund, and seeing that neither of these institutions have been created, whether the Moyne formula for earmarking a proportion of native taxation any longer obtains?
    Mr. Ormsby-Gore: As I informed the hon. Member for Wednesbury (Mr. Banfield) on 17th February, Sir Alan Pim has advised an examination of the whole system of native direct taxation and until such an examination can be carried out it seems premature to consider the application of Lord Moyne's suggestion. In point of fact expenditure on native services has always been very close to the amount which would have been available on that suggestion and in the current year is expected to exceed it.
    Mr. Creech Jones: Is there any intention to abandon the idea of a betterment fund? Can the right hon. Gentleman give me any assurance as to the future?
    Mr. Ormsby-Gore: Pending the examination of the future of native taxation in Kenya and elsewhere in Africa, I do not think I can give any such assurance. I am rather inclined to think that the most important question at the moment to examine is whether native taxation should not be reduced.

    COLONIES (IMPORT QUOTAS).
    Mr. Burkeasked the Secretary of State for the Colonies whether he will give a full statement of the import quotas

    1985
    which have been in force in British Colonies or Protectorates from time to time since 1934 and which are now in force in respect of non-British goods?
    Mr. Ormsby-Gore: The only quotas applicable to imports into the Colonial Dependencies are the quotas on textiles of cotton or artificial silk which were brought into force in 1934. These applied to all parts of the Colonial Empire except the Mandated Territories, the East African territories subject to the provisions of the Congo Basin Treaty, Hong Kong, North Borneo, Tonga, Gibraltar, St. Helena, and the Falkland Islands. They covered imports from all foreign countries, except in West Africa where they were originally confined to imports from Japan. More recently the system has been applied in Nigeria to all foreign countries and in the Gold Coast, to British imports as well. The quotas originally prescribed were based generally on average imports for the years 1927–31 and that basis has been continued, except again in Nigeria and the Gold Coast where it has been thought desirable to provide under the new system for larger imports.

    BRITISH WEST INDIES (UNEMPLOYMENT).
    Mr. Maxtonasked the Secretary of State for the Colonies the number of unemployed in each of the West Indian islands under British control?
    Mr. Ormsby-Gore: I regret that no figures of the number of unemployed in the British West Indies are available.
    Mr. Maxton: Am I to understand that the right hon. Gentleman knows nothing about the state of employment in the West Indian islands?
    Mr. Ormsby-Gore: I know generally that there are no industrial factories and no mines. The islands are purely agricultural and we do not hear of people being unemployed. I have no reason to believe that there are unemployed in the islands.
    Mr. Maxton: Presumably there is someone responsible to the Department in each island?
    Mr. Ormsby-Gore: Yes, the Governors in each case.
    Mr. Leach: Will the right hon. Gentleman try to get us this information, differentiating between the various occupations, and particularly the sugar industry?

    METEOROLOGICAL OFFICE.
    Mr. Markhamasked the Under-Secretary of State for Air whether, in view of the fact that an up-to-date series of average weather statistics is not available to the public, he will cease to permit the Meteorological Office to charge commercial firms and students for supplying information of this kind?
    The Financial Secretary to the War Office (Sir Victor Warrender): I have been asked to reply. It is not the practice of the Meteorological Office to charge for the normal supply of weather statistics. Any member of the public can call at the Meteorological Office and he will be shown the data he requires and is at liberty to take a copy free of charge. If he wishes the Office to make a copy, a small charge based on the time of the clerical staff employed is made.
    Mr. Markham: Is the right hon. Gentleman aware that fundamental and basic statistics which ought to be available are not available, and that comparatively high prices are charged for elementary services?
    Sir V. Warrender: No, I cannot accept that.
    Mr. Markhamasked the Under-Secretary of State for Air whether any members of the staff of the Meteorological Office are engaged in full-time research in weather forecasting; and whether any arrangements are being made to provide more intensive researches into this subject?
    Sir V. Warrender: In the present conditions of pressure arising from the urgent needs of expansion it is not practicable for the time of any members of the staff of the Meteorological Office to be devoted wholly to research in weather forecasting. A considerable amount of research, however, on this and other meteorological subjects is being constantly carried out. As soon as the pressure abates and fully trained meteorologists are available, I hope that it will be possible to provide for more intensive research into weather forecasting.
    Mr. Markham: Can the hon. Gentleman say when research into this question was last made or whether there is any extensive research going on, as there seems to be an impression that no research has taken place since the pre-war years, and that the present situation is not due to the defence plan?
    Sir V. Warrender: There is research going on all the time, but it is limited owing to the pressure which exists on the present staff. We hope to increase the staff, and are in fact increasing it now. Nevertheless considerations affecting the safety of flying are being actively looked into.
    Mr.' Montague: Are the recommendations of the Maybury Committee in reference to this service and kindred services likely to be adopted by the Government?
    Sir V. Warrender: That is another question.
    Mr. H. G. Williams: May I ask my hon. Friend whether the Meteorological Office has reported any depression recently at County Hall?
    Mr. Markhamasked the Under-Secretary of State for Air by what number the staff of the Meteorological Office has been increased during the last three years; and what further additions it is proposed to make in the near future?
    Sir V. Warrender: The total staff of all grades in the Meteorological Office in February, 1934, was 315, and the present total is 423, an increase of 108. So far as can be seen at present, a further increase of about 100 will eventually be required, and of these it is expected that about 40 will be recruited in the course of a month or so.
    Mr. Markham: Is it possible to say how many of these additions to the higher staff will be available for research work?
    Sir V. Warrender: I am afraid I cannot say without notice of the question.

    CRYSTAL PALACE SITE.
    Sir Percy Harrisasked the Prime Minister whether the Government have given any consideration to the future of the Crystal Palace site; and whether, considering that the Palace was a great national institution, he will take steps to
    1988
    secure that the site is utilised to promote the health and recreation of the people?
    The Prime Minister (Mr. Baldwin): As regards the first part of the question, this is primarily a matter for the trustees under the Crystal Palace Act, 1914; as to the second part of the question, if the trustees have any proposals to make with this end in view they will no doubt in due course lay them before the National Advisory Council for Physical Training and Recreation.

    CIVIL LIST.
    Captain Arthur Evansasked the Prime Minister whether in view of the altered circumstances and the consequent new form of the Coronation Oath to be taken in conformity with the Statute of Westminster, His Majesty's Government in the United Kingdom will consult with His Majesty's Governments in Canada, Australia, New Zealand, and South Africa to ascertain whether they would welcome an opportunity of contributing to the Civil List shortly to be considered by this House?
    Tile Prime Minister: No, Sir. I should not regard it as proper that His Majesty's Government in the United Kingdom should approach His Majesty's Governments in the Dominions in the manner suggested.
    Captain Evans: While thanking the Prime Minister for that reply, may I ask him, with great respect, whether he does not feel that the people in the Dominions would welcome an opportunity of contributing financially to the maintenance of the Monarchy; and whether any conversations of a fat not al or informal character have taken place on this matter in the last few years between His Majesty's Government here and His Majesty's Government in the Dominions?
    The Prime Minister: I should require notice of the second part of the question, and with regard to the first part the matter is one for the Dominions and not for me.

  TRADE AND COMMERCE.

    ARGENTINE TRADE AGREEMENT.
    Major Dorman-Smithasked the Prime Minister whether the trade agreement with Argentina has yet been ratified;

    1989
    and, if not, whether facilities will be given for a Debate on that agreement, in view of its important bearing on the home livestock industry?
    The Prime Minister: As regards the first part of the question, I would refer my hon. and gallant Friend to the reply given yesterday by the Under-Secretary of State for Foreign Affairs to a question asked by my hon. Friend the Member for East Bradford (Mr. Hepworth). As regards the second part, I would remind my hon. and gallant Friend that the Agreement has already, in accordance with the customary procedure, lain on the Table of the House for 21 days, and that it is, therefore, now open to His Majesty's Government to ratify it at any time that they may deem appropriate.

    Year.

    Estimated Total Supply of bacon and hams.

    Average of top prices per cwt. of No. 1 Sizeable bacon from four main foreign supplying countries.

    Average top price per cwt. of English No. 1 Sizeable bacon.

    Ministry of Labour Average Retail Price.

    Denmark.

    Netherlands.

    Poland.

    Sweden.

    '000 cwts.

    s.

    d.

    s.

    d.

    s.

    d.

    s.

    d.

    s.

    d.

    s.

    d.

    1932

    …

    13,758

    59

    0

    53

    0

    49

    6

    56

    0

    (a)

    0

    10

    1936

    …

    10,631

    93

    6

    89

    6

    84

    8

    89

    3

    93

    3

    1

    2

    (a) Comparable figure not available.

    Mr. Adamsasked the President of the Board of Trade whether he is aware that the price of bacon is now too high for large sections of the population; and whether, with a view to abolishing this artificial scarcity and at the same time aiding the movement towards freer international trade, the Government propose to abolish the import quota upon this commodity?
    Dr. Burgin: According to the statistics compiled by the Ministry of Labour, the average percentage increase since July, 1914, in the retail price of bacon is below the average percentage increase shown for foodstuffs generally. The answer to the second part of the question is in the negative.
    Mr. Adams: Is the Parliamentary Secretary aware that there is great discontent in the county of Durham? Would he care to investigate it on the spot? If so, we would gladly give him hospitality.
    Dr. Burgin: I am much obliged for the invitation.
    As far as the agricultural aspect is concerned, the matter was debated during the passage of the Beef and Veal Customs Duties Bill.

    BACON.
    Mr. David Adamsasked the President of the Board of Trade what were the total supplies of bacon available in this country in 1932 and the total available in the last 12 months; and what were the average wholesale and retail prices in these years, respectively?
    The Parliamentary Secretary to the Board of Trade (Dr. Burgin): As the answer consists of a table of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    The table is as follows:

    NORWAY
    Sir Nicholas Grattan-Doyleasked the President of the Board of Trade whether he has received any approach from the Norwegian Government for a release from the agreement with this country respecting the importation of coal on the ground of shortage of supplies and price; and, if so, whether he is in a position to make a statement?
    Captain Euan Wallace (Secretary, Overseas Trade Department): No, Sir.

  DEFENCE.

    OIL STOCKS (LOCATION).
    Mr. Gardnerasked the Minister for the Co-ordination of Defence whether his attention has been called to the bulk storage of petrol and other highly inflammable fluids in large capacity tanks in crowded industrial areas and close to docks and important railway lines; and whether he has any considered plan to defend vital industrial districts and means

    1991
    of communication from this additional danger if attacks are again made on this country from the air?
    The Minister for the Co-ordination of Defence (Sir Thomas Inskip): The Committee of Imperial Defence are aware of the location of oil stocks and, as I stated during the Debate last Thursday, are constantly working on plans for the defence of important points against air attack. These include oil stocks and adjacent industrial districts and communications.

    METALS (SUPPLIES).
    Sir P. Harrisasked the Minister for the Co-ordination of Defence whether he is taking any action to secure that the three Defence Departments have the necessary supplies of such metals as tin, lead and spelter; and whether he proposes to take any action to prevent speculators from holding up supplies?
    Sir T. Inskip: The Defence Departments have had no difficulty in obtaining such supplies of these metals as they require; the second part of the question does not, therefore, arise.
    Sir P. Harris: The right hon. Gentleman has not answered my point. Has he been buying at satisfactory prices, and is he satisfied that he has sufficient supplies to prevent the needs of the Government being exploited by high prices?
    Sir T. Inskip: of course, the position is constantly reviewed, but up to the present there has been no difficulty in obtaining sufficient supplies at what are regarded as proper prices.
    Mr. Paling: Are we to understand that the right hon. Gentleman has no concern about the speculation that is going on with regard to these three metals.
    Sir T. Inskip: I was not asked about supplies—
    Mr. Paling: You were asked about prices.
    Sir T. Inskip: —but whether I was taking action to secure that we had the necessary supplies of such materials, and I said, "Yes."
    Mr. Shinwell: Is not the steep rise in prices a matter of concern to the Government, and is it not the duty of the Government to take effective measures to deal with the matter?
    Sir T. Inskip: If the hon. Gentleman likes to put down a question on that matter either to me or to my right hon. Friend the President of the Board of Trade, an endeavour will be made to answer it.
    Mr. Shinwell: Is not that question implied in the original question?
    Sir P. Harris: The right hon. Gentleman has not answered the second part of my question—whether he intends to take any action to prevent speculators from holding up supplies?
    Sir T. Inskip: I said that I thought the second part of the question did not arise, as the Government have had no difficulty in obtaining such supplies as they require. If there is any indication of any difficulty due to the activities of speculators, I will most certainly consider the necessary action.
    Mr. Thurtle: Is not the right hon. Gentleman aware that there have been enormous rises in the metal market in the last fortnight?
    Sir T. Inskip: I am well aware of what has been reported in the Press and I take notice of it, and I shall watch the position.
    Mr. Paling: Is this an example of what the Government are doing generally to deal with profiteering?

    FOOD SUPPLIES.
    Mr. Lyonsasked the President of the Board of Trade whether any decision has yet been reached with reference to the supply of fats for this country from Newfoundland and the maritime provinces of Canada, and the storage thereof; and whether any officer of the Board of Trade is or has been charged with any special duty in the matter?
    Dr. Burgin: The question of supply of foods from all sources, including those to which my hon. and learned Friend refers, has been under close examination in relation to the Government's food defence plans. Apart from this, the reply to the last part of the question is in the negative.
    Mr. De la Bèreasked the President of the Board of Trade whether, as regards the food defence plan, it is now possible to have made available to Parliament a yearly or half-yearly report from the

    1993
    office dealing with the question of food supplies; and whether it will be possible for him to make some statement dealing with the work of the Department during the course of Debate?
    Dr. Burgin: The Food (Defence Plans) Department has only been in existence for less than three months and the question whether it should make a periodical report will be considered in due course after further experience of its working has been gained. It will, however, be appreciated that much of the Department's work must remain confidential. There will no doubt be opportunities from time to time in the course of debate for the Government to furnish the House with such information as it may he possible to give.
    Mr. Thorne: All the Departments are simply saying that the provision for food is adequate. Can the Parliamentary Secretary tell us whether more land is being brought into cultivation?
    Mr. De la Béreasked the Minister of Agriculture whether, as in any future war food will be a primary consideration of defence, and in order that farmers may be encouraged to produce food by an assurance of reasonable profits, he will set up a special committee to examine the whole question with a view to securing both a profitable return to farmers and increased wages to farm labourers?
    The Minister of Pensions (Mr. Ramsbotham): I have been asked to reply. Every aspect of the problem of home food production in relation to national defence is already receiving the attention of His Majesty's Government, and my right hon. Friend does not think that any advantage would be gained in present circumstances by adopting my hon. Friend's suggestion.
    Mr. De la Béoe: Is the hon. Member aware of the widespread discontent among the whole of the agricultural community?
    Mr. Ramsbotham: I have heard nothing of the sort.

  ROYAL AIR FORCE.

    COMPRESSION IGNITION ENGINES.
    Mr. Chorltonasked the Under-Secretary of State for Air whether he is
    1994
    now able to make a further statement of the compression-ignition safety-fuel engine in service, with the number in use in the air; the number in use in Germany; and the output from the factory in Germany manufacturing these safety-fuel engines?
    Sir V. Warrender: There are no compression ignition engines in use in Royal Air Force aircraft. Research work is continuing and it is expected that a service aircraft fitted with engines of this type will shortly commence flight trials. No figures have been published regarding either the number of heavy-oil engines in use in Germany or the output of the factory producing them.
    Mr. Chorlton: Does not my hon. Friend think that it is highly important that he should obtain these figures, as the Germans are developing this engine and using it, and we are not?
    Sir V. Warrender: If the hon. Gentleman will tell me how to get them, I will gladly do so.
    Mr. Garro Jones: Is it not the fact that eminent British aircraft authorities have paid visits to these factories in Germany and that they would be able to provide the Air Ministry with the information in their possession?

    OFFICERS' PAY.
    Captain Harold Balfourasked the Under-Secretary of State for Air the basic pay of a flight lieutenant after five years seniority in his rank as compared to an Army captain of the same seniority, and the corresponding figures for squadron leaders and majors?
    Sir V. Warrender: The figures as required by the question for a flight lieutenant of the general duties branch and an infantry captain are it £15s. 4d. and £I 3s. 6d. a day respectively, and for a squadron leader and a major £1 12s. 6d. and £1 13s. 6d. respectively.
    Captain Balfour: In view of the fact that flying risks are still represented by minus is., would it not be a good thing for Air Force enlistment of officers if flying risks could be better compensated than at present?
    Sir V. Warrender: My hon. and gallant Friend has drafted his question upon a basis which would enable him to draw this deduction. I could easily redraft his

    1995
    question so that an exact contrary deduction could be made.
    Major General Sir Alfred Knox: Is it not a fact that the Army rate in each case represents far more years of service?

    SECONDED ARMY OFFICERS.
    Captain Balfourasked the Under-Secretary of State for Air how many Army officers are seconded to the Royal Air Force on 1st February, 1937, as compared to 1st February, 1935?
    Sir V. Warrender: The numbers of Army officers seconded to the Royal Air Force for flying duties in Army co-operation squadrons, including those under flying instruction, on 1st February, 1935, and 1st February, 1937, were 16 and 42 respectively. In addition, seven Army officers were attached for staff and instructional duties on 1st February, 1935, and 10 on 1st February, 1937.

    AIR RAID PRECAUTIONS (BALLOON BARRAGE).
    Sir Hugh Seelyasked the Under-Secretary of State for Air whether it is proposed to use the balloon-defence barrage for cities other than London; and, if so, what arrangements have been made to provide the necessary personnel?
    Sir V. Warrender: The balloon barrage units now being organised are for the defence of London only, but the provision of units for other cities will be considered in the light of the experience gained in the development of the London barrage.
    Sir H. Seelyasked the Under-Secretary of State for Air what arrangements have now been made to secure the necessary personnel to man the balloon-defence barrage for London?
    Sir V. Warrender: The balloon units will be formed on an Auxiliary Air Force basis with a nucleus of regular personnel. 309 men are now under training for this regular nucleus, and an announcement will be made in due course regarding the opening of recruitment of the auxiliary personnel required.
    Mr. Everard: Can the hon. Member say whether it is still the policy of the Government that searchlights should be run by the Army, and balloon-barrage by the Air Force?

    AEROPLANE MANUFACTURE (COTTON CLOTH).
    Mr. Burkeasked the Under-Secretary of State for Air whether he will give careful consideration to the use of cotton cloth in aeroplane manufacture, with a view to assisting the Lancashire cotton trade?
    Sir V. Warrender: The use of cotton fabrics for aircraft has been the subject of research since 1934, in co-operation with several Lancashire firms, and although such fabrics do not at present appear to possess all the advantages of linen fabrics, further research is proposed It should, however, be added that very little fabric is used on aircraft of current design.
    Mr. Burke: Is the hon. Member aware that for many years past Lancashire has produced a cloth which was made originally for Sir Wilfred Grenfell, in Labrador, which has been used in every expedition and found to be absolutely wind and air proof, that the wide range of cloths at the White City has astonished all who have seen them, and is it not time that this matter was gone into by the Government?
    Sir V. Warrender: I said that research on this question has been going on since 1934.
    Mr. George Griffiths: Is it a fact that the Air Force is wrapping margarine in this cloth?

    NAVY, ARMY AND AIR FORCE INSTITUTES.
    Captain Balfourasked the Under-Secretary of State for Air the proportions of profits of the Navy, Air Force, and Army canteen profits allotted to the Royal Air Force for 1936 as compared to the Army and Navy, and on what basis the proportion is arrived at?
    Sir V. Warrender: I am informed that the accounts of the Nary, Army and Air Force Institutes for 1936 are not yet complete, and figures showing the distribution of rebate and discount for the year are not, therefore, available. There is a separate allocation of profits, based upon trading results, to the Navy on the one hand, and to the Army and Royal Air Force together on the other hand. Uniform rates of rebate for the Royal Air

    1997
    Force and the Army are fixed from time to time with regard to the combined trading results of the two Services, and the amount so allocated varies with the average spending per man per month, whether in the Army or in the Royal Air Force, at each station.
    Captain Balfour: In view of the increasing number of personnel in the Royal Air Force, can the hon. Member make representations that there ought to be a greater allocation to the Air Force at the present time?

    WHITE WALTHAM (FACTORY).
    Mr. Annesley Somervilleasked the Under-Secretary of State for Air whether it is still contemplated to erect in the Thames Valley district, in connection with the re-armament programme, any air-engine or air-component factories at White Waltham or elsewhere in the valley; and whether he will give an assurance that sanction will not be given to the erection of any such factory or factories without previously informing this House?
    Sir V. Warrender: The answer to the first part of the question is in the negative, and the second part does not therefore arise.
    Mr. Somerville: May I ask whether, with regard to the land which it had been proposed to take over for the factory, it has been decided to return it to the owner, who is extremely anxious to retain it?
    Sir V. Warrender: Perhaps the hon. Member will put that question down.

  TRANSPORT.

    ROLLING STOCK, LONDON SUBURBAN RAILWAYS.
    Mr. Bullasked the Minister of Transport whether, in view of the local dissatisfaction with regard to the condition of much of the rolling stock on the suburban lines serving Liverpool Street, he will represent to the railway companies concerned the desirability of its early improvement or replacement?
    The Minister of Transport (Mr. HoreBelisha): I will call the attention of the railway company to my hon. Friend's question and, if he desires to supplement it by details relating to any particular
    1998
    suburban lines, I will forward the information to the company.

    ROAD HAULIERS (LICENCES).
    Mr. Priceasked the Minister of Transport whether he is aware that there is dissatisfaction among "A" and "B" licence holders, road hauliers, with the necessity for public hearings before licensing authorities each year to secure renewals of their licences; and whether he will consider a method of procedure less onerous for these licence holders?
    Mr. Hore-Belisha: "A" licences last for two years and not for one year, as suggested in the question. A Bill now before the House will, if it becomes law, enable me to extend the period of validity of these licences.
    Mr. Priceasked the Minister of Transport whether he is aware that there is dissatisfaction among "A" and "B" licence-holders, road hauliers, with their lack of representation on the Transport Advisory Council; and whether he will take steps to remedy this situation?
    Mr. Hore-Belisha: The constitution of the Transport Advisory Council is determined by the Road and Rail Traffic Act, 1933, and before appointing the present members, representative organisations were consulted in the manner the statute prescribes.
    Mr. Price: Will the right hon. Gentleman consider the question of re-appointment in order to give these people adequate representation?
    Mr. Hore-Belisha: The council now consists of 29 members and the users of motor vehicles have five of that number.

    TUBE RAILWAY (ELEPHANT AND CASTLE-CAMBERWELL).
    Mr. Dayasked the Minister of Transport whether he can give particulars of the proposed extension of the tube between the Elephant and Castle and Camberwell?
    Mr. Hore-Belisha: The matter is now before the Standing Joint Committee.

    STREET NAMES.
    Captain Stricklandasked the Minister of Transport whether any action has been taken by his Department since the issue in 1930 of the Circular No. 240 (Roads) to highway authorities on the

    1999
    display of street names to ensure the more conspicuous and uniform display of street names, especially at road junctions on main roads in urban areas; and whether he will consider the issue of a new edition of the circular revised, in view of the recommendations made by the Departmental Committee on Traffic Signs, in order to assist vehicle drivers in recognising the names of streets?
    Mr. Hore-Belisha: Yes, Sir. I have again drawn the attention of highway authorities to this matter by a Circular issued on 3oth January this year.
    Mr. H. G. Williams: Will the right hon. Gentleman draw the attention of urban authorities to this matter, as their conduct is very much worse?
    Mr. Hore-Belisha: I have already done so.

    TRAFFIC LIGHTS (FIRE ENGINES).
    Mr. W. H. Greenasked the Minister of Transport whether his attention has been called to a recent decision of the magistrate at Clerkenwell police court in which the driver of a London County Council fire engine was fined for passing a red traffic light; and what action he proposes to take in order that some latitude may be allowed to fire engines proceeding to fires and accident ambulances carrying out their duties when faced by adverse traffic lights?
    Sir N. Grattan-Doyleasked the Minister of Transport whether he is aware that fire engines proceeding to a fire are required to conform with the traffic signals although they have exemption with regard to the speed limit; and whether, in view of the urgent nature of the business upon which they are engaged, he will cause them to be exempted from obedience to traffic signals?
    Mr. Hore-Belisha: According to Press reports, the fact that the driver of the fire engine ignored a red signal resulted in an accident.

    ROAD TRAFFIC (SAFETY PRECAUTIONS).
    Sir Gifford Foxasked the Minister of Transport whether his attention has been called to an analysis of fatal accidents by the county surveyor of Oxford, in which he points out the avoidable causes, such as the absence of foot-
    2000
    paths, high hedges, blind junctions at cross roads, especially where there are steep down-grades, and the absence of proper cycle tracks; and what steps he is proposing to take to remedy these conditions on main roads which his Department is taking over and to encourage local authorities to provide the necessary precautions on roads under their control?
    Mr. Hore-Belisha: My hon. Friend might like to read my recent circular to highway authorities upon the design and lay-out of roads.
    Sir G. Fox: Is the right hon. Gentleman aware that the painting of a white line down the main roads of Oxfordshire has been a very great help to motorists, especially in fog and night time?
    Mr. Hore-Belisha: Yes, Sir. Oxfordshire is an exemplary county.
    Captain Strickland: Is the right hon. Gentleman aware that in many places the white line down the middle of the road has not been repainted for a considerable time? Will he emphasise the importance of the white line down the centre of the roads?

    ORGANISED HOLIDAY TOURS.
    Mr. Roland Robinsonasked the Minister of Transport whether he is aware that the present system of granting licences under the Road Traffic Act is causing anxiety among workers who make provision for their annual holiday in co-operation with certain road-traffic concerns; and whether he will consider issuing special instructions to the road traffic commissioners not to hear opposition to the applications of such concerns as deal solely with organised holiday tours?
    Mr. Hore-Belisha: The Road Traffic Act, 193o, requires the commissioners to hear representations from interested parties, and I have no power to issue such instructions.

    ROAD-MAKING (COTTON CLOTH).
    Mr. Burkeasked the Minister of Transport whether he has any information to give regarding experiments in the use of cotton cloth for road-making?
    Mr. Hore-Belisha: Experiments have tended to show that no advantage is gained by using cotton cloth for road-making in this country.
    Mr. Burke: Will the right hon. Gentleman get into touch with the people in the North who have been experimenting, and whose opinion is different from that expressed in his answer?
    Mr. Hore-Belisha: I have been in touch with those who have been conducting these experiments, and their reports are not encouraging. I am ready to listen to any representations that may be made to me.

    ROAD SURFACING.
    Mr. Watkinsasked the Minister of Transport whether, in order to reduce the number of road accidents due to skidding, his Department are investigating any new methods of road-surfacing, rubber or otherwise?
    Mr. Hore-Belisha: Yes, Sir, the fundamental aspects of the question are continuously examined at the Road Research Laboratory.
    Mr. Watkins: May I ask whether that covers the investigation of new methods of road surfacing instead of merely selecting from existing methods?
    Mr. Hore-Belisha: Yes, certainly. I would send the hon. Member a copy of the book on "Road Surface Resistance for Skidding." It is a lengthy volume, but it answers his question completely.

    MENAI BRIDGE.
    Miss Lloyd Georgeasked the Minister of Transport whether he is now in a position to make a statement with regard to the Menai Bridge?
    Mr. Hore-Belisha: I propose to reconstruct the bridge at an estimated cost of £1228,000 so as to enable it to carry the full traffic of the district, and at the same time to maintain the essential features of Telford's design. I am instructing the consulting engineers to prepare the necessary details.
    Major Owen: Will the tolls be abolished when the bridge has been built?
    Mr. Hore-Belisha: I can hold out no such hope at the moment.
    Captain Balfour: Will every other island in England get an equal advantage?
    Mr. Hore-Belisha: One is represented by the hon. Member for Anglesey (Miss Lloyd George).
    Miss Lloyd George: While thanking the Minister, may I ask him whether he is satisfied that the bridge, when reconstructed, will be adequate to carry all modern traffic?
    Mr. Hore-Belisha: Perhaps the hon. Lady will recall the fact that she and I traversed this bridge together. I hope to make the structure adequate for every other purpose.

    ELECTRICAL POWER LEAKAGE, LITTLE STORETON.
    Captain Alan Grahamasked the Minister of Transport whether his attention has been drawn to a recent leakage of electric power from a transformer ct Little Storeton, Wirral, which was of sufficient strength to kill a cow; and what steps, if any, in the interests of the public, he proposes to take in order to prevent a recurrence of such dangerous leakages?
    Mr. Hore-Belisha: An investigation is proceeding.

    PAPER (SUPPLY).
    Sir Joseph Lambasked the President of the Board of Trade whether provision is being made to ensure the supply of paper in this country in time of war?
    Dr. Burgin: My hon. Friend can rest assured that the importance of maintaining paper supplies in time of war is not being overlooked.

  AGRICULTURE.

    GLASSHOUSE CROPS.
    Mr. Chorltonasked the Minister of Agriculture the increase in horticultural production that followed the passing of the Act protecting hothouse products in yearly periods compared with the period before the Act; and whether he can state the proportion in the London district and that in the South Lancashire district?
    Mr. Ramsbotham: I have been asked to reply. As the answer includes a table of figures, I propose, with my hon. Friend's permission, to circulate it in the OFFICIAL REPORT.
    Mr. T. Williams: Will the hon. Member also circulate the prices before and after the passing of the Act?
    Following is the reply:
    Information is not available annually regarding the output of glasshouse crops, but the following statement shows the estimated quantities and values of such

    Description.

    1931.

    1935.

    Increase since 1931.

    Quantity.

    Value.

    Quantity.

    Value.

    Quantity.

    Value.

    £000.

    £000

    Per cent.

    Per cent.

    Fruit and Vegetables:

    Tons.

    Tons.

    Tomatoes

    54,000 Millions.

    2,190

    59,000 Millions.

    2,520

    9

    15

    Cucumbers

    54 lbs.

    770

    75 lbs.

    800

    39

    4

    Grapes

    1,150,000

    90

    2,030,000

    45

    77

    61

    All others

    —

    230

    —

    295

    —

    28

    Flowers, Foliage and Plants

    —

    2,290

    —

    3,205

    —

    40

    Total

    —

    5,570

    —

    6,965

    —

    25

    I regret that I am unable to give comparative figures on a regional basis.

    POULTRY INDUSTRY.
    Mr. Bossomasked the Minister of Agriculture whether, in view of the fact that the trades agreements have in many cases been satisfactory but have worked disastrously for poultry farmers, he will consider a scheme of rebating to our poultry farmers all or part of the import tax collected from foreign eggs on some plan similar to that of the wheat subsidy until such time as it is possible to readjust the existing situation?
    Mr. Ramsbotham: Any plan of the kind suggested by my hon. Friend would require legislation. As he is aware, similar suggestions were made by the Reorganisation Commission for Eggs for Great Britain as part of a balanced policy for the industry, including reorganisation of marketing, on which the industry has not been able to agree. My hon. Friend is no doubt aware that an application for increased duties on eggs and egg products is at present before the Import Duties Advisory Committee. I would also remind him that as my hon. Friend the Parliamentary Secretary of the Board of Trade stated in reply to questions on 16th February, the position of the poultry industry will receive full consideration during the negotiations for a renewal of
    crops produced in England and Wales in the years 1931 and 1935, when special inquiries into output were undertaken.
    various trade agreements which it is hoped may take place this year.
    Mr. Bossom: Is there no constructive suggestion the hon. Member can make to help these poor fellows in this industry who are now being ruined?
    Sir J. Wardlaw-Milne: In view of the special urgency of this matter, and the great distress in the industry, will the hon. Member endeavour to get a speedy reply from the committee who are considering the matter?
    Mr. Ramsbotham: I gave a reply during the last few days to which I can usefully add very little. I would remind hon. Members that the standard mark price is 16s. 6d. per long hundred, compared with 13s. 6d. for the corresponding day of last year, 11s. for 1935 and 12s. for 1934.
    Mr. T. Williams: May I ask whether the National Poultry Council will take any steps to apply any part of the recommendations of the Egg and Poultry Reorganisation Commission?
    Mr. Ramsbotham: As I have said in my answer, on the question of marketing the industry has not been able to agree.
    Mr. Bossom: Will the hon. Member state the increase which has taken place in the price of feeding stuffs?
    Mr. Ramsbotham: There has been an increase of about 30 per cent., but in the last few weeks it has fallen by 3 ½ per cent.
    Mr. Macquisten: Was not this the question put to the industry: "Unless you accept a marketing board with all its bureaucratic control and expense, you will not get protection?" Is not that simply blackmailing the industry?
    Mr. Ramsbotham: That statement is incorrect.

