LOCAL AUTHORITIES (ENABLING) BILL.

HC Deb 04 March 1938 vol 332 cc1415-500

Order for Second Reading read.

11.5 a.m.

Mr. Charles Brown

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

During the time I have been in this House I have not infrequently heard hon. Members opposite pay their tribute to the efficiency of our local government authorities in this country. These tributes may on occasion have been qualified because they have not liked the particular complexion of certain local authorities, but, in general. I do not think there is very much difference of opinion between us in regard to the efficient and good work done by these authorities, especially on the administrative side, though I have no doubt there are differences of opinion in regard to the trading activities carried on by various local authorities even now, which this Bill proposes to empower them to extend in certain directions. In a little while the hon. Member for Hitchin (Sir A. Wilson) will, I understand, be moving the rejection of the Bill, and I have no doubt that he has been carrying on assiduous researches into the matters which are affected by it. He will doubtless have discovered that a Bill similar to this was presented to the House in 1930 and received a Second Reading on 14th February of that year. On 21st May of that year that Bill went to Committee upstairs, and its experience in Committee was rather inglorious.

Captain Sir Derrick Gunston

Hear, hear.

Mr. Brown

The hon. and gallant Member who says "Hear, hear" made a speech on that occasion, to which I shall refer shortly. When the Bill went into Committee it was found necessary by the promoters to withdraw it on the first morning. I need not remind the House of the fact that we had at that time a Labour Government, and that Government put down to that Bill so many Amendments that it was found necessary by the promoters to withdraw it. The Bill that I present to-day has, to some extent, been re-drafted, and it incorporates some of the Amendments which were put down on that occasion by the then Minister of Health. I thought perhaps I had better give the history of this Measure, or the hon. Member for Hitchin would have done it for me. He may still find it necessary to do it and to make some additional comments.

May I now, or otherwise I shall be charged later on with not having done so, very briefly try to explain the Clauses of this Bill? Clause 1 empowers the councils of county boroughs and county districts to carry on certain authorised businesses. Clause 2 defines those authorised businesses and lays it down that a county borough with a population of more than 150,000 may establish a municipal savings bank, and that a county borough or an urban district with a population of more than 50,000 may, if it so desires, trade in milk and cream, coal, bread, bricks, and the treatment of house refuse, trade refuse, and street refuse, and carry on in connection with house, trade, and street refuse processes which are now carried on by certain local governing authorities in this country, and deal in the articles concerned. Clause 3 is to the effect that, subject to the preceding conditions in regard to population, when local Acts have been granted by this House to three or more local authorities, the Minister may extend those powers to the remaining county boroughs or urban districts which may desire to have them on similar conditions to those which apply to businesses under the Bill.

Clause 4 lays down the procedure which local authorities must follow before applying to the Minister for power to establish an authorised business; Clause 5 lays down conditions under which municipal banks may be established; while Clause 6 empowers local authorities to do all those things which are necessary for the carrying on of an authorised business, such as the purchase of land, machinery, vehicles and tools. Clause 7 provides that councils may combine to carry on authorised businesses, and that one council may, with the consent of an adjoining council, carry on its business in the area of the second council. Clause 8 empowers a council to lease or sell an authorised business, while Clause 9 empowers a local authority to borrow money to establish or carry on an authorised business up to a limit of one-twentieth of the rateable value of the borough or district. Clause 10 makes provision for the manner and conditions under which accounts shall be kept and for proper auditing, Clause 11 prescribes in detail how moneys received in respect of authorised businesses may be applied, while Clause 12 gives the Minister power to order the discontinuance of a business. I hope the House will be satisfied with this brief summary of the Clauses of the Bill.

I have no doubt that many hon. Members opposite will take strong exception to the granting to local authorities of the powers proposed in this Bill, though they are only permissive, but I want to remind them that there are local authorities in this country which already have some of the powers proposed to be granted to all local authorities which may desire to have them, within the limits prescribed by this Measure. Let me mention one or two other bodies which, besides Birmingham, now have the power to run municipal savings banks under private Acts, and some, as I know myself from experience, to deal with the treatment of house, street, and trade refuse. This Bill, therefore, does not introduce any new principle into our local government. It only widens the scope of the trading undertakings that may be carried on by local authorities. I know that hon. Members opposite do not like trading activities by local authorities, because I have heard them not infrequently express their objections in various ways. I was looking the other day at some figures in connection with the trading undertakings of local authorities, which are indeed interesting and impressive, but I know I shall be told that those undertakings are monopolies and that therefore my arguments do not apply to these particular instances.

I am merely quoting the figures, because I want to show that the prejudices of hon. Members opposite and the anti-Socialist speeches they make from time to time do not prevent from going on in our midst a process which is gradually leading to the socialisation of more and more of our trading undertakings. In 1913, the receipts of local authorities from gas undertakings which they ran were £8,773,393; in 1934–5 they had risen to £15,977,945. I know there has been a change of values, but we can make allowance for that. The receipts of local authorities from electricity in 1913 were £5,422,942 and in 1934–5 they had risen to. £40,594,332. The figure for transport in 1913 was £10,411,796 and in 1934–5 it was £21,641,297. If hon. Members want to check these figures, they are taken from the Statistical Abstract for England and Wales. I am using them for the purpose of illustrating a process that is going on in this country in spite of all the objections which are raised by hon. Members opposite to socialisation.

Although it is not strictly relevant, may I refer to the fact that a few week ago the Minister of Health, in introducing his Housing Bill, called out attention to the fact that local authorities now own 1,000,000 houses. If some of us on these benches, when carrying on our Socialist propaganda before the War, had dared to suggest that in 24 years' time local authorities would own 1,000,000 houses, we should have been regarded as madmen. The fact is that there is a process going on in our society, and whatever may be the political philosophy and prejudices of hon. Members opposite they are powerless to check it. Therefore, I have some hope that, having made these remarks, I may not find later to-day so much opposition to my Bill as I would otherwise have done. I know we shall hear something about the virtues of private enterprise, that we shall be told that if this Bill becomes law it will seriously undermine private enterprise in its various forms, and that the country will be denuded thereby of the initiative, ability, skill and science that can function only in a society based upon private profit.

I want to deal with the question of municipal banks. Power is given in Clause 2 to county boroughs with a population of more than 150,000 to establish municipal savings banks. It is perhaps fortunate that by the luck of the ballot I am able to introduce this Bill at a time when we can raise this subject, because it falls due for review at this period. A committee on municipal savings banks, of which Lord Bradbury was chairman, reported in January, 1928, and among their conclusions which are to be found on page 53 of their report, is the following: We think that the general establishment of such banks within the next 10 years would cause serious embarrassment to national finance during what is likely to be a very difficult period. The 10 years have elapsed, and therefore we are justified in reviewing this subject this morning. Elsewhere in the report the Committee give their reasons for the statement they make in that conclusion. Those reasons, as far as I am able to gather, are two. The first was that there would be for some time from that date a delicate and difficult situation remaining in this country in regard to the conversion of War Loan. The second point was that they did not want anything to be done in the next 10 years that would imperil the national credit. Hon. Members opposite are always boasting in these days about the national credit being good. It was never better they tell us. They cannot say to-day that if municipal banks are established it will undermine the national credit. National credit has been completely established in regard to the Conversion Loan. That has been successfully carried through, although not as drastically as some of use on these benches would have liked. So the two main reasons which the Bradbury Committee had against the establishment of municipal banks in their report of 1928 have now gone by the board. We are in vastly different conditions to-day, and I hope that hon. Members will not use either of the arguments that were used by this Committee. The Committee seems to have been made up of gentlemen who were biased against municipal banks and to have searched about for reasons in keeping with their inclinations, and they had great difficulty in finding any. They could find only the two I have mentioned of any substance, and I am sure that hon. Members will not attach much importance to them under existing conditions. The essential point is that the 10 years have elapsed. Conversion has been carried through and we are assured on the authority of hon. Members opposite that the national credit is good. I want to mention another point which the Committee made, because they devote a section of their report to an examination of the Birmingham municipal bank. I suppose that that is an establishment of which the Prime Minister is proud.

Sir Arnold Wilson

Hear, hear.

Mr. Brown

I notice that the hon. Member for Hitchin echoes that sentiment. I hope he will come down on the side of municipal banks later in the Debate. This is what the Committee had to say about the Birmingham municipal bank—it is a passage that will bear quoting: The results achieved by the bank are very remarkable and have considerably exceeded anticipations. While it will appear from the later part of our Report that care must be exercised in drawing inferences from these results, there can be no doubt that, thanks to the enthusiasm and efficiency of its direction and to the sentiment of civic pride to which it has appealed, the bank has achieved a success of which Birmingham is justly proud. Are there not many other county boroughs whose citizens have as much enthusiasm, efficiency and civic pride as those of Birmingham? And what is permitted to Birmingham surely ought not to be denied to those county boroughs. It will be exceedingly difficult for hon. Members opposite to find sound arguments in opposition to an extension of the power to establish municipal banks in county boroughs with a population exceeding 150,000. I know that we shall have to meet the argument that local authorities already have enough to do. I think the Bradbury Committee said something about it not being desirable to impose upon them tasks which could be avoided, and we must all agree about that. That argument was advanced in the debate in 1930 and will doubtless be repeated today, not only in connection with municipal banks but the other proposals in the Bill.

The same statement could be made equally well of the central government. The real reason why the task of the central government and local authorities are constantly increasing is to be found in the technical, scientific and material progress, which makes society so much more complicated and raises fresh problems. The central government, as well as the local authorities, will find their duties are always being extended and expanded, and the argument will not weigh with me that these powers should not be given to local authorities because they have already too much to do. Whatever may be the complexion of a local authority, its members, generally speaking, will do all they possibly can in any direction if they think it is of advantage to the citizens, and, therefore, it will not influence me in the slightest degree if I am told that to grant the permissive powers contained in this Bill will impose fresh duties on local authorities, because I know that with the developments in society that becomes inevitable.

If there are hon. Members opposite who desire some simplification of society, I think I may very well say that it is their duty to vote for the Bill, because if certain local authorities were given power to carry on some of the trading undertakings authorised by this Bill it might very well lead to a simplification of life in certain directions. It would take off the streets a lot of unnecessary vehicles. I can well imagine hon. Members opposite saying that that will cause unemployment. Yes, but we are assured by hon. Members opposite, and by all the economists of the Tory party, that rationalisation does not cause unemployment, and that argument ought not to be brought forward when we suggest any process of this kind which can properly be described as rationalisation. The proposal in Clause 2 to allow county boroughs and urban district councils to trade in milk, bread, coal and bricks will, no doubt, be represented as an attack upon small traders. That point was made in 1930, and without doubt it will be put forward to-day.

I cannot understand why hon. Members opposite always pose as the friends of the small trader. It is one of the most astonishing things ever heard in this House. They are the sponsors of a system of capitalistic society in which vast monopolies of all kinds are growing up to menace the private trader in every direction, and I have never heard from hon. Members opposite a single word in denunciation of those processes. The municipal authorities would not seriously damage private traders in comparison with what they suffer from the great chain stores—Marks and Spencer, Burton, The Fifty Shilling Tailors.—[HON. MEMBERS: "And the co-operative societies."] Those are the people who are always damaging the interests of private traders, who are constantly underselling private traders. If hon. Members chip in to ask, "What about the co-operative societies?" I reply, "What about them?" The co-operative societies pay better wages they have shorter hours of labour, they do not undersell the private trader. People are attracted to co-operative societies because they want better quality and for a lot of other reasons, but they do not go there for cheapness. Therefore, it will not affect me in the slightest degree if hon. Members raise the question of the private trader and what the Socialist party would do to him. The capitalist system for which they stand is surely but slowly destroying him.

Mr. Bull

This Bill is going to help him. I suppose?

Mr. Brown

We have not finished yet.

Mr. Bull

It is a good start.

Mr. Levy

It will not damage him, it will kill him.

Mr. Brown

As I do not want to take up too much time I will not deal seriatim with the various industries mentioned in the Bill, but will take the case of coal, because of the attitude of certain hon. Members opposite two or three weeks ago. I have not forgotten the Debates on the Coal Mining Bill. A group of Members opposite raised a very strong case, along with some of my colleagues here, in protest against domestic consumers and other consumers being grossly exploited in the matter of coal prices. If we allow local authorities to trade in coal it would have a salutary effect on some of those who are now grossly exploiting domestic consumers. Local authorities dare not indulge in gross exploitation of domestic consumers. If hon. Members show as much concern about the domestic consumer of coal as they showed during that Coal Mines Debate they will support me to-day. Local authorities would be able to break the ring that exists and the way in which the domestic consumer of coal is exploited.

Mr. Liddall

Queue up for your coal.

Mr. Brown

No, I do not want anybody to queue up for coal, and there is no need why they should do so. If people were to get it from the local authorities, who would supply it with their well-known efficiency and power of organisation, anybody who wanted coal in the local authorities' area would be able to get it quite easily, I have not the slightest doubt. Local authorities manage these matters far better than does private enterprise, nine times out of ten. When a discussion similar to this one took place in 1930 in this House, a great deal was said about bread and about milk by my hon. Friend the Member for West Bermondsey (Dr. Salter), who has had long experience in bread making and distribution. If hon. Members would read that Debate of 1930 they would find that he made out a very good case for giving to local authorities these powers of baking and distributing bread.

On 24th February this year, the hon. Member for West Newcastle-upon-Tyne (Sir J. Leech) asked the Minister of Health: Whether he is aware of the insanitary way in which bread for human consumption is delivered at the residences of consumers by hand, from baskets or carts and without covering; and will he, in consultation with local authorities, devise some by-law to prevent the delivery of bread by this method? That was from an hon. Member who sits upon the Government Benches. The Minister replied: I would refer my hon. Friend to Clause 14 of the draft Food and Drugs Bill recently issued with the third interim report of the Local Government and Public Health Consolidation Committee, which proposes to empower local authorities to make by-laws as to the handling, wrapping and delivery of food. Then my hon. Friend the Member for Wednesbury (Mr. Banfield), who knows a good deal about the baking industry, asked: Is the Minister aware that there is any evidence to show that the delivery of bread is insanitary? The Minister replied: I would like to see that Question on the Paper."—[OFFICIAL REPORT, 24th February, 1938; col. 543, Vol. 332.] No wonder the Minister gave that answer. I understand that the hon. Member who put the original Question is a medical man, and I am certain that there is a good deal of truth in what he said. If we gave power to the local authorities to trade in bread, the bread would be dealt with properly. Bakery and distribution would be under the constant superintendence of the sanitary inspectors and medical officers of health of the local authorities. If we want to make sure that bread reaches the people in the best possible form and quality, and that it is dealt with in a satisfactory manner, I cannot conceive of any better method of doing it than by empowering local authorities to trade in bread. It may be that the standards they would set up would be as high as, if not higher than, the best of the model bakeries in the country, and would have a good effect upon all the other people who are engaged in this trade.

Mr. Levy

It would probably be just about equal in quality to the water supply.

Mr. Brown

That observation is quite unjust to the great majority of local authorities. If the hon. Member thinks that the example of Croydon is typical of what happens all over the country, I profoundly dissent from his view. I agree with him that in certain rural areas the supply is not all that it ought to be, but whose fault is that?

Mr. Levy

The local authorities'.

Mr. Brown

It is very largely the fault of the great landowners and of other people who have had something to do with this matter over long periods of time. The local authorities have now to shoulder the burden that other people ought to have shouldered a long time ago. I consider that the hon. Member's interruption was very much misplaced.

Mr. Liddall

Will the hon. Gentleman continue to deal with bread being baked and sold by local authorities? I do not know whether he has finished with that question, but I would like him to tell the House whether the co-operative societies, who have erected so many costly model bakeries, approve of local authorities entering into competition with them?

Mr. Brown

The hon. Member's question is premature. I know what hon. Members are going to say about cooperative societies, and I will refer to that point before I sit down.

Mr. Liddall

I would like the hon. Member to answer the question.

Mr. Brown

I will deal with the point which the hon. Member has just put, but first of all I want to make a reference to the subject of milk. Since 1930 a good deal has been done by the Government concerning milk. There has been the establishment of the Milk Marketing Board, and what is called the Government's milk policy is to be further developed in the course of the present Session. I do not know whether the hon. Member for Hitchin will tell us about these things, but I would remind hon. Members that Government spokesmen are arguing that a small increase in retail prices is not too much to pay for the industrial prosperity, as they call it, which we have in this country. Some Ministers have used the argument in public that a slight rise in prices can be justified on the ground that it has brought about general prosperity.

Mr. Rowlands

Was not that also the consensus of opinion in 1931, during the slump, among members of all parties?

Mr. Brown

The hon. Member also is premature. I well remember the opinion of hon. Members in this House in 1931, and what went on. Many hon. Members wanted to see a rise in the level of wholesale prices. We were assured from the Government Benches that a rise in the level of wholesale prices did not necessarily mean that there would be a rise in retail prices. From this side of the House it was sometimes contended that you would probably produce a rise in retail prices in many directions. Now Ministers, and those who support the present Government, are seeking to justify a rise in retail prices by arguing that, as it has taken place concurrently with general industrial prosperity, it is good and not bad. That is not the answer to the argument that has been put forward. What I have stated is strictly in keeping with what Ministers and their supporters argued.

Mr. Rowlands

And opposition supporters.

Mr. Brown

Let us get back to the Milk Marketing Board. There is too great a discrepancy between what is called the pool price, paid to the farmer for his liquid milk and the price paid by the consumer. I suggest that one of the best ways to deal with that discrepancy would be to empower local authorities to trade in milk. I hope that the hon. Member for Lincoln (Mr. Liddall) will not jump up and ask me what about the co-operative dairies. I know all about the co-operative dairies and I shall have one or two things to say about them in a moment. In fact, I will say it now.

