HC Deb 01 March 1937 vol 321 cc83-93
The Chairman

I have certain manuscript Amendments before me in regard to Clause 1, which deals with a very complicated matter. I received a copy of these after two o'clock and I find that these Amendments were not handed in at the Table or to the Minister until after the House had commenced its sitting today. In those circumstances and in a complicated matter of this kind, it is difficult for the Chair to deal with such Amendments. Indeed there might be good, reason in a case of that sort—and I only say this as a reminder to hon. Members with regard to other occasions—for the Chair to exercise its right to decline to select such Amendments. In the time at my disposal I have given the best possible attention to these Amendments, which, I gather, are intended to stand together. With regard to the third Amendment, there is no question whatever about the fact that it is out of order because it proposes a remission of a debt to the Crown. Under Standing Order 64 that cannot be done without a Resolution in Committee with the Recommendation of the Crown. The other two Amendments, as far as I can see at present, propose merely to reduce the amount to be paid to the local authorities. To that extent so far as I am at present advised, they are in order, but I imagine that in the circumstances the hon. Members who have put their names to those Amendments will not wish to move them.

Mr. A. Jenkins

It is true that there has been some difficulty in getting these Amendments put down earlier than to-day. It will be remembered, however, that very little time was given by the House to this Bill and we found it impossible to have these Amendments prepared sooner. The third Amendment is consequential upon the first two and no good purpose would be served by moving the first two if it is out of order. I think, therefore, that I had better take the opportunity to raise the point with regard to the Goschen loans, the point with which these Amendments are concerned, on the Question, "That the Clause stand part of the Bill."

The Chairman

I take it, then, that the hon. Member does not wish to move either of the first two Amendments. With regard to what he said about raising the point on the Question, "That the Clause stand part of the Bill," we must wait until we come to that Question.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

6.20 p.m.

Mr. Jenkins

I desire to raise the question of the Goschen loans. These loans were contracted by a number of local authorities some eight or nine years ago and the repayment of those loans and the interest upon them has since been a charge upon those authorities. When the Bill reviewing the block grant came up for consideration, it was felt that the Goschen loans should be dealt with in the same way as the contributions under the Unemployment Insurance Acts which have now been merged into the block grant and will be distributed equally over all the local authorities. The point I wish to make is that payments in connection with the Goschen loans should rank for grant in precisely the same way as any of the other local government expenditure which comes into the block grant. I, therefore, feel that I am in order in raising this matter now, and I wish to draw attention to the fact that last year the Goschen loan payments attracted to the block grant no less a sum than £79,000 from Exchequer Funds.

These loans impose a liability at the present time on only 16 authorities and they apply more particularly to those authorities which are very highly rated including a number of authorities in the special areas. I may cite one or two examples. Merthyr Tydfil has a rate liability of 8.2d. and a yearly liability of £7,324 in respect of the Goschen loans; Sheffield has a rate liability of 5.05d. and an annual liability of £60,809; Monmouthshire has a rate liability of 10.36d. and an annual liability of £40,525, and Glamorganshire has a rate liability of 3.45d. and an annual liability of £35,313. The total amount of payments in respect of the Goschen loans annually is £340,844 and the total amount of debt outstanding is in the region of £2,000,000 and all that liability rests, as I say, upon 16 authorities nearlly all of whom are highly rated. London has a small liability under this head representing a rate of .07d. and a total amount of £16,700 annually but apart from London the other authorities affected are—

The Chairman

I am sorry but I do not see how the hon. Member can discuss this matter on Clause 1. I have followed him very carefully and he appears to be dealing with the burden on certain local authorities of these liabilities with regard to the Goschen loans; presumably with a view to asking for some form of relief for those particular authorities. Clause I, I must point out to him, does not deal with any question of apportionment between local authorities.

Mr. Jenkins

The total amount of money in the block grant originally was £48,000,000. A deduction was made in respect of unemployment insurance contribution which brings it down to £46,000,000. I desired by my Amendments to bring it down to £45,000,000 in order to deal with the Goschen loan repayments.

The Chairman

I think the hon. Member is not on the point which I raised. He appears to be discussing the incidence of relief given, or proposed to be given, to various local authorities in various proportions, but Clause 1 does not deal with that question at all. It deals with the amount of the general Exchequer contribution, and there is no question of apportionment raised in it. Whether the hon. Member can raise his point on another Clause later on remains to be seen, but it seems to be clear that he cannot do so on Clause 1.

Mr. Jenkins

With every possible respect, Sir Dennis, I submit that I am attempting to deal with the Exchequer contribution. As I say, before the Unemployment Insurance contributions were taken into account, the total amount of the block grant was about £48,000,000 made up of certain amounts representing, roughly, 22½ per cent. of Exchequer money. Already that £48,000,000 has been reduced to £46,000,000 by applying to Unemployment Insurance contributions the principle which I am now seeking to apply to the liabilities in respect of the Goschen loans.