    COAL INDUSTRY (OILEXTRACTION).
    Captain Evansasked the Secretary for Mines whether any tests have been made by the Government of the Fischer-Tropsch process of extracting oil from coal; and whether he has any information concerning the erection of a plant in South Wales comparable to Billingham but employing this process?
    The Secretary for Mines (Captain Crookshank): The Fuel Research Station of the Department of Scientific and Industrial Research has been investigating the general reactions of the Fischer synthesis in the course of its normal programme, but in the absence of any plant in this country there has been no opportunity to conduct a test upon the Fischer-Tropsch process. The answer to the second part of the question is—No, Sir.
    Captain Evans: Is it the intention of His Majesty's Government to make what arrangements are necessary to have this scheme tested under commercial auspices in South Wales?
    Captain Crookshank: As I have just said, there is no plant, and as there is no plant there cannot be any test.
    Captain Evans: I am afraid that the Secretary for Mines has misunderstood me. I want to ask whether His Majesty's Government would make what arrangements are necessary for the establishment of such plant?

BUSINESS OF THE HOUSE.
Mr. Attlee: May I ask the Prime Minister what business he proposes to take to-day?
The Prime Minister: We are suspending the Eleven o'Clock Rule in order to take the Second Reading of the Local Government (Financial Provisions) Bill, and the Committee stage of the necessary Money Resolution. We hope to make further progress with the outstanding Supplementary Estimates—the Committee stage of the Post Office Estimate—and the Report stage of the Estimates which were recently considered in Committee.
Mr. Attlee: I hope the Prime Minister does not propose to take the Post Office Estimate at a very late hour?
The Prime Minister: No, certainly not.
Motion made, and Question put,
"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]
The House divided: Ayes, 257; Noes, 107.

Division No. 89.]

AYES.

[3.50 p.m.

Acland, Rt. Hon. Sir F. Dyke

Briscoe, Capt. R. G.

Colville, Lt.-Col. Rt. Hon. D. J.

Acland-Troyte, Lt.-Col. G. J.

Brocklebank, C. E. R.

Cook, Sir T. R. A. M. (Norfolk, N.)

Agnew, Lieut.-Comdr. P. G.

Brown, Brig.-Gen. H. C. (Newbury)

Cooke, J. D. (Hammersmith, S.)

Albery, Sir Irving

Browne, A. C. (Belfast, W.)

Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)

Allen, Lt.-Col. J. Sandeman (B'kn'hd)

Bull, B. B.

Cooper, Rt. Hn. T. M. (E'nburgh, W.)

Anderson, Sir A. Garrett (C. of Ldn.)

Bullock, Capt. M.

Courthope, Col. Sir G. L.

Apsley, Lord

Burgin, Dr. E. L.

Cranborne, Viscount

Aske, Sir R. W.

Burton, Col. H. W.

Crooke, J. S.

Assheton, R.

Butler, R. A.

Crookshank, Capt. H. F. C.

Astor, Hon. W. W. (Fulham, E.)

Campbell, Sir E. T.

Crass, R. H.

Baldwin, Rt. Hon. Stanley

Cartland, J. R. H.

Crowder, J. F. E.

Baldwin-Webb, Col, J.

Cary, R. A.

Davies, Major Sir G. F. (Yeovil)

Balfour, Capt. H. H. (Isle of Thanet)

Castlereagh, Viscount

Davison, Sir W. H.

Balniel, Lord

Cayzer, Sir C. W. (City Of Chester)

De Chair, S. S.

Barclay-Harvey, Sir C. M.

Cazalet, Thelma (Islington, E.)

De la Bère, R.

Baxter, A. Beverley

Chamberlain, Rt. Hn. N. (Edgb't'n)

Denman, Hon. R. D.

Beaumont, Hon. R. E. B. (Portsm'h)

Channon, H.

Denville, Alfred

Beit, Sir A. L.

Chorlton, A. E. L.

Doland, G. F.

Birchall, Sir J. D.

Christie, J. A.

Dorman-Smith, Major R. H.

Bossom, A. C.

Clarke, Lt.-Col. R. S. (E. Grinstead)

Drewe, C.

Boulton, W. W.

Clydesdale, Marquess of

Duckworth, G. A. V. (Salop)

Bowater, Col. Sir T. Vansittart

Cobb, Captain E. C. (Preston)

Duckworth, W. R. (Moss Side)

Boyce, H. Leslie

Colfox, Major W. P.

Dugdale, Major T. L.

Brass, Sir W.

Colman, N. C. D.

Duggan, H. J.

Duncan, J. A. L.

Lambert, Rt. Hon. G.

Rickards, G. W (Skipton)

Dunglass, Lord

Law, Sir A. J. (High Peak)

Roberts, W. (Cumberland, N.)

Eden, Rt. Hon. A.

Leech, Dr. J. W.

Robinson, J. R. (Blackpool)

Elliot, Rt. Hon. W. E.

Lees-Jones, J

Ropner, Colonel L.

Ellis, Sir G.

Leigh, Sir J.

Ross Taylor, W. (Woodbridge)

Elliston, Capt. G. S.

Leighton, Major B. E. P.

Ruggles-Brise, Colonel Sir E. A.

Emery, J. F.

Lennox-Boyd, A. T. L.

Russell, R. J. (Eddisbury)

Emmott, C. E. G. C.

Levy, T.

Russell, S. H. M. (Darwen)

Entwistle, Sir C. F.

Lindsay, K. M.

Salmon, Sir I.

Errington, E.

Llewellin, Lieut.-Col. J. J.

Salt, E. W.

Evans, Capt. A. (Cardiff, S.)

Lloyd, G. W.

Samuel, M. R. A.

Evans, D. O. (Cardigan)

Locker-Lampson, Comdr. O. S.

Sanderson, Sir F. B.

Everard, W. L.

Loftus, P. C.

Sandys, E. D.

Findlay, Sir E,

Lyons, A. M.

Scott, Lord William

Fox, Sir G. W. G.

MacAndrew, Colonel Sir C. G.

Seely, Sir H. M.

Fremantle, Sir F. E

McCorquodale, M. S.

Shakespeare, G. H.

Furness, S. N.

MacDonald, Rt. Hon. J. R. (Scot. U.)

Shaw, Major P. S. (Wavertree)

Ganzoni, Sir J.

MacDonald, Rt. Hon. M. (Ross)

Shute, Colonel Sir J. J.

George, Major G. Lloyd (Pembroke)

Macdonald, Capt. P. (Isle of Wight)

Simon, Rt. Hon. Sir J. A.

George, Megan Lloyd (Anglesey)

McKie, J. H.

Sinclair, Rt. Hon. Sir A. (C'thn's)

Gilmour, Lt.-Col. Rt. Hon. Sir J.

Maclay, Hon. J. P.

Sinclair, Col. T. (Queen's U. B'lf'st)

Gluckstein, L. H.

Macnamara, Capt. J. R. J.

Smiles, Lieut.-Colonel Sir W. D.

Goldie, N. B.

Macquisten, F. A.

Somervell, Sir D. B. (Crewe)

Graham, Captain A. C. (Wirral)

Maitland, A.

Somerville, A. A. (Windsor)

Grant-Ferris, R.

Granville, E. L.

Makins, Brig.-Gen. E.

Southby, Commander A. R. J.

Grattan-Doyle, Sir N.

Mander, G. le M.

Spears, Brigadier-General E. L.

Gretton, Col. Rt. Hon. J.

Manningham-Buller, Sir M.

Spens, W. P.

Gridley, Sir A. B.

Margesson, Capt. Rt. Hon. H. D. R.

Stanley, Rt. Hon. Lord (Fylde)

Griffith F Kingsley (M'ddl'sbro, W.)

Markham, S. F.

Stanley, Rt. Hon. Oliver (W'm'l'd)

Grimston, R. V.

Maxwell, Hon. S. A.

Stewart, William J. (Belfast, S.)

Guest, Hon. I. (Brecon and Radnor)

Mayhew, Lt.-Col. J.

Storey, S.

Guy, J. C. M.

Meller, Sir R. J. (Mitcham)

Strickland, Captain W. F.

Hamilton, Sir G. C.

Mills, Sir F. (Leyton, E.)

Stuart, Lord C. Crichton- (N'thw'h)

Hannah I. C.

Mills, Major J. D. (New Forest)

Stuart, Hon. J. (Moray and Nairn)

Hannon, Sir P. J. H.

Mitchell, H. (Brentford and Chiswick)

Sueter, Rear-Admiral Sir M. F.

Harris, Sir P. A.

Moore, Lieut.-Col. T. C. R.

Sutcliffe, H.

Hartington, Marquess of

Morris-Jones, Sir Henry

Taylor, Vice-Adm. E. A. (Padd., S.)

Haslam, H. C. (Horncastle)

Morrison, G. A. (Scottish Univ's.)

Titchfield, Marquess of

Heilgers, Captain F. F. A.

Morrison, Rt. Hon. W. S. (Cirencester)

Train, Sir J.

Herbert, A. P. (Oxford U.)

Munro, P.

Tryon, Major Rt. Hon. G. C.

Herbert, Major J. A. (Monmouth)

Neven-Spence, Major B. H. H.

Turton, R. H.

Hills, Major Rt. Hon. J. W. (Ripon)

O'Neill, Major Rt. Hon. Sir Hugh

Wakefield, W. W.

Hoare, Rt. Hon. Sir S.

Ormsby-Gore, Rt. Hon. W. G. A.

Wallace, Capt. Rt. Hon. Euan

Holmes, J. S.

Orr-Ewing, I. L.

Wardlaw-Milne, Sir J. S.

Hope, Captain Hon. A. O. J.

Owen, Major G.

Warrander, Sir V.

Hopkinson, A.

Palmer, G. E. H.

Wayland, Sir W. A

Hore-Belisha, Rt. Hon. L.

Patrick, C. M.

Wedderburn, H. J. S.

Horsbrugh, Florence

Peake, O.

White, H. Graham

Howitt, Dr. A. B.

Peat, C. U.

Wickham, Lt.-Col. E. T. R.

Hudson, Capt. A. U. M. (Hack., N.)

Percy, Rt. Hon. Lord E.

Williams, C. (Torquay)

Hudson, R. S. (Southport)

Peters, Dr. S. J.

Williams, H. G. (Croydon, S.)

Hulbert, N. J.

Petherick, M.

Willoughby de Eresby, Lord

Hume, Sir G. H.

Pickthorn, K. W. M.

Windsor-Clive, Lieut.-Colonel G.

Hunter, T.

Pilkington, R.

Wise, A. R.

Inskip, Rt. Hon. Sir T. W. H.

Radford, E. A.

Wolmer, Rt. Hon. Viscount

James, Wing-Commander A. W. H.

Raikes, H. V. A. M.

Womersley, Sir W. J.

Jones, H. Haydn (Merioneth)

Ramsbotham, H.

Wood, Rt. Hon. Sir Kingsley

Keeling, E. H.

Rankin, Sir R.

Wright, Squadron-Leader J. A. C.

Kerr, H. W. (Oldham)

Rathbone, J. R. (Bodmin)

Kerr, J. Graham (Scottish Univs.)

Rawson, Sir Cooper

TELLERS FOR THE AYES.—

Kimball, L.

Rayner, Major R. H.

Sir George Penny and Lieut.

Knox, Major-General Sir A. W. F.

Reid, Sir D. D. (Down)

Colonel Sir A. Lambert Ward.

Lamb, Sir J. Q.

Reid, W. Allan (Derby)

NOES.

Adams, D. (Consett)

Charleton, H. C.

Griffiths, G. A. (Hemsworth)

Adams, D. M. (Poplar, S.)

Chater, D.

Griffiths, J. (Llanelly)

Adamson, W. M.

Cluse, W. S.

Hall, G. H. (Aberdare)

Ammon, C. G.

Cove, W. G.

Hall, J. H. (Whitechapel)

Anderson, F. (Whitehaven)

Davidson, J. J. (Maryhill)

Hardie, G. D.

Attlee, Rt. Hon. C. R.

Davies, R. J. (Westhoughton)

Hayday, A.

Banfield, J. W.

Davies, S. O. (Merthyr)

Henderson, A. (Kingswinford)

Barr, J.

Day, H.

Henderson, T. (Tradeston)

Batey, J.

Dobbie, W.

Hollins, A.

Bellenger, F. J.

Dunn, E. (Rother Valley)

Jenkins, A. (Pontypool)

Benn, Rt. Hon. W. W.

Ede, J. C.

Jenkins, Sir W. (Neath)

Benson, G.

Fletcher, Lt.-Comdr. R. T. H.

John, W.

Bromfield, W.

Gallacher, W.

Johnston, Rt. Hon. T.

Brooke, W.

Gardner, B. W.

Jones, A. C. (Shipley)

Brown, C. (Mansfield)

Garro Jones, G. M.

Jones, Morgan (Caerphilly)

Brown, Rt. Hon. J. (S. Ayrshire)

Gibbins, J.

Kelly, W. T.

Burke, W. A.

Greenwood, Rt. Hon. A.

Kennedy, Rt. Hon. T.

Cape, T.

Grenfell, D. R.

Kirby, B. V.

2008

2009

Lawson, J. J.

Price, M. P.

Taylor, R. J. (Morpeth)

Leach, W.

Pritt, D. N.

Thorne, W.

Lee, F.

Quibell, D. J. K.

Thurtle, E.

Leonard, W.

Richards, R. (Wrexham)

Tinker, J. J.

Logan, D, G.

Riley, B.

Viant, S. P.

Lunn, W.

Rowson, G.

Walkden, A. G.

Macdonald, G. (Ince)

Salter, Dr. A.

Watkins, F. C.

McEntee, V. La T.

Sanders, W. S.

Watson, W. McL.

McGhee, H. G.

Sexton, T. M.

Wedgwood, Rt. Hon. J. C.

Maclean, N.

Shinwell, E.

Westwood, J.

Mainwaring, W. H.

Short, A.

Wilkinson, Ellen

Marshall, F.

Silverman, S. S.

Williams, T. (Don Valley)

Maxton, J.

Simpson, F. B.

Wilson, C. H. (Atterclifle)

Montague, F.

Smith, Ben (Rotherhithe)

Woods, G. S. (Finsbury)

Paling, W.

Smith, E. (Stoke)

Young, Sir R. (Newton)

Parker, J.

Smith, Rt. Hon. H. B. Lees-(K'ly)

Parkinson, J. A.

Sorensen, R. W.

TELLERS FOR THE NOES.—

Pethick-Lawrence, F. W.

Stephen, C.

Mr. Groves and Mr. Mathers.

Potts, J.

Stewart, W. J. (H'ghfn-le-Sp'ng)

Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.

THE CORONATION (MR. SPEAKER'S ATTENDANCE).
The Secretary of State for the Home Department (Sir John Simon): I have to inform the House that His Majesty has been graciously pleased to signify a desire that, at His Majesty's Coronation in Westminster Abbey on Wednesday, 12th May next, the House should be represented by Mr. Speaker. This intimation of His Majesty's Pleasure means that the House will dispense with going to the Abbey in its corporate capacity, and hon. Members will therefore be free to go to the Abbey in the manner most convenient to themselves. I, therefore, beg to move:
"That this House, in accordance with His Majesty's gracious intimation, doth authorise Mr. Speaker, as representing this House, to attend His Majesty's Coronation in Westminster Abbey on Wednesday, the 12th day of May next."

SELECTION (STANDING COMMITTEES).

  STANDING COMMITTEE B.
  Colonel Gretton reported from the Committee of Selection; That they had discharged the following Members from Standing Committee B: Colonel Baldwin-Webb, Mr. Lees-Jones, and Admiral Sir Murray Sueter; and had appointed in substitution: Mr. Cartland, Mr. Rostron Duckworth, and Mr. Rickards.
  Report to lie upon the Table.

ORDERS OF THE DAY.

  LOCAL GOVERNMENT (FINANCIAL PROVISIONS) BILL.
  Order for Second Reading read.
  The Minister of Health (Sir Kingsley Wood): I beg to move, "That the Bill be now read a Second time."
  This is the first time we have been enabled to consider the case of grants made under the Local Government Act of 1929. Many hon. Members whom I see before me will recall the introduction of the Bill by my right hon. Friend the Chancellor of the Exchequer, and the discussions arising on it at the end of 1928. It was at first a Measure not easily understood. We often wished in those days that we had a blackboard in the Chamber, on which to demonstrate to the House some of the calculations and formulae. There were, of course, natural doubts expressed, and on occasion there were predictions of a more or less pessimistic character as to what it all meant and what would be the result both to the local government system and its finances. But I think I can claim, I hope with the general acceptance of the House, that—though as in everything else improvements can be made from time to time as experience and trial warrant—the Act has proved to be a great and successful Measure of local government and of social reform, that it is generally accepted, and that no party in the State advocates its repeal to-day. For instance, in connection with our local government finance and its relationship with the Exchequer, no one would desire to revert to the old percentage system, which took little or no account of the relative wealth or poverty of different districts or of the differing needs of different districts.
  The old system was indeed illogical and often unjust, and it too frequently meant that national contributions to local needs were given in the largest measure to those who had least need, while those who could not afford to maintain their own services got the smallest contribution from the national resources. It was to end all this that the block grant, with its famous and ingenious formula, was designed and adopted by Parliament. If sometimes calculations were difficult, its principles were plain. It took account of the principal factors which govern the need of a
  2022
  locality—population, rateable value per head, the number of children under five, indicative of relative wealth and poverty. They were used and are used to-day to weight the population, as it is called, and to increase it in proportion as the two factors were taken into account. To them two others were added, unemployment and the relation of the sparsity of the population in rural areas.
  To avoid too sudden a change in local finances, certain guarantees were given, and the main distribution during the early grant periods was designed and is being made to-day partly on the loss of rates and grants, and partly on the basis of the formula. The Act in fact provided for a gradual transition from the old financial basis to the new, and it was not to be put completely into operation until nearly 20 years had elapsed since it was first introduced. These reforms were accompanied by others designed to secure a reorganisation and strengthening of the units of local government, while the important services of public assistance and highways were transferred to the larger authorities.
  I think I can claim that as a consequence of these reforms local authorities have in the first place been emancipated from much unnecessary interference by the State Departments and have been given much greater financial interest and freedom in their administration. Certainly I think right hon. Gentlemen opposite will agree that the opportunity for stimulus and co-ordination by the central Department has in fact increased with the disappearance of the percentage grants; and certainly it will not be gainsaid that the block grant has increased and assured for the local authorities a considerable pool to provide for the expansion of their services. The original provision for this purpose was an additional sum of £5,000,000, and it was at the same time proposed by the Government and adopted by Parliament that as local services expanded the aggregate contribution to local services from the State should continue to grow in the same proportion. In 1933 a further sum was added. I remember that at that time anxieties were expressed as to whether the standards of our health services would be maintained under the new system, and again I think it will not be generally gainsaid that much has been achieved since 1929 in the direction of

  2023
  securing that the services of local authorities should reach a higher standard.
  I will give one illustration only, though I could give many. There has, for instance, been a great development since that year in rural sewerage and water schemes, consequent upon the wider powers and financial contributions which were made available by the Act. It has, of course, been aided by the special rural water grant, but the total contribution made by rural district councils and county councils since 1934 has largely exceeded the Government grant itself. I was looking at the figures, so far as loans were concerned, and I see that the amount of loans sanctioned for rural works and sewage disposal has steadily grown from £292,000 in 1932–33 to £1,000,000 in 1935–36.
  There were also many quite natural fears expressed in 1929 that the abandonment of the old system would retard the development of services and that local authorities would decline to find out of the rates the moneys required for the desirable expansion of those services. I remember particularly that grave fears were expressed concerning the maternity and child welfare services. In the last year of the percentage grant, 1929–30, the total expenditure on maternity and child welfare in England and Wales was £2,400,000. Excluding sums paid by the local authorities to voluntary agencies in place of Exchequer grants formerly paid, the expenditure has risen by no less than 25 per cent. in 1934–35. If you look at the comparable figure for the expansion of all services during this particular period, it has risen by no less than 9 per cent.
  When considering the question of State assistance to the local authorities it is right that the House should mark, in the interest of local government itself, the extent to which the national Exchequer is contributing to local expenditure to-day. Already in a considerable number of areas the Exchequer meets between, 55 per cent. and 65 per cent. of the local expenditure. In seven administrative counties the proportion of expenditure for 1934–35 found from grants was between 65 per cent. and 70 per cent.; in Rutland is was 71 per cent.; in the Isle of Ely 72 per cent.; Montgomery 74 per cent.; and in Huntingdon 77 per cent. The proportion in county boroughs was
  2024
  generally less, though in some towns it was considerable. The proportion for the country as a whole was 44.6 per cent.
  Again, most people w ill agree that a point can be reached when the proportion of expenditure made from sources other than local would much weaken if not destroy local government itself. Indeed, I think it is desirable, in the interest of our valued local democratic system, that the responsibility to the ratepayers by local authorities should be fully maintained; but it is obvious that Exchequer subsidies cannot ge beyond a certain limit without the imposition of some direct Exchequer control, and to exceed that limit would sap undoubtedly our local government institutions and in some areas might well end them altogether. It can be said with fairness to-day that we must certainly avoid such a disaster to our system of local administration. There have been many changes in our social and industrial position since my right hon. Friend the Chancellor of the Exchequer introduced his great Measure in 1928. There have been considerable movements of population, a decline in the birth rate, a quinquennial re-valuation, the revival of industry in many areas and a continuance of industrial depression in some others.
  It was in such circumstances as these that for more than 12 months an intensive examination has been undertaken of all the financial issues connected with the distribution of the block grant on the formula basis. It has been carried out in accordance with the Statute, which laid down that that examination should be in consultation with the various associations of local authorities and the London County Council; and, the House will see, in page 2 of the White Paper, that in accordance with that: statutory provision, at the end of November, 1935, I saw the representatives of the County Councils' Association, the Association of Municipal Corporations, the Urban District Councils' Association, the Rural District Councils' Association, and, as regards London, the London County Council and the Metropolitan Boroughs Standing joint Committee. I should like to express, as I think I can in the name of the whole House, our thanks to these associations for their most patient endeavour and work for so long a period. I would call the attention of the House to paragraph 12 of the White Paper, where it is stated that

  2025
  the conclusions which the local authorities reach
  "have been reached in a spirit of compromise and in the opinion of the conference are such as would produce a settlement of county and county borough apportionments which can reasonably be accepted."
  When I saw the conference for the first time at the end of November, 1935, I ventured to make a number of suggestions to them. I suggested that they should consider—
  "How far has the distribution in the first and second grant periods accorded with the original intention of the Act?"
  I suggested also that they should inquire—
  "Does the experience so far gained suggest that the needs of the poorer areas and, in particular, the distressed areas are met under the present method of distribution to the extent of the original intention?"
  There were a number of other minor questions which the House will see on page 3. It was in accordance with these suggestions that the local authorities approached this very difficult and important problem. They adopted a method which, I think, the House will generally approve. They decided to form a committee of financial advisers who were experienced and expert in work of this character, and they added to that committee special expert representatives of the necessitous areas in order that there should be no question that their needs were considered. In the result, a most complete and careful examination of this problem was made by the financial advisors, who ultimately reported to their main bodies, who, in turn, reported to me. I would point out that in any proposals that might be made by the financial advisers of the associations, apart from the merits of the block grant system which they had to consider, there were a number of new considerations which I must mention. There was, first, the suggestion that was made in the Debate in this House on 21st July, 1936, to merge in the block grant the total of the contributions paid by the local authorities under section 45 of the Unemployment Act, 1934. This, it was suggested, would be effected conveniently to all parties by a reduction in the general Exchequer contribution, and our discussions with the local authorities proceeded on the assumption that from the increase in the general Exchequer contribution for the third grant period there
  2026
  would be deducted these unemployment contributions amounting to £2,187,000, and that the individual contributions should be discontinued. That suggestion was accepted without any reservations on the part of the local authorities.
  A question also arose from the decision of the Government that it was proposed to require no specific contributions from local authorities to future work on the transferred trunk roads, but that regard must be had to the transfer when the block grant was being considered. The discussions with the local authorities were, therefore, on the basis that from the beginning of the third fixed grant period, 1st April, 1937, when the transfer will take effect, a reduction would be made on this account in the General Exchequer Contribution equivalent to the normal proportion of grants attracted by the expenditure, namely, a sum of about £133,000, which represents approximately 23 per cent. of the transferred expenditure which is the appropriate block grant contribution. This decision was favourable to local authorities, as the expenditure on these roads has averaged £575,000 a year in recent years, and it must not be forgotten that counties are relieved of all financial responsibility for the heavy costs of future maintenance and improvement. My right hon. Friend the Chancellor of the Exchequer referred, on 30th November, 1936, to the possibility of abolishing the local taxation duty in respect of male servants' licences. It has been agreed with the local authorities that there would be an addition to the total block grant of a sum of £115,000 corresponding to the net loss to the local revenue.
  When the local authorities and their financial advisers came to consider this question, these important matters had to be taken into account, and it was on this basis, and after long and close consultation and discussion with the authorities, that the proposals in this Bill were framed. The first main proposal of the Bill is to fix the amount of the annual general Exchequer contribution, or what is called the main block grant pool, for the third fixed grant period. Accordingly, provision is made that this annual contribution shall be £46,172,000. That figure is arrived at by the increase in the block grant justified by the provisions of Section 86 of the Local Government Act and adjusted by the three considerations I

  2027
  have mentioned, namely, the merging of the contributions under the Unemployment Act, the transfer of the trunk roads, and the male servants' licence duties. This triple adjustment has been rounded up in the Bill so that the net money addition for the third grant period is £2,250,000. The expenditure from which local authorities are relieved is £2,750,000, making a total of £5,000,000 as the measure of increased assistance to local authorities in the next grant period.
  The second main purpose of the Bill is to be found in Clause 2, which is designed to improve the method of distributing the grants to local authorities so that the grants shall be allocated still further according to need, and so that the Special and necessitous areas shall obtain substantial assistance. An alteration in the formula is therefore suggested which strengthens the unemployment factor in particular, and also the sparsity factor, as explained in paragraphs 13 and 14 of the White Paper. The method recommended is, as regards the unemployment factor, to employ a multiple of to instead of, as the 1929 Act provided for the third grant period, a multiple of a little under six. By that means more weight is given to the unemployment factor and a superweight is given to those areas where the percentage of unemployed to the population is over 5, the national average being approximately 3.5. Then, partly to preserve the balance as between counties and county boroughs, and partly to assist the poorer counties, it is proposed to increase the weighting for sparsity. This is to be done partly by an alteration in the factor itself, and partly by applying it to the population weighted for children, rateable value, and unemployment, instead of population weighted for the first two only.
  To anyone who desires to spend further time on this matter during the next weekend, I would commend the particulars which appear in Appendix III, which are most interesting. However we may regard that little excitement in a Government Paper, I think that a clear and simple test of its effect is to observe the tables which are produced in later Appendices. I ought to explain that they are estimated figures. They are based on data relating to 1935, whereas the actual calculations will be based on data relating mainly to 1936.
  2028
  These, I may say, are not yet available, but the results were, in fact, calculated on the assumption that the additional Exchequer money would be only £2,000,000, instead of £2,250,000 as provided in the Bill. I would say to hon. Members, and particularly to the representatives of constituencies which are affected, that there may be some slight differences in the shares of individual areas without affecting the total distribution of £2,250,000, but I think I can assure the House that the estimate, as a whole, is one which may be accepted as a reasonably accurate forecast of the final figures. The right hon. Gentleman opposite knows the care with which these matters are prepared by the Ministry of Health and I have no hesitation in making that statement to the House.
  The results, and it is to the results, after all, that we have to look, are considerable. To Cumberland, Durham and Glamorgan there is the equivalent of a rate in the region of 2s; to Monmouthshire over 3s; to Gateshead 3s; and to Merthyr Tydfil, 5s. I would like to say a few words about some of the areas which appear in the table, because I think that in any consideration which the House may desire to give to the question of gain or loss in the third grant period, as set out in Appendix V, we must take into account the total assistance which counties and county boroughs are now receiving and the circumstances of the respective areas. To take what they are already getting, what they will get under these new proposals and what are the circumstances of the respective areas is to apply a fair and reasonable test, and it is the test which was applied by the local authorities in this respect.
  It can thus be said that the necessitous areas which are shown as receiving all-in gains, are also generally now in receipt of grants which, expressed in terms of rate poundage, are certainly above the average. Cumberland, for instance, with an all-in gain of 2s. Is already in receipt of a grant which in the first year of the current grant period was equivalent to a rate of about 11s.8d.; Monmouth, with an all-in gain of 3s. 3d. has a present grant of 10s. 4d.;.Gateshead, with an all-in gain of 3s., has a present grant of 5s. 5d., and Liverpool, with an all-in gain of 1s. 6d., has a present grant of 3s. 6d. I visited Manchester yesterday, and I found that they

  2029
  were generally pleased with the results of these proposals. In Manchester the figures of children under five, low rate-able value and unemployment are below those for Liverpool and Manchester has an all-in gain of 5d. and is in receipt of a present grant of 2s. 6d. Then take the figures for Lancaster, another area in which the figures as regards children under five are below the average. There is an all-in gain of 2d., it is true, but the present grant is 4s. 7d. Take another cotton area, Blackburn, where there is an all-in gain of 8d., but it has a present grant of 3s. 10d.
  As another test, let us examine the position as it affects industrial county boroughs. Nearly all of them have further assistance. Leeds gains 3½d., with a present grant of 3s. 2d.; Dewsbury 4d., with a present grant of 4s. 10d.; Blackburn, as I have already said, 8d., with a present grant of 3s. 10d.; Sheffield, a gain of 10d., with a present grant of 4s. 4d., and Cardiff a gain of 5d. with a present grant of 2S. 5d. I do not think that it can be said that any undue consideration has been given to residential or seaside county boroughs. Bournemouth gains 1d., and the present grant is 6d.; Croydon gains 2d., and the present grant is 1s. 2d., and Southport, which is so ably represented in this House, has a gain of 2d., and is in receipt of a grant of 10d.
  A number of areas it is true are shown in the report as losing after taking account of all the changes. But I think it will be found that those are the areas which receive the guaranteed minimum, that is, those areas which receive the additional Exchequer grant and whose loss has already been reduced by the concessions contained in Clause 4 of the Bill. Among those areas is the county of Northampton, present grant 8s. 1d.; the East Riding of Yorkshire with a present grant of 9s. 3d.; Burton-upon-Trent with a present grant of 5s. 7d.; Halifax with a present grant of 4s. 7d., and West Ham with a grant of 6s. 3d. Reference has been made to the case of West Ham and think there we have a fair test of the formula which we are about to apply, and have applied in the past. There has been a substantial and progressive decline of population, and they get 1s. per head gain under the minimum grant provisions and benefit to the extent of £8,000 under the arrangements in Clause 4 of
  2030
  the Bill. I have a number of other instances, and if any hon. Member desires to know the particulars of any case, or to have it specially explained, I am sure that my hon. Friend the Parliamentary Secretary will be glad to do so.
  I claim that on the basis of need—and that I particularly emphasise, because I think it is one of the wisest things we have done in regard to local government—it can fairly be said that not only is this method of distribution much fairer than the old percentage system, but, taking it on the whole, apart from cases here and there where people will say that they would like to have a bit more, which is only human nature—I say, taking it on the whole I can claim this afternoon, on behalf of the local authorities and the Ministry who have arrived at these conclusions, that the new adjustment is equitable and right. To repeat a phrase which was used by my right bon. Friend the Chancellor of the Exchequer when he introduced the original Measure, I claim that this proposal is putting new money into the right place.
  Mr. MacLaren: Into the landlord's pocket.
  Sir K. Wood: The hon. Gentleman ought to go to his own local authority and have a talk with them about it. The distribution of such a large amount as that contained in the General Exchequer grant and its distribution—as this mainly is—on a basis of need, is unprecedented in the history of this or any other country. Apart from the great help which it will bring to needy areas, I believe it will do much to strengthen our system of local government, and enable further provision to be made for necessary local services.
  I would like now to say something about London, and I cannot speak of London to-day without referring to the great loss which London has just sustained by the untimely death of our colleague Sir Henry Jackson. He was a good friend to many of us, and was universally respected in this House. He did much for his country and particularly for London.
  The method of grant distribution inside London is on a basis which takes account of the special local government conditions in the county, and this part of the investigation was the special province of the representatives of the London County