When the similar Bill was before the House in 1930, the present Minister of Health, then speaking for the Opposition from this side of the House did not address himself to the main proposals of the Bill. Hon. Members may turn up the Debates for themselves in the OFFICIAL REPORT. Like the astute politician that he is, he tried to drive a wedge between the co-operative movement and the Labour party. That was a natural and proper tactical procedure for such an astute politician, and I have no doubt that the attempt will be made again today. But, so far as consumers' goods are concerned, there is no difference between those of us who are in the Labour party and those who are in the co-operative movement. We all want to do exactly the same thing—we want to give all consumers the highest quality of goods that they can possibly have at the lowest possible prices. That is the policy of both parties, and I suggest to hon. Members opposite that they had better leave us to settle the details and differences between us, because they can neither widen them nor contribute anything to their solution.

Mr. H. G. Williams

Do I understand that hon. Members opposite like to have all these rows upstairs in a party meeting?

Mr. Brown

The same thing happens in the Conservative party; their rows take place upstairs in exactly the same way. I am surprised at the hon. Member's interruption. Why, indeed, if there are differences in our party, should we not settle them in rooms upstairs? Why should we not get the greatest measure of agreement that we can? The Cabinet do that, though occasionally it results in a Foreign Secretary whom they do not like being shelved, and occasionally in a party gathering it may mean the expulsion of a particular individual. I think the hon. Member had better leave that matter alone. In conclusion, I would express the hope that, although I know that the proposals of the Bill will be vehemently denounced in a little while from the benches opposite on the ground of their Socialistic character, there will not be any attempt from this side to deny the charge that these proposals are Socialistic. If that charge is made, we shall not be disturbed by it. Indeed, I shall be disappointed if it is not made. I hope that hon. Members opposite will make that charge with all the vigour at their command.

Mr. Levy

You will not be disappointed.

Mr. Brown

The hon. Member had better wait. It will sound very unreal to some of use on these benches if that charge is made to-day, because hon. Members opposite—I do not express in detail any opinion about the merits of the Bill—have recently passed through this House what the hon. Member for a Division in Kent described as the greatest expropriation of private property that has ever taken place in the history of this country. Hon. Members opposite have done that in the Coal Bill, and they obediently crowded into the Lobby in support of the proposal. Moreover, hon. Members opposite, a short time ago, gave us a national veterinary service, and also a national midwifery service. Why have hon. Members opposite given us that national veterinary service and that national midwifery service? In the latter case it is because the population is falling and they want to save all the babies and mothers possible at the present stage of out national history—they want to place at the disposal of the poorest of our people all the scientific, medical and surgical skill that can possibly be made available, to save the lives of themselves and their children.

The national veterinary service was established because a Cabinet Committee reported that 47 per cent. of our dairy herds were tuberculous, and because the present authorities were not weeding out tuberculous cattle as rapidly as they ought. Therefore, we have a national veterinary service, which is expected to result in the purification of our milk supply. Hon. Members opposite have done that, and it will not sound reasonable to me if they object to-day to this Measure on the ground that it is Socialistic, because I submit that, if local authorities are enabled to raise the standard of bread production and the quality of the bread supplied, and if they are enabled to provide a better, cheaper, and safer supply of milk, it will contribute to that very same objective which hon. Members opposite say they had in mind when they nationalised the veterinary service and when they gave us a national midwifery service.

11.53 a.m

Mr. Frankel

I beg to second the Motion.

It will not be necessary for me to take up much of the time of the House, after the admirable speech of my hon. Friend, but I should like to call attention to one or two other aspects of the Bill. In this House from time to time discussions take place on democracy, and democracy today is often discussed in relation to international affairs. In my view, one of the tests of the sincerity of hon. Members who speak on the subject of democracy is the support that they give to measures of reform. As my hon. Friend has said, this Bill involves no new principle. Hon. Members opposite are always talking of efficiency and economy, but what do we find in this House to-day? We find that a local authority comes here with a private Measure, spends a great deal of money, brings its town clerk and councillors to give evidence, counsel are employed at great expense, and on some occasions the House agrees to that private Measure. It goes on to the Statute Book, and the local authority gets the powers that it desires. Perhaps in a month or two, or a year or two, some other local authority similar in character, with the same sort of population, or perhaps even a larger population, wants the same sort of powers. Is it economical or efficient that the same process should have to be gone through all over again, with, it may be, very different results? We have example after example of similar local authorities, after great expenditure, being treated in different ways.

I consider that one of the most important Clauses of this Bill is Clause 3, which provides that, when three or more local authorities have had these rights established, after exhaustive inquiry by the House—after Committee inquiries as well as inquiries in this Chamber—the Minister shall be empowered to give other local authorities similar powers if he considers that the conditions are the same. I submit to hon. Members opposite that they ought to take very grave notice of a Bill which would not only save a great deal of money to local authorities—public money, not private money—and would also save a great deal of the time of Members of this House and of the House itself. If one looks back over the history of the powers which local authorities have obtained during the last century: if one looks at the great water, tramway, electricity and other undertakings which have been run by the local authorities of this country, one wonders how they have got those powers when during practically the whole of that period there have been successive Tory or Liberal Governments opposed to those principles. One reason, I think, is that they have allowed local authorities to take over matters of that sort because they have been unprofitable to hon. Members opposite. The first principle is that if private enterprise cannot make any money out of a thing, and it is still required by the people, the local authorities may run it; and then, if there is a loss, the capitalists will not have to bear it.

Mr. H. G. Williams

Will the hon. Member give any examples?

Mr. Frankel

I could give many examples; but I think there is one close at home to the hon. Member for South Croydon (Mr. H. G. Williams), which it is not necessary for me to mention.

Mr. Williams

Will the hon. Member mention it?

Mr. Frankel

Sewage disposal. Will the hon. Member suggest that he would like to run a private company for the removal of sewage? I do not think that has ever been suggested. One could extend that argument a good deal. One could start right away with the streets and roads, and go on with the fire brigade and all sorts of matters which are absolutely necessary to the people of this country, and necessary also to capitalism, which they agree should be run by local authorities because there is no profit in them. I suggest that the fundamental principle behind the Bill is that, as local authorities already have been empowered to trade in certain things and to carry on certain undertakings—undertakings which are carried on in such a way that they seldom meet with criticism in this House—they ought to be allowed to extend those functions where it is efficient and economical that they should be so extended. Very often they could be more profitably run if some ancillary trades could be added to them. The fundamental principle involved must, in the future, as in the past, even under this Bill, be decided by this House, but, once that principle has been decided and power given to a local authority, it ought not to be necessary to go through the whole procedure again in this House.

This House, on 15th February—only a few days ago—had a very interesting Debate. The hon. Member for Hitchin (Sir A. Wilson), the hon. Member for Bridgwater (Mr. Croom-Johnson) and the hon. Member for South Shields (Mr. Ede) took part in it. The House discovered that two or three people sitting in secrecy—I would like the attention of the hon. Member for South Croydon on this, in view of his remarks about secrecy—in a room upstairs were able to influence the judgment of local authorities as to what they should bring before this House. It is true that they could not enforce upon the local authorities the removal of any Clause or Clauses in any Bill that they wished to put before the House; but, the procedure being what it is, local authorities know how easy it is for one or two Members by obstruction to destroy a Bill, and so, perhaps against their own judgment and at great expense, they are influenced to withdraw Bills which are before the House. That is a gross abuse of democracy, of the procedure of this House and of the whole parliamentary system on which our Government is based.

Mr. H. G. Williams

I gather that the hon. Member was addressing himself to me. I was not present on the occasion to which he refers, on 15th February, but I was present at a meeting upstairs, to which I was invited, in common with a number of other people, by the local authority concerned. We were not the conveners, and the hon. Member for South Shields (Mr. Ede) was totally inaccurate in his statement.

Mr. Frankel

I did not mention the hon. Member. I mentioned three hon. Members who took part.

Mr. Williams

The hon. Member did mention me.

Mr. Frankel

No, I asked for his attention. The statement made by the hon. Member for Hitchin is on record, and I suggest that that statement shows an abuse of the procedure of this House. It is very important that local authorities should be able to express what is a very real democracy—the democracy of the town, city and county. General elections are very seldom fought on the issues before the House in this Bill. Those issues are decided in the town, city or county by the people themselves, and when they have so decided, through their local government election, that should be taken notice of by this House. I suggest that the Debate on 15th February to which I have referred, and the discussions which apparently take place upstairs, should be borne in mind. I have been a Member of this House only for a little over two years, but one is forced to notice that two or three Members of this House have constituted themselves the opposers of all local government methods. I know that this Bill would take away from the profession of the hon. and learned Member for Bridgwater a great deal of money—I know that that would not influence the hon. and learned Member, but one has to bear that in mind. Not only for the reasons given so well by the Mover of this Bill, but for the reasons I have given, and in order to remove these backdoor discussions upstairs, which could not take place if the Bill were passed, we should give it a Second Reading.

12.2 p.m.

Sir A. Wilson

I beg to move, to leave out the word "now," and, at the end of the Question to add the words, "upon this day six months."

I hope it will not go forth from this House that hon. Members on either side are unduly critical of municipal authorities. I should like to read a quotation from a speech delivered in Birmingham on that subject: It is impossible to over-estimate the value of municipal institutions as a factor in our provincial existence. There is a tendency … to concentrate all our interests in the metropolis. That may be a very good thing for London, but … very bad for the provinces. It impoverishes our local life, and … therefore, out national life… The only way of counteracting this not unnatural tendency is to encourage and stimulate local patriotism and to increase the opportunities of local life, to give to them every extension, so that social, intellectual and public ambition may be amply satisfied in connexion therewith … We shall find that counteracting influence in our municipal institutions more completely than in anything else, because … they offer the widest possible field for beneficent activity. In our municipal institutions we find no longer, if it ever existed, the narrow and the provincial spirit. Our functions have been continually extended, until now there is hardly anything too great or too small for the work of these great corporations in our provincial cities, and all men, to whatever class they belong, whatever may be their intellectual or other capabilities, may find ample scope for an honourable ambition. The highest ambition that any man can entertain is to leave the world a little better than he found it, and it seems to me that the municipal institutions of the country are the most potent instruments that politicians have yet devised for adding to the welfare, the prosperity, and the happiness of the whole community. They give the opportunity to fulfil those obligations. They bring all classes together in common work for the common good, and in that way they constitute a wise alternative to those revolutionary proposals for social regeneration which sometimes find currency amongst ignorant people, but which, if carried to their natural results, would produce nothing but anarchy and national disaster. That speech was made by Mr. Chamberlain, the Member of Parliament for Birmingham.—[HON. MEMBERS: "Which Mr. Chamberlain?"]—the Member of Parliament for Birmingham, and therefore, Mr. Joseph Chamberlain, as reproduced in the "Times" on 9th July, 1896. I believe that every Member of this House on both sides would echo every word though the speech is 40 years old. As the hon. Mover, in a forceful and a bold speech, pointed out, the Bill is no new Measure. This is its ninth appearance on the Order Paper. It was presented to Parliament and rejected in 1920, 1923, 1924, 1925, and 1927 before it received a Second Reading in 1930—

Mr. C. Brown

It is not the same Bill.

Sir A. Wilson

—by a narrow majority, and was sent to a Standing Committee upstairs, where very substantial amendments were made. These Amendments have not to any large extent, so far as I have gathered from my researches, to which the hon. Member was good enough to allude—for one cannot in the Library of the House of Commons conduct one's researches in secrecy—been embodied in this Bill. It retains the worst defects of the original Bill, which was described from the Liberal benches by Mr. E. D. Simon as an extraordinarily badly drafted Bill.

Mr. C. Brown

But he voted for it.

Sir A. Wilson

Though he voted for it. Since then the Bill has been three times before this House although not debated, and this is its ninth, and, I hope, its last appearance. Most of the arguments which I wish to adduce will not be of a strictly party nature, and I should like to endeavour, however ludicrous it may seem to hon. Friends opposite, to imagine myself to be a Socialist Parliamentary Secretary explaining why his Government could not accept this Bill. I propose, at all events to begin with, in spite of a certain provocation received from the Seconder, to avoid a direct attack on party lines. No association of local authorities has asked for this Bill. It has not been the subject of a single communication as far as I know, from any local authorities though it is opposed by the National Chamber of Trade. It is described as an enabling Bill, but it does not deal with any of the clauses which local authorities normally desire. It gives no further facilities to them for dealing with water, gas, electricity, or sewage. It gives no facilities for allocating certain streets during certain hours for playing grounds, or to establish picture galleries, recreation grounds or any of the amenity services in respect of which local authorities are sometimes hampered by the existing law.

Mr. A. Bevan

May I draw the attention of the hon. Member to the fact that in 1930 a Select Committee was appointed by this House on a Resolution moved by me in order to alter the Standing Orders with regard to Private Bill legislation? At that time the local authorities gave evidence to the Minister of Health that the Consolidating Acts were not passed sufficiently frequently by this House in order to enable them to adopt various clauses in Private Bill legislation.

Sir A. Wilson

I do not accept that argument at all. This Bill does not refer to anything that could possibly be put into a Consolidation Bill.

Mr. Bevan

What about Clause 2? The hon. Member is utterly wrong. It is usually done every five or seven years. There are a number of Clauses adopted in Private Bills which might be included in a Consolidation Bill.

Sir A. Wilson

I beg the hon. Gentleman's pardon. On one single Clause he is right—on the Clause regarding sewage and rubbish disposal which was embodied in the Public Health Act ten years ago.

Mr. Bevan

This is a very important point. The hon. Member says that the local authorities have not, in fact, asked for this Bill, but they have asked for a very important part of it.

Sir A. Wilson

I do not think so. No local authority has ever asked for power to sell coal. That provision has never been included in any local Bill. [An HON. MEMBER: "That is because it has had to be taken out."] It was not done when the Labour party were in office. The Sankey Commission recommended by a majority that local authorities should be enabled to sell coal. The Samuel Commission likewise, and there was no objection taken to it by coal distributors in their evidence before the Samuel Commission, which reported as follows: In respect of retail distribution it was proposed to us by Mr. Shinwell, the former Secretary for Mines, that power should be given to municipalities to engage in the trade, in competition with the private merchants. This plan, subject to the proviso that no charge should be allowed to fall on the rates, had in fact been approved of by most of the members of the Commission of 1919. Mr. H. C. Rickett, in his evidence before us, raised no objection to the plan, while stressing the proviso as to rates; he thought that the retail merchants would have no difficulty in holding their own. This proposal might have useful results in the directions that are desirable. But the fact remains that no local authority has ever asked for these powers, not even when the Labour Government were in power. The reason is that after local authorities had looked at it very carefully, they reached the conclusion there was nothing in it.

Mr. T. Smith

Can the hon. Gentleman say what local authorities have turned it down?

Sir A. Wilson

No local authorities have asked for it. It has never got as far as being put into a Private Bill.

Mr. Kirby

Is the hon. Member aware that the Corporation of Liverpool applied for such powers some years ago?

Sir A. Wilson

I am advised, I believe by the most competent authority in England, that they never got as far as putting it into a Bill.

Clause 1 provides for municipal savings banks being established in certain boroughs with a minimum population of 150,000. There are 23 such county boroughs in England. The example of Birmingham was rightly adduced, but the Birmingham Municipal Bank was started at a time when there were no trustee savings banks in Birmingham, and in 1916 when money was dear. When the present Prime Minister applied for its extension permission was given subject to certain Treasury regulations. The Act of 1916 authorised savings banks only in boroughs of over 250,000. The great Trustee Savings Bank movement had only 413 offices; to-day it has 650. Its funds totalled only £80,000,000; to-day they total £271,500,000, of which a sum of more than £80,000,000 is loaned to municipal authorities. I do not think it is open to dispute that to-day money could be borrowed by a municipality in the open market more economically than by running a savings bank. The total net profit, on the average of the last three years, of the Birmingham Municipal Bank, in exceptionally favourable circumstances, is less than £15,000 a year, so that there is not very much in it. Lord Bradbury's Committee reported against municipal banks.

Mr. Burke

Can the hon. Gentleman say how much money the Birmingham Municipal Bank has lent to Birmingham Corporation and at what interest?

Sir A. Wilson

The Birmingham Corporation have not borrowed more cheaply during the past 10 years from the established municipal bank than they could have borrowed in the open market. I make that assertion with confidence and shall be glad to give my hon. Friend further details if he wishes. Lord Bradbury's Committee was quoted by the mover of the Second Reading: We are much impressed with the vigour of municipal life in this country, the general efficiency of local government and the immense value of the civic spirit, and we fully recognise the importance of enlisting that civic spirit in the service of thrift. At the same time, municipal functions are already many and varied, and there is a prima facie presumption against adding to them unnecessarily. After very careful consideration of the whole position in all its bearings, we have come to the definite conclusion that in view of the present position of national finance the extension of municipal savings banks within the next 10 years would not be in the interest of the community as a whole and that, even apart from questions of national finance, it is exceedingly doubtful whether the special incentive to thrift provided by such banks is so great as to outweigh the risks involved. The observations of the right hon. Gentleman the present Prime Minister, when he was Chancellor of the Exchequer, deserve attention: I do not think it would be wise or prudent to give powers like those obtained by Birmingham to any or every local authority. Birmingham has been the pioneer. She has opened up the mine and driven shafts which reveal the possibilities before us. By skill and prudence she has hitherto avoided the perils which must beset such operations. Before others, possibly less fortunate or less skilful, try their hands, it would be well to mark the danger spots, and to lay down regulations by which disaster may be avoided. Since those regulations were laid down by the Treasury two municipalities, Cardiff and Birkenhead, have obtained powers in 1930 to establish municipal banks, but have not seen fit to move, on the ground, I suppose, that it would not pay. Glasgow Corporation had a further opportunity of asking for such powers in 1932. I believe that the Corporation, after a very full discussion and the fullest inquiries in Birmingham, turned the idea down. Manchester, Aberdeen, Nottingham and Dundee municipal councils have also turned it down. They have not assumed that this House would reject it; they have deliberately, as a matter of policy, abandoned the idea and there has been no other application to this House by any local authority for municipal banks.

Mr. Ellis Smith

What about Stoke-on-Trent?

Sir A. Wilson

I have no reason to believe that Stoke-on-Trent applied, and in any case it has not a population of 150,000.

Mr. Riley

Is Sheffield on the list?