The Chairman

I think the hon. Member is right to that extent but he cannot, on this Clause, discuss the relative proportion of the relief to be given to different authorities. He can discuss the inclusion or otherwise of the payments in connection with the Goschen loans in the General Exchequer Contribution, but that is as far as he can go on this Clause.

Mr. Jenkins

As I have pointed out, there is in this £46,000,000 a payment amounting to £79,000 last year which was attracted to the block grant in consequence of the repayment of the Goschen loans, and it seems to me, with every respect to you, Sir Dennis, that since that is included in Clause 1 it ought to be possible to raise the issue which I am seeking to raise, as a general principle. If you so desire, I shall not go into the details of the expenditure imposed upon certain local authorities in this respect but I want to say that the incidence of that expenditure is most unfair. If the principle were applied here which has been applied in respect of unemployment contributions, then it would be deducted from the £46,172,000 in the way I suggest and spread over the whole country and not left as a burden on these 16 authorities. This matter has received the consideration of the associations representing local government bodies during the last year when the block grant was under discussion. It was indeed mentioned by the Minister as one of the factors that should come up for consideration. The County Councils Association discussed it and made a recommendation that the Goschen loans should be dealt with not less favourably than the finances under which the trunk roads have been taken over. I understand that the Association of Municipal Corporations has not arrived at a decision upon it, but there is a favourable view held by a substantial number of local government people in this country that the Goschen loans should be dealt with in the manner that I have suggested.

Since so little time has been given to the House to deal with this Bill, I would like to ask the Minister whether it is not possible for him to make representations to the local government associations for the purpose of getting the matter considered. If that were done, I think it would be possible to reach agreement upon it. Then I would like to ask the right hon. Gentleman whether it would not be possible to introduce a short Measure to this House embodying such decision, so as to avoid the necessity of going on for a very long period, probably 10 years, during which time these 16 local authorities would be called upon to continue to meet this very heavy burden. I think there is a possibility of getting the matter dealt with in that way, and since the Amendments which I wished to move have not been in order, I would like to ask the Minister to make a statement on the question and to say whether he is prepared to make representations to the associations of local government bodies on the subject.

6.32 p.m.

Mr. E. J. Williams

I appreciate that my hon. Friend the Member for Pontypool (Mr. Jenkins) found it somewhat difficult to talk within the radius of Clause 1 of this Bill, and I do not wish to stray beyond the Ruling given by the Chair, but I would like to reinforce what my hon. Friend has said by showing how this burden actually falls twice upon the same personnel in a given local authority's area. It is known by most Members of the Committee that the Goschen loans were contracted by the old boards of guardians prior to 1929, and in the merging of the guardians into the public assistance committees, which, in fact, are the county councils of the country, a large number of the boards of guardians actually met their liabilities contracted through the Goschen loans. The board of guardians in my constituency, known as the Bridgend Board of Guardians, had contracted loans, but in the merging of that board into a public assistance committee it had to meet liabilities that had fallen upon other boards of guardians in the county which had failed to meet their obligations in that regard. I am sure that the Minister fully appreciates that this means that the same people in a county have now to face an obligation that is thrust upon them under the 1929 Act after they have in fact met their previous obligation.

I am sure that the Minister would like to meet this difficulty to the best of his ability, and I know that it is difficult—I have seen what has been taking place —to find a way to do it. I should like the Minister to explain how it might be done and whether his Department is prepared to help, because it is really a very serious obligation that is falling on the shoulders of people who have already met their financial obligations in this connection. I have cited in this regard the authority that comes within the radius of my constituency. If it is possible for a distressed area like my constituency to agree, as they have agreed for the last two years, to meet as far as possible the obligations placed upon them under the 1929 Act, it should be possible for the whole of the country to take upon itself the obligation that falls upon these 16 authorities. That is really the substance of the case that my hon. Friend has placed before the Minister, who, I hope, will endeavour to meet us in this regard.

6.36 p.m.

The Minister of Health (Sir Kingsley Wood)

May I say how much I sympathise with the hon. Member for Pontypool (Mr. Jenkins) in not getting his Amendments past the Chair? I should like to thank him for all the help that he has given us at the Ministry and the local authorities in connection with these proposals, and so any suggestion that he brings forward in relation to them, at any rate, has my sympathy. He has made a considered speech and an informed one, and for all these reasons I was very anxious that he should, if possible, be able to make a fair statement of his case. The right hon. Member for Wakefield (Mr. Greenwood), whom I see opposite me once again, doubtless remembers the Goschen loans as much as I do, and I think that anyone who bears the responsibility, even for a brief period, of a Minister of Health would desire, if possible, to deal with a matter like this, which has been outstanding for some considerable time.