  2031
  Council and the Metropolitan Standing joint Committee. I am glad to say and it is a good sign for local administration in London, that they have reached agreement, and it is not always that the London County Council and the Metropolitan boroughs do agree. But they have reached agreement in this case, and, in effect, the scheme of distribution inside London which the Government have accepted will again afford greater assistance to the poorer Metropolitan boroughs, while, in case there is any feeling as far as the wealthier boroughs are concerned, I may say that they will not have to contribute more than the equivalent of a three-halfpenny rate towards the proposals in the Bill. One or two instances are given in the Memorandum from London, and I propose to give a few more. The chief gainers under the new scheme in London, giving the amount as the equivalent of a rate are: Battersea, 2½d.; Bermondsey, 1s. 1d.; Bethnal Green, 6½d.; Poplar, 10d.; Shoreditch, 6½d.; Southwark, 2d; Stepney, 4d.; and I rather fancy that Woolwich gains 2d.
  Mr. MacLaren: What about Kensington?
  Sir K. Wood: There is another matter to which I must refer. In the course of the investigation into the block grant a number of questions arising out of or closely connected with it had to be considered by the authorities concerned. They have examined those other questions and they have rendered great assistance not so much to the Government as to the country in doing so. I desire to make a brief reference to the amendment of the ratio contained in Clause 1 of the Bill. Hon. Members will recall that the Local Government Act provided that the proportion which the block grant was to bear to the total rate and grant borne expenditure was in effect to be not less than 23 per cent. Actually it was 23.17 per cent. To ensure the maintenance of the existing minimum proportion after allowing for the continuing effect of the adjustments in respect of contributions to unemployment assistance, transfer of trunk roads and the abolition of the male servants' licence duty, it is necessary to amend the provisions of Section 86 of the Act in this respect, and the minimum proportion will now become 22½ per cent.
  2032
  I would also like to refer to the supplementary Exchequer grant to the losing areas. This is a difficult question. It is a question of the additional sums paid to losing county districts to bridge the transition from the old grant system to the new, and it has been represented to me that the annual reduction of one-fifteenth, provided for by the 1929 Act, in the amount added to the capitation grant might cause some hardship and difficulty. We have, therefore, provided in Clause 6 that if the council of a district satisfies the Minister of Health that there is a case of hardship or difficulty he may, by order, direct that an annual reduction of one-thirtieth shall be substituted for the one-fifteenth. The estimated cost to the Exchequer may be as much as £70,000 a year at the end of the third fixed grant period.
  There is a further provision to be made that if the Minister is satisfied that local conditions are such that even a reduction of one-thirtieth would cause hardship, he may, after consultation with the county council, direct that an amount equivalent to the reduction of the one-thirtieth shall be set aside out of the county apportionment for the payment of the district. I may say, for the satisfaction of the areas concerned, that regard will, no doubt, be paid to such things as specially high rates of a district compared with its neighbours in the country, to whether the districts are or are not in the Special Areas, and to the amount of their existing rates and the amount of loss they sustain by the ordinary operation of the supplementary grants provision. These regulations, I may say, I will discuss with the local authorities, and also I will discuss individual cases with the county councils concerned.
  There is another matter that I must mention, because I have been asked to do so, and that is the question of compensation to be paid in the third fixed grant period to rural district councils in respect of loss on account of special and parish rates. The present arrangement is that, while the loss was made good in full in the first and second grant periods, in the third grant period, which we are just approaching, 50 per cent. only is to be paid as part of the districts' grant, and the amount to be paid by the county councils is left to their discretion. There have been expressed to me several times quite natural apprehensions by the rural

  2033
  districts as to the possible loss, at one stroke, of anything up to 5o per cent, of their compensation, and I am, therefore, proposing—and I hope it will meet their case, as I believe it will—in Clause 5 of the Bill that while the county councils' maximum contribution shall not be limited to any stated sum, their minimum contribution shall continue at the present figure of 25 per cent.
  Mr. Silverman: What was the loss to the rural district councils for which this compensation is proposed?
  Sir K. Wood: The hon. Member will find it in Section 92 of the Act of 1929.
  Mr. Silverman: Could the right hon. Gentleman not tell us himself?
  Sir K. Wood: The hon. Member will find the facts in the White Paper, where they are all set out. I want to refer now to Section 89. There the revised formula raises the question of the method of dealing with those counties whose apportionment was insufficient to meet the payments which had to be made to their district councils. Under the existing law the deficiency is made good by the Exchequer, and this matter arises only in two cases—Middlesex and Surrey. Were no revision of the existing provisions made, the new formula will increase the liability to the Exchequer on behalf of the two counties, which, I would suggest to them, are relatively prosperous and which, unlike others, would, if no arrangement was made, be the subject of no grant reduction at all so far as this provision is concerned. I saw the representatives of the two counties concerned and discussed the matter with them, and following that discussion I have inserted in the Bill a suggestion that a contribution should be made by the counties equivalent to half the amount of the deficiency in the county apportionment, subject, however, to a maximum contribution equivalent to the product of a penny rate. I hope that Members of the House will think that a satisfactory arrangement. I know one person who will think it is, and that is the Chancellor of the Exchequer, because the annual charge under the proviso in Section 89, it is estimated, would amount in respect of these deficiency grants in the third fixed grant period to about £260,000, and under the new arrangement this charge will be approximately £160,000.
  2034
  One further matter. It has been strongly represented to me by those representing the associations and the London County Council that some provision should be made to mitigate the effect of the fall in what we call weighted population by relieving the local authorities concerned of some portion of the fall in the standard sums which took place under the present law when weighted population fell. It is said that weighted population may fall in certain areas, and that they have not time to adjust themselves under the provisions of the formula to the new arrangement. I am, therefore, proposing, in Clause 4 of the Bill, that this should be mitigated by disregarding 2½ per cent. of the fail in weighted population in such cases. The additional cost to the Exchequer will be approximately ½150,000 a year in the third fixed grant period, and I may say that the proposal is in addition to the provision that, for the purposes of Section 90, the weighted population for the first fixed grant period will be re-calculated on the new formula.
  The final thing—and I am glad the Opposition are following my remarks with such care, knowledge, and understanding—that the local authorities desired was further provision for a statutory investigation so far as these particular provisions and others were concerned, and it was generally considered advisable, I think, by all of them that in due course a further investigation should be made before the whole of the general Exchequer contribution is distributed on the basis of the formula for weighted population. In a comparatively short period—though I do not know how many of us will be alive then—the whole of this very large sum of money will be distributed in accordance with the formula, and the associations thought it advisable that the formula and methods of distribution within the counties should again be reviewed. Clause 8 accordingly provides that the Minister of Health shall, in consultation with the association of local authorities, cause such investigations to be made, and then report to Parliament. Such investigations may be made at such times as may be directed, but so that both investigations shall be made before the expiration of the fourth fixed grant period, which is, I may say, March, 1947. The date or dates of these further investigations will be matters for later determination in consultation with the repre-

  2035
  sentatives of the local authorities, but I think it not unlikely that the method of distribution of grant inside the counties might usefully be examined at the end of the third grant period, as no change is now being proposed, and by that time the effects of the extensive county revision will be better appreciated.
  I sum up thus the ten main proposals of the new scheme. There is, first, an increase in the general Exchequer contribution to local authorities of £2,250,000 more than at present; second, a minimum proportion in the future of 22½ per cent.; third, a further relief to local authorities by wiping out expenditure amounting to £2,750,000; fourth, a modification of the formula so that grants shall be allocated still further with regard to need, with particular help to those areas which need help the most; fifth, a favourable basis for the local authorities of the calculation of "weighted populations" for the purpose of calculating the additional Exchequer grants; sixth, a mitigation of the effect of the fall in weighted population for the purpose of calculating the additional Exchequer grants, increasing the cost of these to the Exchequer by another £150,000; and the same, I may say, will be effected without reducing standard sums on account of the merging of the unemployment contributions—another £150,000 advantage to the local authorities; seventh, a revision of the provision in respect of the losses of special and parish rates so that county councils may be enabled to make further contributions; eighth, a further provision, partly at the cost of the Exchequer, to meet cases of difficulty among separately rated losing areas; ninth, provision for London so that further relief may be given to the poorer boroughs; and tenth, a complete investigation of the working of the new formula and of internal distribution in good time before the whole of the block grant is distributed on the basis of the formula alone.
  I thank the House for the patience and consideration which they have given me, and I commend these proposals, representing, as they do, the result of much patient and laborious work on the part of the local authorities in collaboration with the Ministry of Health. I ask for their acceptance by Parliament, because I think they may well be regarded as still further strengthening our local govern-
  2036
  ment system, placing its financial relations with the Exchequer on an improved basis and certainly bringing substantial aid to those areas of the country whose needs are the greatest and whom we all desire to help.
  5.0 p.m.
  Mr. Arthur Greenwood: We have listened to the right hon. Gentleman with interest if not with complete understanding, and in saying that I am casting no reflection on this House, for I strongly suspect the Minister himself feels as we do. My mind, like that of the right hon. Gentleman, goes back to those Debates of 1928 and 1929 when the use of the blackboard was invoked, and I feel sure that had the right hon. Gentleman wished to introduce it into the Chamber you, Mr. Speaker, would not have stood in his way. We have had exhibits of one kind and another in this House at various times, but when the right hon. Gentleman and the Chancellor of the Exchequer, both of them equally intellectually befogged as to the formula, might have introduced a blackboard, neither of them had the courage to do so, and we have had no new light thrown upon the intricacies of the formula. What we have had from the right hon. Gentleman, who was heard with satisfaction during the whole of his speech, was a somewhat elaborate defence of his new block grant system, and a somewhat long historical record which enabled him to fill up a great deal of his time without coming to the heart of the problem.
  I am prepared to admit, and, indeed, the facts are obvious from the White Paper, that the new additional money is going to bring relief to a good many local authorities, but I am not saying that the formula has ever worked with smoothness and with justice, nor, I imagine, will the revised formula work justly. The right hon. Gentleman preened himself on his agreement with the local authorities, and pointed out how these conclusions had been reached in a spirit of compromise. It is the kind of compromise which is reached when a man says "Stand and deliver—Your money or your life," and you compromise by giving up your money. Of course, local authorities will accept this arrangement. They will not refuse £2,250,000 of new money to get them out of their difficulties, but that is not to say that at heart they feel that they have been dealt with in a

  2037
  spirit of justice, and I think that as we go along that will become clear. I am trying to deal with the right hon. Gentleman as kindly as I can.
  The right hon. Gentleman emphasised what was insisted upon in 1929 and before, that the formula is based on need, shall not weary the House with long references to the table at the end of the White Paper. The right hon. Gentleman referred to the statement of the Chancellor of the Exchequer about putting new money into the right places. I looked with some interest at two towns which appear next to each other, Barrow-in-Furness and Bath. Barrow-in-Furness gains the equivalent of 9d. in the pound on its rates—Barrow, a gloomy, broken town, with its rates now 13s. 3d. in the pound; not the rates that Barrow would like to levy, pinching its services because it cannot afford to keep them at full strength. The City of Bath gains the equivalent of 8d. in the pound and its rates are only 10s. in the pound. One could go on showing the disparities there are in the application of the formula, though more money is being pumped into the distressed areas under this new arrangement.
  Mr. Maitland: Can the right hon. Gentleman say what the present grants for these two towns are?
  Mr. Greenwood: That is quite irrelevant. The Minister has been trying to ride away on that point. He has told us that Sheffield has already had 4s. 4d., but that is not the point. The point is, What is the burden that is left? That is the theme with which I am dealing. It does not much matter to me if towns are given the equivalent of 10s. in the pound on their rates. If they are still struggling under a heavy burden which they cannot afford to bear justice is not being done.
  Mr. Maitland: The right hon. Gentleman mentioned the rates in Bath and the rates in Barrow-in-Furness, but surely it is important to know what are the present grants to both those places if the House is to draw a proper comparison?
  Mr. Greenwood: That is not really relevant to my point. My point is that Barrow is an industrial town which has suffered since the War; it was developed into a war centre and has suffered heavily
  2038
  from derating, which Bath has not. Its rates are 3s. 3d. in the pound higher than those of Bath, and a grateful State gives the two places much about the same amount of financial help on their rates. The right hon. Gentleman referred to Southport gaining to the extent of 2d. in the pound. Blackpool gains 3.1d.;its rates for the last 10 years have been 7s. 6d. Brighton gains rather over a penny in the pound; its rates last year were 8s. 8d. Eastbourne gains about 1d. in the pound; its rates last year were 7s. 6d. Let me turn to industrial towns; I will not take outside cases, but reasonable cases where the rates are not abnormally high. I find: Burnley, 12s. rate, gains 4d.; Derby, 14s. rate, loses ½d.; Dewsbury, 15s. rate, gets 4d.; Halifax, 15s. rate, loses 5d.—for the reason which the right hon. Gentleman explained, that they have been on the minimum.
  Having pleasure resorts on the one hand and struggling industrial towns with a much higher rate in the pound on the other hand, if the new money is to be limited to £2,250,000 there is no reason why places like Eastbourne, Brighton and Blackpool should receive 1d. Their rates are not as high as those in the rest of the country, and in many cases fall below the general average, and yet money is being trickled out to towns like Eastbourne—a few thousands to Eastbourne, a few thousands to Brighton. They will feel no advantage from that insignificant help, but that amount of help given to a hard-pressed industrial district might have been of considerable value. The right hon. Gentleman told us that the equivalents of rate reliefs of 2s. and 3s., and up to 5s. in the pound in the case of Merthyr Tydvil, had been given. That is not a measure of the Government's generosity, but a measure of the poverty of those areas. Relief of 5s. in the pound to Merthyr looks a lot, but its rates last year were 28s. 5d. in the pound, and 5s. will not clothe its nakedness; 5s. is not going to do more than temporarily relieve a pain which will always be there; it does not remove it, it merely dulls the shock. It looks large, but the effect on Merthyr Tydvil will be insignificant. The point is that this Bill will do something to relieve the heavy gloom in many of these districts but will not remove it, and poverty will stalk gauntly through those

  2039
  areas during this period as it has done during the last period.
  Mr. Gallacher: Oh, no, they will be making munitions.
  Mr. Greenwood: The proposals of the right hon. Gentleman are open to other objections. While many county boroughs are being helped in the case of many municipal boroughs and urban district councils falling within county council areas this principle has worked most unfairly. The right hon. Gentleman is offering an investigation before 1947 and has some hopes that we may have it before 1942.
  Mr. James Griffiths: It will be a costly matter, because we shall then be sitting on the other side of the House.
  Mr. Greenwood: Are the urban district councils to continue under these injustices? The urban areas within counties get what is allocated to them on a population basis, no other factors being taken into consideration. If they are not taken into consideration for a large urban district, why should they be considered in the case of small county boroughs? It is not a question of the dignity of the local authority of whether it is an urban district, or an ordinary municipal borough or a county borough, but a question of the conditions in the area. The Urban District Councils' Association have pointed this out time and time again. They did so during the discussions on the Local Government Act, 1929, and quoted disparities between two urban districts in Monmouthshire. In Rhymney the rates were 27s. in the pound and in Usk only 12s. 2d. in the pound. In the West Riding of Yorkshire they quoted two cases, both in the same county area; in Wombwell the rates were 25s. 9d. and in the urban district of Scammonden, which is really rural, they were 8s. 2d. Such disparities ought to be faced, and with the present system of allocation through counties, based purely on population and having regard to no other factor at all, certain industrial towns which are hard-hit are not receiving a fair share of the money which is now being made available.
  Then the right hon. Gentleman twittered about his £150,000 concessions
  2040
  regarding population. Certain areas are losing population and are thereby losing grant under the new arrangement, but their local authorities have still to maintain their roads, street lighting, sewers, schools and other social services, and just because of depopulation through migration, arising from unemployment, these areas are losing grant when, in fact, they ought not to lose at all, because so long as there is a population there these big services have to be maintained.
  There is one question to which the right hon. Gentleman did not refer. Despite the new money which is to be provided for local authorities, many of those authorities are still suffering from the hardship of having their resources restricted through derating. Industrial districts, often the poorest districts, when faced with derating, have the fount of their resources restricted, and nothing that the right hon. Gentleman is prepared to do, with his limited vision of £2,250,000, will relieve those authorities of the burden imposed upon them by the right hon. Gentleman's friends, in consequence of the derating of industrial property. The Government are salving their consciences with an expenditure of 2,250,000, and they are not treating the problem with the gravity and the seriousness which it deserves. The only sign of intelligence which came from that side of the House during the right hon. Gentleman's speech was a reference to the abolition of the Male Servants Duty. Then hon. Members flickered into life momentarily. Apparently there is no recognition whatever of the big problems which this scheme is trying to hide from the public gaze.
  I am wondering and waiting anxiously for a sight of the Government's Bill dealing with the depressed areas. I am wondering whether they will be as niggardly in their contribution to the solution of that problem as they are in their contribution to the solution of the problem of our hard—pressed local authorities. The right hon. Gentleman said with pride that local authorities have been emancipated —I think that was: he wonderful word he used-from Government interference. The Government are prepared to emancipate local authorities if they can get out of if by paying them less money. The real reason why we get rid of the percentage grant system and give this measure of freedom and emancipation to

  2041
  local authorities is to curtail the amount of money given by the Treasury to the assistance of local authorities. The right hon. Gentleman said that I should not disagree with the block grant system under the Local Government Act; let me say that I disagree with it as much as ever I did.
  Sir K. Wood: Might I recall what the right hon. Gentleman himself said in a previous speech, on 18th March, 1930? He said that he was always in favour of the Act, and he added:
  "It was an Act done by my predecessor with the general approval of public opinion in thin country."
  Mr. Greenwood: If my recollection is right, I was referring on that occasion to the abolition of boards of guardians, which I have favoured ever since 1909. If the right hon. Gentleman will get the head office of the Conservative party to search their files I should be very delighted, because I cannot recollect any occasion on which I said that I favoured the block grant system.
  Sir K. Wood: On another occasion, at Leeds in 1930, the right hon. Gentleman is reported to have said:
  "In the Tong run he thought the Local Government Act would improve local government services."
  Another gem of the right hon. Gentleman, in London on 12th November, 1930, was:
  "The figures now available showed that the Local Government Act had given substantial assistance to necessitous areas."
  Those are some of the commendations upon which I was relying.
  Mr. Greenwood: I can say this: I never, on any single occasion, have said that I was in favour of the block grant system. I invite the file expert of the right hon. Gentleman's party to provide any such instance. I know that the quotations are provided for the right hon. Gentleman. I have never denied, and I have said so on the Floor of the House time and time again, that the Local Government Act has done something for the necessitous areas. There were large blocks of that Act which met with the approval of some of my hon. Friends. That is a different thing from saying that I approve the block grant system. I did not know that the right hon. Gentleman was going so much into the history of this matter. If he had introduced it
  2042
  before, in his speech, it might have been a little brighter.
  The real trouble of the local authorities is the restriction of their resources. We have a saying on this side of the House that the curse of the poor is their poverty. The curse of the poor local authorities is their poverty. Their representative people are no less public-spirited than in the more prosperous places and their municipal services are not less efficient, but they have not the resources with which to develop their services. There is a serious dilemma in the position of those poorer local authorities. The poorer the local authority the heavier the rate burden for a given standard of service, but if you have a lower rateable value it means more in rates to raise £1,000 or £10,000 than if you have a high rate able value. It is precisely those poorer towns with a low rateable value in which the social services are most needed. Those social services are not needed in your Cheltenhams, your Baths or your Southports, to the same extent as they are in our mining and industrial towns. The poor local authority gets hit not merely by its poverty but by the strain which is put upon its resources because of the greater need in that area for social services than in other areas. They are now having to carry the burden of many of their own poor, and the poorest towns have more people to support.
  I see in the Press this morning that a memorandum has been sent to the Prime Minister by the Children's Minimum Council, and that a copy has been sent to the Minister of Health. Either the Minister has not read it or it has made no impression on his mind. I suspect the latter. I will quote part of a summary of the memorandum because it seems to throw light on the problem of the poverty-stricken local authorities:
  "Referring to a reply by Mr. Baldwin to the council last August that children could obtain free meals at school, if in need of them, and that there were various schemes for providing milk to mothers, the memorandum asks, 'How far is this true of the distressed areas?'. In 26 such urban areas only 2.17 per cent. of the children received free dinners for some period during the year. In 24 of these areas 12.29 per cent.—about one-eighth—of the children received free milk. Of 22 schools from various parts of the country only seven provided free solid meals. Only 531 children received free dinners and 780 free milk, while the children whose parents were unemployed totalled 2,393."

  2043
  It goes on to say:
  "Where arrangements were made for free dinners the food provided was very poor in quality,"
  and to explain that that was because of the poverty of the local authorities. Then there is this pathetic note:
  "A note is made on one weekly menu deficient in protective foods, that eggs are added when they are cheap enough."
  The report goes on:
  "Out of the 16 maternity and child welfare authorities of which the council had particulars for 1935, and where the employment rate was over 25 per cent. in September, 1935, six gave no free milk to children between three and five years old, and of these four gave no free milk between the ages of one and five, and one gave no free milk to expectant mothers. Under existing arrangements half of any additional expenditure on school feeding, and the whole cost of any extension of the provision of milk or other food to mothers and children under school age, must be met out of the rates. The greater the need for increased expenditure, the less able are the rates to bear it. While the provision of free milk, biscuits, and cod liver oil preparations meant an additional rate charge of 3½d. in the pound at Pontypridd, where no free dinners are provided, the yield from a penny rate in some of the more prosperous places would provide from five to 20 times the amount of food or milk per child as it would in the distressed areas."
  I think that is a tragic commentary on the situation in which the poor local authority finds itself. A policy of tinkering will do no more than bring a slight temporary relief. As I have said, it may do something to dull the pain, but it is not doing anything to deal with a situation which is becoming chronic. This is not a temporary phase in the history of these areas. Unless the areas are saved quickly, they are dying areas. Their condition is chronic. More heroic steps are needed than a Measure to give £2,250,000, which will be shared by Eastbourne, Bournemouth, Harrogate and Cheltenham—I am enumerating well-off areas—as well as by the other towns which are not getting sufficient to put them in a position equal to the better, circumstanced local authorities.
  The problem, while it is in a sense a poverty problem as regards individuals, is from our point of view a problem of the poverty of local authorities as such, for they are staggering under burdens which it is beyond their financial strength to carry. The need to-day, in the new circumstances arising after the economic revolution through which we are passing,
  2044
  and in view of the creeping paralysis in local government life in many areas of this country, is for something more than a plaster of £2,250,000 for the next five years. The right hon. Gentleman has a good deal of time on his hands now. He has no housing legislation—he has settled that—and he does not feel any great urge to do anything about any other legislation at the moment; here is a great opportunity for him to take on the task of reviewing the functions and responsibilities of local authorities. He might do that instead of studying my speeches, for, although he would get a good deal of enlightenment from my speeches, I would much prefer that he should be engaged on a constructive task.
  I should like him to review the condition of local authorities, to look at them in the light of modern conditions and circumstances, and to consider whether there are not certain services which ought now to be made national responsibilities, and whether the time is not ripe for regional responsibilities in the case of certain types of services. Secondly, he ought to review the whole basis of the financial relations between the State and the local authorities. He and his friends crippled the local authorities by derating, and provided them with no other source of income except that they have now to come cap in hand and accept something above the block grant, arriving at agreement through compromise.
  There is a third question which seems to me to be even more important, and that is that there ought to be forged a new partnership between the State and the local authorities. The State ought to take a more active part in assisting local authorities to recovery. If you deprive them of their resources by derating, and if you provide thorn with no alternative source of income, at least you ought, by deliberate localisation of industry, by directing the channel of economic activities into those area, to do something to restore their prosperity. I do not believe that any measure of were rate relief is going to save the depressed areas and the hard-hit districts. That can only come if the State is courageous enough to take on industrial activities and in the national interest require them to go where labour and industrial resources are available That will give, not merely new life to these areas, but new hope and new possibilities.

  2045
  Following on that point, I suggest that the nation, faced, as it is now, with a crushing expenditure upon armaments, cannot afford to allow the social capital which has been invested by our local authorities during the last three generations to be frittered away either by depopulation or by poverty. It is wrong to start building new towns, which need the investment of enormous sums of capital in schools, roads, houses, and institutions, while the hundreds of millions of pounds which have been invested in the well-established industrial areas are allowed to become demoralised. That is a waste which this country can ill afford. Moreover, the country cannot afford—I have dwelt on this question in the House already, in view of the Government's new physical fitness campaign—the country cannot afford to tolerate the deepening poverty in the distressed areas, because that deepening poverty will not only affect the physique of the people there, but it must in the long run affect their morale. There is nothing which hurts me more in some of the distressed areas than the hang-dog look of men who have lost all hope. If we lose the morale of large districts of our country, we are losing what is the nation's chief asset.
  I would say finally, so far as the present Bill goes, for this relief much thanks, but, as I have tried to make clear to the House, it holds no solution of the great problem with which we are faced, it holds no solution of those problems with which local administrators are heroically struggling from day to day in the attempt to cope with questions which it is beyond their power to solve. If we get £2,250,000 it will be something, but when the next grant period comes round, unless constructive measures of a vigorous and far-reaching kind are taken in the meantime, we shall be left with the same problem that we have to-day, and some Minister of Health will come to this House and with pride in his voice will say, "I am going to give x millions to the poor "—but the poor will still remain.
  5.38 p.m.
  Mr. Kingsley Griffith: With a good deal that the right hon. Gentleman the Member for Wakefield (Mr. Greenwood) has said, I find myself in hearty agreement, particularly when he referred to the fact that the difference between the yields of a penny rate in different parts
  2046
  of the country is at the heart of the problem. I think it is. But I am going to confine myself to much narrower ground by dealing with what is actually in the Bill, with the actual proposals rather than with what is left out, and in particular I want to deal with the formula. It is quite like old times to be dealing with the dear old formula again. I cannot help remembering the days in 1928 when I sat here with the Minister of Labour by my side—or perhaps it would be more respectful to say that the Minister of Labour sat here with me by his side—and we expressed rather sulphurous views with regard to the Act of 1929, as it became in due course. I think we regarded it at the time as something ugly and venomous, but even then we thought it might have a precious jewel concealed somewhere in its head in the shape of this very formula.
  I admit that it is not much to look at. If one turns to Appendix III, on page 20 of the report, one might say that it looks rather sinister. In appearance it might be the nightmare of some demented senior wrangler, or, in the words which were once used by Tim Healy with regard to a certain Irish Bill, it might have been conceived in Bedlam and drafted by Adam Smith. It really is not as bad as that when one comes to apply it. I have found that a great deal of the sting is taken out of it by getting rid of all the P's, and C's, and R's, and U's, and W's, and S's, and by substituting instead the actual figures, which can be got from the borough treasurer or, as I got them, from the Ministry of Health, for one's own constituency. If the actual figures are put in instead of the letters, the whole thing works out as sweetly and simply as a crossword puzzle in the "Times," and it is then extremely instructive.
  I have, by the courtesy of the Ministry of Health, the working out of the formula for the county borough of Middlesbrough, which naturally interests me. I am not going through all the details, but the net result is that under the old formula our actual population of 140,000 was weighted up to 441,948, while under the new formula it is weighted up to 576,633. Therefore, under the old formula the ratio of weighted to unweighted population was 3.16, while under the new formula it is 4.12. That is a very considerable weighting, and I cannot help observing the remarkable fact that a borough

  2047
  which, when its needs are scientifically assessed, needs to be weighted up to that extraordinary extent, is nevertheless not permitted any of the advantages that go' to distressed areas or to Special Areas. That is a very strange state of things.
  Of course, one has to remember, in dealing with the ratio of weighted to un-weighted population, that the value of weighting is always relative. There is only a certain limited amount of money to be divided, and your weighting may entitle you to a high proportion, but, if other people also are heavily weighted, then you lose something. For instance, even under the new system, provision is made, which I gladly welcome, for an additional weighting in respect of unemployment, but, of course, as soon as weighting begins to be given under S, for sparsity of population, that must inevitably mean, in certain counties, taking away something which they had been previously given by the weighting for unemployment. That cannot be avoided.
  There is one thing which I think it is necessary to realise, and I was not sure that the right hon. Gentleman the Member for Wakefield realised it. He was continually giving these proposals credit for providing £2,250,000 of new money. They do not. They do not provide any new money, unless, indeed, the £150,000 is to be taken as new money, because, as I understand it—no doubt I shall be corrected if I am wrong—the £2,250,000 is a direct consequence of the provisions of the Act of 1929. It is money provided in order to maintain the statutory proportion, which was fixed in 1929, between the total grant and the total rate and grant-borne expenditure of the local authorities. That had to be done according w the Statute, and, as the total expenditure of the local authorities has been increasing in the past few years, owing to the increasing burdens which have been placed upon them, the fund as a whole has earned this addition. It would be very wrong and misleading if it went out from this Debate that the Government was generously putting its hand in its pocket, or rather, in the taxpayer's pocket, and providing out of its graciousness all this new money. That is really a deceptive way of putting it. Doubt-
  2048
  less there will be new money to go round, but this is a result of the original working out of the Act of 1929.
  There is another thing which should be realised. The Minister has laid great stress on the agreement arrived at with the local authorities. Of course, they did agree, and we are doubtless grateful to them for doing so, but it is important to realise how far that agreement went and how far it did not go. I find that in the report of the representatives of the Association of Municipal Corporations to their Committee, dated 18th November, 1936, that they say quite clearly:
  "Any arrangement of this kind is neither expressly nor by any implication to be regarded as a withdrawal of the claim made by the local authorities that the contributions from them towards the cost of the cases transferred to the Unemployment Board should not be collected, on the ground that the Government should hear the whole cost thereof."
  Therefore, the local authorities are still maintaining, as the great bulk of them always have maintained, that the whole cost of the able-bodied unemployed should be borne by the State, and they are not withdrawing from that position by any sort of promise or any agreement which they have made with regard to this Measure. It is most important that that should be realised, because that plea for the taking over of the whole burden and getting rid of the 60 per cent. will still be maintained in the future as it has been in the past. There are one or two mysterious things when one compares one town with another. I have found it interesting to compare Bournemouth with Birmingham. Bournemouth gains 1.1d.
  and Birmingham loses precisely the same amount. I am wondering whether there is some sinister political significance in this matter of robbing Neville to pay Henry. Does it mean that the centre of gravity of the Conservative party is moving even further to the right than we have so far supposed? These minor puzzles occur in the comparison of particular towns.
  But, dealing with the Bill as a whole, and dealing particularly with the formula, which I have found the most interesting part of it—to local authorities the revision of the formula is the main part of the Bill—I have consulted three local authorities, but I must not say which because I have not authority to speak on their behalf. The general im-

  2049
  pression that they gave me unofficially was that this new arrangement might have been very much worse. They nearly always say the same thing. That is just about as near to wild enthusiasm as any local authority ever permits itself to come. The right hon. Gentleman, therefore, may be satisfied so far with the reception that his proposals have had. I welcome the opportunity of saying, since I was one of the principal critics—not the most important but occupying the greatest amount of time in my criticism—of the Act of 1929 that I still maintain my objections to the derating proposals but, with regard to the formula, if I have said anything to insult it I will take this opportunity of withdrawing. I think it has stood the test of time. It was a genuine effort to allocate money according to local needs on a scientific basis, and I recommend the example of the Ministry of Health in that matter to the Ministry of Labour, whose method is to draw slap-dash a line on the map and say that everything on one side is to receive certain advantages which are withheld from those on the other. Just as the formula was originally an honest effort to meet the situation, so I think this revision is another honest effort to meet the additional necessities which have come on since that time.
  I am left with this reflection that, going on the basis of the new formula, it is obvious that a good many places have been bearing heavy burdens which, by the evidence of the new formula, they ought not to be bearing, for a considerable measure of time, and I wish it were possible to revise the formula more frequently than can be done under the 1929 Act or under this Bill. The time lag -nay result in local authorities being left with burdens, which ought to be removed and which, as soon as time for consideration is taken, are removed, which so many of them are not in a position to bear. Therefore, whilst supporting a great deal of what was said by the right hon. Gentleman the Member for Wakefield about the inadequacy of the Measure to meet a great many of the problems which it does not meet, and which it was not intended to meet, at the same time within its limited scope I give it a very hearty welcome.
  5.50 p.m.
  Mr. Maitland: I am glad of the opportunity of following the hon. Gentleman,
  2050
  because like him I well remember the Debates we had when the original Bill was introduced. I remember the objections that were then taken not only on the question of derating, but we also had from the right hon. Gentleman the Member for Wakefield (Mr Greenwood) on one occasion an attempt to explain this arithmetical formula. I am certain that, even after it has been in operation for seven or eight years, there is no one in the House who, with his hand on his heart, could say he understood it. But there is one thing that can be said with certainty. As the result of the experience that has been gained, this mysterious formula has proved able to do the work it was intended to do. When the original Bill was introduced, those in control of local government had certain fears on two points more than on any others. The first was this: Under the derating proposals it was obvious that they were going to lose very valuable hereditaments which were subject to local taxation. The first point that arose in their minds was how much the Government were going to give to make up for the loss that they would sustain. The second point, which was equally important to them, arose from the variety of interests in connection with the local authorities themselves. You have counties, county boroughs, non-county boroughs, urban and rural authorities.
  The second point therefore on which people were exercised was as to how the amount the Government intended to pay would be distributed, and there were very genuine apprehensions as to the position in which local authorities would find themselves. The right hon. Gentleman the Member for Wakefield, who says he never explains and never withdraws, has repeated in effect to-day what he said seven years ago. Whether he withdraws or not, the facts are that his gloomy forecast as to what the formula would do has not been justified by experience. It has, in fact, done what is was intended to do. It may very well be that it has not done it to the same extent as we would like. I am authorised to speak to-day on behalf of the Association of Municipal Corporations and I am expressing their view. They appointed a body of financial experts under the chairmanship of a gentleman whose name is very well known to almost every Member of the House, Mr.