Sir A. Wilson

Sheffield never applied for it. Borrowing is now subject to Treasury control, but that would in some measure be avoided by the establishment of municipal banks, which in turn, if established, would restrict the amount available for national purposes through the Post Office Savings Banks and through trustee savings banks. A municipal savings bank would have to pay Income Tax on the surplus of income over expenditure, and would not be allowed any relief from tax on any losses it might make on the realisation of investments. On the other hand, it would not be called upon to pay Income Tax on any profits realised on its investments.

It is not prudent policy to invest the whole of the savings of one city in that city. There is the alternative of the Trustee Savings Bank, spreading risks over the whole country with 650 branches and over £270,000,000 of the public's real savings in their hands. They are the best agency to encourage real thrift. That, I take it, and not merely the saving of a few pounds on borrowing money, is what the movers of the Bill really desire.

Let me turn now to the Clause dating from 1920 which deals with milk. The powers given under it would necessarily clash with those of the Milk Marketing Board, which was not in existence in 1930. Prices are regulated and the Milk Marketing Acts would have to be revised if the local authority was to do any business. One local authority, Sheffield, got powers in 1920 to sell milk, not on the miserable, measly half-baked lines provided in this Bill, where such powers are wholly inadequately described in four lines: The sale of milk and cream within the borough or district, and the purchase, cleaning, cooling and pasteurising and bottling of cream and milk for the purposes of such sale. With very little trouble from this House in 1920, Sheffield got a full-blooded Clause, giving them power to produce and to sell milk and to handle it for commercial purposes as well as for retail sale. They worked it for two years, and at the end of that period, finding that they had made a heavy loss, they sold the business to the Derbyshire Pure Milk Company, and it has never been heard of again.

Mr. Marshall

The hon. Member has misrepresented the facts. I know something of what took place. There was immense opposition to the sale, and today there is a substantial majority of the people of Sheffield who think that when the Corporation sold that milk undertaking they made the worst possible bargain.

Sir A. Wilson

There is no reason whatever why they should not start again. The power is still there. They have not bound themselves not to start again.

Mr. Marshall

The question that the hon. Member has raised is as to the facts of the sale of that milk undertaking. He has got his facts wrong.

Sir A. Wilson

My facts are accurate. It was sold. It was running at a loss and was sold. If the Corporation want to start again, there is nothing to prevent them.

Mr. Marshall

It was sold by the Tory party.

Sir A. Wilson

I understand that Sheffield has the misfortune to be run now by another party. The power is there if it wants to use it. There are half a dozen other local authorities which have these powers. Woolwich got powers in 1905. St Helens in 1911, West Bromwich in 1913 and Preston (for five years), and Wimbledon in 1914. They are narrower powers and relate to the sale of prepared milk for babies, but they are not, I believe, now exercised. These particular Corporations have found that there are other and better ways of supplying the milk.

I do not want to make mischief between the Socialist party and the co-operative societies, but it is pertinent to remember that the co-operative societies sold 193,000,000 gallons of milk last year, through 596 societies, of which 166,000,000 gallons were liquid milk. Co-operative societies are to be found in every one of these boroughs, and I suggest that there is sufficient competition to make it unnecessary for local authorities to come in. As the Bill is drafted the local authorities would be enabled to sell only within their local area. The result would be that each of the municipalities would get what might be called the cream of the traffic in the most highly populated areas, leaving the outside areas to be dealt with a truncated system. That would be thoroughly bad, as has been proved in the case of electricity.

I have dealt with coal. Here again, the co-operative societies have their place in our national life and, as I have pointed out, distributors made it clear, through the mouth of Mr. Ricketts, that as far as they are concerned they are not afraid of the competition of local authorities. The co-operative societies sold last year 6,250,000 tons of coal, an average of 9,000 tons per society, through 727 societies, and an average per member of 0.87 tons. Is there really any justification for local authorities being given by this House something for which they have never asked, namely, power to compete with the co-operative societies as well as private traders in the distribution of coal—a subject much under discussion in this House and one which, I hope, will be the subject of more careful inquiry in the very near future? We have not come to the end of economies in the distribution of coal, but I do not think that the method proposed in the Bill is the right way to tackle it.

As regards bread, substantially the same arguments apply. There are 700 retail co-operative societies making bread, and they sell more than £20,000,000 worth a year. Is not that sufficient competition to prevent unreasonable prices being charged by local bakeries? The bakery trade is admittedly in need of concentration. The report on night baking shows that. I have read the speech of 1930 by the hon. Member for West Bermondsey (Dr. Salter) on the subject, and I am by no means satisfied with the conditions in the bread trade. The trade needs concentration and rationalisation more than most trades, but that local authorities should take it up is the least promising line of approach. Better by far let the local authorities use to the full supervisory powers that they already possess.

There has been some reference to the insanitary handling of bread. There is one public danger—it is not relevant to the Bill—against which we need to protect ourselves, and that is doctors and other people talking about something being "insanitary" without the smallest evidence in support of their statement. Because bread is handled by hand we are told that the method is insanitary, and that the average person must have it wrapped up in a piece of paper before he can receive it. That is a part of the flummery of high pressure salesmanship and has no actual basis. Doctors do an ill service to the community by dogmatising and using the word "insanitary" upon the most flimsy grounds.

Now I come to the question of bricks. The local authority is to have power to make bricks. That provision dates from 1920. No local authority has ever asked for power to make bricks. I do not know that any local authority would even venture to consider it.

Mr. Leach

The hon. Member is mistaken. Bradford is not only exercising this power but doing it very properly.

Sir A. Wilson

I apologise to my hon. Friend I have not heard of Bradford making bricks, but I presume they are being made from rubbish.

Mr. Leach

They are being made in the same way that everybody makes them.

Sir A. Wilson

There are, I understand, several local Acts giving express powers to local authorities to make artificial stone or bricks from refuse, and I presumed that Bradford, which has led the way in the disposal of refuse, might be making bricks from rubbish.

Mr. T. Smith

The hon. Member may be interested to known that we had a local authority in Yorkshire which not only owned a quarry but made its own bricks and did excellent work for the ratepayers.

Sir A. Wilson

I can only say that I have made the most careful inquiries and I am informed that no local authority has ever been refused power to make bricks if they want it. I find it difficult to believe, in the present state of the brick industry, a highly rationalised and highly mechanised industry, and with bricks tending to be drawn from larger centres, and smaller brickworks being closed down in the country, as stated by the chairman of the London Brick Company last week, that there is any real demand for such a Clause in a Bill which has been brought before the House in order to save local authorities the expense of seeking powers.

Clause 3 gives the Ministry power to allow any local authority to do what three local authorities now do. It reminds me of the passage in Lewis Carroll's "Hunting of the Snark": What I tell you three times is true. The Bill as a whole runs counter to the resolution of the executive committee of the Co-operative Congress dealing with the sale of milk, bread and coal, which says: The policy of development by co-operative societies is the most practical and satisfactory way of extending co-operative principles in meeting the needs of the community. I am not, I repeat, trying to make mischief. I am not hostile to the co-operative societies, as long as they remain a part, but only a part, of our commercial distributive system, in fair competition with other traders. There would be a clash with the co-operative societies at an early stage in the operation of this Bill. "Labour and the Nation" had a brief reference to this subject in 1929, but the Labour party's manifesto at the last General Election contained no reference whatever to municipal trading. It was, however, a part of the party's programme in 1930. The Labour party—I hope they will not think that I am trying to speak for them—have swung over rather to nationalisation against municipalisation.

I have up to now been destructively critical, and I will now try to be constructive. It has been suggested that procedure under Private Bill legislation is unduly expensive. That view was put forward by the seconder of the Bill. Private Bills of moderate length cost anything from £1,200 to £1,500 and even up to £5,000 or even £8,000 to promote and to get through Parliament. Many private Bills promoted by local authorities are of inordinate length. It is the length of a Private Bill more than anything else which determines the cost—not the charges of this House or the opposition to it. The proper remedy is to place on the Statute Book a Local Authorities (Enabling) Act which will include all, or most of, the common form Clauses recently drafted by the Committee appointed by the Chairman of Ways and Means to which the hon. Member for South Croydon (Mr. H. G. Williams) with others devoted an immense amount of hard work. It has been of immense service. These common form Clauses could be divided into three groups on the lines of this Bill, namely those which any local authority with over 15,000–23 in number—could adopt; those with over 150,000–130 in number—could adopt and those which local authorities over 250,000–1,464 in number—could adopt automatically. The next step would be to give local authorities special inducements to consolidated and amend their own private Acts. It is impossible to ascertain what powers are exercised by Manchester or Leeds, Newcastle or Bristol, for their Acts are sometimes 120 years old and are spread over 60 or 70 volumes of the Statutes. We ought to give them a financial inducement, by remitting the fees of this House, to consolidate their Acts on lines which would pave the way for a much-needed measure of reform. But before we do that we must pass a new Common Form Clauses Act on the basis of the common clauses so admirably drafted by the Committee to which I have referred.

A Select Committee or a Departmental Committee on local legislation is overdue. I want to speed up the legislative machine. Anyone who has had any experience of local government knows the archaic state of the Statute Book, which in many respects is a standing disgrace to the Mother of Parliaments. It is a museum of antiquities; it should be replaced by a much more flexible and elastic instrument of government by consent. If this Debate serves to show the urgent need for a reform of local and private legislation, it will certainly have justified itself. The Mover of the Bill has misrepresented the real purport of the Measure. It is a Bill to enable local authorities to do what very few of them have even shown any desire to do. It is a Bill to enable them to develop and, in some directions, to compete on lines which very few authorities have ever seriously considered. The Bill is, in fact, 18 years old. It is an old horse which will not run any longer, and I think the best thing we can do is to apply the humane killer as soon as possible.

12.40 p.m.

Mr. Levy

I beg to second the Amendment.

With a number of colleagues I formed a group at the beginning of 1932 for the purpose of dealing with Private Bills presented to this House, and it is true to say that we read through hundreds of Private Bills. The result was that a Committee was set up which decided upon common form Clauses, and if municipal authorities when presenting their private Bills will take the trouble through their Parliamentary agents to conform with these common form Clauses, they will have no difficulty at all in getting their Bills through the House unopposed. I should like to pay a tribute not only to the work of the hon. Member for South Croydon (Mr. H. Williams), but also to the work of the hon. and learned Member for Bridgwater (Mr. Croom-Johnson) in that connection. The Mover of the Bill said that it was intended to increase the powers of municipal authorities to trade in certain directions. He omitted, inadvertently I assume, to read paragraph (e) of Clause 2, which gives them power to deal with any business. It is all embracing, and very elastic The Bill is inconsistent. In Clause 7 local authorities are given power to hold land in mortmain. I have taken the trouble to look up the meaning of the word and I find it means that they have to keep it for ever—they cannot part with it at all. But the Bill gives a local authority power to sell land. That is an inconsistency. Reference has been made to veterinary surgeons. The hon. Member for Mansfield (Mr. C. Brown) said that local authorities for many years have had direct control over veterinary surgeons, but they did their job so badly that the control had to be taken away from them and dealt with in a general Act.

Mr. C. Brown

The hon. Member knows that that was, in the main, by Tory county councils.

Mr. Levy

My experience is that the best and most beneficent Bills from the point of view of the community as a whole have always been passed by the Conservative party. Take the question of water supplies. Is every hon. Member quite satisfied that municipal authorities are dealing efficiently with the water supply in their area? There is no standard of purity. From time to time we hear of diseases occurring which are water-borne diseases—

Mr. Marshall

Is the hon. Member suggesting that medical officers of health attached to local authorities are not doing their work?

Mr. Levy

Certainly. I do not know of any local authority that has a given standard of purity for its water supply—not one. For years I have been trying to impress upon this House the need for setting up a standard of purity, but that does not prevent, or should not prevent, local authorities setting up a standard of purity of their own, something which experts can measure. That would involve continuous supervision, the result of which would be that a number of diseases, particularly contagious diseases, would not occur. Had the local authority at Croydon had a proper purity standard, with continuous and perpetual supervision, there would have been no typhoid epidemic. I do not throw any bouquets or testimonials to, or speak in complimentary terms of, a number of local authorities. I am sure that the majority of hon. Members on this side of the House will agree that the present powers, obligations and work throw upon local authorities as much as they are capable of doing.

I will deal now with the Bill. It is a Bill that is wanted by nobody, except the doctrinaire Socialists. It is part of the Socialist party's doctrine of State control and State trading. This Bill is a discriminatory instalment of that policy, discriminatory because local authorities would be selected according to their population, and the local authorities in sparsely populated areas would not get the so-called boons and benefits of the Bill. I listened very carefully, as I always do, to the speeches of the Mover and Seconder, and I tried to find out from those speeches what boons and benefits the Bill would confer upon the community as such. For the life of me, I could not see that any benefit would be conferred. I can, of course, understand the extreme Socialist local authorities wishing to extend municipal trading at the expense of the ratepayers, and from their point of view the Bill is a heads-I-win; tails-you-lose Bill. I have taken the trouble to satisfy myself that the vast majority of local authorities does not want this Bill. The local authorities rightly take the view that already they have enough to do with the great vital services of education, public health, public assistance, child and maternity welfare, and all the other public services which properly fall to them. This Bill would turn all of them into dairymen, coal merchants, bakers, bankers and candlestick makers, manufacturers, retail and wholesale merchants, and what not. Moreover, it would give them power to continue trading as long as their losses did not equal the yield of a rate of 3d. in the £. I do not wish to go through the Bill Clause by Clause, but I direct the attention of the House to Clause 12, which provides that: If at any time the Minister is satisfied with respect to any authorised business carried on by a council under the powers conferred upon them by this Act that in each of the three last preceding financial years of the council a sum equal to or exceeding the produce of a general rate of threepence in the pound has been paid out of or charged upon the general rate fund of the borough or district in order to meet a deficiency in the income of that undertaking, he may after causing a public local inquiry to be held, by order direct that from such date as may be specified in the order the council shall discontinue that business. That means that if the council kept the loss of the business below a rate of 3d. in the £, if the loss were 2¾d. and 99 per cent. of the remaining farthing, it could carry on the business indefinitely and nobody could prevent it from doing so. If an extravagant and hare-brained Socialist council—and there is a number of them—started a business, a dozen businesses or a couple of dozen businesses, they could run them, with a loss on each business, as long as that loss did not equal the yield of a rate of 3d. in the £ Such a council could mulct the ratepayers of an extra shilling, two shillings or even three shillings in the £ in that locality, and the only way in which they could be stopped would be for the ratepayers to turn them out of office when the time came, but since they would have been elected for three years, they could go on for that period. I ask hon. Members whether this is the sort of Bill they ought to pass. I do not wish to impute motives, but it is very necessary to realise the grave possibilities of mass bribery under this Bill.

Mr. Pritt

Sugar beet and shipping.

Mr. Levy

The commodities and services supplied by the local council could be supplied at a price which would involve a loss, although not a loss so great that the Minister could intervene and close down the business, and then at election time the class of voters who had benefited from the system would be told that unless they re-elected to power the men who were responsible for the businesses, prices of municipal goods and services would be increased. The result would be the creation of mass bribery of a most far-reaching and ruinous kind, and big industrial undertakings and ratepayers would be heavily involved in those increases of rates without having any hope of putting an end to them. Anybody who looks at this matter impartially, and with due regard to the high standard of local government, will agree that that possibility damns the Bill. I maintain that the Bill is not only economic folly, but that it has a sinister aspect. It would be a tremendous weapon in the hands of any political party to retain or obtain the control of local administration, and I should not be surprised if that political motive were in the minds of hon. Members opposite who support the Bill.

There is another aspect of the Bill which is just as bad, if not worse. The Bill would bring the local authorities into direct and subsidised competition with the local private traders. As ratepayers, the private traders would be paying money in order to have their throats cut by the council that was supposed to serve them. How long they could survive that sort of competition is problematical but, sooner or later, they would be bound to close their doors. There would be a decrease in the rate yield in consequence, and there would soon be created a situation that would exceed the worst we have ever experienced in municipal mal-administration and bankruptcy. We have all seen what has happened in boroughs which have been in the hands of these extremists and economic madmen, with far less opportunities than those provided by this Bill. What might happen under a Measure of this kind can scarcely be exaggerated.

I am sorry that the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) is not here. I had intended to ask him what his co-operators thought of a Bill of this kind. Do they relish the idea of competition from their blood brothers the Socialists? Are they to be told that while they will not be able in future to get any dividends from the cooperative societies, they will be able to get their goods at subsidised prices from the Socialist municipal shops? Unless the House throws out this Bill, we shall be doing an injury to all that is best in local government, and opening wide the door to municipal trading of the most undesirable and dangerous character.

12.57 p.m.

Mr. Barr

As far as I could gather from the closing part of the speech of the hon. Member who moved the rejection of the Bill, his main regret was that the Bill did not go far enough in many respects, and did not cover many beneficient operations. He spoke of applying the method of humane slaughter to this old horse, but I gathered that he proposed to bring out a new horse of his own that would go faster and further in the same direction. He made light of the cost incurred by local authorities in coming to this House for Private Bills. In that connection I would like to mention the cost incurred by the town council of the City of Glasgow from 1920 until the present time in Private Bill legislation. Excluding their recent Bill for the extension of boundaries, their costs for these Private Bills amounted to no less than £112,837. Therefore, I think it is clear that the element of cost is a very considerable one.

The hon. Member for Elland (Mr. Levy) spoke as though all these municipal enterprises, or at any rate many of them, were to be run at a great loss, incurred almost voluntarily in order that mass bribery might be practised by extravagant and hairbrained municipalities. The hon. Member also suggested that nobody could stop such practices. I have here details of the municipal trading and general trading, under Private Bills and under general powers, of the city of Glasgow. The figures show that on 31st May last the liabilities were £59,000,000 but the assets were £93,500,000. I am very glad to think that that process cannot be stopped even by hon. Gentlemen opposite. The hon. Member for Elland also spoke of a certain sinister political object behind the Bill and of the possibility of a certain party untilising it to obtain or retain power. I wonder whether the hon. Member forgets the speeches made by Lord Linlithgow when he was chairman of the Conservative Associations. At the annual meeting he urged them to combine against strengthening the powers of local authorities. He said that they might win the big battles, that was the General Elections, but that if they did not keep down the representation of my hon. Friends here on the local authorities, they would lose the long campaign. So, he urged them, on political grounds, to take action against Measures of this kind.