I think there are some 16 local authorities concerned, but I think it right to say that not all of them are in the position which has been represented to us to-day and that some of them, like Derby, Essex and London, are not perhaps in a position to make such a powerful case for relief as has been made on behalf of certain other areas. I think I should also remind the Committee that while the outstanding balance of loans in this respect amounted in 1930 to £6,000,000, at the end of this month it will be about £2,726,000, and is well that the Committee should be reminded that under Section 114 of the 1929 Act a considerable measure of mitigation was made by extending the period of repayment to 15 years and by excusing the payment of interest, and, in any case where the annual charge exceeded the equivalent of the product of a 9d. rate, by limiting the annual repayment throughout the 15 years to that amount. Therefore, speaking roughly, I think that by that provision in the 1929 Act this liability was about halved.

When the matter of the block grant revision came to be considered, we were anxious, at the Ministry of Health, to see whether it was possible, within the limits of the scheme, to deal with this problem, and I and my advisers suggested to the local authorities concerned whether it would be possible within the scheme to come to some arrangement and so deal with the matter. The local authorities have agreed, as the Committee knows, on most of the matters in connection with these proposals, and I hoped that, in connection with these Goschen loans, a similar sort of agreement might be arrived at. In fact, the financial advisers to the local authorities did consider this matter, but I regret to say that they were not able to secure agreement, and therefore I was not able to put any proposals touching this question in the Bill, because, as hon. Members will appreciate, it would mean a certain amount of sacrifice on the part of other local authorities, and perhaps not unnaturally they take the view that they have already given considerable assistance by the agreements they have arrived at so far as the necessitous areas are concerned.

I regret that at present, as the hon. Member knows, that agreement was not arrived at. I have done my best in the matter, and so have my advisers, to bring about an agreement, and if the associations could come to an agreement, I should be very glad to facilitate their efforts. If they feel that they should have more time to consider the matter, and if the hon. Member and others would take some steps to see whether agreement could not be arrived at on these lines, I would do my best to help. I hesitate to say that I would call them together, because that might not be the most helpful way to go about it, but anything that I can do to bring about a common agreement within the terms of the scheme I shall be glad to do. If some agreement were arrived at, I have no doubt there would not be very great difficulty as far as Parliamentary time was concerned. I feel that, so far as this whole scheme is concerned, that this is the only matter, speaking from the point of view of details of administration, in regard to which we have not been able to secure agreement, and anything that I can do to help I shall be very glad to do.

6.42 p.m.

Mr. Arthur Greenwood

I should like to press the right hon. Gentleman a little farther. One realises that he has succeeded in getting a very considerable measure of agreement among the various organisations of local authorities, each of which have their own particular interests and problems, and while the right hon. Gentleman prides himself on his success in having reached agreement, I think he might gather another scalp by settling this outstanding problem, because it is one of considerable importance to certain local authorities which have been very badly hit by economic circumstances. In a town like Barrow, their annual repayment of the Goschen loan amounts to about 9d. in the pound. Barrow is not a rich town; its annual rates are over 13s. in the pound; it did its best; the loans were duly authorised by the Minister of Health at the time; and they were incurred as a contribution to the solution of the problem of dealing with the able-bodied unemployed. In the case of Merthyr Tydfil, where the rates are over 28s. in the pound, their annual repayment amounts to nearly 9d.; and in the case of the Monmouthshire County Council, having to repay each year over £40,000, that amounts to a rate well over 10d. in the pound, and their total rates are 21s. 5d. So one could go on.

In these circumstances the sum involved in relation to the whole amount is not very large, but in relation to the 16 authorities which are still having to pay, it is a very considerable burden. I know that the right hon. Gentleman is anxious to do what he can in this matter, but I should have thought that he might now, if the Committee feels that it would be reasonable, himself take the initiative. Seeing that the right hon. Gentleman is anxious to get agreement and that he would be prepared to accept an agreement, I think that if it were the expressed desire of this Committee that he should again meet the organisations of local authorities, it might help towards a solution. I should like to pay my tribute to those local authorities which have helped to share the burden which is resting on the more distressed areas. It was a gesture of which we can be proud. I know that the local authorities would rather have placed the burden on the right hon. Gentleman's shoulders, and I admire his skill in getting them to take some of it, but at least it shows their public spirit and their desire to help more unfortunate local authorities. On this last one problem which remains I feel that even now it is not too late to get the local authorities to make some proposal which might result in agreement. If the right hon. Gentleman will himself take the initiative on the good will of this Committee, it may serve a very useful purpose, and to the many laurels in his crown another will be added.

6.47 p.m.

Mr. David Adams

I want to raise the question of the establishment of new industries which get the benefit of de-rating, and for which the loss of rates amounts to three-quarters of the whole of the rates that would be payable—

The Deputy-Chairman (Captain Bourne)

I do not think that that question arises on this Clause.

Mr. Adams

There was not time to put down Amendments, and I wanted to appeal to the Minister to take this new position into consideration—

The Deputy-Chairman

It will not be possible to get anything that the hon. Gentleman requires in that direction in this Bill, for it would he outside the scope of the Bill.

Clauses 2 to 4 ordered to stand part of the Bill.