  2051
  Arthur Collins. They have been sitting for something like a year and the astonishing thing is that, after the closest examination, that committee finally decided that in the interests of those whom it was designed to help, that is where the need was greatest for assistance, they had to come back to the formula which has been in operation all these years.
  Mr. Lawson: The hon. Member must be aware that the local authorities had to make a compromise on the matter, as the Minister said. The financial authorities had to tell the people in the distressed areas that no block grant would meet their needs.
  Mr. Maitland: I will come to that in a moment. The point that I want to emphasise is that, when it came to a question of considering some other formula, the conference went back again to the old formula, saying that with certain variations it was the best way in which they could achieve the greatest help to local authorities, consistent, of course, with the point of view of other authorities which had to make some contribution. I hope hon. Members were not unduly perturbed when the right hon. Gentleman the Member for Wakefield referred to some of these figures. It is quite misleading to give figures of the kind that he gave, and to leave the House under the impression that that is all that has to be said about them. It is most important that in any consideration of these alterations there should be taken into account the present amount of assistance that is being given under the existing formula, and unless hon. Members get both figures they will have an entirely erroneous idea of the operation.
  But I did not want to get involved in detailed questions. I rather wanted to say a few words with regard to the general purpose of the Bill. The local authorities are satisfied that the proposed Measure is fair to conflicting interests. It is true that in the early stages those representing the County Councils Association desired another method, but they withdrew their objections and have assented to this proposal. It is an amazing tribute to the good will that must have existed amongst the representatives of the authorities that, in a matter of such complexity and difficulty, it was possible
  2052
  to arive at a result generally satisfactory to all parties. The principle that assistance from the block grant should vary with the need for local government services in relation to ability to meet the cost is one which will appeal to hon. Members. They will recognise that it is a sound principle to apply with regard to the distribution of a block grant to local authorities. I hope when, on other occasions, they are referring to the means test in another sense, they will have in mind that the best test for an application in regard to an individual or an authority is the question of need.
  There are two alterations in the Bill which I am sure will be accepted with appreciation by all sides of the House. The first is, that the General Exchequer Contribution is increased, and the hon. Member for West Middlesbrough (Mr. K. Griffith) may be satisfied, whether he will regard it as new money or not, that it is additional money. There will be placed at the disposal of the local authorities an additional £5,000,000 per annum during the next five years, and £2,250,000 per annum of it is additional money to be provided direct by the Treasury, and the balance is to be found by way of relieving authorities of giving assistance to the able-bodied unemployed, an adjustment in regard to the cost of trunk roads, and Male Servants Licence Duty. The right hon. Gentleman the Member for Wakefield was rather jocular about the way in which the suggestion of the Minister in regard to the abolition of the tax was received. This is the period of the year when all kinds of rumours are floating about with regard to increased taxation, and if any hon. Member were to ask the Chancellor of the Exchequer whether any particular tax would be reduced or removed, the right hon. Gentleman would say, "You must await my Budget statement." The House can be satisfied, in regard to this particular tax, that in the next Budget statement we shall have not its partial reduction, but the absolute abolition of it. I believe that that will be a very good thing—the second alteration gives greater benefits to poorer authorities.
  These proposals have been subjected to the closest scrutiny on the part of the local authorities. They have had the most competent advice with regard to them, and, as far as they are concerned, they are satisfied that they represent a con-

  2053
  clusion which is fair to the local authorities themselves. I have been asked to make that statement to the House, and also this further statement, which I do with the greatest pleasure. They desire to express to the Minister and his Department their warm appreciation of the great assistance which has been rendered, and I am informed that if it had not been for the great patience and assistance given by the Minister and the Department during very long and protracted negotiations, it would have been extremely difficult, if not impossible, to arrive at such a satisfactory result.
  6.3 p.m.
  Mr. Gibbins: The block grant system was instituted to produce equity among local authorities. In Command Paper 3134, page 4, there is a statement by the Minister of Health that the relief of industry is a primary reason for undertaking a scheme of this magnitude. Everybody in the House knows that the provision of the £24,000,000 for de-rating introduced some intricacies into local government. After that the Minister thought of the block grant system. The Minister of Health should not forget that he has abolished the percentage grant. Anybody who listened to his speech to-day would have imagined that this block grant abolished all percentage grants, and that then by a system of weighting they were to deal with local authorities' funds on a perfect and equitable system. That is not true. The hon. Member for Faversham (Mr. Maitland) spoke about the proposal having the support of local authorities. My purpose in intervening in this Debate is to say that, if results have to be the test, then this scheme fails. In spite of Liverpool receiving an additional £428,000, the effect of the block grant and of the economic conditions from 1931 to 1935 has made it necessary for that city to raise its rates, and in some respects to retard its services, or put further burdens upon themselves for the developing of those services. From 1931 to 1934–35 the cost of our able-bodied relief, due in the main to the proposals of the Government, was an increase of over £700,000, and if you add to that the £250,000 due to de-rating, it makes a sum of £950,000, and all that we received in the block grant was £970,000. The result is, that we have practically nothing left with which to
  2054
  contribute to the development of the services exempted from the percentage grants. We have continually been crying out during the last four or five years because the costs were so tremendous.
  I am speaking from experience, because during the four years of my enforced absence from this House I was a member of the Health Committee. Time after time when proposals for development were put forward, we had continually to be asking about the money, and we were told that it would come out of the block grant. We found that the imposition on the Poor Law and the unemployed who had no status in Health Insurance left us with practically nothing in the block grant with which to carry on these two services. This has meant, since 1931, an increase in the expenditure of Liverpool of £700,000 to be met out of the rates. I know that there are some other reasons, but does the Minister suggest that, if the percentage grants had been maintained and local authorities had been allowed to develop normally and naturally, they would have been receiving less than they received under the block grant? That can be ascertained from the amounts paid in the previous standard year. The block grant has failed to do good because it particularly omits two developing services, hospital services and child welfare and health services. Owing to the peculiar position of the City of Liverpool we have to build further out into the suburbs in order to house our people, and that means increased costs in roads and sewers, and, in the main, no percentage of the block grant has been allowed for these because of the tremendous charge for our able-bodied unemployed and those who are not insured for sickness. Last year we received an addition to the block grant of £770,000 from the Government, and I would be the last person in the world to deny any gratitude to them for that. But in spite of that, in our Estimates for next year we have to find over £400,000 for the able-bodied unemployed.
  What about the proposed further burden that may come upon the City? The greatest evil of the block grants was that they were set for five years, and very little advance was made during those five years to meet increased expenditure. You cannot prevent the natural development of a city like Liverpool or a town like Middlesbrough. They are set again for five years, and the present standard of

  2055
  development must be the limit, unless we pay for it ourselves. The failure to take into account these two main services which are excluded from the percentage grants, has made a greater burden. What of the future? I understand that Liverpool is expected to find £400,000 as a minimum contribution for air raid precautions. Then what becomes of the £400,000 added relief which we are supposed to get? It appears that something is given by the Government in one hand and taken away by the other. Liverpool has juvenile centres and a tremendous amount of juvenile unemployment, and only this morning we received notice from the Town Clerk that we are expected to provide £400,000 as the initial cost for air raid precautions. The block grant has failed to a great extent to help cities like Liverpool, which has 28 per cent. of unemployment. The Government have left us with a burden of increased debt and with hardly any resources with which to extend our services. I only hope that the time is not far distant when the block grant will go and we shall get again percentage grants for genuine health work, and that we shall be better off in Liverpool.
  6.13 p.m.
  Mr. Wise: The hon. Member for West Toxteth (Mr. Gibbins) devoted practically the whole of his speech to an attack upon the system of block grants, and as the right hon. Gentleman the Member for Wakefield (Mr. Greenwood) devoted a good deal of his speech to the same subject, I should like to say something about this aspect of the question and the reasons why, in the opinion of many of us, this is the best possible system for administering grants to local authorities. With all due respect to the hon. Member, the percentage grant system cannot be sound. The percentage grant is one which is open to misuse by extravagant authorities.
  Mr. Gibbins: Does the hon. Member say that, after the whole of the percentage grants of to-day have been dealt with, there is still more money to be paid out by the Minister in percentage grants? If he admits that, is he prepared to say that the whole of the percentage grants ought to go?
  Mr. Wise: I do not think that that quite follows from my argument. I am
  2056
  not saying that there should not be percentage grants, but that percentage grants are open to misuse. In the past, when these percentage grants were made, they were in some cases misused, and there were cases where local authorities even had to be replaced by commissioners. Their percentage grants were something enormous because the improvements which they were undertaking were largely unnecessary. The block grant system is really the only possible means by which you can distribute money to local authorities. The only alternative is to have some absolutely arbitrary allotment of funds according to the will of the Minister, who would survey the various districts and say, for instance, "I think Liverpool ought to have a little extra this year, because I like its political views," or, "I think that Birmingham should have a bit less, because its political views are unsound." That arbitrary method of allocating funds cannot possibly be sound. Therefore, the block grant, system, which does take into account the real needs of the area—whether it entirely satisfies them or not is a matter of debate—is the better system. It is undoubtedly the most equitable method of settling what funds the local authority shall have.
  In this Bill a step has been taken in the right direction, and we should be grateful for the advance which is taking place in giving relief for areas which so badly need it. There has been a measure of gratitude even in the criticism which has come from the other side of the House. It is very pleasant to think that that should be so, because these distressed areas and areas on the verge of distress have gone well beyond the ordinary scope of politics, and are not the proper playground for any party cry. I was inclined to agree with the right hon. Member for Wakefield when he said that the allotment of this relief might have given rather more to those in need of it and rather less to the richer areas. That is a matter for examination possibly in Committee, as to whether some alteration could not be made in the system of weighting, but it would be extremely difficult to set up any revision without careful inquiry. I would suggest to the Minister that there is a feeling that places like Bournemouth and Bath, although they have received less in the past than other areas, really do not need any

  2057
  assistance at the moment and could well bear the slightly extra charge, provided that the money so saved went to less happy areas. If some of the rich areas were a penny less well off some of the poorer areas might well be 6d. or 7d. less well off, because of the difference in the product of a penny rate.
  We ought to look upon this Bill as the first step in a great programme which we all hope—some of us are confident—will tend to re-attract industry back to the areas which it has abandoned. Looked at in that light and not purely by itself, because there are other Measures coming along, which we must judge when we see them, I think it is a great assistance. I believe that ultimately we shall all of us come to the conclusion that the whole of poor relief will have to be made a national charge. That will undoubtedly produce a far greater effect than this Bill. In an area like Merthyr Tydvil, which wants to attract industry back to it, relief of 5s. in the pound, or rather more, because the figures have altered slightly since the schedule was produced, is, I hope, going to have a very considerable effect in the bringing back of industry. It is true that with the rates somewhere about 29s., 5s. does not sound an awful lot, but if a penny rate produces only £850 the assessments must be fairly low. When we take into account the three-fourths off for derating, I think it may have the effect of persuading industry to look to that area for new sites instead of going to some of our best agricultural land.
  With regard to the rest of the speech of the right hon. Member for Wakefield, which strayed rather a long way from the Bill, I was in agreement with many of the things he said, but I will not detain the House by following him on a line which was rather remote from what we are discussing. The location of industry is an important matter and one on which there is growing agreement in all quarters of the House, possibly not as to the actual methods but as to the results which we wish to attain by persuading or encouraging industry to go to one part of the country or another. That, however, is not really germane to the Bill. The Bill is undoubtedly a step in the right direction and should be welcomed. I hope that hon. Members opposite will not divide against it as a protest against its
  2058
  inadequacy, but that they will be thankful for something at least which will assist the areas which many of them represent. I think they will realise that they cannot condemn the complete scheme for the assistance of the distressed areas after having seen only the first measures to be undertaken towards their salvation.
  We are expecting the text of another Bill this week and we shall be able to see then what further steps are being taken. I hope that it will be possible in Committee on this Bill to persuade the Minister to make further concessions to the more distressed areas, but that is a matter which we can try only by experiment. Let us be content with the basic fact that £2,250,000 more are being provided for the assistance of the local authorities. The hon. Member for Middlesbrough, West (Mr. K. Griffith), said that it is not new money, for it would have had to be provided anyway. That is the equivalent of saying that when a hen has laid an egg it is not a new egg because everybody knows that the hen would have to lay it somehow.
  Mr. K. Griffith: I was only saying that the hen at present sitting on the Front Bench was not the hen that laid the egg but that it was the present Chancellor of the Exchequer.
  Mr. Wise: We will leave that to be judged, as to which can produce the largest amount of jubilation over the bantling when it arrives. The right hon. Member for Wakefield said that the Government could not salve their conscience with £2,250,000. That is the attitude of the mediaeval farmer trying to sell a farm for as big a sum as possible. Whatever sum the Government offered I am certain that those on the other side of the House would hold out for a little bit more. It is true that the Government cannot salve their conscience on the question of the distressed areas with £2,250,000. No government and no party could salve their conscience with £100,000,000. The conscience is salved not by the amount of money you spend but by the effectiveness of the measures you adopt for the regeneration of these areas. I believe that if we apply that test and if the remainder of the measures are as well directed as this one, even the right hon. Member for Wakefield will not unduly withhold his generous forgiveness.
  6.25 p.m.
  Mr. A. Jenkins: The hon. Member has spoken a good deal about conscience and has in some ways connected that with the distressed areas and the block grant system. It may be said that if the Government had any conscience at all about the distressed areas they would not have existed so long. They have existed for a very long time, and while we are expecting a new Bill this week it needs a great deal of optimism to believe that the Government will this time bring in a Measure that will effectively deal with the problem. On the subject of the Bill I want first of all to express my appreciation of the work which the finance officers have done in connection with this matter. I sat on a sub-committee of the County Councils Association, which was appointed in November, 1935, and we have been meeting occasionally ever since. All through that period the finance officers have been working and studying the finances to find out how the block grant might be varied in order to throw certain moneys over to the Special Areas. There is not sufficient money in the block grant to deal with the problem of the Special Areas, and it would be wise on the part of hon. Members to recognise that fact. In the report of the finance officers they make that point perfectly clear. In paragraph 25 they say:
  "Reference may now be made to the first four questions asked by Sir Kingsley Wood as set out in paragraph 4. Grouping these four questions together, it is well to state at this stage in the report hat there is a general consensus of opinion that the formula does not distribute the pool in such a way as to meet the needs of the poor and distressed areas. On this point, the opinion has on many occasions been expressed, that whilst the revision of the formula should be to reduce inequities, any attempt to revise it to meet the full needs of the distressed areas is impracticable. This view still holds. At the same time, it is reasonable to expect that, as far as possible, some measure of financial amelioration should be accorded to these areas through the medium of the Block Grant system, consistent with the provision of a sufficient measure of financial justice to the other authorities."
  That statement indicates clearly that agreement had to be reached between the authorities. Nothing else could be done. The formula was based, as everybody knows, on the Act of 1929. The Bill was promoted perhaps for the purpose of getting a better distribution of Exchequer monies than existed at the time, but it also had other purposes in view. One of its main purposes was
  2060
  derating. It succeeded in carrying out a large amount of derating, but at the expense of a large number of authorities. I am afraid that some time or other those authorities will pay pretty heavily for that derating. In addition to that, the old percentage system of grants ended as far as certain services of the local authorities are concerned, and under that Measure the authorities have to meet the whole of the expenditure on any extension of their services for a period of years, usually about five years, before the revision. However, due to agreement now having been reached by local authorities, the formula is to be altered in two respects, and a certain amount of additional money will go to the poorer authorities. Like other hon. Members I welcome that proposal, but I want to say quite definitely that it does not. by any manner of means, solve the problem of the Special Areas. Reference has been made to Merthyr Tydvil with a rate of 29s. in the pound. They will get relief under this Measure of 5s. in the pound. How long will they be able under the present circumstances to maintain that rate? It is perfectly obvious that under the conditions which prevail in Merthyr Tydvil the 5s. relief will be wiped out in a year or two.
  Mr. Wise: I do not think that is the case in Merthyr Tydvil, as the rate has been fairly static at 29s. in the pound for some years.
  Mr. Jenkins: Anyone who has gone carefully into the case knows that that has been brought about by the fact that they have not carried out their services to the extent they should have been carried out. Merthyr Tydvil has a very heavy liability in respect of public assistance, but its public assistance rates are particularly low. They are certainly not adequate for the needs of the people, and as the pressure gets more acute so the services contract. It is not only in Merthyr Tydvil that this operates. It operates in all the Special Areas and in other districts as well. I welcome the new money which is coming to these areas under this Measure, but I want to make it perfectly clear that something more must be done for them.
  I rose particularly to call attention to a liability which these areas are carrying and which is not provided for in the Measure. I refer to the Goschen loans,

  2061
  which were contracted years ago when the industrial depression first arose. It was an arrangement by which the Government facilitated the granting of loans to authorities for the purpose of carrying on unemployment relief works. The major portion of the Goschen loans was used in that way, and a substantial amount of loans was contracted by local authorities under that arrangement. I should like to point out that these Goschen loans relieved the Government in those days of the payment of unemployment benefit; national funds were helped as a consequence of the relief works being undertaken. It was thought that it would be possible to carry out relief works and that the period of depression would not last very long. The people were optimistic that things would soon improve and as a consequence substantial loans were contracted.
  These areas have to bear the burden of these loans. They were contracted in the days of the old boards of guardians, but the Act of 1929 abolished boards of guardians and spread the area of public assistance over a wider field. The county was made the area, and with the spreading of the liability for public assistance over these wider areas they also became responsible for the repayment of principal and interest charges upon the Goschen loans. Let me give one particular case. There was the old Bedwellty Board of Guardians, an area in which the depression was earliest and most acute. It included Blaina. From 1921 onwards there was a considerable liability arising from public assistance and consequently these Goschen loans were contracted and relief works undertaken. But in 1929 the liability of the Bedwellty Board of Guardians in connection with these loans was spread over the county. There are other boards of guardians in the county which have also contracted Goschen loans. There was Newport, which, however, had paid off the whole of its liability. When the 1929 Act came in and the liability in respect of these Goschen loans was spread over the whole county every ratepayer in the county of Monmouthshire is now called upon to pay his share in respect of these loans. That amounts to the product of a 10d. rate in Monmouthshire. Originally it was more than that, but some relief was voted by the Government and it was reduced to a 9d. rate. Owing to the falling in rateable
  2062
  value it necessitates the imposition of a 10d. rate to meet that liability.
  I believe there are about 12 local authorities in the whole of the country which have liabilities in respect of these Goschen loans, and the total amount is about £350,000 per annum. It has been paid every year for a period of seven or eight years, but through the operation of the formula about which we are speaking tonight that £350,000 is to rank for a grant from national funds. Every authority, including Bournemouth, is to have an advantage from national funds distributed under the formula. In this Measure we have a provision that the liabilities arising under the Unemployment Insurance Act are to be spread over the whole country. Surely there is an equally strong case for spreading the liability for these Goschen loans over the whole country. If that was done it would not mean more than a halfpenny rate anywhere in the country. National funds were relieved when the loans were contracted and local authorities' funds have benefited all the time the distressed areas have been making payments in respect of the Goschen loans. I rose particularly to make that point. I regret that it is not provided for in the Measure, and I hope very much that the Minister can give us an assurance that an attempt will be made to make provision for spreading the liability in respect of these Goschen loans over the whole country, thus transferring it from the Special Areas upon which it is weighing so heavily at the present time.
  6.39 p.m.
  Lord Eustace Percy: If I may say without impertinence, it is always refreshing to listen to the hon. Member for Pontypool (Mr. A. Jenkins), who always speaks with knowledge not only of local authority work in general, but with special knowledge of the administrative problems in the distressed areas. I largely agree with him on the subject of the Goschen loans. It seems to me that one way in which the National Government should help the specially depressed areas is by cleaning up the past. The Goschen loans are an excellent example of the millstones of the past which are hanging round the necks of authorities in these distressed areas. But it was not for that purpose that I rose. I wish to underline the conclusion which the hon. Member reached at the

  2063
  beginning of his speech, that not only no block grant but no conceivable formula can stretch wide enough to cover the difference between Merthyr Tydvil and Bournemouth—no formula which will take into account the general equities between local authorities, no automatic formula, can reach down to that depth. May I carry it a little further? Will not the House agree that a fortiori a percentage grant can never cover that difference? I was astonished to hear the right hon. Member for Wakefield (Mr. Greenwood) invoke the percentage grant and in the same breath talk about the thousands of pounds which will be given to Eastbourne and Bournemouth and other prosperous places. If there is one system which allots grants on the principle that "to him that hath shall be given" it is the percentage grant system and, therefore, it is no good looking to the percentage grant system as an alternative method which has not the evils of the block grant system.
  Hon. Members opposite and especially the right hon. Member for Wakefield have urged the Ministry to overhaul the functions of local authorities, to consider which ought to be national and which should be regional. I support that plea. I think it is enormously important in the coming years that we should consider whether this automatic business, which has been going on for the last 15 years—that, whenever you find a problem, you unload it on the local authorities—can continue to work. I think we should consider whether a problem like town planning can be dealt with by local authorities. But even if you have a redistribution of functions it is prefectly clear that regionalism is useless in South Wales. You would merely be putting together into one pool a lot of individual miseries and making one large pool of it. Regionalism would not be very much good in Durham. As to the nationalisation of functions, surely it is true, with one single exception, Poor Law relief, that there is no function you can conceivably nationalise which would not benefit the richer authorities more than the poorer authorities, and, the nationalisation of Poor Law relief, which is still left to the public assistance authorities, is so eminently a matter of local touch and personal discretion that its nationalisation would be extremely difficult.
  2064
  The right hon. Member for Wakefield also invoked the principle of not allowing social capital invested in the depressed areas to go to waste. I hope that that consideration will never influence our attitude towards the Special Areas. The number of human beings in those areas and the hardships involved by transferring those human beings to other areas is the consideration that we ought to take into account. But when we talk about social capital, let us remember two things. In the first place, the worst sin of the banks in this country since the War has been lending money on fixed capital, as if fixed capital in itself would produce anything or sell anything. Look at the fixed social capital in Merthyr Tydvil. Can you invite any business man to go to Merthyr Tydvil and put his workmen in the existing houses in all that area of Merthyr Tydvil that adjoins the site occupied by Messrs. Guest, Keen and Nettlefold's works? There is not a house in that area that ought not to be swept away, and it includes much of the most scandalous housing accommodation that exists in any part of this country. Most of the schools also, judged by modern standards, are out of date.
  The truth, from the point of view of pure social capital, is that there is much more justification for replacing that capital elsewhere than replacing it, as you would have to replace it, on the spot. That is not the principle on which we should go in dealing with the Special Areas, but we should go on the principle of taking into full consideration the human problem of the number of people now concentrated in those areas and what would be involved in transferring them elsewhere. That, perhaps, is a digression. I come to the point to which I have been working.
  Mr. Jenkins: The Noble Lord referred to social capital, and in particular to Merthyr Tydvil. I do not know whether he is aware of the fact that a large number of those houses were sold to the workpeople by Messrs. Guest, Keen and Nettlefold before their works were closed.
  Lord E. Percy: I am afraid that only makes it worse. I come to my conclusion. As long as you are trying to devise a system which can be applied to the local authorities of this country as a whole with fair justice as between

  2065
  local authority and local authority, you can have no grant system and no general redistribution of functions between the local authorities and the central Government which will meet the needs of the poorer areas. What is the conclusion that is to be drawn from that? I will not go outside the limits of this Bill into questions of public administration in the Special Areas, but surely, if it be the case that no grant system can take care of the poorest areas, what conceivable justification is there for the principle, in the old Special Areas Act, that the Commissioner for the Special Areas must not aid by grants services already grant-aided by the Ministries in London? That is the dilemma which we who support the Government are in. If you say that the block grant system and the percentage grant system is not intended to, and cannot unfortunately, deal with the poorest areas, you cannot next day turn round and say, "In no case in any of these Special Areas will we make an additional grant to the services which are already aided there." Therfore, I hope the Government will no longer ask the House to support what is fundamentally so unreasonable a proposition.
  The real question which arises, and with which this House is concerned, is whether we have not reached the point—the right hon. Gentleman the Member for Wakefield referred to a new technique of relations between the central and the local Governments—when local authorities should agree and admit that there must be a certain element of arbitrary action by the central Government in dealing with the peculiar needs of the poorest authorities and the economically worst hit areas. Hitherto local authorities have been like the nations at Paris M 1929, when they were drawing up the Covenant of the League of Nations, the smallest nation insisting on the sacred principle of the equality of States and not allowing a great Power to occupy a bigger place in the League than San Marino or the smallest State. So it has been with the local authorities in this country—you must have a system which recognises the equal rights of all local authorities; you must not do something for one authority that you do not do for another, unless you can give a good mathematical reason for your action. We must admit into the action of the Government—the House must admit and local
  2066
  authorities must admit—a certain arbitrary element, and, on the other hand, the Government must be able to show the House that when they are arbitrary, they are discriminatingly arbitrary. That is where the Special Areas system falls hopelessly between two stools. You draw an arbitrary boundary line and within that boundary line you are dealing with local authorities which cannot be distinguished from local authorities outside the boundary line.
  I am afraid I have merely set the House a problem, but at least let us register in this Debate an advance on the Debates that have been held in this House on this subject ever since I have been here. Hitherto we have always had in every Debate on the subject of block grants or percentage grants, the problem of the distressed areas raised, and we have always had accusations and counter-accusations across the Floor of the House on the basis that somehow the general grant system should meet the problem of these particular areas. At least let us register an advance to-night, that we all agree that, while we may have our personal predilections between block grants and percentage grants, these grants can never solve this problem, that the problem has to be solved by quite different methods, and I think by methods which are inevitably arbitrary, with an arbitrariness which the House ought to allow the Government to assume.
  6.53 p.m.
  Mr. Munro: I agree with a great deal that was said by the noble Lord and the hon. Member for Pontypool (Mr. Jenkins). It is becoming obvious that by no system of block grants or percentage grants could the Special Areas problem be solved, and it is a good thing that that should have been said in this Debate. I will not pretend to follow the two hon. Members any further in their remarks, because I feel it would be dangerously near treading upon the Debate on the Bill about the Special Areas which is to come before us in a short time. Therefore, I will leave that point.
  As I have always been an advocate of short speeches, I assure the Parliamentary Secretary that the depth of my welcome to this Bill is in inverse ratio to the brevity of the remarks that I propose to

  2067
  make. I would like to congratulate the Minister, the Parliamentary Secretary and the Department on the method by which they have tackled this very difficult, confusing and complex problem. I associate myself with the hon. Member for Faversham (Mr. Maitland) and the hon. Member for Pontypool in paying a very high tribute to the local authorities concerned and to their staffs, who have done, as was pointed out to us, 12 months' hard labour, or—should I say?—assiduous work, because "hard labour" might have a different connotation. They have worked, as I happen to know, in great earnestness in dealing with this most terrible problem. I was also very interested in the remarks of the hon. Member for West Middlesbrough (Mr. K. Griffith). I was very pleased to hear him explain what a simple thing the much-mentioned formula really is to a man with an acute brain. On behalf of the formula, I would very gladly accept his apology, if, as he said, he had said anything which might redound to its discredit. I, too, have studied the formula and the new additions and alterations which are embodied in the Schedule to the Bill. I would like to claim that I have a mind like that of the hon. Member for Middlesbrough, and I think, although I am now subject to no cross-examination, I understand the formula past, present, and possibly future; but at the same time, in a moment of temporary enthusiasm, when I said this to a friend who knew nothing about the subject, he looked for a moment at paragraph 5 of the Explanatory Memorandum, shuddered and turned it gently away.
  It was a very difficult matter with which the experts had to deal, and in order to find any solution for the matter, they had to be very familiar with these very difficult subjects. I believe it was really due to the innate British good sense both of the Ministry and the local authorities; and the very fair and reasonable compromise which I consider to be embodied in this Bill over the block grant distribution is a perfect example of British good sense in such a difficult matter. I would like to draw the attention of the House particularly to Clause 6 of the Bill. I may say that I have had a telegraphic communication from the Barry Urban District Council, a model of efficient administration, asking me, not
  2068
  only on behalf of myself, but on behalf of them, to express appreciation of the help given to what were known as the "losing areas" under the 1929 Act. In a small way I had something to do with the so-called losing areas. They put their case, after a great deal of work, accurately and carefully before the Ministry of Health. Their case was viewed sympathetically, and as a result of that and other things, we now have Clause 6 in the Bill.
  Section 1 of Clause 6 gives the Minister power, with the consent of the Treasury, to substitute for a one-fifteenth reduction of the capitation grants annually a one-thirtieth reduction. That is a very great relief to all those that were losing areas under the Act. But more than that was done, because when the case for the losing areas was examined by the experts, it became obvious that, although there was general hardship, there were also some particularly and outstandingly hard-hit areas concerned. It would have been impossible for all of them to have been dealt with alike in justice, and I consider that Sub-section (2) of Clause 6 is a good compromise settlement of a difficult subject. By that Sub-section power is given to the Minister, after consultation with the county councils, and if he is satisfied that special hardship and difficulty still exist after the relief given by Clause 1, to arrange for an amount equivalent to the deduction to be paid to the district from the county apportionment. I am not able to prejudge which of the losing areas will be able to satisfy the Minister on the particular circumstances, but I wish on behalf of the losing areas, and especially on behalf of my own constituency, to thank the Ministry for the careful scrutiny which they gave to this matter and the arrangements they have made in Clause 6. Generally speaking, I consider this Bill is a help and a step forward, and is based on a principle of trying to help where help is most needed and most quickly deserved.
  7.2 p.m.
  Mr. Parker: I wish to speak on behalf of some industrial areas that are not depressed. They are areas which have a considerable sense of grievance over this Bill. There are many developing industrial areas round London, and not all of them are rich. If they are urban districts or municipal corporations they have a sense of grievance, and I wish to

  2069
  make a suggestion by which this grievance may be removed. In the distribution of grants under the 1929 Act the total sum available is primarily divided between counties and county boroughs, in accordance with the weighted population formula designed to give larger grants per head to the poorer counties and county boroughs than are paid to the richer. Now a revision is proposed, and to a considerable extent that revision is an advantage. But it should be made in an effective way so as to meet as far as possible existing grievances. Within the various counties half the total sum payable to all counties is divided by the population of the counties. That works out at about 12s. 1d., and when the next alteration takes place in April it will be about 12s. 5d. The urban districts and non-county boroughs receive 12s. 1d.,and each rural district council receives one-fifth of this total. The county council applies the balance in reduction of its general expenditure. The complaint I want to make is that the county portion of the grant is distributed in accordance with rateable value, and that means that the richer areas get a greater proportion of the sum than the poorer areas. That is contrary to the object of this Bill. In the statement justifying the Act it was stated that all urban districts should receive the same sum per head. It is stated in paragraph 3 of the White Paper:
  "the block grant should vary with the need for local government services in any area in relation to the ability of the area to meet the cost."
  The result of this position is that in the residential and some rural urban districts and non-county boroughs the grant of 12s. 1d. is far more than is adequate, but in the poorer areas the grant is not enough. Rich and poor areas are treated alike, and no alteration is made by the Government in the new proposals. In the County of London the various Metropolitan boroughs receive grants based on population weighted by reference to low rateable value and the number of children under five. Under the new provisions further weight is given by reference to the sum lost from derating; the poorer boroughs receive a larger grant per head than the richer boroughs. I do not want to suggest that a similar proposal should be carried through for areas outside London, such as Dagenham, Hornchurch,
  2070
  Romford and Barking, new industrial areas which come in my constituency. If the new proposals for the County of London were brought into effect there they would be ineffective, because in these new industrial areas when derating took place in 1929 there had been little industrial development and, therefore, you could not justly compensate for de-rating in those areas.
  When the Minister asked various associations of local authorities to discuss this matter, the associations did not form the best possible groups of bodies to consider the working of the Local Government Act. There is in the Association of Urban District Councils and the Association of Municipal Corporations a mixture of small towns and large, wealthy boroughs and poor, and the result was that when they criticised the working of the block grant their criticisms largely cancelled one another out. In the reports issued by these bodies to the Minister there are a number of complaints but few constructive suggestions. If the Minister had asked various Special Areas and other local authorities that had particular grievances to get together and send criticisms in jointly to the Minister, he might have received some constructive suggestions. There is one suggestion put forward by the Association of Municipal Corporations in their report which I would like to put to the Minister, and ask him whether he could do anything to meet the point they make. In paragraph 33, Subsection 5, it is stated:
  "If both urban and rural capitation grants are increased but still so as to preserve the ratio of five to one, the poor urbans and the poor rurals all gain appreciably, most of the richer rurals gain a little, and the richer urbans lose considerably. The greater the amount of the county apportionment left with the county the greater the help given to the rich county districts."
  If the total sum ascertained by the formula to be payable to each county were divided between the county districts in accordance with the unweighted population, the poorer area would get more. Why should not a provision to that effect be included in the Bill? It seems to me a simple measure for trying to meet the difficulty, it is not so drastic a method as that adopted in London, it is simple, and it is a great advance on the present system. Further, it is not open to the objection of any system of weighting for low rateable value. I would, therefore,