I wish to refer to what fell from the Mover of the Amendment in regard to the attitude of Glasgow towards municipal trading. He made some reference to the fact that the proposal for a municipal bank had been turned down by Glasgow. That was in the year 1927 when the Moderate party were still strongly in power in Glasgow. Notwithstanding that, the sub-committee on finance with eight members of whom five were Moderates—and one of the most prominent Moderates was a strong supporter of municipal banking—recommended in January, 1927, that the limited powers exercised by certain towns such as Kirkintilloch, Motherwell and about a dozen others should be adopted. That proposal was passed by the finance sub-committee, notwithstanding the fact that the Moderates were in power. Reference has been made to the introduction of political bias. May I point out that when that proposal to which I have just referred was going forward to be decided by the whole council on which there was a majority of Moderates, the "Glasgow Herald" called upon the Moderates to hold up the report. The Moderates at their party meeting agreed to do so and that is why it was not passed.

The hon. Member for Hitchin (Sir A. Wilson) did not, however, make any reference to the position which was reached in Glasgow on 26th April, 1934, under the present regime. The Council then reached the stage of the consideration of the question of municipal banking in the limited sense, and I have statements here to show how far they were from being indifferent to pressing forward for all the powers that could be obtained in relation to some form of municipal banking. A recommendation of the finance committee in favour of the establishment of a civic savings bank, on similar lines to the institutions in Kirkintilloch, Irvine, and other towns, was adopted after strenuous opposition from the Moderates. The bank is to be operated by a company with a membership limited to the town council, that being the only form that is available under existing legislation.

Both the Mover and the Seconder referred to the co-operative societies and seemed to think that they might be able, on this question, to drive a wedge between the co-operators and the Labour party generally. I think that in the matters which we are discussing the position of the co-operative society and the effect it can have upon prices are very much akin to the effect that would follow if the municipal authority were given the selling of coal. The hon. Member for Elland is not now in his place—I understand that he has had to leave, and I impute no discourtesy to him—so that I am sorry he is not able to hear this quotation from the Samuel Commission's Report on the Coal Industry, in 1925, after they had made a very elaborate investigation into accounting: The general result of this comparison is to suggest that the expenditure of the retail merchant on establishment and clerical salaries is excessive; if all the retail trade in London could in these respects be conducted as economically as that of the Cooperative Society whose accounts have been examined, a very substantial margin would be available, either for reducing prices to the consumer or for increasing prices to the colliery, and so increasing wages to the miner. Every word of that is equally applicable to what might be done under municipal enterprise.

Mr. Wragg

Do the co-operative societies sell coal in London or anywhere else cheaper than the average retail trader?

Mr. Barr

That is the whole bearing of the report of the Samuel Commission on the matter. Their whole idea and contention was that if their methods were adopted by the retail dealers, they would be able to sell coal cheaper than they were doing at present.

Mr. Lipson

Then will the hon. Member explain what advantage there would be in the sale of coal by the local authorities which is not at present obtained in the sale of coal by the co-operative societies?

Mr. Barr

The benefit of the sale of coal under a municipality would be general, and the benefit under a co-operative society can only be sectional. Therefore, the argument fortifies me very much in my contention.

I made reference to the only power which we have at present in regard to Municipal Banks, and I said it has been exercised by a number of communities. What is done is that in, say, Kirkintilloch, the first to adopt a municipal bank, the members of the council take shares of 1s. each and form a company. It is known as a municipal bank, but it has not, strictly speaking, legislation behind it; so much so that the Bradbury Committee, to which reference has been made, and which had very strong bias against all these banks, recommended that this was more disastrous still than even the Birmingham bank, and they asked the Treasury at once to get legislation to prohibit the use in the title of any-Banking Company of the term 'Municipal' or any other term that might suggest connection with a local authority. These banks are working under very great difficulties, and yet I venture to give the results of one of them, the one that I know best. Indeed, my one objection to this Bill is that it limits the full operation of a municipal bank to towns with over 150,000 inhabitants. That does not benefit us very much in Scotland, but that is a Committee point that might have to be raised. Taking the Motherwell and Wishaw Municipal Bank, Ltd., their deposits for the year ended 30th April, 1937, amounted to £226,192, and the total amount loaned by the bank to the town council for housing purposes from the beginning has been £247,000. The interest charged to the town council for their building operations is three per cent. There is no profit. It is exactly the same interest as is paid to the depositors. The hon. Member who moved the rejection of the Bill spoke as if Birmingham was more favourably situated, and suggested that even Birmingham could have borrowed and had as favourable a return elsewhere as from the municipal bank there. I have this from the Town Clerk of Motherwell: At this moment the town council, when borrowing from outside sources, are charged anything from £3 12s. 6d. to £3 17s. 6d. The House will, therefore, see what a saving there is when they get it at three per cent., as compared with having to go to outside sources. As a matter of fact, in all these towns that have adopted this system there is a saving on the rates, putting it moderately, of from 2d. to 3d. in the pound a year on this account alone.

The hon. Member for Hitchin was pleased to quote, and I am sure we were glad to hear the quotation, from Mr. Joseph Chamberlain. I thought it would have been more appropriate to have given us a quotation from the present Prime Minister, and I will venture to give one or two. We do not object to the Prime Minister not being in his place, as we do not expect him on a private Members' day, but I will give the House his words in opening the ninth branch of the Municipal Bank of Birmingham, as reported in the "Birmingham Post" of 18th June, 1923: The conclusion he had come to was that the secret of the success lay in the fact that it was associated with our municipal system. He went on: You may call it Socialism if you like; I have never been frightened by a name. I do not care whether it is Socialism or not, so long as it is a good thing. I think our experience proves that the Municipal Savings Bank has advantages which other forms of savings banks have not. Well, then, I say, all power to it, and it will be a good thing for this country if it should be further extended. In his introduction to "Britain's First Municipal Savings Bank," which he wrote in June, 1927, the present Prime Minister said: I believe that this unique principle is to be found in the fact that it is a municipal bank. In a great provincial city, with its strong sense of civic pride, its traditions of public service, and its highly trained and efficient officers, a savings bank which is part of the local administrative machine inspires general confidence, and even a sort of affection. It is constantly in the public eye; it commands the services of the most respected citizens; the councillors, the clergy, the magistrates, the teachers, the local leaders of every class and creed vie with one another in proclaiming its virtues … No one appears to feel any diffidence about entering a municipal bank, which is recognised as having been provided for the convenience of the people. Surely that applies to a far wider range than municipal banks and to many other forms of municipal enterprise as proposed in this Bill. One word more from the present Prime Minister. As to confining it to a single town, he said: For my part, I would as soon endeavour to imprison a volcano. He repeated these opinions in the House in his speech on the Cardiff Corporation Bill on 30th April, 1930.

As to municipal authorities working at a loss and being at a great disadvantage compared with private enterprise, I would cite a dramatic instance that took place in the town council of Glasgow on 2nd April, 1925. Bailie Dollan referred to what had happened under the direct labour in housing schemes, and he took two schemes, one at Drumoyne built by direct labour, and another at Craigton built by private enterprise. He ventured the assertion that the council had saved £200 per house by direct labour as compared with private enterprise. At that time the late Bailie Morton was convener of the housing committee, and he was quite indignant in his denial. He said it was not true to say that through indirect labour they had gained £200 per house; they had gained only £186. That was enough to be going on with. When the figures came out they confirmed the estimate of Bailie Dollan. The private enterprise cost of C1 houses in Craigton was £725 and the cost of an exactly similar house in Drumoyne built by direct labour was £518. The F2 houses which cost £923 under private enterprise cost £632 by direct labour.

Another instance is water supply. An hon. Member opposite spoke about this being unprofitable, and said that when there was no profit in the enterprise it was abandoned by private enterprise and was taken over by the public authority. That is what happened in taking water to Glasgow. There were two private companies that fought one another. One was successful, and the other was a failure. Then Glasgow town council said, "A plague on both your houses," and they brought in the magnificent water scheme we have to-day.

Mr. Dingle Foots

In the examples which the hon. Gentleman has given, the local authority had a monopoly when they took over.

Mr. Barr

I am obliged to the hon. Gentleman, but in all these things we are working for a true monopoly. I do not deny that. The next instance I will give is that of the tramway system in Glasgow. The tramway lines were laid down as early as 1870, and until 1894 the trams were run by a private company. They were then taken over by the corporation at the express will of the citizens, who had been so poorly served by the private company. It was predicted that they would prove an absolute failure financially. When Lord Provost Bell came 22 years later to describe the progress of these events, he said that he received letter after letter, and one of them said: Your vaulting ambition has overleapt itself and you are fast tottering to bankruptcy. In 22 years Glasgow tramways amassed a profit of £4,600,000.

Mr. Levy

The hon. Member, I am sure, is aware that the corporation does not pay rates to itself, whereas private enterprise has to pay rates.

Hon. Members

It does!

Mr. Barr

If the hon. Member will contain himself a minute, he will see that there was something better than merely paying rates. In 22 years the tramways made the enormous profit of £4,600,000, which enabled the corporation to square the capital account and to wipe out all the indebtedness. On 22nd February, 1917, the convener of the tramways subcommittee on finance handed over to the city treasurer a cheque for £2,328,000 to wipe out the whole balance of debt on the tramway undertaking. The tramway system in Glasgow has contributed £3,613,000 in rates and, in addition, £1,286,000 to the common good fund. At a time when so many towns are pulling up their rails, the tramways system of Glasgow remains the sheet anchor of transport finance. There is nothing like it so far as I know, in any part of the kingdom.

Mr. Marshall

Except Sheffield.

Mr. Barr

We allow halfpenny fares in Glasgow and we have a maximum of 2½d., no matter how far you travel. If you take the proper car you can travel 21 miles for 2½d.

Mr. Marshall

We do it cheaper than that.

Mr. Barr

I am sorry that there is this dissension in our party, and that the hon. and learned Member for East Bristol (Sir S. Cripps) is not here to help to solve our differences. It will not be disputed by my hon. Friend that Glasgow is the second city of the Empire. When they brought a Bill here in July, 1930, it passed through this House. It went to another place, and in their vindictiveness against powers being given to this city with such magnificent transport, they cut out the Clause that Would have enabled them to build their own 'buses—a power which English cities have. They did it out of a mere desire, which is evident here to-day, to penalise and to crib, cabin and confine these beneficent efforts.

Now I come to my closing reference. The subject of milk is prominent in this Bill. Ten years ago, when I travelled through all the States of Australia and over the whole of New Zealand, nothing impressed me more than the methods of providing a pure milk supply in the City of Wellington. It is remarkable that it was the farmers who pressed this upon the Government, because they had suffered so much from the previous methods of transport and distribution, and were held to blame for the poor quality of the milk and the faulty condition in which it was delivered. At their instigation the town council of Wellington set up a central depot for the treatment and distribution of milk, and I will take the liberty of reading the three objects which they had in view, as stated by Mr. Heron, the Manager: (1) The safeguarding of the health of consumers; the lowering of the death rate of infants; and the building up of strong, healthy citizens. '"(2) Giving due and proper inducements to producers to supply pure milk. (3) The exclusion of harmful, wasteful and uneconomic methods of collection, transportation, treatment and distribution of milk. In 1919 there was passed the Wellington City Supply Act. It was as yet imperfect, but before an Inquiry Board in 1924, the Food Analyst for the Dominion made a contrast between the conditions as they were in 1910 under private enterprise and as they were in 1922. In 1910, 184 samples of milk were taken and 79 of them, or 43 per cent., failed to comply with the regulations. In 1922, under the municipal scheme, 1,745 samples were taken and only 42 or 2.4 per cent. failed to comply. According to the analyst: The average of the 1922 milk would be brought down to that of 1910 by the addition of 5.9 per cent. of water. On the assumption of 5,000 gallons of milk per day, we may safely conclude that the people of Wellington were in 1910 buying 295 gallons of water as milk per day, costing (at 2s. per gallon) £29 10s. a day, or £10,767 10s. for the year. May I mention the effect, first, on the producer of milk and, secondly, on the consumer? From the first the milk under this municipal supply was always bought on its butter-fat content, and not by the gallon alone. This tended to induce a very high standard of quality. There was no temptation to any farmer to water his milk, because he got no more for it, as it was assessed by its butter-fat content. Indeed, he had every incentive to keep a herd of cattle-producing milk of a high butter-fat content. The penalty for putting in second grade milk was, when I was there, 3s. 6d. per 10 gallons. The result was a steady enrichment of the quality of the milk, so that when I was there 99 per cent. of all the milk had reached the first grade. As for the consumer, he was safeguarded by a very complete system of inspection, an inspection which extended to the farm, the byre, the cattle and the milk-house of the producer. Most elaborate tests were made at the depôt. A sample was taken every day from every farmer's milk; and if it fell below the standard the milk was put aside, and no more milk was taken from that farm until the defect was traced and remedied. There was pasteurisation of the milk and delivery in sealed containers.

The decrease in the cost came about in this way. The city was divided into blocks, and one cart sufficed for delivery in every block, instead of there being several carts competing in the same street. When I was there the milk was selling at 6½d. per quart, summer price, while some private firms in the neighbourhood were selling bottled milk at 9d. Were it not that custom hangs upon us with a weight heavy as frost, deep almost as life; that we are more swayed by prejudice often than by proved facts; and that, in the minds of many persons, private interests still take precedence over the public weal, I cannot conceive of any Parliament that would not grant the limited powers which are contained in this Bill, even if they are open to criticism, as a beginning, or of any local authority which would not, if it were legal, hasten to adopt schemes so fraught with life and health for the community.

Notice taken that 40 members were not present, House counted; and 40 members being present—

1.34 p.m.

Mr. Foot

In view of the incident which has just occurred, I think I am entitled to say that hon. Members above the Gangway would have had no complaint if their Bill had, in fact, been counted out, because it will be within the recollection of the House that only last Friday they were responsible for engineering a count and for preventing their Members from coming into the House—as they did—in order to prevent discussion and a decision upon a Bill which was intended to improve the machinery of local government.

Sir Charles Edwards

That is not so.

Mr. Foot

Oh, yes it is. I have made some enquiries from those who saw Members of that party being kept out of the Lobby by their Whips. We may take it, therefore, that this Bill which they have introduced to-day is certainly not brought in with any desire to improve the machinery of local government.

Having said that, I will come to the question before us. The hon. Member for Coatbridge (Mr. Barr), to whose speech we all listened with very great pleasure and interest, seemed to be dealing rather with the general issue between public trading and private enterprise, but that is not what we are discussing to-day. The question is whether local authorities should be empowered to compete in certain trades with existing private enterprise, which is something entirely different. He gave the example of housing, but we are not being asked to decide whether housing services can better be carried out by direct labour or contract labour. We are being asked whether local authorities should come in as competitors in the trades specified in the Bill. On one point there is thorough agreement between hon. Members on all sides. The first consideration in all our minds is the effect of the Bill upon local government. Our local authorities are just as important a part of our representative democratic system as are the Houses of Parliament. If there were ever an attempt in this country at dictatorship, the would be dictator would have to get control not only of this building and of the Departments in Whitehall, but of very town hall in the country.

The first test we are entitled to apply to the Bill is whether it would contribute to the efficiency and the success of democratic local government in this country. In spite of what the Mover of the Second Reading said, the argument about fresh burdens being imposed upon councils very much appeals to me. In many boroughs there is a great difficulty of getting men of light and leading to serve on the town council. That difficulty is not confined to one party but is the experience of all parties. It occurs not so much with county councils, but in a great many boroughs. It is not due simply to a falling off in public spirit, but is brought about largely by the tremendous demand which is made upon the time of those who serve in local government. A councillor who is keen on his job may have to give three evenings a week to his municipal duties, supposing that there are evening meetings of the council and that he has to attend meetings of various committees. Hon. Members know that very well, in some cases from their personal experience. We are glad that many people are prepared to serve in that way, but there is a reduction in the number of recruits that we get to serve upon local government.

It was pointed out by the hon. Member for Mansfield (Mr. C. Brown) that much of that demand is unavoidable because of the increasing complexity of modern society and the consequential increase in the number of functions that have to be carried out by local government bodies. That is true. We have put many extra duties upon local authorities since the War, particularly in relation to health and housing. No doubt we shall put further duties on them in the future. That does not seem a good argument for saying that we ought to take the action now proposed in order to extend the activities of local authorities to something which is outside the province of most of them. As I listened to the speech of the hon. Member for Mansfield I thought that this would be a most unjust Measure. He pointed out that hon. Members on the Government benches were not entitled to complain of a proposal to substitute public for private enterprise because those Members had recently been responsible for a great Measure of expropriation of private property. That may be correct, and I am not quarrelling with the fact that all parties and all governments do find it advisable from time to time to take into public hands a service that has previously been run by private enterprise. Again, that is not what we are asked to decide in relation to the Bill.

Hon. Members above the Gangway frequently advocate nationalisation. To us, that is a question to be decided on the merits of each case, and you cannot apply it simply a priori to all cases. From the point of view of the private trader, the Bill would be very much worse than a Measure of nationalisation. It does not propose to nationalise the distributing service. That is a matter which would have to be discussed very fully in this House, and if we decided to do it we should pay a fair and proper measure of compensation to those whose businesses were taken over. Nothing of that kind is proposed to-day. No provision for compensation is contained in the Bill. The private trader is to be left in business in impossible conditions. He would have to carry on without assistance while meeting with rate-aided competition, and he would have to pay rates to subsidise the competition that would be driving him out of business. The Bill is simply a proposal of indirect confiscation.

The hon. Member who seconded the Second Reading referred to trams, gas and similar municipal services, but he was missing the entire point of the Bill. It was pointed out to him that the services to which he referred were monopolies. Has there ever been a case of a private tramway or gas undertaking being left in existence and of the local authority coming in to set up a rival undertaking to compete with it? When I interrupted on this point, the hon. Member for Coatbridge said they were working towards monopoly. If that remark means anything it is that the promoters' intention is not only to compete with the private trader but gradually to drive the private trader out of business. He spoke of taking over services; our objection is not that the Bill proposes to take over services but that it will provide new services with advantages over all their private competitors.