  2071
  like to ask the Minister seriously to consider the suggestion that has been put forward by the association and to see whether he could not incorporate it in the Bill. It would meet the grievance of the new developing industrial areas, many of which have few rich people in them, and which get few rates from industry. If this were done they would feel that their grievances had been met.
  7.11 p.m.
  Sir Richard Meller: I wish to approach this question from a rather different angle than that which other speakers have taken. When the 1929 Bill was going through the House, I endeavoured to persuade my constituents that the formula, though a fearful and wonderful thing, would work out well in the end. It is gratifying to-night to find that there is a general consensus of opinion on the working of the formula, and also to appreciate the fact that after the formula has been in operation for some time we find that there is little that should be done by way of improvement on it. It has enabled the Government to come forward with a proposal which, although not wholly relieving necessitous areas, will give some measure of relief. For that we are glad, on all sides of the House. The Minister in his opening speech referred to Clause 3, which affects only two counties, Middlesex and Surrey. The effect of that clause on the two counties is to lay on them a burden of £100,000 which they have not hitherto borne. Those hon. Members who were present during the Debates on the 1929 Act will remember that there was a proviso in Section 89 which was to give relief to any counties which, finding that the apportionment to which they were entitled was insufficient to meet the grants payable to the county authorities, were to receive from the Chancellor of the Exchequer an amount to make up that loss. Under Clause 3 of this Bill we are not in the happy position of having the deficiency made up, but only in part. The proviso in Section 89 of the 1929 Act has gone.
  This has been a matter of compromise, as many of the other things have been. Surrey and Middlesex were not anxious to lose the relief, but the Minister by way of explanation—perhaps of excuse—for the action he has taken referred to these
  2072
  counties as relatively prosperous. That may be true, but, on the other hand, many obligations have been placed upon them. He also said that during the time the Act has been in operation there has been an expansion of services and considerable movement of the population. Although the Surrey County Council are not complaining of their treatment, I think it well to place on record what sort of expansion of services there has been, and what movement of population, which has largely affected this relatively prosperous county of Surrey. Since 1930 the population of the county has increased by 200,000 or 23 per cent. The rateable value has increased by 36 per cent. The expenditure on education has gone up by 69 per cent., and on public health and public assistance by 37 per cent.
  I think it will be more effective if I give the nature of the work which has been carried out by the county, the cost during the past seven years, and the contemplated cost of what has been set in hand. For this movement of the population, very largely from London, we have had to provide 58 new elementary schools and eight new secondary schools costing £1,615,000. The expenditure on mental hospitals has been £300,000, and on public assistance institutions £390,000. The expenditure on these objects during the past seven years has been £2,305,000. That is not the end of it, because the population is still growing and the needs of the population are being met. We have before us a programme of expenditure on public institutions, mental institutions and hospitals of £2,500,000, and in education we have a programme of £802,000; so that the liability for the next two or three years amounts to nearly £3,500,000. We have had placed upon us by the movement of population an extension of services costing £2,300,000. I am not complaining of the action of the Minister, for Surrey is going to do its job. Indeed, it came forward with Middlesex and entered into the arrangement because it realised the difficulties not only of the Minister, but of the Chancellor of the Exchequer. I want it to be understood by the distressed areas that Surrey has not been unwilling to play her part. Surrey and Middlesex have their difficulties because of the great influx of population which has relieved London, and the increase in the case of Surrey

  2073
  of £40,4300 a year is a great burden having regard to the other liabilities it has taken upon itself.
  7.18 p.m.
  Mr. W. Joseph Stewart: As one who comes from a Special Area, I am rather concerned and disappointed at the speech of the right hon. Gentleman the Minister of Health. Durham County has been hard hit in the last few years through industrial depression. When we levied a penny rate in Durham in 1933, the proceeds were £17,562. In 1936, the proceeds were £12,724. This low product of a penny rate is felt very much in the county when it seeks to carry out the various social services for which it is responsible. Not many years ago the Board of Education sent inspectors to Durham, and they decided that in the interests of the children new schools should be built to replace those that had been long condemned. The inspectors condemned 44. They asked the local authority to submit their programme of what they were prepared to do. In the last few years Durham has levied a very heavy rate for the rebuilding of these schools and has embarked upon a heavy capital expenditure. It has spent about £750,000 in that direction during the last few years. In addition, owing to the rise in the school-leaving age, the county has had to build still more schools to make provision for the children who will remain at school for another year.
  Our great difficulty in meeting our obligations in this direction is our low rateable value. If we levy a penny rate per unit of attendance in elementary schools, the proceeds are 1s. 8d. If Surrey levies a penny rate, the proceeds are 9s. 1d., while in Cheshire the proceeds are 5s. The education rate in Durham for elementary purposes is 5s.1½d In Cheshire it is 2S., and in Surrey is. 6½d. In Durham, therefore, owing to the low rateable value, rates must be levied at a high figure and the people are accordingly penalised. In addition, we have had to make provision for milk for the children attending elementary schools. During the last few years we have provided 2,043,000 milk meals a year to 25,00o children at an annual cost of about £30,000. It must be borne in mind that in Durham to-day we have 70,000 fewer men employed in mining than we had in 1924. Industries are in a bad way and rateable values are
  2074
  falling. In seeking to find work for our unemployed and to assist the county, the Government have transferred our young people to other counties. They have taken the youth, the energy, out of Durham and have left us with the aged and the infirm who will be a permanent charge on the local rates. That aspect of our problems has caused us a great amount of concern.
  During 1936 the number of persons in receipt of transitional payment in Durham was 37,785 weekly, and the amount paid to them during the year was £2,581,000. The weekly payments of standard benefit numbered 14,910, with an annual expenditure of £839,133. The persons on public assistance numbered 67,900, the expenditure during the year being £1,128,894. During 1936 we thus paid in Durham for transitional payments, standard benefit and Poor Law relief £4,549,000. We hoped in Durham that when the revision of the block grant took place great consideration would be given to the county so as to help it to grapple with the serious rate burdens it has to meet year after year. When an investigator was sent into Durham County three or four years ago to find out the conditions that prevailed there, he suggested that, in order to give Durham the measure of relief that it ought to have as a Special Area, there ought to be an annual subsidy from the national Exchequer of about £700,000. Instead of that, it will have under the revised block grant £258,000, which is equal to a rate of 1s. 8d. When one takes into consideration the position of the rateable value in Durham, one is bound to come to the conclusion that the Government have not faced up to their responsibility so as to give the measure of relief to that county which it so richly deserves.
  I would like to compare the rates of Durham County with those in other areas. The expenditure of the county council which falls upon the ratepayers is equal to a rate in the pound of 16s. 7¾d. The average rate in the pound for the whole of the counties of England and Wales is 8s. 3.7d. The public assistance rate is bearing very heavily upon Durham at present owing to the large number of unemployed. If Durham's poor rate could be reduced to the average of the country, which is 2S.11½d., that would bring a measure of relief to Durham of 6s. in the pound. We have asked the Govern-

  2075
  ment time and again, in anything which they might do with regard to the revision of the block grant, to take into consideration the excessive Poor Law rate in various counties of England and Wales and especially in a county such as Durham is at the present time. Unless something substantial can be done in the way of relief of the poor rate in Durham, I do not think that in the near future Durham can get anywhere nearly back to the degree of prosperity which it enjoyed a few years ago.
  If we could get industries established there, perhaps our case as an industrial county would be met to an appreciable extent. Those who represent the northern area in this House have asked the Government, if relief cannot be given by reducing the rates, to use their best efforts to provide new industries which would find work for our people. Up to now, there has been no appreciable measure of relief in that direction and Durham county to-day has come to the conclusion that no one in Government circles seems to care whether that county is rehabilitated or not. If there is a Clause in the Bill which gives the Minister power to review the case of a particular district, where he thinks that hardship prevails—and I understand that there is such a Clause—I ask the Minister to focus his attention on Durham county and see, as far as possible, that more relief is given to that county than is suggested in the formula which we are discussing.
  7.33 p.m.
  Mr. Lennox-Boyd: I come from a prosperous county where the incidence of unemployment is very low and problems of rating are not as important as they are in the distressed areas. Coming from such a county, I was particularly interested in the speech of the hon. Member for Mitcham (Sir R. Meller) because he, too, comes from a prosperous county and from what he said, despite the fact that he sees certain flaws in these regulations, I realise that even those counties to which burdens have been added, or which have not materially benefited by the proposals, are prepared to welcome them if they bring practical relief to the distressed areas. A little unlimited liability would not do the comfortable people of England very much harm, and I am very glad to feel that
  2076
  in many districts, where problems of rating relief and unemployment are not severe, there is a growing recognition of our common citizenship.
  The report draws attention to certain changes in general conditions which have made this alteration in the block grant essential, and I would refer particularly in this connection to the town of Merthyr, because I cannot believe that there is any other city or town in the United Kingdom which more closely answers the description of a town in need of practical help than that borough. The report refers to the alteration in rating which must follow on certain changes like continued depression and the movement of population. In regard to the latter, in the last 15 years, 10,000 people have left Merthyr and elaborate and expensive social services remain, which have to be paid for by those who have stayed behind. In regard to continuity of unemployment and depression, of the 19,000 insured workers in that town, 12,000 are out of work and they have 13,o00 dependants to maintain.
  I welcome these proposals not in any sense as an adequate attempt to solve the problem of the depressed areas, but as an essential first step, and I am very glad that His Majesty's Government have brought in these excellently drafted proposals which will, I believe, confer a real benefit on those districts which need it most. A relief of 5s. in the pound, even though the rates of Merthyr will still remain at 24s. in the pound, is a very practical step forward, and I believe the attention of manufacturers should increasingly be drawn to the advantages which that town affords, especially now that rating relief has been conceded.
  There are one or two other points with which I wish briefly to deal. I was very glad that the hon. Member for Pontypool (Mr. Jenkins) raised the question of the Goschen loans, and I was glad also that my Noble Friend the Member for Hastings (Lord E. Percy) associated his name with the plea that those loans should be abolished. They are a legacy from the past, and it is unfair that they should continue to depress the standard of living in towns like Merthyr to-day. Merthyr, through the merging of the unemployment contribution in the block grant, will get a saving of £8,000, but it has also a Goschen loan, I believe, of £7,000, and I see no reason why this

  2077
  should not be merged in the block grant in the same way as the payments under the Unemployment Assistance Act.
  I hope that the Government are going to deal with the problem of the equalisation of the public assistance rates. I know that an immense number of practical difficulties lie ahead in that respect, but I cannot but feel that if the spirit is willing, those difficulties can be overcome. The Commissioner for the Special Areas in his Third Report was emphatic that something ought to be done on those lines. He knew it could not be achieved by any alteration in the block grant, and he asked for immediate emergency measures to deal with the problem. The rate for unemployment assistance in Merthyr will remain even after these proposals at 14s. 7d. in the pound. The Income Tax liability of the ordinary citizen is the same in whatever part of the country he lives, and I cannot see why the obligation to maintain a semi-national service like public assistance should vary according to the place of residence, and should be heaviest in the most depressed areas.
  Lastly, I hope the Government have not lost sight of one handicap under which Merthyr continues to suffer, and that is the possession of a highly expensive water scheme. The Taf Fechan water scheme accounts to-day for a rate of 5s. in the pound. It was carried out at the most expensive period after the War, it was enlarged at the express direction of Parliament to meet other needs and it has been deprived of an order for 1,000,000 gallons of water daily owing to the withdrawal of the Guest Keen works to Cardiff. This gigantic undertaking, as I say, is now costing 5s. in the pound, while some 7,00o,000 to 9,000,000 gallons of water are daily going to waste. I hope that something can be done under the legislation which is shortly to follow to relieve the local authority from an excess burden of that kind. I do not wish to close on an ungenerous or carping note. This is a very important step forward, and all those who are concerned about the prosperity of South Wales and other industrial districts, will welcome it as a real beginning in the Government's policy of immediate practical help for the distressed areas.
  7.40 p.m.
  Mr. Storey: As the representative of a very distressed area, I welcome the
  2078
  speeches of my hon. Friend who has just spoken and of my hon. Friend the Member for Mitcham (Sir R. Meller). It is only by the readiness of the representatives of the rich and prosperous areas to fall in with these proposals, that we can hope to meet the problems of the distressed areas. There are good reasons why the necessitous areas should be helped at the expense of the more prosperous areas. Increase of population and decline in the number of children under five years have given greater value to the population factor in the formula and decreased the value of the weighting factors, and this has been to the advantage of the richer areas. The policy of transference has accentuated this tendency. Transference not only means loss of population and therefore less grant, but it increases the proportion of old, sick and very young to wage-earners in the distressed areas, while decreasing it in the more prosperous areas, thus upsetting the balance. Those areas with a large child population and a small wage-earning population have to bear a large share of the cost of the education and upbringing of the younger generation who are later transferred to more prosperous areas and, in effect, training allowances and transference have been a subsidy to the growing areas.
  For those reasons, I welcome the decision to strengthen the existing factors for unemployment and sparsity in the formula. I think that will be fairer to the necessitous areas. The principle of the formula, that the relative need of each area should be measured by general characteristics which are not influenced by local administration, is, I think, fair and the results as set out in the Appendix are satisfactory. We have, of course, to remember that these figures are based on the estimates of 1935 and that the 1936 figures, with declining unemployment in some areas, may make considerable differences. That may seem fair but unfortunately some areas, though unemployment has fallen off, still bear a high cost of public assistance. Therefore, although I feel that the help under the revised formula and particularly the relief of not having to pay contributions under the Unemployment Insurance Act, is welcome, we cannot accept it as a final settlement of the cost of public assistance in the Special Areas. The cost of public assistance is higher in the Special Areas

  2079
  than it is in other areas, and even if the whole of the additional assistance which the Special Areas will receive under the Bill is set against it, the cost of public assistance in those areas will still be higher. That additional assistance cannot fairly be regarded as a set-off against the cost of public assistance in the Special Areas.
  One of the reasons why more money was added by the Exchequer in 1928 when the scheme of block grants was started, was to enable local authorities to expand their services and so part of the extra money now going to the local authorities must be used to expand their services. Therefore, although the benefit of these proposals will be great, and although we in the Special Areas are thankful for them, I repeat that we cannot accept them as a final settlement of the cost of public assistance. Some day that cost must be spread over the whole country and that must be accompanied by an equalisation of the standard of relief. There is one consequence of the additional assistance which is being given to the local authorities from which I hope the Minister will not shrink. While we want a fair national contribution to the local services administered by the local authorities, and while we want as much freedom as possible, in that administration for the local authorities we must see that that administration justifies the assistance given to it. I have no intention of making any wholesale charge of extravagance against the local authorities—even those controlled by the Labour party do, I think, try to administer their affairs economically—but we cannot deny that some of them are so imbued with the theory of the bottomless purse and are so enthusiastic to do everything for everybody as early as possible, that they sometimes force the pace too fast and go beyond the capacity of the ratepayers. Therefore, I hope that the Minister will use those powers which he possesses, of sanction and of advice, to see that the ratepayer does, at any rate, get as much as is possible of the benefit of this additional assistance.
  As a representative of one of the areas which will benefit the most, I want to thank the Government for this big measure of assistance. It will go a long way towards meeting our rating difficulties, but we must not forget that rating
  2080
  relief is not the solution of the problem of the Special Areas. There is only one solution for that problem, and that is the creation of new industries. Therefore, while I thank the Government for that assistance, I say, and I say confidently, that we expect the plans which they are producing this week will be energetic and definite and will give special aid towards bringing new industries to the Special Areas.
  7.47 p.m.
  Mr. Mainwaring: I regretted to be unable to listen to the Minister opening the Debate. I intervene at this hour merely to give expression to the peculiar situation of the area that I represent, in the hope that the Parliamentary Secretary will be good enough to listen to what I have to say and to convey to the Minister himself the import of the situation as I describe it. I fear that an impression may be created, in a Debate of this kind, that areas may be competing one with another in an effort to have each of them in turn described as worse than all the others. One of my hon. Friends described the conditions in a Durham county division, a very sad tale, and he was followed by the hon. Member for Mid-Bedford (Mr. Lennox-Boyd), who described the condition of the town of Merthyr Tydfil, a sadder case. I might even claim that in some respects the area which I represent, the Rhondda, is sadder still, but competitions of that kind lead nowhere. What we all strive to emphasise is that there is a special problem which the proposals now before the House do not meet.
  Although it was said, back in the 1929 discussions, that the primary purpose of the Bill then before the House was to deal with the relief of industry, subject, however, to consideration being given to the distressed areas, I think an incontrovertible case has been made to-day that that consideration has been far from adequate, and I want to stress the necessity for still greater consideration for areas such as the one that I represent. Other hon. Members have been speaking of county areas. I am not speaking from a county standpoint at all, but from the standpoint of the redistributive process within a county, and within that system of redistribution Rhondda is unfortunately classified as a gaining area. To be thus classified mischievously hides the real conditions in the Rhondda. The

  2081
  industrial conditions which existed in our area before 1929 are responsible for our being placed in this category of a gaining area, and this applies not merely to Rhondda, but to the adjoining authority of Aberdare, much in the same manner.
  It arose in this way. The depression in the mining industry, particularly in the county of Glamorgan, was largely, in the years up to 1929, centred in what was then known as the area of the Pontypridd Union of Guardians, including Rhondda and Aberdare urban areas. So great became the burden of distress in those areas, that the Pontypridd Board became, I believe I am correct in saying, the most heavily burdened union in the country, with a loan charge of over £1,000,000. When, therefore, the Act of 1929 became operative, quite naturally the areas in the Pontypridd Union benefited by the burden being spread over the county, but in consequence of the distribution of the grant and its redistribution within the county, these areas are now classified as gaining areas, which seems to hide the fact that even with the relief obtained under the 1929 Act, we are still more heavily burdened than are other areas which were not relieved on those lines. In fact, these areas are gaining areas because of the excessive poverty in which they had been plunged before that time, and that is why I emphasise the fact that we have received no adequate consideration up to now.
  I will not burden the Members of this House with descriptions of the weight of our social services in general, but I want to refer to a few figures. At the beginning of the mining depression the population of the Rhondda was 162,000; to-day it is 132,000. A town as big as Jarrow has been lost from the Rhondda. [An HON. MEMBER: "No!"] In any case, 30,000 people have gone from the Rhondda, and the effect of that has to be considered. The rateable value of Rhondda in about 1921 or 1922 was £640,000; to-day it is £380,000. The rates levied in the Rhondda to-day amount to 24s. in the pound. Under de-rating we lost £120,000, but hon. Members will note that the fall in rateable value has been from £640,000 down to £380,000. We are, therefore, losing in rateable value at a very rapid rate, quite apart from de-rating. The rating of collieries, for example, alone, by themselves, in 1925 was £240,000 in the area
  2082
  of the Rhondda; in 1935 it was £24,000. The effect of those movements on the capitation grants received within the area is that in the first grant period the Rhondda received £96,000, the population at that time being 154,000, having fallen from 162,454. In the second grant period the population had dropped to 140,000, and the capitation grants had dropped to £85,000. At the present time the population is 132,000, and we are estimating that our grants will fall another £7,500, so that between the first grant period and the new grant period the Rhondda will lose in grants an amount equal to a is. 6d. rate within the area. I want that figure to be noted: The difference in the grants alone will make a difference of a 1s. 6d. rate in the area.
  Another aspect of the Rhondda, which will enable Members to see what manner of community it is that is to be taxed in this way, is that, with a population of 132,000, unemployment benefit and unemployment assistance in Rhondda take £1,500,000 a year. In outside relief public assistance at the present time is being distributed at the rate of £264,000 a year, and if we add to those the cost of administration, institutional treatment, and so forth, public assistance institutions, and other forms in which some of the inhabitants draw upon public funds, it is safe to say that the Rhondda to-day constitutes a burden upon public funds in one form or another to the amount of £2,000,000 a year. That is the area, therefore, which is to be increasingly taxed in order to meet the burden of its own social services. The irony of the position is that the Rhondda, inside of the county of Glamorgan under the redistribution process, is regarded as a gaining area, and out of its grants from the county a sum of £20,000 a year is deducted in favour of the losing areas. That £20,000 will form another 1s. 6d. rate, so that, if we take the actual loss in the amounts of grants received in the Rhondda as between the first grant period and the new grant period about to come into operation, plus the deductions on account of losing areas, Rhondda actually will lose an equivalent of 3s. in rates, because by the misfortune prior to 1929 it is now deemed to be a gaining area.
  My hon. Friend who dealt with the state of affairs within the county of Durham referred to the county as a whole as having some 37,000 unemployed.
  Mr. David Adams: No, 67,000.
  Mr. Mainwaring: Well, 67,000. Rhondda is not a very large place as a geographical area. It is a very small area, but Rhondda has 20,000 unemployed. The county educational rate in Durham is 5s.; the educational rate of Rhondda is 9s. 2d. Why? Because you are dealing with an unemployed, pauperised population. The rateable value in Rhondda and the proceeds of the rates are falling at an alarming rate. Every year there will be an increasing burden, and it is simply folly to consider that this Measure will, in any way, constitute a relief for Rhondda.
  The county of Glamorgan, as a whole, it is proudly stated in the Memorandum, will have a relief of 2S. in the pound. Rhondda is already, between the first and the third grant periods, losing 3s. in the pound because of loss of population and because of its contribution to losing areas. Our loss in grants alone in the Rhondda accounts for an equivalent of is. 6d. in rates. The contribution to the losing area is another is. 6d. rate. Of what use is it to talk of the 2s. coming into the county of Glamorgan as in any way relieving the Rhondda as a special district within the county? The Rhondda constitutes one-third of the total burden of the county in respect of public assistance, but the Rhondda as a part of the county drawing from the county till Rhondda gets only one-seventh—it is one-third of the total burden but draws only one-seventh out of capitation grants, that leaves the Rhondda in a very difficult situation indeed. I want the Minister to give special attention to the condition of the Rhondda and, indeed, to every other area in similar circumstances. There really is a case for reconsideration. The circumstances of Rhondda, Merthyr, Durham, and it may be many more areas deserve further consideration from him to see whether it is possible to give them some measure of relief from the extremely heavy burdens which they are endeavouring to carry in these difficult times.
  8.2 p.m.
  Sir Francis Fremantle: I am certain that all hon. Members, from whatever part of the country they come, will have heard with great sympathy the speeches of the hon. Member for East Rhondda (Mr. Mainwaring) and others who have
  2084
  spoken on behalf of distressed areas. I should like to add my small tribute to those which have been paid from the more comfortable counties like Surrey and Bedfordshire. In the county of Hertfordshire we have warm hearts, and we feel that it is only right that we should give our tribute to these more distressed areas. At the same time I agree strongly with what was said by my Noble Friend the Member for Hastings (Lord E. Percy) that no possible distension of this formula will really cover the needs of the depressed areas, which will have to be dealt with by other means, apart from what is being done for them under this Bill. It may be difficult for those who come from the distressed areas to realise why those of us who live in the more comfortable areas are not contributing as much as we should naturally feel bound to do if we were face to face with the poverty of those areas; but we must all come back to the fact that so long as we recognise the rights of private property so long will it be difficult to insist on those who are in comfortable conditions contributing very largely to those in other areas. I agree that they ought to be relieved of a great deal of the money in their pockets, and, in fact, they are relieved of a great deal of it by the measures which have been introduced in the past half-century.
  It was a move in the right direction. It is going on at a tremendous pace, and I should like those who come from the poorer areas to take note of the speed of the process and to recognise that it is going on quite as fast as is reasonable, having regard to the fact that until quite recently there were those who said definitely that under a democratic system everybody must look after his own affairs, that if people were fortunate enough to live in the more comfortable areas and to have inherited the results of thrift or to have got money by their own efforts, it was their business, and there was no reason why they should be compelled to contribute towards others. The education of the country to an acceptance of the principle of bearing one another's burdens is a process which has gone on rapidly in recent times, and is going on rapidly now, and to those of us who can look back over only 30 years of public life it is perfectly amazing to note the income which is now taken from those who have and is given to those who have not. I do not

  2085
  resent that fact in any way; the pace goes steadily on and rightly so in a democratic country.
  From that point of view we may look back upon the passage of the Local Government Act of 1929 as being a tremendous step in advance. Up to that time measures for encouraging social services of one kind or another had been put forward with no very fixed principle as to the national contribution in each case; it depended on the persuasiveness of the Minister who brought forward the Measure or the backing he had from behind the scenes. But in 1929 the position was put on a definite footing. Then we had that wonderful formula which was devised so cleverly by the great men of the Civil Service, and which none except themselves really understands or can reasonably question in detail. It is a great thing to have a system like that which works mathematically and can be supplemented in one way or another. The present Bill deals with the formula and with provisions for amending it from time to time.
  We have had seven years' experience of that system, and I should like to test the experience of those seven years in one phase of social service, maternity and child welfare. It will be recalled that all the extraordinarily kind-hearted and hardworking people who had worked the whole system of maternity and child welfare services long before local authorities or officialdom took them up—and have since continued, supplemented in some cases by local authorities—raised a tremendous agitation against the proposals in the Measure of 1929. My right hon. Friend will remember the interviews between him and the Chancellor of the Exchequer, then Minister of Health, and the deputations which were received. It was said that by doing away with the percentage grant we should be sterilising the whole movement, doing away with the incentive to progress, and that those areas which had advanced so rapidly under the encouragement of a 50 per cent. grant for every extra step forward would now realise they would get no advantage at all, that they would become subject to the formula, and that for the next five years, until the revision of the grants came under consideration, there would be stagnation. It was said there would be an incentive to them to stagnate; in short, that all the encourage-
  2086
  ment was being given to the lazy authorities and the lazy voluntary institutions.
  Let us come to the actual test. We in the public health world like to test our ideas by actual facts and I think the facts in this case are significant. Take the figures for infant mortality, which are regarded as a good index of public health work. I will give the figures for the seven years before the 1929 Act came in, the figures for 1929 and the figures for 1935. In 1922 deaths per 1,000 births numbered 77, in the year 1929 they had come down to 74, and in the last seven years they were reduced to 57. There is a similar record of progress in each of the periods of the first year of life. Taking infants in the first three months of their lives the mortality was reduced from 47 per 1,000 in 1922 to 44 in 1929, and in the last seven years it fell to 39. There was no reduction in the figure for the second three months of infant life in the seven years before that Act came in, but in the last seven years the figure fell from 11 to 8. In the last half of the first year of the infant's life there was no reduction of mortality in the seven years before the Act came into operation, but in the last seven years a reduction from 19 to 10 deaths per 1,000. Take the case of infants in the first year, the second year, the third year, the fourth year and the fifth year of life. From 1922 there was very little improvement in mortality until the 1929 Act was passed, but since then the mortality among those in the second year of life has been reduced from 24 per 1,000 to 10 per 1,000; in the third year from 10 to 5 per 1,000; in the fourth year from 6 to 3 per 1,000; and in the fifth year from 4 to 3 per 1,000. That is a thermometer of public health.
  The removing of the percentage grants and the providing of block grants, together with the other provisions made in the Act, many of which were almost mandatory to the local authorities in providing and preparing proper schemes for the carrying on of their infant mortality work, have certainly not led to any stagnation. On the contrary, they have coincided with, if they have not, as I believe, been largely responsible for, an absolute improvement all along the line. We can look forward to the next grant period in the same kind of way. I believe that this system of encouragement given

  2087
  by the grant, enables people to look ahead and to make their five-year plan, as is so popular nowadays.
  I could turn, if I had time to do so, and deal with many of the criticisms of the Act of 1929 by showing what action was taken in order to make the infant welfare and local welfare provisions active and alive. I think there was considerable controversy at the time in regard to the problem of venereal disease, which was not treated on the same lines. Certainly there are sufficient indications of the fact that we are moving on. I believe that the help which has come to the poorer areas, and which is so essential for the health of the nation as a whole, must be continued and expanded. We in the more comfortable parts of England should be only too delighted to bear our share, if it were done on a proper principle, where all people share alike, according to their powers and according to their opportunities. I beg to congratulate the Minister on having brought in a very difficult and unpopular Bill, but which, nevertheless, is of very great value in promoting the public services and the public well-being.
  8.17 p.m.
  Mr. David Adams: Coming from a necessitous area I cannot do better than quote observations that were made by the representatives of the Association of Municipal Corporations, in a report which was presented to the Minister and which forms the basis for the White Paper. They said:
  "We have used the block grant formula as much as we think it could reasonably be used in aid of the 'Special Areas.' We do not, however, pretend that these steps suffice to deal adequately with these cases. They have claims to consideration which lie beyond the scope of any block grant scheme."
  That view should be kept well in mind by the House, in case hon. Members think that some wonderful transformation has been brought about by the Measure which is now before us, whereas in reality it leaves the necessitous areas very much as they were. My hon. Friend from the county of Durham has explained the position in some detail. The House has been told that some £2,250,000 of new money will be provided. That, I take it, is merely due to the automatic revision under the Act, and that the new Exchequer grant to the
  2088
  local authorities is only some £28,000. The Government were bound to maintain a fixed proportion between their contribution and the total expenditure of the local authority. While the method of distribution used by the wealthier authorities has been altered by agreement to benefit the heavily-rated areas at the expense of the prosperous districts, it is from the local authorities that the new distribution to the poorer authorities takes place. It is not that the Treasury is supplying some additional new money. That point ought to be kept very closely before us when we are considering the position.
  I feel that we cannot speak on this subject without paying a tribute to the Chancellor, the Author of that monumental work of 1929, the Local Government Act. I once took the advice of Mr. Bernard Shaw, that if you want to know anything about a subject you should lecture about it. I decided to lecture upon the 1929 Local Government Act, which I did, and I may say, as an illustration of the character of that work, that I spent a considerable portion of a fortnight's holiday in studying and mastering the intricacies of it. The Municipal Corporations Act, 1835, raised the status of local authorities and played a notable and enduring part in the history of the country, but the 1929 Act is an even greater Measure. A statement I heard, and know of no reason to dispute—but perhaps the Minister of Health will tell us—that the Chancellor of the Exchequer, in arranging this block grant formula, was able to summon up the shade of Euclid from his happy resting place, and I think he must have spent a considerable portion of time with that enemy of all schoolboys, old Euclid himself.
  This Act achieved two aims: (1) the establishment of derating; (2) the breaking of the felicitous financial relationship between the central Exchequer and the local exchequer. Those two old firms were separated by the Act. Some local authorities found themselves better off under the derating scheme and some worse off. The richer of them could contemplate the future with satisfaction, but the poorer were restricted and restrained owing to the fixed amount of the block grant. It is not as though, during the progress of the respective periods between one valuation and another, an authority could have some automatic

  2089
  advance for an increase of expenditure. I should like the Parliamentary Secretary in his reply to clarify a position which has occurred in the North of England, that is, in the case of new industries which are entitled to derating, that the local authorities receive no automatic relief for having granted a derating of three-quarters of the rate upon new industries.
  If a colliery is started in any area or works are erected which are entitled to derating, the local authorities are at a dead loss, under the 1929 Act. If I may mention a particular case in Newcastleon-Tyne, a large milling concern is working at the present time, but it has been decided to shut it down and to erect, in an adjoining part of Tyneside, a new concern costing £400,000. The Corporation of Newcastle state that they would lose some thousands of pounds per year in rates on this works, owing to the operation of the 1929 Act. That is an important matter, and ought either to be cleared up to the satisfaction of the authorities or the Act should be amended at the earliest date, to give relief.
  Durham county has been mentioned. It would be interesting to give one or two figures relating to that county. The number of people in receipt of relief per 10,000 of the population is 213 in respect of all counties, but in Durham it is three times as great, 717, and in England and Wales only 301. The insured unemployed in December, 1936, in Durham was a percentage of 24.9, while over the whole of the country it was only 12.9. Those figures are illuminating as to the position in Durham at the present time. Parliament in 1933 recognised its responsibilities towards the Special Areas, and Durham in particular, by voting £440,000 as a special grant, of which Durham received about 20 per cent., or £94,000, and continued the same grant for 11 months of the ensuing year, it is but just and equitable that a similar grant should be made—a cash grant—to these authorities if we are to treat them, as they are entitled to be treated, on terms of parity with other authorities of the Kingdom, short of the unification of rating burdens throughout Great Britain.
  The Minister might take note of the fact that in Durham a debt of £490,000, which still exists, was incurred by the late boards of guardians before their responsibilities were transferred to the
  2090
  county council. This was largely due to the national stoppage of 1926, and it entails on the county for the next nine years a burden of not less than £32,000 per annum. He has been, perhaps, a little thoughtless to-day in stating that he has an open mind with regard to the grievances of authorities like Durham. I can promise him that we will take full advantage of the opportunity to present Durham's case to him. Per head of the population, the amount of rateable value in County Durham is £3 11s., whereas the average for the rest of the country is £5 17s. If the rateable value of Durham were equal to that of the rest of the country, the whole of the current services of Durham to-day could be carried out at an economy of £251,000, or is. 1s.9½ in the pound on the rates. That is an illustration of the continual and successive day-to-day burdens upon this great county. We hear of the distresses of Wales, but there is no other county in the United Kingdom where the burdens of unemployment and distress are so great, and therefore we say that special measures are necessary.
  In the meantime we suggest that the Minister should take into consideration the strengthening of the unemployment factor in the formula in relation to our low rateable value and the heavy burden which was bequeathed to Durham County from the other authorities under the Act of 1929. If he would further see whether it is possible to persuade the Cabinet to make a cash grant. Whilst the country as a whole is said to have regained about 90 per cent. of its initial prosperity Durham County remains in the same stagnant position in which it was 10 years ago.
  8.32 p.m.
  Mr. Simpson: I am sure the House was interested to learn from the hon. Member for St. Albans (Sir F. Fremantle) of the desirability of having warm hearts and of the necessity for sharing one an-other's burdens. At the moment there are not many hearts, warm or otherwise, on the benches opposite, but we shall probably agree, whatever we may think about these sentiments, that we need, in addition, wise heads and competent statesmanship if those very generous statements are to be translated into practical facts. I think it was Oliver Wendell Holmes who said that it did not matter

  2091
  so much where we stood at the moment as in what direction we were moving. Possibly the Government may take some comfort and encouragement from the fact that they are moving in the right direction. They have had a few compliments and some encouragement on that ground to-night, but I venture to say that, within the limits of the proposition which is now before us, they are moving to inevitable failure.
  The Bill does not even satisfy the critics with regard to immediate anomalies and quite a number of difficulties that have already been dealt with in the Debate to-night, and no formula, however complicated or impressive it may appear, can possibly deal with the deeper causes that lie behind the necessity for this Bill. Piecemeal action and legislation under pressure are not likely to give the satisfactory results which the situation at the moment so much demands. The problems in the depressed areas arise from causes much deeper than anything that is dealt with in this proposal, and I venture to think that the remedy can only be found in a more comprehensive, indeed a co-operative, conception of social needs and organisation.
  The right hon. Member for Hastings (Lord E. Percy) had in his mind, I think, his own particular suggestions in regard to planning and rationalisation. He does not entitle his proposals in the same, possibly offensive, way in which they might be designated from this side of the House, but was evidently thinking of the absolute necessity for more fundamental treatment than is given in this particular Bill. Indeed, short of some more fundamental effort at social equity and justice, we cannot hope to get any satisfaction from a proposal of this kind. The glaring disparities and injustices in local rating are only too well known, but their treatment has been too long delayed. When we note that public assistance in Barnsley, for instance, represents a rate of 5s. 5¾d.; Blackpool, 7½d.; Bournemouth, 11d.; Hull, 7s.; and Hastings, is. 8½.; it is all too obvious that this Measure is only trifling with the situation. The amendments that are made will have no appreciable result on those very obvious disparities.
  What is worse, further injustices grow around existing injustices. The fact that industry is moving away from these areas
  2092
  that are so unfortunately placed is partly attributable to these difficulties in local rating. Industrialists are always complaining that their efforts are retarded and there is no chance of recovery locally because of the handicap under which they are labouring. Obviously, therefore, if there is to be any serious effort to repatriate people who have been removed from these districts, and to give industry a chance, if the industrialists themselves are going to help themselves and their own friends, they must seek some more radical measures than are offered in this Bill. What interested me, in particular, in listening to the Debate is the rather melancholy fact that it is a century and a quarter ago that a proposition was tabled in this House that there should be equality for the country in dealing with the needs of the people. In 1814 a Bill was tabled for making a more equal county rate for the County Palatine of Lancaster, and in the rather quaint language that the chronicler uses he gives his "reasons and remarks":
  "The gentlemen who reside in the county and enjoy extensive premises should pay equally with those who are residents of the two large towns of Liverpool and Manchester."
  The Bill was withdrawn
  "either on some informality or on the understanding that it was contemplated to take up the question in a more extended light to embrace the country at large."
  As long ago as that they had their special problem of poverty in Liverpool and Manchester, and they needed relief on a larger basis to give them a chance in dealing with their local obligations.
  The hon. Member for Smethwick (Mr. Wise) said he was in favour of the nation shouldering the responsibility for its social burdens. Apparently he did not receive any substantial support from the benches opposite, but undoubtedly until that national obligation is shared, as it should be, we shall not give local authorities equity in the matter, or indeed, give industrialists in the Special Areas the chance that they ought to have. The situation, therefore, demands far more courageous and thoroughgoing action than the Government are, apparently, prepared to give it. It needs something more than can be compressed in any equation, however ingenious its mathematical qualities. The situation demands nothing short of justice in local rating immediately, and I hope the Government

  2093
  will give attention to that larger problem and do in this day of grace what was attempted a century and a quarter ago, but has been too long deferred in the hands of the people who occupy the benches opposite. I hope the Government will attempt something more radical and thoroughgoing than is envisaged in this Measure, and will do something to remove this injustice in dealing with local burdens and to translate into legislative effect the sentiments which have been implied on the benches opposite, but which are not adequately represented in this Measure.
  8.41 p.m.
  Mr. Price: I do not want to appear grudging in appreciation of what little is being done in this Measure towards assisting the distressed and Special Areas. There is no doubt that it is part of a move in the right direction but hon. Members on these benches have shown that the process of the dog eating its own tail is still going on and the distressed and Special Areas have still to bear the burden of keeping their own poor in far too large a measure. I have examined the figures in the White Paper and apparently the constituency that I represent will receive some benefit, although just how far it is difficult to see from the mathematical formula with which we are presented. The county of Gloucester will apparently get an advantage of about 6d. in the pound in regard to its rates, but just how far that will trickle down to the distressed part of the county it is difficult to say. Cheltenham does not figure in the list of the county boroughs. For aught we know, it may be getting a portion of this 6d. I really think that the industrial area of Gloucestershire is far more in need of that 6d., and a great deal more, than any of the other parts of the county which are doing relatively well. After all, the problem that we are faced with is how to deal with these areas where stagnation has set in.
  The Forest of Dean is only a small industrial district, and perhaps poverty and distress is not quite so keen as it is in some parts of South Wales, but the prospects are far worse even than in South Wales, because our assets are wasting. The coalfield will probably not live for more than 15 years, or at the outside 20. All the time the local authorities are
  2094
  being burdened with past debts, and pressure is being put upon them by public opinion, quite rightly, to go on laying out money and improving the conditions. Only the other day I brought to the Minister of Health the case of Coleford, and the demand put upon the district council by the county of Gloucester for an improvement in the sewerage scheme, which is thoroughly unsatisfactory. The rates being what they are, and the district being up to its ears in debt, it cannot by itself get the work done. I approached the Minister with regard to the matter and he rightly said that he had not the funds at his disposal. I believed him. The obvious answer is that something very much more than a paltry 6d. will be needed to meet the difficulties of a place like Coleford. Here we have a district where the human assets also are wasting owing to the fact that the coalfield is not what it was. Over 7,000 men were employed until about 10 years ago, and now there are only a little over 4,000. Owing to the working out of the upper seams and the production of better machinery and improvements generally in working the lower seams there has been a drop of very nearly half of the number of people employed in that coalfield. But the assets are there in the form of schools and public works of all kinds, and they have to be kept going. The young people are gradually trickling away from the district, seeking work elsewhere. Here again is a waste in assets on the human side.
  There is really only one way in which this matter can be dealt with, and that is in a much more radical treatment of the question of rates, much greater recognition of the need for the equalisation of the rates between the prosperous and the stagnant districts, and last, and, in my opinion, most important of all, an attempt to plan our industries for the future to bring, by hook or by crook, fresh industries into the stagnant areas. That really is at the root of it all. Some kind of planning of the movement of industry and the taking of powers by the Government, which they have not now, will in the long run, I believe, be the only way that this most serious problem can be settled. So far as the present Bill goes, it is a small measure of relief undoubtedly for these distressed districts, but one which, I am sure, will only whet the appetite for more.
  8.48 p.m.
  Mr. MacLaren: I have been very quiet all the afternoon, and I think that it is about time the House woke up. I have not intervened in this Debate because, frankly, if I may say so with due humility, 90 per cent. of what has been uttered here this afternoon has been vacuous nonsense. When this matter was first introduced in this House, I remember the present Chancellor of the Exchequer, who was then Minister of Health, giving the history of the rating law in this country. I would commend hon. Gentlemen opposite, when they read the OFFICIAL REPORT to-morrow to make up for their absence from the House to-night, to go back and read the opening passages of the illuminating speech delivered by the Chancellor of the Exchequer when Minister of Health at that time. He outlined the history and aim of the rating system in this country, and truly pointed out that the present rating law was established in 1601. Sometimes I have wished that that fact could be written large in this House of Commons when we were discussing local administration and its cost. That law has not been changed by as much as a comma since that period. It is all very well to say, "We have made amendments to it and changed it here and there," but the fact remains that we are still rated in this country according to the use that is made of a site. If you make good use of it, you are rated, if you make bad use of it, your rates are reduced, and if you make no use of it at all, you pay no rates. In other words, the rating law of this country is such that it penalises every man who begins to make use of the land.
  I see that some hon. Gentlemen opposite seem to smile when I say that there has been no change in the law, and I should like the smilers to challenge what I am now going to say. Outside a lunatic asylum, I do not know of any better device to make it impossible to develop sites than the present rating system. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) on one occasion gave a parable which crystallises the whole operation of it. He said, speaking in Yorkshire: "For the moment I am a valuer going into the present rating system. I go outside of Leeds and I ask the owner of the moor, 'What are you doing with this land?' and he says, I shall hold it up until the people want
  2096
  a reservoir, and then I shall charge them £3,000 to £4,000 per acre.' I said, 'It is such men as you who make our country great. I will go and write it down in the rate books, and you will not be rated at all.'" The right hon. Gentleman the Member for Carnarvon Boroughs goes on. He says, "I am going down the street and somone tells me that Mr. So-and-so is improving his factory, putting up new and airy buildings at his works, with better ventilation and bringing them up to date. I, as the assessor under the law, go along to this man and say, 'Have you improved your factory?' and he says, 'Yes.' Have you improved it much since I called with regard to the previous assessment and valuation?' and he says, 'Yes '"—I observe that there is silence on the Liberal benches—" If that is so, I must increase your rates to £2,000 a year, and do not let me hear of you doing it again.'"
  Sir K. Wood: Liberal taxes.
  Mr. MacLaren: I do not think that it is any laughing matter. I do not see the joke. This is how it operates. The right hon. Gentleman goes on with his parable and says, "I am going down the street and someone says, 'Have you heard that Mr. Brown has put in a new bath?' I go to Mr. Brown and say, 'I hear that you have put in a new bath. How dare you? There will be another pound put on every tire you improve your house.'" He says, finally," I go down to the slum area and I say to myself as an assessor that there are no improvements in this district. I meet the owner of the slum and I say to him, 'Have you improved this area since I was here five years ago? ' He says, ' No, the disrepair and the dilapidations are worse than they were before.'" And says the assessor, "Give me your hand; well done thou good and faithful servant; go down to the rate office and tell them to reduce your assessment." Continuing, he said, "Do you think that I am caricaturing; that is the rating law of England," and it is the inclination to circumvent the economic consequences of that law that you have this farce here to-night.
  The then Minister of Health, the present Chancellor of the Exchequer, stated in his speech when introducing the Bill that it was the present rating system that was making it impossible for in-

  2097
  dustrialists in this country to compete with foreign competitors, because every time that our industrialists improved their factories and were struggling to maintain markets against foreign competition they were met with a sudden increase in the local assessment and in local rates. I remember the right hon. Gentleman the Member for Epping (Mr. Churchill) making a peroration in one of his Budget speeches in which he pointed out that here at last would be the redemption of British industry because, he said, they were going to give relief to British industries by the derating process in order that they would be able to compete with foreign competitors engaged in the same industries.
  In none of this sort of thing have you changed the economic results of the present rating system on the users of the land of this country. The Minister of Health—he is at liberty to rise and challenge what I am going to say—has struggled valiantly for years to try and rehouse the people of this country. What happens? If an acre of land is allowed to lie idle no rates are levied, but if 12 houses are erected on that land the assessor comes along, and promptly levies rates on each of those houses. That is how we are trying to help housing. Then they go to the Minister and say: "For heaven's sake, give us a subsidy for these houses," and one finds that the subsidy on the houses equals the rates which the local authority levies upon them. Under this Act not merely did they derate industrial hereditaments, but they derated what was called agricultural land. Why has not that been mentioned to-day? We find that our cities are bursting to get into the open spaces of the countryside, to get into the stretches of land round London, Glasgow and all the big centres of population. What do we find? We find this so-called agricultural land, paying not a penny to the rates of the country, held in the hands of speculators who are there to exploit the citizens if they try to get out into the open country. Can anyone deny that? The Minister of Health has not infrequently to check the local authorities because of the price asked for land, whether for housing, aerodromes or anything else. By derating agricultural land we gave an impetus to speculation in land values in this country that has never been equalled in our history.
  2098
  To-night we are piously talking about weighted populations, and hon. Members have pleaded that subvention should be given to their districts. Not one word has been said in challenge of the iniquitous system that prevails. Landlordism, without being asked to pay one penny towards the rates of the country, is left to speculate, free of any surcharge on rising values. I notice that occupants of the Front Bench opposite are laughing. Is there any laughter in this? If Ministers were living in the midst of a city, in a slum, with hunger and privation at their door, with a desire that their children should see something of God's earth, the flowers and the beauties of nature, and they went to the local authority and asked to be put on the list so that they might get a corporation house, what would they think if they were told that the list of people waiting for houses was filled? They might ask the corporation why they were not getting on with their housing scheme, and the reply would be: "We cannot get the land because of the price." That is the work of the land speculators. Other little parasites come along when once the land monopoly gets going, and the prices of building materials and other necessary things go up, all combining to keep our people cooped up where they are.
  Yet this afternoon not one word of challenge has been said against the rating system which encourages this state of affairs. We are told about the formula. When the Bill which introduced the formula was introduced I said, at the beginning of the Debate, that I should refuse to take any further part in it and that I would not table or support any Amendment to the Bill, because I looked upon it as one of the greatest pieces of nonsense ever put on the Statute Book. I also said at the time that if our Lord had gone into Jerusalem with such a formula and given it to the twelve Apostles, Christianity would never have been known in England. Whether it be in politics, philosophy, religion or anything else, the one cardinal characteristic of truth is simplicity. The greatest truths that man ever heard were spoken in the language of simplicity in the streets of Jerusalem. Simplicity and truth stand together, and whenever you get into complexity, beware, because there is falsity somewhere.

  2099
  There is a formula. There is not a man in this House who does not feel a quaking when he comes to the formula. I do not blame the permanent officials for this. They are obliged to do it. Along come the Government. They do not wish to challenge vested interests but wish to circumvent the economic effects of the rating law, and they say: "We are getting into a mess; give us some kind of formula that we can work." That is what has happened. We get the weighted population. I wonder who is the Satanic genius who invents this nomenclature of "weighted population," "formula," "lower rateable value," and so on. In passing, may I give an example of what is happening? I see that Stoke-on-Trent is given a pretty low figure as to rateable value. It has "a low rateable value" under the present system where you rate people on their houses. Where you have a house in a slum, covered with vermin and out of repair, course it will have a low rateable value. In Stoke-on-Trent in the last fortnight or three weeks a piece of land, for which the owner, I think, paid a few hundred pounds, was sold for nearly £60,000. What about that for a rateable value? It has not been touched. That is not "a low rateable value." There are hon. Members here representing the distressed areas. I will undertake to go with any competent valuer to Durham, and we should find that the site values of Durham would pay for all the rates required in Durham, without one penny of subvention. Instead of that, hon. Members are here to-night begging and saying, "Give us a little more for the distreesed areas."
  The formula has been in operation for a number of years. What has been the economic result? Has the rating burden as can be easily carried by industry? In 1913–14 the rates collected in England and Wales totaled about £73,000,000. To-day they are £160,000,000. Has the formula tended to stop the constant expansion of rates? Let the House remember, and more especially the workers, that not one penny can be accounted as credited to the ages bill until rent, rates and taxes have been met. Here we have these growing burdens making a constant inroad upon the workers' livelihood—the workers pay this burden of
  2100
  rates and nobody else—and we have an ever growing Budget of taxation. The Budget was £250,000,000 before the War. Look at it to-day. Add the expansion of the local rates burden. What a toll upon the produce of the worker before he can count a penny of wages.
  This is a matter of great concern to those who come to this House as champions of the people. It is a matter of great concern that this constant inroad on the wages of the workers should be stopped. I should he out of order if I were to point to the real basis on which rates and taxes should be levied, but when I read such phrases as "weighted population" in this diabolical formula, and know that there are speculators who have made fortunes within the last 12 months in gambling in the site values of London, and around London where the new satellite towns are rising, I wonder if this House is blind to real facts of daily experience. I remember one site not very far from my own place in Wimbledon Park where a few years ago I saw crows nesting. To-day that land has jumped up to £2,000 and £3,000 per acre, and there are farmers beyond Morden who have retired for life, having received capital sums running to £30,000 and £40,000 for their land. Those site values will not contribute a single penny under this formula.
  I am not asking that you shall tax the working man's tea, sugar and tobacco and other necessaries of life through the most abominable system of indirect taxation, and hand him back some of it as a relief of the local rate pressure. I am challenging this iniquitous system of protecting these vested interests, who have thrown off their obligations to pay rates and taxes while this Parliament has gone on imposing these burdens indirectly on the food and necessaries of the people and rates on the houses of e workers. You cannot reform that by any device or formula. Get on with your formula. As old Carlyle said, you cannot circumvent truth by any device. If you are going to run the State on a system which is pointing to the road to bankruptcy, then be frank and admit honestly that bankruptcy is inevitable.
  Taxes are increasing here as in every other civilised country; rates are rising, and here we have this hollow farce of amending the formula. The Govern-

  2101
  ment are not saying that they have found something radically wrong in the system of rating but that there is something not quite proper in the formula. Your formula will only lead you to another formula, and in three or four years' time your rates will be infinitely higher than they are now. If you do not change the burden from the backs of the people I know of no force more potent in making democracy recoil against the so-called Constitution of the State than when it is ground down by rates and taxes.
  9.9 p.m.
  Mr. Lawson: I listened with interest to the Minister of Health's attempt, apparently to his own satisfaction, to explain the formula in the Bill. I share the anger of the hon. Member for Burslem (Mr. MacLaren) about this formula business, but it seemed a matter of amusement to the right hon. Gentleman. There is the well-known trick of the Indian fakir who pulls down a rope from nowhere and then climbs up it. I understand that no one has yet seen the trick done, but I said to one of my hon. Friends that I had seen the rope trick done this afternoon. I do not think the right hon. Gentleman felt that he had explained the Bill and particularly the formula. Its condemnation is that nobody seems to understand it. The local authorities certainly do not understand it, and the Minister was careful to cling to his brief and read it out word for word rather than go into a detailed explanation. One of the best proofs of this mysterious method is that local authorities had to get financial experts to confirm the Ministry of Health's experts in deciding what everybody was to get, and that when it was put down some authorities had scarcely finished their congratulations to themselves before they realised that what they were supposed to get from the White Paper was not to be given to them at all.
  Why have the Government introduced this Bill, of such vital importance to the distressed areas, before they have introduced the Bill dealing with the Special Areas so that we could know exactly what they are doing? When the Act of 1929 was being discussed it was said that the real need was to deal with necessitous areas, as they were then known. All the arguments of the Chancellor of the Exchequer, who was then Minister of Health, went to prove that the Bill was to im-
  2102
  prove the lot of the necessitous areas. The Act has done nothing of the kind. One of my hon. Friends called the Measure a monumental one; there has been certainly a monumental catastrophe in some of the areas with which the Act of 1929 was supposed to deal. Who will deny that the Special Areas are not worse off to-day than they were then? The Government said that if the heavy industries were derated they would have a chance to compete. In my own area and in South Wales they took three-quarters of the rates off the coal owners and promptly gave the relief away to the foreigner. As a matter of fact, experience has shown that the whole weight has come down upon areas, where the houses are very poor and where the ratepayers really ought not to be paying rates for the shameful places in which they are living.
  Let me give the House an example. In the case of houses of three rooms and less, the average is about 15 per cent. of the rateable value in England and Wales. In Durham, houses of three rooms and less represent 43 per cent. In the case of houses of six rooms and more, the average in England and Wales is 33 per cent., whereas in Durham it is 9 per cent. While I do not envy my hon. Friends who live in county boroughs in the advantages they gain, I hope they will really get those advantages, because I can assure them that there is at least one county borough which will not get what it expects to get. The county boroughs, in the great industrial areas, have at least the advantage of getting the large business concerns which do not come to the great coal and steel areas, which are administrative counties.
  The point I want to make is that, as far as the Chancellor of the Exchequer and the Minister of Health at that time were concerned, there was a definite connection between this matter and the depressed or Special Areas. Why have we not before us the Bill dealing with the Special Areas? The action of the Government in introducing this Bill before we have knowledge of what is to be done for the Special Areas in the Bill which is to be submitted is a deliberate deception. Why, when there are only a few days, before we shall have the Special Areas Bill, have the Government brought forward this Bill, which is vital to the Special Areas, without our knowing what

  2103
  is the Government's policy regarding the Special Areas? I suggest that a piece of very clever work is going on. The right hon. Gentleman the Minister of Health is not in on the deal as far as the Special Areas Bill is concerned, but he is a member of the Cabinet, and I dare say he knows a good deal about the matter.
  If we are to have this formula, why is nothing given for the youngsters who have gone from the Special Areas? That matter has not been taken into consideration. In the Special Areas when the mothers give birth to the children, there have to be nurses, the local authority, or someone else, has to supply the houses, schools have to be built, the children have to be educated, they have to be given all the necessary services until they are citizens; and then, when they are citizens who may be useful to us in the Special Areas, they leave those areas. The House will be surprised to learn that, according to the Commissioner, there have gone from the Special Areas during the last 12 years no fewer than 610,000 young men and women and boys and girls, and that during the last year, 40,000 have left.
  Sir K. Wood: The hon. Member encouraged them to do so when he was at the Ministry of Labour.
  Mr. Lawson: I have never been against transference, nor have the parents, for the simple reason that the parents have had no other alternative. I am pointing out to the right hon. Gentleman that if that is the only policy which the Government have, as apparently it is, at least there ought to be some financial compensation to the areas that lose citizens in this way. There is nothing in this wonderful formula to meet that problem.
  Mr. Wise: There is certain provision made for the transferred population, because the transference of those young adolescents and adults to other areas automatically raises the proportion of children under five of the total population. The formula does take account of their case to a certain extent.
  Mr. Lawson: I think that is rather too fine. The Parliamentary Secretary is very clever at explanations of this sort, but I should be very interested if he could prove to the House that these areas will get some compensation for this loss of citizens.
  2104
  There is another factor to which I would like to draw attention. According to the calculation, Durham is to have an advantage of 1s. 9d. in the rates. I have a statement from the chairman of the finance committee of Durham saying that they are not getting anything of the sort and that they have already been informed by the Ministry of Health that the advantage they will get is reduced to 1s. 7d. I should be very much obliged if I could have some explanation of that. I assure the right hon. Gentleman that that is the position, and I am raising the question because some of the other areas will probably be in the same position as Durham. The statement from the chairman of the finance committee reads:
  "Since the White Paper was issued, a communication has been received from the Minister of Health stating that unemployment figures for 1936 are now available and show a marked improvement in the position of the North-Eastern areas, and on the basis of the average unemployment figures for the three years 1934, 1935 and 1936 which must be taken for the purpose of determining the county apportionment for the Third Fixed Grant Period, the apportionment for Durham County will suffer a reduction of £23,000."
  Consequently, instead of getting £258,000, they will get £235,000. I understand that the reduction of rates also affects areas other than Durham. I would like to have some explanation of this matter from the Parliamentary Secretary. I understand that instead of paying the unemployment grant, it has now to be deducted from the block grant, so that instead of being paid, it is deducted from the General Exchequer Grant. I am told that in Cumberland the local authority's unemployment contribution was £10,649. In actual fact it is going to work out at a loss on the changed method of £12,500. In Durham, the local authority's contribution was £62,000, but under the present method of arrangement there is going to be an actual loss of £26,000. I find that Glamorgan is likely to lose £69,000, and Monmouth nearly £24,000. These are figures which have been given me, and it would be interesting if the Parliamentary Secretary would explain how it is that, apparently, the local authorities are going to be worse off under the new method than when they actually paid the grant.
  I wish to emphasise once more that this Bill has a vital relation to the Special Areas Bill, and we ought to have had both in our hands together, to see what the Government's policy is with respect

  2105
  to the Special Areas. Maybe the Government can take some credit to themselves for some little financial advantage that will go to some of these areas. They are in a position where they grasp at just as much as they can get in order to meet their immediate needs. But this does not touch the edge of the needs of these areas, and I trust that the Government are not misled by some of the sentiments which have been expressed during the Debate to-day. There have been eight years during which the distressed areas have gone from bad to worse, years when not only has there been great suffering, but great services have fallen into arrears. I can say that with some knowledge of some sides of the life of my own county. The Commissioner offers about 85 per cent. for a great hospital which is badly needed in the county, but when they discover that it takes, I think, about £50,000 a year for maintenance, then the county is appalled in face of the decreasing rateable value and the lamentable position in which they find themselves.
  Therefore, I say that while this formula business may continue to bluff the people outside, it is no solution in actual practice of the rating system and of the needs of the distressed areas. I hope that the Parliamentary Secretary will be in a position to tell us the reason for the changes which I have pointed out, and that the Government do not take this as any serious contribution to the financial position in which the Special Areas find themselves, which appeared rather to amulie the Minister of Health. I felt that while he was entitled to some humour in appearing to explain what he did not explain, we were entitled to a little more balanced dealing with a subject which had such a great effect on the distressed areas. I was not inclined to laugh and chuckle as much as the right hon. Gentleman, however estimable he may be as a Minister.
  9.31 p.m.
  The Parliamentary Secretary to the Ministry of Health (Mr. R. S. Hudson): We have listened to-day to a very interesting Debate, and, considering its extreme complexity, the speeches which hon. Members have made have shown commendable knowledge of the subject. Perhaps it would be for the convenience of the House if I followed the order of the various speakers and tried to provide
  2106
  an answer to some of the questions which they have put. The hon. Member for Chester-le-Street (Mr. Lawson) asked me one or two questions, and I will do my best before I sit down to give him an explanation. I might perhaps start with the speech of the right hon. Gentleman the Member for Wakefield (Mr. Greenwood). I should, perhaps, preface my remarks by reminding the House of what my right hon. Friend said in his speech at the opening, namely, that one of the main reasons for introducing derating was to give industry and agriculture what we believed to be a relief to which they were fully entitled. Industry and agriculture for generations in this country have been paying a share for services from which they did not derive a corresponding benefit, and, therefore, the Derating Act was introduced essentially as an act of justice for industry and agriculture. It is necessary to bear that in mind when one comes to consider what the effect of the Act was on the finances of local authorities. The right hon. Gentleman said that in his opinion it was wrong that Bath should receive a relief of a penny or two in rates in view of the fact that Barrow got no greater relief. He said also that a percentage grant system was superior to the present formula system.
  Let us look at the real position of Bath and Barrow. It is important not merely to look at what additional relief Bath and Barrow will get, but at the total relief they get from the Exchequer. It so happens that Bath and Barrow have populations of within a few thousands of each other—the population of the one is 68,000 and of the other 65,000—and therefore, as far as population is concerned, they are much on a par. Anyone who has any knowledge of the country would agree that Bath is more prosperous than Barrow and would, therefore, expect that in any fair system of Exchequer grants Barrow ought to get more than Bath. In fact, Barrow does get more than Bath. Barrow gets twice as much as Bath. Barrow gets something like 23s. per head of its population. Bath gets only 11s. As showing the real advantage to Barrow of this scheme, I would remind hon. Members that before derating the rates in Barrow were 15s. 3d. The rates to-day are 13s. 3d. The average rate for all the county boroughs of England is 13s. 4d. Therefore, very largely as the

  2107
  result of the additional help given by the Exchequer, Barrow, although it has its difficulties, has actually a rate lower than the average for all the county boroughs.
  Let us look at the right hon. Gentleman's percentage grants argument. One of the main reasons, as my right ton. Friend said, why we abandoned the percentage grant system was that it gave far more to the rich areas that could afford to spend money than to the poorer areas that could not afford to spend money. The proof of it lies in the cases of Barrow and Bath. Bath is a rich town and can afford to spend money, and it would get a high percentage grant. Barrow cannot afford to spend as much and, therefore, would get a lower percentage grant, which is exactly the opposite to what the right hon. Gentleman wants. He went on to say he thought that seaside resorts ought not to get any additional advantage at all, and he thought that everything ought to go to the industrial areas. Again, we want to see what actually is being paid by the Exchequer to seaside resorts and compare it with what is being paid to the industrial towns.
  I will quote one or two of the towns that the right hon. Gentleman mentioned. He talked about Bournemouth. That town gets a grant from the Exchequer equivalent to 6d. in the pound, and under the new formula it will get an additional 1d. The total, therefore, will represent only 7d. in the pound. In the case of Burnley, the Exchequer assistance will represent 48d. in the pound. For Eastbourne the Exchequer assistance will represent 8d. only, while for Dewsbury it will represent 59d., although in both cases the estimated increase under the revised formula is comparatively small. Those figures show that we are, under this formua, distributing money very largely in proportion to the needs of the various areas.
  Mr. E. Dunn: May I ask the Minister to deal with the case of Barnsley?
  Mr. Hudson: I do not know whether I have the figures, but I will try to get them. If we take the amounts of money distributed by the Exchequer and not merely the rate in the pound, we get an even more striking picture. The amount of Exchequer assistance to Bournemouth
  2108
  represents 94d. per head of the population. The amount of assistance to Sunderland represents 463d. For Southport the amount is 122d.; and for Merthyr Tydfil 558d. It is very difficult in face of figures like that to suggest that we are not distributing the money in proportion to need. If we take some of the counties, we also find striking results. The hon. Member for Mitcham (Sir R. Metter) spoke about Surrey. The assistance by the Government to Surrey will represent 136d. per head of the population. The assistance to Cumberland 582d. per head. It is very difficult in face of figures like those to suggest that we are not distributing money in accordance with need. The right hon. Gentleman went on to say that, in his opinion, the right system was that poor towns with low rateable value where social services were most needed ought to be given the greatest amount of help. That is precisely what the formula does. It is because we recognise that the poorer towns with low rateable value require more services and are less able to pay for them by themselves that we devised this formula, which provides weighting for the poorer towns with lower rateable value and higher unemployment.
  As I have pointed out, the formula does, in fact, distribute the grant in accordance with what the right hon. Gentleman believes is the right way to do it. He then went on to repeat an accusation which has often been made, and was indeed made when the Bill for the Act of 1929 was going through the House, that the social services would tend to be starved because the local authorities would not have any money to pay for progressive extensions The figures which were given by my right hon. Friend in answer to a question in the House the other day about the maternity services, for example, completely disprove the statement. Take the case of South Wales. Glamorgan in 1930 spent £102,000 on maternity services, and that had risen by 1934–35 to £131,000. Rhondda spent £14,000 in 1930, and £22,000 in 1934–35. Merthyr Tydfil spent £4,900, and that rose to £5,700. There is no evidence of starvation there. The right hon. Gentleman went on to talk about school meals and said there were certain local authorities which were not providing an adequate number of meals to an adequate percentage of children. The answer is that