As I read Clause 2 of the Bill, local authorities will be empowered to sell various commodities to anybody in their areas, that is to say, they will be empowered to sell not only to the private consumer but to the commercial user. Local authorities are naturally anxious today to attract new industries to their districts as well as to encourage the industries that are already there. The basic raw material of industry is coal, which is also one of the commodities mentioned in the Bill as intended to be sold by local authorities. There would be nothing to prevent a local authority from selling coal, not only at cost price but at less than cost price, to commercial users within its own district. That is to say, you could have a local authority deciding in this matter to subsidise one of its local industries out of the rates.

Mr. Leach

Does the hon. Member agree with the view of his former Leader on that matter?

Mr. Foot

I conclude that the hon. Member is referring to the Samuel Report. I have not read that section of the Samuel Report for a very long time, but I imagine that it dealt with the advantages that might accrue from having a municipal service instead of a private enterprise service for the distribution of coal. As I have already ex- plained at some length, that is not the issue before the House. It might very well be that a municipal service might be cheaper, but what I object to is the proposal that, without any form of compensation, the private trader should be subjected to rate-aided and rate-subsidised competition.

If I may return to the point I was making, which has nothing very much to do with the interruption, I was pointing out that you could have a local authority subsidising in this way, out of the rates, one of the industries within its area. It may be said that that would be a desirable thing, and we can quite understand that there might be considerable pressure on a local authority, from those who were running businesses in its district, to let them have coal at less than the usual price. That would be all very well as long as the local authority could afford it, but the poorest authorities, which are unable to place fresh burdens on their ratepayers, because they have had, say, considerable unemployment and great burdens in the form of public assistance in recent years, are precisely those authorities which would be unable to subsidise their industries in that way, and which might find, therefore, that their industries, or perhaps their fishing fleets, were being handicapped in competition with the fleets or the industries of some other local area which was more fortunately situated. That is a situation which might very easily arise as a result of this Bill. The Bill has nothing to do with the general issue of municipal services or private enterprise services; we are not asked to decide anything about that to-day.

I thought there was force in the observation, made, I think by the Mover of the Amendment, with regard to co-operative societies. I am not going to repeat what has been said on that subject, but hon. Members above the Gangway hotly denied that there was any sort of conflict on this matter between the Labour party and the co-operative movement. That may be the case, but, if so, why is it that none of the distinguished spokesmen of the co-operative movement whom we have in the House have appeared here to-day to speak on behalf of the Bill? We have the right hon. Gentleman the Member for Hillsborough (Mr. Alexander), who speaks for co-operative societies in England, and who speaks with very great weight and authority. We have also the hon. Member for St. Rollox (Mr. Leonard), who, I think, may fairly claim to represent the co-operators of Scotland. But not only do we not find either of their names on the back of this Bill, and not only have they not addressed the House to-day, but neither of them, apparently, is even present at this Debate.

1.50 p.m.

Sir D. Gunston

For once I find myself in agreement with the hon. Member for Dundee (Mr. Foot). On this occasion I agree with every word that he has said. I would specially like to associate myself with the remarks that he made at the beginning of his speech about the incident which happened last Friday. I also came down to support the Proportional Representation Bill, but, unfortunately, we were counted out. I mention that because, if that Bill were law, the safeguard mentioned in Clause 4 of the present Bill might be of some use. Under Clause 4, in order to establish and carry on an authorised business, a majority of two-thirds of the council is necessary. But, under the present system of representation, you get in some areas very large majorities on one side or the other, and so I think we can say that Clause 4 would give no protection, as a result of the Labour party's action in torpedoing last week's proposal to establish a system of proportional representation in local authorities which would have been a safeguard.

I have been struck by the great difference in the atmosphere to-day, and by the very different bearing of hon. Members opposite in comparison with what took place on 14th February, 1930. I then had the honour to second the rejection of a similar Measure, and, perhaps somewhat unwisely, I accused the right hon. Gentleman the Member for Wakefield (Mr. Greenwood) of trying to bring in Socialism by a back door on a Friday. He was rather angry with me, saying that that was gross misrepresentation, and that, if it had been said outside the House, he would have called it by a different name. When, however, the Bill, having received its Second Reading in the House, went to a Committee upstairs, we found that the right hon. Gentleman the Member for Wakefield, instead of leading the van of Socialism, sent his Parliamentary Secretary, Miss Susan Lawrence, who torpedoed their own Bill. It may be remembered that Mr. McShane, who had introduced the Bill, said to the Committee: I think, perhaps, it is poetic justice in regard to this Bill, which is a Labour party Bill and which I had the honour of piloting through its Second Reading, that the Parliamentary Secretary to the Ministry of Health should have found it necessary to say those things of a Bill which her own Leader himself introduced."—[OFFICIAL REPORT (Standing Committee B), 21st May, 1930, col. 2220.] He thereupon withdrew the Bill. I have read through the remarks which the then Parliamentary Secretary made in the Committee, and, like my hon. Friend the Member for Hitchin (Sir A. Wilson), I have tried to see whether the present Bill endeavours to meet the objections of the leaders of the Labour party at that time. Miss Lawrence criticised the Bill on the ground that it would not help the local Authorities in regard to the essential services, and pointed out that very often in the case of gas, electricity, and tramways, one of the most necessary things to be done was to acquire land; that this could not be done except by Private Bill procedure; and that the Bill did not help the local authorities to get over that difficulty. The hon. Member for Motherwell (Mr. Barr), in his very interesting speech, told us all about the Glasgow Corporation trams, but I would remind him that under this Bill the Glasgow Corporation tramways department would not get any advantage in the matter of acquiring land, because the provisions of Clause 6, which deals with the power to acquire land, is limited to the authorised businesses defined in Clause 2. Therefore, I think it may be said that the Bill would not help the local authorities in any way in carrying out their main functions.

I wonder why the Bill was introduced at all. I think that probably the Mover was rather surprised at his luck in getting a place in the Ballot. We know what happens in these cases. Probably he went to one of the Whips and said, "I want to launch a good Socialist Measure on the Parliamentary sea," and the Whip said, "We have got one ship which has been launched several times, and the last time it was torpedoed by our own side. However, we have managed to pull it up, though it has lost its funnel and all that is left is a tattered pink flag." I would like to support what the hon. Member for Dundee said in regard to the importance of not discouraging people from taking part in local government. The hon. Gentleman who moved the Bill rather pooh-poohed the idea that the increase of the powers and work of local authorities would discourage people from giving their services, but I do not think we can neglect the danger that the hon. Member for Dundee has pointed out. The more local work requires almost full-time attention, the more you must narrow the field of people who are going to carry on local government. Many hon. Members opposite belong to trade unions; and those who are trade union officials are by the public spirit of their unions, enabled to give almost full-time work in local government. I am not complaining about that; I think we benefit by it.

Mr. Marshall

It is a great over-statement to say that trade union officials can give full-time attention to local government. They are enabled to give some time, but certainly not full time.

Sir D. Gunston

I do not want to dispute that. I was paying a tribute to the unions for making it possible. My point was that some trade union officials have more time to give to local government than people engaged in a shop or a trade. It would be doing a great disservice to local government if we increased the work, so that people could not afford the time which was necessary. I would like to emphasise also what the hon. Member for Dundee and others have said about the unfairness to a trader who has to compete with subsidised municipal trading. If a company sets up in business, it depends for its capital on the proprietors of that company. When a local authority sets up in business, it depends very largely upon its rateable value. That means that a large number of the people who provide the capital have practically no say in the setting up of a municipal trading company. If the local authority decides, in order to get their business going, to use rigorous competition, and drive their competitor out of trade, the competitor goes to the wall; but if they fail to drive him out, and lose money, the competitor who happens to be a large ratepayer has to bear the loss. But this has a bigger effect than that. It gives a trader who has to suffer that unfair competition a feeling of resentment against the local authority. It is a disastrous thing to drive a wedge between a local authority and, perhaps, some of its leading ratepayers.

The hon. Gentleman who moved the Second Reading rather poked fun at the various things that were said on this side, and I think at something that I said in a previous speech. I think he rather overlooked the small trader. He said that we on this side had no right to show sympathy with the small trader, because he is being driven out by the multiple shops. I think that that is, to a great extent, true, and I regret it enormously; but this Bill will accentuate that process. If you are to use the whole power and wealth of the ratepayers in municipal enterprise, you may make it almost impossible for the small trader to compete. The only people who will be able to compete against this rate-aided enterprise will be multiple shops and co-operative societies. Often in this country tragedies which we do not always appreciate take place before our eyes. It is disastrous to see the disappearance of an independent and, in every sense of the word, free body of thought. I am told that there are small towns near London where all the shops are owned by the co-operative societies or the multiple firms—I am not making any distinction between those two. The shops are managed by people who are transferred from one district to another, with the result that you have no leading body of opinion among local shopkeepers as you used to have.

We know that Napoleon called us a nation of shopkeepers, but I do not think that what he meant is always appreciated. He meant that he was fighting a free body of men who were ready to risk, not only their lives, but their businesses, in fighting for what they believed in. In the Civil War, the London shopkeepers were the men who gave the greatest support to Parliament, and in some other towns it was the local shopkeepers who gave the greatest support to the King. Nobody will regret the disappearance of that body more than the hon. Member for Dundee, because it gave great support to the Liberal party in the past. I also deplore the disappearance from our midst of that great body of men carrying on their own trade. I very much fear that this Bill, if it be passed, will have the effect of accentuating the rapidity of their business disappearance.

Clause 12, which, I think, is the most dangerous Clause in the Bill, enables local authorities to continue losing money on one enterprise to the extent of a 3d. rate. They might, under this Bill, be engaged in a small enterprise, but the use of a 3d. rate would enable them to go on, at any rate, for three years, and then to undersell their competitors. Once they had obtained a monopoly, in order to carry on, they would have to raise the price so that the consumer in the long run would not gain, as does the man who succeeds in driving out the small trader and the small shopkeeper. The Labour party made a great mistake when they reintroduced this Bill, which is less dangerous than the Bill of 1930, which enabled local authorities to trade in all commodities. There have been two general elections since then, and so they have, no doubt, tried to tone down the Bill. The Bill can be of no help to local authorities in carrying out their proper functions, and it is one which will harm one of the most deserving sections of the community, and I hope that the House will defeat it by a large majority.

2.7 p.m.

Mr. Marshall

I have listened to the whole of this Debate with the exception of the speech of an hon. Member below the Gangway. Some strange arguments have been brought against the Bill. I listened very carefully to the speech of the hon. Member for Hitchin (Sir A. Wilson), who began by stating that he intended to take a perfectly impartial line. He said that he was going to try to eliminate all party feeling from his speech, but as he went on it was evident that he was developing into a very partial advocate. He delivered a speech of unrelenting opposition to the Bill, and at the end I could not distinguish him really from the most partial and bitter advocate of private enterprise. His attitude reminded me of the statement of George Bernard Shaw, who, when talking about self-sacrifice, said that he believed in self-sacrifice in order that he could sacrifice other people.

There was a good deal of that spirit in the speech of the hon. Member for Hitchin. We all agree that he is a very forcible Member of this House, and that he is an indefatigable student. His researches are very extensive, but, like all individuals who carry out these very extensive researches, he is sometimes apt to get very wrong in his facts. No man can know everything about everything. That is where he fails. I question his statement very much about the sale of milk in the city of Sheffield. I do not think that he was right at all in his facts with regard to that particular case. I should also want to know a great deal more about the Birmingham Municipal Bank before I accepted at face value the statements of the hon. Member for Hitchin. A great deal more is required to be known about these things before we can accept at face value statements of that character.

I could take a perfectly impartial view on this matter, but I am not going to do so. Everybody knows that I would not be telling the truth. I can speak from 20 years' experience of local government and can put my finger upon certain weaknesses from which it is suffering to-day, but my views might be coloured by my political belief. The Seconder of the Amendment prophesied that, if the Bill passed into law, disaster would follow. The words "ruin" and "bankruptcy" were spattered all over his speech. He fulminated against the Bill in long-prepared passages, and prophesied for the Bill not only disaster, but death and damnation. He showed his marvellous intimacy with local government when he made the statement, in reply to an interjection across the Floor of the House, that corporations did not pay rates for their own undertakings. I think that, at any rate, we can dismiss his speech. Everyone in the House felt that the hon. Member had prepared a speech, and that he meant to deliver it. I think we can say, as was once said about a famous speech, that the speech was read, it was not well read, and it was not worth reading. Therefore, we can leave it where it is.

The hon. Member for Hitchin said that Private Bill Procedure was wrong, and I agree with him there. If the first part of his speech had been as useful as the latter part of it, he would have made a useful contribution to the debate. We all agree that Private Bill Procedure is very difficult and costly. A big corporation has to pay as much as £10,000 to promote a Private Bill in this House, in order to obtain the right to do certain things which nearly everybody agrees they ought to do.

Mr. H. G. Williams

No.

Mr. Marshall

I know that the hon. Member for South Croydon (Mr. H. G. Williams) does not agree with me, and I am going to deal with certain aspects which will interest him in a moment. If we could collect all the things that local authorities can do or have powers to do and put them into a Bill, such a Measure would be far more drastic than the provisions of the Bill now before the House. It would extend powers of local government to a far greater extent than is proposed in this Bill. We have heard that local authorities own quarries and that they make bricks, and I know of many other activities in which they engage. The hon. Member for Hitchin stated that the powers to run libraries, playgrounds, and to deal with sewage disposal were not included in this Bill, and he asked why. The answer is obvious. There is no difficulty in getting these powers. Most of them are very necessary services, and if local authorities were not granted powers of this description there would be epidemics, fevers and disease and all kinds of things among our great communities. Parliament is able to grant these powers for the protection of these communities. If any Parliament would not grant powers of that description, it would be turned out, and deservedly so, very quickly. The hon. Member went on to ask why local authorities have not included a provision enabling them to sell coal in the various local government Bills. The answer is that many local authorities have put provisions in their Bills to enable them to sell coal. But when they put in these provisions they know that the moment the Bill reaches the House of Commons they are not only cut out, but the cutting out sometimes jeopardises the whole Bill.

The hon. Member for South Croydon shakes his head, and I will answer him straight away. The hon. Member knows that a short time ago certain Bills were submitted to this House which sought to compel the owners to clean up the sites in the centre of various cities from which slums had been cleared. Many of them are verminous, rubbish heaps. They are ugly; children have to pass them. Some of these are sites from which houses built 100 years ago have been cleared. These were slum dwellings, which had been paid for over and over again by the poor tenants who had had to live in them. The consequence was that certain local authorities, including Rotherham and one or two more, put in Bills clauses which would give them power to compel the owners of these sites to clear up the rubbish and that was a very reasonable request. What did the hon. Member for South Croydon do. He was one of those who put their names down against the granting of these powers, and, owing to the unity of the opposition from the benches opposite, there was an arrangement made that in order not to jeopardise the other things in the Bill that particular proposal would be withdrawn.

Mr. H. G. Williams

The hon. Member is totally and absolutely inaccurate. If he will take the trouble to go into the matter and read what are known as the "common form clauses" he will find a clause the side-heading of which is "Neglected sites," and every municipality can get that clause in a Bill without challenge to-day; moreover it is a clause that was approved by a Committee of which I was a member.

Mr. Marshall

I am referring to certain powers which were asked for by Sheffield, to compel the owners of derelict sites to clean them up and to fence them round.

Mr. Williams

Who stopped them?

Mr. Marshall

They were stopped because there was so much opposition in this House, and the Corporation had to come to an arrangement.

Mr. Williams

The hon. Gentleman has made a statement about me which has not the faintest truth in it. His recollection has deceived him. There is no case I can recall of opposition to sanitary clauses with regard to such sites.

Mr. Marshall

I do not want to do the hon. Member an injustice. Our case is strong enough without inflicting any injustice. There were certain Bills submitted to the House, and these powers were not granted and the Bills went through without them.

Mr. Williams

What Bills?

Mr. Marshall

The Rotherham Corporation Bill and the Sheffield Corporation Bill.

Mr. Williams

In what year?

Mr. Marshall

This year.

Mr. Williams

Obviously then the Bills have not become law yet.

Mr. Marshall

I should have said at the end of last year. The powers that we are asking for in this Bill are very limited. In my view they do not go far enough. Let us see what local authorities can do now. They can run transport, they can impound water, they can make and distribute gas, they can build markets, they can build great electricity stations and distribute electricity. Let us consider one of the anomalies under which they suffer. As I say, they can run trams and buses. Some local authorities can build buses and some can build trams. They can do that by direct labour at an immense saving to the ratepayers. I can mention certain Corporations that are doing it. My hon. Friend said that Glasgow had not been granted these powers. Sheffield is doing it and doing it well, and paying men better wages. Those men are given holidays with pay and are working under splendid conditions. Is anyone going to argue that there is a vehicle less working in that City than before. As a matter of fact there are more. Who is suffering from that Corporation activity? The only one who can suffer is the man who has made profit out of the community of Sheffield.

Liberals say that they do not agree with the Bill because it would do the small trader some harm. That being their view, there is no wonder the Liberal Party are going towards extinction. I have stated that Corporations can run buses and trams and even build buses and trams. They can lay down lines, they can arrange the roads and pave them in order that wonderful modern vehicles can run upon them, and yet if the Corporation come along and say that in order to provide convenience for the passengers who ride in these vehicles "We will build a shelter and provide a little refreshment in the waiting rooms or sell a gallon of petrol if it is asked for," the private interests of the City rise and howl in protest. The Corporation can do all these major things, but if there is a mere mention of these smaller things this great House of tradition says, "No, we will not allow your Corporation to do that." The thing is too absurd for words. It is absolutely reactionary, this resisting of what is a natural development, and an innovation that every one in the provinces knows must come because it is desirable.