  2109
  they could have done it if they had wanted to. Whatever may have been the position in the past, they will certainly have no excuse for not doing it now under the new increased grants that they will get. The hon. Member for West Middlesbrough (Mr. K. Griffith) said that when he first looked at the Act of 1929 he thought it was ugly and venomous, but he had come to the conclusion that the formula had worked very well and had stood the test of time.
  Mr. K. Griffith: My apology was only to the formula, and not to the rest of the Act.
  Mr. Hudson: No doubt the hon. Member's change of mind about the formula may have something to do with the fact that for 1928–29, before the formula came into operation, the rates of Middlesbrough were 19s. 2d. in the pound, and that, as a result very largely of the operation of the formula, the rates are now down to 14s. The town stands to get still further reductions under the revised formula. No doubt that may have something to do with the hon. Member's change of mind. The same thing applies to another Member of the Liberal party—I do not know whether he is still a Member—the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George). He went up and down the country in 1929 saying he would have nothing to do with the Bill, that it was thoroughly bad, and that the formula would provide increased allowances for brewers who did not need them, but not for areas of the country which did need them. I am sorry there is no member of the family present to-night, but it is an interesting fact that the constituency of the hon. Lady the Member for Anglesey (Miss Lloyd George) stands to gain 2s. 6d. under the new formula, and that of the hon. and gallant Member for Pembroke (Major Lloyd George) stands to gain no less than 3s.
  The hon. Member for West Toxteth (Mr. Gibbins) said that during the time he had been out of the House he had been a member of the Liverpool City Council. He will forgive me for saying that the information which he collected during that period does not bear out our information. He said that the Liverpool City Council had been seriously hampered in increasing its services by the fact that
  2110
  it was no longer under the percentage grant system and that its Poor Law expenditure had risen. He seemed to think that if the old system of percentage grants had been in operation, the Exchequer would have contributed to the Poor Law expenditure.
  The fact of the matter is that Poor Law expenditure never attracted a percentage grant, and therefore, even under the old system, Liverpool would still have had to bear the increased charge for Poor Law. Indeed, the Government, under the new legislation which has been put in force lately, relieved Liverpool of 40 per cent. of its expenditure on the able-bodied poor. He then said that Liverpool had gained nothing but had rather lost as a result of derating, and that Liverpool no longer had the same resources as it had in the past when rating was in full operation. What are the facts? Liverpool lost actually in rates and grants, as a result of derating, £801,000 a year. They are getting under the old formula no less than £998,000 a year and on top of that, under the formula which we are discussing, they will get further assistance of £428,000.
  Mr. Gibbins: I am sure the Minister does not want to misquote me. What I suggested was that in the four years before 1931, mainly due to Government policy, the cost for able-bodied unemployed was £700,000 and that £250,000 was added, and that because of the de-rating the whole of the £950,000 had to be spent before you could touch the services which had been excluded from the grant.
  Mr. Hudson: The hon. Member was endeavouring to explain that this was a bad system and that the old system was better under which the local authority received full rates from industry and agriculture instead of receiving a grant from the Government based on the formula. I am showing that under the old system, if it had survived, Liverpool would have had to pay the same amount under the Poor Law as it did pay but it would have been £190,000 a year worse off than it has been during each of the last four years.
  Mr. Gibbins: No.
  Mr. Hudson: I assure the hon. Member that my figures are correct.
  Mr. Gibbins: I have some figures here too.
  Mr. Hudson: Then the hon. Member for Romford (Mr. Parker) suggested that a different factor would have been preferable and would have given better results in his area. I dare say that a different factor would give better results in certain areas, but no doubt the hon. Member has read the White Paper, from which he will see that innumerable factors were discussed and examined in the course of the investigation of the last 12 months. My right hon. Friend as Minister of Health obviously was mainly concerned, and indeed was bound, to have regard to a formula which would produce the best results over the country as a whole. As the report shows, although individual alterations in individual factors might produce different results in particular places, the local authorities as a whole came to the conclusion that the formula which we are discussing was the best for the country as a whole. I need not go through the various factors which were considered. The question of children, the question of declining population, the question of rateable value, the question of the number of people over 60, were all examined meticulously and all rejected in turn, as not producing any better results than the formula which is now under consideration.
  The hon. Member for Houghton-leSpring (Mr. W. Joseph Stewart) said Durham had spent a great deal of money recently on building schools, but that does not seem to be an argument against the formula. The hon. Member no doubt is aware that the question of building schools is already dealt with under a percentage grant, and the fact that he does not like any percentage grant seems to be an argument in favour of rather than against the formula. He then said that Durham had lost heavily by reductions in rateable value. That is true, but Durham gained more than she lost. Durham lost by derating and the discontinuance of certain grants £1,346,000; but under the block grant Durham gets £1,557,000, and under the revised formula Durham will receive, it is estimated, further assistance of £258,000 a year. No one can argue that Durham does not come off better under the formula than under the old system.
  The hon. Member for Rhondda East (Mr. Mainwaring) argued that Rhondda had been losing rateable value rapidly, apart from derating. Surely that, again,
  2112
  is an argument in favour of the formula. If Rhondda had been losing rateable value rapidly, apart from derating, it means that, as the formula was settled and a basic year was taken before Rhondda had lost rateable value, Rhondda really gained in the process because it had, during all those years when its rateable value was falling, been receiving grants based on the days when its rateable value was higher. Therefore, Rhondda has really gained and not lost.
  Mr. Mainwaring: I argued neither for nor against the formula in principle. What I asked the hon. Gentleman and the Minister to consider was whether the conditions in Rhondda did not merit greater consideration than they have given to Rhondda.
  Mr. Hudson: That is a different argument. My answer to it is that the present results are bound to be a compromise and they represent the best compromise that the local authorities, who considered all the circumstances, with the advantage of independent financial advisers and representatives from the distressed areas, have been able to reach. One or two hon. Members suggested that the formula was really incomprehensible, and I think it was the hon. Member for Burslem (Mr. MacLaren) who suggested that one of its demerits was its lack of simplicity. Perhaps for the benefit of hon. Members I should read out some figures showing the actual effect of the formula rather than the algebraic symbols in which it appears in the White Paper. I take, first, the weight given for unemployment. When the percentage of unemployment is 2, the old weighting factor resulted in a weighting of 2.9; under the new factor the weighting becomes 5. I give these figures to show what a great improvement the modified formula is over the old as far as concerns getting money into the areas where it is needed owing to heavy unemployment. Where the percentage of unemployment is 5, the old weighting would have been 20, but the new will be 35. Where the percentage of unemployment is 10, the old weighting would have been 49, and the new will be 110.
  Another way of showing the effects would be to take two county boroughs, Bournemouth and Blackburn, which both happen to have exactly the same population, namely, 118,200. Bournemouth has

  2113
  a rateable value of £15 per head of the population, which is above the average of £10, and will therefore get no weighting for rateable value. Its unemployment percentage is 1.5, and so it will get a negligible weighting for unemployment. Blackburn starts off with the same population but has a rateable value of £6 per head of the population, which is less than the average of £10, and it therefore gains 46,000 population as a weighting for low rateable value. The percentage of unemployment is 7.5, which is 6 more than the basic 1½ and it therefore gains 113,000 for unemployment weighting. It gains a further unemployment weighting owing to the fact that its unemployment, being 7.5, is not only above the 1½ but is also above the 5, and it gains 24,000 superweighting for that. The final result is a weighted population of 324,000, compared with the original 118,000. I think this will perhaps be more clear in the OFFICIAL REPORT tomorrow.
  Mr. Ede: That is a very high compliment to the reporters.
  Mr. Hudson: It is a high compliment to the clarity of my voice. Now I come to the hon. Member for Chester-le-Street, who started by saying that nobody understands the formula. I think that after my lucid explanation, he would not perhaps stand by that observation. He said that the Bill had a vital connection with the Special Areas. The Bill really has a vital connection with Section Ho of the Act of 1929, because it is as a result of that Section that these changes are being made, and the investigation was made as a result of that Section and not because of any connection with the Special Areas. This Bill would have had to have been introduced before 31st March in any case, in order to give legislative sanction to the proposals before the next quinquennium.
  The hon. Member went on to ask if I could explain how it was that Durham lost as a result of being excused its contribution in respect of unemployment, and he also pointed out that Glamorgan lost too. The answer is that the new formula was devised after these losses had been ascertained and having them in view, and the new formula is devised so as to put the bulk of the new money into the distressed areas. It is quite true that under the first calculation Durham loses
  2114
  as a result of being excused its unemployment contribution, but it more than makes up the loss as a result of the new factors in the revised formula. The revised formula was, after all, devised when it was already known that the local authorities were going to be excused payment of unemployment contributions and also after it was known that they were going to get their £115,000 loss on account of the discontinuance of the Male Servants Licence Duty, made good.
  Mr. Lawson: Does the hon. Gentleman say that my figures were not correct?
  Mr. Hudson: No, but the figures that the hon. Gentleman gave to-night as being the result of the excusal of unemployment contributions have only a theoretic value, because the figure that really matters is the grant that Durham is going to get, and Durham's grant is going to be very much more than the loss that it will suffer. The hon. Member ended by saying that the Bill really gave little financial advantage. But that little financial advantage represents to Durham £258,000 a year.
  There is one final word that I would say. Several hon. Members have suggested that more money ought still to be granted to the distressed and necessitous areas. My right hon. Friend earlier to-day gave some striking examples of the extent to which, in certain areas, the Exchequer already pays the vast bulk of local authorities expenditure, and he said, quite rightly, I think, that there must be a limit to which you can go and that if you go much farther, you must start some different system of control over expenditure.
  Mr. Lawson: Do I take it then that this is the full extent to which the Government will recognise the financial responsibilties of the Special Areas?
  Mr. Hudson: No, Sir, not a bit. The hon. Member must not say that. I am dealing with the general principle and saying that, in spite of the great increases in the Exchequer grants which we are dealing with to-day, some hon. Members have said that this is not enough and that we ought to go farther still. I agree with what my Noble Friend the right hon. Member for Hastings (Lord E. Percy) said, that you may well get into the position where, if you are going to ask for very much larger Exchequer

  2115
  grants for individual areas, you will have to face some new system of control, and no one would dislike that more than hon. Members opposite, so that there is a grave danger in pushing this demand for more and more money. I have some interesting figures here showing the extent to which the Exchequer is already paying the vast bulk, in many cases, of local authorities' expenditure, though I will not trouble the House with them now, but it has really got to the stage when we have very likely to call a definite halt.
  I think I have dealt with 'the bulk of the questions put to me and the points raised in the Debate, and I can only end by repeating what my right hon. Friend said, that this new formula represents 12 months' hard work on the part of local authorities, on the part of their independent financial advisers, and on the part of the staff of the Ministry of Health, that the local authorities have accepted it as a fair compromise, and that they have said that they could not find another formula that would substantially improve the distribution of grants; and I would remind the House that the effect of this formula is to distribute 50 per cent. of the additional money among the necessitous areas.
  Mr. David Adams: During my speech I asked whether, in the event of new industries being started in an area and having the benefit of derating, there would be compensation to the local authorities for the loss of those rates. That point has not been answered.
  Mr. Hudson: I am sorry I forgot to deal with a question put to me by the hon. Member for Nelson and Colne (Mr. Silverman). As I understood it, it was an inquiry about the special rates in certain parishes. He wanted to know what had caused special rates to be levied in certain of the parishes where we were making arrangements to provide for 75 per cent. instead of 50 per cent. of the loss. The special rates in rural districts are leviable under the Public Health Act of 1875 and are chargeable in particular parishes which are served by public health works, principally sewerage and sewage disposal works, water supply and scavenging arrangements.
  10.6 p.m.
  Mr. Dunn: I am sure that every hon. Member will be very much clearer in his
  2116
  mind as to the interpretation of the formula after the several hours Debate we have had to-day. I think we shall be as clear as I was last Sunday morning. While I was reading the formula I turned to my little girl and said, "Margaret, can you tell me the chemical formula for whisky?" She immediately said, "Yes Daddy." I said, "What is it?" and' she said, "O.L.IC2" I think that aptly describes the formula as we have listened to it to-day. I have risen to put three questions to the Minister or to the Parliamentary Secretary. On two or three occasions I tried to get into the Debate before the Parliamentary Secretary replied. In his opening statement the Minister informed the House that the figures which he gave as published in the White Paper and in the Bill itself must be taken by the House as being merely an estimate. I am glad that the Minister nods approval, showing that I have got him right on that point. In that case, why did the Parliamentary Secretary speak with such great certainty when dealing with the figures in winding up the Debate?
  My second point is this: I was a member of a local authority when the White Paper of 1928 was issued, and at that time I expressed very grave doubt as to the accuracy of the figures then published. Is there a Minister or a Member of the Opposition who would say, in 1937, that the figures of 1928 formed any safe guide for the local authorities after 1929–30, when the Local Government Act of 1929 came into force? I have in mind one authority which, it was stated in the White Paper, would be a gaining authority to the extent of is. 6d. in the pound I regret to say that instead of being a, gaining authority it has been a losing authority to the extent of is. 6d. in the pound from the time when that Act came into force. To me it is significant that the Minister, in opening this Debate, should safeguard himself by warning the House, so that later, when these figures do not work out, he may be able to say, "I gave the figures merely as an estimate." I take that to be the interpretation which the Minister places upon these figures. If that is a true deduction, there is no reliance to be placed on these figures. No authority in the country can count on them as showing what it will get.
  Sir K. Wood: I would point out that the figures have been carefully checked in consultation with the local authorities and financial advisers, and I think the hon. Member ought to accept my statement, which I made with due responsibility, that I do think they give a fair estimate of what we hope will be possible.
  Mr. Dunn: In view of the fact that the figures of 1928 did not work out, and that many authorities have been losing authorities instead of gaining authorities—having that as our experience, and in view of the statement the Minister made, I think we are entitled to draw the deduction that these figures cannot be relied on. I understood the Minister to say in opening the Debate that if two neighbouring authorities found themselves in difficulties with regard to any uniform rate measured across the authorities, there was a right of appeal to the Minister.
  Sir K. Wood: I do not want to keep interrupting the hon. Member, but I should like him to look at my observations in the OFFICIAL REPORT in the morning. He will find that my statement was confined to the particular matter with which I was dealing at that time. So far as that is concerned it is true. I should like him to read the statement which, of course, was made after careful preparation.
  Mr. Dunn: It will be interesting to read the Minister's statement. I am sure on. Members will read it with a good deal of interest, for this reason. Some of us have in mind local authorities who, under the formula now existing, find that their rates have increased until they are not 13s. 3d., the average, but 15s. 6d. in the pound, plus water, and are even pound for pound, whilst a neighbouring area is not only gaining but pays no general rate at all. Moreover, there are adjoining authorities, one with rates which are pound for pound while the other is able to build council offices out of the profits they are making on the formula grants. That is a point upon which we are entitled to ask the Minister how such a thing may be corrected.
  There is a third point. I understood the Parliamentary Secretary to say that the average rate in the boroughs of this country came to 13s. 3d. in the pound. I wondered whether he could say what the average rate in the pound is for the
  2118
  urban authorities. Those authorities are feeling the effect of the operation of the block grant, but not in a way that they understood it would be when the Bill was passing through the House in 1928–29. The people who are entitled to protection in any revision of the block grant are those who live in the small cottage houses of this country, and who have, in the main, to bear the burden of the rates. I would be pleased if the Minister could reply to my first, second and third questions.
  Sir K. Wood: Perhaps the hon. Member will allow me to send him the information asked for in his third question, as to rates in the urban areas. On his first question, I believe it to be a fact that the block grant results, which will be found exactly defined in the report, show, as I said in my speech to-day, an estimated gain of £2,250,000. There is some hope that the results may be even better than are stated in the White Paper. So far as the hon. Member's second question is concerned, as to the operation of the Act in the past, it might take a very long while to justify the statements that were made in the original White Paper, but I think, in the years immediately following, the results that were formulated came pretty well into operation. The hon. Member will recollect that adverse conditions of unemployment then followed. I am sorry to have had to reply to the hon. Gentleman so frequently to-night, but I am glad to be able to enlighten him further as to the position.
  10.18 p.m.
  Mr. Silverman: It is impossible to allow to pass unchallenged the Parliamentary Secretary's invitation to the House to believe that the operation of the block grant has been more, or at any rate not less, advantageous than the previous system. I understood that his argument was an endeavour to prove the advantages of the present arrangement by pointing to the fact that Middlesbrough, Anglesey, and, I think, Durham, rates had been reduced. If, on that argument, the House is to infer that the system has been advantageous to those places, why does the Minister at the same time invite us to believe that there is an advantage to Liverpool, whose rates have increased from 13s. 10d. in 1931 to 16s. 7d. or 16s. 8d. in 1936?

  2119
  The truth of the matter is that, in those four or five years, Liverpool's unemployment has more than doubled. In the first eight months of 1935 it was 93,000, whereas in the whole of 1931 it was 42,000 or 43,000. It seems rather as though the Parliamentary Secretary was attempting to have it both ways. I do not want to pursue the point, but only to persuade him to reconsider it when he is directing his attention again to Liverpool, and not to allow himself to be persuaded that this new arrangement has been advantageous to Liverpool. It has been anything but advantageous, and even the very large readjustment that Liverpool will get under this rearrangement of the block grant will go only a very small way towards redressing that problem.
  Mr. David Adams: May I have an answer to my question?
  Sir K. Wood: I will send the hon. Member a communication.
  Bill committed to a Committee of the Whole House for Monday next.—[Captain Margesson.]

LOCAL GOVERNMENT (FINANCIAL PROVISIONS) [MONEY.]
Considered in Committee under Standing Order No. 69.
[Captain BOURNE in the Chair.]
Resolved,
"That, for the purposes of any Act of the present Session to amend Part VI of the Local Government Act, 1929, and to repeal Section forty-five of the Unemployment Assistance Act, 1934, and the proviso to paragraph (c) of Sub-section (2) of Section nine of the Rating and Valuation Act, 1925, it is expedient to authorise any increase in the sums payable out of moneys provided by Parliament under the said Act of 1929 (hereinafter referred to as 'the principal Act') which may occur by reason—

(a) of any amendment of the rules for determining weighted population;

(b) of the calculation of Additional Exchequer Grants to counties and county boroughs upon the basis of the weighted population for the first fixed grant period being determined in accordance with such amended rules as aforesaid, and the weighted population for the fixed grant period in respect of which the grants fall to be calculated being increased by a figure
2120
equal to two and one-half per cent. of the weighted population for the first fixed grant period;

(c) of any order made by the Minister of Health with the consent of the Treasury directing, in the case of any district of which the council satisfies the Minister that special hardship or difficulty would be occasioned by the reduction required by paragraph (b) of Sub-section (1) of Section ninety-four of the principal Act to be made in the sums to be added to the General Exchequer Grant of the council, that the reduction shall be remitted to the extent of one-half."—(King's Recommendation signified.)—[Sir K. Wood.]

Resolution to be reported To-morrow.

SUPPLY.
Considered in Committee.
[Captain BOURNE in the Chair.]

REVENUE DEPARTMENTS ESTIMATES, SUPPLEMENTARY ESTIMATE, 1936.

  POST OFFICE.
  Motion made, and Question proposed,
  "That a Supplementary sum, not exceeding £2,600,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for the Salaries and Expenses of the Post Office, including Telegraphs and Telephones."
  10.23 p.m.
  The Postmaster-General (Major Tryon): I find myself to-night in a very unusual position, namely, that of a Postmaster-General discussing the Post Office, because recently we have been discussing other matters. This particular Estimate is one which I venture to think will be satisfactory to the Committee. In the first place it does not involve any charge whatever on the taxpayer, and the reasons for it are also satisfactory. It is due to the great expansion of Post Office business, and I am glad to say that this expenditure will be well balanced by the revenue which is coming in, so that there is no loss to the Exchequer in connection with this Supplementary Estimate. I will mention the main items, and will give any details that hon. Members may select afterwards.
  There is a larger sum for the British Broadcasting Corporation, due to the arrangement under which in future they will get a larger share of the licence revenue. The expansion of works programme and the building up of stocks of telephone engineering materials involve an additional expenditure of £750,000.

  2121
  On salaries and wages there is an additional expenditure of £458,000, and there are one or two other details which I think will suggest to the Committee the reasons for the Supplementary Estimate. We estimated that the postal business of the country would increase in the year by 3 per cent.; as a matter of fact it has increased by 5 per cent. We thought the telephone business would show a growth of about 190,000 new telephones, but as a matter of fact we have installed 240,000 new telephones, so that the expansion is even greater than was anticipated. There is also a great expansion of telegraph business. Sums of £116,000 for conveyance of mails, £599,000 for the engineering establishment, and £115,000 for superannuation, are also asked for. The main point is that our business is expanding and that all that we spend has to be agreed to by the House. On the other hand, there is income coming in which balances this extra Vote, so that there is no loss to the Exchequer and no charge to the taxpayer. The main point is that we are able to give the Committee a story of expanding revenue.
  10.26 p.m.
  Mr. Viant: I think the Committee will be very grateful to the right hon. Gentleman for his statement and is interested to know the manner in which the business of the Post Office is expanding. That in itself is evidence of the expansion of business in general throughout the country. There are a few points in connection with the Estimate that I desire to raise. The first is in connection with the Stores Department. I should like to know whether this increase of £54,000 is due entirely to expansion of business, or is some of it due to an increase in prices, or, on the other hand, to the Department buying in advance? Again, in respect to Salaries in Provincial Establishments, I note that they are up to the extent of £404,000. I should like to know if that is due to an increase in the number of staff, or due in any respect to the amount of overtime that has been worked by the Department? I think the Committee will be pleased to know to what extent the staff has been increased with a view to reducing the amount of overtime that has been worked. I note that Sub-head B, Travelling, Subsistence and Trip Allowances, is up by £43,000. I should like to know the reason for such
  2122
  an abnormal increase. It seems an extraordinary amount.
  Sub-head H.1, Losses by Default, Theft and Fire, is up by £6,000. The Committee will be interested to know whether thefts have increased to an extraordinary extent and to what extent losses by default have increased: The Committee will be disturbed if they learn that the thefts are on the increase to the extent that these figures would lead one to assume. I hope that that is not the case, but having sat on the Front Bench opposite and had to reply to questions connected with thefts, I shall be interested to know to what extent thefts may be taking place at the present time. What do these fires mean? To what extent has the Post Office been subjected to fires, where have the fires taken place, and what is the precise loss sustained as a result of those fires? I notice that Subhead H.2, Compensation for Accidents, is up by £9,000. It is an Estimate, but these Estimates are based upon the previous experience of the Department, and in the main they are fairly actuarially correct. If the Department are estimating £9,000 as compensation for accidents, they must have had a considerable number of accidents during the past 12 months in order to persuade them to make this allowance.
  On page 23, the Estimate for Engineering Materials is up by 750,000. Are there any good reasons to be advanced? We have already been informed that the business is expanding, but I should be interested to know whether the Department are buying in advance. It is apparent to the mind of probably every hon. Member in the Committee that we might expect an advance in prices, and if the Departments are looking ahead and buying in advance, one can appreciate the immensity of the Estimate in that regard. Engineering Establishment salaries are up by £469,000, and I hope that the increased Estimate has been made with a view to increasing the number of staff so as to wipe out the question of overtime completely, making allowance for certain contingencies which are bound to arise in completing an order or something of the kind, when half an hour's or an hour's overtime might be necessary. Also on page 23, I notice that the Estimate in respect of Losses by Default, Accident, etc., has risen from £2,200 to £8,200, very nearly three times as much as the

  2123
  original Estimate. How is this accounted for? These are very reasonable questions which interest the Committee, and they will give the Department an opportunity of telling the Committee the reasons for the Supplementary Estimate additional to those already advanced by the right hon. and gallant Gentleman on the grounds of expanding business.
  10.35 p.m.
  Mr. Tinker: There is one matter that I should like to raise. It comes under the heading of "Conveyance of Mails," the cost of which is increased by £116,000. On page 24 it is stated that £29,000 additional provision is required for the letter mail traffic, which is greater than was provided for in the original Estimate. The letter-carrying business covers millions of letters. My complaint is in regard to one letter. [Laughter.] It may seem a small matter to hon. Members, but the aggregate is made up of units, and if we can deal with the grievances of the units the whole will be right. The point of my question is whether the expense in cases such as the one which I am about to quote could have been curtailed and, if so, if there are many such cases, the business of the Post Office might be made even more successful than it is at the present time.
  Some time ago a letter was sent from America, it was a packet which contained a diploma that had been won by a Britisher. It was sent from America, in a registered letter, to the home of his parents in St. Helens. The letter was held up at Crewe and notification was sent to the parents at St. Helens that the letter had been held up, and that if they desired to see it opened they could go to Crewe for that purpose, otherwise, it would be opened in their absence. They were not able to go to Crewe, and the letter was opened in their absence. Four days elapsed before the letter arrived at St. Helens. There was nothing in the letter of a condemnatory character, or anything that needed to be taxed. It was held up because it was registered. I brought the matter before the Postmaster-General and he agreed that it seemed to be outrageous that it had been held up, but when he went into the matter he found that a certain course had to be adopted and could not be altered, because the Customs and Excise authorities were
  2124
  concerned. As they had no place nearer to St. Helens than Crewe they had to deal with the matter at Crewe. My suggestion is, that if a letter of this kind does arrive and it is thought to contain dutiable goods, instead of holding it up 50 miles from its destination it might very well be sent on to the town to which it is addressed, and some person in authority at the Post Office there could deal with it. That would have meant in this case it being sent to the St. Helens Post Office and word being sent to the parents that it had been held up for a certain purpose, and that if they cared to see it opened they could do so without any expense to themselves.
  This is one of those small matters which may affect a large number of people, but because it happens to be small no one cares to raise it. I am taking the opportunity of raising the matter on this Supplementary Estimate, because if this sort of thing is carried on to any large extent it must mean additional expense to the Post Office, as they hold up the letter at Crewe and have to despatch it again, thereby incurring extra expense It may be a small item, but if such cases are multiplied by hundreds or thousands one gets additional expense, which may well amount to a much bigger item than would appear on the surface. I hope that if the Postmaster-General cannot to-night give me satisfaction, he will take it from me that a sense of injustice prevails in this particular home because of what happened. If they had gone to Crewe it would have cost them at least £1. That is unfair. We trust the Post Office in a great many matters, and I think this could have been dealt with in a better way.
  10.41 p.m.
  Captain Harold Balfour: I want to raise one question which I think, will be in order. It concerns the w hole of the Committee very much. It is the question of the poultry industry. There is under the heading H.2, Compensation for Accidents:
  "Owing to the increase of business additional provision is required for compensation in respect of losses, damage, accidents, etc., £9,000."
  I think we are entitled to ask the Postmaster-General whether all this extra sum of £9,000 is in respect of the transport of the very fragile type of goods—eggs in the post. We are all aware of the great

  2125
  increase in the imports of foreign eggs, which is causing deep concern to every Department in the State, including, I hope, the Minister of Agriculture, and we hope that the Post Office may be able to throw some light on the question as to whether any of this increased charge is in respect of these eggs. Hon. Members will agree that we cannot raise this matter too often in order to draw the attention of the Government to the many complex problems which hon. Members have to meet in this particular difficulty, and the Post Office in this matter can be helpful if they will give some indication as to whether we are now importing a great number of eggs which are being broken. If the Postmaster-General replies that we are importing eggs but that an increased number are not being broken, we shall nevertheless not be shaken in our knowledge that a large number of eggs are coming in in a condition even worse than we had anticipated.
  The Deputy-Chairman: Order.
  Captain Balfour: I only want to ask whether we can have an assurance from the Postmaster-General? I trust the Committee will agree that we cannot raise this matter too strongly or too often.
  10.43 p.m.
  Mr. Lyons: I want to refer to one matter which, I think, will be in Order. It is an item which concerns an additional sum of £500,000 which is to be given to the B.B.C. I understand from what the right hon. and gallant Member said that this is the B.B.C.'s larger share of the licence fees. Does this mean that the Postmaster-General henceforth will have no control whatever—
  The Deputy-Chairman: That matter cannot be raised on this occasion.
  Mr. Lyons: May I ask whether it means that the Postmaster-General will be consulted in the matter of staff—
  The Deputy-Chairman: The hon. Member can raise that question on the salary of the Postmaster-General but not on this occasion.
  Mr. Lyons: May I ask the Postmaster-General whether the payment of this £500,000 additional to the B.B.C. places himself in a different position—
  The Deputy-Chairman: Order!
  10.44 p.m.
  Sir Percy Harris: There is one item which is puzzling many hon. Members, not eggs, either good eggs or election eggs, but the transport of mails by air. There is a saving of £95,000. Is that arrived at by making more satisfactory contract terms? If that is so, then the very high charges now made for the transport of mails by air should be reduced.
  10.45 p.m.
  Mr. Sexton: I would like to ask a question with regard to the item for rent. Does that include anything for new sub-offices that have been opened in the country, or is the additional provision needed for the expansion of the Post Office service? If it includes any new premises, are any of them places where the sub-postmaster or the sub-postmistress is remunerated at £52 a year or less? I understand from questions I have asked that there are 6,500 such places in the country, and I am wondering whether that number is being increased. In my opinion, the remuneration of £52 per annum is totally inadequate. When one considers that the person concerned has to provide premises with rent, at a modest estimate, at 5s. a week, which takes £13 of the £52 and leaves £39—
  The Deputy-Chairman: The hon. Member must raise questions of policy on the main Estimates?
  Mr. Sexton: I would like also to ask a question concerning the item for losses by default, theft and fire, to which reference has already been made by my hon. Friend the Member for West Willesden (Mr. Viant). Have the people who have defaulted or stolen been covered in any way by fidelity bonds, and is the loss by fire covered by fire insurance?—
  The Deputy-Chairman: That does not arise on this occasion. All the hon. Member may ask is why the Supplementary Estimate is presented.
  10.47 p.m.
  Major Tryon: I would like, in the first place, to answer the point raised by the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) as to why so much has not been spent on the air mail. I am sorry to say that it is because the air mail has not developed

  2127
  as rapidly as we had hoped. It is going ahead now, but we made provision for it to develop more rapidly.
  Sir P. Harris: Is the right hon. and gallant Gentleman considering lowering the prices in order to encourage greater use of the service?
  Major Tryon: It has nothing to do with that. The service did not develop as rapidly as we had hoped, but it is going ahead now. My hon. and gallant Friend the Member for the Isle of Thanet (Captain Balfour) made an interesting speech on the subject of eggs in connection with the Post Office, but he did not tell me whether he thought we ought to break the foreign eggs or not. The hon. Member for Leigh (Mr. Tinker) raised a point on which he has already been in communication with me, but it is a matter for the Customs and Excise, and not for the Post Office. If the packets could be examined nearer to their destination, it would be a great convenience, but I do not think anybody would agree that the levying of these Duties should be handed over to the Post Office. However, I agree with the hon. Member that if the packets could be examined nearer their destination, it would be more convenient. I am glad that the article in question was not a perishable article, and I hope the certificate will long be treasured by the parents.
  Mr. Tinker: Can the right hon. and gallant Gentleman advise me when I should raise this point in order to have it dealt with by somebody?
  Major Tryon: When the appropriate Vote is submitted. I come now to the very interesting points raised by the hon. Member for West Willesden (Mr. Viant), and I will endeavour to deal with them. In the first place, he referred to the numbers of the staff, and I am glad to say that during the last year the staff has been increased by 15,000. Although I cannot discuss overtime, the hon. Member will realise that we are enrolling men rapidly, especially in the engineering departments in which I know he is interested. We are making a rapid increase in the staff with a view to handling the work and incidentally—an important point—reducing overtime. The hon. Member made rather a mistake when referring to Item A (5), where there is an
  2128
  increase of £54,000. He asked whether this was due to a rise in prices. It is not due to stores, but to additional wages for additional Post Office workers, and I am sure the hon. Member will not object to that. It has nothing to do with the prices of commodities.
  Mr. Viant: A.4 deals with salaries and then I dealt with A.5, which refers to stores.
  Major Tryon: I am not blaming the hon. Member but the sum of 54,000, for the Stores Department comes under the main heading "Salaries, etc." The hon. Member asked about the losses by default, accident, etc. Losses by default amount to half of the whole total, the losses by theft to one-third, and one-sixth of the losses are due to other causes, including fire. He spoke feelingly of the number of mail-bag thefts which were going on when he had the great pleasure of working at the Post Office. I am delighted to be able to assure him that the losses are now very small. In 1935–36 the total losses by the stealing of mail-bags amounted to only £272. We have not the figures for the whole of this year but we are approaching the end of the financial year, and the losses are so small that the figure I have given is likely again to represent the losses sustained. Two hundred and seventy-two pounds is very little to lose.
  Mr. Garro Jones: I have had occasion to write to the right hon. Gentleman in the case of one or two losses of this character for which he has repudiated liability, and I would like to know whether the figure he has given is composed only of losses for which the Post Office recognises liability to repay and excludes all those cases which are far more than the figure he has given where the Post Office recognises that there have been losses but rejects any liability to repay.
  Major Tryon: The hon. Member has suggested that we have not compensated anybody but that we are asking the Committee to grant money which we have not paid.
  Mr. Garro Jones: The Minister has completely misunderstood my point. I recognise that in this case he is asking the House to pay certain losses. In other cases he is not asking the House to pay losses because he has not paid them him-

  2129
  self. What I wish to know is whether the figure of £272, which he gives to the Committee as an indication of the total losses for the whole service and for which he obtains the plaudits of the Committee, does include all the losses. I wish it to be understood that there are enormous losses for which he rejects responsibility.
  Major Tryon: The hon. Member is mistaken. There are not enormous losses. The figure I gave is for the mail-bag robberies.
  Mr. Benson: Is this a thing which fluctuates very considerably from year to year? On page 25 the greater losses are attributed to the increase of business. The increase in business is 5 per cent., whereas the increase in the figure for losses is nearly 25 per cent.
  Major Tryon: There was one particular case of default where we had to make up the money and that has swollen the return for this one particular year. It must not be taken as normal. I am glad to be able to tell the hon. Member for West Willesden that we are buying in advance. One of the principal causes of the size of the Estimate is that we are laying in stocks in good time to make provision for the increase which we are aware is coming, particularly in connection with the telephone service. Then he referred to the Post Office Savings Bank and noticed that here, unlike on previous occasions, there is something said about losses by default and accident, but nothing about losses by fire. The reason why there has been no loss by fire at the Savings Bank is that there has not been any fire there. I have endeavoured to explain that these increases are due to increasing business, and I hope they will go ahead next year. All that can be said against us is that we have not foreseen the success that has attended the efforts of the staff of the Post Office with whom I am very proud to be associated.
  Mr. Viant: The right hon. Gentleman has not told us where there were fires and to what extent the Post Office has suffered from fire. Furthermore, he has not informed us of the reasons why the compensation for accidents is up by £9,000.
  Major Tryon: I am obliged to the hon. Member for reminding me. The reason why there are more accidents is that we have an enormously increased number of motor vehicles and that their mileage is
  2130
  much greater. I had the opportunity not long ago of answering a question about fatal accidents, and I am glad to say that these have gone down. With regard to the question the hon. Member asked about fire, it is a very small amount. One-sixth of that item includes a number of various things, of which fire is one.
  Question,
  "That a supplementary sum, not exceeding £2,600,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for the Salaries and Expenses of the Post Office, including Telegraphs and Telephones;"
  put, and agreed to.
  Resolution to be reported To-morrow; Committee to sit again To-morrow.

SUPPLY.
REPORT [8TH FEBRUARY]
Resolutions reported:

CIVIL ESTIMATES, SUPPLEMENTARY ESTIMATES, 1936.

  (CLASS IV.)
  1. "That a Supplementary sum, not exceeding £442,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for the Salaries and Expenses of the Board of Education, of the various Establishments connected therewith, including sundry Grants in Aid, and preliminary expenses in connection with Physical Training."
  2. "That a Supplementary sum, not exceeding £62,150, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for Public Education in Scotland, for the Royal Scottish Museum, Edinburgh, including sundry Grants in Aid, and for preliminary expenses in connection with Physical Training."
  REPORT [9TH FEBRUARY].
  Resolutions reported;

CIVIL ESTIMATES, SUPPLEMENTARY ESTIMATES, 1936.