Take the case of electricity. I am giving actual cases for which I have chapter and verse. Anyone who has seen modern electric plants must have been impressed by the marvellous ingenuity, the foresight and the imagination that have gone into the creation of these things. We employ the best engineers, we get the best possible builders to build the stations substantially, we lay down the machines, sometimes by direct labour, and yet having done all that and distributed the electricity in manifold ways for the service of a great community, should the Corporation come along and say "We want to sell an electric bulb to one of our ratepayers," this House of Commons says, "You can do all these other things, but you cannot sell electric bulbs." I do not say that that is the position to-day, because there are certain local authorities which have this power now, but in Sheffield that was the position at one time. The Corporation there could not sell a lamp to the poorest and humblest ratepayer.

Sir D. Gunston

Which Clause in this Bill will allow a municipality to do that?

Mr. Marshall

As I have said, if I had had the drafting of this Bill it would have included such things. We built a market in Sheffield by direct labour and by so doing saved £3,500 of the ratepayers' money. It is a beautiful market, sanitation good, terrazzo floor, everything spotlessly clean, and yet if the Corporation wanted to occupy one of its own stalls Parliament would say, "No." Can anyone imagine a more Gilbertian situation than that? I cannot. I have to-day heard hon. Members opposite using all their legal ingenuity in trying to prevent what even a schoolchild would say is perfectly reasonable. Frankly, I cannot understand the Opposition. There has been some reference made to water supply. I was sorry to hear both the Mover and Seconder of the Amendment imply that medical officers were not doing their duty with regard to water supply. Imagine a water supply in the hands of private enterprise; imagine a big combine providing the water for Birmingham or Glasgow. It is only necessary to state the position to show how utterly absurd it is.

Mr. Levy

This is a subject in which I am interested. With regard to the infectious diseases that have been prevalent in this country for some time, it is extraordinary that they have all occurred where there is a municipal water supply and not where there are private water undertakings.

Mr. Marshall

The reason is that if there is any difficulty or defect about a water supply it is generally dealt with by a municipality.

Mr. Levy

No.

Mr. Marshall

I used to live in a village where we had to pay 2d. a bucket for water.

Mr. Levy

It is so to-day in some places.

Mr. Marshall

It does not matter how humble a ratepayer may be, or in what kind of cottage he lives, if it is within the boundaries of an efficient municipal water supply—and all the great municipal authorities have efficient water supplies—he does not have to pay 2d. per bucket and make profit for a private trader for this great necessity of human life. All that he has to do is to go to the sink, as we call it in Yorkshire, and turn on the tap.

Mr. Levy

That is not so. One of my complaints is that in the housing schemes of local authorities an efficient supply of water is not always included, nor is an efficient drainage scheme included.

Mr. Marshall

I do not know about those authorities. I am speaking of one of the big Socialist authorities, against whom the hon. Member has been fulminating.

Mr. Levy

I am not discriminating.

Mr. Marshall

My point is that the modern water supply in a municipality means that there is no stint of water, except in periods of drought. The people can get the purest water supply and as much as they want, and they have only to pay for it in the rates. Look at what some of the great municipal authorities have done. Birmingham has gone to Wales for its water supply and Manchester has gone to Cumberland. They are tremendous engineering undertakings, in the interests of pure and wholesome water supplies. I am amazed that hon. Members opposite should come to the House and say anything derogatory of the wonderful national endeavour—it is not only a municipal endeavour but a national endeavour—that has brought about these magnificent works, designed in order to give the people the purest water supply possible; a supply which can be got ad lib. Let the hon. Member think of the steps that are taken to preserve the purity of the water supply. The municipalities have to acquire miles of land in order to protect the edges of their reservoirs. That has been done in Sheffield, it has been done at Thirlmere by the Manchester Corporation and it has been done by the Leeds Corporation. I cannot associate myself with the charges that medical authorities are careless with regard to water supply, and I think the hon. Member when he thinks about his words ought to withdraw them or severely modify them.

Mr. Levy

If the hon. Member will take the trouble to study the water supply of this country in the same way that I have done, I do not think that he will speak of it in complimentary and glowing terms. I think he will agree with me that it is essential that the water supply of this country should be tackled comprehensively, and that the municipal authorities are often unable to fulfil the functions that are imposed upon them in this respect.

Mr. Marshall

We are getting the hon. Member down to where we want him. He says that the water supply of the country should be tackled nationally and not by private enterprise.

Mr. Levy

I said "comprehensively."

Mr. Marshall

I suggest that the hon. Member will agree with me that it ought to be tackled nationally, in conjunction with the local authorities.

Mr. Levy

I said "comprehensively."

Mr. Marshall

I agree that everything is not right with the rural water supplies, but that is a far different thing from making wholesale charges against the medical authorities, as the hon. Member did.

Mr. Levy

I can substantiate them.

Mr. Marshall

I have said before, that Parliament ought to have taken steps long ago to ask a responsible Committee to take a general review of the water resources of the country. I know that some local authorities have been so keen to get valuable watersheds that they have sometimes neglected a little village ten miles away. But one cannot blame the local authorities for that; they have been making provision for the future.

Generally speaking, I would grant local authorities further powers. They are the most democratic institutions in the country. A check can be placed on their activities every year by the ratepayers. Let them embark upon these things, and if they go wrong they will soon be pulled up and thrown out of the council. If they do not act upon proper business lines, then the next people who come into the council can undo what they have done. In this great democratic country I think we can trust the people in our great provincial cities and towns to see that the business they carry on in their local authorities is proper business, and such business as will redound to the benefit of the community.

2.31 p.m.

The Parliamentary Secretary to the Ministry of Health (Mr. Bernays)

I congratulate the hon. Member for Mansfield (Mr. C. Brown) on his success in the ballot and the way in which he has used it. I particularly admire the courageous way in which he tried to forestall the arguments that would be used against his Bill. It is a Bill of a very wide character, and I rise in the traditional fashion not to wind up the Debate but to indicate the attitude of the Government. I have said that it is a Bill of a very wide character, and I would say, in the first place, that whatever the merits of the Bill may be, it is far too comprehensive a Measure for private Members' legislation.

Mr. T. Smith

Will the Government take it over?

Mr. Bernays

I know that the statement that I have made has been made before on Bills of this kind and I expected that there would be some objection to it; but I am gratified to find that I have the support of the right hon. Member for Wakefield (Mr. Greenwood) who made precisely the same remarks when the Bill was introduced at the time the Labour Government were in office.

Mr. Silkin

It is a different Bill.

Mr. Bernays

Whether it is a different Bill or not it deals with the same broad question, and that broad question is one which the right hon. Member for Wakefield said was not suitable for legislation by a private Member's Bill. The right hon. Gentleman said: It would be a very big step in the development of local government, and I think hon. Members will agree with me that it would be more appropriate as a Government Measure. I should hope to take a hand in a Government Measure of this kind, if there was one, as I think there may be one day."—[OFFICIAL REPORT, 14th February, 1930; col. 868, Vol. 235.] The right hon. Gentleman voted for the Bill. He discovered the foundling on his doorstep and took it in, but after he had taken it in he very quickly took it upstairs and wrung its neck. [HON. MEMBERS: "No."] I am only quoting the hon. Member opposite who said that so many Amendments were proposed to the Bill that the promoters withdrew it. I shall be asked whether the Government intend to introduce a Measure on these lines, and my reply is that I can hold out no hope of that. Let me give a few reasons why the Government cannot introduce legislation of this kind. In the first place, we believe that there is no demand for it from the local authorities. There is no body of evidence, measured either by local Acts or by the utterances of the chief associations of local authorities, that a Bill on these lines is desirable. In the opinion of the Government the Bill would be injurious to traders, particularly the small traders.

I have been interested by the way in which hon. Members opposite have dealt with the argument about the small trader. It has really amounted to this, that after all the small trader does not matter. [Interruption.] The hon. Member for Brightside (Mr. Marshall), when referring to the hon. Member for Dundee (Mr. Foot), said that the Liberal party had always taken up the cause of the small trader and that is why they were now a small party. I thought at the time that if the Minister of Health were present and heard that remark he would put it upon a poster at the next election. But the argument which has been used by hon. Members opposite is one to which, obviously, the Government and the House must address themselves. It is that local authorities already manage undertakings on a commercial basis, they sell water, and light and transport to their constituents. It is argued that if this does not injure private enterprise it therefore disposes of the argument that an extension of it would be injurious to private enterprise. But the comparison of public utility undertakings with what is proposed in the Bill is entirely a false comparison. A public utility undertaking is a monopoly granted under statutory powers—a monopoly justified by administrative necessity and to satisfy a public need, but a monopoly, nevertheless. It does not touch individual enterprise because there is no such enterprise in competition with it. The management of these undertakings by local authorities is in some cases a century old. They were begun either where there was no provision for the necessary services by private undertakings, or by purchase of an existing undertaking, and there can be no hardship in either case to a private venture. The present Bill proposes to equip local authorities for active competition with private persons and companies in the manufacture, sale, or distribution of certain commodities. It would create a new competitor with unfair advantages, and the unfairness of this competition constitutes, in the opinion of the Government, the main objection to the Bill.

The question of municipal savings banks has been raised, and I propose to say a word on that. The example of the Birmingham Savings Bank has been freely quoted. Clearly it has been a success, and this fact has been used to support the proposal in the Bill to authorise generally the establishment of municipal savings banks. The hon. Member for Mansfield said that what is permitted to Birmingham ought not to be denied to others. I say in reply that it is not denied to others, in fact, that municipalities can proceed on exactly the same lines as Birmingham, and, in fact, some of them have done so. I think two other municipalities, Cardiff and Birkenhead, did obtain these powers, but decided not to use them. I am not surprised. I have looked into the facts of the situation and whatever hopes hon. Members opposite may base upon the success of the Birmingham Savings Bank, it is quite evident that the general establishment of municipal savings banks at this moment is open to the gravest objection. The Birmingham Savings Bank was established at a time when interest rates were high: it could get 5 per cent. on its money. The position today is very different. Interest rates at the present levels could only result in a definite loss to the rates.

Mr. T. Johnston

Is the Parliamentary Secretary aware that in Scotland, and, I think, also in England, where municipal banks have been established by the local authority on what is called a company basis—the local authority forming itself into a limited liability company—in every one of these cases the banks have been a great success and have steadily reduced the level of rates?

Mr. Bernays

In that case why did not Birkenhead and Cardiff proceed with their powers? But let us go into this matter in a little greater detail. Can these savings banks be established now on a reasonable basis? Naturally I can speak only in general terms. Some part of the money must be held in cash or Treasury bills yielding only one-half per cent., and a considerable further proportion in comparatively short-term Government or municipal securities, yielding only a little over 2½ per cent., while even that part of the money which is lent directly to the municipality will earn only 3½ per cent., or a little less. Therefore, the average over-all earnings of a municipal bank would be little if anything more than 3 per cent., and allowing a reasonable margin for administration expenses and reserves, it would not be possible on that basis to pay more than 2½ per cent. to depositors.

Sir George Harvey

I have had a little experience of a trustee savings bank which gets 2⅞ per cent. and pays 2½ per cent. and, therefore, has a margin to work on of ⅜ per cent.

Mr. Bernays

There will be further opportunity in the Debate to challenge the figures I am giving, but my argument is that if a municipal savings bank paid only 2½ per cent., which I suggest is all that it could do, it would not be able to make any headway against existing savings banks, and that if it paid more than 2½ per cent. this would have to come out of the rates. The principal argument against the establishment of municipal savings banks is that they are bad business. I do not deny that the Birmingham Municipal Savings Bank is a success, but it was set up at a time when conditions were very much different from what they are to-day.

Mr. Shinwell

Does it not operate successfully now?

Mr. Bernays

As far as I know, it does.

Mr. Johnston

I was the first chairman of the first municipal bank in Scotland, so that I know something about the matter. I want to make it clear that wherever a municipal bank has been established in Scotland, there is not a Conservative councillor or a Liberal councillor who wants that bank stopped.

Mr. Bernays

Hon. Members opposite have talked a great deal about municipal banks, but I think the House has a right to hear a little more from them about the position of the co-operative movement. A question with regard to that was put to the hon. Member for Mansfield (Mr. C. Brown) and his answer was, "What about the co-operative movement?" That did not take the House very far. I am sure that hon. Members opposite will not misunderstand me and think that I am trying to drive a wedge, for I am not; but everybody knows that the co-operative movement occupies a very big position in the country, and I think we have a right to know what is its attitude towards this Bill. I looked at the list of the promoters of the Bill, but I could not find any co-operative Member among them. I have waited eagerly to hear a co-operative Member speak in the Debate, and I had hoped that the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) would do so.

Mr. Kelly

We are all co-operative Members.

Mr. Bernays

That is excellent. The hon. Member for Mansfield said that the co-operative movement wants to do the same thing as hon. Members opposite. In order that hon. Members on this side of the House may make up their minds quite impartially, I think it is important that we should have some statement as to whether the co-operative movement desires this Bill. I have here a pamphlet issued by the Co-operative Union, Limited, entitled "Municipalities and the Co-operative Movement," and I would like to know whether it represents the views of the co-operative movement.

Mr. Shinwell

The hon. Gentleman is challenging hon. Members on this side. He wants to know whether the co-operative societies support this Bill. If they did support it, would that influence the Government to support it?

Mr. Bernays

That is another question, and before answering it, I must have an answer to my question. The article to which I have referred contains the following passage: The suggested extension of municipal trading to those services now undertaken by the Consumers' Co-operative Movement is fraught with dangers and risks to the consumer which cannot be treated with other than grave concern by the Co-operative movement. It means scrapping the vast organisation of the Movement, with the prospect of an era of experimentation for which municipalities have no machinery nor adaptability. The disruption of the democratic forces caused by such a step would seriously impede progress, and reaction would follow which might put in the saddle a form of administration divorced from democratic control, such as emerged on the Continent. That amounts to saying that the co-operative movement believes that if this Bill is passed, one will be on the way to establishing a totalitarian State.

I wish to conclude by putting two arguments which the Government strongly believe should be in the minds of hon. Members when they vote on this Bill. They are arguments which have been made by my hon. Friend the Member for Elland (Mr. Levy) and my hon. and gallant Friend the Member for Thornbury (Sir D. Gunston). In the first place, local authorities are notoriously overburdened with work and to add other responsibilities at this moment, when, as a result of the searching social policy of the Government, they are having placed upon them increasing burdens for vital social services and also new work in connection with air-raid precautions, would seriously impair the local governmental machinery. Secondly, the Government believe that the position of trade and industry does not justify an experiment in municipal trading of this character. It might well give a severe and dangerous jolt to private enterprise upon which the livelihood of millions depends. While hon. Members are free to vote as they like on this Measure and must make up their minds on the merits of it, I must say that, on behalf of my right hon. Friend, I cannot advise the House to give it a Second Reading.

2.53 p.m.

Mr. Montague

I had hoped to hear in the Debate some criticism of the purpose of the Bill, but I have heard very little, if any, for most speakers have entirely ignored the fact that this is not a Bill to impose Socialism upon municipalities, but an enabling Bill. Many hon. Members seem to imagine that if this Bill is passed, every local authority in the country will be called upon to establish municipal milk depots, municipal banks, municipal coal-sheds and so on. That is not the purpose of the Bill. Its purpose is to enable local authorities to do certain things when they require to do them and in circumstances that are appropriate for doing them. It raises questions of the validity of municipal enterprise which I should have thought by this time had been settled in the minds of most reasonable and well-informed persons. After all, municipal enterprise, even revenue-producing enterprise, apart from the social services, is not a new thing. It has been put in operation in many ways throughout the country by municipalities of different political complexions.

This Bill would give power to local authorities to deal, in a logical and practical manner, with certain other types of productive and distributive services, according to the need for them, in an efficient and co-ordinated manner. I would point out to the Parliamentary Secretary that there is in the Bill a Clause which enables local authorities, if they desire to do so, in respect of every one of the industries or services mentioned, to acquire existing businesses. It does not compel local authorities to start new enterprises in competition with, and in opposition to, existing enterprises. That is the answer to the challenge in connection with the co-operative societies. I do not propose to be led off the track by challenges of a rhetorical and debating character, but we know precisely where we are with respect to the co-operative societies. [HON. MEMBERS: "Where?"] As an hon. Member behind me has already said, we are all members of co-operative societies. We believe in and support the principle of co-operation and, what is more, there is no quarrel between us and the co-operative societies upon this question. There is machinery for the friendly adjustment of any slight administrative differences as to the carrying out of the municipal services. [Laughter.] It is all very well for the hon. Member opposite to laugh, but there are more differences upon his side of the House than there are between the Labour party and the co-operative movement.

Sir D. Gunston

But the hon. Gentleman refuses to tell the House the opinion of the co-operative movement on this Bill.

Mr. Montague

The hon. and learned Member forgets that the Co-operative party is part of the Labour party. We are able to settle our own—not differences, but variations of views—upon questions of administrative detail [Laughter.] There is nothing whatever to laugh at in the matter. It is a business proposition, and we are as capable as hon. Members opposite of dealing with it in a businesslike way.

Sir D. Gunston

The hon. Member says that he and his friends belong to the cooperative movement and that the cooperative movement is a part of the Labour party. Surely he can answer the simple question which has been put to him.

Mr. Montague

What was the simple question?

Mr. Bernays

The question was: Do the co-operative movement support the Bill? Do they want it? Are they backing it?

Mr. Montague

My answer is that the co-operative movement, of which we are all members, support the principle of municipal trading. There is no difference.—[HON. MEMBERS: "Oh"] If hon. Members will allow me to develop my argument I think I can make the point clear, although it is but one among a number of important considerations involved in the Bill. The co-operative movement is part of the Labour party. We do not, in this Bill, propose to compel any municipality to establish milk or coal supplies, or anything else. A municipality, within the compass of the Bill, can make whatever arrangements it pleases, not only with the co-operative societies but with business generally in its area. The Bill is an enabling measure, which allows the fullest scope to local authorities by admitting their right to trade in these commodities. Its application will depend entirely upon circumstances and upon the needs of the various municipalities.