  CLASS I.
  1. "That a Supplementary sum, not exceeding £10,937, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for certain Miscellaneous Expenses, including certain Grants in Aid and Supplement to certain Statutory Salaries."
  2. "That a Supplementary sum, not exceeding £10, be granted to His Majesty, to

  2131
  defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for the Salaries and Expenses of the Offices of His Majesty's Secretary of State for Scotland in London and Edinburgh; Expenses under the Private Legislation Procedure (Scotland) Act, 1936; a Subsidy for Transport Services to the western Highlands and Islands; a Grant in lieu of Land Tax; and Contributions towards the expenses of Probation, and of Remand Homes."
  3. "That a Supplementary sum, not exceeding £10, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for the Salaries and Expenses of the Civil Service Commission."

  CLASS VI.
  4. "That a Supplementary sum, not exceeding £8,900, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for the Salaries and Expenses of the Anglo-Spanish, Anglo-Roumanian, Anglo-Italian and Anglo-Turkish Clearing Offices under the Debts Clearing Offices and Import Restrictions Act, 1934."

  CLASS VII.
  5. "That a Supplementary sum, not exceeding £193,530, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for Rates and Contributions in lieu of Rates, etc., in respect of Property in the occupation of the Crown for the Public Service, and for Rates on Buildings occupied by Representatives of British Dominions and of Foreign Powers; and for the Salaries and Expenses of the Rating of Government Property Department, and a Grant in Aid of the Expenses of the London Fire Brigade."
  6. "That a Supplementary sum, not exceeding £348,510, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for Stationery, Printing, Paper, Binding and Printed Books for the Public Service; for the Salaries and Expenses of the Stationery Office; and for sundry Miscellaneous Services, including Reports of Parliamentary Debates."

  CLASS II.
  7. "That a Supplementary sum, not exceeding £10, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for the Salaries and Expenses of the Department of His Majesty's Secretary of State for Foreign Affairs."

  CLASS III.
  8. "That a Supplementary sum, not exceeding £30,050, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for Grants in respect of the expenses of the Managers of Approved Schools in England and Wales; the expenses of Local Authorities in respect of children and young persons committed to
  2132
  their care; and the expenses of the Councils of Counties and County Boroughs in respect of Remand Homes."

  CLASS VII,
  9. "That a Supplementary sum, not exceeding £29,400, be granted to His Majesty, to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1937, for Expenditure in respect of Art and Science Buildings, Great Britain."
  10. "That a Supplementary sum, not exceeding £40,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for the Salaries and Expenses of the Office of the Commissioners of His Majesty's Works and Public Buildings."
  11. "That a Supplementary sum, not exceeding £153,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for Expenditure in respect of sundry Public Buildings in Great Britain, not provided for on other Votes, including Historic Buildings, Ancient Monuments, Brompton Cemetery and certain Housing Estates."
  12. "That a Supplementary sum, not exceeding £12,100, be graned to His Majesty, to defray the charge which will come in course of payment during the year ending on the 3rst day of March, 1937, for Expenditure in respect of Royal Palaces, including a Grant in Aid."
  13. "That a Supplementary sum, not exceeding £66,000, he granted to His Majesty, to defray the charge which will come in course of payment during the car ending on the 31st day of March, 1937, for Expenditure in respect of Customs and Excise, Inland Revenue, Post Office and Telegraph Buildings in Great Britain, certain Post Offices abroad, and for certain expenses in connection with Boats and Launches belonging to the Customs and Excise Department
  14. "That a Supplementary sum, not exceeding £6,400, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937: for expenditure in respect of Royal Parks and Pleasure Gardens."
  Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
  11.1 p.m.
  Mr. Kelly: I hope that some explanation will be given of this Resolution. "Certain statutory salaries" is a very general statement and tie should not be asked to agree to this item without a word of explanation of the details. That applies to a great many other items in these Votes.
  11.2 p.m.
  The Financial Secretary to the Treasury (Lieut.-Colonel Colville): This Estimate was very fully discussed in Committee and its features were fully explained. It relates in the main to the grant in respect of the administration expenses of the Special Areas Reconstruction Association. About four hours' discussion took place on it in Committee and all possible explanations were then given.
  Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
  11.4 p.m.
  Mr. Kelly: I would like to have some explanation of what is meant by this grant in connection with the rating of Government property in London and elsewhere. Is it a fact that we pay rates on all property held by the Government and are those rates paid in the same proportion as the rates on other buildings in London. Further, what is the amount of the grant in aid of the expenses of the London Fire Brigade? I hope we shall have a statement on those points.
  11.5 p.m.
  Lieut.-Colonel Colville: This again was considered in Committee, but I am glad to give the hon. Member such information as I can on the Report stage. This excess expenditure is mainly due to a large increase in the aggregate rateable value of property in Crown occupation, and to a lesser extent to a further general increase in the poundages of the rates levied in the Metropolitan area. The first cause that I have mentioned is responsible for about one-third of the excess expenditure, on account of the number of Government properties having been added to during the year and to increases having been made in the assessments of a number of War Department, Air Ministry and Post Office buildings. While the Government do not pay rates in the strict sense, they make contributions to local authorities as a general offset for the amounts which those authorities would otherwise receive in rates, and there is an excess this year of such payments due to the expansion of Government activities. That excess expenditure
  2134
  is really a reflection of the general expansion of certain Government activities during the year.
  The hon. Member did not mention Scotland, but the same is true in Scotland, where there have been certain increases in rate poundages, particularly in Glasgow, and also increased assessments in respect of Turnhouse and Leuchars Air Force stations. There are also an Admiralty oil fuel depot on the Clyde and other premises. There is a quite considerable expansion in the amount of Crown property on which the Government make contributions to recoup local authorities for rates which they would otherwise receive. I think that in the main covers the Estimate.
  There is, however, another item of a smaller nature which relates mainly to the rates on buildings occupied by representatives of British Dominions and foreign Powers. These lie generally in the Metropolitan area, particularly in the City of Westminster, in Kensington, and in St. Marylebone, where the majority of the embassies and legations are situated. Where there is any change in the situation there, owing to new legations or embassies being formed, the Government have to enlarge their contribution to the local authorities. The main cause of the increased expenditure, however, is, as I have stated, that up and down the country there has been an expansion in the amount of ground required for Government activities.
  11.8 p.m.
  Mr. Garro Jones: I apologise for not having been present on the Committee stage of this Estimate, but I think the right hon. and gallant Member would be the last to put that forward as a reason why those hon. Members who were not able to be present should not ask for an explanation on the Report stage. The Minister explained that a considerable proportion of these amounts was due to increased rates in respect of the added value of property built by the Services. The only question which I desire to ask is whether that figure appears in any part of the total Estimates of the Government in respect of armaments, or is this a figure which, though really part of our rearmament expenditure, is never shown as part of it but only comes under this Treasury Vote? I think there is a large number of items which are really attributable to

  2135
  rearmament, but which do not appear as such in any of the Votes that come before this House, and I should be glad to have some information on that point.
  Mr. Tinker: Will the Financial Secretary explain what is meant by a grant-in-aid of the expenses of the London Fire Brigade? The question was put by another hon. Member, but there has been no reply.
  11.11 p.m.
  Mr. Ede: Will the Financial Secretary tell us the amount of the contribution in lieu of rates in respect of the part of Lansdowne House which is occupied by the Government. He said the other night that we could not be told the rent, and I am willing to accept that, but the rating authority must know 'the amount that is to be paid in aid of rates. There can be no secret about that. The Committee could not be told the rent, and as the hon. and gallant Member has taken the line that what was told to the Committee was really told to the House, I assume that he will take the line that what he could not tell the Committee he cannot tell the House. I do not want to go round flogging a dead horse, it is very unkind to the horse and still more unkind to the flogger, but I hope that we may be given this piece of information.
  11.12 p.m.
  Lieut.-Colonel Colville: I can speak again only by the leave of the House. The hon. Member for North Aberdeen (Mr. Garro Jones) asked whether this sum appears in any Estimate in connection with armaments. It does not. Rates on Government property, whether used in connection with the Services or for other purposes, fall on this one Vote, and while I pointed out that a considerable part of the increase is due to an expansion of activity in Service activities, it does not appear on any other Vote than this one. The hon. Member who raised the point about the London Fire Brigade has fallen into an old trap. The reference to the London Fire Brigade is in the title of the original Estimate, but all the items mentioned in that are not necessarily reflected in this Supplementary Estimate, in which there is nothing for the London Fire Brigade. As to the third question, I am not in a position to say at present what is the contribution
  2136
  in lieu of rates in relation to Lansdowne House but I shall try to find out that information.
  Mr. Ede: Can the hon. and gallant Member tell us how the Government can occupy premises without paying rates?
  Lieut.-Colonel Colville: In regard to the rates for Lansdowne House I am not in a position to state the general position at the present time, but I can say that there is nothing for Lansdowne House included in this Estimate.
  Mr. A. V. Alexander: Do I understand that we are not to be told what is the rent of Lansdowne House?
  Lieut.-Colonel Colville: That point could not be properly discussed on this Estimate, which has no relation to it.
  Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
  11.15 p.m.
  Mr. Garro Jones: I rose to comment upon the absence from the Government Front Bench of the Noble Lord the Under-Secretary of State for Foreign Affairs, but I see that he has now come in, and my main point is therefore already met. I think it would be in accordance with precedent if the Noble Lord would explain this Vote to the House.
  11.16 p.m.
  The Under-Secretary of State for Foreign Affairs (Viscount Cranborne): The hon. Gentleman will see that there is an Estimate of £5,800 in respect of salaries, of which £3,000 is for the Passport Office where increased staff has been required. There is an estimate of £2,550 in respect of the additional staff and extra pay, necessitated by the political situation abroad, which, as the hon. Member is aware is very complicated. We have had a number of Debates in this House, and a large number of questions have been asked, and that has necessitated an increase of work in the Foreign Office There is also £250 for the Naval Conference. Practically the whole of that item came into last

  2137
  year's Estimates, but one or two items had to be held over to finish the complete expenditure under this heading.
  Then there is a sum of £810 for salaries, etc., in the Communications Department, that is, for increased telegraphing, also necessitated by the international situation, and £400 for telephoning. There is also a sum of £1,000, which is the expected savings on messengers' travelling expenses, partly due to what may be called rationalisation in the services which has resulted in a very welcome reduction in expenditure, and partly to a reduction in expenditure as regards the foreign service mesengers. That leaves the sum of £6,010.I am not going to ask for the whole of that sum because, although the expenditure of the Passport Office has gone up, the proceeds have gone up, and we have been able to meet most of this figure. I am therefore in the very happy position of asking the House to vote only £10.
  Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
  11.19 p.m.
  Mr. Paling: I should like to ask for an explanation of the item of £10,600 for remand homes. The details state:
  "The additional provision required is due to the increased use of the remand homes for the temporary accommodation of children and young persons committed to approved schools where no vacancies are immediately available."
  Is this extra accommodation due to an increase in juvenile crime? If not, what is the explanation?
  11.20 p.m.
  Mr. R. S. Hudson: This Supplementary Estimate is rendered necessary by the increasing use by the courts of the provisions of the Children and Young Persons Act, 1933. I do not think it represents an actual increase in crime, but merely an increased use by the courts of these methods of treating children. The item for new schools explains itself. The item for remand homes is due to the fact that local authorities are carrying out increased duties imposed upon them by the Act. Under the old system, children waiting to be sent to an approved school
  2138
  were detained in accommodation provided by police courts, but now they have to be detained in accommodation provided by the local authorities, and this extra amount is required because local authorities are put to increasing and unexpected expense in this way.
  Mr. Paling: One could not help receiving a painful impression that juvenile crime was on the increase, in view of the large increase over the original Estimate. It may be entirely due to the use of new methods; I hope it is.
  11.22 p.m.
  Mr. Benson: Will these grants give the Government any power of selection of the heads of these new schools?
  Mr. Hudson: I think the arrangement is that the local authority acts as the agent of the Home Office—I know that that is the case with the London County Council—in running these approved schools. The Home Office have supervisory powers, but the engagement of the staff is left to the local authority.
  Mr. Benson: Do not the Government exercise any supervision or power of recommendation in connection with the choice of staff? The hon. Gentleman referred to new methods, but these approved schools are very largely restrictive in character, and there is no new method about them; as far as I know they are just the old industrial schools under another name, and the whole question of new psychological methods for dealing with delinquent and difficult children is left out of account.
  11.24 p.m.
  Mr. Kelly: I do not object to being answered by the hon. Gentleman, who is always extremely courteous and gives all the information he possibly can; but one might have expected the Home Office to be represented here to-night. Dealing with these young people in approved schools is a very important matter, and those Members of the House who have to deal with juveniles, both in the schools of the locality and in approved schools, would have liked more information about it. We are not being told where these six new schools are, and I think we ought to know, because one finds that some magistrates are making it a practice to send young people to colonies for mental defectives rather than to approved schools. [HON. MEMBERS: "No."] I do not

  2139
  know who it was that said "No," but it is evident that they are not in touch with what is happening at this moment, and has been happening during recent months, in London itself as well as in other parts of the country. There is mention of other schools projected. I do not know whether some of this money is being reserved for that purpose. If so, we might have an explanation. Some of these approved schools have been doing excellent work, and I hope they will do it even better than they have done it in the past, but we ought to be told where these six new schools are and where it is intended that the others are to be opened shortly.
  11.26 p.m.
  Mr. Ede: I must protest against the hon. Gentleman's statement that in the matter of these schools the local authorities are the agents of the Home Office. The great advantage of the Children and Young Persons Act, 1933, was that these schools ceased to be Home Office schools and became local authorities schools. My hon. Friend the Member for Chesterfield (Mr. Benson) must not be taken as speaking for anyone but himself when he suggests that the Home Office ought to interfere with the very much more liberal development that the local authorities are giving to these schools. The most disastrous thing that could overtake them would be for a combination of the Parliamentary Secretary, answering for a Department about which he knows less than usual, and my hon. Friend trying to impose the Home Office on these schools again. It is a most hopeful thing that these six new schools are in the main being started on experimental lines and, to my knowledge, local authorities are exercising the widest possible discretion in their attempt to induce people who have made a profound study of child life and in their endeavour to ensure that these young people shall be rescued from a life of crime and given a reasonably fair start in the world. It is regrettable that the old joint standing committees, which were responsible to the Home Office, left the work in a derelict condition. I hope no one will be misled by the statement of the Parliamentary Secretary into thinking that local authorities have other than the widest discretion, with reasonable consultation with the Home Office, in setting up these new
  2140
  schools and carrying on this experimental work.
  Mr. Alexander: I think it would be a great advantage if the Home Secretary would withdraw the Vote, because there are many questions arising on it on which we have had very inadequate information. We have had no information at all about the position which makes it necessary to ask for additional money. The Vote slipped through Committee almost without challenge. Unless we are going to have considerably more information, I trust that the Vote will be withdrawn.
  11.29 p.m.
  The Secretary of State for the Home Department (Sir John Simon): I beg to move, "That the Debate be now adjourned."
  I am afraid that for the moment I had not appreciated that at this stage there was likely to be discussion. I recognise the importance of the subject, and I think the best thing will be to do as the right hon. Gentleman suggests.
  Debate to be resumed To-morrow.
  Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
  Mr. Kelly: I hope that the Parliamentary Secretary to the Ministry of Health, who speaks for the Office of Works in this House, will give an explanation with regard to the £40,000 for salaries and expenses in connection with works and public buildings. There is not the slightest explanation here at all.
  11.31 p.m.
  Mr. R. S. Hudson: My recollection is that I gave the Committee a very full explanation, but I will endeavour to summarise it again. The House will know that as a result of the Supplementary Defence Expenditure has been necessary to take over a number of buildings throughout the country for the use of the Defence Services, and the Office of Works has been asked to act as agent to the War Office in building some of the new munitions factories of which I gave particulars on the last occasion. Naturally, the result of that is to cause an increase in staff of draughtsmen and architects,

  2141
  and, in addition, as I explained in Committee, certain of the grades of the officers concerned, especially draughtsmen, have been granted an increase of salary under agreement, and this item covers that expenditure.
  Mr. Garro Jones Mr. Garro Jones rose—
  Mr. Speaker: When hon. Members have had an opportunity of raising questions and they have been replied to by the Minister, hon. Members cannot put further questions to which answers are demanded. The Minister would really be out of order in making a statement.
  Mr. Ede: The Minister rose before anyone else had a chance.
  Mr. Speaker: He waited quite a time.
  11.33 p.m.
  Mr. Garro Jones: I respectfully acknowledge the point which you have just put before the House, Mr. Speaker, but I rose not to put further inquiries to the Minister, but to draw the attention of the House to a very important piece of information which has emerged from our discussions this evening. It is that, in addition to the vast sums—and I am not now discussing their merits—which are being expended on armaments Votes, very considerable sums are being asked for under Votes which have no connection with armaments Votes at all. Here we have some of these sums included in the cost of buildings which come under the Office of Works. A short time ago a large amount was asked for by the Treasury which was clearly due to rearmament, but which would not appear on the rearmament Vote.
  I observe that when we are drawing comparisons between these expenditures which we are making and the expenditures in foreign countries to justify these increases, of which this is one for which we are asked to vote this evening, we include in the foreign expenditures the expenditure coming within this whole range, whether capital expenditure upon roads or buildings, or whatever it is. But the comparative figure which we put forward from our side is the only figure which comes under the direct heading of armament Votes. I merely rise to call attention to that important fact and to submit to the Treasury Bench that it may have important repercussions on the Defence Loans Bill which is now before the House. At another stage, I hope
  2142
  that my hon. Friends who will deal more particularly with that Bill will endeavour to ascertain the consequences, in some of the provisions of that Bill, of the addition of these amounts to the expenditure on armaments.
  Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
  11.37 p.m.
  Mr. A. V. Alexander: In view of the increased cost in respect of Customs and Excise Buildings, have the Government any idea whether we have reached anything like the limit of the increase required in this respect? There has been increased expenditure for staff and new buildings for the Customs from time to time. We are now collecting £90,000,000 more in Customs than in 1931, thereby increasing very largely the proportion of taxation paid by the working classes. In this Vote we have an indication that we are making provision for extra buildings. Can the Minister give us any idea how far this programme of buildings is to be extended?
  Mr. R. S. Hudson: This is an item of £3,000 in respect of minor alterations which cost less than £500. It relates to minor alterations at the Liverpool and London Docks.
  SUPPLY [22ND FEBRUARY].
  Resolutions reported,

CIVIL ESTIMATES, SUPPLEMENTARY ESTIMATES, 1936.
  CLASS I.
  1. "That a sum, not exceeding £152,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for Expenses connected with His Coronation."

  CLASS II.
  2. "That a Supplementary sum, not exceeding £106,620, be granted to His Majesty, to defray the charge which will come in course

  2143
  of payment during the year ending on the 31st day of March, 1937, for sundry Colonial and Middle Eastern Services under His Majesty's Secretary of State for the Colonies, including certain Non-effective Services and Grants in Aid."

  CLASS VI.
  3. "That a Supplementary sum, not exceeding £4,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for the Salaries and Expenses of the Office of the Committee of Privy Council for Trade, and Subordinate Departments, including certain services arising out of the War."
  4. "That a Supplementary sum, not exceeding £10, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for the Salaries and Expenses of certain Services transferred from the Mercantile Marine Fund and other Services connected with the Mercantile Marine, including Services under the British Shipping (Assistance) Act, 1935, the Coastguard, General Register and Record Office of Shipping and Seamen, and Merchant Seamen's Fund Pensions."
  5. "That a Supplementary sum, not exceeding £25,900, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for the Salaries and Expenses of the Ministry of Agriculture and Fisheries, and of the Royal Botanic Gardens, Kew, including grants and grants in aid in respect of agricultural education and research, eradication of diseases of animals, and fishery research; and grants, grants in aid, and expenses in respect of improvement of breeding, etc., of live stock, land settlement, improvement of cultivation, drainage, etc., regulation of agricultural wages, agricultural credits, and marketing, fishery development; and sundry other services."
  6. "That a Supplementary sum, not exceeding £100,000, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for a Grant to the Cattle Fund."
  7. "That a Supplementary sum, not exceeding £10, be granted to His Majesty, to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1937, for the Expenses of the Survey of Great Britain and of minor Services connected therewith."
  First and Second Resolutions agreed to. Third Resolution read a Second time.
  Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
  11.40 p.m.
  Mr. Alexander: It was on this Vote that we had a difference of opinion with the Parliamentary Secretary on the Committee stage. We asked for a good deal
  2144
  of information. On page 11 there is an item for £6,200 for staff of the Food (Defence Plans) Department. My hon. Friend the Member for Seaham (Mr. Shinwell) raised a large number of important questions as to the expenditure which is covered by this Vote, how far the plans for this essential department of food have been made, and how far they are effective. What we felt at the close of the Debate in Committee was that we had been given singularly little information. Considering the important strategical considerations which arise out of the Vote, we got no information as to what was being done.
  How vastly important it is when one contrasts the situation to-day with the position from 1914 to 1918. At that time we were able to draw a large proportion of our food supplies from places as far distant as Australia, New Zealand and the Far East. At that time we had an alliance with Japan, under which it was possible, after the first few months of war and we had rounded up the "Emden" and other raiders, to concentrate our cruisers to the number of 118 mostly in European or Western waters. We were able to arrange that because the Japanese Government convoyed out food ships from Australia and New Zealand a large proportion of the way on the homeward journey. Apparently that is not going to happen in the war to which, unfortunately, many seem to think we are hurrying at the moment. We have had no real information as to the steps the Government propose to take in regard to the storage of food and the supplies of food in order to make good the position which has been created. That is an important issue, and one upon which we should not be fobbed off by the kind of general statement made by the Parliamentary Secretary on 22nd February.
  While, of course, I recognise that there are certain features of the operations of this and allied departments in regard to plans for Defence which ought not to be revealed—I should be the last to say that we ought to have information given in public which would be of advantage to the enemy, whoever he might be—yet we also have to consider what is the measure of confidence you can bring to the public mind in regard to the provisions made by this Department when you are asking the taxpayer to provide £1,500,000,000 for expenditure on arma-

  2145
  ments in five years. We had on 22nd February very little information as to how far safety is going to be brought to our food supplies in war time. I must point out again that, obviously, we are now almost the most vulnerable country in Europe to air attack, and certainly in regard to the storage of essentials for the maintenance of the life of the population one-half at least of the country must be regarded as a dangerous area. We ought to be told how far this Department is able to secure alternative methods of storage in areas where there will be reasonable safety and in respect of which we may take it that supplies will be maintained. I do not want the Parliamentary Secretary to reveal secrets which may he of advantage to an enemy, but I think we should have some information on the matter.
  11.45 p.m.
  The Parliamentary Secretary to the Board of Trade (Dr. Burgin): I hope the House will not think that there is any reluctance whatever to give information with regard to this Department. The Supplementary Estimate which is before hon. Members is one to provide for the expenses of the staff. This new Department of the Board of Trade was set up in November, 1936, in pursuance of the Government's announcement that the whole of these questions relating to food should be concentrated under he particular Department under my right hon. Friend the President of the Board of Trade. Obviously, for the moment, the Department must be working out plans. Many of the questions asked by the right hon. Gentleman referred to the solutions which the Department may eventually adopt. I am not yet in a position to say that. The Department is to prepare plans concerning all important food commodities, and it has the advantage of having the whole of the records of the Ministry of Food during the War years, when food control was actually in operation. Of course, conditions have very materially changed since then, but those records form a most valuable starting-off point for the formulation of plans for the future.
  The Department was created only at the end of last year, and has had only three months' existence. It has recruited its staff, secured premises, taken over these records and is hard at work; but it is not possible for me to tell hon. Mem-
  2146
  bers whether storage is to take place in connection with any particular commodity, and if so, where that storage is most effectively to be carried out, and what are the detailed arrangements to prevent that storage being vulnerable or otherwise to air attack. I do not at all subscribe to the right hon. Gentleman's suggestion that we are particularly vulnerable, or that one-half of the country is vulnerable in a particular way. I think that is all very much exaggerated; but whatever may be the truth, the Department is expressly to consider problems of that kind and its staff, recruited from the ranks of the Civil Service and presided over by a very distinguished civil servant, is ready to deal with these matters. Apart from plans for providing for food commodities, the Department has been entrusted with preparing the organisation, national and local, which it would be necessary to put into operation should the occasion arise. The Supplementary Estimate is roughly for three months' salaries for the 66 persons, whose qualifications were dealt with fully in the Committee stage. The points raised by the right hon. Gentleman concern the Committee of Imperial Defence, and are not matters connected with this Department, although the Department will work in close connection with the Committee of Imperial Defence, as I indicated on a previous occasion.
  11.48 p.m.
  Mr. Garro Jones: I would not have contravened your suggestion that we should not further interrogate the Minister after he has spoken had the hon. Gentleman not repeated several statements which he made in the Committee stage and which did not find acceptance on this side of the House. They find no more acceptance now, and I think it only right that we should repeat our point of view concerning this matter. The hon. Gentleman endeavoured, in the Committee stage, to discourage discussion of the larger aspects of food organisation on the grounds that we were merely setting up a body to deal with the problem, and I think he appealed to the Chair more than once—at any rate by appealing looks—to rule out of order discussion on the organisation of food defence on the grounds that the body was being set up merely to consider such matters. Surely it is amazing that, at this hour of the day, we should be told that the Food

  2147
  Defence Plans Committee is only beginning to investigate problems of the food supply of the nation in time of war. Has not that been done by the Committee of Imperial Defence for the last ten years? If not, what has the Committee of Imperial Defence been doing with regard to the organisation of food supplies in time of war? This was one of the most vital questions with which the Committee of Imperial Defence had to deal, and it seems to me that it would be entirely wrong to say—
  Mr. Speaker: The hon. Member would certainly be out of order if he discussed the Committee of Imperial Defence.
  Mr. Garro Jones: With very great respect to you, Sir, I was discussing the fact that the Minister's defence of the Vote is that the Committee is not able to do anything but investigate problems of the defence of food supplies. My contention was that that should already have been investigated, and that this Committee can do no other than apply the principles which ought to have been given it by the Cabinet. Therefore, it must be the task of the committee to work out the plans and not merely conduct an investigation. If it is to do that, it must have had some terms of reference given to it by the Cabinet, or are we only now to begin to inquire what powers are to be given in order to organise food supplies in time of war? It will take the Committee 12 months to work that out. It must surely be engaged at this moment in putting plans into effect for the organisation of food supplies. Our position is that before this staff can do its work it must have had terms of reference given to it by the Cabinet. What are to be its powers? What is to be the scope and size of its organisation? I want to utter one warning, which I hope the Minister will take to heart and pass on to the Committee. Unless the Committee is given general and universal powers to control the whole of the food supplies of the nation, we shall find ourselves in the same difficulties as were experienced in the last War, when we found some people making enormous profits, and other people hard put to it to earn a living, although they were engaged with the food supplies of the nation. There will be great difficulties again if there is not
  2148
  a general conscription of the food and the food-producing power of the nation in the next war.
  I hope than any organisation which may be set up, even if it is in an embryo stage, will get in its terms of reference a full assurance that it shall get whatever powers are necessary. But I wish to conclude my remarks on this particular matter. [HON. MEMBERS: "Hear, hear."] Let me assure hon. Members who make those vulgar noises that we are carrying out our duties on these Estimates. They have been drilled by their Whips into thinking that every opposition is fractious. I can assure the House that it would be a bad day if these Estimates were allowed to go through without comment. Bon. Members will have to get used to our examination of the Estimates, or they will find that we shall be even more punctilious in carrying out our duties than we have been. When we raise points we expect to have an answer. I raised at least four points on the Committee stage, but, Mr. Speaker, I will not raise them again in deference to your suggestion.
  Fourth and Fifth Resolutions agreed to. Sixth Resolution read a Second time.
  Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
  Mr. Paling: I want to ask a question with regard to the compensation for injury in the form of ex gratia payments amounting to £300. A question was asked by my right hon. Friend the Member for Hillsborough (Mr. Alexander) in Committee, but we got no answer. Perhaps the hon. Gentleman will now say why these payments are being made, and whether the Department is under any legal obligation to these people.
  11.56 p.m.
  The Minister of Pensions (Mr. Ramsbotham): I am sorry I did not on the Committee stage reply to the right hon. Gentleman the Member for Hillsborough (Mr. Alexander). When he raised his query I took it as an interesting suggestion, and I was not alive to the fact that he wanted a reply there and then. The Cattle Committee are advised that

  2149
  they are not legally liable for accidents to graders on the ground that there is probably no contract of service, because they are not paid by the Committee, but receive their fees for their services from the persons who present cattle for certification. At the same time, accidents do occur in the execution of their duty, and for that reason ex gratia payments have been authorised by the Treasury in suitable cases. The expenditure is in respect of six cases, and amounts to £250. The figure of £300 has been inserted in order to provide for expenditure that might arise in the remaining portion of the financial year. The interesting suggestion of the right hon. Member for Hillsborough in regard to insurance against these cases is answered by the fact that it is the general principle of the Government not to insure against various risks. We naturally take what steps we can to avoid these accidents, but cows will be cows.
  Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
  Mr. Kelly: May I ask whether the Ordnance work is to be speeded up. I realise that the Vote states that it is for the War Office in connection with the Defence programme, but this survey is also required for those who are engaged on town planning and work of a kindred character. I would ask that this work should be speeded up, because it is very much needed in town planning.
  11.59 p.m.
  Mr. Benson: I should like to raise a point which was mentioned in Committee by the Leader of the Opposition. I raise it now because the answer that was given by the Minister of Agriculture did not make sense. The Leader of the Opposition raised the point that there was a saving in the salaries and allowances to civil employes, whereas there was an increase to warrant officers. The reply was that in both cases this was due to the fact that the Department had not been at full strength in respect of civil employes and military employes. That answer explains the decrease in civil cases, but it makes nonsense with regard to the increase of military employés. The first question is: Why did we get that
  2150
  extraordinary answer from the Minister? The second question is: What is the real explanation of the increase in one case and the decrease in another? Is there any policy of replacing civil by military employés. If not, why should there be a saving in the case of the civil employés, made up for, apparently, by an increase in the number of military employés.
  12.1 a.m.
  Mr. Garro Jones: I observe that there is an appropriation-in-aid of £5,200 in respect of money saved on air photographs. I think it regrettable that at this stage in air development, with all the necessity that there is for an efficient survey, both for defence and town-planning purposes, the Government should neglect to make use of this new method. One of the finest air survey organisations in the world was established in this country, but it received little or no encouragement from the Government, and was allowed to fall into decline. I am not sure whether it any longer exists. Repeated suggestions were made to the Government that they should utilise this organisation, in order to secure improved mapping and bring the survey of Great Britain up to date. Every one, I believe, who understands this question maintains that air survey is incomparably the best method of mapping a territory. How then does it come about that £5,200 has been saved out of the meagre provision made for this service in the year? I hope that the Minister will make some representations on this point in the proper quarter.
  12.3 a.m.
  Mr. Ramsbotham: I think if the hon. Member for Chesterfield (Mr. Benson) examines my right hon. Friend's reply more carefully he will see that it makes, very good sense, for this reason—that the Leader of the Opposition asked him to make a statement with regard to savings, and he dealt with the savings which are indicated in this Vote. If the hon. Member looks at the White Paper he will see that the anticipated savings include:
  "A. Pay and Allowances to Staff £580; C. Pay, etc., of Civil Assistants, etc. £7,400."
  Both these items come into the same category. The saving of £580 is in consequence of the establishment of officers in connection with Ordnance

  2151
  Survey having been incomplete during the greater portion of the year. The second item in respect of civil assistants arises mainly from the fact that recruitment of the additional staff required for the larger programme of work, has, for various reasons, been slower than was anticipated. Both these items, as I say, are in precisely the same category and I think that what the hon. Member has in mind may be Item B—
  "Pay and Allowances to Warrant Officers, Non-Commissioned Officers and Sappers."
  Mr. Benson: I raised that point immediately the reply was given to the Leader of the Opposition, and the Minister repeated his explanation that items A and B were due to the same cause, namely, the fact that they had not had a complete staff.
  Mr. Ramsbotham: I am bound to say that I do not get that impression from the OFFICIAL REPORT, and the fact is that the two items I have mentioned are in the same category, while Item B for £3,400 is in a different category. As regards the point raised by the hon. Member for North Aberdeen (Mr. Garro Jones), the trouble has been the absence of weather suitable for taking air photographs. The contractors for the supply of the photographs found unsuitable weather conditions and bad visibility. I agree with the hon. Member as to the importance of using the air survey
  2152
  method, but I understand that actually there were only 20 days in the period covered by the Estimate which could be pronounced thoroughly satisfactory for this purpose. As to the point raised by the hon. Member for Rochdale (Mr. Kelly), the anticipated savings on the Vote are, as I have said, due mainly to the fact that the recruitment of the additional staff required for the larger programme was slower than anticipated, and I hope that this year we shall get the additional staff and the larger programme.

DEAF CHILDREN (SCHOOL ATTENDANCE) BILL.
Read the Third time, and passed.
The remaining Orders were read, and postponed.
It being after Half-past Eleven of the Clock upon Wednesday evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
Adjourned at Six Minutes after Twelve o'Clock.