After all, there is no great question of principle involved. Some hon. Members opposite seem to think that it is all right for municipalities or for the State to have picture galleries, but all wrong for them to have picture palaces. It seems to be thought by them that municipalities should supply water but not water taps; roads but not road-houses; gas but not gas coke; municipal orchestras but not municipal opera. There is no real division in respect of those things and, in our opinion, as a matter of principle, it is competent for any local authority to engage in any enterprise which is justifiable as being of efficient service to the community. I have heard no adequate argument to-day against that principle. Hon. Members opposite, including the Parliamentary Secretary, have wept tears for the small trader. The small trader is always the last resort of the Tory party whether in this House or at municipal elections. If a farthing is put on the rates it is always the small trader who is going to be forced into bankruptcy. He has always been used for electoral purposes by hon. Members opposite, but the very people who weep tears about the small trader are the people who put money into United Dairies and other concerns of that character. In my district there are hardly any small traders making deliveries. The deliveries are all by multiple firms which have nothing to do with the locality, and are certainly not "small" in the sense in which the word is used by hon. Members opposite.

The limited liability principle was established in this country in the forties and that began the decay of the small trader. Limited liability trading is a form of co-operative trading. It is a combination of small capitals and the protection by means of limited liability of the small investor in various forms of enterprise. Why should the ratepayers of a community not be allowed the same right as private individuals are allowed under the Companies Acts to invest their money co-operatively? The only possible answer is that if the municipalities did this they might compel a minority who were not favourable to a project, to become investors against their will. But the answer to that, in turn, is that a municipality would not be justified in doing anything of this kind, if the enterprise were of a speculative character. But no one is talking of speculative investments here.

There is in Clause 12 a provision which would allow losses up to a 3d. rate to be incurred, but what do we mean by a loss in this connection? If the community is providing a public service efficiently—and its efficiency is not to be tested by the balance sheet, but by the actual working of the service—how can you have any loss at all? I suppose there are some hon. Members opposite who think that is a remarkable point to make. I except the hon. Member for South Croydon (Mr. H. G. Williams) who knows more about Socialism than he would lead us to imagine. I am sure he knows too much to regard that as a remarkable point. Let me put this to hon. Members. Does Woolwich Ferry pay? Does Westminster Bridge pay? Do our roads pay? Do our parks pay? Why, a park is an example of pure Communism, let alone Socialism. As a matter of fact, trading services are such because of the system under which we are living to-day. If a community decides that for certain definite purposes and for good reasons it will sell goods, even below cost price, it may show a loss upon a balance-sheet, but it may not prove to be a loss to the community, and if the community so desires, that may be the proper way of doing it.

Take the milk of the country. We pay £88,000,000 a year, doorstep price, for milk in this country, and that represents an expenditure of about 5s. per family per week, if you reckon the whole of the community upon a family basis. I am sure that if you made the milk service a trading service all over the country, and organised the production and distribution of milk, and did away with all the anomalies, waste, and inefficiency that private competition and private monopoly produce in the milk business, it would be possible to provide a free service of milk at far less than the average family pays to-day. I am not arguing that that is a practical thing to do, but I am dealing with the point as to what pays and what does not pay. The real test is the efficiency of the service, and the exact way in which the distribution is made is not to be tested from the point of view of whether there is an adequate revenue or even a so-called loss as a result. I am dealing with fundamental principles. For practical purposes, of course, it will be desirable under the circumstances that we should run businesses, even from the standpoint of a balance-sheet, in a thoroughly businesslike manner, and I am sure that municipalities can set the pace for business methods to any private concern in the community.

In regard to the talk about Sheffield and the loss on milk, I do not believe that is the case—I am assured that it is not so—but even if it were, does not the hon. Member who made that statement realise that it is always possible for a municipality or a public body of any kind to use its powers of public trading in order to give services which are not remunerative to private enterprise, but which are both necessary and desirable? It has occurred in transport. Services of buses and trams go to many places where, if it were left to private enterprise, there would be no service at all. These things have to be taken into account when you are dealing with the question of a profit-and-loss account. The hon. Member for Elland said that the Bill proposed to make local authorities bankers, candlestick makers, milkmen, and so forth. I do not know whether he realises the fact, but by the same token he himself is a printing compositor, a postman, a small shopkeeper, a chef, a waiter, and a barkeeper.

Mr. Levy

I certainly did not know it.

Mr. Montague

I am telling the hon. Member. We propose to make members of municipalities bankers, but every Member of this House is a banker. There is a savings bank side of the Post Office, and the argument is just as good or just as worthless in both cases. Of course, we propose that the local councillors should be responsible for these concerns, and when you tell us that the local authorities have too much to do and that we are adding to their burdens, we should not be adding to their burdens in those things as much as is done in other kinds of social services. I know hon. Members opposite who number among their directorships something like 50, 60, and even 150. There is one Member in this House who has 150 directorships, though I do not say that he finds it burdensome to collect his fees or to attend his directors' meetings. These points are not really arguments against a Bill of this character.

The hon. Member for Elland (Mr. Levy) paid a tribute to local authorities when he said there was a high standard of local government, but he then made the suggestion that, if this Bill were carried and local authorities adopted its provisions, there would be great opportunities for corruption. There are, however, great opportunities for corruption in local government or any other form of public representation, just as there is opportunity, and much more opportunity, in private enterprise. [An HON. MEMBER: "Not with public money."] We are not talking about public money. What is the difference between public money and invested money? It is all public money. The point is surely that local authorities have proved their capacity for running enterprises of various descriptions, and it is not true to say that municipal enterprise does not pay. The returns of the local authorities show that hardly more than half a dozen provide a return which shows that revenue is less than expenditure. There is no question about the capacity of local authorities to run these concerns.

Mr. Levy

I was not referring to individual corruption, but to mass bribery and political corruption.

Mr. Montague

I should imagine the Tory party is as much an authority on that subject as anybody.

I come to the question of water supply. We have a Metropolitan Water Board in London which was established because of the utter corruption and inefficiency of private enterprise. I hope that the hon. Member for South Croydon will not interrupt on this subject. The question of water raises a rather interesting point upon the general principle underlying this Bill. In most parts of the country, at any rate in the urban districts, water is either a municipal or public corporation concern. Is it not a remarkable fact that no one ever worries about over-production in water?

Mr. Levy

Does it exist?

Mr. Montague

The Metropolitan Water Board, for instance, does not for a moment worry its head until there is a prospect of a natural drought due to hot weather or some other circumstances. When there is plenty of water available people can use it to the fullest extent that they desire. They have to pay for it, of course, because we have to pay for everything in this pretty world.

Mr. Levy

When there is a drought they cannot get it, because no provision is made.

Mr. Montague

That may be, but I am not discussing the question whether the administration of the water supply of London is efficient. I disagree with the hon. Gentleman on that question. The point is that in a municipal water supply, as long as the water is there, people can enjoy plenty of it, because plenty is available. It is only when there is a prospect of scarcity that any local authority or public concern of a similar character concerns itself about the amount of water that people use. A short time ago I read an agricultural article in the "Daily Telegraph" headed "Farmers Rejoice." I was curious to find out what farmers were rejoicing about, for once in a while. I found they were rejoicing because the same hot weather that might cause a drought in water supply was causing some shortage of milk from the cows, was interfering with their internal economy in some way or other. The farmers rejoiced because there was a prospect of a shortage of milk.

Why does not the Metropolitan Water Board rejoice when there is a prospect of water? Because in the one case you have private enterprise at work and in the second you have a public body. It is the difference between Socialism and Capitalism. Capitalism is based upon the economics of scarcity. Socialism is based upon the economics of plenty. It is because we want to extend the number of social services, to exchange social service for what is called individual enterprise, competition, and the rest of it, that we support this Bill. How much individual enterprise is there left? Even the small shopkeeper is a cog in the wheel of huge trusts and syndicates. He cannot sell an ounce of tobacco for a farthing less than the fixed price. He turns round and takes it off the shelf, not knowing anything of what is in the packet. The old type of shopkeeper does not exist. He has been squeezed out by the inevitable development of economic forces, and all that we ask is that municipalities, representing the people, shall have as much right to take part in that type of progress as have private companies, private syndicates and trusts.

I believe that the small shopkeeper would be far better off if, instead of trying to keep going, very often against the prospect of imminent bankruptcy, he were to agree with Socialists upon the principle of municipal trading and social service, and became himself an honoured and a respected part of the machinery of that social service. I am sure of that. The experience of the co-operative societies has proved it. I know many small shopkeepers whose shops have been taken over by co-operative societies, and who have become managers of the branches, with guaranteed salaries, with a decent standard of life, and certainly with much more security than they had before. In any event we are not out to penalise the small shopkeeper more than he is already penalised. We are quite prepared to consider taking over the whole of an industry like that of the supply of milk upon the basis of compensation, if it comes to that. All we ask in this Bill is that local authorities shall be given powers to use under appropriate circumstances, and shall not be handicapped by being told they cannot do this, that or the other, when circumstances exist, in newly-developing areas, for example, which make it possible for them, without impinging upon the rights of small business men, to develop these social services upon the lines we suggest. On behalf of the party behind me I ask the House to accept this Bill, which is not a compulsory Measure but an enabling one, and one which does not introduce any new principles, but principles which are in operation successfully all over the country to-day.

3.20 p.m.

Mr. H. G. Williams

I have listened with pleasure, as I always do, to the eloquent speech of the hon. Member for West Islington (Mr. Montague). He has been giving expression to the principles of that somewhat antiquated society the S.D.F., of which he is now one of the most distinguished surviving ornaments. Really, he is terribly old-fashioned. Fancy talking about capitalism being the economics of scarcity. One distinguished gentleman, Lord Nuffield, has made a vast fortune out of the economics of plenty. His primary object is to make things plentiful and cheap, and the cheaper they are the more of them he disposes of. For the hon. Member to give expression to such a hopelessly reactionary and out-of-date doctrine, and then to think that he is telling us something fresh, is rather deplorable in these days. He got terribly excited about the Metropolitan Water Board. It is a great institution which has the right to supply water, and the right to demand as much as is necessary to meet its expenses, which is a most satisfactory form of trading. You pay a special rate for water. The curious thing is that many people in London get their water without buying it from the Metropolitan Water Board. I live in a flat three-quarters of a mile from here. The water which made my coffee this morning and the water in which I washed was not provided by the Metropolitan Water Board, but by the owners of the block of flats. They have had a well for many years. They find they can supply their tenants much more economically than they can buy from the Metropolitan Water Board—which is a strange thing, if the economics of something or other about which the hon. Gentleman has been telling us are right. Practically every industrial user of water in London with convenient access to sources of water gets its own supply instead of buying it from the Metropolitan Water Board.

I speak with some hesitation on the subject of water. Many references have been made this morning to my constituency. I have often wondered whether the authorities would have been more stringent in their examination of their own Department if Croydon water had been supplied by a company. What was the complaint? Lack of liaison between two public officers. The Medical Officer of Health was legitimately taking the view—I am not blaming him—" Water is not my department. That is for the borough engineer." He would not have taken that view if the water supply had belonged to private enterprise. He would then have realised his duty as Medical Officer of Health to keep an eye on the authority's supply of water. If there is any condemnation of public enterprise in the supply of water, it comes from my own constituency.

Mr. Gardner

Why did not the Medical Officer of Health for Croydon keep an eye on the water of the Metropolitan Water Board at Croydon?

Mr. Williams

I am talking of the defect which happened in my constituency in regard to the water supplied by our own municipality, and for which other departments thought they had no responsibility. I am not blaming them. It is instinct. If you have a municipality, it does not examine its own undertakings properly.

The only hon. Gentleman who said anything of any value to-day on the other side did so in answer to an interruption of mine. He had said that, after all, private enterprise was so unenterprising in these matters that a lot of things had never been touched on, and municipalities had had to do them. I asked him for an example, and he replied, "Sewage." At last we can say with truth that Socialism is sewage. I am grateful to the hon. Member for the new definition. The hon. Member for West Islington said that there were not more than five or six undertakings in this country that made a loss on their enterprises.

Mr. Montague

I did not say that.

Mr. Williams

Well, words to that effect.

Mr. Montague

If the hon. Member will excuse me, perhaps I might recall that I said there were not more than five or six undertakings—I am not sure of the exact figure, but it is a very small number—where the revenue did not exceed the expenditure. Those figures are from the Municipal Year Book.

Mr. Williams

I am sorry if I misquoted the hon. Member. I thought he said what I was saying. He said "enterprises," and I said "municipalities"; but it boils down to this, that according to him, only a very few municipal undertakings are unsuccessful by the financial test. I am not surprised. They are all statutory monopolies. A man would have to be singularly incompetent if, when he was given a statutory monopoly, he could not make both ends meet. We are not, however, dealing with that matter; we are dealing with coal, milk and things of that kind, in regard to which nobody proposes that there should be a monopoly. Does anyone suggest that the present prices at which these commodities are sold are unfair, that there is profiteering? We have been told that coal is being sold at an exorbitant price—

Mr. Shinwell

That is what the hon. Member has been saying.

Mr. Williams

I have been saying that, as a result of the marketing scheme set up by a Socialist Government, there is the opportunity of a rake-off at the top which forces the retailer to charge too much. The hon. Member must be careful; he was one of those responsible for that scheme, if I remember rightly. If these municipalities sell coal in competition either with the co-operatives or with private traders, they will buy at the same price, so we can wipe that argument out, as it has no relevance to the discussion, though the hon. Member did not understand it. Is it suggested that the oncost between the time when the retailer gets the coal and the time when it is supplied to the consumer is excessive? The prices at which it can be bought from a cooperative society or from a private trader are obviously the same, because, if the one sold cheaper than the other, he would get all the business. Therefore, the allegation seems to be that the co-operative societies are profiteering in the sale of coal and in the sale of milk.

Mr. Barr

I daresay the hon. Member was not in the House when I quoted the Samuel Commission, who, after much examination, came to the conclusion that, if only private retailers would have the same system as the co-operative societies, they would be able to sell coal much more cheaply, and the benefit would go in wages to the coal industry and ultimately to the miners.

Mr. Williams

Even the hon. Member's contribution has no bearing on the subject, because, if that be true, the private traders are making less profit than the cooperatives. Therefore, the price is determined by the price at which the cooperatives sell, and the allegation is that the municipalities want to come in because the co-operative societies are charging too much.

It has been suggested that some of us not only do not want the municipalities to have these powers, but obstruct them when they seek other powers. The hon. Member for the Brightside Division of Sheffield (Mr. Marshall) made an almost vicious attack on some of us, including, I think, myself. I have taken the trouble to look up the history of the matter. I find that a number of corporations sought certain powers, and my hon. Friend the Member for the Moss Side Division of Manchester (Mr. Rostron Duckworth) took the lead in suggesting that they should not be granted. The corporations concerned were so ashamed of their demands that they never brought them to debate in this House; they ran away before they reached that stage. I am not surprised. It is a little beyond the subject-matter of this Bill, but what the hon. Member overlooked was that, six months before these intelligent corporations promoted their Bill, this House had passed the Public Health Act, 1936. In Sections 58 and 91 of which all the powers to deal with the matter already existed. If the members of the Sheffield Corporation and other corporations with large numbers of Socialists on them were so lacking in knowledge of what Parliament had already passed that they came along with the request for the same powers in a different and less satisfactory form, and some of us thought it rather stupid and objected, hon. Members should not get cross.

Mr. Marshall

Will the hon. Member tell the House exactly what the powers are?

Mr. Williams

Clause 58 relates to dangerous or dilapidated buildings and structures, and these include parts of buildings or structures, and, under Clause 91, there is the general power against nuisances.

Mr. Marshall

I contend that those powers are not the same as the five local authorities asked for. In dealing with sites, the Sheffield Corporation Bill says: 'neglected site' means the site of a demolished building in the city which is in such a condition as to be prejudicial to the property in or the inhabitants of the neighbourhood. It is also provided that the owner may be ordered by the court to clear up a neglected site. This particular Clause was included in Bills from Grimsby, Rochdale, Rotherham, and Sheffield. I respect the hon. Member's research in these matters, but I must take the authority of four town clerks rather than his.

Mr. Williams

The Clause says "buildings or parts of buildings." I did not ask any competent legal authority as to the interpretation. If the four town clerks thought it more important to get those powers, why did they not try? Why did they not say, "We will have it debated on the Floor of the House of Commons"? They ran away.

Mr. E. Smith

May I remind the hon. Member of an example of municipalities who did not run away? After searching investigation, four came to an agreement, and the hon. Member and others organised opposition.

Mr. Wise

On a point of Order. Would you exercise your authority, Mr. Speaker, to bring the discussion back to the Bill?

Mr. Speaker

Some remarks have been made about the hon. Member, and I thought he might be allowed to reply. However, it is a good suggestion that we might get back to the Bill.

Mr. Williams

I was feeling rather nervous, Mr. Speaker, but in view of what was said I thought it was not illegitimate to reply. If municipalities put powers into Bills, and hon. Members object, and then the municipalities withdraw them before coming to the House, quite clearly the hon. Members are justified in objecting. The chief burden of the speech of the hon. Member on the front Opposition Bench was that this is not a Bill to force municipalities to have these powers. That is not the crusading spirit of the old S.D.F. The hon. Member was saying that this is a Bill which will be wanted in only a few cases.

Mr. Montague

No.

Mr. Williams

Why did the hon. Member say that unless it meant something?

Mr. Montague

The point is that the powers are there for municipal authorities to take up where it is desirable to take them up. I hope that it will be desirable in many cases. This is an enabling Bill, however much the hon. Member likes to play with that fact.

Mr. Williams

I agree that it is an enabling Bill. The hon. Member implies that it must not be looked at as a Bill intending to impose these principles generally, but only in a few cases. If hon. Members opposite who are behind this Bill have in mind a few cases where it might be applied, I think that they would have given some examples. Sheffield might have said how helpful it would be if they had the opportunity of being coalowners, or Stoke-on-Trent might say how splendid it would be if they could run a milk supply. There has been no evidence at all. The whole case, as far as it is a case, is for the general use of these powers. Is there anyone in this country who is complaining about the general efficiency with which these services are administered? The hon. Gentleman the Member for Seaham (Mr. Shinwell) in 1924 went to the Ministry of Mines full of ideas, and he conducted the most elaborate inquiry that has ever been held into the retail prices of coal and the cost of distribution. I read every word of that most interesting document. Coal was traced right from the pit to the consumer. It was an analysis of the cost of distribution by private enterprise, by big and little companies and by cooperative societies, and at no stage were they able to find that there was any unreasonable spread between the pit and the consumer. I think that the hon. Gentleman was right. If he had discovered it he would have told us about it with all the eloquence he commands and all the ability he possesses. But having spent several months in the inquiry and having found nothing to talk about, it is natural to remain silent. The present Viceroy of India conducted a great inquiry into the distribution of food prices as long ago as 1922. Again, all these allegations of great waste were tested in the case of many foodstuffs, some of which are affected by this Bill.

Mr. Montague

The Linlithgow Committee.

Mr. Williams

I do not think that town councils are very competent to do this job. I do not think that they are very good at doing their existing job to-day. They are becoming overloaded. The burdens cast by Parliament upon municipalities in recent years have been so great that the standard of efficiency of municipal government in this country is declining. The cost is rising, and within a measurable period of time, unless we reform the system, we shall have a disastrous administration. There is a slackness and want of a complete sense of responsibility characterising the general mass of the municipalities in this country. It is not the fault of the individual; it is because they are trying to do more than they are fitted to do. I oppose this Bill not only on other grounds, but because we are attempting to overload an already overloaded machine.

3.39 p.m.

Mr. Bull

This is a most important Bill, and I think that the more people in the country read about it the better it will be for all of us. The hon. Gentleman who spoke from the front Opposition Bench rightly called it an enabling Measure. The greatest amount of enabling which the Bill does is that it enables the country to obtain some idea of what will be likely to happen to it if hon. Gentlemen opposite get into power. Clause 1 says: Subject to the provisions of this Act, it shall be lawful for the council of any county borough or county district to establish and carry on any business. The words, "It shall be lawful" mean that it may, and that means that councils with a Labour majority will be the first to adopt the provisions of the Bill. That will mean that the people with the least amount of executive experience as regards business will be administering these various undertakings.

Then in Clause 2, at the bottom of page 2, we find these words: The expression 'sale' includes both sale by retail and sale in wholesale quantities, and the distribution or delivery of commodities sold;". That taken in conjunction with paragraph (b) of Clause 6, which says erect and maintain shops, dairies, depots, stores, garages, offices and other buildings; must in time mean the end of private enterprise. That is to say, we shall have a system of taking what we are offered and paying what we are asked to pay for it without any alternative. In Clause 2 we find also these words: Power to acquire an existing business. I would like to know what the word "acquire" means. Where is the money coming from to acquire these existing businesses? In Clause 5 we see that: The accounts of the bank shall be kept separate from all other accounts of the Corporation. I cannot see the advantage of that. If the money is lost, it must either be replaced or lost altogether. On page 5 of the Bill we see that councils may combine to create a still greater monopoly, and soon we should have the monopolies nation-wide as they exist in Russia.

There is a very interesting little paragraph in Sub-section (5) of Clause 11, which says: Any deficiency of income in any year shall, so far as it is not met out of a reserve fund, to be charged upon and payable out of the general rate fund of the borough or district. That is a very nice idea, to take money from the taxpayers and then to set it to work against them. But the most hopeful Clause in the Bill is Clause 12 which contains these words: If at any time the Minister is satisfied with respect to any authorised business carried on by a council under the powers conferred upon them by this Act that in each of the three last preceding financial years of the council a sum equal to or exceeding the produce of a general rate of threepence in the pound has been paid out of or charged upon the general rate fund of the borough or district in order to meet a deficiency in the income of that undertaking, he may after causing a public local inquiry to be held, by order direct that from such date as may be specified in the order the council shall discontinue that business and as from the said date it shall not be lawful for the council to carry on that business, and so far as regards their borough or district, that business shall cease to be an authorised business for the purposes of this Act. That is the most helpful part of the Bill. Clause 15 says that the Act may be cited as the Local Authorities (Enabling) Act. Whatever it is called, the Bill will be quoted with good effect for many years to come. The hon. Gentleman who moved the Second Reading said that hon. Members on this side of the House posed as the friends of the private trader. However that may or may not be, there is one thing that is certain: I do not think that hon. Members opposite will find themselves placed in that invidious position after the speeches which we have heard from them to-day. What we heard about the co-operative societies was very interesting, but I and others here were most surprised that Co-operative members have not risen in their places and given us their point of view to-day. I suppose that they have definitely been counting on hon. Members on this side turning up in sufficient numbers to defeat the Bill. If they are counting on us, and certainly they can count on us with the utmost confidence to defeat the Bill, it will place them under a debt of gratitude to us, and I am sure that they will be the first to recognise that, and perhaps at the next election we shall find them supporting us and not supporting the party opposite. What is wrong with Socialist legislation of this sort is that it attempts to make certain that no one rises above a certain level, or that no one makes more than a certain amount of money, instead of seeing what can be done to raise the general standard. I shall vote against the Bill from conviction, and as a piece of friendly advice I should like to suggest to hon. Members opposite that if they wish to occupy their present places after the next election, they also should vote against the Bill.

3.46 p.m.

Mr. Rickards

The hon. Member who introduced the Bill in an eloquent and interesting speech, said that he thought we on our side ought to vote in favour of it because it was democratic. In this House we try to be democratic. We realise that all of us, no matter on which Benches we sit, worship the same God—the trinity of peace, prosperity and freedom. Let me say how I think this Bill interferes with freedom. It seeks to put trading power in the hands of the local authority, which is the government of the town and has the ratepayers behind it. The local authority would be placed in an impregnable position. Take one point that is raised in Clause I. If the Bill were passed, a town council could make the pasteurisation of milk compulsory. There is great difference of opinion with regard to pasteurisation. I think that pasteurisation is wrong. Great vested interests have made a cat's-paw of the medical profession in trying to get this country to adopt compulsory pasteurisation. I say that the medical profession are not in the least competent to judge. You might just as well have a private in the Army laying down the rules of, we will say, Imperial Defence. Far and away the highest authorities, the great analytical chemists, including the Pasteur Institute, in Paris, are against pasteurisation of milk, for four reasons: (1) it absolutely alters the milk, chemically, (2) it destroys the nutrition, (3) it does not get rid of the toxin, the most dangerous part of the milk. I could explain that, if I had time.

Mr. Speaker

If the non Member had time, he could not do so on this Bill.

Mr. Rickards

In these debates the difficulty is always this, that nationally-run schemes and schemes run by private enterprise are in direct competition. We have had certain schemes on a large scale. Take railways. In Canada the Grand Trunk Railway is run by the Government and the Canadian Pacific by private enterprise. They pay the same wages, but no one can deny that travelling is much more comfortable on the Canadian Pacific, and that that company for years made a lot of money, whereas the Grand Trunk run by the Government have steadily lost money. Take the French railways. I lived in France for years before the War. Some of the railways were run by the Government and some by private enterprise. Everyone will agree that the railways run by private enterprise are much more comfortable. Take the question of capital. I do not worship capital, perhaps because I have none. But the Bill would be only the thin end of the wedge, and municipal corporations would obviously take care to enlarge their borders in the fields where the food was good and would leave the thin part to the capitalist. That would tend to drive capital out of the country, and, in my opinion, it is very important to have all the capital we can possibly have in the country, not from the capitalist's point of view, but from the point of view of the working man. If you keep a lot of capital in the country you get

cheap money, and cheap money helps high wages. Dear money always brings down wages.

I think our present system is by far the better. After all, the Government is a sleeping partner in every business. Although it never helps with losses it always takes 25 per cent. of the profits. Take the case of a rich man—the amount of taxation is fantastic. Suppose my father had been a wealthy man and left me £1,000,000. I live for 20 years and leave the money to my son. Being a Yorkshireman I have invested the money carefully and drawn the enormous sum of £50,000 a year for 20 years. What will the Government get out of it? In Income Tax they will get £250,000, in Supertax, £400,000 and in Death Duties £500,000. In other words, the Government will get £1,150,000 and my son and I will get only £1,000,000. If that is not a capital levy, I do not know what a capital levy is.

Finally, we have heard that the cost of living is going up, and that if hon. Members opposite come into office, they will take over production and distribution. I would like to know, although I am afraid there will be no time for them to tell me this afternoon, what they mean by that. Are they hoodwinking the public and window-dressing, or are they genuine? If they are genuine, it means that all the small shopkeepers will be broken, and that 1,000,000 shopkeepers will lose their livelihood. I hope that if hon. Members opposite really mean what they say, they will tell the public definitely what their intentions are. I know that if they do that, it will be an enormous advantage to this side of the House at the next election.

Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 109; Noes, 160.

Division No. 120.]	AYES.	[3.57 p.m.
Adams, D. (Consatt)	Charleton, H. C.	Edwards, Sir C. (Bedwellty)
Adams, D. M. (Poplar, S.)	Cluse, W. S.	Fletcher, Lt.-Comdr. R. T. H.
Adamson, W. M.	Cocks, F. S.	Frankel, D.
Ammon, C. G.	Ceve, W. G.	Gallacher, W.
Anderson, F. (Whitehaven)	Daggar, G.	Gardner, B. W.
Attlee, Rt. Hon. C. R.	Davidson, J. J. (Maryhill)	Greenwood, Rt. Hon. A.
Banfield, J. W.	Davies, R. J. (Westhoughton)	Grenfell, D. R.
Batey, J.	Davies, S. O. (Merthyr)	Griffiths, J. (Llanelly)
Bellenger, F. J.	Day, H.	Groves, T. E.
Bonn, Rt. Hon. W. W.	Dobbie, W.	Guest, Dr. L. H. (Islington, N.)
Bevan, A.	Dunn, E. (Rother Valley)	Hall, J. H. (Whitechapel)
Burke, W. A.	Ede, J. C.	Hardie, Agnes
Harvey, T. E. (Eng. Univ's.)	Maxton, J.	Smith, Rt. Hon. H. B. Lees (K'ly)
Hayday, A.	Milner, Major J.	Smith, T. (Normanton)
Henderson, J. (Ardwick)	Montague, F.	Sorensen, R. W.
Hills, A. (Pontefract)	Morrison, Rt. Hon. H. (Hackney, S.)	Stephen, C.
Hollins, A.	Muff, G.	Strauss, G. R. (Lambeth, N.)
Jagger, J.	Nathan, Colonel H. L	Taylor, R. J. (Morpeth)
Jenkins, A. (Pontypool)	Naylor, T. E.	Thorne, W.
Jenkins, Sir W. (Neath)	Oliver, G. H.	Thurtle, E.
Johnston, Rt. Hon. T.	Parker, J.	Tinker, J. J.
Jones, A. C. (Shipley)	Parkinson, J. A.	Tomlinson, G.
Jones, Morgan (Caerphilly)	Pearson, A.	Viant, S. P.
Kelly, W. T.	Pethick-Lawrence, Rt. Hon. F. W.	Walkden, A. G.
Kennedy, Rt. Hon. T.	Price, M. P.	Walker, J.
Kirby, B. V.	Pritt, D. N.	Wedgwood, Rt. Hon. J. C.
Lansbury, Rt. Hon. G.	Quibell, D. J. K.	Westwood, J.
Lathan, G.	Ridley, G.	Whiteley, W. (Blaydon)
Lawson, J. J.	Riley, B.	Wilkinson, Ellen
Leach, W.	Ritson, J.	Williams, T. (Don Valley)
Leslie, J. R.	Robinson, W. A. (St. Helens)	Wilson, C. H. (Attercliffe)
Macdonald, G. (Ince)	Salter, Dr. A. (Bermondsey)	Windsor, W. (Hull, C.)
McEntee, V. La T.	Sanders, W. S.	Young, Sir R. (Newton)
McGhee, H. G	Shinwell, E.
MacLaren, A.	Silkin, L.	TELLERS FOR THE AYES—
MacMillan, M. (Western Isles)	Silverman, S. S.	Mr. Charles Brown and Mr.
Marshall, F.	Smith, Ben (Rotherhithe)	Barr.
Mathers, G.	Smith, E. (Stoke)
NOES.
Anderson, Sir A. Garrett (C. of Ldn.)	Greene, W. P. C. (Worcester)	Reid, W. Allan (Derby)
Assheton, R.	Gretton, Col. Rt. Hon. J.	Rickards, G. W. (Skipton)
Atholl, Duchess of	Gridley, Sir A. B.	Robinson, J. R. (Blackpool)
Baillie, Sir A. W. M.	Griffith, F. Kingsley (M'ddl'sbro, W.)	Ropner, Colonel L.
Balniel, Lord	Grimston, R. V.	Ross Taylor, W. (Woodbridge)
Beaumont, Hon. R. E. B. (Portsm'h)	Guinness, T. L. E. B.	Rowlands, G.
Bennett, Sir E. N.	Gunston, Capt. Sir D. W.	Royds, Admiral Sir P. M. R.
Bernays, R. H.	Hannah, I. C.	Russell, Sir Alexander
Birchall, Sir J. D.	Hannon, Sir P. J. H	Russell, S. H. M. (Darwen)
Blair, Sir R.	Harris, Sir P. A.	Salmon, Sir I.
Brass, Sir W.	Harvey, Sir G	Samuel, M. R. A.
Brocklebank, Sir Edmund	Haslam, Sir J. (Bolton)	Sandeman, Sir N. S.
Brown, Brig.-Gen. H. C. (Newbury)	Heneage, Lieut.-Colonel A. P.	Savery, Sir Servington
Browne, A. C. (Belfast, W.)	Herbert, Major J. A. (Monmouth)	Scott, Lord William
Bull, B. B.	Hoare, Rt. Hon. Sir S.	Seely, Sir H. M.
Bullock, Capt. M.	Holmes, J. S.	Selley, H. R.
Butcher, H. W.	Howitt, Dr. A. B.	Shakespeare, G. H.
Campbell, Sir E. T.	Hudson, Capt. A. U. M. (Hack., N.)	Shaw, Captain W. T. (Forfar)
Cary, R. A.	Hulbert, N. J.	Simon, Rt. Hon. Sir J. A.
Cayzer, Sir C. W. (City of Chester)	Hume, Sir G. H.	Smiles, Lieut.-Colonel Sir W. D.
Cazalet, Thelma (Islington, E.)	Hutchinson, G. C.	Smith, Bracewell (Dulwich)
Channon, H.	Kerr, Colonel C. I. (Montrose)	Somervell, Sir D. B. (Crewe)
Chapman, A. (Rutherglen)	Kerr, H. W. (Oldham)	Somerville, A. A. (Windsor)
Clarry, Sir Reginald	Lambert, Rt. Hon. G.	Southby, Commander Sir A. R. J.
Cobb, Captain E. C. (Preston)	Lennox-Boyd, A. T. L.	Spears, Brigadier-General E. L.
Conant, Captain R. J. E.	Liddall, W. S.	Stourton, Major Hon. J. J.
Cooke, J. D. (Hammersmith, S.)	Lipson, D. L.	Strauss, E. A. (Southwark, N.)
Courthope, Col. Rt. Hon. Sir G. L.	Lloyd, G. W.	Strauss, H. G. (Norwich)
Cox, H. B. Trevor	Locker-Lampson, Comdr. O. S.	Stuart, Hon. J. (Moray and Nairn)
Croft, Brig.-Gen. Sir H. Page	Lyons, A. M.	Sutcliffe, H.
Crooke, Sir J. S.	Mabane, W. (Huddersfield)	Tasker, Sir R. I.
Crookshank, Capt. H. F. C.	McCorquodale, M. S.	Taylor, C. S. (Eastbourne)
Cross, R. H.	Macdonald, Capt. T. (Isle of Wight)	Taylor, Vice-Adm. E. A. (Padd., S.)
Crowder, J. F. E.	McEwen, Capt. J. H. F.	Touche, G. C.
Cruddas, Col. B.	Makins, Brig.-Gen. E.	Tufnell, Lieut.-Commander R. L.
De Chair, S. S.	Margesson, Capt. Rt. Hon. H. D. R.	Wakefield, W. W.
De la Bère, R.	Marsden, Commander A.	Ward, Lieut.-Col. Sir A. L. (Hull)
Denman, Hon. R. D.	Mayhew, Lt.-Col. J.	Ward, Irene M. B. (Wallsend)
Doland, G. F.	Mills, Major J. D. (New Forest)	Waterhouse, Captain C.
Duckworth, Arthur (Shrewsbury)	Moore, Lieut.-Colonel Sir T. C. R.	Watt, Major G. S. Harvie
Dugdale, Captain T. L.	Moreing, A. C.	White, H. Graham
Duggan, H. J.	Morgan, R. H.	Whiteley, Major J. P. (Buckingham)
Duncan, J. A. L.	Morrison, G. A. (Scottish Univ's.)	Wickham, Lt.-Col. E. T. R.
Edmondson, Major Sir J.	Munro, P.	Williams, H. G. (Croydon, S.)
Emmott, C. E. G. C.	Neven-Spence, Major B. H. H.	Wilson, Lt.-Col. Sir A. T. (Hitchin)
Evans, Capt. A. (Cardiff, S.)	Nicholson, G. (Farnham)	Windsor-Clive, Lieut.-Colonel G.
Evans, D. O. (Cardigan)	Nicolson. Hon. H. G.	Winterton, Rt. Hon. Earl
Evans, E. (Univ. of Wales)	Orr-Ewing, I. L.	Withers, Sir J. J.
Fleming, E. L.	Peters, Dr. S. J.	Wragg, H.
Fox, Sir G. W. G.	Petherick, M.	Wright, Wing-Commander J. A. C.
Furness, S. N.	Pilkington, R.	Young, A. S. L. (Partick)
George, Megan Lloyd (Anglesey)	Plugge, Capt. L. F.
Gilmour, Lt.-Col. Rt. Hon. Sir J.	Pownall, Lt.-Col. Sir Assheton	TELLERS FOR THE NOES.—
Grant-Ferris, R.	Rathbone, J. R. (Bodmin)	Mr. Wise and Mr. Levy.

Words added.

Main Question, as amended, put, and agreed to. Second Reading put off for six months.

The remaining Orders were read, and postponed.

Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 2.

Adjourned at Five Minutes after Four o'Clock, until Monday next, 7th March.